RETIREMENT BENEFITS

12 Months Ended

Jan. 03, 2025

Retirement Benefits [Abstract]

RETIREMENT BENEFITS

NOTE 9: RETIREMENT BENEFITS

Defined Contribution Plans

We sponsor numerous defined contribution savings plans, which allow our eligible employees to contribute a

portion of their pre-tax and/or after-tax income in accordance with specified guidelines. The plans include several

match contribution formulas which require us to match a percentage of the employee contributions up to certain

limits, generally totaling 6.0% of employee eligible pay. Matching contributions, net of forfeitures, charged to

expense were $276 million, $267 million and $226 million in fiscal 2024, 2023 and 2022, respectively.

Deferred Compensation Plans

We also sponsor certain non-qualified deferred compensation plans. The following table provides the fair value

of our deferred compensation plan investments and liabilities by category and by fair value hierarchy level:

	January 3, 2025		December 29, 2023
(In millions)	Total	Level 1	Total	Level 1
Assets
Deferred compensation plan assets:(1)
Equity and fixed income securities	$219	$219	$106	$106
Investments measured at NAV:
Corporate-owned life insurance	41		37
Total fair value of deferred compensation plan assets	$260		$143
Liabilities
Deferred compensation plan liabilities:(2)
Equity securities and mutual funds	$10	$10	$18	$18
Investments measured at NAV:
Common/collective trusts and guaranteed investment contracts	357		274
Total fair value of deferred compensation plan liabilities	$367		$292

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(1)Represents diversified assets held in rabbi trusts primarily associated with our non-qualified deferred compensation plans, which are

measured at fair value and included in the “Other current assets” and “Other non-current assets” line items in our Consolidated Balance

Sheet. In fiscal 2024, we contributed $100 million to our rabbi trust assets.

(2)Primarily represents obligations to pay benefits under certain non-qualified deferred compensation plans, which we include in the

“Compensation and benefits” and “Other long-term liabilities” line items in our Consolidated Balance Sheet. Under these plans, participants

designate investment options (including stock and fixed-income funds), which serve as the basis for measurement of the notional value of

their accounts.

Defined Benefit Plans

We sponsor various defined benefit pension plans for eligible employees in the U.S., Canada and United

Kingdom. Our largest plans are generally closed to new entrants. Benefits for most participants under the terms of

these plans are based on the employee’s years of service and compensation. We fund these plans as required by

statutory regulations and through voluntary contributions. Some of our employees also participate in other

postretirement defined benefit plans (“Other Benefits”) such as health care and life insurance plans. Our largest

defined benefit plan is the Consolidated Pension Plan, with 85% and 86% of total plan assets and PBO, respectively,

as of January 3, 2025.

During fiscal 2024, we reduced our defined benefit pension plan benefit obligations by approximately $333

million by purchasing group annuity policies and transferring approximately $333 million of pension plan assets to

an insurance company. There was no gain or loss as a result of this transaction.

Funded Status. The following table summarizes the funded status of our defined benefit plans:

	January 3, 2025			December 29, 2023
(In millions)	Pension	Other Benefits	Total	Pension	Other Benefits	Total
Change in benefit obligation
PBO at beginning of fiscal year	$8,563	$231	$8,794	$7,494	$228	$7,722
Service cost	34	2	36	33	2	35
Interest cost	394	10	404	386	11	397
Actuarial (gain) loss	(374)	(4)	(378)	280	(1)	279
Benefits paid(1)	(967)	(22)	(989)	(568)	(23)	(591)
Expenses paid	(19)	—	(19)	(34)	—	(34)
Currency translation adjustment	(24)	(1)	(25)	10	—	10
Acquisitions(2)	—	—	—	960	14	974
Other	(12)	(1)	(13)	2	—	2
PBO at end of fiscal year	$7,595	$215	$7,810	$8,563	$231	$8,794
Change in plan assets
Plan assets at beginning of fiscal year	$8,595	$265	$8,860	$7,411	$242	$7,653
Actual return on plan assets	700	22	722	1,004	37	1,041
Employer contributions	45	9	54	20	9	29
Benefits paid(1)	(967)	(22)	(989)	(568)	(23)	(591)
Expenses paid	(19)	—	(19)	(34)	—	(34)
Currency translation adjustment	(31)	—	(31)	12	—	12
Acquisitions(2)	—	—	—	749	—	749
Other	2	—	2	1	—	1
Plan assets at end of fiscal year	$8,325	$274	$8,599	$8,595	$265	$8,860
Funded status at end of fiscal year	$730	$59	$789	$32	$34	$66

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(1)Fiscal 2024 includes approximately $333 million associated with the purchase of group annuity policies and transfer of plan assets to an

insurance company. The transaction is reflected in this caption as settlement accounting had not been met.

(2)PBO assumed and plan assets acquired in the AJRD acquisition. Net defined benefit plan liability is included in our “Other long-term

liabilities” and “Compensation and benefits” line items in “Acquisition of AJRD” section of Note 13: Acquisitions and Divestitures.

Actuarial gains in the PBO as of January 3, 2025 were primarily the result of higher discount rates. Actuarial

losses in the PBO as of December 29, 2023 were primarily the result of lower discount rates.

The following table summarizes amounts recognized in our Consolidated Balance Sheet:

	January 3, 2025			December 29, 2023
(In millions)	Pension	Other Benefits	Total	Pension	Other Benefits	Total
Assets of business held for sale	$8	$—	$8	$4	$—	$4
Other non-current assets	873	113	986	193	96	289
Compensation and benefits	(12)	(6)	(18)	(12)	(7)	(19)
Other long-term liabilities	(139)	(48)	(187)	(153)	(55)	(208)

The following table summarizes pre-tax amounts recognized in the “Accumulated other comprehensive income

(loss)” line item in our Consolidated Balance Sheet:

	January 3, 2025			December 29, 2023
(In millions)	Pension	Other Benefits	Total	Pension	Other Benefits	Total
Actuarial (gain) loss	$(245)	$(86)	$(331)	$162	$(98)	$64
Net prior service (credit) cost	(144)	2	(142)	(157)	4	(153)
Total recognized in accumulated other comprehensive income (loss), pre-tax	$(389)	$(84)	$(473)	$5	$(94)	$(89)

The following table provides information for our defined benefit plans with PBO in excess of plan assets:

	January 3, 2025		December 29, 2023
(In millions)	Pension	Other Benefits	Pension	Other Benefits
PBO	154	55	226	62
Fair value of plan assets	3	—	60	—

Accumulated Benefit Obligation (“ABO”): The ABO for all defined benefit pension plans was $7,585 million and

$8,563 million at January 3, 2025 and December 29, 2023, respectively. The following table provides information

for our defined benefit plans with ABO in excess of plan assets:

	January 3, 2025		December 29, 2023
(In millions)	Pension	Other Benefits	Pension	Other Benefits
ABO	$153	N/A	$225	N/A
Fair value of plan assets	3	N/A	60	N/A

Net Periodic Benefit Income. We record the service cost component of net periodic benefit income in the “Cost

of revenue” and “General and administrative expenses” line items and the non-service cost components in the

“Non-service FAS pension income and other, net” line item in our Consolidated Statement of Operations.

The following table provides the components of net periodic benefit income and other amounts recognized in

other comprehensive income:

	Fiscal Year Ended
	January 3, 2025		December 29, 2023			December 30, 2022
(In millions)	Pension	Other Benefits	Pension	Other Benefits	T o t a l	Pension	Other Benefits
Net periodic benefit income
Operating
Service cost	$34	$2	$33	$2		$44	$2
Non-operating
Interest cost	394	10	386	11		220	7
Expected return on plan assets	(660)	(20)	(633)	(20)		(624)	(20)
Amortization of net actuarial (gain) loss	(4)	(17)	(9)	(20)		9	(7)
Amortization of prior service (credit) cost	(26)	1	(26)	1		(27)	1
Non-service cost periodic benefit income	(296)	(26)	(282)	(28)		(422)	(19)
Net periodic benefit income	$(262)	$(24)	$(249)	$(26)		$(378)	$(17)
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net actuarial (gain) loss	$(414)	$(7)	$(90)	$(18)		$42	$(34)
Prior service (credit) cost	(14)	—	—	—		8	—
Amortization of net actuarial gain (loss)	4	17	9	20		(9)	7
Amortization of prior service credit (cost)	26	(1)	26	(1)		27	(1)
Currency translation adjustment	4	—	—	—		1	—
Total change recognized in other comprehensive income	(394)	9	(55)	1		69	(28)
Total impact from net periodic benefit income and changes in other comprehensive income	$(656)	$(15)	$(304)	$(25)		$(309)	$(45)

Assumptions. The following table presents the weighted-average assumptions used to determine the benefit

obligation:

	January 3, 2025		December 29, 2023
	Pension(1)	Other Benefits	Pension	Other Benefits
Discount rate	5.46%	5.38%	4.91%	4.87%
Rate of future compensation increase	3.01%	N/A	3.01%	N/A
Cash balance interest crediting rate	4.50%	N/A	4.50%	N/A

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(1)Key assumptions for our Consolidated Pension Plan include a discount rate of 5.49%, cash balance interest crediting rate of 4.50% and a

4.25% interest crediting rate for the frozen pension equity benefit.

The following table presents the weighted-average assumptions used to determine net periodic benefit income:

	Fiscal Year Ended
	January 3, 2025		December 29, 2023		December 30, 2022
	Pension(1)	Other Benefits	Pension	Other Benefits	Pension	Other Benefits
Discount rate to determine service cost	4.92%	5.00%	5.18%	5.26%	2.69%	2.91%
Discount rate to determine interest cost	4.80%	4.78%	5.08%	5.06%	2.27%	2.06%
Expected return on plan assets	7.45%	7.50%	7.46%	7.50%	7.44%	7.50%
Rate of future compensation increase	3.01%	N/A	3.01%	N/A	3.01%	N/A
Cash balance interest crediting rate	4.50%	N/A	4.00%	N/A	3.50%	N/A

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(1)Key assumptions for our Consolidated Pension Plan include expected return on plan assets of 7.50%, which is being maintained at 7.50% for

fiscal 2025.

The expected long-term rate of return on plan assets reflects the expected returns for each major asset class in

which the plans invest, the weight of each asset class in the strategic allocation, the correlations among asset

classes and their expected volatilities. Our expected rate of return on plan assets is estimated by evaluating both

historical returns and estimates of future returns. Specifically, the determination of the expected long-term rate of

return takes into consideration: (1) the plan’s actual historical annual return on assets over the past 15-, 20- and 25-

year time periods, (2) historical broad market returns over long-term timeframes weighted by the plan’s strategic

allocation and (3) independent estimates of future long-term asset class returns, weighted by the plan’s strategic

allocation. Based on this approach, the long-term expected annual rate of return on assets is estimated at 7.50% for

fiscal 2025 for the U.S. defined benefit pension plans. The weighted average long-term expected annual rate of

return on assets for all defined benefit pension plans is estimated to be 7.45% for fiscal 2025.

The assumed composite rate of future increases in the per capita healthcare costs (the healthcare trend rate) is

8.23% for fiscal 2025, decreasing ratably to 4.53% by fiscal 2035.

Investment Policy. The investment strategy for managing defined benefit plan assets is to seek an optimal rate

of return relative to an appropriate level of risk. We manage substantially all defined benefit plan assets on a

commingled basis in a master investment trust. In making these asset allocation decisions, we take into account

recent and expected returns and volatility of returns for each asset class, the expected correlation of returns among

the different investments, as well as anticipated funding and cash flows. To enhance returns and mitigate risk, we

diversify our investments by strategy, asset class, geography and sector and engage a large number of managers to

gain broad exposure to the markets.

The following table provides the current strategic target asset allocation ranges by asset category:

	Target Asset Allocation
Equity investments	30%	—	45%
Fixed income investments	30%	—	50%
Alternative investments	10%	—	30%
Cash and cash equivalents	0%	—	10%

Fair Value of Plan Assets. The following is a description of the valuation techniques and inputs used to measure

fair value for major categories of investments as reflected in the table that follows such description:

•Domestic and international equities, which include common and preferred shares, domestic listed and

foreign listed equity securities, open-ended and closed-ended mutual funds, real estate investment trusts

and exchange traded funds, are generally valued at the closing price reported on the major market

exchanges on which the individual securities are traded at the measurement date. Because these assets are

traded predominantly on liquid, widely traded public exchanges, equity securities are categorized as Level 1

assets.

•Private equity funds are typically limited partnership investment structures. Private equity funds are valued

using a market approach based on NAV calculated by the funds and are not publicly available. Private equity

funds generally have liquidity restrictions that extend for ten or more years. At January 3, 2025 and

December 29, 2023, our defined benefit plans had future unfunded commitments totaling $539 million and

$550 million, respectively, related to private equity fund investments.

•Real asset funds are typically limited partnership investment structures. Real asset funds are valued using a

market approach based on NAV calculated by the funds and are not publicly available. Real asset funds

generally permit redemption on a quarterly basis with 90 or fewer days-notice. At each of January 3, 2025

and December 29, 2023, our defined benefit plans had no future unfunded commitments related to real

asset fund investments.

•Hedge funds, which include equity long/short, event-driven, fixed-income arbitrage and global macro

strategies, are typically limited partnership investment structures. Limited partnership interests in hedge

funds are valued using a market approach based on NAV calculated by the funds and are not publicly

available. Hedge funds generally permit redemption on a quarterly or more frequent basis with 90 or fewer

days’ notice. At each of January 3, 2025 and December 29, 2023, our defined benefit plans had no future

unfunded commitments related to hedge fund investments.

•Fixed income investments, which include U.S. Government securities, investment and non-investment-

grade corporate bonds and securitized bonds, are generally valued using pricing models that use verifiable,

observable market data such as interest rates, benchmark yield curves and credit spreads, bids provided by

brokers or dealers or quoted prices of securities with similar characteristics. Fixed income investments are

generally categorized as Level 2 assets. Fixed income funds valued at the closing price reported on the

major market exchanges on which the individual fund is traded are categorized as Level 1 assets.

•Cash and cash equivalents are primarily comprised of short-term money market funds valued at cost, which

approximates fair value, or valued at quoted market prices of identical instruments. Cash and cash

equivalents currency  are categorized as Level 1 assets; cash equivalents, such as money market funds or

short-term commingled funds, are categorized as Level 2 assets.

•Certain investments that are valued using the NAV per share (or its equivalent) as a practical expedient are

not categorized in the fair value hierarchy and are included in the table to permit reconciliation of the fair

value hierarchy to the aggregate defined benefit plan assets.

The following tables provide the fair value of plan assets held by our defined benefit plans by asset category

and by fair value hierarchy level:

	January 3, 2025
(In millions)	Total	Level 1	Level 2	Level 3
Asset category
Equities:
Domestic equities	$1,048	$1,048	$—	$—
International equities	968	968	—	—
Real estate investment trusts	186	186	—	—
Fixed income:
Corporate bonds	1,685	—	1,642	43
Government securities	698	—	698	—
Securitized assets	79	—	79	—
Fixed income funds	132	4	128	—
Cash and cash equivalents	498	14	484	—
Other	53	—	—	53
Total	5,347	$2,220	$3,031	$96
Investments measured at NAV:
Equity funds	1,389
Fixed income funds	106
Hedge funds	219
Private equity funds	1,127
Real asset funds	323
Other	2
Total investments measured at NAV	3,166
Receivables, net	86
Total fair value of plan assets	$8,599

	December 29, 2023
(In millions)	Total	Level 1	Level 2	Level 3
Asset category
Equities:
Domestic equities	$1,294	$1,294	$—	$—
International equities	1,138	1,138	—	—
Real estate investment trusts	214	214	—	—
Fixed income:
Corporate bonds	1,457	—	1,331	126
Government securities	485	—	485	—
Securitized assets	164	—	164	—
Fixed income funds	137	4	133	—
Cash and cash equivalents	545	18	527	—
Other	61	—	—	61
Total	5,495	$2,668	$2,640	$187
Investments measured at NAV:
Equity funds	1,529
Fixed income funds	3
Hedge funds	396
Private equity funds	1,019
Real asset funds	379
Other	2
Total investments measured at NAV	3,328
Receivables, net	37
Total fair value of plan assets	$8,860

Contributions. Funding requirements under IRS rules are a major consideration in making contributions to our

defined benefit plans. With respect to U.S. qualified pension plans, we intend to contribute annually not less than the

required minimum funding thresholds.

The Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006 and

further amended by the Worker, Retiree, and Employer Recovery Act of 2008, the Moving Ahead for Progress in the

21st Century Act (“MAP-21”) and applicable Internal Revenue Code regulations mandate minimum funding

thresholds. The Highway and Transportation Funding Act of 2014, the Bipartisan Budget Act of 2015, the American

Rescue Plan Act of 2021 and the Infrastructure Investment and Jobs Act further extended the interest rate

stabilization provision of MAP-21. In fiscal 2024, we made approximately $30 million of contributions to our U.S.

qualified defined benefit pension plans. As a result of prior voluntary contributions, we made no material

contributions to our U.S. qualified defined benefit pension plans in fiscal 2023 or 2022. We expect to make

contributions of approximately $23 million to these plans during fiscal 2025, and may consider voluntary

contributions thereafter.

Estimated Future Benefit Payments. The following table provides the projected timing of payments for benefits

earned to date and benefits expected to be earned for future service by current active employees under our defined

benefit plans:

(In millions)	Pension	Other     Benefits(1)	Total
Fiscal Years:
2025	$627	$22	$649
2026	613	21	634
2027	612	21	633
2028	608	20	628
2029	603	19	622
2030 — 2034	2,867	83	2,950

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(1)Projected payments for Other Benefits reflect net payments from the Company, which include subsidies that reduce the gross payments by

less than 1%.

Multi-employer Benefit Plans

Certain of our businesses participate in multi-employer defined benefit pension plans. We make cash

contributions to these plans under the terms of collective-bargaining agreements that cover union employees based

on a fixed rate per hour of service worked by the covered employees. The risks of participating in these multi-

employer plans are different from single-employer plans in the following aspects: (1) assets contributed to the

multi-employer plan by one employer may be used to provide benefits to employees of other participating

employers, (2) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be

borne by the remaining participating employers and (3) if we choose to stop participating in some of our multi-

employer plans, we may be required to pay those plans an amount based on the underfunded status of the plan,

referred to as a withdrawal liability. Cash contributed and expenses recorded for our multi-employer plans were not

material in fiscal 2024, 2023 or 2022.