INCOME TAXES (Tables)

12 Months Ended

Jan. 03, 2025

Income Tax Disclosure [Abstract]

Schedule of Provision For Income Tax

Our provisions for current and deferred income taxes are as follows:

	Fiscal Year Ended
(In millions)	January 3, 2025	December 29, 2023	December 30, 2022
Current:
United States	$(166)	$328	$633
International	72	50	82
State and local	5	66	98
Total current income taxes	(89)	444	813
Deferred:
United States	244	(380)	(523)
International	(34)	10	(61)
State and local	(36)	(51)	(17)
Total deferred income taxes	174	(421)	(601)
Total income taxes	$85	$23	$212

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the U.S. statutory income tax rate to our effective income tax rate is as follows:

	Fiscal Year Ended
(In millions)	January 3, 2025	December 29, 2023	December 30, 2022
U.S. statutory income tax rate	21.0%	21.0%	21.0%
State taxes	2.1	1.4	2.2
International income	0.4	—	—
Non-deductible goodwill impairment	—	3.6	14.2
R&D tax credit	(10.4)	(12.5)	(13.0)
FDII deduction	(2.1)	(4.4)	(5.1)
Changes in valuation allowance	(2.3)	0.2	0.1
Impact of divestitures and reorganizations	1.2	(8.5)	(1.3)
Share-based compensation(1)	(0.6)	0.2	(0.2)
Settlement of tax audits	(3.4)	(1.1)	(0.7)
Other items	(0.6)	2.0	(0.5)
Effective income tax rate	5.3%	1.9%	16.7%

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(1)Includes non-deductible share-based compensation and excess tax benefits from share-based compensation.

Schedule of Deferred Tax Assets, Net of Valuation Allowance

The components of deferred income tax assets (liabilities) were as follows:

(In millions)	January 3, 2025	December 29, 2023
Deferred tax assets, net:
Accruals	$396	$334
Tax loss and credit carryforwards(1)	249	211
Operating lease obligation	212	243
Capitalized research and experimental expenditures	1,694	1,125
Other	461	380
Valuation allowance(2)	(238)	(240)
Deferred tax assets, net	2,774	2,053
Deferred tax liabilities:
Property, plant and equipment	(216)	(252)
Acquired intangibles	(1,974)	(2,143)
Operating lease ROU asset	(188)	(219)
Deferred revenue on long-term contracts(3)	(913)	—
Other	(305)	(163)
Deferred tax liabilities	(3,596)	(2,777)
Net deferred tax liabilities	$(822)	$(724)

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(1)At January 3, 2025, primarily includes operating loss and credit carryforwards of $81 million and $165 million, respectively, which have

expiration dates ranging from less than one year to no expiration date. A significant portion of the carryforwards are either indefinite or begin

expiring in 2035.

(2)Valuation allowance established to offset certain domestic and foreign deferred tax assets due to the uncertainty regarding our ability to

realize these assets in the future. The net change in our valuation allowance in fiscal 2024 and 2023 was a decrease of $2 million and

$3 million, respectively.

(3)Based on recent IRS guidance, we made a method change to defer taxable income for long-term contracts accounted for under the POC

cost-to-cost method that include deferred R&D expenses, resulting in a $913 million reduction in our current income taxes (current payable)

and corresponding increase to our deferred income taxes (deferred tax liability).

Net deferred tax assets (liabilities) were classified as follows in our Consolidated Balance Sheet:

(In millions)	January 3, 2025	December 29, 2023
Deferred income tax assets	$120	$91
Deferred income tax liabilities	(942)	(815)
Net deferred tax liabilities	$(822)	$(724)

Schedule of Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

	Fiscal Year Ended
(In millions)	January 3, 2025	December 29, 2023	December 30, 2022
Balance at beginning of fiscal year	$652	$613	$587
Additions based on tax positions taken during current period	120	99	124
Additions based on tax positions taken during prior period	23	8	4
Additions from tax positions related to acquired entities	92	86	—
Decreases based on tax positions taken during prior period	(113)	(133)	(76)
Decreases from lapse in statutes of limitations	(9)	(11)	(6)
Decreases from settlements	(7)	(10)	(20)
Balance at end of fiscal year(1)	$758	$652	$613

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(1)Includes unrecognized tax benefits that would favorably impact our future tax rates in the event that the tax benefits are eventually

recognized of $666 million and $509 million at January 3, 2025 and December 29, 2023, respectively.