INCOME TAXES |
6 Months Ended |
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Jun. 28, 2024 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES The Company recorded income taxes of $627 million (20.7% effective tax rate) and $359 million (12.5% effective tax rate) during the three months ended June 28, 2024 and June 30, 2023, respectively. The Company recorded income taxes of
$1,314 million (19.0% effective tax rate) and $1,299 million (18.7% effective tax rate) during the six months ended June 28, 2024 and June 30, 2023, respectively.
The Company’s effective tax rates for the three and six months ended June 28, 2024 and June 30, 2023 vary from the statutory U.S. federal tax rate of 21.0% primarily due to the tax impact of significant operating and nonoperating items, as described in Note 12, along with the tax benefits of having significant earnings generated outside of 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. federal tax rate.
The Company’s effective tax rates for the three and six months ended June 28, 2024 included $119 million and $60 million, respectively, of net tax expense related to various discrete tax items, including the resolution of certain foreign tax matters.
The Company’s effective tax rates for the three and six months ended June 30, 2023 included $120 million and $125 million, respectively, of net tax benefits related to various discrete tax items, including a change in tax law in a certain foreign jurisdiction.
On November 18, 2020, the Tax Court issued the Opinion regarding the Company’s 2015 litigation with the IRS involving transfer pricing tax adjustments in which it predominantly sided with the IRS. On November 8, 2023, the Tax Court issued a supplemental opinion, siding with the IRS in concluding both that the blocked-income regulations apply to the Company’s operations and that the Tax Court opinion in 3M Co. & Subs. v. Commissioner (February 9, 2023) controlled as to the validity of those regulations. The Company strongly disagrees with the Opinions and intends to vigorously defend its position. Refer to Note 9.
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