Note 12—Income Taxes

The effective income tax rates were 22% and 28% for the three and nine months ended June 30, 2015, respectively, and 33% and 29% for the three and nine months ended June 30, 2014, respectively.

The effective tax rate for the three months ended June 30, 2015 differs from the effective tax rate in the same period in fiscal 2014 primarily due to a $280 million tax benefit resulting from the resolution of uncertain tax positions with taxing authorities in the third quarter of fiscal 2015. Of the $280 million, $239 million relates to prior fiscal years and $24 million relates to the first and second quarters of fiscal 2015.

The effective tax rate for the nine months ended June 30, 2015 differs from the effective tax rate in the same period in fiscal 2014 primarily due to:


•	the aforementioned $280 million tax benefit resulting from the resolution of uncertain tax positions with taxing authorities in the third quarter of fiscal 2015; and


•	the absence of a one-time $189 million tax benefit recorded in the second quarter of fiscal 2014 related to a deduction for U.S. domestic production activities for years prior to fiscal 2014.

During the three and nine months ended June 30, 2015, the Company's gross unrecognized tax benefits decreased by $245 million and $254 million, respectively. The decrease in gross unrecognized tax benefits is primarily due to the recognition of previously recorded unrecognized tax benefits as a result of the resolution of uncertain tax positions with taxing authorities in the third quarter of fiscal 2015. During the three and nine months ended June 30, 2015, the Company's accrued interest on unrecognized tax benefits decreased by $8 million and $4 million, respectively, as a result of the decrease in unrecognized tax benefits. During the three and nine months ended June 30, 2015, there were no significant changes in penalties related to uncertain tax positions.

The Company’s tax filings are subject to examination by the U.S. federal, state and foreign taxing authorities. The timing and outcome of the final resolutions of the various ongoing income tax examinations are highly uncertain. It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next twelve months.