Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 14. Income Taxes

The effective tax rates for the three and six months ended June 30, 2023 and 2022 represent our estimate of the annual effective tax rates expected to be applicable for the respective full fiscal years, adjusted for any discrete events which are recorded in the period that they occur.

During the three months ended June 30, 2023, we recognized a tax benefit of $8 million on loss before tax of $147 million. The effective tax rate was driven primarily by the inability to recognize a tax benefit on all interest expense. During the six months ended June 30, 2023, we recognized a tax benefit of $27 million on loss before tax of $299 million. The effective tax rate was driven primarily by the inability to recognize a tax benefit on all interest expense.

During the three months ended June 30, 2022, we recognized a tax expense of $45 million on income from continuing operations before tax of $119 million. The effective tax rate was driven primarily by the mix of income taxed at varying rates among the jurisdictions in which we operate and an inability to recognize a tax benefit on all interest expense. During the six months ended June 30, 2022, we recognized a tax expense of $81 million on income from continuing

operations before tax of $198 million. The effective tax rate was driven primarily by a $14 million discrete expense from the sale of our equity interests in Naturepak Beverage, as well as the mix of income taxed at varying rates among the jurisdictions in which we operate and an inability to recognize a tax benefit on all interest expense.

We are under audit by the Internal Revenue Service (“IRS”) and other taxing authorities. The IRS is currently auditing our U.S. income tax returns for 2016-2017. As of June 30, 2023, we have not received any proposed adjustments from taxing authorities that would be material. Although the ultimate timing is uncertain, it is reasonably possible that a reduction of up to $9 million of unrecognized tax benefits could occur within the next twelve months due to changes in audit status, settlements of tax assessments and other events.