REVVITY, INC. 10-K

Item 8. Financial Statements and Supplementary Data TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 40 Consolidated Statements of Operations for Each of the Three Fiscal Years in the Period Ended January 1, 2023 41 Consolidated Statements of Comprehensive Income for Each of the Three Fiscal Years in the Period Ended January 1, 2023 42 Consolidated Balance Sheets as of January 1, 2023 and January 2, 2022 43 Consolidated Statements of Stockholders’ Equity for Each of the Three Fiscal Years in the Period Ended January 1, 2023 44 Consolidated Statements of Cash Flows for Each of the Three Fiscal Years in the Period Ended January 1, 2023 45 Notes to Consolidated Financial Statements 47 39 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Revvity, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Revvity, Inc. and subsidiaries (the “Company”) as of December 31, 2023 and January 1, 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and January 1, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2024, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of 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. Discontinued Operations — Gain on Sale — Refer to Notes 4 and 20 to the financial statements Critical Audit Matter Description On March 13, 2023, the Company completed the previously announced sale of certain assets and the equity interests of certain entities constituting the Company’s Applied, Food and Enterprise Services businesses (the “Business”). The Company received cash proceeds of $ 2.13 billion and is entitled to two elements of additional consideration that become payable upon the resolution of certain events. First, the Company is entitled to proceeds of $ 75.0 million as consideration for the Company’s ceasing use of the PerkinElmer brand and related trademarks and transferring them to the purchaser (“Brand Sale”). This consideration is expected to be received in installments through the first half of 2025. The Company is also entitled to proceeds of up to $ 150.0 million that is contingent on the proceeds that the purchaser and its affiliates receive on a subsequent sale or other capital event related to the Business (“Contingent Gain”). In order to determine the gain on disposal related to the Business, the Company was required to make significant judgments related to the accounting treatment of the Brand Sale and the Contingent Gain, which included assessing the appropriateness of including the future payments related to the Brand Sale and Contingent Gain in the proceeds at closing and measuring the fair value of the Contingent Gain. As a result, auditing the recognition of the Brand Sale and the recognition and measurement of the Contingent Gain required a high degree of auditor judgment and increased effort, including the involvement of specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the accounting treatment for the recognition of the Brand Sale and the recognition and measurement of the Contingent Gain included the following, among others: a. We tested the effectiveness of management’s controls over the accounting conclusions reached and the recognition and measurement of the Brand Sale and Contingent Gain. b. We obtained and read the purchase and sale agreement and other documents related to the sale of the Business in evaluating the reasonableness of the Company’s recognition of the Brand Sale and the Contingent Gain. c. With the assistance of professionals in our firm having expertise in divestiture accounting, we read and evaluated the Company’s accounting treatment for the inclusion of the Brand Sale and Contingent Gain in the proceeds from the sale of the Business at the closing date. d. With the assistance of our fair value specialists, we confirmed the acceptability of the valuation methodology selected, and we developed an independent estimate of the fair value of the Contingent Gain and compared our estimate to the recorded amount. /s / DELOITTE & TOUCHE LLP Boston, Massachusetts February 27, 2024 We have served as the Company’s auditor since 2002. 40 Table of Contents CONSOLIDATED STATEMENTS OF OPERATIONS December 31, 2023 January 1, 2023 January 2, 2022 (In thousands, except per share data) Revenue Product revenue $ 2,415,893 $ 2,634,582 $ 2,735,068 Service revenue 334,678 677,240 1,092,740 Total revenue 2,750,571 3,311,822 3,827,808 Cost of product revenue 1,077,744 1,150,402 1,129,223 Cost of service revenue 133,136 171,590 264,598 Selling, general and administrative expenses 1,022,551 1,025,514 975,193 Research and development expenses 216,578 221,617 200,337 Operating income from continuing operations 300,562 742,699 1,258,457 Interest and other expense, net 117,586 90,862 54,875 Income from continuing operations before income taxes 182,976 651,837 1,203,582 Provision for income taxes 3,473 139,161 314,146 Income from continuing operations 179,503 512,676 889,436 Income from discontinued operations 513,591 56,503 53,721 Net income $ 693,094 $ 569,179 $ 943,157 Basic earnings per share: Income from continuing operations $ 1.44 $ 4.06 $ 7.66 Income from discontinued operations 4.12 0.45 0.46 Net income $ 5.56 $ 4.51 $ 8.12 Diluted earnings per share: Income from continuing operations $ 1.44 $ 4.06 $ 7.62 Income from discontinued operations 4.11 0.45 0.46 Net income $ 5.55 $ 4.50 $ 8.08 The accompanying notes are an integral part of these consolidated financial statements. 41 Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Net income $ 693,094 $ 569,179 $ 943,157 Other comprehensive income (loss) Foreign currency translation adjustments, net of income taxes: Amount recognized in other comprehensive income 80,172 ( 284,854 ) ( 130,873 ) Amounts recognized in discontinued operations 90,814 — — Net foreign currency translation adjustments, net of income taxes 170,986 ( 284,854 ) ( 130,873 ) Unrecognized prior service credit (cost), net of tax — 44 ( 95 ) Unrealized (losses) gains on securities, net of tax ( 181 ) 5 237 Other comprehensive income (loss) 170,805 ( 284,805 ) ( 130,731 ) Comprehensive income $ 863,899 $ 284,374 $ 812,426 The accompanying notes are an integral part of these consolidated financial statements. 42 Table of Contents CONSOLIDATED BALANCE SHEETS December 31, 2023 January 1, 2023 (In thousands, except share and per share data) Current assets: Cash and cash equivalents $ 913,163 $ 454,358 Marketable securities 689,916 — Accounts receivable, net 632,811 612,780 Inventories, net 428,062 405,462 Other current assets 337,139 122,254 Current assets of discontinued operations — 1,693,704 Total current assets 3,001,091 3,288,558 Property, plant and equipment, net 509,654 482,950 Operating lease right-of-use assets, net 155,083 188,351 Intangible assets, net 3,022,321 3,377,174 Goodwill 6,533,550 6,481,768 Other assets, net 342,966 311,054 Total assets $ 13,564,665 $ 14,129,855 Current liabilities: Current portion of long-term debt $ 721,872 $ 470,929 Accounts payable 204,121 272,826 Accrued expenses and other current liabilities 524,470 527,863 Current liabilities of discontinued operations — 272,865 Total current liabilities 1,450,463 1,544,483 Long-term debt 3,177,770 3,923,347 Deferred taxes and other long-term liabilities 930,946 1,109,181 Operating lease liabilities 132,747 169,968 Total liabilities 5,691,926 6,746,979 Commitments and contingencies (see Note 16) Stockholders’ equity: Preferred stock—$1 par value per share, authorized 1,000,000 shares; none issued or outstanding — — Common stock—$1 par value per share, authorized 300,000,000 shares; issued and outstanding 123,426,000 and 126,300,000 shares at December 31, 2023 and January 1, 2023, respectively 123,426 126,300 Capital in excess of par value 2,416,793 2,753,055 Retained earnings 5,609,212 4,951,018 Accumulated other comprehensive loss ( 276,692 ) ( 447,497 ) Total stockholders’ equity 7,872,739 7,382,876 Total liabilities and stockholders’ equity $ 13,564,665 $ 14,129,855 The accompanying notes are an integral part of these consolidated financial statements. 43 Table of Contents CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Common Stock Shares Common Stock Amount Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity (In thousands) 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 loss — — — — ( 130,731 ) ( 130,731 ) Dividends — — — ( 33,245 ) — ( 33,245 ) 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 stock purchase 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 — — 6,251 — — 6,251 Balance, January 2, 2022 126,241 $ 126,241 $ 2,760,522 $ 4,417,174 $ ( 162,692 ) $ 7,141,245 Net income — — — 569,179 — 569,179 Other comprehensive loss — — — — ( 284,805 ) ( 284,805 ) Dividends — — — ( 35,335 ) — ( 35,335 ) Exercise of employee stock options 195 195 13,919 — — 14,114 Issuance of common stock for employee benefit plans 31 31 4,141 — — 4,172 Purchases of common stock ( 493 ) ( 493 ) ( 80,145 ) — — ( 80,638 ) Issuance of common stock for long-term incentive program 326 326 44,235 — — 44,561 Stock-based compensation — — 10,383 — — 10,383 Balance, January 1, 2023 126,300 $ 126,300 $ 2,753,055 $ 4,951,018 $ ( 447,497 ) $ 7,382,876 Net income — — — 693,094 — 693,094 Other comprehensive income — — — — 170,805 170,805 Dividends — — — ( 34,900 ) — ( 34,900 ) Exercise of employee stock options 58 58 4,286 — — 4,344 Issuance of common stock for employee stock purchase plans 29 29 3,103 — — 3,132 Purchases of common stock ( 3,267 ) ( 3,267 ) ( 389,035 ) — — ( 392,302 ) Issuance of common stock for long-term incentive program 306 306 34,886 — — 35,192 Stock-based compensation — — 10,498 — — 10,498 Balance, December 31, 2023 123,426 $ 123,426 $ 2,416,793 $ 5,609,212 $ ( 276,692 ) $ 7,872,739 The accompanying notes are an integral part of these consolidated financial statements. 44 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS For the Fiscal Years Ende d December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Operating activities: Net income $ 693,094 $ 569,179 $ 943,157 Income from discontinued operations ( 513,591 ) ( 56,503 ) ( 53,721 ) Income from continuing operations 179,503 512,676 889,436 Adjustments to reconcile income from continuing operations to net cash provided by continuing operations: Restructuring and other costs, net 26,601 13,580 14,358 Depreciation and amortization 431,769 427,000 311,443 Stock-based compensation 41,410 51,518 29,675 Pension and other post-retirement expense (income) 23,089 ( 23,104 ) ( 28,509 ) Change in fair value of contingent consideration 4,168 ( 1,377 ) 3,119 Deferred taxes ( 123,664 ) ( 105,923 ) ( 55,328 ) Contingencies and non-cash tax matters 26,183 ( 1,488 ) 1,924 Amortization of deferred debt issuance costs and accretion of discounts 7,349 7,310 4,962 Gain on disposition of businesses and assets, net — ( 2,887 ) ( 1,970 ) Amortization of acquired inventory revaluation — 45,289 35,201 Asset impairment — — 3,868 Change in fair value of financial securities 33,921 15,754 ( 10,985 ) Debt extinguishment gain ( 3,685 ) ( 2,880 ) — Unrealized foreign exchange loss 24,089 — — Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired: Accounts receivable, net ( 8,997 ) 66,093 165,590 Inventories ( 14,109 ) ( 48,634 ) 32,280 Accounts payable ( 76,426 ) ( 43,804 ) ( 7,577 ) Accrued expenses and other ( 291,814 ) ( 236,623 ) ( 57,303 ) Net cash provided by operating activities of continuing operations 279,387 672,500 1,330,184 Net cash (used in) provided by operating activities of discontinued operations ( 188,115 ) 7,310 80,566 Net cash provided by operating activities 91,272 679,810 1,410,750 Investing activities: Capital expenditures ( 81,368 ) ( 85,632 ) ( 86,020 ) Purchases of investments ( 6,300 ) ( 47,181 ) ( 23,130 ) Purchases of marketable securities ( 1,221,609 ) — — Proceeds from maturities of marketable securities 550,000 — — Proceeds from notes receivables — 8,890 — Proceeds from disposition of businesses and assets 153 14,505 1,569 Cash paid for acquisitions, net of cash acquired ( 2,086 ) ( 7,518 ) ( 3,982,216 ) Net cash used in investing activities of continuing operations ( 761,210 ) ( 116,936 ) ( 4,089,797 ) Net cash provided by (used in) investing activities of discontinued operations 2,074,734 ( 15,915 ) ( 22,961 ) 45 Table of Contents December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Net cash provided by (used in) investing activities 1,313,524 ( 132,851 ) ( 4,112,758 ) Financing activities: Payments on borrowings — ( 740,000 ) ( 1,559,133 ) Proceeds from borrowings — 240,000 1,900,282 Payments of senior unsecured notes ( 523,808 ) ( 57,876 ) ( 339,605 ) Proceeds from sale of senior unsecured notes — — 3,086,095 Payments of debt financing and equity issuance costs ( 15 ) — ( 30,983 ) Net proceeds (payments) on other credit facilities 6,323 ( 1,292 ) ( 13,670 ) Settlement of cash flow hedges — ( 762 ) ( 4,482 ) Settlement of swaps — — ( 14,314 ) Payments for acquisition-related contingent consideration ( 10,117 ) ( 5 ) ( 2,208 ) Proceeds from issuance of common stock under stock plans 4,344 14,114 25,120 Purchases of common stock ( 388,882 ) ( 80,638 ) ( 73,072 ) Dividends paid ( 34,966 ) ( 35,344 ) ( 32,373 ) Net cash (used in) provided by financing activities of continuing operations ( 947,121 ) ( 661,803 ) 2,941,657 Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 14,048 ) ( 33,747 ) ( 22,926 ) Net increase (decrease) in cash, cash equivalents and restricted cash 443,627 ( 148,591 ) 216,723 Cash, cash equivalents and restricted cash at beginning of year 470,746 619,337 402,614 Cash, cash equivalents and restricted cash at end of year $ 914,373 $ 470,746 $ 619,337 Supplemental disclosures of cash flow information Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows: Cash and cash equivalents $ 913,163 $ 454,358 $ 603,320 Restricted cash included in other current assets 1,210 1,040 1,018 Restricted cash included in other assets — 349 — Cash and cash equivalents included in current assets of discontinued operations — 14,999 14,999 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 914,373 $ 470,746 $ 619,337 Cash paid during the year for: Interest $ 94,008 $ 97,934 $ 54,120 Income taxes 359,800 323,077 364,565 Supplemental disclosures of non-cash investing and financing activities: Consideration receivable from sale of Business $ 241,353 $ — $ — Equity issued for business combination, net of issuance costs — — 2,638,144 The accompanying notes are an integral part of these consolidated financial statements. 46 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: Nature of Operations and Accounting Policies Nature of Operations: Revvity, Inc. (the “Company”) is a leading provider of health sciences solutions, technologies, expertise and services that deliver complete workflow from discovery to development, and diagnosis to cure. The Company has two operating segments: Life Sciences and Diagnostics. The Company’s Life Sciences segment focuses on service and innovating for custo mers spanning the life sciences market. Th e 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. Effective as of April 26, 2023, the Company changed its name from “PerkinElmer, Inc.” to “Revvity, Inc.”. Effective as of May 16, 2023, the Company changed the ticker symbol for its common stock to “RVTY” and the ticker symbol for its 1.875% Notes due 2026 to “RVTY 26”. The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In March 2023, the Company completed the previously announced sale of certain assets and the equity interests of certain entities constituting the Company’s Applied, Food and Enterprise Services businesses (the “Business”). The Business is reported for all pe riods as discontinued operations in the Company’s consolidated financial statements. 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 December 31, 2023 (“fiscal year 2023”), January 1, 2023 (“fiscal year 2022”) and January 2, 2022 (“fiscal year 2021”) included 52 weeks. The fiscal year ending December 29, 2024 (“fiscal year 2024”) will incl ude 52 weeks. Accounting Policies and Estimates: The preparation of consolidated financial statements in accordance with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”) requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Revenue Recognition: The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company recognizes revenue in an amount that reflects the consideration the Company expects to receive in exchange for the promised products or services when a performance obligation is satisfied by transferring control of those products or services to customers. Taxes that are collected by the Company from a customer and assessed by a governmental authority, that are both imposed on and concurrent with a specific revenue-producing transaction, are excluded from revenue. The Company reports shipping and handling revenue in revenue, to the extent it is billed to customers, and the associated costs in cost of product revenue. Inventories : Inventories, which include material, labor and manufacturing overhead, are valued at the lower of cost or market. Inventories are accounted for using the first-in, first-out method of determining inventory costs. Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete inventory are recorded based primarily on the Company’s estimated forecast of product demand and production requirements. Income Taxes: The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. This method also requires the recognition of future tax benefits such as net operating loss carryforwards, to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established for any deferred tax asset for which realization is not more likely than not. 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 47 Table of Contents 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. The Company is subject to the Global In tangible Low Taxed Income (“GILTI”) tax in the U.S. The Company elected to treat taxes on future GILTI inclusions in U.S. ta xable income as a current period expense when incurred. The Company uses the portfolio approach for releasing income tax effects from accumulated other comprehensive income. Property, Plant and Equipment: The Company depreciates property, plant and equipment using the straight-line method over its estimated useful lives, which generally fall within the following ranges: buildings- 10 to 40 years; leasehold improvements - estimated useful life or remaining term of lease, whichever is shorter; and machinery and equipment- 3 to 8 years. Certain tooling costs are capitalized and amortized over a 3 -year life, while repairs and maintenance costs are expensed. Pension and Other Postretirement Benefits: The Company sponsors both funded and unfunded U.S. and non-U.S. defined benefit pension plans and other postretirement benefits. The Company recognizes actuarial gains and losses in operating results in the year in which the gains and losses occur. Actuarial gains and losses are measured annually as of the calendar month-end that is closest to the Company’s fiscal year end and accordingly will be recorded in the fourth quarter, unless the Company is required to perform an interim remeasurement. The remaining components of pension expense, primarily service and interest costs and assumed return on plan assets, are recorded on a quarterly basis. The Company’s funding policy provides that payments to the U.S. pension trusts shall at least be equal to the minimum funding requirements of the Employee Retirement Income Security Act of 1974. Non-U.S. plans are accrued for, but generally not fully funded, and benefits are paid from operating funds. Translation of Foreign Currencies: For foreign operations, asset and liability accounts are translated at current exchange rates; income and expenses are translated using weighted average exchange rates for the reporting period. Resulting translation adjustments, as well as translation gains and losses from certain intercompany transactions considered permanent in nature, are reported in accumulated other comprehensive income (“AOCI”), a separate component of stockholders’ equity. Gains and losses arising from transactions and translation of period-end balances denominated in currencies other than the functional currency are included in other expense, net . Business Combinations: Business combinations are accounted for at fair value. Acquisition costs are expensed as incurred and recorded in selling, general and administrative expenses. Measurement period adjustments are made in the period in which the amounts are determined, and the current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date. All changes that do not qualify as measurement period adjustments are also included in current period earnings. The accounting for business combinations requires estimates and judgment 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 value 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. If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the financial statements could result in a possible impairment of the intangible assets and goodwill, require acceleration of the amortization expense of finite-lived intangible assets, or the recognition of additional consideration which would be expensed. Goodwill and Other Intangible Assets: The Company’s intangible assets consist of (i) goodwill, which is not being amortized; and (ii) amortizing intangibles, which consist of patents, trade names and trademarks, licenses, customer relationships and purchased technologies, which are being amortized over their estimated useful lives. The process of testing goodwill for impairment involves the determination of the fair value of the applicable reporting units. The test consists of the comparison of the fair value to the carrying value of the reporting unit to determine if the carrying value exceeds the fair value. If the carrying value of the reporting unit exceeds its fair value, an impairment loss in an amount equal to that excess is recognized up to the amount of goodwill. This annual impairment assessment is performed by the Company on the later of January 1 or the first day of each fiscal year. Amortizing intangible assets are reviewed for impairment when indicators of impairment are present. When a potential impairment has been identified, forecasted undiscounted net cash flows of the operations to which the asset relates are compared to the current carrying value of the long-lived assets present in that operation. If such cash flows are less than such carrying amounts, long-lived assets, including such intangibles, are written down to their respective fair values. Stock-Based Compensation: The Company accounts for stock-based compensation expense based on estimated grant date fair value, generally using the Black-Scholes option-pricing model or the quoted price of the Company’s stock on the grant 48 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) date. The fair value is recognized as expense in the consolidated financial statements over the requisite service period. The determination of fair value and the timing of expense using option pricing models such as the Black-Scholes model require the input of 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 AOCI until realized. Investments in debt securities that are classified as held-to-maturity are recorded at amortized cost. Investments in equity securities are recorded at fair values with unrealized holding gains and losses included in earnings. Investments in equity securities without a readily determinable fair values are carried at cost minus impairment, if any. When an observable price change in orderly transactions for the identical or a similar investment of the same issuer has occurred, the Company elects to carry those equity investments at fair value as of the date that the observable transaction occurred. Cash and Cash Equivalents: The Company considers all highly liquid, unrestricted instruments with a purchased maturity of three months or less to be cash equivalents. The carrying amount of cash equivalents approximates fair value due to the short maturities of these instruments. Environmental Matters: The Company accrues for costs associated with the remediation of environmental pollution when it is probable that a liability has been incurred and the Company’s proportionate share of the amount can be reasonably estimated. The recorded liabilities have not been discounted. Research and Development: Research and development costs are expensed as incurred. Restructuring and Other Costs: Generally, costs associated with an exit or disposal activity are recognized when the liability is incurred. Prior to recording restructuring charges for employee separation agreements, the Company notifies all employees of termination. Costs related to employee separation arrangements requiring future service beyond a specified minimum retention period are recognized over the service period . The Company recorded restructuring charges, included in selling, general and administrative expenses in the consolidated statements of operations, of $ 26.6 million , $ 13.6 million and $ 14.4 million primarily associated with workforce reductions during fiscal years 2023, 2022 and 2021, respectively . The Company expects severance payments will be substantially completed duri ng fiscal year 2024 . Comprehensive Income: Comprehensive income is defined as net income or loss and other changes in stockholders’ equity from transactions and other events from sources other than stockholders. Comprehensive income is reflected in the consolidated statements of comprehensive income. Derivative Instruments and Hedging: Derivatives are recorded on the consolidated balance sheets at fair value. Accounting for gains or losses resulting from changes in the values of those derivatives depends on the use of the derivative instrument and whether it qualifies for hedge accounting. For a cash flow hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income and subsequently amortized into net earnings when the hedged exposure affects net earnings. Cash flow hedges related to anticipated transactions are designated and documented at the inception of each hedge by matching the terms of the contract to the underlying transaction. The Company classifies the cash flows from hedging transactions in the same categories as the cash flows from the respective hedged items. Once established, cash flow hedges are generally recorded in other comprehensive income, unless an anticipated transaction is no longer likely to occur, and subsequently amortized into net earnings when the hedged exposure affects net earnings. Discontinued or dedesignated cash flow hedges are immediately settled with counterparties, and the related accumulated derivative gains or losses are recognized into net earnings on the consolidated financial statements. Settled cash flow hedges related to forecasted transactions that remain probable are recorded as a component of other comprehensive income (loss) and are subsequently amortized into net earnings when the hedged exposure affects net earnings. Forward contract effectiveness for cash flow hedges is calculated by comparing the fair value of the contract to the change in value of the anticipated transaction using forward rates on a monthly basis. The Company also has entered into other foreign currency forward contracts that are not designated as hedging instruments for accounting purposes. These contracts are recorded at fair value, with the changes in fair value recognized into interest and other expense, net on the consolidated financial statements. The Company also uses foreign currency denominated debt to hedge its investments in certain foreign subsidiaries. Realized and unrealized translation adjustments from these hedges are included in the foreign currency translation component of AOCI, as well as the offset translation adjustments on the underlying net assets of foreign subsidiaries. The cumulative translation gains or losses will remain in AOCI until the foreign subsidiaries are liquidated or sold. 49 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Leases: Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in the Company's consolidated balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. 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. The Company used the implicit rate when readily determinable. The operating lease ROU asset excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as cars, the Company accounts for the lease and non-lease components as a single lease component. 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 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; and 2) the lease component, if accounted for separately, would be classified as an operating lease. 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 Accounting Standards Codification 842, Leases (“ASC 842”). Recently Issued Accounting Pronouncements: From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) and are adopted by the Company as of the specified effective dates. 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 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 will require public entities to disclose on an annual basis a tabular reconciliation using both percentages and amounts, broken out into specific categories with certain reconciling items at or above 5% of the statutory (i.e. expected) tax further broken out by nature and/or jurisdiction. ASU 2023-09 requires all entities to disclose on an annual basis the amount of income taxes paid (net of refunds received), disaggregated between federal (national), state/local and foreign, and amounts paid to an individual jurisdiction when 5% or more of the total income taxes paid. The guidance is required to be applied on a prospective basis; retrospective application is permitted. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Although the guidance only requires additional disclosures, the Company is in the process of determining the impact of this guidance to its income tax disclosures. In November 2023, t he FASB issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 amends Accounting Standards Codification 280, Segment Reporting (“ASC 280”) to require public entities to disclose significant segment expenses and other segment items that are regularly provided to the chief operating decision maker (“CODM”) and included in each reported measure of a reportable segment’s profit or loss, on an annual and interim basis, and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 permits entities to report multiple measures of a reportable segment’s profit or loss if the CODM uses those measures to allocate resources and assess performance. The guidance is required to be applied retrospectively to all periods presented in the financial statements, unless impracticable. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is also permitted. Although the guidance only requires additional disclosures, the Company is in the process of determining the impact of this guidance to its segment disclosures. 50 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Note 2: Revenue 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 to each performance obligation in an arrangement based on relative stand-alone selling prices. The stand-alone selling prices are determined based on the prices at which the Company separately sells the products, extended warranties, and services. For items that are not sold separately, the Company estimates stand-alone selling prices by reference to the amount charged for similar items on a stand-alone basis. The Company sells products and services predominantly through its direct sales force, and the use of distributors is generally limited to geographic regions where the Company has no direct sales force. The Company does not offer product return or exchange rights (other than those relating to defective goods under warranty). In instances where the timing of revenue recognition differs from the timing of invoicing, the Company determined that the contracts generally do not include a significant financing component. 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. Nature of goods and services The Life Sciences segment principally generates revenue from sales of instruments, reagents, software, subscriptions, detection and imaging technologies, extended warranties, training and services in the life sciences market. The Diagnostics segment principally generates revenue from sales of instruments, solutions, consumables, reagents, and services in the diagnostics market. The typical length of a contract for service is 12 to 36 months. The revenue generated from the sale of instruments (inclusive of consumables), reagents, and certain software is recognized at a point in time. The Company recognizes revenue in these arrangements at the point in time when control of the products has been transferred to customers, which is typically at delivery. Certain of the Company's products require specialized installation and configuration at the customer's site. Revenue for these products is deferred until installation is complete and customer acceptance has been received. When the Company places the instrument at the customer's site and sells the reagents to a customer, the instrument and reagents are accounted for together as one performance obligation. The Company does not charge a fee for the use of the instrument and retains ownership of the placed instrument. The Company recognizes revenue upon delivery of reagents, which is the point in time where the Company has performed its obligation to provide a screening solution to the customer. Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 60 days. The revenue generated from the sale of licenses for software as a service, cloud services, subscriptions, and laboratory services and training is recognized over time. Term licenses, subscriptions and cloud services, are generally recognized ratably over the contract period. The Company sells its software subscriptions and cloud services with maintenance services and, in some cases, with consulting services. The Company recognizes revenue for the software commencing when the service is made available to the customer. For maintenance and consulting services, revenue is recognized over the period in which the services are provided. Revenue for laboratory services is recognized over the contract period or when the service is billable, based on time and materials. Product revenue is recognized at a point in time and service revenue is generally recognized over time. Disaggregation of revenue In the following tables, revenue is disaggregated by primary geographical market and major good and service lines. 51 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Reportable Segments For the fiscal year ended December 31, 2023 January 1, 2023 January 2, 2022 Life Sciences Diagnostics Total Life Sciences Diagnostics Total Life Sciences Diagnostics Total (In thousands) Primary geographical markets Americas $ 671,738 $ 543,875 $ 1,215,613 $ 683,170 $ 979,473 $ 1,662,643 $ 444,459 $ 1,362,213 $ 1,806,672 Europe 308,567 438,457 747,024 297,468 534,343 831,811 234,334 982,476 1,216,810 Asia 312,035 475,899 787,934 312,271 505,097 817,368 217,076 587,250 804,326 $ 1,292,340 $ 1,458,231 $ 2,750,571 $ 1,292,909 $ 2,018,913 $ 3,311,822 $ 895,869 $ 2,931,939 $ 3,827,808 Major goods/service lines Life Sciences reagents $ 732,789 $ — $ 732,789 $ 691,344 $ — $ 691,344 $ 399,518 $ — $ 399,518 Life Sciences instruments 381,262 — 381,262 405,554 — 405,554 329,584 — 329,584 Life Sciences software 178,289 — 178,289 196,011 — 196,011 166,767 — 166,767 Reproductive health — 501,302 501,302 — 516,574 516,574 — 514,863 514,863 Applied genomics — 228,443 228,443 — 393,602 393,602 — 619,357 619,357 Immunodiagnostics — 728,486 728,486 — 1,108,737 1,108,737 — 1,797,719 1,797,719 $ 1,292,340 $ 1,458,231 $ 2,750,571 $ 1,292,909 $ 2,018,913 $ 3,311,822 $ 895,869 $ 2,931,939 $ 3,827,808 Major Customer Concentration No single customer comprises more than 10% of net revenues during the fiscal year 2023. Revenues from one customer in the Company’s Diagnostics segment represent approximately $ 330.7 million and $ 638.6 million of the Company’s total revenue during the fiscal years 2022 and 2021, respectively. Contract Balances Contract assets: The unbilled receivables (contract assets) primarily relate to the Company’s right to consideration for work completed but not billed at the reporting date. The unbilled receivables are transferred to trade receivables when billed to customers. Contract assets are generally classified as current assets and are included in “Accounts receivable, net” in the consolidated balance sheets. Contract liabilities: 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. The contract liability balances at the beginning of each period presented were generally fully recognized in the subsequent three month period. The performance obligations that are unsatisfied (or partially unsatisfied) at the end of the period are not material to the Company. Contract balances were as follows: December 31, 2023 January 1, 2023 (In thousands) Contract assets $ 52,648 $ 56,631 Contract liabilities ( 22,504 ) ( 30,133 ) 52 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Note 3: 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. In fiscal year 2021, t he Company completed the acquisition of BioLegend, Inc. ( “ BioLegend ” ) and paid an aggregate consideration of $ 5.7 billion, net of cash acquired of $ 292.4 million, reflecting working capital and other adjustments (the “ Aggregate Consideration ” ). The Aggregate Consideration was paid in a combination of $ 3.3 billion in cash and shares of the Company ’ s common stock having a fair value of approximately $ 2.6 billion based on the $ 187.56 per share closing price of the Company's common stock on the New York Stock Exchange on September 17, 2021 (the “ Stock Consideration ” ). The Stock Consideration consisted of 14,066,799 shares of the Company ’ s common stock. BioLegend is recognized as a leading, global provider of life science antibodies and reagents headquartered in San Diego, California, with approximately 700 employees. The operations for this acquisition is reported within the results of the Company ’ s Life Sciences segment from the acquisition date. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforce acquired, and is not tax deductible. Identifiable definite-lived intangible assets, such as core technology, trade names, customer relationships and clone library, acquired as part of this acquisition had a weighted-average amortization period of 16.3 years. BioLegend’s revenue and net loss for the period from the acquisition date to January 2, 2022 were $ 91.7 million and $ 25.8 million, respectively. The net loss includes $ 47.0 million of amortization of acquired intangible assets. The following unaudited pro forma information presents the combined financial results for the Company and BioLegend as if the acquisition of BioLegend had been completed at the beginning of fiscal year 2020: January 2, 2022 (In thousands, except per share data) Pro Forma Statement of Operations Information: Revenue $ 4,056,122 Income from continuing operations 947,387 Basic earnings per share: Income from continuing operations $ 7.27 Diluted earnings per share: Income from continuing operations $ 7.25 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 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 fiscal year 2021. These pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments, such as fair value adjustment to inventory, increased interest expense on debt obtained to finance the transaction, and increased amortization for the fair value of acquired intangible assets. The pro forma information does not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the combination occurred at the beginning of each period presented, or of future results of the consolidated entities. The actual results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. Other acquisitions in 2021. During fiscal year 2021, the Company also completed the acquisition of seven other businesses for aggregate consideration of $ 1.2 billion. The acquired businesses include Oxford Immunotec Global PLC, a company based in Abingdon, UK with approximately 275 employees, for total consideration of $ 590.9 million and Nexcelom Bioscience Holdings, LLC, a company based in Lawrence, Massachusetts with approximately 130 employees, for total consideration of $ 267.3 million, and five other businesses, which were acquired for total consideration of $ 318.6 million. The 53 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) excess of the purchase prices over the fair values of the acquired businesses' net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as employee workforces acquired, and has been allocated to goodwill, which is not tax deductible. Identifiable definite-lived intangible assets, such as core technology, trade names, and customer relationships, acquired as part of these acquisitions had a weighted-average amortization period of 12.4 years . The total purchase price for the acquisitions in fiscal year 2021 has been allocated to the estimated fair value of assets acquired and liabilities assumed as follows: Final BioLegend Other (In thousands) Fair value of business combinations: Cash payments $ 3,336,115 $ 1,128,584 Common stock issued 2,638,369 — Other liability 6,857 2,910 Contingent consideration — 45,031 Working capital and other adjustments — 183 Less: cash acquired ( 292,377 ) ( 195,010 ) Total $ 5,688,964 $ 981,698 Identifiable assets acquired and liabilities assumed: Current assets $ 184,704 $ 71,840 Property, plant and equipment 147,200 26,507 Other assets 9,330 15,527 Identifiable intangible assets: Core technology and clone library 782,400 290,089 Trade names and patents 38,000 39,476 Licenses 8,979 — Customer relationships and backlog 1,714,800 141,670 Goodwill 3,509,931 545,262 Deferred taxes ( 668,919 ) ( 80,923 ) Deferred revenue — ( 1,197 ) Debt assumed — ( 4,628 ) Liabilities assumed ( 37,461 ) ( 61,925 ) Total $ 5,688,964 $ 981,698 The Company does not consider the acquisitions completed during fiscal years 2022 and 2021, with the exception of the BioLegend acquisition, to be material to its consolidated results of operations; therefore, the Company is only presenting pro forma financial information of operations for the BioLegend acquisition. The aggregate revenue and results of operations for acquisitions completed during fiscal years 2022 and 2021 for the fiscal year period from their respective acquisition dates 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 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 54 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) liabilities primarily result from changes in the estimated probabilities of achieving revenue thresholds or product development milestones during the earnout period. As of December 31, 2023, the Company may have to pay contingent consideration, related to acquisitions with open contingency periods, of up to $ 98.0 million. As of December 31, 2023, the Company has recorded contingent consideration obligations of $ 40.0 million, of which $ 11.0 million was recorded in accrued expenses and other current liabilities, and $ 29.0 million was recorded in long-term liabilities. The expected maximum earnout period for acquisitions with open contingency periods is 7.9 years from December 31, 2023, and the remaining weighted average expected earnout period at December 31, 2023 was 5.0 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 dive stiture-related costs, included in selling, general and administrative expense in the Company’s consolidated statements of operations, were $ 69.2 million, $ 39.8 million and $ 62.8 million for fiscal years 2023, 2022 and 2021. These amounts included $ 34.3 million of rebranding expenses in fiscal year 2023 and $ 20.0 million, $ 26.5 million and $ 6.9 million of stock compensation expense related to awards given to BioLegend employees in fiscal years 2023, 2022 and 2021 , respectively. Total acquisition and dive stiture-related costs, included in interest and other expense, net in the Company’s consolidated statements of operations, were $ 19.9 million and $ 18.0 million for fiscal years 2023 and 2021. These amounts included $ 24.1 million of net foreign exchange loss and $ 4.2 million interest income related to the sale of the Business in fiscal year 2023, and $ 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. These acquisition and divestiture-related costs were expensed as incurred. Note 4: 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. On March 13, 2023, the Company completed the previously announced sale of the Business (the “Closing”) to PerkinElmer Topco, L.P. (formerly known as 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”), for an aggregate purchase price of up to $ 2.45 billion . The Company received approximately $ 2.13 billion in cash proceeds, before transaction costs and subject to post-closing adjustments. The Company is entitled to an additional $ 75.0 million in proceeds as consideration for the Company ’s ceasing the use of the PerkinElmer brand and related trademarks and transferring them to the Purchaser. This consideration is expected to be received in installments through the first half of 2025. The discounted value of the $ 75.0 million was measured as $ 65.2 million and was included in the proceeds. In addition, the Company is entitled to additional consideration of up to $ 150.0 million that is contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital events related to the Business. The fair value of this element of consideration was determined to be $ 15.9 million and was included in the proceeds at Closing. The Company also recorded a receivable, included in Other current assets in the consolidated balance sheets, of approximately $ 160.2 million as of December 31, 2023 for post-closing adjustments that is expected to be received during fiscal year 2024. The final amount of the receivable related to the post-closing adjustments is subject to change. The Company has measured the gain on sale and related income tax provision, however, additional adjustments may arise that may impact the final measurement of the gain. The elements of the gain calculation that may result in adjustments include 55 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) the measurement of the proceeds, including the settlement of the post-closing adjustments, as well as the related tax effects of such adjustments and the filing of tax returns for the period that includes the sale. In connection and concurrent with the Closing, the Company has also entered into a Transition Services Agreement ( “TSA”) with the Purchaser for a period of up to 24 months from the Closing and a Contract Manufacturing Agreement ( “CMA”) for two locations which expired in June 2023. The costs and amounts of reimbursements related to the CMA were not significant. The costs and amounts of reimbursements related to the TSA and other commercial transactions between the parties were not significant in fiscal year 2023 and the amounts in future periods are not expected to be significant. The Business had been reported in the Company’s Discovery & Analytical Solutions segment, which is now referred to as the Life Sciences 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, t he Business is reported for all pe riods as discontinued operations in the Company’s consolidated financial statements. The following table summarizes the results of discontinued operations which are presented as income from discontinued operations in the Company’s consolidated statements of operations: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Revenue $ 176,324 $ 1,298,376 $ 1,239,361 Cost of revenue 125,219 859,330 822,048 Selling, general and administrative expenses 78,613 306,032 268,760 Research and development expenses 10,434 64,605 74,632 Operating (loss) income ( 37,942 ) 68,409 73,921 Other income: Gain on sale 811,472 — — Other (expense) income, net ( 49 ) 5,195 2,383 Total other income 811,423 5,195 2,383 Income from discontinued operations before income taxes 773,481 73,604 76,304 Provision for income tax 259,890 17,101 22,583 Income from discontinued operations $ 513,591 $ 56,503 $ 53,721 The table below provides a reconciliation of the carrying amounts of the major classes of assets and liabilities of the discontinued operations to the amounts presented separately in the consolidated balance sheet at January 1, 2023. 56 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) January 1, 2023 (In thousands) Cash and cash equivalents $ 14,999 Accounts receivable 343,064 Inventories 210,367 Other current assets 32,063 Total current assets 600,493 Property, plant and equipment, net 60,983 Operating lease right-of-use assets 41,487 Intangible assets, net 202,850 Goodwill 772,812 Other assets, net 15,079 Total long-term assets 1,093,211 Total assets of discontinued operations $ 1,693,704 Accounts payable 29,912 Accrued expenses and other current liabilities 161,260 Total current liabilities 191,172 Deferred taxes and long-term liabilities 46,046 Operating lease liabilities 35,647 Total long-term liabilities 81,693 Total liabilities of discontinued operations $ 272,865 The following operating and investing items from discontinued operations were as follows for the fiscal years ended: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Depreciation $ — $ 8,011 $ 12,897 Amortization — 16,984 33,664 Capital expenditures 1,292 10,670 13,868 Note 5: Interest and Other Expense, Net Interest and other expense, net, consisted of the following for the fiscal years ended: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Interest income $ ( 72,131 ) $ ( 3,589 ) $ ( 2,241 ) Interest expense including costs of bridge financing 98,813 103,955 102,128 Change in fair value of financial securities 33,921 15,754 ( 10,985 ) Other components of net periodic pension cost (credit) 19,006 ( 33,158 ) ( 37,385 ) Foreign exchange losses and other expense, net 37,977 7,900 3,358 Total interest and other expense, net $ 117,586 $ 90,862 $ 54,875 57 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Note 6: Income Taxes The components of income from continuing operations before income taxes were as follows for the fiscal years ended: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) U.S. $ 51,314 $ 326,438 $ 547,705 Non-U.S. 131,662 325,399 655,877 Total $ 182,976 $ 651,837 $ 1,203,582 The components of the provision for income taxes on continuing operations were as follows: Current Expense Deferred Expense (Benefit) Total (In thousands) Fiscal year ended December 31, 2023 Federal $ 39,800 $ ( 60,845 ) $ ( 21,045 ) State 9,183 ( 19,619 ) ( 10,436 ) Non-U.S. 78,154 ( 43,200 ) 34,954 Total $ 127,137 $ ( 123,664 ) $ 3,473 Fiscal year ended January 1, 2023 Federal $ 115,436 $ ( 45,246 ) $ 70,190 State 27,757 ( 16,139 ) 11,618 Non-U.S. 101,891 ( 44,538 ) 57,353 Total $ 245,084 $ ( 105,923 ) $ 139,161 Fiscal year ended January 2, 2022 Federal $ 154,905 $ ( 37,858 ) $ 117,047 State 53,961 3,602 57,563 Non-U.S. 160,608 ( 21,072 ) 139,536 Total $ 369,474 $ ( 55,328 ) $ 314,146 The total provision for income taxes included in the consolidated financial statements is as follows for the fiscal years ended: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Continuing operations $ 3,473 $ 139,161 $ 314,146 Discontinued operations 259,890 17,101 22,583 Total $ 263,363 $ 156,262 $ 336,729 A reconciliation of income tax expense at the U.S. federal statutory income tax rate to the recorded tax provision is as follows for the fiscal years ended: 58 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Tax at statutory rate $ 38,346 $ 136,886 $ 252,752 Non-U.S. rate differential, net ( 18,479 ) ( 5,221 ) ( 33,847 ) U.S. taxation of multinational operations ( 4,594 ) 22,102 7,964 State income taxes, net ( 265 ) 7,820 36,832 Impact of rate changes ( 12,795 ) — 14,031 Prior year tax matters 3,971 ( 10,160 ) 1,850 Effect of stock compensation 2,225 845 ( 2,187 ) General business tax credits ( 4,718 ) ( 7,132 ) ( 2,715 ) Transfer pricing matters ( 6,725 ) — — Change in valuation allowance 6,772 4,964 ( 179 ) Effect of foreign repatriations ( 4,737 ) ( 4,940 ) 37,147 Other, net 4,472 ( 6,003 ) 2,498 Total $ 3,473 $ 139,161 $ 314,146 The Company regularly reviews its tax positions in each significant taxing jurisdiction in the process of evaluating its unrecognized tax benefits. The Company makes adjustments to its unrecognized tax benefits when: (i) facts and circumstances regarding a tax position change, causing a change in management’s judgment regarding that tax position; (ii) a tax position is effectively settled with a tax authority at a differing amount; and/or (iii) the statute of limitations expires regarding a tax position. The tabular reconciliation of the total amounts of unrecognized tax benefits is as follows for the fiscal years ended: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Unrecognized tax benefits, beginning of year $ 57,948 $ 61,658 $ 38,773 Gross increases—tax positions in prior periods 64,697 1,489 2,877 Gross decreases—tax positions in prior periods — ( 2,519 ) — Gross increases—current-period tax positions 14,969 7,187 149 Gross increases related to acquisitions — — 22,697 Settlements — — ( 2,252 ) Lapse of statute of limitations ( 10,830 ) ( 8,625 ) ( 563 ) Foreign currency translation adjustments 2,272 ( 1,242 ) ( 23 ) Unrecognized tax benefits, end of year $ 129,056 $ 57,948 $ 61,658 The Company classifies interest and penalties as a component of income tax expense. At December 31, 2023 and January 1, 2023, the Company had accrued interest and penalties of $ 6.3 million and $ 7.2 million, respectively. During fiscal years 2023, 2022 and 2021, the Company recognized a net (benefit) expense of $( 1.1 ) million, $( 0.5 ) million and $ 1.8 million, respectively, for interest and penalties in its total tax provision. At December 31, 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 $ 71.6 million of its uncertain tax positions at December 31, 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. Various tax years after 2010 remain open to examination by certain jurisdictions in which the Company has significant business operations, such as China, Finland, Germany, Luxembourg, The Netherlands, Singapore, the United Kingdom and the United States. The tax years under examination vary by jurisdiction. 59 Table of Contents 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: December 31, 2023 January 1, 2023 (In thousands) Deferred tax assets: Inventory $ 12,934 $ 17,920 Reserves and accruals 63,711 70,912 Accrued compensation 18,339 23,868 Net operating loss and credit carryforwards 133,919 117,953 Accrued pension 11,089 11,653 Restructuring reserve 1,588 1,640 Deferred revenue 17,539 22,644 Capitalized research and development expenses 47,188 44,922 Operating lease liabilities 29,319 43,547 Unrealized foreign exchange loss 12,502 11,158 All other, net 1,610 841 Total deferred tax assets 349,738 367,058 Deferred tax liabilities: Postretirement health benefits ( 4,452 ) ( 4,379 ) Depreciation and amortization ( 784,925 ) ( 916,581 ) Operating lease right-of-use assets ( 26,301 ) ( 39,281 ) Prepaid expenses ( 349 ) ( 3,515 ) Deferred tax liability on foreign earnings ( 17,587 ) ( 15,782 ) Total deferred tax liabilities ( 833,614 ) ( 979,538 ) Valuation allowance ( 84,626 ) ( 96,681 ) Net deferred tax liabilities $ ( 568,502 ) $ ( 709,161 ) The components of net deferred tax liabilities were recognized in the consolidated balance sheets as follows: December 31, 2023 January 1, 2023 (In thousands) Other assets, net $ 8,158 $ 18,527 Deferred taxes and other long-term liabilities ( 576,660 ) ( 727,688 ) Total $ ( 568,502 ) $ ( 709,161 ) At December 31, 2023, the Company had U.S. federal net operating loss carryforwards of $ 109.8 million, state net operating loss ca rryforwards of $ 8.9 million, foreign net operating loss carryforwards of $ 439.8 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 2024. 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 tha n not to be realized. The Company is no longer permanently reinvested in the undistributed earnings of its international subsidiaries that have been previously taxed at the U.S. federal level and/or would be subject to a dividend received deduction if repatriated. The Company recorded the applicable taxes that will be due when such earnings are repatriated. For the remaining other undistributed foreign earnings and outside basis differences, the Company continues to be indefinitely reinvested and have not 60 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) provided any taxes for these amounts, and it is not practicable to estimate the amount of deferred tax liability that would be incurred. Note 7: Earnings Per Share Basic earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding during the period less restricted unvested shares. Diluted earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding plus all potentially dilutive common stock equivalents, primarily shares issuable upon the exercise of stock options using the treasury stock method. The following table reconciles the number of shares utilized in the earnings per share calculations for the fiscal years ended: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Number of common shares—basic 124,704 126,155 116,165 Effect of dilutive securities: Stock options 108 249 391 Restricted stock awards — 22 118 Number of common shares—diluted 124,812 126,426 116,674 Number of potentially dilutive securities excluded from calculation due to antidilutive impact 1,089 611 487 Antidilutive securities include outstanding stock options with exercise prices and average unrecognized compensation cost in excess of the average fair market value of common stock for the related period. Antidilutive securities also include restricted stock awards with average unrecognized compensation cost in excess of the average fair market value of the common stock for the related period. Antidilutive options and restricted stock awards were excluded from the calculation of diluted net income per share and could become dilutive in the future. Note 8: Accounts Receivable, Net Accounts receivable, net consisted of the following: December 31, 2023 January 1, 2023 (In thousands) Accounts receivable, net $ 632,811 $ 612,780 Long-term accounts receivable, net, included in Other assets, net 29,593 34,040 Total accounts receivable, net $ 662,404 $ 646,820 61 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Reserves for credit losses consisted of the following: Balance at Beginning of Year Provisions Charges/ Write-offs Other (1) Balance at End of Year (In thousands) 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 Year ended December 31, 2023 37,543 9,067 ( 3,559 ) 329 43,380 (1) Other amounts primarily relate to the impact of acquisitions, discontinued operations and foreign exchange movements. Note 9: Inventories, Net Inventories, net consisted of the following: December 31, 2023 January 1, 2023 (In thousands) Raw materials $ 197,268 $ 190,640 Work in progress 69,176 68,206 Finished goods 161,618 146,616 Total inventories, net $ 428,062 $ 405,462 Note 10: Property, Plant and Equipment, Net Property, plant and equipment consisted of the following: December 31, 2023 January 1, 2023 (In thousands) At cost: Land $ 29,635 $ 28,340 Building and leasehold improvements 358,380 346,164 Machinery and equipment 595,124 482,639 Total property, plant and equipment 983,139 857,143 Accumulated depreciation ( 473,485 ) ( 374,193 ) Total property, plant and equipment, net $ 509,654 $ 482,950 Depreciation expense on property, plant and equipment for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 was $ 66.7 million, $ 56.4 million and $ 54.9 million, respectively. 62 Table of Contents Note 11: Marketable Securities and Investments Investments consisted of the following: December 31, 2023 January 1, 2023 (In thousands) Marketable securities - held to maturity (current) $ 689,916 $ — Marketable securities - available for sale 13,913 11,083 Equity investments 57,206 54,503 Notes receivables and other investments 12,280 42,500 $ 773,315 $ 108,086 Marketable securities - held to maturity. The Company’s investments in U.S. treasury securities are classified as held-to-maturity and measured at amortized cost. All the outstanding investments in U.S. treasury securities had a contractual maturity of less than one year as of December 31, 2023 and have been classified as current in the consolidated balance sheet to match the maturities of the long-term debt expected to be retired concurrently with the maturity of the marketable securities. Marketable securities - available for sale. Marketable securities, which are included in Other assets, net, are accounted for as available for sale and include equity and fixed-income securities. The net unrealized holding gain and loss on marketable securities, net of deferred income taxes, reported as a component of other comprehensive income (loss) in the consolidated statements of stockholders’ equity, was not material. The proceeds from the sales of securities and the related gains and losses are not material for any period presented. Equity Investments. The Company has equity interests in privately-held entities over which the Company neither has significant influence nor control. Equity investments, which are included in Other assets, net, as of December 31, 2023 and January 1, 2023 consisted of the following: December 31, 2023 January 1, 2023 (In thousands) Equity investments, carried at cost minus impairment, if any $ 47,260 $ 50,654 Equity investments, carried at fair value 9,946 3,849 $ 57,206 $ 54,503 The amount of upward adjustments during the periods presented were not material. The cumulative amount of upward adjustments as of December 31, 2023 and January 1, 2023 was $ 31.3 million and $ 30.7 million, respectively. The cumulative amount of impairments and downward adjustments as of each of December 31, 2023 and January 1, 2023 was $ 5.0 million. Notes receivables and other investments. Notes receivables and other investments, which are included in Other assets, net, are carried at cost less allowance for credit losses. The amortized cost of these investments are not materially different than the fair value. Notes receivables and other investments with a notional amount of $ 19.8 million are due within one to five years. Notes receivables and other investments with a notional amount of $ 25.0 million and a carrying value of $ 12.3 million are convertible into equity securities or are due and payable upon an event of default (as defined in the applicable agreement). The credit losses, included in Interest and other expense, net, in the consolidated statements of operations, during fiscal year 2023 were $ 34.5 million. Note 12: Goodwill and Intangible Assets, Net The Company tests goodwill at least annually for possible impairment. The Company completes the annual testing of impairment for goodwill on the later of January 1 or the first day of each fiscal year. In addition to its annual test, the Company regularly evaluates whether events or circumstances have occurred that may indicate a potential impairment of goodwill. The process of testing goodwill for impairment involves the determination of the fair value of the applicable reporting units. The test consists of the comparison of the fair value to the carrying value of the reporting unit to determine if the carrying value exceeds the fair value. If the carrying value of the reporting unit exceeds its fair value, an impairment loss in an amount equal to that excess is recognized up to the amount of goodwill. The Company performed its annual impairment testing for its 63 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) reporting units as of January 2, 2023 , its annual impairment testing date for fiscal year 2023. The Company concluded based on the first step of the process that there was no goodwill impairment. The changes in the carrying amount of goodwill for fiscal years 2023 and 2022 are as follows: Life Sciences Diagnostics Consolidated (In thousands) 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 measurement period adjustments ( 6,926 ) 1,460 ( 5,466 ) Balance at January 1, 2023 4,551,575 1,930,193 6,481,768 Foreign currency translation 36,363 15,419 51,782 Balance at December 31, 2023 $ 4,587,938 $ 1,945,612 $ 6,533,550 Identifiable intangible asset balances at December 31, 2023 and January 1, 2023 were as follows: December 31, 2023 January 1, 2023 (In thousands) Patents $ 27,811 $ 28,020 Less: Accumulated amortization ( 26,072 ) ( 26,055 ) Net patents 1,739 1,965 Trade names and trademarks 145,542 149,453 Less: Accumulated amortization ( 73,781 ) ( 63,590 ) Net trade names and trademarks 71,761 85,863 Licenses 27,018 62,614 Less: Accumulated amortization ( 16,551 ) ( 54,254 ) Net licenses 10,467 8,360 Core technology 1,582,458 1,556,740 Less: Accumulated amortization ( 607,814 ) ( 449,689 ) Net core technology 974,644 1,107,051 Customer relationships 2,842,531 2,943,761 Less: Accumulated amortization ( 878,821 ) ( 775,104 ) Net customer relationships 1,963,710 2,168,657 In-process research and development — 5,278 Net amortizable intangible assets $ 3,022,321 $ 3,377,174 Total amortization expense related to amortizable intangible assets was $ 365.1 million in fiscal year 2023, $ 370.6 million in fiscal year 2022 and $ 256.6 million in fiscal year 2021. Estimated amortization expense related to amortizable intangible assets for each of the next five years is $ 362.6 million in fiscal year 2024, $ 335.0 million in fiscal year 2025, $ 328.8 million in fiscal year 2026, $ 301.6 million in fiscal year 2027, and $ 275.9 million in fiscal year 2028. Note 13: Debt The Company’s debt consisted of the following: 64 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) December 31, 2023 Outstanding Principal Unamortized Debt Discount Unamortized Debt Issuance Costs Net Carrying Amount (In thousands) Long-Term Debt: Senior Unsecured Revolving Credit Facility $ — $ — $ ( 1,966 ) $ ( 1,966 ) €500,000 Principal 1.875% Senior Unsecured Notes due in 2026 (“2026 Notes”) 553,450 ( 1,438 ) ( 1,279 ) 550,733 1.900% Senior Unsecured Notes due in 2028 (“2028 Notes”) 500,000 ( 250 ) ( 3,024 ) 496,726 3.3% Senior Unsecured Notes due in 2029 (“2029 Notes”) 850,000 ( 1,727 ) ( 4,781 ) 843,492 2.55% Senior Unsecured Notes due in March 2031 (“March 2031 Notes”) 400,000 ( 101 ) ( 2,638 ) 397,261 2.250% Senior Unsecured Notes due in September 2031 (“September 2031 Notes”) 500,000 ( 1,210 ) ( 3,568 ) 495,222 3.625% Senior Unsecured Notes due in 2051 (“2051 Notes”) 400,000 ( 4 ) ( 4,158 ) 395,838 Other Debt Facilities, non-current 464 — — 464 Total Long-Term Debt 3,203,914 ( 4,730 ) ( 21,414 ) 3,177,770 Current Portion of Long-term Debt: 0.850% Senior Unsecured Notes due in 2024 (“2024 Notes”) 711,479 ( 118 ) ( 1,301 ) 710,060 Other Debt Facilities, current 11,812 — — 11,812 Total Current Portion of Long-Term Debt 723,291 ( 118 ) ( 1,301 ) 721,872 Total Debt $ 3,927,205 $ ( 4,848 ) $ ( 22,715 ) $ 3,899,642 January 1, 2023 Outstanding Principal Unamortized Debt Discount Unamortized Debt Issuance Costs Net Carrying Amount (In thousands) Long-Term Debt: Senior Unsecured Revolving Credit Facility $ — $ — $ ( 2,641 ) $ ( 2,641 ) 2024 Notes 771,659 ( 283 ) ( 3,136 ) 768,240 2026 Notes 533,950 ( 1,902 ) ( 1,779 ) 530,269 2028 Notes 500,000 ( 301 ) ( 3,631 ) 496,068 2029 Notes 850,000 ( 2,000 ) ( 5,537 ) 842,463 March 2031 Notes 400,000 ( 114 ) ( 2,978 ) 396,908 September 2031 Notes 500,000 ( 1,353 ) ( 3,991 ) 494,656 2051 Notes 400,000 ( 4 ) ( 4,260 ) 395,736 Other Debt Facilities, non-current 1,648 — — 1,648 Total Long-Term Debt 3,957,257 ( 5,957 ) ( 27,953 ) 3,923,347 Current Portion of Long-term Debt: 0.550% Senior Unsecured Notes due in September 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 Senior Unsecured Revolving Credit Facility. On August 24, 2021, the Company entered into a new senior unsecured revolving credit facility with a five-year term and a borrowing capacity o f $ 1.5 billion available through August 24, 2026. As of 65 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) December 31, 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 December 31, 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 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 % . T he credit agreement for the new facility contains customary affirmative, negative and financial covenants and events of default. The financial covenants include a debt-to-capital ratio that remains applicable for so long as the Company ’ s debt is rated as investment grade. In the event that the Company ’ s debt is not rated as investment grade, a debt-to-capital ratio covenant is replaced with leverage ratio and interest coverage ratio covenants. During the fiscal year 2023, the Company paid in full $ 467.1 million of outstanding 2023 Notes. During fiscal year 2023, the Company repurchased $ 60.2 million in aggregate principal amount of the 2024 Notes in open market transactions. At December 31, 2023, the Company had outstanding U.S. treasury securities with a carrying amou nt of $ 689.9 million w hose proceeds upon maturity are intended to be utilized to repay the outstanding 2024 Notes due in September 2024 (see Note 11). The following table summarizes the maturities of the Company’s indebtedness as of December 31, 2023: (In thousands) 2024 $ 723,291 2025 206 2026 553,570 2027 92 2028 500,046 2029 and thereafter 2,150,000 Total debt payments 3,927,205 Less unamortized discount and debt issuance costs ( 27,563 ) Total $ 3,899,642 Note 14: Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: December 31, 2023 January 1, 2023 (In thousands) Payroll and incentives $ 50,526 $ 52,331 Employee benefits 43,279 51,983 Deferred revenue 135,555 135,531 Federal, non-U.S. and state income taxes 88,159 45,625 Operating lease liabilities 32,906 31,217 Other accrued operating expenses 174,045 211,176 Total accrued expenses and other current liabilities $ 524,470 $ 527,863 Note 15: Employee Benefit Plans Savings Plan: The Company has a 401(k) Savings Plan for the benefit of all qualified U.S. employees, with such employees receiving matching contributions in the amount equal to 100.0 % of the first 5.0 % of eligible compensation up to applicable Internal Revenue Service limits. Savings plan expense was $ 15.0 million in fiscal year 2023, $ 20.0 million in fiscal year 2022, and $ 16.5 million in fiscal year 2021. 66 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Pension Plans: The Company has a defined benefit pension plan covering certain U.S. employees and non-U.S. pension plans for certain non-U.S. employees. The principal U.S. 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. Net periodic pension cost for U.S. and non-U.S. plans included the following components for fiscal years ended: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Service and administrative costs $ 5,736 $ 6,331 $ 5,174 Interest cost 19,585 10,751 9,440 Expected return on plan assets ( 14,600 ) ( 22,056 ) ( 24,417 ) Actuarial losses (gains) 9,341 ( 23,706 ) ( 19,514 ) Net periodic pension cost (credit) $ 20,062 $ ( 28,680 ) $ ( 29,317 ) The Company recognizes actuarial gains and losses, unless an interim remeasurement is required, in the fourth quarter of the year in which the gains and losses occur. Such adjustments for gains and losses are primarily driven by events and circumstances beyond the Company’s control, including changes in interest rates, the performance of the financial markets and mortality assumptions. Actuarial gains and losses, including other components of periodic pension cost, are recognized in the line item “Interest and other expense, net” in the consolidated statements of operations. 67 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The following table sets forth the changes in the funded status of the principal U.S. pension plan and the principal non-U.S. pension plans and the amounts recognized in the Company’s consolidated balance sheets as of December 31, 2023 and January 1, 2023. December 31, 2023 January 1, 2023 Non-U.S. U.S. Non-U.S. U.S. (In thousands) Actuarial present value of benefit obligations: Accumulated benefit obligations $ 227,174 $ 208,505 $ 207,503 $ 231,492 Change in benefit obligations: Projected benefit obligations at beginning of year $ 207,955 $ 231,492 $ 339,390 $ 299,826 Service and administrative costs 4,011 1,725 4,956 1,375 Interest cost 8,843 10,742 3,671 7,080 Benefits paid and plan expenses ( 15,061 ) ( 39,895 ) ( 14,978 ) ( 19,870 ) Benefit obligation classified in discontinued operations — — ( 8,261 ) — Actuarial losses (gains) 12,871 4,441 ( 88,724 ) ( 56,919 ) Effect of exchange rate changes 8,960 — ( 28,099 ) — Projected benefit obligations at end of year $ 227,579 $ 208,505 $ 207,955 $ 231,492 Change in plan assets: Fair value of plan assets at beginning of year $ 106,741 $ 216,748 $ 181,189 $ 290,116 Actual return on plan assets 7,094 15,478 ( 46,383 ) ( 53,498 ) Benefits paid and plan expenses ( 15,061 ) ( 39,895 ) ( 14,978 ) ( 19,870 ) Employer’s contributions 7,606 10,000 6,572 — Effect of exchange rate changes 5,925 — ( 19,659 ) — Fair value of plan assets at end of year $ 112,305 $ 202,331 $ 106,741 $ 216,748 Net liabilities recognized in the consolidated balance sheets $ ( 115,274 ) $ ( 6,174 ) $ ( 101,214 ) $ ( 14,744 ) Net amounts recognized in the consolidated balance sheets consist of: Other assets $ 19,540 $ — $ 19,521 $ — Current liabilities ( 6,899 ) — ( 6,568 ) — Long-term liabilities ( 127,915 ) ( 6,174 ) ( 114,167 ) ( 14,744 ) Net liabilities recognized in the consolidated balance sheets $ ( 115,274 ) $ ( 6,174 ) $ ( 101,214 ) $ ( 14,744 ) Actuarial assumptions as of the year-end measurement date: Discount rate 3.69 % 4.54 % 4.12 % 4.84 % Rate of compensation increase 3.19 % None 3.16 % None Actuarial assumptions used to determine net periodic pension cost during the year were as follows: December 31, 2023 January 1, 2023 January 2, 2022 Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Discount rate 4.12 % 4.84 % 1.41 % 2.44 % 0.92 % 2.21 % Rate of compensation increase 3.16 % None 2.78 % None 2.78 % None Expected rate of return on assets 3.92 % 4.80 % 1.11 % 7.25 % 2.10 % 7.25 % 68 Table of Contents 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. benefit obligations and fair value of assets for pension plans that have benefit obligations in excess of plan assets: December 31, 2023 January 1, 2023 (In thousands) Pension Plans with Projected Benefit Obligations in Excess of Plan Assets Projected benefit obligations $ 134,814 $ 120,736 Fair value of plan assets — — Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets Accumulated benefit obligations $ 134,409 $ 120,283 Fair value of plan assets — — Assets of the defined benefit pension plans are primarily equity and debt securities. Asset allocations as of December 31, 2023 and January 1, 2023, and target asset allocations for fiscal year 2024 are as follows: Target Allocation Percentage of Plan Assets at December 29, 2024 December 31, 2023 January 1, 2023 Asset Category Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Equity securities 0-5% 0-10% — % 6 % — % 44 % Debt securities 0-5% 90-100% — % 94 % — % 56 % Other 95-100% 0-10% 100 % — % 100 % — % Total 100 % 100 % 100 % 100 % 100 % 100 % 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. The target allocations for plan assets are listed in the above table. Equity securities primarily include investments in mutual funds with holdings in large-cap and mid-cap companies located in the United States and abroad. Debt securities include corporate bonds of companies from diversified industries, high-yield bonds, and U.S. government securities. Other types of investments include investments in non-U.S. government index linked bonds, multi-strategy hedge funds, venture capital funds and foreign liability driven investments that follow several different strategies. 69 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The fair value of the Company’s pension plan assets as of December 31, 2023 and January 1, 2023 by asset category, classified in the three levels of inputs described in Note 20 to the consolidated financial statements are as follows: Fair Value Measurements at December 31, 2023 Using: Total Carrying Value at December 31, 2023 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Cash and cash equivalents $ 14,223 $ 14,223 $ — $ — Equity securities: U.S. large-cap 7,011 7,011 — — International large-cap value 2,350 2,350 — — Emerging markets growth 1,068 1,068 — — Fixed income securities: Corporate and U.S. debt instruments 189,318 65,228 124,090 — Other types of investments: Foreign liability driven instrument 100,666 — — 100,666 Total assets measured at fair value $ 314,636 $ 89,880 $ 124,090 $ 100,666 Fair Value Measurements at January 1, 2023 Using: Total Carrying Value at January 1, 2023 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Cash $ 14,483 $ 14,483 $ — $ — Equity Securities: U.S. large-cap 61,680 61,680 — — International large-cap value 20,148 20,148 — — Emerging markets growth 9,902 9,902 — — Fixed income securities: Corporate and U.S. debt instruments 105,126 36,346 68,780 — Corporate bonds 17,088 — 17,088 — Other types of investments: Foreign liability driven instrument 95,062 — — 95,062 Total assets measured at fair value $ 323,489 $ 142,559 $ 85,868 $ 95,062 Valuation Techniques: Valuation techniques utilized need to maximize the use of observable inputs and minimize the use of unobservable inputs. There have been no changes in the methodologies utilized at December 31, 2023 compared to January 1, 2023. The following is a description of the valuation techniques utilized to measure the fair value of the assets shown in the table above. Equity Securities: Mutual funds held by the Master Trust are open‑ended mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value and to transact at that price. The mutual funds held by the Master Trust are deemed to be actively traded. These are categorized as Level 1 assets. Fixed Income Securities: Fixed income U.S. government bonds are valued at quoted market prices and are categorized as Level 1 assets. Fixed income corporate bond exchange traded funds or individual fixed income corporate bonds are categorized as Level 2 assets except where sufficient quoted prices exist in active markets, in which case such securities are categorized as Level 1 assets. These securities are valued using third-party pricing services. These services may use, for example, model-based pricing methods that utilize observable market data as inputs. Broker dealer bids or quotes of securities with similar characteristics may also be used. 70 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Other Types of Investments: In September 2021, the Company’s UK pension scheme executed a buy-in contract with Phoenix Life LTD (“Phoenix”), under which the Company made an upfront payment to Phoenix in exchange for Phoenix agreeing to make the benefit payments under the Company’s UK pension scheme due to specified participants and their beneficiaries, thus transferring most of the investment and longevity risk associated with the covered participants and beneficiaries from the Company to Phoenix. This buy-in contract can be considered a liability-driven investment (“LDI”) solution that hedges not only the investment risk but also the longevity risk under the Company’s UK pension scheme. Like other LDI solutions, it does not eliminate ongoing administrative costs. These are categorized as Level 3 assets. The Company’s policy is to recognize significant transfers between levels at the actual date of the event. A reconciliation of the beginning and ending Level 3 foreign liability driven investments is as follows: (In thousands) Balance at January 2, 2022 $ 165,680 Pension benefits paid ( 6,639 ) Foreign exchange losses ( 18,411 ) Return on plan assets ( 45,568 ) Balance at January 1, 2023 95,062 Pension benefits paid ( 6,051 ) Foreign exchange gains 5,957 Return on plan assets 5,698 Balance at December 31, 2023 $ 100,666 With respect to plans outside of the United States, the Company expects to contribute $ 6.9 million in the aggregate during fiscal year 2024. 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. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows: Non-U.S. U.S. (In thousands) 2024 $ 12,331 $ 18,882 2025 12,598 18,583 2026 12,720 18,240 2027 12,673 17,864 2028 12,914 17,408 2029-2033 64,702 77,782 The Company also sponsors a supplemental executive retirement plan to provide senior management with benefits in excess of normal pension benefits. Effective July 31, 2000, this plan was closed to new entrants. At December 31, 2023 and January 1, 2023, the projected benefit obligations were $ 18.6 million and $ 18.9 million, respectively. Assets with a fair value of $ 0.6 million and $ 0.9 million, segregated in a trust (which is included in marketable securities in the Other assets, net, on the consolidated balance sheets), were available to meet this obligation as of December 31, 2023 and January 1, 2023, respectively. Pension expenses and income for this plan netted to expense of $ 1.5 million in fiscal year 2023, income of $ 3.2 million in fiscal year 2022 and expense of $ 0.2 million in fiscal year 2021. Postretirement Medical Plans: The Company provides healthcare benefits for eligible retired U.S. employees under a comprehensive major medical plan or under health maintenance organizations where available. Eligible U.S. employees qualify for retiree health benefits if they retire directly from the Company and have at least ten years of service. Generally, the major medical plan pays stated percentages of covered expenses after a deductible is met and takes into consideration payments by other group coverage and by Medicare. The plan requires retiree contributions under most circumstances and has provisions for cost-sharing charges. Effective January 1, 2000, this plan was closed to new hires. For employees retiring after 1991, the Company has capped its medical premium contribution based on employees’ years of service. The Company funds the amount allowable under a 401(h) provision in the Company’s defined benefit pension plan. Assets of the plan are primarily equity and debt securities and are available only to pay retiree health benefits. The costs of these plans are not material and the net assets in the plans totaled $ 18.5 million and $ 17.1 million at December 31, 2023 and January 1, 2023, respectively. 71 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Note 16: Contingencies The Company is conducting a number of environmental investigations and remedial actions at current and former locations of the Company and, along with other companies, has been named a potentially responsible party (“PRP”) for certain waste disposal sites. The Company accrues for environmental issues in the accounting period that the Company’s responsibility is established and when the cost can be reasonably estimated. The Company has accrued $ 14.1 million and $ 12.2 million as of December 31, 2023 and January 1, 2023, respecti vely, in accrued expenses and other current liabilities, which represents its management’s estimate of the cost of the remediation of known environmental matters, and does not include any potential liability for related personal injury or property damage claims. The Company’s environmental accrual is not discounted and does not reflect the recovery of any material amounts through insurance or indemnification arrangements. The cost estimates are subject to a number of variables, including the stage of the environmental investigations, the magnitude of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations. For sites where the Company has been named a PRP, management does not currently anticipate any additional liability to result from the inability of other significant named parties to contribute. The Company expects that the majority of such accrued amounts could be paid out over a period of up to ten years. As assessment and remediation activities progress at each individual site, these liabilities are reviewed and adjusted to reflect additional information as it becomes available. There have been no environmental problems to date that have had, or are expected to have, a material adverse effect on the Company’s consolidated financial statements. While it is possible that a loss exceeding the amounts recorded in the consolidated financial statements may be incurred, the potential exposure is not expected to be materially different from those amounts recorded. 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, including product liability claims. Legal defense costs are recognized as incurred, and insurance recoveries are recognized when collection is probable. 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 the reporting date, the total cost of resolving these contingencies at December 31, 2023 should not have a material 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. Note 17: Stock Plans Stock-Based Compensation: The Company’s 2019 Incentive Plan (the “2019 Plan”) authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash awards as part of the Company’s compensation programs. The 2019 Plan replaced the Company’s 2009 Incentive Plan (the “2009 Plan”). Upon shareholder approval of the 2019 Plan, 6.25 million shares of the Company’s common stock, as well as shares of the Company’s common stock previously granted under the 2009 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price subject to a contractual repurchase right, became available for grant under the 2019 Plan. Awards granted under the 2009 Plan prior to its expiration remain outstanding. As part of the Company’s compensation programs, the Company also offers shares of its common stock under its Employee Stock Purchase Plan. The following table summarizes total pre-tax compensation expense recognized related to the Company’s stock options, restricted stock, restricted stock units, performance restricted stock units, performance units and stock grants, included in the Company’s consolidated statements of operations: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Cost of product and service revenue $ 4,224 $ 7,459 $ 3,193 Research and development expenses 5,276 6,799 2,393 Selling, general and administrative expenses 31,910 37,260 24,089 Total stock-based compensation expense $ 41,410 $ 51,518 $ 29,675 The total income tax benefit recognized in the consolidated statements of operations for stock-based compensation was $ 10.6 million in fiscal year 2023, $ 12.8 million in fiscal year 2022 and $ 12.2 million in fiscal year 2021. Stock-based compensation costs capitalized as part of inventory were immaterial in all periods presented. 72 Table of Contents Stock Options: The Company has granted options to purchase common shares at prices equal to the market price of the common shares on the date the option is granted. Conditions of vesting are determined at the time of grant. Options are generally exercisable in equal annual installments over a period of three years , and will generally expire seven years after the date of grant. Options replaced in association with business combination transactions are generally issued with the same terms of the respective plans under which they were originally issued. The fair value of each option grant is estimated using the Black-Scholes option pricing model. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the historical and implied volatility of the Company’s stock. The average expected life was based on the contractual term of the option and historic exercise experience. The risk-free interest rate is based on United States Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The Company’s weighted-average assumptions used in the Black-Scholes option pricing model were as follows for the fiscal years ended: December 31, 2023 January 1, 2023 January 2, 2022 Risk-free interest rate 4.1 % 2.3 % 0.9 % Expected dividend yield 0.2 % 0.2 % 0.2 % Expected lives 5 years 5 years 5 years Expected stock volatility 32.7 % 28.5 % 27.3 % The following table summarizes stock option activity for the fiscal year ended December 31, 2023: Number of Shares Weighted- Average Exercise Price (Shares in thousands) Outstanding at beginning of year 1,048 $ 132.32 Granted 168 128.35 Exercised ( 58 ) 76.12 Canceled ( 49 ) 154.37 Forfeited ( 36 ) 146.13 Outstanding at end of year 1,073 $ 133.28 Exercisable at end of year 693 $ 125.06 The aggregate intrinsic value for stock options outstanding at December 31, 2023 was $ 9.4 million with a weighted-average remaining contractual term of 4.1 years. The aggregate intrinsic value for stock options exercisable at December 31, 2023 was $ 9.3 million with a weighted-average remaining contractual term of 3.4 years. At December 31, 2023, there were 1.1 million stock options that were vested and expected to vest in the future, with an aggregate intrinsic value of $ 9.4 million and a weighted-average remaining contractual term of 4.1 years. The weighted-average grant-date fair value of options granted during fiscal years 2023, 2022 and 2021 was $ 45.18 , $ 48.09 , and $ 40.00 per share, respectively. The total intrinsic value of options exercised during fiscal years 2023, 2022 and 2021 was $ 2.4 million, $ 13.9 million, and $ 32.4 million, respectively. Cash received from option exercises for fiscal years 2023, 2022 and 2021 was $ 4.3 million, $ 14.1 million, and $ 25.1 million, respectively. The total compensation expense recognized related to the Company’s outstanding options was $ 9.1 million in fiscal year 2023, $ 9.5 million in fiscal year 2022 and $ 5.6 million in fiscal year 2021. There was $ 11.2 million of total unrecognized compensation cost related to nonvested stock options granted as of December 31, 2023. This cost is expected to be recognized over a weighted-average period of 1.6 years. Restricted Stock Awards: The Company has awarded shares of restricted stock and restricted stock units to certain employees and non-employee directors at no cost to them, which cannot be sold, assigned, transferred or pledged during the restriction period. The restricted stock and restricted stock units vest through the passage of time, assuming continued employment. The fair value of the award at the time of the grant is expensed on a straight-line basis primarily in selling, general 73 Table of Contents and administrative expenses over the vesting period, which is generally 3 years. Recipients of the restricted stock have the right to vote such shares and receive dividends. The following table summarizes restricted stock award activity for the fiscal year ended December 31, 2023: Number of Shares Weighted- Average Grant- Date Fair Value (Shares in thousands) Nonvested at beginning of year 453 $ 152.79 Granted 139 128.79 Vested ( 221 ) 142.69 Forfeited ( 30 ) 147.80 Nonvested at end of year 341 $ 149.98 The fair value of restricted stock awards vested during fiscal years 2023, 2022 and 2021 was $ 31.5 million, $ 32.8 million, and $ 11.6 million, respectively. The total compensation expense recognized related to the restricted stock awards was $ 28.3 million in fiscal year 2023, $ 34.2 million in fiscal year 2022 and $ 16.3 million in fiscal year 2021. As of December 31, 2023, there was $ 27.1 million of total unrecognized compensation cost, related to nonvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 1.5 years. Employee Stock Purchase Plan: In April 1999, the Company’s shareholders approved the 1998 Employee Stock Purchase Plan. In April 2005, the Compensation and Benefits Committee of the Company's Board of Directors (the “Board”) voted to amend the Employee Stock Purchase Plan, effective July 1, 2005, whereby participating employees have the right to purchase common stock at a price equal to 95 % of the closing price on the last day of each six-month offering period. The number of shares which an employee may purchase, subject to certain aggregate limits, is determined by the employee’s voluntary contribution, which may not exceed 10 % of the employee’s base compensation. During fiscal year 2023, the Company issued 28,899 shares of common stock under the Company’s Employee Stock Purchase Plan at a weighted-average price of $ 108.37 per share. During fiscal year 2022, the Company issued 30,818 shares under this plan at a weighted-average price of $ 134.05 per share. During fiscal year 2021, the Company issued 21,578 shares under this plan at a weighted-average price of $ 168.11 per share. At December 31, 2023 there remains available for sale to employees an aggregate of 0.7 million shares of the Company’s common stock out of the 5.0 million shares authorized by shareholders for issuance under this plan. Note 18: Stockholders’ Equity Comprehensive Income: The components of accumulated other comprehensive income (loss) consisted of the following: Foreign Currency Translation Adjustment, net of tax Unrecognized Prior Service Costs, net of tax Unrealized (Losses) Gains on Securities, net of tax Accumulated Other Comprehensive Income (Loss) (In thousands) Balance, January 3, 2021 $ ( 30,937 ) $ ( 747 ) $ ( 277 ) $ ( 31,961 ) Current year change ( 130,873 ) ( 95 ) 237 ( 130,731 ) Balance, January 2, 2022 ( 161,810 ) ( 842 ) ( 40 ) ( 162,692 ) Current year change ( 284,854 ) 44 5 ( 284,805 ) Balance, January 1, 2023 ( 446,664 ) ( 798 ) ( 35 ) ( 447,497 ) Current year change 80,172 — ( 181 ) 79,991 Reclassification to retained earnings 90,814 — — 90,814 Balance, December 31, 2023 $ ( 275,678 ) $ ( 798 ) $ ( 216 ) $ ( 276,692 ) 74 Table of Contents During fiscal year 2023, the Company transferred $ 90.8 million from cumulative translation adjustments in AOCI to the gain on sale in the consolidated statement of operations as a result of the sale of the Business. Stock Repurchases: On July 22, 2022, the Company’s Board of Directors (the “Board”) authorized the Company to repurchase shares of common stock for an aggregate amount up to $ 300.0 million under a stock repurchase program (the “Repurchase Program”). On April 27, 2023, 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 $ 600.0 million under a new stock repurchase program (the “New Repurchase Program”). The New Repurchase Program will expire on April 26, 2025 unless terminated earlier by the Board and may be suspended or discontinued at any time. During fiscal year 2023 , the Company repurchased 1,004,544 shares of common stock under the Repurchase Program for an aggregate cost of $ 131.3 million. During fiscal year 2023 , the Company repurchased 2,159,985 shares of common stock under the New Repurchase Program for an aggregate cost of $ 244.6 million . As of December 31, 2023, $ 355.4 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. During fiscal year 2023, the Company repurchased 103,144 shares of common stock for this purpose at an aggregate cost of $ 13.1 million. During fiscal year 2022, the Company repurchased 115,247 shares of common stock for this purpose at an aggregate cost of $ 18.1 million. During fiscal year 2021, the Company repurchased 71,248 shares of common stock for this purpose at an aggregate cost of $ 10.5 million. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value. Dividends: The Board declared a regular quarterly cash dividend of $ 0.07 per share in each quarter of fiscal years 2023, 2022 and 2021, resulting in an annual dividend rate of $ 0.28 per share. At December 31, 2023, the Company had accrued $ 8.6 million for a dividend declared in October 2023 for the fourth quarter of fiscal year 2023 that was paid in February 2024. On January 25, 2024 , the Company announced that the Board had declared a quarterly dividend of $ 0.07 per share for the first quarter of fiscal year 2024 that will be payable in May 2024. In the future, the Board may determine to reduce or eliminate the Company’s common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources. Note 19: Derivatives and Hedging Activities The Company uses derivative instruments as part of its risk management strategy only, and includes derivatives utilized as economic hedges that are not designated as hedging instruments. By nature, all financial instruments involve market and credit risks. The Company enters into derivative instruments with major investment grade financial institutions and has policies to monitor the credit risk of those counterparties. 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. As a result, fluctuations in foreign currency exchange rates can increase the costs of financing, investing and operating the business. In the ordinary course of business, the Company enters into foreign exchange contracts for periods consistent with its committed exposures to mitigate the effect of foreign currency movements on transactions denominated in foreign currencies. The intent of these economic hedges is to offset gains and losses that occur on the underlying exposures from these currencies, with gains and losses resulting from the forward currency contracts that hedge these exposures. Transactions covered by hedge contracts include intercompany and third-party receivables and payables. The contracts are primarily in European and Asian currencies, have maturities that do not exceed 12 months, have no cash requirements until maturity, and are recorded at fair value on the Company’s consolidated balance sheets. The unrealized gains and losses on the Company’s foreign currency contracts are recognized immediately in interest and other expense, net. The cash flows related to the settlement of these hedges are included in cash flows from operating activities within the Company’s consolidated statements of cash flows. Principal hedged currencies include the Chinese Renminbi, British Pound, Euro and Singapore Dollar. The Company held forward foreign exchange contracts, designated as economic hedges, with U.S. dollar equivalent notional amounts totaling $ 412.1 million at December 31, 2023 and $ 476.9 million at January 1, 2023, and the fair value of these foreign currency 75 Table of Contents derivative contracts was insignificant. The gains and losses realized on these foreign currency derivative contracts are not material. The duration of these contracts was generally 30 days or less during each of fiscal years 2023, 2022 and 2021. In addition, in connection with certain intercompany loan agreements utilized to finance its acquisitions and stock repurchase program, the Company enters into forward foreign exchange contracts intended to hedge movements in foreign exchange rates prior to settlement of such intercompany loans denominated in foreign currencies. The Company records these hedges at fair value on the Company’s consolidated balance sheets. The unrealized gains and losses on these hedges, as well as the gains and losses associated with the remeasurement of the intercompany loans, are recognized immediately in interest and other expense, net. The cash flows related to the settlement of these hedges are included in cash flows from financing activities within the Company’s consolidated statements of cash flows. During fiscal year 2018, the Company designated a portion of the 2026 Notes to hedge its investments in certain foreign subsidiaries. Unrealized translation adjustments from a portion of the 2026 Notes were included in the foreign currency translation component of AOCI, which offsets translation adjustments on the underlying net assets of foreign subsidiaries. The cumulative translation gains or losses will remain in AOCI until the foreign subsidiaries are liquidated or sold. As of December 31, 2023, the total notional amount of the 2026 Notes that was designated to hedge investments in foreign subsidiaries was € 498.6 million. The unrealized foreign exchange losses (gains) recorded in AOCI related to the ne t investment hedge were $ 19.5 million, $( 34.5 ) million and $( 33.2 ) million during the fiscal years 2023, 2022 and 2021, respectively. The Company does no t expect any material net pre-tax gains or losses to be reclassified from accumulated other comprehensive income (loss) into interest and other expense, net within the next twelve months. Note 20: Fair Value Measurements Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents, derivatives, marketable securities and accounts receivable. The Company believes it had no significant concentrations of credit risk as of December 31, 2023. The Company’s financial assets and liabilities carried at fair value are primarily comprised of marketable securities, derivative contracts used to hedge the Company’s currency risk, and acqu isition and divestiture related contingent consideration. The Company has not elected to measure any additional financial instruments or other items at fair value. Valuation Hierarchy: The following summarizes the three levels of inputs required to measure fair value. For Level 1 inputs, the Company utilizes quoted market prices as these instruments have active markets. For Level 2 inputs, the Company utilizes quoted market prices in markets that are not active, broker or dealer quotations, or utilizes alternative pricing sources with reasonable levels of price transparency. For Level 3 inputs, the Company utilizes unobservable inputs based on the best information available, including estimates by management primarily based on information provided by third-party fund managers, independent brokerage firms and insurance companies. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The following tables show the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2023 and January 1, 2023 classified in one of the three classifications described above: Fair Value Measurements at December 31, 2023 Using: Total Carrying Value at December 31, 2023 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Marketable securities - available for sale $ 13,913 $ 13,913 $ — $ — Foreign exchange derivative assets 1,697 — 1,697 — Foreign exchange derivative liabilities ( 1,763 ) — ( 1,763 ) — Contingent consideration asset 14,890 $ — $ — 14,890 Contingent consideration liability ( 40,005 ) — — ( 40,005 ) 76 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Fair Value Measurements at January 1, 2023 Using: Total Carrying Value at January 1, 2023 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Marketable securities - available for sale $ 11,083 $ 11,083 $ — $ — Foreign exchange derivative assets 2,142 — 2,142 — Foreign exchange derivative liabilities ( 1,549 ) — ( 1,549 ) — Contingent consideration liability ( 46,618 ) — — ( 46,618 ) Level 1 and Level 2 Valuation Techniques: The Company’s Level 1 and Level 2 assets and liabilities are comprised of investments in equity, fixed-income and U.S. treasury securities as well as derivative contracts. For financial assets and liabilities that utilize Level 1 and Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including common stock price quotes, foreign exchange forward prices and bank price quotes. Below is a summary of valuation techniques for Level 1 and Level 2 financial assets and liabilities. Marketable securities - available for sale: Includes equ ity and mutual fund investments measured at fair value using the quoted market prices in active markets at the reporting date. Foreign exchange derivative assets and liabilities: Include foreign exchange derivative contracts that are valued using quoted forward foreign exchange prices at the reporting date. The Company’s foreign exchange derivative contracts are subject to master netting arrangements that allow the Company and its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these arrangements have been presented in the Company’s consolidated balance sheet on a net basis and are recorded in other assets. As of both December 31, 2023 and January 1, 2023, none of the master netting arrangements involved collateral. Level 3 Valuation Techniques: The Company’s Level 3 assets and liabilities are comprised of contingent consideration related to the sale of the Business (see Note 4) and acquisitions. For assets and liabilities that utilize Level 3 inputs, the Company uses significant unobservable inputs. Below is a summary of valuation techniques for Level 3 assets and liabilities. Contingent consideration: Contingent consideration is measured at fair value at the disposition or acquisition date using projected milestone dates, discount rates, volatility, probabilities of success and projected achievement of financial targets, including revenues of the acquired business in many instances. Projected risk-adjusted contingent payments are discounted back to the current period using a discounted cash flow model. The fair value of the contingent consideration asset was initially measured using a lattice model and recognized upon the sale of the Business on March 13, 2023. In accordance with the terms of the sale of the Business, the Company is entitled to receive up to $ 150.0 million that is contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital event related to the Business. Potential valuation adjustments may be made as additional information and market factors that impact the expected exit valuation of the Business becomes available, with the impact of such adjustments being recorded in the Company’s consolidated statements of operations. A reconciliation of the beginning and ending Level 3 asset for contingent consideration is as follows: (In thousands) Balance at January 1, 2023 $ — Amount recognized upon the sale of the Business 15,930 Change in fair value (included within selling, general and administrative expenses) ( 1,040 ) Balance at December 31, 2023 $ 14,890 The fair values of contingent consideration liability are routinely updated based on a collaborative effort of the Company’s regulatory, research and development, operations, finance and accounting groups, as appropriate. Potential valuation adjustments are made as additional information becomes available, including the progress towards achieving proof of concept, regulatory approvals and revenue targets as compared to initial projections, the impact of market competition and market landscape shifts from non-invasive prenatal testing products, with the impact of such adjustments being recorded in the consolidated statements of operations. As of December 31, 2023, the Company may have to pay contingent consideration, related to acquisitions with open contingency periods that are substantially all revenue-based considerations, of up to $ 98.0 million. The expected maximum 77 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) earnout period for acquisitions with open contingency period is 7.9 years from December 31, 2023, and the remaining weighted average expected earnout period at December 31, 2023 was 5.0 years. A reconciliation of the beginning and ending Level 3 liabilities for contingent consideration is as follows: (In thousands) Balance at January 3, 2021 $ ( 2,953 ) Additions ( 57,431 ) Amounts paid and foreign currency translation 5,507 Change in fair value (included within selling, general and administrative expenses) ( 3,119 ) Balance at January 2, 2022 ( 57,996 ) Additions ( 4,961 ) Amounts paid and foreign currency translation 2,562 Purchase accounting adjustments recognized to goodwill 12,400 Change in fair value (included within selling, general and administrative expenses) 1,377 Balance at January 1, 2023 ( 46,618 ) Amounts paid and foreign currency translation 9,741 Change in fair value (included within selling, general and administrative expenses) ( 3,128 ) Balance at December 31, 2023 $ ( 40,005 ) Financial Instruments Not Recorded 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. If measured at fair value, cash and cash equivalents would be classified as Level 1. The Company’s investments in U.S. treasury securities that are classified as held-to-maturity had a fair value of $ 688.7 million and a carrying value of $ 689.9 million as of December 31, 2023. The fair value were classified as Level 1. The Company’s outstanding senior unsecured notes had an aggregate fair value of $ 3,474.5 million and aggregate carrying value of $ 3,889.3 million as of December 31, 2023. The Company’s outstanding senior unsecured notes had an aggregate fair value of $ 3,812.3 million and aggregate carrying value of $ 4,390.5 million as of January 1, 2023. The fair values of the outstanding senior unsecured notes were estimated using market quotes from brokers and were based on current rates offered for similar debt, which are Level 2 measurements. The Company’s other debt facilities, including the Company’s senior unsecured revolving credit facility, had an aggregate carrying value of $ 10.3 million and $ 3.7 million as of December 31, 2023 and January 1, 2023, respectively. The carrying value approximates fair value and were classified as Level 2. Note 21: Leases Lessee Disclosures The Company leases certain property and equipment under operating and finance leases. The Company’s leases have remaining lease terms of less than 1 year to 26 years, some of which include options to extend the lease for up to 5 years, and some of which include options to terminate the lease within 1 year. Finance leases are not material to the Company. The components of lease expense were as follows: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Lease Cost: Operating lease cost $ 47,738 $ 39,989 $ 39,516 78 Table of Contents Supplemental cash flow information related to leases was as follows: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 42,597 $ 37,488 $ 38,970 Right-of-use assets obtained in exchange for new lease obligations: Operating leases 10,049 55,016 12,345 Supplemental balance sheet information related to leases was as follows: December 31, 2023 January 1, 2023 (In thousands, except lease term and discount rate) Operating Leases: Operating lease right-of-use assets $ 155,083 $ 188,351 Operating lease liabilities included in Accrued expenses and other current liabilities $ 32,906 $ 31,217 Operating lease liabilities 132,747 169,968 Total operating lease liabilities $ 165,653 $ 201,185 Weighted Average Remaining Lease Term in Years Operating leases 7.2 6.1 Weighted Average Remaining Discount Rate Operating leases 3.8 % 2.6 % Lease costs from finance leases, short-term leases, variable lease costs and sub-lease income are not material. Future payments of operating lease liabilities as of December 31, 2023 were as follows: (In thousands) 2024 $ 40,010 2025 31,197 2026 24,747 2027 21,368 2028 17,382 2029 and thereafter 56,051 Total lease payments 190,755 Less imputed interest ( 25,102 ) Total $ 165,653 Note 22: Industry Segment and Geographic Area Information The Company discloses information about its operating segments based on the way that management organizes the segments within the Company for making operating decisions and assessing financial performance. The Company evaluates the performance of its operating segments based on revenue and operating income as adjusted for certain items. Intersegment revenue and transfers are not significant. The accounting policies of the operating segments are the same as those described in Note 1. The principal products and services of the Company’s two reportable segments are: • Life Sciences . Provides products and services targeted towards the life sciences customers. • Diagnostics . Develops diagnostics, tools and applications focused on clinically-oriented customers, especially within the reproductive health, emerging market diagnostics and applied genomics. 79 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company has included the expenses for its corporate headquarters, such as legal, tax, audit, human resources, information technology, and other management and compliance costs, as well as the activity related to the mark-to-market adjustment on postretirement benefit plans, as “Corporate” below. The Company has a process to allocate and recharge expenses to the reportable segments when these costs are administered or paid by the corporate headquarters based on the extent to which the segment benefited from the expenses. 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. Revenue and operating income from continuing operations by reportable segment are shown in the table below for the fiscal years ended: December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) Revenues Life Sciences $ 1,292,340 $ 1,292,909 $ 897,718 Diagnostics 1,459,058 2,019,727 2,932,738 Revenue purchase accounting adjustments ( 827 ) ( 814 ) ( 2,648 ) Total revenues $ 2,750,571 $ 3,311,822 $ 3,827,808 Segment Operating Income Life Sciences $ 489,349 $ 503,243 $ 281,602 Diagnostics 320,928 781,985 1,432,769 Corporate ( 40,417 ) ( 73,431 ) ( 77,364 ) Subtotal reportable segments 769,860 1,211,797 1,637,007 Amortization of intangible assets ( 365,113 ) ( 370,638 ) ( 256,569 ) Purchase accounting adjustments ( 5,956 ) ( 45,681 ) ( 40,993 ) Acquisition and divestiture-related costs ( 69,159 ) ( 39,826 ) ( 62,760 ) Asset impairment — — ( 3,767 ) Significant litigation matters and settlements ( 12 ) 627 ( 103 ) Significant environmental matters ( 2,457 ) — — Restructuring and other, net ( 26,601 ) ( 13,580 ) ( 14,358 ) Operating income from continuing operations 300,562 742,699 1,258,457 Interest and other expense, net 117,586 90,862 54,875 Income from continuing operations before income taxes $ 182,976 $ 651,837 $ 1,203,582 Additional information relating to the Company’s reportable segments is as follows for the three fiscal years ended December 31, 2023: Depreciation and Amortization Expense Capital Expenditures December 31, 2023 January 1, 2023 January 2, 2022 December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) (In thousands) Life Sciences $ 276,118 $ 263,698 $ 94,700 $ 35,335 $ 41,532 $ 27,818 Diagnostics 153,099 161,394 214,178 39,894 40,671 57,206 Corporate 2,552 1,908 2,565 6,139 3,429 996 Continuing operations $ 431,769 $ 427,000 $ 311,443 $ 81,368 $ 85,632 $ 86,020 80 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Total Assets December 31, 2023 January 1, 2023 (In thousands) Life Sciences $ 8,401,851 $ 8,330,045 Diagnostics 4,136,305 3,991,659 Corporate 1,026,509 114,447 Current and long-term assets of discontinued operations — 1,693,704 Total assets $ 13,564,665 $ 14,129,855 The following geographic area information for continuing operations includes revenue based on location of external customers for the three fiscal years ended December 31, 2023 and net long-lived assets based on physical location as of December 31, 2023 and January 1, 2023: Revenue December 31, 2023 January 1, 2023 January 2, 2022 (In thousands) U.S. $ 1,117,654 $ 1,546,520 $ 1,682,294 International: China 454,426 476,366 449,588 United Kingdom 125,419 136,017 357,911 Other international 1,053,072 1,152,919 1,338,015 Total international 1,632,917 1,765,302 2,145,514 Total revenue $ 2,750,571 $ 3,311,822 $ 3,827,808 Net Long-Lived Assets (1) December 31, 2023 January 1, 2023 (In thousands) U.S. $ 317,226 $ 311,661 International: Germany 158,228 147,766 China 59,602 68,072 Other international 223,820 216,235 Total international 441,650 432,073 Total net long-lived assets $ 758,876 $ 743,734 (1) Long-lived assets consist of property and equipment, net, operating lease right-of-use assets, rental equipment, software and other long-term assets. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.