Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate was 22.4 percent and 58.7 percent for the three months ended June 30, 2021 and 2020, respectively, and 23.9 percent and 41.9 percent for the six months ended June 30, 2021 and 2020, respectively. The decrease in both periods primarily reflected the impact of discrete tax charges and lower pretax income in the prior year.

We are under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which we have significant business operations. The tax years under examination and open for examination vary by jurisdiction. We are currently under examination by the IRS for the 2017 and 2018 tax years.

We believe it is reasonably possible that our unrecognized tax benefits could decrease within the next twelve months by as much as $133 million, principally as a result of potential resolutions of prior years’ tax items with various taxing authorities. The prior years’ tax items include unrecognized tax benefits relating to the deductibility of certain expenses or losses and the attribution of taxable income to a particular jurisdiction or jurisdictions. Of the $133 million of unrecognized tax benefits, approximately $105 million relates to amounts that, if recognized, would impact the effective tax rate in a future period.