Accrued Liabilities, Commitments and Contingencies

6 Months Ended

Jul. 04, 2026

Commitments and Contingencies Disclosure [Abstract]

Accrued Liabilities, Commitments and Contingencies

Accrued Liabilities

The components of Accrued liabilities are as follows (in millions):


	July 4, 2026		December 31, 2025
Incentive compensation	$	109	$	150
Payroll and benefits	77		75
Customer rebates	74		63
Unremitted cash collections due to banks on factored accounts receivable	68		84
Current portion of lease liabilities	38		38
Freight and duty	30		26
Current portion of warranty liabilities	29		28

Exit and restructuring	15		23
Other	66		71
Accrued liabilities	$	506	$	558

Warranties

The following table is a summary of the Company’s warranty obligations (in millions):


	Six Months Ended
	July 4, 2026		June 28, 2025
Balance at the beginning of the period	$	34	$	26
Warranty expense	18		18
Warranties fulfilled	(17)		(17)
Balance at the end of the period	$	35	$	27

The current and long-term portions of our warranty obligations are included on the Consolidated Balance Sheets within Accrued liabilities and Other long-term liabilities, respectively.

Contingencies

The Company is subject to a variety of investigations, claims, suits, and other legal proceedings that arise from time to time in the ordinary course of business, including but not limited to, intellectual property, employment, tort, and breach of contract matters. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position, or results of operations. Any legal proceedings are subject to inherent uncertainties, and the Company’s view of these matters and their potential effects may change in the future. The Company records a liability for contingencies when a loss is deemed to be probable and the loss can be reasonably estimated.

On February 20, 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the executive branch of government to impose tariffs, which invalidated certain import tariffs enacted in 2025. The matter was remanded to the Court of International Trade and the U.S. Customs and Border Protection (“CBP”) for administration of refunds. The Company has commenced the process of seeking refunds in accordance with the process prescribed by CBP. The Company has evaluated potential refunds of previously paid IEEPA tariffs under a loss recovery model consistent with the principles of ASC 410‑30, Asset Retirement and Environmental Obligations — Environmental Obligations. In the second quarter of 2026, the Company deemed the refund of all previously paid import tariffs to be probable and recognized a benefit of approximately $73 million within Cost of Sales on the Consolidated Statements of Operations, including $46 million attributed to the CF segment and $27 million attributed to the AVA segment. As of July 4, 2026, the Company received $14 million in cash and $59 million is reflected within Accounts Receivable, net on the Consolidated Balance Sheets. An additional $27 million in cash refunds was received through July 31, 2026.