Income Taxes

9 Months Ended

Sep. 26, 2020

Income Tax Disclosure [Abstract]

Income Taxes

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 26, 2020			September 28, 2019			September 26, 2020			September 28, 2019
Net earnings before income taxes	$	251		$	348		$	652		$	808
Income tax expense	45			80			112			180
Effective tax rate	18		%	23		%	17		%	22		%

During the three and nine months ended September 26, 2020, the Company recorded $45 million and $112 million of net tax expense, resulting in an effective tax rate of 18% and 17%, respectively. During the three and nine months ended September 28, 2019, the Company recorded $80 million and $180 million of net tax expense, resulting in an effective tax rate of 23% and 22%, respectively. The three and nine months ended September 26, 2020 and September 28, 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 stock compensation and favorable U.S. return-to-provision adjustments. The effective tax rate for the three and nine months ended September 26, 2020 of 18% and 17%, respectively, is lower than the effective tax rate for the three and nine months ended

September 28, 2019 of 23% and 22%, respectively, primarily due to an increased benefit of forecasted research and development tax credit in the annual effective tax rate and favorable U.S. return-to-provision adjustments recorded in 2020.