INCOME TAXES

3 Months Ended

Apr. 03, 2026

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE F: INCOME TAXES

Tax Legislation Update

The Organisation for Economic Cooperation and Development (“OECD”) established a 15% global minimum tax applicable to multinational companies, which has been adopted by a majority of countries in which we operate and may subject us to this tax. In January 2026, the OECD issued additional guidance that is expected to reduce the global minimum tax burden on U.S. based multinationals. We are actively monitoring the legislative adoption of this guidance in relevant jurisdictions and will continue to evaluate its applicability to our operations and refine our estimates of the effective tax rate and cash tax impacts as new legislation is enacted. There was no impact on our effective tax rate in first quarter 2026.

Effective Tax Rate (“ETR”)

ETR was as follows:

	First Quarter
(In millions)	2026			2025
Income tax expense	$	(77)		$	(73)
ETR	13.1		%	15.9		%

ETR for both periods benefited from favorable impacts of research and development (“R&D”) credits and tax deductions for foreign derived intangible income (“FDII”). First quarter 2026 ETR decreased compared to first quarter 2025, primarily due to higher deductions associated with FDII benefits from exporting products and services, the favorable resolution of audit matters and favorable impact of excess tax benefits from share based-compensation, partially offset by unfavorable return-to-provision adjustments, while first quarter 2025 ETR included an unfavorable impact from the Commercial Aviations Solutions (“CAS disposal group”) divestiture.