Income Tax (Tables)

12 Months Ended

Dec. 31, 2013

Pretax income for computation of income tax provision

Our income (loss) from continuing operations before income taxes on which the provision for income taxes was computed is as follows:



	For the years ended
	December 31, 2013			December 29, 2012			December 31, 2011
	(In millions)
Domestic	$	809.7		$	712.8		$	767.2
Foreign	(155.2		)	(120.7		)	7.0
Total	$	654.5		$	592.1		$	774.2

Current and deferred provisions of income tax expense (benefits)

Income tax expense (benefit) includes the following current and deferred provisions:



	For the years ended
	December 31, 2013			December 29, 2012		December 31, 2011
	(In millions)
Current:
Federal	$	39.1		$	45.5	$	29.8
State	11.8			8.3		5.7
Foreign	50.7			28.2		25.0
Total current tax expense (benefit)	$	101.6		$	82.0	$	60.5
Deferred:
Federal	$	59.6		$	47.9	$	58.8
State	5.1			6.3		2.1
Foreign	(82.3		)	18.3		(22.0		)
Total deferred tax expense (benefit)	$	(17.6	)	$	72.5	$	38.9
Total income tax expense (benefit) from continuing operations	$	84.0		$	154.5	$	99.4

Computation of effective income tax rate

Our income tax expense varies from the amount expected by applying the statutory federal corporate tax rate to income as follows:



	For the years ended
	December 31, 2013		December 29, 2012		December 31, 2011
Statutory Federal income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefits	1.3	%	1.4	%	1.6	%
Effect of foreign tax rates	(27.4	)%	(24.5	)%	(21.4	)%
Effect of foreign tax law and rate changes	0.5	%	6.8	%	(0.4	)%
Effect of unrecognized tax benefits	3.3	%	(0.7	)%	(1.1	)%
Change in valuation allowance	(1.5	)%	6.0	%	—	%
Other, net	1.6	%	2.1	%	(0.9	)%
Effective tax rate	12.8	%	26.1	%	12.8	%

Our fiscal year effective tax rate was approximately 13% in 2013, 26% in 2012 and 13% in 2011. Our effective tax rates were significantly lower than the federal statutory rate of 35% primarily due to the impact of lower effective income tax rates applicable to our foreign businesses and tax planning. In addition, as part of the Acquisition, the statutory tax rates in the countries of Central Europe, ranging from 9% to 20%, in which we began doing business drove the 2013 and 2012 change in the effect of foreign tax rates versus 2011. The 2012 foreign tax law and rate change impact, primarily relates to the increased statutory corporate income tax rate in Serbia from 10% to 15%, effective January 1, 2013 (enacted in 2012). As a result of the impact of the rate change on differences between the book basis and tax basis of intangible and other assets purchased in the Acquisition, we increased our deferred tax liability by $38.3 million in the fourth quarter of 2012. We recorded additional tax expense in 2012 due to increases in our valuation allowance related to capital loss carryforwards and operating losses in several of our jurisdictions. See further discussion below.

Composition of deferred tax assets and liabilities

The table below summarizes our deferred tax assets and liabilities:



	As of
	December 31, 2013			December 29, 2012
	(In millions)
Current deferred tax assets:
Compensation related obligations	$	1.2		$	2.9
Foreign exchange	29.3			—
Accrued liabilities and other	49.4			53.5
Tax loss carryforwards	—			6.1
Valuation allowance	(3.0		)	(20.2		)
Balance sheet reserves and accruals	2.4			—
Other	—			0.6
Total current deferred tax assets	$	79.3		$	42.9
Current deferred tax liabilities:
Partnership investments	160.9			151.6
Balance sheet reserves and accruals	—			4.5
Other	6.1			(0.1		)
Total current deferred tax liabilities	$	167.0		$	156.0
Net current deferred tax assets	—			—
Net current deferred tax liabilities	$	87.7		$	113.1



	As of
	December 31, 2013			December 29, 2012
	(In millions)
Non-current deferred tax assets:
Compensation related obligations	$	8.7		$	13.3
Postretirement benefits	94.8			209.6
Foreign exchange losses	14.8			119.5
Convertible debt	—			0.4
Hedging	—			9.4
Tax credit carryforward	1.7			—
Tax loss carryforwards	154.7			110.9
Intercompany financing	8.4			8.4
Partnership investments	11.8			12.2
Accrued liabilities and other	5.5			19.3
Other(1)	16.6			19.6
Valuation allowance	(94.7		)	(137.3		)
Total non-current deferred tax assets	$	222.3		$	385.3
Non-current deferred tax liabilities:
Fixed assets	120.5			132.6
Partnership investments	22.1			39.6
Intangibles	939.5			1,028.7
Hedging	7.2			—
Other	6.1			7.5
Total non-current deferred tax liabilities	$	1,095.4		$	1,208.4
Net non-current deferred tax assets	—			—
Net non-current deferred tax liabilities	$	873.1		$	823.1


(1)	Primarily relates to certain capitalized costs related to the Acquisition as of December 29, 2012. These capitalized costs are amortized over different periods for book and tax purposes, giving rise to differences in book basis and tax basis in 2012.

The following table presents our deferred tax assets and liabilities on a net basis:



	As of
	December 31, 2013		December 29, 2012
	(In millions)
Domestic net current deferred tax liabilities	$	138.1	$	152.3
Foreign net current deferred tax assets	50.4		39.2
Net current deferred tax liabilities	$	87.7	$	113.1
Domestic net non-current deferred tax assets	$	22.2	$	125.4
Foreign net non-current deferred tax assets	16.1		—
Foreign net non-current deferred tax liabilities	911.4		948.5
Net non-current deferred tax liabilities	$	873.1	$	823.1

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:



	For the years ended
	December 31, 2013			December 29, 2012			December 31, 2011
	(In millions)
Balance at beginning of year	$	75.5		$	70.7		$	84.9
Additions for tax positions related to the current year	3.7			9.9			9.6
Additions for tax positions of prior years	59.2			8.6			4.3
Reductions for tax positions of prior years	(3.2		)	(0.1		)	(0.1		)
Settlements	(2.6		)	(0.9		)	(1.5		)
Release due to statute expiration and legislative changes	(24.9		)	(14.4		)	(25.6		)
Foreign currency adjustment	(3.5		)	1.7			(0.9		)
Balance at end of year	$	104.2		$	75.5		$	70.7

Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block]



	For the years ended
	December 31, 2013			December 29, 2012			December 31, 2011
2013 Reconciliation of Unrecognized Tax Benefits balance	(In millions)
Estimated interest and penalties	$	15.5		$	8.5		$	8.6
Offsetting positions	(3.8		)	(1.9		)	(1.9		)
Unrecognized tax positions	104.2			75.5			70.7
Total unrecognized tax benefits	$	115.9		$	82.1		$	77.4

Current (included in accounts payable and other current liabilities)	$	23.2		$	0.3		$	1.0
Noncurrent	92.7			81.8			76.4
Total unrecognized tax benefits	$	115.9		$	82.1		$	77.4

Amount of unrecognized tax benefits that would impact the effective tax rate	$	104.2		$	75.5		$	70.7