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Retirement Plans

12 Months Ended

Dec. 31, 2023

17 Retirement Plans

U.S. employees are eligible to participate in the Waters Employee Investment Plan, a 401(k) defined contribution plan, immediately upon hire. Employees may contribute up to 60% of eligible pay on a

pre-tax

post-tax

basis and the Company makes matching contributions of 100% for contributions up to 6% of eligible pay. The Company also sponsors a 401(k) Restoration Plan, which is a nonqualified defined contribution plan. Employees are 100% vested in employee and Company matching contributions for both plans. For the year

ended December 31, 2023, 2022 and 2021, the Company’s matching contributions amounted to $22 million, $21 million and $19 million, respectively.

The Company also sponsors other employee benefit plans in the U.S., including a retiree healthcare plan, which provides reimbursement for medical expenses and is contributory. There are various employee benefit plans outside the United States (both defined benefit and defined contribution plans). Certain

non-U.S.

defined benefit plans

(“Non-U.S.

Pension Plans”) are included in the disclosures below, which are required under the accounting standards for retirement benefits.

The Company contributed $18 million, $16 million and $17 million in the year

ended December 31, 2023, 2022 and 2021, respectively, to the

non-U.S.

plans (primarily defined contribution plans) which are currently outside of the scope of the required disclosures. The eligibility and vesting of

non-U.S. plans

are consistent with local laws

and regulations.

The net periodic pension cost

is made up of several components that reflect different aspects of the Company’s financial arrangements as well as the cost of benefits earned by employees. These components are determined using the projected unit credit actuarial cost method and are based on certain actuarial assumptions. The Company’s accounting policy is to reflect in the projected benefit obligation all benefit changes to which the Company is committed as of the current valuation date; use a market-related value of assets to determine pension expense; amortize increases in prior service costs on a straight-line basis over the expected future service of active participants as of the date such costs are first recognized; and amortize cumulative actuarial gains and losses in excess of 10% of the larger of the market-related value of plan assets and the projected benefit obligation over the expected future service of active participants.

Summary data for the U.S. Retiree Healthcare Plan and

Non-U.S. Pension

Plans are presented in the following tables, using the measurement dates of December 31, 2023 and 2022, respectively.

The reconciliation of the projected benefit obligations for the plans at December 31, 2023 and 2022 is as follows

(in thousands):


	2023						2022
	U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans			U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans

Projected benefit obligation, January 1	$	22,583		$	74,025		$	25,958		$	106,924
Service cost		275			3,073			775			4,018
Employee contributions		1,105			601			1,139			536
Interest cost		1,262			2,797			706			1,360
Actuarial losses (gains)		2,166			11,387			(4,657	)		(27,494	)
Benefits paid		(1,649	)		(2,051	)		(1,338	)		(3,567	)
Plan amendments		—			(500	)		—			—
Plan settlements		—			(488	)		—			(812	)
Currency impact		—			3,547			—			(6,940	)

Projected benefit obligation, December 31	$	25,742		$	92,391		$	22,583		$	74,025

The reconciliation of the fair value of the plan assets at December 31, 2023 and 2022 is as follows (in thousands):


	2023						2022
	U.S. Retiree			Non-U.S.			U.S. Retiree			Non-U.S.
	Healthcare			Pension			Healthcare			Pension
	Plan			Plans			Plan			Plans
Fair value of plan assets, January 1	$	15,724		$	77,697		$	18,314		$	91,169
Actual return on plan assets		2,444			4,144			(2,895	)		(6,497	)
Company contributions		529			3,224			504			2,500
Employee contributions		1,105			601			1,139			536
Plan settlements		—			(488	)		—			(812	)
Benefits paid		(1,649	)		(2,051	)		(1,338	)		(3,567	)
Currency impact		—			3,460			—			(5,632	)

Fair value of plan assets, December 31	$	18,153		$	86,587		$	15,724		$	77,697

The summary of the funded status for the plans at December 31, 2023 and 2022 is as follows (in thousands):


	2023						2022
	U.S. Retiree			Non-U.S.			U.S. Retiree			Non-U.S.
	Healthcare			Pension			Healthcare			Pension
	Plan			Plans			Plan			Plans
Projected benefit obligation	$	(25,742	)	$	(92,391	)	$	(22,583	)	$	(74,025	)
Fair value of plan assets		18,153			86,587			15,724			77,697

Funded status	$	(7,589	)	$	(5,804	)	$	(6,859	)	$	3,672

The change in the Company’s projected benefit obligation for the year ended December 31, 2023 was primarily due to net actuarial losses that arose during the year driven by a decrease in discount rates, differences between expected and actual return on plan assets, and fluctuations in foreign currency exchange rates during the year. The change in the Company’s projected benefit obligation for the year ended December 31, 2022 was primarily due to net actuarial gains that arose during the year driven by an increase in discount rates, differences between expected and actual return on plan assets, and fluctuations in foreign currency exchange rates during the year.

The summary of the amounts recognized in the consolidated balance sheets for the plans at December 31, 2023 and 2022 is as follows (in

thousands):


	2023						2022
	U.S. Retiree			Non-U.S.			U.S. Retiree			Non-U.S.
	Healthcare			Pension			Healthcare			Pension
	Plan			Plans			Plan			Plans

Long-term assets	$	—		$	5,220		$	—		$	9,554
Long-term liabilities		(7,589	)		(11,024	)		(6,859	)		(5,882	)

Net amount recognized at December 31	$	(7,589	)	$	(5,804	)	$	(6,859	)	$	3,672

The accumulated benefit obligation for all defined benefit pension plans was $81 million and $64 million at December 31, 2023 and 2022, respectively.

The summary of the

Non-U.S.

Pension Plans that have accumulated benefit obligations in excess of plan assets at December 31, 2023 and 2022 is as follows (in thousands):


	2023		2022
Accumulated benefit obligations	$	60,815	$	16,962
Fair value of plan assets	$	52,894	$	13,616

The summary of the

Non-U.S.

Pension Plans that have projected benefit obligations in excess of plan assets at December 31, 2023 and 2022 is as follows (in thousands):


	2023		2022
Projected benefit obligations	$	63,918	$	19,498
Fair value of plan assets	$	52,894	$	13,616

The summary of the components

of net periodic pension costs for the plans for the years ended December 31, 2023, 2022 and 2021 is as follows (in thousands):


	2023						2022						2021
	U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans			U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans			U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans
Service cost	$	275		$	3,073		$	775		$	4,018		$	884		$	4,577
Interest cost		1,262			2,797			706			1,360			559			1,247
Expected return on plan assets		(978	)		(2,653	)		(1,138	)		(1,972	)		(1,011	)		(1,835	)
Settlement loss		—			221			—			73			—			77
Net amortization:
Prior service credit		(19	)		(105	)		(19	)		(129	)		(19	)		(87	)
Net actuarial (gain) loss		—			(195	)		—			649			10			1,186

Net periodic pension cost	$	540		$	3,138		$	324		$	3,999		$	423		$	5,165

The summary of the changes in amounts recognized in other comprehensive income (loss) for the plans for the years ended December 31, 2023, 2022 and 2021 is as follows (in thousands):


	2023						2022						2021
	U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans			U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans			U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans
Prior service credit	$	—		$	—		$	—		$	—		$	—		$	(69	)
Net (loss) gain arising during the year		(699	)		(9,396	)		623			19,025			1,524			6,708
Amortization:
Prior service credit		(19	)		(105	)		(19	)		(129	)		(19	)		(87	)
Net loss		—			26			—			722			10			1,263
Currency impact		—			(58	)		—			1,305			—			1,179

Total recognized in other comprehensive (loss) income	$	(718	)	$	(9,533	)	$	604		$	20,923		$	1,515		$	8,994

The components of net periodic benefit cost other than the service cost component are included in other income, net in the consolidated statements of operations.

The summary of the amounts included in accumulated other comprehensive loss in stockholders’ equity for the plans at December 31, 2023 and 2022 is as follows (in thousands):


	2023						2022
	U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans			U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans
Net actuarial (loss) gain	$	(964	)	$	(3,241	)	$	(266	)	$	6,157
Prior service credit (cost)		17			(156	)		36			(20	)

Total	$	(947	)	$	(3,397	)	$	(230	)	$	6,137

The plans’ investment asset mix is as follows at December 31, 2023 and 2022:


	2023						2022
	U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans			U.S. Retiree Healthcare Plan			Non-U.S. Pension Plans
Equity securities		70	%		4	%		77	%		5	%
Debt securities		30	%		18	%		23	%		18	%
Cash and cash equivalents		0	%		2	%		0	%		2	%
Insurance contracts and other		0	%		76	%		0	%		75	%

Total		100	%		100	%		100	%		100	%

The plans’ investment policies include the following asset allocation guidelines:


	U.S. Retiree Healthcare Plan					Non-U.S. Pension Plans Policy Target
	Policy Target			Range		Non-U.S. Pension Plans Policy Target
Equity securities		60	%		30% - 90%		13	%
Debt securities		35	%		20% - 50%		19	%
Cash and cash equivalents		0	%		0% - 10%		8	%
Insurance contracts and other		5	%		0% - 10%		60	%

The asset allocation policy for the U.S. Retiree Healthcare Plan was developed in consideration of the following long-term investment objectives: achieving a return on assets consistent with the investment policy, achieving portfolio returns which compare favorably with those of other similar plans, professionally managed portfolios and of appropriate market indexes and maintaining sufficient liquidity to meet the obligations of the plan. Within the equity portfolio of the U.S. Retiree Healthcare Plan, investments are diversified among market capitalization and investment strategy, and targets a 45% allocation of the equity portfolio to be invested in financial markets outside of the United States. The Company does not invest in its own stock within the U.S. Retiree Healthcare Plan’s assets.

Plan assets are measured at fair value using the following valuation techniques and inputs:


Level 1:		The fair value of these types of investments is based on market and observable sources from daily quoted prices on nationally recognized securities exchanges.

Level 2:		The fair value of these types of investments utilizes data points other than quoted prices in active markets that are observable either directly or indirectly.

Level 3:		These bank and insurance investment contracts are issued by well-known, highly-rated companies. The fair value disclosed represents the present value of future cash flows under the terms of the respective contracts. Significant assumptions used to determine the fair value of these contracts include the amount and timing of future cash flows and counterparty credit risk.

There have been no changes in the above valuation techniques associated with determining the value of the plans’ assets during the years ended December 31, 2023 and 2022.

The fair value of the Company’s retirement plan assets are as follows at December 31, 2023 (in thousands):


	Total at December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Retiree Healthcare Plan:
Mutual funds (a)		18,153		18,153		—		—

Total U.S. Retiree Healthcare Plan		18,153		18,153		—		—
Non-U.S. Pension Plans:
Cash equivalents (b)		1,611		1,611		—		—
Mutual funds (c)		18,785		18,785		—		—
Bank and insurance investment contracts (d)		66,191		—		—		66,191

Total Non-U.S. Pension Plans		86,587		20,396		—		66,191

Total fair value of retirement plan assets	$	104,740	$	38,549	$	—	$	66,191

The fair value of the Company’s retirement plan assets are as follows at December 31, 2022 (in thousands):


	Total at December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Retiree Healthcare Plan:
Mutual funds (e)		15,724		15,724		—		—

Total U.S. Retiree Healthcare Plan		15,724		15,724		—		—
Non-U.S. Pension Plans:
Cash equivalents (b)		1,527		1,527		—		—
Mutual funds (f)		18,176		18,176		—		—
Bank and insurance investment contracts (d)		57,994		—		—		57,994

Total Non-U.S. Pension Plans		77,697		19,703		—		57,994

Total fair value of retirement plan assets	$	93,421	$	35,427	$	—	$	57,994

a)	The mutual fund balance in the U.S. Retiree Healthcare Plan is invested in the following categories: 41% in the common stock of large-cap U.S. companies, 29% in the common stock of international growth companies and 30% in fixed income bonds of U.S. companies and the U.S. government.

b)	Primarily represents deposit account funds held with various financial institutions.

c)	The mutual fund balance in the Non-U.S. Pension Plans is primarily invested in the following categories: 76% in international bonds, 18% in the common stock of international companies and 7% in various other global investments.

d)	Amount represents bank and insurance guaranteed investment contracts.

e)	The mutual fund balance in the U.S. Retiree Healthcare Plan is invested in the following categories: 49% in the common stock of large-cap U.S. companies, 28% in the common stock of international growth companies and 23% in fixed income bonds of U.S. companies and the U.S. government.

f)	The mutual fund balance in the Non-U.S. Pension Plans is invested in the following categories: 59% in international bonds, 22% in the common stock of international companies and 19% in various other global investments.

The following table summarizes the changes in fair value of the Level 3 retirement plan assets for the years ended December 31, 2023 and 2022 (in thousands)


	Insurance Guaranteed Investment Contracts
Fair value of assets, December 31, 2021	$	65,945
Net purchases (sales) and appreciation (depreciation)		(7,951	)

Fair value of assets, December 31, 2022		57,994
Net purchases (sales) and appreciation (depreciation)		8,197

Fair value of assets, December 31, 2023	$	66,191

The weighted-average assumptions used to determine the benefit obligation in the consolidated balance sheets at December 31, 2023, 2022 and 2021 are as follows:


	2023						2022						2021
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Discount rate		5.18	%		2.97	%		5.42	%		3.82	%		2.70	%		1.40	%
Increases in compensation levels		*	*		2.90	%		*	*		3.14	%		*	*		2.74	%
Interest crediting rate		5.25	%		2.05	%		5.25	%		1.57	%		5.25	%		0.99	%

**	Not applicable

The weighted-average assumptions used to determine the net periodic pension cost for the years ended December 31, 2023, 2022 and 2021 are as follows:


	2023						2022						2021
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Discount rate		5.42	%		4.70	%		2.70	%		2.09	%		2.25	%		1.40	%
Return on plan assets		6.25	%		3.95	%		6.25	%		3.07	%		6.25	%		2.58	%
Increases in compensation levels		*	*		4.32	%		*	*		3.58	%		*	*		3.11	%
Interest crediting rate		5.25	%		1.47	%		5.25	%		1.55	%		5.25	%		0.77	%

**	Not applicable

To develop the expected long-term rate of return on assets assumption, the Company considered historical returns and future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio and historical expenses paid by the plan. A

one-quarter

percentage point increase in the assumed long-term rate of return on assets would decrease the Company’s net periodic benefit cost by less than $1 million. A

one-quarter

percentage point increase in the discount rate would decrease the Company’s net periodic benefit cost by less than $1 million

During

fiscal year 2024, the Company expects to contribute a total of approximately $3 million to $6 million to the Company’s defined benefit plans. Estimated future benefit payments from the plans as of December 31, 2023 are as follows (in thousands):


	U.S. Retiree Healthcare Plans		Non-U.S. Pension Plans		Total

2024	$	1,959	$	4,018	$	5,977
2025		2,068		4,062		6,130
2026		2,153		3,376		5,529
2027		2,251		4,192		6,443
2028		2,444		5,420		7,864
2029 - 2033		13,807		26,732		40,539

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (q)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480266/715-60-50-3

+ Details