RETIREMENT BENEFITS

3 Months Ended

Mar. 28, 2025

Retirement Benefits [Abstract]

RETIREMENT BENEFITS

NOTE H: RETIREMENT BENEFITS

The components of net periodic benefit income for our defined benefit pension plans and other postretirement benefit plans (“other benefits”) (collectively, “defined benefit plans”) were as follows:

	First Quarter
	2025				2024
(In millions)	Pension		Other Benefits		Pension		Other Benefits
Net periodic benefit income
Operating
Service cost(1)	$	6	$	—	$	8	$	—
Non-operating
Interest cost	88		3		99		3
Expected return on plan assets	(151)		(5)		(165)		(5)
Amortization of net actuarial gains	(1)		(3)		(1)		(4)
Amortization of prior service credits	(7)		—		(7)		—
Effect of settlements(2)	(14)		—		—		—
Non-service cost net periodic benefit income(3)	(85)		(5)		(74)		(6)
Net periodic benefit income	$	(79)	$	(5)	$	(66)	$	(6)

______________

(1)Included in the “Cost of revenue” and “General and administrative expenses” line items in our Condensed Consolidated Statement of Operations.

(2)See discussion under “Pension Group Annuity Purchase” below in this Note.

(3)Included in the “Non-service FAS pension income and other, net” line item in our Condensed Consolidated Statement of Operations.

Pension Group Annuity Purchase

On March 14, 2025, we executed nonparticipating single premium group annuity contracts to transfer $1.2 billion of our Consolidated Pension Plan (“CPP”) benefit obligation, covering approximately 22,000 U.S. retirees and beneficiaries, to an insurance provider. The contracts were funded with $1.2 billion of existing CPP plan assets and did not require any additional cash contributions. This transaction had no impact on the amount, timing or form of the monthly retirement benefit payments to the affected retirees and beneficiaries. As a result of the transaction, we recognized a pre-tax settlement gain of $14 million in first quarter 2025, which is included in the “Non-service FAS pension income and other, net” line item in our Condensed Consolidated Statement of Operations.

In connection with the annuity purchases, we performed a remeasurement of the CPP plan benefit obligation and plan assets as of February 28, 2025, the end of the month closest to the annuity purchase date. As a result, we recorded a net actuarial loss of $54 million, reflecting a loss of $148 million associated with the decrease in discount rate from 5.49% at January 3, 2025 to 5.22% at February 28, 2025, partially offset by a gain of $94 million from actual return on plan assets more favorable than expected. The net actuarial loss, net of income taxes, is included in the “Accumulated other comprehensive (loss) income” line item in our Condensed Consolidated Balance Sheet as of March 28, 2025.