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Fair Value Measurements | 9 Months Ended
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Sep. 28, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements Fair value measurements are estimated based on valuation techniques and inputs categorized as follows: •Level 1—Quoted prices in active markets for identical assets or liabilities •Level 2—Significant other observable inputs •Level 3—Significant unobservable inputs If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The following fair value hierarchy table presents the components and classification of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 28, 2025 and December 29, 2024:
|  |  |  |  |  | September 28, 2025 |  | December 29, 2024
(Dollars in Millions) |  |  |  |  |  | Carrying Value |  | Level 1 |  | Level 2 |  | Level 3 |  | Carrying Value |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts |  |  |  |  |  | $ | 92 |  |  | $ | — |  |  | $ | 92 |  |  | $ | — |  |  | $ | 81 |  |  | $ | — |  |  | $ | 81 |  |  | $ | — |
Cross currency swap contracts |  |  |  |  |  | 15 |  |  | — |  |  | 15 |  |  | — |  |  | 71 |  |  | — |  |  | 71 |  |  | — |
Total assets |  |  |  |  |  | $ | 107 |  |  | $ | — |  |  | $ | 107 |  |  | $ | — |  |  | $ | 152 |  |  | $ | — |  |  | $ | 152 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts |  |  |  |  |  | $ | (66) |  |  | $ | — |  |  | $ | (66) |  |  | $ | — |  |  | $ | (76) |  |  | $ | — |  |  | $ | (76) |  |  | $ | — |
Cross currency swap contracts |  |  |  |  |  | (106) |  |  | — |  |  | (106) |  |  | — |  |  | (1) |  |  | — |  |  | (1) |  |  | — |
Total liabilities |  |  |  |  |  | $ | (172) |  |  | $ | — |  |  | $ | (172) |  |  | $ | — |  |  | $ | (77) |  |  | $ | — |  |  | $ | (77) |  |  | $ | — |
Net amount presented in Prepaid expenses and other receivables: |  |  |  |  |  | $ | 24 |  |  | $ | — |  |  | $ | 24 |  |  | $ | — |  |  | $ | 52 |  |  | $ | — |  |  | $ | 52 |  |  | $ | — |
Net amount presented in Accounts payable: |  |  |  |  |  | $ | (42) |  |  | $ | — |  |  | $ | (42) |  |  | $ | — |  |  | $ | (13) |  |  | $ | — |  |  | $ | (13) |  |  | $ | — |
Net amount presented in Other assets: |  |  |  |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | 36 |  |  | $ | — |  |  | $ | 36 |  |  | $ | — |
Net amount presented in Other liabilities: |  |  |  |  |  | $ | (48) |  |  | $ | — |  |  | $ | (48) |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
As of September 28, 2025 and December 29, 2024, cash equivalents were $145 million and $118 million, respectively, which were primarily composed of time deposits and money market funds. The carrying amount of Cash and cash equivalents, Trade receivables, Prepaid expenses and other receivables, and Loans and notes payable approximated fair value as of September 28, 2025 and December 29, 2024. The fair value of forward foreign exchange contracts is the aggregation by currency of all future cash flows discounted to its present value at the prevailing market interest rates and subsequently converted to the U.S. dollar at the current spot foreign exchange rate. The cross currency swap contracts are each recorded at fair value derived from observable market data, including foreign exchange rates and yield curves. There were no transfers between Level 1, Level 2, or Level 3 during the fiscal three and nine months ended September 28, 2025 and the fiscal twelve months ended December 29, 2024. The following table sets forth the notional amounts of the Company’s outstanding derivative instruments as of September 28, 2025 and December 29, 2024:
|  |  |  |  |  | September 28, 2025 |  | December 29, 2024
(Dollars in Millions) |  |  |  |  |  | Forward Foreign Exchange Contracts |  |  |  | Cross Currency Swap Contracts |  | Total Notional Amount |  | Forward Foreign Exchange Contracts |  |  |  | Cross Currency Swap Contracts |  | Total Notional Amount
Cash flow hedges |  |  |  |  |  | $ | 4,536 |  |  |  |  | $ | — |  |  | $ | 4,536 |  |  | $ | 3,570 |  |  |  |  | $ | — |  |  | $ | 3,570 |
Fair value hedges |  |  |  |  |  | $ | 297 |  |  |  |  | $ | 61 |  |  | $ | 358 |  |  | $ | 30 |  |  |  |  | $ | — |  |  | $ | 30 |
Net investment hedges |  |  |  |  |  | $ | — |  |  |  |  | $ | 2,000 |  |  | $ | 2,000 |  |  | $ | — |  |  |  |  | $ | 1,900 |  |  | $ | 1,900 |
Undesignated hedging instruments |  |  |  |  |  | $ | 565 |  |  |  |  | $ | — |  |  | $ | 565 |  |  | $ | 574 |  |  |  |  | $ | — |  |  | $ | 574 |
Cash Flow Hedges For the fiscal three and nine months ended September 28, 2025, the Company recorded a total after-tax change in Accumulated other comprehensive loss of $0 million and $17 million, respectively, related to its cash flow hedge portfolio. For the fiscal three and nine months ended September 29, 2024, the Company recorded a total after-tax change in Accumulated other comprehensive loss of $11 million and $(22) million, respectively, related to its cash flow hedge portfolio. Forward Foreign Exchange Contracts In certain jurisdictions, the Company uses forward foreign exchange contracts to manage its exposure to the variability of foreign exchange rates. Changes in the fair value of derivatives are recorded each period in earnings or Other comprehensive (loss) income, depending on whether the derivative is designated as part of a hedge transaction, and if so, the type of hedge transaction. The Company enters into forward foreign exchange contracts to hedge a portion of forecasted cash flows denominated in foreign currency. The terms of these contracts are generally no longer than 12 to 18 months. These contracts are designated as cash flow hedging relationships at the date of contract inception, in accordance with the appropriate accounting guidance. At inception, all designated hedging relationships are expected to be highly effective. These contracts are accounted for using the forward method, and all gains/losses associated with these contracts are recorded in Other comprehensive (loss) income. The Company reclassifies the gains and losses related to these contracts at the time the inventory is sold to the customer into Net sales or Cost of sales and Other expense (income), net in the Condensed Consolidated Statements of Operations, as applicable. The Company expects that substantially all of the amounts related to forward foreign exchange contracts will be reclassified into earnings over the next 12 months as a result of transactions that are expected to occur over that period. The maximum length of time over which the Company is hedging transactional exposure is 18 months. The amount ultimately realized in earnings may differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity of the derivative. The following table summarizes the gains and losses recognized on forward foreign exchange contracts designated as cash flow hedges within Other comprehensive (loss) income and the gains and losses reclassified into earnings for the fiscal three and nine months ended September 28, 2025 and September 29, 2024:
|  | Fiscal Three Months Ended |  | Fiscal Nine Months Ended |
(Dollars in Millions) |  | September 28, 2025 |  | September 29, 2024 |  | September 28, 2025 |  | September 29, 2024 |
Gain (loss) recognized in Other comprehensive (loss) income |  | $ | 11 |  |  | $ | 14 |  |  | $ | 42 |  |  | $ | (1) |  |
Gain reclassified from Other comprehensive (loss) income into earnings |  | $ | 10 |  |  | $ | — |  |  | $ | 23 |  |  | $ | 7 |  |
The following tables summarize the gains and losses reclassified from Other comprehensive (loss) income into earnings related to the forward foreign exchange contracts designated as cash flows hedges for the fiscal three and nine months ended September 28, 2025 and September 29, 2024:
|  | Fiscal Three Months Ended
|  | September 28, 2025 |  | September 29, 2024
(Dollars in Millions) |  | Net Sales |  | Cost of Sales |  | Other Expense (Income), Net |  | Net Sales |  | Cost of Sales |  | Other Expense (Income), Net
Gain (loss) reclassified from Other comprehensive (loss) income into earnings |  | $ | 1 |  |  | $ | 13 |  |  | $ | (4) |  |  | $ | (1) |  |  | $ | — |  |  | $ | 1 |
|  | Fiscal Nine Months Ended |
|  | September 28, 2025 |  | September 29, 2024 |
(Dollars in Millions) |  | Net Sales |  | Cost of Sales |  | Other Expense (Income), Net |  | Net Sales |  | Cost of Sales |  | Other Expense (Income), Net |
Gain (loss) reclassified from Other comprehensive (loss) income into earnings |  | $ | 1 |  |  | $ | 15 |  |  | $ | 7 |  |  | $ | (1) |  |  | $ | 12 |  |  | $ | (4) |  |
Forward Starting Interest Rate Swaps The Company enters into forward starting interest rate swaps to manage future interest rate exposure related to changes in the benchmark rate on forecasted debt issuances. These contracts are designated as cash flow hedging relationships at the date of contract inception, in accordance with the appropriate accounting guidance. During the fiscal nine months ended September 28, 2025, the Company recorded a gain of $7 million in Accumulated other comprehensive loss related to the settlement of its forward starting interest rate swaps upon the issuance of long-term debt. The gain in Accumulated other comprehensive loss will be amortized and recorded in Interest expense, net in the Condensed Consolidated Statements of Operations as the hedged item impacts earnings. For the fiscal three and nine months ended September 28, 2025 and September 29, 2024, the amounts reclassified from Other comprehensive (loss) income to the Condensed Consolidated Statements of Operations were not significant. Fair Value Hedges Forward Foreign Exchange Contracts The Company entered into forward foreign exchange contracts beginning in the fiscal three months ended March 31, 2024 to hedge against the risk of changes in the fair value of foreign-denominated intercompany debt attributable to foreign exchange rate fluctuations. These contracts are designated as fair value hedging relationships at the date of contract inception, in accordance with the appropriate accounting guidance. At inception, all designated fair value hedging relationships are expected to be highly effective. The contracts are accounted for using the spot method with changes in the fair value of the contract attributable to the changes in spot rates recorded within Other expense (income), net in the Condensed Consolidated Statements of Operations. The Company has elected to exclude the changes in the fair value attributable to the difference between the spot price and the forward price, as well as any cross currency basis spread, from the assessment of hedge effectiveness (the “Excluded Components”). The value of the Excluded Components was not significant to the Condensed Consolidated Financial Statements in the current fiscal period or prior fiscal period. The changes in fair value attributable to the Excluded Components are recorded in Accumulated other comprehensive loss and are recognized in Other expense (income), net in the Condensed Consolidated Statements of Operations on a systematic and rational basis over the life of the hedging instrument. Net Investment Hedges Cross Currency Swap Contracts Beginning in the fiscal three months ended December 31, 2023, the Company entered into cross currency swap contracts to hedge exposure in foreign subsidiaries with local functional currencies. These contracts are designated as net investment hedges at the date of contract inception, in accordance with the appropriate accounting guidance. These contracts are accounted for using the spot method with changes in the fair value of the contracts attributable to changes in spot rates recorded within Cumulative Translation Adjustments (“CTA”) as a component of Other comprehensive (loss) income and will remain there until the hedged net investments are sold or substantially liquidated. The Company has elected to exclude the changes in the fair value attributable to time value and spot-forward rate differences (the “Excluded Net Investment Hedge Components on Cross Currency Swap Contracts”) from the assessment of the hedge effectiveness. The value of the Excluded Net Investment Hedge Components on Cross Currency Swap Contracts was not significant to the Condensed Consolidated Financial Statements in the current fiscal period or prior fiscal period. The changes in fair value attributable to the Excluded Net Investment Hedge Components on Cross Currency Swap Contracts are recognized into Interest expense, net in the Condensed Consolidated Statements of Operations on a systematic and rational basis through the swap accrual over the life of the hedging instrument. The following table summarizes the gains and losses recognized within Other comprehensive (loss) income related to the cross currency swap contracts designated as net investment hedges for the fiscal three and nine months ended September 28, 2025 and September 29, 2024:
|  | Fiscal Three Months Ended |  | Fiscal Nine Months Ended |
(Dollars in Millions) |  | September 28, 2025 |  | September 29, 2024 |  | September 28, 2025 |  | September 29, 2024 |  |  |
Gain (loss) recognized in CTA within Other comprehensive (loss) income |  | $ | 12 |  |  | $ | (76) |  |  | $ | (167) |  |  | $ | 4 |  |  |  |
Other than amounts excluded from effectiveness testing, the Company did not reclassify any gains or losses from CTA within Other comprehensive (loss) income to earnings during the fiscal three and nine months ended September 28, 2025 and September 29, 2024 related to the cross currency swap contracts designated as net investment hedges. Undesignated Hedging Instruments Undesignated Forward Foreign Exchange Contracts The Company enters into forward foreign exchange contracts to offset the foreign currency exposure related to the monetary assets and liabilities in non-functional currencies. These contracts are not designated as cash flow hedging relationships, and the net allocated gains and losses related to these contracts are recognized within Other expense (income), net in the Condensed Consolidated Statements of Operations. As of September 28, 2025 and December 29, 2024, the Company held forward foreign exchange contracts that were not designated in cash flow hedging relationships with a fair value of $1 million and $0 million, respectively. The following table summarizes the gains and losses recognized within Other expense (income), net related to the undesignated forward foreign exchange contracts for the fiscal three and nine months ended September 28, 2025 and September 29, 2024:
|  | Fiscal Three Months Ended |  | Fiscal Nine Months Ended |  |  |  |  |  |  |  |  |  |  |  |  |  |
(Dollars in Millions) |  | September 28, 2025 |  | September 29, 2024 |  | September 28, 2025 |  | September 29, 2024 |  |  |  |  |  |  |  |  |  |
Gain (loss) recognized in Other expense (income), net |  | $ | 1 |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | (4) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Effectiveness On an ongoing basis, the Company assesses whether each derivative continues to be highly effective in offsetting changes of hedged items. When a derivative is no longer expected to be highly effective, hedge accounting is discontinued. Statement of Cash Flows Cash flows from derivatives designated in hedging relationships are reflected in the Condensed Consolidated Statements of Cash Flows consistent with the presentation of the hedged item. Cash flows from derivatives that were not accounted for as designated hedging relationships reflect the classification of the cash flows associated with the activities being economically hedged. Credit Risk The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial instrument contracts; however, nonperformance is considered unlikely and any nonperformance is unlikely to be material as it is the Company’s policy to contract with diverse, creditworthy counterparties based upon both strong credit ratings and other credit considerations. The Company has negotiated International Swaps and Derivatives Association, Inc. master agreements with its counterparties, which contain master netting provisions providing the legal right and ability to offset exposures across trades with each counterparty. Given the rights provided by these contracts, the Company presents derivative balances based on its “net” counterparty exposure. These agreements do not require the posting of collateral.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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