Employee Benefit Plans | Employee Benefit Plans Savings Plan: The Company has a 401(k) Savings Plan for the benefit of all qualified U.S. employees, with such employees receiving matching contributions in the amount equal to 100.0% of the first 5.0% of eligible compensation up to applicable Internal Revenue Service limits. Savings plan expense was $15.0 million in fiscal year 2023, $20.0 million in fiscal year 2022, and $16.5 million in fiscal year 2021. Pension Plans: The Company has a defined benefit pension plan covering certain U.S. employees and non-U.S. pension plans for certain non-U.S. employees. The principal U.S. defined benefit pension plan is closed to new hires and plan benefits have been frozen. The plans provide benefits that are based on an employee’s years of service and compensation near retirement. Net periodic pension cost for U.S. and non-U.S. plans included the following components for fiscal years ended: December 31, January 1, January 2, (In thousands) Service and administrative costs $ 5,736 $ 6,331 $ 5,174 Interest cost 19,585 10,751 9,440 Expected return on plan assets (14,600) (22,056) (24,417) Actuarial losses (gains) 9,341 (23,706) (19,514) Net periodic pension cost (credit) $ 20,062 $ (28,680) $ (29,317) The Company recognizes actuarial gains and losses, unless an interim remeasurement is required, in the fourth quarter of the year in which the gains and losses occur. Such adjustments for gains and losses are primarily driven by events and circumstances beyond the Company’s control, including changes in interest rates, the performance of the financial markets and mortality assumptions. Actuarial gains and losses, including other components of periodic pension cost, are recognized in the line item “Interest and other expense, net” in the consolidated statements of operations. The following table sets forth the changes in the funded status of the principal U.S. pension plan and the principal non-U.S. pension plans and the amounts recognized in the Company’s consolidated balance sheets as of December 31, 2023 and January 1, 2023. December 31, 2023 January 1, 2023 Non-U.S. U.S. Non-U.S. U.S. (In thousands) Actuarial present value of benefit obligations: Accumulated benefit obligations $ 227,174 $ 208,505 $ 207,503 $ 231,492 Change in benefit obligations: Projected benefit obligations at beginning of year $ 207,955 $ 231,492 $ 339,390 $ 299,826 Service and administrative costs 4,011 1,725 4,956 1,375 Interest cost 8,843 10,742 3,671 7,080 Benefits paid and plan expenses (15,061) (39,895) (14,978) (19,870) Benefit obligation classified in discontinued operations — — (8,261) — Actuarial losses (gains) 12,871 4,441 (88,724) (56,919) Effect of exchange rate changes 8,960 — (28,099) — Projected benefit obligations at end of year $ 227,579 $ 208,505 $ 207,955 $ 231,492 Change in plan assets: Fair value of plan assets at beginning of year $ 106,741 $ 216,748 $ 181,189 $ 290,116 Actual return on plan assets 7,094 15,478 (46,383) (53,498) Benefits paid and plan expenses (15,061) (39,895) (14,978) (19,870) Employer’s contributions 7,606 10,000 6,572 — Effect of exchange rate changes 5,925 — (19,659) — Fair value of plan assets at end of year $ 112,305 $ 202,331 $ 106,741 $ 216,748 Net liabilities recognized in the consolidated balance sheets $ (115,274) $ (6,174) $ (101,214) $ (14,744) Net amounts recognized in the consolidated balance sheets consist of: Other assets $ 19,540 $ — $ 19,521 $ — Current liabilities (6,899) — (6,568) — Long-term liabilities (127,915) (6,174) (114,167) (14,744) Net liabilities recognized in the consolidated balance sheets $ (115,274) $ (6,174) $ (101,214) $ (14,744) Actuarial assumptions as of the year-end measurement date: Discount rate 3.69 % 4.54 % 4.12 % 4.84 % Rate of compensation increase 3.19 % None 3.16 % None Actuarial assumptions used to determine net periodic pension cost during the year were as follows: December 31, 2023 January 1, 2023 January 2, 2022 Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Discount rate 4.12 % 4.84 % 1.41 % 2.44 % 0.92 % 2.21 % Rate of compensation increase 3.16 % None 2.78 % None 2.78 % None Expected rate of return on assets 3.92 % 4.80 % 1.11 % 7.25 % 2.10 % 7.25 % The Company’s expected rate of return on assets assumptions are derived from management’s estimates, as well as other information compiled by management, including studies that utilize customary procedures and techniques. The studies include a review of anticipated future long-term performance of individual asset classes and consideration of the appropriate asset allocation strategy given the anticipated requirements of the plans to determine the average rate of earnings expected on the funds invested to provide for the pension plans benefits. While the study gives appropriate consideration to recent fund performance and historical returns, the assumption is primarily a long-term, prospective rate. The Company’s discount rate assumptions are derived from a range of factors, including a yield curve for certain plans, composed of the rates of return on high-quality fixed-income corporate bonds available at the measurement date and the related expected duration for the obligations, and a bond matching approach for certain plans. The following table provides a breakdown of the non-U.S. benefit obligations and fair value of assets for pension plans that have benefit obligations in excess of plan assets: December 31, January 1, (In thousands) Pension Plans with Projected Benefit Obligations in Excess of Plan Assets Projected benefit obligations $ 134,814 $ 120,736 Fair value of plan assets — — Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets Accumulated benefit obligations $ 134,409 $ 120,283 Fair value of plan assets — — Assets of the defined benefit pension plans are primarily equity and debt securities. Asset allocations as of December 31, 2023 and January 1, 2023, and target asset allocations for fiscal year 2024 are as follows: Target Allocation Percentage of Plan Assets at December 29, 2024 December 31, 2023 January 1, 2023 Asset Category Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Equity securities 0-5% 0-10% — % 6 % — % 44 % Debt securities 0-5% 90-100% — % 94 % — % 56 % Other 95-100% 0-10% 100% — % 100 % — % Total 100 % 100 % 100 % 100 % 100 % 100 % The Company maintains target allocation percentages among various asset classes based on investment policies established for the pension plans which are designed to maximize the total rate of return (income and appreciation) after inflation within the limits of prudent risk taking, while providing for adequate near-term liquidity for benefit payments. The target allocations for plan assets are listed in the above table. Equity securities primarily include investments in mutual funds with holdings in large-cap and mid-cap companies located in the United States and abroad. Debt securities include corporate bonds of companies from diversified industries, high-yield bonds, and U.S. government securities. Other types of investments include investments in non-U.S. government index linked bonds, multi-strategy hedge funds, venture capital funds and foreign liability driven investments that follow several different strategies. The fair value of the Company’s pension plan assets as of December 31, 2023 and January 1, 2023 by asset category, classified in the three levels of inputs described in Note 20 to the consolidated financial statements are as follows: Fair Value Measurements at December 31, 2023 Using: Total Carrying Quoted Prices in Significant Other Significant (In thousands) Cash and cash equivalents $ 14,223 $ 14,223 $ — $ — Equity securities: U.S. large-cap 7,011 7,011 — — International large-cap value 2,350 2,350 — — Emerging markets growth 1,068 1,068 — — Fixed income securities: Corporate and U.S. debt instruments 189,318 65,228 124,090 — Other types of investments: Foreign liability driven instrument 100,666 — — 100,666 Total assets measured at fair value $ 314,636 $ 89,880 $ 124,090 $ 100,666 Fair Value Measurements at January 1, 2023 Using: Total Carrying Quoted Prices in Significant Other Significant (In thousands) Cash $ 14,483 $ 14,483 $ — $ — Equity Securities: U.S. large-cap 61,680 61,680 — — International large-cap value 20,148 20,148 — — Emerging markets growth 9,902 9,902 — — Fixed income securities: Corporate and U.S. debt instruments 105,126 36,346 68,780 — Corporate bonds 17,088 — 17,088 — Other types of investments: Foreign liability driven instrument 95,062 — — 95,062 Total assets measured at fair value $ 323,489 $ 142,559 $ 85,868 $ 95,062 Valuation Techniques: Valuation techniques utilized need to maximize the use of observable inputs and minimize the use of unobservable inputs. There have been no changes in the methodologies utilized at December 31, 2023 compared to January 1, 2023. The following is a description of the valuation techniques utilized to measure the fair value of the assets shown in the table above. Equity Securities: Mutual funds held by the Master Trust are open‑ended mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value and to transact at that price. The mutual funds held by the Master Trust are deemed to be actively traded. These are categorized as Level 1 assets. Fixed Income Securities: Fixed income U.S. government bonds are valued at quoted market prices and are categorized as Level 1 assets. Fixed income corporate bond exchange traded funds or individual fixed income corporate bonds are categorized as Level 2 assets except where sufficient quoted prices exist in active markets, in which case such securities are categorized as Level 1 assets. These securities are valued using third-party pricing services. These services may use, for example, model-based pricing methods that utilize observable market data as inputs. Broker dealer bids or quotes of securities with similar characteristics may also be used. Other Types of Investments: In September 2021, the Company’s UK pension scheme executed a buy-in contract with Phoenix Life LTD (“Phoenix”), under which the Company made an upfront payment to Phoenix in exchange for Phoenix agreeing to make the benefit payments under the Company’s UK pension scheme due to specified participants and their beneficiaries, thus transferring most of the investment and longevity risk associated with the covered participants and beneficiaries from the Company to Phoenix. This buy-in contract can be considered a liability-driven investment (“LDI”) solution that hedges not only the investment risk but also the longevity risk under the Company’s UK pension scheme. Like other LDI solutions, it does not eliminate ongoing administrative costs. These are categorized as Level 3 assets. The Company’s policy is to recognize significant transfers between levels at the actual date of the event. A reconciliation of the beginning and ending Level 3 foreign liability driven investments is as follows: (In thousands) Balance at January 2, 2022 $ 165,680 Pension benefits paid (6,639) Foreign exchange losses (18,411) Return on plan assets (45,568) Balance at January 1, 2023 95,062 Pension benefits paid (6,051) Foreign exchange gains 5,957 Return on plan assets 5,698 Balance at December 31, 2023 $ 100,666 With respect to plans outside of the United States, the Company expects to contribute $6.9 million in the aggregate during fiscal year 2024. During fiscal year 2023, the Company contributed $10.0 million to its defined benefit pension plan in the United States for the plan year 2022. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows: Non-U.S. U.S. (In thousands) 2024 $ 12,331 $ 18,882 2025 12,598 18,583 2026 12,720 18,240 2027 12,673 17,864 2028 12,914 17,408 2029-2033 64,702 77,782 The Company also sponsors a supplemental executive retirement plan to provide senior management with benefits in excess of normal pension benefits. Effective July 31, 2000, this plan was closed to new entrants. At December 31, 2023 and January 1, 2023, the projected benefit obligations were $18.6 million and $18.9 million, respectively. Assets with a fair value of $0.6 million and $0.9 million, segregated in a trust (which is included in marketable securities in the Other assets, net, on the consolidated balance sheets), were available to meet this obligation as of December 31, 2023 and January 1, 2023, respectively. Pension expenses and income for this plan netted to expense of $1.5 million in fiscal year 2023, income of $3.2 million in fiscal year 2022 and expense of $0.2 million in fiscal year 2021. Postretirement Medical Plans: The Company provides healthcare benefits for eligible retired U.S. employees under a comprehensive major medical plan or under health maintenance organizations where available. Eligible U.S. employees qualify for retiree health benefits if they retire directly from the Company and have at least ten years of service. Generally, the major medical plan pays stated percentages of covered expenses after a deductible is met and takes into consideration payments by other group coverage and by Medicare. The plan requires retiree contributions under most circumstances and has provisions for cost-sharing charges. Effective January 1, 2000, this plan was closed to new hires. For employees retiring after 1991, the Company has capped its medical premium contribution based on employees’ years of service. The Company funds the amount allowable under a 401(h) provision in the Company’s defined benefit pension plan. Assets of the plan are primarily equity and debt securities and are available only to pay retiree health benefits. The costs of these plans are not material and the net assets in the plans totaled $18.5 million and $17.1 million at December 31, 2023 and January 1, 2023, respectively. |