7. Income Taxes

Our earnings before taxes decreased 1.1% when compared to the same quarter in 2012, while our income tax expense decreased by $49,148, to ($26,869) for the 13-week period ended September 28, 2013, from $22,279 for the 13-week period ended September 29, 2012. The significant decline was due primarily to the impact of a $52,180 benefit in the third quarter which includes the release of uncertain tax position reserves from 2009 offset by Taiwan surtax expense due to this reserve release. Excluding this item, we would have reported an effective tax rate of 15.7% in the third quarter of 2013 compared to 13.7% in the third quarter of 2012. This increase was primarily driven by an unfavorable income mix across tax jurisdictions, as well as the release of other uncertain tax position reserves, amounting to approximately ($401) in third quarter 2013 and $1,737 in the third quarter 2012 that are considered immaterial, tend to be more recurring in nature and are comparable between periods.

Our earnings before taxes decreased 4.4% when compared to the same period in 2012, while our income tax expense decreased by $56,318 to $192, for the 39-week period ended September 28, 2013, from $56,510 for the 39-week period ended September 29, 2012. The significant decline was due to the impact of a $52,180 benefit in the third quarter, which includes the release of uncertain tax position reserves from 2009 offset by Taiwan surtax expense due to this reserve release and a $16,536 benefit in the first quarter of 2013, also related to reserve releases. Excluding these items, we would have reported an effective tax rate of 15.3% for the first three quarters of 2013 compared to 12.0% for the first three quarters of 2012. This increase was primarily driven by an unfavorable income mix across tax jurisdictions, as well as the release of other uncertain tax position reserves amounting to approximately $9,556 for the 39-weeks ended September 28, 2013 and $11,945 for the 39-weeks ended September 29, 2012 that are considered immaterial, tend to be more recurring in nature and are comparable between periods, partially offset by the impact of $6,301 of research and development tax credits related to 2012 which were recognized when the related legislation was enacted in January 2013.