INCOME TAXES	6 Months Ended
Jul. 03, 2015
INCOME TAXES	INCOME TAXES In the second quarter of fiscal 2015, the Company’s effective income tax rate was 28% as compared to 21% in the corresponding period in fiscal 2014, primarily due to the differences in the geographic mix of pretax income. In the first two quarters of fiscal 2015, the Company's effective income tax rate was 25% as compared to 22% in the corresponding period in fiscal 2014. The first two quarters of fiscal 2015 had a higher effective income tax rate due to differences in the geographic mix of pretax income, partially offset by a tax benefit associated with the closure of a foreign tax audit in the first quarter of 2015 and a tax charge on a partial equity sale of VSS in the first quarter of 2014. Historically, the Company's effective tax rate has been lower than the U.S. federal statutory rate of 35% primarily due to favorable tax rates associated with certain earnings from operations in lower-tax jurisdictions. The Company has not provided U.S. taxes for all of such earnings due to the indefinite reinvestment of some of those earnings outside the U.S. The Company and its subsidiaries are subject to U.S. federal and state, and foreign income tax. The Company is currently in different stages of multiple year examinations by the Internal Revenue Service (“IRS”) as well as various state and foreign taxing authorities. In the first quarter of 2015, the Company received a Notice of Proposed Adjustment from the IRS for the fiscal years ended 2010 and 2011. The proposed adjustments primarily relate to the valuations of intercompany transfers of acquired intellectual property. The assessments of tax, interest and penalties for the years in question total $67.0 million. The Company does not agree with the IRS position and has filed a protest with the IRS Appeals Office in April 2015. No payments have been made on the assessment. The Company intends to vigorously contest the IRS position. Based on the information currently available, the Company does not anticipate a significant increase or decrease to its unrecognized tax benefits within the next twelve months. The unrecognized tax benefits of $44.9 million and $45.6 million as of the end of the second quarter of fiscal 2015 and fiscal year end 2014, respectively, if recognized, would favorably affect the effective income tax rate in future periods. Unrecognized tax benefits are recorded in Other non-current liabilities and in the deferred tax accounts in the accompanying Condensed Consolidated Balance Sheets. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company's unrecognized tax benefit liabilities include interest and penalties as of the end of the second quarter of fiscal 2015 and fiscal year end 2014, of $5.2 million and $4.7 million, respectively, which were recorded in Other non-current liabilities in the accompanying Condensed Consolidated Balance Sheets.

INCOME TAXES

In the second quarter of fiscal 2015, the Company’s effective income tax rate was 28% as compared to 21% in the corresponding period in fiscal 2014, primarily due to the differences in the geographic mix of pretax income. In the first two quarters of fiscal 2015, the Company's effective income tax rate was 25% as compared to 22% in the corresponding period in fiscal 2014. The first two quarters of fiscal 2015 had a higher effective income tax rate due to differences in the geographic mix of pretax income, partially offset by a tax benefit associated with the closure of a foreign tax audit in the first quarter of 2015 and a tax charge on a partial equity sale of VSS in the first quarter of 2014.

Historically, the Company's effective tax rate has been lower than the U.S. federal statutory rate of 35% primarily due to favorable tax rates associated with certain earnings from operations in lower-tax jurisdictions. The Company has not provided U.S. taxes for all of such earnings due to the indefinite reinvestment of some of those earnings outside the U.S.

The Company and its subsidiaries are subject to U.S. federal and state, and foreign income tax. The Company is currently in different stages of multiple year examinations by the Internal Revenue Service (“IRS”) as well as various state and foreign taxing authorities.

In the first quarter of 2015, the Company received a Notice of Proposed Adjustment from the IRS for the fiscal years ended 2010 and 2011. The proposed adjustments primarily relate to the valuations of intercompany transfers of acquired intellectual property. The assessments of tax, interest and penalties for the years in question total $67.0 million. The Company does not agree with the IRS position and has filed a protest with the IRS Appeals Office in April 2015. No payments have been made on the assessment. The Company intends to vigorously contest the IRS position.

Based on the information currently available, the Company does not anticipate a significant increase or decrease to its unrecognized tax benefits within the next twelve months. The unrecognized tax benefits of $44.9 million and $45.6 million as of the end of the second quarter of fiscal 2015 and fiscal year end 2014, respectively, if recognized, would favorably affect the effective income tax rate in future periods. Unrecognized tax benefits are recorded in Other non-current liabilities and in the deferred tax accounts in the accompanying Condensed Consolidated Balance Sheets.

The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company's unrecognized tax benefit liabilities include interest and penalties as of the end of the second quarter of fiscal 2015 and fiscal year end 2014, of $5.2 million and $4.7 million, respectively, which were recorded in Other non-current liabilities in the accompanying Condensed Consolidated Balance Sheets.