Income Taxes

6 Months Ended

Jun. 29, 2019

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
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
Net earnings before income taxes	$	176		$	275		$	401		$	460
Income tax expense	40			67			67			100
Effective tax rate	23		%	24		%	17		%	22		%

During the three and six months ended June 27, 2020, the Company recorded $40 million and $67 million of net tax expense, resulting in an effective tax rate of 23% and 17%, respectively. During the three and six months ended June 29, 2019, the Company recorded $67 million and $100 million of net tax expense, resulting in an effective tax rate of 24% and 22%, respectively. The three months ended June 27, 2020 and June 29, 2019 effective tax rates are different from the U.S. federal statutory tax rate of 21% due to state tax expense, offset primarily by tax benefits related to a stock compensation adjustment. The six months ended June 27, 2020 and June 29, 2019 effective tax rates are different from the U.S. federal statutory tax rate of 21% due to state tax expense, offset by excess tax benefits on share-based compensation. The effective tax rate for the three months ended June 27, 2020 of 23% is lower than the effective tax rate for the three months ended June 29, 2019 of 24%, primarily due to an increased benefit of forecasted research and experimental development investment tax credit in the annual effective tax rate. The effective tax rate for the six months ended June 27, 2020 of 17% is lower than the effective tax rate for the six months ended June 29, 2019 of 22%, primarily due to higher excess tax benefits on share-based compensation.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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