What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-03-01 compared with 2022-03-03 · 346 added, 466 removed, 1292 unchanged (39% of the section changed)

28 unchanged sentences

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.

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

Discontinued Operations - Refer to Notes 1 and 4 to the financial statements

Critical Audit Matter Description

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.

In August 2022, the Company entered into a definitive agreement to sell certain assets and the equity interests of certain entities constituting the Analytical, Food and Enterprise Services businesses (the “Business”).

At that time, management determined that the proposed sale met the criteria for the Business to be classified as held-for-sale and the results of operations and cashflows of the Business was presented as discontinued operations for all periods presented in accordance with Accounting Standard Codification 205-20, Discontinued Operations (“ASC 205-20”).

The net assets of the Business were $ 1.42 billion and $ 1.40 billion as of January 1, 2023 and January 2, 2022, respectively.

Given the level of operational and financial integration between the Business and the continuing operations of the Company, auditing the segregation of assets and liabilities of the Business and the identification of the results of operation and cashflows of the Business required both extensive audit effort and a high degree of auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

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.

Our audit procedures related to the identification and measurement of the net assets of the Business and the related results of operations and cashflows presented as discontinued operations included the following, among others:

• We tested the effectiveness of controls over the identification of the net assets, results of operations and cash flows included in the Company’s discontinued operations presentation.

• We obtained and read the purchase and sale agreement for the proposed sale and compared the terms of that agreement to the identification of the assets and liabilities included in the disposal group.

• We assessed the Company’s identification of assets and liabilities and the related operations and cash flows of the Business by testing the completeness and accuracy of the Company’s accounting data and schedules that segregate the Business from the continuing operations of the Company.

• We assessed the presentation and disclosures related to the discontinued operations to ensure proper application of ASC 205-20.

/s / DELOITTE & TOUCHE LLP

4 unchanged sentences

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands, except per share data)

6 unchanged sentences

Research and development expenses 221,617 200,337 146,441

Restructuring and other costs, net 16,432 8,013 29,428

Operating income from continuing operations 742,699 1,258,457 867,273

3 unchanged sentences

Income from continuing operations 512,676 889,436 630,560

Income from discontinued operations before income taxes 73,604 76,304 106,292

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

Provision for income taxes on discontinued operations 17,101 22,583 8,889

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

Income from discontinued operations 56,503 53,721 97,327

Net income $ 569,179 $ 943,157 $ 727,887

1 unchanged sentence

Income from continuing operations $ 4.06 $ 7.66 $ 5.65

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

Income from discontinued operations 0.45 0.46 0.87

Net income $ 4.51 $ 8.12 $ 6.52

1 unchanged sentence

Income from continuing operations $ 4.06 $ 7.62 $ 5.63

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

Income from discontinued operations 0.45 0.46 0.87

Net income $ 4.50 $ 8.08 $ 6.49

2 unchanged sentences

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

Net income $ 569,179 $ 943,157 $ 727,887

Other comprehensive income (loss)

Other comprehensive (loss) income

Foreign currency translation adjustments, net of tax ( 284,854 ) ( 130,873 ) 169,500

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

Unrecognized prior service credit (cost), net of tax 44 ( 95 ) ( 1,799 )

Unrealized gains (losses) on securities, net of tax 5 237 ( 16 )

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

Other comprehensive (loss) income ( 284,805 ) ( 130,731 ) 167,685

Comprehensive income $ 284,374 $ 812,426 $ 895,572

9 unchanged sentences

Other current assets 122,254 148,255

Current assets of discontinued operations 1,693,704 555,374

Total current assets 3,288,558 2,440,780

4 unchanged sentences

Other assets, net 311,054 317,069

Long-term assets of discontinued operations — 1,144,168

Total assets $ 14,129,855 $ 15,000,554

3 unchanged sentences

Accrued expenses and other current liabilities 527,863 679,099

Current liabilities of discontinued operations 272,865 205,594

Total current liabilities 1,544,483 1,213,744

2 unchanged sentences

Operating lease liabilities 169,968 147,395

Long-term liabilities of discontinued operations — 91,702

Total liabilities 6,746,979 7,859,309

Commitments and contingencies (see Notes 13 and 16)

Commitments and contingencies (see Note 16)

Stockholders’ equity:

10 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Shares Common

Amount Capital in

6 unchanged sentences

Balance, December 30, 2019 111,140 $ 111,140 $ 90,357 $ 2,811,973 $ ( 199,646 ) $ 2,813,824

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

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

Net income — — — 727,887 — 727,887

Other comprehensive loss — — — ( 23,165 ) ( 23,165 )

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

Dividends — — — ( 31,270 ) — ( 31,270 )

Exercise of employee stock options and related income tax benefits 415 19,317 — — 19,732

Exercise of employee stock options 764 764 36,907 — — 37,671

Issuance of common stock for employee stock purchase plans 39 39 4,062 — — 4,101

2 unchanged sentences

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

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

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

Balance, January 3, 2021 112,090 $ 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 )

Exercise of employee stock options and related income tax benefits 764 36,907 — — 37,671

Issuance of common stock for employee stock purchase plans 39 4,062 — — 4,101

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

Exercise of employee stock options 358 358 24,762 — — 25,120

Issuance of common stock for employee benefit plans 21 21 3,607 — — 3,628

Purchases of common stock ( 504 ) ( 504 ) ( 72,568 ) — — ( 73,072 )

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

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

Stock compensation — — 6,251 — — 6,251

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

2 unchanged sentences

Dividends — — — ( 35,335 ) — ( 35,335 )

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

Exercise of employee stock options 195 195 13,919 — — 14,114

Issuance of common stock for employee stock purchase plans 31 31 4,141 — — 4,172

7 unchanged sentences

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

1 unchanged sentence

Net income $ 569,179 $ 943,157 $ 727,887

Loss from discontinued operations and dispositions 126 211 195

Income from discontinued operations ( 56,503 ) ( 53,721 ) ( 97,327 )

Income from continuing operations 512,676 889,436 630,560

3 unchanged sentences

Stock-based compensation 51,518 29,675 26,904

Pension and other post-retirement expense ( 30,891 ) 18,012 26,107

Pension and other post-retirement (income) expense ( 23,104 ) ( 28,509 ) 14,904

Change in fair value of contingent consideration ( 1,377 ) 3,119 ( 8,827 )

6 unchanged sentences

Change in fair value of financial securities 15,754 ( 10,985 ) ( 35 )

Debt extinguishment costs — — 32,541

Debt extinguishment gain ( 2,880 ) — —

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

4 unchanged sentences

Net cash provided by operating activities of continuing operations 672,500 1,330,184 704,720

Net cash provided by operating activities of discontinued operations 7,310 80,566 187,457

Net cash provided by operating activities 679,810 1,410,750 892,177

Investing activities:

1 unchanged sentence

Purchases of investments ( 47,181 ) ( 23,130 ) ( 20,059 )

Purchases of licenses — — ( 5,000 )

Proceeds from notes receivables 8,890 — —

Proceeds from disposition of businesses and assets 14,505 1,460 4,280

Proceeds from surrender of life insurance policies — 109 282

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

Cash paid for acquisitions, net of cash acquired ( 7,518 ) ( 3,982,216 ) ( 411,495 )

Net cash used in investing activities of continuing operations ( 116,936 ) ( 4,089,797 ) ( 490,626 )

Net cash used in investing activities of discontinued operations ( 15,915 ) ( 22,961 ) ( 13,872 )

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

Net cash used in investing activities ( 132,851 ) ( 4,112,758 ) ( 504,498 )

Financing activities:

2 unchanged sentences

Proceeds from term loan — 500,000 —

Payments of term loan ( 500,000 ) — —

Payments of senior unsecured notes ( 57,876 ) ( 339,605 ) —

1 unchanged sentence

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

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

Payments on other credit facilities ( 1,292 ) ( 13,670 ) ( 4,494 )

Settlement of cash flow hedges ( 762 ) ( 4,482 ) ( 4,554 )

4 unchanged sentences

Dividends paid ( 35,344 ) ( 32,373 ) ( 31,212 )

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

Net cash (used in) provided by financing activities ( 661,803 ) 2,941,657 ( 202,872 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 33,747 ) ( 22,926 ) 25,913

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

Net (decrease) increase in cash, cash equivalents and restricted cash ( 148,591 ) 216,723 210,720

Cash, cash equivalents and restricted cash at beginning of year 619,337 402,614 191,894

4 unchanged sentences

Restricted cash included in other current assets 1,040 1,018 578

Restricted cash included in other assets 349 — —

Cash and cash equivalents included in current assets of discontinued operations 14,999 14,999 14,982

Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 470,746 $ 619,337 $ 402,614

9 unchanged sentences

PerkinElmer, Inc.

is a leading provider of products, services and solutions to the diagnostics, life sciences and applied markets.

Through its advanced technologies and differentiated solutions, critical issues are addressed that help to improve lives and the world around us.

The consolidated financial statements include the accounts of PerkinElmer, Inc.

and its subsidiaries (the “Company”).

All intercompany balances and transactions have been eliminated in consolidation.

is a leading provider of products, services and solutions to the diagnostics and life sciences and applied markets.

The Company has two operating segments:

2 unchanged sentences

The Company’s Diagnostics segment is targeted towards meeting the needs of clinically-oriented customers, especially within the growing areas of reproductive health, emerging market diagnostics and applied genomics.

The consolidated financial statements include the accounts of PerkinElmer, Inc.

and its subsidiaries (the “Company”).

All intercompany balances and transactions have been eliminated in consolidation.

In August 2022, the Company announced the proposed sale of certain assets and the equity interests of certain entities constituting the Company’s Analytical, Food and Enterprise Services businesses (the “Business”).

The 2021 and 2020 consolidated financial statements presented herein have been retrospectively adjusted to present the Business as discontinued operations for all periods presented.

The Company’s fiscal year ends on the Sunday nearest December 31.

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.

Each of the fiscal years ended January 1, 2023 (“fiscal year 2022”) and January 2, 2022 (“fiscal year 2021”) included 52 weeks.

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

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

The fiscal year ending December 31, 2023 (“fiscal year 2023”) will include 52 weeks.

Accounting Policies and Estimates:

8 unchanged sentences

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:

The Company provides for estimated warranty costs for products at the time of their sale.

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

Warranty costs were not material in the periods presented.

Inventories :

9 unchanged sentences

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

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Property, Plant and Equipment:

43 unchanged sentences

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

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

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.

Marketable Securities and Investments:

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 debt securities that are classified as available for sale are recorded at fair value with unrealized gains and losses included in AOCI until realized.

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

9 unchanged sentences

Research and development costs are expensed as incurred.

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.

In-process research and development (“IPRD”) 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:

21 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

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

When the Company's lease did not provide an implicit rate, the Company used its incremental borrowing rate in determining the present value of lease payments.

When the Company’s lease did not provide an implicit rate, the Company used its incremental

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

borrowing rate in determining the present value of lease payments.

The Company used the implicit rate when readily determinable.

4 unchanged sentences

For certain equipment leases, such as cars, the Company accounts for the lease and non-lease components as a single lease component.

Additionally, for certain equipment leases, the Company applies a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

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 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:

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 Accounting Standards Codification 606, Revenue From Contracts With Customers (“ASC 606”), and both of the following criteria are met:

1) the timing and pattern of transfer of the non-lease component or components and associated lease component are the same;

1 unchanged sentence

If the non-lease component or components associated with the lease component are the predominant component of the combined component, the Company accounts for the combined component in accordance with ASC 606.

Otherwise, the Company accounts for the combined component as an operating lease in accordance with ASC 842.

Otherwise, the Company accounts for the combined component as an operating lease in accordance with Accounting Standards Codification 842, Leases (“ASC 842”).

Recently Issued Accounting Pronouncements:

1 unchanged sentence

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 December 2019, the FASB issued Accounting Standards Update No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes ("ASU 2019-12").

ASU 2019-12 eliminates certain exceptions and adds guidance to reduce complexity in accounting for income taxes.

Specifically, this guidance:

(1) removes the intraperiod tax allocation exception to the incremental approach;

(2) removes the ownership changes in investments exception in determining when a deferred tax liability is recognized after an investor in a foreign entity transitions to or from the equity method of accounting and applies this provision on a modified retrospective basis through a cumulative-effect adjustment to retained earnings at the beginning of the period of adoption;

and (3) removes the exception to using the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year.

ASU 2019-12 also simplifies accounting principles by making other changes, including requiring an entity to:

(1) evaluate whether a step-up in tax basis of goodwill relates to a business combination or a separate transaction;

(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 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.

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.

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.

In October 2021, t he FASB issued Accounting Standards Update 2021-08, Accounting for Contract Assets and Contract Liabilities From Contracts With Customers ( “ASU 2021-08” ).

ASU 2021-08 amends Accounting Standards Codification 805, Business Combinations ( “ASC 805” ) , to require acquiring entities to apply ASC 606 to recognize and measure contract assets and contract liabilities in a business combination.

Under ASC 805, an acquirer generally recognizes such items at fair value on the acquisition date.

The Company adopted the guidance beginning on January 2, 2023 and will apply the guidance on business combinations beginning in fiscal year 2023.

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,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

extended warranties, and services.

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.

6 unchanged sentences

Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period, and multi-year software licenses or software subscriptions that are invoiced annually with revenue recognized upfront.

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.

In limited circumstances where the Company provides the customer with a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

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

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

15 unchanged sentences

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.

Revenue for laboratory services is recognized over the contract period or 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.

Product revenue is recognized at a point in time and all service revenue is recognized over time.

Disaggregation of revenue

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Reportable Segments

For the fiscal year ended

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

January 1, 2023 January 2, 2022 January 3, 2021

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

8 unchanged sentences

Life sciences 1,292,909 — 1,292,909 895,869 — 895,869 596,288 — 596,288

Applied markets 797,890 — 797,890 683,594 — 683,594 768,961 — $ 768,961

$ 1,292,909 $ 2,018,913 $ 3,311,822 $ 895,869 $ 2,931,939 $ 3,827,808 $ 596,288 $ 2,066,942 $ 2,663,230

Timing of revenue recognition

Products and services transferred at a point in time $ 1,595,245 $ 2,285,836 $ 3,881,081 $ 1,195,249 $ 1,891,482 $ 3,086,731 $ 1,276,499 $ 1,053,974 $ 2,330,473

Services transferred over time 539,985 646,103 1,186,088 520,554 175,460 696,014 469,662 83,538 553,200

$ 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Major Customer Concentration

5 unchanged sentences

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

(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:

The contract liabilities primarily relate to the advance consideration received from customers for products and related installation for which transfer of control has not occurred at the balance sheet date.

The contract liabilities primarily relate to the advance consideration received from customers for products and related services for which transfer of control has not occurred at the balance sheet date.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The contract liability balances at the beginning of each period presented were generally fully recognized in the subsequent three month period.

Contract balances were as follows:

January 1, 2023 January 2, 2022

(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:

The Company recognizes the incremental costs of obtaining a contract with a customer as an asset if it expects the benefit of those costs to be longer than one year.

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 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

The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

The estimated revenue expected to be recognized beyond one year in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the period are not material to the Company.

The remaining performance obligations primarily include noncancelable purchase orders and noncancelable software subscriptions and cloud service contracts.

Contract assets $ 56,631 $ 61,999

Contract liabilities $ ( 30,133 ) $ ( 184,897 )

Business Combinations

Acquisitions in fiscal year 2022

During fiscal year 2022, the Company completed the acquisition of two businesses for aggregate consideration of $ 13.3 million.

Identifiable definite-lived intangible assets, such as core technology, acquired as part of these acquisitions had a weighted average amortization period of 5 years.

Acquisitions in fiscal year 2021

Acquisition of BioLegend, Inc.

13 unchanged sentences

(In thousands, except per share data)

Pro Forma Statements of Operations Information:

Pro Forma Statement of Operations Information:

Revenue $ 4,056,122 $ 2,905,116

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Income from continuing operations $ 7.25 $ 3.60

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.

The unaudited pro forma information for fiscal year 2021 has been calculated after applying the Company’s accounting policies and the impact of acquisition date fair value adjustments.

The fiscal year 2020 unaudited 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 as if those expenses were incurred in fiscal year 2020.

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.

11 unchanged sentences

(In thousands)

Fair value of business combination:

Fair value of business combinations:

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

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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.

The acquired businesses were Horizon Discovery Group plc, 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.

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.

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(In thousands)

Fair value of business combination:

Fair value of business combinations:

Cash payments $ 437,661

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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 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.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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)

Fair value of business combination:

Cash payments $ 409,837

Other liability 7,084

Contingent consideration 12,734

Working capital and other adjustments 3,401

cash acquired ( 15,984 )

Total $ 417,072

Identifiable assets acquired and liabilities assumed:

Current assets $ 62,756

Property, plant and equipment 11,840

Other assets 626

Identifiable intangible assets:

Core technology 153,267

Trade names 11,210

Customer relationships 101,500

Goodwill 169,108

Deferred taxes ( 63,113 )

Debt assumed ( 3,404 )

Liabilities assumed ( 26,718 )

Total $ 417,072

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.

The Company's estimates and assumptions underlying the initial valuations are subject to the collection of information necessary to complete its valuations within the measurement periods, which are up to one year from the respective acquisition dates.

The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, assets and liabilities related to income taxes and related valuation allowances, and residual goodwill.

The Company expects to continue to obtain information to assist in determining the fair values of the net assets acquired at the acquisition dates during the measurement periods.

During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition dates that, if known, would have resulted in the recognition of those assets and liabilities as of those dates.

These adjustments will be made in the periods in which the amounts are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates.

All changes that do not qualify as adjustments made during the measurement periods are also included in current period earnings.

As of January 1, 2023, the allocations of purchase prices for all acquisitions completed in fiscal years 2021 and 2020 were considered final.

During fiscal year 2022, 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.

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 adjustments to the preliminary measurements were not material.

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

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.

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.

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.

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As of January 2, 2022, the Company had recorded contingent consideration obligations with an estimated fair value 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.

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.

The expected maximum earnout period for acquisitions with open contingency periods is 5.9 years from January 1, 2023, and the remaining weighted average expected

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

earnout period at January 1, 2023 was 4.9 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.

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.

Total acquisition and dive stiture-related costs were $ 39.8 million, $ 80.8 million and $ 4.9 million for fiscal years 2022, 2021 and 2020.

These amounts included $ 26.5 million and $ 6.9 million of stock compensation expense related to awards given to BioLegend employees in fiscal years 2022 and 2021, respectively, $ 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, and $ 0.5 million of acquisition-related interest expenses in fiscal year 2020.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restructuring and Other Costs, Net

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

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 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").

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").

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:

Workforce Reductions Closure of Excess Facility Total (Expected) Date Payments Substantially Completed by

Headcount Reduction Diagnostics Discovery & Analytical Solutions Diagnostics Discovery & Analytical Solutions Severance Excess Facility

(In thousands, except headcount data)

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

Q3 2021 Plan 39 366 420 — — 786 Q2 FY2022 —

Q2 2021 Plan 25 564 968 — — 1,532 Q1 FY2022 —

Q1 2021 Plan 77 1,615 3,941 — — 5,556 Q4 FY2021 —

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 —

Q3 2019 Plan 259 2,641 11,156 — — 13,797 Q2 FY2020 —

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 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.

Discontinued Operations

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.

In August 2022, the Company entered into a Master Purchase and Sale Agreement (the “Purchase Agreement”) with Polaris Purchaser, L.P.

(the “Purchaser”), a Delaware limited partnership owned by funds managed by affiliates of New Mountain Capital L.L.C.

(the “Sponsor”), under which the Company agreed to sell to the Purchaser certain assets and the equity interests of certain entities constituting the Company’s Analytical, Food and Enterprise Services businesses (the “Business”) (as further defined in the Purchase Agreement), for cash consideration of up to approximately $ 2.45 billion and the Purchaser’s assumption of certain liabilities relating to the Business (collectively, the “Transaction”).

Approximately $ 2.30 billion of the purchase price will be payable at closing, subject to certain customary adjustments, which includes $ 75.0 million in deferred payments tied to the transfer of the PerkinElmer brand and related trademarks to the Purchaser (which may be completed within 24 months following the date of the closing at the Company’s election).

The Purchase Agreement also provides for potential post-closing payments totaling up to $ 150.0 million, which are contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital events related to the Business.

The Transaction is expected to close in the first quarter of fiscal year 2023, subject to regulatory approvals and other customary closing conditions.

The Business had been recorded in the Discovery & Analytical Solutions segment.

The sale of the Business represents a strategic shift that will have a major effect on the Company’s operations and financial statements.

Accordingly, the Company has classified the assets and liabilities related to the Business as assets and liabilities of discontinued operations in the Company’s consolidated balance sheets and its results of operations are classified as income from discontinued operations in the Company’s consolidated statements of operations.

Financial information in this report relating to fiscal years 2021 and 2020 has been retrospectively adjusted to reflect this discontinued operation.

The summary pre-tax operating results of the discontinued operations, were as follows:

January 1, 2023 January 2, 2022 January 3, 2021

(In thousands)

Revenue $ 1,298,376 $ 1,239,361 $ 1,119,515

Cost of revenue 859,330 822,048 739,817

Selling, general and administrative expenses 306,032 268,760 209,442

Research and development expenses 64,605 74,632 58,948

Operating income 68,409 73,921 111,308

Other (income) expense, net ( 5,195 ) ( 2,383 ) 5,016

Income from discontinued operations before income taxes $ 73,604 $ 76,304 $ 106,292

The carrying amounts of the major classes of assets and liabilities included in discontinued operations related to the Business consisted of the following:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

January 1, 2023 January 2, 2022

(In thousands)

Cash and cash equivalents $ 14,999 $ 14,999

Accounts receivable 343,064 315,851

Inventories 210,367 198,824

Other current assets 32,063 25,700

Total current assets 555,374

Property, plant and equipment, net 60,983 60,074

Operating lease right-of-use assets 41,487 43,735

Intangible assets, net 202,850 241,257

Goodwill 772,812 789,465

Other assets, net 15,079 9,637

Total long-term assets

Total assets of discontinued operations

$ 1,693,704 $ 1,699,542

Accounts payable 29,912 30,647

Accrued expenses and other current liabilities 161,260 174,947

Total current liabilities 205,594

Deferred taxes and long-term liabilities 46,046 53,738

Operating lease liabilities 35,647 37,964

Total long-term liabilities 91,702

Total liabilities of discontinued operations $ 272,865 $ 297,296

The following operating and investing non-cash items from discontinued operations were as follows for the fiscal years ended:

2023 January 2,

2022 January 3,

(In thousands)

$ 8,011 $ 12,897 $ 13,299

16,984 33,664 31,560

Capital expenditures 10,670 13,868 13,872

Interest and Other Expense, Net

1 unchanged sentence

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

1 unchanged sentence

Interest expense including costs of bridge financing 103,955 102,128 49,712

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

Change in fair value of financial securities 15,754 ( 10,985 ) ( 35 )

Other components of net periodic pension (credit) cost ( 33,158 ) ( 37,385 ) 13,819

Debt extinguishment costs — — 32,541

Other expense, net 7,900 3,358 4,715

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2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

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Total $ 369,474 $ ( 55,328 ) $ 314,146

Fiscal year ended December 29, 2019

Fiscal year ended January 3, 2021

Federal $ 39,878 $ 4,875 $ 44,753

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2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

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2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

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Rate change on long term intangibles — 14,031 —

Effect of foreign operations 37,147 — —

Effect of foreign repatriations ( 4,940 ) 37,147 —

Foreign consolidations — — 15,222

Tax elections — — ( 3,700 )

Impact of U.S.

Tax Act — — 2,718

Others, net 4,787 ( 4,753 ) ( 898 )

Other, net ( 6,003 ) 2,498 ( 4,157 )

Total $ 139,161 $ 314,146 $ 169,512

2 unchanged sentences

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.

taxes related to foreign earnings that the Company no longer considered indefinitely reinvested.

During fiscal year 2022, the Company adjusted these estimates and recognized a net benefit of $ 4.9 million relative to its position to permanently reinvest those foreign earnings.

The Company also recognized $ 1.1 million of benefit in fiscal year 2022 derived from the tax holiday in Singapore.

The Company recognized $ 18.2 million in fiscal year 2021 and $ 12.7 million in fiscal year 2020 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 2022 was $ 0.01 and $ 0.01 , respectively, for fiscal year 2021 was $ 0.16 and $ 0.16 , respectively, and for fiscal year 2020 was $ 0.11 and $ 0.11 , 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 tax holiday for one of the Company's subsidiaries in Singapore is scheduled to expire in fiscal year 2023.

The Company expects to renew the tax holiday for one of the Company’s subsidiaries in China that is set 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.

5 unchanged sentences

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

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At January 1, 2023 and January 2, 2022, the Company had accrued interest and penalties of $ 7.2 million and $ 7.6 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

During fiscal years 2022, 2021 and 2020, the Company recognized a net (benefit) expense of $( 0.5 ) million, $ 1.8 million and $ 1.8 million, respectively,

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.

for interest and penalties in its total tax provision.

At January 1, 2023, substantially all of the unrecognized tax benefits, if recognized, would affect the effective tax rate.

The Company believes that it is reasonably possible that approximately $ 17.8 million of its uncertain tax positions at January 1, 2023, 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.

1 unchanged sentence

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.

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 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:

9 unchanged sentences

Deferred revenue 22,644 49,207

Capitalized research and development expenses 44,922 12,114

Operating lease liabilities 43,547 37,299

7 unchanged sentences

Operating lease right-of-use assets ( 39,281 ) ( 33,607 )

Prepaids ( 3,263 ) ( 4,160 )

Prepaid expenses ( 3,515 ) ( 3,265 )

Deferred tax liability on foreign earnings ( 15,782 ) ( 31,239 )

9 unchanged sentences

At January 1, 2023, for income tax return purposes, the Company had U.S.

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.

federal net operating loss carryforwards of $ 67.5 million, state net operating loss carryforwards of $ 4.9 million, foreign net operating loss carryforwards of $ 458.0 million, state tax credit carryforwards of $ 13.8 million and general business tax credit carryforwards of $ 0.1 million.

Certain net operating loss carryforwards and state credit carryforwards do not expire, while other losses begin to expire in 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

The Company regularly evaluates positive and negative evidence available to determine if valuation allowances are required or if existing valuation allowances are no longer required.

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 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)

$ ( 621,449 ) $ 50,302

( 250,359 ) ( 218,741 )

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

Prior to enactment of the Tax Act, the Company did not provide deferred income tax expense on the cumulative undistributed earnings of its international subsidiaries.

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 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.

The increase in the valuation allowance of $ 7.2 million in fiscal year 2022 is primarily due to net operating losses incurred for which the benefit is not expected to be realized.

As of January 1, 2023, the Company evaluated its undistributed foreign earnings and identified approximately $ 879.0 million in earnings that it does not consider to be permanently reinvested.

The Company has recorded a provision of approximately $ 15.8 million for the taxes that would fall due when such earnings are repatriated.

The Company began repatriating such foreign earnings to the United States in the first quarter of fiscal year 2022 and expects to continue the repatriation in fiscal year 2023.

There are other undistributed foreign earnings and outside basis differences for which the Company has not provided for any taxes as these amounts continue to be indefinitely reinvested, and it is not practicable to estimate the amount of deferred tax liability that would be incurred.

Earnings Per Share

3 unchanged sentences

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

7 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

2 unchanged sentences

(In thousands)

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

Accounts receivable, net $ 612,780 $ 707,941

Long-term accounts receivable, net, included in Other assets, net 34,040 29,958

1 unchanged sentence

Reserves for credit losses consisted of the following:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Provisions Charges/

1 unchanged sentence

(In thousands)

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

Year ended January 3, 2021 $ 23,574 $ 10,294 $ ( 1,895 ) $ 1,524 $ 33,497

Year ended January 2, 2022 33,497 6,854 ( 2,198 ) 101 38,254

Year ended January 1, 2023 38,254 9,857 ( 9,672 ) ( 896 ) 37,543

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

16 unchanged sentences

Total property, plant and equipment, net $ 482,950 $ 485,531

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.

Depreciation expense on property, plant and equipment for the fiscal years ended January 1, 2023, January 2, 2022 and January 3, 2021 was $ 56.4 million, $ 54.9 million and $ 40.7 million, respectively.

Marketable Securities and Investments

Investments consisted of the following:

Investments, which are classified in Other assets, net, consisted of the following:

2023 January 2,

2 unchanged sentences

Equity investments 54,503 33,801

Investments in debt securities 42,500 13,500

$ 108,086 $ 80,984

9 unchanged sentences

Equity securities $ 6,775 $ 6,775 $ — $ —

Fixed-income securities 7 7 — —

Other 4,308 4,308 — —

7 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 2, 2022 and January 3, 2021 consisted of the following:

Equity investments as of January 1, 2023 and January 2, 2022 consisted of the following:

2023 January 2,

3 unchanged sentences

$ 54,503 $ 33,801

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 amount of upward adjustments during fiscal years 2022 and 2021 were $ 2.9 million and $ 19.6 million, respectively.

The cumulative amount of upward adjustments as of January 1, 2023 and January 2, 2022 was $ 30.7 million and $ 27.8 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.

The amount of impairments and downward adjustments during fiscal year 2020 was $ 4.9 million.

The cumulative amount of impairments and downward adjustments as of each of January 1, 2023 and January 2, 2022 was $ 5.0 million.

Investments in debt securities.

The Company has investments in debt securities that are classified as available for sale.

The amortized cost of these investments are not materially different to their fair value.

Investments with total carrying value of $ 25.5 million have contractual maturities of one year through five years.

Investments with a carrying value of $ 17.0 million are convertible into equity securities or are due and payable upon event of default (as defined in the applicable agreement).

Goodwill and Intangible Assets, Net

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

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)

5 unchanged sentences

The Company performed its annual impairment testing for its reporting units as of January 3, 2022 , its annual impairment testing date for fiscal year 2022.

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 Company's Tulip reporting unit, which had a fair value that was between 10% and 20% more than its carrying value.

There were no impairments measured in the periods presented.

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.

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.

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.

The changes in the carrying amount of goodwill for fiscal years 2022 and 2021 are as follows:

1 unchanged sentence

(In thousands)

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

Balance at January 3, 2021 $ 948,360 $ 1,691,227 $ 2,639,587

Foreign currency translation ( 33,901 ) ( 40,557 ) ( 74,458 )

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

Acquisitions, earnouts and measurement period adjustments 3,742,310 319,680 4,061,990

Balance at January 2, 2022 4,656,769 1,970,350 6,627,119

Foreign currency translation ( 98,268 ) ( 41,617 ) ( 139,885 )

Acquisitions, earnouts and other 3,742,310 319,680 4,061,990

Acquisitions, earnouts and measurement period adjustments ( 6,926 ) 1,460 ( 5,466 )

Balance at January 1, 2023 $ 4,551,575 $ 1,930,193 $ 6,481,768

18 unchanged sentences

Net customer relationships 1,764,864 403,793 2,168,657

IPR&D 5,920 — 5,920

IPRD 5,278 — 5,278

Net amortizable intangible assets $ 2,686,191 $ 690,983 $ 3,377,174

Indefinite-lived intangible asset:

Trade name 70,584 — 70,584

Total $ 3,169,893 $ 893,211 $ 4,063,104

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Identifiable intangible asset balances at January 2, 2022 by category and segment were as follows:

16 unchanged sentences

Net customer relationships 1,925,304 518,047 2,443,351

IPR&D 10,944 — 10,944

IPRD 5,920 — 5,920

Net amortizable intangible assets $ 2,928,636 $ 893,211 $ 3,821,847

Indefinite-lived intangible asset:

Trade name 70,584 — 70,584

Total $ 562,455 $ 803,238 $ 1,365,693

Total amortization expense related to definite-lived intangible assets was $ 370.6 million in fiscal year 2022, $ 256.6 million in fiscal year 2021 and $ 161.0 million in fiscal year 2020.

8 unchanged sentences

Senior Unsecured Revolving Credit Facility $ — $ — $ ( 2,641 ) $ ( 2,641 )

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

0.850% Senior Unsecured Notes due in 2024 (“2024 Notes”)

1.900% Senior Unsecured Notes due in 2028 500,000 ( 348 ) ( 4,200 ) 495,452

771,659 ( 283 ) ( 3,136 ) 768,240

€500,000 Principal 1.875% Senior Unsecured Notes due in 2026 (“2026 Notes”) 533,950 ( 1,902 ) ( 1,779 ) 530,269

1.900% Senior Unsecured Notes due in 2028 (“2028 Notes”)

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

500,000 ( 301 ) ( 3,631 ) 496,068

3.3% Senior Unsecured Notes due in 2029 (“2029 Notes”) 850,000 ( 2,000 ) ( 5,537 ) 842,463

2.55% Senior Unsecured Notes due in March 2031 (“March 2031 Notes”) 400,000 ( 114 ) ( 2,978 ) 396,908

2.250% Senior Unsecured Notes due in September 2031 (“September 2031 Notes”)

500,000 ( 1,353 ) ( 3,991 ) 494,656

3.625% Senior Unsecured Notes due in 2051 (“2051 Notes”) 400,000 ( 4 ) ( 4,260 ) 395,736

Other Debt Facilities, non-current 1,648 — — 1,648

1 unchanged sentence

Current Portion of Long-term Debt:

0.550% Senior Unsecured Notes due in 2023 (“2023 Notes”)

467,138 ( 63 ) ( 867 ) 466,208

Other Debt Facilities, current 4,721 — — 4,721

Total Current Portion of Long-Term Debt 471,859 ( 63 ) ( 867 ) 470,929

Total Debt $ 4,429,116 $ ( 6,020 ) $ ( 28,820 ) $ 4,394,276

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Outstanding Principal Unamortized Debt Discount

4 unchanged sentences

Senior Unsecured Revolving Credit Facility $ — $ — $ ( 3,362 ) $ ( 3,362 )

Unsecured Term Loan Credit Facility 500,000 ( 14 ) ( 658 ) 499,328

2023 Notes 500,000 ( 152 ) ( 2,093 ) 497,755

2024 Notes 800,000 ( 447 ) ( 4,945 ) 794,608

2026 Notes 568,600 ( 2,538 ) ( 2,280 ) 563,782

2028 Notes 500,000 ( 348 ) ( 4,200 ) 495,452

2029 Notes 850,000 ( 2,252 ) ( 6,234 ) 841,514

March 2031 Notes 400,000 ( 126 ) ( 3,294 ) 396,580

September 2031 Notes 500,000 ( 1,485 ) ( 4,380 ) 494,135

2051 Notes 400,000 ( 4 ) ( 4,335 ) 395,661

Other Debt Facilities, non-current 4,284 — — 4,284

1 unchanged sentence

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 4,240 — — 4,240

Total Current Portion of Long-Term Debt 381,193 ( 16 ) ( 229 ) 380,948

Total Debt $ 5,027,124 $ ( 7,366 ) $ ( 35,781 ) $ 4,983,977

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 1, 2023, undrawn letters of credit in the aggregate amount of $ 7.1 million were treated as issued and outstanding when calculating the borrowing availability under the facility.

As of January 1, 2023, 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.

Borrowings will bear interest, payable quarterly or, if earlier, at the end of an y interest period, at the Company ’ s option at either (a) the base rate (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 % .

2 unchanged sentences

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 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 % .

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.

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.

During the fiscal year 2022, the Company repurchased $ 32.9 million and $ 28.3 million in aggregate principal amount of the 2023 Notes and 2024 Notes, respectively, in open market transactions.

Subsequent to fiscal year 2022, the Company repurchased $ 50.5 million in aggregate principal amount of the 2024 Notes in open market transactions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the maturities of the Company’s indebtedness as of January 1, 2023:

2022 2023 2024 2025 2026 2027 and thereafter Total before unamortized discount and debt issuance costs Unamortized discount and debt issuance costs Total

2023 2024 2025 2026 2027 2028 and thereafter Total before unamortized discount and debt issuance costs Unamortized discount and issuance cost Total

(In thousands)

Senior Unsecured Revolving Credit Facility $ — $ — $ — $ — $ — $ — $ — $ ( 2,641 ) $ ( 2,641 )

Unsecured Term Loan Credit Facility

— — 500,000 — — — 500,000 ( 672 ) 499,328

2023 Notes 467,138 — — — — — 467,138 ( 930 ) 466,208

19 unchanged sentences

31,217 29,313

Contract liabilities

77,178 189,718

Other accrued operating expenses 211,176 319,134

10 unchanged sentences

The principal U.S.

defined benefit pension plan was closed to new hires effective January 31, 2001, and benefits for those employed by the Company’s former Life Sciences business were frozen as of that date.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

accruing in the plan.

defined benefit pension plan is closed to new hires and plan benefits have been frozen.

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:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

3 unchanged sentences

Actuarial (gain) loss ( 23,706 ) ( 19,514 ) 20,291

Curtailment gain — — ( 1,547 )

Amortization of prior service credit — — ( 152 )

Net periodic pension (credit) cost $ ( 28,680 ) $ ( 29,317 ) $ 18,795

6 unchanged sentences

pension plans and the amounts recognized in the Company’s consolidated balance sheets as of January 1, 2023 and January 2, 2022.

The pension liability of the Business at the end of fiscal year 2022 that will transfer upon sale was reclassified to discontinued operations, while the prior year was not restated.

January 1, 2023 January 2, 2022

7 unchanged sentences

Benefits paid and plan expenses ( 14,978 ) ( 19,870 ) ( 15,299 ) ( 18,693 )

Participants’ contributions — — 37 —

Business acquisitions — — ( 120 ) —

Actuarial (gains) losses ( 30,705 ) ( 6,218 ) 35,910 22,494

Benefit obligation classified in discontinued operations ( 8,261 ) — — —

Actuarial gains ( 88,724 ) ( 56,919 ) ( 30,705 ) ( 6,218 )

Effect of exchange rate changes ( 28,099 ) — ( 17,501 ) —

5 unchanged sentences

Employer’s contributions 6,572 — 6,851 20,000

Participants’ contributions — — 37 —

Effect of exchange rate changes ( 19,659 ) — ( 1,992 ) —

10 unchanged sentences

Actuarial assumptions used to determine net periodic pension cost during the year were as follows:

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

January 1, 2023 January 2, 2022 January 3, 2021

Discount rate 1.41 % 2.44 % 0.92 % 2.21 % 1.34 % 3.01 %

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s expected rate of return on assets assumptions are derived from management’s estimates, as well as other information compiled by management, including studies that utilize customary procedures and techniques.

The studies include a review of anticipated future long-term performance of individual asset classes and consideration of the appropriate asset allocation strategy given the anticipated requirements of the plans to determine the average rate of earnings expected on the funds invested to provide for the pension plans benefits.

While the study gives appropriate consideration to recent fund performance and historical returns, the assumption is primarily a long-term, prospective rate.

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.

The following table provides a breakdown of the non-U.S.

11 unchanged sentences

Target Allocation Percentage of Plan Assets at

January 1, 2023 January 2, 2022 January 3, 2021

December 31, 2023 January 1, 2023 January 2, 2022

Asset Category Non-U.S.

4 unchanged sentences

The Company maintains target allocation percentages among various asset classes based on investment policies established for the pension plans which are designed to maximize the total rate of return (income and appreciation) after inflation within the limits of prudent risk taking, while providing for adequate near-term liquidity for benefit payments.

While the study gives appropriate consideration to recent fund performance and historical returns, the assumption is primarily a long-term, prospective rate.

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.

The target allocations for plan assets are listed in the above table.

19 unchanged sentences

Emerging markets growth 9,902 9,902 — —

Foreign real estate funds — — — —

Fixed income securities:

18 unchanged sentences

Emerging markets growth 12,603 12,603 — —

Foreign real estate funds 23,259 — — 23,259

Fixed income securities:

Treasury Securities 106,315 — 106,315 —

Corporate and U.S.

1 unchanged sentence

Corporate bonds 15,650 — 15,650 —

High yield bond funds 2,954 2,954 — —

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

7 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.

3 unchanged sentences

Fixed income mutual funds that are publicly traded are valued at quoted market prices that represent the net asset value of securities held by the fund and are categorized as Level 1 assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fixed income index funds that are not publicly traded are stated at net asset value as determined by the issuer of the fund based on the fair value of the underlying investments and are categorized as Level 2 assets.

4 unchanged sentences

Other Types of Investments:

government index link bond funds are not publicly traded and are stated at net asset value as determined by the issuer of the fund based on the fair value of the underlying investments.

Underlying investments consist of bonds in which payment of income on the principal is related to a specific price index and are categorized as Level 2 assets.

Hedge funds, private equity funds, foreign real estate funds and venture capital funds are valued at fair value by using the net asset values provided by the investment managers and are updated, if necessary, using analytical procedures, appraisals, public market data and/or inquiry of the investment managers.

6 unchanged sentences

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 2022, 2021 and 2020 is as follows:

6 unchanged sentences

Sales — — ( 1,721 ) ( 1,721 )

Realized gains — — 4,175 4,175

Unrealized gains (losses) — 492 ( 3,802 ) ( 3,310 )

Balance at December 29, 2019 — 22,688 1,721 24,409

Sales — — ( 1,721 ) ( 1,721 )

Unrealized gains — 571 — 571

1 unchanged sentence

Sales — ( 23,115 ) — ( 23,115 )

Purchases 165,680 — — 165,680

Realized losses — ( 226 ) — ( 226 )

Realized gains — 82 — 82

Purchases 165,680 — — 165,680

Balance at January 2, 2022 165,680 — — 165,680

Pension benefits paid ( 6,639 ) — — ( 6,639 )

Foreign exchange losses ( 18,411 ) — — ( 18,411 )

Return on plan assets ( 45,568 ) — — ( 45,568 )

Balance at January 1, 2023 $ 95,062 $ — $ — $ 95,062

With respect to plans outside of the United States, the Company expects to contribute $ 6.8 million in the aggregate during fiscal year 2023.

During fiscal years 2021, 2020 and 2019, the Company contributed $ 6.9 million, $ 7.5 million and $ 8.2 million in the aggregate, respectively, to pension plans outside of the United States.

During fiscal year 2023, the Company contributed $ 10.0 million to its defined benefit pension plan in the United States for the plan year 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:

10 unchanged sentences

Assets with a fair value of $ 0.9 million and $ 1.6 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 1, 2023 and January 2, 2022, 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.

Pension expenses and income for this plan netted to income of $ 3.2 million in fiscal year 2022, expense of $ 0.2 million in fiscal year 2021 and expense of $ 2.1 million in fiscal year 2020.

Postretirement Medical Plans:

8 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

debt securities and are available only to pay retiree health benefits.

Assets of the plan are primarily equity and 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 $ 17.1 million and $ 20.7 million at January 1, 2023 and January 2, 2022, respectively.

Deferred Compensation Plans:

During fiscal year 1998, the Company implemented a nonqualified deferred compensation plan that provides benefits payable to officers and certain key employees or their designated beneficiaries at specified future dates, or upon retirement or death.

The plan was amended to eliminate deferral elections, with the exception of Company 401(k) excess contributions for eligible participants, for plan years beginning January 1, 2011.

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 $ 0.3 million and $ 0.6 million as of January 2, 2022 and January 3, 2021, respectively.

Contingencies

10 unchanged sentences

The Company is subject to various claims, legal proceedings and investigations covering a wide range of matters that arise in the ordinary course of its business activities.

Although the Company has established accruals for potential losses that it believes are probable and reasonably estimable, in the opinion of the Company’s management, based on its review of the information available at this time, the total cost of resolving these contingencies at January 2, 2022 should not have a material adverse effect on the Company’s consolidated financial statements.

adverse effect on the Company’s consolidated financial statements.

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.

7 unchanged sentences

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

18 unchanged sentences

2023 January 2,

2021 December 29,

2022 January 3,

Risk-free interest rate 2.3 % 0.9 % 0.9 %

9 unchanged sentences

Exercised ( 195 ) 72.41

Canceled ( 4 ) 143.62

Forfeited ( 129 ) 152.90

3 unchanged sentences

The aggregate intrinsic value for stock options exercisable at January 1, 2023 was $ 20.1 million with a weighted-average remaining contractual term of 3.6 years.

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.

At January 1, 2023, there were 0.6 million stock options that were expected to vest in the future, with an aggregate intrinsic value of $ 4.3 million and a weighted-average remaining contractual term of 5.6 years.

The weighted-average grant-date fair value of options granted during fiscal years 2022, 2021 and 2020 was $ 48.09 , $ 40.00 , and $ 18.98 per share, respectively.

42 unchanged sentences

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 )

2 unchanged sentences

Balance, January 1, 2023 $ ( 446,664 ) $ ( 798 ) $ ( 35 ) $ ( 447,497 )

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 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.

On July 31, 2020, the Company ’ s 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”).

On July 22, 2022, the Repurchase Program was terminated by the Board and the Board authorized the Company to repurchase shares of common stock for an aggregate amount up to $ 300.0 million under a new stock repurchase program (the “ New Repurchase Program ” ).

No shares remain available for repurchase under the Repurchase Program due to its termination.

The New Repurchase Pro gram will expire on July 22, 2024 unless terminated earlier by the Board and may be suspended or discontinued at any time.

During fiscal year 2022 , the Company repurchased 240,000 shares of common stock under the Repurchase Program for an aggregate cost of $ 43.4 million.

During fiscal year 2022 , the Company repurchased 138,025 shares of common stock under the New Repurchase Program for an aggregate cost of $ 19.1 million .

As of January 1, 2023, $ 280.9 million remained available for aggregate repurchases of shares under the New 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.

12 unchanged sentences

The Company does not enter into derivative contracts for trading or other speculative purposes, nor does the Company use leveraged financial instruments.

Approximately 60 % of the Company’s

business is conducted outside of the United States, generally in foreign currencies.

Approximately 55 % 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.

7 unchanged sentences

The Company held forward foreign exchange contracts, designated as economic hedges, with U.S.

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.

dollar equivalent notional amounts totaling $ 476.9 million at January 1, 2023 $ 371.9 million at January 2, 2022, and $ 808.0 million at January 3, 2021, 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.

5 unchanged sentences

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 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 $ 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.

Dollar notional amounts of $ 360.2 million as of January 2, 2022.

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.

3 unchanged sentences

As of January 1, 2023, 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 (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.

This agreement is a contract to exchange fixed-rate payments in one currency for fixed-rate payments in another currency.

Changes in the fair value of this swap are recorded in equity as a component of AOCI in the same manner as foreign currency translation adjustments.

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 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 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 %.

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.

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 unrealized foreign exchange (gains) losses recorded in AOCI related to the ne t investment hedge were $( 34.5 ) million, $( 33.2 ) million and $ 49.6 million during the fiscal years 2022, 2021 and 2020, respectively.

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.

12 unchanged sentences

The following tables show the assets and liabilities carried at fair value measured on a recurring basis as of January 1, 2023 and January 2, 2022 classified in one of the three classifications described above:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value Measurements at January 1, 2023 Using:

35 unchanged sentences

As of both January 1, 2023 and January 2, 2022, none of the master netting arrangements involved collateral.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Level 3 Valuation Techniques:

8 unchanged sentences

As of January 1, 2023, 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 $ 106.2 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)

The expected maximum earnout period for acquisitions with open contingency period is 5.9 years from January 1, 2023, and the remaining weighted average expected earnout period at January 1, 2023 was 4.9 years.

A reconciliation of the beginning and ending Level 3 net liabilities for contingent consideration is as follows:

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

3 unchanged sentences

Amounts paid and foreign currency translation 2,562

Adjustments recognized in goodwill 12,400

Change in fair value (included within selling, general and administrative expenses) 1,377

Balance at January 1, 2023 $ ( 46,618 )

Assets and Liabilities Not Carried at Fair Value

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturities of these assets and liabilities.

11 unchanged sentences

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

2 unchanged sentences

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

3 unchanged sentences

Operating leases $ 55,016 $ 12,345 $ 2,605

S upplemental balance sheet information related to leases was as follows:

Supplemental balance sheet information related to leases was as follows:

2023 January 2,

10 unchanged sentences

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:

Future payments of operating lease liabilities as of January 1, 2023 were as follows:

(In thousands)

4 unchanged sentences

Total $ 201,185

Lessor Disclosures

Certain of the Company's contracts require that it place its instrument at the customer's site and sell reagents to the customer.

As the predominant component in these contracts are the sales of reagents, the Company accounts for the combined component under ASC 606 only when both of the following criteria are met:

1) the timing and pattern of transfer of the non-lease component or components and associated lease component are the same;

and 2) the lease component, if accounted for separately, would be classified as an operating lease.

When only one of the criteria is met, the Company accounts for the non-lease component under ASC 606 and the lease component under ASC 842.

Profit or loss, interest income and aggregate net investment in sales-type leases that did not qualify for the practical expedient are not material to the Company.

Industry Segment and Geographic Area Information

12 unchanged sentences

These amounts have been calculated in a consistent manner and are included in the Company’s calculations of segment results to internally plan and assess the performance of each segment for all purposes, including determining the compensation of the business leaders for each of the Company’s operating segments.

The primary financial measure by which the Company evaluates the performance of its segments is adjusted operating income, which consists of operating income plus amortization of intangible assets, adjustments to operations arising from purchase accounting (primarily adjustments to the fair value of acquired inventory that are subsequently recognized), acquisition and divestiture-related costs, and other costs that are not expected to recur or are of a non-cash nature, including primarily restructuring actions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

1 unchanged sentence

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

Discovery & Analytical Solutions $ 1,292,909 $ 897,718 $ 596,585

Product revenue $ 1,358,484 $ 995,216 $ 1,054,862

Service revenue 776,746 720,587 691,299

Total revenue 2,135,230 1,715,803 1,746,161

Operating income from continuing operations (1)

189,798 183,471 238,331

Product revenue 1,970,618 1,783,509 962,180

Service revenue 961,321 283,433 175,332

Total revenue 2,931,939 2,066,942 1,137,512

Operating income from continuing operations (1)(2)

1,219,944 874,206 189,330

Operating loss from continuing operations (3)

( 77,364 ) ( 79,096 ) ( 65,688 )

Continuing Operations

Product revenue 3,329,102 2,778,725 2,017,042

Service revenue 1,738,067 1,004,020 866,631

Total revenue 5,067,169 3,782,745 2,883,673

Diagnostics 2,019,727 2,932,738 2,067,728

Revenue purchase accounting adjustments ( 814 ) ( 2,648 ) ( 1,083 )

Total revenues $ 3,311,822 $ 3,827,808 $ 2,663,230

Segment Operating Income

Discovery & Analytical Solutions $ 503,243 $ 281,602 $ 129,174

Diagnostics 781,985 1,432,769 1,010,361

Corporate ( 73,431 ) ( 77,364 ) ( 73,854 )

Subtotal reportable segments 1,211,797 1,637,007 1,065,681

Amortization of intangible assets ( 370,638 ) ( 256,569 ) ( 160,991 )

Purchase accounting adjustments ( 45,681 ) ( 40,993 ) ( 6,382 )

Acquisition and divestiture-related costs ( 39,826 ) ( 62,760 ) ( 4,335 )

Restructuring and other ( 12,953 ) ( 18,228 ) ( 26,700 )

Operating income from continuing operations 742,699 1,258,457 867,273

1 unchanged sentence

Income from continuing operations before income taxes $ 651,837 $ 1,203,582 $ 800,072

____________________________

(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 $ 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.

Additional information relating to the Company’s reporting segments is as follows for the three fiscal years ended January 1, 2023:

1 unchanged sentence

2023 January 2,

2021 December 29,

2022 January 3,

2021 January 1,

2021 December 29,

2023 January 2,

2022 January 3,

(In thousands) (In thousands)

3 unchanged sentences

Continuing operations $ 427,000 $ 311,443 $ 201,648 $ 85,632 $ 86,020 $ 63,634

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2023 January 2,

2021 December 29,

(In thousands)

2 unchanged sentences

Corporate 114,447 129,904

Current and long-term assets of discontinued operations 1,693,704 1,699,542

Total assets $ 14,129,855 $ 15,000,554

The following geographic area information for continuing operations includes revenue based on location of external customers for the three fiscal years ended January 1, 2023 and net long-lived assets based on physical location as of January 1, 2023 and January 2, 2022:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2023 January 2,

2021 December 29,

2022 January 3,

(In thousands)

5 unchanged sentences

Total international 1,765,302 2,145,514 1,741,656

Total sales $ 5,067,169 $ 3,782,745 $ 2,883,673

Total revenue $ 3,311,822 $ 3,827,808 $ 2,663,230

Net Long-Lived Assets (1)

9 unchanged sentences

(1) Long-lived assets consist of property and equipment, net, operating lease right-of-use assets, rental equipment, software and other long-term assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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 1, 2023

Revenue $ 963,163 $ 895,642 $ 711,803 $ 741,214 $ 3,311,822

Gross profit 594,740 551,717 407,044 436,329 1,989,830

Operating income from continuing operations 261,967 232,486 110,780 137,466 742,699

Income from continuing operations before income taxes 224,904 206,344 82,142 138,447 651,837

Income from continuing operations 184,070 161,601 69,508 97,497 512,676

(Loss) income from discontinued operations ( 7,108 ) 17,611 15,839 30,161 56,503

Net income 176,962 179,212 85,347 127,658 569,179

Basic earnings per share:

Income from continuing operations $ 1.46 $ 1.28 $ 0.55 $ 0.77 $ 4.06

(Loss) income from discontinued operations ( 0.06 ) 0.14 0.13 0.24 0.45

Net income 1.40 1.42 0.68 1.01 4.51

Diluted earnings per share:

Income from continuing operations $ 1.45 $ 1.28 $ 0.55 $ 0.77 $ 4.06

(Loss) income from discontinued operations ( 0.06 ) 0.14 0.13 0.24 0.45

Net income 1.39 1.42 0.67 1.01 4.50

January 2, 2022

Revenue $ 1,027,836 $ 910,747 $ 861,315 $ 1,027,910 $ 3,827,808

Gross profit 693,187 574,143 522,860 643,797 2,433,987

Operating income from continuing operations 455,010 307,999 195,554 299,894 1,258,457

Income from continuing operations before income taxes 467,537 301,329 135,012 299,704 1,203,582

Income from continuing operations 369,859 227,857 107,631 184,089 889,436

Income from discontinued operations 9,446 18,073 20,107 6,095 53,721

Net income 379,305 245,930 127,738 190,184 943,157

Basic earnings per share:

Income from continuing operations $ 3.30 $ 2.03 $ 0.94 $ 1.46 $ 7.66

Income from discontinued operations 0.08 0.16 0.18 0.05 0.46

Net income 3.38 2.19 1.12 1.51 8.12

Diluted earnings per share:

Income continuing operations $ 3.29 $ 2.03 $ 0.94 $ 1.45 $ 7.62

Income from discontinued operations 0.08 0.16 0.17 0.05 0.46

Net income 3.37 2.19 1.11 1.50 8.08

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