v3.26.1
Benefit Plans And Obligations For Termination Indemnity
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Benefit Plans And Obligations For Termination Indemnity BENEFIT PLANS AND OBLIGATIONS FOR TERMINATION INDEMNITY
The Company’s subsidiaries ESA, IMI and its subsidiaries in Israel, a German subsidiary (the “German Subsidiary”) and a Belgian subsidiary (the “Belgian Subsidiary”) sponsor benefit plans for their employees in the U.S., Israel, Germany and Belgium, respectively, as follows:

1.    Defined Benefit Retirement Plan based on Employer’s Contributions

a)    ESA has five defined benefit pension plans (the “Plans”) which cover the employees of ESA’s two subsidiaries and represented two other subsidiaries. Monthly benefits are based on years of service and annual compensation. Annual contributions to the Plans are determined using the unit credit actuarial cost method and are equal to or exceed the minimum required by law. Pension fund assets of the Plans are invested primarily in stocks, bonds and cash by a financial institution, as the investment manager of the Plans’ assets. The service cost component of net periodic pension and other post-retirement benefit plan expense is recorded in operating profit and is allocated between the cost of sales and general and administrative expenses, depending on the responsibilities of the employees. The non-service cost components of net periodic pension and other post-retirement benefit plan expense (i.e., interest cost, expected return on plan assets and net actuarial gains or losses) are included in the line item Other (income) expense, net in the income statement.

Participation in the ESA’s qualified defined benefit plans was frozen as of January 1, 2010, for non-represented employees. Benefit accruals ceased for non-represented employees effective December 31, 2018. Benefit accruals ceased for all represented employees effective December 31, 2020.

In July 2025, the investment finance committee of ESA approved a resolution to terminate four defined benefit Plans. During the third and fourth quarters of 2025, ESA settled the benefits directly with vested participants electing a lump sum payout, and purchased group annuity contracts from Mutual of Omaha Insurance ESA to administer all future payments to remaining participants. The net funded asset position of all of the plans was sufficient to cover the lump sum payments and the purchase of the group annuity contracts in addition to settling remaining benefit obligations of ESA.

After the settlement of the benefit obligation and payment of expenses, ESA had excess assets in the Plans of approximately $30,256. The Company elected to utilize the remaining surplus after the payment of administrative expenses for ESA’s future discretionary contributions. The transfer of the surplus amount of $30,526 which approximates its fair value as of December 31, 2025 .

Upon settlement of the pension liability, the Company recognized a non-operating settlement benefit of approximately $10,200. See Note 26.

The measurement date for the remaining ESA subsidiaries' benefit obligation is December 31, 2025.
Note 17 - BENEFIT PLANS AND OBLIGATIONS FOR TERMINATION INDEMNITY (Cont.)

b)    IMI and its subsidiaries have several post-employment benefit arrangements, which are based on collective agreements concluded with certain groups of employees before the privatization of IMI. According to these agreements, some groups of employees possess special retirement conditions and preferable rights for post-employment benefits that apply to employees who will terminate their employment in the event of relocation of plants as part of the post privatization restructuring of IMI and subsidiaries. The arrangements are determined according to the various existing formats of employment, seniority and other factors. The liabilities recognized in respect of these arrangements are calculated on an actuarial basis.

c)    The German Subsidiary, which is wholly-owned by the Company, has mainly one defined benefit pension plan (the “P3-plan”) which covers all employees. The P3-plan provides for yearly cash balance credits equal to a percentage of a participant’s compensation, which accumulates together with the respective interest credits on the employee’s cash balance accounts. In case of an insured event (retirement, death or disability) the benefits can be paid as a lump sum, in installments or as a life-long annuity. The P3-plan is an unfunded plan.

d)    The Belgian Subsidiary, which is wholly-owned by the Company, has a defined benefit pension plan, which is divided into two categories:

1)    Normal retirement benefit plan, with eligibility at age 65. The lump sum is based on employee contributions of 2% of the final pensionable salary up to a certain breakpoint, plus 6% exceeding the breakpoint at a maximum of 5% of pensionable salary, and the employer contributions, with a maximum of 40 years. The vested benefit is equal to the retirement benefit calculated with the pensionable salary and pensionable service observed at the date of leaving service.

2)    Pre-retirement death benefit to employees.

The plan is funded and includes profit sharing.
Note 17 - BENEFIT PLANS AND OBLIGATIONS FOR TERMINATION INDEMNITY (Cont.)

The following table sets forth the Plans’ funded status and amounts recognized in the consolidated financial statements for the years ended December 31, 2025 and 2024:
 December 31, 2025December 31, 2024
Changes in benefit obligation:  
Benefit obligation at beginning of year$510,130 $566,786 
Service cost1,950 10,200 
Interest cost25,851 24,605 
Exchange rate differences31,286 (251)
Actuarial gain(16,342)(56,174)
Benefits paid(30,555)(35,036)
Effect of settlement commitment(273,937)— 
Benefit obligation at end of year$248,383 $510,130 
Changes in the Plans’ assets:  
Fair value of Plans’ assets at beginning of year$301,816 $290,008 
Benefit assets related to acquired companies— 203 
Actual return on Plans’ assets (net of expenses)27,116 21,287 
Employer contribution1,184 6,719 
Benefits paid(18,537)(16,401)
Exchange rate differences1,195 — 
Assets transferred to defined contribution plan(30,526)— 
Effect of settlement commitment(273,937)— 
Fair value of Plans’ assets at end of year$8,311 $301,816 
Accrued benefit cost, end of year: 
Funded (unfunded) status$(240,074)$(208,316)
Unrecognized net actuarial loss(68,944)(117,865)
 $(309,018)$(326,181)
Amount recognized in the statement of financial position:  
Accrued benefit liability, current$(35,273)$(38,200)
Accrued benefit liability, non-current(204,801)(170,116)
Accumulated other comprehensive income, pre-tax(68,944)(117,865)
$(309,018)$(326,181)
Note 17 - BENEFIT PLANS AND OBLIGATIONS FOR TERMINATION INDEMNITY (Cont.)
 Year ended December 31, 2025Year ended December 31, 2024Year ended December 31, 2023
Components of the Plans’ net periodic pension cost:   
Service cost$1,950 $10,200 $5,578 
Interest cost25,851 24,605 29,429 
Expected return on Plans’ assets(21,330)(17,742)(17,825)
Amortization of prior service cost— — (1,246)
Recognition of net actuarial gain(27,591)(30,343)(5,098)
Total net periodic benefit cost$(21,120)$(13,280)$10,838 
Additional information   
Accumulated benefit obligation$248,382 $510,130 $561,350 

 December 31, 2025December 31, 2024
Weighted average assumptions:  
Discount rate as of December 314.4 %5.4 %
Expected long-term rate of return on Plans’ assets— %7.0 %
Rate of compensation increase3.5 %1.5 %

Asset allocation by category as of December 31:
 20252024
Asset category:  
Equity Securities46.0 %49.2 %
Debt Securities54.0 %48.4 %
Other— %2.4 %
Total100.0 %100.0 %

The investment policy of ESA is directed toward a broad range of securities. The diversified portfolio seeks to maximize investment return while minimizing the risk levels associated with investing. The investment policy is structured to consider the Plans' obligations and the expected timing of benefit payments. The target asset allocation for the Plans' years presented is as follows:
 20252024
Asset category:  
Equity Securities46.0 %53.0 %
Debt Securities54.0 %46.0 %
Other
— %1.0 %
Total100.0 %100.0 %
Note 17 - BENEFIT PLANS AND OBLIGATIONS FOR TERMINATION INDEMNITY (Cont.)

The fair value of the asset values by category at December 31, 2025, was as follows:
 TotalQuoted prices in active markets for identical assets (level 1)Significant observable inputs
(level 2)		Significant unobservable inputs
(level 3)
Asset category
Cash$4,453 $4,453 — — 
Cash equivalents:    
Money market funds (a)
3,858 3,858 — — 
Mutual funds (d)
— 
Total$8,311 $8,311 $— $— 

(a) This category includes highly liquid daily traded cash-like vehicles.
(b) This category invests in highly liquid mutual funds representing a diverse offering of debt issuance.
(c) This category represents common stocks of companies domiciled outside of the U.S.; they can be represented by ordinary shares or American Depository Receipts (ADRs).
(d) This category represents mutual funds investing principally in a variety of equity assets.

In developing the overall expected long-term rate of return on assets assumption, ESA used a building block approach in which rates of return in excess of inflation were considered separately for equity securities, debt securities, real estate and all other assets. The excess returns were weighted by the representative target allocation and added along with an approximate rate of inflation to develop the overall expected long-term rate of return.

It is the policy of ESA to meet the ERISA minimum contribution requirements for a Plan year. The minimum contribution requirements for the 2025 Plan year have been satisfied as of December 31, 2025. Benefit payments over the next five years are expected to be $80 in 2026, $78 in 2027, $87 in 2028, $84 in 2029 and $82 in 2030.
Note 17 - BENEFIT PLANS AND OBLIGATIONS FOR TERMINATION INDEMNITY (Cont.)

2.    Retiree Medical Plan

ESA offers retiree medical benefits to a limited number of retirees. The measurement date for ESA's benefit obligation is December 31. The following table sets forth the retiree medical plans’ funded status and amounts recognized in the consolidated financial statements for the years ended December 31, 2025 and 2024:
 December 31, 2025December 31, 2024
Change in benefit obligation:  
Benefit obligation at beginning of period$1,239 $1,231 
Service cost109 128 
Interest cost66 58 
Actuarial (gain) loss88 (148)
Employee contribution5 9 
Benefits paid(23)(39)
Benefit obligation at end of period$1,484 $1,239 
Change in plan assets:  
Employer contribution$19 $31 
Employee contribution4 8 
Benefits paid(23)(39)
Fair value of Plan assets at end of period$— $— 

 Year ended December 31, 2025Year ended December 31, 2024
Accrued benefit cost, end of period:  
Funded (unfunded) status$(1,484)$(1,238)
Unrecognized net actuarial gain
(1,380)(1,626)
Accrued benefit cost, end of period$(2,864)$(2,864)
Amounts recognized in the statement of financial position:  
Accrued benefit liability, current$(109)$(61)
Accrued benefit liability, non-current(1,375)(1,177)
Accumulated other comprehensive gain, pretax(1,380)(1,626)
Net amount recognized$(2,864)$(2,864)

Components of net periodic pension cost (for period):Year ended December 31, 2025Year ended December 31, 2024
Service cost$109 $128 
Interest cost66 58 
Amortization of net actuarial gain(157)(138)
Total net periodic benefit cost$18 $48 
Note 17 - BENEFIT PLANS AND OBLIGATIONS FOR TERMINATION INDEMNITY (Cont.)

2.    Retiree Medical Plan (Cont.)
Assumptions as of end of period:Year ended December 31, 2025Year ended December 31, 2024
Discount rate5.10 %5.50 %
Health care cost trend rate assumed for next year7.00 %6.50 %
Ultimate health care cost trend rate4.00 %4.00 %

The effect of a 1% change in the health care cost trend rate at December 31, 2025 was as follows:
 1% increase1% decrease
Net periodic benefit cost$17 $(15)
Benefit obligation$115 $(104)

3.    Defined Contribution Plan

The 401(k) savings plan (“401(k) plan”) is a defined contribution retirement plan that covers all eligible ESA employees, as defined in section 401(k) of the U.S. Internal Revenue Code. Employees may elect to contribute a percentage of their annual gross compensation to the 401(k) plan. ESA may make discretionary matching contributions as determined by ESA. Total expense under the 401(k) plan amounted to $18,008, $18,582 and $16,961 for the years ended December 31, 2025, 2024 and 2023, respectively. Expense for the deferred 401(k) plan is allocated between cost of sales and general and administrative expenses depending on the responsibilities of the related employees.

4.    Non-Qualified Defined Contribution Plan

ESA has two benefit plans for the executives of the organization. The non-qualified, defined contribution plan is structured under Section 409(A). The plan provides the employees at vice president level and above the opportunity to defer up to 100% of their salary to the 409(A) plan. ESA provides a match of 0.005 cents on the dollar up to 10% of the employees’ total salary and incentive-based compensation. The contribution can be made into the 401(k) plan, the 409(A) plan or both plans. The purpose is to provide comparable defined contribution plan benefits for the senior management across ESA locations. The 409(A) plan funds are contributed to several life insurance policies. Participant contributions to the plan were $2,353, $1,558 and $2,418 for the years ended December 31, 2025, 2024 and 2023, respectively, and the total ESA contribution to the plan was $235 for 2025. The cash surrender value of these life insurance policies at December 31, 2025 was $8,175. The total liability related to the 409(A) plan was $22,443 at December 31, 2025.

The second plan implemented is a non-qualified, defined benefit plan for certain executives of ESA. The plan provides the executives with a calculated, guaranteed payment in addition to their regular pension through the company upon retirement. The plan is funded with several life insurance policies. The policies are not segregated into a trust or otherwise effectively restricted. These policies are corporate owned assets that are subject to the claims of general creditors and cannot be considered as formal plan assets. The defined benefit plan put in place meets the ERISA definition of an unfunded deferred compensation plan maintained for the benefit of a select group of management or highly compensated employees. The plan assets of life insurance policies had a cash surrender of $4,796 at December 31, 2025. Related liability for the pension payments was $10,946 at December 31, 2025. As of December 31, 2025, all executives had partially vested balances in the plan.