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Income Taxes
 6 Months Ended
Jul. 01, 2023
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
July 1, 2023July 2, 2022July 1, 2023July 2, 2022
Net earnings before income taxes$487 $300 $846 $520 
Income tax expense114 71 194 23 
Effective tax rate23 %24 %23 %4 %
The effective tax rate for the three months ended July 1, 2023 of 23% and the effective tax rate for the six months ended July 1, 2023 of 23% were 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 July 2, 2022 of 24% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense. The effective tax rate for the six months ended July 2, 2022 of 4% was lower than the U.S. federal statutory tax rate of 21% primarily due to a net deferred tax benefit as a result of an intra-group transfer of certain IP rights, higher excess tax benefits of share-based compensation, and a higher foreign derived intangible income deduction in 2022.
The effective tax rate for the three months ended July 1, 2023 of 23% was lower than the effective tax rate for the three months ended July 2, 2022 of 24%, primarily due to higher excess tax benefits of share-based compensation in 2023. The effective tax rate for the six months ended July 1, 2023 of 23% was higher than the effective tax rate for the six months ended July 2, 2022 of 4%, primarily due to a net deferred tax benefit as a result of an intra-group transfer of certain IP rights, higher excess tax benefits of share-based compensation, and a higher foreign derived intangible income deduction in 2022.