“FAS pension will see a significant reduction next year. We're going to go from about $375 million of income in '23 to about $50 million of loss in 2024.”

In context

“e out for you guys next year given what appears to be much higher discount rates and weak asset returns? Thanks. Jay Malave: Sure. Thank you, David. The first one on the R&D capitalization, the draft guidelines that came out, we view those as promising. We believe that they support our position of continuing to deduct the costs associated with cost plus contracts. And just as you remember, we treat that and view it as a cost of sale, not really as an R&D activity. The risk is really borne by the acquirer of those services. The rights are short-lived and they're also restricted. And so we believe the draft language is, at least thus far, appears to be consistent with our approach. And so we view it positively. As far as pension, a couple of things going on with pension, I'll go on the P&L. FAS pension will see a significant reduction next year. We're going to go from about $375 million of income in '23 to about $50 million of loss in 2024. It's a function of two things. One is the returns. And the second is essentially the expiration of benefits that we're amortizing since - from the 2014 salary plan freeze. And so those run out, and so we'll see a significant increase. As you know, that's pretty much noncash, but it will affect EPS. On the cash side of it, we'll see a little bit of a slight reduction anywhere between $25 million to $50 million reduction. But again, the biggest piece there is on FAS. From a cash contribution, we talked about anywhere between $500 million to $1 billion of contributions required starting in 2025. Right now, given where things are, we would expect that to be in the higher range, if not higher for 2025. And if we stay where we are, it could trigger some contributions in 2024. But I will say, wh”