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INCOME TAXES
 9 Months Ended
Oct. 02, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES
NOTE G: 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 third quarter 2026.
Effective Tax Rate
Our effective tax rate was as follows:
Third QuarterYear to Date
(In millions)2026202520262025
Income tax expense$(111)$(105)$(298)$(244)
Effective tax rate14.9 %18.5 %14.6 %15.7 %
Both third quarter 2026 and 2025 effective tax rate benefited from favorable impacts of research and development (“R&D”) credits and tax deductions for foreign derived deduction-eligible intangible income (“FDDEI”). Third quarter 2026 effective tax rate reflects an incremental benefit of 10% associated with the favorable resolution of audit uncertainties, partially offset by an unfavorable impact from pre-divestiture activities of the Space Technology disposal group. Third quarter 2025 effective tax rate was unfavorably impacted by the reduction in R&D credits from the enactment of the One Big Beautiful Bill Act (“OBBBA”) and the Commercial Aviation Solutions (“CAS disposal group”) divestiture, partially offset by a favorable return-to-provision adjustment.
Both year to date 2026 and 2025 effective tax rate benefited from the favorable resolution of audit uncertainties, favorable impacts of R&D credits and tax deductions for FDDEI. Year to date 2026 effective tax rate is lower than year to date 2025 effective tax rate primarily due to the establishment of a valuation allowance on R&D credit carryforwards in year to date 2025 resulting from a state legislative change.