Income Taxes (Tables)

12 Months Ended

Dec. 28, 2013

Income Taxes

Income (loss) from continuing operations before income taxes

(In millions)	2013		2012		2011
U.S.	$	454	$	644	$	137
Non-U.S.	220		197		200
Total income from continuing operations before income taxes	$	674	$	841	$	337

Income tax expense for continuing operations

(In millions)	2013			2012			2011
Current:
Federal	$	23		$	40		$	(23	)
State	10			9			15
Non-U.S.	56			29			29
	89			78			21
Deferred:
Federal	91			169			67
State	13			23			1
Non-U.S.	(17		)	(10		)	6
	87			182			74
Income tax expense	$	176		$	260		$	95

Federal statutory income tax rate to effective income tax rate for continuing operations

	2013	2012	2011
Federal statutory income tax rate	35.0%	35.0%	35.0%
Increase (decrease) in taxes resulting from:
State income taxes	2.4	2.2	3.1
Non-U.S. tax rate differential and foreign tax credits	(7.2)	(5.4)	(9.4)
Research credit	(3.8)	—	(2.5)
Other, net	(0.3)	(0.9)	1.9
Effective rate	26.1%	30.9%	28.1%

Unrecognized tax benefits and interest related to unrecognized tax benefits

(In millions)	December 28, 2013			December 29, 2012
Balance at beginning of year	$	290		$	294
Additions for tax positions related to current year	15			5
Additions for tax positions of prior years	1			2
Reductions for tax positions of prior years	(17		)	(3		)
Reductions for expiration of statute of limitations and settlements	(5		)	(8		)
Balance at end of year	$	284		$	290

Deferred tax assets and liabilities

(In millions)	December 28,  2013			December 29,  2012
Deferred tax assets
Obligation for pension and postretirement benefits	$	358		$	643
Accrued expenses*	182			205
Deferred compensation	161			180
Loss carryforwards	84			81
Allowance for credit losses	29			39
Inventory	18			30
Deferred income	14			29
Valuation allowance on finance receivables held for sale	7			40
Other, net	123			168
Total deferred tax assets	976			1,415
Valuation allowance for deferred tax assets	(166		)	(165		)
	$	810		$	1,250
Deferred tax liabilities
Leasing transactions	$	(184	)	$	(217	)
Property, plant and equipment, principally depreciation	(174		)	(138		)
Prepaid pension and postretirement benefits	(143		)	—
Amortization of goodwill and other intangibles	(109		)	(110		)
Total deferred tax liabilities	(610		)	(465		)
Net deferred tax asset	$	200		$	785

* Accrued expenses includes warranty and product maintenance reserves, self-insured liabilities and interest.

Breakdown between current and long-term net deferred tax assets

(In millions)	December 28, 2013			December 29, 2012
Manufacturing group:
Other current assets	$	206		$	256
Other assets	270			591
Other liabilities	(147		)	—
Finance group - Other liabilities	(129		)	(62		)
Net deferred tax asset	$	200		$	785

Operating loss and credit carryforward

(In millions)
Non-U.S. net operating loss with no expiration	$	95
Non-U.S. net operating loss expiring through 2033	53
State net operating loss and tax credits, net of tax benefits, expiring through 2033	55