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Income Taxes
9 Months Ended
Jan. 23, 2015
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company’s effective tax rates for the three and nine months ended January 23, 2015 were 18.2 percent and 18.9 percent, respectively, compared to 20.2 percent and 18.8 percent for the three and nine months ended January 24, 2014, respectively. The changes in the Company’s effective tax rate for the three and nine months ended January 23, 2015 were primarily due to the extension of the U.S. federal research and development tax credit for calendar year 2014, the tax impact of special (gains) charges, acquisition-related items, the impact from the additional interest expense incurred during the quarter to fund the cash consideration portion of the Covidien acquisition, changes to uncertain tax position reserves, the tax impact of foreign dividend distributions recorded during the three months ended January 23, 2015 and the impact from year-over-year changes in operational results by tax jurisdiction. During the three months ended January 23, 2015, the Company recorded a $30 million net benefit associated with the extension of the U.S. federal research and development tax credit for calendar year 2014, the finalization of certain income tax returns, and the tax impact of foreign dividend distributions. These tax adjustments are operational in nature and are recorded in the provision for income taxes on the consolidated statement of earnings.
During the nine months ended January 23, 2015, the Company's gross unrecognized tax benefits increased from $1.172 billion to $1.362 billion. In addition, the Company has accrued gross interest and penalties of $184 million as of January 23, 2015. If all of the Company’s unrecognized tax benefits were recognized, approximately $1.212 billion would impact the Company’s effective tax rate. The Company has recorded the gross unrecognized tax benefits as a long-term liability, as it does not expect significant payments to occur or the total amount of unrecognized tax benefits to change significantly over the next 12 months.
The Company will continue to recognize interest and penalties related to income tax matters in the provision for income taxes in the condensed consolidated statements of earnings and record the liability in current or long-term accrued income taxes in the condensed consolidated balance sheets, as appropriate.
As of January 23, 2015, there were no changes to significant unresolved matters with the IRS or foreign tax authorities from what the Company disclosed in its Annual Report on Form 10-K for the year ended April 25, 2014.