for employee severance benefits and $2.6 million for lease cancellations. These actions will result in the termination of 461 employees, 448 of which had been terminated prior to the end of 2005. 

Fiscal 2003 Restructuring Actions 

The Company recorded total restructuring charges of approximately $26.8 million during 2003, including approximately $7.4 million in severance costs, a $5.0 million charge to write-off deferred compensation, $7.1 million in asset impairments, and a $7.3 million charge for lease cancellations primarily related to the closure of the Company’s Singapore manufacturing operations during the first quarter of 2003. Of the $26.8 million charge, all had been utilized by the end of 2005, except for approximately $1.7 million related to operating lease costs on abandoned facilities. These actions resulted in the termination of 353 employees. 

Other Income and Expense 

The Company previously held significant investments in ARM Holdings plc (ARM), Akamai Technologies, Inc. (Akamai), and EarthLink Network, Inc. (EarthLink). T he Company sold all of the remaining holdings in these non-current investments in 2004 and 2003. Pretax gains recorded upon the sale of these non-current investments were $4 million and $10 million in 2004 and 2003, respectively. 

Interest and Other Income, Net 

Total interest and other income, net increased $112 million or 211% to $165 million during 2005 compared to $53 million in 2004 and $83 million in 2003. These increases are attributable primarily to increasing investment yields on the Company’s cash and short-term investments and higher invested balances. The weighted average interest rate earned by the Company on its cash, cash equivalents, and short-term investments increased to 2.70% in 2005 compared to the 1.38% and 1.89% rates earned during 2004 and 2003, respectively. The Company occasionally sells short-term investments prior to their stated maturities. As a result of such sales, the Company recognized net losses of $137,000 in 2005 and net gains of $1 million and $21 million during 2004 and 2003, respectively. Partially offsetting the increase in other income were higher foreign currency hedging expenses. 

Interest expense consisted primarily of interest on the Company’s $300 million aggregate principal amount unsecured notes, which were repaid upon their maturity in February 2004. The unsecured notes were sold at 99.925% of par for an effective yield to maturity of 6.51%. Total deferred gain resulting from the closure of debt swaps of approximately $23 million was fully amortized as of the notes’ maturity in

February 2004. 

Provision for Income Taxes 

The Company’s effective tax rate for the year ended September 24, 2005 was approximately 26%. The Company’s effective rate differs from the statutory federal income tax rate of 35% due primarily to certain undistributed foreign earnings for which no U.S. taxes are provided because such earnings are intended to be indefinitely reinvested outside the U.S., research and development tax credits, and a reduction of certain tax contingency reserves and adjustments to net deferred tax assets. The benefit from adjustments to tax contingency