Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

For interim periods, we recognize income tax expense by applying the estimated annual effective income tax rate to year-to-date results unless this method does not result in a reliable estimate of year-to-date income tax expense. Each period, the income tax accrual is adjusted to the latest estimate, and the difference from the previously accrued year-to-date balance is adjusted in the current quarter. Changes in profitability estimates in various jurisdictions will impact our quarterly effective income tax rates.

The tax provision for income taxes from continuing operations for the six months ended June 30, 2022 and 2021, reflected an estimated annual effective tax rate of 25% and 24%, respectively, excluding discrete items discussed below. The total effective tax rate for continuing operations for the three and six months ended June 30, 2022, was 25% and 24%, compared to 23% for the comparable periods in 2021, respectively.

We recorded a net discrete tax benefit of $9 million in both the six months ended June 30, 2022 and 2021, with the most significant benefit related to excess tax benefits from stock-based compensation in 2022 and the most significant benefits related to stock-based compensation and adjustments to the prior year, including an adjustment to the deferred tax rate in 2021.