Income Taxes

6 Months Ended

Jul. 02, 2011

Income Taxes

Income Taxes

Note 14 – Income Taxes

Zebra has identified, evaluated, and measured the amount of income tax benefits to be recognized for all of our income tax positions. Included in deferred tax assets are amounts related to federal and state net operating losses that resulted from our acquisition of WhereNet Corp in 2007. We intend to utilize these net operating loss carryforwards to offset future income taxes owed.

Zebra is currently under U.S. federal income tax audits for years of 2008 and 2009. The tax years 2006 through 2010 remain open to examination by multiple state taxing jurisdictions. Tax authorities in the United Kingdom have completed income tax audits for tax years through 2006.

Zebra's continuing practice is to recognize interest and/or penalties related to income tax matters as part of income tax expense. For the six months ended July 2, 2011 and July 3, 2010, we made no accruals into income tax expense for any interest or penalties.

	Three Months Ended						Six Months Ended
	July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010
Effective tax rate		28.3	%		31.8	%		30.2	%		27.9	%

Zebra's effective tax rate for the first quarter of 2010 included a $2,764,000 reduction of federal taxes related to prior years' adjustments for intercompany profit in ending inventory which reduced our effective rate for the first six months of 2010 by approximately 4.2%. Zebra's effective rate has decreased slightly in 2011 due to higher profits in lower rate international jurisdictions.