Income Taxes

6 Months Ended

Jun. 27, 2015

Note 7. Income Taxes

		The provision for income taxes in the accompanying statement of income differs from the provision calculated
by applying the statutory federal income tax rate of 35% to income from continuing operations before provision for
income taxes due to the following:

				Six Months Ended
			June 27,			June 28,
(In millions)				2015			2014

Provision for Income Taxes at Statutory Rate				$	310.0		$	353.8

Increases (Decreases) Resulting From:
	Foreign rate differential				(72.6)			(60.8)
	Income tax credits				(204.1)			(59.4)
	Manufacturing deduction				(17.6)			(8.9)
	Singapore tax holiday				(7.5)			—
	Impact of change in tax laws and apportionment on deferred taxes				(14.4)			(25.9)
	Nondeductible expenses				4.4			3.3
	Provision (reversal) of tax reserves, net				—			25.3
	Basis difference on disposal of businesses				—			(61.9)
	Tax return reassessments and settlements				(7.0)			—
	State income taxes, net of federal tax				(3.0)			23.1
	Other, net				0.7			0.7

		Provision for (benefit from) income taxes		$	(11.1)		$	189.3

In 2015, the company implemented tax planning initiatives related to non-U.S. subsidiaries. As a result of these initiatives, the company generated U.S. foreign tax credits of $123 million, offset in part by additional U.S. income taxes of $43 million on the related foreign income which reduced the benefit from the foreign tax rate differential in 2015.

The company has significant activities in Singapore and has received considerable tax incentives. The local taxing authority granted the company pioneer company status which provides an incentive encouraging companies to undertake activities that have the effect of promoting economic or technological development in Singapore. This incentive equates to a tax exemption on earnings associated with most of the company’s manufacturing activities in Singapore and continues through December 31, 2021. The impact of this tax holiday decreased the annual effective tax rate by 0.8% and increased diluted earnings per share by approximately $0.02 in the first six months of 2015.