Item 15. Exhibits and Financial Statement Schedules

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Item 15. Exhibits and Financial Statement Schedules

(a) Exhibits, Financial Statements and Schedules:

Financial Statements. See Index to Consolidated Financial Statements included on page F-1.
Financial Statement Schedule. See Schedule II, which is included on page S-1.
List of Exhibits. See Exhibit Index included on page E-1.

SIGNATURES

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

Mettler-Toledo International Inc.

(Registrant)

Date: February 7, 2014



By:	/s/ Olivier A. Filliol
	Olivier A. Filliol
	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant as of the date set out above and in the capacities indicated.



Signature		Title

/s/ Olivier A. Filliol		President and Chief Executive Officer
Olivier A. Filliol

/s/ William P. Donnelly		Executive Vice President
William P. Donnelly		(Principal Financial Officer)

/s/ Shawn P. Vadala		Chief Financial Officer
Shawn P. Vadala		(Principal Accounting Officer)

/s/ Olivier A. Filliol		Director
Olivier A. Filliol

/s/ Wah-Hui Chu		Director
Wah-Hui Chu

/s/ Francis A. Contino		Director
Francis A. Contino

/s/ Michael A. Kelly		Director
Michael A. Kelly

/s/ Martin Madaus		Director
Martin Madaus

/s/ Hans Ulrich Maerki		Director
Hans Ulrich Maerki

/s/ George M. Milne		Director
George M. Milne

/s/ Thomas P. Salice		Director
Thomas P. Salice

/s/ Robert F. Spoerry		Director
Robert F. Spoerry

EXHIBIT INDEX



Exhibit
No.	Description
3.1	Amended and Restated Certificate of Incorporation of the Company(1)
3.2	Amended By-laws of the Company, effective as of July 23, 2009(2)
10.1	Credit Agreement among Mettler-Toledo International Inc., certain of its subsidiaries, JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, and certain other financial institutions, dated as of November 26, 2013(3)
10.11	Note Purchase Agreement dated as of June 25, 2009 by and among Mettler-Toledo International Inc. and Connecticut General Life Insurance Company, The Lincoln National Life Insurance Company, Lincoln Life & Annuity Company of New York, Massachusetts Mutual Life Insurance Company, C.M. Life Insurance Company, MassMutual Asia Limited, American Investors Life Insurance Company, Aviva Life and Annuity Company, Bankers Life and Casualty Company, Conseco Life Insurance Company, Conseco Health Insurance Company and Colonial Penn Life Insurance Company(4)
10.12	Note Purchase Agreement dated as of October 10, 2012 by and among Mettler-Toledo International Inc., Massachusetts Mutual Life Insurance Company, C.M. Life Insurance Company, MassMutual Asia Limited, The Lincoln National Life Insurance Company, Lincoln Life & Annuity Company of New York and Aviva Life and Annuity Company Royal Neighbors of America.(5)
10.13	Note Purchase Supplement dated July 29, 2013 by and among Mettler-Toledo International Inc., Aviva Life and Annuity Company and Teachers Insurance and Annuity Association of America to a Note Purchase Agreement dated October 10, 2012 by and among Mettler-Toledo International Inc., Massachusetts Mutual Life Insurance Company, C.M. Life Insurance Company, MassMutual Asia Limited, The Lincoln National Life Insurance Company, Lincoln Life & Annuity Company of New York and Aviva Life and Annuity Company Royal Neighbors of America(6)
10.20	Mettler-Toledo International Inc. 2004 Equity Incentive Plan(7)
10.21	Mettler-Toledo International Inc. 2007 Share Plan, effective February 7, 2008(8)
10.22	Mettler-Toledo International Inc. 2013 Equity Incentive Plan(9)
10.31	Regulations of the POBS PLUS — Incentive Scheme for Senior Management of Mettler Toledo, effective as of November, 2006(10)
10.32	Regulations of the POBS PLUS — Incentive Scheme for Members of the Group Management of Mettler Toledo, effective as of January, 2009(10)
10.50	Employment Agreement between Thomas Caratsch and Mettler-Toledo International Inc., dated as of December 4, 2007(8)
10.51	Employment Agreement between Marc de la Guéronnière and Mettler-Toledo International Inc., dated as of January 27, 2011(11)
10.52	Employment Agreement between William Donnelly and Mettler-Toledo GmbH, dated as of November 10, 1997(1)
10.53	Employment Agreement between Olivier Filliol and Mettler-Toledo International Inc., dated as of November 1, 2007(12)
10.54	Employment Agreement between Michael Heidingsfelder and Mettler-Toledo International Inc., dated as of November 30, 2011 (15)
10.55	Employment Agreement between Simon Kirk and Mettler-Toledo International Inc., dated as of November 28, 2011(15)
10.56	Employment Agreement between Christian Magloth and Mettler-Toledo International Inc., dated as of March 22, 2010(11)
10.57	Employment Agreement between Waldemar Rauch and Mettler-Toledo International Inc., dated as of June 10, 2011(14)
10.58	Employment Agreement between Robert Spoerry and Mettler-Toledo International Inc., dated as of November 1, 2007(12)
10.59	Form of Tax Equalization Agreement between Messrs. Caratsch, Filliol, Spoerry, von Arb, Widmer and Kirk and Mettler-Toledo International Inc., dated October 10, 2007(8)
21*	Subsidiaries of the Company
23.1*	Consent of PricewaterhouseCoopers LLP

E- 1



Exhibit
No.	Description
31.1*	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of the Executive Vice President Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3*	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32*	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document


(1)	Incorporated by reference to the Company’s Report on Form 10-K dated March 13, 1998


(2)	Incorporated by reference to the Company’s Report on Form 8-K dated July 24, 2009


(3)	Incorporated by reference to the Company’s Report on Form 8-K dated November 26, 2013


(4)	Incorporated by reference to the Company’s Report on Form 8-K dated June 25, 2009


(5)	Incorporated by reference to the Company's Report on Form 8-K dated October 16, 2012


(6)	Incorporated by reference to the Company's Report on Form 8-K dated July 29, 2013


(7)	Incorporated by reference to the Company’s Form DEF 14-A filed March 29, 2004


(8)	Incorporated by reference to the Company’s Report on Form 10-K dated February 15, 2008


(9)	Incorporated by reference to the Company's Registration Statement on Form S-8 dated July 26, 2013 (Reg. No. 333-190181)


(10)	Incorporated by reference to the Company’s Report on Form 10-K dated February 13, 2009


(11)	Incorporated by reference to the Company's Report on Form 10-K dated February 16, 2010


(12)	Incorporated by reference to the Company’s Report on Form 8-K dated November 1, 2007


(13)	Incorporated by reference to the Company’s Report on Form 10-K dated March 4, 2002


(14)	Incorporated by reference to the Company's Report on Form 10-K dated February 13, 2012


(15)	Incorporated by reference to the Company's Report on Form 10-K dated February 8, 2013


*	Filed herewith

E- 2

METTLER-TOLEDO INTERNATIONAL INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



	Page
Report of Independent Registered Public Accounting Firm	F- 2
Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011	F- 3
Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011	F- 4
Consolidated Balance Sheets as of December 31, 2013 and 2012	F- 5
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2013, 2012 and 2011	F- 6
Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011	F- 7
Notes to the Consolidated Financial Statements	F- 8

F - 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

of Mettler-Toledo International Inc.

In our opinion, the consolidated financial statements listed in the index appearing on page F-1 present fairly, in all material respects, the financial position of Mettler-Toledo International Inc. at December 31, 2013 and December 31, 2012, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule appearing on page S-1 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Columbus, Ohio

February 7, 2014

F - 2

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31

(In thousands, except share data)



	2013		2012		2011
Net sales
Products	$	1,862,026	$	1,852,192	$	1,826,891
Service	516,946		489,336		482,437
Total net sales	2,378,972		2,341,528		2,309,328
Cost of sales
Products	794,915		811,204		798,682
Service	302,031		289,269		292,372
Gross profit	1,282,026		1,241,055		1,218,274
Research and development	116,346		112,530		116,139
Selling, general and administrative	692,788		684,026		703,632
Amortization	24,539		21,357		17,808
Interest expense	22,711		22,764		23,226
Restructuring charges	19,830		16,687		5,912
Other charges (income), net	3,103		1,090		2,380
Earnings before taxes	402,709		382,601		349,177
Provision for taxes	96,615		91,754		79,684
Net earnings	$	306,094	$	290,847	$	269,493

Basic earnings per common share:
Net earnings	$	10.22	$	9.37	$	8.45
Weighted average number of common shares	29,945,954		31,044,532		31,897,779
Diluted earnings per common share:
Net earnings	$	9.96	$	9.14	$	8.21
Weighted average number of common and common equivalent shares	30,728,482		31,824,077		32,839,365

The accompanying notes are an integral part of these consolidated financial statements.

F - 3

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31

(In thousands, except share data)



	2013			2012			2011

Net earnings	$	306,094		$	290,847		$	269,493

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	21,903			15,641			(18,731		)
Unrealized gains (losses) on cash flow hedging arrangements:
Unrealized gains (losses)	(491		)	(1,748		)	(4,028		)
Effective portion of (gains) losses included in net earnings	3,496			2,029			1,911
Defined benefit pension and post-retirement plans:
Net actuarial gains (losses)	30,381			(46,792		)	(79,947		)
Plan amendments and prior service cost	2,371			18,017			(274		)
Amortization of actuarial (gains) losses and plan amendments and prior service cost	6,775			4,261			2,326
Impact of foreign currency	(2,010		)	(1,931		)	3,604
Total other comprehensive income (loss), net of tax	62,425			(10,523		)	(95,139		)

Comprehensive income	$	368,519		$	280,324		$	174,354

The accompanying notes are an integral part of these consolidated financial statements.

F - 4

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED BALANCE SHEETS

As of December 31

(In thousands, except share data)



	2013			2012
ASSETS
Current assets:
Cash and cash equivalents	$	111,874		$	101,702
Trade accounts receivable, less allowances of $14,856 in 2013 and $14,120 in 2012	466,703			437,390
Inventories	210,414			198,939
Current deferred tax assets, net	57,934			57,007
Other current assets and prepaid expenses	67,062			69,199
Total current assets	913,987			864,237
Property, plant and equipment, net	514,438			469,421
Goodwill	455,842			452,351
Other intangible assets, net	114,418			117,564
Non-current deferred tax assets, net	24,121			32,681
Other non-current assets	130,013			86,034
Total assets	$	2,152,819		$	2,022,288
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	145,993		$	142,362
Accrued and other liabilities	116,831			109,844
Accrued compensation and related items	123,493			117,405
Deferred revenue and customer prepayments	83,083			71,435
Taxes payable	61,502			64,000
Current deferred tax liabilities	16,219			15,348
Short-term borrowings and current maturities of long-term debt	17,067			41,600
Total current liabilities	564,188			561,994
Long-term debt	395,960			347,131
Non-current deferred tax liabilities	64,449			45,058
Other non-current liabilities	193,170			240,886
Total liabilities	1,217,767			1,195,069
Commitments and contingencies (Note 17)
Shareholders’ equity:
Preferred stock, $0.01 par value per share; authorized 10,000,000 shares	—			—
Common stock, $0.01 par value per share; authorized 125,000,000 shares; issued 44,786,011 and 44,786,011 shares, outstanding 29,487,075 and 30,410,006 shares at December 31, 2013 and 2012, respectively	448			448
Additional paid-in capital	653,250			638,705
Treasury stock at cost (15,298,936 and 14,376,005 shares at December 31, 2013 and 2012, respectively)	(1,721,030		)	(1,463,924		)
Retained earnings	2,037,420			1,749,451
Accumulated other comprehensive income (loss)	(35,036		)	(97,461		)
Total shareholders’ equity	935,052			827,219
Total liabilities and shareholders’ equity	$	2,152,819		$	2,022,288

The accompanying notes are an integral part of these consolidated financial statements.

F - 5

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the years ended December 31

(In thousands, except share data)



	Common Stock				Additional Paid-In Capital		Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
	Shares		Amount
Balance at December 31, 2010	32,425,315		$	448	$	597,195	$	(1,057,390	)	$	1,223,130		$	8,201		$	771,584
Exercise of stock options and restricted stock units	450,613		—		—		36,843			(16,073		)	—			20,770
Repurchases of common stock	(1,285,827	)	—		—		(204,578		)	—			—			(204,578		)
Tax benefit resulting from exercise of certain employee stock options	—		—		6,737		—			—			—			6,737
Share-based compensation	—		—		12,270		—			—			—			12,270
Net earnings	—		—		—		—			269,493			—			269,493
Other comprehensive income (loss), net of tax	—		—		—		—			—			(95,139		)	(95,139		)
Balance at December 31, 2011	31,590,101		$	448	$	616,202	$	(1,225,125	)	$	1,476,550		$	(86,938	)	$	781,137
Exercise of stock options and restricted stock units	457,732		—		—		39,873			(17,946		)	—			21,927
Repurchases of common stock	(1,637,827	)	—		—		(278,672		)	—			—			(278,672		)
Tax benefit resulting from exercise of certain employee stock options	—		—		9,318		—			—			—			9,318
Share-based compensation	—		—		13,185		—			—			—			13,185
Net earnings	—		—		—		—			290,847			—			290,847
Other comprehensive income (loss), net of tax	—		—		—		—			—			(10,523		)	(10,523		)
Balance at December 31, 2012	30,410,006		$	448	$	638,705	$	(1,463,924	)	$	1,749,451		$	(97,461	)	$	827,219
Exercise of stock options and restricted stock units	398,646		—		—		37,870			(18,125		)	—			19,745
Repurchases of common stock	(1,321,577	)	—		—		(294,976		)	—			—			(294,976		)
Tax benefit resulting from exercise of certain employee stock options	—		—		1,906		—			—			—			1,906
Share-based compensation	—		—		12,639		—			—			—			12,639
Net earnings	—		—		—		—			306,094			—			306,094
Other comprehensive income (loss), net of tax	—		—		—		—			—			62,425			62,425
Balance at December 31, 2013	29,487,075		$	448	$	653,250	$	(1,721,030	)	$	2,037,420		$	(35,036	)	$	935,052

The accompanying notes are an integral part of these consolidated financial statements.

F - 6

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31

(In thousands)



	2013			2012			2011
Cash flows from operating activities:
Net earnings	$	306,094		$	290,847		$	269,493
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	34,765			33,421			31,689
Amortization	24,539			21,357			17,808
Deferred tax provision	8,816			5,420			2,592
Excess tax benefits from share-based payment arrangements	(1,847		)	(9,365		)	(12,612		)
Share-based compensation	12,639			13,185			12,270
Other	498			1,455			(524		)
Increase (decrease) in cash resulting from changes in:
Trade accounts receivable, net	(28,995		)	(8,760		)	(53,964		)
Inventories	(8,484		)	46,831			(20,281		)
Other current assets	1,606			3,583			(301		)
Trade accounts payable	295			(27,881		)	27,551
Taxes payable	(3,540		)	7,482			5,374
Accruals and other	(458		)	(49,871		)	1,785
Net cash provided by operating activities	345,928			327,704			280,880
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment	211			426			2,485
Purchase of property, plant and equipment	(82,349		)	(95,588		)	(98,500		)
Acquisitions	(2,661		)	(2,098		)	(35,373		)
Other investing activities	—			—			(903		)
Net cash used in investing activities	(84,799		)	(97,260		)	(132,291		)
Cash flows from financing activities:
Proceeds from borrowings	556,059			445,425			469,599
Repayments of borrowings	(531,045		)	(563,109		)	(647,694		)
Proceeds from exercise of stock options	19,745			21,927			20,770
Repurchases of common stock	(294,976		)	(278,672		)	(204,578		)
Excess tax benefits from share-based payment arrangements	1,847			9,365			12,612
Acquisition contingent consideration paid	—			(325		)	(7,750		)
Debt issuance costs	(1,522		)	(363		)	(3,144		)
Other financing activities	(1,224		)	(645		)	(284		)
Net cash provided by (used in) financing activities	(251,116		)	(366,397		)	(360,469		)
Effect of exchange rate changes on cash and cash equivalents	159			2,054			(96		)
Net increase (decrease) in cash and cash equivalents	10,172			(133,899		)	(211,976		)
Cash and cash equivalents:
Beginning of period	101,702			235,601			447,577
End of period	$	111,874		$	101,702		$	235,601
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	16,998		$	19,252		$	17,804
Taxes	$	83,200		$	78,009		$	69,656

The accompanying notes are an integral part of these consolidated financial statements.

F - 7

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data, unless otherwise stated)


1.	BUSINESS DESCRIPTION AND BASIS OF PRESENTATION

Mettler-Toledo International Inc. (“Mettler-Toledo” or the “Company”) is a leading global supplier of precision instruments and services. The Company manufactures weighing instruments for use in laboratory, industrial, packaging, logistics and food retailing applications. The Company also manufactures several related analytical instruments and provides automated chemistry solutions used in drug and chemical compound discovery and development. In addition, the Company manufactures metal detection and other end-of-line inspection systems used in production and packaging and provides solutions for use in certain process analytics applications. The Company’s primary manufacturing facilities are located in China, Switzerland, the United States, Germany and the United Kingdom. The Company’s principal executive offices are located in Columbus, Ohio and Greifensee, Switzerland.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all entities in which the Company has control, which are its wholly-owned subsidiaries.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates.

All intercompany transactions and balances have been eliminated.

Certain reclassifications have been made to prior year amounts to conform to the current year presentation.


2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with original maturity dates of three months or less. The carrying value of these cash equivalents approximates fair value.

Trade Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts represents the Company’s best estimate of probable credit losses in its existing trade accounts receivable. The Company determines the allowance based upon a review of both specific accounts for collection and the age of the accounts receivable portfolio.

Inventories

Inventories are valued at the lower of cost or net realizable value. Cost, which includes direct materials, labor and overhead, is generally determined using the first in, first out (FIFO) method. The estimated net realizable value is based on assumptions for future demand and related pricing. Adjustments to the cost basis of the Company’s inventory are made for excess and obsolete items based on usage, orders and technological obsolescence. If actual market conditions are less favorable than those projected by management, reductions in the value of inventory may be required.

F - 8

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Long-Lived Assets


a)	Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Repair and maintenance costs are charged to expense as incurred. The Company expenses all internal-use software costs incurred in the preliminary project stage and capitalizes certain direct costs associated with the development and purchase of internal-use software within property, plant and equipment. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally not exceeding 10 years.

Depreciation and amortization are charged on a straight-line basis over the estimated useful lives of the assets as follows:



Buildings and improvements	15 to 50 years
Machinery and equipment	3 to 12 years
Computer software	3 to 10 years
Leasehold improvements	Shorter of useful life or lease term


b)	Goodwill and Other Intangible Assets

Goodwill, representing the excess of purchase price over the net asset value of companies acquired, and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The annual evaluation for goodwill and indefinite-lived intangible assets are generally based on an assessment of qualitative and quantitative factors to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount.

Other intangible assets include indefinite-lived assets and assets subject to amortization. Where applicable, amortization is charged on a straight-line basis over the expected period of benefit. The straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. The Company assesses the initial acquisition of intangible assets in accordance with the provisions of ASC 805 "Business Combinations" and the continued accounting for previously recognized intangible assets and goodwill in accordance with the provisions of ASC 350 "Intangible - Goodwill and Other" and ASC 360 "Property, Plant and Equipment."

Accounting for Impairment of Long-Lived Assets

The Company assesses the need to record impairment losses on long-lived assets with finite lives when events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. An impairment loss would be recognized when future estimated undiscounted cash flows expected to result from use of the asset are less than the asset’s carrying value, with the loss measured as the difference between carrying value and fair value.

Taxation

The Company files tax returns in each jurisdiction in which it operates. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating

F - 9

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in the respective jurisdictions in which the Company operates. In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Deferred taxes are not provided on the unremitted earnings of subsidiaries outside of the United States when it is expected that these earnings are permanently reinvested. Such earnings may become taxable upon the sale or liquidation of these subsidiaries or upon the remittance of dividends. Deferred taxes are provided when the Company no longer considers subsidiary earnings to be permanently invested, such as in situations where the Company’s subsidiaries plan to make future dividend distributions.

The Company recognizes accrued amounts of interest and penalties related to its uncertain tax positions as part of income tax expense within its consolidated statement of operations.

Currency Translation and Transactions

The reporting currency for the consolidated financial statements of the Company is the U.S. dollar. The functional currency for the Company’s operations is generally the applicable local currency. Accordingly, the assets and liabilities of companies whose functional currency is other than the U.S. dollar are included in the consolidated financial statements by translating the assets and liabilities into the reporting currency at the exchange rates applicable at the end of the reporting period. The statements of operations and cash flows of such non-U.S. dollar functional currency operations are translated at the monthly average exchange rates during the year. Translation gains or losses are accumulated in other comprehensive income (loss) in the consolidated statements of shareholders’ equity. Transaction gains and losses are included as a component of net earnings.

Revenue Recognition

Revenue is recognized when title to a product has transferred and any significant customer obligations have been fulfilled. Standard shipping terms are generally FOB shipping point in most countries and, accordingly, title and risk of loss transfers upon shipment. In countries where title cannot legally transfer before delivery, the Company defers revenue recognition until delivery has occurred. The Company generally maintains the right to accept or reject a product return in its terms and conditions and also maintains appropriate accruals for outstanding credits. Shipping and handling costs charged to customers are included in total net sales and the associated expense is recorded in cost of sales for all periods presented. Other than a few small software applications, the Company does not sell software products without the related hardware instrument as the software is embedded in the instrument. The Company’s products typically require no significant production, modification or customization of the hardware or software that is essential to the functionality of the products. To the extent the Company’s solutions have a post-shipment obligation, such as customer acceptance, revenue is deferred until the obligation has been completed. The Company defers product revenue where installation is required, unless such installation is deemed perfunctory. The Company also sometimes enters into certain arrangements that require the separate delivery of multiple goods and/or services. These deliverables are accounted for separately if the deliverables have standalone value and the performance of undelivered items is probable and within the Company's control. The allocation of revenue between the separate deliverables is typically based on the relative selling price at the time of the sale in accordance with a number of factors including service technician billing rates, time to install and geographic location.

F - 10

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Further, certain products are also sold through indirect distribution channels whereby the distributor assumes any further obligations to the customer upon title transfer. Revenue is recognized on these products upon transfer of title and risk of loss to its distributors. Distributor discounts are offset against revenue at the time such revenue is recognized.

Service revenue not under contract is recognized upon the completion of the service performed. Spare parts sold on a stand-alone basis are recognized upon title and risk of loss transfer which is generally at the time of shipment. Revenues from service contracts are recognized ratably over the contract period. These contracts represent an obligation to perform repair and other services including regulatory compliance qualification, calibration, certification and preventative maintenance on a customer’s pre-defined equipment over the contract period. Service contracts are separately priced and payment is typically received from the customer at the beginning of the contract period.

Research and Development

Research and development costs primarily consist of salaries, consulting and other costs. The Company expenses these costs as incurred.

Warranty

The Company generally offers one-year warranties on most of its products. Product warranties are recorded at the time revenue is recognized. While the Company engages in extensive product quality programs and processes, its warranty obligation is affected by product failure rates, material usage and service costs incurred in correcting a product failure.

Employee Termination Benefits

In situations where contractual termination benefits exist, the Company records accruals for employee termination benefits when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable. All other employee termination arrangements are recognized and measured at their fair value at the communication date unless the employee is required to render additional service beyond the legal notification period, in which case the liability is recognized ratably over the future service period.

Earnings per Common Share

In accordance with the treasury stock method, the Company has included 782,528, 779,545 and 941,586 common equivalent shares in the calculation of diluted weighted average number of common shares for the years ending December 31, 2013, 2012 and 2011, respectively, relating to outstanding stock options and restricted stock units.

Outstanding options and restricted stock units to purchase or receive 23,951, 241,205 and 197,629 shares of common stock for the years ending December 31, 2013, 2012 and 2011, respectively, have been excluded from the calculation of diluted weighted average number of common and common equivalent shares as such options and restricted stock units would be anti-dilutive.

Equity-Based Compensation

The Company applies the fair value methodology in accounting for its equity-based compensation plan.

F - 11

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Derivative Financial Instruments

The Company has only limited involvement with derivative financial instruments and does not use them for trading purposes. As described more fully in Note 5, the Company enters into foreign currency forward exchange contracts to economically hedge certain short-term intercompany balances involving its international businesses. Such contracts limit the Company’s exposure to currency fluctuations on the items they hedge. These contracts are adjusted to fair market value as of each balance sheet date, with the resulting changes in fair value being recognized in other charges (income), consistent with the underlying hedged item.

The Company also enters into foreign currency forward contracts, designated as cash flow hedges, to hedge certain forecasted sales. Such contracts limit the Company’s exposure to currency fluctuations on the items they hedge. Changes in fair value of outstanding foreign currency forward contract agreements that are effective as cash flow hedges are recognized in other comprehensive income as incurred.

The Company also enters into interest rate swap agreements in order to manage its exposure to changes in interest rates. The differential paid or received on interest rate swap agreements is recognized in interest expense over the life of the agreements as incurred. Floating to fixed interest rate swap agreements are accounted for as cash flow hedges. Changes in fair value of outstanding interest rate swap agreements that are effective as cash flow hedges are recognized in other comprehensive income as incurred.

Fair Value Measurements

The Company measures or monitors certain assets and liabilities on a fair value basis. Fair value is used on a recurring basis for assets and liabilities in which fair value is the primary basis of accounting, mainly derivative instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The Company applies the fair value hierarchy established under U.S. GAAP and when possible looks to active and observable markets to price identical assets and liabilities. If identical assets and liabilities are not traded in active markets, the Company looks to market observable data for similar assets and liabilities.

Recent Accounting Pronouncements

In January 2013, the Company adopted ASU 2013-02, to ASC 220 “Comprehensive Income.” The adoption of the guidance requires the Company to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, the Company is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified from each component of accumulated other comprehensive income and the income statement line items affected by the reclassification. The adoption of this guidance did not impact the Company's consolidated results of operations or on the financial position.

In July 2013, the FASB issued amendments to ASC 740 "Income Taxes." The amendments provide further guidance to the balance sheet presentation of unrecognized tax benefits when a net operating loss or similar tax loss carryforwards, or tax credit carryforwards exist. The amendments will be effective for public entities for annual periods beginning after December 15, 2013. The Company is currently

F - 12

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

reviewing the implications of this amendment, but does not believe it will have a material impact out consolidated results of operations or on the financial position.


3.	ACQUISITIONS

The Company utilizes the acquisition method to account for all business combinations. Contingent consideration is measured at fair value on the acquisition date with subsequent changes in the fair value of contingent considerations classified as a liability recognized in earnings.

In August 2011, the Company acquired a vision inspection solutions business located in Germany for an aggregate purchase price of $19.4 million that has been integrated into the Company's product inspection product offering. The Company paid additional cash consideration of $0.3 million during the year ending December 31, 2012 related to an earn-out period. Goodwill recorded in connection with this acquisition totaled $10.9 million, which is included in the Company’s Western European Operations segment. The Company also recorded $13.3 million of identified intangibles primarily pertaining to tradename, customer relationships and technology.

In March 2011, the Company completed acquisitions totaling $15.4 million, of which $12.0 million related to an x-ray inspection solutions business that has been integrated into the Company's product inspection product offering. Goodwill recorded in connection with these acquisitions totaled $4.4 million, of which $1.9 million is included in the Company's U.S. Operations segment and $2.5 million is included in the Company's Swiss Operations segment. The Company also recorded $9.9 million of identified intangibles pertaining to tradename, customer relationships and technology.

The weighted average amortization periods for the finite-lived intangibles purchased in 2011 are 15 years for tradename, 10 years for technology and 18 years for customer relationships.


4.	INVENTORIES

Inventory consisted of the following at December 31:



	2013		2012
Raw materials and parts	$	98,244	$	94,450
Work-in-progress	38,061		36,899
Finished goods	74,109		67,590
	$	210,414	$	198,939


5.	FINANCIAL INSTRUMENTS

The Company has limited involvement with derivative financial instruments and does not use them for trading purposes. As described below, the Company enters into certain interest rate swap agreements in order to manage its exposure to changes in interest rates. At December 31, 2013, the interest payments associated with 73% of the Company's debt are fixed obligations. The amount of the Company's fixed obligation interest payments may change based upon the expiration dates of its interest rate swap agreement and the level and composition of its debt. The Company also enters into foreign currency forward contracts to limit the Company's exposure to currency fluctuations on the respective hedged items. For additional disclosures on the fair value of financial instruments, see Note 6 to the consolidated financial statements.

F - 13

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Cash Flow Hedge

The Company has an interest rate swap agreement, designated as a cash flow hedge. The agreement is a forward-starting swap which had the effect of changing the floating rate LIBOR-based interest payments associated with $100 million in forecasted borrowings under the Company’s credit facility to a fixed obligation of 3.24% beginning in October 2010. The swap is recorded at fair value in other non-current liabilities in the consolidated balance sheet at December 31, 2013 and 2012 of $5.3 million and $8.2 million, respectively. The amounts recognized in other comprehensive income (loss) during the years ended December 31, 2013 and 2012 were a loss of $0.2 million, $0.1 million net of tax, and a loss of $2.0 million, $1.3 million net of tax, respectively. The effective portion of the loss reclassified from accumulated other comprehensive income (loss) to interest expense was $3.1 million, $1.9 million after tax, for the year ended December 31, 2013 and $3.0 million, $1.9 million after tax for the year ended December 31, 2012, respectively. A derivative loss of $3.0 million, $1.9 million after tax, based upon interest rates on December 31, 2013 is expected to be recognized in earnings in the next twelve months. Through December 31, 2013, the hedge ineffectiveness related to this instrument was not material.

In June 2013, the Company entered into a forward starting interest rate swap agreement, designated as a cash flow hedge. The agreement will change the floating rate LIBOR-based interest payments associated with $50 million in forecasted borrowings under the Company's credit agreement to a fixed obligation of 2.52% beginning in October 2015. The swap is recorded in other non-current assets in the consolidated balance sheet at its fair value at December 31, 2013 of $1.3 million. The amount recognized in other comprehensive income (loss) during the year ended December 31, 2013 was a gain of $1.3 million, $0.8 million after tax.

In July 2012, the Company began entering into foreign currency forward contracts, designated as cash flow hedges, to hedge certain forecasted intercompany sales denominated in euro with its Swiss-based business. The notional amount of foreign currency forward contracts outstanding at December 31, 2013 and 2012 was $78.2 million and $78.0 million, respectively. The foreign currency forward contracts are recorded gross at their fair value in the consolidated balance sheet at December 31, 2013 in other current assets of $0.3 million and in accrued and other liabilities of $0.1 million, respectively. At December 31, 2012, the foreign currency forward contracts are recorded gross at their fair value in the consolidated balance sheet in accrued and other liabilities of $0.4 million. The Company records the effective portion of the cash flow derivative hedging gains and losses in accumulated other comprehensive income (loss), net of tax and reclassifies these amounts into earnings in the period in which the transactions affect earnings. The amounts recognized in other comprehensive income (loss) during the year ended December 31, 2013 and 2012 were losses of $1.4 million, $1.1 million after tax, and $0.6 million, $0.5 million after tax. The effective portion of the loss reclassified from accumulated other comprehensive income (loss) to cost of sales was $2.0 million, $1.6 million after tax, for the year ended December 31, 2013 and $0.2 million, $0.2 million after tax, for the year ended December 31, 2012, respectively. A derivative gain of $0.2 million, $0.1 million after tax, as of December 31, 2013, is expected to be recognized in earnings in the next twelve months. Through December 31, 2013 no hedge ineffectiveness has occurred in relation to this hedge.

F - 14

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Other Derivatives

The Company enters into foreign currency forward contracts in order to economically hedge short-term intercompany balances largely denominated in Swiss franc and other major European currencies with its foreign businesses. In accordance with U.S. GAAP, these contracts are considered “derivatives not designated as hedging instruments.” Gains or losses on these instruments are reported in current earnings. The foreign currency forward contracts were reported at their fair value in the consolidated balance sheet at December 31, 2013 and 2012 in other current assets of $0.7 million and $0.4 million, respectively, and other liabilities of $0.4 million and $0.3 million, respectively. The Company recognized in other charges (income), a net gain of $2.1 million during the year ended December 31, 2013. At December 31, 2013 and 2012, these contracts had a notional value of $180.3 million and $132.3 million, respectively.

The Company may be exposed to credit losses in the event of nonperformance by the counterparties to its derivative financial instrument contracts. Counterparties are established banks and financial institutions with high credit ratings. The Company believes that such counterparties will be able to fully satisfy their obligations under these contracts.


6.	FAIR VALUE MEASUREMENTS

At December 31, 2013 and 2012, the Company had derivative assets totaling $2.3 million and $0.4 million, respectively, and derivative liabilities totaling $5.8 million and $8.9 million, respectively. The fair values of the interest rate swap agreements, foreign currency forward contracts designated as cash flow hedges and foreign currency forward contracts that economically hedge short-term intercompany balances are estimated based upon inputs from current valuation information obtained from dealer quotes and priced with observable market assumptions and appropriate valuation adjustments for credit risk. The Company has evaluated the valuation methodologies used to develop the fair values by dealers in order to determine whether such valuations are representative of an exit price in the Company’s principal market. In addition, the Company uses an internally developed model to perform testing on the valuations received from brokers. The Company has also considered both its own credit risk and counterparty credit risk in determining fair value and determined these adjustments were insignificant for the years ended December 31, 2013 and December 31, 2012.

The Company had $16.9 million and $13.6 million of cash equivalents at December 31, 2013 and 2012, respectively, the fair value of which is determined through quoted and corroborated prices in active markets. The fair value of cash equivalents approximates cost.

The difference between the fair value and carrying value of the Company’s long-term debt is not material and is classified in Level 2 and Level 3 of the fair value hierarchy. The fair value of the Company's debt is estimated based on either similar issues or other inputs derived from available market information, including interest rates, term of debt and creditworthiness.

Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement consists of observable and unobservable inputs that reflect the assumptions that a market participant would use in pricing an asset or liability.

A fair value hierarchy has been established that categorizes these inputs into three levels:

Level 1: Quoted prices in active markets for identical assets and liabilities

F - 15

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Level 2: Observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3: Unobservable inputs

The following table presents for each of these hierarchy levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2013 and 2012:



	December 31, 2013								December 31, 2012
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	16,868	$	—	$	16,868	$	—	$	13,636	$	—	$	13,636	$	—
Interest rate swap agreement	1,269		—		1,269		—		—		—		—		—
Foreign currency forward contracts designated as cash flow hedges	268		—		268		—		—		—		—		—
Foreign currency forward contracts not designated as hedging instrument	719		—		719		—		448		—		448		—
Total	$	19,124	$	—	$	19,124	$	—	$	14,084	$	—	$	14,084	$	—

Liabilities:
Interest rate swap agreements	$	5,312	$	—	$	5,312	$	—	$	8,172	$	—	$	8,172	$	—
Foreign currency forward contracts designated as cash flow hedge	103		—		103		—		421		—		421		—
Foreign currency forward contracts not designated as hedging instrument	355		—		355		—		280		—		280		—
Total	$	5,770	$	—	$	5,770	$	—	$	8,873	$	—	$	8,873	$	—


7.	PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following at December 31:



	2013			2012
Land	$	56,214		$	54,804
Building and leasehold improvements	212,277			206,744
Machinery and equipment	361,978			340,834
Computer software	302,681			247,044
	933,150			849,426
Less accumulated depreciation and amortization	(418,712		)	(380,005		)
	$	514,438		$	469,421


8.	GOODWILL AND OTHER INTANGIBLE ASSETS

The following table shows the changes in the carrying amount of goodwill for the years ended December 31:



	2013		2012
Balance at beginning of year	$	452,351	$	447,743
Goodwill acquired	1,049		648
Foreign currency translation	2,442		3,960
Balance at year end	$	455,842	$	452,351

F - 16

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Goodwill and indefinite-lived assets are reviewed for impairment on an annual basis in the fourth quarter. The Company completed its impairment review and determined that, through December 31, 2013, there had been no impairment of these assets.

The components of other intangible assets as of December 31 are as follows:



	2013					2012
	Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Customer relationships	$	98,374	$	(25,313	)	$	96,575	$	(21,928	)
Proven technology and patents	43,233		(29,763		)	42,960		(28,014		)
Tradename (finite life)	4,300		(1,619		)	3,972		(1,345		)
Tradename (indefinite life)	25,108		—			25,061		—
Other	757		(659		)	745		(462		)
	$	171,772	$	(57,354	)	$	169,313	$	(51,749	)

The Company recognized amortization expense associated with the above intangible assets of $5.9 million, $7.2 million and $6.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. The annual aggregate amortization expense based on the current balance of other intangible assets is estimated at $6.0 million for 2014, $5.4 million for 2015, $5.2 million for 2016, $5.0 million for 2017 and $4.7 million for 2018. The finite-lived intangible assets are amortized on a straight-line basis over periods ranging from 3 to 45 years. The straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. Purchased intangibles amortization was $5.3 million, $3.6 million after tax, $6.8 million, $4.5 million after tax and $6.2 million, $4.1 million after tax, for the years ended December 31, 2013, 2012 and 2011, respectively.

In addition to the above amortization, the Company recorded amortization expense associated with capitalized software of $18.6 million, $13.9 million and $10.8 million for the years ended December 31, 2013, 2012 and 2011, respectively.


9.	WARRANTY

The Company’s accrual for product warranties is included in accrued and other liabilities in the consolidated balance sheets. Changes to the Company’s accrual for product warranties for the years ended December 31, 2013 and 2012 are as follows:



	2013			2012
Balance at beginning of year	$	16,295		$	16,748
Accruals for warranties	19,779			17,667
Payments/utilizations	(19,179		)	(18,343		)
Foreign currency translation	96			223
Balance at year end	$	16,991		$	16,295

F - 17

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)


10.	DEBT

Debt consisted of the following at December 31:



	2013			2012
$100 million Senior Notes, interest at 6.30%, due June 25, 2015	$	100,000		$	100,000
$50 million Senior Notes, interest at 3.67%, due December 17, 2022	50,000			50,000
$50 million Senior Notes, interest 4.10%, due September 19, 2023	50,000			—
$800 million Credit Agreement, interest at LIBOR plus 75 basis points	195,960			197,131
Other local arrangements	17,067			41,600
	413,027			388,731
Less: current portion	(17,067		)	(41,600		)
Long-term debt	$	395,960		$	347,131

6.30% Senior Notes

In 2009, the Company issued and sold $100 million of 6.30% Senior Notes due June 25, 2015 in a private placement. The 6.30% Senior Notes are senior unsecured obligations of the Company.

Interest on the 6.30% Senior Notes is payable semi-annually in June and December. The Company may at any time prepay the 6.30% Senior Notes, in whole or in part (but in an amount not less than 10% of the original aggregate principal amount), at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest, plus a “make-whole” prepayment premium. In the event of a change in control of the Company (as defined in the note purchase agreement), the Company may be required to offer to prepay the 6.30% Senior Notes in whole at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest.

The 6.30% Senior Notes contain customary affirmative and negative covenants including, among others, limitations on the Company and its subsidiaries with respect to incurrence of liens and priority indebtedness, disposition of assets, mergers, and transactions with affiliates. The note purchase agreement also requires the Company to maintain a consolidated interest coverage ratio of not less than 3.5 to 1.0 and a consolidated leverage ratio of not more than 3.5 to 1.0. The agreement contains customary events of default with customary grace periods, as applicable. The Company was in compliance with these covenants at December 31, 2013.

Issuance costs approximating $0.7 million will be amortized to interest expense over the six-year term of the 6.30% Senior Notes.

3.67% Senior Notes

In 2012, the Company issued and sold $50 million of 3.67% Senior Notes due December 17, 2022 in a private placement. The 3.67% Senior Notes are senior unsecured obligations of the Company. Interest is payable semi-annually in June and December.

The 3.67% Senior Notes contain customary affirmative and negative covenants, change in control and prepayment provisions, that are substantially similar to those contained in the previously issued debt of the Company as described above. The 3.67% Senior Notes also contain customary events of default with customary grace periods, as applicable. The Company was in compliance with these covenants at December 31, 2013.

F - 18

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Issuance costs approximating $0.4 million will be amortized to interest expense over the ten-year term of the 3.67% Senior Notes.

4.10% Senior Notes

In the third quarter of 2013, the Company issued and sold $50 million of 4.10% Senior Notes due September 2023 in a private placement. The 4.10% Senior Notes are senior unsecured obligations of the Company. Interest on the 4.10% Senior Notes is payable semi-annually in March and September of each year, beginning in March 2014.

The 4.10% Senior Notes contain customary affirmative and negative covenants, change in control and prepayment provisions, that are substantially similar to those contained in the previously issued debt of the Company as described above. The 4.10% Senior Notes also contain customary events of default with customary grace periods, as applicable. The Company was in compliance with these covenants at December 31, 2013.

Issuance costs approximating $0.4 million will be amortized to interest expense over the ten-year term of the 4.10% Senior Notes.

Credit Agreement

In November 2013, the Company entered into an $800 million Credit Agreement (the "Credit Agreement"), which amended its $880 million Amended and Restated Credit Agreement (the "Prior Credit Agreement"). The Credit Agreement is provided by a group of financial institutions (similar to the Company's Prior Credit Agreement) and has a maturity date of November 26, 2018. It is a revolving credit facility and is not subject to any scheduled principal payments prior to maturity. The obligations under the Credit Agreement are unsecured.

Borrowings under the Credit Agreement bear interest at current market rates plus a margin based on the Company’s consolidated leverage ratio, which was, as of December 31, 2013, set at LIBOR plus 75 basis points. The Company must also pay facility fees that are tied to its leverage ratio. The Credit Agreement contains covenants that are substantially similar to those contained in the previously issued debt of the Company as described above, with which the Company was in compliance as of December 31, 2013. The Credit Agreement also places certain limitations on the Company, including limiting the ability to incur liens or indebtedness at a subsidiary level. In addition, the Credit Agreement has several events of default. The Company incurred approximately $0.4 million of debt extinguishment costs during 2013 related to the Prior Credit Agreement. The Company capitalized $1.1 million in financing fees during 2013 associated with the Credit Agreement which will be amortized to interest expense through 2018. As of December 31, 2013, approximately $600.0 million was available under the facility.

The Company’s weighted average interest rate for the years ended December 31, 2013 and 2012 was approximately 5% in both years. The carrying value of the Company’s debt obligations approximates fair value.

F - 19

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)


11.	SHAREHOLDERS’ EQUITY

Common Stock

The number of authorized shares of the Company’s common stock is 125,000,000 shares with a par value of $0.01 per share. Holders of the Company’s common stock are entitled to one vote per share. At December 31, 2013, 4,762,751 shares of the Company’s common stock were reserved for issuance pursuant to the Company’s stock option plans.

Preferred Stock

The Board of Directors, without further shareholder authorization, is authorized to issue up to 10,000,000 shares of preferred stock, par value $0.01 per share in one or more series and to determine and fix the rights, preferences and privileges of each series, including dividend rights and preferences over dividends on the common stock and one or more series of the preferred stock, conversion rights, voting rights (in addition to those provided by law), redemption rights and the terms of any sinking fund therefore, and rights upon liquidation, dissolution or winding up, including preferences over the common stock and one or more series of the preferred stock. The issuance of shares of preferred stock, or the issuance of rights to purchase such shares, may have the effect of delaying, deferring or preventing a change in control of the Company or an unsolicited acquisition proposal.

Restricted Stock Units

In 2013 and 2012, the Company granted 29,507 and 43,078 restricted stock units, respectively, to certain employees and directors. The weighted average grant-date fair value of the restricted stock units granted in 2013 and 2012 was $244.90 and $169.37 per unit, respectively, and the restricted units vest ratably primarily over a 5 years-year period. The total fair value of the restricted stock units on the date of grant of $7.2 million for 2013 and $7.3 million for 2012 will be recorded as compensation expense ratably over the vesting period. Approximately $5.5 million and $5.3 million of compensation expense was recognized during the years ended December 31, 2013 and 2012, respectively.

Share Repurchase Program

The Company has a $3 billion share repurchase program, which includes an additional $750 million that was authorized by the Board of Directors during 2013. The Company expects that the authorization will be utilized over the next several years. As of December 31, 2013, there were $892 million of remaining common shares authorized to be repurchased under the program. The share repurchases are expected to be funded from cash balances, borrowings and cash generated from operating activities. Repurchases will be made through open market transactions, and the amount and timing of purchases will depend on business and market conditions, the stock price, trading restrictions, the level of acquisition activity and other factors.

The Company has purchased 21.5 million shares since the inception of the program through December 31, 2013. During the years ended December 31, 2013 and 2012, the Company spent $295.0 million and $278.7 million on the repurchase of 1,321,577 shares and 1,637,827 shares at an average price per share of $223.18 and $170.13, respectively. The Company reissued 398,646 shares and 457,732 shares held in treasury for the exercise of stock options and restricted stock units during 2013 and 2012, respectively.

F - 20

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income by component for the period ended December 31, 2013:



	Currency Translation Adjustment, Net of Tax		Net Unrealized Gain (Loss) on Cash Flow Hedging Arrangements, Net of Tax			Pension and Post-Retirement Benefit Related Items, Net of Tax			Total
Balance at December 31, 2012	$	56,012	$	(5,438	)	$	(148,035	)	$	(97,461	)
Other comprehensive income (loss), net of tax:
Unrealized actuarial gains (loss), prior service costs and plan amendments	—		—			32,752			32,752
Unrealized gains (loss) on cash flow hedging arrangements	—		(448		)	—			(448		)
Foreign currency translation adjustment	21,903		(43		)	(2,010		)	19,850
Amounts recognized from accumulated other comprehensive income (loss), net of tax	—		3,496			6,775			10,271
Net change in other comprehensive income (loss), net of tax	21,903		3,005			37,517			62,425
Balance at December 31, 2013	$	77,915	$	(2,433	)	$	(110,518	)	$	(35,036	)

The following table presents amounts recognized from accumulated other comprehensive income (loss) for the twelve months period ended December 31, 2013:



	2013		Location of Amounts Recognized in Earnings
Effective portion of losses on cash flow hedging arrangements:
Interest rate swap agreements	$	3,081	Interest expense
Foreign currency forward contracts	2,013		Cost of sales - products
Total before taxes	5,094
Provision for taxes	1,598		Provision for taxes
Total, net of taxes	$	3,496

Recognition of defined benefit pension and post-retirement items:
Recognition of actuarial losses, plan amendments and prior service cost, before taxes	$	10,426	(a)
Provision for taxes	3,651		Provision for taxes
Total, net of taxes	$	6,775


(a)	These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and post-retirement cost. See Note 13 for additional details for the twelve months ended December 31, 2013.

F - 21

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Accumulated other comprehensive income (loss) consisted of the following at December 31:



	2013			2012			2011
Currency translation adjustment, net of tax	$	77,915		$	56,012		$	40,371
Net unrealized (loss) gain on cash flow hedging arrangements, net of tax	(2,433		)	(5,438		)	(5,719		)
Pension and post-retirement benefit related items	(154,068		)	(209,775		)	(176,005		)
Deferred taxes on pension and post-retirement benefit related items	43,550			61,740			54,415
Total accumulated other comprehensive income (loss)	$	(35,036	)	$	(97,461	)	$	(86,938	)


12.	EQUITY INCENTIVE PLAN

The Company’s equity incentive plan provides employees and directors of the Company additional incentives to join and/or remain in the service of the Company as well as to maintain and enhance the long-term performance and profitability of the Company. The Company’s 2013 equity incentive plan was approved by shareholders on May 2, 2013 and provides that 2 million shares of common stock, plus any options outstanding under the Company’s prior option plan that terminate without being exercised, may be the subject of awards. The plan provides for the grant of options, restricted stock, restricted stock units and other equity-based awards. The exercise price of options granted shall not be less than the fair market value of the common stock on the date of the award. Options primarily vest equally over a five-year period from the date of grant and have a maximum term of up to ten years and six months. Restricted units primarily vest equally over a five-year period from the date of grant. Since 2005, the compensation committee of the Board of Directors has generally granted restricted share units to participating managers and non-qualified stock options to executive officers.

All share-based compensation arrangements granted to employees, including stock option grants, are recognized in the consolidated statement of operations based on the grant-date fair value of the award over the period during which an employee is required to provide service in exchange for the award. Share-based compensation expense is recorded within selling, general and administrative in the consolidated statement of operations with a corresponding offset to additional paid-in capital in the consolidated balance sheet.

The fair values of stock options granted were calculated using the Black-Scholes pricing model. The aggregate intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The following table summarizes all stock option activity from December 31, 2012 through December 31, 2013:



	Number of Options		Weighted Average Exercise Price	Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2012	2,104,775		$94.45	$208.9
Granted	135,858		244.99
Exercised	(352,602	)	56.00
Forfeited	(16,337	)	115.04
Outstanding at December 31, 2013	1,871,694		$112.57	$243.7
Options exercisable at December 31, 2013	1,377,919		$90.35	$209.8

F - 22

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

The following table details the weighted average remaining contractual life of options outstanding at December 31, 2013 by range of exercise prices:



Number of Options Outstanding	Weighted Average Exercise Price		Remaining Contractual Life of Options Outstanding	Options Exercisable

84,157	$	46.32	1.0	84,157
339,250	$	61.57	2.8	339,250
472,789	$	81.31	5.3	433,569
298,050	$	108.90	3.9	298,050
359,084	$	141.51	7.3	181,965
318,364	$	201.64	9.3	40,928
1,871,694			5.5	1,377,919

As of the date granted, the weighted average grant-date fair value of the options granted during the years ended December 31, 2013, 2012 and 2011 was approximately $66.33, $46.72 and $42.43, respectively.

Such weighted average grant-date fair value was determined using an option pricing model that incorporated the following assumptions:



	2013		2012		2011
Risk-free interest rate	1.31	%	0.71	%	1.09	%
Expected life in years	5		5		5
Expected volatility	28	%	30	%	30	%
Expected dividend yield	—		—		—

The total intrinsic value of options exercised during the years ended December 31, 2013, 2012 and 2011 was approximately $60.0 million, $50.9 million and $44.7 million, respectively.

The total fair value of options vested during the years ended December 31, 2013, 2012 and 2011 was approximately $5.7 million, $6.9 million and $6.8 million, respectively.

The following table summarizes all restricted stock unit activity from December 31, 2012 through December 31, 2013:



	Number of Restricted Stock Units		Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2012	131,025		$	25.3
Granted	29,507
Vested	(46,044	)
Forfeited	(6,706	)
Outstanding at December 31, 2013	107,782		$	26.1

The total fair value of restricted stock units vested during the years ended December 31, 2013, 2012 and 2011 was approximately $5.6 million, $5.3 million and $4.5 million, respectively.

At December 31, 2013, a total of 2,753,858 shares of common stock were available for grant in the form of stock options or restricted stock units.

F - 23

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

As of December 31, 2013, the unrecorded deferred share-based compensation balance related to both stock options and restricted stock units was $38.5 million and will be recognized using a straight-line method over an estimated weighted average amortization period of 2.3 years.


13.	BENEFIT PLANS

The Company maintains a number of retirement and other post-retirement employee benefit plans.

Certain subsidiaries sponsor defined contribution plans. Benefits are determined and funded annually based upon the terms of the plans. Amounts recognized as cost under these plans amounted to $17.3 million, $15.7 million and $15.5 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Certain subsidiaries sponsor defined benefit plans. Benefits are provided to employees primarily based upon years of service and employees’ compensation for certain periods during the last years of employment. Prior to 2002, the Company’s U.S. operations also provided post-retirement medical benefits to their employees. Contributions for medical benefits are related to employee years of service.

The following tables set forth the change in benefit obligation, the change in plan assets, the funded status and amounts recognized in the consolidated financial statements for the Company’s defined benefit plans and post-retirement plan at December 31, 2013 and 2012:



	U.S. Pension Benefits						Non-U.S. Pension Benefits						Other Benefits						Total
	2013			2012			2013			2012			2013			2012			2013			2012
Change in benefit obligation:
Benefit obligation at beginning of year	$	156,804		$	146,492		$	798,657		$	717,503		$	11,267		$	13,257		$	966,728		$	877,252
Service cost, gross	494			455			30,315			27,312			216			333			31,025			28,100
Interest cost	5,755			6,093			19,566			22,104			405			539			25,726			28,736
Actuarial losses (gains)	(18,226		)	10,184			(11,477		)	68,807			(1,988		)	(2,059		)	(31,691		)	76,932
Plan amendments and other	—			—			293			(21,915		)	(3,733		)	75			(3,440		)	(21,840		)
Benefits paid	(6,680		)	(6,420		)	(43,271		)	(36,861		)	(872		)	(878		)	(50,823		)	(44,159		)
Impact of foreign currency	—			—			20,117			21,707			—			—			20,117			21,707
Benefit obligation at end of year	$	138,147		$	156,804		$	814,200		$	798,657		$	5,295		$	11,267		$	957,642		$	966,728
Change in plan assets:
Fair value of plan assets at beginning of year	$	94,734		$	87,904		$	731,040		$	665,126		$	—		$	—		$	825,774		$	753,030
Actual return on plan assets	12,073			9,501			42,480			47,797			—			—			54,553			57,298
Employer contributions	17,776			3,749			25,147			22,309			723			803			43,646			26,861
Plan participants’ contributions	—			—			13,255			12,315			149			75			13,404			12,390
Benefits paid	(6,680		)	(6,420		)	(43,271		)	(36,861		)	(872		)	(878		)	(50,823		)	(44,159		)
Impact of foreign currency and other	—			—			17,881			20,354			—			—			17,881			20,354
Fair value of plan assets at end of year	$	117,903		$	94,734		$	786,532		$	731,040		$	—		$	—		904,435			825,774
Funded status	$	(20,244	)	$	(62,070	)	$	(27,668	)	$	(67,617	)	$	(5,295	)	$	(11,267	)	$	(53,207	)	$	(140,954	)

F - 24

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

Amounts recognized in the consolidated balance sheets consist of:



	U.S. Pension Benefits						Non-U.S. Pension Benefits						Other Benefits						Total
	2013			2012			2013			2012			2013			2012			2013			2012
Other non-current assets	$	—		$	—		$	105,132		$	64,183		$	—		$	—		$	105,132		$	64,183
Pension and other post-retirement liabilities	(20,244		)	(62,070		)	(132,800		)	(131,800		)	(5,295		)	(11,267		)	(158,339		)	(205,137		)
Accumulated other comprehensive loss (income)	59,013			89,940			110,965			130,776			(15,910		)	(10,941		)	154,068			209,775
Total	$	38,769		$	27,870		$	83,297		$	63,159		$	(21,205	)	$	(22,208	)	$	100,861		$	68,821

The prepaid pension asset is recorded in other non-current assets on the consolidated balance sheet. The short-term and long-term portion of the accrued pension liability is recorded on the consolidated balance sheet within accrued and other liabilities and other non-current liabilities, respectively. The long-term portion of the accrued pension liabilities and other post-retirement liabilities at December 31, 2013 and 2012 was $20.2 million and $62.0 million, respectively, for the U.S. defined benefit pension plan, $127.8 million and $126.8 million, respectively, for the non-U.S. plans and $4.8 million and $10.3 million, respectively, for the U.S. post-retirement plan. The current portion of accrued pension liabilities was $0.1 million and $5.0 million at both December 31, 2013 and 2012 for the U.S. defined benefit pension plan and the non-U.S. plans, respectively. The current portion of the U.S. post-retirement plan was $0.5 million and $1.0 million at December 31, 2013 and 2012, respectively.

The following amounts have been recognized in accumulated other comprehensive income (loss), before taxes, at December 31, 2013 and have not yet been recognized as a component of net periodic pension cost:



	U.S. Pension Benefits		Non-U.S. Pension Benefits			Other Benefits			Total			Total, After Tax
Plan amendments and prior service cost	$	—	$	(25,137	)	$	(3,598	)	$	(28,735	)	$	(22,413	)
Actuarial losses (gains)	59,013		136,102			(12,312		)	182,803			132,931
Total	$	59,013	$	110,965		$	(15,910	)	$	154,068		$	110,518

The following changes in plan assets and benefit obligations were recognized in other comprehensive income (loss), before taxes, for the year ended December 31, 2013:



	U.S. Pension Benefits			Non-U.S. Pension Benefits			Other Benefits			Total			Total, After Tax
Net actuarial losses (gains)	$	(23,145	)	$	(18,795	)	$	(1,988	)	$	(43,928	)	$	(30,381	)
Plan amendments and prior service cost, net	—			17			(3,882		)	(3,865		)	(2,371		)
Amortization of:
Actuarial (losses) gains	(7,782		)	(7,398		)	988			(14,192		)	(9,821		)
Plan amendments and prior service cost	—			3,853			(87		)	3,766			3,046
Impact of foreign currency	—			2,512			—			2,512			2,010
Total	$	(30,927	)	$	(19,811	)	$	(4,969	)	$	(55,707	)	$	(37,517	)

F - 25

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

The accumulated benefit obligations at December 31, 2013 and 2012 were $138.1 million and $156.8 million, respectively, for the U.S. defined benefit pension plan and $785.8 million and $772.9 million, respectively, for all non-U.S. plans. Certain of the plans included within non-U.S. pension benefits have benefit obligations which exceed the fair value of plan assets. The projected benefit obligation, the accumulated benefit obligation and fair value of assets of these plans as of December 31, 2013 were $183.1 million, $168.4 million and $50.3 million, respectively.

The assumed discount rates and rates of increase in future compensation levels used in calculating the projected benefit obligations vary according to the economic conditions of the country in which the retirement plans are situated. The weighted average rates used for the purposes of the Company’s plans are as follows:



	U.S.						Non-U.S.
	2013		2012		2011		2013		2012		2011
Discount rate	4.75	%	3.75	%	4.25	%	2.73	%	2.50	%	3.10	%
Compensation increase rate	n/a		n/a		n/a		1.61	%	1.60	%	1.75	%
Expected long-term rate of return on plan assets	7.50	%	7.75	%	8.00	%	4.87	%	4.89	%	4.80	%

The assumed discount rates, rates of increase in future compensation levels and the long-term rate of return used in calculating the net periodic pension cost vary according to the economic conditions of the country in which the retirement plans are situated. The weighted average rates used for the purposes of the Company’s plans are as follows:



	U.S.						Non-U.S.
	2013		2012		2011		2013		2012		2011
Discount rate	3.75	%	4.25	%	5.25	%	2.50	%	3.10	%	3.60	%
Compensation increase rate	n/a		n/a		n/a		1.60	%	1.75	%	2.20	%
Expected long-term rate of return on plan assets	7.75	%	8.00	%	8.00	%	4.89	%	4.80	%	4.94	%

Net periodic pension cost for the defined benefit plans includes the following components for the years ended December 31:



	U.S.									Non-U.S.
	2013			2012			2011			2013			2012			2011
Service cost, net	$	494		$	455		$	331		$	17,386		$	15,011		$	13,699
Interest cost on projected benefit obligations	5,755			6,093			6,422			19,566			22,104			24,637
Expected return on plan assets	(7,154		)	(6,965		)	(7,499		)	(35,048		)	(32,989		)	(34,325		)
Recognition of actuarial losses/(gains) and prior service costs	7,782			7,664			5,103			3,545			210			(339		)
Net periodic pension cost	$	6,877		$	7,247		$	4,357		$	5,449		$	4,336		$	3,672

Net periodic post-retirement benefit (credit)/cost for the U.S. post-retirement plan includes the following components for the years ended December 31:



	2013			2012			2011
Service cost	$	216		$	333		$	304
Interest cost on projected benefit obligations	405			539			731
Net amortization and deferral	(901		)	(753		)	(692		)
Net periodic post-retirement benefit (credit)/cost	$	(280	)	$	119		$	343

F - 26

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

The amounts remaining in accumulated other comprehensive income (loss) that are expected to be recognized as a component of net periodic pension cost during 2014 are as follows:



	U.S. Pension Benefits		Non-U.S. Pension Benefits			Other Benefits			Total
Plan amendments and prior service costs	$	—	$	(3,941	)	$	(779	)	$	(4,720	)
Actuarial losses (gains)	4,845		4,246			(1,436		)	7,655
Total	$	4,845	$	305		$	(2,215	)	$	2,935

The projected post-retirement benefit obligation was principally determined using discount rates of 4.75% in 2013, 3.75% in 2012 and 4.25% in 2011. Net periodic post-retirement benefit cost was principally determined using discount rates of 3.75% in 2013 and 4.25% in 2012, and 5.25% in 2011. The health care cost trend rate was 8.00% in 2013 and 2012 and 9.00% in 2011, decreasing to 5.00% in 2020.

The health care cost trend rate assumption has a significant effect on the accumulated post-retirement benefit obligation and net periodic post-retirement benefit cost. A one-percentage-point change in health care cost trend rates would have the following effects:



	One-Percentage-Point Increase		One-Percentage-Point Decrease
Effect on total of service and interest cost components	$	56	$	(50	)
Effect on post-retirement benefit obligation	$	208	$	(190	)

The Company’s overall asset investment strategy is to achieve long-term growth while minimizing volatility by widely diversifying among asset types and strategies. Target asset allocations and investment return criteria are established by the pension committee or designated officers of each plan. Target asset allocation ranges for the U.S. pension plan include 30-50% equity securities, 15-35% fixed income securities and 25-45% other types of investments. International plan assets relate primarily to the Company’s Swiss plan with target allocations of 25-45% in equities, 35-55% in fixed income securities and 15-25% in other types of investments. Actual results are monitored against targets and the trustees are required to report to the members of each plan, including an analysis of investment performance on an annual basis at a minimum. Day-to-day asset management is typically performed by third-party asset managers, reporting to the pension committees or designated officers.

The long-term rate of return on plan asset assumptions used to determine pension expense under U.S. GAAP are generally based on estimated future returns for the target investment mix determined by the trustees as well as historical investment performance.

F - 27

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

The following table presents the fair value measurement of the Company’s plan assets by hierarchy level:



	December 31, 2013								December 31, 2012
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Observable Inputs for Identical Assets (Level 2)		Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Observable Inputs for Identical Assets (Level 2)		Unobservable Inputs (Level 3)		Total
Asset Category:
Cash and Cash Equivalents	$	129,932	$	—	$	—	$	129,932	$	141,020	$	—	$	—	$	141,020
Equity Securities:
Mettler-Toledo Stock	3,425		—		—		3,425		3,284		—		—		3,284
Equity Mutual Funds:
U.S.(1)	5,960		27,652		—		33,612		25,880		21,268		—		47,148
International(2)	44,149		54,120		—		98,269		37,982		46,312		—		84,294
Emerging Markets(3)	78,392		5,773		—		84,165		36,449		5,704		—		42,153
Fixed Income Securities:
Corporate/Government	129,155		—		—		129,155		66,331		—		—		66,331
Bonds(4)
Fixed Income Mutual Funds:
Insurance Contracts(5)	—		24,633		1,475		26,108		—		23,015		1,726		24,741
Core Bond(6)	146,857		36,327		—		183,184		147,853		35,980		—		183,833
Real Asset Mutual Funds:
Real Estate(7)	66,431		—		—		66,431		62,172		—		—		62,172
Commodities(8)	23,293		3,323		23,136		49,752		30,976		3,775		22,986		57,737
Other Types of Investments:
Global Allocation Funds(9)	12,002		11,088		—		23,090		29,504		8,572		—		38,076
Multi-Strategy Fund of	—		—		77,312		77,312		—		—		74,985		74,985
Hedge Funds(10)
	$	639,596	$	162,916	$	101,923	$	904,435	$	581,451	$	144,626	$	99,697	$	825,774


(1)	Represents primarily large capitalization equity mutual funds tracking the S&P 500 Index.


(2)	Represents all capitalization core and value equity mutual funds located primarily in Switzerland, the United Kingdom and Canada.


(3)	Represents core and growth mutual funds and funds of mutual funds invested in emerging markets primarily in Eastern Europe, Latin America and Asia.


(4)	Represents investments in high-grade corporate and government bonds located in Switzerland and the European Union.


(5)	Represents fixed and variable rate annuity contracts provided by insurance companies.


(6)	Represents fixed income mutual funds invested in the U.S., the United Kingdom, Switzerland and European government bonds, high-grade corporate bonds, mortgage-backed securities and collateralized mortgage obligations.


(7)	Represents mutual funds invested in real estate located primarily in Switzerland.


(8)	Represents commodity funds invested across a broad range of sectors.


(9)	Represents mutual funds invested globally in both equities and fixed income securities.


(10)	Represents primarily equity investments to profit from long and short equity positions, economic and government driven events and relative value and tactical trading strategies.

The fair value of the Company’s stock and corporate and government bonds are valued at the year end closing price as reported on the securities exchange on which they are traded. Mutual funds are valued at the exchange-listed year end closing price or at the net asset value of shares held by the fund at the end

F - 28

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

of the year. Insurance contracts are valued by discounting the related cash flows using a current year end market rate or at cash surrender value, which is presumed to equal fair value. Funds of hedge funds are valued at the net asset value of shares held by the fund at the end of the year.

The following table presents a rollforward of activity for the years ended December 31, 2013 and 2012 for level 3 asset categories:



	Multi- Strategy Fund of Hedge Funds			Commodities			Insurance Contract			Convertible Preferred Equity Certificates			Total
Balance at December 31, 2011	$	78,650		$	21,816		$	1,661		$	14,366		$	116,493
Actual return on plan assets:
Related to assets held at end of year	1,099			533			31			—			1,663
Related to assets sold during the year	317			—			3			2,240			2,560
Purchases	8,638			—			161			—			8,799
Sales	(15,418		)	—			(165		)	(16,636		)	(32,219		)
Impact of foreign currency	1,699			637			35			30			2,401
Balance at December 31, 2012	$	74,985		$	22,986		$	1,726		$	—		$	99,697
Actual return on plan assets:
Related to assets held at end of year	1,420			(449		)	69			—			1,040
Purchases	11,792			—			127			—			11,919
Sales	(12,691		)	—			(519		)	—			(13,210		)
Impact of foreign currency	1,806			599			72			—			2,477
Balance at December 31, 2013	$	77,312		$	23,136		$	1,475		$	—		$	101,923

There were no transfers between any asset levels during the years ended December 31, 2013 and 2012.

The following benefit payments, which reflect expected future service as appropriate, are expected to be paid:



	U.S. Pension Benefits		Non-U.S. Pension Benefits		Other Benefits Net of Subsidy		Total
2014	$	7,082	$	43,703	$	508	$	51,293
2015	7,268		42,903		510		50,681
2016	7,489		44,259		491		52,239
2017	7,842		45,016		493		53,351
2018	8,129		44,480		499		53,108
2019-2023	44,543		224,801		2,516		271,860

The Company made voluntary incremental pension contributions of $17.6 million in 2013 and $1.0 million in 2012 to increase the funded status of its pension plans. The Company does not expect to receive any refunds from its benefit plans during 2014.

In 2014, the Company expects to make employer pension contributions of approximately $21.8 million to its non-U.S. pension plan and employer contributions of approximately $0.5 million to its U.S. post-retirement medical plan.

F - 29

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)


14.	TAXES

The sources of the Company’s earnings before taxes were as follows for the years ending December 31:



	2013		2012		2011
United States	$	18,119	$	32,296	$	(6,758	)
Non-United States	384,590		350,305		355,935
Earnings before taxes	$	402,709	$	382,601	$	349,177

The provisions for taxes consist of:



	Current		Deferred			Total
Year ended December 31, 2013:
United States federal	$	—	$	8,249		$	8,249
State and local	1,459		965			2,424
Non-United States	86,340		(398		)	85,942
Total	$	87,799	$	8,816		$	96,615
Year ended December 31, 2012:
United States federal	$	—	$	12,341		$	12,341
State and local	1,372		87			1,459
Non-United States	84,962		(7,008		)	77,954
Total	$	86,334	$	5,420		$	91,754
Year ended December 31, 2011:
United States federal	$	—	$	(9,111	)	$	(9,111	)
State and local	1,512		(482		)	1,030
Non-United States	75,580		12,185			87,765
Total	$	77,092	$	2,592		$	79,684

The provisions for tax expense for the years ending December 31, 2013, 2012 and 2011 differed from the amounts computed by applying the United States federal income tax rate of 35% to the earnings before taxes as a result of the following:



	2013			2012			2011
Expected tax	$	140,948		$	133,910		$	122,212
United States state and local income taxes, net of federal income tax benefit	1,167			1,459			1,030
Change in valuation allowance	1,178			—			—
Other non-United States income taxes at other than a 35% rate	(50,041		)	(44,288		)	(36,814		)
Other, net	3,363			673			(6,744		)
Total provision for taxes	$	96,615		$	91,754		$	79,684

F - 30

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below at December 31, 2013:



	2013			2012
Deferred tax assets:
Inventory	$	23,957		$	20,615
Accrued and other liabilities	74,755			67,426
Accrued post-retirement benefit and pension costs	48,296			62,980
Net operating loss and tax credit carryforwards	43,939			39,018
Other	12,832			17,938
Total deferred tax assets	203,779			207,977
Less valuation allowance	(31,697		)	(23,177		)
Total deferred tax assets less valuation allowance	172,082			184,800
Deferred tax liabilities:
Inventory	4,155			3,788
Property, plant and equipment	51,763			47,172
Rainin intangibles amortization	59,889			54,507
Prepaid post-retirement benefit and pension costs	44,049			39,593
International earnings	10,838			10,458
Total deferred tax liabilities	170,694			155,518
Net deferred tax (liability) asset	$	1,388		$	29,282

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:



	2013			2012
Unrecognized tax benefits at beginning of year	$	17,780		$	20,150
Increases related to current tax positions	2,024			2,470
Increases related to prior year tax positions	1,137			—
Decreases related to prior year tax positions	(362		)	(378		)
Foreign currency translation (decreases) increases to prior year tax positions	101			58
Decreases relating to taxing authority settlements	(393		)	(128		)
Decreases resulting from a lapse of the applicable statute of limitations	(1,439		)	(4,392		)
Unrecognized tax benefits at end of year	$	18,848		$	17,780

Included in the balance of unrecognized tax benefits at December 31, 2013 and 2012 were $15.5 million and $14.0 million, respectively of tax benefits that if recognized, would reduce the Company’s effective tax rate. The Company recognizes accrued amounts of interest and penalties related to its uncertain tax positions as part of its income tax expense within its consolidated statement of operations. The amount of accrued interest and penalties included within other non-current liabilities within the Company’s consolidated balance sheet as of December 31, 2013 and 2012 was $1.6 million and $1.3 million, respectively.

The Company believes that it is reasonably possible that the unrecognized tax benefit balance could change over the next twelve months, primarily related to potential disputes raised by the taxing authorities over income and expense recognition. An estimate of the range of these increases cannot currently be made. However, the Company does not expect a change would have a material impact on its financial position, results of operations or cash flows.

F - 31

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

The Company has recorded valuation allowances related to certain of its deferred income tax assets due to the uncertainty of the ultimate realization of future benefits from such assets. The potential decrease or increase of the valuation allowance in the near term is dependent on the future ability of the Company to realize the deferred tax assets that are affected by the future profitability of operations in various worldwide jurisdictions. The $8.5 million increase and $11.6 million decrease in the total valuation allowance during 2013 and 2012, respectively, are primarily attributable to changes in the foreign tax credit carryforward and foreign currency fluctuation differences.

The deferred tax assets and valuation allowance as of December 31, 2013 do not include certain deferred tax assets that arose directly from (or the use of which was postponed by) tax deductions related to equity compensation in excess of compensation expense recorded. Shareholders' equity will be increased by $32.5 million if and when such deferred tax assets are ultimately realized.

Certain adjustments have been made to prior year amounts to correct the presentation of deferred taxes in the consolidated balance sheet. In the fourth quarter of 2013, we reduced December 31, 2012 non-current deferred tax assets and non-current deferred tax liabilities by $94 million in order to offset deferred tax balances within the same jurisdiction in accordance with ASC 740 (Income Taxes). This revision did not affect the Company’s Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, Consolidated Statements of Shareholders’ Equity or Consolidated Statements of Cash Flows for any period.

At December 31, 2013, the Company has various U.S. state net operating losses and various foreign net operating losses that have various expiration periods.

The Company plans to repatriate earnings from China, Switzerland, Germany, the United Kingdom and certain other countries in future years and believes that there will be no additional cost associated with the repatriation of such foreign earnings other than withholding taxes. All other undistributed earnings are considered to be permanently reinvested.

During the third quarter of 2011, the Company recorded discrete tax items resulting in a net tax benefit $3.8 million, primarily related to the favorable resolution of certain prior year tax matters.

As of December 31, 2013, the major jurisdictions for which the Company is subject to examinations are Germany for years after 2008, the United States after 2009, France after 2010, Switzerland after 2009, the United Kingdom after 2010 and China after 2011. Additionally, the Company is currently under examination in various taxing jurisdictions in which it conducts business operations. While the Company has not yet received any material assessments from these taxing authorities, the Company believes that adequate amounts of taxes and related interest and penalties have been provided for any adverse adjustments as a result of these examinations and that the ultimate outcome of these examinations will not result in a material impact on the Company’s consolidated results of operations or financial position.


15.	RESTRUCTURING CHARGES

During 2012 and 2013, we initiated additional cost reduction measures in response to global economic conditions. For the years ending December 31, 2013 and 2012, we have incurred $19.8 million and $16.7 million, respectively, of restructuring expenses which primarily comprise employee related costs. Liabilities related to restructuring activities are included in accrued and other liabilities in the consolidated balance sheet.

F - 32

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

A rollforward of the Company’s accrual for restructuring activities for the years ended December 31, 2013 and 2012 is as follows:



	Employee Related			Other			Total
Balance at December 31, 2011	$	7,469		$	100		$	7,569
Restructuring charges	14,652			2,035			16,687
Cash payments / utilization	(10,746		)	(1,845		)	(12,591		)
Impact of foreign currency	280			—			280
Balance at December 31, 2012	11,655			290			11,945
Restructuring charges	15,196			4,634			19,830
Cash payments / utilization	(14,156		)	(4,793		)	(18,949		)
Impact of foreign currency	359			—			359
Balance at December 31, 2013	$	13,054		$	131		$	13,185


16.	OTHER CHARGES (INCOME), NET

Other charges (income), net consists primarily of (gains) losses from foreign currency transactions, interest income and other items.


17.	COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain of its facilities and equipment under operating leases. The future minimum lease payments under non-cancelable operating leases are as follows at December 31, 2013:



2014	$	33,028
2015	24,980
2016	16,063
2017	10,024
2018	7,418
Thereafter	10,004
Total	$	101,517

Rent expense for operating leases amounted to $37.0 million, $36.7 million and $34.3 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Legal

The Company is party to various legal proceedings, including certain environmental matters, incidental to the normal course of business. Management does not expect that any of such proceedings will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

F - 33

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)


18.	SEGMENT REPORTING

The Company has five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other. U.S. Operations represent certain of the Company’s marketing and producing organizations located in the United States. Western European Operations include the Company’s marketing and producing organizations in Western Europe, excluding operations located in Switzerland. Swiss Operations include marketing and producing organizations located in Switzerland as well as extensive R&D operations that are responsible for the development, production and marketing of precision instruments, including weighing, analytical and measurement technologies for use in a variety of industrial and laboratory applications. Chinese Operations represent the Company’s marketing and producing organizations located in China. The Company’s market organizations are geographically focused and are responsible for all aspects of the Company’s sales and service. Operating segments that exist outside these reportable segments are included in Other.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on segment profit for segment reporting (gross profit less research and development and selling, general and administrative expenses, before amortization, interest expense, restructuring charges, other charges (income), net and taxes). Inter-segment sales and transfers are priced to reflect consideration of market conditions and the regulations of the countries in which the transferring entities are located.

The following tables show the operations of the Company’s operating segments:



For the Year Ended December 31, 2013	Net Sales to External Customers		Net Sales to Other Segments			Total Net Sales			Segment Profit			Depreciation		Total Assets			Purchase of Property, Plant and Equipment			Goodwill

U.S. Operations	$	720,568	$	81,283		$	801,851		$	138,366		$	6,223	$	1,242,501		$	(6,297	)	$	307,933
Swiss Operations	127,031		440,177			567,208			151,743			6,576		1,090,353			(6,801		)	24,288
Western European Operations	674,620		111,707			786,327			111,828			4,708		1,059,525			(6,096		)	108,662
Chinese Operations	407,131		149,084			556,215			122,214			6,527		731,650			(6,200		)	746
Other(a)	449,622		6,308			455,930			49,228			2,694		257,141			(7,172		)	14,213
Eliminations and Corporate(b)	—		(788,559		)	(788,559		)	(100,487		)	8,037		(2,228,351		)	(49,783		)	—
Total	$	2,378,972	$	—		$	2,378,972		$	472,892		$	34,765	$	2,152,819		$	(82,349	)	$	455,842



For the Year Ended December 31, 2012	Net Sales to External Customers		Net Sales to Other Segments			Total Net Sales			Segment Profit			Depreciation		Total Assets			Purchase of Property, Plant and Equipment			Goodwill

U.S. Operations	$	699,361	$	78,759		$	778,120		$	138,894		$	5,799	$	1,128,902		$	(10,988	)	$	307,933
Swiss Operations	124,362		406,485			530,847			133,691			7,194		922,620			(5,529		)	23,684
Western European Operations	644,361		101,952			746,313			95,523			4,947		975,174			(5,504		)	105,522
Chinese Operations	432,255		123,669			555,924			125,217			5,567		631,075			(9,872		)	717
Other(a)	441,189		6,538			447,727			48,857			2,653		237,232			(5,542		)	14,495
Eliminations and Corporate(b)	—		(717,403		)	(717,403		)	(97,683		)	7,261		(1,872,715		)	(58,153		)	—
Total	$	2,341,528	$	—		$	2,341,528		$	444,499		$	33,421	$	2,022,288		$	(95,588	)	$	452,351

F - 34

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)



For the Year Ended December 31, 2011	Net Sales to External Customers		Net Sales to Other Segments			Total Net Sales			Segment Profit			Depreciation		Total Assets			Purchase of Property, Plant and Equipment			Goodwill

U.S. Operations	$	665,245	$	80,013		$	745,258		$	121,398		$	5,757	$	1,037,238		$	(6,926	)	$	307,485
Swiss Operations	143,520		411,788			555,308			113,997			7,581		795,828			(8,178		)	22,986
Western European Operations	692,348		107,585			799,933			99,969			5,065		963,563			(4,962		)	101,899
Chinese Operations	388,592		126,550			515,142			120,857			4,920		366,442			(15,601		)	710
Other(a)	419,623		6,348			425,971			50,045			2,161		328,867			(4,088		)	14,663
Eliminations and Corporate(b)	—		(732,284		)	(732,284		)	(107,763		)	6,205		(1,377,028		)	(58,745		)	—
Total	$	2,309,328	$	—		$	2,309,328		$	398,503		$	31,689	$	2,114,910		$	(98,500	)	$	447,743


(a)	Other includes reporting units in Eastern Europe, Latin America, Southeast Asia and other countries.


(b)	Eliminations and Corporate includes the elimination of inter-segment transactions as well as certain corporate expenses and intercompany investments, which are not included in the Company’s operating segments.

A reconciliation of earnings before taxes to segment profit follows:



	2013		2012		2011
Earnings before taxes	$	402,709	$	382,601	$	349,177
Amortization	24,539		21,357		17,808
Interest expense	22,711		22,764		23,226
Restructuring charges	19,830		16,687		5,912
Other charges (income), net	3,103		1,090		2,380
Segment profit	$	472,892	$	444,499	$	398,503

During 2013 restructuring charges of $19.8 million were recognized, of which $1.7 million, $8.0 million, $7.7 million, $2.0 million, and $0.4 million relate to the Company’s U.S., Swiss, Western European, Chinese, and Other Operations, respectively. Restructuring charges of $16.7 million were recognized in 2012, of which $1.7 million, $5.7 million, $7.8 million, $1.1 million, and $0.4 million relate to the Company's U.S., Swiss, Western European, Chinese, and Other Operations, respectively.

The Company sells precision instruments, including weighing instruments and certain analytical and measurement technologies, and related services to a variety of customers and industries. None of these customers account for more than 1% of net sales. Service revenues are primarily derived from repair and other services including regulatory compliance qualification, calibration, certification and preventative maintenance.

A breakdown of the Company's sales by product category for the years ended December 31 follows:



	2013		2012		2011
Laboratory	$	1,100,632	$	1,071,299	$	1,047,319
Industrial	1,065,605		1,063,653		1,038,871
Retail	212,735		206,576		223,138
Total net sales	$	2,378,972	$	2,341,528	$	2,309,328

F - 35

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)

In certain circumstances, our operating segments sell directly into other geographies. A breakdown of net sales to external customers by geographic customer destination and property, plant and equipment, net for the years ended December 31 follows:



	Net Sales						Property, Plant and Equipment, Net
	2013		2012		2011		2013		2012
United States	$	664,665	$	643,902	$	612,643	$	133,323	$	66,978
Other Americas	168,347		161,853		159,756		4,831		4,074
Total Americas	833,012		805,755		772,399		138,154		71,052
Germany	195,521		183,859		200,062		29,008		26,404
France	122,658		123,007		136,589		6,737		6,781
United Kingdom	65,922		62,389		66,321		6,001		6,103
Switzerland	74,574		65,430		79,376		243,697		275,944
Other Europe	377,353		355,266		379,784		7,936		6,767
Total Europe	836,028		789,951		862,132		293,379		321,999
China	396,620		422,894		379,791		74,546		69,784
Rest of World	313,312		322,928		295,006		8,359		6,586
Total Asia/Rest of World	709,932		745,822		674,797		82,905		76,370
Total	$	2,378,972	$	2,341,528	$	2,309,328	$	514,438	$	469,421

F - 36

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except share data, unless otherwise stated)


19.	QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial data for the years ended December 31, 2013 and 2012 are as follows:



	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
2013
Net sales	$	524,353		$	578,680		$	591,686		$	684,253
Gross profit	279,253			308,843			318,573			375,357
Net earnings	$	52,544		$	69,062		$	74,326		$	110,162
Basic earnings per common share:
Net earnings	$	1.73		$	2.29		$	2.49		$	3.72
Weighted average number of common shares	30,299,569			30,119,889			29,818,218			29,596,949
Diluted earnings per common share:
Net earnings	$	1.69		$	2.24		$	2.43		$	3.63
Weighted average number of common and common equivalent shares	31,101,979			30,849,934			30,579,954			30,366,603
Market price per share:
High	$	221.56		$	228.00		$	242.56		$	253.27
Low	$	196.72		$	197.91		$	205.55		$	233.71
2012
Net sales	$	535,400		$	570,283		$	578,553		$	657,292
Gross profit	277,102			299,008			308,157			356,788
Net earnings	$	52,327		$	61,704		$	72,183		$	104,633
Basic earnings per common share:
Net earnings	$	1.66		$	1.97		$	2.34		$	3.43
Weighted average number of common shares	31,531,915			31,267,660			30,846,062			30,532,491
Diluted earnings per common share:
Net earnings	$	1.62		$	1.93		$	2.28		$	3.35
Weighted average number of common and common equivalent shares	32,386,924			32,038,928			31,599,081			31,271,377
Market price per share:
High	$	189.67	185.08	$	185.08	195.00	$	177.44	185.08	$	195.00
Low	$	152.19	150.57	$	150.57	161.80	$	148.68	150.57	$	161.80

F - 37

Schedule II — Valuation and Qualifying Accounts (in thousands)



Column A	Column B			Column C					Column D		Column E
				Additions
				(1)		(2)
	Balance at the Beginning of Period			Charged to Costs and Expenses		Charged to Other Accounts					Balance at End of Period
Description			-Deductions-
						Note (A)			Note (B)
Accounts receivable — allowance for doubtful accounts:
Year ended December 31, 2013	$	14,120		$	1,775	$	115		$	1,154	$	14,856
Year ended December 31, 2012	$	12,317		$	2,106	$	267		$	570	$	14,120
Year ended December 31, 2011	$	11,536		$	1,933	$	(220	)	$	932	$	12,317
Deferred tax valuation allowance:
Year ended December 31, 2013	$	23,177		$	—	$	10,131		$	1,611	$	31,697
Year ended December 31, 2012	$	34,738		$	—	$	4,764		$	16,325	$	23,177
Year ended December 31, 2011	$	44,669		$	—	$	912		$	10,843	$	34,738

Note (A)

For accounts receivable, amounts comprise currency translation adjustments.

For deferred tax valuation allowance in 2013, 2012 and 2011, amounts relate primarily to changes in foreign tax credit carryforwards and foreign currency differences recorded through other comprehensive income.

Note (B)

For accounts receivable, amounts represent excess of uncollectible balances written off over recoveries of accounts previously written off.

For deferred tax valuation allowance, the decrease in 2013 relates primarily to decreases in foreign tax loss carryforwards, while in 2012 and 2011 the reductions relate primarily to a decrease of recorded foreign tax credit and research and development tax credits.

S- 1

Previous: Item 14. Principal Accounting Fees and Services