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						Six Months Ended
	July 2, 2016			July 4, 2015			July 2, 2016			July 4, 2015
Earnings from continuing operations before income taxes	$	167		$	215		$	189		$	343
Income tax expense	59			64			64			104
Effective tax rate	35		%	30		%	34		%	30		%

The Company recorded $59 million of net tax expense in the second quarter of 2016 resulting in an effective tax rate of 35%, compared to $64 million of net tax expense in the second quarter of 2015 resulting in an effective tax rate of 30%. The effective tax rate in the second quarter of 2016 was equal to the U.S. statutory tax rate of 35% and was impacted by discrete adjustments to deferred tax assets of foreign subsidiaries, offset by excess tax benefits on share-based compensation. The effective tax rate in the second quarter of 2015 was lower than the U.S. statutory tax rate of 35% primarily due to the rate differential for foreign affiliates and the U.S. domestic production tax deduction.

The Company recorded $64 million of net tax expense in the first half of 2016 resulting in an effective tax rate of 34%, compared to $104 million of net tax expense resulting in an effective tax rate of 30% in the first half of 2015. The effective tax rate for the first half of 2016 was lower than the U.S. statutory tax rate of 35% partly due to the recognition of excess tax benefits on share-based compensation. The effective tax rate in the first half of 2015 was lower than the U.S. statutory tax rate of 35% primarily due to the rate differential for foreign affiliates and the U.S. domestic production tax deduction.