Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Employee Benefit Plans

Note 12: Employee Benefit Plans

Defined Benefit Pension Plans

The Company maintains defined benefit pension plans for employees of certain of its foreign subsidiaries. Such plans conform to local practice in terms of providing minimum benefits mandated by law, collective agreements or customary practice. The Company recognizes the aggregate amount of all overfunded plans as assets and the aggregate amount of all underfunded plans as liabilities in its Consolidated Balance Sheets. The Company's expected long-term rate of return on plan assets is updated at least annually, taking into consideration its asset allocation, historical returns on similar types of assets and the current economic environment. For estimation purposes, the Company assumes its long-term asset mix will generally be consistent with the current mix. The Company determines its discount rates using highly rated corporate bond yields and government bond yields.

Benefits under all of the plans are valued utilizing the projected unit credit cost method. The Company's policy is to fund its defined benefit plans in accordance with local requirements and regulations. The funding is primarily driven by the current assessment of the economic environment and projected benefit payments of foreign subsidiaries. The measurement date for determining the defined benefit obligations for all plans is December 31 of each year.

The Company recognizes actuarial gains and losses during the period the Company's annual pension plan actuarial valuations are prepared, which generally occurs during the fourth calendar quarter of each year, or during any interim period where a revaluation is deemed necessary. For the years ended December 31, 2023, 2022 and 2021, the Company recognized an actuarial loss of $4.0 million, and actuarial gains of $22.1 million and $21.4 million, respectively. Of the actuarial loss for 2023, $7.8 million was primarily due to an increase in the discount rates reduced by $3.8 million due to higher-than-expected returns on plan assets.

Following is a summary of the status of the Company's foreign defined benefit pension plans and the net periodic pension cost (in millions):

	Year Ended December 31,
	2023			2022			2021
Service cost	$	4.7		$	8.1		$	11.7
Interest cost	6.3			4.0			4.5
Expected return on plan assets	(4.7)			(4.3)			(6.5)
Curtailment gain	—			—			(0.4)
Actuarial (gains) losses	4.0			(22.1)			(21.4)
Total net periodic pension (gain) cost	$	10.3		$	(14.3)		$	(12.1)
Weighted average assumptions
Discount rate used for net periodic pension costs	3.27		%	1.54		%	1.31		%
Discount rate used for pension benefit obligations	3.63		%	3.63		%	1.54		%
Expected return on plan assets	3.46		%	2.98		%	3.04		%
Rate of compensation increase	4.26		%	3.43		%	3.45		%

The long-term rate of return on plan assets was determined using the weighted-average method, which incorporates factors that include the historical inflation rates, interest rate yield curve and current market conditions.

	As of December 31,
	2023		2022
Change in projected benefit obligation (PBO)
Projected benefit obligation at the beginning of the year	$	185.5	$	293.6
Divestiture of businesses	—		(41.3)
Service cost	4.7		8.1
Interest cost	6.3		4.0
Net actuarial (gain) loss	7.8		(38.3)
Benefits paid by plan assets	(10.7)		(5.3)
Benefits paid by the Company	(3.2)		(3.4)
Participant contributions	0.1		0.1
Translation and other (gain) loss	0.6		(32.0)
Projected benefit obligation at the end of the year	$	191.1	$	185.5
Accumulated benefit obligation at the end of the year	$	157.3	$	153.8
Change in plan assets
Fair value of plan assets at the beginning of the year	$	131.7	$	189.7
Divestiture of businesses	—		(21.9)
Actual return on plan assets	8.5		(11.9)
Benefits paid from plan assets	(10.7)		(5.3)
Employer contributions	11.3		2.3
Translation and other gain (loss)	(0.5)		(21.2)
Fair value of plan assets at the end of the year	$	140.3	$	131.7
	As of December 31,
	2023		2022
Plans with underfunded or non-funded projected benefit obligation
Projected benefit obligation	$	118.2	$	121.1
Fair value of plan assets	50.2		54.2
Plans with underfunded or non-funded accumulated benefit obligation
Accumulated benefit obligation	$	87.7	$	84.2
Fair value of plan assets	50.2		44.9
Amounts recognized in the balance sheet consist of
Current assets	$	0.7	$	0.7
Non-current assets	16.4		12.4
Current liabilities	(1.4)		(0.4)
Non-current liabilities	(66.5)		(66.5)
Funded status	$	(50.8)	$	(53.8)

Included in assets held-for-sale within Other current assets is an insignificant balance representing the overfunded status of the pension plan for the divested fab at Niigata, Japan as of December 31, 2023 and 2022. The PBO and pension asset balances related to this plan are included in the table above. These balances are expected to be derecognized during 2024 upon approval from the appropriate authorities. See Note 5: ''Acquisitions and Divestitures'' for further discussion of the Niigata factory sale.

Plan Assets

The Company's overall investment strategy is to focus on stable and low credit risk investments aimed at providing a positive rate of return to the plan assets. The Company has an investment mix with a wide diversification of asset types and fund strategies that are aligned with each region and foreign location's economy and market conditions. Investments in government securities are generally guaranteed by the respective government offering the securities. Investments in corporate bonds, equity

securities, and foreign mutual funds are made with the expectation that these investments will give an adequate rate of long-term returns despite periods of high volatility. Other types of investments include investments in cash deposits, money market funds and insurance contracts. Asset allocations are based on the anticipated required funding amounts, timing of benefit payments, historical returns on similar assets and the influence of the current economic environment.

The following table sets forth, by level within the fair value hierarchy, a summary of investments measured at fair value and the asset allocations of the plan assets in the Company's foreign pension plans (in millions):                            

	As of December 31, 2023
	Allocation		Total		Level 1		Level 2		Level 3
Asset Category
Cash/Money Markets	2	%	$	3.5	$	3.5	$	—	$	—
Foreign Government/Treasury Securities (1)	7	%	9.9		9.9		—		—
Corporate Bonds, Debentures (2)	31	%	43.2		—		43.2		—
Equity Securities (3)	22	%	31.3		—		31.3		—
Mutual Funds	9	%	11.9		—		11.9		—
Investment and Insurance Contracts (4)	29	%	40.5		—		16.0		24.5
	100	%	$	140.3	$	13.4	$	102.4	$	24.5
	As of December 31, 2022
	Allocation		Total		Level 1		Level 2		Level 3
Asset Category
Cash/Money Markets	2	%	$	3.0	$	3.0	$	—	$	—
Foreign Government/Treasury Securities (1)	10	%	13.4		13.4		—		—
Corporate Bonds, Debentures (2)	26	%	33.4		—		33.4		—
Equity Securities (3)	23	%	30.2		—		30.2		—
Mutual Funds	7	%	9.3		—		9.3		—
Investment and Insurance Contracts (4)	32	%	42.4		—		18.6		23.8
	100	%	$	131.7	$	16.4	$	91.5	$	23.8

_______________________

(1)Includes investments primarily in guaranteed return securities.

(2)    Includes investments in government bonds and corporate bonds of developed countries, emerging market government bonds, emerging market corporate bonds and convertible bonds.

(3)    Includes investments in equity securities of developed countries and emerging markets.

(4)    Includes certain investments with insurance companies that guarantee a minimum rate of return on the investment.

When available, the Company uses observable market data, including pricing on recently closed market transactions and quoted prices, which are included in Level 2. When data is unobservable, valuation methodologies using comparable market data are utilized and included in Level 3. Activity during the years ended December 31, 2023 and 2022, respectively, for plan assets with fair value measurement using significant unobservable inputs (Level 3) were as follows (in millions):

	Investment and Insurance Contracts
Balance at December 31, 2021	$	50.6
Actual return on plan assets	(2.8)
Purchase, sales and settlements, net	(21.7)
Foreign currency impact	(2.3)
Balance at December 31, 2022	$	23.8
Actual return on plan assets	1.2
Purchase, sales and settlements, net	(1.3)
Foreign currency impact	0.8
Balance at December 31, 2023	$	24.5

The Company generally contributes to its foreign defined benefit plans based on specific plan or statutory requirements. In 2024, the Company expects to contribute $22.7 million. The expected benefit payments from the Company's defined benefit plans from 2024 through 2028 and the five years thereafter are as follows (in millions):

2024	$	7.1
2025	9.4
2026	8.2
2027	11.4
2028	13.0
Five years thereafter	68.4
Total	$	117.5

Defined Contribution Plans

The Company has a deferred compensation savings plan for all eligible U.S. employees established under the provisions of Section 401(k) of the Internal Revenue Code. Eligible employees may contribute a percentage of their salary subject to certain limitations. The Company has elected to match 100% of employee contributions between 0% and 4% of their salary, with an annual limit as mandated by the Internal Revenue Service. The Company recognized $19.9 million, $14.7 million and $16.7 million of expense relating to matching contributions in 2023, 2022 and 2021, respectively.

Certain foreign subsidiaries have defined contribution plans in which eligible employees participate. The Company recognized compensation expense of $22.3 million, $20.5 million and $27.2 million relating to these plans for the years ended 2023, 2022 and 2021, respectively.