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Income Taxes
3 Months Ended
Oct. 01, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Note 12. Income Taxes
The Company recorded an income tax expense of $5.7 million and $2.9 million related to the income (loss) from continuing operations for the three months ended months ended October 1, 2016 and October 3, 2015, respectively.
The income tax expense related to the income (loss) from continuing operations recorded for the three months ended October 1, 2016 and October 3, 2015 primarily relates to income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income or loss for the respective year. In addition, for the three months ended October 3, 2015, the Company’s income tax provision includes a tax benefit of $13.4 million related to the income tax intraperiod tax allocation rules for discontinued operations and other comprehensive income, and a tax expense of $8.9 million related to a one-time increase in valuation allowance associated with deferred tax assets transferred to Lumentum in connection with the Separation.
The income tax expense related to the income (loss) from continuing operations recorded differs from the expected tax expense (benefit) that would be calculated by applying the federal statutory rate to the Company’s income (loss) from continuing operations before taxes primarily due to the changes in valuation allowance for deferred tax assets attributable to the Company’s domestic and foreign income (loss)from continuing operations, the income tax benefit recorded in continuing operations under the income tax intraperiod tax allocation rules, and the increase in valuation allowance associated with deferred tax assets transferred to Lumentum in connection with the separation.
As of October 1, 2016 and July 2, 2016, the Company’s unrecognized tax benefits totaled $41.8 million and $41.7 million, respectively, and are included in deferred taxes and other non-current tax liabilities, net. The Company had $1.8 million accrued for the payment of interest and penalties at October 1, 2016. The unrecognized tax benefits that may be recognized during the next twelve months are approximately $1.0 million.