Income Taxes

9 Months Ended

Oct. 01, 2011

Income Taxes

Income Taxes

11.  Income Taxes

Our effective income tax rate from continuing operations for the three months ended October 1, 2011 and October 2, 2010, was 32.2% and 37.4%, respectively.  Our effective income tax rate for the nine months ended October 1, 2011 and October 2, 2010, was 33.4% and 35.6%, respectively. Fluctuations in our reported income tax rates were primarily due to a one-time reversal of tax reserves related to California research and development credit, favorable return-to-provision adjustments in 2011 and our inability during the nine months ended October 2, 2010 to recognize federal research and development credits in the absence of enacted legislation.

During the next twelve months, it is reasonably possible that audit resolutions and the expiration of statutes of limitations could potentially reduce our unrecognized tax benefits by up to $2.0 million. However, this amount may change because we continue to have ongoing negotiations with various taxing authorities throughout the year.

As of October 1, 2011, the liability for uncertain tax positions was $10.1 million, including interest and penalties. Due to the high degree of uncertainty regarding the timing of potential future cash flows associated with these liabilities, we are unable to make a reasonably reliable estimate of the amount and period in which these liabilities might be paid.