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Derivative Instruments | 9 Months Ended
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Oct. 03, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Note 5–Derivative Instruments We manage our risk to changes in interest rates through the use of derivative instruments. We do not hold derivative instruments for trading or speculative purposes. For variable rate borrowings, we use fixed interest rate swaps, effectively converting a portion of the variable interest rate payments to fixed interest rate payments. These swaps are designated as cash flow hedges. The fair value of the interest rate swaps was as follows:
(in millions) | Balance sheet line item |  | October 3, 2025 |  | January 3, 2025
Cash flow interest rate swaps | Other current assets |  | $ | — |  |  | $ | 4 |
The cash flows associated with the interest rate swaps are classified as operating activities in the condensed consolidated statements of cash flows. CASH FLOW HEDGES As of January 3, 2025, we had 2.96% fixed interest rate swap agreements to hedge the cash flows of $500 million of the variable rate senior unsecured term loan (the "Variable Rate Loan"). The objective of these instruments was to reduce variability in the forecasted interest payments of the Variable Rate Loan. Under the terms of the interest rate swap agreements, we received monthly variable interest payments based on the one-month SOFR and paid interest at a fixed rate. These interest rate swap agreements matured in August 2025. The interest rate swap transactions were accounted for as cash flow hedges. The gain/loss on the swaps was reported as a component of other comprehensive income (loss) and was reclassified into earnings when the interest payments on the underlying hedged items impacted earnings. A qualitative assessment of hedge effectiveness was performed on a quarterly basis. The effect of the cash flow hedges on other comprehensive income (loss) and earnings for the periods presented was as follows:
|  | Three Months Ended |  | Nine Months Ended
(in millions) |  | October 3, 2025 |  | September 27, 2024 |  | October 3, 2025 |  | September 27, 2024
Total interest expense, net presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded |  | $ | 51 |  |  | $ | 46 |  |  | $ | 155 |  |  | $ | 146 |
Amount recognized in other comprehensive income (loss) |  | — |  |  | (4) |  |  | 1 |  |  | 3 |
Amount reclassified from accumulated other comprehensive loss to interest expense, net |  | (1) |  |  | (3) |  |  | (4) |  |  | (9) |

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