NORDSON CORP 10-K

Item 8. Financial Statements and Supplementary Data Consolidated Statements of Income Years ended October 31, 2024, 2023 and 2022 (In thousands except for per-share amounts) 2024 2023 2022 Sales $ 2,689,921 $ 2,628,632 $ 2,590,278 Operating costs and expenses: Cost of sales 1,203,792 1,203,227 1,163,742 Selling and administrative expenses 812,128 752,644 724,176 2,015,920 1,955,871 1,887,918 Operating profit 674,001 672,761 702,360 Other income (expense): Interest expense ( 88,924 ) ( 59,505 ) ( 22,413 ) Interest and investment income 4,913 2,680 2,026 Pension settlement charge for U.S. Plans — — ( 41,221 ) Other - net ( 4,509 ) ( 597 ) 8,527 ( 88,520 ) ( 57,422 ) ( 53,081 ) Income before income taxes 585,481 615,339 649,279 Income tax expense 118,197 127,846 136,176 Net income $ 467,284 $ 487,493 $ 513,103 Average common shares 57,176 57,090 57,629 Incremental common shares attributable to equity compensation 440 541 620 Average common shares and common share equivalents 57,616 57,631 58,249 Basic earnings per share $ 8.17 $ 8.54 $ 8.90 Diluted earnings per share $ 8.11 $ 8.46 $ 8.81 Dividends declared per common share $ 2.82 $ 2.63 $ 2.18 The accompanying notes are an integral part of the consolidated financial statements. Nordson Corporation 34 Table of Contents Consolidated Statements of Comprehensive Income Years ended October 31, 2024, 2023 and 2022 (In thousands) 2024 2023 2022 Net income $ 467,284 $ 487,493 $ 513,103 Components of other comprehensive income (loss), net of tax: Foreign currency translation adjustments 16,390 26,766 ( 126,657 ) Pension and postretirement benefit plans: Net actuarial gain (loss) arising during the year ( 4,387 ) ( 15,106 ) 54,065 Amortization of prior service cost ( 7 ) ( 34 ) ( 201 ) Amortization of actuarial (gain) loss ( 502 ) ( 24 ) 7,575 Curtailment gain (loss) — ( 2 ) 1,052 Settlement (gain) loss recognized 107 ( 259 ) 32,219 Total pension and postretirement benefit plans ( 4,789 ) ( 15,425 ) 94,710 Total other comprehensive income (loss) 11,601 11,341 ( 31,947 ) Total comprehensive income $ 478,885 $ 498,834 $ 481,156 The accompanying notes are an integral part of the consolidated financial statements. Nordson Corporation 35 Table of Contents Consolidated Balance Sheets October 31, 2024 and 2023 (In thousands) Assets Current assets: 2024 2023 Cash and cash equivalents $ 115,952 $ 115,679 Receivables - net 594,663 590,886 Inventories - net 476,935 454,775 Prepaid expenses and other current assets 87,482 67,970 Total current assets 1,275,032 1,229,310 Goodwill 3,280,819 2,784,201 Property, plant and equipment - net 544,607 392,846 Intangible assets - net 740,846 672,744 Operating right of use lease assets 93,620 106,176 Deferred income taxes 11,196 16,022 Other assets 54,846 50,471 $ 6,000,966 $ 5,251,770 Liabilities and shareholders' equity Current liabilities: Current maturities of long-term debt and notes payable $ 103,928 $ 115,662 Accrued liabilities 225,231 199,588 Accounts payable 97,839 106,320 Customer advance payments 46,400 93,389 Income taxes payable 32,754 45,359 Operating lease liability - current 17,063 16,853 Finance lease liability 5,262 4,918 Total current liabilities 528,477 582,089 Long-term debt 2,101,197 1,621,394 Operating lease liability - noncurrent 80,818 92,412 Deferred income taxes 205,687 210,637 Postretirement obligations 51,544 50,862 Pension obligations 46,893 40,425 Finance lease liability - noncurrent 12,083 11,670 Other long-term liabilities 42,075 44,221 Shareholders' equity: Preferred shares, no par value; 10,000 shares authorized; none issued — — Common shares, no par value; 160,000 shares authorized; 98,023 shares issued at October 31, 2024 and 2023 12,253 12,253 Capital in excess of stated value 714,091 668,097 Retained earnings 4,295,199 3,989,353 Accumulated other comprehensive loss ( 184,840 ) ( 196,441 ) Common shares in treasury, at cost ( 1,904,511 ) ( 1,875,202 ) Total shareholders' equity 2,932,192 2,598,060 $ 6,000,966 $ 5,251,770 The accompanying notes are an integral part of the consolidated financial statements. Nordson Corporation 36 Table of Contents Consolidated Statements of Shareholders’ Equity Years ended October 31, 2024, 2023 and 2022 (In thousands, except for per share data) Common Shares Additional Paid-in- Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Common Shares in Treasury, at cost TOTAL October 31, 2021 $ 12,253 $ 585,334 $ 3,265,027 $ ( 175,835 ) $ ( 1,527,649 ) $ 2,159,130 Shares issued under company stock and employee benefit plans — 10,615 — — 1,509 12,124 Stock-based compensation — 30,748 — — — 30,748 Purchase of treasury shares — — — — ( 262,869 ) ( 262,869 ) Dividends declared ($ 2.18 per share) — — ( 125,914 ) — — ( 125,914 ) Net income — — 513,103 — — 513,103 Other comprehensive income (loss): Foreign currency translation adjustments — — — ( 126,657 ) — ( 126,657 ) Pension plan settlement adjustment 33,271 33,271 Defined benefit pension and post-retirement plans adjustment — — — 61,439 — 61,439 October 31, 2022 $ 12,253 $ 626,697 $ 3,652,216 $ ( 207,782 ) $ ( 1,789,009 ) $ 2,294,375 Shares issued under company stock and employee benefit plans — 17,858 — — 3,515 21,373 Stock-based compensation — 23,542 — — — 23,542 Purchase of treasury shares — — — — ( 89,708 ) ( 89,708 ) Dividends declared ($ 2.63 per share) — — ( 150,356 ) — — ( 150,356 ) Net income — — 487,493 — — 487,493 Other comprehensive income (loss): Foreign currency translation adjustments — — — 26,766 — 26,766 Defined benefit pension and post-retirement plans adjustment — — — ( 15,425 ) — ( 15,425 ) October 31, 2023 $ 12,253 $ 668,097 $ 3,989,353 $ ( 196,441 ) $ ( 1,875,202 ) $ 2,598,060 Shares issued under company stock and employee benefit plans — 27,037 — — 4,030 31,067 Stock-based compensation — 18,957 — — — 18,957 Purchase of treasury shares — — — — ( 33,339 ) ( 33,339 ) Dividends declared ($ 2.82 per share) — — ( 161,438 ) — — ( 161,438 ) Net income — — 467,284 — — 467,284 Other comprehensive income (loss): Foreign currency translation adjustments — — — 16,390 — 16,390 Defined benefit pension and post-retirement plans adjustment — — — ( 4,789 ) — ( 4,789 ) October 31, 2024 $ 12,253 $ 714,091 $ 4,295,199 $ ( 184,840 ) $ ( 1,904,511 ) $ 2,932,192 The accompanying notes are an integral part of the consolidated financial statements. Nordson Corporation 37 Table of Contents Consolidated Statements of Cash Flows Years ended October 31, 2024, 2023 and 2022 (In thousands) Cash flows from operating activities: 2024 2023 2022 Net income $ 467,284 $ 487,493 $ 513,103 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 59,203 52,179 49,098 Amortization 76,972 59,719 50,825 Provision for losses on receivables 619 283 1,259 Deferred income taxes ( 18,557 ) ( 16,116 ) ( 10,732 ) Non-cash stock compensation 18,957 22,710 30,748 Loss (gain) on sale of property, plant and equipment 1,468 1,092 ( 581 ) Pension settlement charge for U.S. Plans — — 41,221 Other non-cash 3,396 8,136 1,259 Changes in operating assets and liabilities: Receivables 13,988 18,185 ( 72,907 ) Inventories 46,615 22,418 ( 69,132 ) Prepaid expenses ( 4,543 ) ( 14,677 ) ( 1,708 ) Accounts payable ( 38,591 ) ( 15,820 ) 10,671 Income taxes payable ( 19,385 ) 17,722 6,155 Accrued liabilities 8,187 ( 28,620 ) 925 Customer advance payments ( 48,425 ) ( 2,779 ) 18,682 Other ( 10,995 ) 29,357 ( 55,755 ) Net cash provided by operating activities 556,193 641,282 513,131 Cash flows from investing activities: Additions to property, plant and equipment ( 64,410 ) ( 34,583 ) ( 51,428 ) Proceeds from sale of property, plant and equipment 75 101 280 Acquisition of businesses, net of cash acquired ( 789,996 ) ( 1,422,780 ) ( 171,613 ) Other 9,933 20,383 — Net cash used in investing activities ( 844,398 ) ( 1,436,879 ) ( 222,761 ) Cash flows from financing activities: Proceeds from issuance of debt 783,039 2,178,596 63,067 Repayment of debt ( 318,686 ) ( 1,202,553 ) ( 96,975 ) Repayment of capital lease obligations ( 6,148 ) ( 6,840 ) ( 5,439 ) Issuance of common shares 31,067 21,373 12,124 Purchase of treasury shares ( 33,339 ) ( 89,708 ) ( 262,869 ) Dividends paid ( 161,438 ) ( 150,356 ) ( 125,914 ) Net cash provided (used) in financing activities 294,495 750,512 ( 416,006 ) Effect of exchange rate changes on cash ( 6,017 ) ( 2,693 ) ( 10,879 ) Increase (decrease) in cash and cash equivalents 273 ( 47,778 ) ( 136,515 ) Cash and cash equivalents at beginning of year 115,679 163,457 299,972 Cash and cash equivalents at end of year $ 115,952 $ 115,679 $ 163,457 The accompanying notes are an integral part of the consolidated financial statements. Nordson Corporation 38 Table of Contents Notes to Consolidated Financial Statements NOTE REGARDING AMOUNTS AND FISCAL YEAR REFERENCES In this annual report, all amounts related to United States dollars and foreign currency and to the number of Nordson Corporation’s common shares, except for per share earnings and dividend amounts, are expressed in thousands. Unless the context otherwise indicates, all references to “we” or the “Company” mean Nordson Corporation. Unless otherwise noted, all references to years relate to our fiscal year. Note 1 — Significant accounting policies Consolidation — The consolidated financial statements include the accounts of Nordson Corporation and its 100%-owned and controlled subsidiaries. Investments in affiliates and joint ventures in which our ownership is 50 percent or less or in which we do not have control but have the ability to exercise significant influence, are accounted for under the equity method. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of estimates — The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and notes. Actual amounts could differ from these estimates. Fiscal year — Our fiscal year is November 1 through October 31. Revenue recognition — A contract exists when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. Revenue is recognized when performance obligations under the terms of the contract with a customer are satisfied. Generally, our revenue results from short-term, fixed-price contracts and primarily is recognized as of a point in time when the product is shipped or at a later point when the control of the product transfers to the customer. For products in which control transfers upon delivery, revenue is deferred for undelivered items and included within Accrued liabilities in our Consolidated Balance Sheets. Revenues deferred as of October 31, 2024 and 2023 were not material. However, for certain contracts related to the sale of customer-specific products within our Medical and Fluid Solutions segment, revenue is recognized over time as we satisfy performance obligations because of the continuous transfer of control to the customer. The continuous transfer of control to the customer occurs as we enhance assets that are customer controlled, and we are contractually entitled to payment for work performed to date plus a reasonable margin. As control transfers over time for these products or services, revenue is recognized based on progress toward completion of the performance obligations. The selection method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We have elected to use the input method – costs incurred for these contracts because it best depicts the transfer of products or services to the customer based on incurring costs on the contract. Under this method, revenues are recorded proportionally as costs are incurred. Contract assets recognized are recorded in Prepaid expenses and other current assets and contract liabilities are recorded in Accrued liabilities in our Consolidated Balance Sheets and were not material at October 31, 2024 or 2023. Revenue recognized over time represented approximately less than ten percent of our overall consolidated revenues for October 31, 2024 and 2023. Revenue is measured as the amount of consideration we expect to be entitled to in exchange for transferring products or services. Taxes, including sales and value add, that we collect concurrently with revenue-producing activities are excluded from revenue. As a practical expedient, we may exclude the assessment of whether goods or services are performance obligations, if they are immaterial in the context of the contract and combine these with other performance obligations. While payment terms and conditions vary by contract type, we have determined that our contracts generally do not include a significant financing component. We have elected to apply the practical expedient to treat all shipping and handling costs as fulfillment costs, as a significant portion of these costs are incurred prior to transfer of control to the customer. We have also elected to apply the practical expedient to expense sales commissions as they are incurred, as the amortization period resulting from capitalizing the costs is one year or less. These costs are recorded within Selling and administrative expenses in our Consolidated Statements of Income. We offer assurance-type warranties on our products as well as separately sold warranty contracts. Revenue related to warranty contracts that are sold separately is recognized over the life of the warranty term and is not material. Certain arrangements may include installation, installation supervision, training and spare parts, which tend to be completed in a short period of time, at an insignificant cost, and utilizing skills not unique to us, therefore, these items are typically regarded as inconsequential or not material. We disclose disaggregated revenues by operating segment and geography in accordance with the revenue standard and on the same basis used internally by the chief operating decision maker for evaluating performance of operating segments and for allocating resources. Refer to Note 14 for details on our operating segments. Nordson Corporation 39 Table of Contents Notes to Consolidated Financial Statements — (Continued) Shipping and handling costs — Amounts billed to customers for shipping and handling are recorded as revenue. Shipping and handling expenses are included in cost of sales. Advertising costs — Advertising costs are expensed as incurred and we re $ 8,923 , $ 7,635 and $ 7,028 in 2024, 2023 and 2022, respectively. Research and development — Investments in research and development are important to our long-term growth, enabling us to keep pace with changing customer and marketplace needs through the development of new products and new applications for existing products. We place strong emphasis on technology developments and improvements through internal engineering and research teams. Research and development costs are expensed as incurred and were $ 64,992 , $ 71,400 and $ 52,531 in 2024, 2023 and 2022, respectively. Earnings per share — Basic earnings per share are computed based on the weighted-average number of common shares outstanding during each year, while diluted earnings per share are based on the weighted-average number of common shares and common share equivalents outstanding. Common share equivalents consist of shares issuable upon exercise of stock options computed using the treasury stock method, as well as restricted stock and deferred stock-based compensation. Options whose exercise price is higher than the average market price are excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive. Options f or 74 c ommon shares were excluded from the diluted earnings per share calculation in 2024 and 140 and 78 options were excluded from the calculation of diluted earnings per share in 2023 and 2022, respectively, because their effect would have been anti-dilutive. Under the 2021 Stock Incentive and Award Plan, executive officers and selected other key employees receive common share awards based on corporate performance measures over three-year performance periods. Awards for which performance measures have not been met were excluded from the calculation of diluted earnings per share. Cash and cash equivalents — Highly liquid instruments with maturities of 90 days or less at date of purchase are considered to be cash equivalents. Allowance for doubtful accounts — An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments. The amount of the allowance is determined principally on the basis of past collection experience and known factors regarding specific customers. Accounts are written off against the allowance when it becomes evident that collection will not occur. Credit is extended to customers satisfying pre-defined credit criteria. We believe we have limited concentration of credit risk due to the diversity of our customer base. Our primary allowance for credit losses is the allowance for doubtful accounts, which is principally determined based on aging of receivables. Receivables are exposed to credit risk based on the customers' ability to pay which is influenced by, among other factors, their financial liquidity. We perform ongoing customer credit evaluation to maintain sufficient allowances for potential credit losses. Our segments perform credit evaluation and monitoring to estimate and manage credit risk through the review of customer information, credit ratings, approval and monitoring of customer credit limits and assessment of market conditions. We may also require prepayments or bank guarantees from customers to mitigate credit risk. Our receivables are generally short-term in nature with a majority of receivables outstanding less than 90 days. Accounts receivable balances are written-off against the allowance if deemed uncollectible. Accounts receivable are net of an allowance for credit losses of $ 9,769 and $ 10,015 at October 31, 2024 and October 31, 2023, respectively. The provision for losses on receivables was $ 619 for the twelve months ended October 31, 2024 compared to $ 283 for the same period a year ago. The remaining change in the allowance for credit losses is principally related to increases due to acquisitions and the write-off of uncollectible accounts. Inventories — Inventories are valued at the lower of cost or net realizable value. Effective in the third quarter of 2022, we changed our accounting method for certain U.S. inventories from a last-in, first-out basis ("LIFO") to a first-in, first-out basis. Previously, the LIFO method was used to determine the cost of a portion of our inventories in the U.S. We believe this change in accounting method is preferable as it is consistent with how we manage our business, results in a uniform method to value our inventory across all regions of our business, improves comparability with our peers and is expected to better reflect the current value of inventory on the consolidated balance sheets. We applied this accounting change as a cumulative effect adjustment to cost of sales in the third quarter of 2022 and did not restate prior period financial statements because the impact was not material. Derivatives — The Company does not enter into derivative financial instruments for trading purposes. Derivative instruments are used to manage risks associated with foreign exchange rates. We operate internationally and enter into intercompany transactions denominated in foreign currencies. Consequently, we are subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions. These contracts usually have maturities of Nordson Corporation 40 Table of Contents Notes to Consolidated Financial Statements — (Continued) 90 days or less and generally require us to exchange foreign currencies for U.S. dollars at maturity, at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in “Other – net” on the Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position. The settlement of these contracts is recorded in operating activities on the Consolidated Statements of Cash Flows. We utilize net investment hedges to offset the translation adjustment arising from re-measuring our investment in foreign subsidiaries. These hedges are included on the balance sheet at fair value. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether a hedge has been designated. For derivative instruments that qualify for hedge accounting and are used to hedge net assets of certain foreign subsidiaries, we designate the hedging instrument as a hedge of a net investment in a foreign operation with the effective portion of the derivative's gain or loss reported in Accumulated other comprehensive loss as part of the cumulative translation adjustment and amounts reclassified out of accumulated other comprehensive loss into earnings when the hedged net investment is either sold or substantially liquidated. The settlement of these hedges is recorded in investing activities on the Consolidated Statement of Cash Flows. Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings in "Other-net" on the Consolidated Statements of Income. The Company has entered into treasury locks to fix the interest rate related to notes issued. The derivative positions are closed when the debt is priced with a cash settlement net payment that offsets changes in the benchmark treasury rate between execution of the treasury rate locks and the debt pricing date. The treasury locks are designed as cash flow hedges and the deferred amounts are reported in Accumulated Other Comprehensive Income (loss) ("AOCI") and subsequently reclassed to interest expense as payments are made on the notes through the maturity date. Property, plant and equipment and depreciation — Property, plant and equipment are carried at cost. Additions and improvements that extend the lives of assets are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Plant and equipment are depreciated for financial reporting purposes using the straight-line method over the estimated useful lives of the assets or, in the case of property under finance leases, over the terms of the leases. Leasehold improvements are depreciated over the shorter of the lease term or their useful lives. Useful lives are as follows: Land improvements 15 - 25 years Buildings 20 - 40 years Machinery and equipment 3 - 18 years Enterprise management systems 5 - 13 years Depreciation expense is included in Cost of sales and Selling and administrative expenses on the Consolidated Statements of Income. Internal use software costs are expensed or capitalized depending on whether they are incurred in the preliminary project stage, application development stage or the post-implementation stage. Amounts capitalized are amortized over the estimated useful lives of the software beginning with the project’s completion. All re-engineering costs are expensed as incurred. Interest costs on significant capital projects are capitalized. No interest was capitalized in 2024, 2023 or 2022. Goodwill and intangible assets — Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill relates to and is assigned directly to specific reporting units. Goodwill is not amortized but is subject to annual impairment testing. Our annual impairment testing is performed as of August 1. Testing is done more frequently if an event occurs or circumstances change that would indicate the fair value of a reporting unit is less than the carrying amount of those assets. The acquisitions of our businesses are accounted for under the acquisition method of accounting. The amounts assigned to the identifiable assets acquired and liabilities assumed in connection with acquisitions are based on estimated fair values as of the date of the acquisition, with the remainder, if any, recorded as goodwill. The fair values are determined by management, taking into consideration information supplied by the management of the acquired entities, and other relevant information. Such information typically includes valuations obtained from independent appraisal experts, which management reviews and considers in its estimates of fair values. The valuations are generally based upon future cash flow projections for the acquired assets, discounted to present value. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future revenue growth rates and EBITDA margins, discount rates, customer attrition rates, and asset lives, among other items. This judgment could result in either a higher or lower value assigned to amortizable or depreciable assets. The impact could result in either higher or lower amortization and/or depreciation expense. Nordson Corporation 41 Table of Contents Notes to Consolidated Financial Statements — (Continued) Other amortizable intangible assets, which consist primarily of patent/technology costs, customer relationships, non-compete agreements and trade names, are amortized over their useful lives on a straight-line basis. At October 31, 2024, the weighted-average useful lives for each major category of amortizable intangible assets were: Patent/technology costs 11 years Customer relationships 17 years Noncompete agreements 4 years Trade names 10 years Foreign currency translation — The financial statements of subsidiaries outside the United States are generally measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet dates. Income and expense items are translated at average monthly rates of exchange. The resulting translation adjustments are included in AOCI, a separate component of Shareholders’ equity. Generally, gains and losses from foreign currency transactions, including forward contracts, of these subsidiaries and the United States parent are included in net income. Gains and losses from intercompany foreign currency transactions of a long-term investment nature are included in AOCI. Accumulated other comprehensive loss — Accumulated other comprehensive loss at October 31, 2024 and 2023 consisted of: Cumulative translation adjustments Pension and postretirement benefit plan adjustments Accumulated other comprehensive loss Balance at October 31, 2023 $ ( 133,280 ) $ ( 63,161 ) $ ( 196,441 ) Pension and postretirement plan changes, net of tax of $ 1,716 — ( 4,789 ) ( 4,789 ) Currency translation losses 16,390 — 16,390 Balance at October 31, 2024 $ ( 116,890 ) $ ( 67,950 ) $ ( 184,840 ) Warranties — We offer warranties to our customers depending on the specific product and terms of the customer purchase agreement. A typical warranty program requires that we repair or replace defective products within a specified time period (generally one year ) measured from the date of delivery or first use. We record an estimate for future warranty-related costs based on actual historical return rates. Based on analysis of return rates and other factors, the adequacy of our warranty provisions is adjusted as necessary. The liability for warranty costs is included in Accrued liabilities in the Consolidated Balance Sheets. Following is a reconciliation of the product warranty liability as of October 31, 2024 and 2023: 2024 2023 Balance at beginning of year $ 14,401 $ 11,723 Accruals for warranties 14,965 20,910 Warranty payments ( 15,717 ) ( 16,171 ) Currency adjustments ( 111 ) ( 2,061 ) Balance at end of year $ 13,538 $ 14,401 Note 2 — Recently issued accounting standards In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . ASU 2023-07 requires enhanced disclosures about significant segment expenses and enhanced disclosures in interim periods. The guidance in ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023 and interim reporting periods in fiscal years beginning after December 31, 2024, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2023-07 will have on its consolidated financial statements and disclosures and anticipates adoption in 2025. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU 2023-09 is intended to improve income tax disclosure requirements by requiring specific disclosure in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold. The guidance in ASU 2023-09 will be effective for annual reporting periods in fiscal years beginning after December 15, 2024. The Company is currently evaluating Nordson Corporation 42 Table of Contents Notes to Consolidated Financial Statements — (Continued) the impact that the adoption of ASU 2023-09 will have on its consolidated financial statements and disclosures and anticipates adoption in fiscal 2026. In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income. ASU 2024-03 does not change or remove current expense presentation requirements within the Consolidated Statements of Income. However, the amendments require disclosure, on an annual and interim basis, disaggregated information about certain income statement expense line items within the notes to the consolidated financial statements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures and anticipates adoption in fiscal 2028. Note 3 — Acquisitions Business acquisitions have been accounted for using the acquisition method, with the acquired assets and liabilities recorded at estimated fair value on the dates of acquisition. The cost in excess of the net assets of the business acquired is included in goodwill. Operating results since the respective dates of acquisitions are included in the Consolidated Statements of Income. 2024 Acquisition On August 21, 2024, the Company completed the acquisition of Atrion Corporation, a Delaware corporation (“Atrion”), pursuant to the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated May 28, 2024, with Alpha Medical Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Nordson (“Merger Sub”), and Atrion. Pursuant to the Merger Agreement, Merger Sub merged with and into Atrion (the “Merger”), with Atrion surviving the Merger as a wholly owned subsidiary of Nordson. Atrion is a leader in proprietary medical infusion fluid delivery and niche cardiovascular solutions and will operate within our Medical and Fluid Solutions segment. The all-cash acquisition of Atrion of $ 789,996 , net of cash acquired, was funded using borrowings under our revolving credit facility and the 364-day term loan agreement with a group of banks for a delayed draw term loan facility in the aggregate principal amount of $ 500,000 (the “364-Day Term Loan Agreement”) (see Note 8 to the Consolidated Financial Statements for additional details) and cash on hand. Based on the fair value of the assets acquired and the liabilities assumed, a preliminary purchase price allocation resulted in the recognition of $ 494,279 of goodwill and $ 129,600 of identifiable intangible assets. The identifiable intangible assets consist primarily of $ 40,100 of tradenames (amortized over 15 years), $ 24,900 of technology (amortized over 15 years), and $ 64,600 of customer relationships (amortized over 19 years). Goodwill associated with the acquisition was not tax deductible. As of October 31, 2024, the purchase price allocation remains preliminary as we complete our assessment, principally related to income taxes. The financial results of the Atrion acquisition are not expected to have a material impact on our Consolidated Financial Statements. The assets and liabilities acquired were as follows: August 21, 2024 Cash $ 24,428 Receivables - net 20,883 Inventories - net 64,801 Goodwill 494,279 Intangibles 129,600 Other assets 158,059 Total Assets $ 892,050 Accounts payable $ 25,587 Deferred income taxes 31,221 Other liabilities 20,818 Total Liabilities $ 77,626 2023 Acquisitions On August 24, 2023, the Company completed the acquisition of the ARAG Group and its subsidiaries ("ARAG Group" or "ARAG") pursuant to the terms of the Sale and Purchase Agreement, dated as of June 25, 2023, by and among the Company, its Italian subsidiary, Capvis Equity V LP, DRIP Co-Investment, and certain individuals. ARAG is a global market and innovation leader in the development, production and supply of precision control systems and smart fluid components for agricultural spraying. ARAG operates as a division of our Industrial Precision Solutions segment. In anticipation of the acquisition, the Company entered into a € 760,000 senior unsecured term loan facility with a group of banks in August 2023 (the “364-Day Nordson Corporation 43 Table of Contents Notes to Consolidated Financial Statements — (Continued) Term Loan Facility”). The all-cash ARAG acquisition of approximately € 957,000 , net of the repayment of approximately € 30,300 of debt of the acquired companies, was funded using borrowings under the 364-Day Term Loan Facility and the Company's revolving credit facility. The 364-Day Term Loan Facility was subsequentially paid off in September 2023 with the net proceeds of a senior notes offering (see Note 8 to the Consolidated Financial Statements for additional details). Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 684,938 and identifiable intangible assets of $ 353,500 were recorded. The identifiable intangible assets consist primarily of $ 27,500 of tradenames (amortized over 9 years ), $ 31,000 of technology (amortized over 5 years ), and $ 295,000 of customer relationships (amortized over 22 years ). Goodwill associated with the acquisition was not tax deductible. As of October 31, 2024, the purchase price allocation is final. The financial results of the ARAG Group acquisition are not expected to have a material impact on our Consolidated Financial Statements. The assets and liabilities acquired were as follows: August 24, 2023 Cash $ 32,966 Receivables - net 31,081 Inventories - net 54,252 Goodwill 684,938 Intangibles 353,500 Other assets 55,963 Total Assets $ 1,212,700 Accounts payable $ 18,915 Deferred income taxes 100,097 Other liabilities 15,785 Total Liabilities $ 134,797 On November 3, 2022, we acquired 100 % of CyberOptics Corporation ("CyberOptics"). CyberOptics is a leading global developer and manufacturer of high-precision 3D optical s ensing technology solutions. The CyberOptics acquisition expanded our test and inspection platform, providing differentiated technology that expands our product offering in the semiconductor and electronics industries and is reported in our Advanced Technology Solutions segment. We acquired CyberOptics for an aggregate purchase price of $ 377,843 , net of cash of approximately $ 40,890 , funded using borrowings under our revolving credit facility and cash on hand. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 285,330 and identifiable intangible assets of $ 58,600 were recorded. The identifiable intangible assets consist primarily of $ 15,200 of tradenames (amortized over 15 years), $ 14,600 of technology (amortized over 7 years), and $ 28,800 of customer relationships (amortized over 12 years). Goodwill associated with the acquisition was not tax deductible . As of October 31, 2024, the purchase price allocation was final. The financial results of CyberOptics are not material to our Consolidated Financial Statements. The assets and liabilities acquired were as follows: November 3, 2022 Cash $ 40,890 Receivables - net 21,364 Inventories - net 33,639 Goodwill 285,330 Intangibles 58,600 Other assets 13,768 Total Assets $ 453,591 Accounts payable $ 8,109 Deferred income taxes 14,826 Other liabilities 11,923 Total Liabilities $ 34,858 Nordson Corporation 44 Table of Contents Notes to Consolidated Financial Statements — (Continued) 2022 Acquisition On November 1, 2021, we acquired 100 % of NDC Technologies ("NDC"), a leading global provider of precision measurement solutions for in-line manufacturing process control. NDC's technology portfolio includes in-line measurement sensors, gauges and analyzers using near-infrared, laser, X-ray, optical and nucleonic technologies, as well as proprietary algorithms and software. We acquired NDC for an aggregate purchase price of $ 171,613 , net of cash of approximately $ 7,533 and other working capital adjustments of $ 2,763 , utilizing cash on hand. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 131,129 and identifiable intangible assets of $ 31,130 were recorded. The identifiable intangible assets consist primarily of $ 10,800 of tradenames (amortized over 13 years), $ 10,000 of technology (amortized over 7 years), $ 9,500 of customer relationships (amortized over 4 years) and $ 830 of non-compete agreements (amortized over 3 years). Goodwill associated with this acquisition of $ 72,018 is tax deductible. This acquisition is being reported in our Industrial Precision Solutions segment and the financial results of NDC are not material to our Consolidated Financial Statements. Note 4 — Details of Consolidated Balance Sheet 2024 2023 Receivables: Accounts $ 571,381 $ 558,393 Notes 595 662 Other 32,456 41,845 604,432 600,901 Allowance for doubtful accounts ( 9,769 ) ( 10,015 ) $ 594,663 $ 590,886 Inventories: Finished goods $ 256,465 $ 233,552 Raw materials and component parts 250,477 211,874 Work-in-process 55,790 86,474 562,732 531,900 Obsolescence and other reserves ( 85,797 ) ( 77,125 ) $ 476,935 $ 454,775 Property, plant and equipment: Land $ 32,018 $ 15,792 Land improvements 4,822 5,019 Buildings 354,854 294,267 Machinery and equipment 649,510 549,291 Enterprise management system 53,401 52,939 Construction-in-progress 58,362 24,916 Leased property under finance leases 29,404 28,406 1,182,371 970,630 Accumulated depreciation ( 637,764 ) ( 577,784 ) $ 544,607 $ 392,846 Accrued liabilities: Salaries and other compensation $ 77,799 $ 63,130 Interest 13,800 11,240 Taxes other than income taxes 13,560 14,894 Warranty 13,538 14,401 Net Investment Contracts 10,675 — Pension and other employee benefits 8,919 8,686 Commissions and rebates 6,844 8,823 Foreign currency forward contracts 5,508 10,425 Other 74,588 67,989 $ 225,231 $ 199,588 Nordson Corporation 45 Table of Contents Notes to Consolidated Financial Statements — (Continued) Note 5 — Goodwill and intangible assets We account for goodwill and other intangible assets in accordance with the provisions of ASC 350 and account for business combinations using the acquisition method of accounting and accordingly, the assets and liabilities of the entities acquired are recorded at their estimated fair values at the acquisition date. Goodwill is the excess of purchase price over the fair value of tangible and identifiable intangible net assets acquired in various business combinations. Goodwill is not amortized but is subject to annual impairment testing. Our annual impairment testing is performed as of August 1. Testing is done more frequently if an event occurs or circumstances change that would indicate the fair value of a reporting unit is less than the carrying amount of those assets. We assess the fair value of reporting units on a non-recurring basis using a quantitative analysis that uses a combination of the Income Approach and the guideline public company method of the Market Approach, and compare the result against the reporting unit’s carrying value of net assets. The implied fair value of our reporting units is determined based on significant unobservable inputs, as discussed below; accordingly, these inputs fall within Level 3 of the fair value hierarchy. The Income Approach uses assumptions for revenue growth, operating margin and working capital turnover that are based on management’s strategic plans tempered by performance trends and reasonable expectations about those trends. Terminal value calculations employ a published formula known as the Gordon Growth Model Method that essentially captures the present value of perpetual cash flows beyond the last projected period assuming a constant Weighted Average Cost of Capital ("WACC") methodology and growth rate. For each reporting unit, a sensitivity analysis is performed to vary the discount and terminal growth rates in order to provide a range of reasonableness for detecting impairment. Discount rates are developed using a WACC methodology. The WACC represents the blended average required rate of return for equity and debt capital based on observed market return data and company specific risk factors. In the application of the guideline public company method, fair value is determined using transactional evidence for similar publicly traded equity. The comparable company guideline group is determined based on relative similarities to each reporting unit since exact correlations are not available. An indication of fair value for each reporting unit is based on the placement of each reporting unit within a range of multiples determined for its comparable guideline company group. Valuation multiples are derived by dividing latest twelve-month performance for revenues and Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") into total invested capital, which is the sum of traded equity plus interest bearing debt less cash. These multiples are applied against the revenue and EBITDA of each reporting unit. While the implied indications of fair value using the guideline public company method yield meaningful results, the discounted cash flow method of the Income Approach includes management’s thoughtful projections and insights as to what the reporting units will accomplish in the near future. Accordingly, the reasonable, implied fair value of each reporting unit is a blend based on the consideration of both the Income and Market approaches. An impairment charge is recorded for the amount by which the carrying value of the reporting unit exceeds the fair value of the reporting unit, as calculated in the quantitative analysis described above. Based on our annual impairment tests in 2024, 2023 and 2022, the fair value of each reporting unit exceeded its carrying value, and accordingly, we did not record any goodwill impairment charges in 2024, 2023 or 2022. Our reporting units include components of the Industrial Precision Solutions, Medical and Fluid Solutions, and the Advanced Technology Solutions segments. Changes in the carrying amount of goodwill during 2024 by operating segment: Industrial Precision Solutions Medical and Fluid Solutions Advanced Technology Systems Total Balance at October 31, 2023 $ 1,208,996 $ 1,173,858 $ 401,347 $ 2,784,201 Acquisitions ( 9,962 ) 494,279 — 484,317 Currency effect 8,597 1,611 2,093 12,301 Balance at October 31, 2024 $ 1,207,631 $ 1,669,748 $ 403,440 $ 3,280,819 The increase in goodwill for 2024 was due to the acquisition of Atrion. See Note 3 to the Consolidated Financial Statements for additional details. Nordson Corporation 46 Table of Contents Notes to Consolidated Financial Statements — (Continued) Changes in the carrying amount of goodwill during 2023 by operating segment: Industrial Precision Solutions Medical and Fluid Solutions Advanced Technology Systems Total Balance at October 31, 2022 $ 520,236 $ 1,172,069 $ 112,388 $ 1,804,693 Acquisitions 694,900 — 285,330 980,230 Currency effect ( 6,140 ) 1,789 3,629 ( 722 ) Balance at October 31, 2023 $ 1,208,996 $ 1,173,858 $ 401,347 $ 2,784,201 The increase in goodwill for 2023 was due to the acquisition of CyberOptics and the ARAG Group. See Note 3 to the Consolidated Financial Statements for additional details. Information regarding intangible assets subject to amortization: October 31, 2024 Carrying Amount Accumulated Amortization Net Book Value Customer relationships $ 878,071 $ 339,756 $ 538,315 Patent/technology costs 232,371 134,187 98,184 Trade names 167,144 62,887 104,257 Noncompete agreements 8,502 8,412 90 Other 500 500 — Total $ 1,286,588 $ 545,742 $ 740,846 October 31, 2023 Carrying Amount Accumulated Amortization Net Book Value Customer relationships $ 794,706 $ 287,585 $ 507,121 Patent/technology costs 204,905 112,994 91,911 Trade names 125,692 52,488 73,204 Noncompete agreements 10,028 9,521 507 Other 182 181 1 Total $ 1,135,513 $ 462,769 $ 672,744 Amortization expense for 2024, 2023 and 2022 was $ 76,972 , $ 59,719 and $ 50,825 , respectively. See Note 3 for details regarding intangibles recorded due to acquisitions. Estimated amortization expense for each of the five succeeding years: Year Amounts 2025 $ 77,220 2026 $ 73,639 2027 $ 70,807 2028 $ 68,239 2029 $ 62,334 Note 6 — Retirement, pension and other postretirement plans Retirement plans — We have funded contributory retirement plans covering certain employees. Our contributions are primarily determined by the terms of the plans, subject to the limitation that they shall not exceed the amounts deductible for income tax purposes. We also sponsor unfunded contributory supplemental retirement plans for certain employees. Generally, benefits under these plans vest gradually over a period of approximately three years from date of employment and are based on the employee’s contribution. The expense applicable to retirement plans for 2024, 2023 and 2022 was approximately $ 30,564 , $ 29,511 and $ 26,635 , respectively. Nordson Corporation 47 Table of Contents Notes to Consolidated Financial Statements — (Continued) Pension plans — We have various pension plans covering a portion of our United States and international employees. Pension plan benefits are generally based on years of employment and, for salaried employees, the level of compensation. Actuarially determined amounts are contributed to United States plans to provide sufficient assets to meet future benefit payment requirements. We also sponsor an unfunded supplemental pension plan for certain employees. International subsidiaries fund their pension plans according to local requirements. During the second quarter of 2022, we completed a partial plan settlement transaction in regard to two of our U.S. pension plans in which plan assets amounting to $ 171,181 were used to purchase a group annuity contract from The Prudential Insurance Company of America ("Prudential"). The settlement resulted in a loss of $ 41,221 , whic h is included in Pension settlement charge for U.S. Plans on the Consolidated Statements of Income. This transaction relieved the Company of its responsibility for the pension obligation related to certain retired employees and transferred the obligation and payment responsibility to Prudential for retirement benefits owed to approximately 1,500 retirees and other beneficiaries. The annuity contract covered retirees who commenced receiving benefits on or before November 1, 2021. The monthly retirement benefit payment amounts currently received by retirees and their beneficiaries did not change as a result of this transaction. Plan participants not included in the transaction remain in the plans and responsibility for payment of the retirement benefits remains with the Company. A reconciliation of the benefit obligations, plan assets, accrued benefit cost and the amount recognized in financial statements for pension plans is as follows: United States International 2024 2023 2024 2023 Change in benefit obligation: Benefit obligation at beginning of year $ 319,186 $ 303,520 $ 62,813 $ 60,880 Service cost 10,043 10,973 942 1,096 Interest cost 18,975 16,699 2,766 2,513 Participant contributions — — 82 79 Settlements ( 1,659 ) ( 1,499 ) ( 805 ) ( 607 ) Curtailments — — — ( 2 ) Foreign currency exchange rate change — — 2,320 3,566 Actuarial (gain) loss 30,709 ( 4,120 ) 4,086 ( 2,361 ) Benefits paid ( 8,906 ) ( 6,387 ) ( 2,841 ) ( 2,351 ) Benefit obligation at end of year $ 368,348 $ 319,186 $ 69,363 $ 62,813 Change in plan assets: Beginning fair value of plan assets $ 321,676 $ 333,851 $ 39,863 $ 38,316 Actual return on plan assets 52,744 ( 6,307 ) 4,460 117 Company contributions 2,187 2,018 2,104 2,429 Participant contributions — — 82 79 Settlements ( 1,659 ) ( 1,499 ) ( 805 ) ( 607 ) Foreign currency exchange rate change — — 1,966 1,880 Benefits paid ( 8,906 ) ( 6,387 ) ( 2,841 ) ( 2,351 ) Ending fair value of plan assets $ 366,042 $ 321,676 $ 44,829 $ 39,863 Funded status at end of year $ ( 2,306 ) $ 2,490 $ ( 24,534 ) $ ( 22,950 ) Amounts recognized in financial statements: Noncurrent asset $ 7,320 $ 11,473 $ 13,716 $ 9,991 Accrued benefit liability ( 977 ) ( 1,494 ) ( 6 ) ( 5 ) Long-term pension obligations ( 8,649 ) ( 7,489 ) ( 38,244 ) ( 32,936 ) Total amount recognized in financial statements $ ( 2,306 ) $ 2,490 $ ( 24,534 ) $ ( 22,950 ) Nordson Corporation 48 Table of Contents Notes to Consolidated Financial Statements — (Continued) The net actuarial loss included in the projected benefit obligation for the United States and international pension plans for 2024 was primarily due to lower discount rates partially offset by gains due to demographic experience. The actuarial gain included in the projected benefit obligation for the United States pension plans for 2023 was primarily due to higher discount rates partially offset by losses due to demographic experience. Amounts recognized in accumulated other comprehensive loss (income): United States International 2024 2023 2024 2023 Net actuarial loss (gain) $ 107,027 $ 102,506 $ ( 2,312 ) $ ( 3,122 ) Prior service cost (credit) — — ( 88 ) ( 91 ) Accumulated other comprehensive loss (income) $ 107,027 $ 102,506 $ ( 2,400 ) $ ( 3,213 ) The following table summarizes the changes in accumulated other comprehensive loss (income): United States International 2024 2023 2024 2023 Balance at beginning of year $ 102,506 $ 74,293 $ ( 3,213 ) $ ( 2,413 ) Net loss (gain) arising during the year 4,577 28,303 1,197 ( 943 ) Net (gain) recognized during the year — — ( 29 ) ( 79 ) Prior service adjustment recognized during the year — — 8 50 Settlement (gain) loss ( 56 ) ( 90 ) ( 95 ) 425 Curtailment (gain) loss — — — 2 Exchange rate effect during the year — — ( 268 ) ( 255 ) Balance at end of year $ 107,027 $ 102,506 $ ( 2,400 ) $ ( 3,213 ) Information regarding the funded status of the Company's plans is as follows: United States International 2024 2023 2024 2023 For plans with accumulated benefit obligation in excess of plan assets: Accumulated benefit obligation $ 10,121 $ 8,703 $ 41,647 $ 36,413 Fair value of plan assets — — 5,323 5,115 For plans with projected benefit obligation in excess of plan assets: Projected benefit obligation 9,626 8,983 43,574 38,039 Fair value of plan assets — — 5,323 5,115 Net periodic pension costs include the following components: United States International 2024 2023 2022 2024 2023 2022 Service cost $ 10,043 $ 10,973 $ 16,820 $ 942 $ 1,096 $ 1,693 Interest cost 18,975 16,699 14,486 2,766 2,513 1,105 Expected return on plan assets ( 26,611 ) ( 26,116 ) ( 27,776 ) ( 1,626 ) ( 1,532 ) ( 1,430 ) Amortization of prior service credit — — 48 ( 8 ) ( 50 ) ( 104 ) Amortization of net actuarial loss — — 7,504 29 79 2,278 Settlement loss (gain) 56 90 41,548 95 ( 425 ) ( 29 ) Curtailment gain — — — — ( 2 ) ( 2,112 ) Total benefit cost $ 2,463 $ 1,646 $ 52,630 $ 2,198 $ 1,679 $ 1,401 Net periodic pension cost for 2024 included a settlement loss of $ 151 due to lump sum retirement payments. Net periodic pension cost for 2023 included a settlement gain of $ 335 due to lump sum retirement payments. Net periodic pension cost for 2022 included a settlement loss of $ 298 due to lump sum retirement payments. Net periodic pension cost for 2022 included a curtailment gain of $ 2,112 due to the freeze of an international defined benefit plan. Nordson Corporation 49 Table of Contents Notes to Consolidated Financial Statements — (Continued) The components of net periodic pension cost other than service cost are included in Pension settlement charge for U.S. Plans and Other – net in our Consolidated Statements of Income . The weighted average assumptions used in the valuation of pension benefits were as follows: United States International 2024 2023 2022 2024 2023 2022 Assumptions used to determine benefit obligations at October 31: Discount rate 5.27 % 6.08 % 5.70 % 3.80 % 4.35 % 3.78 % Rate of compensation increase 3.96 3.92 4.30 3.08 2.96 3.44 Assumptions used to determine net benefit costs for the years ended October 31: Discount rate - benefit obligation 6.08 5.70 3.02 4.35 3.78 1.30 Discount rate - service cost 6.18 5.89 3.42 3.48 2.88 1.14 Discount rate - interest cost 5.84 5.37 2.35 4.28 3.85 1.37 Expected return on plan assets 6.50 6.40 5.75 4.04 3.75 3.29 Rate of compensation increase 3.92 3.87 4.00 2.96 3.44 2.90 The amortization of prior service cost is determined using a straight-line amortization of the cost over the average remaining service period of employees expected to receive benefits under the plans. The discount rate reflects the current rate at which pension liabilities could be effectively settled at the end of the year. The discount rate used considers a yield derived from matching projected pension payments with maturities of a portfolio of available bonds that receive the highest rating given from a recognized investments ratings agency. The changes in the discount rates in 2024, 2023 and 2022 are due to changes in yields for these types of investments as a result of the economic environment. In determining the expected return on plan assets using the calculated value of plan assets, we consider both historical performance and an estimate of future long-term rates of return on assets similar to those in our plans. We consult with and consider the opinions of financial and other professionals in developing appropriate return assumptions. The rate of compensation increase is based on management’s estimates using historical experience and expected increases in rates. The international plans include a cash balance plan with promised interest crediting rates. The weighted average crediting rates were 1.10 %, 0.70 % and 0.60 % for 2024, 2023 and 2022, respectively. Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when exceeding the accounting corridor, which is set at 10 percent of the greater of the plan assets or benefit obligations. Gains or losses within the corridor remain in other comprehensive income and are retested in subsequent measurements. Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan. If substantially all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. The allocation of pension plan assets as of October 31, 2024 and 2023 is as follows: United States International 2024 2023 2024 2023 Asset Category Equity securities 3 % 3 % — % — % Debt securities 45 43 — — Insurance contracts — — 17 31 Pooled investment funds 51 53 82 67 Other 1 1 1 2 Total 100 % 100 % 100 % 100 % Our investment objective for defined benefit plan assets is to meet the plans’ benefit obligations, while minimizing the potential for future required plan contributions. Nordson Corporation 50 Table of Contents Notes to Consolidated Financial Statements — (Continued) Our United States plans comprise 89 percent of the Company's worldwide pension assets. In general, the investment strategies focus on asset class diversification, liquidity to meet benefit payments, and an appropriate balance of long-term investment return and risk. Target ranges for asset allocations are determined by dynamically matching the actuarial projections of the plans’ future liabilities and benefit payments with expected long-term rates of return on the assets, taking into account investment return volatility and correlations across asset classes. For 2024, the target in “return-seeking assets” is 30 percent and 70 percent in longer duration fixed income assets. Plan assets are diversified across multiple investment managers and are invested in liquid funds that are selected to track broad market indices. Investment risk is carefully controlled with plan assets rebalanced to target allocations on a periodic basis and continual monitoring of investment managers’ performance relative to the guidelines established with each investment manager. Our international plans comprise 11 percent of the Company's worldwide pension assets. Asset allocations are developed on a country-specific basis. Our investment strategy is to cover pension obligations with insurance contracts or to employ independent managers to invest the assets. The fair values of our pension plan assets at October 31, 2024 by asset category are in the table below: United States International Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Cash $ — $ — $ — $ — $ 442 $ 442 $ — $ — Equity securities: Basic materials 683 683 — — — — — — Consumer goods 1,788 1,788 — — — — — — Financial 2,461 2,461 — — — — — — Healthcare 1,811 1,811 — — — — — — Industrial goods 2,021 2,021 — — — — — — Technology 2,104 2,104 — — — — — — Fixed income securities: U.S. Government 58,000 — 58,000 — — — — — Corporate 100,909 — 100,909 — — — — — Other 5,879 — 5,879 — — — — — Other types of investments: Insurance contracts — — — — 7,390 — — 7,390 Other 1,524 1,524 — — — — — — Total investments in the fair value hierarchy $ 177,180 $ 12,392 $ 164,788 $ — $ 7,832 $ 442 $ — $ 7,390 Investments measured at Net Asset Value: Real estate collective funds 33,270 — Pooled investment funds 155,592 36,997 Total Investments at Fair Value $ 366,042 $ 44,829 Nordson Corporation 51 Table of Contents Notes to Consolidated Financial Statements — (Continued) The fair values of our pension plan assets at October 31, 2023 by asset category are in the table below: United States International Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Cash $ 355 $ 355 $ — $ — $ 777 $ 777 $ — $ — Money market funds 251 251 — — — — — — Equity securities: Basic materials 632 632 — — — — — — Consumer goods 1,614 1,614 — — — — — — Financial 1,787 1,787 — — — — — — Healthcare 1,368 1,368 — — — — — — Industrial goods 1,403 1,403 — — — — — — Technology 1,732 1,732 — — — — — — Fixed income securities: U.S. Government 42,269 — 42,269 — — — — — Corporate 94,650 — 94,650 — — — — — Other 2,640 — 2,640 — — — — — Other types of investments: Insurance contracts — — — — 12,224 — — 12,224 Other 2,092 2,092 — — — — — — Total investments in the fair value hierarchy $ 150,793 $ 11,234 $ 139,559 $ — $ 13,001 $ 777 $ — $ 12,224 Investments measured at Net Asset Value: Real estate collective funds 42,780 — Pooled investment funds 128,103 26,862 Total Investments at Fair Value $ 321,676 $ 39,863 These investment funds did not own a significant number of Nordson Corporation common shares for any year presented. The inputs and methodology used to measure fair value of plan assets are consistent with those described in Note 10. Following are the valuation methodologies used to measure these assets: • Money market funds - Money market funds are public investment vehicles that are valued with a net asset value of one dollar. This value is a quoted price in an active market and is classified as Level 1. • Equity securities - Common stocks and mutual funds are valued at the closing price reported on the active market on which the individual securities are traded and are classified as Level 1. • Fixed income securities - U.S. government securities are valued using bid evaluations and are classified as Level 2. Corporate fixed income securities are valued using evaluated prices, such as dealer quotes, bids and offers and are therefore classified as Level 2. • Insurance contracts - Insurance contracts are investments with various insurance companies. The contract value represents the best estimate of fair value. These contracts do not hold any specific assets. These investments are classified as Level 3. • Real estate collective funds – These funds are valued using the net asset value of the underlying properties. Net asset value is calculated using a combination of key inputs, such as revenue and expense growth rates, terminal capitalization rates and discount rates. • Pooled investment funds - These are public investment vehicles valued using the net asset value. The net asset value is based on the value of the assets owned by the plan, less liabilities. These investments are not quoted on an active exchange. Nordson Corporation 52 Table of Contents Notes to Consolidated Financial Statements — (Continued) The following tables present an analysis of changes during the years ended October 31, 2024 and 2023 in Level 3 plan assets, by plan asset class, for U.S. and international pension plans using significant unobservable inputs to measure fair value: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Insurance contracts Beginning balance at October 31, 2023 $ 12,224 Actual return on plan assets: Purchases 1,428 Sales ( 7,010 ) Settlements ( 214 ) Unrealized gains 440 Foreign currency translation 522 Ending balance at October 31, 2024 $ 7,390 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Insurance contracts Beginning balance at October 31, 2022 $ 18,066 Actual return on plan assets: Purchases 1,320 Sales ( 8,007 ) Settlements ( 607 ) Unrealized gains 266 Foreign currency translation 1,186 Ending balance at October 31, 2023 $ 12,224 Contributions to pension plans in 2025 are estimated to be approximately $ 3,726 . Retiree pension benefit payments, which include expected future service, are anticipated to be paid as follows: Year United States International 2025 $ 10,851 $ 2,988 2026 $ 12,667 $ 5,076 2027 $ 14,587 $ 3,955 2028 $ 16,470 $ 3,637 2029 $ 18,297 $ 3,934 2030-2034 $ 117,167 $ 20,033 Other postretirement plans - We sponsor an unfunded postretirement health care benefit plan covering certain of our United States employees. Employees hired after January 1, 2002, are not eligible to participate in this plan. For eligible retirees under the age of 65 who enroll in the plan, the plan is contributory in nature, with retiree contributions in the form of premiums that are adjusted annually. For eligible retirees age 65 and older who enroll in the plan, the plan delivers a benefit in the form of a Health Reimbursement Account ("HRA"), which retirees use for eligible reimbursable expenses, including premiums paid for purchase of a Medicare supplement plan or other out-of-pocket medical expenses such as deductibles or co-pays. Nordson Corporation 53 Table of Contents Notes to Consolidated Financial Statements — (Continued) A reconciliation of the benefit obligations, accrued benefit cost and the amount recognized in financial statements for other postretirement plans in the United States is as follows: 2024 2023 Change in benefit obligation: Benefit obligation at beginning of year $ 53,433 $ 59,851 Service cost 281 399 Interest cost 3,018 3,063 Participant contributions 580 614 Actuarial (gain) loss 623 ( 7,301 ) Benefits paid ( 3,683 ) ( 3,193 ) Benefit obligation at end of year $ 54,252 $ 53,433 Change in plan assets: Beginning fair value of plan assets $ — $ — Company contributions 3,103 2,579 Participant contributions 580 614 Benefits paid ( 3,683 ) ( 3,193 ) Ending fair value of plan assets $ — $ — Funded status at end of year $ ( 54,252 ) $ ( 53,433 ) Amounts recognized in financial statements: Accrued benefit liability $ ( 2,890 ) $ ( 2,800 ) Long-term postretirement obligations ( 51,362 ) ( 50,633 ) Total amount recognized in financial statements $ ( 54,252 ) $ ( 53,433 ) The following table summarizes the changes in accumulated other comprehensive (gain) loss: 2024 2023 Balance at beginning of year $ ( 12,336 ) $ ( 5,035 ) Net (gain) loss arising during the year 623 ( 7,301 ) Net gain (loss) recognized during the year 591 — Balance at end of year $ ( 11,122 ) $ ( 12,336 ) Net postretirement benefit costs include the following components: 2024 2023 2022 Service cost $ 281 $ 399 $ 687 Interest cost 3,018 3,063 1,923 Amortization of net actuarial (gain) loss ( 591 ) — 978 Total benefit cost (credit) $ 2,708 $ 3,462 $ 3,588 The components of net postretirement benefit cost other than service cost are included in Other – net in our Consolidated Statements of Income. Nordson Corporation 54 Table of Contents Notes to Consolidated Financial Statements — (Continued) The weighted average assumptions used in the valuation of postretirement benefits were as follows: 2024 2023 2022 Assumptions used to determine benefit obligations at October 31: Discount rate 5.18 % 6.02 % 5.59 % Health care cost trend rate 2.25 3.40 3.50 Rate to which health care cost trend rate is assumed to incline/decline (ultimate trend rate) 1.80 3.16 3.19 Year the rate reaches the ultimate trend rate 2033 2032 2032 Assumption used to determine net benefit costs for the years ended October 31: Discount rate benefit obligation 6.02 % 5.59 % 2.98 % Discount rate service cost 6.26 6.00 3.55 Discount rate interest cost 5.76 5.22 2.30 The weighted average health care trend rates reflect expected increases in the Company’s portion of the obligation. The decrease in the health care cost trend rates in 2024 for the U.S. postretirement plan is due to a reduction in the long-term increase assumption for the HRA benefit. Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when exceeding the accounting corridor, which is set at 10 percent of the greater of the plan assets or benefit obligations. Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan. If substantially all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. Contributions to postretirement plans in 2025 are estimated to be approximately $ 2,896 . Retiree postretirement benefit payments are anticipated to be paid as follows: Year 2025 $ 2,890 2026 $ 3,021 2027 $ 3,203 2028 $ 3,331 2029 $ 3,455 2030-2034 $ 18,876 Nordson Corporation 55 Table of Contents Notes to Consolidated Financial Statements — (Continued) Note 7 — Income taxes Income before income taxes and income tax expense (benefit) are comprised of the following: 2024 2023 2022 Income before income taxes: Domestic $ 314,263 $ 269,934 $ 302,549 Foreign 271,218 345,405 346,730 Total income before income taxes $ 585,481 $ 615,339 $ 649,279 Current: U.S. federal $ 65,085 $ 54,157 $ 59,639 State and local 2,017 285 7,535 Foreign 69,652 89,520 79,734 Total current 136,754 143,962 146,908 Deferred: U.S. federal ( 11,622 ) ( 9,119 ) ( 9,408 ) State and local ( 1,387 ) ( 1,279 ) ( 596 ) Foreign ( 5,548 ) ( 5,718 ) ( 728 ) Total deferred ( 18,557 ) ( 16,116 ) ( 10,732 ) $ 118,197 $ 127,846 $ 136,176 A reconciliation of the U.S. statutory federal rate to the worldwide consolidated effective tax rate follows: 2024 2023 2022 Statutory federal income tax rate 21.00 % 21.00 % 21.00 % Share-based and other compensation ( 0.02 ) ( 0.25 ) 0.26 Foreign tax rate variances 1.22 1.83 0.95 State and local taxes, net of federal income tax benefit 0.08 ( 0.13 ) 0.84 Foreign-Derived Intangible Income Deduction ( 2.54 ) ( 2.24 ) ( 1.59 ) Global Intangible Low-Taxed Income net of foreign tax credits 0.40 0.71 0.23 Other – net 0.05 ( 0.14 ) ( 0.72 ) Effective tax rate 20.19 % 20.78 % 20.97 % Deferred income taxes are not provided on undistributed earnings of international subsidiaries that are intended to be permanently invested in their operations. These undistributed earnings represent the post-income tax earnings under U.S. GAAP not adjusted for previously taxed income which aggregated approximately $ 1,433,106 and $ 1,533,889 at October 31, 2024 and 2023, respectively. Should these earnings be distributed, applicable foreign tax credits, distributions of previously taxed income and utilization of other attributes would substantially offset taxes due upon the distribution. It is not practical to estimate the amount of additional taxes that might be payable on these basis differences because of the multiple methods by which these differences could reverse and the impact of withholding, U.S. state and local taxes and currency translation considerations. At October 31, 2024 and 2023, total unrecognized tax benefits were $ 7,481 and $ 8,002 , respectively. The amounts that, if recognized, would impact the effective tax rate were $ 6,670 and $ 4,497 at October 31, 2024 and 2023, respectively. During 2024, unrecognized tax benefits related primarily to domestic positions and, as recognized, a substantial portion of the gross unrecognized tax benefits were offset against assets recorded in the Consolidated Balance Sheets. Nordson Corporation 56 Table of Contents Notes to Consolidated Financial Statements — (Continued) A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2024, 2023 and 2022 is as follows: 2024 2023 2022 Gross balance at beginning of year $ 8,002 $ 2,872 $ 3,720 Additions based on tax positions related to the current year 300 410 310 Additions for tax positions of prior years — 10 — Increases related to acquired businesses — 6,602 — Reductions for tax positions of prior years ( 418 ) — ( 70 ) Lapse of statute of limitations ( 403 ) ( 1,892 ) ( 1,088 ) Gross balance at end of year $ 7,481 $ 8,002 $ 2,872 At October 31, 2024 and 2023, we had accrued interest and penalty expense related to unrecognized tax benefits of $ 800 and $ 401 , respectively. We include interest accrued related to unrecognized tax benefits in interest expense. Penalties, if incurred, would be recognized as other income (expense). We are subject to United States Federal income tax as well as income taxes in numerous state and foreign jurisdictions. We are subject to examination in the U.S. by the Internal Revenue Service ("IRS") for the years 2021 through 2024; years prior to 2021 year are closed to further examination by the IRS. Generally, major state and foreign jurisdiction tax years remain open to examination for years after 2018. Within the next twelve months, it is reasonably possible that certain statute of limitations periods would expire, which could result in a minimal decrease in our unrecognized tax benefits. Significant components of deferred tax assets and liabilities are as follows: 2024 2023 Deferred tax assets: Lease Liabilities $ 25,254 $ 26,678 Employee benefits 29,291 26,680 Tax credit and loss carryforwards 35,258 28,667 Other accruals not currently deductible for taxes 9,190 8,944 Inventory adjustments 16,634 5,932 Total deferred tax assets 115,627 96,901 Valuation allowance ( 33,596 ) ( 23,732 ) Total deferred tax assets 82,031 73,169 Deferred tax liabilities: Depreciation and amortization 256,183 238,210 Lease right-of-use assets 24,204 25,925 Other - net ( 3,865 ) 3,649 Total deferred tax liabilities 276,522 267,784 Net deferred tax liabilities $ ( 194,491 ) $ ( 194,615 ) At October 31, 2024, we had $ 20,367 of tax credit carryforwards, $ 15,116 of which expires in 2026-2038 and $ 5,251 of which has an indefinite carryforward period. We also had $ 30,897 of state operating loss carryforwards, $ 47,966 of foreign operating loss carryforwards, and a $ 4,459 capital loss carryforward, of which $ 58,426 will expire in 2025 through 2043, and $ 24,897 of which has an indefinite carryforward period. The net change in the valuation allowance was an increase of $ 9,864 in 2024 and an increase of $ 13,602 in 2023. The valuation allowance of $ 33,596 at October 31, 2024, related primarily to tax credits and loss carryforwards that may expire before being realized. We continue to assess the need for valuation allowances against deferred tax assets based on determinations of whether it is more likely than not that deferred tax benefits will be realized. Nordson Corporation 57 Table of Contents Notes to Consolidated Financial Statements — (Continued) Note 8 — Long-term debt A summary of long-term debt is as follows: 2024 2023 Notes Payable $ 18,285 $ 5,019 Revolving credit agreement, due 2028 240,000 248,000 Term loan, due 2026 280,000 300,000 Senior notes, due 2025 8,500 32,000 Senior notes, due 2025-2027 37,143 54,286 Senior notes, due 2025-2030 190,000 260,000 5.600% Notes due 2028 350,000 350,000 5.800% Notes due 2033 500,000 500,000 4.500% Notes due 2029 600,000 — 2,223,928 1,749,305 Less current maturities 103,928 115,662 Less unamortized debt issuance costs 16,359 10,773 Less bond discounts 2,444 1,476 Long-term maturities $ 2,101,197 $ 1,621,394 Revolving credit agreement — In April 2019, we entered into a $ 850,000 unsecured multi-currency credit facility with a group of banks, which amended, restated and extended our then existing syndicated revolving credit agreement. This facility had a five-year term expiring in April 2024 and included a $ 75,000 sub-facility for swing-line loans. On April 17, 2023, we entered into an amendment to, among other things, replace London Interbank Offered Rate with the Secured Overnight Financing Rate (“SOFR”), the Euro Interbank Offered Rate, the Sterling Overnight Index Average and the Tokyo Interbank Offered Rate for U.S. Dollar, Euro, British Pound Sterling and Japanese Yen borrowings, respectively. On June 6, 2023, this credit agreement was terminated and replaced by the New Credit Agreement (as defined below). In June 2023, we entered into a $ 1,150,000 unsecured multi-currency credit facility with a group of banks, which provides for a term loan facility in the aggregate principal amount of $ 300,000 (the "Term Loan Facility"), maturing in June 2026, and a multicurrency revolving credit facility in the aggregate principal amount of $ 850,000 (the "Revolving Facility"), maturing in June 2028 (the "New Credit Agreement"). In June 2024, the Revolving Facility was amended to increase the aggregate principal amount to $ 922,500 . The Company borrowed and has outstanding $ 280,000 on the Term Loan Facility and $ 240,000 on the Revolving Facility as of October 31, 2024 . The Revolving Facility permits borrowing in U.S. Dollars, Euros, Sterling, Swiss Francs, Singapore Dollars, Yen, and each other currency approved by a Revolving Facility lender. The New Credit Agreement provides that the applicable margin for (i) Risk-Free Rate ("RFR"), as defined in the New Credit Agreement, and Eurodollar Loans will range from 0.85 % to 1.20 % and (ii) Base Rate Loans will range from 0.00 % to 0.20 %, in each case, based on the Company’s Leverage Ratio (as defined in the Credit Agreement and calculated on a consolidated net debt basis). Borrowings under the New Credit Agreement bear interest at (i) either a base rate or a SOFR rate, with respect to borrowings in U.S. dollars, (ii) a eurocurrency rate, with respect to borrowings in Euros and Yen, or (iii) Daily Simple RFR, with respect to borrowings in Sterling, Swiss Francs or Singapore Dollars, plus, in each case, an applicable margin (and, solely in the case of Singapore Dollars, a spread adjustment). The applicable margin is based on the Company’s Leverage Ratio. The weighted-average interest rate at October 31, 2024 was 5.66 %. Senior notes, due 2025 — These unsecured fixed-rate notes entered into in 2012 with a group of insurance companies have a remaining weighted-average life of 0.73 years. The weighted-average interest rate at October 31, 2024 was 3.07 percent. Senior notes, due 2025-2027 — These unsecured fixed-rate notes entered into in 2015 with a group of insurance companies have a remaining weighted-average life of 1.55 years. The weighted-average interest rate at October 31, 2024 was 3.13 percent. Senior notes, due 2025-2030 — These unsecured fixed-rate notes entered in 2018 with a group of insurance companies have a remaining weighted-average life of 2.70 years. The weighted-average interest rate at October 31, 2024 was 4.03 percent. 5.600% Notes due 2028 and 5.800% Notes due 2033 — In September 2023, we completed an underwritten public offering of $ 350,000 aggregate principal amount of 5.600 % Notes due 2028 and $ 500,000 aggregate principal amount of 5.800 % Notes due 2033. 4.500% Notes due 2029 - In September 2024, we completed an underwritten public offering of $ 600,000 aggregate principal amount of 4.500 % Notes due 2029 (the "2029 Notes"). Nordson Corporation 58 Table of Contents Notes to Consolidated Financial Statements — (Continued) We were in compliance with all covenants at October 31, 2024 and the amount we could borrow would not have been limited by any debt covenants. Annual maturities — The annual ma turities of long-term debt for the five years subsequent to October 31, 2024, are as follows: $ 103,928 in 2025; $ 330,000 in 2026; $ 10,000 in 2027; $ 630,000 in 2028 and $ 620,000 in 2029. Bank lines of credit are summarized as follows: 2024 2023 Maximum borrowings available under bank lines of credit (all foreign banks) $ 123,983 $ 114,464 Outstanding borrowings / notes payable (all foreign bank debt) ( 18,285 ) ( 5,019 ) Unused bank lines of credit $ 105,698 $ 109,445 Note 9 — Leases We review new contracts to determine if the contracts include a lease. To the extent a lease agreement includes an extension option that is reasonably certain to be exercised, we have recognized those amounts as part of the right-of-use assets and lease liabilities. We combine lease and non-lease components, such as common area maintenance, in the calculation of the lease assets and related liabilities. As most lease agreements do not provide an implicit rate, we use an incremental borrowing rate ("IBR") based on information available at the lease commencement date in determining the present value of lease payments and to help classify the lease as operating or financing. We calculate the IBR based on a bond yield curve which considers secured borrowing rates based on our credit rating and current economic environment, as well as other publicly available data. We lease certain manufacturing facilities, warehouse space, machinery and equipment, and vehicles. We often have options to renew lease terms for buildings and other assets. We evaluate renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the Consolidated Balance Sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments occur. Variable payments for leases primarily relate to future rates or amounts, miles, or other quantifiable usage factors which are not determinable at the time the lease agreement commences. Finance lease assets are recorded in Property, plant and equipment – net on the Consolidated Balance Sheets with related amortization recorded in depreciation expense on the Consolidated Statement of Cash Flows. As of October 31, 2024, we had no material leases that had yet to commence. Additional lease information is summarized below for the twelve months ended October 31: October 31, 2024 October 31, 2023 Finance Leases Operating Leases Finance Leases Operating Leases Amortization of right of use assets $ 5,978 $ 5,926 Interest 505 357 Lease cost (1) 6,483 $ 20,133 6,283 $ 19,662 Short-term and variable lease cost (1) 3,019 2,908 2,338 1,989 Total lease cost $ 9,502 $ 23,041 $ 8,621 $ 21,651 (1) Lease costs are recorded in both Cost of sales and Selling and administrative expenses on the Consolidated Statements of Income. Supplemental cash flow information is summarized below for the twelve months ended October 31, 2024: Finance Leases Operating Leases Cash outflows for leases $ 6,148 $ 20,754 Weighted average remaining lease term (years) 6.70 8.06 Weighted average discount rate 3.08 % 2.09 % Nordson Corporation 59 Table of Contents Notes to Consolidated Financial Statements — (Continued) The following table reconciles the undiscounted cash flows for five years and thereafter to the operating and finance lease liabilities recognized on the Consolidated Balance Sheet as of October 31, 2024. The reconciliation excludes short-term leases that are not recognized on the Consolidated Balance Sheet. Year: Finance Leases Operating Leases 2025 $ 5,713 $ 18,784 2026 4,316 17,651 2027 2,957 14,164 2028 1,385 11,379 2029 469 10,062 Later years 4,175 34,646 Total minimum lease payments 19,015 106,686 Amounts representing interest 1,670 8,805 Present value of minimum lease payments $ 17,345 $ 97,881 Rental expense for operating leases during the fiscal years ended October 31, 2024, 2023 and 2022 was $ 21,184 , $ 22,095 and $ 20,479 , respectively. Capitalized net finance leases included in property, plant and equipment during the fiscal years ended October 31, 2024 and October 31, 2023 was $ 16,364 and $ 16,310 , respectively. Note 10 — Fair value measurements The inputs to the valuation techniques used to measure fair value are classified into the following categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The following tables present the classification of our assets and liabilities measured at fair value on a recurring basis: October 31, 2024 Total Level 1 Level 2 Level 3 Assets: Foreign currency forward contracts (a) $ 3,332 $ — $ 3,332 $ — Net investment contracts (b) 6,049 — 6,049 — Total assets at fair value $ 9,381 $ — $ 9,381 $ — Liabilities: Deferred compensation plans (c) $ 9,615 $ — $ 9,615 $ — Net investment contracts (b) 20,261 — 20,261 — Foreign currency forward contracts (a) 5,508 — 5,508 — Total liabilities at fair value $ 35,384 $ — $ 35,384 $ — October 31, 2023 Total Level 1 Level 2 Level 3 Assets: Foreign currency forward contracts (a) $ 696 $ — $ 696 $ — Net investment contracts (b) 13,713 — 13,713 — Total assets at fair value $ 14,409 $ — $ 14,409 $ — Liabilities: Deferred compensation plans (c) $ 9,637 $ — $ 9,637 $ — Net investment contracts (b) 9,985 — 9,985 — Foreign currency forward contracts (a) 10,425 — 10,425 — Total liabilities at fair value $ 30,047 $ — $ 30,047 $ — Nordson Corporation 60 Table of Contents Notes to Consolidated Financial Statements — (Continued) (a) We enter into foreign currency forward contracts to reduce the risk of foreign currency exposures resulting from receivables, payables, intercompany receivables, intercompany payables and loans denominated in foreign currencies. Foreign exchange contracts are valued using market exchange rates. These foreign exchange contracts are not designated as hedges. (b) Net assets of our foreign subsidiaries are exposed to volatility in foreign currency exchange rates. We utilize net investment hedges to offset the translation adjustment arising from re-measuring our investment in foreign subsidiaries. The fair value of these hedges is primarily based on the exchange rate between the currency pair of the hedge upon which settlement is based and includes an adjustment for the counterparty’s or Company’s credit risk. The notional amount of our net investment hedge contracts as of October 31, 2024 was $ 845,333 . (c) Executive officers and other highly compensated employees may defer up to 100 percent of their salary and annual cash incentive compensation and for executive officers, up to 90 percent of their long-term incentive compensation, into various non-qualified deferred compensation plans. Deferrals can be allocated to various market performance measurement funds. Changes in the value of compensation deferred under these plans are recognized each period based on the fair value of the underlying measurement funds. The carrying amounts and fair values of financial instruments, other than cash and cash equivalents, receivables and accounts payable, are shown in the table below. The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these instruments. 2024 2023 Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt (including current portion) $ 2,186,840 $ 2,219,414 $ 1,732,037 $ 1,699,187 Long-term debt is valued by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions, which are considered to be Level 2 inputs under the fair value hierarchy. The carrying amount of long-term debt is shown net of unamortized debt issuance costs and bond discounts as described in the Long-term debt Note. Note 11 — Derivative financial instruments We operate internationally and enter into intercompany transactions denominated in foreign currencies. Consequently, we are subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions. These contracts usually have maturities of 90 days or less and generally require us to exchange foreign currencies for U.S. dollars at maturity, at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in “Other – net” on the Consolidated Statement of Income together with the transaction gain or loss from the related balance sheet position. The settlement of these contracts is recorded in operating activities on the Consolidated Statement of Cash Flows. In 2024, we recognized net gains of $ 7,553 on foreign currency forward contracts and net loss of $ 13,052 from the change in fair value of balance sheet positions. In 2023, we recognized net losses of $ 3,041 on foreign currency forward contracts and net loss of $ 4,701 from the change in fair value of balance sheet positions. In 2022, we recognized net losses of $ 4,937 on foreign currency forward contracts and net gains of $ 11,207 from the change in fair value of balance sheet positions. The fair values of our foreign currency forward contract assets and liabilities are included in Receivables-net and Accrued liabilities, respectively in the Consolidated Balance Sheets. Nordson Corporation 61 Table of Contents Notes to Consolidated Financial Statements — (Continued) The following table summarizes, by currency, the contracts outstanding at October 31, 2024 and 2023: Notional Amounts Sell Buy October 31, 2024 contract amounts: Euro $ 156,836 $ 171,840 Pound sterling 22,043 168,763 Japanese yen 24,559 29,943 Mexican peso 1,732 27,996 Hong Kong dollar 1,946 1,961 Singapore dollar 73 21,472 Australian dollar — 10,167 Taiwan dollar — 8,000 Other 8,389 75,686 Total $ 215,578 $ 515,828 October 31, 2023 contract amounts: Euro $ 107,056 $ 53,919 Pound sterling 17,449 163,116 Japanese yen 18,858 22,088 Mexican peso 45 26,063 Hong Kong dollar 1,509 8,943 Singapore dollar 448 20,126 Australian dollar — 9,112 Taiwan Dollar — 8,000 Other 14,518 79,814 Total $ 159,883 $ 391,181 We are exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments. These financial instruments include cash deposits and foreign currency forward contracts. We periodically monitor the credit ratings of these counterparties in order to minimize our exposure. Our customers represent a wide variety of industries and geographic regions. As of October 31, 2024 and 2023, there were no significant concentrations of credit risk. Treasury Locks During the fourth quarter of 2024, the Company entered into treasury locks to fix the interest rate related to $ 250,000 of the $ 600,000 of 2029 Notes issued on September 4, 2024. The derivative positions were closed when the debt was priced on September 4, 2024 with a cash settlement net payment of $ 2,306 that offset changes in the benchmark treasury rate between execution of the treasury rate locks and the debt pricing date. These derivatives were designed as cash flow hedges and the deferred amount reported in AOCI is being reclassed to interest expense as payments are made on the notes through the maturity date. Net Investment Hedges Net assets of our foreign subsidiaries are exposed to volatility in foreign currency exchange rates. We may utilize net investment hedges to offset the translation adjustment arising from re-measuring our investment in foreign subsidiaries. During 2024, the Company was party to various cross currency swaps between the U.S. Dollar and Euro, Japanese Yen, Taiwan Dollar, Singapore Dollar and Chinese Yuan, which were designated as hedges of our net investments in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. Any increases or decreases related to the remeasurement of the hedges are recorded in the currency translation component of Accumulated other comprehensive income (loss) within Shareholders' Equity in the Consolidated Balance Sheets until the sale or substantial liquidation of the underlying investments. A net gain of $ 16,214 , net of tax of $ 5,366 , was recorded in 2024 related to all net investment hedges, which is included in foreign currency translation adjustments in the Consolidated Statements of Shareholders' Equity. Nordson Corporation 62 Table of Contents Notes to Consolidated Financial Statements — (Continued) Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings. The settlement of net investment hedges is recorded in investing activities on the Consolidated Statements of Cash Flows. The following table summarizes the fair values of our net investment contracts designated as net investment hedges in the Company's Consolidated Balance Sheet as of October 31, 2024: Prepaid expenses and other current assets Other assets Accrued liabilities Other long-term liabilities Net investment contracts $ 5,976 $ 73 $ 10,675 $ 9,586 Note 12 — Capital shares Preferred — We have authorized 10,000 Series A convertible preferred shares without par value. No preferred shares were outstanding in 2024, 2023 or 2022. Common — We have 160,000 authorized common shares without par value. At October 31, 2024 and 2023, there were 98,023 common shares issued. At October 31, 2024 and 2023, the number of outstanding common shares, net of treasury shares, was 57,197 and 57,007 , respectively. Common shares repurchased as part of publicly announced programs during 2024, 2023 and 2022 were as follows: Year Number of Shares Total Amount Average per Share 2024 123 $ 28,198 $ 228.60 2023 373 79,786 213.62 2022 1,190 260,288 218.69 These amounts exclude share repurchases associated with employee equity award exercises and vesting. Note 13 — Stock-based compensation During the 2021 Annual Meeting of Shareholders, our shareholders approved the Nordson Corporation 2021 Stock Incentive and Award Plan (the “2021 Plan”) as the successor to the Amended and Restated 2012 Stock Incentive and Award Plan (the "2012 Plan"). The 2021 Plan provides for the granting of stock options, stock appreciation rights, restricted shares, restricted share units, performance shares, cash awards and other stock or performance-based incentives. A maximum of 900 common shares were authorized for grant under the 2021 Plan plus the number of shares that were available to be granted under the 2012 Plan, as well as issuable under the CyberOptics equity plan. As of October 31, 2024, a total of 1,875 common shares were available to be granted under the 2021 Plan. Stock options — Nonqualified or incentive stock options may be granted to our employees and directors. Generally, options granted to employees may be exercised beginning one year from the date of grant at a rate not exceeding 25 percent per year and expire 10 years from the date of grant. Vesting accelerates upon a qualified termination in connection with a change in control. In the event of termination of employment due to early retirement or normal retirement at age 65 , options granted within 12 months prior to termination are forfeited, and vesting continues post-retirement for all other unvested options granted. In the event of disability or death, all unvested stock options granted within 12 months prior to termination fully vest. Termination for any other reason results in forfeiture of unvested options and vested options in certain circumstances. The amortized cost of options is accelerated if the retirement eligibility date occurs before the normal vesting date. Option exercises are satisfied through the issuance of treasury shares on a first-in, first-out basis. We recognized compensation expense related to stock options of $ 4,616 , $ 6,655 and $ 7,265 for 2024, 2023 and 2022, respectively. Nordson Corporation 63 Table of Contents Notes to Consolidated Financial Statements — (Continued) The following table summarizes activity related to stock options during 2024: Number of Options Weighted˗Average Exercise Price Per Share Aggregate Intrinsic Value Weighted˗Average Remaining Term Outstanding at October 31, 2023 1,062 $ 152.41 Granted 61 $ 238.35 Exercised ( 261 ) $ 121.80 Forfeited or expired ( 7 ) $ 229.54 Outstanding at October 31, 2024 855 $ 167.26 $ 70,409 4.7 years Expected to vest 164 $ 239.44 $ 2,110 7.8 years Exercisable at October 31, 2024 690 $ 149.97 $ 68,283 4.0 years Summarized information on currently outstanding options follows: Range of Exercise Price $ 67 - $ 125 $ 126 - $ 190 $ 191 - $ 268 Number outstanding 261 314 280 Weighted-average remaining contractual life, in years 3.0 4.5 7.4 Weighted-average exercise price $ 110.17 $ 154.44 $ 235.04 Number exercisable 261 313 116 Weighted-average exercise price $ 110.15 $ 154.36 $ 227.51 As of October 31, 2024, there was $ 4,981 of total unrecognized compensation cost related to unvested stock options. That cost is expected to be amortized over a weighted average period of approximately 2.8 years. The fair value of each option grant was estimated at the date of the grant using the Black-Scholes option-pricing model with the following assumptions: 2024 2023 2022 Expected volatility 30.3 %- 31.7 % 30.4 %- 31.8 % 30.6 %- 30.8 % Expected dividend yield 1.15 %- 1.20 % 1.12 %- 1.27 % 0.76 %- 0.89 % Risk-free interest rate 4.22 %- 4.52 % 3.79 %- 4.21 % 1.36 %- 2.65 % Expected life of the option (in years) 5.0 - 6.2 5.0 - 6.2 5.3 - 6.2 The weighted-average expected volatility used to value options granted in 2024, 2023 and 2022 was 30.7 percent, 30.6 percent and 30.6 percent, respectively. Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of United States Treasury issues with terms equal to the expected life of the option being valued. The weighted average grant date fair value of stock options granted during 2024, 2023 and 2022 was $ 79.84 , $ 77.99 and $ 78.88 , respectively. The total intrinsic value of options exercised during 2024, 2023 and 2022 was $ 35,620 , $ 23,706 and $ 15,376 , respectively. Cash received from the exercise of stock options for 2024, 2023 and 2022 was $ 31,067 , $ 21,373 and $ 12,124 , respectively. Restricted shares and restricted share units — We may grant restricted shares and/or restricted share units to our employees and directors. These shares or units may not be transferred for a designated period of time (generally one to three years ) defined at the date of grant . We may also grant continuation awards in the form of restricted share units with cliff vesting and a performance measure that must be achieved for the restricted share units to vest. For employee recipients, in the event of termination of employment due to early retirement, with consent of the Company, restricted shares and units granted within 12 months prior to termination are forfeited, and other restricted shares and units vest on a pro-rata basis, subject to the consent of the Compensation Committee. In the event of termination of employment due to normal retirement at age 65 , restricted shares and units granted within 12 months prior to termination are forfeited, and, for other restricted shares and units, the restriction period applicable to restricted shares will lapse and the shares will vest and be transferable and all unvested units will become vested in full, subject to the consent of the Compensation Committee. In the event of a recipient's disability or death, all restricted shares and units granted within 12 months prior to termination fully vest. Nordson Corporation 64 Table of Contents Notes to Consolidated Financial Statements — (Continued) Termination for any other reason prior to the lapse of any restrictions or vesting of units results in forfeiture of the shares or units. For non-employee directors, all restrictions lapse in the event of disability or death of the non-employee director. Termination of service as a director for any other reason within one year of date of grant results in a pro-rata vesting of shares or units. As shares or units are issued, stock-based compensation equivalent to the fair market value on the date of grant is expensed over the vesting period. As of October 31, 2024, there was no unrecognized compensation cost related to restricted shares. The amount charged to expense related to restricted shares was $ 0 , $ 336 and $ 1,096 in 2024, 2023 and 2022, respectively. These amounts included common share dividends of $ 0 , $ 5 and $ 19 in 2024, 2023 and 2022, respectively. The following table summarizes activity related to restricted share units in 2024: Number of Units Weighted˗Average Grant Date Fair Value Restricted share units at October 31, 2023 69 $ 236.28 Granted 41 $ 235.53 Forfeited ( 6 ) $ 241.89 Vested ( 37 ) $ 229.72 Restricted share units at October 31, 2024 67 $ 238.83 As of October 31, 2024, there was $ 8,883 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 1.8 years. The amounts charged to expense related to restricted share units in 2024, 2023 and 2022 were $ 8,853 , $ 8,765 and $ 8,403 , respectively. Restricted share unit expense increased beginning in 2021 compared to prior years as the granting of restricted share units has generally replaced the granting of stock options for key employees. Performance share incentive awards — Executive officers and selected other key employees are eligible to receive common share-based incentive awards. Payouts, in the form of unrestricted common shares, vary based on the degree to which corporate financial performance exceeds predetermined threshold, target and maximum performance goals over three-year performance periods. No payout will occur unless threshold performance is achieved . The amount of compensation expense is based upon current performance projections and the percentage of the requisite service that has been rendered. The calculations are based upon the grant date fair value which is principally driven by the stock price on the date of grant or a Monte Carlo valuation for awards with market conditions. The per share values were $ 229.58 and $ 225.14 for 2024; $ 231.34 , $ 211.25 and $ 214.51 for 2023; and $ 260.60 , $ 273.50 and $ 221.94 for 2022. The amount charged to expense for executive officers and selected other key employees in 2024, 2023 and 2022 were $ 5,070 , $ 6,543 and $ 13,626 , respectively. As of October 31, 2024, there was $ 6,529 of unrecognized compensation cost related to performance share incentive awards. Deferred compensation — Our executive officers and other highly compensated employees may elect to defer up to 100 percent of their base pay and cash incentive compensation and, for executive officers, up to 90 percent of their share-based performance incentive award payout each year. Additional share units are credited for quarterly dividends paid on our common shares. Expense related to dividends paid under this plan was $ 97 , $ 107 and $ 72 for 2024, 2023 and 2022, respectively . Deferred directors’ compensation — Non-employee directors may defer all or part of their cash and equity-based compensation until retirement. Cash compensation may be deferred as cash or as share equivalent units. Deferred cash amounts are recorded as liabilities, and share equivalent units are recorded as equity. Additional share equivalent units are earned when common share dividends are declared. Nordson Corporation 65 Table of Contents Notes to Consolidated Financial Statements — (Continued) The following table summarizes activity related to director deferred compensation share equivalent units during 2024: Number of Shares Weighted˗Average Grant Date Fair Value Per Share Outstanding at October 31, 2023 78 $ 93.11 Restricted stock units vested 5 $ 215.81 Dividend equivalents 1 $ 249.07 Distributions ( 19 ) $ 54.54 Outstanding at October 31, 2024 65 $ 115.66 The amount charged to expense related to director deferred compensation was $ 321 , $ 309 and $ 305 in 2024, 2023 and 2022, respectively. Shares reserved for future issuance — At October 31, 2024, there were 1,139 of common shares reserved for future issuance through the exercise of outstanding options or rights . Note 14 — Operating segments and geographic area data We conduct business in three primary operating segments: Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions. The composition of segments and measure of segment profitability is consistent with that used by our chief operating decision maker. The primary measure used by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit, which equals sales less cost of sales and certain operating expenses. Items below the operating profit line of the Consolidated Statement of Income (interest and investment income, interest expense and other income/expense) are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment. The accounting policies of the segments are the same as those described in Note 1. Industrial Precision Solutions: This segment focuses on delivering proprietary dispensing and processing technology, both standard and highly customized equipment, to diverse end markets. Product lines commonly reduce material consumption, increase line efficiency through precision dispense and measurement and control, and enhance product brand and appearance. Components are used for dispensing adhesives, coatings, paint, finishes, sealants and other materials. This segment primarily serves the industrial, agricultural, consumer durables and non-durables markets. Medical and Fluid Solutions: This segment includes the Company’s fluid management solutions for medical, high-tech industrial and other diverse end markets. Related plastic tubing, balloons, catheters, syringes, cartridges, tips and fluid connection components are used to dispense or control fluids within customers’ medical devices or products, as well as production processes. Advanced Technology Solutions: This segment focuses on products serving electronics end markets. Advanced Technology Solutions products integrate our proprietary product technologies found in progressive stages of an electronics customer’s production processes, such as surface treatment, precisely controlled dispensing of material and test and inspection to ensure quality and reliability. Applications include, but are not limited to, semiconductors, printed circuit boards, electronic components and automotive electronics. No single customer accounted for 10 percent or more of sales in 2024, 2023 or 2022. Nordson Corporation 66 Table of Contents Notes to Consolidated Financial Statements — (Continued) The following table presents information about our reportable segments: Industrial Precision Solutions Medical and Fluid Solutions Advanced Technology Solutions Corporate Total Year ended October 31, 2024 Net external sales $ 1,484,249 $ 695,452 $ 510,220 $ — $ 2,689,921 Depreciation and amortization 56,856 58,061 13,433 7,825 136,175 Operating profit (loss) 470,559 187,731 94,231 ( 78,520 ) 674,001 Identifiable assets (a) 1,926,426 2,267,239 697,224 1,184,222 6,075,111 Property, plant and equipment expenditures 16,892 19,533 4,269 23,716 64,410 Year ended October 31, 2023 Net external sales $ 1,391,046 $ 660,316 $ 577,270 $ — $ 2,628,632 Depreciation and amortization 33,228 54,988 15,185 8,497 111,898 Operating profit (loss) 460,889 189,367 101,662 ( 79,157 ) 672,761 Identifiable assets (a) 1,932,527 1,544,456 730,192 1,105,471 5,312,646 Property, plant and equipment expenditures 9,257 15,716 4,209 5,401 34,583 Year ended October 31, 2022 Net external sales $ 1,337,242 $ 690,177 $ 562,859 $ — $ 2,590,278 Depreciation and amortization 27,891 54,674 8,780 8,578 99,923 Operating profit (loss) 434,476 217,199 133,253 ( 82,568 ) 702,360 Identifiable assets (a) 1,112,825 1,558,861 397,250 812,964 3,881,900 Property, plant and equipment expenditures 9,490 31,009 2,383 8,546 51,428 (a) Operating segment identifiable assets include notes and accounts receivable net of allowance for doubtful accounts, inventories net of reserves, property, plant and equipment net of accumulated depreciation and goodwill. Corporate assets are principally cash and cash equivalents, deferred income taxes, leases, headquarter facilities and intangible assets. We have significant sales and long-lived assets in the following geographic areas: 2024 2023 2022 Net external sales Americas $ 1,178,626 $ 1,149,760 $ 1,096,596 Europe 726,100 682,676 645,603 Asia Pacific 785,195 796,196 848,079 Total net external sales $ 2,689,921 $ 2,628,632 $ 2,590,278 Long-lived assets Americas $ 465,521 $ 328,312 $ 332,709 Europe 113,274 109,428 62,039 Asia Pacific 59,432 61,282 60,973 Total long-lived assets $ 638,227 $ 499,022 $ 455,721 Long-lived assets include property, plant and equipment - net and operating right of use lease assets. A reconciliation of total assets for reportable segments to total consolidated assets is as follows: 2024 2023 2022 Total identifiable assets for reportable segments $ 6,075,111 $ 5,312,646 $ 3,881,900 Eliminations ( 74,145 ) ( 60,876 ) ( 61,525 ) Total consolidated assets $ 6,000,966 $ 5,251,770 $ 3,820,375 Nordson Corporation 67 Table of Contents Notes to Consolidated Financial Statements — (Continued) Note 15 — Supplemental information for the statement of cash flows 2024 2023 2022 Cash operating activities: Interest paid $ 85,966 $ 54,710 $ 22,975 Income taxes paid 160,122 112,912 141,212 Note 16 — Contingencies We are involved in pending or potential litigation regarding environmental, product liability, patent, contract, employee and other matters arising from the normal course of business. Including the environmental matter discussed below, after consultation with legal counsel, we do not believe that losses in excess of the amounts we have accrued would have a material adverse effect on our financial condition, quarterly or annual operating results or cash flows. We have voluntarily agreed with the City of New Richmond, Wisconsin and other Potentially Responsible Parties to share costs associated with the remediation of the City of New Richmond municipal landfill (the “Site”) and the construction of a potable water delivery system serving the impacted area down gradient of the Site. At October 31, 2024 and October 31, 2023, our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $ 181 and $ 231 , respectively. The liability for environmental remediation represents management’s best estimate of the probable and reasonably estimable undiscounted costs related to known remediation obligations. The accuracy of our estimate of environmental liability is affected by several uncertainties such as additional requirements that may be identified in connection with remedial activities, the complexity and evolution of environmental laws and regulations, and the identification of presently unknown remediation requirements. Consequently, our liability could be greater than our current estimate. However, we do not expect that the costs associated with remediation will have a material adverse effect on our financial condition or results of operations. Nordson Corporation 68 Table of Contents Management’s Report on Internal Control Over Financial Reporting The management of Nordson Corporation is responsible for establishing and maintaining adequate internal control over financial reporting. Using criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework ("2013 framework"), Nordson’s management assessed the effectiveness of our internal control over financial reporting as of October 31, 2024. We completed the acquisition of Atrion Corporation and its subsidiaries ("Atrion") on August 21, 2024. As permitted by SEC guidance, the scope of our evaluation of internal control over financial reporting as of October 31, 2024 did not include the internal control over financial reporting of Atrion. The results of Atrion are included in our consolidated financial statements from the date the business was acquired. The total assets of the Atrion represented 14% of our total assets at October 31, 2024. The net revenues represented 1% of consolidated revenues for the year ended October 31, 2024 and the net income for the year ended October 31, 2024 did not have a material impact on the Company’s operations . Based on our assessment, management concluded that our internal control over financial reporting was effective as of October 31, 2024. The independent registered public accounting firm, Ernst & Young LLP, has also audited the effectiveness of our internal control over financial reporting as of October 31, 2024. Ernst & Young LLP's report on Nordson's internal control over financial reporting is included herein. /s/ Sundaram Nagarajan /s/ Daniel R. Hopgood President and Chief Executive Officer Executive Vice President and Chief Financial Officer December 18, 2024 December 18, 2024 Nordson Corporation 69 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Nordson Corporation Opinion on Internal Control Over Financial Reporting We have audited Nordson Corporation’s internal control over financial reporting as of October 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Nordson Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of October 31, 2024, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Atrion Corporation and its subsidiaries (Atrion), which is included in the 2024 consolidated financial statements of the Company and constitu ted 14% of total assets as of October 31, 2024 and 1% of total revenues for the year then ended. Net income for the year then ended did not have a material impact on the Company’s operations. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Atrion. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of October 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended October 31, 2024, and the related notes and schedule listed in the Index at Item 15(a) and our report dated December 18, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Cleveland, Ohio December 18, 2024 Nordson Corporation 70 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Nordson Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Nordson Corporation (the Company) as of October 31, 2024 and 2023 , the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended October 31, 2024 , and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at October 31, 2024 and 2023 , and the results of its operations and its cash flows for each of the three years in the period ended October 31, 2024 , in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of October 31, 2024 , based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated December 18, 2024 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. Nordson Corporation 71 Table of Contents Valuation of Goodwill Description of the Matter At October 31, 2024, the Company had $3,280,819 thousand of goodwill. As discussed in Note 5 to the consolidated financial statements, the Company evaluates the carrying amount of goodwill for impairment annually as of August 1, and between annual evaluations if an event occurs or circumstances change that would indicate the fair value of a reporting unit is less than the carrying amount of those assets. The Company performed a quantitative impairment test for all reporting units in fiscal 2024. As part of the quantitative impairment tests, the Company estimated the fair value of each reporting unit using a combination of valuation techniques including the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach. Auditing management’s annual goodwill impairment assessment relating to goodwill was complex due to the use of valuation methodologies in the determination of the estimated fair values of the reporting units. These fair value estimates are impacted by assumptions such as discount rates, revenue growth rates, and operating margins which are affected by expectations about future market or economic conditions. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment process whereby the Company develops assumptions that are used as inputs to the annual goodwill impairment tests. This included controls over management's review of the valuation models and the assumptions, described above. To test the implied fair value of the Company’s reporting units, we performed audit procedures that included, among others, assessing the valuation methodologies, testing the assumptions, and testing the completeness and accuracy of the underlying data. We involved our internal valuation specialists in assessing the fair value methodologies applied and evaluating the reasonableness of certain assumptions selected by management. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions. We tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company. We also assessed the appropriateness of the disclosures in the consolidated financial statements. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1956. Cleveland, Ohio December 18, 2024 Nordson Corporation 72 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.