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Derivative Instruments

12 Months Ended

Jan. 03, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 12—Derivative Instruments

The fair value of the interest rate swaps was as follows:

(in millions)			Balance sheet line item			January 3, 2025						December 29, 2023
Cash flow interest rate swaps			Other current assets (1)			$	4					$	11

(1) As of December 29, 2023, the cash flow interest rate swaps were reported in the "other long-term assets" on the consolidated balance sheet.

The cash flows associated with the interest rate swaps are classified as operating activities in the consolidated statements of cash flows.

CASH FLOW HEDGES

We have interest rate swap agreements to hedge the cash flows of $500 million of the variable rate senior unsecured term loan (the “Variable Rate Loan”). These interest rate swap agreements have a maturity date of August 2025 and a fixed interest rate of 2.96%. The objective of these instruments is to reduce variability in the forecasted interest payments of the Variable Rate Loan.

The interest rate swap transactions are accounted for as cash flow hedges. The gain/loss on the swaps is reported as a component of other comprehensive income (loss) and is reclassified into earnings when the interest payments on the underlying hedged items impact earnings. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective.

The effect of the cash flow hedges on other comprehensive income (loss) and earnings for the periods presented was as follows:

						Year Ended
(in millions)						January 3, 2025						December 29, 2023						December 30, 2022
Total interest expense, net presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded						$	193					$	212					$	199
Amount recognized in other comprehensive income						5						6						59
Amount reclassified from accumulated other comprehensive income (loss) to interest expense, net						(11)						(15)						11

We expect to reclassify net gains of $3 million from accumulated other comprehensive loss into earnings during the next 12 months.

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- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480237/815-40-50-5

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 815
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/815/tableOfContent

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