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Income taxes (Tables) | 12 Months Ended
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Dec. 29, 2024
Income Tax Disclosure [Abstract] |
Provision for Income Taxes | The provision for taxes on income on continuing operations consists of:
(Dollars in Millions) | 2024 |  | 2023 |  | 2022 |
Currently payable: |  |  |  |  |  |
U.S. taxes | $2,200 |  | 2,705 |  | 2,274 |
International taxes | 2,604 |  | 3,090 |  | 2,295 |
Total currently payable | 4,804 |  | 5,795 |  | 4,569 |
Deferred: |  |  |  |  |  |
U.S. taxes | (2,539) |  | (3,440) |  | (1,990) |
International taxes | 356 |  | (619) |  | 410 |
Total deferred | (2,183) |  | (4,059) |  | (1,580) |
Provision for taxes on income | $2,621 |  | 1,736 |  | 2,989 |
Comparison of Income Taxes at Statutory Rate and Company's Effective Tax Rate | A comparison of income tax expense at the U.S. statutory rate of 21% in fiscal years 2024, 2023 and 2022, to the Company’s effective tax rate is as follows:
(Dollars in Millions) | 2024 |  | 2023 |  | 2022
U.S. | $(458) |  | (2,033) |  | 4,606
International | 17,145 |  | 17,095 |  | 14,753
Earnings before taxes on income: | $16,687 |  | 15,062 |  | 19,359
Tax rates: |  |  |  |  |
U.S. statutory rate | 21.0 | % |  | 21.0 |  |  | 21.0 |
International operations(1) | (5.2) |  |  | (8.1) |  |  | (5.0) |
U.S. tax settlements | 1.0 |  |  | (3.0) |  |  | — |
U.S. taxes on international income(2) | (2.6) |  |  | (0.3) |  |  | (1.1) |
U.S. state taxes | 1.5 |  |  | 1.0 |  |  | 0.3 |
Tax benefits on share-based compensation | (0.6) |  |  | (0.8) |  |  | (1.4) |
All other | 0.6 |  |  | 1.7 |  |  | 1.6 |
Effective Rate | 15.7 | % |  | 11.5 |  |  | 15.4 |
(1)International operations reflect the impacts of operations in jurisdictions with statutory tax rates different than the U.S., particularly Ireland, Switzerland, and Belgium, which is a favorable impact on the effective tax rate as compared with the U.S. statutory rate. (2)Includes the net impact of the GILTI tax, the Foreign-Derived Intangible Income deduction and other foreign income that is taxable under the U.S. tax code as well as related foreign tax credits.
Temporary Differences and Carryforwards | Temporary differences and carryforwards at the end of fiscal years 2024 and 2023 were as follows:
|  | 2024 Deferred Tax |  | 2023 Deferred Tax
(Dollars in Millions) |  | Asset |  | Liability |  | Asset |  | Liability
Employee related obligations |  | $372 |  |  |  | 586 |  |
Stock based compensation |  | 717 |  |  |  | 686 |  |
Depreciation of property, plant and equipment |  |  |  | (833) |  |  |  | (902)
Goodwill and intangibles |  |  |  | (3,261) |  |  |  | (1,252)
R&D capitalized for tax |  | 4,398 |  |  |  | 3,595 |  |
Reserves & liabilities |  | 4,444 |  |  |  | 3,816 |  |
Inventory related |  | 371 |  |  |  | 359 |  |
Operating loss carryforwards |  | 2,298 |  |  |  | 2,145 |  |
Undistributed foreign earnings |  | 1,931 |  | (1,492) |  | 1,801 |  | (1,695)
Global intangible low-taxed income |  |  |  | (1,589) |  |  |  | (2,731)
Miscellaneous international |  | 1,212 |  |  |  | 831 |  |
Miscellaneous U.S. |  | 1,083 |  |  |  |  |  | (4)
Total deferred income taxes |  | 16,826 |  | (7,175) |  | 13,819 |  | (6,584)
Valuation allowances |  | (1,638) |  |  |  | (1,149) |  |
Total deferred income taxes net of valuation allowances |  | 15,188 |  | (7,175) |  | 12,670 |  | (6,584)
Summary of Valuation Allowance | The following table summarizes the activity related to valuation allowances for continuing operations:
(Dollars in Millions) | 2024 |  | 2023
Beginning of year | $1,149 |  | 775
Provision | 451 |  | 355
Utilization | — |  | (116)
Foreign currency translation | (46) |  | 25
Net acquisitions / (dispositions/liquidations) | 84 |  | 110
End of year | $1,638 |  | $1,149
Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to unrecognized tax benefits for continuing operations:
(Dollars in Millions) | 2024 |  | 2023 |  | 2022
Beginning of year | $2,485 |  | 3,716 |  | 3,210
Increases related to current year tax positions | 176 |  | 239 |  | 523
Increases related to prior period tax positions | 129 |  | 244 |  | 143
Decreases related to prior period tax positions | (147) |  | (781) |  | (148)
Settlements | (583) |  | (880) |  | (1)
Lapse of statute of limitations | (40) |  | (53) |  | (11)
End of year | $2,020 |  | 2,485 |  | 3,716

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