v3.25.2
Income Taxes
 6 Months Ended
Jun. 28, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
At the end of each interim reporting period, the Company makes an estimate of its annual effective income tax rate. Tax expense in interim periods is calculated at the estimated annual effective tax rate plus or minus the tax effects of items of income and expense that are discrete to the period. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods.
The following table provides details of income taxes:
Three Months EndedSix Months Ended
June 28, 2025June 29, 2024June 28, 2025June 29, 2024
Net earnings before income taxes$680 $580 $1,227 $490 
Income tax expense165 135 280 83 
Effective tax rate24 %23 %23 %17 %
The effective tax rate for the three months ended June 28, 2025 of 24% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by excess tax benefits of share-based compensation. The effective tax rate for the six months ended June 28, 2025 of 23% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by excess tax benefits of share-based compensation.
The effective tax rate for the three months ended June 29, 2024 of 23% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by the tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions and excess tax benefits of share-based compensation. The effective tax rate for the six months ended June 29, 2024 of 17% was lower than the U.S. federal statutory tax rate of 21% primarily due to the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allowed for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return, and excess tax benefits of share-based compensation, offset by the non-tax deductible loss on the extinguishment of the Silver Lake Convertible Debt in the first quarter of 2024 and state tax expense.
The effective tax rate for the three months ended June 28, 2025 of 24% was higher than the effective tax rate for the three months ended June 29, 2024 of 23%, primarily due to tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024 and lower excess tax benefits of share-based compensation in 2025. The effective tax rate for the six months ended June 28, 2025 of 23% was higher than the effective tax rate for the six months ended June 29, 2024 of 17%, primarily due to the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allowed for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return and tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024, offset by the non-tax deductible loss on the extinguishment of Silver Lake Convertible Debt in 2024.
Subsequent to quarter end, on July 4, 2025, the "One Big Beautiful Bill Act" was enacted into law, introducing a broad range of changes to the U.S. corporate income tax framework. The legislation includes business provisions that may impact the Company's tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. The Company is currently evaluating the potential effects of these changes on its financial statements, inclusive of its income tax provision, income tax payable, and deferred tax asset balances. Due to the timing of the bill's enactment, the financial impact of this legislation is not reflected in this quarter's results. The Company will recognize the effects of this legislation in accordance with the enactment and effective dates of the applicable provisions.