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Income Taxes (Notes)
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3 Months Ended |
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Mar. 29, 2014
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| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
In the first quarter of 2014, the Company recorded an income tax provision of $2 million due to foreign taxes in profitable locations.
In the first quarter of 2013, the Company recorded an income tax provision of $2 million due to $2 million of foreign taxes in profitable locations and $1 million related to the reversal of previously recognized tax benefits associated with other comprehensive income, partially offset by $1 million of tax benefits from Canadian co-op credits and the monetization of U.S. tax credits.
As of March 29, 2014, substantially all of the Company's U.S. and Canadian deferred tax assets, net of deferred tax liabilities, continue to be subject to a valuation allowance. The realization of these assets is dependent on substantial future taxable income which, at March 29, 2014, in management's estimate, is not more likely than not to be achieved.
The Company's gross unrecognized tax benefits increased by $1 million during the first quarter of 2014 due to an increase in Canadian tax credits. The total gross unrecognized tax benefits as of March 29, 2014 were $53 million. As of March 29, 2014, the Company recognized $2 million of previously unrecognized tax benefits available to offset $2 million of tax liabilities. There were no material changes to accrued interest or penalties in the first quarter of 2014.
The Company currently expects to reduce its unrecognized tax benefits by $31 million primarily as a result of the potential settlement of tax audits with certain foreign tax authorities over the next 12 months. The Company does not believe it is reasonably possible that other unrecognized tax benefits will materially change in the next 12 months. However, the settlement, resolution or closure of tax audits are highly uncertain.
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