INCOME TAXES (Tables)

12 Months Ended

Jan. 02, 2026

Income Tax Disclosure [Abstract]

Schedule of Provision For Income Tax

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

	Fiscal Year
(In millions)	2025		2024		2023
Current:
United States	$	(10)	$	(166)	$	328
International	77		72		50
State and local	53		5		66
Total current income taxes	120		(89)		444
Deferred:
United States	166		244		(380)
International	(14)		(34)		10
State and local	54		(36)		(51)
Total deferred income taxes	206		174		(421)
Income taxes	$	326	$	85	$	23

Schedule of Income before Income Tax, Domestic and Foreign

The components of our income before income taxes included in our Consolidated Statement of Operations are as follows:

	Fiscal Year
(In millions)	2025		2024		2023
United States	$	1,677	$	1,406	$	1,016
International	255		191		205
Income before income taxes	$	1,932	$	1,597	$	1,221

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
(In millions)	2025
U.S. federal statutory income tax rate	$	406	21.0	%
State and local income taxes, net of federal income tax effect(1)(2)	70		3.6
Foreign tax effects:
Canada:
Statutory tax rate difference between Canada and U.S.	(11)		(0.6)
Local Provincial Taxes	22		1.1
Other	(3)		(0.2)
Various foreign jurisdictions	3		0.2
Effect of cross-border tax laws:
Foreign-derived intangible income	(35)		(1.8)
Tax credits:
R&D tax credits	(226)		(11.7)
Advanced manufacturing credits	(22)		(1.1)
Other	(2)		(0.1)
Changes in unrecognized tax benefits	20		1.1
Other adjustments:
Impact of divestitures and reorganizations	95		4.9
Other	9		0.5
Effective income tax rate	$	326	16.9	%

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(1)State taxes in Texas, New Jersey and New Hampshire make up the majority (greater than 50 percent) of the tax effect in this category.

(2)Includes the impact of a change in Texas legislation, which required us to record a $32 million valuation allowance against our Texas R&D credit carryforwards.

	Fiscal Year
(In millions)	2024		2023
U.S. statutory income tax rate	21.0	%	21.0	%
State taxes	2.1		1.4
International income	0.4		—
Non-deductible goodwill impairment	—		3.6
R&D tax credit	(10.4)		(12.5)
Foreign-derived intangible income	(2.1)		(4.4)
Changes in valuation allowance	(2.3)		0.2
Impact of divestitures and reorganizations	1.2		(8.5)
Share-based compensation(1)	(0.6)		0.2
Settlement of tax audits	(3.4)		(1.1)
Other items	(0.6)		2.0
Effective income tax rate	5.3	%	1.9	%

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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 2, 2026		January 3, 2025
Deferred tax assets, net:
Accruals	$	407	$	396
Tax loss and credit carryforwards(1)	222		249
Operating lease obligation	231		212
Capitalized research and experimental expenditures	1,245		1,694
Other	393		461
Valuation allowance(2)	(260)		(238)
Deferred tax assets, net	2,238		2,774
Deferred tax liabilities:
Property, plant and equipment	(204)		(216)
Acquired intangibles	(1,794)		(1,974)
Operating lease ROU asset	(211)		(188)
Deferred revenue on long-term contracts	(677)		(913)
Pension and other post-employment benefits	(297)		(196)
Other	(93)		(109)
Deferred tax liabilities	(3,276)		(3,596)
Net deferred tax liabilities	$	(1,038)	$	(822)

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(1)As of January 2, 2026, primarily includes credit carryforwards of $189 million and operating loss carryforwards of $37 million 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 2025 and 2024 was an increase of $22 million and a decrease of $2 million, respectively.

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

(In millions)	January 2, 2026		January 3, 2025
Deferred income tax assets	$	76	$	120
Deferred income tax liabilities	(1,114)		(942)
Net deferred tax liabilities	$	(1,038)	$	(822)

Schedule of Cash Flow, Supplemental Disclosures

A reconciliation of income taxes paid, net of refunds received, is as follows:

	Fiscal Year
(In millions)	2025
Payment / (refund):
U.S federal(1)	$	(164)
Texas	5
California	5
New Hampshire	5
Massachusetts	5
Florida	5
Other	10
Total U.S. state and local	35
Canada	57
Italy	4
United Kingdom	3
Other	10
Total foreign	74
Total income taxes paid, net of refunds received	$	(55)

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(1)In fiscal 2025, we received $355 million in refunds associated with amended returns and carryback claims, partially offset by payments of $191 million for the purchase of transferable tax credits.

Schedule of Reconciliation of Unrecognized Tax Benefits

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

	Fiscal Year
(In millions)	2025		2024		2023
Balance at beginning of fiscal year	$	758	$	652	$	613
Additions based on:
Tax positions taken during current period	88		120		99
Tax positions taken during prior period	21		23		8
Tax positions related to acquired entities	—		92		86
Reductions based on:
Tax positions taken during prior period	(96)		(113)		(133)
Lapse in statutes of limitations	(4)		(9)		(11)
Settlements with tax authorities	(13)		(7)		(10)
Balance at end of fiscal year(1)	$	754	$	758	$	652

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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 $635 million and $666 million as of January 2, 2026 and January 3, 2025, respectively.