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Income Taxes
3 Months Ended
Mar. 29, 2014
Income Taxes
Income Taxes
The Company recognized income tax expense of $73.7 million and $120.5 million for the three and six months ended June 28, 2014, respectively, resulting in effective tax rates of 25.1% and 23.8%, respectively. The effective tax rates differ from the U.S. statutory tax rate for the three and six months ended June 28, 2014, primarily due to a portion of the Company’s earnings being realized in lower-taxed foreign jurisdictions, the favorable settlement of several foreign income tax audits and the reversal of valuation allowances for certain foreign net operating losses which have become realizable.
The Company recognized income tax expense of $54.4 million and $63.1 million for the three and six months ended June 29, 2013, respectively, resulting in effective tax rates of 21.6% and, 18.3% respectively. The effective tax rates differ from the U.S. statutory tax rate for the three and six months ended June 29, 2013, primarily due to a portion of the Company’s earnings being realized in lower-taxed foreign jurisdictions, the acceleration of certain tax credits, the recurring benefit of various foreign business integration structures and the reversal of certain foreign and U.S. state uncertain tax position reserves, related largely to statute expiration.
The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other taxing authorities both domestically and internationally. The final outcome of the future tax consequences of these examinations and legal proceedings, as well as the outcome of competent authority proceedings, changes and interpretation in regulatory tax laws, or expiration of statute of limitations, could impact the Company’s financial statements. Accordingly, the Company has tax reserves recorded for which it is reasonably possible that the amount of the unrecognized tax benefit will increase or decrease which could have a material effect on the financial results for any particular fiscal quarter or year. However, based on the uncertainties associated with litigation and the status of examinations, including the protocols of finalizing audits by the relevant tax authorities which could include formal legal proceedings, it is not possible to estimate the impact of any such change.