DEBT AND CREDIT ARRANGEMENTS

12 Months Ended

Jan. 02, 2026

NOTE 8: DEBT AND CREDIT ARRANGEMENTS

Long-Term Debt

Long-term debt is summarized below:


(In millions)	January 2, 2026		January 3, 2025

Fixed-rate debt:(1)
3.832% notes, due April 2025(“3.832% 2025 Notes”)(2)(3)	$	—	$	600
7.00% debentures, due January 2026(4)	100		100
3.85% notes, due December 2026(2)	550		550
5.40% notes, due January 2027(2)(3)(5)	1,250		1,250
6.35% debentures, due February 2028(2)	26		26
4.40% notes, due June 2028(2)(3)	1,850		1,850
5.05% notes, due June 2029 (“5.05% 2029 Notes”)(2)(3)(6)	750		750
2.90% notes, due December 2029(2)	400		400
1.80% notes, due January 2031(2)(3)	650		650
5.25% notes, due June 2031 (“5.25% 2031 Notes”)(2)(3)(6)	750		750
5.40% notes, due July 2033(2)(3)(5)	1,500		1,500
5.35% notes, due June 2034 (“5.35% 2034 Notes”)(2)(3)(6)	750		750
4.854% notes, due April 2035(2)(3)	400		400
6.15% notes, due December 2040(2)(3)	300		300
5.054% notes, due April 2045(2)(3)	500		500
5.60% notes, due July 2053(2)(3)(5)	500		500
5.50% notes, due August 2054 (“5.50% 2054 Notes”)(2)(3)	600		600
Fixed-rate debt	10,876		11,476
Finance lease obligations and other	283		288


Unamortized discounts and issuance costs, net of bond premium	(43)		(43)
Total long-term debt	11,116		11,721
Less: current portion(7)	673		640
Long-term debt, net of current portion	$	10,443	$	11,081

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(1)All fixed-rate notes and debentures rank equally in right of payment.

(2)We may redeem these notes, in whole or in part, at our option, at a pre-determined redemption price pursuant to their terms prior to the applicable maturity date.

(3)Upon change of control combined with a below-investment-grade rating event, we may be required to make an offer to repurchase these notes at a pre-determined price pursuant to their terms.

(4)The debentures are not redeemable prior to maturity.

(5)Collectively, the “AJRD Notes”. The AJRD Notes were used to fund a portion of the purchase price for the AJRD acquisition, and to pay related fees and expenses.

(6)Collectively, the “March Issued 2024 Notes”.

(7)Included in the “Other current liabilities” line item in our Consolidated Balance Sheet.

The maturities of long-term debt, including the current portion of long-term debt and excluding finance lease obligations, for the five years following the end of fiscal 2025 and, in total thereafter, are: $660 million in fiscal 2026; $1,256 million in fiscal 2027; $1,880 million in fiscal 2028; $1,155 million in fiscal 2029; $5 million in fiscal 2030; and $5,973 million thereafter.

Long-Term Debt Issuances. On March 13, 2024, we closed the issuance and sale of the March Issued 2024 Notes. The March Issued 2024 Notes were used to repay the entire outstanding $2.25 billion, three-year senior unsecured credit facility (“Term Loan 2025”), including related fees and expenses, which had an outstanding

balance of $2.25 billion as of January 3, 2025. Interest on the March Issued 2024 Notes is payable semi-annually in arrears on June 1 and December 1 of each year.

On August 2, 2024, we closed the issuance and sale of $600 million 5.50% 2054 Notes, and used the net proceeds to repay borrowings under our CP Program. Interest on the 5.50% 2054 Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2025.

Long-Term Debt Repayments.

Fiscal 2025. On April 27, 2025, we repaid the entire outstanding $600 million 3.832% 2025 Notes with proceeds from the 5.50% 2054 Notes issued in fiscal 2024.

Fiscal 2024. On March 14, 2024, we repaid the entire outstanding $2.25 billion drawn on Term Loan 2025, which at time of repayment had a variable interest rate of 6.7%, with proceeds from the issuance of the March Issued 2024 Notes, which bear fixed interest rates between 5.05% and 5.35%. Additionally, during the quarter ended June 28, 2024, we repaid the $350 million aggregate principal amount of our 3.95% notes due May 28, 2024.

Commercial Paper Program

Under our CP Program, we may issue unsecured commercial paper notes up to a maximum aggregate amount of $3.0 billion. The CP Program is supported by amounts available under our credit agreements, discussed below.

The commercial paper notes are sold at par less a discount representing an interest factor or, if interest bearing, at par, and the maturities vary but may not exceed 397 days from the date of issue. The commercial paper notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness.

As of January 2, 2026, we had no outstanding notes under our CP Program. As of January 3, 2025, we had $515 million in outstanding notes under our CP Program, which had a weighted-average interest rate of 4.70%. These outstanding notes are included as a component of the “Short-term debt” line item in our Consolidated Balance Sheet.

Fair Value of Debt

As of January 2, 2026 and January 3, 2025, the estimated fair value of long-term debt was $11.2 billion and $11.5 billion, respectively. These values were estimated using a market approach based on quoted market prices for our debt in the secondary market and would be classified as Level 2 in the fair value hierarchy.

Credit Agreements

2025 Five-Year Credit Facility. On February 18, 2025, we established a new $2.5 billion, five-year senior unsecured revolving credit facility by entering into the 2025 Five-Year Credit Agreement maturing on February 18, 2030 with a syndicate of lenders. The 2025 Five-Year Credit Facility replaces the prior $2.0 billion, five-year senior unsecured revolving credit facility established under the 2022 Credit Agreement, and provides for revolving loans, swingline loans and letters of credit, with a sub-limit of $200 million for swingline loans and a sub-limit of $350 million for letters of credit, with the option to request an increase of the maximum amount of commitments up to $3.5 billion.

At our election, borrowings in U.S. Dollars under the 2025 Five-Year Credit Agreement will bear interest at the sum of the secured overnight funding rate (“SOFR”) or the Base Rate (as defined in the 2025 Five-Year Credit Agreement), plus an applicable margin that varies based on the ratings of our senior unsecured long-term debt securities (“Senior Debt Ratings”). In addition to interest payable on the principal amount of indebtedness outstanding, we are required to pay a quarterly unused commitment fee and letter of credit fees based on our Senior Debt Ratings.

2025 364-Day Credit Facility. On February 18, 2025, we established a new $500 million 364-day senior unsecured revolving credit facility by entering into the 2025 364-Day Credit Agreement maturing no later than February 17, 2026 with a syndicate of lenders. The 2025 364-Day Credit Agreement replaces the prior $1.5 billion 364-day 2024 Credit Agreement, which matured on January 24, 2025.

At our election, borrowings in U.S. Dollars under the 2025 364-Day Credit Agreement, will bear interest at the sum of the applicable SOFR or the Base Rate (as defined in the 2025 364-Day Credit Agreement), plus an applicable margin that varies based on our Senior Debt Ratings. In addition to interest payable on the principal amount of indebtedness outstanding, we are required to pay a quarterly unused commitment fee that varies based on our Senior Debt Ratings.

Both the 2025 Five-Year Credit Agreement and the 2025 364-Day Credit Agreement contain customary representations, warranties, covenants and events of default for investment grade borrowers and financings of this type.

2024 Credit Agreement. On January 26, 2024, we established a new $1.5 billion, 364-day senior unsecured revolving credit facility by entering into a 364-day credit agreement maturing no later than January 24, 2025 with a syndicate of lenders. The 2024 Credit Agreement, which matured on January 24, 2025, replaced the 2023 Credit Agreement.

At our election, borrowings under the 2024 Credit Agreement, which were designated in U.S. Dollars, bore interest at the sum of the term SOFR or the Base Rate (as defined in the 2024 Credit Agreement), plus an applicable margin that varied based on the ratings of our senior unsecured long-term debt securities (“Senior Debt Ratings”). In addition to interest payable on the principal amount of indebtedness outstanding, we were required to pay a quarterly unused commitment fee that varied based on our Senior Debt Ratings.

The 2024 Credit Agreement contained customary representations, warranties, covenants and events of default for investment grade borrowers and financings of this type.

As of January 2, 2026, we had no outstanding borrowings under our credit facilities, had available borrowing capacity of $3.0 billion, and were in compliance with all covenants under the 2025 364-Day Credit Agreement and the 2025 Five-Year Credit Agreement.

As of January 3, 2025, we had no outstanding borrowings under our credit facilities, had available borrowing capacity of $2,985 million, net of outstanding notes under our CP Program, and were in compliance with all covenants under the 2024 Credit Agreement and the 2022 Credit Agreement.

Interest Paid

Total interest paid was $604 million, $654 million and $489 million in fiscal 2025, 2024 and 2023, respectively.