IDEXX Laboratories (IDXX) 10-K risk factor changes: FY2022 vs FY2021

Our future operating results involve a number of risks and [removed: uncertainties] [added: uncertainties,] and actual events or results may differ materially from those discussed in this Annual Report on Form 10-K.

Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating [removed: results] [added: results,] and stock price.

[removed: In addition,] [added: Economic weakness may also reduce demand for our companion animal, water, livestock, poultry, and dairy products and services, and] public health-related guidance and directives, including stay-at-home orders that may be further deployed to combat [removed: the spread of COVID-19, including variants (such as Delta and Omicron),] [added: public health issues,] and possible higher infection rates could result in a decrease in companion animal clinical visits, [removed: labor shortages,] the delay of elective procedures and wellness [removed: visits,] [added: visits] and disruption of veterinary clinic operations, all of which would have a negative effect on veterinary service providers and result in declines in demand for our CAG products and [removed: services, which represented 90% of our 2021 consolidated revenues.][added: services.]

[removed: In addition, the] [added: The] ongoing [removed: pandemic has] [added: impacts of the global COVID-19 pandemic, inflation, rising interest rates, fear of a global economic downturn or recession and other economic factors, have] increased economic uncertainty and caused economic slowdowns that may continue or recur.

- Developing and introducing new [added: or improved] innovative diagnostic tests and services for both our reference laboratories and in-clinic applications that provide valuable medical information to our customers and effectively differentiate our products and services from those of our competitors;

- Developing and introducing [added: new or improved] innovative, data-insightful software solutions that [added: enable our veterinary customers to improve practice management and efficiency, staff productivity, and client communications and that] increase the value to our [added: veterinary] customers of our [added: other] companion animal products and services by enhancing the integration of the information and transactions of these products and [added: services and supporting] the [added: interpretation and] management of diagnostic information derived from [removed: our products;][added: these products and services;]

- Providing our veterinary customers with the medical and business tools, information, and resources that enable them to grow their practices and [removed: the] [added: increase] utilization of our diagnostic products and services, through increased pet visits, use of preventive care protocols, enhanced practice of real-time care, and improved practice efficiency;

- Attracting, developing, and retaining key leadership and talent necessary to support all elements of our strategy, which is challenging due to the increasingly competitive and tight labor markets in which we operate, as well as [added: public health issues, including pandemics, such as the] COVID-19-related [added: pandemic] impacts on the workforce;

- Strengthening our sales and marketing activities to continue to grow our profitability both in [removed: the U.S.] and [removed: in geographies] outside [removed: of] the U.S.;

- Identifying, completing, and integrating acquisitions that enhance our existing [removed: businesses or] [added: businesses,] create new [removed: business] [added: businesses for us] or [added: expand the] geographic areas [removed: for us;][added: in which we do business;]

Actions taken by third-party suppliers in operating their business, as well as any disruptions to their business operations (or their [removed: supplier's] [added: suppliers'] business operations), could disrupt our supply chain or operations and materially negatively impact our ability to supply the market, substantially decrease sales, lead to higher costs, and damage our reputation with our customers.

Our supply chain and our cost of goods also may be adversely impacted by unanticipated price increases due to factors such as [removed: inflation, including] [added: inflation (including] wage [removed: inflation, or to] [added: inflation),] supply restrictions beyond our control or the control of our [added: suppliers, or regulatory requirements regarding the importation, exportation, composition, or production processes of the goods or materials provided by our] suppliers.

If current suppliers fail to supply sufficient goods or materials [added: that comply with applicable regulatory requirements] to us on a timely basis, or at all, [added: or are unable to comply with any due diligence requests that may be required pursuant to applicable law or regulation,] we could experience inventory shortages and disruptions in our supply of goods or materials.

For examples of some of the events that could result in disruption to our supply chain or operations, and negatively impact our operating results, refer to [added: “Various U.S. and foreign government regulations could limit or delay our ability to market and sell our products or otherwise negatively impact our business,”] “We are increasingly dependent on the continuous and reliable operation of our information technology systems, and a disruption of these systems or significant security breaches could adversely affect our business” and [removed: "Factors] [added: “Factors] and events beyond our control could disrupt our operations, supply chain, and logistics network and adversely affect our [removed: business"] [added: business”] below.

[removed: If we are unable to obtain adequate quantities of products, components, or raw materials in the future from sole] and single-source [removed: suppliers, or if such sole and single-source] suppliers are unable to obtain the components or other materials required to manufacture the products, we may be unable to supply our customers, which could have a material adverse effect on our results of operations, and any longer-term disruptions could potentially result in the permanent loss of customers, which could reduce our recurring revenues and long-term profitability.

In the U.S., the manufacture and sale of certain of our products are regulated by [removed: agencies] [added: federal agencies,] such as the USDA, the FDA, and the EPA.

Our diagnostic tests for animal health applications that involve the detection of infectious diseases, including most rapid assay canine and feline SNAP tests and livestock and poultry diagnostic tests, must be approved by the USDA prior to sale in the U.S. Our dairy testing [removed: products] [added: products,] as well as the manufacture and sale of our OPTI line of human point-of-care electrolytes and blood gas [removed: analyzers] [added: analyzers,] require approval by the FDA before they may be sold commercially in the [removed: U.S., and] [added: U.S. The methods used by] our [removed: OPTI PCR test kits for] [added: water testing products must be approved by] the [removed: detection] [added: EPA, as a part] of [removed: the virus that causes COVID-19, are subject to regulation] [added: its water quality monitoring program, before they can be used] by [added: customers in] the [removed: FDA and sold] [added: U.S. Delays in obtaining regulatory approvals for new products or product upgrades could have a negative impact on our growth] and [removed: distributed pursuant to Emergency Use Authorizations issued by the FDA.][added: profitability.]

Compliance with these and similar [added: laws, directives and] regulations in the U.S. and abroad may require registration of the applicable [removed: substances or] [added: substances, performance of due diligence across our supply chain and reporting thereon, and/or] the redesign or reformulation of our [removed: products] [added: products,] and may reduce or eliminate the availability of certain parts and components used in our products and services [added: or lead us to change our suppliers] in the event our suppliers are unable to comply with [added: our due diligence requests or] the applicable regulations in a timely and cost-effective manner.

Any redesign or [removed: reformulation] [added: reformulation, change in our suppliers,] or [removed: restricted] [added: restrictions in our] supply of parts and components may negatively affect the availability or performance of our products and services, add testing lead-times for products and reformulated products, reduce our margins, result in additional costs, or have other similar effects.

There can also be no assurance that confidential, proprietary information provided to foreign regulatory agencies may not be accessed by [added: unauthorized persons or otherwise stolen, which could negatively impact our ability to protect our proprietary rights in our innovative products and our future success.]

These legal, regulatory, and [removed: political] [added: sometimes politically motivated] requirements [removed: and environments] differ among jurisdictions around the world and are rapidly changing and increasingly complex.

As a result, we invest substantial funds and efforts into R&D, investigating new products and technologies being developed by third [removed: parties] [added: parties,] and obtaining certain such new products and technologies through licenses or acquisitions.

We also cannot predict whether any product or service offering, once launched, will achieve market [removed: acceptance] [added: acceptance,] or achieve sales and revenue consistent with our expectations.

We also license patents and technologies from third parties to enable the use of third-party technologies in the [removed: development] [added: development, production,] and [removed: production] [added: provision] of our products and [removed: offerings.][added: services.]

[removed: Even if our patents] cover products [added: or services] sold by our competitors, the time and expense of litigating to enforce our patent rights could be substantial and could have an adverse effect on our results of operations.

In addition, expiration of patent rights could result in substantial new competition for products [added: or services] previously covered by those patent rights.

In the past, we have received notices claiming that our products [added: or services] infringe third-party patents, and we may receive such notices in the future.

If we lose, we may be prohibited from selling certain products [added: or services] and/or we may be required to pay damages and/or ongoing royalties as a result of the lawsuit.

While we believe that our offerings are competitively differentiated due to our innovative products and services (such as the IDEXX SDMA test and VetConnect Plus) that offer an integrated, comprehensive diagnostic solution and the quality of our technical and customer service, there can be no assurance [added: that increased consolidation among our competitors or customers (as well as any resulting reference laboratory vertical integration among our customers) would not have a negative impact on our ability to compete successfully.]

In addition, our ability to attract and retain customers depends on the effectiveness of our customer marketing and incentive programs and multiple competitors could bundle product and service offerings through co-marketing or other arrangements, which could enhance their ability to compete with our broad product and service [removed: offering.][added: offerings.]

[removed: Furthermore, an] increasing percentage of individually-owned veterinary hospitals in the U.S. are participating in buying consortiums.

While we have strong supplier relationships with several corporate hospital groups and buying consortiums, decisions by larger corporate owners and buying consortiums to shift their purchasing of products and services away from us and to a competitor would have a negative impact on our results of [removed: operations.][added: operations from the loss of future business.]

Our livestock and poultry products business in particular is subject to fluctuations resulting [added: from changes in disease prevalence.]

[removed: We cannot assure you] [added: There can be no assurances made] that we will be successful in maintaining and strengthening our relationships with our distributors or establishing relationships with new distributors who have the ability to market, sell, and support our products effectively.

We depend on [added: the efforts of] key [removed: leadership] [added: personnel] and talent to succeed and compete effectively

Our continued success is substantially dependent on our ability to attract, develop, and retain highly capable, [removed: skilled] [added: skilled,] and diverse employees and leaders.

Our ability to recruit and retain such talent will depend on a number of factors, including compensation and benefits, work location, [added: flexibility regarding virtual and hybrid] work [removed: environment] [added: arrangements, work environment, corporate culture,] and development opportunities.

Furthermore, [removed: the recent pandemic-related] [added: a more competitive] labor [removed: force shortages have] [added: market has] made it more difficult and costly to attract qualified labor, and prolonged shortages could adversely affect our ability to achieve our business objectives.

The loss of the services of, or our failure to recruit or develop and implement effective succession plans for, our senior [removed: leadership or] [added: leadership,] other key [removed: personnel] [added: personnel, and employees] may significantly delay or prevent the achievement of our strategic objectives, disrupt our operations, and adversely affect our business and our future success.

In addition, even if we effectively develop and implement succession plans and make key leadership transitions, we cannot provide assurances as to whether we may experience management or other challenges in connection with any of those leadership transitions that could adversely affect our future [removed: success.][added: success and could otherwise materially adversely affect our business, reputation, results of operations, and financial condition.]

If we are unable to obtain adequate quantities of products, components, or raw materials in the future from sole and single-source suppliers, or if such sole

We are also subject to chemical regulation in the U.S., such as California’s Proposition 65, which requires businesses to provide warnings to California residents about significant risk of exposures to chemicals in products that are known to cause cancer, birth defects, or other reproductive harm.

In addition, governmental authorities in the U.S. are increasingly focused on preventing environmental contamination from per- and polyfluoroalkyl substances (“PFAS”), which may be contained in certain IDEXX products.

For example, the state of Maine requires reporting of intentionally-added PFAS in products, and the sale in Maine of any product containing intentionally-added PFAS will be prohibited after January 1, 2030 (subject to certain exceptions to be promulgated by the Maine Department of Environmental Protection).

In addition, federal and state governments and agencies are in various stages of considering and/or implementing laws and regulations requiring the reporting, restriction and/or phase-out of PFAS in products.

In addition, European Union regulatory authorities and certain European countries are contemplating regulations to restrict and phase-out PFAS.

In extreme situations, compliance with these laws,

directives and regulations may require us to eliminate or discontinue the use of a part or component in one or more products, but the redesign or reformulation of such products without such parts or components may not be possible.

Any inability to redesign or reformulate one or more of our products may preclude us from marketing and selling such products in the applicable regions.

We are also subject to a variety of federal, state, local, and international laws and regulations governing our global business practices.

For example, jurisdictions in which we operate prohibit bribery and corruption, anti-competitive behavior, and money laundering; impose trade compliance requirements and restrictions, such as prohibitions on doing business with certain entities or individuals; determine rules impacting the importation and exportation of our products; and regulate immigration and travel.

Even if our patents

Furthermore, an

Under these circumstances, we may receive customer contract resolution payments, which would generally be recorded in other operating income in the period received.

Nonetheless, the loss of future revenue may still be significant and adversely affect our future revenue growth rate and profitability.

We are subject to risks associated with public health issues, including pandemics, which could have a material adverse effect on our financial condition and results of operations

We are subject to risks associated with public health issues, including the COVID-19 pandemic and other events beyond our control.

Public health issues and crises may adversely impact our operations, supply chain and logistics network if the locations where we operate, manufacture or distribute our products; where our raw materials or product components are sourced, manufactured or distributed; or where our third-party distributors, suppliers and other service providers operate, are disrupted, temporarily closed or experience worker shortages for a sustained period of time.

In addition, public health issues and crises may adversely impact our customers’ businesses due to business lockdowns, decreased companion animal clinical visits, labor shortages, the delay of elective procedures and wellness visits, and disruption of veterinary clinic and other customer operations, all of which could cause a decline in demand for our products and services.

These disruptions could also cause economic slowdowns or increased economic uncertainty.

While we largely avoided any significant disruption to the business as a result of the COVID-19 pandemic, a future public health issue, pandemic or outbreak of COVID-19 could lead to delays in the manufacturing and supply of products, which could have a material adverse effect on our business and results of operations.

Moreover, any future public health issue such as a resurgence in COVID-19 infections, including due to new variants of the virus for which current vaccines may not be effective, could result in the imposition of new governmental restrictions, quarantine requirements or other measures to slow the spread of the virus, which could result in closures or other restrictions that significantly disrupt our operations or those of our third-party distributors, suppliers or other service providers, or otherwise adversely affect our customers’ businesses or operations, or result in economic weakness or slowdowns in one or more of our key geographies, any of which could adversely affect our financial condition.

standards and practices, including business practices prohibited by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations.

Climate change, or legal, regulatory or market measures to address climate change, could adversely affect our business, financial condition, and results of operation

We operate in many regions around the world where our businesses and the activities of our customers and suppliers could be disrupted by climate change.

We are exposed to physical risks (such as extreme weather conditions or rising sea levels), risks in transitioning to a low-carbon economy (such as additional legal or regulatory requirements, changes in technology, market risk and reputational risk) and social and human effects (such as harm to health and well-being) associated with climate change.

These risks can be either acute (short-term) or chronic (long-term).

Potential physical risks from climate change may include altered distribution and intensity of rainfall, prolonged droughts or flooding, increased frequency of wildfires and other natural disasters, rising sea levels, and a rising heat index, any of which could cause negative impacts to our and our customers’ and suppliers’ businesses.

Increased frequency and severity of extreme weather events could impact our suppliers, manufacturing locations, logistics, and/or customers in the short term.

Such impacts include losses incurred as a result of physical damage to facilities, loss or spoilage of inventory, and business interruption caused by such natural disasters and extreme weather events.

Other potential physical impacts due to climate change include reduced access to high-quality water in certain regions and the loss of biodiversity, which could impact future product development.

These risks could disrupt our operations and supply chain, which may result in increased costs.

New legal or regulatory requirements may be enacted to prevent, mitigate, or adapt to the implications of a changing climate and its effects on the environment.

These regulations, which may differ across jurisdictions, could result in our being subject to new or expanded carbon pricing or taxes, increased compliance costs, restrictions on greenhouse gas emissions, investment in new technologies, increased carbon disclosure and transparency, investments in developing data gathering and reporting systems, upgrade of facilities to meet new building codes, increased energy costs, and the redesign of utility systems, which could increase our operating costs.

Our supply chain would likely be subject to these same transitional risks and would likely pass along any increased costs to us, which may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require.

cause veterinarians to defer purchasing capital items such as our instruments and systems.

- The California Consumer Privacy Act, as amended by the California Privacy Rights Act (“CPRA”), as well as any similar U.S. state laws that may apply to our business operations within a respective state and/or a U.S. federal privacy law that may be passed in the future, all of which may have conflicting requirements that would make compliance challenging.

The CCPA contained certain exemptions for personal information of employees and job applicants, and personal information collected in a “business-to-business” context, each of which expired as of January 1, 2023, expanding compliance obligations under to the CCPA.

Noncompliance could result in regulatory enforcement actions resulting in monetary penalties of up to the greater of €20 million or 4% of global annual revenues, private litigation, a suspension or termination of processing activities, reputational damage, and loss of customers.

Additional countries in which we operate are considering adopting or expanding laws and regulations regarding personal data.

RISK RELATED TO THE COVID-19 PANDEMIC

The effects of the ongoing COVID-19 pandemic could have a material adverse impact on our business, results of operations, liquidity, financial condition, and stock price.

The duration, extent, and impacts of the ongoing COVID-19 pandemic remain uncertain and could have a material adverse impact on our business, results of operations, liquidity, financial condition, and stock price.

The spread of COVID-19 has caused us to modify aspects of our business practices (including the management of and access to our facilities, employee remote work locations, and employee travel), and we may take further actions, as may be required by federal, state, and local governments or as we determine to be in the best interests of our employees and customers.

Such actions may disrupt our supply chain, logistics network, operations, facilities, and employee workforce, which could negatively affect our employees' efficiency and productivity; our development and introduction of innovative new products and services; our ability to manufacture, market, sell, and distribute our products and services; and our financial performance.

If stay-at-home orders or other similar public health-related directives are re-implemented periodically to combat the spread of COVID-19, particularly in the United States, the negative impact on veterinary service providers and their businesses, and correspondingly on demand for our CAG products and services, may be material.

Business lockdowns, pool and beach closures and weakened economic conditions related to the COVID-19 pandemic reduced demand for our water testing products in 2020.

While our water testing volumes have been recovering during 2021, public health-related guidance and directives that may be further deployed to combat the spread of COVID-19, including variants, may significantly reduce demand.

Economic weakness in our key geographies related to the COVID-19 pandemic may also reduce demand for our companion animal, water, livestock, poultry and dairy products and services, which could have an adverse impact on our results of operations.

While demand for our CAG products and services remained strong in 2021, the degree to which the COVID-19 pandemic ultimately impacts us depends on future developments that are unpredictable and most of which are outside of our control, including the duration, scope, and severity of the COVID-19 pandemic, the emergence of new variants, changes in infection rates, the vaccine participation rate, the effectiveness of vaccines, the availability of testing kits, as well as regulations and requirements impacting the ability of veterinarians to treat patients, the return to our offices, and/or our ability to visit customer sites.

There can be no assurance that we will be able to prevent or mitigate any or all of the COVID-19 near or long-term adverse impacts.

Any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could have a material adverse effect on our business, results of operations, liquidity, financial conditions, and stock price.

The methods used by our water testing products must be approved by the EPA, as a part of its water quality monitoring program, before they can be used by customers in the U.S. Delays in obtaining regulatory approvals for new products or product upgrades, or any termination, revision, or revocation of an Emergency Use Authorization for our OPTI test kits, could have a negative impact on our growth and profitability.

unauthorized persons or otherwise stolen, which could negatively impact our ability to protect our proprietary rights in our innovative products and our future success.

We are also subject to a variety of federal, state, local, and international laws and regulations governing, as well as legal and political environments that vary broadly regarding, among other things, the importation and exportation of products; our global business practices, such as anti-corruption, anti-money laundering, and anti-competition laws; and immigration and travel restrictions.

that increased consolidation among our competitors or customers (as well as any resulting reference laboratory vertical integration among our customers) would not have a negative impact on our ability to compete successfully.

from changes in disease prevalence.

Economic weakness (whether or not related to the COVID-19 pandemic) may also reduce demand for our companion animal, water, livestock, poultry, and dairy products and services, and public health-related guidance and directives, including stay-at-home orders that may be further deployed to combat the spread of COVID-19, and possible higher infection rates could result in a decrease in companion animal clinical visits, the delay of elective procedures and wellness visits and disruption of veterinary clinic operations, all of which would have a negative effect on veterinary service providers and result in declines in demand for our CAG products and services.

Due to governmental mandates and recommended safety measures to control the spread of COVID-19, we modified aspects of our business practices.

results of operations or prospects.

- The California Consumer Privacy Act (“CCPA”), which became effective in January 2020, gives California residents, among other things, expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches.

Moreover, a new privacy law, the California Privacy Rights Act ("CPRA"), which is scheduled to take effect on January 1, 2023 (with a lookback to January 1, 2022), will significantly modify the CCPA, and will impose additional data protection obligations on companies such as ours doing business in California.

Similarly, other states such as Virginia and Colorado, have instituted privacy and data security laws, rules, and regulations, and many similar laws have been proposed at the federal and state level, all of which may have potentially conflicting requirements that would make compliance challenging.

The effects of the CCPA, CRPA, and other similar laws may require us to modify our data processing practices and policies and to incur substantial costs and expenses to comply.

- Following the United Kingdom’s ("UK") withdrawal from the EEA and the EU on December 31, 2020, we became subject to the GDPR as incorporated into the United Kingdom law "UK GDPR"), and noncompliance can trigger fines of up to the greater of £17.5 million or 4% of global turnover.

The European Commission adopted a UK adequacy decision in June 2021 which organizations can rely on for EEA to UK personal data transfers.

This decision will automatically expire four years after its entry into force, but it might be renewed provided the UK maintains an adequate level of data protection.

The relationship between the UK and the EU in relation to certain aspects of data

protection law remains unclear, however, and it is unclear how UK data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the UK will be regulated in the long term.

Any changes to these laws may require us to modify our data processing practices and policies and to incur substantial costs and expenses to comply.

The European Commission updated the SCCs on June 4, 2021, and additional regulatory guidance has been released that seeks to impose additional obligations on companies seeking to rely on the SCCs for such transfers.

Parties transferring personal data from the EEA to third countries with “inadequate data protection” such as the U.S. will have until December 27, 2022 to update any existing agreements, or any new agreements executed before September 27, 2021, that rely on SCCs.

The new SCCs apply only to the transfer of data outside of the EEA and not the UK, though on January 31, 2022, the UK’s Information Commissioner’s Officer announced that proposals for the U.K.'s own form of agreement and addendum to the E.U. SCCs (the "U.K. SCCs") which could be used for transfers for data from the U.K., have been laid before Parliament.

If no objections are raised in Parliament and the proposals are approved, the U.K. SCCs will come into force on March 21, 2022 (subject to a grace period for implementation).

Any transfers by us or our vendors of personal data from the EEA/UK may not comply with EEA/UK data protection laws, may increase our exposure to the GDPR’s/UK GDPR’s heightened sanctions for violations of its cross-border data transfer restrictions and may reduce demand for our products from companies subject to European/United Kingdom data protection laws.

Similar laws have been proposed or passed in other countries, which may create additional compliance challenges for cross-border transfers of personal data.

- In August 2021, China passed the new China Personal Information Protection Law ("PIPL"), which became effective November 2021.

The PIPL provides a comprehensive set of data privacy and protection requirements that apply to the processing of personal information and expands data protection compliance obligations to cover the processing of personal information of persons by organizations and individuals in China, and the processing of personal information of persons in China outside of China if such processing is for purposes of providing products and services to, or analyzing and evaluating the behavior of, persons in China.

Several PIPL requirements (such as data localization requirements and international cross border transfer restrictions) remain unclear as the processing amount thresholds for these requirements have not been implemented by the Chinese authorities yet.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10‑K.* *The discussion of our financial condition and results of operations and liquidity and capital resources for the year ended December 31, [removed: 2019,] [added: 2020,] and year-over-year comparisons between [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] is included in our Annual Report on Form 10-K for the year ended December 31, [removed: 2020,] [added: 2021,] within Item 7.

We have included certain terms and abbreviations used throughout this Annual Report on Form 10-K in the [removed: "Glossary] [added: “Glossary] of Terms and Selected Abbreviations.”

Segment [removed: Reporting"] [added: Reporting”] to the consolidated financial statements for the year ended December 31, [removed: 2021,] [added: 2022,] included in this Annual Report on Form 10-K for financial information about our segments, including our product and service categories, and our geographic areas.

Below is a table showing active installed base units of our [added: premium] diagnostic instruments as of the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019:][added: 2020:]

| Instrument | | | | | | December 31, [removed: 2021] [added: 2022] | | | | | | December 31, [removed: 2020] [added: 2021] | | | | | | December 31, [removed: 2019] [added: 2020] | | |

| Premium Hematology | | | | | | [removed: 38.2] [added: 43.1] | | | | | | [removed: 34.6] [added: 38.2] | | | | | | [removed: 31.5] [added: 34.6] | | |

| SediVue | | | | | | [removed: 13.2] [added: 15.6] | | | | | | [removed: 10.7] [added: 13.2] | | | | | | [removed: 8.9] [added: 10.7] | | |

With all of our instrument product lines, we seek to differentiate our products from our competitors’ products based on time-to-result, ease-of-use, throughput, breadth of diagnostic menu, flexibility of menu selection, accuracy, reliability, ability to [added: handle compromised samples, analytical capability of diagnostics software, integration with the IVLS and VetConnect PLUS, client communications capabilities, education and training, and superior sales and customer service.]

For the year ended December 31, [removed: 2021,] [added: 2022,] recurring diagnostic revenue, which is both highly durable and profitable, accounted for approximately 79% of our consolidated revenue.

[removed: We further augment our product development and customer service efforts with sales and] marketing programs that enhance medical awareness and understanding regarding certain diseases and the importance of diagnostic testing.

[added: Our volume commitment programs, such as IDEXX 360, provide] customers with a free or discounted instrument or system upon entering into multi-year agreements to purchase annual minimum amounts of products and services.

Our portfolio of practice management offerings is designed to serve the full range of customers primarily within the North American, Australian, [added: New Zealand,] and European regions.

We market Cornerstone, ezyVet, IDEXX Neo, and DVMAX practice management systems to customers primarily in North [removed: America] [added: America, Australia,] and [removed: Australia.][added: New Zealand.]

While we continue to [removed: develop, sell, and] support our licensed-based Cornerstone and DVMAX software, we are growing our installed base of subscription-based practice management offerings for new customers of IDEXX practice management systems.

[removed: Pet Health Network Pro online client communication and education service complements the entire IDEXX] product offering by educating pet owners and building loyalty through engaging the pet owner before, during and after the visit, thereby building client loyalty and driving more patient visits.

Our [added: Alertys Ruminant Pregnancy Test,] Rapid Visual Pregnancy Test and Alertys On-Farm Pregnancy Test for cattle can detect pregnancy 28 days after breeding.

During the early stage of an instrument’s life cycle, relatively greater revenues are derived from instrument placements, while consumable sales become relatively more significant in later [removed: stages as the installed base of instruments increases and instrument placement revenues begin to decline.]

A significant portion of the [added: 2021] growth in our OPTI Medical business was from revenue generated from the test kits and related laboratory services.

Revenue [removed: Recognition"] [added: Recognition”] to the consolidated financial statements for the year ended December 31, [removed: 2021,] [added: 2022,] included in this Annual Report on Form 10-K for additional information about our revenue recognition policy and criteria for recognizing revenue.

We enter into contracts [removed: with multiple performance obligations] where customers purchase [removed: a combination] [added: combinations] of IDEXX products and services.

We utilize the observable standalone selling price when available, which represents the price charged for the [removed: performance obligation] [added: promised product or service] when sold separately.

If a customer breaches [removed: its] [added: their] agreement, they are required to refund all or a portion of the up-front cash or IDEXX Points, or make other repayments, remedial actions, or both.

[removed: If these up-front incentives are] subsequently utilized to purchase instruments, we allocate total consideration, including future committed purchases less up-front incentives and estimates of expected price adjustments, based on relative standalone selling prices to identified performance obligations and recognize instrument revenue and cost at the time of installation and customer acceptance.

Differences between estimated and actual customer purchases may impact the timing and amount of revenue recognition during the term of the customer contract, and a 10% change in these estimates would have increased or reduced deferred revenue and cumulative revenue related to these programs by approximately [removed: $1.3] [added: $1.1] million at December 31, [removed: 2021.][added: 2022.]

We allocate total consideration, including future committed purchases and expected price adjustments, based on relative standalone selling prices to identified performance obligations and recognize instrument revenue and cost at the time of installation and customer acceptance in advance of billing the customer, which is also when the customer obtains control of the [added: instrument based on legal title transfer.]

The contract asset is transferred to accounts receivable when customers are billed for [removed: future] products and services over the term of the contract.

Differences between estimated and actual customer purchases may impact the timing and amount of revenue recognition during the term of the customer contract, and a 10% change in these estimates would have increased or reduced contract assets and cumulative revenue related to these programs by approximately [removed: $4.0] [added: $4.3] million at December 31, [removed: 2021.][added: 2022.]

We allocate total consideration to identified performance obligations, including [removed: a] [added: the] customer’s right to earn rebates on future purchases, which is deferred and [added: subsequently] recognized upon the purchase of [removed: future] products and services, partly offsetting [removed: future] rebates as they are earned.

Differences between estimated and actual customer rebates may impact the timing and amount of revenue recognition during the term of the customer contract, and a 10% change in these estimates would have increased or reduced deferred revenue and cumulative revenue related to these programs by approximately [removed: $2.0] [added: $2.8] million at December 31, [removed: 2021.][added: 2022.]

An impairment charge is recorded for the amount, if any, by which the carrying [removed: amount of goodwill exceeds its implied fair value.]

A substantial portion of the goodwill remaining from the pharmaceutical business, included in our “Other [removed: Segment”,] [added: Segment,”] is associated with intellectual property that has been, or may be, licensed to third parties.

Examples of the factors considered in assessing the fair value of a reporting unit include: the results of the most recent impairment test; the competitive environment; the regulatory environment; the effects [removed: of the ongoing COVID-19 pandemic;] [added: natural disasters;] anticipated changes in product, supply chain, or labor costs; revenue [removed: growth trends;] [added: and profitability trends and expectations;] the consistency of [removed: operating margins and] cash flows; and current and long-range financial forecasts.

The long-range financial forecasts of the reporting units, which are based upon [added: management’s long-term view of our markets, are used by senior management and the Board of Directors to evaluate operating performance.]

In the fourth [removed: quarters] [added: quarter] of [removed: 2021 and 2020,] [added: 2022,] we [removed: elected to bypass the] [added: performed a] qualitative [removed: approach that allows the] assessment of [removed: qualitative factors to determine whether] [added: goodwill impairment for all of our reporting units, except for Pharmaceutical Activities, and concluded that] it is [added: not] more likely than not that the fair value of [removed: a] [added: any of those] reporting [removed: unit] [added: units] is less than its carrying [removed: amount and instead proceeded directly to assessing the fair value of all of our reporting units and comparing the fair value of each reporting unit to the carrying value to determine if any impairment exists.][added: amount, including goodwill.]

[removed: Additionally, we] [added: We] maintain approximately $6.5 million of goodwill associated with [removed: our remaining] [added: Pharmaceutical Activities, which comprises] pharmaceutical intellectual property, out-licensing arrangements, and certain retained drug delivery technologies [removed: (collectively “Pharmaceutical Activities”) that] [added: from which] we [removed: seek to commercialize through arrangements with third parties.][added: earn royalty revenue.]

[removed: There] [added: These] is no guarantee that we will be able to maintain [removed: or increase] revenues from our remaining Pharmaceutical Activities.

No goodwill impairments were identified during the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019.][added: 2020.]

Future impairment tests may result in an impairment of [removed: goodwill, depending on the outcome of future impairment tests.][added: goodwill.]

We [added: also] assess the realizability of intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

If the net carrying value of the asset group exceeds the related estimated undiscounted future cash flows, an impairment [added: loss] to adjust the intangible asset to its fair value would be reported as a non-cash charge to earnings.

| Catalyst | | | | | | 63.1 | | | | | | 56.6 | | | | | | 49.7 | | |

We further augment our product development and customer service efforts with sales and

Pet Health Network Pro online client communication and education service complements the entire IDEXX

stages as the installed base of instruments increases and instrument placement revenues begin to decline.

The amount of revenue from this product decreased in 2022, with less demand for testing.

We expect revenues from COVID-19 related testing products and services to be inconsequential in 2023.

If these up-front incentives are

amount of goodwill exceeds its implied fair value.

For our Pharmaceutical Activities, we performed a quantitative assessment and concluded that the estimated fair value approximates the carrying amount of the reporting unit.

We estimated the fair value of the Pharmaceutical Activities using an income approach based on discounted forecasted cash flows, making assumptions about future cash flows and discount rates.

jurisdiction.

CAG Trends.

In the U.S., average diagnostics revenue per practice grew 6.9% on a same-store basis during 2022, faster than 5.1% growth in overall clinic revenues.

U.S. same-store clinical visits at veterinary practices declined 2.3% in 2022, reflecting impacts this year from reductions in veterinary clinic capacity levels and comparison to high prior-year visit levels.

Growth for pet healthcare including diagnostics remains elevated compared to pre-pandemic levels reflecting compound annual growth of 2.9% in clinical visits and 11.2% in same-store diagnostics revenues for the U.S. compared to 2019.

We continue to monitor these supply chain and logistics challenges, including potential fuel rationing and shortages, and have implemented mitigation strategies to adjust for, among other things, delayed shipments of products and components.

War in Ukraine / Russia Operations.

Our operations in the Russia, Belarus, and Ukraine region are limited, with no manufacturing or significant supply arrangements.

After significantly scaling back our operations in Russia in the first quarter of 2022, including suspending sales of veterinary diagnostic equipment; promotional, marketing, and hiring activities; and new business development and related investments, we decided in June 2022 to wind down and liquidate our sole Russian subsidiary, as well as our direct Russian operations, which consisted of marketing and selling diagnostic products for veterinary clinics in Russia.

We anticipate that only a limited number of our products, which are important for human or animal healthcare, will continue to be sold in Russia pursuant to ongoing third-party distribution agreements.

Some of our products are also sold in Belarus pursuant to ongoing third-party distribution agreements.

Historical revenues from the Russia, Belarus, and Ukraine region have been less than 1% of our total consolidated revenue.

| CAG | | | | | | $ | 3,058,793 | | | | | $ | 2,889,960 | | | | | $ | 168,833 | | | | | 5.8 | | % | | | | (3.3 | | %) | | | | 0.7 | | % | | | | 8.4 | | % |

| *United States* | | | | | | *2,073,222* | | | | | | *1,881,887* | | | | | | *191,335* | | | | | | *10.2* | | *%* | | | | *—* | | | | | | *0.9* | | *%* | | | | *9.3* | | *%* |

| *International* | | | | | | *985,571* | | | | | | *1,008,073* | | | | | | *(22,502)* | | | | | | *(2.2* | | *%)* | | | | *(9.2* | | *%)* | | | | *0.3* | | *%* | | | | *6.7* | | *%* |

| Water | | | | | | $ | 155,720 | | | | | $ | 146,505 | | | | | $ | 9,215 | | | | | 6.3 | | % | | | | (4.0 | | %) | | | | *0.5* | | *%* | | | | 9.7 | | % |

| *United States* | | | | | | *76,875* | | | | | | *70,654* | | | | | | *6,221* | | | | | | *8.8* | | *%* | | | | *—* | | | | | | *—* | | | | | | *8.8* | | *%* |

| *International* | | | | | | *78,845* | | | | | | *75,851* | | | | | | *2,994* | | | | | | *3.9* | | *%* | | | | *(7.8* | | *%)* | | | | *1.1* | | *%* | | | | *10.6* | | *%* |

| LPD | | | | | | $ | 122,607 | | | | | $ | 135,887 | | | | | $ | (13,280) | | | | | (9.8 | | %) | | | | (5.8 | | %) | | | | — | | | | | | (4.0 | | %) |

| *United States* | | | | | | *16,633* | | | | | | *15,626* | | | | | | *1,007* | | | | | | *6.4* | | *%* | | | | *—* | | | | | | *—* | | | | | | *6.4* | | *%* |

| *International* | | | | | | *105,974* | | | | | | *120,261* | | | | | | *(14,287)* | | | | | | *(11.9* | | *%)* | | | | *(6.4* | | *%)* | | | | *—* | | | | | | *(5.4* | | *%)* |

| Other | | | | | | $ | 30,204 | | | | | $ | 43,008 | | | | | $ | (12,804) | | | | | (29.8 | | %) | | | | 0.2 | | % | | | | — | | | | | | (30.0 | | %) |

| Total Company | | | | | | $ | 3,367,324 | | | | | $ | 3,215,360 | | | | | $ | 151,964 | | | | | 4.7 | | % | | | | (3.4 | | %) | | | | 0.7 | | % | | | | 7.4 | | % |

| *United States* | | | | | | *2,182,959* | | | | | | *1,995,683* | | | | | | *187,276* | | | | | | *9.4* | | *%* | | | | *—* | | | | | | *0.8* | | *%* | | | | *8.5* | | *%* |

| *International* | | | | | | *1,184,365* | | | | | | *1,219,677* | | | | | | *(35,312)* | | | | | | *(2.9* | | *%)* | | | | *(8.7* | | *%)* | | | | *0.3* | | *%* | | | | *5.5* | | *%* |

The increase in organic revenue reflects higher realized prices and continued demand for companion animal diagnostics globally, supported by higher CAG Diagnostics recurring revenue, primarily in the U.S. Increases in our subscription-based veterinary software and diagnostic imaging services also contributed to higher revenue for the year.

The higher revenue in our Water business was primarily due to the benefit of price increases and higher testing volumes.

The decrease in Other revenue reflects lower sales of OPTI COVID-19 PCR testing products.

The impact of currency movements decreased total revenue growth by 3.4%, while the impact of acquisitions increased total revenue growth by 0.7%.

| Revenues | | | | | | $ | 3,367,324 | | | | | | | | | | | $ | 3,215,360 | | | | | | | | | | | $ | 151,964 | | | | | 4.7 | | % |

| Catalyst | | | | | | 56.5 | | | | | | 49.6 | | | | | | 43.9 | | |

We place our Catalyst chemistry analyzers through sales, leases, rental, and other programs.

A majority of our Catalyst chemistry analyzer placements were to customers that are new to IDEXX, including customers who had been using instruments from one of our competitors, sometimes referred to as competitive accounts.

Generally, placement of an instrument with a new or competitive account has the highest economic value as the entire consumable stream associated with that placement represents incremental recurring revenue.

We also place additional chemistry analyzers at existing large customers where utilization supports multiple analyzers.

We place our premium hematology analyzers through multiple sales programs as well.

A majority of our ProCyte analyzer placements were made to new or competitive accounts.

During the second half of 2020, we began selling our new ProCyte One analyzer.

As we continue to experience growth in placements of ProCyte analyzers and in sales of related consumables, we expect this growth to be partly offset by a decline in placements of LaserCyte Dx and VetAutoread analyzers and a decrease in the associated recurring revenue stream.

With our ProCyte One analyzer, we provide customers with consumables that are charged upon utilization, which we refer to as pay-per-run, as compared to the ProCyte Dx analyzer, where we charge upon shipment of consumables.

Our premium SediVue Dx analyzer and single-use consumable system provides a highly accurate way to automate the process of examining urine under a microscope.

We provide customers with SediVue Dx consumables that are charged upon utilization, similar to the ProCyte One analyzer.

Other than our ProCyte One and SediVue analyzers, we charge upon shipment of consumables for all our other analyzers.

We seek to enhance the attractiveness and customer loyalty of our SNAP rapid assay tests, including by providing the SNAP Pro Analyzer, which activates SNAP tests, properly times the run, captures, and saves images of the results and, in conjunction with IVLS, records invoice charges in the patient record.

Our ProRead software interprets results of the SNAP Pro Analyzer.

These features promote practice efficiency by eliminating manual entry of test results in patient records and also helps ensure that the services are recorded and accurately invoiced.

In addition, SNAP Pro Analyzer results can be shared with pet owners on the SNAP Pro screen or, in conjunction with IVLS, via VetConnect PLUS.

We also sell the SNAPshot Dx, which automatically reads certain SNAP test results and, in conjunction with IVLS, records those results in the electronic medical record.

We continue to work on enhancing the functionality of our analyzers to read the results of additional tests from our canine and feline family of rapid assay products.

handle compromised samples, analytical capability of diagnostics software, integration with the IVLS and VetConnect PLUS, client communications capabilities, education and training, and superior sales and customer service.

Our volume commitment programs, such as IDEXX 360, provide

To successfully increase sales of dairy testing products, we believe that we need to increase penetration in dairy processors.

The future demand for this product is difficult to project given the uncertain nature of the COVID-19 pandemic, including short-term project commitments, available PCR testing capacity, alternative suppliers, and the potential impact of vaccinations and other treatments.

instrument based on legal title transfer.

management’s long-term view of our markets, are used by senior management and the Board of Directors to evaluate operating performance.

We estimate the fair values of applicable reporting units using an income approach based on discounted forecasted cash flows.

We make significant assumptions about the extent and timing of future cash flows, growth rates and discount rates.

Model assumptions are based on our projections and best estimates, using appropriate and customary market participant assumptions.

In addition, we make certain assumptions in allocating shared assets and liabilities to individual reporting units in determining the carrying value of each reporting unit.

To validate the reasonableness of the estimated fair values of our reporting units, we reconcile the aggregate fair values of our reporting units to our total market capitalization.

Valuation assumptions reflect our projections and best estimates, based on significant assumptions about the extent and timing of future cash flows, growth rates and discount rates.

The results of our most recent goodwill impairment test in the fourth quarter of 2021 indicated an excess of estimated fair value over the carrying amount for each of our reporting units with a minimum of approximately 65% and a weighted average of approximately 1,375% in total.

The majority of our goodwill is related to our CAG Diagnostics reporting units with a weighted average of approximately 1,550% excess of estimated fair value over the carrying amount, including our Reference Laboratory Diagnostic and Consulting Services, Rapid Assay Products, and IDEXX VetLab Consumables, Instruments, Services and Accessories.

We also maintain approximately $94 million of goodwill associated with our Veterinary Software and Services reporting unit, which is primarily comprised of recent acquisitions of early-stage software companies that expand our suite of technology applications for the veterinary profession, including SaaS-based practice management systems, applications that extend workflow capabilities, client marketing, wellness plan management and other connectivity and communication needs.

These software applications are in various stages of commercial development, and therefore our Veterinary Software and Services reporting unit has a relatively lower excess of estimated fair value over the carrying amount, as indicated by the results of our most recent goodwill impairment test, which indicated approximately $385 million and 210% of the reporting unit’s carrying value.

Realization of this goodwill is dependent on our successful commercialization of these software applications.

Currently, our primary support for the carrying value of this goodwill is royalty revenue associated with the commercialization of certain intellectual property.

The results of our goodwill impairment test for these Pharmaceutical Activities indicate an excess of estimated fair value over the carrying amount of this reporting unit by approximately $4.2 million and approximately 65% of the reporting unit’s carrying value.

While we believe that the assumptions used to determine the estimated fair values of each of our reporting units are reasonable, a change in assumptions underlying these estimates could result in a material negative effect on the estimated fair value of the reporting units.

Our fair value estimate assumes the achievement of future financial results contemplated in our forecasted cash flows, and there can be no assurance that we will realize that value.

For the year ended December 31, [removed: 2021,] [added: 2022,] approximately [removed: 23%] [added: 21%] of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, as compared to [removed: 21%] [added: 23%] and [removed: 22%] [added: 21%] for the years ended December 31, [removed: 2020,] [added: 2021] and [removed: 2019,] [added: 2020,] respectively.

The functional currency of most of our subsidiaries is their local currency, except [removed: four] [added: six] of our foreign subsidiaries where the functional currency is the U.S. dollar.

| *(in thousands, except per share amounts)* | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Revenue [removed: increase (decrease)] [added: (decrease) increase] | | | | | | $ | [removed: 46,001] [added: (108,812)] | | | | | $ | [removed: 1,301] [added: 46,001] | | | | | $ | [removed: (38,624)] [added: 1,301] | |

| Operating profit [removed: increase (decrease),] [added: (decrease) increase,] excluding hedge activity and exchange impacts on settlement of foreign currency denominated transactions | | | | | | $ | [removed: 28,557] [added: (56,420)] | | | | | $ | [removed: 887] [added: 28,557] | | | | | $ | [removed: (18,989)] [added: 887] | |

| Hedge gains (losses) - current period | | | | | | [removed: (7,121)] [added: 25,733] | | | | | | [removed: 829] [added: (7,121)] | | | | | | [removed: 10,628] [added: 829] | | |

| Exchange [removed: gains] (losses) [added: gains] on settlements of foreign currency denominated transactions - current period | | | | | | [removed: (2,111)] [added: (3,408)] | | | | | | [removed: 699] [added: (2,111)] | | | | | | [removed: (1,116)] [added: 699] | | |

| Operating profit [removed: increase] (decrease) [added: increase] - current period | | | | | | $ | [removed: 19,325] [added: (34,095)] | | | | | $ | [removed: 2,415] [added: 19,325] | | | | | $ | [removed: (9,477)] [added: 2,415] | |

| Hedge [removed: (gains)] losses [added: (gains)] - prior period | | | | | | [removed: (829)] [added: 7,121] | | | | | | [removed: (10,628)] [added: (829)] | | | | | | [removed: 976] [added: (10,628)] | | |

| Exchange [removed: (gains)] losses [added: (gains)] on settlement of foreign currency denominated transactions - prior period | | | | | | [removed: (699)] [added: 2,111] | | | | | | [removed: 1,116] [added: (699)] | | | | | | [removed: 3,158] [added: 1,116] | | |

| Operating profit [removed: increase] (decrease) [added: increase] - as compared to prior period | | | | | | $ | [removed: 17,797] [added: (24,863)] | | | | | $ | [removed: (7,097)] [added: 17,797] | | | | | $ | [removed: (5,343)] [added: (7,097)] | |

| Diluted earnings per share [removed: increase] (decrease) [added: increase] - as compared to prior period | | | | | | $ | [removed: 0.16] [added: (0.22)] | | | | | $ | [removed: (0.06)] [added: 0.16] | | | | | $ | [removed: (0.05)] [added: (0.06)] | |

[removed: Based on projected revenues and expenses for 2022, excluding] [added: Excluding] the impact of intercompany and trade balances denominated in currencies other than the functional subsidiary currencies, a 1% strengthening of the U.S. dollar would reduce revenue by approximately $12 million and operating income by approximately [removed: $7 million.][added: $3 million to $4 million, net of hedge positions.]

At our current foreign exchange rate assumptions, we anticipate the effect of a stronger U.S. dollar will have [removed: a] [added: an] unfavorable effect on our operating results by decreasing our revenues, operating profit, and diluted earnings per share in the year ended December 31, [removed: 2022,] [added: 2023,] by approximately [removed: $55] [added: $16] million, [removed: $9] [added: $25] million, and [removed: $0.08] [added: $0.23] per share, respectively.

This unfavorable impact includes [added: net year-over-year impacts of] foreign currency hedging activity, which is expected to [removed: increase] [added: decrease] total company operating profit by approximately $18 million and diluted earnings per share by [removed: $0.16] [added: $0.17] during the year ending December 31, [removed: 2022.][added: 2023.]

The above estimate assumes that the value of the U.S. dollar relative to other currencies will reflect the euro at [removed: $1.12,] [added: $1.06,] the British pound at [removed: $1.34,] [added: $1.19,] the Canadian dollar at [removed: $0.78,] [added: $0.73,] and the Australian dollar at [removed: $0.71;] [added: $0.68;] and the [added: Japanese yen at ¥135, the Chinese renminbi at RMB 6.88, and the Brazilian real at R$5.30 to the U.S. dollar for the full year of 2023.]

Our foreign currency hedging strategy is consistent with prior periods and there were no material changes in our market risk exposure during the year ended December 31, [removed: 2021.][added: 2022.]

As a result, no significant ineffectiveness has resulted or been recorded through the statements of income for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019.][added: 2020.]

The notional amount of foreign currency exchange contracts to hedge forecasted intercompany purchases and sales totaled [removed: $286.7] [added: $258.2] million at December 31, [removed: 2021,] [added: 2022,] and [removed: $202.7] [added: $286.7] million at December 31, [removed: 2020.][added: 2021.]

At December 31, [removed: 2021,] [added: 2022,] we had [removed: $8.2] [added: $0.8] million of net unrealized gains on foreign currency exchange contracts recorded in accumulated other comprehensive loss, net of related tax.

Although the Credit Facility does not mature until December 9, 2026, all individual borrowings under the terms of the Credit Facility [removed: predominantly] have a stated term between 1 and 180 [removed: days.][added: days, including the $250 million Term Loan that matures on October 20, 2025.]

At December 31, [removed: 2021,] [added: 2022,] we had [removed: $73.5] [added: $579.0] million of borrowings outstanding under the Credit Facility.

As of December 31, [removed: 2021,] [added: 2022,] based on our gross leverage ratio, our borrowing costs under the Credit Facility were approximately [removed: 1.1%.][added: 3.1%.]

The foreign currency exchange impacts on our revenue and operating income will be different from our 2023 estimates if actual foreign exchange rates are different from our assumptions.

The variable rates are based on SOFR, with rolling maturities of 1 and 3 month increments.

Based on the amount outstanding under our Credit Facility as of December 31, 2022, an increase in SOFR of 1% would increase interest expense by approximately $5.8 million on an annual basis.

During 2022, we experienced inflationary pressure on our operating costs.

During 2023, we expect to continue to face higher costs for labor, commodities, energy, and transportation, as well as increased prices from suppliers.

We may not be able to offset these higher costs through productivity initiatives and price increases, which may materially and adversely affect our business, results of operations, and financial condition.

Any price increases we may impose may lead to declines in sales volume or sector share, if competitors do not similarly adjust their prices, or customers refuse to purchase at the higher prices.

Additionally, we project our foreign currency hedge contracts in place as of December 31, 2021, would provide incremental offsetting gains of approximately $3 million.

The impact of the intercompany and monetary balances referred to in the third component above have been excluded, as they are transacted at multiple times during the year and we are not able to reliably forecast the impact that changes in exchange rates would have.

Japanese yen at ¥117, the Chinese renminbi at RMB 6.47, and the Brazilian real at R$5.74 to the U.S. dollar for the full year of 2022.

Inflation generally impacts us by increasing our costs of labor, material, transportation and general overhead costs.

The rates of inflation experienced in recent years have not had a material impact on our financial statements as inflationary cost increases have been more than offset by net realized annual price increases and productivity gains.

We cannot reasonably estimate our ability to successfully recover any impact of inflation cost increases into the future.

We have three blood and urine chemistry analyzers that are used by veterinarians to measure levels of certain enzymes and other substances in blood or urine for monitoring health status and assisting [removed: in diagnosing physiologic conditions.]

The principal feline SNAP rapid assay tests include SNAP Feline Triple, which tests for feline immunodeficiency virus (“FIV”) (which is similar to the virus that leads to AIDS in humans), [added: feline leukemia virus (“FeLV”)] and [added: heartworm, and] SNAP FIV/FeLV Combo Test, which tests for FIV and [removed: Feline leukemia virus ("FeLV").][added: FeLV.]

Our SmartFlow cloud offering works in conjunction with major veterinary practice management systems, including [added: ezyVet,] Cornerstone, Animana, IDEXX Neo, DVMAX, and certain third-party practice management systems, and VetRadar provides workflow capability for ezyVet.

Our principal products are the Colilert, Colilert-18, and Colisure tests, which detect the presence of total coliforms and [removed: *E. coli*] [added: E. coli] in water.

Our SimPlate [added: and EasyDisc] for HPC [removed: product detects] [added: products detect] the total number of the most common bacteria in a water sample.

Livestock, Poultry and Dairy (“LPD”) - LPD provides diagnostic tests, services, and related instrumentation that are used to manage the health status of livestock and poultry, to improve producer efficiency, and to ensure the quality and safety of [removed: milk and food.][added: milk.]

We sell diagnostic tests, services and related instrumentation that are used to manage the health status of livestock and poultry, to improve producer [removed: efficiency, and to ensure the quality and safety of milk.][added: efficiency.]

Our livestock and poultry diagnostic products are purchased by government and private laboratories that provide testing services to livestock veterinarians, producers, and [removed: processors.][added: processors, and also directly by livestock veterinarians and producers.]

BVDV is a common and contagious viral infection that suppresses the immune system, making the animal susceptible to a host of other infections, [added: and] impacting beef and dairy production yields as a result.

We also sell our [added: Alertys Ruminant Pregnancy Test,] Rapid Visual Pregnancy Test and Alertys On-Farm Pregnancy Test for cattle, which can detect pregnancy 28 days after breeding using whole blood samples.

[removed: These OPTI analyzers are used primarily] in emergency rooms, operating rooms, cardiac monitoring areas, and other locations where time-critical diagnostic testing is performed within the hospital setting.

[removed: Similar to our earlier generation OPTI CCA and OPTI Touch Electrolyte analyzers, the] [added: The] OPTI CCA-TS2 analyzer runs whole blood, plasma, and serum samples on single-use disposable cassettes that contain various configurations of analytes.

Our research and development expenses, which consist of salaries, employee benefits, [added: certain licensing agreements,] materials and external consulting and development costs, were [removed: $161.0] [added: $254.8] million for the year ended December 31, [removed: 2021,] [added: 2022,] or [removed: 5.0%] [added: 7.6%] of our consolidated revenue, [removed: $141.2] [added: $161.0] million for the year ended December 31, [removed: 2020,] [added: 2021,] or [removed: 5.2%] [added: 5.0%] of our consolidated revenue and [removed: $133.2] [added: $141.2] million for the year ended December 31, [removed: 2019,] [added: 2020,] or [removed: 5.5%] [added: 5.2%] of our consolidated revenue.

Although we have certain patents and licenses of patents and technologies from third parties that are expected to expire in [removed: 2022 and beyond,] [added: future years,] the expiration of these patents and licenses, individually or in the aggregate, is not expected to have a material effect on our financial position or future operations.

Significant products supplied by sole and single-source providers include certain Catalyst Dx and Catalyst One consumables (other than electrolyte consumables and the fructosamine, T4, CRP, progesterone, and [removed: SDMA] [added: SDMA, and Bile Acid] slides), VetTest slides, VetLyte consumables, LaserCyte Dx consumables, VetAutoread and ProCyte Dx analyzers and consumables, SediVue Dx urinalysis instruments and consumables, and certain components of our internally manufactured analyzers.

[removed: VetTest and certain] [added: Certain] Catalyst chemistry slides are supplied by Ortho under supply agreements that are currently set to expire in December of 2031.

We are required to purchase all of our requirements for our current menu of Catalyst [removed: and VetTest] chemistry slides from Ortho to the extent Ortho is able to supply those requirements.

Our competitors vary in our different [removed: sectors.][added: business areas and regions.]

In some [removed: sectors,] [added: cases,] academic institutions, governmental agencies, and other public and private research organizations conduct research activities and may commercialize products or [removed: services] [added: services,] which could compete with our products, on their own or through joint ventures.

Our major competitors in most geographic locations in North America are Antech Diagnostics, a [removed: unit of VCA Inc., a division] [added: Mars Petcare brand] of Mars, Incorporated; Zoetis Inc. (including its wholly-owned subsidiary Abaxis, Inc.); Heska Corporation, and Samsung Electronics Co., Ltd. We also compete in certain international geographies with Zoetis, Fujifilm Holdings Corporation, Samsung Electronics, Arkray, Inc., Heska, [removed: Mindray] [added: Antech Diagnostics, Mindray,] and BioNote, Inc.

Our competitors include [removed: highly focused] [added: highly-focused] smaller companies and multibillion-dollar companies with small livestock and poultry diagnostics and water testing solution franchises.

We compete primarily on the basis of functionality, [removed: connectivity to equipment and other systems,] [added: system workflows,] performance characteristics, effectiveness of our implementation, training process and customer service, information handling capabilities, advances in technologies, enhancement of veterinary practice efficiency, and our pricing relative to the value of our products and [added: services in comparison with competitive products and] services.

We also compete with numerous [removed: focused] [added: highly-focused] smaller companies throughout the geographies in which we offer veterinary software, including those offering cloud-based solutions.

[removed: These products include] [added: A subset of] our [added: veterinary] diagnostic [added: products, including our diagnostic] test kits for companion and food animal infectious diseases, [removed: including] [added: as well as] most of our livestock and poultry products and many of our rapid assay [removed: products.][added: products, are licensed and regulated in the U.S. by the Center for Veterinary Biologics within the United States Department of Agriculture (“USDA”) Animal and Plant Health Inspection Service (“APHIS”).]

Our LPD manufacturing facility in Montpellier, France [added: is a USDA-permitted site, and] has been approved by APHIS [removed: and we have a permit] to [removed: import one LPD product manufactured in Montpellier, France to the U.S. for distribution.][added: manufacture USDA-licensed products.]

Our veterinary diagnostic [removed: slide and instrument systems,] [added: products] including [removed: T4, fructosamine, progesterone, CRP,] [added: instruments, such as Catalyst One] and [removed: SDMA,] [added: ProCyte One, as well as their corresponding consumables,] are veterinary medical devices regulated by the FDA under the Food, Drug and Cosmetics Act (the “FDC Act”).

Other FDA regulated products include our [removed: non-licensed] rapid assay products such as SNAP [removed: Pancreatic Lipase, Cortisol, Bile Acid, Foal IgG,] [added: devices] and [removed: ProBNP.][added: ELISA plates.]

While the sale of these products does not require premarket approval by the FDA and does not subject us to FDA inspections or the [removed: FDA’s] [added: FDA's] current Good Manufacturing [removed: Practices] [added: Practice] regulations (“cGMP”), the [removed: FDC] [added: FDA] Act specifies that these products must not be adulterated, mislabeled, or misbranded.

Our water tests are [added: generally] not subject to formal premarket regulatory approval.

[removed: However, before] [added: Before these] products [removed: requiring FDA approval] can be sold in the U.S., performance data must be submitted in accordance with an FDA-approved protocol administered by an independent body, such as the Association of Analytical Chemists Research Institute (“AOAC RI”).

Our OPTI instrument systems are classified [added: by the FDA] as Class I and/or Class II medical devices, and their design, manufacture, and marketing are regulated by the FDA.

The FDA’s Quality System regulations further set forth standards for product design and manufacturing processes, require the maintenance of certain records, and provide for [removed: inspections of our facilities by the FDA.]

New OPTI products fall into FDA classifications that require notification of and review by the FDA [removed: before marketing, and which are submitted as] [added: via] a 510(k) [removed: application.][added: application before marketing or sale of such products.]

These OPTI products are also subject to the regulations governing the manufacture and marketing of medical devices in other countries in which they are sold, including the EU [removed: Regulations on] Medical Devices [added: Regulation] and In Vitro Diagnostic [removed: Devices.][added: Devices Regulation.]

OPTI manufactures, [removed: sells] [added: sells,] and distributes PCR and antibody ELISA test kits for the detection of the virus that causes COVID-19.

These products are also subject to the regulations governing the manufacturing and marketing of medical devices in other countries in which they are sold, including the EU [removed: Regulations on] Medical Devices [added: Regulation] and In Vitro Diagnostic [removed: Devices.][added: Devices Regulations.]

For more information about the risks associated with various U.S. and foreign government regulation, refer to [removed: *"Various] [added: “*Various] U.S. and foreign government regulations could limit or delay our ability to market and sell our products or otherwise negatively impact our [removed: business*"] [added: business”*] under [removed: "Part] [added: “Part] I, Item 1A.

In the U.S., the EPA regulates chemical use similarly to the [removed: EU.][added: European Union.]

In addition, certain states have their own chemical regulations, such as California's Proposition 65, which requires businesses to provide warnings to California residents about significant risk of exposures to chemicals in products that are known to cause cancer, birth defects, or other reproductive [removed: harm; and Maine's pending 2023 restrictions on PFAS (per- and polyfluoroalkyl substances) used in all products.][added: harm.]

In addition to the foregoing, our business is generally subject to various U.S. and foreign regulatory authorities, including the U.S. Federal Trade Commission (the “FTC”) and other anti-competition authorities, and we are also subject to anti-bribery and anti-corruption laws, such as the [added: U.S.] Foreign Corrupt Practices [added: Act and the UK Bribery] Act, import and export laws and regulations, including U.S. import and export control and sanctions laws, and laws and regulations governing the collection, use, retention, sharing and security of [removed: data.][added: data such as the EU General Data Protection Regulation.]

- Point-of-care electrolytes and blood gas analyzers.

in diagnosing physiologic conditions.

We also offer cancer screening to aid in diagnosis, assist in therapy selection, and support therapy management and monitoring.

During the third quarter of

2022, we acquired TECTA-PDS, a Canadian-based water testing company with customers in more than 50 countries.

Through this acquisition, we are able to provide an automated rapid microbiology monitoring system to detect total coliforms and E. coli or enterococci in water.

The TECTA-PDS test has also been approved by the EPA for detecting total coliforms and E. coli for drinking water compliance testing.

IDEXX also offers the following products:

These OPTI analyzers are used primarily

We also provide human testing solutions for the detection of SARS-CoV-2, the virus that causes COVID-19, as well as influenza A and B.

Product quality and safety.

We believe that product quality and safety are essential to our business.

We conduct our operations within an Integrated Management System, which encompasses our Quality Assurance program, to help ensure compliance with applicable regulations, product safety requirements and standards, and customer requirements.

This Integrated Management System includes strict manufacturing processes and procedures, employee training, ongoing process

improvement, product quality risk management procedures, incident investigation and corrective action procedures, and internal and third-party auditing.

Our manufacturing and distribution facilities in Westbrook, Maine; Memphis, Tennessee; and the Netherlands, Switzerland, France and the United Kingdom are certified to the ISO 9001 quality standard, and certain of our other facilities are certified to the environmental (ISO 14001) and testing and calibration laboratory (ISO 17025) quality standards.

ISO quality standards are internationally recognized manufacturing standards established by the International Organization for Standardization, which are audited and certified by third-party auditors in addition to our internal self-audits.

We also require our key suppliers to have quality management systems that comply with recognized industry standards, such as ISO 9001, and are aligned with our quality requirements, and we regularly conduct audits with our Tier 1 suppliers to verify control systems meet all our requirements.

In addition, we make available instructions and other information to help ensure the proper and safe use of our products.

inspections of our facilities by the FDA.

PFAS (per- and polyfluoroalkyl substances), which may be contained in certain IDEXX products, are a subject of increasing regulatory attention.

Both the EPA and the European Union have proposed draft regulations regarding PFAS, which include restrictions, data gathering and/or phase-out requirements.

In the U.S., a number of states, including Maine, where we manufacture many of our products, have also developed product reporting and/or phase-out requirements.

Maine’s statute requires that effective as of January 1, 2023, manufacturers of products with intentionally-added PFAS report the presence of such substances, and specifies that (subject to certain exceptions to be promulgated by the Maine Department of Environmental Protection) no product containing intentionally-added PFAS may be sold in Maine after January 1, 2030.

We have applied for an extension for compliance with the reporting requirement.

| Asian | | | | | | 6.5 | | % | | | |

| White | | | | | | 75.5 | | % | | | |

| Global People Managers | | | | | | 49.2 | | % | | | |

We provide free counseling for employees and their dependents globally through our mental wellness partner and Employee Assistance Program.

Interactive holistic well-being resources are available to employees globally, including monthly educational webinars, ergonomic support, team fitness challenges, nutrition programs, and self-guided courses on a broad range of topics.

As of December 31, 2022, our offices are open and we follow public health guidance and protocols, while continuing to support flexible work options.

We promote a positive workplace environment and build a collaborative culture through in-person and virtual events, including town halls, in-office celebrations, and employee-led communities.

Ensuring the health, safety, and well-being of our employees is a top priority at IDEXX.

We provide our employees with the training, tools, and resources they need to safeguard their health and we empower them to put safety first.

Our Environmental Health & Safety (“EH&S”) team oversees the IDEXX EH&S management system and our company-wide safety programs, ensuring that all of our locations implement health and safety processes to maintain and improve employee safety, reduce workplace risks, and drive continuous improvement.

- Point-of-care electrolytes and blood gas analyzers and SARS-CoV-2 RT-PCR (COVID-19 test) used in the human diagnostics sector.

We introduced the ProCyte One analyzer in 2020 and began delivery of these analyzers in 2021.

Our OPTI CCA-TS2 Blood Gas and Electrolyte analyzer contains many new features relative to previous generation blood gas analyzers including customized workflows, faster time to result, improved communication, and a multi-level electronic control.

Through OPTI Medical we also provide human COVID-19 testing products and laboratory services.

On May 7, 2020, we announced that OPTI Medical was granted by the United States Food and Drug Administration ("FDA") an Emergency Use Authorization ("EUA") for the OPTI SARS-CoV-2 RT-PCR laboratory test kit for the detection of SARS-CoV-2, the virus that causes COVID-19.

On June 5, 2020 OPTI Medical announced that it had received the CE mark certification in the European Union for its OPTI SARS-CoV-2 RT-PCR laboratory test kit.

Additionally, the FDA has granted EUA for the OPTI DNA/RNA Magnetic Bead Kit for nucleic acid extraction from respiratory samples to be used with the OPTI SARS-CoV-2 RT-PCR test kit, which enables OPTI Medical Systems to provide laboratories with a complete OPTI Medical Systems-manufactured workflow solution for COVID-19 testing.

We also provide human COVID-19 testing laboratories services to the Maine Center for Disease Control and Prevention in support of their COVID-19 testing program.

- Methods for detecting BVDV that started to expire in 2017 and will continue into 2022;

- Reagents and methods for the detection of *Anaplasma phagocytophilum* that started to expire in 2017 and will continue into 2022;

- Reagents and methods for the detection of *Ehrlichia canis* that began to expire in 2019 and will continue into 2022;

We also compete with a number of companies around the world that produce human COVID-19 testing.

These products are licensed and regulated in the U.S. by the Center for Veterinary Biologics within the United States Department of Agriculture (“USDA”) Animal and Plant Health Inspection Service (“APHIS”).

| Asian | | | | | | 6.4 | | % | | | |

| White | | | | | | 76.3 | | % | | | |

We provide emotional well-being services through our Employee Assistance Program and a variety of interactive resources as well as lifestyle coaching, a global well-being speaker series, and ergonomic programs that help support employees’ physical well-being.

We also provided a work-from-home fund to assist employees and added paid time off and caregiving support to enhance employee health and well-being.

While many of our employees have continued to work from home since March 2020, we have re-opened some of our offices, consistent with public health guidance and protocols, and support flexible work options.

With the contraction of the labor force as a result of the global pandemic, we have recently experienced the effects of the labor shortage in our staffing.

We expect the labor shortage to continue in 2022 and will continue to monitor and analyze retention closely to identify any areas of concern.

Given the pandemic-related impacts on our front-line workers' engagement, we are actively working to better understand what matters the most to them and what drives their engagement and retention.

Some of the actions taken in 2021 as a result of this increased focus include increasing the frequency of bonus payments to twice per year for our U.S. operations workers and advancing market competitive pay increases, as appropriate.

We are also monitoring the current landscape of wage inflation and labor shortages in connection with our employees' overall compensation.

| | | | [added: | | |] (Mark One) | | | | | |

| [added: | | |] ☒ | | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | | | |

For the fiscal year ended December 31, [removed: 2021][added: 2022]

| [added: | | |] ☐ | | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | | | |

[removed: ][added: ]

| [added: Large accelerated filer | | | ☒ | | | Accelerated filer | | | ☐ | | |] Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ | | | [added: Emerging growth company | | | ☐ | | |]

Based on the closing sale price on June 30, [removed: 2021] [added: 2022] of the registrant’s Common Stock, the last business day of the registrant’s most recently completed second fiscal quarter, as reported by the NASDAQ Global Select Market, the aggregate market value of the voting stock held by non-affiliates of the registrant was [removed: $53,417,914,936.][added: $28,964,148,468.]

The number of shares outstanding of the registrant’s Common Stock was [removed: 84,249,085] [added: 82,903,371] on February [removed: 11, 2022.][added: 10, 2023.]

Part III—Specifically identified portions of the Company’s definitive Proxy Statement to be filed in connection with the Company’s [removed: 2022] [added: 2023] annual meeting of stockholders (the [removed: “2022] [added: “2023] Annual Meeting”), to be held on May [removed: 11, 2022,] [added: 17, 2023,] are incorporated herein by reference.

| Credit Facility | | | | | | Our [removed: $1] [added: $1.25] billion five-year unsecured [removed: revolving] credit facility under an amended and restated credit [removed: agreement that was executed in December 2021,] [added: agreement; consisting of i) $1 billion revolving credit facility,] also referred to as line of [removed: credit.] [added: credit, and ii) $250 million three-year term loan.] | | |

| Ortho | | | | | | Ortho Clinical Diagnostics, Inc., a [added: subsidiary of QuidelOrtho Corporation, a] supplier of dry slide consumables used in our Catalyst One and Catalyst Dx Chemistry Analyzers and VetTest Chemistry Analyzer. | | |

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| [removed: [Signatures](#i5d795a6851d746ca914a2ddae761c329_253)] [added: [Signatures](#i2439a8dca9b9490ab3c040c8367b3e92_253)] | | | | | | | | |

Our name, logo and the following terms used in this Annual Report on Form 10-K are either registered trademarks or trademarks of IDEXX Laboratories, Inc. in the United States and/or other countries: 4Dx®, Alertys®, Animana® Veterinary Software, Catalyst Dx®, Catalyst One®, Coag Dx™, Colilert®, Colisure®, Cornerstone®, DVMAX®, Enterolert®, ezyVet®, Feline Triple®, Filta-Max®, Filta-Max *xpress*®, IDEXX I-Vision CR®, IDEXX I-Vision DR®, IDEXX I-Vision Mobile™, IDEXX [removed: ImageBank™ ,] [added: ImageBank™,] IDEXX Neo®, IDEXX-PACS™, IDEXX SDMA®, IDEXX VetLab®, LaserCyte®, LaserCyte® Dx, OPTI®, Pet Health Network®, Petly® Plans, Practice Profile™, ProCyte Dx®, Pseudalert®, Quanti-Tray®, rVetLink®, SediVue Dx®, SNAP®, SNAPduo®, SNAP Pro®, SNAP® cPL™, SNAP® fPL™, SNAPshot Dx®, IDEXX VetAutoread™, VetConnect®, IDEXX VetLab® UA™, VetLINK®, VetLyte®, Vet Radar®, VetStat®, and VetTest®.

This Annual Report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] contains statements which, to the extent they are not statements of historical fact, constitute “forward-looking statements.” Such forward-looking statements about our business and expectations within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), include statements relating [removed: to the impact of the COVID-19 pandemic;] [added: to, among other things, global trends in companion animal healthcare and demand for] our [added: products and services; our] expectations regarding supply chain and logistics [removed: disruptions;] [added: challenges;] our expectations regarding the labor supply; future revenue growth rates; future tax benefits; the impact of tax legislation and regulatory action; revenue recognition timing and amounts; business trends, earnings and other measures of financial performance; the effect of economic downturns on our business performance; the projected effect of patent and license expirations; the projected impact of foreign currency exchange rates and hedging activities; [removed: demand for our products;] [added: the impact of the COVID-19 pandemic;] realizability of assets; future cash flow and uses of cash; future repurchases of common stock; future levels of indebtedness and capital spending; [added: the working capital and liquidity outlook;] interest expense; warranty expense; share-based compensation expense; the adoption and projected impact of new accounting standards; critical accounting estimates; [added: deductibility of goodwill; research and development expense estimate;] future commercial and operational efforts; future product launches; projected cost and completion of capital investments; and competition.

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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).

| ASU | | | | | | Accounting Standards Update | | |

| CRP | | | | | | Canine C-reactive protein | | |

| SOFR | | | | | | The secured overnight financing rate as administered by the Federal Reserve Board of New York (or a successor administrator of the secured overnight financing rate) | | |

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| Large accelerated filer | | | ☒ | | | Accelerated filer | | | ☐ | | |

| | | | | | | Emerging growth company | | | ☐ | | |

| EURIBOR | | | | | | Interest rate used in lending between banks on the European Union interbank market and also used as a reference for setting the interest rate on other loans. | | |

We are also in the process of completing the construction of a new facility located in Scarborough, Maine to support the growth of our Water and LPD lines of business.

The construction of this facility is expected to be completed in 2023.

A detailed listing of all our locations can be found on our website.

As of February [removed: 11, 2022,] [added: 10, 2023,] there were 390 holders of record of our common stock.

During the three months ended December 31, [removed: 2021,] [added: 2022,] we repurchased shares of common stock as described below:

(1)As of December 31, [removed: 2021,] [added: 2022,] our Board of Directors had approved the repurchase of up to 73 million shares of our common stock in the open market or in negotiated transactions pursuant to the Company’s share repurchase program.

There were no other repurchase programs outstanding during the three months ended December 31, [removed: 2021,] [added: 2022,] and no repurchase programs expired during the period.

(2)During the three months ended December 31, [removed: 2021,] [added: 2022,] we received [removed: 101] [added: 742] shares of our common stock that were surrendered by employees in payment for the required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units.

During the year ended December 31, [removed: 2021,] [added: 2022,] we repurchased approximately [removed: 1.3] [added: 2.0] million shares of our common stock in transactions made pursuant to our repurchase program and received approximately [removed: 0.03] [added: 0.02] million shares of our common stock that were surrendered by employees in payment for the minimum required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units.

Repurchases of Common [removed: Stock"] [added: Stock”] to the consolidated financial statements for the year ended December 31, [removed: 2021,] [added: 2022,] included in this Annual Report on Form 10-K for further information.

This graph assumes the investment of $100 on December 31, [removed: 2016,] [added: 2017,] in IDEXX’s common stock, the S&P 500 Index, the S&P 500 Health Care Index, and the NASDAQ Index and assumes dividends, if any, are reinvested.

Measurement points are the last trading days of the years ended December [removed: 2016] [added: 2017] to [removed: 2021.][added: 2022.]

[removed: ][added: ]

| | | | | | | [removed: 12/31/2016] [added: 2017] | | | | | | [removed: 12/31/2017] [added: 2018] | | | | | | [removed: 12/31/2018] [added: 2019] | | | | | | [removed: 12/31/2019] [added: 2020] | | | | | | [removed: 12/31/2020] [added: 2021] | | | | | | [removed: 12/31/2021] [added: 2022] | | |

| October 1, 2022 to October 31, 2022 | | | | | | 186,797 | | | | | | $ | 339.26 | | | | | 186,797 | | | | | | 3,041,892 | | |

| November 1, 2022 to November 30, 2022 | | | | | | 12,650 | | | | | | $ | 388.07 | | | | | 12,650 | | | | | | 3,029,242 | | |

| December 1, 2022 to December 31, 2022 | | | | | | 123 | | | | | | $ | 439.17 | | | | | — | | | | | | 3,029,242 | | |

| Total | | | | | | 199,570 | | | (2) | | | | | | | | | 199,447 | | | | | | 3,029,242 | | |

Historic stock price performance should not be relied on as being indicative of future stock price performance.

| IDEXX Laboratories, Inc. | | | | | | $100.00 | | | | | | $118.95 | | | | | | $166.98 | | | | | | $319.65 | | | | | | $421.06 | | | | | | $260.88 | | |

| NASDAQ Index | | | | | | $100.00 | | | | | | $97.16 | | | | | | $132.81 | | | | | | $192.47 | | | | | | $235.15 | | | | | | $158.65 | | |

| S&P 500 Index | | | | | | $100.00 | | | | | | $93.76 | | | | | | $120.84 | | | | | | $140.49 | | | | | | $178.27 | | | | | | $143.61 | | |

| S&P 500 Health Care Index | | | | | | $100.00 | | | | | | $106.47 | | | | | | $128.64 | | | | | | $145.93 | | | | | | $184.07 | | | | | | $180.47 | | |

| October 1, 2021 to October 31, 2021 | | | | | | 101,855 | | | | | | $ | 632.26 | | | | | 101,855 | | | | | | 5,280,968 | | |

| November 1, 2021 to November 30, 2021 | | | | | | 129,176 | | | | | | $ | 629.38 | | | | | 129,174 | | | | | | 5,151,794 | | |

| December 1, 2021 to December 31, 2021 | | | | | | 159,662 | | | | | | $ | 619.88 | | | | | 159,563 | | | | | | 4,992,231 | | |

| Total | | | | | | 390,693 | | | (2) | | | | | | | | | 390,592 | | | | | | 4,992,231 | | |

| IDEXX Laboratories, Inc. | | | | | | $100.00 | | | | | | $133.35 | | | | | | $158.63 | | | | | | $222.67 | | | | | | $426.26 | | | | | | $561.49 | | |

| NASDAQ Index | | | | | | $100.00 | | | | | | $129.64 | | | | | | $125.96 | | | | | | $172.18 | | | | | | $249.51 | | | | | | $304.85 | | |

| S&P 500 Index | | | | | | $100.00 | | | | | | $121.83 | | | | | | $116.49 | | | | | | $153.17 | | | | | | $181.35 | | | | | | $233.41 | | |

| S&P 500 Health Care Index | | | | | | $100.00 | | | | | | $122.08 | | | | | | $129.97 | | | | | | $157.04 | | | | | | $178.15 | | | | | | $224.71 | | |

Disclosure controls and procedures [removed: include] [added: include, without limitation,] controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Based on the evaluation of our disclosure controls and procedures at December 31, [removed: 2021,] [added: 2022,] our [removed: chief executive officer] [added: Chief Executive Officer] and [removed: chief financial officer] [added: Chief Financial Officer] have concluded that, as of such date, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Based on this evaluation, we concluded that, at December 31, [removed: 2021,] [added: 2022,] our internal control over financial reporting was effective.

The effectiveness of the Company's internal control over financial reporting at December 31, [removed: 2021,] [added: 2022,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, [removed: 2021,] [added: 2022,] that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The information required by this Item with respect to Directors, executive officers, compliance with Section 16(a) of the Exchange Act, our code of ethics and corporate governance is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Corporate Governance - Proposal One [removed: -] [added: –] Election of Directors,” “Executive Officers,” “Stock Ownership Information [removed: -] [added: –] Delinquent Section 16(a) Reports,” “Corporate Governance – Corporate Governance Guidelines and Code of Ethics,” and “Corporate Governance –Board Committees” in the Company’s definitive Proxy Statement with respect to its [removed: 2022] [added: 2023] Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on [removed: Form 10-K.]

Form 10-K.

The information required by this Item is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Executive Compensation – Compensation Discussion and Analysis,” “Executive Compensation – Executive Compensation Tables,” “Executive Compensation – Potential Payments Upon Termination or [removed: Change-in-Control,”] [added: Change in Control,”] “Corporate Governance – [removed: Board Committees –] Compensation [removed: and Talent] Committee [removed: – Compensation and Talent Committee] Interlocks and Insider Participation,” and “Compensation and Talent Committee Report” in the Company’s definitive Proxy Statement with respect to its [removed: 2022] [added: 2023] Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by this Item with respect to Item 201(d) of Regulation S-K is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the section entitled “Equity Compensation Plan Information” in the Company’s definitive Proxy Statement with respect to its [removed: 2022] [added: 2023] Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by this Item with respect to Item 403 of Regulation S-K is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Stock Ownership Information” in the Company’s definitive Proxy Statement with respect to its [removed: 2022] [added: 2023] Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by this Item is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Corporate Governance – Related Person Transactions” and “Corporate Governance – Director Independence” in the Company’s definitive Proxy Statement with respect to its [removed: 2022] [added: 2023] Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by this Item is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the section entitled “Audit Committee Matters - Independent Auditors’ Fees” in the Company’s definitive Proxy Statement with respect to its [removed: 2022] [added: 2023] Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this report.

| [Report of Independent Registered Public Accounting [removed: Firm](#i5d795a6851d746ca914a2ddae761c329_151) [\-] [added: Firm -] PCAOB [removed: ID](#i5d795a6851d746ca914a2ddae761c329_151) [](#i5d795a6851d746ca914a2ddae761c329_151)[](#i5d795a6851d746ca914a2ddae761c329_151)[No.](#i5d795a6851d746ca914a2ddae761c329_151) [](#i5d795a6851d746ca914a2ddae761c329_151)238] [added: ID No.](#i2439a8dca9b9490ab3c040c8367b3e92_154) [](#i2439a8dca9b9490ab3c040c8367b3e92_154)238] | | | [removed: [F-](#i5d795a6851d746ca914a2ddae761c329_151)[2](#i5d795a6851d746ca914a2ddae761c329_151)] [added: [F-](#i2439a8dca9b9490ab3c040c8367b3e92_154)[2](#i2439a8dca9b9490ab3c040c8367b3e92_154)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 202](#i5d795a6851d746ca914a2ddae761c329_154)[1](#i5d795a6851d746ca914a2ddae761c329_154) [and 20](#i5d795a6851d746ca914a2ddae761c329_154)[20](#i5d795a6851d746ca914a2ddae761c329_154)] [added: 2022 and 2021](#i2439a8dca9b9490ab3c040c8367b3e92_157)] | | | [removed: [F-](#i5d795a6851d746ca914a2ddae761c329_154)[4](#i5d795a6851d746ca914a2ddae761c329_154)] [added: [F-](#i2439a8dca9b9490ab3c040c8367b3e92_157)[4](#i2439a8dca9b9490ab3c040c8367b3e92_157)] | | |

| [Consolidated Statements of Income for the Years Ended December 31, [removed: 202](#i5d795a6851d746ca914a2ddae761c329_157)[1](#i5d795a6851d746ca914a2ddae761c329_157)[, 20](#i5d795a6851d746ca914a2ddae761c329_157)[20](#i5d795a6851d746ca914a2ddae761c329_157) [and 201](#i5d795a6851d746ca914a2ddae761c329_157)[9](#i5d795a6851d746ca914a2ddae761c329_157)] [added: 2022, 2021 and 2020](#i2439a8dca9b9490ab3c040c8367b3e92_160)] | | | [removed: [F-](#i5d795a6851d746ca914a2ddae761c329_157)[5](#i5d795a6851d746ca914a2ddae761c329_157)] [added: [F-](#i2439a8dca9b9490ab3c040c8367b3e92_160)[5](#i2439a8dca9b9490ab3c040c8367b3e92_160)] | | |

| [Consolidated Statements of Comprehensive Income for the Years Ended December 31, [removed: 202](#i5d795a6851d746ca914a2ddae761c329_160)[1](#i5d795a6851d746ca914a2ddae761c329_160)[, 20](#i5d795a6851d746ca914a2ddae761c329_160)[20](#i5d795a6851d746ca914a2ddae761c329_160) [and 201](#i5d795a6851d746ca914a2ddae761c329_160)[9](#i5d795a6851d746ca914a2ddae761c329_160)] [added: 2022, 2021 and 2020](#i2439a8dca9b9490ab3c040c8367b3e92_163)] | | | [removed: [F-](#i5d795a6851d746ca914a2ddae761c329_160)[6](#i5d795a6851d746ca914a2ddae761c329_160)] [added: [F-](#i2439a8dca9b9490ab3c040c8367b3e92_163)[6](#i2439a8dca9b9490ab3c040c8367b3e92_163)] | | |

| [Consolidated Statements of Stockholders’ Equity [removed: (Deficit)] for the Years Ended December 31, [removed: 202](#i5d795a6851d746ca914a2ddae761c329_163)[1](#i5d795a6851d746ca914a2ddae761c329_163)[, 20](#i5d795a6851d746ca914a2ddae761c329_163)[20](#i5d795a6851d746ca914a2ddae761c329_163) [and 201](#i5d795a6851d746ca914a2ddae761c329_163)[9](#i5d795a6851d746ca914a2ddae761c329_163)] [added: 2022, 2021 and 2020](#i2439a8dca9b9490ab3c040c8367b3e92_166)] | | | [removed: [F-](#i5d795a6851d746ca914a2ddae761c329_163)[7](#i5d795a6851d746ca914a2ddae761c329_163)] [added: [F-](#i2439a8dca9b9490ab3c040c8367b3e92_166)[7](#i2439a8dca9b9490ab3c040c8367b3e92_166)] | | |

| [Consolidated Statements of Cash Flows for the Years Ended December 31, [removed: 202](#i5d795a6851d746ca914a2ddae761c329_166)[1](#i5d795a6851d746ca914a2ddae761c329_166)[, 20](#i5d795a6851d746ca914a2ddae761c329_166)[20](#i5d795a6851d746ca914a2ddae761c329_166) [and 201](#i5d795a6851d746ca914a2ddae761c329_166)[9](#i5d795a6851d746ca914a2ddae761c329_166)] [added: 2022, 2021 and 2020](#i2439a8dca9b9490ab3c040c8367b3e92_169)] | | | [removed: [F-](#i5d795a6851d746ca914a2ddae761c329_166)[8](#i5d795a6851d746ca914a2ddae761c329_166)] [added: [F-](#i2439a8dca9b9490ab3c040c8367b3e92_169)[8](#i2439a8dca9b9490ab3c040c8367b3e92_169)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i5d795a6851d746ca914a2ddae761c329_169)] [added: Statements](#i2439a8dca9b9490ab3c040c8367b3e92_172)] | | | [removed: [F-](#i5d795a6851d746ca914a2ddae761c329_169)[9](#i5d795a6851d746ca914a2ddae761c329_169)] [added: [F-](#i2439a8dca9b9490ab3c040c8367b3e92_172)[9](#i2439a8dca9b9490ab3c040c8367b3e92_172)] | | |

We have audited the accompanying consolidated balance sheets of IDEXX Laboratories, Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the related consolidated statements of income, of comprehensive income, of stockholders' equity [removed: (deficit)] and of cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] 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, [removed: 2021,] [added: 2022,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: 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, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] 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, [removed: 2021,] [added: 2022,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: Framework] (2013) issued by the COSO.

[removed: *Revenue Recognition Relating to Customer] [added: *Customer] Commitment [removed: Programs*][added: Programs Revenue Recognition – Transaction Price*]

As described in Note 3 to the consolidated financial statements, the Company recognized revenue associated with instruments totaling [removed: $149.1] [added: $147.3] million for the year ended December 31, [removed: 2021,] [added: 2022,] the majority of which [removed: were] [added: related to] sales under customer commitment programs.

These [removed: customer] commitment programs provide customers with a free or discounted instrument or [removed: system,] [added: system] upon entering into multi-year agreements to purchase annual minimum amounts of [removed: future] products or services.

The principal [removed: considerations] [added: consideration] for our determination that performing procedures relating to [removed: revenue recognition relating to the] customer commitment [removed: program] [added: programs revenue recognition] is a critical audit matter [removed: are the significant judgment by management in estimating the amount] [added: is a high degree] of [removed: variable consideration included in the transaction price, which in turn led to significant] auditor [removed: judgment, subjectivity,] effort [removed: and complexity] in [removed: assessing audit evidence in] performing procedures [removed: to evaluate the amount] [added: over management’s determination] of [removed: variable consideration included in] the transaction price [removed: and significant assumptions] related to [removed: forecasted product purchases.][added: the customer commitment programs.]

These procedures included testing the effectiveness of controls relating to the revenue recognition [removed: process and customer commitment programs,] [added: process,] including controls over the [removed: estimation of the amount] [added: determination] of [removed: variable consideration included in] the transaction [removed: price.][added: price related to the customer commitment programs.]

These procedures also included, among [removed: others,] [added: others] (i) [removed: examining contracts on a test basis, (ii)] testing management’s process for [removed: estimating the amount of variable consideration included in] [added: determining] the transaction [removed: price, (iii)] [added: price related to the customer commitment programs, (ii)] testing the completeness and accuracy of [removed: historical sales] [added: underlying] data [added: used by management,] and [removed: (iv) evaluating] [added: (iii) testing, on a sample basis,] the [removed: significant assumptions used] [added: transaction price determined] by management [removed: related to the forecasted purchase of products.][added: by obtaining and inspecting source documents, including contracts, invoices, and cash receipts, where applicable.]

| | | | December 31, [removed: 2021] [added: 2022] | | | | | | December 31, [removed: 2020] [added: 2021] | | |

| Cash and cash equivalents [added: at beginning of period] | | | [removed: $] | [added: | |] 144,454 | | | | | [removed: $] | 383,928 | | [added: | | | | 90,326 | | |]

| Accounts receivable, net of allowance of [removed: $5,668] [added: $8,265] in [removed: 2021] [added: 2022] and [removed: $6,784] [added: $5,668] in [removed: 2020] [added: 2021] | | | [removed: 368,348] [added: 400,619] | | | | | | [removed: 331,429] [added: 368,348] | | |

| Inventories | | | [removed: 269,030] [added: 367,823] | | | | | | [removed: 209,873] [added: 269,030] | | |

| Other current assets | | | [removed: 173,823] [added: 220,489] | | | | | | [removed: 137,508] [added: 173,823] | | |

| Total current assets | | | [removed: 955,655] [added: 1,101,477] | | | | | | [removed: 1,062,738] [added: 955,655] | | |

| Property and equipment, net | | | [removed: 587,667] [added: 649,474] | | | | | | [removed: 555,167] [added: 587,667] | | |

| Operating lease right-of-use assets | | | [removed: 105,101] [added: 118,618] | | | | | | [removed: 91,171] [added: 105,101] | | |

| Goodwill | | | [removed: 359,345] [added: 361,795] | | | | | | [removed: 243,347] [added: 359,345] | | |

| Intangible assets, net | | | [removed: 99,035] [added: 97,672] | | | | | | [removed: 52,543] [added: 99,035] | | |

| Other long-term assets | | | [removed: 330,400] [added: 417,729] | | | | | | [removed: 289,595] [added: 330,400] | | |

| Total long-term assets | | | [removed: 1,481,548] [added: 1,645,288] | | | | | | [removed: 1,231,823] [added: 1,481,548] | | |

| TOTAL ASSETS | | | $ | [removed: 2,437,203] [added: 2,746,765] | | | | | $ | [removed: 2,294,561] [added: 2,437,203] | |

| Accounts payable | | | $ | [removed: 116,140] [added: 110,221] | | | | | $ | [removed: 74,558] [added: 116,140] | |

| Accrued liabilities | | | [removed: 458,909] [added: 433,662] | | | | | | [removed: 415,648] [added: 458,909] | | |

| Current portion of long-term debt | | | [removed: 74,996] [added: 74,982] | | | | | | [removed: 49,988] [added: 74,996] | | |

| Current portion of deferred revenue | | | [removed: 40,034] [added: 37,938] | | | | | | [removed: 42,567] [added: 40,034] | | |

| Total current liabilities | | | [removed: 763,579] [added: 1,235,803] | | | | | | [removed: 582,761] [added: 763,579] | | |

| Deferred income tax liabilities | | | [removed: 8,935] [added: 8,150] | | | | | | [removed: 11,707] [added: 8,935] | | |

| Long-term debt, net of current portion | | | [removed: 775,205] [added: 694,387] | | | | | | [removed: 858,492] [added: 775,205] | | |

| Long-term deferred revenue, net of current portion | | | [removed: 41,174] [added: 30,862] | | | | | | [removed: 46,163] [added: 41,174] | | |

| Long-term operating lease liabilities | | | [removed: 87,377] [added: 101,239] | | | | | | [removed: 77,039] [added: 87,377] | | |

| Other long-term liabilities | | | [removed: 70,941] [added: 67,587] | | | | | | [removed: 85,604] [added: 70,941] | | |

The Company offers customer incentives upon entering into multi-year agreements to purchase annual minimum amounts of products and services.

February 16, 2023

| Credit facility | | | 579,000 | | | | | | 73,500 | | |

| Defined benefit plans, net of tax expense of $(613) in 2022 | | | | | | (3,282) | | | | | | — | | | | | | — | | |

| Reclassification adjustment for defined benefit plans included in net income, net of tax of $99 in 2022 | | | | | | 506 | | | | | | — | | | | | | — | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 679,089 | | | | | | — | | | | | | — | | | | | | — | | | | | | 679,089 | | |

| Balance December 31, 2022 | | | 107,193 | | | | | | $ | 10,719 | | | | | $ | 1,463,215 | | | | | $ | 5,182 | | | | | $ | 3,599,529 | | | | | $ | (77,796) | | | | | $ | (4,392,112) | | | | | $ | — | | | | | $ | 608,737 | |

| Net income | | | | | | $ | 679,089 | | | | | $ | 744,844 | | | | | $ | 582,131 | |

| Acquisitions of intangible assets | | | | | | (10,000) | | | | | | — | | | | | | (668) | | |

| Equity investments | | | | | | (25,000) | | | | | | — | | | | | | (250) | | |

The functional currency of six of our foreign subsidiaries is the U.S. dollar.

(t) Equity and Cost Methods of Accounting for Investments

Investments where we have the ability to exercise significant influence, but do not control the entity, are accounted for under the equity method of accounting.

Significant influence generally exists if we have a 20% to 50% ownership interest in the investee.

Equity investments in entities for which we do not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost less impairment, if any, adjusted for changes resulting from qualifying observable price changes for the identical investment of the same issuer should they occur.

We evaluate our investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired.

If a decline in the value of an investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

As of December 31, 2022 and 2021, our equity investments of $30.3 million and $5.3 million, respectively, are recorded at cost in other long-term assets.

Acquisitions, Asset Purchases and Investments” for additional information regarding our acquisition of equity investments.

In September 2022, the FASB issued ASU 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” which adds certain disclosure requirements for a buyer in a supplier finance program.

The amendments require a buyer that uses supplier finance programs to make annual disclosures about the program’s key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period, and associated roll-forward information.

In interim reporting periods, the amount outstanding at the end of the period is required to be disclosed.

The amendments are effective for all entities for fiscal years beginning after December 15, 2022 on a retrospective basis, including interim periods within those fiscal years, except for the requirement to disclose roll-forward information, which is effective prospectively for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

We do not expect this guidance will have a material impact on our consolidated financial statements.

Contracts may be amended to account for changes in contract specifications and requirements.

Contract modifications exist when the amendment either creates new, or changes existing, enforceable rights and obligations.

A modification is considered to be a separate contract, and revenue is recognized prospectively, when the modification creates new performance obligations to deliver additional goods or services and the related increase in consideration approximates the standalone selling price for the additional goods or services.

If a contract modification does not create a new performance obligation to deliver new goods and/or services but the goods and/or services to be delivered after the contract modification date are distinct from the goods and/or services delivered on or before the contract modification date, then this contract modification is not accounted for as a separate contract, and we account for the goods and/or services to be delivered after the contract modification date prospectively.

We account for a contract modification as if it were a part of the existing contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification.

The effect that these contract modifications have on the transaction price, and on our measure of progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue at the date of the contract modification, with the adjustment to revenue made on a cumulative catch-up basis.

acceptance.

These types of agreements include an embedded lease for the right to use our instruments.

Impairments and revenue adjustments that relate to performance obligations satisfied in prior periods, including cumulative catch-up adjustments to revenue arising from contract modifications, during the years ended December 31, 2022 and 2021, were not material.

Refund

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

Asset Purchases and Investments

During 2022, we entered into two discrete arrangements to license intellectual property for which we paid $65.0 million and accrued $15.0 million in subsequent payments, all of which was charged to research and development expense.

The $15.0 million milestone payment was issued in the first quarter of 2023.

These two arrangements were treated as asset acquisitions under U.S. GAAP and resulted in the full amount being expensed to research and development expense as in-

| | | | | | |

| --- | --- | --- | --- | --- | --- |

The Company offers customer incentives through its various customer commitment programs.

To the extent the transaction price includes variable consideration, such as volume rebates or expected price adjustments, management applies judgment in estimating variable consideration based on the Company’s historical and projected experience with similar customer contracts.

Management monitors customer purchases over the term of the agreement and reviews estimates of variable consideration.

Evaluating management’s assumptions related to forecasted product purchases involved evaluating whether the assumptions used by management were reasonable by comparing the forecasted product purchases to historical sales data.

February 16, 2022

| Line of credit | | | 73,500 | | | | | | — | | |

| Noncontrolling interest | | | — | | | | | | 707 | | |

| Total stockholders’ equity | | | 689,992 | | | | | | 632,795 | | |

| Balance December 31, 2018 | | | 105,087 | | | | | | $ | 10,509 | | | | | $ | 1,138,216 | | | | | $ | 4,524 | | | | | $ | 1,167,928 | | | | | $ | (41,791) | | | | | $ | (2,288,899) | | | | | $ | 280 | | | | | $ | (9,233) | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 427,720 | | | | | | — | | | | | | — | | | | | | 72 | | | | | | 427,792 | | |

| Acquisitions of intangible assets and equity investments | | | | | | — | | | | | | (918) | | | | | | (255) | | |

Concentration of credit risk with respect to accounts receivable is limited to certain customers to whom we make substantial sales.

We adopted ASU 2016-02, "Leases (Topic 842)," as of January 1, 2019, using the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and did not restate prior periods.

We adopted ASU 2018-13, "Fair Value Measurement (Topic 820)," as of January 1, 2020, which modifies the disclosure requirements on fair value measurements under ASC Topic No. 820, Fair Value Measurement, as amended (“ASC 820”).

ASU 2018-13 removes (a) the prior requirement to disclose the amount and reason for transfers between Level 1 and Level 2 of the fair value hierarchy contained in ASC 820, (b) the policy for timing of transfers between levels, and (c) the valuation processes used for Level 3 fair value measurements.

ASU 2018-13 also adds, among other things, a requirement to disclose the range and weighted average of significant unobservable inputs used in Level 3 fair value measurements.

Early adoption is permitted, including in an interim period, for any period for which financial statements have not yet been issued.

We are currently evaluating the impact, if any, of ASU 2021-08 on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 is intended to provide optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued.

The FASB also issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope," in January 2021.

It clarifies that certain optional expedients and exceptions apply to derivatives that are affected by the discounting transition.

The amendments in this ASU affect the guidance in ASU No. 2020-04 and are effective in the same timeframe as ASU 2020-04.

The relief offered by this guidance, if adopted, is available to companies for the period March 12, 2020 through December 31, 2022.

Our Credit Facility includes a provision for the determination of a benchmark replacement rate as a successor to the LIBOR rate, therefore; we do not expect the discontinuation of LIBOR to have an impact on our consolidated financial statements.

We recognize revenue associated with extended

If these up-front incentives are subsequently utilized to purchase instruments, we

Differences between estimated and actual customer purchases may impact the timing and amount of revenue recognition.

IDEXX Points that have not

The purchase price allocation is

subject to revision as additional information becomes available regarding review of taxes and the settlement of the working capital adjustment.

During the fourth quarter of 2019 we acquired the assets of a multi-site reference laboratory business in the mid-west of the U.S. for $50.0 million in cash.

This acquisition expands our national reference laboratory presence in the U.S., and was accounted for as a business combination.

We finalized the valuation of the fair value of the assets acquired during the first quarter of 2020.

The fair value of the assets acquired consists of $26.9 million in intangible assets, primarily for customer relationships, with a weighted average life of 13.8 years, $0.2 million of tangible assets, and $22.9 million of goodwill, representing synergies within our reference laboratory portfolio.

In the fourth quarter of 2019, we entered into a mutual separation agreement with our former CEO, pursuant to which Mr. Ayers’s outstanding stock options were modified, resulting in a share-based compensation expense of approximately $10.9 million, primarily representing an acceleration of the cost of the equity awards.

This expense was partially offset by a reduction to our provision for income taxes of approximately $0.8 million.

Vesting of option awards issued is conditional based on continuous service.

| Share price at grant | | | | | | $ | 546.36 | | | | | $ | 291.14 | | | | | $ | 218.66 | |