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Income Taxes
9 Months Ended
Mar. 27, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

Note 5 – Income Taxes

During the third quarter of fiscal 2014 we recorded discrete tax items which resulted in approximately $677 of income tax benefit. Consequently, we recognized income tax expense of $927 for the third quarter of fiscal 2014 which resulted in an effective tax rate of 20.1%. The discrete tax items recorded in the third quarter of fiscal 2014 primarily relate to the tax benefit of losses realized from the divestiture of an equity investment in ARMA Energy, Inc. (“ARMA”), and the cancellation of a secured promissory note receivable due from ARMA. A portion of the loss on disposal of the investment is available as a carryforward capital loss. Since the capital loss is not expected to be realized in the foreseeable future, a valuation allowance has been recorded.

 

We recorded approximately $776 of discrete income tax items during the third quarter of fiscal 2013, which resulted in income tax expense of $1,447 and an effective tax rate of 80.9%. The discrete tax items recorded in the third quarter of fiscal 2013 primarily related to the to the impact of a full valuation allowance recorded against deferred tax assets that were created as a result of our initial transactions with ARMA.

At the beginning of fiscal year 2014, based on our final fiscal 2013 tax returns, we had gross state tax net operating losses of approximately $6,053 that will expire between 2017 and 2030 if not utilized.

As of March 27, 2014, unrecognized tax benefits and accrued interest and penalties were not material. There were no material changes to the amount of unrecognized tax benefits during the first three quarters of fiscal 2014. We do not anticipate that total unrecognized tax benefits will significantly change in the next twelve months.

We file income tax returns with federal and state tax authorities within the United States of America. Our federal tax returns are open for audit for fiscal 2011 and later. Our Illinois tax returns are currently under audit for fiscal 2011 and 2012. Our Illinois tax returns are open for audit for fiscal 2009 and 2010. Our California tax returns are open for audit for fiscal 2008 and later. No other tax jurisdictions are material to us.