Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

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INCOME TAXES
 6 Months Ended
Jul. 01, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company recorded income taxes of $384 million (16.8 percent effective tax rate) and $994 million (27.5 percent effective tax rate) during the three months ended July 1, 2022 and July 2, 2021, respectively. The Company recorded income taxes of $1,049 million (18.3 percent effective tax rate) and $1,502 million (23.5 percent effective tax rate) during the six months ended July 1, 2022 and July 2, 2021, respectively.
The Company’s effective tax rates for the three and six months ended July 1, 2022 and July 2, 2021 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, as described in Note 11, 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. rate.
The Company’s effective tax rates for the three and six months ended July 2, 2021 included $183 million and $176 million, respectively, of net tax expense related to various discrete tax items, primarily changes in tax laws in certain foreign jurisdictions.
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 the court predominantly sided with the IRS. The Company strongly disagrees with the Opinion and intends to vigorously defend its position. Refer to Note 8.