EMPLOYEE BENEFIT PLANS

Defined Benefit Plans - As of January 3, 2015, the Company maintained two domestic pension plans and three German pension plans. The Company used a January 3 measurement date for these plans. One of the Company’s domestic pension plans covers two management employees, while the other domestic plan covers all other eligible employees. The two domestic and three German plans collectively comprise the ‘Pension Benefits’ disclosure caption.

The Company redesigned certain retirement plan offerings in 2012. The redesign was completed in order to increase standardization of retirement plans among U.S. salaried employees and to reduce the expected cash funding volatility of retirement plans, while at the same time keeping in place a competitive retirement plan offering to attract and retain talent. The Company achieved this by freezing both the Basic Pension Plan and the Cash Balance Plan as of December 31, 2011, with the exception of a certain limited number of Basic Pension Plan participants who will still accrue benefits over a five year sunset period. Also effective December 31, 2011, the Cash Balance Plan was closed (the Basic Pension Plan was previously closed) and the two plans were merged into a single plan. The portion of the non-qualified pension plan related to the Cash Balance Plan was also frozen and the account balances were transferred out of the plan into the Company's qualified defined contribution plan. As of January 1, 2012, the Company instituted new service-based contributions, supplemental to the existing Company match for employees, into the defined contribution retirement plan offering.

The Company also maintains a postretirement benefit plan to provide health and life insurance benefits to employees hired prior to 1992. The Company effectively capped its cost for those benefits through plan amendments made in 1992, freezing Company contributions for insurance benefits at 1991 levels for current and future beneficiaries with actuarially reduced benefits for employees who retire before age 65. The disclosures surrounding this plan are reflected in the "Other Benefits" caption.

The following table sets forth aggregated information related to the Company’s pension benefits and other postretirement benefits, including changes in the benefit obligations, changes in plan assets, funded status, amounts recognized in the balance sheet, amounts recognized in accumulated other comprehensive income, and actuarial assumptions that the Company considered in its determination of benefit obligations and plan costs. Benefit obligation balances presented below reflect the projected benefit obligation (PBO) for the Company's pension plans, and accumulated postretirement benefit obligations (APBO) for the Company's other benefit plans.



(In millions)	Pension Benefits						Other Benefits
	2014			2013			2014			2013
Accumulated benefit obligation, end of year	$	203.4		$	180.6		$	13.0		$	12.6

Change in benefit obligation:
Benefit obligation, beginning of year	$	184.7		$	196.3		$	12.6		$	14.5
Service cost	1.2			1.8			0.1			0.1
Interest cost	8.2			7.6			0.5			0.5
Actuarial (gain)/loss	33.0			(10.2		)	1.2			(1.0		)
Settlements paid	(0.2		)	(0.8		)	—			—
Benefits paid	(15.0		)	(10.7		)	(1.4		)	(1.5		)
Foreign currency exchange	(2.4		)	0.7			—			—
Benefit obligation, end of year	$	209.5		$	184.7		$	13.0		$	12.6

Change in plan assets:
Fair value of assets, beginning of year	$	151.1		$	130.2		$	—		$	—
Actual return on plan assets	14.4			24.3			—			—
Company contributions	10.1			7.7			1.4			1.5
Settlements paid	(0.1		)	(0.6		)	—			—
Benefits paid	(15.0		)	(10.7		)	(1.4		)	(1.5		)
Foreign currency exchange	(0.5		)	0.2			—			—
Plan assets, end of year	$	160.0		$	151.1		$	—		$	—

Funded status	$	(49.5	)	$	(33.6	)	$	(13.0	)	$	(12.6	)

Amounts recognized in balance sheet:
Deferred tax asset	30.4			21.2			1.5			1.2
Current liabilities	(3.5		)	(3.2		)	(1.3		)	(1.3		)
Noncurrent liabilities	(46.0		)	(30.4		)	(11.7		)	(11.3		)
Net liability, end of year	$	(19.1	)	$	(12.4	)	$	(11.5	)	$	(11.4	)

Amount recognized in accumulated other comprehensive income:
Prior service cost	—			—			0.7			1.0
Net actuarial loss	52.3			36.8			1.7			0.9
Settlement	1.4			—			—			—
Total recognized in accumulated other comprehensive income	$	53.7		$	36.8		$	2.4		$	1.9

The following table sets forth other changes in plan assets and benefit obligation recognized in other comprehensive income for 2014 and 2013:



(In millions)	Pension Benefits						Other Benefits
	2014			2013			2014			2013
Net actuarial (gain)/loss	$	29.1		$	(24.6	)	$	1.3		$	(1.0	)
Amortization of:
Net actuarial gain	(2.2		)	(3.2		)	(0.1		)	(0.3		)
Prior service credit	—			—			(0.4		)	(0.4		)
Settlement recognition	(1.4		)	(0.7		)	—			—
Transition asset	—			—			—			—
Deferred tax asset/(liability)	(8.3		)	11.4			(0.3		)	0.7
Foreign currency exchange	(0.3		)	—			—			—
Total recognized in other comprehensive income	$	16.9		$	(17.1	)	$	0.5		$	(1.0	)

Weighted-average assumptions used to determine domestic benefit obligations:



	Pension Benefits				Other Benefits
	2014		2013		2014		2013
Discount rate	3.95	%	4.75	%	3.75	%	4.50	%
Rate of increase in future compensation*	—	%	—	%	3.00 - 8.00% (Graded)		3.00 - 12.00% (Graded)

*No rate of increases in future compensation used within assumptions for 2014 and 2013, as the cash balance component of the domestic Pension Plan was frozen and the other domestic Pension Plan components do not base benefits on compensation.

Assumptions used to determine domestic periodic benefit cost:



	Pension Benefits						Other Benefits
	2014		2013		2012		2014		2013		2012
Discount rate	4.75	%	4.00	%	4.75	%	4.50	%	3.50	%	4.50	%
Rate of increase in future compensation	—	%	—	%	—	%	3.00 - 12.00% (Graded)		3.00 - 12.00% (Graded)		3.00 - 12.00% (Graded)
Expected long-term rate of return on plan assets	7.70	%	8.00	%	8.00	%	—	%	—	%	—	%

For the fiscal year ended January 3, 2015, the Company adopted the RP-2014 and MP-2014 mortality tables released by the Society of Actuaries during 2014. These tables provide assumptions for longer life expectancies for plan participants.

The accumulated benefit obligation for the Company’s tax qualified plan and German benefit pension plans was $192.8 million and $168.4 million for the years ended 2014 and 2013.

The following table sets forth the aggregated net periodic benefit cost for all pension plans for 2014, 2013, and 2012:



(In millions)	Pension Benefits									Other Benefits
	2014			2013			2012			2014		2013		2012
Service cost	$	1.2		$	1.8		$	1.5		$	0.1	$	0.1	$	0.1
Interest cost	8.2			7.6			8.2			0.5		0.5		0.6
Expected return on assets	(10.6		)	(10.0		)	(10.1		)	—		—		—
Amortization of transition obligation	—			—			—			—		0.4		0.2
Settlement cost	—			0.1			—			—		—		—
Prior service cost	—			—			—			0.4		0.4		0.3
Loss	2.5			3.6			2.0			0.1		—		0.1
Net periodic benefit cost	$	1.3		$	3.1		$	1.6		$	1.1	$	1.4	$	1.3
Curtailment	—			—			—			—		—		—
Settlement cost	1.0			—			—			—		—		—
Total net periodic benefit cost	$	2.3		$	3.1		$	1.6		$	1.1	$	1.4	$	1.3

The estimated net actuarial (gain)/loss, prior service cost/(credit), and transition (asset)/obligation that will be amortized from accumulated other comprehensive income into net periodic benefit cost during the 2015 fiscal year are $3.4 million, $0.0 million, and $0.0 million, respectively, for the pension plans and $0.2 million, $0.4 million, and $0.0 million respectively, for all other benefits.

The Company consults with a third party investment manager for the assets of the funded domestic defined benefit plan. The plan assets are currently invested primarily in pooled funds, where each fund in turn is composed of mutual funds that have at least daily net asset valuations. Thus, the Company’s funded domestic defined benefit plan assets are invested in a “fund of funds” approach.

The Company’s Board has delegated oversight and guidance to an appointed Employee Benefits Committee. The Committee has the tasks of reviewing plan performance and asset allocation, ensuring plan compliance with applicable laws, establishing plan policies, procedures, and controls, monitoring expenses, and other related activities.

The plans’ investment policies and strategies focus on the ability to fund benefit obligations as they come due. Considerations include the plan's current funded level, plan design, benefit payment assumptions, funding regulations, impact of potentially volatile business results on the Company’s ability to make certain levels of contributions, and interest rate and asset return volatility among other considerations. The Company currently attempts to maintain plan funded status at approximately 80 percent or greater pursuant to the Pension Protection Act of 2007. Given the plan’s current funded status, the Company’s cash on hand, cash historically generated from business operations, and cash available under committed credit facilities, the Company sees ample liquidity to achieve this goal.

Risk management and continuous monitoring requirements are met through monthly investment portfolio reports, quarterly Employee Benefits Committee meetings, annual valuations, asset/liability studies, and the annual assumption process focusing primarily on the return on asset assumption and the discount rate assumption. As of January 3, 2015, funds were invested in equity, fixed income, and other investments as follows:



Equity	Percentage
U.S. Large Cap	14	%
World Equity ex-U.S.	13	%
U.S. Small / Mid Cap	6	%
Subtotal	33	%

Fixed Income
U.S. Treasury and Government Agency Securities	18	%
Long Duration Bond	39	%
High Yield Fixed Income	4	%
Emerging Markets Debt	3	%
Subtotal	64	%

Other
Insurance Contracts	3	%
Total	100	%

The Company does not see any particular concentration of risk within the plans, nor any plan assets that pose difficulties for fair value assessment. The Company currently has no allocation to potentially illiquid or potentially difficult to value assets such as hedge funds, venture capital, private equity, and real estate.

The Company works with actuaries and consultants in making its determination of the asset rate of return assumption and also the discount rate assumption.

Asset class assumptions are set using a combination of empirical and forward-looking analysis for long-term rate of return on plan assets. A variety of models are applied for filtering historical data and isolating the fundamental characteristics of asset classes. These models provide empirical return estimates for each asset class, which are then reviewed and combined with a qualitative assessment of long-term relationships between asset classes before a return estimate is finalized. This provides an additional means for correcting for the effect of unrealistic or unsustainable short-term valuations or trends, opting instead for return levels and behavior that are more likely to prevail over long periods. With that, the Company has assumed an expected long-term rate of return on plan assets of 7.00 percent for the 2015 net periodic benefit cost, down from 7.70 percent in the prior year. This decrease in the assumed long-term rate of return is due to a higher mix of fixed income securities in the plan asset portfolios beginning in 2014.

The Company uses the Aon Hewitt AA Above Median curve to determine the discount rate. All cash flow obligations under the plan are matched to bonds in the Aon Hewitt universe of liquid, high-quality, non-callable / non-putable corporate bonds with outliers removed. From that matching exercise, a discount rate is determined.

The Company’s German pension plans are funded by insurance contract policies whereby the insurance company guarantees a fixed minimum return. Due to tax legislation, individual pension benefits can only be financed using direct insurance policies up to certain maximums. These maximum amounts in respect of each member are paid into such an arrangement on a yearly basis.

The Company designated all equity and most domestic fixed income plan assets as Level 1, as they are mutual funds with prices that are readily available. The U.S. Treasury securities and German plan assets are designated as Level 2 inputs. The fair value of the German plan assets are measured by the reserve that is supervised by the German Federal Financial Supervisory Authority. The U.S. Treasury securities are administered by the United States government.

The fair values of the Company’s pension plan assets for 2014 and 2013 by asset category are as follows:



(In millions)	2014		Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity
U.S. Large Cap	$	23.0	$	23.0		$	—	$	—
U.S. Small / Mid Cap	8.9		8.9			—		—
World Equity ex-U.S.	19.9		19.9			—		—
Fixed Income
U.S. Treasury and Government Agency Securities	27.9		—			27.9		—
U.S. Core Fixed Income	—		—		—	—		—
Long Duration Bond	62.7		62.7			—		—
High Yield Fixed Income	7.0		7.0			—		—
Emerging Markets Debt	5.4		5.4			—		—
Other
Insurance Contracts	5.2		—			5.2		—
Total	$	160.0	$	126.9		$	33.1	$	—



(In millions)	2013		Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Equity
U.S. Large Cap	$	69.4	$	69.4		$	—		$	—
U.S. Small / Mid Cap	12.8		12.8			—			—
World Equity ex-U.S.	25.6		25.6			—			—
Fixed Income
U.S. Treasury and Government Agency Securities	—		—		—	—		—	—
U.S. Core Fixed Income	17.9		17.9			—			—
Long Duration Bond	11.5		11.5			—			—
High Yield Fixed Income	4.4		4.4			—			—
Emerging Markets Debt	3.7		3.7			—			—
Other
Insurance Contracts	5.8		—			5.8			—
Total	$	151.1	$	145.3		$	5.8		$	—

One of the Company’s domestic pension plans covers only two management employees. The Company does not fund this plan, and its assets were zero in both 2014 and 2013. The plan’s projected benefit obligation and accumulated benefit obligation were $12.4 million and $10.5 million, respectively, for 2014, and $12.4 million and $12.3 million, respectively, for 2013.

The Company estimates total contributions to the plans of $10.3 million in 2015.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid in accordance with the following schedule:



(In millions)	Pension Benefits		Other Benefits
2015	$	14.6	$	1.3
2016	14.2		1.2
2017	11.2		1.1
2018	11.4		1.0
2019	11.1		1.0
Years 2020 through 2024	60.2		4.2

Defined Contribution Plans - The Company maintained a 401(k) Plan during 2014 and 2013. The Company's cash contributions are allocated to participant's accounts based on investment elections.

The following table sets forth Company contributions to the 401(k) Plan:



(In millions)	2014		2013		2012
Company contributions to the plan	$	5.6	$	5.3	$	5.0