Postretirement Benefit Plans

The following tables provide the components of our net periodic benefit income for our defined benefit plans, including defined benefit pension plans and other postretirement defined benefit plans. Net periodic benefit income presented in these tables includes both continuing operations and discontinued operations. For the quarter and three quarters ended March 31, 2017 and April 1, 2016, $1 million and $2 million, respectively, of the service cost component of net period benefit income is included as a component of the “Discontinued operations, net of income taxes” line item in our Condensed Consolidated Statement of Income (Unaudited):



	Quarter Ended March 31, 2017									Three Quarters Ended March 31, 2017
	Pension			Other Benefits			Total			Pension			Other Benefits			Total

	(In millions)
Net periodic benefit income
Service cost	$	15		$	1		$	16		$	44		$	1		$	45
Interest cost	46			2			48			138			6			144
Expected return on plan assets	(85		)	(5		)	(90		)	(255		)	(13		)	(268		)
Total net periodic benefit income	$	(24	)	$	(2	)	$	(26	)	$	(73	)	$	(6	)	$	(79	)

	Quarter Ended April 1, 2016									Three Quarters Ended April 1, 2016
	Pension			Other Benefits			Total			Pension			Other Benefits			Total

	(In millions)
Net periodic benefit income
Service cost	$	18		$	1		$	19		$	56		$	4		$	60
Interest cost	63			3			66			186			10			196
Expected return on plan assets	(87		)	(4		)	(91		)	(258		)	(13		)	(271		)
Amortization of net actuarial loss	—			—			—			—			2			2
Amortization of prior service cost	—			—			—			—			(7		)	(7		)
Net periodic benefit income	$	(6	)	$	—		$	(6	)	$	(16	)	$	(4	)	$	(20	)
Effect of curtailments or settlements (1)	—			—			—			—			(121		)	(121		)
Total net periodic benefit income	$	(6	)	$	—		$	(6	)	$	(16	)	$	(125	)	$	(141	)

(1) We discontinued certain significantly underfunded post-employment benefit plans effective December 31, 2015. Under GAAP, this resulted in a negative plan amendment and curtailment during the quarter ended January 1, 2016, a settlement as of December 31, 2015, and a net liability reduction of $101 million.

Starting in fiscal 2017, we changed the approach used to determine the service and interest components of net periodic benefit cost of our U.S. defined benefit plans. The new estimation approach discounts the individual expected cash flows underlying the service cost and interest cost by applying the applicable spot rates derived from the yield curve used to discount the cash flows in determining the benefit obligation. Historically, the service and interest cost components were determined by a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. This change resulted in approximately $35 million of lower service and interest costs for our U.S. defined benefit plans in the three quarters ended March 31, 2017 compared with the single weighted-average discount method. See Note 14: “Pension and Other Postretirement Benefits” in our Notes to Consolidated Financial Statements in our Fiscal 2016 Form 10-K for additional information.

We contributed $143 million and $134 million to our qualified defined benefit pension plans during the three quarters ended March 31, 2017 and April 1, 2016, respectively. We currently anticipate making additional contributions to our qualified defined benefit pension plans of approximately $446 million during the remainder of fiscal 2017.

The U.S. Salaried Retirement Plan (“U.S. SRP”) is our largest defined benefit pension plan, with assets valued at $3.8 billion and a projected benefit obligation of $5.9 billion as of July 1, 2016. Effective December 31, 2016, future benefit accruals under the U.S. SRP were frozen and replaced with a 1% cash balance defined benefit plan.