Income Taxes |
6 Months Ended |
|---|---|
Jun. 26, 2020 | |
| Income taxes | |
| Income Taxes | INCOME TAXES The Company recorded income taxes of $438 million (19.9 percent effective tax rate) and $421 million (13.8 percent effective tax rate) during the three months ended June 26, 2020 and June 28, 2019, respectively. The Company recorded income taxes of $653 million (12.5 percent effective tax rate) and $943 million (17.9 percent effective tax rate) during the six months ended June 26, 2020 and June 28, 2019, respectively.
The Company's effective tax rates for the three and six months ended June 26, 2020 and June 28, 2019 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 rate for the six months ended June 26, 2020 included the favorable impact of a $40 million tax benefit associated with the gain recorded upon the acquisition of the remaining interest in fairlife and also included the net tax benefit of various discrete tax items. Refer to Note 2 for additional information on the fairlife acquisition.
The Company's effective tax rates for the three and six months ended June 28, 2019 included $199 million of tax benefit recorded as a result of CCBA no longer qualifying as a discontinued operation. Refer to Note 2.
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. The Company contested the proposed adjustments in U.S. Tax Court and is currently awaiting a decision. Refer to Note 8.
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