Income Taxes

3 Months Ended

Mar. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The determination of the Company’s overall effective tax rate requires the use of estimates. The effective tax rate reflects the income earned and taxed in various United States federal and state jurisdictions based on enacted tax law, permanent differences between book and tax items, tax credits and the Company’s change in relative income in each jurisdiction.

The Company estimated its annual effective tax rate for the full fiscal year and applied the annual effective tax rate to the results of the 13-weeks ended March 30, 2019 and March 31, 2018 for purposes of determining its year-to-date tax provision.

For the 13-weeks ended March 30, 2019, the Company's effective income tax rate was 22%, compared to the 21% federal corporate income tax rate, primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax

items included a tax benefit of $2 million, primarily related to the reduction of an unrecognized tax benefit following a lapse of the statute of limitations and a tax benefit of $1 million, primarily related to excess tax benefits associated with share-based compensation. For the 13-weeks ended March 31, 2018, the Company's effective income tax rate was (7)%, compared to the 21% federal corporate income tax rate, primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax benefit of $19 million, primarily related to the reduction of an unrecognized tax benefit due to the receipt of an affirmative written consent from the IRS to change a method of accounting, and a tax benefit of $2 million, primarily related to excess tax benefits associated with share-based compensation.