taxed at rates lower than the U.S. statutory rate of 35 percent. As a result of employment actions and capital investments made by the Company, certain tax jurisdictions provide income tax incentive grants, including Brazil, Costa Rica, Singapore and Swaziland. The terms of these grants expire from 2015 to 2022. We expect each of these grants to be renewed indefinitely. Tax incentive grants favorably impacted our income tax expense by $279 million, $280 million and $193 million for the years endedDecember 31, 2013, 2012 and 2011, respectively. In addition, our effective tax rate reflects the benefits of having significant earnings generated in investments accounted for under the equity method of accounting, which are generally taxed at rates lower than the U.S. statutory rate. 

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company had $105 million, $113 million and $110 million in interest and penalties related to unrecognized tax benefits accrued as ofDecember 31, 2013, 2012 and 2011, respectively. Of these amounts, $8 million of benefit, $33 million of expense and $2 million of benefit were recognized through income tax expense in2013, 2012 and 2011, respectively. If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would also be a benefit to the Company's effective tax rate. 

Based on current tax laws, the Company's effective tax rate in 2014 is expected to be approximately 23 percent before considering the effect of any unusual or special items that may affect our tax rate. 

Liquidity, Capital Resources and Financial Position 

We believe our ability to generate cash from operating activities is one of our fundamental financial strengths. Refer to the heading "Cash Flows from Operating Activities" below. The near-term outlook for our business remains strong, and we expect to generate substantial cash flows from operations in 2014. As a result of our expected cash flows from operations, we have significant flexibility to meet our financial commitments. The Company does not typically raise capital through the issuance of stock. Instead, we use debt financing to lower our overall cost of capital and increase our return on shareowners' equity. Refer to the heading "Cash Flows from Financing Activities" below. We have a history of borrowing funds domestically and continue to have the ability to borrow funds domestically at reasonable interest rates. Our debt financing includes the use of an extensive commercial paper program as part of our overall cash management strategy. The Company reviews its optimal mix of short-term and long-term debt regularly and may replace certain amounts of commercial paper, short-term debt and current maturities of long-term debt with new issuances of long-term debt in the future. In addition to the Company's cash balances, commercial paper program, and our ability to issue long-term debt, we also had $6,410 million in lines of credit for general corporate purposes as of December 31, 2013. These backup lines of credit expire at various times from2014 through 2018. 

We have significant operations