v3.26.3
Pension Plans
 9 Months Ended
Sep. 26, 2026
Retirement Benefits [Abstract]  
Pension Plans Pension Plans
For the periods prior to the Spin-off, certain employees of the Company participated in U.S. pension plans sponsored by Honeywell. For the purposes of the Condensed Consolidated Financial Statements, the Company accounted for these plans as multiemployer plans as they are not sponsored by the Company. Therefore, the related assets and liabilities are not reflected in the Condensed Consolidated Balance Sheets prior to the Spin-off.
Following the Spin-off, the Company sponsors qualified and non-qualified defined benefit pension plans for these U.S. employees (“U.S. Plans”), with benefit obligations and corresponding assets transferred from the Honeywell plans in which these employees participated. The U.S. Plans are closed to new participants. Subsequent to the Spin-off, the Company accounts for the U.S. Plans as single employer plans as they are sponsored by the Company. Therefore, the related assets and liabilities are reflected in the Condensed Consolidated Balance Sheets.
The Company also sponsors defined benefit pension plans which cover non-U.S. employees, in certain jurisdictions, principally Germany and Switzerland. The largest plans are closed to new participants. The non-U.S. pension plans are not material to the Company either individually or in the aggregate.
The following tables summarize the balance sheet impact, including the benefit obligations, assets, and funded status associated with the Company's U.S. Plans:
September 26, 2026
Change in benefit obligation:
Benefit obligation on December 31, 2025$— 
Transfer from Honeywell6,213 
Service cost4 
Interest cost76 
Benefits paid(116)
Benefit obligation on September 26, 20266,177 
Change in plan assets:
Fair value of plan assets on December 31, 2025— 
Transfer from Honeywell9,015 
Expected return on plan assets157 
Benefits paid(116)
Employer contributions4 
Expected fair value of plan assets on September 26, 20269,060 
Funded status of plans$2,883 
Amounts recognized in Consolidated Balance Sheets consist of:
Pension assets$3,022 
Accrued pension liabilities—current(1)
(18)
Accrued pension liabilities—noncurrent(2)
(121)
Net amount recognized$2,883 
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1.Included in Accrued liabilities in the Condensed Consolidated Balance Sheets.
2.Included in Other liabilities in the Condensed Consolidated Balance Sheets.

Amount recognized in Accumulated other comprehensive loss including the transfer from Honeywell, on a pre-tax basis, associated with the Company’s U.S. Plans as of September 26, 2026 are as follows:
September 26, 2026
Prior service (credit) cost$— 
Net actuarial loss867 
Net amount recognized$867 
Net periodic benefit income for the Company's U.S. Plans includes the following components:
Three Months Ended
September 26, 2026
Service cost$4 
Interest cost76 
Expected return on plan assets(157)
Net periodic benefit income$(77)
Major actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for the Company's U.S. Plans are presented in the following table as weighted averages:
September 26, 2026
Actuarial assumptions used to determine benefit obligations:
Discount rate5.50 %
Expected annual rate of compensation increase3.25 %
Actuarial assumptions used to determine net periodic benefit (income) cost:
Discount rate—benefit obligation5.50 %
Discount rate—service cost5.47 %
Discount rate—interest cost5.16 %
Expected rate of return on plan assets7.25 %
Expected annual rate of compensation increase3.25 %
The discount rate for the Company's U.S. Plans reflects the current rate at which the associated liabilities could be settled at the measurement date, which was the date of Spin-off. To determine discount rates for the Company's U.S. Plans, the Company uses a modeling process that involves matching the expected cash outflows of the Company's benefit plans to a yield curve constructed from a portfolio of high-quality, fixed income debt instruments. The Company uses the single weighted average yield of this hypothetical portfolio as a discount rate benchmark. The Company utilizes a full yield curve approach in the estimation of the service and interest cost components of net periodic pension benefit (income) cost for the Company's U.S. Plans. This approach applies the specific spot rates along the yield curve used in the determination of the pension benefit obligation to their underlying projected cash flows and provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates.
The Company's asset return assumption is based on historical plan asset returns over varying long-term periods combined with current market conditions and broad asset mix considerations with a focus on long-term trends rather than short-term market conditions. The Company will review the expected rate of return on an annual basis and revise it as appropriate.
The following amounts relate to the Company's U.S. Plans with accumulated benefit obligations exceeding the fair value of plan assets:
September 26, 2026
Projected benefit obligation$139 
Accumulated benefit obligation135 
Fair value of plan assets— 
The accumulated benefit obligation for the Company's U.S. defined benefit pension plans was $6.2 billion as of September 26, 2026.
The Company's asset investment strategy for its U.S. Plans focuses on maintaining a diversified portfolio using various asset classes in order to achieve the Company's long-term investment objectives on a risk adjusted basis. The Company's long-term target allocations are as follows: 60%-80% fixed income securities and cash, 10%-20% public equity securities, and 0%-10% real estate and private markets investments. Fixed income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, and U.S. Treasuries. Equity securities include publicly traded stock of companies located inside the United States. Real estate investments include direct investments in commercial properties and investments in real estate funds. Private market investments include investments in private equity that follow several different strategies. The Company reviews its assets on a regular basis to ensure that the Company is
within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back within target allocations.
In accordance with ASC Topic 820, Fair Value Measurement, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the following tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets.
As of the Spin-off, the fair values of the Company's U.S. Plans’ assets transferred from Honeywell by asset category are as follows:
TotalLevel 1Level 2Level 3
Equities:
Honeywell Aerospace common stock$741 $741 $— $— 
Fixed income:
Short term investments338 3 335 — 
Government securities1,521 — 1,521 — 
Corporate bonds2,867 — 2,867 — 
Mortgage/Asset-backed securities8 — 8 — 
Direct investments:
Direct private investments294 — — 294 
Real estate properties482 — — 482 
Total$6,251 $744 $4,731 $776 
Investments measured at NAV:
Private equity funds961 
Total$7,212 
Other items to reconcile to fair value of plan assets(1)
1,803 
Total fair value of plan assets$9,015 
__________________
1.Other items to reconcile to fair value of plan assets represents a receivable from the Honeywell sponsored pension plan that is expected to transfer to the Honeywell Aerospace sponsored pension plan in 2027.
The Company enters into futures contracts to gain exposure to certain markets. Sufficient cash or cash equivalents are held by the Company's pension plans to cover the notional value of the futures contracts. As of the Spin-off, the Company's U.S. plans had fixed income futures contracts with a total notional amount of $1.5 billion.
Common stocks, real estate investment trusts, and short-term investments are valued at the closing price reported in the active market in which the individual securities are traded. Corporate bonds, mortgage/asset-backed securities, and government securities are valued either by using pricing models, bids provided by brokers or dealers, quoted prices of securities with similar characteristics, or discounted cash flows, and as such, include adjustments for certain risks that may not be observable such as credit and liquidity risks. Certain securities are held in collective trust funds which are valued using net asset values provided by the administrators of the funds. Investments in private equity, debt, real estate and hedge funds, and direct private investments are valued at estimated fair value based on quarterly financial information received from the investment advisor and/or general partner. Investments in real estate properties are valued on a quarterly basis using the income approach. Valuation estimates are periodically supplemented by third party appraisals.
The Company's funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. The Company expects to make an immaterial amount of contributions for the Company’s U.S. plans in 2026.
Benefit payments for the U.S. pension plans, including amounts to be paid from Company assets, and reflecting expected future service, as appropriate, are expected to be paid as follows:
Twelve Months EndedAmount
September 2027$729 
September 2028681 
September 2029638 
September 2030601 
September 2031569 
Thereafter through September 20362,416