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Relationship with J&J | 12 Months Ended
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Dec. 28, 2025
Related Party Transactions [Abstract] |
Relationship with J&J | Relationship with J&J On August 23, 2023, Kenvue became a fully independent company upon the completion of the Exchange Offer (see Note 1, “Description of the Company and Summary of Significant Accounting Policies—Description of the Company and Business Segments”), and J&J ceased to be a related party on that date. The Company continues to have material agreements with J&J—see “—Transactions with J&J, Including the Separation Agreement” section within this footnote for additional details of these material agreements that govern the Company’s relationship with J&J. Cost Allocations from J&J Prior to Kenvue IPO Prior to the Kenvue IPO, J&J provided significant support functions to the Company. The Consolidated Financial Statements reflect an allocation of these costs. Similarly, certain of the Company’s operations provided support to J&J’s affiliates and related costs for support were charged to J&J’s affiliates. Allocated costs included in Cost of sales in the Consolidated Statement of Operations related to enterprise-wide support primarily consisting of facilities, insurance, logistics, quality, and compliance, which were predominantly allocated based on Net sales. Allocated costs included in Selling, general, and administrative expenses primarily related to finance, human resources, benefits administration, procurement support, information technology, legal, corporate strategy, corporate governance, other professional services, and general commercial support functions, and were predominantly allocated based on Net sales or headcount. See Note 1, “Description of the Company and Summary of Significant Accounting Policies—Basis of Presentation.” Prior to Kenvue becoming a fully independent company, the allocations (excluding stock-based compensation expense), net of costs charged to J&J’s affiliates reflected in the Consolidated Statement of Operations for the fiscal twelve months ended December 31, 2023 were:
|  |  |  |  |  |  |  |  |  | Fiscal Twelve Months Ended
(Dollars in Millions) |  |  |  |  |  |  |  |  |  | December 31, 2023
Cost of sales |  |  |  |  |  |  |  |  |  | $ | 25 |
Selling, general, and administrative expenses |  |  |  |  |  |  |  |  |  | 120 |
Total costs allocated |  |  |  |  |  |  |  |  |  | $ | 145 |
Management believes these cost allocations are a reasonable reflection of the utilization of services provided to, or the benefit derived by, the Company during the periods presented. The allocations may not, however, be indicative of the actual expenses that would have been incurred had the Company operated as a standalone public company. Actual costs that may have been incurred if the Company had been a standalone public company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by the Company’s employees, and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology, and infrastructure. No allocations were made subsequent to the fiscal three months ended July 2, 2023, during which Kenvue became a fully independent company. Net Transfers to J&J Net transfers to J&J are included in Net Investment from J&J in the Consolidated Statement of Stockholders’ Equity and within financing activities in the Consolidated Statement of Cash Flows and represent the net effect of transactions between the Company and J&J. No transactions were recorded in Net transfers to J&J subsequent to the fiscal three months ended July 2, 2023, during which Kenvue became a fully independent company. The components of Net transfers to J&J for the fiscal twelve months ended December 31, 2023 were:
|  |  |  |  |  |  |  |  |  | Fiscal Twelve Months Ended
(Dollars in Millions) |  |  |  |  |  |  |  |  |  | December 31, 2023
Cash pooling and general financing activities |  |  |  |  |  |  |  |  |  | $ | (446) |
Corporate cost allocations |  |  |  |  |  |  |  |  |  | 145 |
Taxes deemed settled with J&J |  |  |  |  |  |  |  |  |  | 27 |
Net transfers to J&J as reflected in the Consolidated Statement of Cash Flows |  |  |  |  |  |  |  |  |  | $ | (274) |
Other(1) |  |  |  |  |  |  |  |  |  | (34) |
Net transfers to J&J as reflected in the Consolidated Statement of Stockholders’ Equity |  |  |  |  |  |  |  |  |  | $ | (308) |
(1) Other primarily relates to the impact of the change in accounting principle for Global Intangible Low-Tax Income (“GILTI”). Transactions with J&J, Including the Separation Agreement In connection with the Separation, Kenvue entered into various agreements with J&J, including the Separation Agreement, which created a framework for the Company’s ongoing relationship with J&J following the completion of the Kenvue IPO. In connection with the terms of the Separation Agreement, certain assets and liabilities included on the pre-Separation balance sheet were retained by J&J and certain assets and liabilities not included on the pre-Separation balance sheet were transferred to Kenvue. Separation-related adjustments have been recognized in Net Investment from J&J, the net impact of which resulted in an increase in net assets and total equity by $91 million for the fiscal twelve months ended December 31, 2023. The impact on net assets primarily represents 1) recognition of balances with J&J including indemnification matters, 2) changes to income tax assets and liabilities as a result of change in the basis of presentation, 3) contribution of certain liabilities including pension and employee-related obligations from J&J, 4) the retention of assets and liabilities by J&J of certain Deferred Local Businesses (as defined in Note 1, “Description of the Company and Summary of Significant Accounting Policies—Variable Interest Entities and Net Economic Benefit Arrangements”), and 5) other assets and liability transfers between Kenvue and J&J in connection with the Separation. The agreements entered into with J&J include, but are not limited to: •the Separation Agreement, which governs aspects of Kenvue’s relationship with J&J following the Kenvue IPO; •a tax matters agreement (the “Tax Matters Agreement”), which governs J&J’s and Kenvue’s respective rights, responsibilities, and obligations with respect to all tax matters, including tax liabilities, tax attributes, tax contests, and tax returns (see “—Tax Indemnification” below); •a transition services agreement (the “Transition Services Agreement”), pursuant to which J&J provides to Kenvue certain services for terms of varying duration following the Kenvue IPO; and •a transition manufacturing agreement (the “Transition Manufacturing Agreement”), pursuant to which J&J provides to Kenvue certain manufacturing services for terms of varying duration following the Kenvue IPO. The Company had the following balances and transactions with J&J and its affiliates, primarily in connection with the Tax Matters Agreement, Transition Services Agreement, and the Transition Manufacturing Agreement, reported in the Consolidated Financial Statements:
(Dollars in Millions) |  |  |  |  |  | December 28, 2025 |  | December 29, 2024
Prepaid expenses and other receivables |  |  |  |  |  | $ | 21 |  |  | $ | 109 |
Accounts payable and Accrued liabilities |  |  |  |  |  | $ | 136 |  |  | $ | 270 |
Other assets |  |  |  |  |  | $ | 91 |  |  | $ | 78 |
Other liabilities |  |  |  |  |  | $ | 139 |  |  | $ | 143 |
|  |  |  | Fiscal Twelve Months Ended
(Dollars in Millions) |  |  |  |  |  | December 28, 2025 |  | December 29, 2024 |  | December 31, 2023
Cost of sales |  |  |  |  |  | $ | 168 |  |  | $ | 203 |  |  | $ | 148 |
Selling, general, and administrative expenses |  |  |  |  |  | $ | 9 |  |  | $ | 203 |  |  | $ | 189 |
In April 2025, the Company completed its Transition Services Agreement program. Consistent with the program’s plan, the Company finalized the exit of more than 2,300 transition services. Tax Indemnification The Company entered into the Tax Matters Agreement with J&J on May 3, 2023 that governs the parties’ respective rights, responsibilities, and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and other matters regarding taxes. Allocation of Taxes With respect to taxes other than those incurred in connection with the Separation and any subsequent distribution or the disposition by J&J of the shares of Kenvue stock owned by J&J following the Kenvue IPO (the “Distribution”), the Tax Matters Agreement provides that Kenvue will generally indemnify J&J for 1) any taxes of Kenvue for all periods after the Distribution and 2) any taxes of Kenvue or J&J for periods prior to the Distribution to the extent attributable to the Consumer Health Business. J&J will generally indemnify Kenvue for 1) any taxes of J&J for all periods after the Distribution and 2) any taxes of Kenvue or J&J for periods prior to the Distribution to the extent attributable to the business and operations conducted by J&J other than the Consumer Health Business. Furthermore, subject to certain exceptions, the Company is required to reimburse J&J for certain tax refunds it receives with respect to taxes paid prior to the effective date of the Tax Matters Agreement. Preservation of the Intended Tax Treatment of Certain Steps of the Separation and the Distribution With respect to taxes incurred in connection with the Separation and the Distribution, Kenvue will generally be required to indemnify J&J for any taxes resulting from the failure of certain steps of the Separation and the Distribution to qualify for their intended tax treatment, where such taxes are attributable to actions or omissions by Kenvue. In addition, during the time period ending two years after the date of the Distribution, August 23, 2025, covenants were in place that limited or restricted certain actions, including share issuances, business combinations, sales of assets, and similar transactions by Kenvue. The above covenants did not have a material impact on the Company, and the Company believes that it complied with these requirements through August 23, 2025. The Company had a net liability to J&J totaling approximately $61 million and $104 million for income and non-income indemnification tax payables and refunds, unrecognized tax benefits, and associated interest due as Prepaid expenses and other receivables and Accrued liabilities for current assets and current liabilities, respectively, and to Other assets and Other liabilities for non-current assets and non-current liabilities, respectively, on the Consolidated Balance Sheets as of December 28, 2025 and December 29, 2024, respectively. Debt Financing Transactions and Kenvue IPO Consideration During the fiscal six months ended July 2, 2023, the Company received debt proceeds of approximately $7.7 billion from the issuance of the 2023 Senior Notes and received initial proceeds from its commercial paper program of $1.2 billion. The Company loaned the total proceeds to J&J through the Facility Agreement. Upon the completion of the Kenvue IPO on May 8, 2023, the Facility Agreement was terminated and the balance of the loans, and all accrued interest, were repaid by J&J for a total cash inflow of $9.0 billion. The Company remitted this cash back to J&J as a distribution in connection with the Separation.

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