The following table presents the provision for income taxes and the effective tax rate:



	Three months ended						Six months ended
	June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
	(In thousands, except percentages)
Provision for income taxes	$	10,171		$	129,131		$	4,763		$	269,722
Tax rate	11.1		%	32.0		%	3.8		%	33.2		%

The provision for income taxes for the three and six months ended June 28, 2015 prior to discrete items differs from the U.S. statutory tax rate of 35% due primarily to the tax impact of earnings from foreign operations, state taxes, non-deductibility of certain share-based compensation and tax-exempt interest income. Earnings and taxes resulting from foreign operations are largely attributable to the Company’s Chinese, Irish, Israeli, Japanese and Malaysian entities. Earnings in these countries where tax rates are lower than the U.S. notional rate contributed to the majority of the difference between the rate of the Company’s tax provision and the U.S. statutory tax rate. The lower effective tax rate for the three and six months ended June 28, 2015, compared to the same period in 2014, is primarily attributable to benefits of $16.6 million and $37.5 million, respectively, recorded as a result of tax audit settlements. As of June 28, 2015, the Company believes that most of its deferred tax assets are more likely than not to be realized, except for certain loss and credit carry forwards in certain U.S. and foreign tax jurisdictions.

As of June 28, 2015, the Company had not made a provision for U.S. income taxes or foreign withholding taxes on $1.25 billion of undistributed earnings of foreign subsidiaries as the Company intends to indefinitely reinvest these earnings outside the U.S. to fund its international capital expenditures and operating requirements. The Company determined that it is not practicable to calculate the amount of unrecognized deferred tax liability related to these cumulative unremitted earnings. 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 any available foreign tax credits.

Unrecognized tax benefits were $91.7 million and $125.2 million as of June 28, 2015 and December 28, 2014, respectively. Unrecognized tax benefits that would impact the effective tax rate in the future were approximately $70.7 million at June 28, 2015. Income tax expense for the three and six months ended June 28, 2015 included a benefit from a reversal of interest and penalties of $5.7 million and $8.9 million, respectively. Interest and penalties included in income tax expense for each of the three and six months ended June 29, 2014 were immaterial. It is reasonably possible that the unrecognized tax benefits could decrease by approximately $11.3 million within the next 12 months as a result of the expiration of statutes of limitations and potential settlements of tax authority examinations. The Company is currently under audit by several tax authorities in which the timing of the resolution and/or closure of these audits is highly uncertain. Therefore it is not possible to estimate other changes to the amount of unrecognized tax benefits for positions existing as of June 28, 2015.

The Company is subject to U.S. federal income tax as well as income taxes in multiple state and foreign jurisdictions. During the six months ended June 28, 2015, the Company received and signed the closing agreement with the Internal Revenue Service (“IRS”) related to the examination of the Company’s federal income tax returns for 2009 through 2011, and finalized audits for certain periods with the California Franchise Tax Board and other various states’ tax authorities. 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 materially harm the Company’s financial position, results of operations or liquidity.

The Company has tax holidays in Malaysia that begin to expire in December 2028. The impact of the tax holidays was immaterial to all periods presented.