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INCOME TAXES
9 Months Ended
Sep. 28, 2012
INCOME TAXES
NOTE 12. INCOME TAXES
In the third quarter of fiscal 2012, the Company’s effective income tax rate was 19% as compared to 9% in the corresponding period in 2011, primarily due to geographic mix of pretax income and the expiration of federal R&D credits. In the first three quarters of fiscal 2012, the Company’s effective income tax rate was 18% as compared to 12% in the corresponding period in 2011, primarily due to the same reasons mentioned above.
The 2012 and 2011 third quarter effective tax rates are lower than the statutory federal income tax rate of 35% primarily due to the geographical mix of pre-tax income.
The Company and its subsidiaries are subject to U.S. federal and state, and foreign income tax. The Company has substantially concluded all U.S. federal income tax audits for years through 2009 with the exception of acquired companies. State income tax matters have been concluded for years through 2005 and non-U.S. income tax matters have been concluded for years through 2000. The Company is currently in various stages of multiple year examinations by federal, state and foreign taxing authorities. Although the timing of resolution and/or closure on audits is highly uncertain, the Company does not believe that the unrecognized tax benefits would materially change in the next twelve months.
The unrecognized tax benefits of 32.8 million and $28.7 million as of the third quarter of fiscal 2012 and fiscal year end 2011, respectively, if recognized, would favorably affect the effective income tax rate in future periods. Unrecognized tax benefits are recorded in Other non-current liabilities and in the deferred tax accounts in the accompanying Condensed Consolidated Balance Sheets.
The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company's unrecognized tax benefit liabilities include interest and penalties as of the third quarter of fiscal 2012 and fiscal year end 2011, of $3.0 million and $2.7 million, respectively, which were recorded in Other non-current liabilities in the accompanying Condensed Consolidated Balance Sheets.