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Income Taxes
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9 Months Ended |
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Jun. 29, 2014
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| Notes to Financial Statements [Abstract] | |
| Note 4 - Income Taxes |
Note 4 — Income Taxes
The Company estimates its annual effective income tax rate for continuing operations to be approximately 14% for fiscal 2014, which is less than the 16% effective income tax rate for fiscal 2013. Tax benefits from foreign income taxed at rates lower than rates in the United States are expected to be approximately 20% in fiscal 2014, compared to 17% in fiscal 2013. The estimated annual effective tax rate for fiscal 2014 reflects the United States federal research and development tax credit generated through December 31, 2013, the date on which the credit expired. The annual effective tax rate for fiscal 2013 included a tax benefit of $64 million related to fiscal 2012 due to the retroactive extension of the United States federal research and development tax credit in fiscal 2013.
The Company had unrecognized tax benefits of $85 million and $221 million at June 29, 2014 and September 29, 2013, respectively. The total amount of unrecognized tax benefits decreased due to an agreement reached with the Internal Revenue Service on components of the Company’s fiscal 2013 tax return. As a result, the Company recorded a tax benefit of $66 million in the third quarter of fiscal 2014. Additionally, the Company believes that several other audits will be resolved within the next 12 months, further decreasing the unrecognized tax benefits, which will reduce the effective tax rate to the extent tax benefits are sustained or in the settlement of the liability with the tax authorities to the extent not sustained.
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