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						Nine Months Ended
	September 30, 2017			October 1, 2016			September 30, 2017			October 1, 2016
Net earnings before income taxes	$	286		$	293		$	610		$	482
Income tax expense	73			100			188			164
Effective tax rate	26		%	34		%	31		%	34		%

The Company recorded $73 million of net tax expense during the three months ended September 30, 2017, resulting in an effective tax rate of 26%, compared to $100 million of net tax expense during the three months ended October 1, 2016, resulting in an effective tax rate of 34%. The effective tax rate in the third quarter of 2017 was lower than the U.S. statutory tax rate of 35% primarily driven by a tax benefit due to the recognition of a U.S. capital loss. The effective tax rate in the third quarter of 2016 was lower than the U.S. statutory tax rate of 35% partly due to favorable discrete adjustments to deferred tax assets of foreign subsidiaries.

The Company recorded $188 million of net tax expense during the nine months ended September 30, 2017, resulting in an effective tax rate of 31%, compared to $164 million of net tax expense during the nine months ended October 1, 2016, resulting in an effective tax rate of 34%. The effective tax rate in the first nine months of 2017 was lower than the U.S. statutory tax rate of 35% primarily due to a tax benefit due to the recognition of a U.S. capital loss. The effective tax rate in the first nine months 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.