Income Taxes

6 Months Ended

Jun. 27, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes

The consolidated effective tax rate for the quarter ended June 27, 2020 was 23% as compared to 20% in the same quarter of the prior year. The consolidated effective tax rate for the year-to-date periods ended June 27, 2020 and June 29, 2019 was 22% and 20%, respectively. The effective tax rate for the quarter and year-to-date periods ended June 27, 2020, were unfavorably impacted by the remeasurement of deferred taxes primarily due to a change in the Company's indefinite reinvestment assertion on foreign earnings of a subsidiary during the second quarter.

As of June 27, 2020, the Company classified $22 million of unrecognized tax benefits as a net current tax liability. The Company believes a decrease of $44 million in unrecognized tax benefits during the next twelve months is reasonably possible, primarily due to finalization of tax examinations. In addition, this decrease is expected to be offset by approximately $3 million of projected additions related primarily to ongoing intercompany transfer pricing activity. Management is currently unaware of any issues under review that could result in significant additional payments, accruals or other material deviation in this estimate.

The Company’s total gross unrecognized tax benefits as of June 27, 2020 was $95 million. Of this balance, $85 million represents the amount that, if recognized, would affect the Company’s effective income tax rate in future periods.

December 28, 2019	$	90
Tax positions related to current year:
Additions	3
Reductions	—
Tax positions related to prior years:
Additions	3
Reductions	—
Settlements	(1)
Lapse in statute of limitations	—
June 27, 2020	$	95

The accrual balance for tax-related interest was approximately $13 million at June 27, 2020.