Income Taxes |
9 Months Ended |
|---|---|
Sep. 27, 2019 | |
| Income taxes | |
| Income Taxes | INCOME TAXES
The Company recorded income taxes of $503 million (16.3 percent effective tax rate) and $555 million (23.4 percent effective tax rate) during the three months ended September 27, 2019 and September 28, 2018, respectively. The Company recorded income taxes of $1,446 million (17.3 percent effective tax rate) and $1,711 million (23.6 percent effective tax rate) during the nine months ended September 27, 2019 and September 28, 2018, respectively.
The Company's effective tax rates for the three and nine months ended September 27, 2019 and September 28, 2018 vary from the statutory U.S. federal income tax rate of 21.0 percent primarily due to the tax impact of significant operating and nonoperating items, along with the tax benefits of having significant operations outside the United States and significant earnings generated in investments accounted for under the equity method, both of which are generally taxed at rates lower than the statutory U.S. rate.
The Company's effective tax rates for the three and nine months ended September 27, 2019 included $213 million and $245 million, respectively, of net tax benefit recorded, primarily associated with return to provision adjustments. Also included are excess tax benefits associated with the Company's stock-based compensation arrangements and net tax charges for changes to our uncertain tax positions, including interest and penalties, as well as for agreed-upon tax matters. The Company's effective tax rate for the nine months ended September 27, 2019 also included $199 million of tax benefit recorded as a result of CCBA no longer qualifying as a discontinued operation.
The Company's effective tax rates for the three and nine months ended September 28, 2018 included $125 million of tax benefit and $9 million of tax expense, respectively, to adjust our provisional tax estimate recorded as of December 31, 2017 related to the Tax Reform Act signed into law on December 22, 2017.
On September 17, 2015, the Company received a Statutory Notice of Deficiency from the IRS for the tax years 2007 through 2009, after a five-year audit. Refer to Note 9.
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