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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K

☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

| OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024
or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

| OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:
001-14010
Waters Corporation
(Exact name of registrant as specified in its charter)

Delaware |  | 13-3668640
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

34 Maple Street
Milford, Massachusetts 01757
(Address, including zip code, of principal executive offices)
(508) 478-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common Stock, par value $0.01 per share |  | WAT |  | New York Stock Exchange, Inc.

Securities registered pursuant to Section 12(g) of the Act: |  | None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in
Rule 12b-2
of the Exchange Act. (Check one):

Large accelerated filer☑ |  | Accelerated filer ☐ |  | Non-accelerated filer ☐ |  | Smaller reporting company☐
|  |  |  | Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2
of the Act). Yes ☐ No☑
State the aggregate market value of the registrant’s common stock held by
non-affiliates
of the registrant as of June 29, 2024: $17,219,389,367.
Indicate the number of shares outstanding of the registrant’s common stock as of February 21, 2025: 59,410,941
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement that will be filed for the 2025 Annual Meeting of Stockholders are incorporated by reference in Part III.

##### Table of Contents

ANNUAL REPORT ON FORM 10-K

INDEX

Item No. |  |  |  |  | Page |
|  |  | PART I |  |  |
| 1. |  |  | Business |  |  | 1 |
| 1A. |  |  | Risk Factors |  |  | 14 |
| 1B. |  |  | Unresolved Staff Comments |  |  | 27 |
| 1C. |  |  | Cybersecurity |  |  | 28 |
| 2. |  |  | Properties |  |  | 30 |
| 3. |  |  | Legal Proceedings |  |  | 31 |
| 4. |  |  | Mine Safety Disclosures |  |  | 31 |
|  |  | PART II |  |  |
| 5. |  |  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  |  | 32 |
| 6. |  |  | Reserved |  |  | 35 |
| 7. |  |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  |  | 35 |
| 7A. |  |  | Quantitative and Qualitative Disclosures About Market Risk |  |  | 48 |
| 8. |  |  | Financial Statements and Supplementary Data |  |  | 51 |
|  |  |  | Report of Independent Registered Public Accounting Firm (PCAOB ID 238) |  |  | 52 |
| 9. |  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |  |  | 100 |
| 9A. |  |  | Controls and Procedures |  |  | 100 |
| 9B. |  |  | Other Information |  |  | 100 |
| 9C. |  |  | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |  |  | 100 |
|  |  | PART III |  |  |
| 10. |  |  | Directors, Executive Officers and Corporate Governance |  |  | 101 |
| 11. |  |  | Executive Compensation |  |  | 102 |
| 12. |  |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |  |  | 103 |
| 13. |  |  | Certain Relationships and Related Transactions and Director Independence |  |  | 103 |
| 14. |  |  | Principal Accountant Fees and Services |  |  | 103 |
|  |  | PART IV |  |  |
| 15. |  |  | Exhibits and Financial Statement Schedules |  |  | 104 |
| 16. |  |  | Form 10-K Summary |  |  | 107 |
|  |  |  | Signatures |  |  | 108 |

##### Table of Contents

PART I

Item 1: Business

General

Waters Corporation (the “Company,” “Waters,” “we,” “our,” or “us”), a global leader in analytical instruments and software, has pioneered innovations in chromatography, mass spectrometry and thermal analysis serving life, materials and food sciences for more than 65 years. With approximately 7,600 employees worldwide, Waters operates directly in over 35 countries and has products available in more than 100 countries. The Company primarily designs, manufactures, sells and services high-performance liquid chromatography (“HPLC”), ultra-performance liquid chromatography (“UPLC” and together with HPLC, referred to as “LC”) and mass spectrometry (“MS”) technology systems and support products, including chromatography columns, other consumable products and comprehensive post-warranty service plans. These systems are complementary products that are frequently employed together (“LC-MS”) and sold as integrated instrument systems using common software platforms. In addition, the Company designs, manufactures, sells and services thermal analysis, rheometry and calorimetry instruments through its TA InstrumentsTM (“TA”) product line. The Company is also a developer and supplier of advanced software-based products that interface with the Company’s instruments, as well as other manufacturers’ instruments.

The Company’s products are used by pharmaceutical, clinical, biochemical, industrial, nutritional safety, environmental, academic and governmental customers working in research and development, quality assurance and other laboratory applications. LC is a standard technique and is utilized in a broad range of industries to detect, identify, monitor and measure the chemical, physical and biological composition of materials, and to purify a full range of compounds. MS technology, principally in conjunction with chromatography, is employed in drug discovery and development, including clinical trial testing, the analysis of proteins in disease processes (known as “proteomics”), nutritional safety analysis and environmental testing. LC-MS instruments combine a liquid phase sample introduction and separation system with mass spectrometric compound identification and quantification. The Company’s thermal analysis, rheometry and calorimetry instruments are used in predicting the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals and viscous liquids for various industrial, consumer goods and healthcare products, as well as for life science research.

Waters Corporation, organized as a Delaware corporation in 1991, is a holding company that owns all of the outstanding common stock of Waters Technologies Corporation, its operating subsidiary. Waters Corporation became a publicly traded company with its initial public offering (“IPO”) in November 1995. Since the IPO, the Company has added three significant and complementary technologies to its range of products with the acquisitions of TA Instruments in May 1996, Micromass Limited in September 1997 and Wyatt Technology in May 2023.

Business Segments

The Company’s business activities, for which discrete financial information is available, are regularly reviewed and evaluated by the chief operating decision maker. As a result of this evaluation, the Company determined that it has two operating segments: Waters and TA. The Waters operating segment is primarily in the business of designing, manufacturing, selling and servicing LC and MS instrument systems, columns and other precision chemistry consumables that can be integrated and used along with other analytical instruments. The TA operating segment is primarily in the business of designing, manufacturing, selling and servicing thermal analysis, rheometry and calorimetry instruments. The Company’s two operating segments have similar economic characteristics; product processes; products and services; types and classes of customers; methods of distribution; and regulatory environments. Because of these similarities, the two segments have been aggregated into one reporting segment for financial statement purposes. Operations of the Wyatt business are part of the Waters operating segment.

Information concerning revenues and long-lived assets attributable to each of the Company’s products, services and geographic areas is set forth in Note 17 in the Notes to the Consolidated Financial Statements, which is incorporated herein by reference.

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Waters Products and Markets

High-Performance and Ultra-Performance Liquid Chromatography

HPLC is a standard technique used to identify and analyze the constituent components of a variety of chemicals and other materials. The Company believes that HPLC’s performance capabilities enable it to separate, identify and quantify a high proportion of all known chemicals. As a result, HPLC is used to analyze substances in a wide variety of industries for research and development purposes, quality control and process engineering applications.

The most significant end-use markets for HPLC are those served by the pharmaceutical and life science industries. In these markets, HPLC is used extensively to understand diseases, identify new drugs, develop manufacturing methods and assure the potency and purity of new pharmaceuticals. HPLC is also used in a variety of other applications, such as analyses of foods and beverages for nutritional labeling and compliance with safety regulations and the testing of water and air purity within the environmental testing industry, as well as applications in other industries, such as chemical and consumer products. Waters also has in-vitro diagnostic labelled products that are used as general-purpose instruments for clinical diagnostic applications, such as newborn screening and therapeutic drug management, in countries where these products are registered. HPLC is also used by universities, research institutions and governmental agencies, such as the United States Food and Drug Administration (“FDA”) and the United States Environmental Protection Agency (“EPA”) and their foreign counterparts that mandate safety and efficacy testing.

In 2004, Waters introduced a novel technology that the Company describes as ultra-performance liquid chromatography that utilizes a packing material with small, uniform diameter particles and a specialized instrument, the ACQUITYTM UPLCTM System, to accommodate the increased pressure and narrower chromatographic bands that are generated by these small and tightly packed particles. By using the ACQUITY UPLC System, researchers and analysts are able to achieve more comprehensive chemical separations and faster analysis times in comparison with many analyses previously performed by HPLC. In addition, in using the ACQUITY UPLC System, researchers have the potential to extend the range of applications beyond that of HPLC, enabling them to uncover more levels of scientific information. While offering significant performance advantages, the ACQUITY UPLC System is also compatible with the Company’s software products and the general operating protocols of HPLC. For these reasons, the Company’s customers and field sales and support organizations are well positioned to utilize this innovative technology and instrument.

Waters manufactures LC instruments that are offered in configurations that allow for varying degrees of automation, from component configured systems for academic teaching and research applications to fully automated systems for regulated and high sample throughput testing, and that have a variety of detection technologies, from optical-based ultra-violet absorbance, refractive index and fluorescence detectors to a suite of MS-based detectors, optimized for certain analyses.

During the second half of 2023, Waters introduced the DynaProTM ZetaStarTM instrument through its Wyatt TechnologyTM portfolio for nanoparticle analysis. The new instrument simultaneously enables dynamic and static light scattering and dynamic and electrophoretic light scattering measurements, all in one device. By combining multiple light scattering techniques and automatically assessing data quality and performing adaptive data capture, the ZetaStar instrument delivers both increased sensitivity and faster measurements to aid the precise development of complex biologics, using extremely low sample volumes.

In 2024, the Company introduced HPLC CONNECT software, an all-in-one software platform that enables full digital synchronization between Waters high- and ultra-performance liquid chromatography (HPLC/UPLC) systems and multi-angle light-scattering instruments (MALS) from its Wyatt Technology™ portfolio. The software delivers ease-of-use, greater efficiency, and higher confidence for scientists performing size exclusion chromatography and MALS (SEC-MALS) analyses for complex and critical biopharmaceutical innovations, including antibody drug conjugates, other complex protein conjugates, and gene therapies.

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The primary consumable products for LC instruments are chromatography columns. These columns are packed with separation media used in the LC testing process and are typically replaced at regular intervals. The chromatography column contains one of several types of packing material, typically stationary phase particles made from silica or polymeric resins. As a pressurized sample is introduced to the column inlet and permeates through the packed column, it is separated into its constituent components.

The Company’s precision chemistry consumable products also include environmental and nutritional safety testing products, including Certified Reference Materials and Proficiency Testing products. Laboratories around the world and across multiple industries use these products for quality control and proficiency testing and purchase product support services required to help with their federal and state mandated accreditation requirements or with quality control over critical pharmaceutical analysis.

Waters HPLC columns can be used on Waters-branded and competitors’ LC systems. The Company believes that it is one of a few suppliers in the world that manufactures silica and polymeric resins, packs columns and distributes its own products. In doing so, the Company believes it can better ensure product consistency, a key attribute for its customers in quality control laboratories and can react quickly to new customer requirements. The Company believes that its ACQUITY UPLC Columns are used primarily on its ACQUITY UPLC Systems and, furthermore, that its ACQUITY UPLC Systems primarily use ACQUITY UPLC Columns.

In 2023, the Company introduced the first in a new line of size exclusion chromatography columns aimed at improving analysis while lowering the cost of gene therapies, specifically adeno-associated viral (“AAV”) vectors. The new Waters XBridgeTM Premier GTx BEHTM size exclusion chromatography columns double the speed of measuring the potency and safety of AAVs. Combining the columns with light scattering technologies from its Wyatt Technology portfolio deepens the level of information acquired from a single experiment and optimizes the manufacturing of these novel gene delivery vehicles.

The Company also introduced the AllianceTM iS HPLC System, the next-generation intelligent HPLC System, designed to reduce compliance risk by adding new levels of proactive error detection, troubleshooting and ease-of-use. When combined with Waters compliance-ready EmpowerTM Chromatography Software and eConnectTM HPLC Columns, the Alliance iS HPLC System streamlines the task of making accurate and precise measurements by detecting and eliminating common errors. In doing so, the Alliance iS HPLC System helps quality control laboratories to consistently meet quality, safety, compliance and on-time product delivery goals. This system also integrates with the cloud-native waters_connectTM System Monitoring Software enabling real-time monitoring of the Alliance iS HPLC System and any other chromatography instruments controlled by Empower Software. Laboratory managers can view the live status of their HPLC instrument fleet from anywhere and at any time to further improve equipment utilization and overall productivity. In addition, Waters introduced the new bioprocess walk-up solutions designed to further simplify biologic sample preparation and analysis. This solution eliminated the need to send bioreactor samples to a central laboratory for analysis making it even easier to accelerate upstream bioprocess development by up to six weeks over traditional methods.

In 2024, Waters introduced the new Oasis WAX/GCB and GCB/WAX for PFAS Analysis Cartridges with new design features that significantly streamline and expedite sample preparation and analysis of per- and polyfluoroalkyl substances (“PFAS”). To help ensure accuracy and further confidence in test results, Oasis WAX/GCB and GCB/WAX Cartridges are QC-tested by an accredited laboratory for low residual PFAS, to reduce or eliminate any time spent troubleshooting potential assay contamination. The Company also introduced the Alliance iS Bio HPLC System with new capabilities that address the operational and analytical challenges of biopharma quality control laboratories. The new HPLC system combines advanced bio-separation technology and built-in instrument intelligence features and is designed to help biopharma QC analysts boost efficiency and eliminate up to 40% of common errors, saving time lost by investigating the source of failed runs and out-of-specification results. In addition, Waters introduced the new GTxResolve Premier Size Exclusion Chromatography 1000Å 3-micron (3 µm) Columns. Waters has implemented a unique combination of novel packing materials and MaxPeakPremier High-Performance Surface technology into the columns to help scientists accelerate the development of gene-based therapeutics, including cell & gene, mRNA and lipid nanoparticles.

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Mass Spectrometry and Liquid Chromatography-Mass Spectrometry

MS is a powerful analytical technology that is used to identify unknown compounds, to quantify known materials and to elucidate the structural and chemical properties of molecules by measuring the masses of molecules that have been converted into ions.

The Company is a technology and market leader in the development, manufacture, sale and service of MS instruments and components. These instruments are typically integrated and used along with other complementary analytical instruments and systems, such as LC, chemical electrophoresis and gas chromatography. A wide variety of instrumental designs fall within the overall category of MS instrumentation, including devices that incorporate quadrupole, ion trap, time-of-flight (“Tof”), magnetic sector and ion mobility technologies. Furthermore, these technologies are often used in tandem to maximize the speed and/or efficacy of certain experiments.

Currently, the Company offers a wide range of MS instrument systems utilizing various combinations of quadrupole, Tof and ion mobility designs. These instrument systems are used in drug discovery and development, as well as for environmental, clinical and nutritional safety testing. The overwhelming majority of mass spectrometers sold by the Company are designed to utilize an LC system and a liquid compatible interface (such as an electrospray ionization source) as the sample introduction device. These products supply a diverse market with a strong emphasis on the pharmaceutical, biomedical, clinical, food and beverage and environmental market segments worldwide.

MS is an increasingly important detection technology for LC. The Company’s smaller-sized mass spectrometers, such as the single quadrupole detector and the tandem quadrupole detector (“TQD”), are often referred to as LC “detectors” and are typically sold as part of an LC system or as an LC system upgrade. Larger quadrupole systems, such as the XevoTM TQ MS System and Xevo TQ-S MS System, are used primarily for experiments performed for late-stage drug development, including clinical trial testing. Quadrupole time-of-flight (“Q-Tof”) instruments, such as the Company’s SYNAPTTM G2-S HDMS System, are often used to analyze the role of proteins in disease processes, an application sometimes referred to as “proteomics.”

LC and MS are typically embodied within an analytical system tailored for either a dedicated class of analyses or as a general-purpose analytical device. An increasing percentage of the Company’s customers are purchasing LC and MS components simultaneously and it has become common for LC and MS instrumentation to be used within the same laboratory and operated by the same user. The descriptions of LC and MS above reflect the historical segmentation of these analytical technologies and the historical categorization of their respective practitioners. Increasingly in today’s instrument market, this segmentation and categorization is becoming obsolete as a high percentage of instruments used in the laboratory embody both LC and MS technologies as part of a single device. In response to this development and to further promote the high utilization of these hybrid instruments, the Company has organized its Waters operating segment to develop, manufacture, sell and service integrated LC-MS systems.

In 2022, the Company introduced the Xevo TQ Absolute System, the most sensitive and compact benchtop tandem mass spec in its class. The Company introduced the new Xevo G3 Q-Tof Mass Spectrometer with CONFIRM Sequence, a new oligonucleotide sequencing confirmation app for the waters_connect Software platform and an electrospray ionization source for the high-resolution SELECT SERIES MRT Mass Spectrometer.

Based upon 2024, reports from independent marketing research firms and publicly disclosed sales figures from competitors, the Company believes that it is one of the world’s largest manufacturers and distributors of LC and LC-MS instrument systems, chromatography columns and other consumables and related services.

The Company has been a developer and supplier of software-based products that interface with both the Company’s and other suppliers’ instruments. The Company’s newest software technology for mass spectrometry is the waters_connect Software platform.

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In 2022, the Company introduced a new PFAS quantitation workflow enabled by enhancements to its waters_connect Software for quantitation software and the Company introduced Extraction+ TM Connected Device, a new software-controlled product for the Waters Andrew+TM Pipetting Robot that automates the preparation of biological, food, forensics and environmental samples by solid phase extraction.

In 2023, the Company introduced the next generation Xevo TQ Absolute IVD Mass Spectrometer, expanding its family of MassTrakTM IVD LC-MS/MS Systems for clinical diagnostic applications. The powerful analytical performance of the Xevo TQ Absolute IVD Mass Spectrometer is up to five times more sensitive for quantifying clinical analytes. This sensitivity enables clinical laboratories to detect and measure trace level analytes within a sample at lower detection levels than previously possible. It can also extend the testing capabilities of the clinical laboratory to include lower volume samples obtained in less-invasive assays such as saliva, breath, dried blood spots and multiplex panels and large molecules. The new MassTrak LC-MS/MS IVD System includes the ACQUITY UPLC I-Class PLUS System with the Xevo TQ Absolute IVD Mass Spectrometer. The ACQUITY UPLC I-Class PLUS System is designed to deliver rapid and accurate sample analysis to enhance the sensitivity of any mass spectrometer and simplify the characterization of the most complex sample. The Xevo TQ Absolute IVD System provides more consistent instrument-to-instrument performance, with a user-friendly design that maximizes service uptime. Its innovative design is also 45% smaller and uses 50% less nitrogen gas and electricity than comparable tandem quadrupole-mass spectrometry systems, making it ideal for hospital labs and independent commercial labs with both sustainability and business growth goals to meet.

In addition, in 2023, the Company introduced the industry’s first targeted imaging mass spectrometer based on its Xevo TQ Absolute Tandem Quadrupole Mass Spectrometer which is the most sensitive and compact mass spectrometer in its class. The new instrument combines the Waters DESI XS source with the Xevo TQ Absolute System and is five times more sensitive and five times faster than discovery-based imaging systems at precisely determining whether a particular small molecule drug product, and how much of it, reaches its intended target, such as a brain, liver or lung, in a test subject. Further, the Company announced new updates to its SELECT SERIES MRT System that increases its specificity and utility for UPLC-MS/MS metabolomics and drug discovery applications and for mass spectrometry imaging experiments. The MRT System now offers 50% higher resolution, making it capable of 300,000 FWHM resolution, a 3X faster scan rate and parts-per-billion mass accuracy. These MRT System enhancements are designed to help research scientists unambiguously identify analytes of interest in samples of blood, urine and tissue, contributing to a greater understanding of molecules and their mechanisms of action in numerous scientific fields. It is compatible with numerous MS imaging sources including DESI and MALDI, and generates crystal-clear, high-resolution images without compromising mass spectral resolution or accuracy. Lastly, in 2023, the Company combined its BioAccord LC-MS System and the Waters Andrew+ Pipetting Robot, connecting via new protocols in OneLabTM Software to create fully integrated and easy-to-use bioprocess walk-up solutions. It is designed to enable less experienced LC-MS users to acquire critical quality attribute data for analysis of drug product and cell culture media. Capturing data directly at the bioproduction laboratory can help bioprocess engineers improve process understanding, leading to more robust manufacturing processes and accelerated development timelines.

Waters Service

Services provided by Waters enable customers to maximize technology productivity, support customer compliance activities and provide transparency into enterprise resource management efficiencies. The customer benefits from improved budget control, data-driven technology adoption and accelerated workflow at a site or on a global perspective. The Company considers its service offerings to be highly differentiated from its competition, as evidenced by a consistent increase in annual service revenues. The Company’s principal competitors in the service market include Revvity, Inc., Agilent Technologies, Inc. and Thermo Fisher Scientific Inc. These competitors can provide certain services on Waters instruments to varying degrees and always present competitive risk.

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The servicing and support of instruments, software and accessories is an important source of revenue and represented over 35% of sales for Waters in 2024. These revenues are derived primarily through the sale of support plans, demand services, spare parts, customer performance validation services and customer training. Support plans typically involve scheduled instrument maintenance and an agreement to promptly repair a non-functioning instrument in return for a fee described in a contract that is priced according to the configuration of the instrument.

The waters_connect System Monitoring is a new Software-as-a-Service application that enables laboratory managers and analysts to monitor the real-time status of any chromatography instruments, regardless of the manufacturer, running on Waters Empower Software. The waters_connect System Monitoring application was developed especially for high-volume quality assurance/quality control laboratories. It can reduce the turnaround time of product release samples and facilitate the planning and progress of critical analyses via live, at-a-glance dashboard views of the operational status of chromatography instruments. The cloud-native application also helps lab managers utilize capital resources better by providing an understanding of instrument history and usage levels and improve the productivity of their teams.

TA Products and Markets

Thermal Analysis, Rheometry and Calorimetry

Thermal analysis measures the physical or thermodynamic characteristics of materials as a function of temperature. Changes in temperature affect several characteristics of materials, such as their heat flow characteristics, physical state, weight, dimension and mechanical and electrical properties, which may be measured by one or more thermal analysis techniques, including calorimetry. Consequently, thermal analysis techniques are widely used in the development, production and characterization of materials in various industries, such as plastics, chemicals, automobiles, pharmaceuticals and electronics.

Rheometry instruments often complement thermal analyzers in characterizing materials. Rheometry characterizes the flow properties of materials and measures their viscosity, elasticity and deformation under different types of “loading” or other conditions. The information obtained under such conditions provides insight into a material’s behavior during processing, packaging, transport, usage and storage.

Thermal analysis, rheometry and calorimetry instruments are heavily used in material testing laboratories and, in many cases, provide information useful in predicting the suitability and stability of industrial polymers, fine chemicals, pharmaceuticals, water, metals and viscous liquids in various industrial, consumer goods and healthcare products, as well as for life science research. As with systems offered by Waters, a range of instrument configurations is available with increasing levels of sample handling and information processing automation. In addition, systems and accompanying software packages can be tailored for specific applications.

In 2022, TA introduced the Powder Rheology Accessory, which enables our Discovery Hybrid Rheometers to characterize the behavior of powders during storage, dispensing, processing and end-use. The Powder Rheology Accessory provides relevant property and processing measurements for battery electrode coatings to prevent defects that cause cell failure and pharmaceutical tablets to prevent instabilities of API blends.

Also in 2022, TA introduced Polymer Workflow Guided Methods, which provides walk up and use functionality by codifying polymer workflows. Guided Methods leverages the power of TRIOS AutoPilot Software and enables novice users to quickly learn and use the instrument to set up test methods, run tests, and execute analyses across our Thermal Analysis and Rheology product lines.

In 2023, TA introduced a new Battery Cycler Microcalorimeter Solution for high-resolution characterization of battery cells. The instrument and software combination enables non-destructive testing under real-world operating conditions and significantly reduces experiment time from months to weeks, while providing decisive insights for greater battery efficiency, safety and stability.

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In 2024, TA introduced the following new instrument systems:

| • |  | Rheo-IS accessory for our Discovery Hybrid Rheometers. This new accessory for its Discovery Hybrid Rheometers is designed to enable simultaneous electrical impedance and rheological measurements, a critical capability for scientists working on new battery formulations.

| • |  | Rapid Screening-Differential Scanning Calorimeter (“RS-DSC”), designed for biopharmaceutical developers. The RS-DSC is a high-throughput DSC for precise thermal stability testing of high-concentration biologic formulations specifically for antibody drugs and engineered proteins.

| • |  | TA introduced the Discovery Core Rheometer, a streamlined, modern rheometer designed for routine manufacturing quality control and assurance laboratories. The new analyzer can handle multiple material types such as battery slurries, printing inks, food, and personal care products and it features an easy-to-use touchscreen interface with self-guided training, methods, and applications for all levels of rheology users.

TA Service

Similar to Waters, the servicing and support of TA’s instruments is an important source of revenue and represented more than 25% of sales for TA in 2024. TA operates independently from the Waters operating segment, though many of its overseas offices are jointly occupied with Waters to achieve operational efficiencies. TA has dedicated field sales and service operations. Service sales are primarily derived from the sale of support plans, replacement parts and billed labor fees associated with the repair, maintenance and upgrade of installed systems.

Global Customers

The Company typically has a broad and diversified customer base that includes pharmaceutical accounts, other industrial accounts, universities and governmental agencies. Purchase of the Company’s instrument systems is often dependent on its customers’ capital spending, or funding as in the cases of academic, governmental and research institutions, which often fluctuate from year to year. The pharmaceutical segment represents the Company’s largest sector and includes multinational pharmaceutical companies, generic drug manufacturers, contract research organizations (“CROs”) and biotechnology companies. The Company’s other industrial customers include chemical manufacturers, polymer manufacturers, food and beverage companies and environmental testing laboratories. The Company also sells to universities and governmental agencies worldwide. The Company’s technical sales and support staff members work closely with its customers in developing and implementing applications that meet their full range of analytical requirements. During 2024, 58% of the Company’s net sales were to pharmaceutical accounts, 31% to other industrial accounts and 11% to academic institutions and governmental agencies. Although the Company transacts business with various government agencies, no government contract is of such magnitude that a renegotiation of profits or termination of the contract at the election of the government agency would have a material adverse effect on the Company’s financial results.

The Company typically experiences seasonality in its orders that is reflected as an increase in sales in the fourth quarter, as a result of purchasing habits for capital goods of many customers who tend to exhaust their spending budgets by calendar year-end. The Company does not rely on any single customer for a material portion of its sales. During fiscal years 2024, 2023 and 2022, no single customer accounted for more than 2% of the Company’s net sales.

Sales and Service

The Company has one of the largest direct sales and service organizations focused exclusively on the analytical workflows offered by the Company. Across these product technologies, using respective specialized sales and service workforces, the Company serves its customer base with 79 sales offices throughout the world as of

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December 31, 2024 and approximately 4,200, 4,300 and 4,500 field representatives in 2024, 2023 and 2022, respectively. This investment in sales and service personnel serves to maintain and expand the Company’s installed base of instruments. The Company’s sales representatives have direct responsibility for account relationships, while service representatives work in the field to install instruments, train customers and minimize instrument downtime. In-house and field-based technical support representatives work directly with customers, providing them assistance with applications and procedures on Company products. The Company provides customers with comprehensive information through various corporate and geographic-specific internet websites and product literature and also makes consumable products available through electronic ordering facilities and a dedicated catalog.

Manufacturing and Distribution

The Company provides high product quality by overseeing each stage of the production of its instruments, columns and chemical reagents.

The Company currently assembles a portion of its LC instruments at its facility in Milford, Massachusetts, where it performs machining, assembly and testing. The Milford facility maintains quality management and environmental management systems in accordance with the requirements of ISO 9001:2015, ISO 13485:2016, ISO 45001:2018 and ISO 14001:2015, and adheres to applicable regulatory requirements (including the FDA Quality System Regulation and the European In-Vitro Diagnostic Directive). The Company outsources manufacturing of certain electronic components, such as computers, monitors and circuit boards, to outside vendors that meet the Company’s quality requirements. In addition, the Company outsources the manufacturing of certain LC instrument systems and components to well-established contract manufacturing firms in Singapore. The Company’s Singapore entity is ISO 9001:2015 certified and manages all Asian outsourced manufacturing as well as the distribution of all products from Asia. The Company may pursue outsourcing opportunities as they arise but believes it maintains adequate supply chain and manufacturing capabilities in the event of disruption or natural disasters.

The Company primarily manufactures and distributes its LC columns at its facilities in Taunton, Massachusetts and Wexford, Ireland. In February 2024, the Company completed an expansion of its Taunton manufacturing facility, incurring costs of approximately $251 million in connection with the expansion between 2018 and 2024. The Taunton facility processes, sizes and treats silica and polymeric media that are packed into columns, solid phase extraction cartridges and bulk shipping containers in both Taunton and Wexford. The Wexford facility also manufactures and distributes certain data, instruments and software components for the Company’s LC, MS and TA product lines. The Company’s Taunton facility is certified to ISO 9001:2015 and ISO 14001:2015. The Wexford facility is certified to ISO 9001:2015, ISO 13485:2016/EN ISO 13485:2016 and ISO 14001:2015. VICAM manufactures antibody-linked resins and magnetic beads that are packed into columns and kits in Milford, Massachusetts. The Company manufactures and distributes its Analytical Standards and Reagents and Environmental Resource Associates (“ERA”) product lines at its facility in Golden, Colorado, which is certified to ISO 9001:2015 and accredited to ISO/IEC 17025:2017, ISO/IEC 17034:16, ISO/IEC 17043:2010 and TNI Standard Vol. 3:2016. Some ERA products are also manufactured in the Wexford, Ireland facility, which is also accredited to ISO/IEC 17025:2017 and ISO/IEC 17034:2016.

The Company manufactures and distributes its MS products at its facilities in Wilmslow, England and Wexford, Ireland. In 2024, Waters opened a new facility in Birmingham, England which will increase the Company’s capacity to manufacture certain components used in the Company’s MS instruments. Each stage of this supply chain is closely monitored by the Company to maintain high quality and performance standards. The instruments, components or modules are then returned to the Company’s facilities, where its engineers perform final assembly, calibrations to customer specifications and quality control procedures. The Company’s MS facilities are certified to ISO 9001:2015, ISO 13485:2016/EN ISO 13485:2016 and ISO 14001:2015 (Wexford only) and adhere to applicable regulatory requirements (including the FDA Quality System Regulation and the European In-Vitro Diagnostic Directive).

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TA’s thermal analysis, rheometry and calorimetry products are manufactured and distributed at the Company’s New Castle, Delaware, Eden Prairie, Minnesota, Lindon, Utah and Hüllhorst, Germany facilities. Similar to MS, elements of TA’s products are manufactured by outside contractors and are then returned to the Company’s facilities for final assembly, calibration and quality control. The Company’s New Castle facility is certified to the ISO 9001:2015 standard and the Eden Prairie facility is certified to both ISO 9001:2015 and ISO/IEC 17025:2017 standards, and the Lindon facility is certified to ISO 9001:2015.

All instrument manufacturing for Wyatt products takes place at its facilities in Santa Barbara, California. The Company’s Wyatt facility in Santa Barbara, California is certified to ISO 9001:2015.

Raw Materials

The Company purchases a variety of raw materials, primarily consisting of high temperature alloy sheet metal and castings, forgings, pre-plated metals and electrical components from various vendors. The materials used by the Company’s operations are generally available from a number of sources and in sufficient quantities to meet current requirements subject to normal lead times.

The Company is subject to rules of the Securities and Exchange Commission (“SEC”) under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which require disclosure as to whether certain materials (tantalum, tin, gold and tungsten), known as conflict minerals, which may be contained in the Company’s products, are mined from the Democratic Republic of the Congo and adjoining countries. In 2024, the Company was not able to determine with certainty the country of origin of some of the conflict minerals in its manufactured products. However, the Company does not have knowledge that any of its conflict minerals originated from the Democratic Republic of the Congo or adjoining countries. The Company is in the process of evaluating its 2024 supply chain, and the Company plans to file its 2024 Form SD with the SEC in May 2025. The results of this and future evaluations may impose additional costs and may introduce new risks related to the Company’s ability to verify the origin of any conflict minerals contained in its products.

In addition, the Company continues to monitor environmental, health and safety regulations in countries in which it operates throughout the world, in particular, European Union and China Restrictions on the use of certain Hazardous Substances in electrical and electronic equipment and European Union Waste Electrical and Electronic Equipment directives. Further information regarding these regulations is available on the Company’s website, www.waters.com, under the caption “About Waters / Corporate Governance”.

Research and Development

The Company maintains an active research and development program focused on the development and commercialization of products that extend, complement and update its existing product offering. The Company’s research and development expenditures for 2024, 2023 and 2022 were $183 million, $175 million and $176 million, respectively.

Nearly all of the Company’s LC products have been developed at the Company’s main research and development center located in Milford, Massachusetts, with input and feedback from the Company’s extensive field organizations and customers. The majority of the Company’s MS products are developed at facilities in England and most of the Company’s current materials characterization products are developed at the Company’s research and development center in New Castle, Delaware. At December 31, 2024, 2023 and 2022, there were approximately 1,100, 1,200 and 1,200 employees involved in the Company’s research and development efforts, respectively. The Company has increased research and development expenses from its continued commitment to invest significantly in new product development and existing product enhancements, and as a result of acquisitions. Despite the Company’s active research and development programs, there can be no assurance that the Company’s product development and commercialization efforts will be successful or that the products developed by the Company will be accepted by the marketplace.

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The Company maintains research laboratories in Cambridge, MA and at the University of Delaware, which serves as a strategic, collaborative space in the community, where Waters can partner with academia, research and industry to accelerate the next generation of scientific advancements.

Human Capital

We believe that our people differentiate our business and are vital to our continued success. As a result, we have made important investments in our workforce through initiatives and programs that support talent development and inclusion and enhance our Total Rewards programs.

Employees

The Company employed approximately 7,600, 7,900 and 8,200 employees at December 31, 2024, 2023 and 2022, respectively, with approximately 39% of the Company’s employees located in the United States. The Company believes its employee relations are generally good. The Company’s employees are not unionized or affiliated with any internal or external labor organizations.

Talent Development

We believe that our future success depends in a significant part on our continued ability to attract and retain highly skilled employees and then contribute to the growth and development of these employees.

We further the growth and development of our employees by investing in various programs, digital platforms and workshops that build professional and technical skills. In addition, management periodically assesses succession planning for certain key positions and reviews our workforce to identify high potential employees for future growth and development.

Culture of Inclusion

We believe inclusion is a core tenet of organizational success and that fostering a sense of inclusivity allows our employees to maximize their performance contribution to our business. As part of our company-led initiatives to drive an inclusive workplace, we have created Employee Circles and Employee Hubs, which are voluntary, employee-driven employee resource groups open to all our employees worldwide to foster an inclusive culture. Waters has focused on expanding the pipeline of strong candidates in our recruitment processes, including developing partnerships with organizations that support a culture of inclusion in hiring and employee engagement.

Health and Safety

The health and safety of our employees is our highest priority. Through online and in-person training programs, we believe that we foster a safe workplace and ensure that all employees are empowered to prevent accidents and injuries.

Competition

The analytical instrument systems, supplies and services market is highly competitive. The Company encounters competition from several worldwide suppliers and other companies in both domestic and foreign markets for each of its three primary technologies. The Company competes in its markets primarily on the basis of product performance, reliability, service and, to a lesser extent, price. Competitors continuously introduce new products and have instrument businesses that are generally more diversified than the Company’s business. Some competitors have greater financial resources and broader distribution than the Company’s.

In the markets served by Waters, the Company’s principal competitors include: Agilent Technologies, Inc., Shimadzu Corporation, Bruker Corporation, Danaher Corporation and Thermo Fisher Scientific Inc. In the

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markets served by TA, the Company’s principal competitors include: PerkinElmer, Inc., NETZSCH-Geraetebau GmbH, Thermo Fisher Scientific Inc., Malvern PANalytical Ltd., a subsidiary of Spectris plc, Anton-Paar GmbH and others not identified here.

The market for consumable LC products, including separation columns, is highly competitive and generally more fragmented than the analytical instruments market. The Company encounters competition in the consumable columns market from chemical companies that produce column sorbents and small specialized companies that primarily pack purchased sorbents into columns and subsequently package and distribute columns. The Company believes that it is one of the few suppliers that processes silica and polymeric resins, packs columns and distributes its own products. The Company competes in this market on the basis of performance, reproducibility, reputation and, to a lesser extent, price. In recent years, the Company’s principal competitors for consumable products have included: Danaher Corporation; Merck KGaA; Agilent Technologies, Inc.; General Electric Company and Thermo Fisher Scientific Inc. The ACQUITY UPLC Instrument is designed to offer a predictable level of performance when used with ACQUITY UPLC Columns and the Company believes that the expansion of the ACQUITY UPLC Instrument base will enhance its chromatographic column business because of the high level of synergy between ACQUITY UPLC Columns and the ACQUITY UPLC Instruments.

Patents, Trademarks and Licenses

The Company owns a number of United States and foreign patents and has patent applications pending in the United States and abroad. Certain technology and software has been acquired or is licensed from third parties. The Company also owns a number of trademarks. The Company’s patents, trademarks and licenses are viewed as valuable assets to its operations. However, the Company believes that no one patent or group of patents, trademark or license is, in and of itself, essential to the Company such that its loss would materially affect the Company’s business as a whole.

Environmental Matters and Climate Change

The Company is subject to foreign and U.S. federal, state and local laws, regulations and ordinances that (i) govern activities or operations that may have adverse environmental effects, such as discharges to air and water as well as handling and disposal practices for solid and hazardous wastes, and (ii) impose liability for the costs of cleaning up and certain damages resulting from sites of past spills, disposals or other releases of hazardous substances. The Company believes that it currently conducts its operations and has operated its business in the past in substantial compliance with applicable environmental laws. From time to time, Company operations have resulted or may result in noncompliance with environmental laws or liability for cleanup pursuant to environmental laws. The Company does not currently anticipate any material adverse effect on its operations, financial condition or competitive position as a result of its efforts to comply with environmental laws.

The Company is sensitive to the growing global debate with respect to climate change. An internal sustainability working group develops increasingly robust data with respect to the Company’s utilization of carbon producing substances in an effort to continuously reduce the Company’s carbon footprint. In 2019, the Company published a sustainability report identifying the various actions and behaviors the Company adopted in 2018 concerning its commitment to both the environment and the broader topic of social responsibility. The Company has continued to publish a sustainability report (which was renamed the ESG Report in 2022) on an annual basis. In November 2024, the Company published its 2024 ESG Report, detailing the Company’s efforts to address its environmental impact and uphold its social responsibilities in 2024. See Item 1A, Risk Factors – The effects of climate change could harm the Company’s business, for more information on the potential significance of climate change legislation. See also Note 17 in the Notes to the Consolidated Financial Statements for financial information about geographic areas.

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Available Information

The Company files or furnishes all required reports with the SEC. The Company is an electronic filer and the SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The address of the SEC electronic filing website is http://www.sec.gov. The Company also makes available, free of charge on its website, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The website address for Waters Corporation is http://www.waters.com and SEC filings can be found under the caption “Investors”. The Company is providing its website address solely for the information of investors. The Company does not intend the address to be an active link or to otherwise incorporate the contents of the website, including any reports that are noted in this annual report on Form 10-K (this “Annual Report”) as being posted on the website, into this Annual Report. Investors and others should note that we may announce material information to our investors using our investor relations website (ir.waters.com), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media, to communicate with our investors and the public about our Company, our business and other issues. It is possible that the information that we post on these channels could be deemed to be material information. We therefore encourage investors to visit these websites from time to time.

Forward-Looking Statements

This Annual Report, including the information incorporated by reference herein, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not statements of historical fact may be deemed forward-looking statements. You can identify these forward-looking statements by the use of the words “feels”, “believes”, “anticipates”, “plans”, “expects”, “may”, “will”, “would”, “intends”, “suggests”, “appears”, “estimates”, “projects”, “should” and similar expressions, whether in the negative or affirmative. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the control of the Company, including, and without limitation:

| • |  | foreign currency exchange rate fluctuations potentially affecting translation of the Company’s future non-U.S. operating results, particularly when a foreign currency weakens against the U.S. dollar;

| • |  | current global economic, sovereign and political conditions and uncertainties, including the effect of new or proposed tariff or trade regulations, as well as other new or changed domestic and foreign laws, regulations and policies (or new interpretations thereof), inflation and interest rates, the impacts and costs of war, in particular as a result of the ongoing conflicts between Russia and Ukraine and in the Middle East, and the possibility of further escalation resulting in new geopolitical and regulatory instability;

| • |  | economic conditions in China, trade tensions and tariffs between the U.S. and China and their impact on our business, increased competition from local and international competitors in China, the Chinese government’s ongoing tightening of restrictions on procurement by government-funded customers and other regulatory and other challenges and uncertainties in the Chinese market;

| • |  | the Company’s ability to access capital, maintain liquidity and service the Company’s debt in volatile market conditions;

| • |  | changes in timing and demand for the Company’s products among the Company’s customers and various market sectors, particularly as a result of fluctuations in their expenditures or ability to obtain funding;

| • |  | the ability to realize the expected benefits related to the Company’s various cost-saving initiatives, including workforce reductions and organizational restructurings;

| • |  | the introduction of competing products by other companies and loss of market share, as well as pressures on prices from competitors and/or customers;

| • |  | changes in the competitive landscape as a result of changes in ownership, mergers and continued consolidation among the Company’s competitors;

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| • |  | regulatory, economic and competitive obstacles to new product introductions, lack of acceptance of new products and inability to grow organically through innovation;

| • |  | rapidly changing technology and product obsolescence;

| • |  | the risks related to the development, deployment and use of artificial intelligence (“AI”);

| • |  | a failure to timely and effectively use AI and embed it into new product offerings and services that negatively impacts our competitiveness;

| • |  | risks associated with previous or future acquisitions, strategic investments, joint ventures and divestitures, including risks associated with achieving the anticipated financial results and operational synergies, contingent purchase price payments and expansion of our business into new or developing markets;

| • |  | risks associated with unexpected disruptions in operations, including risks associated with our transition to a new ERP system;

| • |  | risks related to any public health crisis or pandemic, climate change, severe weather and geological conditions or events or other events beyond our control;

| • |  | failure to adequately protect the Company’s intellectual property, infringement of intellectual property rights of third parties and inability to obtain licenses on commercially reasonable terms;

| • |  | the Company’s ability to acquire adequate sources of supply and its reliance on outside contractors for certain components and modules, as well as disruptions to its supply chain;

| • |  | risks associated with third-party sales intermediaries and resellers;

| • |  | the impact and costs of changes in statutory or contractual tax rates in jurisdictions in which the Company operates as well as shifts in taxable income among jurisdictions with different effective tax rates, the outcome of ongoing and future tax examinations and changes in legislation affecting the Company’s effective tax rate;

| • |  | the Company’s ability to attract and retain qualified employees and management personnel;

| • |  | risks associated with cybersecurity and our information technology infrastructure, including attempts by third parties, both private and state-sponsored, to defeat the information security measures of the Company or its third-party partners and gain unauthorized access to sensitive and proprietary Company products, services, systems, or data;

| • |  | risks associated with compliance with data privacy and information security laws and regulations regarding the collection, transmission, storage and use of personally identifying information;

| • |  | increased regulatory burdens as the Company’s business evolves, especially with respect to the U.S. Food and Drug Administration and U.S. Environmental Protection Agency, among others, and in connection with government contracts;

| • |  | regulatory, environmental and logistical obstacles affecting the distribution of the Company’s products, completion of purchase order documentation and the ability of customers to obtain letters of credit or other financing alternatives;

| • |  | risks associated with litigation and other legal and regulatory proceedings; and

| • |  | the impact and costs incurred from changes in accounting principles and practices.

Certain of these and other factors are further described below in Item 1A, Risk Factors, of this Annual Report. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements, whether because of these factors or for other reasons. All forward-looking statements speak only as of the date of this Annual Report, and forward-looking statements in documents that are incorporated by reference hereto speak only as of the date of those documents. Such forward-looking statements are expressly qualified in their entirety by the cautionary statements included in this report. Except as required by law, the Company does not assume any obligation to update any forward-looking statements.

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Item 1A: Risk Factors

The Company is subject to risks and uncertainties, including, but not limited to, the following:

RISKS RELATED TO MACROECONOMIC CONDITIONS

The Company’s international operations may be negatively affected by political events, wars or terrorism, economic conditions and regulatory changes, related to either a specific country or a larger region. These potential political, currency and economic disruptions, as well as foreign currency exchange rate fluctuations, could have a material adverse effect on the Company’s results of operations or financial condition.

Approximately 68% and 69% of the Company’s net sales in 2024 and 2023, respectively, were outside of the United States and were primarily denominated in foreign currencies. In addition, the Company has considerable manufacturing operations in Ireland and the U.K., as well as significant subcontractors located in Singapore. As a result, a significant portion of the Company’s sales and operations are subject to certain risks, including adverse developments in the political, regulatory and economic environment, in particular, uncertainty regarding possible changes to foreign and domestic trade policy; trade protection measures, including embargoes, sanctions and tariffs; impact and costs of terrorism or war, in particular as a result of the ongoing conflict between Russia and Ukraine and in the Middle East, and the possibility of further escalation resulting in new geopolitical and regulatory instability; the financial difficulties and debt burden experienced by a number of European countries; sudden movements in a country’s foreign exchange rates due to a change in a country’s sovereign risk profile or foreign exchange regulatory practices; differing tax laws and changes in those laws; restrictions on investments and/or limitations regarding foreign ownership; nationalization of private enterprises which may result in the confiscation of assets; credit risk and uncertainties regarding the collectability of accounts receivable; the impact of global health crises, pandemics and epidemics; changes in inflation and interest rates; instability in the global banking industry; rising energy prices and potential energy shortages; difficulties in protecting intellectual property; difficulties in staffing and managing foreign operations; and associated adverse operational, contractual and tax consequences.

In 2024, the Company generated $397 million of total net sales from China, down from $565 million in 2022. This significant 30% reduction in sales from China resulted from lower customer demand for our products across all customer classes, driven by various factors. Such factors include a decline in the economic conditions in China, trade tensions and tariffs between the U.S. and China and their impact on our business and particularly customers’ purchasing decisions, increased competition from local and international competitors in China, the Chinese government’s ongoing tightening of restrictions on procurement by government-funded customers and other regulatory and compliance challenges and uncertainties in the Chinese market, all of which had, and may continue to have, an adverse effect on our business and operations in China. For example, in March 2024, the Company had a reduction in workforce that impacted approximately 2% of its employees, primarily in China due to the significant decline in sales resulting from lower customer demand.

In particular, China’s government continues to play a significant role in regulating industry development by imposing sector-specific policies, and it maintains control over China’s economic growth through setting monetary policy and determining treatment of particular industries or companies. The U.S. government has called for substantial changes to foreign trade policy with China and has recently raised, and has proposed to further raise in the future, tariffs on several Chinese goods. China has retaliated with increased tariffs on U.S. goods, which may increase our cost of doing business in China. Any further changes in U.S. trade policy could trigger retaliatory actions by affected countries, including China, resulting in trade wars and increased costs for goods imported into the U.S. and impacting our ability to sell our products in China and other affected countries. Accordingly, our financial position or results of operations can be adversely influenced by political, economic, legal, compliance, social and business conditions in China generally.

Additionally, the U.S. dollar value of the Company’s net sales, cost of sales, operating expenses, interest, taxes and net income varies with foreign currency exchange rate fluctuations. Significant increases or decreases

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in the value of the U.S. dollar relative to certain foreign currencies, particularly the euro, Japanese yen, British pound and Chinese renminbi, could have a material adverse effect or benefit on the Company’s results of operations or financial condition.

From time to time, the Company enters into certain foreign currency exchange contracts that are intended to offset some of the market risk associated with sales denominated in foreign currencies. We cannot predict the effectiveness of these transactions or their impact upon our future operating results, and from time to time they may negatively affect our quarterly earnings.

Global economic conditions may have an adverse effect on the demand for, and supply of, the Company’s products and harm the Company’s financial results.

The Company is a global business that may be adversely affected by changes in global economic conditions such as changes in the rate of inflation (including the cost of raw materials, commodities and supplies) and interest rates. Both our domestic and international markets experience varying degrees of inflationary and interest rate pressures. These changes in global economic conditions may affect the demand for, and supply of, the Company’s products and services. This may result in a decline in sales in the future, increased rate of order cancellations or delays, increased risk of excess or obsolete inventories, longer sales cycles and potential difficulty in collecting sales proceeds. There can be no assurance regarding demand for the Company’s products and services in the future.

Disruption in worldwide financial markets could adversely impact the Company’s access to capital and financial condition.

Financial markets in the U.S., Europe and Asia have experienced times of extreme disruption, including, among other things, sharp increases in the cost of new capital, credit rating downgrades and bailouts, severely diminished capital availability and severely reduced liquidity in money markets. Financial and banking institutions have also experienced disruptions, resulting in large asset write-downs, higher costs of capital, rating downgrades and reduced desire to lend money. There can be no assurance that there will not be future deterioration or prolonged disruption in financial markets or financial institutions. Any future deterioration or prolonged disruption in financial markets or financial institutions in which the Company participates may impair the Company’s ability to access its existing cash, utilize its existing syndicated bank credit facility funded by such financial institutions or access sources of new capital, which it may need to meet its capital needs. The cost to the Company of any new capital raised and interest expense would increase if this were to occur.

Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on the Company’s business and operations.

Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on our business and operations, including Company sales and cash flow. Such public health crises, epidemics and pandemics have the potential to create significant volatility, uncertainty and worldwide economic disruption, resulting in an economic slowdown of potentially extended duration, as seen with the COVID-19 pandemic from 2020 to 2022. The Company’s global operations expose it to risks associated with such public health crises, epidemics and pandemics, which could have an adverse effect on its business, results of operations and financial condition. The degree to which such public health crisis, epidemics or pandemics ultimately affects the Company’s business, results of operations and financial condition is highly uncertain and cannot be predicted.

RISKS RELATED TO OUR BUSINESS

The Company’s financial results are subject to changes in customer demand, which may decrease for a number of reasons, many beyond the Company’s control.

The demand for the Company’s products is dependent upon the size of the markets for its LC, LC-MS, light scattering, thermal analysis, rheometry and calorimetry products; the timing and level of capital spending and expenditures of the Company’s customers; changes in governmental regulations, particularly those affecting drug, food and drinking water testing; funding available to academic, governmental and research institutions;

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health policy; export controls; general economic conditions and the rate of economic growth in the Company’s major markets; and competitive considerations. Policy, regulatory and enforcement changes introduced by the new presidential administration and regulatory leadership in the United States may impact the business and capital expenditure strategies of the Company’s customers, which in turn could adversely impact the Company’s results of operations or financial condition. The Company typically experiences seasonality in its orders that is reflected as an increase in sales in its fourth quarter as a result of purchasing habits for capital goods by customers that tend to exhaust their spending budgets by calendar year-end. However, there can be no assurance that the Company will effectively forecast customer demand and appropriately allocate research and development expenditures to products with high growth and high margin prospects. Additionally, there can be no assurance that the Company’s results of operations or financial condition will not be adversely impacted by a change in any of the factors listed above or the continuation of uncertain global economic conditions.

The analytical instrument market may also, from time to time, experience low sales growth. Approximately 58% and 57% of the Company’s net sales in 2024 and 2023, respectively, were to worldwide pharmaceutical accounts, which are periodically subject to unfavorable market conditions and consolidations. Unfavorable industry conditions could have a material adverse effect on the Company’s results of operations or financial condition.

Competitors may introduce more effective or less expensive products than the Company’s, which could result in decreased sales. The competitive landscape may transform as a result of potential changes in ownership, mergers and continued consolidations among the Company’s competitors, which could harm the Company’s business.

The analytical instrument market, and, in particular, the portion related to the Company’s HPLC, UPLC, LC-MS, light scattering, thermal analysis, rheometry and calorimetry product lines, is highly competitive. The Company encounters competition from several international instrument suppliers and other companies in both domestic and foreign markets. Some competitors have instrument businesses that are generally more diversified than the Company’s business but are typically less focused on the Company’s chosen markets. Over the years, some competitors have merged with other competitors for various reasons, including increasing product line offerings, improving market share and reducing costs. There can be no assurance that the Company’s competitors will not introduce new, disruptive technologies that displace the Company’s existing technologies or more effective and less costly products than those of the Company or that the Company will be able to increase its sales and profitability from new product introductions. There can be no assurance that the Company’s sales and marketing forces will compete successfully against the Company’s competitors in the future.

Strategies for organic growth require developing new technologies and bringing these new technologies to market, which could negatively impact the Company’s financial results.

The Company’s corporate strategy is fundamentally based on winning through organic innovation and deep application expertise. The Company is in the process of developing new products with recently acquired technologies. The future development of these new products will require a significant amount of spending over the next few years before any significant, robust sales will be realized. Furthermore, these new products will be sold into both the non-clinical and clinical markets, and any new products requiring FDA clearance may take longer to bring to market. There can be no assurance given as to the timing of these new product launches and the ultimate realization of sales and profitability in the future.

In addition, the Company’s products are subject to rapid changes in technology. Rapidly changing technology could make some or all of our product lines obsolete unless the Company is able to continually improve our existing products and develop new products. If the Company fails to develop and introduce products in a timely manner in response to changing technology, market demands or the requirements of our customers, the Company’s product sales may decline, and we could experience an adverse effect on our results of operations or financial condition.

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Issues and uncertainties related to the development, deployment and use of artificial intelligence in the Company’s business operations and products may result in harm to the Company’s reputation, regulatory action or legal liability.

The Company is beginning to integrate artificial intelligence (“AI”) into its business operations and products and continues to research further uses and opportunities for AI development. As AI is a rapidly developing technology that is still in the early stages of being researched and understood, the development, deployment and use of AI presents novel risks and challenges that have the potential to adversely impact the Company’s business. The premature use of inadequate AI or the use of deficient AI, including flawed or biased algorithms, could harm the Company’s brand, reputation or competitive advantage or result in regulatory penalties or legal liability. Failures in AI functionality could result in delays in new product offerings and services and have an adverse impact on other business activities. Delays or disruptions in successfully developing and implementing AI as part of the Company’s business activities, products or services could have a negative impact on the Company’s competitiveness, particularly if competitors are successful in making and leveraging such advancements, and the development of adequate AI technology will require significant investment. Due to the novelty of AI technology, the Company may also experience additional risks that cannot yet be predicted.

Laws and regulations arising from the use and development of AI technology present additional uncertainties and risks to the Company. In particular, the use and development of AI implicates risks related to intellectual property, data protection and privacy laws and regulations. Due to the rapid developments being made in AI technology, the legal and regulatory landscape related to AI is constantly evolving. Complying with developing laws, regulations and standards could significantly burden the Company, and failures to comply could result in legal liability, regulatory action or reputational harm.

The Company may face risks associated with previous or future acquisitions, strategic investments, joint ventures and divestitures.

In the normal course of business, the Company may engage in discussions with third parties relating to possible acquisitions, strategic investments, joint ventures and divestitures. The Company may pursue transactions that complement or augment its existing products and services, such as the Wyatt acquisition that was completed in May 2023. Such transactions involve numerous risks, including difficulties in integrating the acquired operations, technologies and products; diversion of management’s attention from other business concerns; inability to predict financial results; potential departures of key employees of the acquired company; and difficulties in effectively transferring divested businesses and liabilities. If the Company successfully identifies acquisitions in the future, completing such acquisitions may result in new issuances of the Company’s stock that may be dilutive to current owners; increases in the Company’s debt and contingent liabilities; and additional amortization expense related to intangible assets. For example, the Company financed the Wyatt acquisition, in part, through borrowings under its revolving credit facility, resulting in a significant increase in the Company’s outstanding debt. Acquired businesses may also expose the Company to new risks and new markets, and the Company may have difficulty addressing these risks in a cost-effective and timely manner. Any of these transaction-related risks could have a material adverse effect on the Company’s profitability. In addition, the Company may not be able to identify, successfully complete, or integrate potential acquisitions in the future. Even if the Company can do so, it cannot be sure that these acquisitions will have a positive impact on the Company’s business or operating results.

The Company’s software or hardware may contain coding or manufacturing errors that could impact their function, performance and security, and result in other negative consequences.

Despite testing prior to the release and throughout the lifecycle of a product or service, the detection and correction of any errors in released software or hardware can be time consuming and costly. This could delay the development or release of new products or services, or new versions of products or services, create security vulnerabilities in the Company’s products or services, and adversely affect market acceptance of products or services. If the Company experiences errors or delays in releasing its software or hardware, or new versions thereof, its sales could be affected, and revenues could decline. Errors in software or hardware could expose the Company to product liability, performance and warranty claims as well as harm to brand and reputation, which could impact future sales.

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A successful product liability claim brought against the Company in excess of, or outside the coverage of, the Company’s insurance coverage could have a material adverse effect on our business, financial condition and results of operations. The Company may not be able to maintain product liability insurance on acceptable terms, if at all, and insurance may not provide adequate coverage against potential liabilities.

Disruption of operations, including at the Company’s manufacturing facilities, or disruption or failure of the Company’s key technology systems could have a material impact on the Company’s business, results of operations and financial condition.

The Company manufactures LC instruments at facilities in Milford, Massachusetts and through a subcontractor in Singapore; precision chemistry separation columns at its facilities in Taunton, Massachusetts and Wexford, Ireland; MS products at its facilities in Wilmslow, England, Birmingham, England and Wexford, Ireland; thermal analysis and rheometry products at its facilities in New Castle, Delaware; and other instruments and consumables at various other locations as a result of the Company’s acquisitions. Any prolonged disruption to the operations at any of these facilities, whether due to labor difficulties, destruction of or damage to any facility, power interruptions, cybersecurity incidents, failure of key technology systems, weather events or natural disasters (including the potential impacts of climate change) or other reasons, could harm our customer relationships, impede our ability to generate sales and have a material adverse effect on the Company’s results of operations or financial condition.

Our worldwide enterprise resource planning (“ERP”) system is integral to our ability to accurately and efficiently maintain our books and records, record transactions, coordinate resource allocation between our manufacturing facilities across the globe, provide critical information to our management, and prepare our financial statements. In December 2024, the Company’s Board of Directors approved the implementation of a new worldwide ERP system, which is expected to provide enhanced operating efficiencies, process alignment, information sharing, and scalability compared to the Company’s existing ERP system. While implementation of the new ERP system is currently underway, the full transition to the new ERP system is expected to be a multi-year process. Transitioning from the existing ERP system to the new ERP system has required and will continue to require significant investment of human and financial resources, and we may experience significant increases to inherent costs and risks associated with such a transition, including capital expenditures, additional operating expenses, demands on management time and other risks and costs of delays or potential challenges, such as the cost of training personnel, migration of data, the potential instability of the new ERP system and cost overruns. A significant disruption or deficiency in the design or implementation of the new ERP system may adversely affect our ability to process orders, ship product, send invoices and track payments, fulfil contractual obligations, maintain effective disclosure controls and internal control over financial reporting or otherwise operate our business and, as a result, may have an adverse and material adverse effect on our results of operations or financial condition.

Failure to adequately protect intellectual property could have materially adverse effects on the Company’s results of operations or financial condition.

Our success depends on our ability to obtain, maintain, and enforce patents on our technology, maintain our trademarks, and protect our trade secrets. There can be no assurance that any patents held by the Company will not be challenged, invalidated or circumvented or that the rights granted thereunder will provide competitive advantages to the Company. Additionally, there could be successful claims against the Company by third-party patent holders with respect to certain Company products that may infringe the intellectual property rights of such third parties. In the event that a claim relating to intellectual property is asserted against the Company, or third parties hold pending or issued patents that relate to the Company’s products or technology, the Company may seek licenses to such intellectual property or challenge those patents. However, the Company may be unable to obtain these licenses on commercially reasonable terms, if at all, and the challenge of the patents may be unsuccessful. The Company’s failure to obtain the necessary licenses or other rights could impact the sale, manufacture, or distribution of its products and, therefore, could have a material adverse effect on its results of operations and financial condition. The Company’s patents, including those licensed from others, expire on various dates.

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The Company also depends in part on its trademarks and the strength of its proprietary brands, which the Company considers important to its business. The Company’s inability to protect or preserve the value of its intellectual property rights for any reason, including the Company’s inability to successfully defend against counterfeit, knock-offs, grey-market, infringing or otherwise unauthorized products, could damage the Company’s brand and reputation and harm its business.

The Company also relies on trade secrets and proprietary know-how with which it seeks to protect its products, in part, by confidentiality agreements with its collaborators, employees and consultants. These agreements may not adequately protect the Company’s trade secrets and other proprietary rights. These agreements may be breached, and the Company may not have adequate remedies for any breach. In addition, the Company’s trade secrets may otherwise become known or be independently developed by its competitors. If the Company is unable to protect its intellectual property rights, it could have an adverse and material effect on the Company’s results of operations or financial condition.

The Company’s business would suffer if the Company were unable to acquire adequate sources of supply.

Most of the raw materials, components and supplies purchased by the Company are available from a number of different suppliers; however, a number of items are purchased from limited or single sources of supply. Consolidation among such suppliers could also result in other limited or sole-source suppliers for the Company in the future. Disruption of these sources could have, at a minimum, a temporary adverse effect on shipments and the financial results of the Company. In addition, price increases from these suppliers, including as a result of any imposed tariffs, could have an adverse effect on the Company’s margins. A prolonged inability to obtain certain materials or components or a sustained material cost increase to source such materials and components could have an adverse effect on the Company’s financial condition or results of operations and could result in damage to its relationships with its customers and, accordingly, adversely affect the Company’s business.

The Company’s sales would deteriorate if the Company’s outside contractors fail to provide necessary components or modules.

Certain components or modules of the Company’s LC and MS instruments are manufactured by outside contractors, including the manufacturing of LC instrument systems and related components by contract manufacturing firms in Singapore. The ability of these contractors to perform their obligations is largely outside of the Company’s control. Failure by these outside contractors to perform their obligations in a timely manner or at satisfactory quality levels could have an adverse effect on the supply chain and the financial results of the Company. In addition, if one or more of such contractors experience significant disruption in services or institute a significant price increase, the Company may have to seek alternative providers, its costs could increase and the delivery of its products could be prevented or delayed. A prolonged inability to obtain these components or modules could have an adverse effect on the Company’s financial condition or results of operations.

The Company’s business could be harmed by actions of third-party sales intermediaries and other third parties that sell our products.

The Company sells some products through third parties, including third-party sales intermediaries and value-added resellers. This exposes us to various risks, including competitive pressure, concentration of sales volumes, credit risks and compliance risks. We may rely on one or a few key third-party sales intermediaries for a product or market and the loss of these third-party sales intermediaries could reduce our revenue or net earnings. Third-party sales intermediaries may also face financial difficulties, including bankruptcy, which could harm our collection of accounts receivable. Moreover, violations of the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act or similar anti-bribery laws by distributors or other third-party intermediaries could materially and adversely impact our business, reputation and results of operations. Risks related to our use of third-party sales intermediaries and other third parties may reduce sales, increase expenses and weaken our competitive position.

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The Company is subject to laws and regulations governing government contracts, and failure to address these laws and regulations or comply with government contracts could harm its business by leading to a reduction in revenues associated with these customers.

The Company derives a portion of its revenue from direct and indirect sales to U.S. federal, state and local as well as foreign governments and their respective agencies, and, as a result, it is subject to various statutes and regulations that apply to companies doing business with the government. The laws governing government contracts differ from the laws governing private contracts and government contracts may contain pricing terms and conditions that are not applicable to private contracts. The Company is also subject to investigation for compliance with the regulations governing government contracts. A failure to comply with these regulations could result in suspension of these contracts, criminal, civil and administrative penalties or debarment, which could negatively impact the Company’s business and operations. If the Company’s government contracts are terminated, if it is suspended from government work or if its ability to compete for new contracts is adversely affected, the Company’s business could be negatively impacted.

The Company’s financial results are subject to unexpected shifts in pre-tax income between tax jurisdictions, changing application of tax law and tax audit examinations.

The Company is subject to rates of income tax that range from 0% up to 34% in various jurisdictions in which it conducts business. In addition, the Company typically generates a substantial portion of its income in the fourth quarter of each fiscal year. Geographical shifts in income from previous quarters’ projections caused by factors including, but not limited to, changes in volume and product mix and fluctuations in foreign currency translation rates, could therefore have potentially significant favorable or unfavorable effects on the Company’s income tax expense, effective tax rate and results of operations.

Governments in the jurisdictions in which the Company operates implement changes to tax laws and regulations from time to time. Starting in 2024, various foreign jurisdictions are beginning to implement aspects of the guidance issued by the Organization for Economic Co-operation and Development related to the new Pillar Two system of global minimum tax rules. These new tax laws and regulations, and any changes in corporate income tax rates or regulations regarding transfer pricing or repatriation of dividends or capital, as well as changes in the interpretation of existing tax laws and regulations, could adversely affect the Company’s cash flow and lead to increases in its overall tax burden, which would negatively affect the Company’s profitability. These changes in tax law did not have a material impact on the Company’s financial position, results of operations and cash flows in 2024. As of the date of this Annual Report, the Company does not anticipate that the Pillar Two tax rules will have a material impact on future periods.

The Company entered into a new Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026. Prior to April 1, 2021, the Company had a tax exemption in Singapore on certain types of income, based upon the achievement and continued satisfaction of certain operational and financial milestones, which the Company met as of December 31, 2020 and maintained through March 2021. The Company had determined that it was more likely than not to realize the tax exemption in Singapore and, accordingly, did not recognize any reserves for unrecognized tax benefits on its balance sheet related to this tax exemption. If any of the milestone targets were not met, the Company would not have been entitled to the tax exemption on income earned in Singapore dating back to the start date of the agreement (April 1, 2016), and all the tax benefits previously recognized would be reversed, resulting in the recognition of income tax expense equal to the statutory tax of 17% on income earned during that period.

As a global business, the Company is subject to tax audit examinations in various jurisdictions throughout the world. The Company must manage the cost and disruption of responding to governmental audits, investigations and proceedings. In addition, the impact of the settlement of pending or future tax audit examination could have an unfavorable effect on the Company’s income tax expense, effective tax rate and results of operations.

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The Company may be required to recognize impairment charges for our goodwill and other intangible assets.

As of December 31, 2024, the net carrying value of the Company’s goodwill and other intangible assets totaled approximately $1.9 billion. The Wyatt acquisition significantly increased the carrying value of the Company’s goodwill and other intangible assets, which could lead to potential impairments if Wyatt’s financial results are significantly less than anticipated in the future. In accordance with generally accepted accounting principles, the Company periodically assesses these assets to determine if they are impaired. Significant negative industry or economic trends, disruptions to the Company’s business, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of our assets, changes in the structure of our business, divestitures, market capitalization declines or increases in associated discount rates can impair the Company’s goodwill and other intangible assets. Any charges relating to such impairments adversely affect the Company’s financial statements in the periods recognized.

RISKS RELATED TO HUMAN CAPITAL MANAGEMENT

We may not be able to attract and retain qualified employees.

Our future success depends upon the continued service of our executive officers and other key management and technical personnel, and on our ability to continue to identify, attract, retain and motivate them. Implementing our business strategy requires specialized engineering and other talent, as our revenues are highly dependent on technological and product innovations. The market for employees in our industry is extremely competitive, and competitors for talent, particularly engineering talent, increasingly attempt to hire, and to varying degrees have been successful in hiring, our employees. A number of such competitors for talent are significantly larger than us and are able to offer compensation in excess of what we are able to offer. Additionally, macroeconomic conditions, including wage inflation, could have a material impact on our ability to attract and retain talent, our turnover rate and the cost of operating our business. During 2024 and 2023, the Company made organizational changes to better align its resources with its growth and innovation strategies, resulting in a worldwide workforce reduction that impacted approximately 5% of the Company’s employees. These workforce reductions may not have the desired impact on our cost-saving initiatives, as they could adversely affect our productivity, morale, customer relationships, product quality, innovation capabilities and ability to execute our strategic plans. Moreover, these workforce reductions could expose us to potential litigation, severance costs, reputational damage and loss of key personnel. If we are unable to manage the effects of these workforce reductions or achieve the expected benefits from them, our business, financial condition and results of operations could be materially and adversely affected. Further, existing immigration laws make it more difficult for us to recruit and retain highly skilled foreign national graduates of universities in the United States, making the pool of available talent even smaller. If we are unable to attract and retain qualified employees, our business may be harmed.

The loss of key members of management and the risks inherent in succession planning could adversely affect the Company’s results of operations or financial condition.

The operation of the Company requires managerial and operational expertise. None of the Company’s key management employees, with the exception of the Chief Executive Officer and Chief Financial Officer, have an employment contract with the Company and there can be no assurance that such individuals will remain with the Company. If, for any reason, other key personnel do not continue to be active in management, the Company’s results of operations or financial condition could be adversely affected. The Company’s success also depends on its ability to execute leadership succession plans. The inability to successfully transition key management roles could have a material adverse effect on the Company’s operating results.

RISKS RELATED TO CYBERSECURITY AND DATA PRIVACY

Disruption, cyber-attack or unforeseen problems with the security, maintenance or upgrade of the Company’s information and web-based systems could have an adverse effect on the Company’s business strategy, results of operations and financial condition.

The Company relies on its technology infrastructure and that of its third-party partners, including its software and banking partners, among other functions, to interact with suppliers, sell products and services, fulfill contract

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obligations, ship products, collect and make electronic wire and check based payments and otherwise conduct business. The Company’s technology infrastructure and that of its third-party partners has been, and may in the future be, vulnerable to damage or interruption from, but not limited to, natural disasters, power loss, telecommunication failures, terrorist attacks, computer viruses, ransomware, unauthorized access to customer or employee data, unauthorized access to and funds transfers from Company bank accounts and other attempts to harm the Company’s systems. The risk of damage or interruption to technology infrastructure as a result of cyber-attacks has generally increased as the number, intensity and sophistication of attempted attacks from around the world have increased, including through state-sponsored actors and/or the use of artificial intelligence.

In the event of such an incident, the Company has in the past, and may in the future, suffer interruptions in service, loss of assets or data or reduced functionality. The Company attempts to mitigate cybersecurity risks by employing a number of proactive measures, including mandatory ongoing employee training and awareness, technical security controls, enhanced data protection and maintenance of backup and protective systems. Despite these mitigation measures, the Company’s systems and those of its partners remain potentially vulnerable to cybersecurity threats, any of which could have a material adverse effect on the Company’s business. To date, cybersecurity incidents have not resulted in a material adverse impact to the Company’s business strategy, results of operations, or financial condition, but future incidents could have such an impact. Additionally, the Company must maintain and periodically upgrade its information and web-based systems, which has caused and will in the future cause temporary interruptions to its technology infrastructure. Any prolonged disruption to the Company’s technology infrastructure, at any of its facilities, could have a material adverse effect on the Company’s business strategy, results of operations or financial condition. While the Company maintains cyber insurance, this insurance may not, however, be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of its systems.

If the Company’s security measures are compromised or fail to adequately protect its technology infrastructure, research and development efforts or manufacturing operations, the Company’s products and services may be perceived as vulnerable or unreliable, the information protected by the Company’s controls and processes may be subject to unauthorized access, acquisition or modification, the Company’s brand and reputation could be damaged, the services that the Company provides to its customers could be disrupted, and customers may stop using the Company’s products and services, all of which could reduce the Company’s revenue and earnings, increase its expenses and expose it to legal claims and regulatory actions.

The Company is in the business of designing, manufacturing, selling and servicing analytical instruments to life science, pharmaceutical, biochemical, industrial, nutritional safety and environmental, academic and governmental customers working in research and development, quality assurance and other laboratory applications, and the Company is also a developer and supplier of software and software-based products that support instrument systems. Many of the Company’s customers are in highly regulated industries. While the Company has invested time and resources implementing measures designed to protect the integrity and security of its technology infrastructure, research and development processes, manufacturing operations, products and services, and the internal and external data managed by the Company, there is a risk these measures will be defeated or compromised or that they are otherwise insufficient to protect against existing or emerging threats. The Company also has acquired companies, products, services and technologies over time and may face inherent risk when integrating these acquisitions into the Company. In addition, at times, the Company faces attempts by third parties to defeat its security measures or exploit vulnerabilities in its systems. These risks will increase as the Company continues to grow and expand geographically, and its systems, products and services become increasingly digital and sensor- and web-based.

The Company could suffer significant damage to its brand and reputation if a security incident resulted in unauthorized access to, acquisition of, or modification to the Company’s technology infrastructure, research and development processes, manufacturing operations, its products and services as well as the internal and external data managed by the Company. Such an incident could disrupt the Company’s operations and customers could lose confidence in the Company’s ability to deliver quality and reliable products or services. This could negatively impact sales and could increase costs related to fixing and addressing these incidents and any

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vulnerabilities exposed by them, as well as to lawsuits, regulatory investigations, claims or legal liability including contractual liability, costs and expenses owed to customers and business partners.

The Company is subject to varying data privacy laws and regulations, and a violation of such laws and regulations could have a negative impact on the Company’s business, results of operations and financial condition.

The Company is subject to varying data privacy laws and regulations related to the collection, storage and transmission of personal data in jurisdictions including the United States, the European Union and the United Kingdom, among others. The legal and regulatory landscape relating to data privacy is continuously changing, and there has been an increased emphasis on developing and enforcing privacy and data protection laws. In addition to regulatory consequences, any failure to protect personal data may damage the Company’s reputation or relationships with its customers, employees and partners. Safeguarding personal data and complying with related laws and regulations creates significant costs for the Company, and a failure to comply could result in legal liability, regulatory action or reputational harm, which could adversely affect the Company’s business, results of operations and financial condition.

RISKS RELATED TO COMPLIANCE, REGULATORY OR LEGAL MATTERS

Changes in governmental regulations and compliance failures could harm the Company’s business.

The Company is subject to regulation by various federal, state and foreign governments and agencies in areas including, among others, health and safety, import/export, privacy and data protection, FCPA and environmental laws and regulations. A portion of the Company’s operations are subject to regulation by the FDA and similar foreign regulatory agencies. Regulations govern an array of product activities, including design, development, labeling, manufacturing, promotion, sales and distribution. These regulations are complex and can change frequently (including as a result of changes in interpretation of existing regulations). In particular, significant political shifts in any of the countries in which the Company conducts business, including the United States, may result in regulatory uncertainty and substantial changes in the regulatory regimes to which the Company is subject. For example, the new presidential administration and regulatory leadership in the United States may propose, enact or pursue policy, regulatory and enforcement changes that create additional uncertainty for our business. Any failure by the Company to comply with applicable governmental regulations could result in product recalls, the imposition of fines, restrictions on the Company’s ability to conduct or expand its operations or the cessation of all or a portion of its operations. Additionally, the Company develops, configures and markets its products and services to meet customer needs created by these regulations, and any significant change in regulations could reduce demand for its products, increase its expenses or otherwise materially impact its financial position and results of operations.

Regulators globally are increasingly imposing greater fines and penalties for privacy and data protection violations, and the European Union, as an example, has enacted a broad data protection regulation with fines based on a percentage of global revenues. Changes in laws or regulations associated with enhanced protection of certain sensitive types of personal information, such as information related to health, could greatly increase the cost of compliance and the cost of providing the Company’s products or services. Any failure, or perceived failure, by the Company to comply with laws and regulations on privacy, data security or consumer protection, or other policies, public perception, standards, self-regulatory requirements or legal obligations, could result in lost or restricted business, proceedings, actions or fines brought against the Company or levied by governmental entities or others, or could otherwise adversely affect the business and harm the Company’s reputation.

Some of the Company’s operations are subject to domestic and international laws and regulations with respect to the manufacturing, handling, use or sale of toxic or hazardous substances. This requires the Company to devote substantial resources to maintain compliance with those applicable laws and regulations. If the Company fails to comply with such requirements in the manufacturing or distribution of its products, it could face civil and/or criminal penalties and potentially be prohibited from distributing or selling such products until they are compliant.

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Some of the Company’s products are also subject to the rules of certain industrial standards bodies, such as the International Standards Organization. The Company must comply with these rules, as well as those of other agencies, such as the United States Occupational Safety and Health Administration. Failure to comply with such rules could result in the loss of certification and/or the imposition of fines and penalties, which could have a material adverse effect on the Company’s operations.

As a publicly traded company, the Company is subject to the rules of the SEC and the New York Stock Exchange. In addition, the Company must comply with the Sarbanes-Oxley regulations, which require the Company to establish and maintain adequate internal control over financial reporting. The Company’s efforts to comply with such laws and regulations are time consuming and costly. While we continue to enhance our controls, we cannot be certain that we will be able to prevent future significant deficiencies or material weaknesses. Failure to comply with such regulations or having inadequate internal controls could have a material adverse effect on the Company’s financial condition and operations, which could cause investors to lose confidence in our reported financial information and could have a negative effect on the trading price of our stock and our access to capital.

The Company is subject to the rules of the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which require disclosure as to whether certain materials (tantalum, tin, gold and tungsten), known as conflict minerals, which may be contained in the Company’s products, are mined from the Democratic Republic of the Congo and adjoining countries. In 2023, the Company was not able to determine with certainty the country of origin of some of the conflict minerals in its manufactured products. However, the Company does not have knowledge that any of its conflict minerals originated from the Democratic Republic of the Congo or adjoining countries. The Company is in the process of evaluating its 2024 supply chain, and the Company plans to file its 2024 Form SD with the SEC in May 2025. The results of this and future evaluations may impose additional costs and may introduce new risks related to the Company’s ability to verify the origin of any conflict minerals contained in its products.

The Company may be harmed by improper conduct of any of our employees, agents or business partners.

We cannot provide assurance that our internal controls and compliance systems will always protect the Company from acts committed by employees, agents or business partners that would violate domestic and international laws, including laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, export and import compliance, money laundering and data privacy. In particular, the FCPA, the U.K. Bribery Act and similar anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business, and we operate in many parts of the world that have experienced governmental corruption to some degree. Any such improper actions or allegations of such acts could damage our reputation and subject us to civil or criminal investigations in the U.S. and in other jurisdictions and related shareholder lawsuits, could lead to substantial civil and criminal, monetary and non-monetary penalties and could cause us to incur significant legal and investigatory fees. In addition, the government may seek to hold us liable as a successor for violations committed by companies in which we invest or that we acquire. We also rely on our suppliers to adhere to our supplier standards of conduct and material violations of such standards of conduct could occur that could have a material effect on our business, reputation and financial statements. In addition, any allegations of issues resulting from the misuse of our products could, even if untrue, adversely affect our reputation and our customers’ willingness to purchase products from us. Any such allegations could cause us to lose customers and divert our resources from other tasks, which could materially and adversely affect our business and operating results.

Environmental, social and corporate governance (“ESG”) issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure related to public companies’ ESG

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practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor, customer, consumer, employee or other stakeholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmental stewardship and sustainability, support for local communities, director and employee diversity, human capital management, employee health and safety practices, product quality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and our customers and suppliers may be unwilling to continue to conduct business with us.

Customers, consumers, investors and other stakeholders are increasingly focusing on environmental issues, including climate change, energy and water use, plastic waste and other sustainability concerns. Concern over climate change or plastics and packaging materials, in particular, may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands or requirements regarding plastics and packaging materials, including single-use and non-recyclable plastic products and packaging, other components of our products and their environmental impact on sustainability, or increased customer and consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of substances present in certain of our products. Complying with these demands or requirements could cause us and companies in our supply chain to incur additional manufacturing, operating or product development costs.

If we do not adapt to or comply with new regulations, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, and customers and consumers may choose to stop purchasing our products, which could have a material adverse effect on our reputation, business or financial condition.

The Company is subject to or otherwise responsible for a variety of litigation and other legal and regulatory proceedings in the ordinary course of business that can adversely affect our business, results of operations and financial condition.

From time to time, the Company and its subsidiaries are subject to or otherwise responsible for a variety of litigation and other legal and regulatory proceedings in the ordinary course of business, as well as regulatory subpoenas, requests for information, investigations and enforcement. Defending or otherwise responding to these matters can divert the Company’s management’s attention and may cause it to incur significant expenses. The Company believes it has meritorious arguments in its current litigation matters and believes any outcome, either individually or in the aggregate, will not be material to the Company’s financial position or results of operations. 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.

GENERAL RISK FACTORS

The effects of climate change could harm the Company’s business.

The Company’s manufacturing processes for certain of its products involve the use of chemicals and other substances that are regulated under various international, federal, state and local laws governing the environment. In the event that any future climate change legislation would require that stricter standards be imposed by domestic or international environmental regulatory authorities with respect to the use and/or levels of possible emissions from such chemicals and/or other substances, the Company may be required to make certain changes and adaptations to its manufacturing processes. Any such changes could have a material adverse effect on the financial statements of the Company.

Another potential effect of climate change is an increase in the severity of global weather conditions. The Company’s manufacturing facilities are located in the U.S., U.K., Ireland and Germany. In addition, the Company manufactures a growing percentage of its HPLC, UPLC and MS products in both Singapore and Ireland. Severe weather and geological conditions or events, including earthquakes, hurricanes and/or tsunamis, could potentially cause significant damage to the Company’s manufacturing facilities in each of these countries. The effects of such damage and the resulting disruption of manufacturing operations and the impact of lost sales could have a material adverse impact on the financial results of the Company.

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Estimates and assumptions made in accounting for the Company’s results from operations are dependent on future results, which involve significant judgments and may be imprecise and may differ materially from actual results.

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities at the dates of the financial statements. These estimates and assumptions must be made due to certain information used in preparation of our financial statements which is dependent on future events, cannot be calculated with a high degree of precision from data available or is not capable of being readily calculated based on generally accepted methodologies. The Company believes that the accounting related to revenue recognition, goodwill and intangible assets, income taxes, uncertain tax positions, litigation, business combinations and asset acquisitions and inventory valuation involves significant judgments and estimates. Actual results for all estimates could differ materially from the estimates and assumptions used, which could have a material adverse effect on our financial condition and results of operations.

The Company’s financial condition and results of operations could be adversely affected by changes to the Company’s retirement plans or retirement plan assets.

The Company sponsors various retirement plans, both inside and outside the United States. Any changes in regulations made by governments in countries in which the Company sponsors retirement plans could adversely impact the Company’s cash flows or results of operations. In connection with these retirement plans, the Company is exposed to market risks associated with changes in the various capital markets. For example, changes in long-term interest rates affect the discount rate that is used to measure the Company’s retirement plan obligations and related expense. In addition, changes in the market value of investments held by the retirement plans could materially impact the funded status of the retirement plans and affect the related pension expense and level and timing of contributions required under applicable laws.

The Company’s financial condition and results of operations could be adversely affected if the Company is unable to maintain a sufficient level of cash flow.

The Company had $1.6 billion in debt and $325 million in cash, cash equivalents and investments as of December 31, 2024. As of December 31, 2024, the Company also had the ability to borrow an additional $1.6 billion from its existing, committed credit facility. All but a small portion of the Company’s debt was in the U.S. There is a substantial cash requirement in the United States to fund operations and capital expenditures, service debt interest obligations, finance potential United States acquisitions and continue authorized stock repurchase programs. As such, the Company’s financial condition and results of operations could be adversely impacted if the Company is unable to generate and maintain a sufficient level of cash flow to address these requirements through (1) cash from operations, (2) the Company’s ability to access its existing cash and revolving credit facility, (3) the ability to expand the Company’s borrowing capacity and (4) other sources of capital obtained at an acceptable cost.

Debt covenants, and the Company’s failure to comply with them, could negatively impact the Company’s capital and financial results.

The Company’s existing debt is, and future debt may be, subject to restrictive debt covenants that limit the Company’s ability to engage in certain activities that could otherwise benefit the Company. These debt covenants include restrictions on the Company’s ability to enter into certain contracts or agreements, which may limit the Company’s ability to make dividend or other payments, secure other indebtedness, enter into transactions with affiliates and consolidate, merge or transfer all or substantially all of the Company’s assets. The Company is also required to meet specified financial ratios under the terms of the Company’s debt agreements. The Company’s ability to comply with these financial restrictions and all other covenants is dependent on the Company’s future performance, which is subject to, but not limited to, prevailing economic conditions and other factors, including factors that are beyond the Company’s control, such as foreign exchange rates, interest rates, changes in technology and changes in the level of competition. Failure to comply with restrictive debt covenants that are not waived or cured could result in an event of default under the applicable debt instrument, which could permit acceleration of the applicable debt and require the Company to prepay the debt before its scheduled due date.

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Item 1B: Unresolved Staff Comments

None.

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true
Item 1C:
Cybersecurity
We maintain a robust system of data protection and cybersecurity resources, technology and processes. We regularly evaluate new and emerging risks and ever-changing legal and compliance requirements. We make strategic investments to address these risks and legal and compliance requirements to keep Company, customer and employee data secure. We monitor risks of sensitive information compromise at our business partners where relevant and reevaluate these risks on a periodic basis. We also perform annual and ongoing cybersecurity training and awareness for our employees.
We have a longstanding information security risk management framework structured according to the National Institute of Standards and Technology Cybersecurity Framework, industry best practices, privacy legislation, and other global and local standards and regulations. This risk management framework is under the specific oversight of the Company’s Vice President and Chief Information Officer (the “CIO”) and includes a
defense-in-depth
approach with multiple layers of security controls, including network segmentation, security monitoring, endpoint protection, and identity and access management, as well as data protection best practices and data loss prevention controls. Our Audit and Finance Committee is updated on the overall performance of our information security risk management framework on an annual basis by the CIO.
Our cybersecurity awareness program includes regular phishing simulations, annual general cybersecurity awareness, and data protection modules, as well as more contextual and personalized modules for targeted users and roles. We also perform simulations and drills at both a technical and leadership level at least annually. We incorporate external expertise and guidance in all aspects of our cybersecurity program. We complete annual internal security audits and vulnerability assessments of the Company’s information systems and related controls, including systems affecting personal data. In addition, we leverage cybersecurity specialists to complete annual external audits and objective assessments of our cybersecurity program and practices, including our data protection practices, as well as to conduct targeted attack simulations. We continually enhance our information security capabilities in order to protect against emerging threats, while also increasing our ability to detect and respond to cyber incidents and maximize our resilience to recover from potential cyber-attacks. We have a robust incident response plan in place that provides a documented playbook for responding to cybersecurity incidents and facilitates coordination across multiple parts of our Company. Additionally, we have purchased network security and cyber liability insurance in order to provide a level of financial protection, should a data breach occur.
Despite the existence of mitigation measures, the Company’s systems and those of its partners remain potentially vulnerable to cybersecurity threats, any of which could have a material adverse effect on the Company’s business. To date, cybersecurity incidents have not resulted in a material adverse impact to the Company’s business strategy, results of operations and financial condition, but future incidents could have such an impact. See Item 1A, Risk Factors - Risks Related to Cybersecurity and Data Privacy.
The Board of Directors oversees the Company’s information security risk management framework that seeks to identify new risks, develop and implement risk mitigation plans, and monitor the results affecting the Company’s business and operations on an ongoing basis. The CIO manages this framework, in collaboration with the Company’s businesses and functions. The CIO presents updates to the Audit and Finance Committee at least annually and, as necessary, to the full Board of Directors. These reports include detailed updates on the Company’s performance preparing for, preventing, detecting, responding to and recovering from cyber incidents. The CIO also promptly informs and updates the Board of Directors about any information security incidents that may pose significant risk to the Company. The Company’s program is periodically evaluated by external experts, and the results of those reviews are reported to the Audit and Finance Committee and the Board of Directors. Together with management, the Audit and Finance Committee reviews the Company’s risk assessment and risk management practices and discusses major cybersecurity risk exposures as well as steps taken by management to monitor and control such exposures.
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The Company’s Vice President and Chief Information Officer has over 24 years of business experience managing risks from cybersecurity threats/developing and implementing cybersecurity policies and procedures, as well as several relevant certifications.
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Item 2: Properties

Waters Corporation operates 19 United States facilities and 68 international facilities, including field offices. The Company believes its facilities are suitable and adequate for its current production level and for reasonable growth over the next several years. The Company’s primary facilities are summarized in the table below.

Primary Facility Locations (1)

Location |  | Function (2) |  | Owned/Leased
Golden, CO |  | M, R, S, D, A |  | Owned
New Castle, DE |  | M, R, S, D, A |  | Owned
Franklin, MA |  | D |  | Leased
Milford, MA |  | M, R, S, A |  | Owned
Taunton, MA |  | M, R |  | Owned
Cambridge, MA |  | R, S |  | Leased
Eden Prairie, MN |  | M, R, S, D, A |  | Leased
Lindon, UT |  | M, R, S, D, A |  | Leased
Santa Barbara, CA |  | M, R, S, D, A |  | Leased
Beijing, China |  | S, A |  | Leased
Shanghai, China |  | R, S, A |  | Leased
Birmingham, England |  | M, A |  | Owned
Wilmslow, England |  | M, R, S, D, A |  | Owned
St. Quentin, France |  | S, A |  | Leased
Hüllhorst, Germany |  | M, R, S, D, A |  | Owned
Wexford, Ireland |  | M, R, D, A |  | Owned
Bangalore, India |  | M, R, S, D, A |  | Owned/Leased
Etten-Leur, Netherlands |  | S, D, A |  | Owned
Brasov, Romania |  | R, A |  | Leased
Singapore |  | R, S, D, A |  | Leased

(1) | The Company operates more than one primary facility within certain states and foreign countries.

(2) | M = Manufacturing; R = Research; S = Sales and Service; D = Distribution; A = Administration

The Company operates and maintains 9 field offices in the United States and 55 field offices abroad in addition to sales offices in the primary facilities listed above. The Company’s field office locations are listed below.

Field Office Locations (3)

United States |  | International
Costa Mesa, CA |  | Australia |  | Hong Kong |  | People’s Republic of China
Pleasanton, CA |  | Austria |  | India |  | Portugal
Wood Dale, IL |  | Belgium |  | Ireland |  | Poland
Carmel, IN |  | Brazil |  | Israel |  | Puerto Rico
Woburn, MA |  | Canada |  | Italy |  | Spain
Columbia, MD |  | Czech Republic |  | Japan |  | Sweden
Morrisville, NC |  | Denmark |  | Korea |  | Switzerland
Parsippany, NJ |  | Finland |  | Malaysia |  | Taiwan
Bellaire, TX |  | France |  | Mexico |  | United Arab Emirates
|  | Germany |  | Netherlands |  | United Kingdom
|  | Hungary |  | Norway |  |

(3) | The Company operates more than one field office within certain states and foreign countries.

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Item 3: Legal Proceedings

From time to time, the Company and its subsidiaries are involved in various lawsuits, claims, investigations and proceedings covering a wide range of matters that arise in the ordinary course of business. The Company believes it has meritorious arguments in its current litigation matters and believes any outcome, either individually or in the aggregate, will not be material to the Company’s financial position or results of operations. 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.

Item 4: Mine Safety Disclosures

Not applicable.

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PART II

Item 5: | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s common stock is registered under the Exchange Act and is listed on the New York Stock Exchange under the symbol “WAT”. As of February 21, 2025, the Company had 65 common stockholders of record. The Company has not declared or paid any dividends on its common stock in its past three fiscal years and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay cash dividends will be made at the discretion of the Board of Directors and will depend on restrictions and other factors the Board of Directors may deem relevant. The Company has not made any sales of unregistered equity securities in the years ended December 31, 2024, 2023 and 2022.

Securities Authorized for Issuance under Equity Compensation Plans

Equity compensation plan information is incorporated by reference from Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, of this document and should be considered an integral part of this Item 5.

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Stock Price Performance Graph

The following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing.

The following graph compares the cumulative total return on $100 invested as of December 31, 2019 (the last day of public trading of the Company’s common stock in fiscal year 2019) through December 31, 2024 (the last day of public trading of the common stock in fiscal year 2024) in the Company’s common stock, the NYSE Market Index, the SIC Code 3826 Index and the S&P 500 Index. The return of the indices is calculated assuming reinvestment of dividends during the period presented. The Company has not paid any dividends since its IPO. The stock price performance shown on the graph below is not necessarily indicative of future price performance.

COMPARISON OF CUMULATIVE TOTAL RETURN SINCE DECEMBER 31, 2019

AMONG WATERS CORPORATION, NYSE MARKET INDEX, SIC CODE 3826 INDEX – LABORATORY ANALYTICAL INSTRUMENTS AND S&P 500 INDEX

|  | 2019 |  |  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |
WATERS CORPORATION |  |  | 100.00 |  |  |  | 105.89 |  |  |  | 159.47 |  |  |  | 146.62 |  |  |  | 140.91 |  |  |  | 158.78 |
NYSE MARKET INDEX |  |  | 100.00 |  |  |  | 106.99 |  |  |  | 129.11 |  |  |  | 117.04 |  |  |  | 133.16 |  |  |  | 154.19 |
SIC CODE INDEX |  |  | 100.00 |  |  |  | 128.89 |  |  |  | 161.64 |  |  |  | 107.91 |  |  |  | 96.14 |  |  |  | 89.95 |
S&P 500 INDEX |  |  | 100.00 |  |  |  | 118.40 |  |  |  | 152.39 |  |  |  | 124.79 |  |  |  | 157.59 |  |  |  | 197.02 |

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Purchases of Equity Securities by the Issuer

The following table provides information about purchases by the Company during the three months ended December 31, 2024 of equity securities registered by the Company under the Exchange Act (in thousands, except per share data):

Period |  | Total Number of Shares Purchased (1) |  |  | Average Price Paid per Share |  |  | Total Number of Shares Purchased as Part of Publicly Announced Programs |  |  | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Programs (2) |
September 29, 2024 to October 26, 2024 |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | 961,207 |
October 27, 2024 to November 23, 2024 |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | 961,207 |
November 24, 2024 to December 31, 2024 |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | 961,207 |
Total |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | 961,207 |

(1) | The Company repurchased fewer than one thousand shares of common stock at a cost of less than $1 million related to the vesting of restricted stock during the three months ended December 31, 2024.

(2) | In December 2024, the Company’s Board of Directors authorized the extension of the existing share repurchase program through January 21, 2028. The Company’s remaining authorization is $1.0 billion. The size and timing of these purchases, if any, will depend on our stock price and market and business conditions, as well as other factors.

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Item 6: Reserved

Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

The Company has two operating segments: Waters and TA. Waters products and services primarily consist of high-performance liquid chromatography (“HPLC”), ultra-performance liquid chromatography (“UPLC” and, together with HPLC, referred to as “LC”), mass spectrometry (“MS”) and precision chemistry consumable products and related services. TA products and services primarily consist of thermal analysis, rheometry and calorimetry instrument systems and service sales. The Company’s products are used by pharmaceutical, biochemical, industrial, nutritional safety, environmental, academic and government customers. These customers use the Company’s products to detect, identify, monitor and measure the chemical, physical and biological composition of materials and to predict the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals and viscous liquids in various industrial, consumer goods and healthcare products. Operations of the recently acquired Wyatt business are part of the Waters operating segment.

Wyatt Acquisition

On May 16, 2023, the Company completed the acquisition of Wyatt Technology, LLC and its three operating subsidiaries, Wyatt Technology Europe GmbH, Wyatt Technology France and Wyatt Technology UK Ltd. (collectively, “Wyatt”), for a total purchase price of $1.3 billion in cash. Wyatt is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories and services. The acquisition has expanded Waters’ portfolio and increased our exposure to large molecule applications. The Company financed this transaction with a combination of cash on its balance sheet and borrowings under its revolving credit facility. The Company’s financial results for the year ended December 31, 2024 include the financial results of Wyatt for the full year, while the financial results for the year ended December 31, 2023 only included seven-and-a-half months of Wyatt’s financial results as the closing of the acquisition occurred during the second quarter of 2023.

Financial Overview

The Company’s operating results are as follows for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands, except per share data):

|  | Year Ended December 31, |  |  | % change |
|  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2024 vs 2023 |  |  | 2023 vs 2022 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Product sales |  | $ | 1,844,176 |  |  | $ | 1,903,050 |  |  | $ | 1,988,169 |  |  |  | (3 | %) |  |  | (4 | %)
Service sales |  |  | 1,114,211 |  |  |  | 1,053,366 |  |  |  | 983,787 |  |  |  | 6 | % |  |  | 7 | %
Total net sales |  |  | 2,958,387 |  |  |  | 2,956,416 |  |  |  | 2,971,956 |  |  |  | — |  |  |  | (1 | %)
Costs and operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  |  | 1,200,201 |  |  |  | 1,195,223 |  |  |  | 1,248,182 |  |  |  | — |  |  |  | (4 | %)
Selling and administrative expenses |  |  | 690,148 |  |  |  | 736,014 |  |  |  | 658,026 |  |  |  | (6 | %) |  |  | 12 | %
Research and development expenses |  |  | 183,027 |  |  |  | 174,945 |  |  |  | 176,190 |  |  |  | 5 | % |  |  | (1 | %)
Purchased intangibles amortization |  |  | 47,090 |  |  |  | 32,558 |  |  |  | 6,366 |  |  |  | 45 | % |  |  | 411 | %
Acquired in-process research and development |  |  | — |  |  |  | — |  |  |  | 9,797 |  |  |  | * | * |  |  | * | *
Litigation provision |  |  | 11,568 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | * | *
Operating income |  |  | 826,353 |  |  |  | 817,676 |  |  |  | 873,395 |  |  |  | 1 | % |  |  | (6 | %)
Operating income as a % of sales |  |  | 27.9 | % |  |  | 27.7 | % |  |  | 29.4 | % |  |  |  |  |  |  |  |
Other income, net |  |  | 776 |  |  |  | 807 |  |  |  | 2,228 |  |  |  | (4 | %) |  |  | (64 | %)
Interest expense, net |  |  | (72,261 | ) |  |  | (82,240 | ) |  |  | (37,777 | ) |  |  | (12 | %) |  |  | 118 | %
Income before income taxes |  |  | 754,868 |  |  |  | 736,243 |  |  |  | 837,846 |  |  |  | 3 | % |  |  | (12 | %)
Provision for income taxes |  |  | 117,034 |  |  |  | 94,009 |  |  |  | 130,091 |  |  |  | 24 | % |  |  | (28 | %)
Net income |  | $ | 637,834 |  |  | $ | 642,234 |  |  | $ | 707,755 |  |  |  | (1 | %) |  |  | (9 | %)
Net income per diluted common share |  | $ | 10.71 |  |  | $ | 10.84 |  |  | $ | 11.73 |  |  |  | (1 | %) |  |  | (8 | %)

** | Percentage not meaningful

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The Company’s net sales were flat in 2024 as compared to 2023 and decreased 1% in 2023 as compared to 2022 as the Company’s sales growth in most major geographies was offset by a 10% and a 22% reduction in sales in China, respectively. The decline in China sales were primarily driven by lower demand for our instrument systems and chemistry products as a result of increased government regulations and lower spending by our customers due to macroeconomic conditions. Excluding China, the Company’s sales growth increased 2% and 5% in 2024 and 2023, respectively. Foreign currency translation decreased sales growth by 1% in both 2024 and 2023. Wyatt sales increased the Company’s sales growth by 1% and 3% in 2024 and 2023, respectively.

Instrument system sales decreased 6% in 2024 as compared to 2023 and 7% in 2023 as compared to 2022 as a result of weaker customer demand in most geographies, driven primarily by the 15% and 30% decline in our China instrument sales, respectively. Excluding China, the Company’s instrument system sales declined 4% in 2024 and grew 1% in 2023. Wyatt’s instrument system sales added 2% and 4% to the Company’s instrument system sales growth in 2024 and 2023, respectively.

Recurring revenues (combined sales of precision chemistry consumables and services) increased 5% and 6% in 2024 and 2023, respectively. Foreign currency translation decreased recurring revenues sales growth by 1% in both 2024 and 2023.

Operating income was $826 million in 2024, up from $818 million in 2023 as the cost savings from recent workforce reductions and the absence of the $26 million in severance costs associated with the workforce reduction incurred in 2023 were offset by higher annual incentive compensation, a full year of amortization associated with the Wyatt acquisition and merit increases in 2024. In addition, foreign currency translation lowered operating income by $43 million.

Operating income of $818 million in 2023 declined $55 million from the operating income of $873 million in 2022 as a result of the $26 million severance costs associated with the workforce reductions and the additional expenses associated with the Wyatt acquisition relating to purchased intangible amortization of $27 million, retention agreement costs of $19 million and due diligence costs of $13 million. These costs were partially offset by the cost savings from the workforce reductions and lower electronic components costs and freight costs. In addition, the negative effect of foreign currency translation lowered operating income by approximately $23 million during 2023.

The Company’s effective tax rates were 15.5%, 12.8% and 15.5% for 2024, 2023 and 2022, respectively. Net income per diluted share was $10.71, $10.84 and $11.73 in 2024, 2023 and 2022, respectively.

The Company generated $762 million, $603 million and $612 million of net cash flow from operating activities in 2024, 2023 and 2022, respectively. The increase in cash flows from operating activities in 2024 was driven by lower annual incentive bonus payments and an improvement in working capital in the current year. The decrease in 2023 operating cash flow was primarily a result of lower sales volumes, higher income tax payments and higher incentive compensation payments in 2023 as compared to 2022.

Net cash used in investing activities included capital expenditures related to property, plant, equipment and software capitalization of $142 million, $161 million and $176 million in 2024, 2023 and 2022, respectively. The decline in 2024 is primarily due to the completion of the Company’s new manufacturing facilities. In addition, net cash used in investing activities in 2023 included $1.3 billion for the Wyatt acquisition.

In July 2024, the Company entered into a private Master Note Facility Agreement (the “Shelf Agreement”) with NYL Investors LLC (“NYL”) pursuant to which the Company may, at its option, authorize the issuance and sale of senior promissory notes (the “Shelf Notes”) up to an aggregate principal amount of $200 million. The purchase of any Shelf Notes is in the sole discretion of NYL. Any Shelf Notes sold or issued pursuant to the Shelf Agreement will mature no more than 15 years after the issuance date and will bear interest on the unpaid balance from the issuance date at the rates specified in the Shelf Agreement.

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In December 2024, the Company’s Board of Directors authorized the extension of the existing share repurchase program through January 21, 2028. The Company’s remaining authorization is $1.0 billion. The Company believes that it has the financial flexibility to fund these share repurchases, as well as to invest in research, technology and business acquisitions to further grow the Company’s sales and profits, given current cash and investment levels and debt borrowing capacity.

Results of Operations

Sales by Geography

Geographic sales information is presented below for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands):

|  | Year Ended December 31, |  |  | % change |
|  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2024 vs. 2023 |  |  | 2023 vs. 2022 |
Net Sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
China |  | $ | 396,599 |  |  | $ | 440,707 |  |  | $ | 565,143 |  |  |  | (10 | %) |  |  | (22 | %)
Japan |  |  | 157,321 |  |  |  | 167,202 |  |  |  | 167,220 |  |  |  | (6 | %) |  |  | — |
Asia Other |  |  | 415,302 |  |  |  | 399,916 |  |  |  | 399,380 |  |  |  | 4 | % |  |  | — |
Total Asia |  |  | 969,222 |  |  |  | 1,007,825 |  |  |  | 1,131,743 |  |  |  | (4 | %) |  |  | (11 | %)
Americas: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  |  | 933,926 |  |  |  | 927,982 |  |  |  | 886,140 |  |  |  | 1 | % |  |  | 5 | %
Americas Other |  |  | 181,854 |  |  |  | 180,591 |  |  |  | 169,495 |  |  |  | 1 | % |  |  | 7 | %
Total Americas |  |  | 1,115,780 |  |  |  | 1,108,573 |  |  |  | 1,055,635 |  |  |  | 1 | % |  |  | 5 | %
Europe |  |  | 873,385 |  |  |  | 840,018 |  |  |  | 784,578 |  |  |  | 4 | % |  |  | 7 | %
Total net sales |  | $ | 2,958,387 |  |  | $ | 2,956,416 |  |  | $ | 2,971,956 |  |  |  | — |  |  |  | (1 | %)

In 2024, sales growth was flat as compared to 2023 and sales declined by 1% in 2023 as compared to 2022. During these periods, the Company’s sales in most geographies grew positively, except in China and Japan. The sales growth outside of China was led by India where sales increased 15% and 2% in 2024 and 2023, respectively. China’s sales declined by 10% and 22% in 2024 and 2023, respectively, and were primarily driven by lower demand for our instrument systems and chemistry products resulting from increased government regulations and lower spending by our customers due to macroeconomic conditions. Excluding China, the Company’s sales increased 2% and 5% in 2024 and 2023, respectively. Foreign currency translation decreased sales growth by 1% in both 2024 and 2023. Wyatt sales increased the Company’s sales growth by 1% and 3% in 2024 and 2023, respectively, and added 3% to the U.S. sales.

In 2024, sales increased 1% in the U.S. and 4% in Europe, while decreasing 4% in Asia, with the effect of foreign currency translation increasing sales growth in Europe by 1% and decreasing sales growth in Asia by 4%. The decrease in Asia sales growth is driven by the decline in China’s sales and the effect of foreign currency translation which decreased Japan’s sales growth by 7%.

In 2023, sales increased 5% in the U.S. and 7% in Europe, while decreasing 11% in Asia, with the effect of foreign currency translation increasing sales growth in Europe by 2% and decreasing sales growth in Asia by 4%, which includes a 9% decrease in sales in Japan resulting from foreign currency translation. Wyatt’s sales contributed 5% and 3% of sales growth to the U.S. and Europe in 2023, respectively.

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Sales by Trade Class

Net sales by customer class are presented below for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands):

|  | Year Ended December 31, |  |  | % change |
|  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2024 vs. 2023 |  |  | 2023 vs. 2022 |
Pharmaceutical |  | $ | 1,718,899 |  |  | $ | 1,696,875 |  |  | $ | 1,751,665 |  |  |  | 1 | % |  |  | (3 | %)
Industrial |  |  | 908,486 |  |  |  | 909,003 |  |  |  | 909,805 |  |  |  | — |  |  |  | — |
Academic and government |  |  | 331,002 |  |  |  | 350,538 |  |  |  | 310,486 |  |  |  | (6 | %) |  |  | 13 | %
Total net sales |  | $ | 2,958,387 |  |  | $ | 2,956,416 |  |  | $ | 2,971,956 |  |  |  | — |  |  |  | (1 | %)

In 2024, sales to pharmaceutical customers increased 1% as compared to 2023 as the 18% increase in India’s sales was offset by the 11% decline in China’s sales. Combined sales to industrial customers, which include material characterization, food, environmental and fine chemical markets, were flat in 2024 as the 7% sales growth in the U.S. was primarily offset by a 9% decline in China’s sales. Combined sales to academic and government customers decreased 6% in 2024 as sales declined in most major geographies, except for Europe and India where sales grew 1% and 27%, respectively. Sales to our academic and government customers are highly dependent on when institutions receive funding to purchase our instrument systems and, as such, sales can vary significantly from period to period.

In 2023, sales to pharmaceutical customers decreased 3%, primarily driven by weakness in customer demand in China, with foreign currency translation decreasing pharmaceutical sales growth by 1% and Wyatt sales contributing 3% to the Company’s pharmaceutical sales growth. Combined sales to industrial customers, which include material characterization, food, environmental and fine chemical markets, were flat in 2023, with foreign currency translation decreasing industrial sales growth by 1% and Wyatt contributing 1% to industrial sales growth. Combined sales to academic and government customers increased 13% in 2023, with foreign currency translation decreasing academic and government sales growth by 1% and Wyatt sales contributing 4% to academic and government sales growth.

Waters Products and Services Net Sales

Net sales for Waters products and services were as follows for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands):

|  | Year Ended December 31, |  |  | % change |
|  | 2024 |  |  | % of Total |  |  | 2023 |  |  | % of Total |  |  | 2022 |  |  | % of Total |  |  | 2024 vs. 2023 |  |  | 2023 vs. 2022 |
Waters instrument systems |  | $ | 1,032,493 |  |  |  | 40 | % |  | $ | 1,108,702 |  |  |  | 43 | % |  | $ | 1,210,456 |  |  |  | 46 | % |  |  | (7 | %) |  |  | (8 | %)
Chemistry consumables |  |  | 565,481 |  |  |  | 21 | % |  |  | 541,469 |  |  |  | 20 | % |  |  | 525,399 |  |  |  | 20 | % |  |  | 4 | % |  |  | 3 | %
Total Waters product sales |  |  | 1,597,974 |  |  |  | 61 | % |  |  | 1,650,171 |  |  |  | 63 | % |  |  | 1,735,855 |  |  |  | 66 | % |  |  | (3 | %) |  |  | (5 | %)
Waters service |  |  | 1,006,447 |  |  |  | 39 | % |  |  | 951,419 |  |  |  | 37 | % |  |  | 890,607 |  |  |  | 34 | % |  |  | 6 | % |  |  | 7 | %
Total Waters net sales |  | $ | 2,604,421 |  |  |  | 100 | % |  | $ | 2,601,590 |  |  |  | 100 | % |  | $ | 2,626,462 |  |  |  | 100 | % |  |  | — |  |  |  | (1 | %)

Waters products and service sales were flat and decreased by 1% in 2024 and 2023, respectively, with the effect of foreign currency translation decreasing Waters sales growth by 1% in both 2024 and 2023. Wyatt sales increased Waters products and service sales by approximately 1% in 2024. Waters instrument system sales (LC and MS technology-based) decreased 7% in 2024, primarily driven by weaker customer demand in China where Waters instrument sales declined 12%. Excluding China, the Company’s instrument system sales decreased 4% as compared to 2023. In addition, Wyatt’s instrument system sales contributed 3% to Waters instrument system sales growth in 2024. Waters chemistry consumables sales growth was due to the continued

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demand in most major geographies driven by the uptake in columns and application-specific testing kits to pharmaceutical customers, partially offset by weaker demand in China and the negative impact from foreign currency translation, which decreased chemistry sales growth by 1% in 2024.

Waters service sales increased 6% in 2024 due to higher service demand billing, partially offset by the negative impact from foreign currency translation, which decreased service sales growth by 1% in 2024. Wyatt service revenues added 1% to Waters service revenue growth in 2024.

In 2023, Waters products and service sales decreased 1% with the effect of foreign currency translation decreasing Waters sales growth by 1% in 2023. Wyatt products and service sales increased Waters products and service sales by approximately 3% in 2023.

Waters instrument system sales (LC and MS technology-based) decreased 8% in 2023, primarily driven by weaker customer demand in China. Excluding China, the Company’s instrument system sales were flat as compared to 2022. In addition, Wyatt’s instrument system sales contributed 5% to Waters instrument system sales growth in 2023. Waters chemistry consumables sales were significantly impacted by the lower customer demand in China for our products. Excluding China, the Company’s chemistry sales grew 7% in 2023. This sales growth was primarily due to the continued strong demand in most major geographies, driven by the uptake in columns and application-specific testing kits to pharmaceutical customers, partially offset by the negative impact from foreign currency translation, which decreased chemistry sales growth by 1% in 2023. Waters service sales increased 7% in 2023 due to higher service demand billing, partially offset by the negative impact from foreign currency translation, which decreased service sales growth by 1% in 2023. Wyatt service revenues added 2% to Waters service revenue growth in 2023.

TA Product and Services Net Sales

Net sales for TA products and services were as follows for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands):

|  | Year Ended December 31, |  |  | % change |
|  | 2024 |  |  | % of Total |  |  | 2023 |  |  | % of Total |  |  | 2022 |  |  | % of Total |  |  | 2024 vs. 2023 |  |  | 2023 vs. 2022 |
TA instrument systems |  | $ | 246,202 |  |  |  | 70 | % |  | $ | 252,879 |  |  |  | 71 | % |  | $ | 252,314 |  |  |  | 73 | % |  |  | (3 | %) |  |  | — |
TA service |  |  | 107,764 |  |  |  | 30 | % |  |  | 101,947 |  |  |  | 29 | % |  |  | 93,180 |  |  |  | 27 | % |  |  | 6 | % |  |  | 9 | %
Total TA net sales |  |  | 353,966 |  |  |  | 100 | % |  |  | 354,826 |  |  |  | 100 | % |  |  | 345,494 |  |  |  | 100 | % |  |  | — |  |  |  | 3 | %

TA instrument system and service sales growth was flat and grew 3% in 2024 and 2023, respectively. Foreign currency translation decreased sales growth by 1% and had a minimal impact on sales growth in 2023. In 2024, sales growth was broad-based across most major geographies, partially offset by weakness in China. The growth outside of China was primarily driven by strong customer demand for our thermal analysis instruments and services.

Cost of Sales

Cost of sales were flat in 2024 as compared to 2023, primarily due to the change in sales mix and the impact of foreign exchange. In 2023, cost of sales decreased 4% as compared to 2022, primarily due to the change in sales mix and the lower material and freight costs.

Cost of sales is affected by many factors, including, but not limited to, foreign currency translation, product mix, product costs of instrument systems and amortization of software platforms. At current foreign currency exchange rates, the Company expects foreign currency translation to be negative to gross profit during 2025.

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Selling and Administrative Expenses

Selling and administrative expenses decreased 6% and increased 12% in 2024 and 2023, respectively, as the cost savings from the recent workforce reductions and the absence of costs incurred in the prior year relating to severance charges in connection with the 2023 workforce reduction and the Wyatt acquisition-related due diligence costs were partially offset by an increase in annual incentive compensation expenses.

The increase in 2023 is primarily driven by severance-related costs in connection with a reduction in workforce, which increased expenses by 4%; the Wyatt acquisition due diligence and integration costs, which increased expenses by 2%; and the Wyatt acquisition-related retention expense, which increased expenses by 3%. These increases were partially offset by lower incentive compensation costs. The increase in selling and administrative expenses in 2023 as compared to 2022 can be attributed to higher salary merit and variable incentive compensation costs due to an increase in the number of employees. The effect of foreign currency translation had minimal impact on selling and administrative expenses in 2024 and 2023.

As a percentage of net sales, selling and administrative expenses were 23.3%, 24.9% and 22.1% for 2024, 2023, and 2022, respectively.

Research and Development Expenses

Research and development expenses increased 5% and decreased 1% in 2024 and 2023, respectively. The increase in research and development expenses in 2024 can be attributed to increases from merit compensation and costs associated with new products and the development of new technology initiatives, being partially offset by lower incentive compensation costs. The impact of foreign currency exchange increased expenses by 3% and decreased expenses by 1% in 2024 and 2023, respectively.

Purchased Intangibles Amortization

The increase in purchased intangible amortization of $15 million and $26 million in 2024 and 2023, respectively, can be attributed to the timing of the Wyatt acquisition in May of 2023 as 2024 includes a full year of the amortization from the Wyatt acquisition intangible assets.

Litigation Provisions

The Company incurred $12 million of litigation provisions of 2024, primarily related to a patent litigation settlement.

Acquired In-Process Research & Development

In 2022, the Company completed an asset acquisition in which the CDMS technology assets of Megadalton were acquired for approximately $10 million in total purchase price, of which $5 million was paid at closing and the remaining $4 million will be paid in the future at various dates through 2029.

Other (Expense) Income, net

In 2022, the Company sold an equity investment for $10 million in cash and recorded a gain on the sale of approximately $7 million in other income, net on the statement of operations. The Company also incurred $6 million in losses on an equity investment in 2022 within other income, net on the statement of operations.

Interest Expense, net

Net interest expense in 2024 decreased $10 million as compared to 2023 due to the average outstanding debt in these periods being impacted by the timing of the borrowings to fund the Wyatt acquisition, which closed in May 2023, as well as the timing of the repayment of $1 billion of debt since the completion of the acquisition.

Net interest expense in 2023 increased $44 million as compared to 2022 due to the additional borrowings by the Company to fund the Wyatt acquisition in 2023.

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Provision for Income Taxes

The four principal jurisdictions in which the Company manufactures are the U.S., Ireland, the U.K. and Singapore, where the statutory tax rates were 21%, 12.5%, 25% and 17%, respectively, as of December 31, 2024. The Company has a new Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026. Prior to April 1, 2021, the Company had a tax exemption on income arising from qualifying activities in Singapore based upon the achievement of certain contractual milestones, which the Company met as of December 31, 2020 and maintained through March 2021. The effect of applying the concessionary income tax rates rather than the statutory tax rate to income arising from qualifying activities in Singapore increased the Company’s net income by $14 million, $16 million and $20 million, and increased the Company’s net income per diluted share by $0.24, $0.27 and $0.33 for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company’s effective tax rate for the years ended December 31, 2024, 2023 and 2022 was 15.5%, 12.8% and 15.5%, respectively.

The 2024 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, a $5 million provision related to the GILTI tax and a tax benefit of $3 million on stock-based compensation.

The 2023 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, an $18 million recognition of a previously unrecognized tax benefit as a result of the completion of a tax examination, a $15 million provision related to the Global Intangible Low-Taxed Income (“GILTI”) tax and a tax benefit of $3 million on stock-based compensation.

The 2022 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, an $18 million provision related to the GILTI tax and a tax benefit of $7 million on stock-based compensation.

Effective starting in 2024, various foreign jurisdictions are beginning to implement aspects of the guidance issued by the Organization for Economic Co-operation and Development related to the new Pillar Two system of global minimum tax rules. These changes in tax law did not have a material impact on the Company’s financial position, results of operations and cash flows in 2024. As of the date of this Annual Report, the Company does not anticipate that the Pillar Two tax rules will have a material impact on future periods.

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Liquidity and Capital Resources

Condensed Consolidated Statements of Cash Flows (in thousands):

|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Net income |  | $ | 637,834 |  |  | $ | 642,234 |  |  | $ | 707,755 |
Depreciation and amortization |  |  | 191,825 |  |  |  | 165,905 |  |  |  | 130,423 |
Stock-based compensation |  |  | 44,709 |  |  |  | 36,868 |  |  |  | 42,564 |
Deferred income taxes |  |  | (877 | ) |  |  | (1,197 | ) |  |  | (31,988 | )
Acquired in-process research and development and other non-cash items |  |  | — |  |  |  | — |  |  |  | 10,003 |
Change in accounts receivable |  |  | (66,240 | ) |  |  | 49,179 |  |  |  | (137,874 | )
Change in inventories |  |  | 20,943 |  |  |  | (45,443 | ) |  |  | (101,902 | )
Change in accounts payable and other current liabilities |  |  | 61,585 |  |  |  | (79,524 | ) |  |  | 60,984 |
Change in deferred revenue and customer advances |  |  | 6,165 |  |  |  | 10,433 |  |  |  | 12,862 |
Other changes |  |  | (133,821 | ) |  |  | (175,646 | ) |  |  | (81,166 | )
Net cash provided by operating activities |  |  | 762,123 |  |  |  | 602,809 |  |  |  | 611,661 |
Net cash used in investing activities |  |  | (144,023 | ) |  |  | (1,442,265 | ) |  |  | (107,967 | )
Net cash (used in) provided by financing activities |  |  | (696,675 | ) |  |  | 754,951 |  |  |  | (509,633 | )
Effect of exchange rate changes on cash and cash equivalents |  |  | 7,920 |  |  |  | (948 | ) |  |  | (14,766 | )
Decrease in cash and cash equivalents |  | $ | (70,655 | ) |  | $ | (85,453 | ) |  | $ | (20,705 | )

Cash Flow from Operating Activities

Net cash provided by operating activities was $762 million, $603 million and $612 million in 2024, 2023 and 2022, respectively. The increase in 2024 operating cash flow was primarily a result of lower inventory levels, partially offset by lower net income. The changes within net cash provided by operating activities include the following significant changes in the sources and uses of net cash provided by operating activities, in addition to the changes in net income:

| • |  | The changes in accounts receivable were primarily attributable to timing of payments made by customers and timing of sales. Days sales outstanding was 79 days at December 31, 2024, 78 days at December 31, 2023 and 77 days at December 31, 2022.

| • |  | The decrease in inventory can primarily be attributed to better inventory management and higher sales volume in the second half of 2024.

| • |  | The changes in accounts payable and other current liabilities were a result of the timing of payments to vendors, as well as the annual payment of management incentive compensation.

| • |  | A decrease in income tax payments of $60 million as compared to the prior year.

| • |  | Net cash provided from deferred revenue and customer advances results from annual increases in new service contracts as a higher installed base of customers renew annual service contracts.

| • |  | Other changes were attributable to variation in the timing of various provisions, expenditures, prepaid income taxes and accruals in other current assets, other assets and other liabilities.

Cash Flow from Investing Activities

Net cash used in investing activities totaled $144 million, $1.4 billion and $108 million in 2024, 2023 and 2022, respectively. Additions to fixed assets and capitalized software were $142 million, $161 million and $176 million in 2024, 2023 and 2022, respectively. The cash flows from investing activities in 2023 and 2022 include $16 million and $32 million, respectively, of capital expenditures related to the major expansion of the Company’s precision chemistry consumable operations in the United States.

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During 2024, 2023 and 2022, the Company purchased $4 million, $2 million and $11 million of investments, respectively, while $4 million, $2 million and $78 million of investments matured, respectively, and were used for financing activities described below.

In 2023, the Company completed the acquisition of Wyatt for a total purchase price of $1.3 billion in cash. Wyatt is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories, and services. The acquisition has expanded Waters’ portfolio and increased our exposure to large molecule applications.

In 2022, the Company paid $5 million for the CDMS technology and intellectual property right asset from Megadalton, and the Company is required to make an additional $4 million of guaranteed payments at various dates in the future through 2029. The total purchase price of approximately $10 million was accounted for as Acquired In-Process Research and Development and expensed as part of costs and operating expenses in the statement of operations in 2024.

There were no business acquisitions in 2024.

Cash Flow from Financing Activities

The Company has a credit agreement with an aggregate borrowing capacity of $2.0 billion. As of December 31, 2024, the Company had a total of $1.6 billion in outstanding debt, which consisted of $1.3 billion in outstanding senior unsecured notes and $0.4 billion borrowed under its credit agreement. The Company’s net debt borrowings as of December 31, 2024 were $730 million lower than as of December 31, 2023, while the net borrowings as of December 31, 2023 and 2022 were $780 million and $60 million higher than as of December 31, 2022 and 2021, respectively.

In July 2024, the Company entered into the Shelf Agreement with NYL pursuant to which the Company may, at its option, authorize the issuance and sale of Shelf Notes up to an aggregate amount of $200 million. The purchase of any Shelf Notes is in the sole discretion of NYL. Any Shelf Notes sold or issued pursuant to the Shelf Agreement will mature no more than 15 years after the issuance date and will bear interest on the unpaid balance from the issuance date at the rates specified in the Shelf Agreement. The Company entered into the Shelf Agreement to increase its borrowing capacity for general corporate purposes. The Company has not issued any Shelf Notes pursuant to the Shelf Agreement through the date of these financial statements.

As of December 31, 2024, the Company has entered into three-year interest rate cross-currency swap derivative agreements with a notional value of $625 million to hedge the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated and yen-denominated net asset investments. As a result of entering into these agreements, the Company lowered net interest expense by approximately $9 million, $11 million and $9 million in 2024, 2023 and 2022, respectively. The Company anticipates that these swap agreements will lower net interest expense by approximately $9 million in 2025.

In December 2024, the Company’s Board of Directors authorized the extension of the existing share repurchase program through January 21, 2028. The Company’s remaining authorization is $1.0 billion. During 2023 and 2022, the Company repurchased $58 million and $616 million, respectively, of the Company’s outstanding common stock under authorized share repurchase programs. The Company did not make any open market share repurchases in 2024. In addition, the Company repurchased $13 million, $12 million and $11 million of common stock related to the vesting of restricted stock units during 2024, 2023 and 2022, respectively.

The Company received $30 million, $30 million and $43 million of proceeds from the exercise of stock options and the purchase of shares pursuant to the Company’s employee stock purchase plan during 2024, 2023 and 2022, respectively.

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The Company had cash, cash equivalents and investments of $325 million as of December 31, 2024. The majority of the Company’s cash and cash equivalents are generated from foreign operations, with $275 million held by foreign subsidiaries at December 31, 2024, of which $226 million was held in currencies other than U.S. dollars.

As of December 31, 2024, the Company’s material cash requirements include the following contractual and other obligations:

Long-term debt. As of December 31, 2024, the Company had $1.6 billion of cash requirements for the principal on long-term debt that will mature and be paid as follows: $830 million in 2026; $50 million in 2028; $300 million in 2029; $50 million in 2030 and $400 million in 2031.

Interest on Senior Unsecured Notes. As of December 31, 2024, the Company had $150 million of cash requirements for the interest on senior unsecured notes that is to be paid as follows: $38 million in 2025; $32 million in 2026; $25 million in 2027; $23 million in 2028; $20 million in 2029; $10 million in 2030; and $2 million in 2031. See also Note 8 in the Notes to the Consolidated Financial Statements for financial information about interest payable.

2017 Tax Act liabilities. As a result of the 2017 Tax Act, the Company incurred a Transition Toll Tax, that would be paid over an eight-year period, starting in 2018, and will not accrue interest. As of December 31, 2024, the Company had a remaining cash requirement of $120 million which will be paid in 2025. See also Note 9 in the Notes to the Consolidated Financial Statements for financial information about tax liabilities.

Operating Leases. The Company’s cash requirements for future lease payments were approximately $81 million as of December 31, 2024. See also Note 11 in the Notes to the Consolidated Financial Statements for financial information about lease liabilities.

Long-term Software Contract Commitments. For contracts the Company is committed to that are not cancelable without penalties, the Company’s contractual obligations were approximately $94 million as of December 31, 2024. In December 2024, the Company’s Board of Directors approved the implementation of a new ERP system. The Company anticipates spending approximately $130 million over the next three years in connection with the implementation of the new ERP system. The Company expects to use existing cash and its credit facility to fund the ERP implementation.

Wyatt Retention Agreements. In conjunction with the Wyatt acquisition, the Company entered into retention agreements with certain employees, in which the Company agreed to pay a total of $40 million by the end of the second anniversary of the acquisition date provided the employees remain employed over that period of time. As of December 31, 2024 the Company’s remaining future obligations associated with the Wyatt retention agreements were $20 million.

Management believes, as of the date of this report, that the Company’s financial position, along with expected future cash flows from earnings based on historical trends and the ability to raise funds from external sources and the borrowing capacity from existing, committed credit facilities, will be sufficient to service debt and fund working capital and capital spending requirements, authorized share repurchase amounts and potential acquisitions for at least the next twelve months.

Critical Accounting Policies and Estimates

Summary

The preparation of consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. Critical accounting policies are those that are central to the presentation of the Company’s financial condition and results of operations that require management to make estimates about matters that are highly uncertain and that would have a material impact on the Company’s results of operations given changes in the

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estimate that are reasonably likely to occur from period to period or use of different estimates that reasonably could have been used in the current period. On an ongoing basis, the Company evaluates its policies and 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 amounts may differ from these estimates under different assumptions or conditions. There are other items within the Company’s consolidated financial statements that require estimation, but are not deemed critical as defined above. Changes in estimates used in these and other items could potentially have a material impact on the Company’s consolidated financial statements.

Revenue Recognition

The Company recognizes revenue upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally enters into contracts that include a combination of products and services. Revenue is allocated to distinct performance obligations and is recognized net of allowances for returns and discounts.

The Company recognizes revenue on product sales at the time control of the product transfers to the customer. In substantially all of the Company’s arrangements, title of the product transfers at shipping point and, as a result, the Company determined control transfers at the point of shipment. In more limited cases, there are destination-based shipping terms and, thus, control is deemed to transfer when the products arrive at the customer site.

Generally, the Company’s contracts for products include a performance obligation related to installation. The Company has determined that the installation represents a distinct performance obligation and revenue is recognized separately upon the completion of installation. The Company determines the amount of the transaction price to allocate to the installation service based on the standalone selling price of the product and the service, which requires judgment. The Company determines the relative standalone selling price of installation based upon a number of factors, including hourly service billing rates and estimated installation hours. In developing these estimates, the Company considers past history, competition, billing rates of current services and other factors.

The Company has sales from standalone software, which are included in product revenue. These arrangements typically include software licenses and maintenance contracts, both of which the Company has determined are distinct performance obligations. The Company determines the amount of the transaction price to allocate to the license and maintenance contract based on the relative standalone selling price of each performance obligation. Software license revenue is recognized at the point in time when control has been transferred to the customer. The revenue allocated to the software maintenance contract is recognized on a straight-line basis over the maintenance period, which is the contractual term of the contract, as a time-based measure of progress best reflects the Company’s performance in satisfying this obligation. Unspecified rights to software upgrades are typically sold as part of the maintenance contract on a when-and-if-available basis.

Service revenue includes (i) service and software maintenance contracts and (ii) service calls (time and materials). Instrument service contracts and software maintenance contracts are typically annual contracts, which are billed at the beginning of the contract or maintenance period. The amount of the service and software maintenance contract is recognized on a straight-line basis to revenue over the maintenance service period, which is the contractual term of the contract, as a time-based measure of progress best reflects the Company’s performance in satisfying this obligation. There are no deferred costs associated with the service contract, as the cost of the service is recorded when the service is performed. Service calls are recognized to revenue at the time a service is performed.

The Company’s deferred revenue liabilities at December 31, 2024 of $320 million on the consolidated balance sheets consist of instrument service contract obligations and customer payments received in advance, prior to transfer of control of the instrument. The Company records deferred revenue primarily related to its service contracts, where consideration is billable at the beginning of the service period.

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Loss Provision on Inventory

The Company values all of its inventories at the lower of cost or net realizable value on a first-in, first-out basis (“FIFO”). The Company estimates revisions to its inventory valuations based on technical obsolescence, historical demand, projections of future demand, including in the Company’s current backlog of orders, and industry and market conditions. If actual future demand or market conditions are less favorable than those projected by management, additional write-downs may be required. The Company’s inventory balance at December 31, 2024 was recorded at its net realizable value of $477 million, which is net of write-downs of $42 million.

Long-Lived Assets, Intangible Assets and Goodwill

Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may not be recoverable. In assessing the recoverability of goodwill and indefinite-lived intangible assets, we must make assumptions regarding the estimated future cash flows, including forecasted revenue growth and the discount rate to determine the fair value of these assets. If these estimates or their related assumptions change in the future, we may be required to record impairment charges against these assets in the reporting period in which the impairment is determined.

We test goodwill for impairment at the reporting unit level, which is the operating segment or one level below an operating segment. We have the option of performing a qualitative assessment to determine whether further impairment testing is necessary before performing the quantitative assessment. If as a result of the qualitative assessment, it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test will be required. Otherwise, no further testing will be required. If a quantitative impairment test is performed, we compare the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. Estimating the fair value of the reporting units requires significant judgment by management. If the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment charge is recognized for the amount by which the carrying value amount exceeds the reporting unit’s fair value up to the total amount of goodwill allocated to the reporting unit. The Company performs an annual goodwill impairment assessment for its reporting units as of December 31 each year. The Company has two reporting units: Waters and TA. Goodwill is allocated to the reporting units at the time of acquisition.

The Company’s intangible assets include purchased technology; capitalized software; costs associated with acquiring Company patents, trademarks and intellectual properties, such as licenses; and acquired IPR&D. Purchased intangibles are recorded at their fair market values as of the acquisition date and amortized over their estimated useful lives, ranging from one to fifteen years. Other intangibles are amortized over a period ranging from one to ten years. Acquired IPR&D is amortized from the date of completion of the acquired program over its estimated useful life.

Goodwill totaled $1.3 billion as of both December 31, 2024 and 2023. Net intangible assets and long-lived assets amounted to $568 million and $651 million, as of December 31, 2024, respectively, and $629 million and $639 million as of December 31, 2023, respectively.

Income Taxes

As part of the process of preparing the consolidated financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves the Company estimating its income taxes, taking into account the amount, timing and character of taxable income, tax deductions and credits and assessing changes in tax laws, regulations, agreements and treaties. Differing treatment of items for tax and accounting purposes, such as depreciation, amortization and inventory reserves, result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. In the event that actual results differ from these estimates, or the Company adjusts these estimates in future periods, such changes could materially impact the Company’s financial position and results of operations.

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The Company continually evaluates the necessity of establishing or changing a valuation allowance for deferred tax assets depending on whether it is more likely than not that the actual benefit of those assets will be realized in future periods.

Uncertain Tax Positions

The Company accounts for its uncertain tax return positions in accordance with the accounting standards for income taxes, which require financial statement reporting of the expected future tax consequences of uncertain tax positions on the presumption that all concerned tax authorities possess full knowledge of those tax positions, as well as all of the pertinent facts and circumstances, but prohibit any discounting of unrecognized tax benefits associated with those positions for the time value of money. The Company classified interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes. At December 31, 2024, the Company had unrecognized tax benefits, excluding interest and penalties, of $18 million.

The Company has a Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026. This incentive has similar requirements for business spending targets, attaining and sustaining employment targets and performance of certain research and manufacturing activities as previous agreements. Prior to April 1, 2021, the Company had a tax exemption on income arising from qualifying activities in Singapore, based upon the achievement of certain contractual milestones, which the Company met as of December 31, 2020 and maintained through March 2021. These milestones include the following types of objectives: reaching and maintaining annual revenue and business spending targets; meeting capital expenditures targets; attaining and sustaining employment targets; and establishing a local research and development and service center. The Company determined that it was more likely than not to realize the tax exemption in Singapore and, accordingly, did not recognize any reserves for unrecognized tax benefits on its balance sheet related to this exemption. In the event that any of the milestone targets were not met, the Company would not be entitled to the tax exemption on income earned in Singapore and all the tax benefits previously recognized would be reversed, resulting in the recognition of income tax expense equal to the statutory tax of 17% on income earned during that period.

The effect of applying these concessionary income tax rates rather than the statutory tax rate to income arising from qualifying activities in Singapore increased the Company’s net income by $14 million, $16 million and $20 million and increased the Company’s net income per diluted share by $0.24, $0.27 and $0.33 for the years ended December 31, 2024, 2023 and 2022, respectively.

Business Combinations and Asset Acquisitions

We use assumptions and estimates in determining the fair value of assets acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets, which represents a significant portion of the purchase price in our recent acquisition of Wyatt, requires the use of significant judgment with regard to (i) the fair value; and (ii) whether such intangibles are amortizable or non-amortizable and, if the former, the period and the method by which the intangible asset will be amortized. We utilize commonly accepted valuation techniques, such as the income, cost and market approaches, as appropriate, in establishing the fair value of intangible assets. Typically, key assumptions include projections of cash flows that arise from identifiable intangible assets of acquired businesses as well as discount rates based on an analysis of the weighted-average cost of capital, adjusted for specific risks associated with the assets.

In our prior year acquisition of Wyatt in fiscal 2023, customer relationship intangible assets have been the most significant identifiable assets acquired. The customer relationships were valued using the multi-period excess earnings method under the income approach. Our cash flow projections for the customer relationships acquired included significant judgments and assumptions related to customer attrition rate, discount rate, and forecasted revenues. The value of the client relationships acquired was $331 million in fiscal year 2023, the majority of which relates to U.S. customer relationships.

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Recent Accounting Standard Changes and Developments

Information regarding recent accounting standard changes and developments is incorporated by reference from Part II, Item 8, Financial Statements and Supplementary Data, of this document and should be considered an integral part of this Item 7. See Note 2 in the Notes to the Consolidated Financial Statements for recently adopted and issued accounting standards.

Item 7A: Quantitative and Qualitative Disclosures About Market Risk

Derivative Transactions

The Company is a global company that operates in over 35 countries and, as a result, the Company’s net sales, cost of sales, operating expenses and balance sheet amounts are significantly impacted by fluctuations in foreign currency exchange rates. The Company is exposed to currency price risk on foreign currency exchange rate fluctuations when it translates its non-U.S. dollar foreign subsidiaries’ financial statements into U.S. dollars, and when any of the Company’s subsidiaries purchase or sell products or services in a currency other than its own currency.

The Company’s principal strategies in managing exposures to changes in foreign currency exchange rates are to (1) naturally hedge the foreign-currency-denominated liabilities on the Company’s balance sheet against corresponding assets of the same currency, such that any changes in liabilities due to fluctuations in foreign currency exchange rates are typically offset by corresponding changes in assets and (2) mitigate foreign exchange risk exposure of international operations by hedging the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated and yen-denominated net asset investments. The Company presents the derivative transactions in financing activities in the statement of cash flows.

Foreign Currency Exchange Contracts

The Company does not specifically enter into any derivatives that hedge foreign-currency-denominated operating assets, liabilities or commitments on its balance sheet, other than a portion of certain third-party accounts receivable and accounts payable, and the Company’s net worldwide intercompany receivables and payables, which are eliminated in consolidation. The Company periodically aggregates these net worldwide balances by currency and then enters into foreign currency exchange contracts that mature within 90 days to hedge a portion of the remaining balance to minimize some of the Company’s currency price risk exposure. The foreign currency exchange contracts are not designated for hedge accounting treatment. Principal hedged currencies include the euro, Japanese yen, British pound, Mexican peso and Brazilian real.

Cash Flow Hedges

The Company’s Credit Facility is a variable borrowing and has interest payments based on a contractually specified interest rate index. The contractually specified index on the Credit Facility is the 3-month Term SOFR. The variable rate interest payments create interest risk for the Company as interest payments will fluctuate based on changes in the contractually specified interest rate index over the life of the Credit Facility. In order to reduce interest rate risk, the Company enters into interest rate swaps that will effectively lock-in the forecasted interest payments on the variable rate borrowing over its term. The interest rate swaps represent cash flow hedges and are assessed for hedge effectiveness each reporting period. When the hedge relationship is highly effective at achieving offsetting changes in cash flows, the Company will record the entire change in fair value of the interest rate swaps in accumulated other comprehensive loss. The amount in accumulated other comprehensive loss is reclassified to earnings in the period that the underlying transaction impacts consolidated earnings. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be de-designated and amounts accumulated in other comprehensive loss will be reclassified to earnings in the current period. Interest settlements due to benchmark interest rate changes are recorded in interest income or interest expense. For the years ended December 31, 2024 and 2023, the Company did not have any cash flow hedges that were deemed ineffective.

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Interest Rate Cross-Currency Swap Agreements

As of December 31, 2024, the Company had three-year interest rate cross-currency swap derivative agreements with a notional value of $625 million to hedge the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated and yen-denominated net asset investments. Under hedge accounting, the change in fair value of the derivative that relates to changes in the foreign currency spot rate are recorded in the currency translation adjustment in other comprehensive income and remain in accumulated other comprehensive loss in stockholders’ equity until the sale or substantial liquidation of the foreign operation. The difference between the interest rate received and paid under the interest rate cross-currency swap derivative agreement is recorded in interest income in the statement of operations.

The Company’s foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap agreements designated as cash flow hedges included in the consolidated balance sheets are classified as follows (in thousands):

|  | December 31, 2024 |  |  | December 31, 2023 |
|  | Notional Value |  |  | Fair Value |  |  | Notional Value |  |  | Fair Value |
Foreign currency exchange contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current assets |  | $ | 14,999 |  |  | $ | 482 |  |  | $ | 24,155 |  |  | $ | 183 |
Other current liabilities |  | $ | 24,749 |  |  | $ | 261 |  |  | $ | 16,000 |  |  | $ | 207 |
Interest rate cross-currency swap agreements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other assets |  | $ | 625,000 |  |  | $ | 26,196 |  |  | $ | 220,000 |  |  | $ | 4,835 |
Other liabilities |  | $ | — |  |  | $ | — |  |  | $ | 405,000 |  |  | $ | 13,384 |
Accumulated other comprehensive income (loss) |  |  |  |  |  | $ | 32,979 |  |  |  |  |  |  | $ | (7,975 | )
Interest rate swap cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other assets |  | $ | 100,000 |  |  | $ | 503 |  |  | $ | — |  |  | $ | — |
Other liabilities |  | $ | 50,000 |  |  | $ | 641 |  |  | $ | 100,000 |  |  | $ | 2,974 |
Accumulated other comprehensive loss |  |  |  |  |  | $ | (138 | ) |  |  |  |  |  | $ | (2,974 | )

The following is a summary of the activity included in the consolidated statements of operations and statements of comprehensive income related to the foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap agreements designated as cash flow hedges (in thousands):

|  | Financial Statement Classification |  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Foreign currency exchange contracts: |  |  |  |  |  |  |  |  |  |  |  |
Realized gains (losses) on closed contracts |  | Cost of sales |  | $ | 850 |  |  | $ | 224 |  |  | $ | (3,855 | )
Unrealized gains (losses) on open contracts |  | Cost of sales |  |  | 245 |  |  |  | (156 | ) |  |  | (176 | )
Cumulative net pre-tax gains (losses) |  | Cost of sales |  | $ | 1,095 |  |  | $ | 68 |  |  | $ | (4,031 | )
Interest rate cross-currency swap agreements: |  |  |  |  |  |  |  |  |  |  |  |
Interest earned |  | Interest income |  | $ | 10,110 |  |  | $ | 10,974 |  |  | $ | 8,872 |
Unrealized gains (losses) on open contracts |  | Accumulated other comprehensive loss |  | $ | 40,954 |  |  | $ | (18,001 | ) |  | $ | 25,969 |
Interest rate swap cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |
Interest earned |  | Interest income |  | $ | 1,281 |  |  | $ | 326 |  |  | $ | — |
Unrealized losses on open contracts |  | Accumulated other comprehensive loss |  | $ | (2,835 | ) |  | $ | (2,974 | ) |  | $ | — |

Assuming a hypothetical adverse change of 10% in year-end exchange rates (a strengthening of the U.S. dollar), the fair market value of the foreign currency exchange contracts outstanding as of December 31, 2024 would decrease pre-tax earnings by approximately $1 million. Assuming a hypothetical adverse change of 10% in year-end exchange rates (a strengthening of the U.S. dollar), the fair market value of the interest rate

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cross-currency swap agreements outstanding as of December 31, 2024 would increase by approximately $60 million and would be recorded to foreign currency translation in other comprehensive income within stockholders’ equity. The related impact on interest income would not have a material effect on pre-tax earnings.

The Company’s cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments. The Company’s cash equivalents represent highly liquid investments, with original maturities of 90 days or less, primarily in bank deposits, U.S. treasury bill money market funds and commercial paper. As of December 31, 2024, the carrying value of the Company’s cash and cash equivalents approximated fair value.

The Company is exposed to the risk of interest rate fluctuations from the investments of cash generated from operations. Investments with maturities greater than 90 days are classified as investments and are held primarily in U.S. dollar-denominated treasury bills and commercial paper, bank deposits and corporate debt securities. As of December 31, 2024, the Company estimates that a hypothetical adverse change of 100 basis points across all maturities would not have a material effect on the fair market value of its portfolio.

The Company is also exposed to the risk of exchange rate fluctuations. The Company maintains cash balances in various operating accounts in excess of federally insured limits, and in foreign subsidiary accounts in currencies other than the U.S. dollar. As of December 31, 2024 and 2023, $275 million out of $325 million and $321 million out of $396 million, respectively, of the Company’s total cash, cash equivalents and investments were held by foreign subsidiaries. In addition, $226 million out of $325 million and $233 million out of $396 million of cash, cash equivalents and investments were held in currencies other than the U.S. dollar at December 31, 2024 and 2023, respectively. As of December 31, 2024, the Company had no holdings in auction rate securities or commercial paper issued by structured investment vehicles.

Assuming a hypothetical adverse change of 10% in year-end exchange rates (a strengthening of the U.S. dollar), the fair market value of the Company’s cash, cash equivalents and investments held in currencies other than the U.S. dollar as of December 31, 2024 would decrease by approximately $23 million, of which the majority would be recorded to foreign currency translation in other comprehensive income within stockholders’ equity.

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The Company is a global company that operates in over 35 countries and, as a result, the Company’s net sales, cost of sales, operating expenses and balance sheet amounts are significantly impacted by fluctuations in foreign currency exchange rates.2026-09-30 http://fasb.org/us-gaap/2024#AmortizationOfAcquisitionCosts 238 P3Y P15Y P1Y P39Y P5Y P3Y P1Y
Item 8:
Financial Statements and Supplementary Data
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Rules 13a-15(f)
and
15d-15(f)
under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under the framework in Internal Control — Integrated Framework (2013), our management, including our chief executive officer and chief financial officer, concluded that our internal control over financial reporting was effective as of December 31, 2024.
The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Waters Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Waters Corporation and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control—Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control—Integrated Framework
(2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (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 audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
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accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Product Revenue Recognition
As described in Note 2 to the consolidated financial statements, the Company recognizes revenue upon transfer of control of promised products to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products. The Company recognizes revenue on product sales at the time control of the product transfers to the customer. Certain of the Company’s customers have terms where control of the product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery. Product sales totaled $1.8 billion for the year ended December 31, 2024.
The principal consideration for our determination that performing procedures relating to product revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s product revenue recognition.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to product revenue recognition. These procedures also included, among others, (i) evaluating the recognition of revenue for a sample of transactions by obtaining and inspecting source documents, such as invoices, customer purchase orders, and shipping documents, and (ii) obtaining and inspecting evidence of remittance of cash payment from customers, as applicable, related to product revenue.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 25,
202
5
We have served as the Company’s auditor since 1994.
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WATERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|  | December 31, |
|  | 2024 |  |  | 2023 |
|  | (In thousands, except per share data) |
ASSETS |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 324,421 |  |  | $ | 395,076 |
Investments |  |  | 934 |  |  |  | 898 |
Accounts receivable, net |  |  | 733,365 |  |  |  | 702,168 |
Inventories |  |  | 477,261 |  |  |  | 516,236 |
Other current assets |  |  | 133,130 |  |  |  | 138,489 |
Total current assets |  |  | 1,669,111 |  |  |  | 1,752,867 |
Property, plant and equipment, net |  |  | 651,200 |  |  |  | 639,073 |
Intangible assets, net |  |  | 567,906 |  |  |  | 629,187 |
Goodwill |  |  | 1,295,720 |  |  |  | 1,305,446 |
Operating lease assets |  |  | 74,193 |  |  |  | 84,591 |
Other assets |  |  | 295,665 |  |  |  | 215,690 |
Total assets |  | $ | 4,553,795 |  |  | $ | 4,626,854 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Notes payable and debt |  | $ | — |  |  | $ | 50,000 |
Accounts payable |  |  | 99,931 |  |  |  | 84,705 |
Accrued employee compensation |  |  | 93,969 |  |  |  | 69,391 |
Deferred revenue and customer advances |  |  | 250,807 |  |  |  | 256,675 |
Current operating lease liabilities |  |  | 25,537 |  |  |  | 27,825 |
Accrued income taxes |  |  | 158,658 |  |  |  | 120,257 |
Accrued warranty |  |  | 11,602 |  |  |  | 12,050 |
Other current liabilities |  |  | 149,254 |  |  |  | 168,677 |
Total current liabilities |  |  | 789,758 |  |  |  | 789,580 |
Long-term liabilities: |  |  |  |  |  |  |  |
Long-term debt |  |  | 1,626,488 |  |  |  | 2,305,513 |
Long-term portion of retirement benefits |  |  | 44,611 |  |  |  | 47,559 |
Long-term income tax liabilities |  |  | 30,318 |  |  |  | 137,123 |
Long-term operating lease liabilities |  |  | 50,317 |  |  |  | 58,926 |
Other long-term liabilities |  |  | 183,796 |  |  |  | 137,812 |
Total long-term liabilities |  |  | 1,935,530 |  |  |  | 2,686,933 |
Total liabilities |  |  | 2,725,288 |  |  |  | 3,476,513 |
Commitments and contingencies (Notes 8, 9, 10, 11, 12 and 16) |  |  |  |  |  |  |  |
Stockholders’ equity: |  |  |  |  |  |  |  |
Preferred stock, par value $0.01 per share, 5,000 shares authorized, none issued at December 31, 2024 and December 31, 2023 |  |  | — |  |  |  | — |
Common stock, par value $0.01 per share, 400,000 shares authorized, 162,962 and 162,709 shares issued, 59,388 and 59,176 shares outstanding at December 31, 2024 and December 31, 2023, respectively |  |  | 1,630 |  |  |  | 1,627 |
Additional paid-in capital |  |  | 2,341,298 |  |  |  | 2,266,265 |
Retained earnings |  |  | 9,788,655 |  |  |  | 9,150,821 |
Treasury stock, at cost, 103,574 and 103,533 shares at December 31, 2024 and December 31, 2023, respectively |  |  | (10,147,793 | ) |  |  | (10,134,252 | )
Accumulated other comprehensive loss |  |  | (155,283 | ) |  |  | (134,120 | )
Total stockholders’ equity |  |  | 1,828,507 |  |  |  | 1,150,341 |
Total liabilities and stockholders’ equity |  | $ | 4,553,795 |  |  | $ | 4,626,854 |

The accompanying notes are an integral part of the consolidated financial statements.
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WATERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (In thousands, except per share data) |
Revenues: |  |  |  |
Product sales |  | $ | 1,844,176 |  |  | $ | 1,903,050 |  |  | $ | 1,988,169 |
Service sales |  |  | 1,114,211 |  |  |  | 1,053,366 |  |  |  | 983,787 |
Total net sales |  |  | 2,958,387 |  |  |  | 2,956,416 |  |  |  | 2,971,956 |
Costs and operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Cost of product sales |  |  | 747,920 |  |  |  | 766,374 |  |  |  | 836,209 |
Cost of service sales |  |  | 452,281 |  |  |  | 428,849 |  |  |  | 411,973 |
Selling and administrative expenses |  |  | 690,148 |  |  |  | 736,014 |  |  |  | 658,026 |
Research and development expenses |  |  | 183,027 |  |  |  | 174,945 |  |  |  | 176,190 |
Purchased intangibles amortization |  |  | 47,090 |  |  |  | 32,558 |  |  |  | 6,366 |
Litigation provision |  |  | 11,568 |  |  |  | — |  |  |  | — |
Acquired in-process research and development |  |  | — |  |  |  | — |  |  |  | 9,797 |
Total costs and operating expenses |  |  | 2,132,034 |  |  |  | 2,138,740 |  |  |  | 2,098,561 |
Operating income |  |  | 826,353 |  |  |  | 817,676 |  |  |  | 873,395 |
Other income, net |  |  | 776 |  |  |  | 807 |  |  |  | 2,228 |
Interest expense |  |  | (89,677 | ) |  |  | (98,861 | ) |  |  | (48,797 | )
Interest income |  |  | 17,416 |  |  |  | 16,621 |  |  |  | 11,020 |
Income before income taxes |  |  | 754,868 |  |  |  | 736,243 |  |  |  | 837,846 |
Provision for income taxes |  |  | 117,034 |  |  |  | 94,009 |  |  |  | 130,091 |
Net income |  | $ | 637,834 |  |  | $ | 642,234 |  |  | $ | 707,755 |
Net income per basic common share |  | $ | 10.75 |  |  | $ | 10.87 |  |  | $ | 11.80 |
Weighted-average number of basic common shares |  |  | 59,333 |  |  |  | 59,076 |  |  |  | 59,985 |
Net income per diluted common share |  | $ | 10.71 |  |  | $ | 10.84 |  |  | $ | 11.73 |
Weighted-average number of diluted common shares and equivalents |  |  | 59,552 |  |  |  | 59,270 |  |  |  | 60,331 |

The accompanying notes are an integral part of the consolidated financial statements.
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WATERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (In thousands) |
Net income |  | $ | 637,834 |  |  | $ | 642,234 |  |  | $ | 707,755 |
Other comprehensive (loss) income: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation |  |  | (26,565 | ) |  |  | 17,761 |  |  |  | (46,135 | )
Unrealized gains (losses) on derivative instruments before reclassifications |  |  | 4,116 |  |  |  | (2,648 | ) |  |  | — |
Amounts reclassified to interest income |  |  | (1,281 | ) |  |  | (326 | ) |  |  | — |
Unrealized gains (losses) on derivative instruments before income taxes |  |  | 2,835 |  |  |  | (2,974 | ) |  |  | — |
Income tax (expense) benefit |  |  | (680 | ) |  |  | 714 |  |  |  | — |
Unrealized gains (losses) on derivative instruments, net of tax |  |  | 2,155 |  |  |  | (2,260 | ) |  |  | — |
Unrealized gains on investments before income taxes |  |  | — |  |  |  | — |  |  |  | 26 |
Income tax expense |  |  | — |  |  |  | — |  |  |  | (6 | )
Unrealized gains on investments, net of tax |  |  | — |  |  |  | — |  |  |  | 20 |
Retirement liability adjustment before reclassifications |  |  | 3,828 |  |  |  | (10,153 | ) |  |  | 20,953 |
Amounts reclassified to other income, net |  |  | 448 |  |  |  | (98 | ) |  |  | 574 |
Retirement liability adjustment before income taxes |  |  | 4,276 |  |  |  | (10,251 | ) |  |  | 21,527 |
Income tax (expense) benefit |  |  | (1,029 | ) |  |  | 2,202 |  |  |  | (5,119 | )
Retirement liability adjustment, net of tax |  |  | 3,247 |  |  |  | (8,049 | ) |  |  | 16,408 |
Other comprehensive (loss) income |  |  | (21,163 | ) |  |  | 7,452 |  |  |  | (29,707 | )
Comprehensive income |  | $ | 616,671 |  |  | $ | 649,686 |  |  | $ | 678,048 |

The accompanying notes are an integral part of the consolidated financial statements.
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WATERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (In thousands) |
Cash flows from operating activities: |  |  |  |
Net income |  | $ | 637,834 |  |  | $ | 642,234 |  |  | $ | 707,755 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation |  |  | 44,709 |  |  |  | 36,868 |  |  |  | 42,564 |
Deferred income taxes |  |  | (877 | ) |  |  | (1,197 | ) |  |  | (31,988 | )
Depreciation |  |  | 87,018 |  |  |  | 84,625 |  |  |  | 71,998 |
Amortization of intangibles |  |  | 104,807 |  |  |  | 81,280 |  |  |  | 58,425 |
Realized gain on sale of investment |  |  | — |  |  |  | (742 | ) |  |  | — |
In-process research and development and other non-cash charges |  |  | — |  |  |  | — |  |  |  | 10,003 |
Change in operating assets and liabilities, net of acquisitions: |  |  |  |  |  |  |  |  |  |  |  |
(Increase) decrease in accounts receivable |  |  | (66,240 | ) |  |  | 49,179 |  |  |  | (137,874 | )
Decrease (increase) in inventories |  |  | 20,943 |  |  |  | (45,443 | ) |  |  | (101,902 | )
Increase in other current assets |  |  | (9,537 | ) |  |  | (43,164 | ) |  |  | (23,074 | )
Decrease (increase) in other assets |  |  | 4,654 |  |  |  | (26,264 | ) |  |  | (5,514 | )
Increase (decrease) in accounts payable and other current liabilities |  |  | 61,585 |  |  |  | (79,524 | ) |  |  | 60,984 |
Increase in deferred revenue and customer advances |  |  | 6,165 |  |  |  | 10,433 |  |  |  | 12,862 |
Decrease in other liabilities |  |  | (128,938 | ) |  |  | (105,476 | ) |  |  | (52,578 | )
Net cash provided by operating activities |  |  | 762,123 |  |  |  | 602,809 |  |  |  | 611,661 |
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |
Additions to property, plant, equipment and software capitalization |  |  | (142,481 | ) |  |  | (160,632 | ) |  |  | (175,921 | )
Asset and business acquisitions, net of cash acquired |  |  | — |  |  |  | (1,282,354 | ) |  |  | — |
Proceeds from (investments in) equity investments, net |  |  | (1,489 | ) |  |  | 742 |  |  |  | 8,903 |
Payments for intellectual property licenses |  |  | — |  |  |  | — |  |  |  | (7,535 | )
Purchases of investments |  |  | (3,729 | ) |  |  | (1,791 | ) |  |  | (11,407 | )
Maturities and sales of investments |  |  | 3,676 |  |  |  | 1,770 |  |  |  | 77,993 |
Net cash used in investing activities |  |  | (144,023 | ) |  |  | (1,442,265 | ) |  |  | (107,967 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from debt issuances |  |  | 170,000 |  |  |  | 1,450,040 |  |  |  | 205,000 |
Payments on debt |  |  | (900,000 | ) |  |  | (670,040 | ) |  |  | (145,000 | )
Payments of debt issuance costs |  |  | — |  |  |  | (400 | ) |  |  | — |
Proceeds from stock plans |  |  | 30,366 |  |  |  | 29,792 |  |  |  | 42,801 |
Purchases of treasury shares |  |  | (13,541 | ) |  |  | (70,277 | ) |  |  | (626,061 | )
Proceeds from derivative contracts |  |  | 16,500 |  |  |  | 15,836 |  |  |  | 13,627 |
Net cash (used in) provided by financing activities |  |  | (696,675 | ) |  |  | 754,951 |  |  |  | (509,633 | )
Effect of exchange rate changes on cash and cash equivalents |  |  | 7,920 |  |  |  | (948 | ) |  |  | (14,766 | )
Decrease in cash and cash equivalents |  |  | (70,655 | ) |  |  | (85,453 | ) |  |  | (20,705 | )
Cash and cash equivalents at beginning of period |  |  | 395,076 |  |  |  | 480,529 |  |  |  | 501,234 |
Cash and cash equivalents at end of period |  | $ | 324,421 |  |  | $ | 395,076 |  |  | $ | 480,529 |
Supplemental cash flow information: |  |  |  |  |  |  |  |  |  |  |  |
Income taxes paid |  | $ | 183,341 |  |  | $ | 243,316 |  |  | $ | 160,082 |
Interest paid |  | $ | 92,096 |  |  | $ | 94,099 |  |  | $ | 48,083 |

The accompanying notes are an integral part of the consolidated financial statements.
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WATERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

|  | Number of Common Shares |  |  | Common Stock |  |  | Additional Paid-In Capital |  |  | Retained Earnings |  |  | Treasury Stock |  |  | Accumulated Other Comprehensive Loss |  |  | Total Stockholders’ Equity |
|  | (In thousands) |
Balance December 31, 2021 |  |  | 162,084 |  |  | $ | 1,621 |  |  | $ | 2,114,880 |  |  | $ | 7,800,832 |  |  | $ | (9,437,914 | ) |  | $ | (111,865 | ) |  | $ | 367,554 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 707,755 |  |  |  | — |  |  |  | — |  |  |  | 707,755 |
Other comprehensive loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (29,707 | ) |  |  | (29,707 | )
Issuance of common stock for employees: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee Stock Purchase Plan |  |  | 37 |  |  |  | — |  |  |  | 10,952 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10,952 |
Stock options exercised |  |  | 192 |  |  |  | 2 |  |  |  | 31,676 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 31,678 |
Treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (626,061 | ) |  |  | — |  |  |  | (626,061 | )
Stock-based compensation |  |  | 112 |  |  |  | 1 |  |  |  | 42,316 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 42,317 |
Balance December 31, 2022 |  |  | 162,425 |  |  | $ | 1,624 |  |  | $ | 2,199,824 |  |  | $ | 8,508,587 |  |  | $ | (10,063,975 | ) |  | $ | (141,572 | ) |  | $ | 504,488 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 642,234 |  |  |  | — |  |  |  | — |  |  |  | 642,234 |
Other comprehensive income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7,452 |  |  |  | 7,452 |
Issuance of common stock for employees: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee Stock Purchase Plan |  |  | 41 |  |  |  | — |  |  |  | 11,124 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11,124 |
Stock options exercised |  |  | 100 |  |  |  | 1 |  |  |  | 17,635 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 17,636 |
Treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (70,277 | ) |  |  | — |  |  |  | (70,277 | )
Stock-based compensation |  |  | 143 |  |  |  | 2 |  |  |  | 37,682 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 37,684 |
Balance December 31, 2023 |  |  | 162,709 |  |  | $ | 1,627 |  |  | $ | 2,266,265 |  |  | $ | 9,150,821 |  |  | $ | (10,134,252 | ) |  | $ | (134,120 | ) |  | $ | 1,150,341 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 637,834 |  |  |  | — |  |  |  | — |  |  |  | 637,834 |
Other comprehensive loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (21,163 | ) |  |  | (21,163 | )
Issuance of common stock for employees: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee Stock Purchase Plan |  |  | 36 |  |  |  | — |  |  |  | 9,778 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,778 |
Stock options exercised |  |  | 98 |  |  |  | 1 |  |  |  | 21,203 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 21,204 |
Treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (13,541 | ) |  |  | — |  |  |  | (13,541 | )
Stock-based compensation |  |  | 119 |  |  |  | 2 |  |  |  | 44,052 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 44,054 |
Balance December 31, 2024 |  |  | 162,962 |  |  | $ | 1,630 |  |  | $ | 2,341,298 |  |  | $ | 9,788,655 |  |  | $ | (10,147,793 | ) |  | $ | (155,283 | ) |  | $ | 1,828,507 |

The accompanying notes are an integral part of the consolidated financial statements.
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1 Description of Business and Organization
Waters Corporation (the “Company,” “we,” “our,” or “us”), a global leader in analytical instruments and software, has pioneered innovations in chromatography, mass spectrometry and thermal analysis serving life, materials and food sciences for more than 65 years. The Company primarily designs, manufactures, sells and services high-performance liquid chromatography (“HPLC”), ultra-performance liquid chromatography (“UPLC” and together with HPLC, referred to as “LC”) and mass spectrometry (“MS”) technology systems and support products, including chromatography columns, other consumable products and comprehensive post-warranty service plans. These systems are complementary products that are frequently employed together
(“LC-MS”)
and sold as integrated instrument systems using common software platforms. LC is a standard technique and is utilized in a broad range of industries to detect, identify, monitor and measure the chemical, physical and biological composition of materials, and to purify a full range of compounds. MS technology, principally in conjunction with chromatography, is employed in drug discovery and development, including clinical trial testing, the analysis of proteins in disease processes (known as “proteomics”), nutritional safety analysis and environmental testing.
LC-MS
instruments combine a liquid phase sample introduction and separation system with mass spectrometric compound identification and quantification. In addition, the Company designs, manufactures, sells and services thermal analysis, rheometry and calorimetry instruments through its TA Instruments product line. These instruments are used in predicting the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals and viscous liquids for various industrial, consumer goods and healthcare products, as well as for life science research. The Company is also a developer and supplier of advanced software-based products that interface with the Company’s instruments, as well as other manufacturers’ instruments.
On May 16, 2023, the Company completed the acquisition of Wyatt Technology, LLC and its three operating subsidiaries, Wyatt Technology Europe GmbH, Wyatt Technology France and Wyatt Technology UK Ltd. (collectively, “Wyatt”), for a total purchase price of $1.3
billion in cash. Wyatt is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories and services. The acquisition has expanded Waters’ portfolio and increased our exposure to large molecule applications. The Company financed this transaction with a combination of cash on its balance sheet and borrowings under its revolving credit facility. The Company’s financial results for the year ended December 31, 2024 include the financial results of Wyatt for the full year, while the financial results for the year ended December 31, 2023 only include
seven-and-a-half
months of Wyatt’s financial results as the closing of the acquisition occurred during the second quarter of 2023.
2 Basis of Presentation and Summary of Significant Accounting Policies
Use of Estimates
The preparation of consolidated financial statements in conformity with 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 liabilities at the dates of the financial statements. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, goodwill and intangible assets, income taxes, litigation and inventory valuation. 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 amounts may differ from these estimates under different assumptions or conditions.
Risks and Uncertainties
The Company is subject to risks common to companies in the analytical instrument industry, including, but not limited to, global economic and financial market conditions, fluctuations in foreign currency exchange rates,
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fluctuations in customer demand, development by
its
competitors of new technological innovations, costs of developing new technologies, levels of debt and debt service requirements, risk of disruption, dependence on key personnel, protection and litigation of proprietary technology, shifts in taxable income between tax jurisdictions and compliance with regulations of the U.S.
Food
and Drug Administration and similar foreign regulatory authorities and agencies.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries, which are wholly owned. The Company consolidates entities in which it owns or controls 50% or more of the voting shares. All inter-company balances and transactions have been eliminated.
Translation of Foreign Currencies
The functional currency of each of the Company’s foreign operating subsidiaries is the local currency of its country of domicile, except for the Company’s subsidiaries in Hong Kong and Singapore, where the underlying transactional cash flows are denominated in currencies other than the respective local currency of domicile. The functional currency of the Hong Kong and Singapore subsidiaries is the U.S. dollar, based on the respective entity’s cash flows.
For the Company’s foreign operations, assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the balance sheet date, while revenues and expenses are translated at average exchange rates prevailing during the respective period. Any resulting translation gains or losses are included in accumulated other comprehensive loss in the consolidated balance sheets.
The Company’s net sales derived from operations outside the United States were 68%, 69% and 70% in 2024, 2023 and 2022, respectively. Gains and losses from foreign currency transactions are included primarily in cost of sales in the consolidated statements of operations. In 2024, 2023 and 2022, foreign currency transactions resulted in net losses of $36 million, $16 million and $31 million, respectively.
Seasonality of Business
The Company typically experiences seasonality in its orders that is reflected as an increase in sales in the fourth quarter, as a result of purchasing habits for capital goods of customers that tend to exhaust their spending budgets by calendar
year-end.
Cash, Cash Equivalents and Investments
Cash equivalents represent highly liquid investments, with original maturities of 90 days or less, primarily in bank deposits, U.S. treasury bill money market funds and commercial paper. Investments with longer maturities are classified as investments, and are held primarily in U.S. treasury bills, U.S. dollar-denominated treasury bills and commercial paper, bank deposits and corporate debt securities.
The Company maintains cash balances in various operating accounts in excess of federally insured limits, and in foreign subsidiary accounts in currencies other than the U.S. dollar. As of December 31, 2024 and 2023, $275 million out of $325 million and $321 million out of $396 million, respectively, of the Company’s total cash, cash equivalents and investments were held by foreign subsidiaries. In addition, $226 million out of $325 million and $233 million out of $396 million of cash, cash equivalents and investments were held in currencies other than the U.S. dollar at December 31, 2024 and 2023, respectively.
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Accounts Receivable and Allowance for Credit Losses
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company has very limited use of rebates and other cash considerations payable to customers and, as a result, the transaction price determination does not have any material variable consideration. The Company does not consider there to be significant concentrations of credit risk with respect to trade receivables due to the short-term nature of the balances, the Company having a large and diverse customer base, and the Company having a strong historical experience of collecting receivables with minimal defaults. As a result, credit risk is considered low across territories and trade receivables are considered to be a single class of financial asset. The allowance for credit losses is based on a number of factors and is calculated by applying a historical loss rate to trade receivable aging balances to estimate a general reserve balance along with an additional adjustment for any specific receivables with known or anticipated issues affecting the likelihood of recovery. Past due balances with a probability of default based on historical data as well as relevant available forward-looking information are included in the specific adjustment. The historical loss rate is reviewed on at least an annual basis and the allowance for credit losses is reviewed quarterly for any required adjustments. The Company does not have any
off-balance
sheet credit exposure related to its customers.
Trade receivables related to instrument sales are collateralized by the instrument that is sold. If there is a risk of default related to a receivable that is collateralized, then the fair value of the collateral is calculated and adjusted for the cost to
re-possess,
refurbish and
re-sell
the instrument. This adjusted fair value is compared to the receivable balance and the difference would be recorded as the expected credit loss.
The following is a summary of the activity of the Company’s allowance for credit losses for the twelve months ended December 31, 2024, 2023 and 2022 (in thousands):

|  | Balance at Beginning of Period |  |  | Additions |  |  | Deductions and Other |  |  | Balance at End of Period |
Allowance for Credit Losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2024 |  | $ | 19,335 |  |  | $ | 3,198 |  |  | $ | (8,264 | ) |  | $ | 14,269 |
December 31, 2023 |  | $ | 14,311 |  |  | $ | 8,120 |  |  | $ | (3,096 | ) |  | $ | 19,335 |
December 31, 2022 |  | $ | 13,228 |  |  | $ | 6,509 |  |  | $ | (5,426 | ) |  | $ | 14,311 |

Concentration of Credit Risk
The Company sells its products and services to a significant number of large and small customers throughout the world, with net sales to the pharmaceutical industry of approximately 58%, 57% and 59% in 2024, 2023 and 2022, respectively. None of the Company’s individual customers accounted for more than 2% of annual Company sales in 2024, 2023 or 2022. The Company performs continuing credit evaluations of its customers and generally does not require collateral, but in certain circumstances may require letters of credit or deposits. Historically, the Company has not experienced significant credit losses.
Inventory
The Company values all of its inventories at the lower of cost or net realizable value on a
first-in,
first-out
basis (“FIFO”).
Income Taxes
As part of the process of preparing the consolidated financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves the Company estimating its
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income taxes, taking into account the amount, timing and character of taxable income, tax deductions and credits and assessing changes in tax laws, regulations, agreements and treaties. Differing treatment of items for tax and accounting purposes, such as depreciation, amortization and inventory reserves, result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. In the event that actual results differ from these estimates, or the Company adjusts these estimates in future periods, such changes could materially impact the Company’s financial position and results of operations.
The accounting standards for income taxes require that a company continually evaluate the necessity of establishing or changing a valuation allowance for deferred tax assets depending on whether it is more likely than not that the actual benefit of those assets will be realized in future periods.
The Company accounts for its uncertain tax return positions in accordance with the accounting standards for income taxes, which require financial statement reporting of the expected future tax consequences of uncertain tax positions on the presumption that all concerned tax authorities possess full knowledge of those tax positions, as well as all of the pertinent facts and circumstances, but prohibit any discounting of unrecognized tax benefits associated with those positions for the time value of money. The Company classified interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.
Leases
The Company’s lease portfolio consists primarily of operating leases. The Company’s operating leases consist of property leases for sales, demonstration, laboratory, warehouse and office spaces, automotive leases for sales and service personnel and equipment leases, primarily used in our manufacturing and distribution operations. The Company categorizes leases as either operating or finance leases at the commencement date of the lease. The Company does not have any material financing leases.
The Company makes variable lease payments that do not depend on a rate or index, primarily for items such as real estate taxes and other expenses. These expenses are recorded as variable costs in the period incurred. For the years ended December 31, 2024, 2023 and 2022, variable costs incurred were not material.
The Company’s lease agreements may include tenant improvement allowances, rent holidays, and/or contingent rent provisions as well as a certain number of these leases contain rental escalation clauses that are either fixed or adjusted periodically for inflation of market rates which are factored into our determination of lease payments at lease inception. The Company’s leases also sometimes include renewal options and/or termination options which are included in the determination of the lease term when they are reasonably certain to be exercised.
The Company has lease agreements which contain lease and
non-lease
components, which are accounted for as a single lease component for all underlying classes of assets.
For leases with terms greater than 12 months, the Company records a
right-of-use
asset and lease liability at the present value of lease payments over the term of the leases and records rent expense on a straight-line basis over the lease term. The Company has elected not to apply the recognition requirements to short-term leases with terms less than 12 months. For short-term leases, the Company recognizes lease payments in net income on a straight-line basis over the term of the lease. For the years ended December 31, 2024, 2023
and
2022, costs incurred
related
to short-term leases were not material.
When available, the Company uses the rate implicit in the lease to discount lease payments to determine the present value of the lease liabilities; however, most of the leases do not provide a readily determinable implicit
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rate and, as required by the accounting guidance, the Company estimates its incremental secured borrowing rate to discount the lease payments based on information available at lease commencement (or, for the leases in existence on the adoption date, the January 1, 2019 information). The Company’s incremental borrowing rate reflects the estimated rate of interest that the Company would pay to borrow on a collateralized basis over a similar term to the lease payments in a similar economic
environment
.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost.
Expenditures
for maintenance and repairs are charged to expense, while the costs of significant improvements are capitalized. Depreciation is provided using the straight-line method over the following estimated useful lives: buildings — fifteen to thirty-nine years; building improvements — five to
ten years; leasehold improvements — the shorter of the economic useful life or life of lease; and production and other equipment —
three
to ten years. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are eliminated from the consolidated balance sheets and related gains or losses are reflected in the consolidated statements of operations.
Asset Impairments
The Company reviews its long-lived assets for impairment in accordance with the accounting standards for property, plant and equipment. Whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable, the Company evaluates the recoverability of the carrying value of the asset based on the expected future cash flows, relying on a number of factors, including, but not limited to, operating results, business plans, economic projections and anticipated future cash flows. If the asset is deemed not recoverable, it is written down to fair value and the impairment is recorded in the consolidated statements of operations.
During 2022, the Company recorded a total
non-cash
charge of $6
million in other income (expense), net in the consolidated statement of operations for the impairment of various equity investments without readily determinable fair values accounted for under the measurement alternative or the equity method of accounting. The impairments resulted from the substantial doubt of the investee’s ability to continue as a going concern.
Business Combinations and Asset Acquisitions
The Company accounts for business acquisitions under the accounting standards for business combinations. The results of each acquisition are included in the Company’s consolidated results as of the acquisition date and the purchase price of an acquisition is allocated to tangible and intangible assets and assumed liabilities based on their estimated fair values. Any excess of the fair value consideration transferred over the estimated fair values of the net assets acquired is recognized as goodwill. We use assumptions and estimates in determining the fair value of assets acquired and liabilities assumed. The determination of the fair value of intangible assets, which represents a significant portion of the purchase price in our recent acquisition of Wyatt, requires the use of significant judgment with regard to (i) the fair value; and (ii) whether such intangibles are amortizable or
non-amortizable
and, if the former, the period and the method by which the intangible asset will be amortized. We utilize commonly accepted valuation techniques, such as the income, cost and market approaches, as appropriate, in establishing the fair value of intangible assets. Typically, key assumptions include projections of cash flows that arise from identifiable intangible assets of acquired businesses as well as discount rates based on an analysis of the weighted average cost of capital, adjusted for specific risks associated with the assets.
The customer relationship intangible assets were the most significant identifiable assets acquired in the acquisition of Wyatt. The customer relationships were valued using the multi-period excess earnings method under the income approach. Our cash flow projections for the customer relationships acquired included significant judgments and assumptions related to customer attrition rate, discount rate, and forecasted revenues.
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Goodwill and Other Intangible Assets
Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may not be recoverable. In assessing the recoverability of goodwill and indefinite-lived intangible assets, we must make assumptions regarding the estimated future cash flows, including forecasted revenue growth and the discount rate to determine the fair value of these assets. If these estimates or their related assumptions change in the future, we may be required to record impairment charges against these assets in the reporting period in which the impairment is determined.
We test goodwill for impairment at the reporting unit level, which is the operating segment or one level below an operating segment. We have the option of performing a qualitative assessment to determine whether further impairment testing is necessary before performing the quantitative assessment. If as a result of the qualitative assessment, it is
more-likely-than-not
that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test will be required. Otherwise, no further testing will be required. If a quantitative impairment test is performed, we compare the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. Estimating the fair value of the reporting units requires significant judgment by management. If the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment charge is recognized for the amount by which the carrying value amount exceeds the reporting unit’s fair value up to the total amount of goodwill allocated to the reporting unit. The Company performs an annual goodwill impairment assessment for its reporting units as of December 31 each year. The Company has two reporting units: Waters and TA. Goodwill is allocated to the reporting units at the time of acquisition.
The Company’s intangible assets include purchased technology; capitalized software; costs associated with acquiring Company patents, trademarks and intellectual properties, such as licenses; and acquired IPR&D. Purchased intangibles are recorded at their fair market values as of the acquisition date and amortized over their estimated useful lives, ranging from
one
to fifteen years. Other intangibles are amortized over a period ranging from
one
to ten years. Acquired IPR&D is amortized from the date of completion of the acquired program over its estimated useful life.
Goodwill totaled $1.3 billion as of both December 31, 2024 and 2023, respectively. Net intangible assets and long-lived assets amounted to $568 million and $651 million, as of December 31, 2024, respectively, and $629 million and $639 million as of December 31, 2023, respectively.
Software Development Costs
The Company capitalizes internal and external software development costs for products offered for sale in accordance with the accounting standards for the costs of software to be sold, leased, or otherwise marketed. Capitalized costs are amortized to cost of sales over the period of economic benefit, which approximates a straight-line basis over the estimated useful lives of the related software products, generally
three
to
ten years
. The Company capitalized $34 million, $44 million and $46 million of direct expenses that were related to the development of software in 2024, 2023 and 2022, respectively. Net capitalized software included in intangible assets totaled $154 million and $165 million at December 31, 2024 and 2023, respectively. See Note 7, Goodwill and Other Intangibles.
The Company capitalizes software development costs for internal use. Capitalized internal software development costs are amortized over the period of economic benefit, which approximates a straight-line basis over ten years.
Net capitalized internal software included in property, plant and equipment totaled $
56 million and $
53
million at December 31, 2024 and 2023, respectively.
Other Investments
The Company accounts for its investments that represent less than twenty percent ownership, and for which the Company does not have the ability to exercise significant influence, using the accounting standards for
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investments in equity securities. Investments for which the Company does not have the ability to exercise significant influence, and for which there is not a readily determinable market value, are accounted for at cost, adjusted for subsequent observable price changes as applicable. The Company periodically evaluates the carrying value of its investments for which the Company does not have the ability to exercise significant influence, and for which there is not a readily determinable fair value and carries them at cost, less impairment, adjusted for subsequent observable price changes. For equity investments in which the Company has the ability to exercise significant influence over operating and financial policies of the investee, the equity method of accounting is used. The Company’s share of net income or losses of equity method investments is included in the consolidated statements of operations and was not material in any period presented.
During the year ended December 31, 2024, the Company received no proceeds from, and made $1 million of investments in, unaffiliated companies. During the year ended December 31, 2023
,
the Company received $1 million in proceeds from, and made no investments in, unaffiliated companies. During the year ended December 31, 2022
,
the Company received $10 million in proceeds from, and made investments of $1 million in, unaffiliated companies.
In 2022, the Company recorded a realized gain of $7 million in other income (expense), net in the consolidated statement of operations due to the sales of various equity investments as well as incurring $6 million in impairment losses. The Company also recognized an additional $2 million
non-cash
gain on the cashless exercise of a warrant.
Fair Value Measurements
In accordance with the accounting standards for fair value measurements and disclosures, certain of the Company’s assets and liabilities are measured at fair value on a recurring basis as of December 31, 2024 and 2023. Fair values determined by Level 1 inputs utilize observable data, such as quoted prices in active markets. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points for which there is little or no market data, which require the reporting entity to develop its own assumptions.
The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2024 (in thousands):

|  | Total at December 31, 2024 |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Time deposits |  | $ | 934 |  |  | $ | — |  |  | $ | 934 |  |  | $ | — |
Waters 401(k) Restoration Plan assets |  |  | 30,137 |  |  |  | 30,137 |  |  |  | — |  |  |  | — |
Foreign currency exchange contracts |  |  | 482 |  |  |  | — |  |  |  | 482 |  |  |  | — |
Interest rate cross-currency swap agreements |  |  | 26,196 |  |  |  | — |  |  |  | 26,196 |  |  |  | — |
Interest rate swap cash flow hedge |  |  | 503 |  |  |  | — |  |  |  | 503 |  |  |  | — |
Total |  | $ | 58,252 |  |  | $ | 30,137 |  |  | $ | 28,115 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  | $ | 261 |  |  | $ | — |  |  | $ | 261 |  |  | $ | — |
Interest rate swap cash flow hedge |  |  | 641 |  |  |  | — |  |  |  | 641 |  |  |  | — |
Total |  | $ | 902 |  |  | $ | — |  |  | $ | 902 |  |  | $ | — |

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The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis 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) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Time deposits |  | $ | 898 |  |  | $ | — |  |  | $ | 898 |  |  | $ | — |
Waters 401(k) Restoration Plan assets |  |  | 28,995 |  |  |  | 28,995 |  |  |  | — |  |  |  | — |
Foreign currency exchange contracts |  |  | 183 |  |  |  | — |  |  |  | 183 |  |  |  | — |
Interest rate cross-currency swap agreements |  |  | 4,835 |  |  |  | — |  |  |  | 4,835 |  |  |  | — |
Total |  | $ | 34,911 |  |  | $ | 28,995 |  |  | $ | 5,916 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  | $ | 207 |  |  | $ | — |  |  | $ | 207 |  |  | $ | — |
Interest rate cross-currency swap agreements |  |  | 13,384 |  |  |  | — |  |  |  | 13,384 |  |  |  | — |
Interest rate swap cash flow hedge |  |  | 2,974 |  |  |  | — |  |  |  | 2,974 |  |  |  | — |
Total |  | $ | 16,565 |  |  | $ | — |  |  | $ | 16,565 |  |  | $ | — |

Fair Value of 401(k) Restoration Plan Assets
The 401(k) Restoration Plan is a nonqualified defined contribution plan and the assets were held in registered mutual funds and have been classified as Level 1. The fair values of the assets in the plan are determined through market and observable sources from daily quoted prices on nationally recognized securities exchanges.
Fair Value of Cash Equivalents, Investments, Foreign Currency Exchange Contracts, Interest Rate Cross-Currency Swap Agreements and Interest Rate Swap Cash Flow Hedges
The fair values of the Company’s cash equivalents, investments, foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap cash flow hedges are determined through market and observable sources and have been classified as Level 2. These assets and liabilities have been initially valued at the transaction price and subsequently valued, typically utilizing third-party pricing services. The pricing services use many inputs to determine value, including reportable trades, benchmark yields, credit spreads, broker/dealer quotes, current spot rates and other industry and economic events. The Company validates the prices provided by third-party pricing services by reviewing their pricing methods and obtaining market values from other pricing sources.
Fair Value of Other Financial Instruments
The Company’s accounts receivable and accounts payable are recorded at cost, which approximates fair value due to their short-term nature. The carrying value of the Company’s variable interest rate debt approximates fair value due to the variable nature of the interest rate. The carrying value of the Company’s fixed interest rate debt was $1.3 billion at both December 31, 2024 and 2023. The fair value of the Company’s fixed interest rate debt was estimated using discounted cash flow models, based on estimated current rates offered for similar debt under current market conditions for the Company. The fair value of the Company’s fixed interest rate debt was e
stimate
d to be $1.1
billion
and $1.2 billion at December 31, 2024 and 2023, respectively, using Level 2 inputs.
Derivative Transactions
The Company is a global company that operates in over 35 countries and, as a result, the Company’s net sales, cost of sales, operating expenses and balance sheet amounts are significantly impacted by fluctuations in foreign
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currency exchange rates. The Company is exposed to currency price risk on foreign currency exchange rate fluctuations when it translates its
non-U.S.
dollar foreign subsidiaries’ financial statements into U.S. dollars and when any of the Company’s subsidiaries purchase or sell products or services in a currency other than its own currency.
The Company’s principal strategies in managing exposures to changes in foreign currency exchange rates are to (1) naturally hedge the foreign-currency-denominated liabilities on the Company’s balance sheet against corresponding assets of the same currency, such that any changes in liabilities due to fluctuations in foreign currency exchange rates are typically offset by corresponding changes in assets and (2) mitigate foreign exchange risk exposure of international operations by hedging the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated and
yen-denominated
net asset investments. The Company presents the derivative transactions in financing activities in the statement of cash flows.
Foreign Currency Exchange Contracts
The Company does not specifically enter into any derivatives that hedge foreign-currency-denominated operating assets, liabilities or commitments on its balance sheet, other than a portion of certain third-party accounts receivable and accounts payable, and the Company’s net worldwide intercompany receivables and payables, which are eliminated in consolidation. The Company periodically aggregates its net worldwide balances by currency and then enters into foreign currency exchange contracts that mature within 90 days to hedge a portion of the remaining balance to minimize some of the Company’s currency price risk exposure. The foreign currency exchange contracts are not designated for hedge accounting treatment. Principal hedged currencies include the euro, Japanese yen, British pound, Mexican peso and Brazilian real.
Cash Flow Hedges
The Company’s Credit Facility is a variable borrowing and has interest payments based on a contractually specified interest rate index. The contractually specified index on the Credit Facility is the
3-month
Term SOFR. The variable rate interest payments create interest risk for the Company as interest payments will fluctuate based on changes in the contractually specified interest rate index over the life of the Credit Facility. In order to reduce interest rate risk, the Company has entered in interest rate swaps with an aggregate notional value of $150 million to effectively
lock-in
the forecasted interest payments on the variable rate borrowing over its term. The interest rate swaps represent cash flow hedges and are assessed for hedge effectiveness each reporting period. When the hedge relationship is highly effective at achieving offsetting changes in cash flows, the Company will record the entire change in fair value of the interest rate swaps in accumulated other comprehensive loss. The amount in accumulated other comprehensive loss is reclassified to income in the period that the underlying transaction impacts consolidated income. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be
de-designated
and amounts accumulated in other comprehensive loss will be reclassified to income in the current period. Interest settlements due to benchmark interest rate changes are recorded in interest income or interest expense. For the twelve months ended December 31, 2024, the Company did not have any cash flow hedges that were deemed ineffective.
Interest Rate Cross-Currency Swap Agreements
As of December 31, 2024, the Company had entered into interest rate cross-currency swap derivative agreements with durations up to three years with an aggregate notional value of $625 million to hedge the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated and
yen-denominated
net asset investments. Under hedge accounting, the change in fair value of the derivative that relates to changes in the foreign currency spot rate are recorded in the currency translation adjustment in other comprehensive income and remain in accumulated other comprehensive loss in stockholders’ equity until the sale or substantial
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liquidation of the foreign operation. The difference between the interest rate received and paid under the interest rate cross-currency swap derivative agreement is recorded in interest income in the statement of operations.
The Company’s foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap agreements designated as cash flow hedges included in the consolidated balance sheets are classified as follows (in thousands):

|  | December 31, 2024 |  |  | December 31, 2023 |
|  | Notional Value |  |  | Fair Value |  |  | Notional Value |  |  | Fair Value |
Foreign currency exchange contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current assets |  | $ | 14,999 |  |  | $ | 482 |  |  | $ | 24,155 |  |  | $ | 183 |
Other current liabilities |  | $ | 24,749 |  |  | $ | 261 |  |  | $ | 16,000 |  |  | $ | 207 |
Interest rate cross-currency swap agreements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other assets |  | $ | 625,000 |  |  | $ | 26,196 |  |  | $ | 220,000 |  |  | $ | 4,835 |
Other liabilities |  | $ |  |  |  | $ |  |  |  | $ | 405,000 |  |  | $ | 13,384 |
Accumulated other comprehensive income (loss) |  |  |  |  |  | $ | 32,979 |  |  |  |  |  |  | $ | (7,975 | )
Interest rate swap cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other assets |  | $ | 100,000 |  |  | $ | 503 |  |  | $ | — |  |  | $ | — |
Other liabilities |  | $ | 50,000 |  |  | $ | 641 |  |  | $ | 100,000 |  |  | $ | 2,974 |
Accumulated other comprehensive loss |  |  |  |  |  | $ | (138 | ) |  |  |  |  |  | $ | (2,974 | )

The following is a summary of the activity included in the consolidated statements of operations and statements of comprehensive income related to the foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap agreements designated as cash flow hedges (in thousands):

|  | Financial Statement Classification |  |  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Foreign currency exchange contracts: |  |  |  |  |  |  |  |  |  |  |  |  |
Realized gains (losses) on closed contracts |  |  | Cost of sales |  |  | $ | 850 |  |  | $ | 224 |  |  | $ | (3,855 | )
Unrealized gains (losses) on open contracts |  |  | Cost of sales |  |  |  | 245 |  |  |  | (156 | ) |  |  | (176 | )
Cumulative net pre-tax gains (losses) |  |  | Cost of sales |  |  | $ | 1,095 |  |  | $ | 68 |  |  | $ | (4,031 | )
Interest rate cross-currency swap agreements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest earned |  |  | Interest income |  |  | $ | 10,110 |  |  | $ | 10,974 |  |  | $ | 8,872 |
Unrealized gains (losses) on open contracts |  |  | Accumulated other comprehensive loss |  |  | $ | 40,954 |  |  | $ | (18,001 | ) |  | $ | 25,969 |
Interest rate swap cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest earned |  |  | Interest income |  |  | $ | 1,281 |  |  | $ | 326 |  |  | $ | — |
Unrealized losses on open contracts |  |  | Accumulated other comprehensive loss |  |  | $ | (2,835 | ) |  | $ | (2,974 | ) |  | $ | — |

Stockholders’ Equity
In December 202
4
, the Company’s Board of Directors authorized the extension of the existing share repurchase program through January 21, 202
8
. The Company’s remaining authorization is $1.0 billion. During 2023 and 2022, the Company repurchased 0.2 million and 2.0 million shares of the Company’s outstanding common stock at a cost of $58 million and $616
million, respectively, under authorized share repurchase programs. The Company did not make any open market share repurchases in 2024. In addition, the Company repurchased
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$13 million, $12 million and $11 million of common stock related to the vesting of restricted stock units during the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2
02
4, the Company has a total of $1.0 billion authorized for future repurchases.
Revenue Recognition
The Company recognizes revenue upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally enters into contracts that include a combination of products and services. Revenue is allocated to distinct performance obligations and is recognized net of allowances for returns and discounts.
The Company recognizes revenue on product sales at the time control of the product transfers to the customer. Certain of the Company’s customers have terms where control of the product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery. All incremental costs of obtaining a contract are expensed as and when incurred if the expected amortization period of the asset that would have been recognized is one year or less. Shipping and handling costs are included as a component of cost of sales. In situations where the control of the goods transfers prior to the completion of the Company’s obligation to ship the products to its customers, the Company has elected the practical expedient to account for the shipping services as a fulfillment cost. Accordingly, such costs are recognized when control of the related goods is transferred to the customer. In more rare situations, the Company has revenue associated with products that contain specific customer acceptance criteria and the related revenue is not recognized before the customer acceptance criteria are satisfied. The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with specific revenue-producing transactions and collected by the Company from a customer.
Generally, the Company’s contracts for products include a performance obligation related to installation. The Company has determined that the installation represents a distinct performance obligation and revenue is recognized separately upon the completion of installation. The Company determines the amount of the transaction price to allocate to the installation service based on the standalone selling price of the product and the service, which requires judgment. The Company determines the relative standalone selling price of installation based upon a number of factors, including hourly service billing rates and estimated installation hours. In developing these estimates, the Company considers past history, competition, billing rates of current services and other factors.
The Company has sales from standalone software, which are included in product revenue. These arrangements typically include software licenses and maintenance contracts, both of which the Company has determined are distinct performance obligations. The Company determines the amount of the transaction price to allocate to the license and maintenance contract based on the relative standalone selling price of each performance obligation. Software license revenue is recognized at the point in time when control has been transferred to the customer. The revenue allocated to the software maintenance contract is recognized on a straight-line basis over the maintenance period, which is the contractual term of the contract, as a time-based measure of progress best reflects the Company’s performance in satisfying this obligation. Unspecified rights to software upgrades are typically sold as part of the maintenance contract on a
when-and-if-available
basis.
Payment terms and conditions vary among the Company’s revenue streams, although terms generally include a requirement of payment within 30 to 60 days of product shipment. Prior to providing payment terms to customers, an evaluation of their credit risk is performed. Returns and customer credits are infrequent and insignificant and are recorded as a reduction to sales. Rights of return are not included in sales arrangements and, therefore, there is minimal variable consideration included in the transaction price of our products.
6
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Service revenue includes (1) service and software maintenance contracts and (2) service calls (time and materials). Instrument service contracts and software maintenance contracts are typically annual contracts, which are billed at the beginning of the contract or maintenance period. The amount of the service and software maintenance contract is recognized on a straight-line basis to revenue over the maintenance service period, which is the contractual term of the contract, as a time-based measure of progress best reflects the Company’s performance in satisfying this obligation. There are no deferred costs associated with the service contract, as the cost of the service is recorded when the service is performed. Service calls are recognized to revenue at the time a service is performed.
Product Warranty Costs
The Company accrues estimated product warranty costs at the time of sale, which are included in cost of sales in the consolidated statements of operations. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. The amount of the accrued warranty liability is based on historical information, such as past experience, product failure rates, number of units repaired and estimated costs of material and labor. The liability is reviewed for reasonableness at least quarterly.
The following is a summary of the activity of the Company’s accrued warranty liability for the twelve months ended December 31, 2024, 2023 and 2022 (in thousands):

|  | Balance at Beginning of Period |  |  | Accruals for Warranties |  |  | Settlements Made |  |  | Balance at End of Period |
Accrued warranty liability: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2024 |  | $ | 12,050 |  |  | $ | 7,214 |  |  | $ | (7,662 | ) |  | $ | 11,602 |
December 31, 2023 |  | $ | 11,949 |  |  | $ | 7,727 |  |  | $ | (7,626 | ) |  | $ | 12,050 |
December 31, 2022 |  | $ | 10,718 |  |  | $ | 10,067 |  |  | $ | (8,836 | ) |  | $ | 11,949 |

Advertising Costs
All advertising costs are expensed as incurred and are included in selling and administrative expenses in the consolidated statements of operations. Advertising expenses were $6
million for the twelve months ended December 31, 2024 and $7 million for both the twelve months ended December 31, 2023 and 2022.
Research and Development Expenses
Research and development expenses are comprised of costs incurred in performing research and development activities, including salaries and benefits, facilities costs, overhead costs, contract services and other outside costs. Research and development expenses are expensed as incurred.
Stock-Based Compensation
The Company has two stock-based compensation plans, which are described in Note 13, “Stock-Based Compensation”.
Earnings Per Share
In accordance with the earnings per share accounting standards, the Company presents two earnings per share (“EPS”) amounts. Income per basic common share is based on income available to common shareholders
and
the
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weighted-average number of common
shares
outstanding during the periods presented. Income per diluted common share includes additional dilution from potential common stock, such as stock issuable pursuant to the exercise of stock options outstanding.
Retirement Plans
The Company sponsors various retirement plans, which are described in Note 16, “Retirement Plans”.
Comprehensive Income
The Company accounts for comprehensive income in accordance with the accounting standards for comprehensive income, which establish the accounting rules for reporting and displaying comprehensive income. These standards require that all components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements.
Restructuring
In March 2024, the Company implemented a reduction in workforce that impacted approximately
2% of the Company’s employees, primarily in China, where there had been a significant decline in sales as a result of lower customer demand. As a result, the Company incurred approximately $9
million of severance-related costs.
D
uring 2024, the Company paid $
15
million of severance-related costs in connection with the workforce reduction that occurred in
March 2024 and
July 2023. The accrued restructuring expense was approximately $
1
million at December 31, 2024 and $
7
million at December 31, 2023 and included in other current liabilities on the consolidated balance sheets.
Recently Adopted Accounting Standards
In March 2020, accounting guidance was issued that facilitates the effects of reference rate reform on financial reporting. The amendments in the update provide optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January of 2021, an update was issued to clarify that certain optional expedients and exceptions under the reference rate reform guidance for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, certain provisions in the reference rate reform guidance, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. This temporary guidance is effective for all entities as of March 12, 2020, through December 31, 2022. In December 2022, an update was issued because the cessation date for overnight LIBOR rates being published was extended to June 30, 2023, which was beyond the current expiration date of this guidance. The update extended the sunset date to December 31, 2024. The Company may elect to apply this guidance for all contract modifications or eligible hedging relationships during that time period subject to certain criteria. The Company did not elect to adopt this guidance because the Company did not have material reference rate exposure which required utilizing the guidance under this accounting pronouncement.
In November 2023, accounting guidance was issued that requires additional disclosures of reportable segment information. The guidance requires that public entities disclose, on an annual and interim basis (1) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, (2) an amount for other segment items by reportable segment and a description of its composition (the other segment items category is the difference
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between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss), (3) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods, (4) clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements, (5) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources, and (6) if a public entity has a single reportable segment to provide all the disclosures required by the amendments in this update and all existing segment disclosures in Topic 280. The amendments in this update do not change how operating segments are identified or aggregated nor how the quantitative thresholds are applied to determine its reportable segments. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments in this update should be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company has adopted this accounting standard update and included its significant expense categories in Note 17 “Business Segment Information”.
Recently Issued Accounting Standards
In December 2023, accounting guidance was issued to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this update change disclosure requirements related to the rate reconciliation, income taxes paid and other disclosures. For the rate reconciliation the amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. For income taxes paid the amendments require that all entities disclose on an annual basis the following information; (1) the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, (2) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). Finally, for other disclosures the amendments require that all entities disclose the following information: (1) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (2) income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. This update also eliminates the requirement for all entities to (1) disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or (2) make a statement that an estimate of the range cannot be made. As well as removing the requirement to disclose the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures. The amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis and retrospective application is permitted. The Company does not believe this accounting standard update will have a material impact on the Company’s financial position, results of operations and cash flows. The Company is currently evaluating the impact the adoption of this accounting standard update will have on our footnote disclosures.
In November 2024, accounting guidance was issued to improve disclosures of expenses and address requests from investors for more detailed information about the types of expenses (including purchases of
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inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). This incremental information will allow investors to better understand the components of an entity’s expenses, make their own judgements about the entity’s performance, and more accurately forecast expenses which will allow investors to better assess an entity’s prospects for future cash flows. The amendments in this update require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity (1) disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a) — (d), (2) include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements, (3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, (4) disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this update or (2) retrospectively to any or all prior periods presented in the financial statements. The Company does not believe this accounting standard update will have a material impact on the Company’s financial position, results of operations and cash flows. The Company is currently evaluating the impact the adoption of this accounting standard update will have on our footnote disclosures.
3 Revenue Recognition
The Company’s deferred revenue liabilities in the consolidated balance sheets consist of the obligation on instrument service contracts and customer payments received in advance, prior to transfer of control of the instrument. The Company records deferred revenue primarily related to its service contracts, where consideration is billable at the beginning of the service period.
The following is a summary of the activity of the Company’s deferred revenue and customer advances for the twelve months ended December 31, 2024, 2023 and 2022 (in thousands):

|  | December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Balance at the beginning of the period |  | $ | 323,516 |  |  | $ | 285,175 |  |  | $ | 273,598 |
Recognition of revenue included in balance at beginning of the period |  |  | (265,167 | ) |  |  | (240,808 | ) |  |  | (230,615 | )
Revenue deferred during the period, net of revenue recognized |  |  | 261,697 |  |  |  | 279,149 |  |  |  | 242,192 |
Balance at the end of the period |  | $ | 320,046 |  |  | $ | 323,516 |  |  | $ | 285,175 |

The Company classified $69 million and $67 million of deferred revenue and customer advances in other long-term liabilities at December 31, 2024 and 2023, respectively.
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The amount of unfulfilled performance obligations as of December 31, 2024, and the time such amounts are expected to be recognized in the future, is as follows (in thousands):

|  | December 31, 2024 |
Unfulfilled performance obligations expected to be recognized in: |  |  |  |
One year or less |  | $ | 262,752 |
13-24 months |  |  | 38,008 |
25 months and beyond |  |  | 31,232 |
Total |  | $ | 331,992 |

4 Inventories
Inventories are classified as follows (in thousands):

|  | December 31, 2024 |  |  | December 31, 2023 |
Raw materials |  | $ | 227,032 |  |  | $ | 233,952 |
Work in progress |  |  | 21,801 |  |  |  | 20,198 |
Finished goods |  |  | 228,428 |  |  |  | 262,086 |
Total inventories |  | $ | 477,261 |  |  | $ | 516,236 |

During 2024, 2023 and 2022, the Company recorded inventory-related excess and obsolescence provisions of $14 million, $11 million and $14 million, respectively.
5 Property, Plant and Equipment
Property, plant and equipment consist of the following (in thousands):

|  | December 31, |
|  | 2024 |  |  | 2023 |
Land and land improvements |  | $ | 40,945 |  |  | $ | 35,635 |
Buildings and leasehold improvements |  |  | 547,666 |  |  |  | 488,667 |
Production and other equipment |  |  | 752,872 |  |  |  | 748,411 |
Construction in progress |  |  | 39,180 |  |  |  | 118,492 |
Total property, plant and equipment |  |  | 1,380,663 |  |  |  | 1,391,205 |
Less: accumulated depreciation and amortization |  |  | (729,463 | ) |  |  | (752,132 | )
Property, plant and equipment, net |  | $ | 651,200 |  |  | $ | 639,073 |

During 2024, 2023 and 2022, the Company retired and disposed of approximately $108 million, $48 million and $24 million of property, plant and equipment, respectively, most of which was fully depreciated and no longer in use. Gains or losses on disposals were immaterial for the years ended December 31, 2024, 2023 and 2022.
6 Acquisitions
On May 16, 2023, the Company acquired all of the issued and outstanding equity interests of Wyatt for $1.3
billion, net of cash acquired. Wyatt is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories and services. The acquisition has expanded Waters’ portfolio and increased our exposure to large molecule applications.
The Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The Company allocated $
418
million of
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the purchase price to intangible assets comprised of developed technology, trade name and customer relationships. The developed technology and customer relationships will be amortized over ten years and the trade name will be amortized over five years.
The intangible assets were valued with input from valuation specialists. The Company used variations of the income approach, which uses Level 3 inputs, in determining the fair value of intangible assets acquired in the Wyatt acquisition. Specifically, the customer relationships were valued using the multi-period excess earnings method under the income approach. The Company utilized the relief from royalty method to determine the fair value of the tradename and the developed technology. The following table presents the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of May 16, 2023 (in thousands):

Purchase Price |  |  |  |
Cash paid |  | $ | 1,307,978 |
Less: cash acquired |  |  | (25,624 | )
Net cash consideration |  |  | 1,282,354 |
Identifiable Net Assets (Liabilities) Acquired |  |  |  |
Accounts receivable |  |  | 20,099 |
Inventory |  |  | 14,706 |
Deferred tax assets |  |  | 11,335 |
Prepaid and other assets |  |  | 1,096 |
Property, plant and equipment |  |  | 9,056 |
Operating lease assets |  |  | 5,204 |
Intangible assets |  |  | 418,100 |
Accounts payable and accrued expenses |  |  | (31,664 | )
Operating lease liabilities |  |  | (5,204 | )
Tax liabilities |  |  | (3,917 | )
Deferred revenue |  |  | (15,219 | )
Other liabilities |  |  | (5,728 | )
Total identifiable net assets acquired |  |  | 417,864 |
Goodwill |  |  | 864,490 |
Cash consideration paid |  | $ | 1,282,354 |

The details of the purchase price allocated to the intangible assets acquired and the estimated useful lives are as follows (dollars in thousands):

|  | Amount |  |  | Weighted-Average Life |
Developed technology |  | $ | 80,000 |  |  |  | 10 years |
Customer relationships |  |  | 330,600 |  |  |  | 10 years |
Trade name |  |  | 7,500 |  |  |  | 5 years |
Total |  |  | $418,100 |  |  |  |  |

The Company allocated $864 million of the purchase price to goodwill which is primarily deductible for tax purposes and has been allocated to the Waters Division operating segment. The goodwill arising from the acquisition consists largely of the value of intangible assets that do not qualify for separate recognition such as workforce in place and cash flows from the integration of acquired technology, distribution channels and products with the Company’s products, which are higher than if the acquired companies’ technology, customer access or products were utilized on a stand-alone basis.
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The Company’s consolidated results include net sales of $111 million during fiscal 2024 and $73 million during the period in fiscal 2023 following the
Wyatt
acquisition that closed on May 16, 2023. For each of those periods, Wyatt operated at an immaterial net loss after purchased intangibles amortization, the retention
expenses
and interest expense. The Company also incurred transaction related costs of $
13
million during the twelve months ended December 31, 2023, in connection with the Company’s acquisition of Wyatt, which are recorded in selling and administrative expenses in the consolidated statement of operations.
Unaudited Pro Forma Financial Information
The following unaudited pro forma information is presented for illustrative purposes only. It is not necessarily indicative of the actual results of operations that actually would have been realized had the entities been a single company as of January 1, 2022 or the future operating results of the combined entity. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies that may be associated with the acquisition. The unaudited pro forma information also does not include any integration costs that the Company may incur related to the acquisition as part of combining the operations of the companies.
The following unaudited pro forma information shows the results of the Company’s operations for the twelve months ended December 31, 2023 and 2022, as if the acquisition had occurred on January 1, 2022 (in thousands):

|  | December 31, 2023 |  |  | December 31, 2022 |
Revenue |  | $ | 2,995,001 |  |  | $ | 3,086,281 |
Net income |  |  | 658,431 |  |  |  | 651,869 |

To reflect the acquisition of Wyatt as if it had occurred on January 1, 2022, the unaudited pro forma information includes adjustments to reflect, among other things, the incremental intangible asset amortization to be incurred based on the values of each identifiable intangible asset of Wyatt and the interest expense from debt financings obtained to partially fund the cash consideration transferred. Pro forma adjustments were tax effected at the Company’s historical statutory rates in effect for the respective periods.
Pro forma net income for the twelve months ended December 31, 2023, was adjusted to exclude certain
non-recurring
expenses related to transaction costs incurred and the fair value adjustment of inventory. These
non-recurring
expenses were reclassified to the prior period and included in the pro forma net income for the twelve months ended December 31, 2023 and 2022.
In conjunction with the Wyatt acquisition, the Company entered into retention agreements with certain employees, in which the Company agreed to pay a total of $40 million, in two equal installments upon the first and second anniversary of the acquisition date. As these employees are earning their individual cash award by providing service over the
two-year
period that benefit
s
the Company, the $40 million will be recognized within total costs and operating expenses in the consolidated statements of operations over the
two-year
service period. The Company has recorded $18 million and $19 million of expense in the consolidated statement of operations for the twelve months ended December 31, 2024 and 2023, respectively.
On January 31, 2022, the Company completed an asset acquisition in which the charge detection mass spectrometry technology (“CDMS technology”) assets of Megadalton Solutions, Inc. (“Megadalton”) were acquired for approximately $10 million in total purchase price, of which $5 million was paid at closing and
the remaining
$4
million will be paid in the future at various dates through 2029. This CDMS technology makes it possible to analyze extremely large proteins and protein complexes used in cell and gene therapies that would otherwise be difficult to analyze with conventional mass spectrometry. Once this technology is further
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developed, it will extend the capabilities of our mass spectrometry portfolio for a broader set of applications, and as such, the cost of this technology asset has been accounted for as Acquired
In-Process Research
and Development and expensed in costs and operating expenses in the statement of operations.
7 Goodwill and Other Intangibles
The carrying amount of goodwill was $1.3 billion at both December 31, 2024 and 2023.
The Company’s intangible assets included in the consolidated balance sheets are detailed as follows (dollars in thousands):

|  | December 31, 2024 |  |  | December 31, 2023 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Weighted- Average Amortization Period |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Weighted- Average Amortization Period |
Capitalized software |  | $ | 662,085 |  |  | $ | 508,339 |  |  |  | 5 years |  |  | $ | 660,273 |  |  | $ | 495,317 |  |  |  | 5 years |
Purchased intangibles |  |  | 610,351 |  |  |  | 241,093 |  |  |  | 10 years |  |  |  | 614,357 |  |  |  | 197,154 |  |  |  | 10 years |
Trademarks |  |  | 9,680 |  |  |  | — |  |  |  | — |  |  |  | 9,680 |  |  |  | — |  |  |  | — |
Licenses |  |  | 14,549 |  |  |  | 9,628 |  |  |  | 7 years |  |  |  | 14,798 |  |  |  | 8,429 |  |  |  | 7 years |
Patents and other intangibles |  |  | 117,781 |  |  |  | 87,480 |  |  |  | 8 years |  |  |  | 111,962 |  |  |  | 80,983 |  |  |  | 8 years |
Total |  | $ | 1,414,446 |  |  | $ | 846,540 |  |  |  | 7 years |  |  | $ | 1,411,070 |  |  | $ | 781,883 |  |  |  | 7 years |

The Company capitalized $40 million, $468 million and $54 million of intangible assets for the years ended December 31, 2024, 2023 and 2022, respectively. The gross carrying value of intangible assets and accumulated amortization for intangible assets decreased by $37 million and $39 million, respectively, in the year ended December 31, 2024 due to the effects of foreign currency translation. Amortization expense for intangible assets was $105 million, $81 million and $58 million for the years ended December 31, 2024, 2023 and 2022, respectively. In addition, in the year ended December 31, 2023, the company wrote off a $4 million intangible asset that was fully amortized. Amortization expense for intangible assets is estimated to be $107 million per year for each of the next five years.
8 Debt
On July 12, 2024 the Company entered into a private Master Note Facility Agreement (the “Shelf Agreement”) with NYL Investors LLC, pursuant to which the Company may, at its option, authorize the issuance and sale of senior promissory notes (the “Shelf Notes”) up to an aggregate principal amount of $
200
million. The purchase of any Shelf Notes is in the sole discretion of NYL. Any Shelf Notes sold or issued pursuant to the Shelf Agreement will mature no more than
15 years after the issuance date and will bear interest on the unpaid balance from the issuance date at the rates specified in the Shelf Agreement.
The Company has a five-year, $2.0 billion revolving credit facility (the “Credit Facility”) that matures in
September 2026
. As of December 31, 2024 and December 31, 2023, the Credit Facility had a total of $0.4 billion and $1.1 billion outstanding, respectively.
The interest rates applicable under the Credit Facility are, at the Company’s option, equal to either the alternate base rate (which is a rate per annum equal to the greatest of (1) the prime rate in effect on such day, (2) the Federal Reserve Bank of New York Rate on such day plus
1
⁄
2
of 1% per annum and (3) the adjusted Term SOFR rate for a
one-month
interest period as published two U.S. Government Securities Business Days prior to such day (or if such day is not a U.S. Government Securities Business Day, the immediately preceding U.S.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Government Securities Business Day), plus 1% annum) or the applicable 1, 3 or 6 month adjusted Term SOFR or EURIBO rate for euro-denominated loans, in each case, plus an interest rate margin based upon the Company’s leverage ratio, which can range between 0 and 12.5 basis points for alternate base rate loans and between 80 and 112.5 basis points for Term SOFR or EURIBO rate loans. The facility fee on the Credit Facility ranges between 7.5 and 25 basis points per annum, based on the leverage ratio, of the amount of the revolving facility commitments and the outstanding term loan.
The Credit Facility requires that the Company comply with an interest coverage ratio test of not less than
3.50
:1 as of the end of any fiscal quarter for any period of four consecutive fiscal quarters and a leverage ratio test of not more than
3.50
:1 as of the end of any fiscal quarter. In addition, the Credit Facility includes negative covenants, affirmative covenants, representations and warranties and events of default that are customary for investment grade credit facilities.
As of both December 31, 2024 and 2023, the Company had a total of $1.3 billion of outstanding senior unsecured notes. Interest on the fixed rate senior unsecured notes is payable semi-annually each year. Interest on the floating rate senior unsecured notes is payable quarterly. The Company may prepay all or some of the senior unsecured notes at any time in an amount not less than 10% of the aggregate principal amount outstanding. In the event of a change in control of the Company (as defined in the note purchase agreement), the Company may be required to prepay the senior unsecured notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest. These senior unsecured notes require that the Company comply with an interest coverage ratio test of not less than 3.50:1 for any period of four consecutive fiscal quarters and a leverage ratio test of not more than 3.50:1 as of the end of any fiscal quarter. In addition, these senior unsecured notes include customary negative covenants, affirmative covenants, representations and warranties and events of default.
The Company had the following outstanding debt at December 31, 2024 and 2023 (in thousands):

|  | December 31, 2024 |  |  | December 31, 2023 |
Senior unsecured notes - Series G - 3.92%, due June 2024 |  | $ | — |  |  | $ | 50,000 |
Total notes payable and debt, current |  |  | — |  |  |  | 50,000 |
Senior unsecured notes - Series K - 3.44%, due May 2026 |  |  | 160,000 |  |  |  | 160,000 |
Senior unsecured notes - Series L - 3.31%, due September 2026 |  |  | 200,000 |  |  |  | 200,000 |
Senior unsecured notes - Series M - 3.53%, due September 2029 |  |  | 300,000 |  |  |  | 300,000 |
Senior unsecured notes - Series N - 1.68%, due March 2026 |  |  | 100,000 |  |  |  | 100,000 |
Senior unsecured notes - Series O - 2.25%, due March 2031 |  |  | 400,000 |  |  |  | 400,000 |
Senior unsecured notes - Series P - 4.91%, due May 2028 |  |  | 50,000 |  |  |  | 50,000 |
Senior unsecured notes - Series Q - 4.91%, due May 2030 |  |  | 50,000 |  |  |  | 50,000 |
Credit agreement |  |  | 370,000 |  |  |  | 1,050,000 |
Unamortized debt issuance costs |  |  | (3,512 | ) |  |  | (4,487 | )
Total long-term debt |  |  | 1,626,488 |  |  |  | 2,305,513 |
Total debt |  | $ | 1,626,488 |  |  | $ | 2,355,513 |

As of December 31, 2024 and 2023, the Company had a total amount available to borrow under the Credit Facility of $1.6 billion and $0.9 billion, respectively, after outstanding letters of credit. The weighted-average interest rates applicable to the senior unsecured notes and credit agreement borrowings collectively were 3.72% and 4.69% at December 31, 2024 and 2023, respectively. As of December 31, 2024, the Company was in compliance with all debt covenants.
The Company and its foreign subsidiaries also had available short-term lines of credit totaling $111 million and $114 million at December 31, 2024 and December 31, 2023, respectively, for the purpose of short-term borrowing and issuance of commercial guarantees. None of the Company’s foreign subsidiaries had outstanding short-term borrowings as of December 31, 2024 or December 31, 2023.
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Annual maturities of debt outstanding at December 31, 2024 are as follows (in thousands):

|  | Total |
2025 |  | $ | — |
2026 |  |  | 830,000 |
2027 |  |  | — |
2028 |  |  | 50,000 |
2029 |  |  | 300,000 |
Thereafter |  |  | 450,000 |
Total |  | $ | 1,630,000 |

9 Income Taxes
Income tax data for the years ended December 31, 2024, 2023 and 2022 is as follows (in thousands):

|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
The components of income before income taxes are as follows: |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  | $ | 121,630 |  |  | $ | 74,119 |  |  | $ | 133,816 |
Foreign |  |  | 633,238 |  |  |  | 662,124 |  |  |  | 704,030 |
Total |  | $ | 754,868 |  |  | $ | 736,243 |  |  | $ | 837,846 |

|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
The components of the income tax provision were as follows: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 20,609 |  |  | $ | 178 |  |  | $ | 62,153 |
State |  |  | 6,395 |  |  |  | 6,427 |  |  |  | 8,025 |
Foreign |  |  | 90,907 |  |  |  | 88,601 |  |  |  | 91,901 |
Total current tax provision |  | $ | 117,911 |  |  | $ | 95,206 |  |  | $ | 162,079 |
Federal |  | $ | (383 | ) |  | $ | (2,457 | ) |  | $ | (26,551 | )
State |  |  | 303 |  |  |  | (3,029 | ) |  |  | (4,420 | )
Foreign |  |  | (797 | ) |  |  | 4,289 |  |  |  | (1,017 | )
Total deferred tax provision |  |  | (877 | ) |  |  | (1,197 | ) |  |  | (31,988 | )
Total provision |  | $ | 117,034 |  |  | $ | 94,009 |  |  | $ | 130,091 |

The differences between income taxes computed at the United States statutory rate and the provision for income taxes are summarized as follows for the years ended December 31, 2024, 2023 and 2022 (in thousands):

|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Federal tax computed at U.S. statutory income tax rate |  | $ | 158,522 |  |  | $ | 154,611 |  |  | $ | 175,948 |
GILTI, net of foreign tax credits |  |  | 4,820 |  |  |  | 15,103 |  |  |  | 17,812 |
Uncertain tax positions |  |  | 5,024 |  |  |  | (16,211 | ) |  |  | 1,051 |
State income tax, net of federal income tax benefit |  |  | 6,078 |  |  |  | 2,880 |  |  |  | 3,605 |
Net effect of foreign operations |  |  | (47,732 | ) |  |  | (48,587 | ) |  |  | (55,273 | )
Effect of stock-based compensation |  |  | (2,155 | ) |  |  | (2,262 | ) |  |  | (7,341 | )
Other, net |  |  | (7,523 | ) |  |  | (11,525 | ) |  |  | (5,711 | )
Provision for income taxes |  | $ | 117,034 |  |  | $ | 94,009 |  |  | $ | 130,091 |

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The Company’s effective tax rate was 15.5%, 12.8% and 15.5
% for the years ended December 31, 2024, 2023 and 2022, respectively. The increase in the Company’s effective tax rate in 2024 can primarily be attributed to the recognition of a previously unrecognized tax benefit of $
18
million as a result of the completion of a tax examination in 2023
.
The Company’s effective income tax rate differs from the U.S. federal statutory rate each year due to differences in the proportionate amounts of
pre-tax
income recognized in jurisdictions with different effective tax rates and the items discussed below. Included in the 2024 net effect of foreign operations is the impact of the Pillar Two system of global minimum tax rules, which did not have a material impact.
The four principal jurisdictions in which the Company manufactures are the U.S., Ireland, the U.K. and Singapore, where the statutory tax rates were 21%, 12.5%, 25% and 17
%, respectively, as of December 31, 2024. The Company has a Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of
5
% on certain types of income for the period April 1, 2021 through March 31, 2026. The effect of applying these concessionary income tax rates rather than the statutory tax rate to income arising from qualifying activities in Singapore increased the Company’s net income by $
14 million, $16 million and $20 million and increased the Company’s net income per diluted share by $0.24, $0.27 and $0.33 for the years ended December 31, 2024, 2023 and 2022, respectively.
During 2024, the Company’s effective tax rate differed from the 21
% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings,
a
$
5
million provision related to the GILTI tax, including the impact of capitalizing research and development expenditures pursuant to IRC Section 174, and a tax benefit of $
3 million on stock-based compensation.
The 2023 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, a $18 million recognition of a previously unrecognized tax benefit as a result of the completion of a tax examination, a $15 million provision related to the GILTI tax, including the impact of capitalizing research and development expenditures pursuant to IRC Section 174 and a tax benefit of $3 million on stock-based compensation.
The 2022 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, an $18 million provision related to the GILTI tax and a tax benefit of $7 million on stock-based compensation.
The Company recorded a tax provision of $3 million, $4 million and $4 million for 2024, 2023 and 2022, respectively, for future withholding taxes and U.S. state taxes on the repatriation of 2024, 2023 and 2022 undistributed earnings.
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The tax effects of temporary differences and carryforwards which give rise to deferred tax assets and deferred tax liabilities are summarized as follows (in thousands):

|  | December 31, |
|  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating losses and credits |  | $ | 118,854 |  |  | $ | 54,901 |
Operating leases |  |  | 16,573 |  |  |  | 20,307 |
Amortization |  |  | 9,006 |  |  |  | 5,905 |
Stock-based compensation |  |  | 6,343 |  |  |  | 7,754 |
Deferred compensation |  |  | 20,515 |  |  |  | 14,886 |
Deferred revenue |  |  | 15,707 |  |  |  | 17,127 |
Inventory |  |  | 7,083 |  |  |  | 7,534 |
Capitalized interest |  |  | — |  |  |  | 12,586 |
Capitalized Section 174 Expenditures |  |  | 51,514 |  |  |  | 34,487 |
Other |  |  | 13,212 |  |  |  | 14,907 |
Total deferred tax assets |  |  | 258,807 |  |  |  | 190,394 |
Valuation allowance |  |  | (119,464 | ) |  |  | (57,873 | )
Deferred tax assets, net of valuation allowance |  |  | 139,343 |  |  |  | 132,521 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Capitalized software |  |  | (29,309 | ) |  |  | (29,281 | )
Operating leases |  |  | (16,312 | ) |  |  | (20,117 | )
Indefinite-lived intangibles |  |  | (29,924 | ) |  |  | (14,824 | )
Deferred tax liability on foreign earnings |  |  | (20,278 | ) |  |  | (20,374 | )
Total deferred tax liabilities |  |  | (95,823 | ) |  |  | (84,596 | )
Net deferred tax assets |  | $ | 43,520 |  |  | $ | 47,925 |

The Company has gross foreign net operating losses of $505 million, of which $176 million do not expire under current laws
,
$42
million start expiring in 2025 and $287 million start expiring in 2041. As of December 31, 2024, the Company has provided a deferred tax valuation allowance of
$119 million, of which $113 million relates to certain foreign net operating losses. The Company’s net deferred tax assets associated with net operating losses and tax credit carryforwards are approximately $5 million as of December 31, 2024, which represent the future tax benefit of foreign net operating loss carryforwards that do not expire under current law.
The Company accounts for its uncertain tax return positions in accordance with the accounting standards for income taxes, which require financial statement reporting of the expected future tax consequences of uncertain tax reporting positions on the presumption that all concerned tax authorities possess full knowledge of those tax reporting positions, as well as all of the pertinent facts and circumstances, but prohibit any discounting of unrecognized tax benefits associated with those reporting positions for the time value of money. The Company
continues
to classify interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.
The following is a summary of the activity of the Company’s gross unrecognized tax benefits, excluding interest and penalties, for the year ended December 31, 2024, 2023 and 2022 (in thousands):

|  | 2024 |  |  | 2023 |  |  | 2022 |
Balance at the beginning of the period |  | $ | 14,323 |  |  | $ | 29,019 |  |  | $ | 28,692 |
Net reductions for settlement of tax audits |  |  | — |  |  |  | (17,651 | ) |  |  | — |
Net reductions for lapse of statutes taken during the period |  |  | (616 | ) |  |  | (512 | ) |  |  | (818 | )
Net additions for tax positions taken during the prior period |  |  | 3,407 |  |  |  | 2,473 |  |  |  | — |
Net additions for tax positions taken during the current period |  |  | 543 |  |  |  | 994 |  |  |  | 1,145 |
Balance at the end of the period |  | $ | 17,657 |  |  | $ | 14,323 |  |  | $ | 29,019 |

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As of 2024, the total amount of gross unrecognized tax benefits was $18
million, all of which, if recognized, would impact the Company’s effective tax rate. The Company is subject to various foreign audits and inquiries, and we currently do not expect any material adjustments.
With limited exceptions, the Company is no longer subject to tax audit examinations in significant jurisdictions for the years ended on or before December 31, 2019. The Company continuously monitors the lapsing of statutes of limitations on potential tax assessments for related changes in the measurement of unrecognized tax benefits, related net interest and penalties and deferred tax assets and liabilities.
As of December 31, 2024, the Company expects to record additional reductions in the measurement of its unrecognized tax benefits and related net interest and penalties of approximately $1 million within the next twelve months due to potential tax audit settlements and the lapsing of statutes of limitations on potential tax assessments. The Company does not expect to record any other material reductions in the measurement of its unrecognized tax benefits within the next twelve months.
The following is a summary of the activity of the Company’s valuation allowance for the years ended December 31, 2024, 2023 and 2022 (in thousands):

|  | Balance at Beginning of Period |  |  | Charged to Provision for Income Taxes* |  |  | Other** |  |  | Balance at End of Period |
Valuation allowance for deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2024 |  | $ | 57,873 |  |  | $ | 64,310 |  |  | $ | (2,719 | ) |  | $ | 119,464 |
2023 |  | $ | 54,300 |  |  | $ | 1,467 |  |  | $ | 2,106 |  |  | $ | 57,873 |
2022 |  | $ | 58,834 |  |  | $ | (1,647 | ) |  | $ | (2,887 | ) |  | $ | 54,300 |

* | These amounts have been recorded as part of the income statement provision for income taxes. The income statement effects of these amounts have largely been offset by amounts related to changes in other deferred tax balance sheet accounts. The increase in the 2024 charge to the provision for income taxes can be attributed to an increase in foreign net operating losses.

** | The changes in the valuation allowance during the years ended December 31, 2024, 2023 and 2022 are primarily due to the effect of foreign currency translation on a valuation allowance related to a net operating loss carryforward.

10 Litigation
From time to time, the Company and its subsidiaries are involved in various litigation matters arising in the ordinary course of business. The Company believes it has meritorious arguments in its current litigation matters and believes any outcome, either individually or in the aggregate, will not be material to the Company’s financial position, results of operations or cash flows. During the year ended December 31, 2024, the Company recorded $12 million and paid $10 million of patent litigation settlement and related costs.
11 Leases
As of December 31, 2024 and 2023, the Company had lease agreements that expire at various dates through 2034, with weighted-average remaining lease terms of 3.6 years and 4.5 years, respectively. Rental expense was
$39 million, $38 million and $36 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024 and 2023, the weighted-average discount rates used to determine the present value of lease liabilities were 4.41% and 4.15% respectively. During the years ended December 31, 2024, 2023 and 2022, cash paid for amounts included in the measurement of lease liabilities in operating activities in the statement of cash flows was $39 million, $38 million and $36 million, respectively. The Company recorded
a
$3
million decrease in right-of-use assets in exchange for new operating lease liabilities during the year ended December 31, 2024
. The Company recorded a
$
2
million and $
12
million increase of right-of-use assets in exchange for new operating lease liabilities during the years ended December 31, 2023 and 2022, respectively.
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The Company’s
right-of-use
lease assets and lease liabilities included in the consolidated balance sheets are classified as follows (in thousands):

|  |  |  | December 31, |
|  | Financial Statement Classification |  | 2024 |  |  | 2023 |
Assets: |  |  |  |  |  |  |  |  |  |
Property operating lease assets |  | Operating lease assets |  | $ | 43,622 |  |  | $ | 55,006 |
Automobile operating lease assets |  | Operating lease assets |  |  | 30,013 |  |  |  | 28,675 |
Equipment operating lease assets |  | Operating lease assets |  |  | 558 |  |  |  | 910 |
Total lease assets |  |  |  | $ | 74,193 |  |  | $ | 84,591 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Current operating lease liabilities |  | Current operating lease liabilities |  | $ | 25,537 |  |  | $ | 27,825 |
Long-term operating lease liabilities |  | Long-term operating lease liabilities |  |  | 50,317 |  |  |  | 58,926 |
Total lease liabilities |  |  |  | $ | 75,854 |  |  | $ | 86,751 |

Undiscounted future minimum rents payable as of December 31, 2024 under
non-cancelable
leases with initial terms exceeding one year reconcile to lease liabilities included in the consolidated balance sheet as follows (in thousands):

2025 |  | $ | 27,783 |
2026 |  |  | 22,880 |
2027 |  |  | 14,991 |
2028 |  |  | 9,259 |
2029 |  |  | 3,211 |
2030 and thereafter |  |  | 2,701 |
Total future minimum lease payments |  |  | 80,825 |
Less: amount of lease payments representing interest |  |  | (4,971 | )
Present value of future minimum lease payments |  |  | 75,854 |
Less: current operating lease liabilities |  |  | (25,537 | )
Long-term operating lease liabilities |  | $ | 50,317 |

12 Other Commitments and Contingencies
The Company licenses certain technology and software from third parties in the
ordinary
course of business. Future minimum fees payable under existing technology and software license agreements as of December 31, 2024 are $98 million for the years ended December 31, 2025 and thereafter.
The software license agreements are long-term contracts and are not cancellable by the Company until the expiration of their initial term. The amounts owed under these contracts are included in both other assets and other long-term liabilities on the Company’s consolidated balance sheet as of December 31, 2024. In December 2024, the Company’s Board of Directors approved the implementation of a new worldwide enterprise resource planning system (“ERP”). The Company anticipates spending approximately
$130 million on the ERP implementation over the next three years. The Company expects to use existing cash and its credit facility to fund the ERP implementation.
The Company enters into standard indemnification agreements in its ordinary course of business. Pursuant to these agreements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with patent, copyright or other intellectual property infringement claims by any third party with respect to its current products, as well as claims relating to property damage or personal injury resulting from the
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performance of services by the Company or its subcontractors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. Historically, the Company’s costs to defend lawsuits or settle claims relating to such indemnity agreements have been minimal and management accordingly believes the estimated fair value of these agreements is immaterial.
13 Stock-Based Compensation
In May 2020, the Company’s shareholders approved the Company’s 2020 Equity Incentive Plan (“2020 Plan”). As of December 31, 2024, the 2020 Plan has 6.0 million shares available for grant in the form of incentive or
non-qualified
stock options, stock appreciation rights (“SARs”), restricted stock or other types of awards (e.g. restricted stock units and performance stock units). The Company issues new shares of common stock upon exercise of stock options, restricted stock unit conversion or performance stock unit conversion. Under the 2020 Plan, the exercise price for stock options may not be less than the fair market value of the underlying stock at the date of grant. The 2020 Plan is scheduled to terminate on May 13, 2030. Options generally will expire no later than ten years after the date on which they are granted and will become exercisable as directed by the Compensation Committee of the Board of Directors and generally vest in equal annual installments over a five-year period. A SAR may be granted alone or in conjunction with an option or other award. Shares of restricted stock, restricted stock units and performance stock units may be issued under the 2020 Plan for such consideration as is determined by the Compensation Committee of the Board of Directors. As of December 31, 2024, the Company had stock options, restricted stock and restricted and performance stock unit awards outstanding.
In May 2009, the Company’s shareholders approved the 2009 Employee Stock Purchase Plan, under which eligible employees may contribute up to 15% of their earnings toward the quarterly purchase of the Company’s common stock. The plan makes available 0.8 million shares of the Company’s common stock,
and as
of December 31, 2024, 0.8 million shares have been issued under
the plan
. Each plan period lasts three months beginning on January 1, April 1, July 1 and October 1 of each year. The purchase price for each share of stock is the lesser of 90% of the market price on the first day of the plan period or 100% of the market price on the last day of the plan period. Stock-based compensation expense related to this plan was $1 million for each of the years ended December 31, 2024, 2023 and 2022.
The Company accounts for stock-based compensation costs in accordance with the accounting standards for stock-based compensation, which require that all share-based payments to employees be recognized in the statements of operations, based on their grant date fair values. The Company recognizes the expense using the straight-line attribution method. The stock-based compensation expense recognized in the consolidated statements of operations is based on awards that ultimately are expected to vest; therefore, the amount of expense has been reduced for estimated forfeitures. Forfeitures are estimated based on historical experience. If actual results differ significantly from these estimates, stock-based compensation expense and the Company’s results of operations could be materially impacted. In addition, if the Company employs different assumptions in the application of these standards, the compensation expense that the Company records in the future periods may differ significantly from what the Company has recorded in the current period.
The consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 include the following stock-based compensation expense related to stock option awards, restricted stock awards, restricted stock unit awards, performance stock unit awards and the employee stock purchase plan (in thousands):

|  | 2024 |  |  | 2023 |  |  | 2022 |
Cost of sales |  | $ | 2,587 |  |  | $ | 2,014 |  |  | $ | 3,498 |
Selling and administrative expenses |  |  | 36,160 |  |  |  | 31,012 |  |  |  | 32,192 |
Research and development expenses |  |  | 5,962 |  |  |  | 3,842 |  |  |  | 6,874 |
Total stock-based compensation |  | $ | 44,709 |  |  | $ | 36,868 |  |  | $ | 42,564 |

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Stock Options
In determining the fair value of the stock options, the Company makes a variety of assumptions and estimates, including volatility measures, expected yields and expected stock option lives. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. The Company uses implied volatility on its publicly traded options as the basis for its estimate of expected volatility. The Company believes that implied volatility is the most appropriate indicator of expected volatility because it is generally reflective of historical volatility and expectations of how future volatility will differ from historical volatility. The expected life assumption for grants is based on historical experience for the population of
non-qualified
stock option exercises. The risk-free interest rate is the yield currently available on U.S. Treasury
zero-coupon
issues with a remaining term approximating the expected term used as the input to the Black-Scholes
model.
The relevant data used to determine the value of the stock options granted during the twelve months ended December 31, 2024, 2023 and 2022 are as follows:

Options Issued and Significant Weighted-Average Assumptions Used to Estimate Option Fair Values |  | 2024 |  |  | 2023 |  |  | 2022 |
Options issued in thousands |  |  | 128 |  |  |  | 132 |  |  |  | 138 |
Risk-free interest rate |  |  | 4.1 | % |  |  | 3.9 | % |  |  | 2.0 | %
Expected life in years |  |  | 6 |  |  |  | 6 |  |  |  | 6 |
Expected volatility |  |  | 31.9 | % |  |  | 31.1 | % |  |  | 30.7 | %
Expected dividends |  |  | — |  |  |  | — |  |  |  | — |

Weighted-Average Exercise Price and Fair Value of Options on the Date of Grant |  | 2024 |  |  | 2023 |  |  | 2022 |
Exercise price |  | $ | 325.45 |  |  | $ | 331.76 |  |  | $ | 321.15 |
Fair value |  | $ | 127.93 |  |  | $ | 126.73 |  |  | $ | 107.99 |

The following table summarizes stock option activity for the plans for the twelve months ended December 31, 2024 (in thousands, except per share data):

|  | Number of Shares |  |  | Exercise Price per Share |  |  | Weighted- Average Exercise Price per Share |
Outstanding at December 31, 2023 |  |  | 587 |  |  | $ | 113.88 |  |  |  | to |  |  | $ | 371.64 |  |  | $ | 265.17 |
Granted |  |  | 128 |  |  | $ | 130.94 |  |  |  | to |  |  | $ | 355.95 |  |  | $ | 325.45 |
Exercised |  |  | (98 | ) |  | $ | 113.88 |  |  |  | to |  |  | $ | 342.29 |  |  | $ | 216.13 |
Canceled |  |  | (24 | ) |  | $ | 203.37 |  |  |  | to |  |  | $ | 364.59 |  |  | $ | 303.28 |
Outstanding at December 31, 2024 |  |  | 593 |  |  | $ | 128.93 |  |  |  | to |  |  | $ | 371.64 |  |  | $ | 284.74 |

The following table d
eta
ils the options outstanding at December 31, 2024 by range of exercise prices (in thousands, except per share data):

Exercise Price Range |  | Number of Shares Outstanding |  |  | Weighted- Average Exercise Price |  |  | Remaining Contractual Life of Options Outstanding |  |  | Number of Shares Exercisable |  |  | Weighted- Average Exercise Price |
$128.93 to $279.90 |  |  | 212 |  |  | $ | 217.63 |  |  |  | 4.6 |  |  |  | 171 |  |  | $ | 211.25 |
$279.91 to $323.54 |  |  | 211 |  |  | $ | 311.05 |  |  |  | 7.8 |  |  |  | 60 |  |  | $ | 301.00 |
$323.55 to $371.64 |  |  | 170 |  |  | $ | 335.77 |  |  |  | 8.3 |  |  |  | 44 |  |  | $ | 340.04 |
Total |  |  | 593 |  |  | $ | 284.74 |  |  |  | 6.8 |  |  |  | 275 |  |  | $ | 251.63 |

During 2024, 2023 and 2022, the total intrinsic value of the stock options exercised (i.e., the difference between the market price at exercise and the price paid by the employee to exercise the options) was $14
million,
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$11 million and $31 million, respectively. The total cash received from the exercise of these stock options was $21 million, $18 million and $32 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The aggregate intrinsic value of the outstanding stock options at December 31, 2024 was $51 million. There were 0.3 million options exercisable at December 31, 2024, 2023 and 2022. The weighted-average exercise prices of options exercisable at December 31, 2024, 2023 and 2022 were $251.63, $223.37 and $188.21, respectively. The weighted-average remaining contractual life of the exercisable outstanding stock options at December 31, 2024 was 5.3 years. The aggregate intrinsic value of stock options exercisable as of December 31, 2024 was $33 million.
At December 31, 2024, the Company had 0.6 million stock options that are vested and expected to vest. The intrinsic value, weighted-average exercise price and remaining contractual life of the vested and expected to vest stock options were $50 million, $283.20 and 6.7 years, respectively, at December 31, 2024.
The amount of compensation costs recognized for the years ended December 31, 2024, 2023 and 2022 on the stock options expected to vest were $11 million, $10 million and $8 million, respectively. As of December 31, 2024, there were $25 million of total unrecognized compensation costs related to unvested stock option awards that are expected to vest. These costs are expected to be recognized over a weighted-average period of 3.2 years.
Restricted Stock
During
each of
the years ended December 31, 2024, 2023 and 2022, the Company granted three
thousand shares of restricted stock. The weighted-average fair value per share on the grant date of the restricted stock granted in 2024, 2023 and 2022 was
$329.00, $341.04 and $363.44, respectively. The Company has recorded $1 million of compensation expense in each of the years ended December 31, 2024, 2023 and 2022 related to the restricted stock grants. As of December 31, 2024, the Company had three thousand unvested shares of restricted stock outstanding, which have been fully expensed.
Restricted Stock Units
The following table summarizes the unvested restricted stock unit award activity for the twelve months ended December 31, 2024 (in thousands, except per share data):

|  | Shares |  |  | Weighted-Average Grant Date Fair Value per Share |
Unvested at December 31, 2023 |  |  | 235 |  |  | $ | 297.18 |
Granted |  |  | 121 |  |  | $ | 331.19 |
Vested |  |  | (70 | ) |  | $ | 279.82 |
Forfeited |  |  | (25 | ) |  | $ | 311.31 |
Unvested at December 31, 2024 |  |  | 261 |  |  | $ | 316.27 |

Restricted stock units are generally granted annually in February and vest in equal annual installments over a five-year period. The amount of compensation costs recognized for the years ended December 31, 2024, 2023 and 2022 on the restricted stock units expected to vest were $22 million, $19 million and $19 million, respectively. As of December 31, 2024, there were $60 million of total unrecognized compensation costs related to the restricted stock unit awards that are expected to vest. These costs are expected to be recognized over a weighted-average period of 3.3 years.
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Performance Stock Units
The Company’s performance stock units are equity compensation awards with a market vesting condition based on the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the components of the S&P Health Care Index. TSR is the change in value of a stock price over time, including the reinvestment of dividends. The vesting schedule ranges from 0% to 200% of the target shares awarded. Beginning with the grants made in 2020, the vesting conditions for performance stock units now include a performance condition based on future sales growth.
In determining the fair value of the performance stock units, the Company makes a variety of assumptions and estimates, including volatility measures, expected yields and expected terms. The fair value of each performance stock unit grant was estimated on the date of grant using the Monte Carlo simulation model. The Company uses implied volatility on its publicly traded options as the basis for its estimate of expected volatility. The Company believes that implied volatility is the most appropriate indicator of expected volatility because it is generally reflective of historical volatility and expectations of how future volatility will differ from historical volatility. The expected life assumption for grants is based on the performance period of the underlying performance stock units. The risk-free interest rate is the yield currently available on U.S. Treasury
zero-coupon
issues with a remaining term approximating the expected term used as the input to the Monte Carlo simulation model. The correlation coefficient is used to model the way in which each company in the S&P Health Care Index tends to move in relation to each other during the performance period. The relevant data used to determine the value of the performance stock units granted during the years ended December 31, 2024, 2023 and 2022 are as follows:

Performance Stock Units Issued and Significant Assumptions Used to Estimate Fair Values |  | 2024 |  |  | 2023 |  |  | 2022 |
Performance stock units issued in thousands |  |  | 43 |  |  |  | 45 |  |  |  | 40 |
Risk-free interest rate |  |  | 4.7 | % |  |  | 4.8 | % |  |  | 1.6 | %
Expected life in years |  |  | 2.9 |  |  |  | 2.9 |  |  |  | 2.9 |
Expected volatility |  |  | 30.4 | % |  |  | 33.3 | % |  |  | 25.4 | %
Average volatility of peer companies |  |  | 29.6 | % |  |  | 32.8 | % |  |  | 34.5 | %
Correlation Coefficient |  |  | 33.4 | % |  |  | 38.2 | % |  |  | 43.0 | %
Expected dividends |  |  | — |  |  |  | — |  |  |  | — |

The following table summarizes the unvested performance stock unit award activity for the twelve months ended December 31, 2024 (in thousands, except per share data):

|  | Shares |  |  | Weighted-Average Grant-Date Fair Value |
Unvested at December 31, 2023 |  |  | 108 |  |  | $ | 337.22 |
Granted |  |  | 43 |  |  | $ | 340.20 |
Vested |  |  | (48 | ) |  | $ | 360.58 |
Forfeited |  |  | (11 | ) |  | $ | 342.58 |
Change in performance shares in the year due to exceeding performance targets |  |  | 18 |  |  | $ | 360.00 |
Unvested at December 31, 2024 |  |  | 110 |  |  | $ | 331.55 |

The amount of compensation costs recognized for the years ended December 31, 2024, 2023 and 2022 on the performance stock units expected to vest were $9 million, $5 million and $13 million, respectively. As of December 31, 2024, there were $15 million of total unrecognized compensation costs related to the performance stock unit awards that are expected to vest. These costs are expected to be recognized over a weighted-average period of 1.9 years.
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14 Earnings Per Share
Basic and diluted EPS calculations are detailed as follows (in thousands, except per share data):

|  | Year Ended December 31, 2024 |
|  | Net Income |  |  | Weighted-Average Shares |  |  | Per Share |
|  | (Numerator) |  |  | (Denominator) |  |  | Amount |
Net income per basic common share |  | $ | 637,834 |  |  |  | 59,333 |  |  | $ | 10.75 |
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |  |  | — |  |  |  | 219 |  |  |  | (0.04 | )
Net income per diluted common share |  | $ | 637,834 |  |  |  | 59,552 |  |  | $ | 10.71 |

|  | Year Ended December 31, 2023 |
|  | Net Income |  |  | Weighted-Average Shares |  |  | Per Share |
|  | (Numerator) |  |  | (Denominator) |  |  | Amount |
Net income per basic common share |  | $ | 642,234 |  |  |  | 59,076 |  |  | $ | 10.87 |
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |  |  | — |  |  |  | 194 |  |  |  | (0.03 | )
Net income per diluted common share |  | $ | 642,234 |  |  |  | 59,270 |  |  | $ | 10.84 |

|  | Year Ended December 31, 2022 |
|  | Net Income |  |  | Weighted-Average Shares |  |  | Per Share |
|  | (Numerator) |  |  | (Denominator) |  |  | Amount |
Net income per basic common share |  | $ | 707,755 |  |  |  | 59,985 |  |  | $ | 11.80 |
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |  |  | — |  |  |  | 346 |  |  |  | (0.07 | )
Net income per diluted common share |  | $ | 707,755 |  |  |  | 60,331 |  |  | $ | 11.73 |

For the years ended December 31, 2024, 2023 and 2022, the Company had 79 thousand, 245 thousand and 66 thousand stock options that were antidilutive, respectively, due to having higher exercise prices than the Company’s average stock price during the period. These securities were not included in the computation of
diluted
EPS. The effect of dilutive securities was calculated using the treasury stock method.
15 Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss are detailed as follows (in thousands):

|  | Currency Translation |  |  | Unrealized Loss on Retirement Plans |  |  | Unrealized Loss on Derivative Instruments |  |  | Accumulated Other Comprehensive Loss |
Balance at December 31, 2022 |  | $ | (146,120 | ) |  | $ | 4,548 |  |  | $ | — |  |  | $ | (141,572 | )
Other comprehensive income (loss), net of tax |  |  | 17,761 |  |  |  | (8,049 | ) |  |  | (2,260 | ) |  |  | 7,452 |
Balance at December 31, 2023 |  | $ | (128,359 | ) |  | $ | (3,501 | ) |  | $ | (2,260 | ) |  | $ | (134,120 | )
Other comprehensive (loss) income, net of tax |  |  | (26,565 | ) |  |  | 3,247 |  |  |  | 2,155 |  |  |  | (21,163 | )
Balance at December 31, 2024 |  | $ | (154,924 | ) |  | $ | (254 | ) |  | $ | (105 | ) |  | $ | (155,283 | )

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16 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
or
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 years ended December 31, 2024, 2023 and 2022, the Company’s matching contributions amounted to $20 million, $22 million and $21 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, $18 million and $16 million in the years ended December 31, 2024, 2023 and 2022, 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, 2024 and 2023, respectively.
The reconciliation of the projected benefit obligations for the plans at December 31, 2024 and 2023 is as follows (in thousands):

|  | 2024 |  |  | 2023 |
|  | 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 |  | $ | 25,742 |  |  | $ | 92,391 |  |  | $ | 22,583 |  |  | $ | 74,025 |
Service cost |  |  | 340 |  |  |  | 3,398 |  |  |  | 275 |  |  |  | 3,073 |
Employee contributions |  |  | 1,037 |  |  |  | 554 |  |  |  | 1,105 |  |  |  | 601 |
Interest cost |  |  | 1,282 |  |  |  | 2,610 |  |  |  | 1,262 |  |  |  | 2,797 |
Actuarial (gains) losses |  |  | (690 | ) |  |  | (2,124 | ) |  |  | 2,166 |  |  |  | 11,387 |
Benefits paid |  |  | (1,860 | ) |  |  | (2,834 | ) |  |  | (1,649 | ) |  |  | (2,051 | )
Plan amendments |  |  | — |  |  |  | (965 | ) |  |  | — |  |  |  | (500 | )
Plan settlements |  |  | — |  |  |  | (3,288 | ) |  |  | — |  |  |  | (488 | )
Currency impact |  |  | — |  |  |  | (5,861 | ) |  |  | — |  |  |  | 3,547 |
Projected benefit obligation, December 31 |  | $ | 25,851 |  |  | $ | 83,881 |  |  | $ | 25,742 |  |  | $ | 92,391 |

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The reconciliation of the fair value of the plan assets at December 31, 2024 and 2023 is as follows (in thousands):

|  | 2024 |  |  | 2023 |
|  | 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 |  | $ | 18,153 |  |  | $ | 86,587 |  |  | $ | 15,724 |  |  | $ | 77,697 |
Actual return on plan assets |  |  | 1,764 |  |  |  | 2,201 |  |  |  | 2,444 |  |  |  | 4,144 |
Company contributions |  |  | 686 |  |  |  | 3,083 |  |  |  | 529 |  |  |  | 3,224 |
Employee contributions |  |  | 1,037 |  |  |  | 554 |  |  |  | 1,105 |  |  |  | 601 |
Plan settlements |  |  | — |  |  |  | (3,288 | ) |  |  | — |  |  |  | (488 | )
Benefits paid |  |  | (1,860 | ) |  |  | (2,834 | ) |  |  | (1,649 | ) |  |  | (2,051 | )
Currency impact |  |  | — |  |  |  | (5,553 | ) |  |  | — |  |  |  | 3,460 |
Fair value of plan assets, December 31 |  | $ | 19,780 |  |  | $ | 80,750 |  |  | $ | 18,153 |  |  | $ | 86,587 |

The summary of the funded status for the plans at December 31, 2024 and 2023 is as follows (in thousands):

|  | 2024 |  |  | 2023 |
|  | U.S. Retiree |  |  | Non-U.S. |  |  | U.S. Retiree |  |  | Non-U.S. |
|  | Healthcare |  |  | Pension |  |  | Healthcare |  |  | Pension |
|  | Plan |  |  | Plans |  |  | Plan |  |  | Plans |
Projected benefit obligation |  | $ | (25,851 | ) |  | $ | (83,881 | ) |  | $ | (25,742 | ) |  | $ | (92,391 | )
Fair value of plan assets |  |  | 19,780 |  |  |  | 80,750 |  |  |  | 18,153 |  |  |  | 86,587 |
Funded status |  | $ | (6,071 | ) |  | $ | (3,131 | ) |  | $ | (7,589 | ) |  | $ | (5,804 | )

The change in the Company’s projected benefit obligation for the year ended December 31, 2024 was primarily due to net actuarial gains that arose during the year driven by a
n
increase 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, 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 summary of the amounts recognized in the consolidated balance sheets for the plans at December 31, 2024 and 2023 is as follows (in thousands):

|  | 2024 |  |  | 2023 |
|  | U.S. Retiree |  |  | Non-U.S. |  |  | U.S. Retiree |  |  | Non-U.S. |
|  | Healthcare |  |  | Pension |  |  | Healthcare |  |  | Pension |
|  | Plan |  |  | Plans |  |  | Plan |  |  | Plans |
Long-term assets |  | $ | — |  |  | $ | 5,109 |  |  | $ | — |  |  | $ | 5,220 |
Long-term liabilities |  |  | (6,071 | ) |  |  | (8,240 | ) |  |  | (7,589 | ) |  |  | (11,024 | )
Net amount recognized at December 31 |  | $ | (6,071 | ) |  | $ | (3,131 | ) |  | $ | (7,589 | ) |  | $ | (5,804 | )

The accumulated benefit obligation for all defined benefit pension plans was $74 million and $81 million at December 31, 2024 and 2023, respectively.
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The summary of the
Non-U.S.
Pension Plans that have accumulated benefit obligations in excess of plan assets at December 31, 2024 and 2023 is as follows (in thousands):

|  | 2024 |  |  | 2023 |
Accumulated benefit obligations |  | $ | 38,076 |  |  | $ | 60,815 |
Fair value of plan assets |  | $ | 33,998 |  |  | $ | 52,894 |

The summary of the
Non-U.S.
Pension Plans that have projected benefit obligations in excess of plan assets at December 31, 2024 and 2023 is as follows (in thousands):

|  | 2024 |  |  | 2023 |
Projected benefit obligations |  | $ | 42,238 |  |  | $ | 63,918 |
Fair value of plan assets |  | $ | 33,998 |  |  | $ | 52,894 |

The summary of the components of net periodic pension costs for the plans for the years ended December 31, 2024, 2023 and 2022 is as follows (in thousands):

|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | 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 |  | $ | 340 |  |  | $ | 3,398 |  |  | $ | 275 |  |  | $ | 3,073 |  |  | $ | 775 |  |  | $ | 4,018 |
Interest cost |  |  | 1,282 |  |  |  | 2,610 |  |  |  | 1,262 |  |  |  | 2,797 |  |  |  | 706 |  |  |  | 1,360 |
Expected return on plan assets |  |  | (1,120 | ) |  |  | (2,825 | ) |  |  | (978 | ) |  |  | (2,653 | ) |  |  | (1,138 | ) |  |  | (1,972 | )
Settlement loss |  |  | — |  |  |  | 552 |  |  |  | — |  |  |  | 221 |  |  |  | — |  |  |  | 73 |
Net amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit |  |  | (17 | ) |  |  | (73 | ) |  |  | (19 | ) |  |  | (105 | ) |  |  | (19 | ) |  |  | (129 | )
Net actuarial (gain) loss |  |  | — |  |  |  | (14 | ) |  |  | — |  |  |  | (195 | ) |  |  | — |  |  |  | 649 |
Net periodic pension cost |  | $ | 485 |  |  | $ | 3,648 |  |  | $ | 540 |  |  | $ | 3,138 |  |  | $ | 324 |  |  | $ | 3,999 |

The summary of the changes in amounts recognized in other comprehensive income (loss) for the plans for the years ended December 31, 2024, 2023 and 2022 is as follows (in thousands):

|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | 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 cost |  | $ | — |  |  | $ | 965 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Net gain (loss) arising during the year |  |  | 1,333 |  |  |  | 1,500 |  |  |  | (699 | ) |  |  | (9,396 | ) |  |  | 623 |  |  |  | 19,025 |
Amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit |  |  | (17 | ) |  |  | (73 | ) |  |  | (19 | ) |  |  | (105 | ) |  |  | (19 | ) |  |  | (129 | )
Net loss |  |  | — |  |  |  | 538 |  |  |  | — |  |  |  | 26 |  |  |  | — |  |  |  | 722 |
Currency impact |  |  | — |  |  |  | 30 |  |  |  | — |  |  |  | (58 | ) |  |  | — |  |  |  | 1,305 |
Total recognized in other comprehensive income (loss) |  | $ | 1,316 |  |  | $ | 2,960 |  |  | $ | (718 | ) |  | $ | (9,533 | ) |  | $ | 604 |  |  | $ | 20,923 |

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.
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The summary of the amounts included in accumulated other comprehensive loss in stockholders’ equity for the plans at December 31, 2024 and 2023 is as follows (in thousands):

|  | 2024 |  |  | 2023 |
|  | U.S. Retiree Healthcare Plan |  |  | Non-U.S. Pension Plans |  |  | U.S. Retiree Healthcare Plan |  |  | Non-U.S. Pension Plans |
Net actuarial gain (loss) |  | $ | 369 |  |  | $ | (1,153 | ) |  | $ | (964 | ) |  | $ | (3,241 | )
Prior service credit (cost) |  |  | — |  |  |  | 716 |  |  |  | 17 |  |  |  | (156 | )
Total |  | $ | 369 |  |  | $ | (437 | ) |  | $ | (947 | ) |  | $ | (3,397 | )

The plans’ investment asset mix is as follows at December 31, 2024 and 2023:

|  | 2024 |  |  | 2023 |
|  | U.S. Retiree Healthcare Plan |  |  | Non-U.S. Pension Plans |  |  | U.S. Retiree Healthcare Plan |  |  | Non-U.S. Pension Plans |
Equity securities |  |  | 65 | % |  |  | 6 | % |  |  | 70 | % |  |  | 4 | %
Debt securities |  |  | 35 | % |  |  | 17 | % |  |  | 30 | % |  |  | 18 | %
Cash and cash equivalents |  |  | 0 | % |  |  | 1 | % |  |  | 0 | % |  |  | 2 | %
Insurance contracts and other |  |  | 0 | % |  |  | 76 | % |  |  | 0 | % |  |  | 76 | %
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 |
Equity securities |  |  | 65 | % |  |  | 30% -90% |  |  |  | 18 | %
Debt securities |  |  | 35 | % |  |  | 20% -50% |  |  |  | 22 | %
Cash and cash equivalents |  |  | 0 | % |  |  | 0% -10% |  |  |  | 4 | %
Insurance contracts and other |  |  | 0 | % |  |  | 0% -10% |  |  |  | 56 | %

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.
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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, 2024 and 2023.
The fair value of the Company’s retirement plan assets are as follows at December 31, 2024 (in thousands):

|  | Total at December 31, 2024 |  |  | 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) |  | $ | 19,780 |  |  | $ | 19,780 |  |  | $ | — |  |  | $ | — |
Total U.S. Retiree Healthcare Plan |  |  | 19,780 |  |  |  | 19,780 |  |  |  | — |  |  |  | — |
Non-U.S. Pension Plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents (b) |  |  | 910 |  |  |  | 910 |  |  |  | — |  |  |  | — |
Mutual funds (c) |  |  | 18,413 |  |  |  | 18,413 |  |  |  | — |  |  |  | — |
Bank and insurance investment contracts (d) |  |  | 61,427 |  |  |  | — |  |  |  | — |  |  |  | 61,427 |
Total Non-U.S. Pension Plans |  |  | 80,750 |  |  |  | 19,323 |  |  |  | — |  |  |  | 61,427 |
Total fair value of retirement plan assets |  | $ | 100,530 |  |  | $ | 39,103 |  |  | $ | — |  |  | $ | 61,427 |

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 (e) |  | $ | 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 (f) |  |  | 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 |

a) | The mutual fund balance in the U.S. Retiree Healthcare Plan is invested in the following categories: 47% in the common stock of large-cap U.S. companies, 18% in the common stock of international growth companies and 35% in fixed income bonds of U.S. companies and the U.S. government.

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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: 71% in international bonds, 25% in the common stock of international companies and 4% 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: 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.

f) | The mutual fund balance in the Non-U.S. Pension Plans is invested in the following categories: 76% in international bonds, 18% in the common stock of international companies and 7% 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, 2024 and 2023 (in thousands):

|  | Insurance Guaranteed Investment Contracts |
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 |
Net purchases (sales) and appreciation (depreciation) |  |  | (4,764 | )
Fair value of assets, December 31, 2024 |  | $ | 61,427 |

The weighted-average assumptions used to determine the benefit obligation in the consolidated balance sheets at December 31, 2024, 2023 and 2022 are as follows:

|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Discount rate |  |  | 5.62 | % |  |  | 3.00 | % |  |  | 5.18 | % |  |  | 2.97 | % |  |  | 5.42 | % |  |  | 3.82 | %
Increases in compensation levels |  |  | * | * |  |  | 2.92 | % |  |  | * | * |  |  | 2.90 | % |  |  | * | * |  |  | 3.14 | %
Interest crediting rate |  |  | 5.25 | % |  |  | 2.09 | % |  |  | 5.25 | % |  |  | 2.05 | % |  |  | 5.25 | % |  |  | 1.57 | %

** | Not applicable

The weighted-average assumptions used to determine the net periodic pension cost for the years ended December 31, 2024, 2023 and 2022 are as follows:

|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Discount rate |  |  | 5.18 | % |  |  | 3.58 | % |  |  | 5.42 | % |  |  | 4.70 | % |  |  | 2.70 | % |  |  | 2.09 | %
Return on plan assets |  |  | 6.25 | % |  |  | 3.80 | % |  |  | 6.25 | % |  |  | 3.95 | % |  |  | 6.25 | % |  |  | 3.07 | %
Increases in compensation levels |  |  | * | * |  |  | 3.74 | % |  |  | * | * |  |  | 4.32 | % |  |  | * | * |  |  | 3.58 | %
Interest crediting rate |  |  | 5.25 | % |  |  | 2.03 | % |  |  | 5.25 | % |  |  | 1.47 | % |  |  | 5.25 | % |  |  | 1.55 | %

** | 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
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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 2025, 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, 2024 are as follows (in thousands):

|  | U.S. Retiree Healthcare Plans |  |  | Non-U.S. Pension Plans |  |  | Total |
2025 |  | $ | 2,180 |  |  | $ | 4,617 |  |  | $ | 6,797 |
2026 |  |  | 2,228 |  |  |  | 3,091 |  |  |  | 5,319 |
2027 |  |  | 2,314 |  |  |  | 3,538 |  |  |  | 5,852 |
2028 |  |  | 2,443 |  |  |  | 4,902 |  |  |  | 7,345 |
2029 |  |  | 2,586 |  |  |  | 4,232 |  |  |  | 6,818 |
2030 - 2034 |  |  | 13,769 |  |  |  | 25,518 |  |  |  | 39,287 |

17  Business Segment Information
The accounting standards for segment reporting establish standards for reporting information about operating segments in annual financial statements and require selected information for those segments to be presented in interim financial reports of public business enterprises. They also establish standards for related disclosures about products and services, geographic areas and major customers. The Company’s Chief Executive Officer is the CODM. The CODM evaluates the business based on our two operating segments: Waters and TA.
The Waters operating segment is primarily in the business of designing, manufacturing, selling and servicing LC and MS instruments, columns and other precision chemistry consumables that can be integrated and used along with other analytical instruments. The TA operating segment is primarily in the business of designing, manufacturing, selling and servicing thermal analysis, rheometry and calorimetry instruments. The Company’s two operating segments have similar economic characteristics; product processes; products and services; types and classes of customers; methods of distribution; and regulatory environments. Because of these similarities, the two segments have been aggregated into one reporting segment for financial statement purposes. Please refer to the consolidated financial statements for financial information regarding the one reportable segment of the Company.
Net sales for the Company’s products and services are as follows for the years ended December 31, 2024, 2023 and 2022 (in thousands):

|  | 2024 |  |  | 2023 |  |  | 2022 |
Product net sales: |  |  |  |  |  |  |  |  |  |  |  |
Waters instrument systems |  | $ | 1,032,493 |  |  | $ | 1,108,702 |  |  | $ | 1,210,456 |
Chemistry consumables |  |  | 565,481 |  |  |  | 541,469 |  |  |  | 525,399 |
TA instrument systems |  |  | 246,202 |  |  |  | 252,879 |  |  |  | 252,314 |
Total product sales |  |  | 1,844,176 |  |  |  | 1,903,050 |  |  |  | 1,988,169 |
Service net sales: |  |  |  |  |  |  |  |  |  |  |  |
Waters service |  |  | 1,006,447 |  |  |  | 951,419 |  |  |  | 890,607 |
TA service |  |  | 107,764 |  |  |  | 101,947 |  |  |  | 93,180 |
Total service sales |  |  | 1,114,211 |  |  |  | 1,053,366 |  |  |  | 983,787 |
Total net sales |  | $ | 2,958,387 |  |  | $ | 2,956,416 |  |  | $ | 2,971,956 |

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Net sales are attributable to geographic areas based on the region of destination. Geographic sales information is presented below for the years ended December 31, 2024, 2023 and 2022 (in thousands):

|  | 2024 |  |  | 2023 |  |  | 2022 |
Net Sales: |  |  |  |  |  |  |  |  |  |  |  |
Asia: |  |  |  |  |  |  |  |  |  |  |  |
China |  | $ | 396,599 |  |  | $ | 440,707 |  |  | $ | 565,143 |
Japan |  |  | 157,321 |  |  |  | 167,202 |  |  |  | 167,220 |
Asia Other |  |  | 415,302 |  |  |  | 399,916 |  |  |  | 399,380 |
Total Asia |  |  | 969,222 |  |  |  | 1,007,825 |  |  |  | 1,131,743 |
Americas: |  |  |  |  |  |  |  |  |  |  |  |
United States |  |  | 933,926 |  |  |  | 927,982 |  |  |  | 886,140 |
Americas Other |  |  | 181,854 |  |  |  | 180,591 |  |  |  | 169,495 |
Total Americas |  |  | 1,115,780 |  |  |  | 1,108,573 |  |  |  | 1,055,635 |
Europe |  |  | 873,385 |  |  |  | 840,018 |  |  |  | 784,578 |
Total net sales |  | $ | 2,958,387 |  |  | $ | 2,956,416 |  |  | $ | 2,971,956 |

None of the Company’s individual customers accounts for more than 2% of annual Company sales. Net sales by customer class are as follows for the years ended December 31, 2024, 2023 and 2022 (in thousands):

|  | 2024 |  |  | 2023 |  |  | 2022 |
Pharmaceutical |  | $ | 1,718,899 |  |  | $ | 1,696,875 |  |  | $ | 1,751,665 |
Industrial |  |  | 908,486 |  |  |  | 909,003 |  |  |  | 909,805 |
Academic and government |  |  | 331,002 |  |  |  | 350,538 |  |  |  | 310,486 |
Total net sales |  | $ | 2,958,387 |  |  | $ | 2,956,416 |  |  | $ | 2,971,956 |

Net sales for the Company recognized at a point in time versus over time are as follows for the years ended December 31, 2024, 2023 and 2022 (in thousands):

|  | 2024 |  |  | 2023 |  |  | 2022 |
Net sales recognized at a point in time: |  |  |  |  |  |  |  |  |  |  |  |
Instrument systems |  | $ | 1,278,695 |  |  | $ | 1,361,581 |  |  | $ | 1,462,770 |
Chemistry consumables |  |  | 565,481 |  |  |  | 541,469 |  |  |  | 525,399 |
Service sales recognized at a point in time (time & materials) |  |  | 369,149 |  |  |  | 372,530 |  |  |  | 367,501 |
Total net sales recognized at a point in time |  |  | 2,213,325 |  |  |  | 2,275,580 |  |  |  | 2,355,670 |
Net sales recognized over time: |  |  |  |  |  |  |  |  |  |  |  |
Service and software maintenance sales recognized over time (contracts) |  |  | 745,062 |  |  |  | 680,836 |  |  |  | 616,286 |
Total net sales |  | $ | 2,958,387 |  |  | $ | 2,956,416 |  |  | $ | 2,971,956 |

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Long-lived assets information at December 31, 2024, 2023 and 2022 is presented below (in thousands):

|  | December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Long-lived assets: |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 445,883 |  |  | $ | 440,993 |  |  | $ | 429,469 |
Americas Other |  |  | 1,971 |  |  |  | 2,632 |  |  |  | 1,663 |
Total Americas |  |  | 447,854 |  |  |  | 443,625 |  |  |  | 431,132 |
Europe |  |  | 176,310 |  |  |  | 167,948 |  |  |  | 133,465 |
Asia |  |  | 27,036 |  |  |  | 27,500 |  |  |  | 17,620 |
Total long-lived assets |  | $ | 651,200 |  |  | $ | 639,073 |  |  | $ | 582,217 |

The Americas Other category includes Canada, Latin America and Puerto Rico. Long-lived assets exclude goodwill, other intangible assets and other assets.
The Company’s segment performance measure is net income attributable to Waters shareholders, which is used by our CODM when assessing performance and allocating capital and resources to our business. Significant segment expenses are presented in the Company’s consolidated statements of operations. Additional disaggregated significant segment expenses, that are not separately presented on the Company’s consolidated statements of operations, are presented below.
The significant segment expenses, revenues and net income of the Company’s one reportable segment are as follows for the years ended December 31, 2024, 2023 and 2022 (in thousands):

|  | 2024 |  |  | 2023 |  |  | 2022 |
Total sales, net |  | $ | 2,958,387 |  |  | $ | 2,956,416 |  |  | $ | 2,971,956 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Labor costs within selling and administrative and research and development expenses |  |  | (596,381 | ) |  |  | (605,884 | ) |  |  | (567,689 | )
Material purchases |  |  | (556,123 | ) |  |  | (551,005 | ) |  |  | (635,583 | )
Labor costs within product and service cost of sales |  |  | (350,978 | ) |  |  | (358,788 | ) |  |  | (365,674 | )
Other segment expenses |  |  | (628,552 | ) |  |  | (623,063 | ) |  |  | (529,615 | )
Interest expense and other income, net |  |  | (71,485 | ) |  |  | (81,433 | ) |  |  | (35,549 | )
Provision for income taxes |  |  | (117,034 | ) |  |  | (94,009 | ) |  |  | (130,091 | )
Net income |  | $ | 637,834 |  |  | $ | 642,234 |  |  | $ | 707,755 |

The other segment expenses include depreciation and amortization expenses, facilities and information technology costs, travel, freight, professional fees and all other costs.
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18  Unaudited Quarterly Results
The Company’s unaudited quarterly results are summarized below (in thousands, except per share data):

|  | First |  |  | Second |  |  | Third |  |  | Fourth |  |  |  |
2024 |  | Quarter |  |  | Quarter |  |  | Quarter |  |  | Quarter |  |  | Total |
Net sales |  | $ | 636,839 |  |  | $ | 708,529 |  |  | $ | 740,305 |  |  | $ | 872,714 |  |  | $ | 2,958,387 |
Costs and operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  |  | 261,786 |  |  |  | 288,244 |  |  |  | 301,655 |  |  |  | 348,516 |  |  |  | 1,200,201 |
Selling and administrative expenses |  |  | 174,536 |  |  |  | 173,247 |  |  |  | 169,097 |  |  |  | 173,268 |  |  |  | 690,148 |
Research and development expenses |  |  | 44,595 |  |  |  | 46,182 |  |  |  | 45,336 |  |  |  | 46,914 |  |  |  | 183,027 |
Purchased intangibles amortization |  |  | 11,834 |  |  |  | 11,744 |  |  |  | 11,759 |  |  |  | 11,753 |  |  |  | 47,090 |
Litigation provisions |  |  | 10,242 |  |  |  | — |  |  |  | 1,326 |  |  |  | — |  |  |  | 11,568 |
Total costs and operating expenses |  |  | 502,993 |  |  |  | 519,417 |  |  |  | 529,173 |  |  |  | 580,451 |  |  |  | 2,132,034 |
Operating income |  |  | 133,846 |  |  |  | 189,112 |  |  |  | 211,132 |  |  |  | 292,263 |  |  |  | 826,353 |
Other income (expense), net |  |  | 2,259 |  |  |  | (302 | ) |  |  | (338 | ) |  |  | (843 | ) |  |  | 776 |
Interest expense |  |  | (25,520 | ) |  |  | (23,726 | ) |  |  | (21,435 | ) |  |  | (18,996 | ) |  |  | (89,677 | )
Interest income |  |  | 4,271 |  |  |  | 4,328 |  |  |  | 4,258 |  |  |  | 4,559 |  |  |  | 17,416 |
Income before income taxes |  |  | 114,856 |  |  |  | 169,412 |  |  |  | 193,617 |  |  |  | 276,983 |  |  |  | 754,868 |
Provision for income taxes |  |  | 12,660 |  |  |  | 26,675 |  |  |  | 32,114 |  |  |  | 45,585 |  |  |  | 117,034 |
Net income |  | $ | 102,196 |  |  | $ | 142,737 |  |  | $ | 161,503 |  |  | $ | 231,398 |  |  | $ | 637,834 |
Net income per basic common share |  |  | 1.73 |  |  |  | 2.41 |  |  |  | 2.72 |  |  |  | 3.90 |  |  |  | 10.75 |
Weighted-average number of basic common shares |  |  | 59,232 |  |  |  | 59,339 |  |  |  | 59,367 |  |  |  | 59,386 |  |  |  | 59,333 |
Net income per diluted common share |  |  | 1.72 |  |  |  | 2.40 |  |  |  | 2.71 |  |  |  | 3.88 |  |  |  | 10.71 |
Weighted-average number of diluted common shares and equivalents |  |  | 59,431 |  |  |  | 59,451 |  |  |  | 59,504 |  |  |  | 59,645 |  |  |  | 59,552 |

|  | First |  |  | Second |  |  | Third |  |  | Fourth |  |  |  |
2023 |  | Quarter |  |  | Quarter |  |  | Quarter |  |  | Quarter |  |  | Total |
Net sales |  | $ | 684,674 |  |  | $ | 740,576 |  |  | $ | 711,692 |  |  | $ | 819,474 |  |  | $ | 2,956,416 |
Costs and operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  |  | 284,380 |  |  |  | 301,076 |  |  |  | 291,407 |  |  |  | 318,360 |  |  |  | 1,195,223 |
Selling and administrative expenses |  |  | 181,956 |  |  |  | 186,953 |  |  |  | 186,748 |  |  |  | 180,357 |  |  |  | 736,014 |
Research and development expenses |  |  | 42,691 |  |  |  | 45,873 |  |  |  | 41,995 |  |  |  | 44,386 |  |  |  | 174,945 |
Purchased intangibles amortization |  |  | 1,479 |  |  |  | 6,815 |  |  |  | 12,116 |  |  |  | 12,148 |  |  |  | 32,558 |
Total costs and operating expenses |  |  | 510,506 |  |  |  | 540,717 |  |  |  | 532,266 |  |  |  | 555,251 |  |  |  | 2,138,740 |
Operating income |  |  | 174,168 |  |  |  | 199,859 |  |  |  | 179,426 |  |  |  | 264,223 |  |  |  | 817,676 |
Other income (expense), net |  |  | 1,388 |  |  |  | (352 | ) |  |  | 328 |  |  |  | (557 | ) |  |  | 807 |
Interest expense |  |  | (14,444 | ) |  |  | (23,272 | ) |  |  | (30,442 | ) |  |  | (30,703 | ) |  |  | (98,861 | )
Interest income |  |  | 4,061 |  |  |  | 4,040 |  |  |  | 3,883 |  |  |  | 4,637 |  |  |  | 16,621 |
Income before income taxes |  |  | 165,173 |  |  |  | 180,275 |  |  |  | 153,195 |  |  |  | 237,600 |  |  |  | 736,243 |
Provision for income taxes |  |  | 24,250 |  |  |  | 29,721 |  |  |  | 18,643 |  |  |  | 21,395 |  |  |  | 94,009 |
Net income |  | $ | 140,923 |  |  | $ | 150,554 |  |  | $ | 134,552 |  |  | $ | 216,205 |  |  | $ | 642,234 |
Net income per basic common share |  |  | 2.39 |  |  |  | 2.56 |  |  |  | 2.28 |  |  |  | 3.66 |  |  |  | 10.87 |
Weighted-average number of basic common shares |  |  | 59,023 |  |  |  | 58,857 |  |  |  | 59,093 |  |  |  | 59,142 |  |  |  | 59,076 |
Net income per diluted common share |  |  | 2.38 |  |  |  | 2.55 |  |  |  | 2.27 |  |  |  | 3.65 |  |  |  | 10.84 |
Weighted-average number of diluted common shares and equivalents |  |  | 59,317 |  |  |  | 59,010 |  |  |  | 59,225 |  |  |  | 59,311 |  |  |  | 59,270 |

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company typically experiences an increase in sales in the fourth quarter, as a result of purchasing habits for capital goods of customers that tend to exhaust their spending budgets by calendar year-end. Selling and administrative expenses are typically higher after the first quarter in each year as the Company’s annual payroll merit increases take effect.
The Company experienced significant increases in purchased intangibles amortization and interest expense beginning in the second quarter of 2023 as a result of the Wyatt acquisition.
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Item 9:
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A:
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s chief executive officer and chief financial officer (principal executive officer and principal financial officer), with the participation of management, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in
Rules 13a-15(e)
and
15d-15(e)
under the Exchange Act) as of the end of the period covered by this annual report on Form
10-K.
Based on this evaluation, the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2024 (1) to ensure that information required to be disclosed by the Company, including its consolidated subsidiaries, in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its chief executive officer and chief financial officer, to allow timely decisions regarding the required disclosure and (2) to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Management’s Annual Report on Internal Control Over Financial Reporting
See Management’s Report on Internal Control Over Financial Reporting in Item 8 on page 51 of this Annual Report.
Report of the Independent Registered Public Accounting Firm
See the report of PricewaterhouseCoopers LLP in Item 8 beginning on page 52 of this Annual Report.
Changes in Internal Control Over Financial Reporting
No change was identified in the Company’s internal control over financial reporting (as defined in
Rules 13a-15(f)
and
15d-15(f)
under the Exchange Act) during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B:
Other Information
Insider Trading Arrangements and Related Disclosures
None.
Item 9C:
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
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PART III
Item 10:
Directors, Executive Officers and Corporate Governance
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Officers of the Company are elected annually by the Board of Directors and hold office at the discretion of the Board of Directors. The following persons serve as executive officers of the Company:
Dr. Udit Batra, 54, was appointed a Director of the Company as well as President and CEO on September 1, 2020. He most recently served as Chief Executive Officer of the Life Science business of Merck KGaA, Darmstadt, Germany, which operates as MilliporeSigma in the United States and Canada, and as a member of its Executive Board, roles he held from 2014 and 2016, respectively, through July 2020. Prior to that, Dr. Batra served as President and Chief Executive Officer of Merck KGaA, Darmstadt, Germany’s Consumer Health business. Dr. Batra oversaw the company’s Bioethics Advisory Panel and had Board responsibility for the global Information Technology function. Before joining Merck KGaA, Darmstadt, Germany, Dr. Batra held several positions of increasing responsibility at Novartis, including Global Head of Corporate Strategy in Switzerland, Country President for the Pharma Business of Novartis in Australia and New Zealand and the Global Head of Public Health and Market Access in Cambridge, Massachusetts. Dr. Batra also served at the global consultancy McKinsey & Company across the healthcare, consumer and
non-profit
sectors. Dr. Batra started his career at Merck Research Labs in West Point, Pennsylvania as a research engineer.
Jianqing Bennett, 55, was appointed Senior Vice President of TA Instruments Division on May 1, 2021. Previously, Ms. Bennett served as Senior Vice President, High Growth Markets at Beckman Coulter Diagnostics from November 2017 to March 2021. Prior to that, from 2007-2017, she held various senior management positions at Carestream Health Inc, including serving as President, Medical Digital Solutions from August 2015 to November 2017.
Amol Chaubal, 49, was appointed Chief Financial Officer of Waters Corporation on May 12, 2021. Previously, Mr. Chaubal was Chief Financial Officer of Quanterix Corporation, a life sciences company, where he served as Chief Financial Officer since April 2019. Before Quanterix, Mr. Chaubal served as Chief Financial Officer, Global Operations at Smith & Nephew, a global medical devices company, from October 2017 to April 2019. Prior to his time at Smith & Nephew, he served as Corporate Vice President and Head of Finance for the Clinical Research Services and Access business at Parexel from July 2015 to October 2017.
Robert Carpio, 42, was appointed Senior Vice President of the Waters Division on June 24, 2024. Previously, Mr. Carpio served in multiple roles at Madison Industries’ Filtration Group from October 2017 to May 2024, including as Group President of Life Sciences from January 2022 to May 2024 and President of Porex from June 2019 to April 2022. Prior to Madison, Mr. Carpio held various positions at Precision Castparts Corporation, Alcoa Corporation and McKinsey & Company. Mr. Carpio began his career in the United States Army, serving both on active duty and as a member of the Massachusetts National Guard.
Information regarding the Company’s directors, any material changes to the process by which security holders may recommend nominees to the Board of Directors and the information required by the Item will be contained in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, to be filed with the SEC not later than 120 days after the close of business of the fiscal year and is incorporated in this report by reference (the “2025 Proxy Statement”), under the headings “Election of Directors”, “Directors Meetings and Board Committees”, “Corporate Governance”, “Report of the Audit and Finance Committee of the Board of Directors” and “Compensation of Directors and Executive Officers”. Information regarding compliance with Section 16(a) of the Exchange Act will be contained in the 2025 Proxy Statement, under the heading “Delinquent Section 16(a) Reports”. Information regarding the Company’s Audit and Finance Committee and Audit and Finance Committee Financial Expert will be contained in the 2025 Proxy Statement, under the headings “Report of the Audit and Finance Committee of the Board of Directors” and “Directors Meetings and Board Committees”. Such information is incorporated herein by reference.
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The Company has adopted a Global Code of Business Conduct & Ethics (the “Code”) that applies to all of the Company’s employees (including its executive officers) and directors and that is in compliance with Item 406 of Regulation
S-K.
The Code has been distributed to all employees of the Company. In addition, the Code is available on the Company’s website, https://www.waters.com, under the caption “Corporate Governance”. The Company intends to satisfy the disclosure requirement regarding any amendment to, or waiver of a provision of, the Code applicable to any executive officer or director by posting such information on its website. The Company shall also provide to any person without charge, upon request, a copy of the Code. Any such request must be made in writing to the Secretary of the Company, c/o Waters Corporation, 34 Maple Street, Milford, MA 01757.
The Company’s corporate governance guidelines and the charters of the audit committee, compensation committee and nominating and corporate governance committee of the Board of Directors are available on the Company’s website, https://www.waters.com, under the caption “Corporate Governance”. The Company shall provide to any person without charge, upon request, a copy of any of the foregoing materials. Any such request must be made in writing to the Secretary of the Company, c/o Waters Corporation, 34 Maple Street, Milford, MA 01757.

Item 11: | Executive Compensation

This information will be contained in the 2025 Proxy Statement, under the headings “Compensation of Directors and Executive Officers”, “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report”. Such information is incorporated herein by reference.
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Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Except for the Equity Compensation Plan information set forth below, this information will be contained in the 2025 Proxy Statement, under the heading “Security Ownership of Certain Beneficial Owners and Management”. Such information is incorporated herein by reference.

Equity Compensation Plan Information

The following table provides information as of December 31, 2024 about the Company’s common stock that may be issued upon the exercise of options, warrants and rights under its existing equity compensation plans (in thousands):

|  | A |  |  | B |  |  | C |
|  | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) |  |  | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (1) |  |  | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (A)) |
Equity compensation plans approved by security holders |  |  | 973 |  |  | $ | 284.74 |  |  |  | 6,392 |
Equity compensation plans not approved by security holders |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 973 |  |  | $ | 284.74 |  |  |  | 6,392 |

(1) | Column (a) includes an aggregate of 380 shares of common stock to be issued upon settlement of restricted stock, restricted stock units and performance stock units. The weighted-average share price in column (b) does not take into account restricted stock, restricted stock units or performance stock units, which do not have an exercise price.

See Note 13, Stock-Based Compensation, in the Notes to Consolidated Financial Statements for a description of the material features of the Company’s equity compensation plans.

Item 13: | Certain Relationships and Related Transactions and Director Independence

This information is contained in the 2025 Proxy Statement, under the headings “Directors Meetings and Board Committees”, “Corporate Governance” and “Compensation of Directors and Executive Officers”. Such information is incorporated herein by reference.

Item 14: | Principal Accountant Fees and Services

This information is contained in the 2025 Proxy Statement, under the headings “Ratification of Selection of Independent Registered Public Accounting Firm” and “Report of the Audit and Finance Committee of the Board of Directors”. Such information is incorporated herein by reference.

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PART IV

Item 15: Exhibits, Financial Statement Schedules

(a) Documents filed as part of this report:

| (1) | Financial Statements:

The consolidated financial statements of the Company and its subsidiaries are filed as part of this Annual Report and are set forth on pages 54 to 99. The report of PricewaterhouseCoopers LLP (PCAOB ID: 238), an independent registered public accounting firm, dated February 25, 2025, is set forth beginning on page 52 of this Annual Report.

| (2) | Exhibits:

Exhibit Number |  | Description of Document
2.1 |  | Share Purchase Agreement, dated as of February 14, 2023, by and among Wyatt Technology Corporation, Waters Technologies Corporation, the shareholders named therein and Geofrey Wyatt in his capacity as representative of the shareholders (Incorporated by reference to the Registrant’s Report on Form 8-K dated February 15, 2023 (File No. 001-14010)).
3.1 |  | Second Amended and Restated Certificate of Incorporation of Waters Corporation (Incorporated by reference to the Registrant’s Report on Form 10-K dated March 29, 1996 (File No. 001-14010)).+
3.2 |  | Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of Waters Corporation, dated as of May 12, 1999 (Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 11, 1999 (File No. 001-14010)).
3.3 |  | Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of Waters Corporation, dated as of July 27, 2000 (Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 8, 2000 (File No. 001-14010)).
3.4 |  | Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of Waters Corporation, dated as of May 25, 2001 (Incorporated by reference to the Registrant’s Report on Form 10-K dated March 28, 2002 (File No. 001-14010)).
3.5 |  | Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of Waters Corporation, dated as of June 24, 2004 (Incorporated by reference to Exhibit 3.1 to the Registrant’s Report on Form 10-Q dated July 31, 2024 (File No. 001-14010)).
3.6 |  | Amended and Restated Bylaws of Waters Corporation, dated as of February 23, 2024 (Incorporated by reference to Exhibit 3.5 to the Registrant’s Report on Form 10-K dated February 27, 2024 (File No. 001-14010)).
4.1 |  | Description of Registrant’s Securities. (Incorporated by reference to Exhibit 4.1 of the Registrant’s Report on Form 10-K dated February 24, 2021 (File No. 001-14010)).
10.1 |  | Waters Corporation Retirement Plan (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 dated October 24, 1996 (File No. 333-96934)).*+
10.2 |  | Amended and Restated Waters 401(k) Restoration Plan, effective January 1, 2008. (Incorporated by reference to the Registrant’s Report on Form 10-Q dated November 2, 2007 (File No. 001-14010)).*
10.3 |  | Amended and Restated Waters Retirement Restoration Plan, effective January 1, 2008 (Incorporated by reference to the Registrant’s Report on Form 10-K dated February 27, 2009 (File No. 001-14010)).*
10.4 |  | Amended and Restated Waters Corporation 1996 Non-Employee Director Deferred Compensation Plan, Effective January 1, 2008. (Incorporated by reference to the Registrant’s Report on Form 10-K dated February 27, 2009 (File No. 001-14010)).*

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Exhibit Number |  | Description of Document
10.5 |  | 2014 Waters Corporation Management Incentive Plan. (Incorporated by reference to the Registrant’s Report on Form 10-K dated February 27, 2015 (File No. 001-14010)).*
10.6 |  | Waters Corporation 2009 Employee Stock Purchase Plan (Incorporated by reference to the Registrant’s Report on Form S-8 dated July 10, 2009 (File No. 333-160507)).*
10.7 |  | Waters Corporation 2012 Equity Incentive Plan. (Incorporated by reference to the Registrant’s Report on Form S-8 dated September 5, 2012 (File No. 333-183721)).*
10.8 |  | Form of Waters 2012 Stock Option Agreement - Executive Officers (Incorporated by reference to the Registrant’s Report on Form 8-K dated December 11, 2012 (File No. 001-14010)).*
10.9 |  | Form of Waters 2012 Stock Option Agreement - Directors (Incorporated by reference to the Registrant’s Report on Form 8-K dated December 11, 2012 (File No. 001-14010)).*
10.10 |  | Form of Waters 2012 Restricted Stock Agreement - Directors (Incorporated by reference to the Registrant’s Report on Form 8-K dated December 11, 2012 (File No. 001-14010)).*
10.11 |  | Form of Waters 2012 Restricted Stock Unit Agreement for Executive Officers - Five Year Vesting. (Incorporated by reference to the Registrant’s Report on Form 8-K dated December 11, 2013 (File No. 001-14010)).*
10.12 |  | Form of Waters 2012 Restricted Stock Unit Agreement for Executive Officers - One Year Vesting (Incorporated by reference to the Registrant’s Report on Form 8-K dated December 11, 2013 (File No. 001-14010)).*
10.13 |  | Note Purchase Agreement, dated June 30, 2014, between Waters Corporation and the purchases named therein (Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 1, 2014 (File No. 001-14010)).
10.14 |  | First Amendment to the Note Purchase Agreement, dated as of June 30, 2014 (Incorporated by reference to the Registrant’s Report on Form 10-K/A dated March 1, 2019 (File No. 001-14010)).
10.15 |  | Note Purchase Agreement, dated as of May 12, 2016, between Waters Corporation and the purchasers named therein (Incorporated by reference to the Registrant’s Report on Form 10-Q dated August 5, 2016 (File No. 001-14010)).
10.16 |  | First Amendment to the Note Purchase Agreement, dated as of May 12, 2016 (Incorporated by reference to the Registrant’s Report on Form 10-K/A dated March 1, 2019 (File No. 001-14010)).
10.17 |  | Form of Waters 2012 Performance Stock Unit Award Agreement (Incorporated by reference to the Registrant’s Report on Form 8-K dated December 15, 2016 (File No. 001-14010)).*
10.18 |  | Form of Change of Control/Severance Agreement (Incorporated by reference to the Registrant’s Report on Form 8-K dated March 27, 2017 (File No. 001-14010)).*
10.19 |  | Credit Agreement, dated as of November 30, 2017, among Waters Corporation, JPMorgan Chase Bank, N.A., JP Morgan Europe Limited and other Lenders party thereto (Incorporated by reference to the Registrant’s Report on Form 10-K dated February 27, 2018 (File No. 001-14010)).
10.20 |  | First Amendment to the Credit Agreement, dated as of November 30, 2017, among Waters Corporation, JPMorgan Chase Bank, N.A., JP Morgan Europe Limited and other Lenders party thereto (Incorporated by reference to the Registrant’s Report on Form 10-K/A dated March 1, 2019 (File No. 001-14010)).
10.21 |  | Amendment and Restatement Agreement to the Credit Agreement, dated as of September 17, 2021, by and among the lenders and issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent (Incorporated by reference to the Registrant’s Report on Form 8-K dated September 20, 2021 (File No. 001-14010)).

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Exhibit Number |  | Description of Document
10.22 |  | Amendment and Incremental Commitment Agreement, dated as of March 3, 2023, by and among the Company, Waters Technologies Corporation, TA Instruments - Waters L.L.C., Waters Asia Limited, Environmental Resource Associates, Inc., the lenders party thereto, the issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent (Incorporated by reference to the Registrant’s Report on Form 8-K dated March 7, 2023 (File No. 001-14010)).
10.23 |  | Note Purchase Agreement, dated as of September 12, 2019, between Waters Corporation and the purchasers named therein (Incorporated by reference to the Registrant’s Report on Form 8-K dated September 16, 2019 (File No. 001-14010)).
10.24 |  | Form of Performance Stock Unit Award Agreement under the Waters Corporation 2012 Equity Incentive Plan (Incorporated by reference to the Registrant’s Report on Form 10-K dated February 25, 2020 (File No. 001-14010)).*
10.25 |  | President and Chief Executive Employment Agreement, dated July 14, 2020, between Waters Corporation and Udit Batra (Incorporated by reference to the Registrant’s Report on Form 10-Q dated July 29, 2020 (File No. 001-14010)).*
10.26 |  | Change of Control/Severance Agreement, dated as of July 14, 2020, between Waters Corporation and Udit Batra (Incorporated by reference to the Registrant’s Report on Form 10-Q dated July 29, 2020 (File No. 001-14010)).*
10.27 |  | Waters Corporation 2020 Equity Incentive Plan (Incorporated by reference to Exhibit 4.2 of the Registration Statement filed on Form S-8 dated June 8, 2020 (File No. 333-239020)).*
10.28 |  | Employee Form of Stock Option Award Agreement under the Waters Corporation 2020 Equity Incentive Plan (Incorporated by reference to the Registrant’s Report on Form 10-Q dated July 29, 2020 (File No. 001-14010)).*
10.29 |  | Director Form of Stock Option Award Agreement under the Waters Corporation 2020 Equity Incentive Plan (Incorporated by reference to the Registrant’s Report on Form 10-Q dated July 29, 2020 (File No. 001-14010)).*
10.30 |  | Form of RSU Agreement under the Waters Corporation 2020 Equity Incentive Plan. (Incorporated by reference to the Registrant’s Report on Form 10-Q dated July 29, 2020 (File No. 001-14010)).*
10.31 |  | CEO Form of PSU Agreement under the Waters Corporation 2020 Equity Incentive Plan (Incorporated by reference to the Registrant’s Report on Form 10-Q dated July 29, 2020 (File No. 001-14010)).*
10.32 |  | Employee (Non-CEO) PSU Agreement under the Waters Corporation 2020 Equity Incentive Plan (Incorporated by reference to the Registrant’s Report on Form 10-Q dated July 29, 2020 (File No. 001-14010)).*
10.33 |  | Director Form of RSA Agreement under the Waters Corporation 2020 Equity Incentive Plan (Incorporated by reference to the Registrant’s Report on Form 10-Q dated July 29, 2020 (File No. 001-14010)).*
10.34 |  | Note Purchase Agreement, dated as of March 2, 2021, by and among the Company and the purchasers signatory thereto, including the forms of notes (Incorporated by reference to the Registrant’s Report on Form 8-K dated March 4, 2021 (File No. 001-14010)).
10.35 |  | Employment Offer Letter, dated April 16, 2021, between Waters Corporation and Amol Chaubal (Incorporated by reference to the Registrant’s Report on Form 10-Q dated May 6, 2021 (File No. 001-14010)).*
10.36 |  | Change of Control and Severance Agreement, dated April 16, 2021, between Waters Corporation and Amol Chaubal (Incorporated by reference to the Registrant’s Report on Form 10-Q dated May 6, 2021 (File No. 001-14010)).*

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Exhibit Number |  | Description of Document
10.37 |  | Multi-Currency Note Purchase and Private Shelf Agreement, dated as of May 11, 2023, between Waters Corporation, PGIM, Inc. and each of the purchasers listed on Schedules A-1 and A-2 attached thereto (Incorporated by reference to the Registrant’s Report on Form 8-K dated May 11, 2023 (File No. 001-14010)).
10.38 |  | Master Note Facility Agreement, dated as of July 12, 2024, by and between Waters Corporation and NYL Investors LLC (Incorporated by reference to the Registrant’s Report on Form 8-K dated July 18, 2024 (File No. 001-14010)).
10.39 |  | Employment Offer Letter, dated February 8, 2021, between Waters Corporation and Jianqing Bennett.*
10.40 |  | Employment Offer Letter, dated May 28, 2024, between Waters Corporation and Robert Carpio (Incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 10-Q dated July 31, 2024 (File No. 001-14010)).*
19.1 |  | Waters Corporation Insider Trading Policy.
21.1 |  | Subsidiaries of Waters Corporation.
23.1 |  | Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm.
31.1 |  | Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 |  | Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 |  | Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2 |  | Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
97 |  | Waters Corporation Mandatory Clawback Policy (Incorporated by reference to Exhibit 97 to the Registrant’s Report on Form 10-K dated February 27, 2024 (File No. 001-14010)).*
101 |  | The following materials from Waters Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Stockholders’ Equity (Deficit) and (vi) Notes to Consolidated Financial Statements.
104 |  | Cover Page Interactive Date File (formatted in iXBRL and contained in Exhibit 101).

+ | Paper Filing

* | Management contract or compensatory plan required to be filed as an exhibit to this Annual Report.

** | This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference.

(b) | See Item 15 (a) (2) above.

Item 16: | Form 10-K Summary

The optional summary in Item 16 has not been included in this Annual Report.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WATERS CORPORATION
/s/ Amol Chaubal
Amol Chaubal
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)

Date: February 25, 2025

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated on February 25, 2025.

/s/ Dr. Flemming Ornskov, M.D., M.P.H. |  |  |  | Chairman of the Board of Directors
Dr. Flemming Ornskov, M.D., M.P.H. |  |  |  |
/s/ Udit Batra, Ph.D. |  |  |  | President and Chief Executive Officer
Udit Batra, Ph.D. |  |  |  | Director (Principal Executive Officer)
/s/ Amol Chaubal |  |  |  | Senior Vice President and Chief Financial Officer
Amol Chaubal |  |  |  | (Principal Financial Officer)
|  |  |  | (Principal Accounting Officer)
/s/ Linda Baddour |  |  |  | Director
Linda Baddour |  |  |  |
/s/ Dan Brennan |  |  |  | Director
Dan Brennan |  |  |  |
/s/ Richard Fearon |  |  |  | Director
Richard Fearon |  |  |  |
/s/ Pearl S. Huang, Ph.D. |  |  |  | Director
Pearl S. Huang, Ph.D. |  |  |  |
/s/ Wei Jiang |  |  |  | Director
Wei Jiang |  |  |  |
/s/ Heather Knight |  |  |  | Director
Heather Knight |  |  |  |
/s/ Christopher A. Kuebler |  |  |  | Director
Christopher A. Kuebler |  |  |  |
/s/ Mark Vergnano |  |  |  | Director
Mark Vergnano |  |  |  |

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