Fair Value Measurements (Tables)

6 Months Ended

Jul. 02, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

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:

	2022								2021
(Dollars in Millions)	Carrying Value		Level 1		Level 2		Level 3		Carrying Value		Level 1		Level 2		Level 3
Cash and cash equivalents:
Time deposits	$	—	—		—		—		$	32	—		32		—
Derivatives designated as cash flow hedges:
Assets:
Forward foreign exchange contracts	39		—		39		—		—		—		—		—
Interest rate swaps	29		—		29		—		—		—		—		—
Total	$	68	$	—	$	68	$	—	$	—	$	—	$	—	$	—
Liabilities:
Forward foreign exchange contracts	(15)		—		(15)		—		—		—		—		—
Interest rate swaps	(39)		—		(39)		—		—		—		—		—
Total	$	(54)	$	—	$	(54)	$	—	$	—	$	—	$	—	$	—
Net amount presented in Prepaid expenses and other receivables:	$	14	$	—	14		$	—	$	—	$	—	$	—	$	—

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:

	July 2, 2023								January 1, 2023
(Dollars in Millions)	Carrying Value		Level 1		Level 2		Level 3		Carrying Value		Level 1		Level 2		Level 3
Assets:
Forward foreign exchange contracts	$	66	$	—	$	66	$	—	$	39	$	—	$	39	$	—
Interest rate swaps	—		—		—		—		29		—		29		—
Total	66		—		66		—		68		—		68		—
Liabilities:
Forward foreign exchange contracts	$	(48)	—		(48)		—		(15)		—		(15)		—
Interest rate swaps	—		—		—		—		(39)		—		(39)		—
Total	(48)		—		(48)		—		(54)		—		(54)		—
Net amount presented in Prepaid expenses and other receivables:	$	18	$	—	$	18	$	—	$	14	$	—	$	14	$	—

Schedule of Notional Amounts of Outstanding Derivative Instruments

The following table sets forth the notional amounts of the Company’s outstanding derivative instruments:

	January 1, 2023
	Forward foreign exchange contracts		Interest rate swaps		Total
Cash Flow Hedges	$	1,768	$	2,400	$	4,168

The following table sets forth the notional amounts of the Company’s outstanding derivative instruments:

	July 2, 2023						January 1, 2023
(Dollars in Millions)	Forward foreign exchange contracts		Interest rate swaps		Total		Forward foreign exchange contracts		Interest rate swaps		Total
Cash flow hedges	$	3,307	$	—	$	3,307	$	1,768	$	2,400	$	4,168
Undesignated forward foreign exchange contracts	$	578	$	—	$	578	$	—	$	—	$	—
Net investment hedges	$	10	$	—	$	10	$	—	$	—	$	—

Summary of Derivative Activity

The following table is a summary of the activity related to derivatives and hedges for fiscal years 2022, 2021 and 2020, net of tax.

	2022				2021			2020
	Net Sales		Cost of sales	Other expense (income), net	Net Sales	Cost of sales	Other expense (income), net	Net Sales	Cost of sales	Other expense (income), net
Gain (loss) on cash flow hedges	$	21	12	30	11	(23)	(21)	(2)	(3)	10
Gain (loss) on forward currency exchange contracts not designated as hedges	$	—	—	33	—	—	(15)	—	—	(34)

The following table is a summary of gains and losses on forward foreign exchange contracts designated as cash flow hedges within Other comprehensive income (loss) and amount reclassified into earnings:

	Fiscal Three Months Ended				Fiscal Six Months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Gain (loss) recognized in Other comprehensive income (loss)	$	(17)	$	1	$	—	$	(2)
Gain (loss) reclassified from Other comprehensive income (loss) to earnings	$	(6)	$	(1)	$	5	$	—

The following tables are a summary of the reclassifications to Net Income related to the Company’s forward foreign exchange contracts for the fiscal three and six months ended July 2, 2023 and July 3, 2022:

	Fiscal Three Months Ended
	July 2, 2023						July 3, 2022
(Dollars in Millions)	Net Sales		Cost of Sales		Other (income) expense, net		Net Sales		Cost of Sales		Other (income) expense, net
Gain (loss) on cash flow hedges	$	(1)	$	(3)	$	(2)	$	8	$	3	$	12
Gain (loss) on forward currency exchange contracts not designated as hedges	$	—	$	—	$	(2)	$	—	$	—	$	(1)

	Fiscal Six Months Ended
	July 2, 2023						July 3, 2022
(Dollars in Millions)	Net Sales		Cost of Sales		Other (income) expense, net		Net Sales	Cost of Sales	Other (income) expense, net
Gain (loss) on cash flow hedges	$	—	$	7	$	(2)	11	3	10
Gain on forward currency exchange contracts not designated as hedges	$	—	$	—	$	4	—	—	7