v2.4.0.8

Income Taxes (Tables)

12 Months Ended

Dec. 28, 2013

Income Tax Disclosure [Abstract]

Income before income taxes

U.S. and foreign income before taxes are set forth below:

		2013				2012				2011
U.S.		$	464			$	504			$	266
Foreign		1,087				1,641				1,393
		$	1,551			$	2,145			$	1,659

Details of income tax provision (benefit)

The details of our income tax provision (benefit) are set forth below:

				2013				2012				2011
Current:		Federal		$	159			$	160			$	78
		Foreign		330				314				374
		State		22				35				9
				$	511			$	509			461
Deferred:		Federal		$	42			$	91			(83		)
		Foreign		(53		)		(57		)		(40		)
		State		(13		)		(6		)		(14		)
				(24		)		28				(137		)
				$	487			$	537			$	324

Effective income tax and tax rate reconciliation

The reconciliation of income taxes calculated at the U.S. federal tax statutory rate to our effective tax rate is set forth below:

		2013							2012							2011
U.S. federal statutory rate		$	543			35.0	%		$	751			35.0	%		$	580			35.0	%
State income tax, net of federal tax benefit		3				0.2			4				0.2			2				0.1
Statutory rate differential attributable to foreign operations		(177		)		(11.4	)		(165		)		(7.7	)		(218		)		(13.1	)
Adjustments to reserves and prior years		49				3.1			(47		)		(2.2	)		24				1.4
Net benefit from LJS and A&W divestitures		—				—			—				—			(72		)		(4.3	)
Change in valuation allowances		23				1.5			14				0.6			22				1.3
Other, net		46				3.0			(20		)		(0.9	)		(14		)		(0.9	)
Effective income tax rate		$	487			31.4	%		$	537			25.0	%		$	324			19.5	%

Details of deferred tax assets (liabilities)

The details of 2013 and 2012 deferred tax assets (liabilities) are set forth below:

		2013				2012
Operating losses and tax credit carryforwards		$	310			$	337
Employee benefits		182				251
Share-based compensation		118				108
Self-insured casualty claims		48				50
Lease-related liabilities		120				115
Various liabilities		88				82
Property, plant and equipment		42				39
Deferred income and other		58				57
Gross deferred tax assets		966				1,039
Deferred tax asset valuation allowances		(203		)		(200		)
Net deferred tax assets		$	763			$	839
Intangible assets, including goodwill		$	(233	)		$	(256	)
Property, plant and equipment		(93		)		(95		)
Other		(55		)		(48		)
Gross deferred tax liabilities		$	(381	)		$	(399	)
Net deferred tax assets (liabilities)		$	382			$	440

Reported in Consolidated Balance Sheets as:
Deferred income taxes – current		$	123			$	127
Deferred income taxes – long-term		399				467
Accounts payable and other current liabilities		(2		)		(5		)
Other liabilities and deferred credits		(138		)		(149		)
		$	382			$	440

Loss carryforwards, by year of expiration

At December 28, 2013, the Company has foreign operating and capital loss carryforwards of $0.6 billion and U.S. state operating loss, capital loss and tax credit carryforwards of $1.2 billion and U.S. federal capital loss and tax credit carryforwards of $0.2 billion.  These losses are being carried forward in jurisdictions where we are permitted to use tax losses from prior periods to reduce future taxable income and will expire as follows:

		Year of Expiration
		2014				2015-2018				2019-2033				Indefinitely				Total
Foreign		$	38			$	132			$	91			$	325			$	586
U.S. state		16				105				1,040				—				1,161
U.S. federal		—				90				64				—				154
		$	54			$	327			$	1,195			$	325			$	1,901

Unrecognized tax benefits reconciliation

The Company had $243 million and $309 million of unrecognized tax benefits at December 28, 2013 and December 29, 2012, respectively, $170 million and $184 million of which, if recognized, would impact the effective income tax rate.  A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:

		2013				2012
Beginning of Year		$	309			$	348
Additions on tax positions - current year		19				50
Additions for tax positions - prior years		55				23
Reductions for tax positions - prior years		(102		)		(90		)
Reductions for settlements		(23		)		(6		)
Reductions due to statute expiration		(16		)		(16		)
Foreign currency translation adjustment		1				—
End of Year		$	243			$	309

Summary of income tax examinations

The following table summarizes our major jurisdictions and the tax years that are either currently under audit or remain open and subject to examination:

Jurisdiction		Open Tax Years
U.S. Federal		2004 – 2013
China		2010 – 2013
United Kingdom		2010 – 2013
Mexico		2006 – 2013
Australia		2009 – 2013

In addition, the Company is subject to various U.S. state income tax examinations, for which, in the aggregate, we had significant unrecognized tax benefits at December 28, 2013, each of which is individually insignificant.

The accrued interest and penalties related to income taxes at December 28, 2013 and December 29, 2012 are set forth below:

		2013				2012
Accrued interest and penalties		$	64			$	50

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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