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Income Taxes
9 Months Ended
Aug. 24, 2014
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES
The effective income tax rate was 28.7% for the nine months ended August 24, 2014, compared to 28.8% for the same period ended August 25, 2013. The decrease in the effective tax rate in 2014 was primarily due to a $3.7 million tax benefit that the Company recorded during the nine months ended August 24, 2014, as a result of reversing a deferred tax liability associated with undistributed foreign earnings, as well as a favorable change in the projected mix of earnings in jurisdictions with lower effective tax rates. Partially offsetting the rate decline was a $3.0 million correction that the Company recorded in the third quarter of 2014 associated with errors identified on previously-filed tax returns related to temporary differences.  The Company determined that the amounts were not material to its previously issued financial statements or to the current period and recorded a correcting entry in the third quarter of 2014. The correction had no effect on operating income or cash, but increased income tax expense and decreased net income in the third quarter of 2014 by $3.0 million. The 2013 effective tax rate benefited from the July 2013 finalization of the U.S. federal tax audit of tax years 2003 – 2008, which enabled the Company to record previously unrecognized tax benefits of $23.4 million during the three months ended August 25, 2013, of which $14.2 million reduced income tax expense for that period.
The Company historically planned to repatriate to the United States the undistributed earnings of its foreign subsidiaries, and accordingly, provided for a deferred tax liability totaling $3.7 million as of November 24, 2013. For the nine months ended August 24, 2014, management made an assertion that $75.0 million of undistributed foreign earnings in certain foreign subsidiaries are indefinitely reinvested. As such, the Company recorded a $3.7 million tax benefit resulting from a reversal of the previously recorded deferred tax liability on undistributed foreign earnings.