Income Taxes

The Company's effective tax rate from continuing operations (ETR) was 32.4% and 31.9% for the quarter and six months ended September 27, 2013, respectively, and 28.4% and 32.2% for the quarter and six months ended September 28, 2012, respectively. The following are the primary drivers of the ETR for the six months ended September 27, 2013 and September 28, 2012. For the tax impact of discontinued operations, see Note 3.


•	During the second quarter and six months ended September 27, 2013, the ETR was impacted by the change in valuation allowances in non-U.S. jurisdictions and the global mix of income.


•	During the second quarter and six months ended September 27, 2013, the Company recorded an income tax expense of $10 million related to the previous restructuring of an operating subsidiary. This expense increased the ETR for the second quarter and six months ended September 27, 2013 by 4.6% and 2.3%, respectively.


•	During the second quarter and six months ended September 28, 2012, there was an increase in valuation allowances in non-U.S. jurisdictions which was partially offset by exempt income as well as a change in the global mix of income.


•	During the second quarter and six months ended September 28, 2012, the Company released $6.4 million of its liability for uncertain tax positions related to prior year research and development credits which reduced the ETR for the second quarter and six months ended September 28, 2012 by 4.0% and 3.2%, respectively.

There were no material changes to uncertain tax positions in the second quarter of fiscal 2014 compared to the fiscal 2013 year-end.

The IRS is examining the Company's federal income tax returns for fiscal years 2008 through 2010. During the first quarter of fiscal 2014, the IRS indicated they need additional time to complete the examination. Therefore, the Company now expects to reach a resolution during fiscal year 2015. In addition, the statute of limitation for these fiscal years is currently expected to close during fiscal year 2015. The significant item subject to examination primarily relates to foreign exchange losses. In addition, the Company may settle certain other tax examinations, have lapses in statutes of limitations, or voluntarily settle income tax positions in negotiated settlements for different amounts than the Company has accrued as uncertain tax positions. The Company may need to accrue and ultimately pay additional amounts for tax positions that previously met a more likely than not standard if such positions are not upheld. Conversely, the Company could settle positions with the tax authorities for amounts lower than those that have been accrued or extinguish a position through payment. The Company believes the outcomes which are reasonably possible within the next twelve months may result in a reduction in the liability for uncertain tax positions of up to $9 million, excluding interest, penalties, and tax carryforwards.