Three Months Ended

July 31,

2020

July 26,

2019

Effective tax rates

26.0

13.4

Our effective tax rate for the three months ended July 31, 2020 reflects the impact of taxes resulting from the integration of acquired companies. Excluding these acquisition integration-related taxes, our effective tax rate for the first quarter of fiscal 2021 is

approximately 16%, which is lower than the United States (U.S.) statutory tax rate due to a significant amount of our earnings being taxed in foreign jurisdictions at rates below the U.S. statutory tax rate. The remaining differences in effective tax rates for the three months ended July 31, 2020 and July 26, 2019 were primarily due to certain discrete tax expenses, including foreign audit results and differences in discrete tax benefits for stock-based compensation in fiscal 2021.

As of July 31, 2020, we had $220 million of gross unrecognized tax benefits, of which $142 million has been recorded in other long-term liabilities. Inclusive of penalties, interest and certain income tax benefits, $142 million would affect our provision for income taxes if recognized.

We are currently undergoing various income tax audits in the U.S. and audits in several foreign tax jurisdictions. Transfer pricing calculations are key topics under these audits and are often subject to dispute and appeals.

We continue to monitor the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. We engage in continuous discussion and negotiation with taxing authorities regarding tax matters in multiple jurisdictions. We believe that within the next 12 months, it is reasonably possible that either certain audits will conclude, certain statutes of limitations will lapse, or both. As a result of uncertainties regarding tax audits and their possible outcomes, an estimate of the range of possible impacts to unrecognized tax benefits in the next twelve months cannot be made at this time.