POSTRETIREMENT BENEFIT PLANS

6 Months Ended

Jun. 25, 2023

Retirement Benefits [Abstract]

POSTRETIREMENT BENEFIT PLANS

POSTRETIREMENT BENEFIT PLANS

FAS income (expense)

The pretax FAS income (expense) related to our qualified defined benefit pension plans and retiree medical and life insurance plans consisted of the following (in millions):

	Quarters Ended				Six Months Ended
	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Qualified defined benefit pension plans
Operating:
Service cost	$	(16)	$	(24)	$	(32)	$	(48)
Non-operating:
Interest cost	(365)		(303)		(730)		(605)
Expected return on plan assets	431		503		861		1,005
Amortization of actuarial losses	(42)		(151)		(84)		(301)
Amortization of prior service credits	87		90		174		180
Pension settlement charge	—		(1,470)		—		(1,470)
Non-service FAS pension income (expense)	111		(1,331)		221		(1,191)
Total FAS pension income (expense)	$	95	$	(1,355)	$	189	$	(1,239)
Retiree medical and life insurance plans
Operating:
Service cost	$	(2)	$	(2)	$	(3)	$	(4)
Non-operating:
Interest cost	(17)		(12)		(34)		(24)
Expected return on plan assets	26		34		52		68
Amortization of actuarial gains	8		12		16		23
Amortization of prior service costs	(2)		(7)		(5)		(14)
Non-service FAS retiree medical and life income	15		27		29		53
Total FAS retiree medical and life income	$	13	$	25	$	26	$	49

We record the service cost component of FAS income for our qualified defined benefit pension plans and retiree medical and life insurance plans in the cost of sales accounts; the non-service components of our FAS income (expense) for our qualified defined benefit pension plans in the non-service FAS pension income (expense) account; and the non-service components of our FAS income (expense) for our retiree medical and life insurance plans as part of the other non-operating (expense) income, net account on our consolidated statements of earnings.

The amortization of net actuarial losses or gains and prior service credits or costs in the table above, along with similar costs related to our other postretirement benefit plans ($4 million and $7 million for the quarter and six months ended June 25, 2023 and $6 million and $11 million for the quarter and six months ended June 26, 2022) were reclassified from accumulated other comprehensive loss (AOCL) and recorded as a component of FAS income (expense) for the periods presented. These costs totaled $(47) million ($(37) million, net of tax) and $(94) million ($(74) million, net of tax) during the quarter and six months ended June 25, 2023, and $62 million ($47 million, net of tax) and $123 million ($95 million, net of tax) during the quarter and six months ended June 26, 2022.

Purchase of Group Annuity Contracts and Pension Remeasurement

The quarter and six months ending June 26, 2022 reflect a noncash, non-operating pension settlement charge of $1.5 billion ($1.2 billion, or $4.33 per share, after-tax) recognized in connection with the transfer of $4.3 billion of our gross defined benefit pension obligations and related plan assets to an insurance company on June 24, 2022.

Funding Requirements

The required funding of our qualified defined benefit pension plans is determined in accordance with the Employee Retirement Income Security Act of 1974 (ERISA), as amended, along with consideration of CAS and Internal Revenue Code rules. We made no contributions to our qualified defined benefit pension plans during the quarters and six months ended June 25, 2023 and June 26, 2022.