The increase in interest and investment income for the quarter was primarily due to gains on sales of investments in the current quarter.
The effective income tax rate was as follows:
|April 1,||April 2,|
|Effective income tax rate||32||.3||%||34||.0||%||1||.7||ppt|
The decrease in the effective income tax rate for the quarter was
primarily due to the favorable impact from the adoption of a new
accounting pronouncement ($53 million). In the first quarter of the
current year, the Company adopted new accounting guidance, which
requires that excess tax benefits or tax deficiencies on employee
share-based awards be included in “Income taxes” in the Condensed
Consolidated Statement of Income. These amounts were previously recorded
in “Common stock” in the Condensed Consolidated Balance Sheet. An excess
tax benefit arises when the value of an employee share-based award on
the exercise or vesting date is higher than the fair value on the grant
date. A tax deficiency arises when the value on the exercise or vesting
date is lower than the grant date fair value.