v3.26.1
Risk Management
 6 Months Ended
Jul. 04, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Risk Management Risk Management
Foreign Currency Risk
The Company had outstanding foreign exchange contracts with notional amounts totaling $1.5 billion and $1.6 billion for the periods ended July 4, 2026 and December 31, 2025, respectively. The Company does not believe these financial instruments should subject it to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions.
The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of July 4, 2026, and the corresponding positions as of December 31, 2025: 
Notional Amount
Net Buy (Sell) by CurrencyJuly 4, 2026December 31, 2025
British Pound$330 $301 
Euro246 191 
Canadian dollar116 115 
Australian dollar(106)(160)
Danish krone88 58 
Counterparty Risk
The use of derivative financial instruments exposes the Company to counterparty credit risk in the event of non-performance by counterparties. However, the Company’s risk is limited to the fair value of the instruments when the derivative is in an asset position. The Company actively monitors its exposure to credit risk. As of July 4, 2026, all of the counterparties had investment grade credit ratings. As of July 4, 2026, the Company had $4 million of exposure to aggregate credit risk with all counterparties.
Derivative Financial Instruments
The following tables summarize the fair values and locations in the Condensed Consolidated Balance Sheets of all derivative financial instruments held by the Company as of July 4, 2026 and December 31, 2025:
Fair Values of Derivative Instruments
July 4, 2026Other Current AssetsAccrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts$2 $— 
Derivatives not designated as hedging instruments:
Foreign exchange contracts$2 $11 
Total derivatives$4 $11 
Fair Values of Derivative Instruments
December 31, 2025Other Current AssetsAccrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts$— $19 
Derivatives not designated as hedging instruments:
Foreign exchange contracts$10 $— 
Total derivatives$10 $19 
The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and six months ended July 4, 2026 and June 28, 2025:
Financial Statement LocationThree Months EndedSix Months Ended
DerivativesJuly 4, 2026June 28, 2025July 4, 2026June 28, 2025
Derivatives designated as hedging instruments:
Foreign exchange contractsAccumulated other
comprehensive income (loss)		$2 $(17)$4 $(23)
Amortized hedge incomeOther income (expense)1 2 2 3 
Derivatives not designated as hedging instruments:
Foreign exchange contractsOther income (expense)$(17)$34 $(44)$48 
Equity swap contractsSelling, general and administrative expenses3 2 2 1 
Net Investment Hedges
The Company uses foreign exchange forward and option contracts to hedge against the effect of the British pound and the Euro exchange rate fluctuations against the U.S. dollar on a portion of its net investments in certain European operations. The Company recognizes changes in the fair value of the net investment hedges as a component of foreign currency translation adjustments within Other comprehensive income to offset a portion of the change in translated value of the net investments being hedged, until the investments are sold or liquidated. As of July 4, 2026, the Company had €160 million of net investment hedges in certain Euro functional subsidiaries and £50 million of net investment hedges in a British pound functional subsidiary.
The Company excludes the difference between the spot rate and the forward rate of the forward contracts and initial time value of the options from its assessment of hedge effectiveness. The effect of the forward points recognized in forward contracts and the initial time value of the option contracts are amortized on a straight-line basis and recognized through interest expense within Other income (expense) in the Condensed Consolidated Statement of Operations.
Equity Swap Contracts
The Company uses equity swap contracts which serve as economic hedges against volatility within the equity markets, impacting the Company's deferred compensation plan obligations. These contracts are not designated as hedges for accounting purposes. Unrealized gains and losses on these contracts are included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The notional amount of these contracts as of July 4, 2026 was $24 million.
Treasury Rate Lock
In order to manage interest rate exposure, during the period ended July 4, 2026, the Company entered into Treasury rate lock agreements to protect against unfavorable interest rate changes relating to forecasted debt transactions. These derivatives are designated as cash flow hedges with unrealized gains and losses deferred in other comprehensive income. The derivatives will be settled upon the issuance of the related debt and gains and losses generated from the derivatives will be recognized within interest expense over the same period that the hedged interest payments affect earnings. The Company entered into Treasury rate lock agreements in a cash flow hedging relationship with a notional amount of $150 million for which the fair value as of July 4, 2026 was de minimis.