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Income Taxes (Tables)
 12 Months Ended
Dec. 29, 2013
Income Tax Disclosure [Abstract]  
Provision for income taxes
The provision for taxes on income consists of:
(Dollars in Millions)
 
2013
 
2012
 
2011
Currently payable:
 
 
 
 
 
 
U.S. taxes
 
$
594

 
2,023

 
2,392

International taxes
 
1,653

 
1,277

 
1,133

Total currently payable
 
2,247

 
3,300

 
3,525

Deferred:
 
 
 
 
 
 
U.S. taxes
 
(251
)
 
(120
)
 
(690
)
International taxes
 
(356
)
 
81

 
(146
)
Total deferred
 
(607
)
 
(39
)
 
(836
)
Provision for taxes on income
 
$
1,640

 
3,261

 
2,689
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 35% in 2013, 2012 and 2011, to the Company’s effective tax rate is as follows:
(Dollars in Millions)
 
2013
 
2012
 
2011
 
U.S. 
 
$
4,261

 
4,664

 
3,634

 
International
 
11,210

 
9,111

 
8,727

 
Earnings before taxes on income:
 
$
15,471

 
13,775

 
12,361

 
Tax rates:
 
 
 
 
 
 
 
U.S. statutory rate
 
35.0
 %
 
35.0

 
35.0

 
International operations excluding Ireland
 
(10.6
)
 
(9.8
)
 
(14.0
)
 
Ireland and Puerto Rico operations
 
(9.0
)
 
(3.9
)
 
(1.8
)
 
Research and orphan drug tax credits
 
(0.8
)
 
—

 
(0.8
)
 
U.S. state and local
 
0.4

 
1.3

 
2.1

 
U.S. manufacturing deduction
 
(0.8
)
 
(0.9
)
 
(0.8
)
 
U.S. tax on international income
 
1.7

 
1.1

 
(0.4
)
 
U.S. tax benefit on asset write-offs
 
(5.1
)
 
—

 
—

 
All other
 
(0.2
)
 
0.9

 
2.5

 
Effective tax rate
 
10.6
 %
 
23.7

 
21.8

 
Deferred income tax assets and liabilities
Temporary differences and carryforwards for 2013 and 2012 were as follows:
 
 
2013 Deferred Tax
 
2012 Deferred Tax
(Dollars in Millions)
 
Asset
 
Liability
 
Asset
 
Liability
Employee related obligations
 
$
1,908

 


 
3,343

 


Stock based compensation
 
1,121

 


 
1,199

 


Depreciation
 


 
(772
)
 


 
(933
)
Non-deductible intangibles
 


 
(6,250
)
 


 
(6,261
)
International R&D capitalized for tax
 
1,656

 


 
1,599

 


Reserves & liabilities
 
1,587

 


 
1,908

 


Income reported for tax purposes
 
1,043

 


 
726

 


Net operating loss carryforward international
 
1,090

 


 
1,117

 


Miscellaneous international (1)
 
1,508

 
(361
)
 
1,291

 
(371
)
Miscellaneous U.S. 
 
927

 


 
915

 


Total deferred income taxes
 
$
10,840

 
(7,383
)
 
12,098

 
(7,565
)

(1) The $1,508 million is net of a valuation allowance related to Belgium of $187 million.
Changes in/activity related to unrecognized tax benefits
The following table summarizes the activity related to unrecognized tax benefits:
(Dollars in Millions)
 
2013
 
2012
 
2011
Beginning of year
 
$
3,054

 
2,699

 
2,307

Increases related to current year tax positions
 
643

 
538

 
402

Increases related to prior period tax positions
 
80

 
57

 
87

Decreases related to prior period tax positions
 
(574
)
 
(41
)
 
(77
)
Settlements
 
(418
)
 
(120
)
 
(16
)
Lapse of statute of limitations
 
(56
)
 
(79
)
 
(4
)
End of year
 
$
2,729

 
3,054

 
2,699