Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE G – INCOME TAXES

Our effective tax rate from continuing operations is presented below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Effective tax rate from continuing operations	23.3	%	13.2	%	25.2	%	1.1	%

The changes in our reported tax rates for the third quarter and first nine months of 2022, as compared to the same periods in 2021, relate primarily to the impact of certain receipts and charges that are taxed at different rates than our effective tax rate. These include intangible asset impairment charges, acquisition/divestiture-related charges and receipts, litigation-related net charges, investment portfolio net losses (gains), as well as certain discrete tax items primarily related to foreign return-to-provision adjustments, changes in valuation allowance and changes in tax laws.

As of September 30, 2022, we had $419 million of gross unrecognized tax benefits, of which a net $340 million, if recognized, would affect our effective tax rate. As of December 31, 2021, we had $255 million of gross unrecognized tax benefits, of which a net $177 million, if recognized, would affect our effective tax rate. The change in our gross unrecognized tax benefit is primarily related to positions on new entities we acquired through recent acquisitions and restructuring activities.

It is reasonably possible that within the next 12 months, we will resolve multiple issues with foreign, federal and state taxing authorities, resulting in a reduction in our balance of unrecognized tax benefits of up to $54 million.