Ultra Clean Holdings, Inc.

3. FAIR VALUE

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following table summarizes, for assets or liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy:

The estimated fair value of the pension obligation is based on expected years of service and average compensation. The valuation model used to value pension obligation utilizes mortality rate, inflation, interest rate risks and changes in the life expectancy for pensioners. These assumptions are routinely made in the appraisal process by the independent actuary resulting in a Level 3 classification. As of September 25, 2026, the Company’s aggregate pension benefit obligations were $13.1 million and the fair value of the pension plan assets was $10.4 million, resulting in underfunded pension benefit obligations of $2.7 million. The Company recognizes the overfunded or underfunded status of defined benefit pension plans, measured as the difference between the fair value of the plan assets and the benefit obligation. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability.

There were no transfers in or out of any level during the nine months ended September 25, 2026 and September 26, 2025. Fair value adjustments were noncash, and therefore did not impact the Company’s liquidity or capital resources.