Pension and Retiree Medical Benefits (Notes)

8 Months Ended

Sep. 03, 2022

Pension and Retiree Medical Benefits [Abstract]

Pension and Retiree Medical Benefits

Pension and Retiree Medical Benefits

In the 12 and 36 weeks ended September 3, 2022, we recognized pre-tax settlement charges of $59 million ($46 million after-tax or $0.03 per share) and $190 million ($147 million after-tax or $0.11 per share), respectively, primarily related to a U.S. qualified defined benefit pension plan due to lump sum distributions to retired or terminated employees. The settlement charge was triggered when the cumulative lump sum distributions exceeded the total annual service and interest cost in 2022. Related plan assets and benefit obligations were remeasured using remeasurement date assumptions. The weighted-average discount rate for the U.S. defined benefit plans’ projected benefit obligations increased from 2.9% to 3.4%. In addition, the U.S. defined benefit pension plans’ weighted-average interest cost discount rate and expected return on plan assets used to determine 2022 net periodic benefit cost/(income) increased from 2.4% and 6.3% to 3.1% and 6.7%, respectively.

For further information on our policies for pension, retiree-medical and savings plans, refer to Note 7 to our consolidated financial statements in our 2021 Form 10-K.

In the 36 weeks ended September 3, 2022, we transferred pension and retiree medical obligations of $145 million and related assets to the Tropicana JV in connection with the Juice Transaction. See Note 11 for further information.

The components of net periodic benefit cost/(income) for pension and retiree medical plans are as follows:

	12 Weeks Ended
	Pension								Retiree Medical
	U.S.				International
	9/3/2022		9/4/2021		9/3/2022		9/4/2021		9/3/2022		9/4/2021
Service cost	$	111	$	119	$	13	$	25	$	8	$	8
Other pension and retiree medical benefits income:
Interest cost	111		75		23		17		5		3
Expected return on plan assets	(206)		(223)		(55)		(55)		(4)		(3)
Amortization of prior service credits	(6)		(8)		(1)		—		(2)		(2)
Amortization of net losses/(gains)	35		52		8		19		(3)		(4)
Settlement/curtailment losses	59		5		—		5		—		—
Special termination benefits	—		1		—		—		—		—
Total other pension and retiree medical benefits income	(7)		(98)		(25)		(14)		(4)		(6)
Total	$	104	$	21	$	(12)	$	11	$	4	$	2

	36 Weeks Ended
	Pension								Retiree Medical
	U.S.				International
	9/3/2022		9/4/2021		9/3/2022		9/4/2021		9/3/2022		9/4/2021
Service cost	$	340	$	359	$	47	$	69	$	25	$	23
Other pension and retiree medical benefits income:
Interest cost	286		224		63		49		13		10
Expected return on plan assets	(637)		(671)		(153)		(153)		(11)		(10)
Amortization of prior service credits	(19)		(22)		(1)		(1)		(6)		(7)
Amortization of net losses/(gains)	103		155		20		51		(9)		(10)
Settlement/curtailment losses/(gains)	190		5		—		10		(16)		—
Special termination benefits	9		6		—		—		—		—
Total other pension and retiree medical benefits income	(68)		(303)		(71)		(44)		(29)		(17)
Total	$	272	$	56	$	(24)	$	25	$	(4)	$	6

We regularly evaluate opportunities to reduce risk and volatility associated with our pension and retiree medical plans.

During the 36 weeks ended September 3, 2022 and September 4, 2021, we made discretionary contributions of $150 million and $500 million, respectively, to our U.S. qualified defined benefit plans, and $10 million and $25 million, respectively, to our international defined benefit plans.