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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2024
Retirement Benefits [Abstract] |
Employee Benefit Plans | NOTE 18: EMPLOYEE BENEFIT PLANS Defined contribution pension plans The Company has several def ined contribution plans covering substantially all of its employees. Costs for the defined contribution plans were $24.4 million, $21.8 million and $19.5 millio n for the years ended December 31, 2024, 2023, and 2022, respectively. Defined benefit pension plans The Company maintains defined benefit plans for certain employees in the United Kingdom and France. In the United Kingdom, the Company maintains two defined benefit schemes which provide both pensions in retirement and death benefits to members. Pension benefits are related to the member’s final salary at retirement (or their career average revalued salary) and their length of service. The main scheme is the Vector Aerospace International Limited Pension Scheme (the “Scheme”). The other defined benefit scheme is the Vector Aerospace 1998 Pension Plan (the “Plan”). The Scheme and Plan are generally closed for new members, who participate in a separate defined contribution plan. In France, the defined benefit plan is a government-mandated defined obligation that provides employees with retirement indemnities in the form of lump sums on the basis of the length of service and employee compensation levels. The plan is unfunded and benefits are paid when amounts become due, commencing when participants retire. Actuarial gains and losses of the year for long service awards are immediately recognized in the Consolidated Statements of Operations. An actuarial valuation of the defined benefit plans was prepared as of December 31, 2024 and December 31, 2023. The following table summarizes the funded status of the United Kingdom and France defined benefit pension plans as follows:
|  | December 31, 2024 |  |  | December 31, 2023 |
|  | France |  |  | United Kingdom |  |  | France |  |  | United Kingdom |
|  | (in thousands) |
Fair value of plan assets, beginning of year |  | $ | — |  |  | $ | 71,602 |  |  | $ | — |  |  | $ | 67,423 |
Actual return on assets |  |  | — |  |  |  | (6,308 | ) |  |  | — |  |  |  | 113 |
Company contribution |  |  | — |  |  |  | 3,478 |  |  |  | — |  |  |  | 3,395 |
Benefits paid |  |  | — |  |  |  | (2,728 | ) |  |  | — |  |  |  | (3,135 | )
Foreign exchange |  |  | — |  |  |  | (1,188 | ) |  |  | — |  |  |  | 3,806 |
Plan assets, end of year |  | $ | — |  |  | $ | 64,856 |  |  | $ | — |  |  | $ | 71,602 |
Projected pension obligation, beginning of year |  | $ | (2,806 | ) |  | $ | (75,678 | ) |  | $ | (2,758 | ) |  | $ | (68,870 | )
Service costs |  |  | (132 | ) |  |  | — |  |  |  | (135 | ) |  |  | — |
Interest costs |  |  | (79 | ) |  |  | (3,323 | ) |  |  | (83 | ) |  |  | (3,314 | )
Actuarial gains (losses) |  |  | (115 | ) |  |  | 10,110 |  |  |  | (28 | ) |  |  | (2,681 | )
Benefits paid |  |  | 390 |  |  |  | 2,728 |  |  |  | 303 |  |  |  | 3,135 |
Foreign exchange |  |  | 173 |  |  |  | 1,308 |  |  |  | (105 | ) |  |  | (3,948 | )
Projected pension obligation, end of year |  |  | (2,569 | ) |  |  | (64,855 | ) |  |  | (2,806 | ) |  |  | (75,678 | )
Overfunded (underfunded) status, end of year |  | $ | (2,569 | ) |  | $ | 1 |  |  | $ | (2,806 | ) |  | $ | (4,076 | )
The accumulated benefit obligation for all defined benefit pension plans was $65.4 million and $75.7 million at December 31, 2024 and December 31, 2023.
|  | December 31, 2024 |  |  | December 31, 2023 |
|  | France |  |  | United Kingdom |  |  | France |  |  | United Kingdom |
|  | (In thousands) |
Accumulated benefit obligation, end of year |  | $ | 1,960 |  |  | $ | 63,478 |  |  | $ | 2,207 |  |  | $ | 73,510 |
Accumulated benefit obligation, beginning of year |  |  | 2,207 |  |  |  | 73,510 |  |  |  | 2,126 |  |  |  | 67,283 |
Amounts recognized in the Consolidated Balance Sheets consist o f $2.6 million as of December 31, 2024, and $6.9 million as of December 31, 2023, in Other non-current liabilities. Amounts recognized in accumulated other comprehensive loss consist of the following amounts:
|  | As of December 31, |
|  | 2024 |  |  | 2023 |
|  | (in thousands) |
Cumulative gross unrecognized, net actuarial loss |  | $ | (3,964 | ) |  | $ | (4,348 | )
Related tax impact |  |  | 952 |  |  |  | 1,092 |
Total included in accumulated other comprehensive loss |  | $ | (3,012 | ) |  | $ | (3,256 | )
The net periodic benefit cost charged to the Consolidated Statements of Operations includes the following components (in thousands):
|  | Year ended December 31 |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Service cost |  | $ | 132 |  |  | $ | 135 |  |  | $ | 148 |
Interest cost |  |  | 3,402 |  |  |  | 3,397 |  |  |  | 2,141 |
Expected return on plan assets |  |  | (3,406 | ) |  |  | (3,207 | ) |  |  | (3,390 | )
Amortization of net (gain) loss |  |  | (76 | ) |  |  | (78 | ) |  |  | (655 | )
|  | $ | 52 |  |  | $ | 247 |  |  | $ | (1,756 | )
The principal long-term assumptions on which the valuation was based are as follows:
|  | France |  |  | United Kingdom |  |  | France |  |  | United Kingdom |
|  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |
Discount rate to determine benefit obligations |  |  | 3.40 | % |  |  | 5.54 | % |  |  | 3.25 | % |  |  | 4.55 | %
Discount rate – to determine net periodic benefit cost |  |  | 3.40 | % |  |  | 4.55 | % |  |  | 3.10 | % |  |  | 4.77 | %
Compensation growth rate |  |  | 3.00 | % |  |  | 3.83 | % |  |  | 3.00 | % |  |  | 3.71 | %
Expected return on plan assets – Scheme |  | n/a |  |  |  | 6.10 | % |  | n/a |  |  |  | 4.83 | %
Expected return on plan assets – Plan |  | n/a |  |  |  | 5.47 | % |  | n/a |  |  |  | 4.79 | %
The United Kingdom defined benefit plan assets are held in trust by the Trustees. The Trustees determine the investment strategy for the plan assets after taking advice from investment advisers and consulting with the Company. The assets chosen are invested in a diverse portfolio of investments in order to reduce investment risk. The allocation of investments is likely to change as a result of a range of factors such as changes in market conditions and the expected returns and risks. The two defined benefit pension arrangements in the United Kingdom have bespoke investment strategies to reflect the different maturity profiles and funding positions of the respective plans. The current investment strategy for the VA98 Plan includes target allocations for plan assets of approximately 9% in liquid growth, 15% in alternative assets and 76% in liability-driven investments and corporate bonds. The current investment strategy for the VAIL Scheme includes target allocations for plan assets of approximately 18% in liquid growth, 22% in alternative assets and 60% in liability-driven investments and corporate bonds. The Trustees recognize a number of risks involved in the investment of the plan assets and monitor and manage these risks on a regular basis, including through the use of derivatives, which are permitted within the investment strategy. The Company has an established and well-documented process for determining fair values. Fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, fair value is based upon models that primarily use, as inputs, market-based or independently sourced market parameters, including yield curves, interest rates, volatilities, equity or debt prices, foreign exchange rates and credit curves. While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The authoritative literature establishes a three-level hierarchy to prioritize the inputs used in measuring fair value. The levels within the hierarchy are described in the table below with Level 1 having the highest priority and Level 3 having the lowest. The Net Asset Value (“NAV”) is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of units outstanding. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for the investments measured at fair value. • Cash - Cash is valued at the amount held on deposit by the custodian bank and is classified as Level 1 of the valuation hierarchy. • Equity and fixed income funds - these funds are valued at the closing NAV values supplied by the fund managers at the reporting date based on the fair value of the underlying investments of the funds and are classified within Level 2 of the fair value hierarchy unless the determination of fair value of the underlying investments within the funds requires significant unobservable data in which case the funds are classified as Level 3 of the valuation hierarchy. • Real estate and property funds - the NAV of these funds are valued based on appraisals of the underlying real estate investments. Such appraisals involve significant judgments with respect to estimates and assumptions and as a result these funds are classified within Level 3 of the valuation hierarchy. • Hedge funds - the NAV of these funds are valued using observable inputs including interest rate curves, credit spreads and volatilities and are classified within Level 2 of the valuation hierarchy • Other assets - These investments are priced based on unobservable inputs and are classified as Level 3 of the valuation hierarchy. The fair value of plan assets for the United Kingdom defined benefit plans by major category were as follows:
|  | As of December 31, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | (in thousands) |
Cash |  | $ | 3,546 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,546 |
Equity funds: |  |  |  |  |  |  |  |  |  |  |  |
International equities |  |  | — |  |  |  | 6,492 |  |  |  | — |  |  |  | 6,492 |
Emerging market equities |  |  | — |  |  |  | 907 |  |  |  | — |  |  |  | 907 |
Fixed income funds: |  |  |  |  |  |  |  |  |  |  |  |
U.S. and international government bonds |  |  | — |  |  |  | 25,494 |  |  |  | — |  |  |  | 25,494 |
Corporate bonds |  |  | — |  |  |  | 11,699 |  |  |  | 4,305 |  |  |  | 16,004 |
Emerging market bonds |  |  | — |  |  |  | 1,784 |  |  |  | — |  |  |  | 1,784 |
Real estate and property funds |  |  | — |  |  |  | — |  |  |  | 7,489 |  |  |  | 7,489 |
Hedge funds |  |  | — |  |  |  | 1,988 |  |  |  | — |  |  |  | 1,988 |
Other funds |  |  | — |  |  |  | — |  |  |  | 1,152 |  |  |  | 1,152 |
Fair value of pension assets |  | $ | 3,546 |  |  | $ | 48,364 |  |  | $ | 12,946 |  |  | $ | 64,856 |
The fair value of plan assets for the United Kingdom defined benefit plans by major category were as follows:
|  | As of December 31, 2023 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | (in thousands) |
Cash |  | $ | 165 |  |  | $ | — |  |  | $ | — |  |  | $ | 165 |
Equity funds: |  |  |  |  |  |  |  |  |  |  |  |
International equities |  |  | — |  |  |  | 7,321 |  |  |  | — |  |  |  | 7,321 |
Emerging market equities |  |  | — |  |  |  | 913 |  |  |  | — |  |  |  | 913 |
Fixed income funds: |  |  |  |  |  |  |  |  |  |  |  |
U.S. and international government bonds |  |  | — |  |  |  | 32,944 |  |  |  | — |  |  |  | 32,944 |
Corporate bonds |  |  | — |  |  |  | 13,892 |  |  |  | 3,658 |  |  |  | 17,550 |
Emerging market bonds |  |  | — |  |  |  | 2,185 |  |  |  | — |  |  |  | 2,185 |
Real estate and property funds |  |  | — |  |  |  | — |  |  |  | 7,859 |  |  |  | 7,859 |
Hedge funds |  |  | — |  |  |  | 1,356 |  |  |  | — |  |  |  | 1,356 |
Other funds |  |  | — |  |  |  | — |  |  |  | 1,309 |  |  |  | 1,309 |
Fair value of pension assets |  | $ | 165 |  |  | $ | 58,611 |  |  | $ | 12,826 |  |  | $ | 71,602 |
The following table represents the reconciliation of the Level 3 pension assets measured at fair value:
|  | Corporate Bonds funds |  |  | Real Estate and Property funds |  |  | Other funds |  |  | Total |
|  | (in thousands) |
Balance, December 31, 2022 |  |  | 5,969 |  |  |  | 5,396 |  |  |  | 1,406 |  |  |  | 12,771 |
Purchases |  |  | — |  |  |  | 2,612 |  |  |  | 4 |  |  |  | 2,616 |
Sales |  |  | (3,268 | ) |  |  | (199 | ) |  |  | (9 | ) |  |  | (3,476 | )
Change in market value: |  |  | 620 |  |  |  | 138 |  |  |  | (559 | ) |  |  | 199 |
Foreign exchange |  |  | 337 |  |  |  | (88 | ) |  |  | 467 |  |  |  | 716 |
Balance, December 31, 2023 |  | $ | 3,658 |  |  | $ | 7,859 |  |  | $ | 1,309 |  |  | $ | 12,826 |
Sales |  |  | — |  |  |  | (482 | ) |  |  | (13 | ) |  |  | (495 | )
Change in market value: |  |  | 711 |  |  |  | 259 |  |  |  | (69 | ) |  |  | 901 |
Foreign exchange |  |  | (64 | ) |  |  | (147 | ) |  |  | (75 | ) |  |  | (286 | )
Balance, December 31, 2024 |  | $ | 4,305 |  |  | $ | 7,489 |  |  | $ | 1,152 |  |  | $ | 12,946 |
The Company expects to contr ibute $3.4 million to its pension plan in 2025. Future estimated benefit payments over the next 10 years from the United Kingdom and France defined benefit plans for the years ending December 31 and thereafter are as follows (in thousands) :
2025 |  | $ | 2,942 |
2026 |  |  | 2,964 |
2027 |  |  | 3,081 |
2028 |  |  | 3,448 |
2029 |  |  | 3,474 |
Thereafter (2030-2034) |  |  | 18,192 |
Total |  | $ | 34,101 |

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