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Income Taxes
3 Months Ended
Jan. 27, 2013
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Applied’s effective income tax rate for the first quarter of fiscal 2013 was a benefit of 88.9 percent compared to a provision of 26.4 percent for the first quarter of fiscal 2012. The change in the rate for the first quarter of fiscal 2013 from the comparable period in the prior year was primarily due to an $11 million benefit arising from the resolution of prior uncertainties related to Varian and a $10 million benefit resulting from reinstatement of the U.S. federal research and development tax credit, retroactive to January 1, 2012. The tax rates were also affected by changes in composition of income in jurisdictions outside the U.S. with tax incentives. Applied’s future effective income tax rate depends on various factors, such as tax legislation and the geographic composition of Applied’s pre-tax income. Management carefully monitors these factors and timely adjusts the interim effective income tax rate accordingly.
The timing of the resolution of income tax examinations, as well as the amounts and timing of various tax payments that may be made as part of the resolution process, is highly uncertain and could cause an impact to Applied’s consolidated results of operations. This could also cause large fluctuations in the balance sheet classification of current assets and non-current assets and liabilities. Applied does not expect a material change in unrecognized tax benefits in the next 12 months.