Income Taxes

6 Months Ended

Jun. 25, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s tax provision is comprised of the most recent estimated annual effective tax rate applied to year-to-date ordinary income before taxes. The tax impacts of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are recorded discretely in the interim period in which they occur.

Income tax expense (benefit) was $(19) million and $17 million for the three months ended June 25, 2022 and June 26, 2021, respectively. The effective income tax rate for the three months ended June 25, 2022 was 24.8% compared to 32.6% for the three months ended June 26, 2021. The decrease in income tax expense and tax rate was primarily driven by a favorable discrete tax adjustment related to the trade name impairment charge for the three months ended June 25, 2022.

Income tax expense (benefit) was $(6) million and $13 million for the six months ended June 25, 2022 and June 26, 2021, respectively. The effective income tax rate for the six months ended June 25, 2022 was 20.6% compared to 45.2% for the six months ended June 26, 2021. The net decrease in income tax expense and tax rate was primarily driven by a favorable discrete tax adjustment related to the trade name impairment charge for the six months ended June 25, 2022, and favorable discrete tax adjustments related to non-deductible loss on debt extinguishment as well as tax deductible costs incurred related to the initial public offering for the six months ended June 26, 2021.