v3.26.1
Tax Matters
 3 Months Ended
Mar. 29, 2026
Income Tax Disclosure [Abstract]  
Tax Matters Tax Matters
A. Taxes on Income from Continuing Operations
Our effective tax rate for continuing operations was 14.6% for the first quarter of 2026, compared to (6.8)% for the first quarter of 2025. The increase in the effective tax rate for the first quarter of 2026, compared to the first quarter of 2025, was primarily due to an unfavorable change in the jurisdictional mix of earnings, and non-recurrence of favorable global income tax resolutions.
We elected, with the filing of our 2018 U.S. Federal Consolidated Income Tax Return, to pay our initial estimated $15 billion repatriation tax liability on accumulated post-1986 foreign earnings (Transition Tax liability) over eight years through 2026. The eighth and final annual installment was paid by its April 15, 2026 due date and was reported in current Income taxes payable as of March 29, 2026. Our obligations may vary due to the availability of attributes such as foreign tax and other credit carryforwards or carrybacks.
See Note 5A in our 2025 Form 10-K for information on our income taxes paid (net of refunds received).
B. Tax Contingencies
We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation.
The U.S. is one of our major tax jurisdictions, and we are regularly audited by the IRS. Tax years 2019-2022 are under audit. Tax years 2023-2026 are open but not under audit. All other tax years are closed. In addition to the open audit years in the U.S., we have open audit years and certain related audits, appeals and investigations in certain major international tax jurisdictions dating back to 2016.
See Note 5D in our 2025 Form 10-K.
C. Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)
Components of Tax provision/(benefit) on other comprehensive income/(loss) include:
Three Months Ended
(MILLIONS)March 29,
2026		March 30,
2025
Foreign currency translation adjustments, net(a)
$76 $(102)
Unrealized holding gains/(losses) on derivative financial instruments, net(5)(34)
Reclassification adjustments for (gains)/losses included in net income
6 (55)
— (89)
Unrealized holding gains/(losses) on available-for-sale securities, net5 (4)
Reclassification adjustments for (gains)/losses included in net income
3 19 
7 15 
Reclassification adjustments related to amortization of prior service costs and other, net(2)(7)
Reclassification adjustments related to curtailments of prior service costs and other, net(1)(9)
(3)(16)
Tax provision/(benefit) on other comprehensive income/(loss)
$81 $(191)
(a)Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that are expected to be held indefinitely.