1)	Basis of Presentation

The terms “MKS” and the “Company” refer to MKS Instruments, Inc. and its subsidiaries. The interim financial data as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012 are unaudited; however, in the opinion of MKS, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The consolidated balance sheet presented as of December 31, 2012 has been derived from the audited consolidated financial statements as of that date. The unaudited consolidated financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by United States generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the MKS Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission on February 26, 2013.

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, stock-based compensation, inventory, intangible assets, goodwill and other long-lived assets, acquisition expenses, income taxes and investments. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revision of prior period financial statements

During the three months ended September 30, 2013, the Company identified a prior period error which affected the previous balance sheets of all interim periods in 2013 and all interim and annual periods in 2012 and 2011 and certain footnote disclosures for annual periods in 2012, 2011 and 2010. The Company previously reported the amounts of its uncertain tax positions on the balance sheets net instead of gross. The Company considered the guidance in Accounting Standards Codification (“ASC”) Topic 740-10-45, Other Presentation Matters and ASC Topic 210-20, Offsetting with respect to this matter. The error had no impact to the income statement, statements of cash flows or the statements of stockholders’ equity of any previously reported periods. In evaluating whether our previously issued consolidated financial statements were materially misstated, the Company considered the guidance in ASC Topic 250, Accounting Changes and Error Corrections, ASC Topic 250-10-S99-1, Assessing Materiality, and ASC Topic 250-10-S99-2, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. The Company concluded this error was not material to the prior reporting periods, or to the 2013 results, and therefore, amendments of previously filed reports were not required. Accordingly, during the three months ended September 30, 2013, the Company recorded these prior period adjustments to correct this error. The revisions for these corrections to the applicable prior periods are reflected in the financial information herein and will be reflected in future filings containing such financial information.

The tables below reflect the revisions in the balance sheet line items for the periods ended December 31, 2012 and 2011.


	December 31, 2012
	As previously reported		Adjustment		As revised
Other assets	$	11,692	$	17,720	$	29,412
Other liabilities	$	43,375	$	17,720	$	61,095


	December 31, 2011
	As previously reported		Adjustment		As revised
Other assets	$	12,266	$	15,281	$	27,547
Other liabilities	$	32,211	$	15,281	$	47,492

The tables below reflect the sections in certain footnotes that were affected by the revision for the periods ended December 31, 2012 and 2011.

Other Assets


	December 31, 2012
	As previously reported		Adjustment		As revised
Deferred tax assets, net	$	9,497	$	—	$	9,497
Long-term income tax receivable		—		17,720		17,720
Other		2,195		—		2,195

	$	11,692	$	17,720	$	29,412


	December 31, 2011
	As previously reported		Adjustment		As revised
Deferred tax assets, net	$	10,274	$	—	$	10,274
Long-term income tax receivable		—		15,281		15,281
Other		1,992		—		1,992

	$	12,266	$	15,281	$	27,547

Other Liabilities


	December 31, 2012
	As previously reported		Adjustment		As revised
Long-term income tax payable	$	20,880	$	17,720	$	38,600
Accrued compensation		18,750		—		18,750
Other		3,745		—		3,745

	$	43,375	$	17,720	$	61,095


	December 31, 2011
	As previously reported		Adjustment		As revised
Long-term income tax payable	$	16,084	$	15,281	$	31,365
Accrued compensation		15,174		—		15,174
Other		953		—		953

	$	32,211	$	15,281	$	47,492

Income Taxes


	December 31, 2012
	As previously reported		Adjustment			As revised
Current taxes:
United States	$	10,431	$	4,314		$	14,745
State		783		—			783
Foreign		12,074		(4,314	)		7,760

	$	23,288	$	—		$	23,288


	December 31, 2011
	As previously reported		Adjustment			As revised
Current taxes:
United States	$	25,824	$	15,032		$	40,856
State		2,602		—			2,602
Foreign		20,346		(15,032	)		5,314

	$	48,772	$	—		$	48,772


	December 31, 2010
	As previously reported		Adjustment			As revised
Current taxes:
United States	$	27,789	$	8,807		$	36,596
State		3,323		—			3,323
Foreign		22,296		(8,807	)		13,489

	$	53,408	$	—		$	53,408

Segment Note

A reconciliation of segment assets to consolidated total assets is as follows:


	December 31, 2012
	As previously reported		Adjustment		As revised
Total segment assets	$	216,699	$	—	$	216,699
Cash and cash equivalents and investments		627,399		—		627,399
Other current assets		36,242		—		36,242
Property, plant and equipment, net		80,516		—		80,516
Goodwill and intangible assets, net		162,294		—		162,294
Other assets		11,692		17,720		29,412

Consolidated total assets	$	1,134,842	$	17,720	$	1,152,562


	December 31, 2011
	As previously reported		Adjustment		As revised
Total segment assets	$	274,526	$	—	$	274,526
Cash and cash equivalents and investments		573,392		—		573,392
Other current assets		44,856		—		44,856
Property, plant and equipment, net		72,487		—		72,487
Goodwill and intangible assets, net		141,127		—		141,127
Other assets		12,266		15,281		27,547

Consolidated total assets	$	1,118,654	$	15,281	$	1,133,935