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Income Taxes (Tables) | 12 Months Ended
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Dec. 28, 2024
Income Tax Disclosure [Abstract] |
Income Before Income Taxes | Income from continuing operations before income taxes is as follows:
(In millions) | 2024 | 2023 | 2022
U.S. | $ | 739 |  | $ | 905 |  | $ | 810 |
Non-U.S. | 204 |  | 182 |  | 206 |
Income from continuing operations before income taxes | $ | 943 |  | $ | 1,087 |  | $ | 1,016 |
Income Tax Expense (Benefit) | Income tax expense is summarized as follows:
(In millions) | 2024 | 2023 | 2022
Current expense: |  |  |
Federal | $ | 84 |  | $ | 267 |  | $ | 272 |
State | 21 |  | 18 |  | 33 |
Non-U.S. | 61 |  | 72 |  | 69 |
| 166 |  | 357 |  | 374 |
Deferred expense (benefit): |  |  |
Federal | (34) |  | (181) |  | (182) |
State | (24) |  | 1 |  | (29) |
Non-U.S. | 10 |  | (12) |  | (9) |
| (48) |  | (192) |  | (220) |
Income tax expense | $ | 118 |  | $ | 165 |  | $ | 154 |
Effective Income Tax Rate Reconciliation | The following table reconciles the U.S. Federal statutory income tax rate to our effective income tax rate:
| 2024 | 2023 | 2022
U.S. Federal statutory income tax rate | 21.0% | 21.0% | 21.0%
Increase (decrease) resulting from: |  |  |
State income taxes, net of federal tax benefit | (0.2) | 1.4 | 0.3
Non-U.S. tax rate differential and foreign tax credits | 2.1 | 1.5 | 1.8
Research and development tax credits | (5.4) | (4.7) | (5.0)
Uncertain tax positions release for 2012 to 2017 IRS audit | (2.9) | — | —
Foreign-derived intangible income deduction | (1.7) | (3.2) | (2.5)
Other, net | (0.4) | (0.8) | (0.4)
Effective income tax rate | 12.5% | 15.2% | 15.2%
Reconciliation of Unrecognized Tax Benefits | A reconciliation of these unrecognized tax benefits is as follows:
(In millions) | 2024 | 2023 | 2022
Balance at beginning of year | $ | 222 |  | $ | 231 |  | $ | 207 |
Additions for tax positions related to current year | 17 |  | 16 |  | 24 |
Additions for tax positions of prior years | 4 |  | 3 |  | — |
Reductions for tax positions of prior years | — |  | (28) |  | — |
Reductions for settlements | (28) |  | — |  | — |
Balance at end of year | $ | 215 |  | $ | 222 |  | $ | 231 |
Deferred Taxes | The significant components of our net deferred tax assets/(liabilities) are provided below:
(In millions) | December 28, 2024 | December 30, 2023
Capitalized research and development expenditures | $ | 631 |  | $ | 520 |
Accrued liabilities (a) | 224 |  | 228 |
U.S. operating loss and tax credit carryforwards (b) | 212 |  | 216 |
Obligation for pension and postretirement benefits | 109 |  | 123 |
Deferred compensation | 94 |  | 103 |
Operating lease liabilities | 93 |  | 102 |
Non-U.S. operating loss and tax credit carryforwards (c) | 88 |  | 73 |
Prepaid pension benefits | (562) |  | (387) |
Property, plant and equipment, principally depreciation | (198) |  | (211) |
Amortization of goodwill and other intangibles | (184) |  | (185) |
Operating lease right-of-use assets | (90) |  | (99) |
Valuation allowance on deferred tax assets | (82) |  | (82) |
Other leasing transactions, principally leveraged leases | (42) |  | (47) |
Other, net | (32) |  | (5) |
Deferred taxes, net | $ | 261 |  | $ | 349 |
(a)Accrued liabilities include warranty reserves, self-insured liabilities and interest. (b)At December 28, 2024, U.S. operating loss and tax credit carryforward benefits of $166 million expire through 2044 if not utilized and $46 million may be carried forward indefinitely. (c)At December 28, 2024, non-U.S. operating loss and tax credit carryforward benefits of $80 million may be carried forward indefinitely. The following table presents the breakdown of our deferred taxes:
(In millions) | December 28, 2024 | December 30, 2023
Manufacturing group: |  |
Deferred tax assets, net of valuation allowance | $ | 394 |  | $ | 443 |
Deferred tax liabilities | (96) |  | (56) |
Finance group – Deferred tax liabilities | (37) |  | (38) |
Net deferred tax asset | $ | 261 |  | $ | 349 |

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