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Income Taxes
6 Months Ended
Jul. 03, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income taxes
The consolidated effective tax rate for the quarters ended July 3, 2021 and June 27, 2020 was 27% and 23%, respectively. The consolidated effective tax rate for the year-do-date periods ended July 3, 2021 and June 27, 2020 was 25% and 22%, respectively. The effective tax rate for the quarter and year-to-date periods ended July 3, 2021, were unfavorably impacted by tax legislation in the United Kingdom (UK). During the second quarter of 2021, the Company recorded tax expense of $23 million as a result of tax legislation enacted in the UK in June 2021, which increased the statutory UK tax rate from 19 percent to 25 percent for tax periods after April 1, 2023. The Company revalued its net deferred tax balances related to the UK business to reflect the increased tax rate.

As of July 3, 2021, the Company classified $15 million of unrecognized tax benefits as a net current tax liability. Management's estimate of reasonably possible changes in unrecognized tax benefits during the next twelve months consists of the current liability expected to be settled within one year, offset by approximately $3 million of projected additions related primarily to ongoing intercompany transfer pricing activity. Management is currently unaware of any issues under review that could result in significant additional payments, accruals or other material deviation in this estimate.
The Company’s total gross unrecognized tax benefits as of July 3, 2021 was $62 million. Of this balance, $53 million represents the amount that, if recognized, would affect the Company’s effective income tax rate in future periods.
The accrual balance for tax-related interest was approximately $14 million at July 3, 2021.