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 $12.5 million in fiscal year 2017, and $12.8 million in each of fiscal years 2016 and 2015.

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 was closed to new hires effective January 31, 2001, and benefits for those employed by the Company’s former Life Sciences business were frozen as of that date. Plan benefits were frozen as of March 2003 for those employed by the Company’s former Analytical Instruments business and corporate employees. Plan benefits were frozen as of January 31, 2011 for all remaining employees that were still actively accruing in the plan. The plans provide benefits that are based on an employee’s years of service and compensation near retirement.

Net periodic pension (credit) cost for U.S. and non-U.S. plans included the following components for fiscal years ended:



	December 31, 2017			January 1, 2017			January 3, 2016
	(In thousands)
Service and administrative costs	$	4,951		$	4,337		$	4,332
Interest cost	16,707			18,638			20,696
Expected return on plan assets	(26,401		)	(24,245		)	(26,021		)
Curtailment gain	—			—			(907		)
Actuarial (gain) loss	(7,085		)	15,890			12,953
Amortization of prior service cost	(195		)	(210		)	(238		)
Net periodic pension (credit) cost	$	(12,023	)	$	14,410		$	10,815

During fiscal year 2014, the Company notified certain employees of its intention to terminate their employment as part of a restructuring plan that the Company implemented during the third quarter of fiscal year 2014. During fiscal year 2015, the termination of these participants decreased the expected future service lives in excess of the curtailment limit for one of the Company's pension plans, which resulted in a curtailment gain. The Company recorded the curtailment gain of $0.8 million during fiscal year 2015. As part of the curtailment, the Company remeasured the assets and liabilities of the plan that had the curtailment based upon current discount rates and the fair value of the pension plan's assets as of the curtailment date, which resulted in an actuarial loss of $0.8 million.

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, 2017 and January 1, 2017.



	December 31, 2017						January 1, 2017
	Non-U.S.			U.S.			Non-U.S.			U.S.
	(In thousands)
Actuarial present value of benefit obligations:
Accumulated benefit obligations	$	334,151		$	308,713		$	271,127		$	300,650
Change in benefit obligations:
Projected benefit obligations at beginning of year	$	279,522		$	300,650		$	276,960		$	301,416
Service and administrative costs	2,201			2,750			2,262			2,075
Interest cost	4,870			11,836			6,205			12,433
Benefits paid and plan expenses	(13,238		)	(20,032		)	(11,940		)	(19,424		)
Participants’ contributions	189			—			209			—
Business acquisition (divestiture)	39,293			—			(2,955		)	—
Plan settlements	—			—			(993		)	—
Actuarial (gain) loss	(1,486		)	13,509			38,623			4,150
Effect of exchange rate changes	32,059			—			(28,849		)	—
Projected benefit obligations at end of year	$	343,410		$	308,713		$	279,522		$	300,650
Change in plan assets:
Fair value of plan assets at beginning of year	$	153,281		$	243,817		$	150,894		$	244,693
Actual return on plan assets	15,866			29,642			32,581			18,548
Benefits paid and plan expenses	(13,238		)	(20,032		)	(11,940		)	(19,424		)
Employer’s contributions	8,422			—			9,562			—
Participants’ contributions	189			—			209			—
Plan settlements	—			—			(993		)	—
Effect of exchange rate changes	15,216			—			(27,032		)	—
Fair value of plan assets at end of year	$	179,736		$	253,427		$	153,281		$	243,817
Net liabilities recognized in the consolidated balance sheets	$	(163,674	)	$	(55,286	)	$	(126,241	)	$	(56,833	)

Net amounts recognized in the consolidated balance sheets consist of:
Noncurrent assets	$	26,591		$	—		$	12,944		$	—
Current liabilities	(7,017		)	—			(6,033		)	—
Noncurrent liabilities	(183,248		)	(55,286		)	(133,152		)	(56,833		)
Net liabilities recognized in the consolidated balance sheets	$	(163,674	)	$	(55,286	)	$	(126,241	)	$	(56,833	)

Net amounts recognized in accumulated other comprehensive income consist of:
Prior service cost	$	(457	)	$	—		$	(603	)	$	—

Actuarial assumptions as of the year-end measurement date:
Discount rate	1.99		%	3.56		%	2.06		%	4.06		%
Rate of compensation increase	3.50		%	None			3.64		%	None

Actuarial assumptions used to determine net periodic pension cost during the year were as follows:



	December 31, 2017				January 1, 2017				January 3, 2016
	Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.
Discount rate	2.06	%	4.06	%	2.88	%	4.25	%	2.75	%	4.08	%
Rate of compensation increase	3.64	%	None		3.26	%	None		3.28	%	None
Expected rate of return on assets	6.00	%	7.25	%	5.30	%	7.25	%	4.60	%	7.25	%

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, 2017		January 1, 2017
	(In thousands)
Pension Plans with Projected Benefit Obligations in Excess of Plan Assets
Projected benefit obligations	$	190,265	$	139,185
Fair value of plan assets	—		—

Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets
Accumulated benefit obligations	$	187,329	$	136,197
Fair value of plan assets	—		—

Assets of the defined benefit pension plans are primarily equity and debt securities. Asset allocations as of December 31, 2017 and January 1, 2017, and target asset allocations for fiscal year 2018 are as follows:



	Target Allocation				Percentage of Plan Assets at
	December 30, 2018				December 31, 2017				January 1, 2017
Asset Category	Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.
Equity securities	45-55%		40-50%		51	%	41	%	48	%	41	%
Debt securities	45-55%		50-60%		49	%	59	%	51	%	59	%
Other	0-5%		0-5%		—	%	—	%	1	%	—	%
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 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.

For the plans in the United States, the Company adopted the updated projection scale, MP-2015, that was published by the Society of Actuaries in 2015, as of January 3, 2016. The adoption of the updated projection scale resulted in a $6.8 million decrease to the projected benefit obligation as of January 3, 2016. During fiscal year 2016, the Society of Actuaries issued an updated projection scale, MP-2016, which reduced the life expectancy used to determine the projected benefit obligation. The Company adopted MP-2016 as of January 1, 2017. The adoption of the updated projection scale resulted in a $5.5 million decrease to the projected benefit obligation at January 1, 2017. During fiscal year 2017, the Society of Actuaries issued an updated projection scale, MP-2017, which reduced the life expectancy used to determine the projected benefit obligation. The Company adopted MP-2017 as of December 31, 2017. The adoption of the updated projection scale resulted in a $2.6 million decrease to the projected benefit obligation at December 31, 2017. The changes to the projected benefit obligations due to the adoption of the mortality base table and projection scale are included within "Actuarial loss (gain)" in the Change in Benefit Obligations for fiscal years 2017 and 2016 above.

The target allocations for plan assets are listed in the above table. Equity securities primarily include investments in large-cap and mid-cap companies located in the United States and abroad, and equity index funds. 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 and venture capital funds that follow several different strategies.

The fair values of the Company’s pension plan assets as of December 31, 2017 and January 1, 2017 by asset category, classified in the three levels of inputs described in Note 21 to the consolidated financial statements are as follows:



			Fair Value Measurements at December 31, 2017 Using:
	Total Carrying Value at December 31, 2017		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Cash	$	4,307	$	4,307	$	—	$	—
Equity Securities:
U.S. large-cap	30,008		30,008		—		—
International large-cap value	32,613		32,613		—		—
U.S. small mid-cap	2,104		2,104		—		—
Emerging markets growth	14,348		14,348		—		—
Equity index funds	90,838		—		90,838		—
Domestic real estate funds	1,401		1,401		—		—
Commodity funds	7,387		7,387		—		—
Fixed income securities:
Non-U.S. Treasury Securities	24,946		—		24,946		—
Corporate and U.S. debt instruments	138,948		40,290		98,658		—
Corporate bonds	27,571		—		27,571		—
High yield bond funds	5,912		5,912		—		—
Other types of investments:
Multi-strategy hedge funds	16,789		—		—		16,789
Non-U.S. government index linked bonds	35,991		—		35,991		—
Total assets measured at fair value	$	433,163	$	138,370	$	278,004	$	16,789



			Fair Value Measurements at January 1, 2017 Using:
	Total Carrying Value at January 1, 2017		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Cash	$	6,079	$	6,079	$	—	$	—
Equity Securities:
U.S. large-cap	25,523		25,523		—		—
International large-cap value	28,267		28,267		—		—
U.S. small-cap	1,756		1,756		—		—
Emerging markets growth	12,144		12,144		—		—
Equity index funds	74,274		—		74,274		—
Domestic real estate funds	1,401		1,401		—		—
Commodity funds	6,854		6,854		—		—
Fixed income securities:
Non-U.S. Treasury Securities	22,059		—		22,059		—
Corporate and U.S. debt instruments	133,406		35,971		97,435		—
Corporate bonds	23,906		—		23,906		—
High yield bond funds	5,636		5,636		—		—
Other types of investments:
Multi-strategy hedge funds	23,790		—		—		23,790
Non-U.S. government index linked bonds	32,003		—		32,003		—
Total assets measured at fair value	$	397,098	$	123,631	$	249,677	$	23,790

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, 2017 compared to January 1, 2017. 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: Shares of registered investment companies that are publicly traded are categorized as Level 1 assets; they are valued at quoted market prices that represent the net asset value of the fund. These instruments have active markets.

Equity index funds are mutual funds that are not publicly traded and are comprised primarily of underlying equity securities that are publicly traded on exchanges. Price quotes for the assets held by these funds are readily observable and available. Equity index funds are categorized as Level 2 assets.

Fixed Income Securities: Fixed income mutual funds that are publicly traded are valued at quoted market prices that represent the net asset value of securities held by the fund and are categorized as Level 1 assets.

Fixed income index funds that are not publicly traded are stated at net asset value as determined by the issuer of the fund based on the fair value of the underlying investments and are categorized as Level 2 assets.

Individual fixed income 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: Non-U.S. government index link bond funds are not publicly traded and are stated at net asset value as determined by the issuer of the fund based on the fair value of the underlying investments. Underlying investments consist of bonds in which payment of income on the principal is related to a specific price index and are categorized as Level 2 assets.

Hedge funds, private equity funds and venture capital funds are valued at fair value by using the net asset values provided by the investment managers and are updated, if necessary, using analytical procedures, appraisals, public market data and/or inquiry of the investment managers. The net asset values are determined based upon the fair values of the underlying investments in the funds. These other investments invest primarily in readily available marketable securities and allocate gains, losses, and expense to the investor based on the ownership percentage as described in the fund agreements. They 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 assets for fiscal years 2017, 2016 and 2015 is as follows:



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3):
	Venture Capital Funds			Multi-strategy Hedge Funds			Total
	(In thousands)
Balance at December 28, 2014	$	1		$	23,332		$	23,333
Unrealized gains	—			83			83
Balance at January 3, 2016	1			23,415			23,416
Realized losses	(1		)	—			(1		)
Unrealized gains	—			375			375
Balance at January 1, 2017	—			23,790			23,790
Sales	—			(8,189		)	(8,189		)
Realized gains	—			1,542			1,542
Unrealized losses	—			(354		)	(354		)
Balance at December 31, 2017	$	—		$	16,789		$	16,789

With respect to plans outside of the United States, the Company expects to contribute $8.8 million in the aggregate during fiscal year 2018. In January 2018, the Company made a voluntary $15.0 million contribution to its defined benefit pension plan in the United States for the plan year 2017. During fiscal year 2017, the Company contributed $8.4 million, in the aggregate, to pension plans outside of the United States. During fiscal year 2016, the Company made contributions of $9.6 million, in the aggregate, to plans outside of the United States. During fiscal year 2015, the Company contributed $14.9 million, in the aggregate, to plans outside of the United States and $20.0 million to its defined benefit pension plan in the United States.

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)
2018	$	11,786	$	18,593
2019	12,166		18,860
2020	12,566		19,125
2021	13,151		19,392
2022	13,275		19,630
2023-2026	71,963		97,295

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, 2017 and January 1, 2017, the projected benefit obligations were $23.7 million and $21.8 million, respectively. Assets with a fair value of $1.4 million and $1.1 million, segregated in a trust (which is included in marketable securities and investments on the consolidated balance sheets), were available to meet this obligation as of December 31, 2017 and January 1, 2017, respectively. Pension expenses and income for this plan netted to expense of $3.2 million in fiscal year 2017, expense of $1.6 million in fiscal year 2016 and income of $1.6 million in fiscal year 2015.

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.

Net periodic postretirement medical benefit (credit) cost included the following components for the fiscal years ended:



	December 31, 2017			January 1, 2017			January 3, 2016
	(In thousands)
Service cost	$	92		$	101		$	108
Interest cost	125			142			143
Expected return on plan assets	(1,114		)	(1,035		)	(1,062		)
Actuarial (gain) loss	(741		)	(539		)	971
Net periodic postretirement medical benefit (credit) cost	$	(1,638	)	$	(1,331	)	$	160

The following table sets forth the changes in the postretirement medical plan’s funded status and the amounts recognized in the Company’s consolidated balance sheets as of December 31, 2017 and January 1, 2017.



	December 31, 2017			January 1, 2017
	(In thousands)
Actuarial present value of benefit obligations:
Retirees	$	804		$	907
Active employees eligible to retire	379			423
Other active employees	1,948			2,031
Accumulated benefit obligations at beginning of year	3,131			3,361
Service cost	92			101
Interest cost	125			142
Benefits paid	(122		)	(145		)
Actuarial loss (gain)	187			(329		)
Change in accumulated benefit obligations during the year	282			(231		)
Retirees	688			804
Active employees eligible to retire	408			379
Other active employees	2,317			1,948
Accumulated benefit obligations at end of year	$	3,413		$	3,131
Change in plan assets:
Fair value of plan assets at beginning of year	$	15,453		$	14,353
Actual return on plan assets	1,921			1,100
Fair value of plan assets at end of year	$	17,374		$	15,453
Net assets recognized in the consolidated balance sheets	$	13,961		$	12,322

Net amounts recognized in the consolidated balance sheets consist of:
Noncurrent assets	$	13,961		$	12,322

Net amounts recognized in accumulated other comprehensive income consist of:
Prior service cost	$	—		$	—

Actuarial assumptions as of the year-end measurement date:
Discount rate	3.60		%	4.11		%

Actuarial assumptions used to determine net cost during the year are as follows:



	December 31, 2017		January 1, 2017		January 3, 2016
Discount rate	4.11	%	4.34	%	4.10	%
Expected rate of return on assets	7.25	%	7.25	%	7.25	%

The Company maintains a master trust for plan assets related to the U.S. defined benefit plans and the U.S. postretirement medical plan. Accordingly, investment policies, target asset allocations and actual asset allocations are the same as those disclosed for the U.S. defined benefit plans.

The fair values of the Company’s plan assets at December 31, 2017 and January 1, 2017 by asset category, classified in the three levels of inputs described in Note 21, are as follows:



			Fair Value Measurements at December 31, 2017 Using:
	Total Carrying Value at December 31, 2017		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Cash	$	268	$	268	$	—	$	—
Equity Securities:
U.S. large-cap	2,057		2,057		—		—
International large-cap value	2,236		2,236		—		—
U.S. small mid-cap	144		144		—		—
Emerging markets growth	984		984		—		—
Domestic real estate funds	96		96		—		—
Commodity funds	506		506		—		—
Fixed income securities:
Corporate debt instruments	9,526		2,762		6,764		—
High yield bond funds	406		406		—		—
Other types of investments:
Multi-strategy hedge funds	1,151		—		—		1,151
Total assets measured at fair value	$	17,374	$	9,459	$	6,764	$	1,151



			Fair Value Measurements at January 1, 2017 Using:
	Total Carrying Value at January 1, 2017		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Cash	$	319	$	319	$	—	$	—
Equity Securities:
U.S. large-cap	1,618		1,618		—		—
International large-cap value	1,792		1,792		—		—
U.S. small mid-cap	111		111		—		—
Emerging markets growth	770		770		—		—
Domestic real estate funds	89		89		—		—
Commodity funds	434		434		—		—
Fixed income securities:
Corporate debt instruments	8,456		2,280		6,176		—
High yield bond funds	356		356		—		—
Other types of investments:
Multi-strategy hedge funds	1,508		—		—		1,508
Total assets measured at fair value	$	15,453	$	7,769	$	6,176	$	1,508

Valuation Techniques: Valuation techniques are the same as those disclosed for the U.S. defined benefit plans above.

A reconciliation of the beginning and ending Level 3 assets for fiscal years 2017, 2016 and 2015 is as follows:



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3):
	Multi-strategy Hedge Funds
	(In thousands)
Balance at December 28, 2014	$	1,341
Unrealized gains	33
Balance at January 3, 2016	1,374
Unrealized gains	134
Balance at January 1, 2017	1,508
Sales	(562		)
Realized gains	229
Unrealized losses	(24		)
Balance at December 31, 2017	$	1,151

The Company does not expect to make any contributions to the postretirement medical plan during fiscal year 2018.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:



Postretirement Medical Plan
	(In thousands)
2018	$	147
2019	166
2020	178
2021	195
2022	211
2023-2026	1,153

Deferred Compensation Plans: During fiscal year 1998, the Company implemented a nonqualified deferred compensation plan that provides benefits payable to officers and certain key employees or their designated beneficiaries at specified future dates, or upon retirement or death. The plan was amended to eliminate deferral elections, with the exception of Company 401(k) excess contributions for eligible participants, for plan years beginning January 1, 2011. Benefit payments under the plan are funded by contributions from participants, and for certain participants, contributions by the Company. The obligations related to the deferred compensation plan totaled $1.0 million at December 31, 2017 and $0.9 million at January 1, 2017.