Taxes Based on Income

6 Months Ended

Jun. 29, 2013

Taxes Based on Income

Taxes Based on Income

Note 11.  Taxes Based on Income

The effective tax rate for continuing operations was 35.3% and 27.8% for the three and six months ended June 29, 2013, respectively, and 33.3% and 31.1% for the three and six months ended June 30, 2012, respectively.  The effective tax rate for the three months ended June 29, 2013 reflects a discrete tax expense of $1.4 million and, for the six months ended June 29, 2013, the effective tax rate reflects net discrete tax benefits of $8.9 million. The net discrete tax benefits relate to changes in tax law, including a $4.2 million benefit attributable to the retroactive reinstatement of the federal research and development tax credit and a net $3.7 million benefit for revaluation of deferred tax balances due to changes in certain foreign statutory tax rates.  For the three and six months ended June 30, 2012, the effective tax rate included discrete tax benefits of $2.7 million and $6.4 million, respectively, for releases of certain tax reserves due to lapses of applicable statutory periods and adjustments to foreign income taxes.

The following table summarizes our income from continuing operations before taxes, provision for income taxes from continuing operations, and effective tax rate:

	Three Months Ended				Six Months Ended
(In millions)	June 29, 2013		June 30, 2012		June 29, 2013		June 30, 2012
Income from continuing operations before taxes	$	109.5	$	73.6	$	190.6	$	135.9
Provision for income taxes	38.7		24.5		53.0		42.2
Effective tax rate	35.3%		33.3%		27.8%		31.1%

The amount of income taxes we pay is subject to ongoing audits by taxing jurisdictions around the world.  Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of relevant risks, facts, and circumstances existing at the time.  We believe that we have adequately provided for reasonably foreseeable outcomes related to these matters.  However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, which may impact our effective tax rate.  With some exceptions, we and our subsidiaries are no longer subject to income tax examinations by tax authorities for years prior to 2006.

It is reasonably possible that, during the next 12 months, we may realize a decrease in our gross uncertain tax positions and related interest and penalties of approximately $13 million, primarily as a result of closing tax years.