Taxes On Income From Continuing Operations

6 Months Ended

Jul. 01, 2012

Taxes On Income From Continuing Operations

Note 11—Taxes on income from continuing operations

	Three Months Ended						Six Months Ended
	July 1, 2012			June 26, 2011			July 1, 2012			June 26, 2011
Effective income tax rate		(0.6	)%		21.3	%		1.8	%		22.6	%

The effective income tax rate for the three months and six months ended July 1, 2012 was (0.6)% and 1.8% , respectively, compared to 21.3% and 22.6% for the three months and six months ended June 26, 2011, respectively. The decrease in the effective tax rate for the three months ended July 1, 2012 is primarily due to (i) a $7.7 million tax benefit on the settlement of foreign tax audits and (ii) a $5.0 million reduction in deferred tax liability resulting from a reduction in tax expense associated with potential future repatriation of non-permanently reinvested foreign earnings. In addition to the aforementioned items, the decrease in the effective tax rate for the six months ended July 1, 2012 was also impacted by a goodwill impairment charge recorded in the first quarter of 2012 for which only $45 million was tax deductible. Accordingly, the reduction in the tax rate for the six months ended July 1, 2012 reflects our inability to realize the full benefit of this charge.