Income Taxes

At the end of each interim reporting period, the Company makes an estimate of its annual effective income tax rate. Tax expense in interim periods is calculated at the estimated annual effective tax rate plus or minus the tax effects of items of income and expense that are discrete to the period. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods.

The following table provides details of income taxes:



	Three Months Ended
	April 2, 2016			April 4, 2015
Earnings from continuing operations before income taxes	$	22		$	128
Income tax expense	5			40
Effective tax rate	23		%	31		%

The Company recorded $5 million of net tax expense in the first quarter of 2016 resulting in an effective tax rate of 23%, compared to $40 million of net tax expense in the first quarter of 2015 resulting in an effective tax rate of 31%. The effective tax rate in the first quarter of 2016 was lower than the U.S. statutory tax rate of 35% primarily due to the recognition of excess tax benefits on share-based compensation in income tax expense as a result of the Company's adoption of ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." The rate was also positively impacted by the release of unrecognized tax benefit reserves, offset by increases in state valuation allowances and other adjustments to certain deferred tax assets. The effective tax rate in the first quarter of 2015 was lower than the U.S. statutory tax rate of 35% primarily due to the U.S. domestic production tax deduction and rate differential for foreign affiliates.