INCOME TAXES

The Company’s income tax expense and related effective rate were as follows (in thousands, except percentage data):



	For the 13 Weeks Ended October 3, 2015			For the 13 Weeks Ended October 4, 2014			For the 39 Weeks Ended October 3, 2015			For the 40 Weeks Ended October 4, 2014
Income tax expense	$	17,303		$	46,931		$	58,721		$	103,286
Income tax rate	22.3		%	30.6		%	27.1		%	30.9		%

The lower effective tax rate in the Third Quarter, as compared to the Prior Year Quarter, was primarily due to foreign tax credits generated from management's decision to no longer permanently reinvest the earnings of certain high-taxed foreign subsidiaries and a reduction in foreign earnings subject to U.S. taxation. The lower effective tax rate for the Year to Date Period, as compared to the Prior Year YTD Period, was primarily attributable to foreign tax credits generated from management's decision to no longer permanently reinvest the earnings of certain high-taxed foreign subsidiaries, the recognition of income tax benefits due to the settlement of audits and a reduction in foreign earnings subject to U.S. taxation.

As of October 3, 2015, the total amount of unrecognized tax benefits, excluding interest and penalties, was $13.1 million, of which $10.3 million would favorably impact the effective tax rate in future periods, if recognized. During the second quarter of fiscal year 2015, the U.S. Internal Revenue Service closed its examination of the Company’s 2010-2012 federal income tax returns, and the Company received a refund of $2.2 million. The Company is subject to examinations in various state and foreign jurisdictions for its 2008-2014 tax years, none of which the Company believes are significant, individually or in the aggregate. Tax audit outcomes and timing of tax audit settlements are subject to significant uncertainty.

The Company has classified uncertain tax positions as long-term income taxes payable, unless such amounts are expected to be paid within twelve months of the condensed consolidated balance sheet date. As of October 3, 2015, the Company had recorded $1.8 million of unrecognized tax benefits, excluding interest and penalties, for positions that are expected to be settled within the next twelve months. Consistent with its past practice, the Company recognizes interest and/or penalties related to income tax overpayments and income tax underpayments in income tax expense and income taxes receivable/payable, respectively. The total amount of accrued income tax-related interest and penalties included in the condensed consolidated balance sheets at October 3, 2015 was $1.9 million and $0.4 million, respectively. For the Third Quarter and Year To Date Period, the Company accrued income tax-related interest expense of $0.2 million and $0.6 million, respectively.