

6.	Income Taxes

The Company recognized an income tax benefit of $34.2 million on income from continuing operations before income taxes of $42.3 million for the three months ended March 27, 2015 and an income tax benefit of $20.3 million on loss from continuing operations before income taxes of $8.6 million for the three months ended March 28, 2014. This resulted in effective tax rates of negative 80.9% and positive 236.0% for the three months ended March 27, 2015 and March 28, 2014, respectively. The Company recognized income tax benefits of $43.5 million and $3.7 million on income from continuing operations before income taxes of $125.1 million and $54.4 million for the six months ended March 27, 2015 and March 28, 2014, respectively. This resulted in effective tax rates of negative 34.8% and negative 6.8% for the six months ended March 27, 2015 and March 28, 2014, respectively.

The $13.9 million increase in tax benefit for the three months ended March 27, 2015, as compared with the three months ended March 28, 2014, resulted in an approximately 316% decrease in the effective tax rate. Of this overall decrease, 212% was attributable to a diminutive loss from continuing operations before taxes for the three months ended March 28, 2014, 66% was due to an increase in amortization of acquired intangible assets resulting in an increase to the favorable rate difference between non-U.S. and U.S. tax jurisdictions,36% was due to an increase in the favorable rate difference between non-U.S. and U.S. tax jurisdictions related to the impact of recent acquisitions which includes the impacts of acquisition financing and the integration of the acquired intangible property into the Company’s legal entity structure, and 3% was due to the recognition of previously unrecognized tax benefits within the three months ended March 27, 2015.

The effective rate for the six months ended March 27, 2015, as compared with the six months ended March 28, 2014, decreased by approximately 28%, of which approximately 14% was attributable to an increase in the favorable rate difference between non-U.S. and U.S. tax jurisdictions related to the impact of recent acquisitions, which includes the impacts of acquisition financing and the integration of the acquired intangible property into the Company’s legal entity structure, and 10% was due to an increase in amortization of acquired intangible assets resulting in an increase to the favorable rate difference between non-U.S. and U.S. tax jurisdictions.

As a part of the Cadence integration, the Company entered into an internal installment sale transaction during the year ended September 26, 2014. As a part of the Questcor integration, the Company entered into an internal installment sale transaction during the three months ended December 26, 2014. The Questcor internal installment sale transaction resulted in a decrease of $1,488.7 million to the deferred tax liability associated with the Acthar intangible asset, a $1,515.9 million increase to the deferred tax liability associated with an installment sale note receivable, a $25.3 million increase to deferred tax charges and a $1.9 million increase to prepaid taxes.

During the three and six months ended March 27, 2015, the Company recognized a$22.5 million benefit associated with the expiration of tax indemnifications, as further discussed in Note 16, within discontinued operations within the unaudited condensed consolidated statement of income. The Company realized a deferred tax asset of $8.2 million and released a corresponding valuation allowance, which resulted in no net tax consequences associated with this expiration.

The Company's unrecognized tax benefits, excluding interest, totaled $77.4 million at March 27, 2015 and $82.0 million at September 26, 2014. The net decrease of $4.6 million primarily resulted from decreases to prior period tax positions of $2.7 million, settlements of $4.0 million and the lapse of the applicable statutes of limitation of $1.3 million, which were partially offset by $3.4 million of increases to current year activity. If favorably settled, the $77.4 million of unrecognized tax benefits at March 27, 2015 would impact the effective tax rate. The total amount of accrued interest related to these obligations was $42.0 million at March 27, 2015 and $45.1 million at September 26, 2014.

Additionally, the Company reduced its current and non-current payables by $5.0 million for matters other than uncertain tax positions related to periods prior to September 29, 2012. These reductions included payments of $3.0 million and a favorable impact to the tax provision for the three and six months ended March 27, 2015.

It is reasonably possible that within the next twelve months, as a result of the resolution of various federal, state and foreign examinations and appeals and the expiration of various statutes of limitation, the unrecognized tax benefits will decrease by up to $15.0 million and the amount of interest and penalties will decrease by up to $11.3 million.