Motorola Solutions Inc

7. 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:

The effective tax rate for the three months ended September 28, 2024 of 19% was lower than the U.S. federal statutory tax rate of 21% primarily due to favorable U.S. return-to-provision adjustments, excess tax benefits of share-based compensation, and tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions, partially offset by state tax expense. The effective tax rate for the nine months ended September 28, 2024 of 18% was lower than the U.S. federal statutory tax rate of 21% primarily due to favorable U.S. return-to-provision adjustments (inclusive of the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allows for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return), excess tax benefits of share-based compensation, and tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions, partially 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 September 30, 2023 of 21% was equal to the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by the excess tax benefits of share-based compensation and favorable U.S. return-to-provision adjustments. The effective tax rate for the nine months ended September 30, 2023 of 22% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, partially offset by the excess tax benefits of share-based compensation and favorable U.S. return-to-provision adjustments.

The effective tax rate for the three months ended September 28, 2024 of 19% was lower than the effective tax rate for the three months ended September 30, 2023 of 21%, primarily due to higher excess tax benefits of share-based compensation and tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024. The effective tax rate for the nine months ended September 28, 2024 of 18% was lower than the effective tax rate for the nine months ended September 30, 2023 of 22%, primarily due to the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allows for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return, tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions, and higher excess tax benefits of share-based compensation in 2024, offset by the non-tax deductible loss on the extinguishment of Silver Lake Convertible Debt in 2024.