12.

Income Taxes

Our effective tax rates for the periods presented were as follows:


	Nine Months Ended
	January 27, 2012			January 28, 2011
Effective tax rates		14.7	%		12.5	%

Our effective tax rates reflect the impact of a significant amount of our earnings being taxed in foreign jurisdictions at rates below the U.S. statutory tax rate.

In January 2012, we reached agreement with the U.S. Internal Revenue Service (IRS) with regards to a tax position taken during prior periods. As a result of the settlement and resulting remeasurement of our tax positions, we recorded a discrete tax expense of $11.7 million, net of federal benefit, during the three and nine months ended January 27, 2012. In addition, we recognized a net increase of $17.4 million to the balance of our unrecognized tax benefits related to prior years as a result of the settlement and remeasurement.

As of January 27, 2012, we had $155.5 million of unrecognized tax benefits, of which $104.3 million has been recorded in other long-term liabilities and $96.6 million, including penalties and interest, would affect our provision for income taxes if recognized. During the nine months ended January 27, 2012, there was a gross increase in our unrecognized tax benefits of $8.0 million for tax positions related to the current year, and a gross increase of $20.3 million and gross decrease of $6.0 million for tax positions related to prior years.

In accordance with our accounting policy, we recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. Interest and penalties recognized through income tax expense during the three and nine months ended January 27, 2012 and January 28, 2011 were not material.

In February 2012, the IRS commenced an examination of our fiscal 2008 through fiscal 2010 income tax returns. We are also under audit by the California Franchise Tax Board for our fiscal 2007 and 2008 California income tax returns. Our open years in U.S. federal jurisdictions are fiscal 2005 and later years. In addition, we are effectively subject to federal tax examination adjustments for tax years ended on or after fiscal year 2000, in that we have tax attribute carryforwards from these years that could be subject to adjustments, if and when utilized.

On September 17, 2010, the Danish Tax Authorities issued a decision concluding that distributions declared in 2005 and 2006 from our Danish subsidiary were subject to Danish at-source dividend withholding tax. We do not believe that our Danish subsidiary is liable for withholding tax and filed an appeal with the Danish Tax Tribunal to that effect. On December 19, 2011, the Danish Tax Tribunal issued a ruling that our Danish subsidiary was not liable for Danish withholding tax. The ruling is subject to appeal to the Danish High Court.

We are in various stages of the examination and appeals process in connection with tax audits worldwide and it is difficult to determine when these examinations will be settled. It is reasonably possible that over the next twelve-month period, we may experience an increase or decrease in unrecognized tax benefits. It is not possible to determine either the magnitude or the range of any increase or decrease at this time.

In April 2010, our Dutch subsidiary received a favorable tax ruling from the Dutch tax authorities effective May 1, 2010 that replaced the previous Dutch tax ruling which expired on April 30, 2010. This ruling resulted in both a lower level of earnings subject to tax in the Netherlands and an extension of the expiration date to April 30, 2015.

On December 17, 2010, the Tax Relief Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the Act) was signed into law. Under the Act, the federal research credit was retroactively extended for amounts paid or incurred after December 31, 2009, and before January 1, 2012. Unless retroactively extended again, the federal research credit expired on December 31, 2011.