What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-03-03 compared with 2021-03-02 · 516 added, 1030 removed, 1242 unchanged (55% of the section changed)

Financial Statements and Supplemental Data

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Statements of Operations for Each of the Three Fiscal Years in the Period Ended January 2 , 202 2

Consolidated Statements of Comprehensive Income for Each of the Three Fiscal Years in the Period Ended January 2, 2022

Consolidated Balance Sheets as of January 3, 2021 and December 29, 2019

Consolidated Balance Sheets as of January 2, 2022 and January 3, 2021

Consolidated Statements of Stockholders’ Equity for Each of the Three Fiscal Years in the Period Ended January 2, 2022

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We have audited the accompanying consolidated balance sheets of PerkinElmer, Inc.

and subsidiaries (the “Company”) as of January 3, 2021 and December 29, 2019, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended January 3, 2021, the related notes, and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 3, 2021 and December 29, 2019, and the results of its operations and its cash flows for each of the three years in the period ended January 3, 2021, in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the “Company”) as of January 2, 2022 and January 3, 2021 and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended January 2, 2022 and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 2, 2022 and January 3, 2021, and the results of its operations and its cash flows for each of the three years in the period ended January 2, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also 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 January 2, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 3, 2022 expressed an unqualified opinion on the Company’s internal control over financial reporting.

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The communication of critical audit matters does not alter in any way our opinion on the 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 accounts or disclosures to which it relates.

Revenue Recognition – Refer to Note 2 to the financial statements

Business Combinations – Identifiable Intangible Assets– Refer to Note 3 to the financial statements

Critical Audit Matter Description

The Company recognizes revenue as it fulfills its performance obligations and transfers control of products or renders services to its customers.

The Company entered into a contract (the “Contract”) with the State of California to perform COVID-19 testing.

The Contract includes variable consideration for monthly testing capacity as well as for completing testing on individual samples.

The Company also received consideration upfront to set-up the testing location and ensure its readiness for the performance of testing as the testing samples were provided.

The accounting for the Contract involves management judgment, particularly in the identification of the performance obligations and in the allocation of consideration to each performance obligation.

The amount recognized per completed test is based on the Company’s forecast of tests to be performed per month over the period of contract performance.

We identified the revenue recognition related to this contract as a critical audit matter because of the significant estimates and assumptions management made in identifying performance obligations and in allocating consideration to each performance

This required a higher degree of auditor judgment and an increased extent of effort, when performing audit procedures to evaluate the reasonableness of the related revenue recognition.

The Company completed the acquisition of BioLegend, Inc.

for $ 5.7 billion in total consideration, net of cash acquired during the third quarter of fiscal year 2021.

In addition, the Company completed the acquisition of seven other businesses for aggregate consideration of $ 1.2 billion during fiscal year 2021.

The Company accounted for the acquisitions under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including identifiable intangible assets totaling $ 2.5 billion in the BioLegend acquisition and $ 0.5 billion in the other seven acquisitions.

Of the identifiable intangible assets acquired, the most significant included core technology of $ 1.1 billion and customer relationships of $ 1.9 billion.

Management estimated the fair value of these intangible assets using customary valuation procedures and techniques, including income approach methods.

The fair value determination of the intangible assets acquired required management to make significant estimates and assumptions related to revenue forecasts and the selection of the discount rates.

We identified the valuation of the intangible assets as a critical audit matter because of the significant estimates and assumptions management made to measure the fair value of the identifiable intangible assets acquired for purposes of the purchase price allocation.

These fair value measurements required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s revenue forecasts and the selection of the discount rates for the identified intangible assets.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the identification of performance obligations and allocation of consideration to each performance obligation included the following, among others:

• We tested the effectiveness of controls over the revenue recognition process, including management’s controls over the identification of performance obligations, allocation of consideration to performance obligations and forecasting testing levels.

• We assessed the reasonableness of management’s determination of performance obligations by independently reading the contract to determine each promise in the contract and evaluating the promise to determine if each promise represents a separate performance obligation.

• We assessed the reasonableness of management’s determination of transaction price;

including variable consideration, by independently evaluating the determination of fixed consideration and constraints applied to variable consideration based on the forecasted testing levels and recalculating the consideration allocated to each performance obligation.

Our audit procedures related to the revenue forecasts and the selection of the discount rates for the identifiable intangible assets included the following, among others:

• We tested the effectiveness of controls over the valuation of the identifiable intangible assets, including management’s controls over revenue forecasts and selection of the discount rates.

• We assessed the reasonableness of management’s revenue forecasts by performing the following, on a sample basis:

– We compared the revenue forecasts to historical results.

– We compared the revenue forecasts to internal communications to management and the Board of Directors and other information obtained while performing the audit.

– We compared the growth rates to similar businesses acquired by the Company, to the Company’s legacy operations that operate in a similar business, and to peer companies.

• With the assistance of our fair value specialists, we also performed the following, on a sample basis:

– We evaluated the reasonableness of the valuation methodologies selected.

– We tested the source information underlying the determination of the discount rates, tested the mathematical accuracy of the calculations and compared those to the amounts selected by management.

/s / DELOITTE & TOUCHE LLP

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CONSOLIDATED STATEMENTS OF OPERATIONS

For the Fiscal Years Ended

2021 December 29,

2022 January 3,

2021 December 29,

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Loss on disposition of discontinued operations before income taxes — ( 76 ) —

Provision for (benefit from) income taxes on discontinued operations and dispositions 135 195 ( 1,311 )

(Loss) gain from discontinued operations and dispositions ( 211 ) ( 195 ) 452

Provision for income taxes on discontinued operations 126 135 195

Loss from discontinued operations and dispositions ( 126 ) ( 211 ) ( 195 )

Net income $ 943,157 $ 727,887 $ 227,558

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Income from continuing operations $ 8.12 $ 6.53 $ 2.06

(Loss) gain from discontinued operations and dispositions ( 0.00 ) 0.00 0.00

Loss from discontinued operations and dispositions ( 0.00 ) ( 0.00 ) ( 0.00 )

Net income $ 8.12 $ 6.53 $ 2.06

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Income from continuing operations $ 8.08 $ 6.50 $ 2.04

(Loss) gain from discontinued operations and dispositions ( 0.00 ) 0.00 0.00

Loss from discontinued operations and dispositions ( 0.00 ) ( 0.00 ) ( 0.00 )

Net income $ 8.08 $ 6.49 $ 2.04

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Fiscal Years Ended

2021 December 29,

2022 January 3,

2021 December 29,

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Foreign currency translation adjustments, net of tax ( 130,873 ) 169,500 ( 23,978 )

Reclassification of taxes on foreign currency translation adjustments to earnings upon adoption of ASU 2018-02 — — ( 6,489 )

Unrecognized prior service (cost) credit, net of tax ( 95 ) ( 1,799 ) 807

Unrealized (losses) gains on securities, net of tax ( 16 ) 6 ( 9 )

Unrealized gains (losses) on securities, net of tax 237 ( 16 ) 6

Other comprehensive income (loss) ( 130,731 ) 167,685 ( 23,165 )

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CONSOLIDATED BALANCE SHEETS

As of the Fiscal Years Ended

2021 December 29,

2022 January 3,

(In thousands, except share

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Accounts payable 355,458 327,325

Short-term accrued restructuring and other costs 4,716 11,559

Accrued expenses and other current liabilities 854,046 943,916

Current liabilities of discontinued operations 2,173 2,112

Total current liabilities 1,213,744 1,652,189

Long-term debt 4,979,737 1,609,701

Long-term liabilities 774,531 751,468

Deferred taxes and other long-term liabilities 1,480,469 774,531

Operating lease liabilities 185,359 188,402

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Common stock—$1 par value per share, authorized 300,000,000 shares;

issued and outstanding 112,090,000 and 111,140,000 shares at January 3, 2021 and December 29, 2019, respectively 112,090 111,140

issued and outstanding 126,241,000 and 112,090,000 shares at January 2, 2022 and January 3, 2021, respectively 126,241 112,090

Capital in excess of par value 2,760,522 148,101

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Fiscal Years Ended January 3, 2021

Amount Capital in

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Balance, December 30, 2018 $ 110,597 $ 48,772 $ 2,602,067 $ ( 176,481 ) $ 2,584,955

Cumulative effect of adopting ASC 606 — — 10,209 — 10,209

Impact of adopting ASU 2016-16 — — ( 2,062 ) — ( 2,062 )

Impact of adopting ASU 2018-02 — — 6,489 ( 6,489 ) —

Impact of adopting ASC 842 — — 13,289 — 13,289

Net income — — 227,558 — 227,558

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Issuance of common stock for long-term incentive program 162 19,145 — — 19,307

Stock compensation — 5,382 — — 5,382

Stock-based compensation — 6,626 — — 6,626

Balance, December 29, 2019 $ 111,140 $ 90,357 $ 2,811,973 $ ( 199,646 ) $ 2,813,824

Impact of adopting ASC 842 (see Note 1) — — 13,289 — 13,289

Impact of adopting ASU 2016-13 — — ( 1,328 ) — ( 1,328 )

Net income — — 727,887 — 727,887

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Issuance of common stock for long-term incentive program 219 19,985 — — 20,204

Stock compensation — 6,626 — — 6,626

Balance, December 29, 2019 $ 111,140 $ 90,357 $ 2,811,973 $ ( 199,646 ) $ 2,813,824

Impact of adopting ASU 2016-13 (see Note 1) — — ( 1,328 ) — ( 1,328 )

Stock-based compensation — 3,662 — — 3,662

Balance, January 3, 2021 $ 112,090 $ 148,101 $ 3,507,262 $ ( 31,961 ) $ 3,735,492

Net income — — 943,157 — 943,157

Other comprehensive income — — — 167,685 167,685

Other comprehensive loss — — — ( 130,731 ) ( 130,731 )

Dividends — — ( 33,245 ) — ( 33,245 )

Issuance of common stock for business combination, net of issuance costs 14,067 2,624,077 — — 2,638,144

Exercise of employee stock options and related income tax benefits 358 24,762 — — 25,120

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Issuance of common stock for long-term incentive program 209 26,292 — — 26,501

Stock compensation — 3,662 — — 3,662

Stock-based compensation — 6,251 — — 6,251

Balance, January 2, 2022 $ 126,241 $ 2,760,522 $ 4,417,174 $ ( 162,692 ) $ 7,141,245

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For the Fiscal Years Ende d

2021 December 29,

2022 January 3,

2021 December 29,

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Net income $ 943,157 $ 727,887 $ 227,558

Loss (gain) from discontinued operations and dispositions, net of income taxes 211 195 ( 452 )

Loss from discontinued operations and dispositions 126 211 195

Income from continuing operations 943,283 728,098 227,753

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Amortization of deferred debt issuance costs and accretion of discounts 4,962 3,391 3,846

Loss (gain) on disposition of businesses and assets, net 886 2,469 ( 12,844 )

(Gain) loss on disposition of businesses and assets, net ( 1,970 ) 886 2,469

Amortization of acquired inventory revaluation 35,201 2,793 21,590

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Debt extinguishment costs — — 32,541

Gain on sale of investments, net — — ( 557 )

Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired:

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Net cash provided by operating activities of continuing operations 1,410,750 892,177 363,469

Net cash used in operating activities of discontinued operations — — ( 200 )

Net cash provided by operating activities 892,177 363,469 311,038

Investing activities:

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Proceeds from surrender of life insurance policies 109 282 —

Activity related to acquisitions, net of cash, cash equivalents and restricted cash acquired ( 411,495 ) ( 400,405 ) ( 97,686 )

Cash paid for acquisitions, net of cash, cash equivalents and restricted cash acquired ( 3,991,309 ) ( 411,495 ) ( 400,405 )

Net cash used in investing activities of continuing operations ( 4,112,758 ) ( 504,498 ) ( 487,573 )

Net cash provided by investing activities of discontinued operations — — —

Net cash used in investing activities ( 504,498 ) ( 487,573 ) ( 159,859 )

2021 December 29,

2022 January 3,

2021 December 29,

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Proceeds from borrowings 1,400,282 714,698 1,599,416

Payments of senior debt — ( 530,276 ) —

Proceeds from sale of senior debt — 847,195 369,340

Payments of debt financing costs — ( 9,879 ) ( 2,634 )

Proceeds from term loan 500,000 — —

Payments of senior unsecured notes ( 339,605 ) — ( 530,276 )

Proceeds from sale of senior unsecured notes 3,086,095 — 847,195

Payments of debt financing and equity issuance costs ( 30,983 ) — ( 9,879 )

Net payments on other credit facilities ( 13,670 ) ( 4,494 ) ( 14,975 )

Settlement of cash flow hedges ( 4,482 ) ( 4,554 ) ( 1,280 )

Settlement of swaps ( 14,314 ) — —

Payments for acquisition-related contingent consideration ( 2,208 ) ( 10,363 ) ( 29,942 )

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Dividends paid ( 32,373 ) ( 31,212 ) ( 31,059 )

Net cash (used in) provided by financing activities of continuing operations ( 202,872 ) 150,130 ( 179,230 )

Net cash used in financing activities of discontinued operations — — —

Net cash (used in) provided by financing activities ( 202,872 ) 150,130 ( 179,230 )

Net cash provided by (used in) financing activities of continuing operations 2,941,657 ( 202,872 ) 150,130

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 22,926 ) 25,913 ( 447 )

Net increase (decrease) in cash, cash equivalents and restricted cash 210,720 25,579 ( 36,055 )

Net increase in cash, cash equivalents and restricted cash 216,723 210,720 25,579

Cash, cash equivalents and restricted cash at beginning of year 402,614 191,894 166,315

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Income taxes $ 364,565 $ 162,454 $ 77,059

Supplemental disclosures of non-cash investing and financing activities:

Equity issued for business combination, net of issuance costs $ 2,638,144 $ — $ —

The accompanying notes are an integral part of these consolidated financial statements.

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The Company reports fiscal years under a 52/53 week format and as a result, certain fiscal years will contain 53 weeks.

Each of the fiscal years ended January 2, 2022 ("fiscal year 2021") and December 29, 2019 ("fiscal year 2019") included 52 weeks.

The fiscal year ended January 3, 2021 ("fiscal year 2020") included 53 weeks.

Each of the fiscal years ended December 29, 2019 ("fiscal year 2019") and December 30, 2018 ("fiscal year 2018") included 52 weeks.

The fiscal year ending January 1, 2023 ("fiscal year 2022") will include 52 weeks.

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The Company recognizes revenue in an amount that reflects the consideration the Company expects to receive in exchange for the promised products or services when a performance obligation is satisfied by transferring control of those products or services to customers.

See Note 2 below for additional details.

Taxes that are collected by the Company from a customer and assessed by a governmental authority, that are both imposed on and concurrent with a specific revenue-producing transaction, are excluded from revenue.

The Company reports shipping and handling revenue in revenue, to the extent it is billed to customers, and the associated costs in cost of product revenue.

Warranty Costs:

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Warranty liabilities are estimated using expected future repair costs based on historical labor and material costs incurred during the warranty period.

Shipping and Handling Costs:

The Company reports shipping and handling revenue in revenue, to the extent they are billed to customers, and the associated costs in cost of product revenue.

Warranty costs were not material in the periods presented.

Inventories :

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A valuation allowance is established for any deferred tax asset for which realization is not more likely than not.

With respect to earnings expected to be indefinitely reinvested offshore, the Company does not accrue tax for the repatriation of such foreign earnings.

When the Company determines during the period that previously undistributed earnings of certain international subsidiaries no longer meet the requirements of indefinite reinvestment, the Company recognizes the income tax expense in that period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions and other issues.

These reserves are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

related to the tax benefit.

Potential interest and penalties associated with such uncertain tax positions is recorded as a component of income tax expense.

See Note 7 below for additional details.

The Company uses an individual unit of account approach for releasing the income tax effects of unrealized gains and losses from accumulated other comprehensive income ("AOCI").

Property, Plant and Equipment:

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income and expenses are translated using weighted average exchange rates for the reporting period.

Resulting translation adjustments, as well as translation gains and losses from certain intercompany transactions considered permanent in nature, are reported in AOCI, a separate component of stockholders’ equity.

Resulting translation adjustments, as well as translation gains and losses from certain intercompany transactions considered permanent in nature, are reported in accumulated other comprehensive income ("AOCI"), a separate component of stockholders’ equity.

Gains and losses arising from transactions and translation of period-end balances denominated in currencies other than the functional currency are included in other expense, net .

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Acquisition costs are expensed as incurred and recorded in selling, general and administrative expenses.

previously held equity interests are valued at fair value upon the acquisition of a controlling interest;

in-process research and development (“IPR&D”) is recorded at fair value as an intangible asset at the acquisition date;

restructuring costs associated with a business combination are expensed subsequent to the acquisition date;

and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date affect income tax expense.

Measurement period adjustments are made in the period in which the amounts are determined and the current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date.

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This annual impairment assessment is performed by the Company on the later of January 1 or the first day of each fiscal year.

Non-amortizing intangibles are also subject to an annual impairment test.

The impairment test consists of a comparison of the fair value of the non-amortizing intangible asset with its carrying amount.

If the carrying amount of a non-amortizing intangible asset exceeds its fair value, an impairment loss in an amount equal to that excess is recognized up to the amount of the amortizing intangible asset .

In addition, the Company

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

evaluates the remaining useful life of its non-amortizing intangible asset at least annually to determine whether events or circumstances continue to support an indefinite useful life.

If events or circumstances indicate that the useful life of non-amortizing intangible asset is no longer indefinite, the asset will be tested for impairment.

The intangible asset will then be amortized prospectively over its estimated remaining useful life and accounted for in the same manner as other intangible assets that are subject to amortization.

Indefinite-lived intangibles are also subject to an annual impairment test.

The impairment test consists of a comparison of the fair value of the indefinite-lived intangible asset with its carrying amount.

If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss in an amount equal to that excess is recognized up to the amount of the amortizing intangible asset .

Amortizing intangible assets are reviewed for impairment when indicators of impairment are present.

1 unchanged sentence

If such cash flows are less than such carrying amounts, long-lived assets, including such intangibles, are written down to their respective fair values.

See Note 13 below for additional details.

Stock-Based Compensation:

1 unchanged sentence

The fair value is recognized as expense in the consolidated financial statements over the requisite service period.

The determination of fair value and the timing of expense using option pricing models such as the Black-Scholes model require the input of highly subjective assumptions, including the expected term and the expected price volatility of the underlying stock.

The determination of fair value and the timing of expense using option

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

pricing models such as the Black-Scholes model require the input of subjective assumptions, including the expected term and the expected price volatility of the underlying stock.

The Company estimates the expected term assumption based on historical experience.

In determining the Company’s expected stock price volatility assumption, the Company reviews both the historical and implied volatility of the Company’s common stock, with implied volatility based on the implied volatility of publicly traded options on the Company’s common stock.

The Company has one stock-based compensation plan from which it makes grants, which is described more fully in Note 19 below.

In determining the Company’s expected stock price volatility assumption, the Company reviews both the historical and implied volatility of the Company’s common stock.

Marketable Securities and Investments:

Investments in debt securities that are classified as available for sale are recorded at their fair values with unrealized gains and losses included in accumulated other comprehensive (loss) income until realized.

Investments in debt securities that are classified as available for sale are recorded at fair value with unrealized gains and losses included in accumulated other comprehensive (loss) income until realized.

Investments in equity securities are recorded at their fair values with unrealized holding gains and losses included in earnings.

Investments in equity securities without a readily determinable fair value are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, with changes included in earnings.

Upon the Company's adoption of ASU 2019-04, beginning on December 30, 2019, equity investments without readily determinable fair value are carried at cost minus impairment, if any.

Investments in equity securities without a readily determinable fair value are carried at cost minus impairment, if any.

When an observable price change in orderly transactions for the identical or a similar investment of the same issuer has occurred, the Company elects to carry those equity investments at fair value as of the date that the observable transaction occurred.

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Research and development costs are expensed as incurred.

The fair value of acquired IPR&D costs are recorded at fair value as an intangible asset at the acquisition date and amortized once the product is ready for sale or expensed if abandoned.

In-process research and development ("IPR&D") costs acquired in a business combination are recorded at fair value as an intangible asset at the acquisition date and amortized once the product is ready for sale or expensed if abandoned.

Restructuring and Other Costs:

In recent fiscal years, the Company has undertaken a series of restructuring actions related to the impact of acquisitions and divestitures, the alignment of its operations with its growth strategy, the integration of its business units and its productivity initiatives.

In connection with these initiatives, the Company has recorded restructuring and other charges, as more fully described in Note 5 below, which include employee severance, other exit costs as well as costs of terminating certain lease agreements or contracts and other costs associated with relocating facilities.

Generally, costs associated with an exit or disposal activity are recognized when the liability is incurred.

1 unchanged sentence

Costs related to employee separation arrangements requiring future service beyond a specified minimum retention period are recognized over the service period.

Prior to adoption of Accounting Standards Codification ("ASC") 842, Leases , costs related to lease terminations were recorded at the fair value of the liability based on the remaining lease rental payments, reduced by estimated sublease rentals that could be reasonably obtained for the property, at the date the Company ceased use.

Comprehensive Income:

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Accounting for gains or losses resulting from changes in the values of those derivatives depends on the use of the derivative instrument and whether it qualifies for hedge accounting.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For a cash flow hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income and subsequently amortized into net earnings when the hedged exposure affects net earnings.

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Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in the Company's consolidated balance sheet.

ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease.

ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Operating lease ROU assets and liabilities were recognized based on the present value of the remaining lease payments over the lease term.

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The Company has made an accounting policy election not to recognize ROU assets and lease liabilities that arise from short-term leases for facilities and equipment.

Instead, the Company recognizes the lease payments in the consolidated statement of operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

Instead, the Company recognizes the lease payments in the consolidated statements of operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

As a lessor, the Company applies the practical expedient to not separate non-lease components from the associated lease component and instead accounts for those components as a single component if the non-lease components otherwise would be accounted for under ASC 606, Revenue From Contracts With Customers (“ASC 606”), and both of the following criteria are met:

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Unless otherwise discussed, such pronouncements did not have or will not have a significant impact on the Company’s consolidated financial position, results of operations and cash flows or do not apply to the Company’s operations.

In March 2020, the FASB issued Accounting Standards Update No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04").

This update provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

reference rate expected to be discontinued because of reference rate reform.

The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the FASB's ASC are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance:

(1) modifications of contracts within the scope of Topic 310, Receivables , and Topic 470, Debt , should be accounted for by prospectively adjusting the effective interest rate;

and (2) modifications of contracts within the scope of Topic 840, Leases , and Topic 842, Leases , should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate or remeasurements of lease payments.

For other Topics or Industry Subtopics in the ASC, the amendments also include a general principle that permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant Topic or Industry Subtopic.

ASU 2020-04 is effective for any contract modifications or hedging relationships as of March 12, 2020 through December 31, 2022.

In accordance with ASU 2020-04, the Company adopted the guidance as of March 12, 2020.

The adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In March 2020, the FASB issued Accounting Standards Update No.

2020-03, Codification Improvements to Financial Instruments ("ASU 2020-03").

This guidance clarifies various ASC Topics related to financial instruments, including the following, among others:

(1) Fair Value Option Disclosures:

all entities are required to provide the fair value option disclosures in paragraphs 825-10-50-24 through 50-32 of the ASC;

(2) Cross-Reference to Line-of-Credit or Revolving-Debt Arrangements Guidance in Subtopic 470-50, Modifications and Extinguishments :

the amendments improve the understandability of the guidance;

(3) Interaction of Topic 842 and Topic 326:

the contractual term of a net investment in a lease determined in accordance with Topic 842, Leases should be the contractual term used to measure expected credit losses under Topic 326, Financial Instruments - Credit Losses ;

and (4) Interaction of Topic 326 and Subtopic 860-20:

the amendments to Subtopic 860- 20 clarify that when an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326.

For Fair Value Option Disclosures and Cross-Reference to Line-of-Credit or Revolving-Debt Arrangements Guidance, the provisions are effective upon issuance of this guidance.

For Interaction of Topic 842 and Topic 326 and Interaction of Topic 326 and 860-20, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2016-13, as described below.

In accordance with ASU 2020-03, the Company adopted the guidance as of April 5, 2020.

The adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In January 2020, the FASB issued Accounting Standards Update No.

2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 ("ASU 2020-01").

This guidance addresses the accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities.

The amendments clarify that:

(a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method;

and (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825.

The provisions of this guidance are to be applied prospectively upon their effective date.

ASU 2020-01 is effective for annual reporting periods beginning after December 15, 2020, and interim periods within those years.

The standard was effective for the Company beginning on January 4, 2021, the first day of fiscal year 2021.

The adoption is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In December 2019, the FASB issued Accounting Standards Update No.

9 unchanged sentences

(2) make a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax and to apply this provision retrospectively to all periods presented;

and (3) recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and apply this provision either retrospectively for all periods presented or on a modified retrospective basis through a cumulative-effect

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

adjustment to retained earnings as of the beginning of the period of adoption.

The provisions of this guidance (except as specifically mentioned above) are to be applied prospectively upon their effective date.

ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020, and interim p eriods within those years.

The standard was effective for the Company beginning on January 4, 2021, the first day of fiscal year 2021.

The adoption is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In April 2019, the FASB issued Accounting Standards Update No.

2019-04, Codification Impro vem ents to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments ("ASU 2019-04").

ASU 2019-04 clarifies certain aspects of previously issued accounting standards related to:

(1) ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Statements ("ASU 2016-13"), in areas of accrued interest receivable, transfers of loans and debt securities between classifications, recoveries and prepayments, (2) ASU 2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"), in areas of partial-term fair value hedges, fair value hedge basis adjustments, certain disclosures and transition requirements and (3) ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10):

Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"), in areas of remeasurement of equity securities under ASC 820, Fair Value Measurement , when using the measurement alternative and remeasurement of equity securities at historical exchange rates.

The amendments related to ASU 2016-13 are required to be adopted in conjunction with that accounting standards update, as further described below.

Since the Company has already adopted ASU 2017-12 and ASU 2016-01, the related amendments in ASU 2019-04 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted in any interim period.

The amendments to ASU 2017-12 can either be adopted retrospectively as of the date of adoption of ASU 2017-12 or they can be adopted prospectively.

The amendments to ASU 2016-01 are required to be applied using a modified-retrospective adoption approach with a cumulative-effect adjustment to retained earnings as of the date of adoption of ASU 2016-01, except for those related to equity securities without readily determinable fair values that are measured using the measurement alternative, which are required to be applied prospectively.

The standard was effective for the Company beginning on December 30, 2019, the first day of the Company's fiscal year 2020.

The Company applied the provisions of this guidance prospectively.

The adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In August 2018, the FASB issued Accounting Standards Update No.

2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract ("ASU 2018-15").

ASU 2018-15 aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software (and hosting arrangements that include an internal-use software license).

The provisions of this guidance are to be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.

The standard was effective for the Company beginning on December 30, 2019, the first day of the Company's fiscal year 2020.

The Company applied the provisions of this guidance prospectively.

The adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In August 2018, the FASB issued Accounting Standards Update No.

2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20):

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14").

ASU 2018-14 adds, removes, and clarifies disclosure requirements related to defined benefit pension and other postretirement plans.

ASU 2018-14 adds requirements for an entity to disclose the weighted-average interest crediting rates used in the entity’s cash balance pension plans and other similar plans;

and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period .

Further, ASU 2018-14 removes guidance that currently requires the following disclosures:

the amounts in accumulated other comprehensive income expected to be recognized as part of net periodic benefit cost over the next year;

the amount and timing of plan assets expected to be returned to the employer;

information about (1) benefits covered by related-party insurance and annuity contracts and (2) significant transactions between the plan and related parties;

and the effects of a one-percentage-point change on the assumed health care costs and the effect of this change in rates on service cost, interest cost, and the benefit obligation for postretirement health care benefits.

ASU 2018-14 also clarifies the guidance in Compensation-Retirement Benefits (Topic 715-20-50-3) on defined benefit plans to require disclosure of (1) the projected benefit obligation ("PBO") and fair value of plan assets for pension plans with PBOs in excess of plan assets (the same disclosure with reference to the accumulated postretirement benefit obligation rather than the PBO is required for other postretirement benefit plans) and (2) the accumulated benefit obligation ("ABO") and fair value of plan assets for pension plans with ABOs in excess of plan assets.

The provisions of this guidance are to be applied retrospectively to all periods presented upon their effective date.

ASU 2018-14 is effective for annual reporting periods beginning after December 15, 2020, and interim periods within those years with early adoption permitted.

The standard was effective for the Company beginning on January 4, 2021, the first day of fiscal year 2021.

The adoption is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In August 2018, the FASB issued Accounting Standards Update No.

2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13").

ASU 2018-13 adds, removes, and modifies certain disclosures related to fair value measurements.

ASU 2018-13 adds requirements for an entity to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period;

and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

Further, ASU 2018-13 removes the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;

the policy for timing of transfers between levels;

and the valuation processes for Level 3 fair value measurements.

ASU 2018-13 also modifies existing disclosure requirements related to measurement uncertainty.

The amendments regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty are to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption.

All other amendments are to be applied retrospectively to all periods presented upon their effective date.

The standard was effective for the Company beginning on December 30, 2019, the first day of the Company's fiscal year 2020.

The Company adopted the guidance beginning on January 4, 2021.

The adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In June 2016, the FASB issued Accounting Standards Update No.

2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments .

ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The standard requires entities to use the expected loss impairment model and will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance sheet credit exposures.

Entities are required to estimate the lifetime “expected credit loss” for each applicable financial asset and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset.

The standard also amends the impairment model for available-for-sale (“AFS”) debt securities and requires entities to determine whether all or a portion of the unrealized loss on an AFS debt security is a credit loss.

An entity will recognize an allowance for credit losses on an AFS debt security as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment.

The provisions of this guidance are to be applied using a modified-retrospective approach.

A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date.

Subsequent to the issuance of ASU 2016-13, in November 2018, the FASB issued Accounting Standards Update No.

2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses ("ASU 2018-19"), in April 2019, the FASB issued ASU 2019-04, and in May 2019, the FASB issued Accounting Standards Update No.

2019-05, Financial Instruments - Credit Losses (Topic 326), Targeted Transition Relief ("ASU 2019-05") .

The amendments in ASU 2018-19 clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost .

Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases .

The amendments in ASU 2019-04 clarify the measurement of allowance for credit losses on accrued interest receivable;

the inclusion of expected recoveries in the allowance for credit losses;

the permission of a prepayment-adjusted effective interest rate when determining the allowance for credit losses;

and the steps entities should take when recording the transfer of loans or debt securities between measurement classifications.

The amendments in ASU 2019-05 provide an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments-Overall , on an instrument-by-instrument basis, for eligible financial assets measured at amortized cost basis upon adoption of ASU 2016-13, but this fair value option election does not apply to held-to-maturity debt securities.

The effective date and transition requirements for the amendments in ASU 2018-19, ASU 2019-04 and ASU 2019-05 are the same as the effective date and transition requirements of ASU 2016-13, which is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those years.

The standards were effective for the Company beginning on December 30, 2019, the first day of the Company's fiscal year 2020.

The Company adopted these standards using the modified-retrospective approach.

The adoption of the standard resulted in a decrease in retained earnings at December 30, 2019 of approximately $ 1.3 million from the cumulative effect of initially applying the standards as of that date.

In addition, the adoption of the standard resulted in an increase in reserve for doubtful accounts of $ 1.7 million and an increase in deferred tax assets of $ 0.4 million from the tax impact of the cumulative adjustments.

The adoption did not have an impact on cash from or used in operating, investing or financing activities in the Company's consolidated statement of cash flows at December 30, 2019.

Nature of goods and services

The following is a description of principal activities, by reportable segments, from which the Company generates its revenue.

For more detailed information about the reportable segments, see Note 24.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Discovery & Analytical Solutions

The Discovery & Analytical Solutions segment of the Company principally generates revenue from sales of (a) instruments, consumables and services in the applied markets and (b) instruments, reagents, informatics, detection and imaging technologies, extended warranties, training and services in the life sciences market.

Products and services may be sold separately or in bundled packages.

The typical length of a contract for service is 12 to 36 months.

For bundled packages, the Company accounts for individual products and services separately if they are distinct - i.e.

For arrangements with multiple performance obligations, the Company accounts for individual products and services separately if they are distinct - i.e.

if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer.

The consideration (including any discounts) is allocated between separate products and services in a bundle based on their stand-alone selling prices.

The stand-alone selling prices are determined based on the prices at which the Company separately sells the products, extended warranties, and services.

The stand-alone selling prices are determined based on the prices at which the Company separately sells the products,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

extended warranties, and services.

For items that are not sold separately, the Company estimates stand-alone selling prices by reference to the amount charged for similar items on a stand-alone basis.

7 unchanged sentences

In limited circumstances where the Company provides the customer with a significant benefit of financing, the Company uses the practical expedient and only adjusts the transaction price for the effects of the time value of money and only on contracts where the duration of financing is more than one year.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Products and services Nature, timing of satisfaction of performance obligations, and significant payment terms

Instruments For instruments that include installation, and if the installation meets the criteria to be considered a separate performance obligation, product revenue is generally recognized upon delivery or when title has transferred to the customer, which is generally the point in time where control of the products has been transferred to customers, and installation revenue is recognized when the installation is complete.

Certain of the Company's products require specialized installation and configuration at the customer's site.

Revenue for these products is deferred until installation is complete and customer acceptance has been received.

Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 60 days.

Consumables and reagents The Company recognizes revenue from the sale of consumables and reagents upon delivery or when title has transferred to the customer, which is generally the point in time where control of the products has been transferred to customers.

Payment terms and conditions vary, although terms generally include a requirement of payment within 30 days.

Software licenses and subscriptions Customers may purchase perpetual or term licenses, or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software.

The Company sells its software subscriptions or software licenses with maintenance services and, in some cases, with consulting services.

The Company recognizes revenue for the software upfront at the point in time when the software is made available to the customer.

For maintenance and consulting services, revenue is recognized ratably over the period in which the services are provided.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days.

Subscription contracts are typically billed annually on the anniversary date of the contract.

Software subscriptions and maintenance service contracts are non-cancelable.

Cloud services Cloud services, which allow customers to use hosted software over the contract period without taking possession of the software, are provided on either a subscription or consumption basis.

Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract period.

Revenue related to cloud services provided on a consumption basis, such as the amount of storage used in a period, is recognized based on the customer utilization of such resources.

Payment terms are generally net 30 days from signing of contract and contracts are non-cancelable.

Extended warranty The Company recognizes revenue for extended warranties on a straight-line basis over the extended warranty period in service revenue.

In the majority of countries in which the Company operates, the customary warranty period is one year and the extended warranty covers periods beyond year one.

Customers typically pay for extended warranties on an annual basis over the term of the warranty.

In general, customers can cancel the extended warranty at any time with 30 days notice without significant penalty.

Laboratory services and training The Company's service offerings include service contracts, field service, including related time and materials, and training.

The Company recognizes revenue as the services are performed.

Revenue for the service contracts is recognized over the contract period or at a point in time when the service is billable based on time and materials.

The Company recognizes revenue as training is provided in service revenue.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days.

In general, customers can cancel the service contracts at any time with 30 to 90 days notice without significant penalty.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Nature of goods and services

The Discovery & Analytical Solutions segment of the Company principally generates revenue from sales of (a) instruments, consumables and services in the applied markets and (b) instruments, reagents, informatics, software, subscriptions, detection and imaging technologies, extended warranties, training and services in the life sciences market.

The Diagnostics segment of the Company principally generates revenue from sales of instruments, solutions, consumables, reagents, extended warranties and services in the diagnostics market.

Products and services may be sold separately or in bundled packages.

For bundled packages, the Company accounts for individual products and services separately if they are distinct - i.e.

The consideration (including any discounts) is allocated between separate products and services in a bundle based on their stand-alone selling prices.

The stand-alone selling prices are determined based on the prices at which the Company separately sells the products, extended warranties, and services.

For items that are not sold separately, the Company estimates stand-alone selling prices by reference to the amount charged for similar items on a stand-alone basis.

The Company sells products and services predominantly through its direct sales force.

As a result, the use of distributors is generally limited to geographic regions where the Company has no direct sales force.

The Company does not offer product return or exchange rights (other than those relating to defective goods under warranty) or price protection allowances to its customers, including distributors.

Payment terms granted to distributors are the same as those granted to end-customers and payments are not dependent upon the distributor's receipt of payment from their end-user customers.

In instances where the timing of revenue recognition differs from the timing of invoicing, the Company determined that the contracts generally do not include a significant financing component.

The primary purpose of its invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services, rather than to receive financing from the customers or to provide customers with financing.

Examples include invoicing at the beginning of a storage period with revenue recognized ratably over the contract period.

Products and services Nature, timing of satisfaction of performance obligations, and significant payment terms

The typical length of a contract for service is 12 to 36 months.

The revenue generated from the sale of instruments, consumables, reagents, and certain software is recognized at a point in time.

The Company recognizes revenue in these arrangements at the point in time when control of the products has been transferred to customers, which is typically at delivery.

Certain of the Company's products require specialized installation and configuration at the customer's site.

Revenue for these products is deferred until installation is complete and customer acceptance has been received.

Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 60 days.

Payment terms and conditions vary, although terms generally include a requirement of payment within 30 days.

Solutions When the Company sells the instrument and reagents that work only on those instruments to a customer or distributor, the Company considers the instrument and reagents as separate performance obligations.

The Company recognizes revenue when an instrument is sold to the customer upon delivery or when title has transferred to the customer, which is generally the point in time where control of the products has been transferred to customers.

Revenue from the sale of reagents is also recognized at the time of delivery or when title has transferred to the customer.

Payment terms for instrument and reagent sales are usually net 30 days from invoice date.

When the Company places the instrument at the customer's site and sells the reagents to a customer, the instrument and reagents are accounted for together as one performance obligation.

2 unchanged sentences

The Company recognizes revenue upon delivery of reagents, which is the point in time where the Company has performed its obligation to provide a screening solution to the customer.

Payment terms are usually net 30 days from invoice date.

Payment terms for certain contracts are based on equal installments over the duration of the contract.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Extended warranty The Company recognizes revenue for extended warranties on a straight-line basis over the extended warranty period in service revenue.

In the majority of countries in which the Company operates, the customary warranty period is one year and the extended warranty covers periods beyond year one.

Customers typically pay for extended warranties on an annual basis over the term of the warranty.

In general, customers can cancel the extended warranty at any time with 30 days notice without significant penalty.

Services The Company's service offerings include genetic testing, COVID-19 testing, cord blood processing and storage, and training.

The Company recognizes revenue for the genetic testing, cord blood processing and training as the services are performed in service revenue.

Revenue for the storage contracts are recognized over the contract period.

Storage is typically for a period of 1, 20, or 25 years or lifetime.

Lifetime storage is recognized over a certain period that is based on the life expectancy estimate from Social Security data.

For genetic testing and cord blood processing, customers pay the fee in full at the point of sale.

The fee is non-refundable unless the cord blood is non-viable for storage.

For storage, customers are required to pay the storage fees in full upfront.

Storage fees are refundable to the customer on a pro-rated basis if the contract is canceled.

In August 2020, the Company entered into a contract with the State of California to perform COVID-19 testing for a term of 14 months with automatic renewal for two successive terms of one year unless the State of California provides notice of termination within 90 days prior to expiration of the current term.

The Company has determined that providing monthly testing capacity and individual tests are two separate performance obligations.

The pricing in the contract is variable based on the testing capacity and the number of testing results provided in a month.

The customer is entitled to a credit on previous tests such that, at the conclusion of the contract, the customer will pay, on average, the price per test result based on the highest volume.

The Company allocates the contract consideration to each of these performance obligations based on estimated stand-alone selling price.

As the stand-alone selling price is not directly observable, the Company estimates stand-alone selling prices based on the expected cost plus margin approach.

The Company recognizes revenue for the monthly testing capacity on a per day basis once the Company has confirmed that it ha s met the requested capacity level.

The Company recognizes revenue for the individual tests as the tests are performed.

The amount recognized per test is based on the Company's forecast of tests to be performed per month over the contract period.

The contract includes upfront prepayments based on completion of milestones that are non-refundable except due to breach of contract.

These prepayments are recorded as contract liabilities and will be recognized as revenue on a per test basis.

Monthly testing capacity is billed one month in advance and individual tests are billed monthly for the duration of the contract.

Payment terms are net 45 days from invoice date.

Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 60 days.

The revenue generated from the sale of licenses for software as a service, cloud services, subscriptions, extended warranties, and laboratory services and training is recognized over time.

Term licenses, subscriptions and cloud services, are generally recognized ratably over the contract period or based upon consumption.

The Company sells its software subscriptions and cloud services with maintenance services and, in some cases, with consulting services.

The Company recognizes revenue for the software commencing when the service is made available to the customer.

For maintenance and consulting services, revenue is recognized ratably over the period in which the services are provided.

Revenue for laboratory services is recognized over the contract period or at a point in time when the service is billable, based on time and materials.

Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 60 days.

Disaggregation of revenue

In the following tables, revenue is disaggregated by primary geographical market, end-markets and timing of revenue recognition.

The tables also include a reconciliation of the disaggregated revenue with the reportable segments revenue.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

1 unchanged sentence

For the fiscal year ended

January 3, 2021 December 29, 2019

Discovery & Analytical Solutions Diagnostics Total Discovery & Analytical Solutions Diagnostics Total

January 2, 2022 January 3, 2021 December 29, 2019

Discovery & Analytical Solutions Diagnostics Total Discovery & Analytical Solutions Diagnostics Total Discovery & Analytical Solutions Diagnostics Total

(In thousands)

13 unchanged sentences

$ 2,135,230 $ 2,931,939 $ 5,067,169 $ 1,715,803 $ 2,066,942 $ 3,782,745 $ 1,746,161 $ 1,137,512 $ 2,883,673

Major Customer Concentration

Revenues from one customer in the Company's Diagnostics segment represent approximately $ 638.6 million, $ 97.8 million and $ 30.8 million of the Company's total revenue during the fiscal years 2021, 2020 and 2019, respectively.

Contract Balances

3 unchanged sentences

Contract assets are generally classified as current assets and are included in "Accounts receivable, net" in the consolidated balance sheets.

The balances of contract assets as of January 3, 2021 and December 29, 2019 were $ 59.5 million and $ 37.0 million, respectively.

The amount of unbilled receivables recognized at the beginning of fiscal year 2020 that were transferred to trade receivables during the fiscal year ended January 3, 2021 was $ 33.2 million.

The increase in unbilled receivables during the fiscal year ended January 3, 2021 as a result of recognition of revenue before billing to customers, excluding amounts transferred to trade receivables during the period, amounted to $ 55.7 million.

The amount of unbilled receivables recognized at the beginning of fiscal year 2019 that were transferred to trade receivables during the fiscal year ended December 29, 2019 was $ 17.3 million.

The increase in unbilled receivables during the fiscal year ended December 29, 2019 as a result of recognition of revenue before billing to customers, excluding amounts transferred to trade receivables during the period, amounted to $ 22.4 million.

(In thousands)

Balance at December 29, 2019 $ 37,036

Transferred to trade receivables from unbilled receivables recognized at the beginning of the period ( 33,236 )

Increases as a result of recognition of revenue before billing to customers, excluding amounts transferred to trade receivables during the period 55,674

Balance at January 3, 2021 59,474

Transferred to trade receivables from unbilled receivables recognized at the beginning of the period ( 51,969 )

Increases as a result of recognition of revenue before billing to customers, excluding amounts transferred to trade receivables during the period 64,612

Balance at January 2, 2022 $ 72,117

Contract liabilities:

1 unchanged sentence

Contract liabilities are classified as either current in "Accounts payable" or "Accrued expenses and other current liabilities" or as long-term in "Long-term liabilities" in the consolidated balance sheets based on the timing of when the Company expects to recognize revenue.

The balances of contract liabilities as of January 3, 2021 and December 29, 2019 were $ 238.1 million and $ 29.9 million, respectively.

The increase in contract liabilities during the fiscal year ended January 3, 2021 due to cash received, excluding amounts recognized as revenue during the period, was $ 235.5 million.

The amount of revenue recognized during the fiscal year ended January 3, 2021 that was included in the contract liability balance at the beginning of the period was $ 27.3 million.

The increase in contract liabilities during the fiscal year ended December 29, 2019 due to cash received, excluding amounts recognized as revenue during the period, was $ 20.4 million.

The amount of revenue recognized during the fiscal year ended December 29, 2019 that was included in the contract liability balance at the beginning of the period was $ 21.2 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands)

Balance at December 29, 2019 $ 29,944

Revenue recognized that was included in the contract liability balance at the beginning of the period ( 27,328 )

Increases due to cash received, excluding amounts recognized as revenue during the period 235,499

Balance at January 3, 2021 238,115

Revenue recognized that was included in the contract liability balance at the beginning of the period ( 99,997 )

Increases due to cash received, excluding amounts recognized as revenue during the period 62,955

Balance at January 2, 2022 $ 201,073

Contract costs:

1 unchanged sentence

The Company determined that certain sales incentive programs meet the requirements to be capitalized.

Total capitalized costs to obtain a contract were immaterial during the period and are included in other current and long-term assets on the consolidated balance sheet.

The Company applies a practical expedient to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.

These costs include the Company's internal sales force compensation program, as the Company determined that annual compensation is commensurate with annual sales activities.

Total capitalized costs to obtain a contract were immaterial during the period and are included in other current and long-term assets on the consolidated balance sheets.

The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.

Transaction price allocated to the remaining performance obligations

4 unchanged sentences

Acquisitions in fiscal year 2021

During the fiscal year 2020, the Company completed the acquisition of four businesses for aggregate consideration of $ 438.7 million.

The acquired businesses include Horizon Discovery Group plc (“Horizon”), a company based in Cambridge, UK with approximately 400 employees, which was acquired on December 23, 2020 for a total consideration of $ 399.4 million (£ 296.0 million), and three other businesses which were acquired for a total consideration of $ 39.3 million.

The excess of the purchase prices over the fair values of the acquired businesses' net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforces acquired, and has been allocated to goodwill, which is not tax deductible.

The Company has reported the operations for these acquisitions within the results of the Company's Diagnostics and Discovery & Analytical Solutions segments, as applicable, from the acquisition dates.

Identifiable definite-lived intangible assets, such as core technology, trade names, customer relationships and IPR&D, acquired as part of these acquisitions had a weighted average amortization period of 11.0 years.

Acquisition of BioLegend, Inc.

In fiscal year 2021, t he Company completed the acquisition of BioLegend, Inc.

("BioLegend") and paid an aggregate consideration of $ 5.7 billion, net of cash acquired of $ 292.4 million, reflecting working capital and other adjustments (the "Aggregate Consideration").

The Aggregate Consideration was paid in a combination of $ 3.3 billion in cash and shares of the Company's common stock having a fair value of approximately $ 2.6 billion based on the $ 187.56 per share closing price of the Company's common stock on the New York Stock Exchange on September 17, 2021 (the "Stock Consideration").

The Stock Consideration consisted of 14,066,799 shares of the Company's common stock.

BioLegend is recognized as a leading, global provider of life science antibodies and reagents headquartered in San Diego, California, with approximately 700 employees.

The operations for this acquisition is reported within the results of the Company's Discovery & Analytical Solutions segment from the acquisition date.

The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforce acquired, and is not tax deductible.

Identifiable definite-lived intangible assets, such as core technology, trade names, customer relationships and clone library, acquired as part of this acquisition had a weighted-average amortization period of 16.3 years.

BioLegend's revenue and net loss for the period from the acquisition date to January 2, 2022 were $ 91.7 million and $ 25.8 million, respectively.

The net loss includes $ 47.0 million of amortization of acquired intangible assets.

The following unaudited pro forma information presents the combined financial results for the Company and BioLegend as if the acquisition of BioLegend had been completed at the beginning of fiscal year 2020:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The total purchase price for the acquisitions in fiscal year 2020 has been allocated to the estimated fair values of assets acquired and liabilities assumed as follows:

Horizon Other

2022 January 3,

(In thousands, except per share data)

Pro Forma Statements of Operations Information:

Revenue $ 5,295,483 $ 4,024,631

Income from continuing operations 1,001,109 551,572

Basic earnings per share:

Income from continuing operations $ 7.69 $ 4.39

Diluted earnings per share:

Income from continuing operations $ 7.66 $ 4.37

The unaudited pro forma information for fiscal years 2021 and 2020 have been calculated after applying the Company's accounting policies and the impact of acquisition date fair value adjustments.

The fiscal year 2021 unaudited pro forma income from continuing operations was adjusted to exclude approximately $ 43.2 million of acquisition-related transaction costs and $ 23.3 million of costs of bridge financing and debt pre-issuance hedges that were recognized in expense during the year.

The fiscal year 2020 pro forma income from continuing operations was adjusted to include these acquisition-related transaction costs and the nonrecurring expenses related to the bridge financing and debt pre-issuance hedging costs and fair value adjustments.

These pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments, such as fair value adjustment to inventory, increased interest expense on debt obtained to finance the transaction, and increased amortization for the fair value of acquired intangible assets.

The pro forma information does not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition.

The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the combination occurred at the beginning of each period presented, or of future results of the consolidated entities.

The actual results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

Other acquisitions in 2021.

During fiscal year 2021, the Company also completed the acquisition of seven other businesses for aggregate consideration of $ 1.2 billion.

The acquired businesses include Oxford Immunotec Global PLC, a company based in Abingdon, UK with approximately 275 employees, for total consideration of $ 590.9 million and Nexcelom Bioscience Holdings, LLC, a company based in Lawrence, Massachusetts with approximately 130 employees, for total consideration of $ 267.3 million, and five other businesses, which were acquired for total consideration of $ 331.0 million.

The excess of the purchase prices over the fair values of the acquired businesses' net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as employee workforces acquired, and has been allocated to goodwill, which is not tax deductible.

Identifiable definite-lived intangible assets, such as core technology, trade names, and customer relationships, acquired as part of these acquisitions had a weighted-average amortization period of 12.4 years .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The total purchase price for the acquisitions in fiscal year 2021 has been allocated to the estimated fair value of assets acquired and liabilities assumed as follows:

BioLegend Other

(In thousands)

1 unchanged sentence

Cash payments $ 3,336,115 $ 1,128,584

Common stock issued 2,638,369 —

Other liability 6,857 2,910

Contingent consideration — 57,431

Working capital and other adjustments — 183

6 unchanged sentences

Identifiable intangible assets:

Core technology 60,000 5,730

Trade names 4,900 680

Customer relationships 96,600 10,923

IPR&D 10,800 —

Core technology and clone library 782,400 299,699

Trade names and patents 38,000 39,620

Licenses 8,979 —

Customer relationships and backlog 1,714,800 141,170

Goodwill 3,510,710 547,388

4 unchanged sentences

Total $ 5,688,964 $ 994,098

The Company does not consider the other acquisitions completed during fiscal year 2021 to be material to its consolidated results of operations;

therefore, the Company is only presenting pro forma financial information of operations for the BioLegend acquisition.

The aggregate revenue and results of operations for the other acquisitions completed during fiscal year 2021 for the period from their respective acquisition dates to January 2, 2022 were not material.

Acquisitions in fiscal year 2020

During the fiscal year 2019, the Company completed the acquisition of five businesses for aggregate consideration of $ 433.1 million.

The acquired businesses include Cisbio Bioassays SAS (“Cisbio”), a company based in Codolet, France, which was acquired for a total consideration of $ 219.9 million, Shandong Meizheng Bio-Tech Co., Ltd.

("Meizheng Group"), a company headquartered in Beijing, China, for a total consideration of $ 166.5 million, and three other businesses which were acquired for a total consideration of $ 46.6 million.

The Company has a potential obligation to pay the former shareholders of certain of these acquired businesses additional contingent consideration of up to $ 31.8 million.

During fiscal year 2020, the Company completed the acquisition of four businesses for aggregate consideration of $ 438.9 million.

The acquired businesses were Horizon Discovery Group plc (“Horizon”), a company based in Cambridge, UK with approximately 400 employees, which was acquired on December 23, 2020 for a total consideration of $ 399.8 million (£ 296.0 million), and three other businesses which were acquired for a total consideration of $ 39.1 million.

Identifiable definite-lived intangible assets, such as core technology, trade names and customer relationships, acquired as part of these acquisitions had a weighted average amortization period of 11.0 years.

Identifiable definite-lived intangible assets, such as core technology, trade names, customer relationships and in-process research and development, acquired as part of these acquisitions had a weighted average amortization period of 11.0 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The total purchase price for the acquisitions in fiscal year 2019 has been allocated to the estimated fair values of assets acquired and liabilities assumed as follows:

Cisbio Meizheng Group Other

The total purchase price for the acquisitions in fiscal year 2020 has been allocated to the estimated fair value of assets acquired and liabilities assumed as follows:

(In thousands)

2 unchanged sentences

Other liability 1,660

Contingent consideration — 12,100 634

Working capital and other adjustments ( 384 )

8 unchanged sentences

Trade names 5,580

Customer relationships 39,000 55,800 6,700

Customer relationships and backlog 108,523

Goodwill 221,751

Deferred taxes ( 25,674 )

Debt assumed — ( 706 ) ( 2,698 )

Deferred revenue ( 2,031 )

Liabilities assumed ( 46,430 )

Total $ 412,097

The Company does not consider the acquisitions completed during fiscal year 2020 to be material to its consolidated results of operations.

The aggregate revenue and results of operations for the acquisitions completed during fiscal year 2020 for the period from their respective acquisition dates to January 3, 2021 were not material.

Acquisitions in fiscal year 2019

During fiscal year 2018, the Company completed the acquisition of four businesses for aggregate consideration of $ 105.8 million.

During fiscal year 2019, the Company completed the acquisition of five businesses for aggregate consideration of $ 433.1 million.

The acquired businesses include Cisbio Bioassays SAS, a company based in Codolet, France, which was acquired for total consideration of $ 219.9 million, Shandong Meizheng Bio-Tech Co., Ltd.

("Meizheng Group"), a company headquartered in Beijing, China, for total consideration of $ 166.5 million, and three other businesses which were acquired for total consideration of $ 46.6 million.

The Company has a potential obligation to pay the former shareholders of certain of these acquired businesses additional contingent consideration of up to $ 31.8 million.

The Company has reported the operations for these acquisitions within the results of the Company's Diagnostics and Discovery & Analytical Solutions segments from the acquisition dates.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The total purchase price for the acquisitions in fiscal year 2018 has been allocated to the estimated fair values of assets acquired and liabilities assumed as follows:

The total purchase price for the acquisitions in fiscal year 2019 has been allocated to the estimated fair value of assets acquired and liabilities assumed as follows:

(In thousands)

13 unchanged sentences

Trade names 11,210

GC Libraries 2,065

Customer relationships 101,500

4 unchanged sentences

Total $ 417,072

The Company does not consider the acquisitions completed during fiscal years 2020, 2019 and 2018 to be material to its consolidated results of operations;

therefore, the Company is not presenting pro forma financial information of operations for these acquisitions.

The aggregate revenue and the results of operations for the acquisitions completed during fiscal year 2020 for the period from their acquisition dates to January 3, 2021 were no t material.

The aggregate revenue and the results of operations for the acquisitions completed during fiscal year 2019 for the period from their acquisition dates to December 29, 2019 were no t material.

The aggregate revenue for the acquisitions completed during fiscal year 2018 for the period from their acquisition dates to December 30, 2018 were no t material.

The Company has also determined that the presentation of the results of operations for each of those acquisitions, from the date of acquisition, is impracticable due to the integration of the operations upon acquisition.

As of January 3, 2021, the allocations of purchase prices for acquisitions completed in fiscal years 2019 and 2018 were final.

The Company does not consider the acquisitions completed during fiscal year 2019 to be material to its consolidated results of operations.

The aggregate revenue and results of operations for the acquisitions completed during fiscal year 2019 for the period from their respective acquisition dates to December 29, 2019 were not material.

As of January 2, 2022, the allocations of purchase prices for acquisitions completed in fiscal years 2020 and 2019 were considered final.

The preliminary allocations of the purchase prices for acquisitions completed in fiscal year 2021 were based upon initial valuations.

6 unchanged sentences

During fiscal year 2021, the Company obtained information relevant to determining the fair values of certain tangible and intangible assets acquired, and liabilities assumed, related to recent acquisitions and adjusted its purchase price allocations.

Based on this information, the Company recognized an increase in intangible assets of $ 1.9 million, an increase in deferred tax liabilities of $ 0.4 million, a decrease in goodwill of $ 1.8 million, and a decrease in liabilities assumed of $ 0.4 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Allocations of the purchase price for acquisitions are based on estimates of the fair value of the net assets acquired and are subject to adjustment upon finalization of the purchase price allocations.

The adjustments to the preliminary measurement were not material.

The allocations of the purchase prices for acquisitions are based on estimates of the fair value of the net assets acquired and are subject to adjustment upon finalization of the purchase price allocations.

The accounting for business combinations requires estimates and judgments as to expectations for future cash flows of the acquired business, and the allocation of those cash flows to identifiable intangible assets, in determining the estimated fair values for assets acquired and liabilities assumed.

The fair values assigned to tangible and intangible assets acquired and liabilities assumed, including contingent consideration, are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.

Contingent consideration is measured at fair value at the acquisition date, based on the probability that revenue thresholds or product development milestones will be achieved during the earnout period, with changes in the fair value after the acquisition date affecting earnings to the extent it is to be settled in cash.

Contingent consideration is measured at fair value at the acquisition date, based on the probability that revenue thresholds or product development milestones will be achieved during

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the earnout period, with changes in the fair value after the acquisition date affecting earnings to the extent it is to be settled in cash.

Increases or decreases in the fair value of contingent consideration liabilities primarily result from changes in the estimated probabilities of achieving revenue thresholds or product development milestones during the earnout period.

1 unchanged sentence

As of January 2, 2022, the Company has recorded contingent consideration obligations of $ 58.0 million, of which $ 1.3 million was recorded in accrued expenses and other current liabilities, and $ 56.7 million was recorded in long-term liabilities.

As of December 29, 2019, the Company has recorded contingent consideration obligations of $ 35.5 million, of which $ 20.8 million was recorded in accrued expenses and other current liabilities, and $ 14.7 million was recorded in long-term liabilities.

As of January 3, 2021, the Company had recorded contingent consideration obligations with an estimated fair value of $ 3.0 million, of which $ 2.9 million was recorded in accrued expenses and other current liabilities, and $ 0.1 million was recorded in long-term liabilities.

The expected maximum earnout period for acquisitions with open contingency periods does not exceed 6.9 years from January 2, 2022, and the remaining weighted average expected earnout period at January 2, 2022 was 5.4 years.

If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the consolidated financial statements could result in a possible impairment of the intangible assets and goodwill, require acceleration of the amortization expense of definite-lived intangible assets or the recognition of additional contingent consideration which would be recognized as a component of operating expenses from continuing operations.

In connection with the purchase price allocations for acquisitions, the Company estimates the fair value of deferred revenue assumed with its acquisitions.

The estimated fair value of deferred revenue is determined by the legal performance obligation at the date of acquisition, and is generally based on the nature of the activities to be performed and the related costs to be incurred after the acquisition date.

The fair value of an assumed liability related to deferred revenue is estimated based on the current market cost of fulfilling the obligation, plus a normal profit margin thereon.

The estimated costs to fulfill the deferred revenue are based on the historical direct costs related to providing the services.

The Company does not include any costs associated with selling effort, research and development, or the related margins on these costs.

In most acquisitions, profit associated with selling effort is excluded because the acquired businesses would have concluded the selling effort on the support contracts prior to the acquisition date.

The estimated research and development costs are not included in the fair value determination, as these costs are not deemed to represent a legal obligation at the time of acquisition.

The sum of the costs and operating income approximates, in theory, the amount that the Company would be required to pay a third-party to assume the obligation.

Total acquisition and divestiture-related costs for fiscal years 2020 and 2019 were $ 9.3 million and $ 6.6 million, respectively.

These amounts included $ 4.7 million of incentive award associated with the Company's acquisition of Meizheng Group for fiscal year 2020, and $ 0.5 million of compensation expense related to Tulip Diagnostics Private Limited ("Tulip") and $ 2.6 million of net foreign exchange loss related mainly to the Company's acquisition of Cisbio for fiscal year 2019.

Acquisition-related interest expenses was $ 0.5 million in fiscal year 2020.

Total acquisition and divestiture-related costs were $ 97.5 million, $ 9.3 million and $ 6.6 million for fiscal years 2021, 2020 and 2019.

These amounts included $ 14.3 million of incentive award associated with the Company's acquisition of Meizheng Group, $ 5.4 million of net foreign exchange gain and $ 23.4 million of costs of bridge financing and debt pre-issuance hedges related to the BioLegend acquisition in fiscal year 2021, $ 4.7 million of incentive award associated with the Company's acquisition of Meizheng Group and $ 0.5 million of acquisition-related interest expenses in fiscal year 2020, and $ 2.6 million of net foreign exchange loss related mainly to the Company's acquisition of Cisbio Bioassays SAS and $ 0.5 million of compensation expense related to the acquisition of Tulip Diagnostics Private Limited in fiscal year 2019.

These acquisition and divestiture-related costs were expensed as incurred and recorded in selling, general and administrative expenses and interest and other expense, net in the Company's consolidated statements of operations.

Disposition of Businesses and Assets

As part of the Company’s continuing efforts to focus on higher growth opportunities, the Company has discontinued certain businesses.

When the discontinued operations represented a strategic shift that will have a major effect on the Company's operations and financial statements, the Company has accounted for these businesses as discontinued operations and accordingly, has presented the results of operations and related cash flows as discontinued operations.

Any business deemed to be a discontinued operation prior to the adoption of Accounting Standards Update 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of An Entity, continues to be reported as a discontinued operation, and the results of operations and related cash flows are presented as discontinued operations for all periods presented.

Any remaining assets and liabilities of these businesses have been presented separately, and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of January 3, 2021 and December 29, 2019.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company recorded the following pre-tax losses, which have been reported as a net loss on disposition of discontinued operations during the three fiscal years ended:

2021 December 29,

2019 December 30,

(In thousands)

Loss on disposition of the Medical Imaging business $ — $ — $ ( 793 )

Loss on disposition of Fluid Sciences business ( 76 ) — ( 66 )

Loss on disposition of discontinued operations before income taxes $ ( 76 ) $ — $ ( 859 )

During fiscal year 2018, the Company completed the sale of substantially all of the assets and liabilities related to its multispectral imaging business for aggregate consideration of $ 37.3 million, recognizing a pre-tax gain of $ 13.0 million.

The pre-tax gain is included in interest and other expense, net in the consolidated statement of operations.

The multispectral imaging business was a component of the Company's Discovery & Analytical Solutions segment.

The divestiture of the multispectral imaging business has not been classified as a discontinued operation in this Form 10-K because the disposition does not represent a strategic shift that will have a major effect on the Company's operations and financial statements.

The Company recorded a provision for (benefit from) income taxes of $ 0.1 million, $ 0.2 million and $( 1.3 ) million on discontinued operations and dispositions in fiscal years 2020, 2019 and 2018, respectively.

Restructuring and Other Costs, Net

1 unchanged sentence

The activities associated with these plans have been reported as restructuring and other costs, net, as applicable, and are included as a component of income from continuing operations.

The current portion of restructuring and other costs is recorded in short-term accrued restructuring and other costs, accrued expense and other current liabilities, and operating lease right-of-use-assets.

The current portion of restructuring and other costs is recorded in short-term accrued restructuring and other costs and accrued expenses and other current liabilities.

The long-term portion of restructuring and other costs is recorded in operating lease liabilities and long-term liabilities.

The Company implemented restructuring plans in each quarter of fiscal year 2021 consisting of workforce reductions or closure of excess facility principally intended to realign resources to emphasize growth initiatives and integrate new acquisitions (the "Q1 2021 Plan" and "Q2 2021 Plan", "Q3 2021 Plan", and "Q4 2021 Plan", respectively).

The Company implemented a restructuring plan in the first quarter of fiscal year 2020 consisting of workforce reductions and closure of excess facilities principally intended to realign resources to emphasize growth initiatives (the "Q1 2020 Plan").

The Company implemented a restructuring plan in the third quarter of fiscal year 2020 consisting of workforce reductions principally intended to realign resources to emphasize growth initiatives ("Q3 2020 Plan").

The Company implemented a restructuring plan in each quarter of fiscal year 2019 consisting of workforce reductions principally intended to realign resources to emphasize growth initiatives (the "Q1 2019 Plan", "Q2 2019 Plan", "Q3 2019 Plan" and "Q4 2019 Plan", respectively).

The Company implemented a restructuring plan in each of the first, third and fourth quarters of fiscal year 2018 consisting of workforce reductions principally intended to realign resources to emphasize growth initiatives (the "Q1 2018 Plan", "Q3 2018 Plan" and "Q4 2018 Plan", respectively).

All other previous restructuring plans were workforce reductions or the closure of excess facility space principally intended to integrate the Company's businesses in order to realign operations, reduce costs, achieve operational efficiencies and shift resources into geographic regions and end markets that are more consistent with the Company's growth strategy (the "Previous Plans").

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the number of employees reduced, the initial restructuring or contract termination charges by operating segment, and the dates by which payments were substantially completed, or the expected dates by which payments will be substantially completed, for restructuring actions implemented during fiscal years 2021, 2020 and 2019 in continuing operations:

2 unchanged sentences

(In thousands, except headcount data)

Q3 2020 Plan 23 $ 901 $ 2,080 $ — $ — $ 2,981 Q2 FY2021 —

Q4 2021 Plan 31 $ 77 $ 3,139 $ — $ 150 $ 3,366 Q3 FY2022 Q1 FY2023

3 unchanged sentences

Q3 2020 Plan 23 901 2,080 — — 2,981 Q2 FY2021 —

Q1 2020 Plan 32 1,134 2,312 682 92 4,220 Q4 FY2020 Q1 FY2022

Q4 2019 Plan 22 2,404 177 — — 2,581 Q3 FY2020 —

1 unchanged sentence

Q2 2019 Plan 44 1,129 4,461 — — 5,590 Q1 FY2020 —

Q1 2019 Plan 105 1,459 6,001 — — 7,460 Q4 FY2019 —

The Company expects to make payments under the Previous Plans for remaining residual lease obligations, with terms varying in length, through fiscal year 2022.

The Company has terminated various contractual commitments in connection with certain disposal activities and has recorded charges, to the extent applicable, for the costs of terminating these contracts before the end of their terms and the costs that will continue to be incurred for the remaining terms without economic benefit to the Company.

The Company recorded additional pre-tax charges of $ 0.2 million, $ 0.2 million, $ 5.0 million in the Discovery & Analytical Solutions segment during fiscal years 2020, 2019 and 2018, respectively, and $ 0.1 million and $ 0.2 million during fiscal years 2020 and 2019, respectively, in the Diagnostics segment as a result of these contract terminations.

The Company recorded pre-tax charges of $ 4.3 million and $ 0.8 million associated with relocating facilities during fiscal years 2020 and 2019.

The Company expects to make payments on these relocation activities through fiscal year 2021.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

At January 3, 2021, the Company had $ 8.3 million recorded for accrued restructuring and other costs, of which $ 4.7 million was recorded in short-term accrued restructuring and other costs, $ 0.3 million was recorded in operating lease right-of-use assets, $ 2.0 million was recorded in accrued expenses and other current liabilities, and $ 1.3 million was recorded in operating lease liabilities.

At December 29, 2019, the Company had $ 13.9 million recorded for accrued restructuring and other costs, of which $ 11.6 million was recorded in short-term accrued restructuring and other costs, $ 0.4 million was recorded in accrued expenses and other current liabilities, $ 0.8 million was recorded in long-term liabilities, and $ 1.1 million was recorded in operating lease liabilities.

The following table summarizes the Company's restructuring accrual balances and related activity by restructuring plan, as well as other accrual balances and related activity, during fiscal years 2020, 2019 and 2018 in continuing operations:

Balance at December 31, 2017 2018 Charges and Changes in Estimates, Net 2018 Amounts Paid Balance at December 30, 2018 2019 Charges and Changes in Estimates, Net 2019 Amounts Paid Balance at December 29, 2019 2020 Charges and Changes in Estimates, Net 2020 Amounts Paid Balance at January 3, 2021

Q3 2020 Plan $ — $ — $ — $ — $ — $ — $ — $ 2,981 $ ( 1,814 ) $ 1,167

Q1 2020 Plan — — — — — — — 3,446 ( 2,574 ) 872

Q4 2019 Plan (1)

— — — — 2,581 ( 1,692 ) 889 ( 386 ) ( 454 ) 49

Q3 2019 Plan (2)

— — — — 13,797 ( 7,486 ) 6,311 ( 2,025 ) ( 2,779 ) 1,507

Q2 2019 Plan (3)

— — — — 5,590 ( 3,701 ) 1,889 ( 376 ) ( 1,241 ) 272

Q1 2019 Plan (4)

— — — — 7,483 ( 5,354 ) 2,129 ( 867 ) ( 669 ) 593

Q4 2018 Plan — 348 — 348 3 ( 351 ) — — — —

Q3 2018 Plan — 2,054 ( 639 ) 1,415 ( 77 ) ( 1,314 ) 24 — — 24

Q1 2018 Plan (5)

— 5,998 ( 4,389 ) 1,609 ( 1,069 ) ( 282 ) 258 ( 255 ) — 3

Q1 2020 Plan — — — — — — — 774 ( 380 ) 394

Previous Plans (6)

10,921 ( 1,998 ) ( 6,252 ) 2,671 ( 159 ) ( 1,147 ) 1,365 219 ( 482 ) 1,102

Restructuring 10,921 6,402 ( 11,280 ) 6,043 28,149 ( 21,327 ) 12,865 3,511 ( 10,393 ) 5,983

Contract Termination 3,048 4,742 ( 7,653 ) 137 452 ( 401 ) 188 212 ( 82 ) 318

Other Costs — — — — 827 — 827 4,290 ( 3,119 ) 1,998

Total Restructuring and Other Liabilities $ 13,969 $ 11,144 $ ( 18,933 ) $ 6,180 $ 29,428 $ ( 21,728 ) $ 13,880 $ 8,013 $ ( 13,594 ) $ 8,299

____________________________

(1) During fiscal year 2020, the Company recognized pre-tax restructuring reversals of $ 0.3 million in the Discovery & Analytical Solutions segment and $ 0.1 million in the Diagnostics segment related to lower than expected costs associated with workforce reductions for the Q4 2019 Plan.

(2) During fiscal year 2020, the Company recognized pre-tax restructuring reversals of $ 1.9 million in the Discovery & Analytical Solutions segment and $ 0.1 million in the Diagnostics segment related to lower than expected costs associated with workforce reductions for the Q3 2019 Plan.

(3) During fiscal year 2020, the Company recognized pre-tax restructuring reversals of $ 0.4 million in the Discovery & Analytical Solutions segment related to lower than expected costs associated with workforce reductions for the Q2 2019 Plan.

(4) During fiscal year 2020, the Company recognized pre-tax restructuring reversals of $ 0.9 million in the Discovery & Analytical Solutions segment related to lower than expected costs associated with workforce reductions for the Q1 2019 Plan.

(5) During fiscal year 2020, the Company recognized pre-tax restructuring reversals of $0.2 million in the Discovery & Analytical Solutions segment and $0.1 million in the Diagnostics segment related to lower than expected costs associated with workforce reductions for the Q1 2018 Plan.

The Company recorded additional pre-tax charges of $ 0.2 million and $ 0.2 million in the Discovery & Analytical Solutions segment during fiscal years 2020 and 2019, respectively, and $ 0.1 million and $ 0.2 million in the Diagnostics segment during fiscal years 2020 and 2019, respectively, as a result of these contract terminations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(6) During fiscal year 2020, the Company recognized pre-tax restructuring reversals of $ 0.1 million in each of the Discovery & Analytical Solutions and Diagnostics segments related to lower than expected costs associated with workforce reductions for the Previous Plans.

The Company recorded pre-tax charges of $ 7.1 million, $ 4.3 million and $ 0.8 million associated with relocating facilities during fiscal years 2021, 2020 and 2019.

The Company expects to make payments on these relocation activities through fiscal year 2022.

At January 2, 2022, the Company had $ 10.3 million recorded for accrued restructuring and other costs, of which $ 8.0 million was recorded in accrued expenses and other current liabilities, $ 0.7 million was recorded in long-term liabilities and $ 1.6 million was recorded as a reduction in operating lease right-of-use assets.

At January 3, 2021, the Company had $ 8.3 million recorded for accrued restructuring and other costs, of which $ 4.7 million was recorded in short-term accrued restructuring and other costs, $ 2.0 million was recorded in accrued expenses and other current liabilities and $ 1.6 million was recorded as a reduction in operating lease right-of-use assets.

Interest and Other Expense, Net

Interest and other expense, net, consisted of the following for the fiscal years ended:

2021 December 29,

2022 January 3,

2021 December 29,

1 unchanged sentence

Interest income $ ( 2,241 ) $ ( 1,010 ) $ ( 1,495 )

Interest expense 49,712 63,627 66,976

Loss (gain) on disposition of businesses and assets, net (see Note 4) — 2,469 ( 12,844 )

Debt extinguishment costs (see Note 14) — 32,541 —

Interest expense including costs of bridge financing 102,128 49,712 63,627

Loss on disposition of businesses and assets, net — — 2,469

Change in fair value of financial securities ( 10,985 ) ( 35 ) ( 3,249 )

Other components of net periodic pension (credit) cost ( 39,767 ) 18,833 25,344

Debt extinguishment costs — — 32,541

Other expense, net 3,357 4,717 5,594

Total interest and other expense, net $ 52,492 $ 72,217 $ 124,831

Foreign currency transaction (gains) losses were $( 2.7 ) million, $ 6.5 million and $( 9.4 ) million in fiscal years 2020, 2019 and 2018, respectively.

Net losses (gains) from forward currency hedge contracts were $ 7.7 million, $( 3.5 ) million and $ 11.7 million in fiscal years 2020, 2019 and 2018, respectively.

The other components of net periodic pension cost were $ 18.8 million, $ 25.3 million and $ 11.5 million in fiscal years 2020, 2019 and 2018, respectively.

These amounts were included in other expense, net.

The Company regularly reviews its tax positions in each significant taxing jurisdiction in the process of evaluating its unrecognized tax benefits.

The Company makes adjustments to its unrecognized tax benefits when:

(i) facts and circumstances regarding a tax position change, causing a change in management’s judgment regarding that tax position;

(ii) a tax position is effectively settled with a tax authority at a differing amount;

and/or (iii) the statute of limitations expires regarding a tax position.

The tabular reconciliation of the total amounts of unrecognized tax benefits is as follows for the fiscal years ended:

2021 December 29,

2019 December 30,

(In thousands)

Unrecognized tax benefits, beginning of year $ 35,547 $ 33,009 $ 30,308

Gross increases—tax positions in prior periods 4,974 4,433 6,931

Gross decreases—tax positions in prior periods ( 2,471 ) ( 2,183 ) ( 1,622 )

Gross increases—current-period tax positions 309 152 —

Settlements — ( 45 ) ( 2,253 )

Lapse of statute of limitations — — ( 181 )

Foreign currency translation adjustments 414 181 ( 174 )

Unrecognized tax benefits, end of year $ 38,773 $ 35,547 $ 33,009

The Company classifies interest and penalties as a component of income tax expense.

At January 3, 2021 and December 29, 2019, the Company had accrued interest and penalties of $ 5.8 million and $ 4.1 million, respectively.

During fiscal years 2020, 2019 and 2018, the Company recognized a net expense of $ 4.7 million, $ 1.6 million and $ 0.4 million, respectively, for interest and penalties in its total tax provision which includes settlements and statutes of limitations that had lapsed.

At January 3, 2021, the Company had gross tax effected unrecognized tax benefits of $ 38.8 million, of which $ 37.1 million, if recognized, would affect the continuing operations effective tax rate.

The remaining amount, if recognized, would affect discontinued operations.

The Company believes that it is reasonably possible that approximately $ 0.2 million of its uncertain tax positions at January 3, 2021, including accrued interest and penalties, and net of tax benefits, may be resolved over the next twelve months

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

as a result of lapses in applicable statutes of limitations and potential settlements.

Various tax years after 2010 remain open to examination by certain jurisdictions in which the Company has significant business operations, such as China, Finland, Germany, Luxembourg, The Netherlands, Singapore, the United Kingdom and the United States.

The tax years under examination vary by jurisdiction.

During fiscal year 2020, the Company recorded net discrete income tax expense of $ 10.8 million, which primarily consisted of a $ 15.2 million assessment related to foreign entities for which the Company had previously believed, in error, that the relevant tax authority had granted fiscal unity to consolidate in fiscal years 2019 and 2018.

The Company determined that this is not material to any of the previous periods or the current fiscal year.

The Company filed an appeal for relief on this matter with the foreign tax authority but cannot be assured of a favorable outcome and has therefore recorded the full impact in the current year’s tax provision as a result of not being granted fiscal unity in fiscal years 2019 and 2018.

The Company also provided for interest on uncertain tax positions of $ 4.5 million, foreign tax rate changes of $ 2.5 million, return to provision adjustments of $ 1.2 million and other tax matters of $ 1.6 million, offset by recognition of excess tax benefits on stock compensation of $ 11.7 million and a valuation allowance reversal of $ 2.5 million.

During fiscal years 2019 and 2018, the Company recorded net discrete income tax benefits of $ 23.4 million and $ 8.1 million, respectively.

The $ 23.4 million tax benefits in fiscal year 2019 was primarily due to a valuation allowance reversal of $ 12.3 million, recognition of excess tax benefits on stock compensation of $ 4.9 million, return to provision adjustments of $ 6.7 million and benefits from tax elections made during fiscal year 2019 of $ 3.7 million, partially offset by a tax expense of $ 2.7 million related to the one-time transition tax under the Tax Cut and Jobs Act ("Tax Act") and additional discrete expense of $ 1.4 million expense related to other tax matters.

The $ 8.1 million of tax benefits in fiscal year 2018 was primarily due to a discrete benefit of $ 7.2 million related to the recognition of excess tax benefits on stock compensation, along with an additional discrete benefit of $ 2.0 million as a result of the Tax Act, partially offset by discrete benefits of $ 1.1 million related to other tax matters.

The components of income from continuing operations before income taxes were as follows for the fiscal years ended:

2021 December 29,

2022 January 3,

2021 December 29,

3 unchanged sentences

Total $ 1,279,886 $ 906,364 $ 237,142

income tax basis, the Company has reported significant taxable income over the three-year period ended January 3, 2021.

The Company has utilized tax attributes to minimize cash taxes paid on that taxable income.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The components of the provision for income taxes on continuing operations were as follows:

7 unchanged sentences

Total $ 385,945 $ ( 49,342 ) $ 336,603

Fiscal year ended December 29, 2019

Fiscal year ended January 3, 2021

Federal $ 21,262 $ 15,951 $ 37,213

7 unchanged sentences

Total $ 70,742 $ ( 61,353 ) $ 9,389

The total provision for (benefit from) income taxes included in the consolidated financial statements is as follows for the fiscal years ended:

2021 December 29,

The total provision for income taxes included in the consolidated financial statements is as follows for the fiscal years ended:

2022 January 3,

2021 December 29,

5 unchanged sentences

federal statutory income tax rate to the recorded tax provision is as follows for the fiscal years ended:

2021 December 29,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2022 January 3,

2021 December 29,

8 unchanged sentences

Change in valuation allowance 3,070 10 ( 1,117 )

Rate change on long term intangibles 14,031 — —

Effect of foreign operations 37,147 — —

Foreign consolidations — 15,222 —

4 unchanged sentences

Total $ 336,603 $ 178,266 $ 9,389

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The variation in the Company's effective tax rate for each year is primarily a result of the recognition of earnings in foreign jurisdictions, predominantly Finland, Singapore and the United Kingdom in fiscal year 2020 and Finland, Singapore and The Netherlands in fiscal years 2019 and 2018, which are taxed at rates lower than the U.S.

federal statutory rate, resulting in a benefit from income taxes of $ 42.5 million in fiscal year 2020 , $ 16.7 million in fiscal year 2019 and $ 18.7 million in fiscal year 2018.

These amounts include $ 21.8 million in fiscal year 2020, $ 10.4 million in fiscal year 2019 and $ 10.3 million in fiscal year 2018 of benefits derived from tax holidays in China and Singapore.

The effect of these benefits, derived from tax holidays, on basic and diluted earnings per s hare for fiscal year 2020 was $ 0.20 and $ 0.19 , respectively, for fiscal year 2019 was $ 0.09 and $ 0.09 , respectively, and for fiscal year 2018 was $ 0.09 and $ 0.09 , respectively.

The variation in the Company's effective tax rate for fiscal year 2021 is primarily affected by the recognition of $ 37.1 million in U.S.

federal, U.S.

state and non-U.S.

taxes due when the Company repatriates foreign earnings that it no longer considers indefinitely reinvested.

The Company also recognized $ 19.0 million in fiscal year 2021, $ 21.8 million in fiscal year 2020 and $ 10.4 million in fiscal year 2019 of benefits derived from tax holidays in China and Singapore.

The effect of these benefits, derived from tax holidays, on basic and diluted earnings per share for fiscal year 2021 was $ 0.16 and $ 0.16 , respectively, for fiscal year 2020 was $ 0.20 and $ 0.19 , respectively, and for fiscal year 2019 was $ 0.09 and $ 0.09 , respectively.

The tax holiday in China is renewed every three years.

The Company expects to renew the tax holiday for two of the Company's subsidiaries in China that expired in fiscal year 2021.

The t ax holiday for one of the Company's subsidiaries in Singapore is scheduled to expire in fiscal year 2023.

The tax effects of temporary differences and attributes that gave rise to deferred income tax assets and liabilities as of January 3, 2021 and December 29, 2019 were as follows:

The tax holiday for one of the Company's subsidiaries in Singapore is scheduled to expire in fiscal year 2023.

The Company regularly reviews its tax positions in each significant taxing jurisdiction in the process of evaluating its unrecognized tax benefits.

The Company makes adjustments to its unrecognized tax benefits when:

(i) facts and circumstances regarding a tax position change, causing a change in management’s judgment regarding that tax position;

(ii) a tax position is effectively settled with a tax authority at a differing amount;

and/or (iii) the statute of limitations expires regarding a tax position.

The tabular reconciliation of the total amounts of unrecognized tax benefits is as follows for the fiscal years ended:

2022 January 3,

2021 December 29,

(In thousands)

Unrecognized tax benefits, beginning of year $ 38,773 $ 35,547 $ 33,009

Gross increases—tax positions in prior periods 2,877 4,974 275

Gross decreases—tax positions in prior periods — ( 2,471 ) ( 2,183 )

Gross increases—current-period tax positions 149 151 152

Gross increases related to acquisitions 22,697 158 4,158

Settlements ( 2,252 ) — ( 45 )

Lapse of statute of limitations ( 563 ) — —

Foreign currency translation adjustments ( 23 ) 414 181

Unrecognized tax benefits, end of year $ 61,658 $ 38,773 $ 35,547

The Company classifies interest and penalties as a component of income tax expense.

At January 2, 2022 and January 3, 2021, the Company had accrued interest and penalties of $ 7.6 million and $ 5.8 million, respectively.

During fiscal years 2021, 2020 and 2019, the Company recognized a net expense of $ 1.8 million, $ 1.8 million and $ 1.6 million, respectively, for interest

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and penalties in its total tax provision which includes settlements and statutes of limitations that had lapsed.

At January 2, 2022, the Company had tax effected unrecognized tax benefits which, if recognized, $ 58.0 million would affect the continuing operations effective tax rate and $ 1.7 million would affect discontinued operations.

The Company believes that it is reasonably possible that approximately $ 1.0 million of its uncertain tax positions at January 2, 2022, including accrued interest and penalties, and net of tax benefits, may be resolved over the next twelve months as a result of lapses in applicable statutes of limitations and potential settlements.

The tax years under examination vary by jurisdiction.

During fiscal year 2021, the Company recorded net discrete income tax expense of $ 43.2 million, which primarily consisted of $ 37.1 million related to the assertions regarding reinvestment of foreign earnings, increase in unrecognized tax benefits of $ 1.9 million, other adjustments of $ 3.9 million and a discrete tax expense of $ 14.0 million due to the remeasurement of United Kingdom deferred tax liabilities on long-lived purchase accounting intangibles and a $ 1.8 million tax benefit related to other net United Kingdom deferred tax assets and liabilities in connection with United Kingdom Finance Act 2021, which increased the United Kingdom corporation tax from 19% to 25%, effective April 1, 2023.

The remaining discrete tax benefit, excluding the United Kingdom rate change, related to excess tax benefits on stock compensation of $ 5.5 million and $ 6.4 million resulting from a transaction that was completed during the second quarter of fiscal year 2021.

During fiscal year 2020, the Company recorded net discrete income tax expense of $ 10.8 million, which primarily consisted of $ 15.2 million assessment related to the consolidation of foreign entities in fiscal years 2019 and 2018.

The Company filed an appeal for relief on this matter with the relevant foreign tax authority, but cannot be assured of a favorable outcome, and has therefore recorded the full impact in the tax provision.

During fiscal year 2019, the Compan y recorded a net discrete income tax benefit of $ 23.4 million which was primarily due to a valuation allowance reversal of $ 12.3 million, recognition of excess tax benefits on stock compensation of $ 4.9 million, return to provision adjustments of $ 6.7 million and benefits from tax elections made during fiscal year 2019 of $ 3.7 million, partially offset by a tax expense of $ 2.7 million related to the one-time transition tax under the Tax Cut and Jobs Act ("Tax Act") and additional discrete expense of $ 1.4 million expense related to other tax matters.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The tax effects of temporary differences and attributes that gave rise to deferred income tax assets and liabilities were as follows:

2022 January 3,

(In thousands)

Deferred tax assets:

8 unchanged sentences

Unrealized foreign exchange loss

14,631 21,614

All other, net 631 —

Total deferred tax assets 331,248 338,103

3 unchanged sentences

Operating lease right-of-use assets ( 34,111 ) ( 38,598 )

All other, net ( 4,160 ) ( 1,780 )

Prepaids ( 3,263 ) ( 4,160 )

Deferred tax liability on foreign earnings ( 31,239 ) —

Total deferred tax liabilities ( 1,111,553 ) ( 406,802 )

1 unchanged sentence

Net deferred tax liabilities $ ( 871,808 ) $ ( 168,439 )

The components of net deferred tax liabilities as of January 3, 2021 and December 29, 2019 were recognized in the consolidated balance sheets as follows:

2021 December 29,

The components of net deferred tax liabilities were recognized in the consolidated balance sheets as follows:

2022 January 3,

(In thousands)

Other assets, net $ 22,007 $ 65,518

Long-term liabilities ( 233,957 ) ( 224,936 )

Deferred taxes and other long-term liabilities ( 893,815 ) ( 233,957 )

Total $ ( 871,808 ) $ ( 168,439 )

At January 2, 2022, for income tax return purposes, the Company had U.S.

federal net operating loss carryforwards of $ 36.6 million , state net operating loss carryforw ards of $ 11.5 million, foreig n ne t operating loss carryforwards of $ 495.3 million, state tax credit carryforwards of $ 15.3 million, general business tax credit carryforwards of $ 0.3 million, and foreign tax credit carryforwards of $ 0.1 million.

These are subject to expiration in years ranging from 2021 to 2038, and without expiration for certain foreign net operating loss carryforwards and certain state c redit carryforwards.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

federal net operating loss carryforwards of $ 74.8 million, state net operating loss carryforwards of $ 10.8 million, foreign net operating loss carryforwards of $ 452.0 million, state tax credit carryforwards of $ 15.0 million, general business tax credit carryforwards of $ 0.6 million, and foreign tax credit carryforwards of $ 0.1 million.

These losses begin to expire in 2022 without expiration for certain foreign net operating loss carryforwards and certain state credit carryforwards.

Valuation allowances take into consideration limitations imposed upon the use of the tax attributes and reduce the value of such items to the likely net realizable amount.

1 unchanged sentence

Valuation allowances have been provided on state net operating loss and state tax credit carryforwards and on certain foreign tax attributes that the Company has determined are not more likely than not to be realized.

The increase in the valuation allowance of $ 11.3 million in fiscal year 2020 is primarily due to a net build of tax attributes related to the generation and utilization of net operating loss carryforwards by some of the Company's non-U.S.

subsidiaries, as well as realization of certain U.S.

state tax credit carryforwards.

The components of net deferred tax (liabilities) assets as of January 3, 2021 and December 29, 2019 were as follows:

2021 December 29,

The decrease in the valuation allowance of $ 8.2 million in fiscal year 2021 is primarily due to release of net operating loss carryforwards as a result of an audit settlement in Finland and utilization of carryforwards in Luxembourg, offset by an increase in China and other jurisdictions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The components of net deferred tax liabilities were as follows:

2022 January 3,

(In thousands)

4 unchanged sentences

The Tax Act required the Company to accrue a one-time transition tax on the unremitted earnings of its foreign subsidiaries.

At December 31, 2017, the Company recorded an income tax expense of $ 85.0 million in continuing operations in accordance with the Tax Act.

Treasury issued regulations in 2019 and accordingly the Company refined its calculations of the one-time transition tax and recorded a tax expense (benefit) of $ 2.7 million and $( 4.6 ) million during fiscal years 2019 and 2018, respectively.

At the end of fiscal year 2020, the Company evaluated its undistributed foreign earnings and identified certain earnings that it no longer considered indefinitely reinvested and therefore recognized $ 1.6 million of income tax expense during the year.

The Company's intent is to continue to reinvest the remaining undistributed earnings of its international subsidiaries indefinitely.

No additional deferred income taxes have been provided for any remaining undistributed foreign earnings, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested.

However, should the Company change its business plans in the future and decide to repatriate a portion of these earnings to one of its U.S.

subsidiaries, the Company will recognize additional income tax liabilities.

As of January 3, 2021, the Company has approximately $ 1.5 billion of foreign earnings that it has the intent and ability to keep invested outside the U.S.

indefinitely and for which no additional incremental U.S.

tax cost has been provided.

It is not practicable to calculate the unrecognized deferred tax liability related to such incremental tax costs on those earnings.

At December 31, 2017, the Company accrued for a one-time transition tax expense of $ 85.0 million on its unremitted foreign earnings in accordance with the Tax Act.

Treasury subsequently issued regulations on the Tax Act and the Company recorded tax expense (benefit) of $ 2.7 million and $( 4.6 ) million during fiscal years 2019 and 2018, respectively.

As of January 2, 2022, the Company evaluated its undistributed foreign earnings and identified approximately $ 1.2 billion in earnings that it no longer considers indefinitely reinvested.

The Company intends to begin repatriating such earnings to the U.S., in whole or in part, during fiscal year 2022.

In doing so, the Company has recorded a provision of approximately $ 37.1 million for the U.S.

federal, U.S.

state and non-U.S.

taxes that would fall due when such earnings are repatriated.

No additional income tax expense has been provided for any remaining undistributed foreign earnings, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested.

Earnings Per Share

2 unchanged sentences

The following table reconciles the number of shares utilized in the earnings per share calculations for the fiscal years ended:

2021 December 29,

2022 January 3,

2021 December 29,

8 unchanged sentences

Antidilutive options were excluded from the calculation of diluted net income per share and could become dilutive in the future.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accounts Receivable, Net

Accounts receivable, net as of January 3, 2021 and December 29, 2019 consisted of the following:

2021 December 29,

Accounts receivable, net consisted of the following:

2022 January 3,

(In thousands)

Accounts receivable, net, current $ 1,023,792 $ 1,155,109

Long-term accounts receivable, net, included in Other assets 22,510 19,677

Long-term accounts receivable, net, included in Other assets, net 30,303 22,510

Total accounts receivable, net $ 1,054,095 $ 1,177,619

Accounts receivable were net of reserves for doubtful accounts of $ 47.6 million and $ 35.2 million as of January 3, 2021 and December 29, 2019, respectively.

Inventories as of January 3, 2021 and December 29, 2019 consisted of the following:

2021 December 29,

Reserves for credit losses consisted of the following:

Year Provisions Charges/

offs Other (1)

(In thousands)

Year ended December 29, 2019 $ 30,590 $ 6,853 $ ( 3,009 ) $ 798 $ 35,232

Year ended January 3, 2021 35,232 16,695 ( 5,857 ) 1,524 47,594

Year ended January 2, 2022 47,594 8,150 ( 4,646 ) 101 51,199

(1) Other amounts primarily relate to the impact of acquisitions, discontinued operations and foreign exchange movements.

Inventories consisted of the following:

2022 January 3,

(In thousands)

Raw materials $ 229,356 $ 205,022

3 unchanged sentences

Property, Plant and Equipment, Net

Property, plant and equipment as of January 3, 2021 and December 29, 2019, consisted of the following:

2021 December 29,

Property, plant and equipment consisted of the following:

2022 January 3,

(In thousands)

5 unchanged sentences

Total property, plant and equipment, net $ 545,605 $ 368,304

Depreciation expense on property, plant and equipment for the fiscal years ended January 3, 2021, December 29, 2019 and December 30, 2018 was $ 54.0 million, $ 49.7 million and $ 44.7 million, respectively.

Depreciation expense on property, plant and equipment for the fiscal years ended January 2, 2022, January 3, 2021 and December 29, 2019 was $ 67.3 million, $ 54.0 million and $ 49.7 million, respectively.

Marketable Securities and Investments

Investments as of January 3, 2021 and December 29, 2019 consisted of the following:

2021 December 29,

Investments consisted of the following:

2022 January 3,

(In thousands)

3 unchanged sentences

Marketable securities.

Marketable securities include equity and fixed-income securities held to meet obligations associated with the Company’s supplemental executive retirement plan and other deferred compensation plans.

The Company has, accordingly, classified these securities as long-term.

The net unrealized holding gain and loss on marketable securities, net of deferred income taxes, reported as a component of other comprehensive income (loss) in the statements of stockholders’ equity, were not material in fiscal years 2020 and 2019.

Marketable securities include equity and fixed-income securities.

The net unrealized holding gain and loss on marketable securities, net of deferred income taxes, reported as a component of other comprehensive income (loss) in the consolidated statements of stockholders' equity, was not material in fiscal years 2021 and 2020.

The proceeds from the sales of securities and the related gains and losses are not material for any period presented.

Marketable securities classified as available for sale as of January 3, 2021 and December 29, 2019 consisted of the following:

Marketable securities classified as available for sale consisted of the following:

Market Value Gross Unrealized Holding

6 unchanged sentences

$ 53,073 $ 53,136 $ — $ ( 63 )

December 29, 2019

January 3, 2021

Equity securities $ 203 $ 584 $ — $ ( 381 )

4 unchanged sentences

The Company has equity interests in privately-held entities over which the Company neither has significant influence nor control.

Equity investments without readily determinable fair values as of January 3, 2021 and December 29, 2019 consisted of the following:

2021 December 29,

Equity investments without readily determinable fair values as of January 2, 2022 and January 3, 2021 consisted of the following:

2022 January 3,

(In thousands)

2 unchanged sentences

$ 31,514 $ 48,626

The amount of upward adjustments during fiscal years 2020 and 2019 were $ 35,000 and $ 8.2 million, respectively.

The cumulative amount of upward adjustments as of each of January 3, 2021 and December 29, 2019 was $ 8.2 million.

The amount of impairments and downward adjustments during fiscal year 2019 was $ 4.9 million.

The cumulative amount of impairments and downward adjustments as of each of January 3, 2021 and December 29, 2019 was $ 4.9 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The amount of upward adjustments during fiscal years 2021, 2020 and 2019 were $ 19.6 million, $ 0.04 million and $ 8.2 million, respectively.

The cumulative amount of upward adjustments as of January 2, 2022 and January 3, 2021 was $ 27.8 million and $ 8.2 million, respectively.

The amount of impairments and downward adjustments during fiscal year 2021 and fiscal year 2019 were $ 0.1 million and $ 4.9 million, respectively.

The cumulative amount of impairments and downward adjustments as of January 2, 2022 and January 3, 2021 was $ 5.0 million and $ 4.9 million, respectively.

Goodwill and Intangible Assets, Net

The Company tests goodwill and non-amortizing intangible assets at least annually for possible impairment.

Accordingly, the Company completes the annual testing of impairment for goodwill and non-amortizing intangible assets on the later of January 1 or the first day of each fiscal year.

In addition to its annual test, the Company regularly evaluates whether events or circumstances have occurred that may indicate a potential impairment of goodwill or non-amortizing intangible assets.

The Company tests goodwill and indefinite-lived intangible assets at least annually for possible impairment.

Accordingly, the Company completes the annual testing of impairment for goodwill and indefinite-lived intangible assets on the later of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

January 1 or the first day of each fiscal year.

In addition to its annual test, the Company regularly evaluates whether events or circumstances have occurred that may indicate a potential impairment of goodwill or indefinite-lived intangible assets.

The process of testing goodwill for impairment involves the determination of the fair value of the applicable reporting units.

2 unchanged sentences

The Company performed its annual impairment testing for its reporting units as of January 4, 2021 , its annual impairment testing date for fiscal year 2021.

The Company concluded based on the first step of the process that there was no goodwill impairment, and the fair value exceeded the carrying value by more than 20% for each reporting unit, except for the Meizheng Group reporting unit.

The fair value of the Meizheng Group reporting unit approximated its carrying value given that the reporting unit was a relatively new acquisition.

At January 4, 2021, the Tulip reporting unit, which had a goodwill balance of $ 77.8 million at January 3, 2021, had a fair value that was between 10% and 20% more than its carrying value.

Tulip is at increased risk of an impairment charge given its ongoing weakness due to the impact of COVID-19.

Despite the increased risk associated with this reporting unit, the Company does not believe there will be a significant change in the key estimates or assumptions driving the fair value of this reporting unit that would lead to a material impairment charge.

While the Company believes that its estimates of current value are reasonable, if actual results differ from the estimates and judgments used, including such items as future cash flows and the volatility inherent in markets which the Company serves, impairment charges against the carrying value of those assets could be required in the future.

Non-amortizing intangibles are also subject to an annual impairment test.

The Company consistently employed the relief from royalty model to estimate the current fair value when testing for impairment of non-amortizing intangible asset.

The impairment test consists of a comparison of the fair value of the non-amortizing intangible asset with its carrying amount.

In addition, the Company evaluates the remaining useful life of our non-amortizing intangible asset at least annually to determine whether events or circumstances continue to support an indefinite useful life.

If events or circumstances indicate that the useful life of our non-amortizing intangible asset is no longer indefinite, the asset will be tested for impairment.

This intangible asset will then be amortized prospectively over its estimated remaining useful life and accounted for in the same manner as other intangible assets that are subject to amortization.

Indefinite-lived intangibles are also subject to an annual impairment test.

The Company consistently employed the relief from royalty model to estimate the current fair value when testing for impairment of indefinite-lived intangible asset.

The impairment test consists of a comparison of the fair value of the indefinite-lived intangible asset with its carrying amount.

The changes in the carrying amount of goodwill for fiscal years 2021 and 2020 are as follows:

4 unchanged sentences

Acquisitions, earnouts and other 198,981 16,224 215,205

Balance at December 29, 2019 1,498,820 1,612,407 3,111,227

Balance at January 3, 2021 1,755,887 1,691,227 3,447,114

Foreign currency translation ( 51,963 ) ( 40,557 ) ( 92,520 )

22 unchanged sentences

Net amortizable intangible assets 3,099,309 893,211 3,992,520

Non-amortizing intangible asset:

Indefinite-lived intangible asset:

Trade name 70,584 — 70,584

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Identifiable intangible asset balances at December 29, 2019 by category and segment were as follows:

Identifiable intangible asset balances at January 3, 2021 by category and segment were as follows:

Discovery & Analytical Solutions Diagnostics Consolidated

17 unchanged sentences

Net amortizable intangible assets 491,871 803,238 1,295,109

Non-amortizing intangible asset:

Indefinite-lived intangible asset:

Trade name 70,584 — 70,584

2 unchanged sentences

Estimated amortization expense related to definite-lived intangible assets for each of the next five years is $ 413.6 million in fiscal year 2022, $ 402.8 million in fiscal year 2023, $ 391.0 million in fiscal year 2024, $ 363.5 million in fiscal year 2025, and $ 349.6 million in fiscal year 2026.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s debt consisted of the following:

Outstanding Principal Unamortized Debt Discount

Unamortized Debt Issuance Costs

Net Carrying Amount

(In thousands)

Long-Term Debt:

Senior Unsecured Revolving Credit Facility $ — $ — $ ( 3,362 ) $ ( 3,362 )

The Company's senior unsecured revolving credit facility provides for $ 1.0 billion of revolving loans that may be either US Dollar Base Rate loans or Eurocurrency Rate loans, as those terms are defined in the credit agreement, and has an initial maturity of September 17, 2024.

Unsecured Term Loan Credit Facility 500,000 ( 14 ) ( 658 ) 499,328

0.550% Senior Unsecured Notes due in 2023 500,000 ( 152 ) ( 2,093 ) 497,755

0.850% Senior Unsecured Notes due in 2024 800,000 ( 447 ) ( 4,945 ) 794,608

1.875% Senior Unsecured Notes due in 2026 ("2026 Notes") 568,600 ( 2,538 ) ( 2,280 ) 563,782

1.900% Senior Unsecured Notes due in 2028 500,000 ( 348 ) ( 4,200 ) 495,452

3.3% Senior Unsecured Notes due in 2029 ("2029 Notes") 850,000 ( 2,252 ) ( 6,234 ) 841,514

2.55% Senior Unsecured Notes due in 2031 400,000 ( 126 ) ( 3,294 ) 396,580

2.250% Senior Unsecured Notes due in 2031 500,000 ( 1,485 ) ( 4,380 ) 494,135

3.625% Senior Unsecured Notes due in 2051 400,000 ( 4 ) ( 4,335 ) 395,661

Other Debt Facilities, non-current 4,284 — — 4,284

Total Long-Term Debt 5,022,884 ( 7,366 ) ( 35,781 ) 4,979,737

Current Portion of Long-term Debt:

Other Debt Facilities, current 4,240 — — 4,240

Total Debt $ 5,027,124 $ ( 7,366 ) $ ( 35,781 ) $ 4,983,977

Outstanding Principal Unamortized Debt Discount

Unamortized Debt Issuance Costs

Net Carrying Amount

(In thousands)

Long-Term Debt:

Senior Unsecured Revolving Credit Facility $ 158,595 $ — $ ( 2,621 ) $ 155,974

2026 Notes 610,750 ( 3,253 ) ( 2,782 ) 604,715

2029 Notes 850,000 ( 2,496 ) ( 6,908 ) 840,596

Other Debt Facilities, non-current 8,416 — — 8,416

Total Long-Term Debt 1,627,761 ( 5,749 ) ( 12,311 ) 1,609,701

Current Portion of Long-term Debt:

0.6% Senior Unsecured Notes due in 2021 ("2021 Notes") 366,450 ( 16 ) ( 229 ) 366,205

Other Debt Facilities, current 14,743 — — 14,743

Total Current Portion of Long-Term Debt 381,193 ( 16 ) ( 229 ) 380,948

Total Debt $ 2,008,954 $ ( 5,765 ) $ ( 12,540 ) $ 1,990,649

Senior Unsecured Revolving Credit Facility.

On August 24, 2021, the Company terminated its previous senior unsecured revolving credit facility and entered into a new senior unsecured revolving credit facility with a five-year term and a borrowing capacity of $ 1.5 billion available through August 24, 2026.

As of January 2, 2022, undrawn letters of credit in the aggregate amount of $ 11.0 million were treated as issued and outstanding when calculating the borrowing availability under the facility.

As of January 3, 2021, the Company had $ 830.4 million available for additional borrowing under the facility.

The Company plans to use the senior unsecured revolving credit facility for general corporate purposes, which may include working capital, refinancing existing indebtedness, capital expenditures, share repurchases, acquisitions and strategic alliances.

The interest rates on the Eurocurrency Rate loans are based on the Eurocurrency Rate at the time of borrowing, plus a percentage spread based on the credit rating of the Company's debt.

The interest rates on the US Dollar Base Rate loans are based on the US Dollar Base Rate at the time of borrowing, plus a percentage spread based on the credit rating of the Company's debt.

The base rate is the higher of (i) the Federal Funds Rate (as defined in the credit agreement) plus 50 basis points (ii) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate," or (iii) the Eurocurrency Rate plus 1.00%.

As of January 2, 2022, the Company had $ 1.49 billion available for additional borrowing under the facility.

Borrowings will bear interest, payable quarterly or, if earlier, at the end of any interest period, at the Company's option at either (a) the base rate

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(as defined in the credit agreement), or (b) the eurocurrency rate (a publicly published rate), in each case plus a percentage spread based on the credit rating of the Company's debt.

The base rate is the highest of (a) the Federal Funds Rate (as defined in the credit agreement) plus 0.50 %, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate," and (c) the Eurocurrency Rate plus 1.00 % .

T he credit agreement for the new facility contains customary affirmative, negative and financial covenants and events of default.

The financial covenants include a debt-to-capital ratio that remains applicable for so long as the Company's debt is rated as investment grade.

In the event that the Company's debt is not rated as investment grade, the debt-to-capital ratio covenant is replaced with leverage ratio and interest coverage ratio covenants.

Unsecured Term Loan Credit Facility.

The Company ente red into an unsecured delayed draw term loan credit facility on August 11, 2021 that provided for $ 500.0 million of term loans available through the earlier of (i) the consummation of the Company's acquisition of BioLegend (with such transaction acquiring BioLegend being the “Acquisition”) and (ii) the date that is five (5) business days after October 25, 2021, and as could be extended through January 31, 2022 in the event that the outside date under the definitive agreement with respect to the Acquisition was extended.

On September 16, 2021, the Company borrowed the full $ 500.0 million from the term loan facility and used the proceeds to partially fund the Acquisition.

The interest rates under the senior unsecured term loan credit facility are at either (a) the base rate, as described in the credit agreement, or (b) the eurocurrency rate (a publicly published rate), in each case plus a percentage spread based on the credit rating of the Company’s debt.

The Eurocurrency margin as of January 2, 2022 was 113.0 basis points.

The weighted average Eurocurrency interest rate as of January 2, 2022 was 0.10 %, resulting in a weighted average effective Eurocurrency Rate, including the margin, of 1.23 %, which was the interest applicable to the borrowings outstanding as of January 2, 2022.

As of January 3, 2021, the senior unsecured revolving credit facility had outstanding borrowings of $ 158.6 million, and $ 2.6 million of unamortized debt issuance costs.

As of December 29, 2019, the senior unsecured revolving credit facility had $ 325.4 million of outstanding borrowings, and $ 3.4 million of unamortized debt issuance costs.

The credit agreement for the facility contains affirmative, negative and financial covenants and events of default.

The financial covenants include a debt-to-capital ratio that remains applicable for so long as the Company's debt is rated as investment grade.

In the event that the Company's debt is not

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

rated as investment grade, the debt-to-capital ratio covenant is replaced with a maximum consolidated leverage ratio covenant and a minimum consolidated interest coverage ratio covenant.

1.875 % Senior Unsecured Notes due 2026.

On July 19, 2016, the Company issued € 500.0 million aggregate principal amount of senior unsecured notes due in 2026 (the “2026 Notes”) in a registered public offering and received approximately € 492.3 million of net proceeds from the issuance.

The 2026 Notes were issued at 99.118 % of the principal amount, which resulted in a discount of € 4.4 million.

The 2026 Notes mature in July 2026 and bear interest at an annual rate of 1.875 %.

Interest on the 2026 Notes is payable annually on July 19th each year.

The proceeds from the 2026 Notes were used to pay in full the outstanding balance of the Company's previous senior unsecured revolving credit facility.

As of January 3, 2021, the 2026 Notes had an aggregate carrying value of $ 604.7 million, net of $ 3.3 million of unamortized original issue discount and $ 2.8 million of unamortized debt issuance costs.

As of December 29, 2019, the 2026 Notes had an aggregate carrying value of $ 552.2 million, net of $ 3.5 million of unamortized original issue discount and $ 3.3 million of unamortized debt issuance costs.

Prior to April 19, 2026 (three months prior to their maturity date), the Company may redeem the 2026 Notes in whole at any time or in part from time to time, at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of the 2026 Notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest in respect to the 2026 Notes being redeemed, discounted on an annual basis, at the applicable Comparable Government Bond Rate (as defined in the indenture governing the 2026 Notes) plus 35 basis points;

plus, in each case, accrued and unpaid interest.

In addition, at any time on or after April 19, 2026 (three months prior to their maturity date), the Company may redeem the 2026 Notes, at its option, at a redemption price equal to 100% of the principal amount of the 2026 Notes due to be redeemed plus accrued and unpaid interest.

Upon a change of control (as defined in the indenture governing the 2026 Notes) and a contemporaneous downgrade of the 2026 Notes below investment grade, the Company will, in certain circumstances, make an offer to purchase the 2026 Notes at a price equal to 101 % of their principal amount plus any accrued and unpaid interest.

0.6 % Senior Unsecured Notes due in 2021.

On April 11, 2018, the Company issued € 300.0 million aggregate principal amount of senior unsecured notes due in 2021 (the “2021 Notes”) in a registered public offering and received approximately € 298.7 million of net proceeds from the issuance.

The 2021 Notes were issued at 99.95 % of the principal amount, which resulted in a discount of € 0.2 million.

As of January 3, 2021, the 2021 Notes had an aggregate carrying value of $ 366.2 million, net of $ 16,200 of unamortized original issue discount and $0.2 million of unamortized debt issuance costs.

As of December 29, 2019, the 2021 Notes had an aggregate carrying value of $ 334.2 million, net of $ 0.1 million of unamortized original issue discount and $ 1.1 million of unamortized debt issuance costs.

The 2021 Notes mature in April 2021 and bear interest at an annual rate of 0.6 %.

Interest on the 2021 Notes is payable annually on April 9th each year.

Prior to the maturity date of the 2021 Notes, the Company may redeem them in whole at any time or in part from time to time, at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of the 2021 Notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest in respect to the 2021 Notes being redeemed, discounted on an annual basis, at the applicable Comparable Government Bond Rate (as defined in the indenture governing the 2021 Notes) plus 15 basis points;

plus, in each case, accrued and unpaid interest.

Upon a change of control (as defined in the indenture governing the 2021 Notes) and a contemporaneous downgrade of the 2021 Notes below investment grade, the Company will, in certain circumstances, make an offer to purchase the 2021 Notes at a price equal to 101 % of their principal amount, plus accrued and unpaid interest.

3.3 % Senior Unsecured Notes due in 2029.

On September 12, 2019, the Company issued $ 850.0 million aggregate principal amount of senior unsecured notes due in 2029 (the "2029 Notes”) in a registered public offering and received $ 847.2 million of net proceeds from the issuance.

The 2029 Notes were issued at 99.67 % of the principal amount, which resulted in a discount of $ 2.8 million.

As of January 3, 2021, the 2029 Notes had an aggregate carrying value of $ 840.6 million, net of $ 2.5 million of unamortized original issue discount and $ 6.9 million of unamortized debt issuance costs.

As of December 29, 2019, the 2029 Notes had an aggregate carrying value of $ 839.9 million, net of $ 2.7 million of unamortized original issue discount and $ 7.4 million of unamortized debt issuance costs.

The 2029 Notes mature in September 2029 and bear interest at an annual rate of 3.3 %.

Interest on the 2029 Notes is payable semi-annually on March 15th and September 15th each year.

Proceeds from the 2029 Notes were used to repay all outstanding borrowings under the Company’s previous senior unsecured revolving credit facility with the remaining proceeds used in the redemption of the 5% senior unsecured notes that were due in November 2021.

Prior to June 15, 2029 (three months prior to their maturity date), the Company may redeem the 2029 Notes in whole or in part, at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of the 2029 Notes to be redeemed, and (ii) the sum of the present values of the remaining scheduled payments of principal and interest in respect to the 2029 Notes being redeemed (not including any portion of such payments of interest accrued but unpaid as of the date of redemption) assuming that such 2029 Notes matured on June 15, 2029, discounted at the date of redemption on a semi-annual basis (assuming a 360-day year of twelve 30-day months), at the Treasury Rate (as defined in the indenture governing the 2029 Notes) plus 25 basis points, plus accrued and unpaid interest.

At any time on or after June 15, 2029 (three months prior to their

The credit agreement for the facility contains customary affirmative, negative and financial covenants and events of defaults which are substantially similar to those contained in the senior unsecured revolving credit facility.

Senior Unsecured Notes.

On September 10, 2021, the Company issued the following notes:

• $ 500.0 million aggregate principal amount of 0.550 % senior unsecured notes due in 2023 (the "2023 Notes”),

• $ 800.0 million aggregate principal amount of 0.850 % senior unsecured notes due in 2024 (the "2024 Notes”),

• $ 500.0 million aggregate principal amount of 1.900 % senior unsecured notes due in 2028 (the "2028 Notes”), and

• $ 500.0 million aggregate principal amount of 2.250 % senior unsecured notes due in September 2031 (the "September 2031 Notes”).

On March 8, 2021, the Company issued the following notes:

• $ 400.0 million aggregate principal amount of 2.550 % senior unsecured notes due in March 2031 (the "March 2031 Notes”), and

• $ 400.0 million aggregate principal amount of 3.625 % senior unsecured notes due in 2051 (the "2051 Notes”).

Interest on each series of notes is payable semi-annually on March 15th and September 15th each year.

The notes include optional redemption features, which allow the Company to redeem the notes, at the Company's option and subject to terms, conditions and limitations specified in the indentures governing the notes, at redemption prices set forth in the indentures governing the notes, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.

Upon a change of control repurchase event (as defined in the indentures governing the notes) of the Company, the Company will, in certain circumstances, make an offer to repurchase the notes at a price equal to 101 % of their principal amount plus any accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

maturity date), the Company may redeem the 2029 Notes, at its option, at a redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed plus accrued and unpaid interest.

Upon a change of control (as defined in the indenture governing the 2029 Notes) and a contemporaneous downgrade of the 2029 Notes below investment grade, each holder of 2029 Notes will have the right to require the Company to repurchase such holder's 2029 Notes for 101 % of their principal amount, plus accrued and unpaid interest.

Other Debt Facilities.

The Company's other debt facilities include Euro-denominated bank loans with an aggregate carrying value of $ 17.0 million (or € 13.9 million) and $ 23.8 million (or € 21.3 million) as of January 3, 2021 and December 29, 2019, respectively.

These bank loans are primarily utilized for financing fixed assets and are required to be repaid in monthly or quarterly installments with maturity dates extending to 2028.

Of these bank loans, loans in the aggregate amount of $ 17.0 million bear fixed interest rates between 1.1 % and 4.3 % and a loan in the amount of $ 0.1 million bears a variable interest rate based on the Euribor rate plus a margin of 1.5 %.

An aggregate amount of $ 4.8 million of the bank loans are secured by mortgages on real property and the remaining $ 12.2 million are unsecured.

Certain credit agreements for the unsecured bank loans include financial covenants which are based on an equity ratio or an equity ratio and minimum interest coverage ratio.

In addition, the Company had secured bank loans in the aggregate amount of $ 6.1 million and $ 1.9 million as of January 3, 2021 and December 29, 2019, respectively.

The secured bank loans of $ 6.1 million bear fixed annual interest rates between 1.95 % and 8.94 % and are required to be repaid in monthly installments until 2027.

The following table summarizes the maturities of the Company’s indebtedness as of January 2, 2022:

Credit Facility

Maturing in 2024 2021

Notes 2026 Notes 2029 Notes Other Debt Facilities Total

2022 2023 2024 2025 2026 2027 and thereafter Total before unamortized discount and debt issuance costs Unamortized discount and debt issuance costs Total

(In thousands)

2021 $ — $ 366,450 $ — $ — $ 14,743 $ 381,193

2022 — — — — 4,075 4,075

2023 — — — — 2,457 2,457

2024 158,595 — — — 1,372 159,967

Senior Unsecured Revolving Credit Facility $ — $ — $ — $ — $ — $ — $ — $ ( 3,362 ) $ ( 3,362 )

Unsecured Term Loan Credit Facility

— — 500,000 — — — 500,000 ( 672 ) 499,328

2026 and thereafter — — 610,750 850,000 282 1,461,032

Total before unamortized discount and debt issuance costs 158,595 366,450 610,750 850,000 23,159 2,008,954

Unamortized discount and debt issuance costs ( 2,621 ) ( 245 ) ( 6,035 ) ( 9,404 ) — ( 18,305 )

2023 Notes — 500,000 — — — — 500,000 ( 2,245 ) 497,755

2024 Notes — — 800,000 — — — 800,000 ( 5,392 ) 794,608

2026 Notes — — — — 568,600 — 568,600 ( 4,818 ) 563,782

2028 Notes — — — — — 500,000 500,000 ( 4,548 ) 495,452

2029 Notes — — — — — 850,000 850,000 ( 8,486 ) 841,514

March 2031 Notes — — — — — 400,000 400,000 ( 3,420 ) 396,580

September 2031 Notes — — — — — 500,000 500,000 ( 5,865 ) 494,135

2051 Notes — — — — — 400,000 400,000 ( 4,339 ) 395,661

Other Debt Facilities 4,240 2,530 1,277 214 123 140 8,524 — 8,524

Total $ 4,240 $ 502,530 $ 1,301,277 $ 214 $ 568,723 $ 2,650,140 $ 5,027,124 $ ( 43,147 ) $ 4,983,977

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities as of January 3, 2021 and December 29, 2019 consisted of the following:

2021 December 29,

Accrued expenses and other current liabilities consisted of the following:

2022 January 3,

(In thousands)

7 unchanged sentences

Contract liabilities

77,178 189,718

Other accrued operating expenses 258,611 265,977

1 unchanged sentence

Employee Benefit Plans

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Savings Plan:

9 unchanged sentences

Plan benefits were frozen as of March 2003 for those employed by the Company’s former Analytical Instruments business and corporate employees.

Plan benefits were frozen as of January 31, 2011 for all remaining employees that were still actively accruing in the plan.

Plan benefits were frozen as of January 31, 2011 for all remaining employees that were still actively

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

accruing in the plan.

The plans provide benefits that are based on an employee’s years of service and compensation near retirement.

1 unchanged sentence

plans included the following components for fiscal years ended:

2021 December 29,

2022 January 3,

2021 December 29,

3 unchanged sentences

Expected return on plan assets ( 24,417 ) ( 21,786 ) ( 24,561 )

Actuarial loss 20,291 27,134 17,146

Actuarial (gain) loss ( 19,514 ) 20,291 27,134

Curtailment gain — — ( 1,547 )

Amortization of prior service (credit) cost — ( 152 ) 375

Net periodic pension cost $ 18,795 $ 24,018 $ 11,581

The Company recognizes actuarial gains and losses, unless an interim remeasurement is required, in the fourth quarter of the year in which the gains and losses occur, in accordance with the Company's accounting method for defined benefit pension plans and other postretirement benefits as described in Note 1, Nature of Operations and Accounting Policies .

Amortization of prior service credit — — ( 152 )

Net periodic pension (credit) cost $ ( 29,317 ) $ 18,795 $ 24,018

The Company recognizes actuarial gains and losses, unless an interim remeasurement is required, in the fourth quarter of the year in which the gains and losses occur.

Such adjustments for gains and losses are primarily driven by events and circumstances beyond the Company's control, including changes in interest rates, the performance of the financial markets and mortality assumptions.

3 unchanged sentences

pension plan and the principal non-U.S.

pension plans and the amounts recognized in the Company’s consolidated balance sheets as of January 3, 2021 and December 29, 2019.

January 3, 2021 December 29, 2019

pension plans and the amounts recognized in the Company’s consolidated balance sheets as of January 2, 2022 and January 3, 2021.

January 2, 2022 January 3, 2021

(In thousands)

8 unchanged sentences

Business acquisitions — — ( 120 ) —

Plan curtailments — — ( 1,420 ) —

Actuarial loss 35,910 22,494 34,602 29,114

Actuarial (gains) losses ( 30,705 ) ( 6,218 ) 35,910 22,494

Effect of exchange rate changes ( 17,501 ) — 24,575 —

14 unchanged sentences

Net liabilities recognized in the consolidated balance sheets $ ( 158,201 ) $ ( 9,710 ) $ ( 190,595 ) $ ( 48,993 )

Net amounts recognized in accumulated other comprehensive income consist of:

Prior service cost $ — $ — $ — $ —

Actuarial assumptions as of the year-end measurement date:

1 unchanged sentence

Rate of compensation increase 2.78 % None 2.78 % None

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Actuarial assumptions used to determine net periodic pension cost during the year were as follows:

January 3, 2021 December 29, 2019 December 30, 2018

January 2, 2022 January 3, 2021 December 29, 2019

Discount rate 0.92 % 2.21 % 1.34 % 3.01 % 2.07 % 4.05 %

1 unchanged sentence

Expected rate of return on assets 2.10 % 7.25 % 2.20 % 7.25 % 5.30 % 7.25 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table provides a breakdown of the non-U.S.

benefit obligations and fair value of assets for pension plans that have benefit obligations in excess of plan assets:

2021 December 29,

2022 January 3,

(In thousands)

6 unchanged sentences

Assets of the defined benefit pension plans are primarily equity and debt securities.

Asset allocations as of January 3, 2021 and December 29, 2019, and target asset allocations for fiscal year 2021 are as follows:

Asset allocations as of January 2, 2022 and January 3, 2021, and target asset allocations for fiscal year 2022 are as follows:

Target Allocation Percentage of Plan Assets at

January 2, 2022 January 3, 2021 December 29, 2019

January 1, 2023 January 2, 2022 January 3, 2021

Asset Category Non-U.S.

8 unchanged sentences

The Company's discount rate assumptions are derived from a range of factors, including a yield curve for certain plans, composed of the rates of return on high-quality fixed-income corporate bonds available at the measurement date and the related expected duration for the obligations, and a bond matching approach for certain plans.

During fiscal year 2018, the Society of Actuaries issued an updated projection scale, MP-2018, which incorporated an additional year (2016) of U.S.

population data and reduced the life expectancy used to determine the projected benefit obligation.

The Company adopted MP-2018 as of December 30, 2018.

The adoption of MP-2018 resulted in a $ 1.0 million decrease to the projected benefit obligation at December 30, 2018.

During fiscal year 2019, the Society of Actuaries issued an updated projection scale, MP-2019, which incorporated an additional year (2017) of U.S.

population data and reduced the life expectancy used to determine the projected benefit obligation.

The Company adopted MP-2019 as of December 29, 2019.

The adoption of MP-2019 resulted in a $ 4.4 million decrease to the projected benefit obligation at December 29, 2019.

During fiscal

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

year 2020, the Society of Actuaries issued an updated projection scale, MP-2020, which incorporated an additional year (2018) of U.S.

population data and made a few adjustments to the long-term rate of mortality improvement assumed.

The Company adopted MP-2020 as of January 3, 2021.

The adoption of MP-2020 resulted in a $ 2.7 million decrease to the projected benefit obligation at January 3, 2021.

The changes to the projected benefit obligations due to the adoption of the mortality base table and projection scale are included within "Actuarial loss (gain)" in the Change in Benefit Obligations for fiscal years 2020 and 2019 above.

The target allocations for plan assets are listed in the above table.

4 unchanged sentences

government index linked bonds, multi-strategy hedge funds and venture capital funds that follow several different strategies.

The fair values of the Company’s pension plan assets as of January 3, 2021 and December 29, 2019 by asset category, classified in the three levels of inputs described in Note 22 to the consolidated financial statements are as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The fair value of the Company’s pension plan assets as of January 2, 2022 and January 3, 2021 by asset category, classified in the three levels of inputs described in Note 20 to the consolidated financial statements are as follows:

Fair Value Measurements at January 2, 2022 Using:

13 unchanged sentences

Fixed income securities:

treasury securities 106,315 — 106,315 —

Corporate and U.S.

debt instruments 133,727 41,725 92,002 —

Corporate bonds 35,816 — 35,816 —

High yield bond funds 2,954 2,954 — —

Short-term corporate bonds 15,650 — 15,650 —

Other types of investments:

government index linked bonds 38,231 — 38,231 —

Foreign liability driven instrument 165,680 — — 165,680

Total assets measured at fair value $ 471,305 $ 197,973 $ 107,652 $ 165,680

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value Measurements at December 29, 2019 Using:

Fair Value Measurements at January 3, 2021 Using:

Total Carrying

December 29, 2019 Quoted Prices in

January 3, 2021 Quoted Prices in

Active Markets

7 unchanged sentences

International large-cap value 28,315 28,315 — —

small mid-cap 2,700 2,700 — —

Emerging markets growth 13,594 13,594 — —

Domestic real estate funds 2,010 2,010 — —

Foreign real estate funds 23,259 — — 23,259

6 unchanged sentences

Other types of investments:

Multi-strategy hedge funds 1,721 — — 1,721

government index linked bonds 38,231 — 38,231 —

2 unchanged sentences

Valuation techniques utilized need to maximize the use of observable inputs and minimize the use of unobservable inputs.

There have been no changes in the methodologies utilized at January 3, 2021 compared to December 29, 2019.

There have been no changes in the methodologies utilized at January 2, 2022 compared to January 3, 2021.

The following is a description of the valuation techniques utilized to measure the fair value of the assets shown in the table above.

3 unchanged sentences

These instruments have active markets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Equity index funds are mutual funds that are not publicly traded and are comprised primarily of underlying equity securities that are publicly traded on exchanges.

13 unchanged sentences

The net asset values are determined based upon the fair values of the underlying investments in the funds.

These other investments invest primarily in readily available marketable securities and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

allocate gains, losses, and expense to the investor based on the ownership percentage as described in the fund agreements.

These other investments invest primarily in readily available marketable securities and allocate gains, losses, and expense to the investor based on the ownership percentage as described in the fund agreements.

They are categorized as Level 3 assets.

In September 2021, the Company’s UK pension scheme executed a buy-in contract with Phoenix Life LTD (''Phoenix"), under which the Company made an upfront payment to Phoenix in exchange for Phoenix agreeing to make the benefit payments under the Company’s UK pension scheme due to specified participants and their beneficiaries, thus transferring most of the investment and longevity risk associated with the covered participants and beneficiaries from the Company to Phoenix.

This buy-in contract can be considered a liability-driven investment (''LDI") solution that hedges not only the investment risk but also the longevity risk under the Company’s UK pension scheme.

Like other LDI solutions, it does not eliminate ongoing administrative costs .

The Company's policy is to recognize significant transfers between levels at the actual date of the event.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A reconciliation of the beginning and ending Level 3 assets for fiscal years 2021, 2020 and 2019 is as follows:

1 unchanged sentence

Significant Unobservable Inputs

Foreign liability driven investment Foreign

Funds Multi-strategy

1 unchanged sentence

Balance at December 30, 2018 $ — $ 22,196 $ 16,934 $ 39,130

Unrealized gains — 145 145

Purchases 22,196 — 22,196

Balance at December 30, 2018 22,196 16,934 39,130

Sales — — ( 15,586 ) ( 15,586 )

5 unchanged sentences

Balance at January 3, 2021 — 23,259 — 23,259

Sales — ( 23,115 ) — ( 23,115 )

Realized losses — ( 226 ) — ( 226 )

Realized gains — 82 — 82

Purchases 165,680 — — 165,680

Balance at January 2, 2022 $ 165,680 $ — $ — $ 165,680

With respect to plans outside of the United States, the Company expects to contribute $ 7.0 million in the aggregate during fiscal year 2022.

11 unchanged sentences

Effective July 31, 2000, this plan was closed to new entrants.

At January 3, 2021 and December 29, 2019, the projected benefit obligations were $ 25.9 million and $ 25.7 million, respectively.

Assets with a fair value of $ 1.9 million and $ 2.1 million, segregated in a trust (which is included in marketable securities and investments on the consolidated balance sheets), were available to meet this obligation as of January 3, 2021 and December 29, 2019, respectively.

Pension expenses and income for this plan netted to expense of $ 2.1 million in fiscal year 2020, expense of $ 4.8 million in fiscal year 2019 and income of $ 0.3 million in fiscal year 2018.

At January 2, 2022 and January 3, 2021, the projected benefit obligations were $ 24.1 million and $ 25.9 million, respectively.

Assets with a fair value of $ 1.6 million and $ 1.9 million, segregated in a trust (which is included in marketable securities and investments on the consolidated balance sheets), were available to meet this obligation as of January 2, 2022 and January 3, 2021, respectively.

Pension expenses and income for this plan netted to expense of $ 0.2 million in fiscal year 2021, expense of $ 2.1 million in fiscal year 2020 and expense of $ 4.8 million in fiscal year 2019.

Postretirement Medical Plans:

6 unchanged sentences

Effective January 1, 2000, this plan was closed to new hires.

For employees retiring after 1991, the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company has capped its medical premium contribution based on employees’ years of service.

For employees retiring after 1991, the Company has capped its medical premium contribution based on employees’ years of service.

The Company funds the amount allowable under a 401(h) provision in the Company’s defined benefit pension plan.

Assets of the plan are primarily equity and debt securities and are available only to pay retiree health benefits.

Net periodic postretirement medical benefit (credit) cost included the following components for the fiscal years ended:

2021 December 29,

2019 December 30,

(In thousands)

Service cost $ 73 $ 87 $ 106

Interest cost 94 116 120

Expected return on plan assets ( 1,389 ) ( 1,175 ) ( 1,254 )

Actuarial (gain) loss ( 1,647 ) ( 1,776 ) 1,621

Net periodic postretirement medical benefit (credit) cost $ ( 2,869 ) $ ( 2,748 ) $ 593

The following table sets forth the changes in the postretirement medical plan’s funded status and the amounts recognized in the Company’s consolidated balance sheets as of January 3, 2021 and December 29, 2019.

2021 December 29,

(In thousands)

Actuarial present value of benefit obligations:

Retirees $ 611 $ 583

Active employees eligible to retire 420 362

Other active employees 2,069 1,966

Accumulated benefit obligations at beginning of year 3,100 2,911

Service cost 73 87

Interest cost 94 116

Benefits paid ( 101 ) ( 122 )

Actuarial (gain) loss ( 179 ) 108

Change in accumulated benefit obligations during the year ( 113 ) 189

Retirees 545 611

Active employees eligible to retire 1,232 420

Other active employees 1,211 2,069

Accumulated benefit obligations at end of year $ 2,988 $ 3,100

Change in plan assets:

Fair value of plan assets at beginning of year $ 19,216 $ 16,279

Actual return on plan assets 2,756 2,937

Fair value of plan assets at end of year $ 21,972 $ 19,216

Net assets recognized in the consolidated balance sheets $ 18,984 $ 16,116

Net amounts recognized in the consolidated balance sheets consist of:

Other assets $ 18,984 $ 16,116

Net amounts recognized in accumulated other comprehensive income consist of:

Prior service cost $ — $ —

Actuarial assumptions as of the year-end measurement date:

Discount rate 2.34 % 3.09 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Actuarial assumptions used to determine net cost during the year are as follows:

2021 December 29,

2019 December 30,

Discount rate 3.09 % 4.09 % 3.60 %

Expected rate of return on assets 7.25 % 7.25 % 7.25 %

The Company maintains a master trust for plan assets related to the U.S.

defined benefit plans and the U.S.

postretirement medical plan.

Accordingly, investment policies, target asset allocations and actual asset allocations are the same as those disclosed for the U.S.

defined benefit plans.

The fair values of the Company’s plan assets at January 3, 2021 and December 29, 2019 by asset category, classified in the three levels of inputs described in Note 22, are as follows:

Fair Value Measurements at January 3, 2021 Using:

Total Carrying

January 3, 2021 Quoted Prices in

Active Markets

(Level 1) Significant Other

Observable Inputs

(Level 2) Significant

(In thousands)

Cash $ 428 $ 428 $ — $ —

Equity securities:

large-cap 6,398 6,398 — —

International large-cap value 2,315 2,315 — —

Emerging markets growth 1,112 1,112 — —

Fixed income securities:

Corporate and U.S.

debt instruments 11,477 3,557 7,920 —

High yield bond funds 242 242 — —

Total assets measured at fair value $ 21,972 $ 14,052 $ 7,920 $ —

Fair Value Measurements at December 29, 2019 Using:

Total Carrying

December 29, 2019 Quoted Prices in

Active Markets

(Level 1) Significant Other

Observable Inputs

(Level 2) Significant

(In thousands)

Cash $ 408 $ 408 $ — $ —

Equity securities:

large-cap 4,365 4,365 — —

International large-cap value 2,033 2,033 — —

small mid-cap 204 204 — —

Emerging markets growth 971 971 — —

Domestic real estate funds 152 152 — —

Fixed income securities:

Corporate debt instruments 10,520 3,557 6,963 —

High yield bond funds 433 433 — —

Other types of investments:

Multi-strategy hedge funds 130 — — 130

Total assets measured at fair value $ 19,216 $ 12,123 $ 6,963 $ 130

Assets of the plan are primarily equity and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Valuation Techniques:

Valuation techniques are the same as those disclosed for the U.S.

defined benefit plans above.

A reconciliation of the beginning and ending Level 3 assets for fiscal years 2020, 2019 and 2018 is as follows:

Multi-strategy

(In thousands)

Balance at December 31, 2017 $ 1,151

Unrealized gains 25

Balance at December 30, 2018 1,176

Sales ( 1,074 )

Realized gains 315

Unrealized losses ( 287 )

Balance at December 29, 2019 130

Sales ( 130 )

Balance at January 3, 2021 $ —

The Company does not expect to make any contributions to the postretirement medical plan during fiscal year 2021.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:

Postretirement Medical Plan

(In thousands)

2026-2030 883

debt securities and are available only to pay retiree health benefits.

The costs of these plans are not material and the net assets in the plans totaled $ 20.7 million and $ 19.0 million at January 2, 2022 and January 3, 2021, respectively.

Deferred Compensation Plans:

2 unchanged sentences

Benefit payments under the plan are funded by contributions from participants, and for certain participants, contributions by the Company.

The obligations related to the deferred compensation plan totaled $ 0.6 million and $ 1.1 million as of January 3, 2021 and December 29, 2019, respectively.

The obligations related to the deferred compensation plan totaled $ 0.3 million and $ 0.6 million as of January 2, 2022 and January 3, 2021, respectively.

Contingencies

1 unchanged sentence

The Company accrues for environmental issues in the accounting period that the Company's responsibility is established and when the cost can be reasonably estimated.

The Company has accrued $ 12.9 million and $ 7.7 million as of January 3, 2021 and December 29, 2019, respectively, in accrued expenses and other current liabilities, which represents its management’s estimate of the cost of the remediation of known environmental matters, and does not include any potential liability for related personal injury or property damage claims.

The Company has accrued $ 11.9 million and $ 12.9 million as of January 2, 2022 and January 3, 2021, respectively, in accrued expenses and other current liabilities, which represents its management’s estimate of the cost of the remediation of known environmental matters, and does not include any potential liability for related personal injury or property damage claims.

The Company's environmental accrual is not discounted and does not reflect the recovery of any material amounts through insurance or indemnification arrangements.

The cost estimates

are subject to a number of variables, including the stage of the environmental investigations, the magnitude of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations.

The cost estimates are subject to a number of variables, including the stage of the environmental investigations, the magnitude of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations.

For sites where the Company has been named a PRP, management does not currently anticipate any additional liability to result from the inability of other significant named parties to contribute.

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However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to the Company.

Warranty Reserves

The Company provides warranty protection for certain products usually for a period of one year beyond the date of sale.

The majority of costs associated with warranty obligations include the replacement of parts and the time for service personnel to respond to repair and replacement requests.

A warranty reserve is recorded based upon historical results, supplemented by management’s expectations of future costs.

Warranty reserves are included in “Accrued expenses and other current liabilities” on the consolidated balance sheets.

A summary of warranty reserve activity for the fiscal years ended January 3, 2021, December 29, 2019 and December 30, 2018 is as follows:

(In thousands)

Balance at December 31, 2017 $ 9,050

Provision charged to income 13,545

Payments ( 13,775 )

Adjustments to previously provided warranties, net ( 157 )

Foreign currency translation and acquisitions ( 270 )

Balance at December 30, 2018 8,393

Provision charged to income 12,199

Payments ( 14,613 )

Adjustments to previously provided warranties, net 2,889

Foreign currency translation and acquisitions ( 56 )

Balance at December 29, 2019 8,812

Provision charged to income 15,315

Payments ( 15,130 )

Adjustments to previously provided warranties, net 2,721

Foreign currency translation and acquisitions 355

Balance at January 3, 2021 $ 12,073

Stock-Based Compensation:

The Company’s 2019 Incentive Plan (the “2019 Plan”) authorizes the issuance of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash awards as part of the Company’s compensation programs.

The 2019 Plan was approved by the Company’s Board on January 24, 2019 and by the Company’s shareholders on

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

April 23, 2019.

The 2019 Plan replaced the Company’s 2009 Incentive Plan (the “2009 Plan”), under which the Company’s common stock was made available for stock option grants, restricted stock awards, performance restricted stock units, performance units and stock awards as part of the Company’s compensation programs.

The Company’s 2019 Incentive Plan (the “2019 Plan”) authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash awards as part of the Company’s compensation programs.

The 2019 Plan replaced the Company’s 2009 Incentive Plan (the “2009 Plan”).

Upon shareholder approval of the 2019 Plan, 6.25 million shares of the Company’s common stock, as well as shares of the Company’s common stock previously granted under the 2009 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price subject to a contractual repurchase right, became available for grant under the 2019 Plan.

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The following table summarizes total pre-tax compensation expense recognized related to the Company’s stock options, restricted stock, restricted stock units, performance restricted stock units, performance units and stock grants, included in the Company’s consolidated statements of operations for fiscal years 2021, 2020 and 2019:

2021 December 29,

2022 January 3,

2021 December 29,

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The total income tax benefit recognized in the consolidated statements of operations for stock-based compensation was $ 14.0 million in fiscal year 2021, $ 17.2 million in fiscal year 2020 and $ 11.6 million in fiscal year 2019.

Stock-based compensation costs capitalized as part of inventory were $ 0.4 million and $ 0.3 million as of January 3, 2021 and December 29, 2019, respectively.

Stock compensation expense from acceleration of vesting of certain stock awards to the Company's former Chief Executive Officer was $ 7.7 million for fiscal year 2019.

Stock-based compensation costs capitalized as part of inventory were immaterial in all periods presented.

Stock Options:

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The Company’s weighted-average assumptions used in the Black-Scholes option pricing model were as follows for the fiscal years ended:

2021 December 29,

2022 January 3,

2021 December 29,

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Expected stock volatility 27.3 % 23.8 % 22.8 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes stock option activity for the fiscal year ended January 2, 2022:

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Exercised ( 359 ) 70.44

Canceled ( 1 ) 95.74

Forfeited ( 35 ) 107.70

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At January 2, 2022, there were 1.2 million stock options that were vested and expected to vest in the future, with an aggregate intrinsic value of $ 97.4 million and a weighted-average remaining contractual term of 5.1 years.

The weighted-average per-share grant-date fair value of options granted during fiscal years 2020, 2019 and 2018 was $ 18.98 , $ 22.63 , and $ 17.56 , respectively.

The weighted-average grant-date fair value of options granted during fiscal years 2021, 2020 and 2019 was $ 40.00 , $ 18.98 , and $ 22.63 per share, respectively.

The total intrinsic value of options exercised during fiscal years 2021, 2020 and 2019 was $ 32.4 million, $ 51.1 million, and $ 19.1 million, respectively.

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The fair value of the award at the time of the grant is expensed on a straight line basis primarily in selling, general and administrative expenses over the vesting period, which is generally 3 years.

These awards were granted under the Company’s 2009 Plan.

Recipients of the restricted stock have the right to vote such shares and receive dividends.

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That cost is expected to be recognized over a weighted-average period of 1.9 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Performance Restricted Stock Units:

As part of the Company's executive compensation program, the Company granted 49,138 and 76,218 performance restricted stock units during fiscal years 2020 and 2019, respectively, that will vest based on performance of the Company.

The weighted-average per-share grant date fair value of performance restricted stock units granted during fiscal years 2020 and 2019 was $ 95.43 and $ 92.95 , respectively.

During fiscal year 2020, 29,943 performance restricted stock units were forfeited.

The total compensation expense recognized related to the performance restricted stock units was $ 7.9 million in fiscal year 2020 and $ 5.9 million in fiscal year 2019.

As of January 3, 2021, there were 121,759 performance restricted stock units outstanding.

Performance Units:

The Company’s performance unit program provides a cash award based on the achievement of specific performance criteria.

A target number of units are granted at the beginning of a three-year performance period.

The number of units earned at the end of the performance period is determined by multiplying the number of units granted by a performance factor ranging from 0 % to 200 %.

Awards are determined by multiplying the number of units earned by the stock price at the end of the performance period, and are paid in cash and accounted for as a liability based award.

The compensation expense associated with these units is recognized over the period that the performance targets are expected to be achieved.

No performance units were granted during the fiscal years 2020 and 2019.

The Company granted 37,281 performance units during fiscal year 2018.

The weighted-average per-share grant-date fair value of performance units granted during fiscal year 2018 was $ 73.23 .

During fiscal years 2020 and 2019, 1,948 performance units and 10,116 performance units, respectively, were forfeited.

The total compensation expense related to performance units was $ 6.1 million, $ 5.6 million, and $ 7.7 million for fiscal years 2020, 2019 and 2018, respectively.

As of January 3, 2021, there were 31,207 performance units outstanding subject to forfeiture, with a corresponding liability of $ 9.4 million recorded in accrued expenses and other current liabilities in the consolidated balance sheets.

Stock Awards:

The Company’s stock award program provides an annual equity award to non-employee directors.

For fiscal years 2020, 2019 and 2018, the award equaled the number of shares of the Company’s common stock which has an aggregate fair market value of $ 100,000 on the date of the award.

The stock award is prorated for non-employee directors who serve for only a portion of the year.

The compensation expense associated with these stock awards is recognized when the stock award is granted.

In fiscal years 2020, 2019 and 2018, the Company awarded 8,333 shares, 7,301 shares, and 11,088 shares, respectively, to non-employee directors.

The weighted-average per-share grant-date fair value of stock awards granted during fiscal years 2020, 2019 and 2018 was $ 91.75 , $ 95.84 , and $ 72.17 , respectively.

The total compensation expense recognized related to these stock awards was $ 0.8 million, $ 0.7 million and $ 0.8 million in fiscal years 2020, 2019 and 2018, respectively.

Employee Stock Purchase Plan:

In April 1999, the Company’s shareholders approved the 1998 Employee Stock Purchase Plan.

In April 2005, the Compensation and Benefits Committee of the Board voted to amend the Employee Stock Purchase Plan, effective July 1, 2005, whereby participating employees have the right to purchase common stock at a price equal to 95 % of the closing price on the last day of each six-month offering period.

In April 2005, the Compensation and Benefits Committee of the Company's Board of Directors (the "Board") voted to amend the Employee Stock Purchase Plan, effective July 1, 2005, whereby participating employees have the right to purchase common stock at a price equal to 95 % of the closing price on the last day of each six-month offering period.

The number of shares which an employee may purchase, subject to certain aggregate limits, is determined by the employee’s voluntary contribution, which may not exceed 10 % of the employee’s base compensation.

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At January 2, 2022 there remains available for sale to employees an aggregate of 0.8 million shares of the Company’s common stock out of the 5.0 million shares authorized by shareholders for issuance under this plan.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stockholders’ Equity

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Current year change ( 23,978 ) 807 6 ( 23,165 )

Reclassification to retained earnings upon adoption of ASU 2018-02 ( 6,489 ) — — ( 6,489 )

Balance, December 29, 2019 ( 200,437 ) 1,052 ( 261 ) ( 199,646 )

Current year change 169,500 ( 1,799 ) ( 16 ) 167,685

Balance, December 29, 2019 ( 200,437 ) 1,052 ( 261 ) ( 199,646 )

Balance, January 3, 2021 ( 30,937 ) ( 747 ) ( 277 ) ( 31,961 )

Current year change ( 130,873 ) ( 95 ) 237 ( 130,731 )

Balance, January 2, 2022 $ ( 161,810 ) $ ( 842 ) $ ( 40 ) $ ( 162,692 )

During fiscal years 2020, 2019 and 2018, pre-tax credit (cost) of $ 1.8 million, $ 0.8 million, and $( 0.1 ) million, respectively, was reclassified from accumulated other comprehensive income into selling, general and administrative expenses as a component of net periodic pension cost.

During fiscal years 2021, 2020 and 2019, pre-tax pension credit (cost) of $ 0.1 million, $( 1.8 ) million, and $ 0.8 million, respectively, was reclassified from accumulated other comprehensive income into selling, general and administrative expenses as a component of net periodic pension cost.

Stock Repurchases:

On July 23, 2018, the Board of Directors (the "Board") authorized the Company to repurchase shares of common stock for an aggregate amount up to $ 250.0 million under a stock repurchase program (the "Repurchase Program").

The Repurchase Program expired on July 23, 2020, and no shares remain available for repurchase under the Repurchase Program due to its expiration.

On July 31, 2020, the Board authorized the Company to repurchase shares of common stock for an aggregate amount up to $ 250.0 million under a new stock repurchase program (the "New Repurchase Program").

The New Repurchase Program will expire on July 27, 2022 unless terminated earlier by the Board and may be suspended or discontinued at any time.

During fiscal year 2020, the Company had no stock repurchases under either the Repurchase Program or the New Repurchase Program.

As of January 3, 2021, $ 250.0 million remained available for aggregate repurchases of shares under the New Repurchase Program.

Subsequent to fiscal year 2020, the Company repurchased 233,000 shares of common stock under the New Repurchase Program at an aggregate cost of $ 33.6 million.

On July 31, 2020, the Board authorized the Company to repurchase shares of common stock for an aggregate amount up to $ 250.0 million under a stock repurchase program (the "Repurchase Program").

The Repurchase Program will expire on July 27, 2022 unless terminated earlier by the Board and may be suspended or discontinued at any time.

During fiscal year 2021, the Company repurchased 433,000 shares of common stock under the Repurchase Program at an aggregate cost of $ 62.6 million.

As of January 2, 2022, $ 187.4 million remained available for aggregate repurchases of shares under the Repurchase Program.

In addition, the Board has authorized the Company to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to the Company’s equity incentive plans and to satisfy obligations related to the exercise of stock options made pursuant to the Company's equity incentive plans.

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The Company does not enter into derivative contracts for trading or other speculative purposes, nor does the Company use leveraged financial instruments.

Approximately 70 % of the Company’s business is conducted outside of the United States, generally in foreign currencies.

Approximately 60 % of the Company’s

business is conducted outside of the United States, generally in foreign currencies.

As a result, fluctuations in foreign currency exchange rates can increase the costs of financing, investing and operating the business.

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The cash flows related to the settlement of these hedges are included in cash flows from operating activities within the Company’s consolidated statements of cash flows.

Principal hedged currencies include the Brazilian Real, British Pound, Chinese Yuan, Euro, Indian Rupee, Singapore Dollar and Swedish Krona.

Principal hedged currencies include the Australian Dollar, British Pound, Euro, Indian Rupee, Singapore Dollar and Swedish Krona.

The Company held forward foreign exchange contracts, designated as economic hedges, with U.S.

dollar equivalent notional amounts totaling $ 808.0 million at January 3, 2021, $ 277.6 million at December 29, 2019, and $ 223.3 million at December 30, 2018, and the fair value of these foreign currency derivative contracts was insignificant.

dollar equivalent notional amounts totaling $ 371.9 million at January 2, 2022, $ 808.0 million at January 3, 2021, and $ 277.6 million at December 29, 2019, and the fair value of these foreign currency derivative contracts was insignificant.

The gains and losses realized on these foreign currency derivative contracts are not material.

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The cash flows related to the settlement of these hedges are included in cash flows from financing activities within the Company’s consolidated statements of cash flows.

The outstanding forward exchange contracts designated as economic hedges, which were intended to hedge movements in foreign exchange rates prior to the settlement of certain intercompany loan agreements, included combined Euro notional amounts of € 33.4 million and U.S.

Dollar notional amounts of $ 360.2 million as of January 2, 2022, combined Euro notional amounts of € 33.4 million and combined U.S.

Dollar notional amounts of $ 5.6 million as of December 29, 2019, and combined Euro notional amounts of € 37.3 million and combined U.S.

Dollar notional amounts of $ 499.0 million as of January 3, 2021, and combined Euro notional amounts of € 105.8 million and combined U.S.

Dollar notional amounts of $ 5.6 million as of December 29, 2019.

The net gains and losses on these derivatives, combined with the gains and losses on the remeasurement of the hedged intercompany loans were not material for each of the fiscal years 2020 and 2019.

The Company paid $ 4.6 million and $ 1.3 million during the fiscal years 2020 and 2019, respectively, from the settlement of these hedges.

The net gains and losses on these derivatives, combined with the gains and losses on the remeasurement of the hedged intercompany loans were not material.

During fiscal year 2018, the Company designated a portion of the 2026 Notes to hedge its investments in certain foreign subsidiaries.

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As of January 2, 2022, the total notional amount of the 2026 Notes that was designated to hedge investments in foreign subsidiaries was € 497.2 million.

The unrealized foreign exchange losses (gains) recorded in AOCI related to the net investment hedge were $ 49.6 million and $( 4.9 ) million during the fiscal years 2020 and 2019, respectively.

During fiscal year 2018, the Company designated the 2021 Notes to hedge its investments in certain foreign subsidiaries.

Unrealized translation adjustments from the 2021 Notes were included in the foreign currency translation component of AOCI, which offsets translation adjustments on the underlying net assets of foreign subsidiaries.

The cumulative translation gains or losses will remain in AOCI until the foreign subsidiaries are liquidated or sold.

During the second quarter of fiscal year 2020, the Company removed the hedging relationship of the first € 100.0 million of the 2021 Notes and investments in certain foreign subsidiaries.

During the third quarter of fiscal year 2020, the Company removed the hedging relationship of the remaining € 200.0 million of the 2021 Notes and investments in certain foreign subsidiaries.

The unrealized foreign exchange losses

(gains) recorded in AOCI related to the net investment hedge were $ 1.8 million and $( 8.0 ) million during the fiscal years 2020 and 2019, respectively.

The unrealized foreign exchange (gains) losses recorded in AOCI related to the net investment hedge were $( 33.2 ) million, $ 49.6 million and $( 4.9 ) million during the fiscal years 2021, 2020 and 2019, respectively.

During fiscal year 2019, the Company entered into a cross-currency swap designated as a net investment hedge to hedge the Euro currency exposure of the Company’s net investment in certain foreign subsidiaries.

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In assessing the effectiveness of this hedge, the Company uses a method based on changes in spot rates to measure the impact of the foreign currency exchange rate fluctuations on both its foreign subsidiary net investment and the related swap.

Under this method, changes in the fair value of the hedging instrument other than those due to changes in the spot rate are initially recorded in AOCI as a translation adjustment, and then are amortized into other (income) expense, net in the condensed consolidated statement of operations using a systematic and rational method over the instrument’s term.

Under this method, changes in the fair value of the hedging instrument other than those due to changes in the spot rate are initially recorded in AOCI as a translation adjustment, and then are amortized into other (income) expense, net in the consolidated statement of operations using a systematic and rational method over the instrument’s term.

Changes in the fair value associated with the effective portion (i.e.

those changes due to the spot rate) are recorded in AOCI as a translation adjustment and are released and recognized in earnings only upon the sale or liquidation of the hedged net investment.

The cross-currency swap has an initial notional value of € 197.4 million or $ 220.0 million and matures on November 15, 2021.

Interest on the cross-currency swap is payable semi-annually, in Euro, on May 15th and November 15th of each year based on the Euro notional value and a fixed rate of 2.47 %.

The Company receives interest in U.S.

The cross-currency swap had an initial notional value of € 197.4 million or $ 220.0 million and matured on November 15, 2021.

Interest on the cross-currency swap was payable semi-annually, in Euro, on May 15th and November 15th of each year based on the Euro notional value and a fixed rate of 2.47 %.

The Company received interest in U.S.

dollars on May 15th and November 15th of each year based on the U.S.

dollar equivalent of the Euro notional value and a fixed rate of 5.00 %.

As of January 3, 2021, the fair value of the cross-currency swap was $( 18.3 ) million, which was recorded in AOCI.

The unrealized foreign exchange (losses) gains recorded in AOCI related to cross-currency swap were $( 18.6 ) million and $ 0.3 million dur ing the fiscal years 2020 and 2019, respectively.

During the second and third quarters of fiscal year 2020, the Company entered into forward foreign exchange contracts, designated as cash flow hedges, to hedge the 2021 Notes.

During fiscal year 2020, the Company entered into forward foreign exchange contracts, designated as cash flow hedges, to hedge the 2021 Notes.

The effective portion of the gain or loss of the cash flow hedges were reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affected earnings.

During the second quarter of fiscal year 2021, the Company redeemed all of its outstanding 2021 Notes and settled the forward foreign exchange contracts that were designated as cash flow hedges.

The foreign exchange losses (gains) recorded in earnings related to the cash flow hedges were $ 9.5 million and $( 29.3 ) million d ur ing the fiscal years 2021 and 2020, respectively.

During fiscal year 2021, the Company entered into forward foreign exchange contracts, designated as cash flow hedges, to hedge a portion of the 2026 Notes.

The effective portion of the gain or loss of the cash flow hedges will be reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings.

As of January 3, 2021, the total notional amount of the forward foreign exchange contracts that were designated as cash flow hedges was € 300.0 million.

The unrealized foreign exchange gains recorded in earnings related to the cash flow hedges were $ 29.3 million during the fiscal year 2020.

During the fourth quarter of fiscal year 2021, the Company settled the forward foreign exchange contracts that were designated as cash flow hedges.

The foreign exchange loss recorded in earnings related to the cash flow hedges was $ 8.7 million during fiscal year 2021.

During fiscal year 2021, the Company entered into two interest rate swaption agreements (together, the “Swaptions”) with expiration dates of September 30, 2021 in anticipation of issuing notes to fund the acquisition of BioLegend.

The first Swaption had a term of 2 months and hedged an anticipated 10-year note offering, with a notional value of $ 500.0 million.

The second Swaption had a term of 2 months and hedged an anticipated 7-year note offering, with a notional value of $ 500.0 million.

The Company designated the Swaptions as qualifying hedging instruments and accounted for these derivatives as cash flow hedges.

On September 8, 2021, the Company sold both Swaptions, and as a result, recognized a loss of $ 8.2 million in interest and other expense, net during the fiscal year 2021.

The Company also recorded other comprehensive income of $ 3.8 million, which will be amortized to interest and other expense, net over the 7 and 10 year terms, respectively, of the related permanent financing.

The Company does no t expect any material net pre-tax gains or losses to be reclassified from accumulated other comprehensive (loss) income into interest and other expense, net within the next twelve months.

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The Company believes it had no significant concentrations of credit risk as of January 2, 2022.

The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during fiscal years 2020 and 2019.

The Company’s financial assets and liabilities carried at fair value are primarily comprised of marketable securities, derivative contracts used to hedge the Company’s currency risk, and acquisition related contingent consideration.

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In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.

The following tables show the assets and liabilities carried at fair value measured on a recurring basis as of January 3, 2021 and December 29, 2019 classified in one of the three classifications described above:

The following tables show the assets and liabilities carried at fair value measured on a recurring basis as of January 2, 2022 and January 3, 2021 classified in one of the three classifications described above:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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Contingent consideration ( 57,996 ) — — ( 57,996 )

Fair Value Measurements at December 29, 2019 Using:

Fair Value Measurements at January 3, 2021 Using:

Total Carrying

Value at December 29, 2019 Quoted Prices in

Value at January 3, 2021 Quoted Prices in

Active Markets

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Derivative assets and liabilities that can be net settled under these arrangements have been presented in the Company's consolidated balance sheet on a net basis and are recorded in other assets.

As of both January 3, 2021 and December 29, 2019, none of the master netting arrangements involved collateral.

As of both January 2, 2022 and January 3, 2021, none of the master netting arrangements involved collateral.

Level 3 Valuation Techniques:

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Projected risk-adjusted contingent payments are discounted back to the current period using a discounted cash flow model.

During fiscal year 2015, the Company acquired all the shares of Vanadis Diagnostics AB ("Vanadis").

Under the terms of the acquisition, the initial purchase consideration was $ 32.0 million, net of cash and the Company was obligated to make potential future milestone payments, based on completion of a proof of concept, regulatory approvals and product sales, of up to $ 93.0 million ranging from 2016 to 2019.

The fair value of the contingent consideration as of the acquisition date was estimated at $ 56.9 million.

As of January 3, 2021, the Company has no remaining obligation to the previous owners of Vanadis.

During the fiscal year 2019, the Company recorded a contingent consideration obligation relating to other acquisitions with an estimated fair value of $ 12.7 million.

During the fiscal year 2020, the Company paid $ 23.7 million of contingent consideration, of which $ 10.4 million was included in financing activities and $ 13.3 million was included in operating activities in the consolidated statements of cash flows.

During the fiscal year 2019, the Company paid $ 50.9 million of contingent consideration, of which $ 29.9 million was included in financing activities and $ 20.9 million was included in operating activities in the consolidated statements of cash flows.

The fair values of contingent consideration are calculated on a quarterly basis based on a collaborative effort of the Company’s regulatory, research and development, operations, finance and accounting groups, as appropriate.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

valuation adjustments are made as additional information becomes available, including the progress towards achieving proof of concept, regulatory approvals and revenue targets as compared to initial projections, the impact of market competition and market landscape shifts from non-invasive prenatal testing products, with the impact of such adjustments being recorded in the consolidated statements of operations.

As of January 3, 2021, the Company may have to pay contingent consideration, related to acquisitions with open contingency periods, of up to $ 7.3 million.

Potential valuation adjustments are made as additional information becomes available, including the progress towards achieving proof of concept, regulatory approvals and revenue targets as compared to initial projections, the impact of market competition and market landscape shifts from non-invasive prenatal testing products, with the impact of such adjustments being recorded in the consolidated statements of operations.

As of January 2, 2022, the Company may have to pay contingent consideration, related to acquisitions with open contingency periods that are substantially all revenue-based consideration, of up to $ 108.4 million.

The expected maximum earnout period for acquisitions with open contingency period does not exceed 6.9 years from January 2, 2022, and the remaining weighted average expected earnout period at January 2, 2022 was 5.4 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A reconciliation of the beginning and ending Level 3 net liabilities for contingent consideration is as follows:

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Balance at December 30, 2018 $ ( 69,661 )

Additions ( 12,734 )

Amounts paid and foreign currency translation 50,795

1 unchanged sentence

Balance at December 29, 2019 ( 35,481 )

Additions ( 12,734 )

Amounts paid and foreign currency translation 23,701

Change in fair value (included within selling, general and administrative expenses) 8,827

Balance at December 29, 2019 ( 35,481 )

Balance at January 3, 2021 ( 2,953 )

Additions ( 57,431 )

Amounts paid and foreign currency translation 5,507

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If measured at fair value, cash and cash equivalents would be classified as Level 1.

As of January 3, 2021, the Company’s senior unsecured revolving credit facility, which provides for $ 1.0 billion of revolving loans, had a carrying value of $ 156.0 million, net of $ 2.6 million of unamortized debt issuance costs.

As of December 29, 2019, the Company's senior unsecured revolving credit facility had a carrying value of $ 322.0 million, net of $ 3.4 million of unamortized debt issuance costs.

The interest rate on the Company’s senior unsecured revolving credit facility is reset at least monthly to correspond to variable rates that reflect currently available terms and conditions for similar debt.

The Company had no change in credit standing during fiscal year 2020.

Consequently, the carrying value approximates fair value and were classified as Level 2.

The Company's 2026 Notes, with a face value of € 500.0 million, had an aggregate carrying value of $ 604.7 million, net of $ 3.3 million of unamortized original issue discount and $ 2.8 million of unamortized debt issuance costs as of January 3, 2021.

The 2026 Notes had an aggregate carrying value of $ 552.2 million, net of $ 3.5 million of unamortized original issue discount and $ 3.3 million of unamortized debt issuance costs as of December 29, 2019.

The 2026 Notes had a fair value of € 539.8 million (or $ 659.3 million) and € 518.5 million (or $ 579.6 million) as of January 3, 2021 and December 29, 2019, respectively.

The fair value of the 2026 Notes is estimated using market quotes from brokers and is based on current rates offered for similar debt.

The Company's 2021 Notes, with a face value of € 300.0 million, had an aggregate carrying value of $ 366.2 million, net of $ 16,200 of unamortized original issue discount and $0.2 million of unamortized debt issuance costs as of January 3, 2021.

The 2021 Notes had an aggregate carrying value of $ 334.2 million, net of $ 0.1 million of unamortized original issue discount and $ 1.1 million of unamortized debt issuance costs as of December 29, 2019.

The 2021 Notes had a fair value of € 300.5 million (or $ 367.1 million) and € 301.9 million (or $ 337.4 million) as of January 3, 2021 and December 29, 2019.

The fair value of the 2021 Notes is estimated using market quotes from brokers and is based on current rates offered for similar debt.

The Company's 2029 Notes, with a face value of $ 850.0 million, had an aggregate carrying value of $ 840.6 million, net of $ 2.5 million of unamortized original issue discount and $ 6.9 million of unamortized debt issuance costs as of January 3, 2021.

The 2029 Notes had an aggregate carrying value of $ 839.9 million, net of $ 2.7 million of unamortized original issue discount and $ 7.4 million of unamortized debt issuance costs as of December 29, 2019.

The 2029 Notes had a fair value of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$ 957.9 million and $ 872.3 million as of January 3, 2021 and December 29, 2019.

The fair value of the 2029 Notes is estimated using market quotes from brokers and is based on current rates offered for similar debt.

The Company’s other debt facilities had an aggregate carrying value of $ 23.2 million and $ 25.7 million as of January 3, 2021 and December 29, 2019, respectively.

As of January 3, 2021, these consisted of bank loans in the aggregate amount of $ 23.1 million bearing fixed interest rates between 1.1 % and 8.9 % and a bank loan in the amount of $ 0.1 million bearing a variable interest rate based on the Euribor rate plus a margin of 1.5 %.

The Company had no change in credit standing during fiscal year 2020.

Consequently, the carrying value approximates fair value.

As of January 3, 2021, the 2021 Notes, 2026 Notes, 2029 Notes and other debt facilities were classified as Level 2.

As of January 3, 2021, there has not been any significant impact to the fair value of the Company’s derivative liabilities due to credit risk.

Similarly, there has not been any significant adverse impact to the Company’s derivative assets based on the evaluation of its counterparties’ credit risks.

The Company's outstanding senior unsecured notes had an aggregate fair value of $ 4,612.8 million and aggregate carrying value of $ 4,479.5 million as of January 2, 2022.

The Company's outstanding senior unsecured notes had an aggregate fair value of $ 1,984.3 million and aggregate carrying value of $ 1,811.5 million as of January 3, 2021.

The fair values of the outstanding senior unsecured notes were estimated using market quotes from brokers and were based on current rates offered for similar debt, which are Level 2 measurements.

The Company’s other debt facilities, including the Company's senior revolving credit facility and term loan facility, had an aggregate carrying value of $ 504.5 million and $ 179.1 million as of January 2, 2022 and January 3, 2021, respectively.

The carrying value approximates fair value and were classified as Level 2.

Lessee Disclosures

3 unchanged sentences

The components of lease expense were as follows:

2022 January 3,

2021 December 29,

2 unchanged sentences

Supplemental cash flow information related to leases was as follows:

2022 January 3,

2021 December 29,

2 unchanged sentences

Operating cash flows from operating leases $ 53,455 $ 47,427 $ 50,155

Supplemental balance sheet information related to leases was as follows:

2021 December 29,

Right-of-use assets obtained in exchange for new lease obligations:

Operating leases $ 18,694 $ 5,048 $ 5,685

S upplemental balance sheet information related to leases was as follows:

2022 January 3,

(In thousands, except lease term and discount rate)

3 unchanged sentences

Operating lease liabilities 185,359 188,402

Total operating liabilities $ 228,732 $ 182,972

Total operating lease liabilities $ 225,926 $ 228,732

Weighted Average Remaining Lease Term in Years

2 unchanged sentences

Operating leases 2.6 % 2.9 %

Maturities of operating lease liabilities as of January 3, 2021 were as follows:

Lease costs from finance leases, short-term leases, variable lease costs and sub-lease income are not material.

Future p ayments of operating lease liabilities as of January 2, 2022 were as follows:

(In thousands)

27 unchanged sentences

Revenue and operating income (loss) from continuing operations by operating segment are shown in the table below for the fiscal years ended:

2021 December 29,

2022 January 3,

2021 December 29,

18 unchanged sentences

Operating income from continuing operations 1,332,378 978,581 361,973

Interest and other expense, net (see Note 6) 72,217 124,831 66,201

Interest and other expense, net 52,492 72,217 124,831

Income from continuing operations before income taxes $ 1,279,886 $ 906,364 $ 237,142

____________________________

(1) Legal costs for significant litigation matters and settlements in the Company's Discovery & Analytical Solutions segment were $ 5.9 million, $ 2.2 million and $ 5.3 million for fiscal years 2020, 2019 and 2018, respectively.

(1) Legal costs for significant litigation matters and settlements in the Company's Discovery & Analytical Solutions segment were $ 5.9 million and $ 2.2 million for fiscal years 2020 and 2019, respectively.

Legal costs for significant litigation matters and settlements in the Company's Diagnostics segment were $ 0.1 million, $ 1.2 million and $ 0.1 million for fiscal years 2021, 2020 and 2019, respectively.

(2) Asset impairment in the Company's Diagnostics segment was $ 7.9 million for fiscal year 2020.

(3) Costs for significant environmental matters was $ 5.2 million for fiscal year 2020.

(2) Asset impairment in the Company's Diagnostics segment was $ 3.9 million and $ 7.9 million for fiscal years 2021 and 2020.

(3) Costs for significant environmental matters were $ 5.2 million for fiscal year 2020.

Stock compensation expense from acceleration of executive compensation was $ 7.7 million for fiscal year 2019.

1 unchanged sentence

Depreciation and Amortization Expense Capital Expenditures

2021 December 29,

2019 December 30,

2022 January 3,

2021 December 29,

2019 January 2,

2022 January 3,

2021 December 29,

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2021 December 29,

2022 January 3,

2021 December 29,

4 unchanged sentences

Total assets $ 15,000,554 $ 7,960,315 $ 6,538,564

The following geographic area information for continuing operations includes revenue based on location of external customers for the three fiscal years ended January 3, 2021 and net long-lived assets based on physical location as of January 3, 2021 and December 29, 2019:

2021 December 29,

The following geographic area information for continuing operations includes revenue based on location of external customers for the three fiscal years ended January 2, 2022 and net long-lived assets based on physical location as of January 2, 2022 and January 3, 2021:

2022 January 3,

2021 December 29,

4 unchanged sentences

United Kingdom 417,199 362,591 70,703

Germany 200,294 146,577 142,411

Italy 163,056 101,461 95,908

France 148,898 96,994 97,990

Republic of Korea 114,846 71,069 60,126

India 103,785 97,423 92,327

Japan 88,473 82,478 79,238

Other international 1,932,972 1,658,578 1,257,095

2 unchanged sentences

Net Long-Lived Assets (1)

2021 December 29,

2019 December 30,

2022 January 3,

(In thousands)

3 unchanged sentences

China 79,851 75,199

Finland 60,559 29,052 16,211

United Kingdom 35,243 51,659 33,429

Singapore 24,291 23,063 14,942

India 21,975 19,691 14,636

Italy 17,051 14,152 11,324

France 13,325 12,940 3,210

Brazil 8,627 9,126 8,237

Poland 7,732 7,216 3,212

Canada 5,671 6,485 5,454

Other international 256,956 229,099

1 unchanged sentence

Total net long-lived assets $ 828,578 $ 651,158

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) Long-lived assets consist of property and equipment, net, operating lease right-of-use assets, rental equipment, software and other long-term assets.

Quarterly Financial Information (Unaudited)

Selected quarterly financial information is as follows for the fiscal years ended:

Quarter Second

Quarter Third

Quarter Fourth

(In thousands, except per share data)

January 3, 2021

Revenue $ 652,396 $ 811,718 $ 964,025 $ 1,354,606 $ 3,782,745

Gross profit 308,023 447,344 527,445 827,065 2,109,877

Restructuring and other costs, net 5,858 1,158 4,059 ( 3,062 ) 8,013

Operating income from continuing operations 44,682 175,639 248,006 510,254 978,581

Income from continuing operations before income taxes 34,689 164,827 233,757 473,091 906,364

Income from continuing operations 33,715 137,213 176,736 380,434 728,098

Loss from discontinued operations and dispositions ( 50 ) ( 51 ) ( 37 ) ( 73 ) ( 211 )

Net income 33,665 137,162 176,699 380,361 727,887

Basic earnings per share:

Income from continuing operations $ 0.30 $ 1.23 $ 1.58 $ 3.40 $ 6.53

Loss from discontinued operations and dispositions ( 0.00 ) ( 0.00 ) ( 0.00 ) ( 0.00 ) ( 0.00 )

Net income 0.30 1.23 1.58 3.40 6.53

Diluted earnings per share:

Income from continuing operations $ 0.30 $ 1.23 $ 1.57 $ 3.38 $ 6.50

Loss from discontinued operations and dispositions ( 0.00 ) ( 0.00 ) ( 0.00 ) ( 0.00 ) ( 0.00 )

Net income 0.30 1.23 1.57 3.38 6.49

Cash dividends declared per common share $ 0.07 $ 0.07 $ 0.07 $ 0.07 $ 0.28

December 29, 2019

Revenue $ 648,737 $ 722,517 $ 706,923 $ 805,496 $ 2,883,673

Gross profit 307,806 347,793 342,275 398,181 1,396,055

Restructuring and other costs, net 7,639 6,161 14,068 1,560 29,428

Operating income from continuing operations 53,330 91,735 78,660 138,248 361,973

Income from continuing operations before income taxes 36,765 71,827 63,254 65,296 237,142

Income from continuing operations 35,453 69,141 58,610 64,549 227,753

Loss from discontinued operations and dispositions ( 41 ) ( 54 ) ( 52 ) ( 48 ) ( 195 )

Net income 35,412 69,087 58,558 64,501 227,558

Basic earnings per share:

Income from continuing operations $ 0.32 $ 0.62 $ 0.53 $ 0.58 $ 2.06

Loss from discontinued operations and dispositions ( 0.00 ) ( 0.00 ) ( 0.00 ) ( 0.00 ) ( 0.00 )

Net income 0.32 0.62 0.53 0.58 2.06

Diluted earnings per share:

Income continuing operations $ 0.32 $ 0.62 $ 0.53 $ 0.58 $ 2.04

Loss from discontinued operations and dispositions ( 0.00 ) ( 0.00 ) ( 0.00 ) ( 0.00 ) ( 0.00 )

Net income 0.32 0.62 0.52 0.58 2.04

Cash dividends declared per common share $ 0.07 $ 0.07 $ 0.07 $ 0.07 $ 0.28

____________________________

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) The fourth quarter of fiscal year 2020 includes a pre-tax loss of $ 25.4 million as a result of the mark-to-market adjustment on postretirement benefit plans.

The fourth quarter of fiscal year 2019 includes a pre-tax loss of $ 31.2 million as a result of the mark-to-market adjustment on postretirement benefit plans.

See Note 1 for a discussion of this accounting policy .

Subsequent Events

Subsequent to fiscal year 2020, the Company reached an agreement with Oxford Immunotec Global PLC (“Oxford Immunotec”) on terms under which the Company has agreed to acquire Oxford Immunotec.

It is intended that the acquisition will be implemented by means of a U.K.

High Court of Justice-sanctioned scheme of arrangement under Part 26 of the U.K.

Companies Act 2006 between Oxford Immunotec and its shareholders (the “Scheme”).

Under the terms of the acquisition, Oxford Immunotec shareholders will be entitled to receive $ 22 in cash for each outstanding ordinary share.

The terms of the acquisition value Oxford Immunotec’s entire issued and to be issued ordinary share capital at approximately $ 591.0 million.

The Scheme has been approved by the shareholders of Oxford Immunotec.

Subject to the satisfaction of other customary closing conditions, the Company currently anticipates that the transaction will close later this month.

Oxford Immunotec is based in Abingdon, UK, has approximately 275 employees, and is widely recognized as a global leader of proprietary test kits for latent tuberculosis.

Its Interferon Gamma Release Assay offering identifies individuals who are infected with tuberculosis.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data