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Income Taxes
9 Months Ended
Jul. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Applied’s effective tax rates for the third quarters of fiscal 2017 and 2016 were 5.4 percent and 10.5 percent, respectively. Applied’s effective tax rates for the first nine months of fiscal 2017 and 2016 were 7.7 percent and 12.7 percent, respectively.
The effective tax rate for the third quarter of fiscal 2017 was lower than in the same quarter in the prior fiscal year primarily due to the recognition of previously unrecognized foreign tax credits and changes in the geographical composition of income.
The effective tax rate for the first nine months of fiscal 2017 was lower than in the same period in the prior year primarily due to the recognition of previously unrecognized foreign tax credits, favorable resolutions to income tax liabilities for uncertain tax positions during the first nine months of fiscal 2017, unfavorable resolutions to income tax liabilities for uncertain tax positions during the first nine months of fiscal 2016 and changes in the geographical composition of income. These were partially offset by the reinstatement of the U.S. R&D tax credit during the first nine months of fiscal 2016 which was retroactive to its expiration in December of the prior year.
During the next twelve months, it is reasonably possible that existing liabilities for unrecognized tax benefits could be reduced by approximately $74 million as a result of negotiations with taxing authorities and the expiration of statutes of limitation.