6Income Taxes

For the three months ended June 28, 2013 and June 29, 2012, the Company’s effective income tax rate attributable to earnings before income taxes was 12.0% and 36.0%, respectively. During the third quarter of fiscal year 2013, the Company recognized tax expense of $1,856 on income before income tax of $15,510. The decrease in the Company’s effective tax rate versus the prior year period was primarily due to the reversal of valuation allowance on foreign tax credits. Further contributing to the difference in effective tax rates was income in tax jurisdictions with deferred tax valuation allowances in the current period versus losses in the prior year period.

For the nine months ended June 28, 2013 and June 29, 2012, the Company’s effective income tax rate attributable to earnings before income taxes was 21.7% and 44.9%, respectively. The decrease in the Company’s effective tax rate for the nine months ended June 28, 2013 versus the prior year period was primarily due to the reversal of valuation allowance on foreign tax credits. Further contributing to the difference in effective tax rates was income in tax jurisdictions with deferred tax valuation allowances in the current year period versus losses in the prior year period. The retroactive research and development credit enactment during the nine month period ended June 28, 2013 also contributed to the difference in the effective tax rate.

During the nine months ended June 28, 2013, the Company continued to maintain valuation allowances in Japan, Italy, Spain, Indonesia, New Zealand, the United Kingdom, the Netherlands and France. A valuation allowance remains for various state and federal U.S. deferred tax assets where it is more likely than not that the asset will not be realized due to a lack of apportioned income or limited carryforward periods. The Company would ordinarily recognize a tax expense or benefit on operating income or loss in these jurisdictions; however, due to the recent cumulative losses for book purposes and the uncertainty of the realization of certain deferred tax assets in these jurisdictions, the Company continues to adjust its valuation allowances resulting in effectively no recorded tax expense or benefit in these jurisdictions.

The Company regularly assesses the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes. As a result, the Company may adjust the reserves for unrecognized tax benefits for the impact of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities, and lapses of statutes of limitation. The Company’s 2013 fiscal year tax expense is anticipated to include approximately $218 related to uncertain income tax positions.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company is projecting accrued interest, for the Company’s fiscal year ending September 27, 2013 of $125.

The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The Company is currently undergoing an income tax examination in Italy for the 2011 tax year. The following tax years remain subject to examination by the respective tax jurisdictions:


Jurisdiction	Fiscal Years
United States	2011-2012
Canada	2008-2012
France	2009-2012
Germany	2009-2012
Italy	2009-2012
Japan	2012
Switzerland	2002-2012