Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes

The consolidated effective tax rate for the quarters ended September 30, 2023 and October 1, 2022 was 28% and 19%, respectively. The consolidated effective tax rates for the year-to-date periods ended September 30, 2023 and October 1, 2022 was 24% and 21%, respectively.

The increase in effective tax rate for the quarter ended September 30, 2023 versus the prior year quarter is due to zero tax benefit recognized on the $113 million loss incurred on the divestiture of the Russia business.

As of September 30, 2023, the Company classified $11 million of unrecognized tax benefits as a 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 September 30, 2023 was $34 million. Of this balance, $28 million represents the amount that, if recognized, would affect the Company’s effective income tax rate in future periods.