ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) |
OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) |
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
| |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
|
|
|
Securities registered pursuant to Section 12(g) of the Act: |
None |
☑ |
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company | ||
Emerging growth company |
Item No. |
Page |
|||||||
PART I |
||||||||
1. |
1 |
|||||||
1A. |
12 |
|||||||
1B. |
19 |
|||||||
2. |
19 |
|||||||
3. |
20 |
|||||||
4. |
20 |
|||||||
20 |
||||||||
PART II |
||||||||
5. |
22 |
|||||||
6. |
25 |
|||||||
7. |
26 |
|||||||
7A. |
43 |
|||||||
8. |
46 |
|||||||
9. |
96 |
|||||||
9A. |
96 |
|||||||
9B. |
96 |
|||||||
PART III |
||||||||
10. |
97 |
|||||||
11. |
97 |
|||||||
12. |
97 |
|||||||
13. |
98 |
|||||||
14. |
98 |
|||||||
PART IV |
||||||||
15. |
99 |
|||||||
16. |
103 |
|||||||
104 |
Item 1: Business |
• | Foreign currency exchange rate fluctuations that could adversely affect translation of the Company’s future sales, financial operating results and the condition of its non-U.S. operations, especially when a currency weakens against the U.S. dollar. |
• | Current global economic, sovereign and political conditions and uncertainties, particularly regarding the effect of new or proposed tariff or trade regulations; the United Kingdom’s exit from the European Union, as well as the Chinese government’s ongoing tightening of restrictions on procurement by government-funded customers; the Company’s ability to access capital and maintain liquidity in volatile market conditions; changes in timing and demand for the Company’s products among the Company’s customers and various market sectors, particularly if they should reduce capital expenditures or are unable to obtain funding, as in the cases of academic, governmental and research institutions; the effect of mergers and acquisitions on customer demand for the Company’s products; and the Company’s ability to sustain and enhance service. |
• | Negative industry trends; changes in the competitive landscape as a result of changes in ownership, mergers and continued consolidation among the Company’s competitors; introduction of competing products by other companies and loss of market share; pressures on prices from customers or resulting from competition; regulatory, economic and competitive obstacles to new product introductions; lack of acceptance of new products; expansion of our business in developing markets; spending by certain end-markets; ability to obtain alternative sources for components and modules; and the possibility that future sales of new products related to acquisitions, which trigger contingent purchase payments, may exceed the Company’s expectations. |
• | Increased regulatory burdens as the Company’s business evolves, especially with respect to the FDA and EPA, among others, as well as regulatory, environmental and logistical obstacles affecting the distribution of the Company’s products, including the impact, if any, of the coronavirus in China or elsewhere; completion of purchase order documentation by our customers; and the customers’ ability to obtain letters of credit or other financing alternatives. |
• | Risks associated with lawsuits, particularly involving claims for infringement of patents and other intellectual property rights. |
• | The impact and costs incurred from changes in accounting principles and practices; the impact and costs of changes in statutory or contractual tax rates in jurisdictions in which the Company operates, specifically as it relates to the 2017 Tax Act in the U.S.; shifts in taxable income among jurisdictions with different effective tax rates; and the outcome of and costs associated with ongoing and future tax audit examinations or changes in respective country legislation affecting the Company’s effective rates. |
Item |
1B: Unresolved Staff Comments |
Location |
Function (1) |
Owned/Leased |
||||||
Golden, CO |
M, R, S, D, A |
Leased |
||||||
New Castle, DE |
M, R, S, D, A |
Owned |
||||||
Franklin, MA |
D |
Leased |
||||||
Milford, MA |
M, R, S, A |
Owned |
||||||
Taunton, MA |
M, R |
Owned |
||||||
Cambridge, MA |
R, S |
Leased |
||||||
Wakefield, MA |
M, R, S, D, A |
Leased |
||||||
Eden Prairie, MN |
M, R, S, D, A |
Leased |
||||||
Nixa, MO |
M, S, D, A |
Leased |
||||||
Sharpsburg, PA |
M, R, S, D, A |
Leased |
||||||
Lindon, UT |
M, R, S, D, A |
Leased |
||||||
Newcastle, England |
R, S, D, A |
Leased |
||||||
Solihull, England |
M,A |
Owned |
||||||
Wilmslow, England |
M, R, S, D, A |
Owned |
||||||
St. Quentin, France |
S, A |
Leased |
||||||
Bochum, Germany |
R, S, A |
Leased |
||||||
Huellhorst, Germany |
M, R, S, D, A |
Owned |
||||||
Budapest, Hungary |
R |
Leased |
||||||
Wexford, Ireland |
M, R, D, A |
Owned |
||||||
Etten-Leur, Netherlands |
S, D, A |
Owned |
||||||
Brasov, Romania |
R, A |
Leased |
||||||
Singapore |
R, S, D, A |
Leased |
(1) | M = Manufacturing; R = Research; S = Sales and Service; D = Distribution; A = Administration |
United States |
International | |||||
Costa Mesa, CA |
Australia |
India |
Portugal | |||
Pleasanton, CA |
Austria |
Ireland |
Poland | |||
Wood Dale, IL |
Belgium |
Israel |
Puerto Rico | |||
Carmel, IN |
Brazil |
Italy |
Spain | |||
Columbia, MD |
Canada |
Japan |
Sweden | |||
Beverly, MA |
Czech Republic |
Korea |
Switzerland | |||
Durham, NC |
Denmark |
Malaysia |
Taiwan | |||
Morrisville, NC |
Finland |
Mexico |
United Kingdom | |||
Parsippany, NJ |
France |
Netherlands |
||||
Plymouth Meeting, PA |
Germany |
Norway |
||||
Bellaire, TX |
Hungary |
People’s Republic of China |
(2) | The Company operates more than one field office within certain states and foreign countries. |
Item 5: |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
||||||||||||||||||||
WATERS CORPORATION |
$ | 100.00 |
$ | 119.39 |
$ | 119.22 |
$ | 171.39 |
$ | 167.36 |
$ | 207.28 |
|||||||||||||
NYSE MARKET INDEX |
$ | 100.00 |
$ | 95.91 |
$ | 107.36 |
$ | 127.46 |
$ | 116.06 |
$ | 145.66 |
|||||||||||||
SIC CODE INDEX |
$ | 100.00 |
$ | 111.14 |
$ | 102.42 |
$ | 156.71 |
$ | 165.13 |
$ | 205.80 |
|||||||||||||
S&P 500 INDEX |
$ | 100.00 |
$ | 101.38 |
$ | 113.51 |
$ | 138.29 |
$ | 132.23 |
$ | 173.86 |
Period |
Total Number of Shares Purchased (1) |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Programs (2) |
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs (2) |
||||||||||||
September 29, 2019 to October 26, 2019 |
646 |
$ | 217.06 |
646 |
$ | 2,112,901 |
||||||||||
October 27, 2019 to November 23, 2019 |
797 |
$ | 214.93 |
797 |
$ | 1,941,602 |
||||||||||
November 24, 2019 to December 31, 2019 |
1,092 |
$ | 228.96 |
1,092 |
$ | 1,691,643 |
||||||||||
Total |
2,535 |
$ | 221.52 |
2,535 |
$ | 1,691,643 |
||||||||||
(1) | The Company’s repurchase activity related to the vesting of restricted stock units during the three months ended December 31, 2019 was insignificant. |
(2) | In January 2019, the Company’s Board of Directors authorized the Company to repurchase up to $4 billion of its outstanding common stock in open market or private transactions over a two-year period. This new program replaced the remaining amounts available under the pre-existing authorization. |
Item 6: |
Selected Financial Data |
In thousands, except per share and employees data |
2019 |
2018 |
2017 |
2016 |
2015 |
|||||||||||||||
STATEMENT OF OPERATIONS DATA: |
||||||||||||||||||||
Net sales |
$ | 2,406,596 |
$ | 2,419,929 |
$ | 2,309,078 |
$ | 2,167,423 |
$ | 2,042,332 |
||||||||||
Income from operations before income taxes |
$ | 678,239 |
$ | 682,146 |
$ | 641,097 |
$ | 600,114 |
$ | 541,918 |
||||||||||
Net income* |
$ | 592,198 |
$ | 593,794 |
$ | 20,311 |
$ | 521,503 |
$ | 469,275 |
||||||||||
Net income per basic common share* |
$ | 8.76 |
$ | 7.71 |
$ | 0.25 |
$ | 6.46 |
$ | 5.70 |
||||||||||
Weighted-average number of basic common shares |
67,627 |
76,992 |
79,793 |
80,786 |
82,336 |
|||||||||||||||
Net income per diluted common share* |
$ | 8.69 |
$ | 7.65 |
$ | 0.25 |
$ | 6.41 |
$ | 5.65 |
||||||||||
Weighted-average number of diluted common shares and equivalents |
68,166 |
77,618 |
80,604 |
81,417 |
83,087 |
|||||||||||||||
BALANCE SHEET AND OTHER DATA: |
||||||||||||||||||||
Cash, cash equivalents and investments |
$ | 337,144 |
$ | 1,735,224 |
$ | 3,393,701 |
$ | 2,813,032 |
$ | 2,399,263 |
||||||||||
Working capital, including current maturities of debt** |
$ | 721,157 |
$ | 2,214,232 |
$ | 3,663,977 |
$ | 3,115,124 |
$ | 2,649,457 |
||||||||||
Total assets** |
$ | 2,557,055 |
$ | 3,727,426 |
$ | 5,324,354 |
$ | 4,662,059 |
$ | 4,268,677 |
||||||||||
Long-term debt |
$ | 1,580,797 |
$ | 1,148,172 |
$ | 1,897,501 |
$ | 1,701,966 |
$ | 1,493,027 |
||||||||||
Stockholders’ (deficit) equity*** |
$ | (216,281 |
) | $ | 1,567,258 |
$ | 2,233,788 |
$ | 2,301,949 |
$ | 2,058,851 |
|||||||||
Employees |
7,467 |
7,246 |
7,020 |
6,899 |
6,594 |
* | The provision for income taxes for 2017 includes a $550 million estimate for the impact of the enactment of the 2017 Tax Act, which was signed into law on December 22, 2017. The $550 million income tax provision reduced net income per share by $6.82. The $550 million income tax provision primarily consists of an estimated transition tax, as well as estimated income tax provisions for state and withholding taxes and a provision associated with the remeasurement of the Company’s deferred tax assets and liabilities from 35% to the new U.S. corporate income tax rate of 21%. |
** | In January 2019, the company adopted new accounting guidance related to the accounting for leases. The new guidance requires lessees to present the assets and liabilities that arise from leases on their balance sheets. The standard required using a modified retrospective transition approach to be applied to leases existing as of, or entered into after, January 1, 2019. As a result, the Company recorded a $93 million right-of-use asset as of December 31, 2019. The adoption of this standard did not have a material impact on the Company’s results of operations, cash flows and stockholder’s (deficit) equity. |
*** | In 2018, the Company adopted new accounting guidance which eliminates the deferral of tax effects on intra-entity transfers other than inventory and requires an entity to recognize the income tax consequences when the transfer occurs. The Company adopted this standard as of January 1, 2018 with a $4 million charge to beginning retained earnings in the consolidated balance sheet. |
Item 7: |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Year Ended December 31, |
% change |
|||||||||||||||||||
2019 |
2018 |
2017 |
2019 vs. 2018 |
2018 vs. 2017 |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Product sales |
$ | 1,567,189 |
$ | 1,604,993 |
$ | 1,552,349 |
(2 |
%) |
3 |
% | ||||||||||
Service sales |
839,407 |
814,936 |
756,729 |
3 |
% |
8 |
% | |||||||||||||
Total net sales |
2,406,596 |
2,419,929 |
2,309,078 |
(1 |
%) |
5 |
% | |||||||||||||
Costs and operating expenses: |
||||||||||||||||||||
Cost of sales |
1,010,700 |
992,564 |
947,067 |
2 |
% |
5 |
% | |||||||||||||
Selling and administrative expenses |
534,791 |
536,902 |
544,363 |
— |
(1 |
%) | ||||||||||||||
Research and development expenses |
142,955 |
143,403 |
132,593 |
— |
8 |
% | ||||||||||||||
Purchased intangibles amortization |
9,693 |
7,712 |
6,743 |
26 |
% |
14 |
% | |||||||||||||
Litigation (settlement) provision |
— |
(426 |
) | 11,114 |
100 |
% |
(104 |
%) | ||||||||||||
Acquired in-process research and development |
— |
— |
5,000 |
— |
(100 |
%) | ||||||||||||||
Operating income |
708,457 |
739,774 |
662,198 |
(4 |
%) |
12 |
% | |||||||||||||
Operating income as a % of sales |
29.4 |
% |
30.6 |
% |
28.7 |
% |
||||||||||||||
Other expense |
(3,586 |
) | (47,794 |
) | (340 |
) | ** |
** | ||||||||||||
Interest expense, net |
(26,632 |
) | (9,834 |
) | (20,761 |
) | 171 |
% |
(53 |
%) | ||||||||||
Income before income taxes |
678,239 |
682,146 |
641,097 |
(1 |
%) |
6 |
% | |||||||||||||
Provision for income taxes |
86,041 |
88,352 |
620,786 |
(3 |
%) |
(86 |
%) | |||||||||||||
Net income |
$ | 592,198 |
$ | 593,794 |
$ | 20,311 |
— |
** | ||||||||||||
Net income per diluted common share |
$ | 8.69 |
$ | 7.65 |
$ | 0.25 |
14 |
% |
** |
Year Ended December 31, |
% change |
|||||||||||||||||||
2019 |
2018 |
2017 |
2019 vs. 2018 |
2018 vs. 2017 |
||||||||||||||||
Net Sales: |
||||||||||||||||||||
Asia: |
||||||||||||||||||||
China |
$ | 439,557 |
$ | 443,321 |
$ | 387,059 |
(1 |
%) |
15 |
% | ||||||||||
Japan |
180,707 |
173,357 |
167,258 |
4 |
% |
4 |
% | |||||||||||||
Asia Other |
318,848 |
305,613 |
308,300 |
4 |
% |
(1 |
%) | |||||||||||||
Total Asia |
939,112 |
922,291 |
862,617 |
2 |
% |
7 |
% | |||||||||||||
Americas: |
||||||||||||||||||||
United States |
692,277 |
683,596 |
669,274 |
1 |
% |
2 |
% | |||||||||||||
Americas Other |
137,964 |
151,581 |
140,715 |
(9 |
%) |
8 |
% | |||||||||||||
Total Americas |
830,241 |
835,177 |
809,989 |
(1 |
%) |
3 |
% | |||||||||||||
Europe |
637,243 |
662,461 |
636,472 |
(4 |
%) |
4 |
% | |||||||||||||
Total net sales |
$ | 2,406,596 |
$ | 2,419,929 |
$ | 2,309,078 |
(1 |
%) |
5 |
% | ||||||||||
Year Ended December 31, |
% change |
|||||||||||||||||||
2019 |
2018 |
2017 |
2019 vs. 2018 |
2018 vs. 2017 |
||||||||||||||||
Pharmaceutical |
$ | 1,365,275 |
$ | 1,365,731 |
$ | 1,294,668 |
— |
5 |
% | |||||||||||
Industrial |
719,377 |
737,144 |
721,088 |
(2 |
%) |
2 |
% | |||||||||||||
Academic and governmental |
321,944 |
317,054 |
293,322 |
2 |
% |
8 |
% | |||||||||||||
Total net sales |
$ | 2,406,596 |
$ | 2,419,929 |
$ | 2,309,078 |
(1 |
%) |
5 |
% | ||||||||||
Year Ended December 31, |
% change |
|||||||||||||||||||||||||||||||
2019 |
% of Total |
2018 |
% of Total |
2017 |
% of Total |
2019 vs. 2018 |
2018 vs. 2017 |
|||||||||||||||||||||||||
Waters instrument systems |
$ | 963,871 |
45 |
% |
$ | 1,000,625 |
47 |
% |
$ | 988,750 |
48 |
% |
(4 |
%) |
1 |
% | ||||||||||||||||
Chemistry consumables |
412,018 |
19 |
% |
400,287 |
18 |
% |
372,157 |
18 |
% |
3 |
% |
8 |
% | |||||||||||||||||||
Total Waters product sales |
1,375,889 |
64 |
% |
1,400,912 |
65 |
% |
1,360,907 |
66 |
% |
(2 |
%) |
3 |
% | |||||||||||||||||||
Waters service |
761,594 |
36 |
% |
738,433 |
35 |
% |
686,656 |
34 |
% |
3 |
% |
8 |
% | |||||||||||||||||||
Total Waters net sales |
$ | 2,137,483 |
100 |
% |
$ | 2,139,345 |
100 |
% |
$ | 2,047,563 |
100 |
% |
— |
4 |
% | |||||||||||||||||
Year Ended December 31, |
% change |
|||||||||||||||||||||||||||||||
2019 |
% of Total |
2018 |
% of Total |
2017 |
% of Total |
2019 vs. 2018 |
2018 vs. 2017 |
|||||||||||||||||||||||||
TA instrument systems |
$ | 191,300 |
71 |
% |
$ | 204,081 |
73 |
% |
$ | 191,442 |
73 |
% |
(6 |
%) |
7 |
% | ||||||||||||||||
TA service |
77,813 |
29 |
% |
76,503 |
27 |
% |
70,073 |
27 |
% |
2 |
% |
9 |
% | |||||||||||||||||||
Total TA net sales |
$ | 269,113 |
100 |
% |
$ | 280,584 |
100 |
% |
$ | 261,515 |
100 |
% |
(4 |
%) |
7 |
% | ||||||||||||||||
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Net income |
$ | 592,198 |
$ | 593,794 |
$ | 20,311 |
||||||
Depreciation and amortization |
105,296 |
108,408 |
106,002 |
|||||||||
Stock-based compensation |
38,577 |
37,541 |
39,436 |
|||||||||
Deferred income taxes |
9,620 |
2,405 |
45,510 |
|||||||||
In-process research and development and other non-cash charges |
— |
— |
5,000 |
|||||||||
Change in accounts receivable |
(22,195 |
) | (47,921 |
) | (24,013 |
) | ||||||
Change in inventories |
(31,854 |
) | (25,396 |
) | 731 |
|||||||
Change in accounts payable and other current liabilities |
9,784 |
(81,663 |
) | 3,175 |
||||||||
Change in deferred revenue and customer advances |
12,189 |
2,721 |
10,386 |
|||||||||
Effect of the 2017 Tax Cuts and Jobs Act |
(3,229 |
) | (6,059 |
) | 530,383 |
|||||||
Other changes |
(67,299 |
) | 20,616 |
(39,281 |
) | |||||||
Net cash provided by operating activities |
643,087 |
604,446 |
697,640 |
|||||||||
Net cash provided by (used in) investing activities |
768,802 |
1,683,302 |
(535,752 |
) | ||||||||
Net cash used in financing activities |
(1,872,678 |
) | (2,119,522 |
) | (63,869 |
) | ||||||
Effect of exchange rate changes on cash and cash equivalents |
224 |
(14,265 |
) | 38,669 |
||||||||
(Decrease) increase in cash and cash equivalents |
$ | (460,565 |
) | $ | 153,961 |
$ | 136,688 |
|||||
• | The changes in accounts receivable were primarily attributable to timing of payments made by customers and timing of sales. Days sales outstanding was 77 days at December 31, 2019, 74 days at December 31, 2018 and 71 days at 2017. |
• | The changes in inventory were primarily attributable to new product launches and the increase in safety stock in advance of Brexit. |
• | The changes in accounts payable and other current liabilities were the result of timing of payments to vendors. In addition, the change in 2019 as compared to 2018 includes $29 million and $103 million, respectively, of income tax payments made in the U.S. relating to the Company’s estimated 2017 tax reform liability and 2018 estimated income tax payments and a $15 million litigation settlement payment. |
• | Net cash provided from deferred revenue and customer advances results from annual increases in new service contracts as a higher installed base of customers renew annual service contracts. |
• | Other changes were attributable to variation in the timing of various provisions, expenditures, prepaid income taxes and accruals in other current assets, other assets, other liabilities, and income tax expenses related to the 2017 Tax Act. In addition, in 2018, the Company made $11 million of contributions to certain defined benefit pension plans. |
Payments Due by Year (1) |
||||||||||||||||||||||||||||||||
Total |
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
After 2025 |
|||||||||||||||||||||||||
Notes payable and debt |
$ |
100,366 |
$ |
100,366 |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||||||||||
Interest on senior unsecured notes |
214,160 |
33,962 |
30,273 |
28,160 |
27,182 |
24,654 |
22,714 |
47,215 |
||||||||||||||||||||||||
Long-term debt (2) |
1,585,000 |
— |
150,000 |
625,000 |
50,000 |
100,000 |
— |
660,000 |
||||||||||||||||||||||||
2017 Tax Act liability |
403,768 |
38,454 |
38,454 |
38,454 |
72,101 |
96,135 |
120,170 |
— |
||||||||||||||||||||||||
Operating leases |
103,359 |
29,489 |
21,774 |
16,743 |
9,175 |
6,867 |
5,550 |
13,761 |
||||||||||||||||||||||||
Total |
$ |
2,406,653 |
$ |
202,271 |
$ |
240,501 |
$ |
708,357 |
$ |
158,458 |
$ |
227,656 |
$ |
148,434 |
$ |
720,976 |
||||||||||||||||
(1) |
Does not include normal purchases made in the ordinary course of business and uncertain tax positions discussed below. |
(2) |
The interest rates applicable to the 2017 Credit Agreement are, at the Company’s option, equal to either the alternate base rate (which is a rate per annum equal to the greatest of (a) the prime rate in effect on such day, (b) the Federal Reserve Bank of New York Rate on such day plus 1/2 of 1% per annum and (c) the adjusted LIBO rate on such day (or if such day is not a business day, the immediately preceding business day) for a deposit in U.S. dollars with a maturity of one month plus 1% per annum) or the applicable 1, 2, 3 or 6 month adjusted LIBO rate or EURIBO rate for Euro-denominated loans, in each case, plus an interest rate margin based upon the Company’s leverage ratio, which can range between 0 and 12.5 basis points for alternate base rate loans and between 80 and 112.5 basis points for LIBO rate or EURIBO rate loans. The facility fee on the 2017 Credit Agreement ranges between 7.5 and 25 basis points per annum, based on the leverage ratio, of the amount of the revolving facility commitments and the outstanding term loan. The 2017 Credit Agreement requires that the Company comply with an interest coverage ratio test of not less than 3.50:1 as of the end of any fiscal quarter for any period of four consecutive fiscal quarters and a leverage ratio test of not more than 3.50:1 as of the end of any fiscal quarter. In addition, the 2017 Credit Agreement includes negative covenants, affirmative covenants, representations and warranties and events of default that are customary for investment grade credit facilities. As of December 31, 2019, the Company was in compliance with all such covenants. |
Amount of Commitments Expiration Per Period |
||||||||||||||||||||||||||||||||
Total |
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
After 2025 |
|||||||||||||||||||||||||
Letters of credit |
$ |
1,797 |
$ |
1,797 |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
• |
significant underperformance relative to historical or projected future operating results, particularly as it pertains to capitalized software and patent costs; |
• |
significant negative industry or economic trends, competitive products and technologies; and |
• |
significant changes or developments in strategic technological collaborations or legal matters which affect the Company’s capitalized patents, purchased technology, trademarks and intellectual properties, such as licenses. |
• |
significant decline in the Company’s projected revenue, earnings or cash flows; |
• |
significant adverse change in legal factors or business climate; |
• |
significant decline in the Company’s stock price or the stock price of comparable companies; |
• |
adverse action or assessment by a regulator; and |
• |
unanticipated competition. |
Unrecognized Compensation Costs |
Weighted-Average Life in Years |
|||||||
Stock options |
$ | 32 |
3.2 |
|||||
Restricted stock units |
36 |
3.3 |
||||||
Performance stock units |
10 |
1.9 |
||||||
Restricted stock |
— |
— |
||||||
Total |
$ | 78 |
3.1 |
|||||
Item 7A: |
Quantitative and Qualitative Disclosures About Market Risk |
December 31, 2019 |
December 31, 2018 |
|||||||||||||||
Notional Value |
Fair Value |
Notional Value |
Fair Value |
|||||||||||||
Foreign currency exchange contracts: |
||||||||||||||||
Other current assets |
$ | 119,576 |
$ | 16 |
$ | 112,212 |
$ | 503 |
||||||||
Other current liabilities |
$ | 29,495 |
$ | 1,028 |
$ | 40,175 |
$ | 224 |
||||||||
Interest rate cross-currency swap agreements: |
||||||||||||||||
Other assets |
$ | 560,000 |
$ | 4,485 |
$ | 300,000 |
$ | 1,093 |
||||||||
Accumulated other comprehensive income |
$ | (4,485 |
) | $ | (1,093 |
) |
Financial Statement Classification |
||||||||||||||||
Year Ended December 31, |
||||||||||||||||
2019 |
2018 |
2017 |
||||||||||||||
Foreign currency exchange contracts: |
||||||||||||||||
Realized (losses) gains on closed contracts |
Cost of sales |
$ | (3,552 |
) | $ | (6,684 |
) | $ | 3,894 |
|||||||
Unrealized (losses) gains on open contracts |
Cost of sales |
(1,292 |
) | (105 |
) | 1,054 |
||||||||||
Cumulative net pre-tax (losses) gains |
Cost of sales |
$ | (4,844 |
) | $ | (6,789 |
) | $ | 4,948 |
|||||||
Interest rate cross-currency swap agreements: |
||||||||||||||||
Interest earned |
Interest income |
$ | 11,709 |
$ | 2,713 |
$ | — |
|||||||||
Unrealized gains on open contracts |
Stockholders’ (deficit) equity |
$ | 4,485 |
$ | 1,093 |
$ | — |
Item |
8: Financial Statements and Supplementary Data |
/s/ PricewaterhouseCoopers LLP |
Boston, Massachusetts |
February 25, 2020 |
December 31, |
||||||||
2019 |
2018 |
|||||||
(In thousands, except per share data) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Investments |
||||||||
Accounts receivable, net |
||||||||
Inventories |
||||||||
Other current assets |
||||||||
Total current assets |
||||||||
Property, plant and equipment, net |
||||||||
Intangible assets, net |
||||||||
Goodwill |
||||||||
Operating lease assets |
— |
|||||||
Other assets |
||||||||
Total assets |
$ |
$ |
||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |
||||||||
Current liabilities: |
||||||||
Notes payable and debt |
$ |
$ |
||||||
Accounts payable |
||||||||
Accrued employee compensation |
||||||||
Deferred revenue and customer advances |
||||||||
Current operating lease liabilities |
— |
|||||||
Accrued income taxes |
||||||||
Accrued warranty |
||||||||
Other current liabilities |
||||||||
Total current liabilities |
||||||||
Long-term liabilities: |
||||||||
Long-term debt |
||||||||
Long-term portion of retirement benefits |
||||||||
Long-term income tax liabilities |
||||||||
Long-term operating lease liabilities |
— |
|||||||
Other long-term liabilities |
||||||||
Total long-term liabil ities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies (Notes 6, 9, 10, 11, 12, 13 and 17 ) |
||||||||
Stockholders’ (deficit) equity: |
||||||||
Preferred stock, par value $ per share, shares authorized, ne issued at December 31, 2019 and December 31, 2018 |
— |
— |
||||||
Common stock, par value $ per share, shares authorized, and shares issued, and shares outstanding at December 31, 2019 and December 31, 2018, respectively |
||||||||
Additional paid-in capital |
||||||||
Retained earnings |
||||||||
Treasury stock, at cost, and shares at December 31, 2019 and December 31, 2018, respectively |
( |
) |
( |
) | ||||
Accumulated other comprehensive loss |
( |
) |
( |
) | ||||
Total stockholders’ (deficit) equity |
( |
) |
||||||
Total liabilities and stockholders’ (deficit) equity |
$ |
$ |
||||||
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
(In thousands, except per share data) |
||||||||||||
Revenues: |
||||||||||||
Product sales |
$ | |
$ | |
$ | |
||||||
Service sales |
|
|
|
|||||||||
Total net sales |
|
|
|
|||||||||
Costs and operating expenses: |
||||||||||||
Cost of product sales |
|
|
|
|||||||||
Cost of service sales |
|
|
|
|||||||||
Selling and administrative expenses |
|
|
|
|||||||||
Research and development expenses |
|
|
|
|||||||||
Purchased intangibles amortization |
|
|
|
|||||||||
Litigation provision (settlement) (Note 11) |
— |
( |
) | |
||||||||
Acquired in-process research and development (Note 2) |
— |
— |
|
|||||||||
Total costs and operating expenses |
|
|
|
|||||||||
Operating income |
|
|
|
|||||||||
Other expense |
( |
) | ( |
) | ( |
) | ||||||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Interest income |
|
|
|
|||||||||
Income before income taxes |
|
|
|
|||||||||
Provision for income taxes |
|
|
|
|||||||||
Net income |
$ | |
$ | |
$ | |
||||||
Net income per basic common share |
$ | |
$ | |
$ | |
||||||
Weighted-average number of basic common shares |
|
|
|
|||||||||
Net income per diluted common share |
$ | |
$ | |
$ | |
||||||
Weighted-average number of diluted common shares and equivalents |
|
|
|
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
(In thousands) |
||||||||||||
Net income |
$ | |
$ | |
$ | |
||||||
Other comprehensive (loss) income: |
||||||||||||
Foreign currency translation |
|
( |
) | |
||||||||
Unrealized gains (losses) on investments before income taxes |
|
|
( |
) | ||||||||
Income tax (expense) benefit |
( |
) | |
|
||||||||
Unrealized gains (losses) on investments, net of tax |
|
|
( |
) | ||||||||
Retirement liability adjustment before reclassifications |
( |
) | ( |
) | |
|||||||
Amounts reclassified to other expense |
|
|
|
|||||||||
Retirement liability adjustment before income taxes |
( |
) | |
|
||||||||
Income tax benefit (expense) |
|
( |
) | ( |
) | |||||||
Retirement liability adjustment, net of tax |
( |
) | |
|
||||||||
Other comprehensive (loss) income |
( |
) | ( |
) | |
|||||||
Comprehensive income |
$ | |
$ | |
$ | |
||||||
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
(In thousands) |
||||||||||||
Cash flows from operating activities: |
||||||||||||
Net income |
$ | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
Stock-based compensation |
||||||||||||
Deferred income taxes |
||||||||||||
Depreciation |
||||||||||||
Amortization of intangibles |
||||||||||||
In-process research and development and other non-cash charges |
— |
— |
||||||||||
Change in operating assets and liabilities, net of acquisitions: |
||||||||||||
Increase in accounts receivable |
( |
) | ( |
) | ( |
) | ||||||
( Increase) decrease in inventories |
( |
) | ( |
) | ||||||||
Increase in other current assets |
( |
) | ( |
) | ( |
) | ||||||
(Increase) decrease in other assets |
( |
) | ( |
) | ||||||||
Increase (decrease) in accounts payable and other current liabilities |
( |
) | ||||||||||
I ncrease in deferred revenue and customer advances |
||||||||||||
Effect of the 2017 Tax Cuts and Jobs Act |
( |
) | ( |
) | ||||||||
(Decrease) ncrease in other liabilities i |
( |
) | ||||||||||
Net cash provided by operating activities |
||||||||||||
Cash flows from investing activities: |
||||||||||||
Additions to property, plant, equipment and software capitalization |
( |
) | ( |
) | ( |
) | ||||||
Asset and business acquisitions, net of cash acquired |
— |
( |
) | — |
||||||||
Investment in unaffiliated company |
( |
) | ( |
) | ( |
) | ||||||
Paym ents for intellectual p roperty licen ses |
— |
— |
( |
) | ||||||||
P of investments urc hases |
( |
) | ( |
) | ( |
) | ||||||
Maturities and sales of inves tments |
||||||||||||
Net cash provided by (used in) investing activities |
( |
) | ||||||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from debt issuances |
||||||||||||
Payments on debt |
( |
) | ( |
) | ( |
) | ||||||
Payments of debt issuance costs |
( |
) | — |
( |
) | |||||||
Proceeds from stock plans |
||||||||||||
Purchases of treasury shares |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from (payments for) derivative contracts |
( |
) | ||||||||||
Net cash used in financing activities |
( |
) | ( |
) | ( |
) | ||||||
Effect of exchange rate changes on cash and cash equivalents |
( |
) | ||||||||||
(Decrease) increase in cash and cash equivalents |
( |
) | ||||||||||
Cash and cash equivalents at beginning of period |
||||||||||||
Cash and cash equivalents at end of period |
$ | $ | $ | |||||||||
Supplemental cash flow information: |
||||||||||||
Income taxes paid |
$ | $ | $ | |||||||||
Interest paid |
$ | $ | $ |
Number of Common Shares |
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Total Stockholders’ Equity ( Defi cit) |
||||||||||||||||||||||
(In thousands) |
||||||||||||||||||||||||||||
Balance December 31, 2016 |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
|||||||||||||
Net income |
— |
— |
— |
|
— |
— |
|
|||||||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
— |
|
|
|||||||||||||||||||||
Issuance of common stock for employees: |
||||||||||||||||||||||||||||
Employee Stock Purchase Plan |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Stock options exercised |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Treasury stock |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||
Stock-based compensation |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Balance December 31, 2017 |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
|||||||||||||
Adoption of new accounting pronouncement |
— |
— |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||||
Net income |
— |
— |
— |
|
— |
— |
|
|||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||
Issuance of common stock for employees: |
||||||||||||||||||||||||||||
Employee Stock Purchase Plan |
|
— |
|
— |
— |
— |
|
|||||||||||||||||||||
Stock options exercised |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Treasury stock |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||
Stock-based compensation |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Balance December 31, 2018 |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
|||||||||||||
Net income |
— |
— |
— |
|
— |
— |
|
|||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||
Issuance of common stock for employees: |
||||||||||||||||||||||||||||
Employee Stock Purchase Plan |
|
— |
|
— |
— |
— |
|
|||||||||||||||||||||
Stock options exercised |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Treasury stock |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||
Stock-based compensation |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Balance December 31, 2019 |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||
Balance at Beginning of Period |
Additions |
Deduction |
Balance at End of Period |
|||||||||||||
Allowance for Doubtful Accounts |
||||||||||||||||
December 31, 2019 |
$ | $ |
$ | ( |
) | $ | ||||||||||
December 31, 2018 |
$ | $ | $ | ( |
) | $ | ||||||||||
December 31, 2017 |
$ | $ | $ | ( |
) | $ |
Total at December 31, 2019 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
Assets: |
||||||||||||||||
Time deposits |
$ |
|
$ |
— |
$ |
|
$ |
— |
||||||||
Waters 401(k) Restoration Plan assets |
|
|
— |
— |
||||||||||||
Foreign currency exchange contracts |
|
— |
|
— |
||||||||||||
Interest rate cross-currency swap agreements |
|
— |
|
— |
||||||||||||
Total |
$ | |
$ | |
$ | |
$ | — |
||||||||
Liabilities: |
||||||||||||||||
Contingent consideration |
$ | |
$ | — |
$ | — |
$ | |
||||||||
Foreign currency exchange contracts |
|
— |
|
— |
||||||||||||
Total |
$ | |
$ | — |
$ | |
$ | |
||||||||
Total at December 31, 2018 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
Assets: |
||||||||||||||||
U.S. Treasury securities |
$ | $ | — |
$ | $ | — |
||||||||||
Foreign government securities |
— |
— |
||||||||||||||
Corporate debt securities |
— |
— |
||||||||||||||
Time deposits |
— |
— |
||||||||||||||
Waters 401(k) Restoration Plan assets |
— |
— |
||||||||||||||
Foreign currency exchange contracts |
— |
— |
||||||||||||||
Interest rate cross-currency swap agreements |
||||||||||||||||
Total |
$ | $ | $ | $ | — |
|||||||||||
Liabilities: |
||||||||||||||||
Contingent consideration |
$ | $ | — |
$ | — |
$ | ||||||||||
Foreign currency exchange contracts |
— |
— |
||||||||||||||
Total |
$ | $ | — |
$ | $ | |||||||||||
December 31, 2019 |
December 31, 2018 |
|||||||||||||||
Notional Value |
Fair Value |
Notional Value |
Fair Value |
|||||||||||||
Foreign currency exchange contracts: |
||||||||||||||||
Other current assets |
$ | $ | $ | $ | ||||||||||||
Other current liabilities |
$ | $ | $ | $ | ||||||||||||
Interest rate cross-currency swap agreements: |
||||||||||||||||
Other assets |
$ | $ | $ | $ | ||||||||||||
Accumulated other comprehensive income |
$ | ( |
) | $ | ( |
) |
Financial Statement Classification |
||||||||||||||||
Year Ended December 31, |
||||||||||||||||
2019 |
2018 |
2017 |
||||||||||||||
Foreign currency exchange contracts: |
||||||||||||||||
Realized (losses) gains on closed contracts |
Cost of sales |
$ | ( |
) | $ | ( |
) | $ | ||||||||
Unrealized (losses) gains on open contracts |
Cost of sales |
( |
) | ( |
) | |||||||||||
Cumulative net pre-tax (losses) gains |
Cost of sales |
$ | ( |
) | $ | ( |
) | $ | ||||||||
Interest rate cross-currency swap agreements: |
||||||||||||||||
Interest earned |
Interest income |
$ | $ | $ | — |
|||||||||||
Unrealized gains on open contracts |
Stockholders’ ( def i cit equity |
$ | $ | $ | — |
Balance at Beginning of Period |
Accruals for Warranties |
Settlements Made |
Balance at End of Period |
|||||||||||||
Accrued warranty liability: |
||||||||||||||||
December 31, 2019 |
$ | $ | $ | ( |
) | $ | ||||||||||
December 31, 2018 |
$ | $ | $ | ( |
) | $ | ||||||||||
December 31, 2017 |
$ | $ | $ | ( |
) | $ |
December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Balance at the beginning of the period |
$ | $ | $ | |||||||||
Recognition of revenue included in balance at beginning of the period |
( |
) | ( |
) | ( |
) | ||||||
Revenue deferred during the period, net of revenue recognized |
||||||||||||
Balance at the end of the period |
$ | $ | $ | |||||||||
December 31, 2019 |
||||
Deferred revenue and customer advances expected to be recognized in: |
||||
$ | ||||
months -24 |
||||
months and beyond |
||||
Total |
$ | |||
December 31, 2019 |
||||||||||||||||
Amortized Cost |
Unrealized Gain |
Unrealized Loss |
Fair Value |
|||||||||||||
Time deposits |
$ |
$ |
— |
$ |
— |
$ |
||||||||||
Total |
$ | $ | — |
$ | — |
$ | ||||||||||
Amounts included in: |
||||||||||||||||
Cash equivalents |
$ | $ | — |
$ | — |
$ | ||||||||||
Investments |
— |
— |
||||||||||||||
Total |
$ | $ | — |
$ | — |
$ | ||||||||||
December 31, 2018 |
||||||||||||||||
Amortized Cost |
Unrealized Gain |
Unrealized Loss |
Fair Value |
|||||||||||||
U.S. Treasury securities |
$ | $ | $ | ( |
) | $ | ||||||||||
Foreign government securities |
( |
) | ||||||||||||||
Corporate debt securities |
( |
) | ||||||||||||||
Time deposits |
— |
— |
||||||||||||||
Total |
$ | $ | $ | ( |
) | $ | ||||||||||
Amounts included in: |
||||||||||||||||
Cash equivalents |
$ | $ | — |
$ | ( |
) | $ | |||||||||
Investments |
( |
) | ||||||||||||||
Total |
$ | $ | $ | ( |
) | $ | ||||||||||
December 31, 2019 |
December 31, 2018 |
|||||||
Due in one year or less |
$ | $ | ||||||
Due after one year through three years |
— |
|||||||
Total |
$ | $ | ||||||
December 31, 2019 |
December 31, 2018 |
|||||||
Raw materials |
$ | $ | ||||||
Work in progress |
||||||||
Finished goods |
||||||||
Total inventories |
$ | $ | ||||||
December 31, |
||||||||
2019 |
2018 |
|||||||
Land and land improvements |
$ | $ | ||||||
Buildings and leasehold improvements |
||||||||
Production and other equipment |
||||||||
Construction in progress |
||||||||
Total property, plant and equipment |
||||||||
Less: accumulated depreciation and amortization |
( |
) | ( |
) | ||||
Property, plant and equipment, net |
$ | $ | ||||||
December 31, 2019 |
December 31, 2018 |
|||||||||||||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Weighted- Average Amortization Period |
Gross Carrying Amount |
Accumulated Amortization |
Weighted- Average Amortization Period |
|||||||||||||||||||
Capitalized software |
$ |
$ |
$ |
$ |
||||||||||||||||||||
Purchased intangibles |
||||||||||||||||||||||||
Trademarks and IPR&D |
— |
— |
— |
— |
||||||||||||||||||||
Licenses |
||||||||||||||||||||||||
Patents and other intangibles |
||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
||||||||||||||||||||
Senior |
Face Value |
|||||||||||||||
Unsecured Notes |
Term |
Interest Rate |
(in millions) |
Maturity Date |
||||||||||||
Series L |
% |
$ |
||||||||||||||
Series M |
% |
$ |
December 31, 2019 |
December 31, 2018 |
|||||||
Foreign subsidiary lines of credit |
$ | |
$ | |
||||
Senior unsecured notes - Series B - |
|
— |
||||||
Total notes payable and debt, current |
|
|
||||||
Senior unsecured notes - Series B - |
— |
|
||||||
Senior unsecured notes - Series E - |
|
|
||||||
Senior unsecured notes - Series F - |
|
|
||||||
Senior unsecured notes - Series G - |
|
|
||||||
Senior unsecured notes - Series H - floating rate*, due June 2024 |
|
|
||||||
Senior unsecured notes - Series I - |
|
|
||||||
Senior unsecured notes - Series K - |
|
|
||||||
Senior unsecured notes - Series L - |
|
— |
||||||
Senior unsecured notes - Series M - |
|
— |
||||||
Credit agreement |
|
|
||||||
Unamortized debt issuance costs |
( |
) | ( |
) | ||||
Total long-term debt |
|
|
||||||
Total debt |
$ | |
$ | |
||||
* |
Total |
||||
2020 |
$ | |
||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
2024 |
|
|||
Thereafter |
|
|||
Total |
$ | |
||
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
The components of income from operations before income taxes are as follows: |
||||||||||||
Domestic |
$ | |
$ | |
$ | |
||||||
Foreign |
|
|
|
|||||||||
Total |
$ | |
$ | |
$ | |
||||||
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
The components of the income tax provision from operations were as follows: |
||||||||||||
Federal |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
State |
|
|
|
|
|
|
( |
) |
|
|
|
|
Foreign |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current tax provision |
$ | |
$ | |
$ | |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Stat e |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign |
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax provision |
|
|
|
|||||||||
Total provision |
$ | |
$ | |
$ | |
||||||
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Federal tax computed at U.S. statutory income tax rate |
$ |
|
$ | |
$ | |
||||||
Enactment of the 2017 Tax Cuts and Jobs Act |
— |
( |
) | |
||||||||
Foreign currency exchange impact on distributed earnings |
( |
) | |
— |
||||||||
GILTI, net of foreign tax credits |
|
|
— |
|||||||||
Settlement of tax audits |
— |
— |
|
|||||||||
State income tax, net of federal income tax benefit |
|
|
|
|||||||||
Net effect of foreign operations |
( |
) | ( |
) | ( |
) | ||||||
Effect of stock-based compensation |
( |
) |
( |
) | ( |
) | ||||||
Other, net |
( |
) | ( |
) | ( |
) | ||||||
Provision for income taxes |
$ | |
$ | |
$ | |
||||||
December 31, |
||||||||
2019 |
2018 |
|||||||
Deferred tax assets: |
||||||||
Net operating losses and credits |
$ | $ | ||||||
Depreciation |
||||||||
Operating leases |
— |
|||||||
Amortization |
||||||||
Stock-based compensation |
||||||||
Deferred compensation |
||||||||
Unrealized foreign currency gain/loss |
||||||||
Deferred revenue |
||||||||
Revaluation of equity investments and licenses |
||||||||
Inventory |
||||||||
Accrued liabilities and reserves |
||||||||
Other |
||||||||
Total deferred tax assets |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
Deferred tax assets, net of valuation allowance |
||||||||
Deferred tax liabilities: |
||||||||
Capitalized software |
( |
) | ( |
) | ||||
Operating leases |
( |
) | — |
|||||
Indefinite-lived intangibles |
( |
) | ( |
) | ||||
Deferred tax liability on foreign earning s |
( |
) | ( |
) | ||||
Total deferred tax liabilities |
( |
) | ( |
) | ||||
Net deferred tax assets |
$ | $ | ||||||
2019 |
2018 |
2017 |
||||||||||
Balance at the beginning of the period |
$ | $ | $ | |||||||||
Net reductions for settlement of tax audits |
— |
— |
( |
) | ||||||||
Net reductions for lapse of statutes taken during the period |
( |
) | ( |
) | ( |
) | ||||||
Net additions for tax positions taken during the prior period |
— |
— |
||||||||||
Net additions for tax positions taken during the current period |
||||||||||||
Balance at the end of the period |
$ | $ | $ | |||||||||
Balance at Beginning of Period |
Charged to Provision for Income Taxes* |
Other** |
Balance at End of Period |
|||||||||||||
Valuation allowance for deferred tax assets: |
||||||||||||||||
2019 |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
2018 |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
201 7 |
$ | $ | ( |
) | $ | $ |
* | These amounts have been recorded as part of the income statement provision for income taxes. The income statement effects of these amounts have largely been offset by amounts related to changes in other deferred tax balance sheet accounts. |
** | The change in the valuation allowance during the year ended December 31, 2019 is primarily due to the effect of foreign currency translation on a valuation allowance related to a net operating loss carryforward. The change in the valuation allowance during the year ended December 31, 2018 was primarily due to the write-off of a valuation allowance to Retained Earnings for the tax effect related to intra-entity transfers. The change in the valuation allowance during the year ended December 31, 2017 was primarily due to the effect of foreign currency translation on a valuation allowance related to a net operating loss carryforward. |
Financial Statement Classification |
December 31, 2019 |
|||||
Assets: |
||||||
Property operating lease assets |
Operating lease assets |
$ | |
|||
Automobile operating lease assets |
Operating lease assets |
|
||||
Equipment operating lease assets |
Operating lease assets |
|
||||
Total lease assets |
$ | |
||||
Liabilities: |
||||||
Current operating lease liabilities |
Current operating lease liabilities |
$ | |
|||
Long-term operating lease liabilities |
Long-term operating lease liabilities |
|
||||
Total lease liabilities |
$ | |
||||
2020 |
$ | |
||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
2024 |
|
|||
2025 and thereafter |
|
|||
Total future minimum lease payments |
|
|||
Less: amount of lease payments representing interest |
( |
) | ||
Present value of future minimum lease payments |
|
|||
Less: current operating lease liabilities |
( |
) | ||
Long-term operating lease liabilities |
$ | |
||
2019 |
$ |
|
||
2020 |
|
|||
2021 |
|
|||
2022 |
|
|||
2023 and thereafter |
|
|||
Total future minimum lease payments |
$ |
|
||
2019 |
2018 |
2017 |
||||||||||
Cost of sales |
$ | $ | $ | |||||||||
Selling and administrative expenses |
||||||||||||
Research and development expenses |
||||||||||||
Total stock-based compensation |
$ | $ | $ | |||||||||
Options Issued and Significant Assumptions Used to Estimate Option Fair Values |
2019 |
2018 |
2017 |
|||||||||
Options issued in thousands |
||||||||||||
Risk-free interest rate |
% | % | % | |||||||||
Expected life in years |
||||||||||||
Expected volatility |
% | % | % | |||||||||
Expected dividends |
— |
— |
— |
Weighted-Average Exercise Price and Fair Value of Options on the Date of Grant |
2019 |
2018 |
2017 |
|||||||||
Exercise price |
$ | $ | $ | |||||||||
Fair value |
$ | $ | $ |
Number of Shares |
Exercise Price per Share |
Weighted- Average Exercise Price per Share |
||||||||||||||||||
Outstanding at December 31, 2018 |
$ | to |
$ | $ | ||||||||||||||||
Granted |
$ | to |
$ | $ | ||||||||||||||||
Exercised |
( |
) | $ | to |
$ | $ | ||||||||||||||
Canceled |
( |
) | $ | to |
$ | $ | ||||||||||||||
Outstanding at December 31, 2019 |
$ | to |
$ | $ | ||||||||||||||||
Exercise Price Range |
Number of Shares Outstanding |
Weighted- Average Exercise Price |
Remaining Contractual Life of Options Outstanding |
Number of Shares Exercisable |
Weighted- Average Exercise Price |
|||||||||||||||
$61.63 to $128.93 |
$ | $ | ||||||||||||||||||
$128.94 to $192.62 |
$ | $ | ||||||||||||||||||
$192.63 to $238.52 |
$ | $ | ||||||||||||||||||
Total |
$ | $ | ||||||||||||||||||
Shares |
Weighted-Average Grant Fair Dat e Value per |
|||||||
Unvested at December 31, 2018 |
$ | |||||||
Granted |
$ | |||||||
Vested |
( |
) | $ | |||||
Forfeited |
( |
) | $ | |||||
Unvested at December 31, 2019 |
$ | |||||||
Performance Stock Units Issued and Significant Assumptions Used to Estimate Fair Values |
2019 |
2018 |
2017 |
|||||||||
Performance stock units issued in thousands |
||||||||||||
Risk-free interest rate |
% | % | % | |||||||||
Expected life in years |
||||||||||||
Expected volatility |
% | % | % | |||||||||
Average volatility of peer companies |
% | % | % | |||||||||
Correlation Coefficient |
% | % | % | |||||||||
Expected dividends |
— |
— |
— |
Shares |
Weighted-Average Fair Value per Share |
|||||||
Unvested at December 31, 2018 |
$ | |||||||
Granted |
$ | |||||||
Forfeited |
( |
) | $ | |||||
Unvested at December 31, 2019 |
$ | |||||||
Year Ended December 31, 2019 |
||||||||||||
Net Income |
Weighted-Average Shares |
Per Share |
||||||||||
(Numerator) |
(Denominator) |
Amount |
||||||||||
Net income per basic common share |
$ | $ | ||||||||||
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |
— |
( |
) | |||||||||
Net income per diluted common share |
$ | $ | ||||||||||
Year Ended December 31, 2018 |
||||||||||||
Net Income |
Weighted-Average Shares |
Per Share |
||||||||||
(Numerator) |
(Denominator) |
Amount |
||||||||||
Net income per basic common share |
$ | $ | ||||||||||
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |
— |
( |
) | |||||||||
Net income per diluted common share |
$ | $ | ||||||||||
Year Ended December 31, 2017 |
||||||||||||
Net Income |
Weighted-Average Shares |
Per Share |
||||||||||
(Numerator) |
(Denominator) |
Amount |
||||||||||
Net income per basic common share |
$ | $ | ||||||||||
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |
— |
— |
||||||||||
Net income per diluted common share |
$ | $ | ||||||||||
Currency Translation |
Unrealized Gain (Loss) on Retirement Plans |
Unrealized Gain (Loss) on Investments |
Accumulated Other Comprehensive Income (Loss) |
|||||||||||||
Balance at December 31, 2017 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||
Other comprehensive (loss) income, net of tax |
( |
) |
( |
) | ||||||||||||
Balance at December 31, 2018 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Other comprehensive income (loss), net of tax |
( |
) | ( |
) | ||||||||||||
Balance at December 31, 2019 |
$ | ( |
) | $ | ( |
) | $ | — |
$ | ( |
) | |||||
2019 |
2018 |
|||||||||||||||||||||||
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
|||||||||||||||||||
Projected benefit obligation, January 1 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Service cost |
— |
|||||||||||||||||||||||
Employee contributions |
— |
— |
||||||||||||||||||||||
Interest cost |
||||||||||||||||||||||||
Actuarial (gains) losses |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Benefits paid |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Plan amendments |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||
Plan settlements |
( |
) | — |
( |
) | ( |
) | — |
( |
) | ||||||||||||||
Other plans |
— |
— |
— |
— |
||||||||||||||||||||
Currency impact |
— |
— |
( |
) | — |
— |
( |
) | ||||||||||||||||
Projected benefit obligation, December 31 |
$ | — |
$ | $ | $ | $ | $ | |||||||||||||||||
2019 |
2018 |
|||||||||||||||||||||||
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
|||||||||||||||||||
Accumulated benefit obligation |
$ | — |
** | $ | $ | ** | $ |
** |
Not applicable. |
2019 |
2018 |
|||||||||||||||||||||||
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
|||||||||||||||||||
Fair value of plan assets, January 1 |
$ | — |
$ | $ | $ | $ | $ | |||||||||||||||||
Actual return on plan assets |
— |
( |
) | |||||||||||||||||||||
Company contributions |
||||||||||||||||||||||||
Employee contributions |
— |
— |
||||||||||||||||||||||
Plan settlements |
( |
) | — |
( |
) |
( |
) | — |
— |
|||||||||||||||
Benefits paid |
— |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||
Other plans |
— |
— |
— |
— |
— |
|||||||||||||||||||
Currency impact |
— |
— |
( |
) | — |
— |
( |
) | ||||||||||||||||
Fair value of plan assets, December 31 |
$ | — |
$ | $ | $ | — |
$ | $ | ||||||||||||||||
2019 |
2018 |
|||||||||||||||||||||||
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
|||||||||||||||||||
Projected benefit obligation |
$ | — |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
Fair value of plan assets |
— |
— |
||||||||||||||||||||||
Funded status |
$ | — |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
2019 |
2018 |
|||||||||||||||||||||||
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
|||||||||||||||||||
Long-term assets |
$ | — |
$ | — |
$ | $ | — |
$ | — |
$ | ||||||||||||||
Current liabilities |
— |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||
Long-term liabilities |
— |
( |
) | ( |
) | — |
( |
) | ( |
) | ||||||||||||||
Net amount recognized at December 31 |
$ | — |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
2019 |
2018 |
|||||||
Projected benefit obligation |
$ | $ | ||||||
Accumulated benefit obligations |
$ | $ | ||||||
Fair value of plan assets |
$ | $ |
2019 |
2018 |
2017 |
||||||||||||||||||||||||||||||||||
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
||||||||||||||||||||||||||||
Service cost |
$ | — |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
Interest cost |
||||||||||||||||||||||||||||||||||||
Expected return on plan assets |
— |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||
Settlement loss |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||
Net amortization: |
||||||||||||||||||||||||||||||||||||
Prior service credit |
— |
( |
) | ( |
) | — |
( |
) |
( |
) | — |
— |
( |
) | ||||||||||||||||||||||
Net actuarial loss |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||
Net periodic pension cost (benefit) |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||
2019 |
2018 |
2017 |
||||||||||||||||||||||||||||||||||
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
||||||||||||||||||||||||||||
Prior service (cost) credit |
$ | — |
$ | — |
$ | — |
$ | — |
$ | $ | $ | — |
$ | — |
$ | ( |
) | |||||||||||||||||||
Net gain (loss) arising during the year |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Amortization: |
||||||||||||||||||||||||||||||||||||
Prior service credit |
— |
( |
) | ( |
) | — |
( |
) |
( |
) | — |
— |
( |
) | ||||||||||||||||||||||
Net loss |
— |
— |
— |
|||||||||||||||||||||||||||||||||
Other Plans |
— |
— |
— |
— |
( |
) |
— |
— |
— |
|||||||||||||||||||||||||||
Currency impact |
— |
— |
— |
— |
— |
— |
( |
) | ||||||||||||||||||||||||||||
Total recognized in other comprehensive (loss) income |
$ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | $ | $ | $ | ( |
) | |||||||||||||||||||
2019 |
2018 |
|||||||||||||||||||||||
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
|||||||||||||||||||
Net actuarial loss |
$ | — |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
Prior service credit |
— |
— |
||||||||||||||||||||||
Total |
$ | — |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | |||||||||
2019 |
||||||||||||
U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
||||||||||
Net actuarial loss |
$ | — |
$ | — |
$ | ( |
) | |||||
Prior service credit |
— |
|||||||||||
Total |
$ | — |
$ | $ | ( |
) | ||||||
2019 |
2018 |
|||||||||||||||
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans |
|||||||||||||
Equity securities |
% | % | % | % | ||||||||||||
Debt securities |
% | % | % | % | ||||||||||||
Cash and cash equivalents |
% | % | % | % | ||||||||||||
Insurance contracts and other |
% | % | % | % | ||||||||||||
Total |
% | % | % | % | ||||||||||||
U.S. Retiree Healthcare Plan |
Non-U.S. Pension Plans Policy Target |
|||||||||||
Policy Target |
Range |
|||||||||||
Equity securities |
% | - |
% | |||||||||
Debt securities |
% | % | ||||||||||
Cash and cash equivalents |
% | % | ||||||||||
Insurance contracts and other |
% | % |
Level 1: |
The fair value of these types of investments is based on market and observable sources from daily quoted prices on nationally recognized securities exchanges. | |
Level 2: |
The fair value of these types of investments utilizes data points other than quoted prices in active markets that are observable either directly or indirectly. | |
Level 3: |
These bank and insurance investment contracts are issued by well-known, highly-rated companies. The fair value disclosed represents the present value of future cash flows under the terms of the respective contracts. Significant assumptions used to determine the fair value of these contracts include the amount and timing of future cash flows and counterparty credit risk. |
Total at December 31, 2019 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
U.S. Retiree Healthcare Plan: |
||||||||||||||||
Mutual funds (a) |
— |
— |
||||||||||||||
Total U.S. Retiree Healthcare Plan |
— |
— |
||||||||||||||
Non-U.S. Pension Plans: |
||||||||||||||||
Cash equivalents (b) |
— |
— |
||||||||||||||
Mutual funds (c) |
— |
— |
||||||||||||||
Bank and insurance investment contracts (d) |
— |
— |
||||||||||||||
Total Non-U.S. Pension Plans |
— |
|||||||||||||||
Total fair value of retirement plan assets |
$ | $ | $ | — |
$ | |||||||||||
Total at December 31, 2018 |
Quoted Prices in Active Markets for Identical (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
U.S. Retiree Healthcare Plan: |
||||||||||||||||
Mutual funds ( e ) |
— |
— |
||||||||||||||
Total U.S. Retiree Healthcare Plan |
— |
— |
||||||||||||||
Non-U.S. Pension Plans: |
||||||||||||||||
Cash equivalents (b) |
— |
— |
||||||||||||||
Mutual funds ( f ) |
— |
— |
||||||||||||||
Bank and insurance investment contracts (d) |
— |
— |
||||||||||||||
Total Non-U.S. Pension Plans |
— |
|||||||||||||||
Total fair value of retirement plan assets |
$ |
$ | $ | — |
$ | |||||||||||
(a) | The mutual fund balance in the U.S. Retiree Healthcare Plan is invested in the following categories: large-cap U.S. companies, the U.S. government. |
(b) | Primarily represents deposit account funds held with various financial institutions. |
(c) | The mutual fund balance in the Non-U.S. Pension Plans is primarily invested in the following categories: |
(d) | Amount represents bank and insurance guaranteed investment contracts. |
(e) | The mutual fund balance in the U.S. Retiree Healthcare Plan is invested in the following categories: large-cap U.S. companies, of U.S. companies and the U.S. government. |
(f) | The mutual fund balance in the Non- U.S. Pension Plans is invested in the following categories: international bonds, in various other global investments. |
Insurance Guaranteed Investment Contracts |
||||
Fair value of assets, December 31, 2017 |
$ | |||
Net purchases (sales) and appreciation (depreciation) |
||||
Fair value of assets, December 31, 2018 |
||||
Net purchases (sales) and appreciation (depreciation) |
||||
Fair value of assets, December 31, 2019 |
$ | |||
2019 |
2018 |
2017 |
||||||||||||||||||||||
U.S. |
Non-U.S. |
U.S. |
Non-U.S. |
U.S. |
Non-U.S. |
|||||||||||||||||||
Discount rate |
% | % | % | % | % | % | ||||||||||||||||||
Increases in compensation levels |
** |
% |
** |
% |
** |
% |
** | Not applicable |
2019 |
2018 |
2017 |
||||||||||||||||||||||
U.S. |
Non-U.S. |
U.S. |
Non-U.S. |
U.S. |
Non-U.S. |
|||||||||||||||||||
Discount rate |
% | % | % | % | % | % | ||||||||||||||||||
Return on plan assets |
% | % | % | % | % | % | ||||||||||||||||||
Increases in compensation levels |
** |
% |
** |
% |
** |
% |
** | Not applicable |
U.S. Retiree Healthcare Plans |
Non-U.S. Pension Plans |
Total |
||||||||||
2020 |
$ | $ | $ | |||||||||
2021 |
||||||||||||
2022 |
||||||||||||
2023 |
||||||||||||
2024 |
||||||||||||
2025 - 2029 |
2019 |
2018 |
2017 |
||||||||||
Product net sales: |
||||||||||||
Waters instrument systems |
$ | $ | $ | |||||||||
Chemistry consumables |
||||||||||||
TA instrument systems |
||||||||||||
Total product sales |
||||||||||||
Service net sales: |
||||||||||||
Waters service |
||||||||||||
TA service |
||||||||||||
Total service sales |
||||||||||||
Total net sales |
$ | $ | $ | |||||||||
2019 |
2018 |
2017 |
||||||||||
Net Sales: |
||||||||||||
Asia: |
||||||||||||
China |
$ | $ | $ | |||||||||
Japan |
||||||||||||
Asia Other |
||||||||||||
Total Asia |
||||||||||||
Americas: |
||||||||||||
United States |
||||||||||||
Americas Other |
||||||||||||
Total Americas |
||||||||||||
Europe |
||||||||||||
Total net sales |
$ | $ | $ | |||||||||
2019 |
2018 |
2017 |
||||||||||
Pharmaceutical |
$ | $ | $ | |||||||||
Industrial |
||||||||||||
Academic and governmental |
||||||||||||
Total net sales |
$ | $ | $ | |||||||||
2019 |
2018 |
2017 |
||||||||||
Net sales recognized at a point in time: |
||||||||||||
Instrument systems |
$ | $ | $ | |||||||||
Chemistry consumables |
||||||||||||
Service sales recognized at a point in time (time & materials) |
||||||||||||
Total net sales recognized at a point in time |
||||||||||||
Net sales recognized over time: |
||||||||||||
Service and software sales recognized over time (contracts) |
||||||||||||
Total net sales |
$ | $ | $ | |||||||||
2019 |
2018 |
2017 |
||||||||||
Long-lived assets: |
||||||||||||
United States |
$ | |
$ | |
$ | |
||||||
Americas Other |
|
|
|
|||||||||
Total Americas |
|
|
|
|||||||||
Europe |
|
|
|
|||||||||
Asia |
|
|
|
|||||||||
Total long-lived assets |
$ | |
$ | |
$ | |
||||||
First |
Second |
Third |
Fourth |
|||||||||||||||||
2019 |
Quarter |
Quarter |
Quarter |
Quarter |
Total |
|||||||||||||||
Net sales |
$ | |
$ | |
$ | |
$ | |
$ | |
||||||||||
Costs and operating expenses: |
||||||||||||||||||||
Cost of sales |
|
|
|
|
|
|||||||||||||||
Selling and administrative expenses |
|
|
|
|
|
|||||||||||||||
Research and development expenses |
|
|
|
|
|
|||||||||||||||
Purchased intangibles amortization |
|
|
|
|
|
|||||||||||||||
Total costs and operating expenses |
|
|
|
|
|
|||||||||||||||
Operating income |
|
|
|
|
|
|||||||||||||||
Other expense |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Interest income |
|
|
|
|
|
|||||||||||||||
Income before income taxes |
|
|
|
|
|
|||||||||||||||
Provision for income taxes |
|
|
|
|
|
|||||||||||||||
Net income |
$ | |
$ | |
$ | |
$ | |
$ | |
||||||||||
Net income per basic common share |
|
|
|
|
|
|||||||||||||||
Weighted-average number of basic common shares |
|
|
|
|
|
|||||||||||||||
Net income per diluted common share |
|
|
|
|
|
|||||||||||||||
Weighted-average number of diluted common shares and equivalents |
|
|
|
|
|
First |
Second |
Third |
Fourth |
|||||||||||||||||
2018 |
Quarter |
Quarter |
Quarter |
Quarter |
Total |
|||||||||||||||
Net sales |
$ | |
$ | |
$ | |
$ | |
$ | |
||||||||||
Costs and operating expenses: |
||||||||||||||||||||
Cost of sales |
|
|
|
|
|
|||||||||||||||
Selling and administrative expenses |
|
|
|
|
|
|||||||||||||||
Research and development expenses |
|
|
|
|
|
|||||||||||||||
Purchased intangibles amortization |
|
|
|
|
|
|||||||||||||||
Litigation provisions |
( |
) | — |
|
|
( |
) | |||||||||||||
Total costs and operating expenses |
|
|
|
|
|
|||||||||||||||
Operating income |
|
|
|
|
|
|||||||||||||||
Other income (expense) |
|
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Interest income |
|
|
|
|
|
|||||||||||||||
Income before income taxes |
|
|
|
|
|
|||||||||||||||
Provision for income taxes |
|
|
|
|
|
|||||||||||||||
Net income |
$ | |
$ | |
$ | |
$ | |
$ | |
||||||||||
Net income per basic common share |
|
|
|
|
|
|||||||||||||||
Weighted-average number of basic common shares |
|
|
|
|
|
|||||||||||||||
Net income per diluted common share |
|
|
|
|
|
|||||||||||||||
Weighted-average number of diluted common shares and equivalents |
|
|
|
|
|
Item 9A: |
Controls and Procedures |
Item 9B: Other |
Information |
Item 10: |
Directors, Executive Officers and Corporate Governance |
Item 11: |
Executive Compensation |
Item 12: |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
A |
B |
C |
||||||||||
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) |
Weighted-Average ExercisePrice of Outstanding Options, Warrants and Rights (1) |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (A)) |
||||||||||
Equity compensation plans approved by security holders |
1,861 |
$ | 158.61 |
2,711 |
||||||||
Equity compensation plans not approved by security holders |
— |
— |
— |
|||||||||
Total |
1,861 |
$ | 158.61 |
2,711 |
||||||||
(1) | Column (a) includes an aggregate of 406 shares of common stock to be issued upon settlement of restricted stock, restricted stock units and performance stock units. The weighted-average share price in column (b) does not take into account restricted stock, restricted stock units or performance stock units, which do not have an exercise price. |
Item |
13: Certain Relationships and Related Transactions and Director Independence |
Item |
14: Principal Accountant Fees and Services |
(1) | Financial Statements: |
(2) | Exhibits: |
Exhibit Number |
Description of Document | |||
3.1 |
Second Amended and Restated Certificate of Incorporation of Waters Corporation.(1)(P) | |||
3.2 |
||||
3.3 |
||||
3.4 |
||||
3.5 |
||||
4.1 |
||||
10.1 |
Waters Corporation Retirement Plan.(2)(P)(*) | |||
10.2 |
||||
10.3 |
||||
10.4 |
||||
10.5 |
||||
10.6 |
||||
10.7 |
||||
10.8 |
||||
10.9 |
||||
10.10 |
||||
10.11 |
||||
10.12 |
Exhibit Number |
Description of Document | |||
10.13 |
||||
10.14 |
||||
10.15 |
||||
10.16 |
||||
10.17 |
||||
10.18 |
||||
10.19 |
||||
10.20 |
||||
10.21 |
||||
10.22 |
||||
10.23 |
||||
10.24 |
||||
10.25 |
||||
10.26 |
||||
10.27 |
||||
10.28 |
||||
10.29 |
||||
10.30 |
||||
10.31 |
||||
10.32 |
||||
10.33 |
||||
10.34 |
||||
10.35 |
||||
10.36 |
||||
10.37 |
Exhibit Number |
Description of Document | |||
10.38 |
||||
10.39 |
||||
10.40 |
||||
10.41 |
||||
10.42 |
||||
10.43 |
||||
21.1 |
||||
23.1 |
||||
31.1 |
||||
31.2 |
||||
32.1 |
||||
32.2 |
||||
101 |
The following materials from Waters Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Stockholders’ Equity (Deficit) and (vi) Notes to Consolidated Financial Statements. | |||
104 |
Cover Page Interactive Date File (formatted in iXBRL and contained in Exhibit 101). |
(1) | Incorporated by reference to the Registrant’s Report on Form 10-K dated March 29, 1996 (File No. 001-14010). |
(2) | Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-96934). |
(3) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 11, 1999 (File No. 001-14010). |
(4) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 8, 2000 (File No. 001-14010). |
(5) | Incorporated by reference to the Registrant’s Report on Form 10-K dated March 28, 2002 (File No. 001-14010). |
(6) | Incorporated by reference to the Registrant’s Report on Form S-8 dated November 20, 2003 (File No. 333-110613). |
(7) | Incorporated by reference to the Registrant’s Report on Form 10-K dated March 12, 2004 (File No. 001-14010). |
(8) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated November 10, 2004 (File No. 001-14010). |
(9) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 5, 2005 (File No. 001-14010). |
(10) | Incorporated by reference to the Registrant’s Report on Form 10-K dated March 1, 2007 (File No. 001-14010). |
(11) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated November 2, 2007 (File No. 001-14010). |
(12) | Incorporated by reference to the Registrant’s Report on Form 10-K dated February 29, 2008 (File No. 001-14010). |
(13) | Incorporated by reference to the Registrant’s Report on Form 10-K dated February 27, 2009 (File No. 001-14010). |
(14) | Incorporated by reference to the Registrant’s Report on Form S-8 dated July 10, 2009 (File No. 333-160507). |
(15) | Incorporated by reference to the Registrant’s Report on Form 10-K dated February 26, 2010 (File No. 001-14010). |
(16) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated May 6, 2011 (File No. 001-14010). |
(17) | Incorporated by reference to the Registrant’s Report on Form S-8 dated September 5, 2012 (File No. 333-183721). |
(18) | Incorporated by reference to the Registrant’s Report on Form 8-K dated December 11, 2012 (File No. 001-14010). |
(19) | Incorporated by reference to the Registrant’s Report on Form 8-K dated December 11, 2013 (File No. 001-14010). |
(20) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 1, 2014 (File No. 001-14010). |
(21) | Incorporated by reference to the Registrant’s Report on Form 10-K dated February 27, 2015 (File No. 001-14010). |
(22) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated May 8, 2015 (File No. 001-14010). |
(23) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 7, 2015 (File No. 001-14010). |
(24) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 5, 2016 (File No. 001-14010). |
(25) | Incorporated by reference to the Registrant’s Report on Form 8-K dated December 15, 2016 (File No. 001-14010). |
(26) | Incorporated by reference to the Registrant’s Report on Form 10-K dated February 24, 2017 (File No. 001-14010). |
(27) | Incorporated by reference to the Registrant’s Report on Form 8-K dated March 27, 2017 (File No. 001-14010). |
(28) | Incorporated by reference to the Registrant’s Report on Form 10-Q dated November 3, 2017 (File No. 001-14010). |
(29) | Incorporated by reference to the Registrant’s Report on Form 8-K dated December 8, 2017 (File No. 001-14010). |
(30) | Incorporated by reference to the Registrant’s Report on Form 10-K dated February 27, 2018 (File No. 001-14010). |
(31) | Incorporated by reference to the Registrant’s Report on Form 10-K/A dated March 1, 2019 (File No. 001-14010). |
(32) | Incorporated by reference to the Registrant’s Report on Form 8-K dated September 16, 2019 (File No. 001-14010). |
(P) | Paper Filing |
(*) | Management contract or compensatory plan required to be filed as an Exhibit to this Form 10-K. |
(**) | This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference. |
(b) | See Item 15 (a) (3) above. |
Item |
16: Form 10-K Summary |
Waters Corporation |
/s/ Sherry L. Buck |
Sherry L. Buck |
Senior Vice President and |
Chief Financial Officer |
/s/ Christopher J. O’Connell |
Chairman of the Board of Directors and Chief | |
Christopher J. O’Connell |
Executive Officer (principal executive officer) | |
/s/ Sherry L. Buck |
Senior Vice President and Chief Financial Officer | |
Sherry L. Buck |
(principal financial officer) (principal accounting officer) | |
/s/ Linda Baddour |
Director | |
Linda Baddour |
||
/s/ Dr. Michael J. Berendt |
Director | |
Dr. Michael J. Berendt |
||
/s/ Edward Conard |
Director | |
Edward Conard |
||
/s/ Dr. Laurie H. Glimcher |
Director | |
Dr. Laurie H. Glimcher |
||
/s/ Gary Hendrickson |
Director | |
Gary Hendrickson |
||
/s/ Christopher A. Kuebler |
Director | |
Christopher A. Kuebler |
||
/s/ Flemming Ornskov |
Director | |
Flemming Ornskov |
||
/s/ JoAnn A. Reed |
Director | |
JoAnn A. Reed |
||
/s/ Thomas P. Salice |
Director | |
Thomas P. Salice |