XML 69 R18.htm IDEA: XBRL DOCUMENT v3.24.0.1
RETIREMENT BENEFITS
 12 Months Ended
Dec. 29, 2023
Retirement Benefits [Abstract]  
RETIREMENT BENEFITS
NOTE 9: RETIREMENT BENEFITS
Defined Contribution Plans
As of December 29, 2023, we sponsor numerous defined contribution savings plans, which allow our eligible employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. The plans include several match contribution formulas which require us to match a percentage of the employee contributions up to certain limits, generally totaling 6.0% of employee eligible pay. Matching contributions, net of forfeitures, charged to expense were $267 million, $226 million and $230 million in fiscal 2023, 2022 and 2021, respectively.
Deferred Compensation Plans
We also sponsor certain non-qualified deferred compensation plans. The following table provides the fair value of our deferred compensation plan investments and liabilities by category and by fair value hierarchy level:
December 29, 2023December 30, 2022
(In millions)TotalLevel 1TotalLevel 1
Assets
Deferred compensation plan assets:(1)
Equity and fixed income securities$106 $106 $64 $64 
Investments measured at NAV:
Corporate-owned life insurance37 33 
Total fair value of deferred compensation plan assets$143 $97 
Liabilities
Deferred compensation plan liabilities:(2)
Equity securities and mutual funds$18 $18 $8 $8 
Investments measured at NAV:
Common/collective trusts and guaranteed investment contracts274 192 
Total fair value of deferred compensation plan liabilities$292 $200 
_______________
(1)Represents diversified assets held in “rabbi trusts” primarily associated with our non-qualified deferred compensation plans, which we include in the “Other current assets” and “Other non-current assets” line items in our Consolidated Balance Sheet, and which are measured at fair value.
(2)Primarily represents obligations to pay benefits under certain non-qualified deferred compensation plans, which we include in the “Compensation and benefits” and “Other long-term liabilities” line items in our Consolidated Balance Sheet. Under these plans, participants designate investment options (including stock and fixed-income funds), which serve as the basis for measurement of the notional value of their accounts.
Defined Benefit Plans
We sponsor numerous defined benefit pension plans for eligible employees. Benefits for most participants under the terms of these plans are based on the employee’s years of service and compensation. We fund these plans as required by statutory regulations and through voluntary contributions. Some of our employees also participate in other postretirement defined benefit plans such as health care and life insurance plans.
During fiscal 2023, in connection with the July 28, 2023 acquisition of AJRD, we acquired defined benefit plans with assets valued at $749 million and a PBO of $974 million. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. Additionally, the Aviation Products Pension Plan name was changed to the Consolidated Pension Plan (“CPP”). The CPP is our largest defined benefit pension plan, with assets valued at $7.5 billion and a PBO of $7.5 billion as of December 29, 2023. On December 31, 2023, the qualified pension plans acquired with AJRD were merged into the CPP.
During fiscal 2022, we reduced our pension benefit obligations by approximately $64 million by purchasing group annuity policies and transferring approximately $64 million of pension plan assets to an insurance company. There was no gain or loss as a result of this transaction.
During fiscal 2021, we reduced our pension benefit obligations by approximately $250 million by purchasing group annuity policies and transferring approximately $250 million of pension plan assets to an insurance company. As a result of the annuity purchases, we recognized a pre-tax loss of $4 million in fiscal 2021, which is included as a component of the “Non-service FAS pension income and other, net” line item in our Consolidated Statement of Operations. We also recognized a pre-tax curtailment gain of $3 million in fiscal 2021 as a result of employee terminations, which is included as a component of the “Non-service FAS pension income and other, net” line item in our Consolidated Statement of Operations.
Balance Sheet Information
Amounts recognized in our Consolidated Balance Sheet for defined benefit plans reflect the funded status of our plans. The following table provides a summary of the funded status of our defined benefit plans and the presentation of such balances within our Consolidated Balance Sheet:
 December 29, 2023December 30, 2022
(In millions)PensionOther
Benefits		TotalPensionOther
Benefits		Total
Fair value of plan assets$8,595 $265 $8,860 $7,411 $242 $7,653 
PBO(8,563)(231)(8,794)(7,494)(228)(7,722)
Funded status$32 $34 $66 $(83)$14 $(69)
Consolidated Balance Sheet line item amounts:
Assets of business held for sale$4 $— $4 $— $— $— 
Other non-current assets$193 $96 $289 $144 $66 $210 
Compensation and benefits(12)(7)(19)(11)(6)(17)
Other long-term liabilities(153)(55)(208)(216)(46)(262)
A portion of our PBO includes amounts that have not yet been recognized as expense (or reductions of expense) in our results of operations. Such amounts are recorded in the “Accumulated other comprehensive loss” line item in our Consolidated Balance Sheet until they are amortized as a component of net periodic benefit income. The following table provides a summary of pre-tax amounts recorded within Accumulated other comprehensive loss:
 December 29, 2023December 30, 2022
(In millions)PensionOther
Benefits		TotalPensionOther
Benefits		Total
Actuarial loss (gain)$162 $(98)$64 $243 $(100)$143 
Net prior service (credit) cost(157)4 (153)(183)5 (178)
Total PBO not yet recognized as expense$5 $(94)$(89)$60 $(95)$(35)
The following table provides a roll-forward of the PBO for our defined benefit plans:
 December 29, 2023December 30, 2022
(In millions)PensionOther
Benefits		TotalPensionOther
Benefits		Total
Change in benefit obligation
Benefit obligation at beginning of fiscal year$7,494 $228 $7,722 $10,007 $348 $10,355 
Service cost33 2 35 44 2 46 
Interest cost386 11 397 220 7 227 
Actuarial loss (gain)280 (1)279 (2,097)(107)(2,204)
Benefits paid(1)
(568)(23)(591)(626)(22)(648)
Expenses paid(34)— (34)(26)— (26)
Currency translation adjustment10 — 10 (28)— (28)
Acquisitions(2)
960 14 974 — — — 
Divestiture— — — (8)— (8)
Other2 — 2 8 — 8 
Benefit obligation at end of fiscal year$8,563 $231 $8,794 $7,494 $228 $7,722 
_______________
(1)Fiscal 2022 includes approximately $64 million associated with the purchase of group annuity policies. The transaction is reflected in Benefits paid as settlement accounting had not been met.
(2)Benefit obligation assumed in the AJRD acquisition. Net defined benefit plan liability is included in our “Other long-term liabilities” and “Compensation and benefits” line items in “Acquisition of AJRD” section of Note 13: Acquisitions, Divestitures and Asset Sales.
Actuarial losses in the PBO as of December 29, 2023 were primarily the result of lower discount rates.
The following table provides a roll-forward of the assets and the ending funded status of our defined benefit plans:
 December 29, 2023December 30, 2022
(In millions)PensionOther
Benefits		TotalPensionOther
Benefits		Total
Change in plan assets
Plan assets at beginning of fiscal year$7,411 $242 $7,653 $9,604 $320 $9,924 
Actual return on plan assets1,004 37 1,041 (1,516)(51)(1,567)
Acquisitions(1)
749 — 749 — — — 
Employer contributions20 9 29 16 (5)11 
Benefits paid(2)
(568)(23)(591)(626)(22)(648)
Expenses paid(34)— (34)(26)— (26)
Currency translation adjustment12 — 12 (32)— (32)
Divestiture— — — (10)— (10)
Other1 — 1 1 — 1 
Plan assets at end of fiscal year$8,595 $265 $8,860 $7,411 $242 $7,653 
Funded status at end of fiscal year$32 $34 $66 $(83)$14 $(69)
_______________
(1)Plan assets acquired in the AJRD acquisition. Net defined benefit plan liability is included in “Other long-term liabilities” and “Compensation and benefits” line items in “Acquisition of AJRD” section of Note 13: Acquisitions, Divestitures and Asset Sales.
(2)Fiscal 2022 includes approximately $64 million associated with the transfer of plan assets to an insurance company. The transaction is reflected in Benefits paid as settlement accounting had not been met.

The accumulated benefit obligation for all defined benefit pension plans was $8.6 billion at December 29, 2023. The following tables provide information for benefit plans with accumulated benefit obligations in excess of plan assets and benefit plans with PBO in excess of plan assets:
December 29, 2023December 30, 2022
(In millions)PensionOther
Benefits		PensionOther
Benefits
Accumulated benefit obligation$225 N/A$6,698 N/A
Fair value of plan assets60 N/A6,472 N/A
December 29, 2023December 30, 2022
(In millions)PensionOther
Benefits		PensionOther
Benefits
PBO$226 $62 $6,699 $52 
Fair value of plan assets60 — 6,472 — 
Statement of Operations Information
The following table provides the components of net periodic benefit income and other amounts recognized in other comprehensive income in fiscal 2023, 2022 and 2021 as they pertain to our defined benefit plans:
Pension
Fiscal Year Ended
(In millions)December 29, 2023December 30, 2022December 31, 2021
Net periodic benefit income
Operating
Service cost$33 $44 $66 
Non-operating
Interest cost386 220 188 
Expected return on plan assets(633)(624)(621)
Amortization of net actuarial (gain) loss(9)9 30 
Amortization of prior service credit(26)(27)(28)
Effect of curtailments or settlements— — 1 
Non-service cost periodic benefit income(282)(422)(430)
Net periodic benefit income$(249)$(378)$(364)
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net actuarial (gain) loss$(90)$42 $(972)
Prior service cost— 8 2 
Amortization of net actuarial gain (loss)9 (9)(30)
Amortization of prior service credit26 27 28 
Currency translation adjustment— 1 1 
Recognized prior service credit— — 4 
Recognized net actuarial loss— — (4)
Total change recognized in other comprehensive income(55)69 (971)
Total impact from net periodic benefit income and changes in other comprehensive income$(304)$(309)$(1,335)
Other Benefits
Fiscal Year Ended
(In millions)December 29, 2023December 30, 2022December 31, 2021
Net periodic benefit income
Operating
Service cost$2 $2 $2 
Non-operating
Interest cost11 7 5 
Expected return on plan assets(20)(20)(20)
Amortization of net actuarial gain(20)(7)— 
Amortization of prior service cost1 1 1 
Non-service cost periodic benefit income(28)(19)(14)
Net periodic benefit income$(26)$(17)$(12)
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net actuarial gain$(18)$(34)$(46)
Amortization of net actuarial gain20 7 — 
Amortization of prior service cost(1)(1)(1)
Total change recognized in other comprehensive income1 (28)(47)
Total impact from net periodic benefit income and changes in other comprehensive income$(25)$(45)$(59)
Defined Benefit Plan Assumptions
The determination of the assumptions related to defined benefit plans are based on the provisions of the applicable accounting pronouncements, review of various market data and discussions with our actuaries. We develop each assumption using relevant Company experience in conjunction with market-related data. Assumptions are reviewed annually and adjusted as appropriate.
The following tables provide the weighted-average assumptions used to determine PBO and net periodic benefit income, as they pertain to our defined benefit pension plans:
Obligation assumptions as of:December 29, 2023December 30, 2022
Discount rate4.91 %5.18 %
Rate of future compensation increase3.01 %3.01 %
Cash balance interest crediting rate4.50 %4.00 %
Cost assumptions for fiscal periods ended:December 29, 2023December 30, 2022December 31, 2021
Discount rate to determine service cost 5.18 %2.69 %2.26 %
Discount rate to determine interest cost5.08 %2.27 %1.80 %
Expected return on plan assets7.46 %7.44 %7.43 %
Rate of future compensation increase3.01 %3.01 %3.01 %
Cash balance interest crediting rate4.00 %3.50 %3.50 %
Key assumptions for our CPP (our largest defined benefit pension plan with 88% of the total PBO) included a discount rate for obligation assumptions of 4.92%, a cash balance interest crediting rate of 4.50% and expected return on plan assets of 7.50% for fiscal 2023, which is being maintained at 7.50% for fiscal 2024. There is also a frozen pension equity benefit that assumes a 4.25% interest crediting rate.
The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit income, as they pertain to our other postretirement defined benefit plans:
Obligation assumptions as of:December 29, 2023December 30, 2022
Discount rate4.87 %5.16 %
Rate of future compensation increaseN/AN/A
Cost assumptions for fiscal periods ended:December 29, 2023December 30, 2022December 31, 2021
Discount rate to determine service cost 5.26 %2.91 %2.49 %
Discount rate to determine interest cost5.06 %2.06 %1.42 %
Rate of future compensation increaseN/AN/AN/A
The expected long-term rate of return on plan assets reflects the expected returns for each major asset class in which the plans invest, the weight of each asset class in the strategic allocation, the correlations among asset classes and their expected volatilities. Our expected rate of return on plan assets is estimated by evaluating both historical returns and estimates of future returns. Specifically, the determination of the expected long-term rate of return takes into consideration: (1) the plan’s actual historical annual return on assets over the past 15-, 20- and 25-year time periods, (2) historical broad market returns over long-term timeframes weighted by the plan’s strategic allocation and (3) independent estimates of future long-term asset class returns, weighted by the plan’s strategic allocation. Based on this approach, the long-term expected annual rate of return on assets is estimated at 7.50% for fiscal 2024 for the U.S. defined benefit pension plans. The weighted average long-term expected annual rate of return on assets for all defined benefit pension plans is estimated to be 7.46% for fiscal 2024.
In fiscal 2021, we adopted updated mortality tables, which resulted in an increase in the defined benefit plans’ PBO as of December 31, 2021 and a decrease in the estimated net periodic benefit income beginning with fiscal 2022.
The assumed composite rate of future increases in the per capita healthcare costs (the healthcare trend rate) is 7.05% for fiscal 2024, decreasing ratably to 4.53% by fiscal 2035. To the extent that actual experience differs from these assumptions, the effect will be accumulated and generally amortized for each plan to the extent required over the estimated future life expectancy or, if applicable, the future working lifetime of the plan’s active participants.
Investment Policy
The investment strategy for managing defined benefit plan assets is to seek an optimal rate of return relative to an appropriate level of risk. We manage substantially all defined benefit plan assets on a commingled basis in a master investment trust. In making these asset allocation decisions, we take into account recent and expected returns and volatility of returns for each asset class, the expected correlation of returns among the different investments, as well as anticipated funding and cash flows. To enhance returns and mitigate risk, we diversify our investments by strategy, asset class, geography and sector and engage a large number of managers to gain broad exposure to the markets.
The following table provides the current strategic target asset allocation ranges by asset category:
 Target Asset
Allocation
Equity investments35 %—55%
Fixed income investments25 %—35%
Alternative investments12 %—30%
Cash and cash equivalents0 %—10%
Fair Value of Plan Assets
The following is a description of the valuation techniques and inputs used to measure fair value for major categories of investments as reflected in the table that follows such description:
•Domestic and international equities, which include common and preferred shares, domestic listed and foreign listed equity securities, open-ended and closed-ended mutual funds, real estate investment trusts and exchange traded funds, are generally valued at the closing price reported on the major market exchanges on which the individual securities are traded at the measurement date. Because these assets are traded predominantly on liquid, widely traded public exchanges, equity securities are categorized as Level 1 assets.
•Private equity funds, which include buy-out, mezzanine, venture capital, distressed asset and secondary funds, are typically limited partnership investment structures. Private equity funds are valued using a market approach based on NAV calculated by the funds and are not publicly available. Private equity funds generally have liquidity restrictions that extend for ten or more years. At December 29, 2023 and December 30, 2022, our defined benefit plans had future unfunded commitments totaling $550 million and $568 million, respectively, related to private equity fund investments.
•Real estate funds, which include core, core plus, value-add and opportunistic funds, are typically limited partnership investment structures. Real estate funds are valued using a market approach based on NAV calculated by the funds and are not publicly available. Real estate funds generally permit redemption on a quarterly basis with 90 or fewer days-notice. At December 29, 2023, real estate fund investments had no future unfunded commitments related to our defined benefit plans. At December 30, 2022, our defined benefit plans had future unfunded commitments totaling $33 million related to real estate fund investments.
•Hedge funds, which include equity long/short, event-driven, fixed-income arbitrage and global macro strategies, are typically limited partnership investment structures. Limited partnership interests in hedge funds are valued using a market approach based on NAV calculated by the funds and are not publicly available. Hedge funds generally permit redemption on a quarterly or more frequent basis with 90 or fewer days notice. At each of December 29, 2023 and December 30, 2022, our defined benefit plans had no future unfunded commitments related to hedge fund investments.
•Fixed income investments, which include U.S. Government securities, investment and non-investment-grade corporate bonds and securitized bonds, are generally valued using pricing models that use verifiable, observable market data such as interest rates, benchmark yield curves and credit spreads, bids provided by brokers or dealers or quoted prices of securities with similar characteristics. Fixed income investments are generally categorized as Level 2 assets. Fixed income funds valued at the closing price reported on the major market exchanges on which the individual fund is traded are categorized as Level 1 assets.
•Other is comprised of guaranteed insurance contracts valued at book value, which approximates fair value, calculated using the prior-year balance adjusted for investment returns, changes in cash flows, changes in interest rates and corporate owned life insurance policies valued at the accumulated benefit.
•Cash and cash equivalents are primarily comprised of short-term money market funds valued at cost, which approximates fair value, or valued at quoted market prices of identical instruments. Cash and currency are categorized as Level 1 assets; cash equivalents, such as money market funds or short-term commingled funds, are categorized as Level 2 assets.
•Certain investments that are valued using the NAV per share (or its equivalent) as a practical expedient are not categorized in the fair value hierarchy and are included in the table to permit reconciliation of the fair value hierarchy to the aggregate defined benefit plan assets.
The following tables provide the fair value of plan assets held by our defined benefit plans by asset category and by fair value hierarchy level:
 December 29, 2023
(In millions)TotalLevel 1Level 2Level 3
Asset category
Equities:
Domestic equities$1,294 $1,294 $— $— 
International equities1,138 1,138 — — 
Real estate investment trusts214 214 — — 
Fixed income:
Corporate bonds1,457 — 1,331 126 
Government securities485 — 485 — 
Securitized assets164 — 164 — 
Fixed income funds137 4 133 — 
Cash and cash equivalents545 18 527 — 
Other61 — — 61 
Total5,495 $2,668 $2,640 $187 
Investments measured at NAV:
Equity funds1,529 
Fixed income funds3 
Hedge funds396 
Private equity funds1,019 
Real estate funds379 
Other2 
Total investments measured at NAV3,328 
Receivables, net37 
Total fair value of plan assets$8,860 

December 30, 2022
(In millions)TotalLevel 1Level 2Level 3
Asset category
Equities:
Domestic equities$1,275 $1,275 $— $— 
International equities1,044 1,002 42 — 
Real estate investment trusts192 192 — — 
Fixed income:
Corporate bonds1,118 — 995 123 
Government securities320 — 320 — 
Securitized assets166 — 166 — 
Fixed income funds92 4 88 — 
Cash and cash equivalents148 22 126 — 
Total4,355 $2,495 $1,737 $123 
Investments measured at NAV:
Equity funds1,661 
Fixed income funds299 
Hedge funds294 
Private equity funds696 
Real estate funds372 
Other2 
Total investments measured at NAV3,324 
Payables, net(26)
Total fair value of plan assets$7,653 
Contributions
Funding requirements under IRS rules are a major consideration in making contributions to our postretirement benefit plans. With respect to U.S. qualified pension plans, we intend to contribute annually not less than the required minimum funding thresholds.
The Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006 and further amended by the Worker, Retiree, and Employer Recovery Act of 2008, the Moving Ahead for Progress in the 21st Century Act (“MAP-21”) and applicable Internal Revenue Code regulations mandate minimum funding thresholds. The Highway and Transportation Funding Act of 2014, the Bipartisan Budget Act of 2015, the American Rescue Plan Act of 2021 and the Infrastructure Investment and Jobs Act further extended the interest rate stabilization provision of MAP-21. As a result of prior voluntary contributions, we made no material contributions to our U.S. qualified defined benefit pension plans in fiscal 2023, 2022, or 2021. We expect to make contributions of approximately $35 million to these plans during fiscal 2024, and may consider voluntary contributions thereafter.
Estimated Future Benefit Payments
The following table provides the projected timing of payments for benefits earned to date and benefits expected to be earned for future service by current active employees under our defined benefit plans:
(In millions)Pension
Other
    Benefits(1)
Total
Fiscal Years:
2024$672 $22 $694 
2025670 22 692 
2026665 21 686 
2027660 20 680 
2028649 19 668 
2029 — 20333,072 84 3,156 
_______________
(1)Projected payments for Other Benefits reflect net payments from the Company, which include subsidies that reduce the gross payments by less than 1%.
Multi-employer Benefit Plans
Certain of our businesses participate in multi-employer defined benefit pension plans. We make cash contributions to these plans under the terms of collective-bargaining agreements that cover union employees based on a fixed rate per hour of service worked by the covered employees. The risks of participating in these multi-employer plans are different from single-employer plans in the following aspects: (1) assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers, (2) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers and (3) if we choose to stop participating in some of our multi-employer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Cash contributed and expenses recorded for our multi-employer plans were not material in fiscal 2023, 2022 or 2021.