Employee Benefits

6 Months Ended

Jul. 02, 2022

Retirement Benefits [Abstract]

Employee Benefits

Employee benefits

The Company sponsors a number of U.S. and foreign pension plans as well as other nonpension postretirement and postemployment plans to provide various benefits for its employees. These plans are described within the footnotes to the Consolidated Financial Statements included in the Company’s 2021 Annual Report on Form 10-K. Components of Company benefit plan (income) expense for the periods presented are included in the tables below. Excluding the service cost component, these amounts are included within Other income (expense) in the Consolidated Statement of Income.

Pension

	Quarter ended				Year-to-date period ended
(millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Service cost	$	8	$	9	$	17	$	18
Interest cost	28		25		57		50
Expected return on plan assets	(72)		(77)		(143)		(155)
Amortization of unrecognized prior service cost	3		2		5		4
Recognized net (gain) loss	(10)		(11)		(31)		(20)
Total pension (income) expense	$	(43)	$	(52)	$	(95)	$	(103)

Other nonpension postretirement

	Quarter ended				Year-to-date period ended
(millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Service cost	$	3	$	3	$	6	$	6
Interest cost	6		5		12		10
Expected return on plan assets	(27)		(23)		(55)		(46)
Amortization of unrecognized prior service cost	(3)		(2)		(5)		(4)
Total postretirement benefit (income) expense	$	(21)	$	(17)	$	(42)	$	(34)

Postemployment

	Quarter ended				Year-to-date period ended
(millions)	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Service cost	$	1	$	1	$	2	$	2
Recognized net experience (gain) loss	(1)		(1)		(2)		(2)
Total postemployment benefit expense	$	—	$	—	$	—	$	—

For the quarter and year-to-date periods ended July 2, 2022, the Company recognized a gain of $10 million and $31 million, respectively, related to the remeasurement of certain U.S. pension plans. For the quarter and year-to-date periods ended July 3, 2021, the Company recognized a gain of $11 million and $20 million, respectively, related to the remeasurement of certain U.S. pension plans. These remeasurements were the result of distributions that exceeded service and interest costs resulting in settlement accounting for that particular plan. For the quarter and year-to-date periods ended July 2, 2022 and July 3, 2021, remeasurements recognized were due primarily to an increase in the discount rate relative to the previous remeasurement date partially offset by lower than expected return on plan assets. Fiscal 2022 net periodic benefit cost for the U.S. pension plans was initially determined using a weighted average discount rate of 3.0%. As a result of the remeasurements, this rate has increased to 3.6%.

Company contributions to employee benefit plans are summarized as follows:

(millions)	Pension		Nonpension postretirement		Total
Quarter ended:
July 2, 2022	$	—	$	5	$	5
July 3, 2021	$	1	$	7	$	8
Year-to-date period ended:
July 2, 2022	$	1	$	11	$	12
July 3, 2021	$	2	$	8	$	10
Full year:
Fiscal year 2022 (projected)	$	3	$	17	$	20
Fiscal year 2021 (actual)	$	4	$	16	$	20

Plan funding strategies may be modified in response to management's evaluation of tax deductibility, market conditions, and competing investment alternatives.