Basis of Presentation and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jul. 04, 2026

Summary of Activity of Company's Allowance for Doubtful Accounts

The following is a summary of the activity of the Company’s allowance for credit losses for the six months ended July 4, 2026 and June 28, 2025 (in millions):


	Balance at Beginning of Period		Additions		Deductions and Other			Balance at End of Period
	Balance at Beginning of Period		Additions		Deductions and Other			Balance at End of Period
Allowance for Credit Losses
July 4, 2026	$	12	$	3	$	1		$	16
June 28, 2025	$	14	$	4	$	(5	)	$	13

Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis at July 4, 2026 (in millions):



	Total at July 4, 2026		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
401(k) Restoration Plan assets	$	32	$	32	$	—	$	—
Foreign currency exchange contracts		1		—		1		—
Interest rate cross-currency swap agreements		17		—		17		—

Total	$	50	$	32	$	18	$	—

Liabilities:
Interest rate cross-currency swap agreements		22		—		22		—
Interest rate swap cash flow hedge		1		—		1		—

Total	$	23	$	—	$	23	$	—

The following table represents the Company’s assets and liabilities measured at fair value on a rec

urr

ing basis at December 31, 2025 (in millions):


	Total at December 31, 2025		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
401(k) Restoration Plan assets	$	31	$	31	$	—	$	—
Foreign currency exchange contracts		—		—		—		—
Interest rate cross-currency swap agreements		—		—		—		—
Interest rate swap cash flow hedge		—		—		—		—

Total	$	31	$	31	$	—	$	—

Liabilities:
Foreign currency exchange contracts	$	—	$	—	$	—	$	—
Interest rate cross-currency swap agreements		50		—		50		—
Interest rate swap cash flow hedge		2		—		2		—

Total	$	52	$	—	$	52	$	—

Summary of Foreign Currency Exchange Contracts and Interest Rate Cross-Currency Swap Agreements

The Company’s foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap agreements designated as cash flow hedges included in the consolidated balance sheets are classified as follows (in millions):


	July 4, 2026					December 31, 2025
	Notional Value		Fair Value			Notional Value		Fair Value
Foreign currency exchange contracts:
Other current assets	$	43	$	1		$	39	$	—
Other current liabilities	$	9	$	—		$	19	$	—
Interest rate cross-currency swap agreements:
Other assets	$	900	$	17		$	20	$	—
Other liabilities (1)	$	380	$	22		$	880	$	50
Accumulated other comprehensive loss			$	(22	)			$	(54	)
Interest rate swap cash flow hedges:
Other assets	$	50	$	—		$	50	$	—
Other liabilities	$	100	$	1		$	100	$	2
Accumulated other comprehensive loss			$	(1	)			$	(2	)

(1)	Includes $ 18 million and $ 4 million classified as Other current liabilities and Other noncurrent liabilities in the consolidated balance sheets, respectively.

Gains (Losses) on Foreign Exchange Contracts

The following is a summary of the activity included in the consolidated statements of operations and statements of comprehensive (loss)/income related to the foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap agreements designated as cash flow hedges (in millions):


	Financial Statement Classification	Three Months Ended						Six Months Ended
	Financial Statement Classification	July 4, 2026			June 28, 2025			July 4, 2026			June 28, 2025
Foreign currency exchange contracts:
Realized losses on closed contracts	Cost of revenue	$	(3	)	$	(1	)	$	(4	)	$	(1	)
Unrealized gains on open contracts	Cost of revenue		—			1			—			—

Cumulative net pre-tax losses	Cost of revenue	$	(3	)	$	—		$	(4	)	$	(1	)

Interest rate cross-currency swap agreements:
Interest earned	Interest income	$	4		$	3		$	8		$	5
Unrealized gains (losses) on open contracts	Other comprehensive income (loss)	$	11		$	(56	)	$	32		$	(83	)
Interest rate swap cash flow hedges:
Unrealized gains (losses) on open contracts	Other comprehensive income (loss)	$	1		$	(1	)	$	2		$	(2	)

(1)	Unrealized (losses) gains on open contracts from interest rate cross-currency swap agreements fluctuated year over year primarily due to changes in foreign exchange rates, which resulted in period-to-period variability.

Summary of Activity of Company's Accrued Warranty Liability

The following is a summary of the activity of the Company’s accrued warranty liability for the six months ended July 4, 2026 and June 28, 2025 (in millions):


	Balance at Beginning of Period		Accruals for Warranties		Settlements Made			Acquisitions		Balance at End of Period
Accrued warranty liability:
July 4, 2026	$	12	$	12	$	(14	)	$	11	$	21
June 28, 2025	$	12	$	3	$	(3	)	$	—	$	12