INCOME TAXES |
6 Months Ended |
|---|---|
Jul. 03, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES The Company recorded income taxes of $1,037 million (18.9% effective tax rate) and $993 million (20.7% effective tax rate) during the three months ended July 3, 2026 and June 27, 2025, respectively. The Company recorded income taxes of $1,682 million (16.7% effective tax rate) and $1,715 million (19.4% effective tax rate) during the six months ended July 3, 2026 and June 27, 2025, respectively. The Company’s effective tax rates for the three and six months ended July 3, 2026 and June 27, 2025 vary from the statutory U.S. federal tax rate of 21.0%, primarily due to the tax impact of significant operating and nonoperating items, as described in Note 12, along with the tax benefits of having significant earnings generated outside of the United States and significant earnings generated in investments accounted for under the equity method, both of which are generally taxed at rates lower than the statutory U.S. federal tax rate. The Company’s effective tax rates for the three and six months ended July 3, 2026 included $40 million and $319 million, respectively, of net tax benefits related to various discrete tax items, including net interest income of $43 million and $98 million, respectively, related to the IRS Tax Litigation Deposit recorded in the line item income taxes in our consolidated statements of income, in accordance with our accounting policy. The Company’s effective tax rates for the three and six months ended July 3, 2026 also included net tax expense of $13 million and a net tax benefit of $181 million, respectively, primarily related to return to provision adjustments. The Company’s effective tax rates for the three and six months ended June 27, 2025 included $12 million and $155 million, respectively, of net tax benefits related to various discrete tax items, including net interest income of $54 million and $107 million, respectively, related to the IRS Tax Litigation Deposit recorded in the line item income taxes in our consolidated statements of income, in accordance with our accounting policy. The Company’s effective tax rate for the six months ended June 27, 2025 also included a tax benefit of $85 million related to a change in the Company’s indefinite reinvestment assertion for certain foreign entities. During the six months ended July 3, 2026, the Company invested $75 million in limited partnerships that receive tax credits and other tax benefits by constructing, owning and operating alternative energy generation facilities. During the three and six months ended July 3, 2026, the Company received tax credits and other income tax benefits of $2 million and $5 million, respectively, and recognized amortization expense of $2 million and $4 million, respectively, related to all of our investments of this nature. The amount of non-income tax-related activity and other returns related to these investments was not material during the three and six months ended July 3, 2026. During the six months ended June 27, 2025, the Company invested $148 million in limited partnerships that receive tax credits and other tax benefits by constructing, owning and operating alternative energy generation facilities. During the three and six months ended June 27, 2025, the Company received tax credits and other income tax benefits of $146 million and $155 million, respectively, and recognized amortization expense of $135 million and $142 million, respectively, related to all of our investments of this nature. The amount of non-income tax-related activity and other returns related to these investments was not material during the three and six months ended June 27, 2025. As of July 3, 2026 and December 31, 2025, the carrying values of these investments were $246 million and $32 million, respectively. The Company recorded $174 million and $32 million of unfunded commitments related to these investments in the line item accounts payable and accrued expenses in our consolidated balance sheets as of July 3, 2026 and December 31, 2025, respectively. We are currently in litigation with the IRS for tax years 2007 through 2009. Refer to Note 9.
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