Postretirement Benefit Plans

6 Months Ended

Jul. 02, 2021

Retirement Benefits [Abstract]

Postretirement Benefit Plans

Note K — 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:

	Quarter Ended July 2, 2021				Two Quarters Ended July 2, 2021
(In millions)	Pension		Other Benefits		Pension		Other Benefits
Net periodic benefit income
Service cost	$	18	$	—	$	36	$	1
Interest cost	46		2		92		3
Expected return on plan assets	(157)		(5)		(312)		(10)
Amortization of net actuarial loss	10		—		19		—
Amortization of prior service credit	(7)		—		(14)		—
Net gain from curtailments and settlements	(3)		—		(3)		—
Net periodic benefit income	$	(93)	$	(3)	$	(182)	$	(6)

	Quarter Ended July 3, 2020				Two Quarters Ended July 3, 2020
(In millions)	Pension		Other Benefits		Pension		Other Benefits
Net periodic benefit income
Service cost	$	16	$	1	$	32	$	1
Interest cost	68		2		137		4
Expected return on plan assets	(157)		(5)		(315)		(10)
Amortization of net actuarial loss (gain)	3		(1)		5		(1)
Amortization of prior service credit	(7)		—		(14)		—
Contractual termination cost(1)	—		—		1		—
Net periodic benefit income	$	(77)	$	(3)	$	(154)	$	(6)

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(1)For the two quarters ended July 3, 2020, includes contractual termination benefits related to facility rationalization as part of restructuring activities in connection with the L3Harris Merger integration. See Note 4: “Restructuring and Other Exit Costs” in the Notes to Consolidated Financial Statements in our Fiscal 2020 Form 10-K for further information.

During the quarter ended July 2, 2021, we undertook an initiative to de-risk pension obligations by purchasing a group annuity policy and transferring approximately $169 million of pension plan assets to an insurance company thereby reducing our defined benefit obligations by approximately $169 million. As a result of the annuity purchase, we recognized a pre-tax Financial Accounting Standard settlement gain of $3 million in the quarter ended July 2, 2021, which is included as a component of the “Non-operating income” line item in our Condensed Consolidated Statement of Income (Unaudited).

The service cost component of net periodic benefit income is included in the “Cost of product sales and services” and “Engineering, selling and administrative expenses” line items in our Condensed Consolidated Statement of Income (Unaudited). The non-service cost components of net periodic benefit income are included in the “Non-operating income” line item in our Condensed Consolidated Statement of Income (Unaudited), except for contractual termination benefits which are included in the “Engineering, selling and administrative expenses” line item in our Condensed Consolidated Statement of Income (Unaudited).

As a result of prior voluntary contributions, we are not required to make any contributions to these plans during the remainder of fiscal 2021 and for several years thereafter.