Provision for Income Taxes

9 Months Ended

Oct. 02, 2011

Income Tax Disclosure [Abstract]

Provision for Income Taxes

Provision for Income Taxes

The following table presents the provision for income taxes and the effective tax rate for the three and nine months endedOctober 2, 2011 and October 3, 2010.

	Three months ended						Nine months ended
	October 2, 2011			October 3, 2010			October 2, 2011			October 3, 2010
	(In thousands, except percentages)
Provision for income taxes	$	129,296		$	106,464		$	352,453		$	295,648
Effective tax rate	35.7		%	24.8		%	33.3		%	26.6		%

The provision for income taxes for the three and nine months ended October 2, 2011 differs from the U.S. statutory tax rate primarily due to the tax impact of earnings from foreign operations, state taxes, tax-exempt interest income and the benefit from federal and California research and development credits. The Company’s earnings and taxes resulting from foreign operations are largely attributable to the Company’s Irish, Chinese, Israeli and Japanese entities. The provision for income taxes for the three and nine months endedOctober 2, 2011 is higher compared to the same period in fiscal year 2010 due to the inclusion of benefits from the release of the U.S. valuation allowance in fiscal year 2010. As of October 2, 2011, the Company believes that most of its deferred tax assets are more likely than not to be realized, except for loss carry forwards in certain U.S. and foreign tax jurisdictions.

Unrecognized tax benefits were $179.1 million and $172.1 million as of October 2, 2011 and January 2, 2011, respectively. Unrecognized tax benefits that would impact the effective tax rate in the future were approximately $74.3 million and $70.1 million at October 2, 2011 and January 2, 2011, respectively. As of October 2, 2011 and January 2, 2011, the Company had $30.6 million and $27.8 million, respectively, of gross interest and penalties accrued in Other non-current liabilities in the Condensed Consolidated Balance Sheets.

The Company is subject to U.S. federal income tax as well as income taxes in multiple state and foreign jurisdictions. In October 2009, the Internal Revenue Service commenced an examination of the Company’s federal income tax returns for fiscal years 2005 through 2008. The timing of a complete resolution is not certain within the next twelve months. In addition, the Company is currently under audit by various state and international tax authorities. The Company cannot reasonably estimate the outcome of these examinations, or provide assurance that the outcome of these examinations will not have a material effect on its financial position, results of operations or liquidity.

The Company provides for U.S. income taxes on the earnings of foreign subsidiaries unless the earnings are considered indefinitely invested outside of the U.S. As of January 2, 2011, no provision had been made for U.S. income taxes or foreign withholding taxes on $195.4 million of undistributed earnings of foreign subsidiaries since the Company intends to indefinitely reinvest these earnings outside the U.S. The Company determined that the calculation of the amount of unrecognized deferred tax liability related to these cumulative unremitted earnings was not practicable. If these earnings were distributed to the U.S., the Company would be subject to additional U.S. income taxes and foreign withholding taxes reduced by available foreign tax credits