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Tax Matters | 9 Months Ended
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Sep. 28, 2025
Income Tax Disclosure [Abstract] |
Tax Matters | Tax Matters A. Taxes on Income from Continuing Operations Our effective tax rate for continuing operations was (6.5)% for the third quarter of 2025, compared to 5.0% for the third quarter of 2024, and was (2.9)% for the first nine months of 2025, compared to 4.9% for the first nine months of 2024. The negative and lower effective tax rates for the third quarter and the first nine months of 2025, compared to the third quarter and the first nine months of 2024, were primarily due to a favorable change in the jurisdictional mix of earnings, the remeasurement of deferred tax liabilities due to the enactment of the OBBBA on July 4, 2025, and tax benefits related to global income tax resolutions in multiple tax jurisdictions spanning multiple tax years. We elected, with the filing of our 2018 U.S. Federal Consolidated Income Tax Return, to pay our initial estimated $15 billion repatriation tax liability on accumulated post-1986 foreign earnings (Transition Tax liability) over eight years through 2026. The seventh annual installment was paid by its April 15, 2025 due date. The eighth and final annual installment is due April 15, 2026 and is reported in current Income taxes payable as of September 28, 2025. Our obligations may vary due to the availability of attributes such as foreign tax and other credit carryforwards or carrybacks. See Note 5A in our 2024 Form 10-K for information on our cash paid for income taxes, net of refunds. B. Tax Contingencies We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation. The U.S. is one of our major tax jurisdictions, and we are regularly audited by the IRS. Tax years 2019-2022 are under audit. Tax years 2023-2025 are open but not under audit. All other tax years are closed. In addition to the open audit years in the U.S., we have open audit years and certain related audits, appeals and investigations in certain major international tax jurisdictions dating back to 2016. See Note 5D in our 2024 Form 10-K. C. Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)
Components of Tax provision/(benefit) on other comprehensive income/(loss) include:
|  | Three Months Ended |  | Nine Months Ended
(MILLIONS) |  | September 28, 2025 |  | September 29, 2024 |  | September 28, 2025 |  | September 29, 2024
Foreign currency translation adjustments, net(a) |  | $ | 34 |  |  | $ | (50) |  |  | $ | (338) |  |  | $ | (7) |
Unrealized holding gains/(losses) on derivative financial instruments, net |  | (2) |  |  | (65) |  |  | (84) |  |  | 5 |
Reclassification adjustments for (gains)/losses included in net income |  | 32 |  |  | (42) |  |  | (55) |  |  | (68) |
|  | 30 |  |  | (107) |  |  | (139) |  |  | (63) |
Unrealized holding gains/(losses) on available-for-sale securities, net |  | (1) |  |  | 7 |  |  | 16 |  |  | (2) |
Reclassification adjustments for (gains)/losses included in net income |  | (12) |  |  | (1) |  |  | (3) |  |  | 10 |
|  | (13) |  |  | 7 |  |  | 12 |  |  | 8 |
Reclassification adjustments related to amortization of prior service costs and other, net |  | (4) |  |  | (6) |  |  | (17) |  |  | (20) |
Reclassification adjustments related to curtailments of prior service costs and other, net |  | (1) |  |  | — |  |  | (11) |  |  | 1 |
|  | (5) |  |  | (6) |  |  | (28) |  |  | (18) |
Tax provision/(benefit) on other comprehensive income/(loss) |  | $ | 45 |  |  | $ | (157) |  |  | $ | (492) |  |  | $ | (81) |
(a)Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that are expected to be held indefinitely.

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