Mettler-Toledo (MTD) 10-K risk factor changes: FY2014 vs FY2013

In addition, if developed countries [removed: continue] [added: were] to experience slow growth or recession, we could see the following effects:

In addition, concerns in recent years have existed regarding the overall stability of the [removed: euro,] [added: euro] and the suitability of the euro as a single currency given the diverse economic and political circumstances in individual Eurozone countries.

In addition, concerns over the effect of this financial crisis on financial institutions in Europe and globally could have an adverse effect on the global capital markets and, more [removed: specifically] [added: specifically,] on the ability of our Company, our customers, [removed: suppliers] [added: suppliers,] and lenders to finance their respective businesses, to access liquidity at acceptable financing costs, if at all, on the availability of supplies and [removed: materials] [added: materials,] and on the demand for our products.

We conduct business in many countries, including emerging markets in Asia, Latin [removed: America] [added: America,] and Eastern Europe, and these operations represent a significant portion of our sales and earnings.

For example, our Chinese operations account for 17% of sales to external [removed: customers and] [added: customers,] approximately 30% of our global production, and 26% of segment profit during [removed: 2013.][added: 2014.]

| • | nationalization of private enterprises which may result in the confiscation of [removed: assets] [added: assets,] as we hold significant assets around the world in the form of property, [removed: plant] [added: plant,] and equipment, [removed: inventory] [added: inventory,] and accounts receivable, as well as [removed: $64.4] [added: $46.3] million of cash at December 31, [removed: 2013] [added: 2014] in our Chinese subsidiaries; |

| • | other uncertain local economic, [removed: political] [added: political,] and social conditions, including hyper-inflationary conditions or periods of low or no productivity growth; and |

We are required to comply with various import, export [removed: control] [added: control,] and economic sanctions laws, which may affect our transactions with certain customers, business [removed: partners] [added: partners,] and other persons, including in certain cases dealings with or between our employees and subsidiaries.

In certain circumstances, export control and economic sanctions regulations may prohibit the export of certain products, [removed: services] [added: services,] and technologies, and in other circumstances, we may be required to obtain an export license before exporting a controlled item.

[removed: These] [added: Current Chinese] market conditions reflect overcapacity in certain end-user segments and a reduction of credit availability for many local Chinese customers.

[added: As a result, we face numerous regional or] specialized competitors, many of which are well established in their markets.

We rely on our technology infrastructure to interact with suppliers, sell our products and services, support our customers, fulfill [removed: orders] [added: orders,] and bill, [removed: collect] [added: collect,] and make payments.

Our systems are vulnerable to damage or interruption from natural disasters, power loss, telecommunication failures, terrorist [added: or hacker] attacks, computer viruses, and other events.

When we upgrade or change systems, we may suffer interruptions in service, loss of [removed: data] [added: data,] or reduced functionality.

Despite any precautions we may take, such problems could result in interruptions in our [removed: services] [added: services, fraudulent loss of assets,] or unauthorized disclosure of confidential information, which could harm our reputation and financial condition.

We do not carry business interruption insurance sufficient to compensate us for losses that may result from interruptions in our services [added: or data loss] as a result of system failures.

We have implemented the program in our Swiss, [removed: Chinese] [added: Chinese,] and certain U.S. [added: and German] operations and [removed: now] have [removed: approximately] [added: more than] half of the program implemented, as measured in users.

In addition, the implementation will increase our reliance on a single information technology [removed: system] [added: system,] which would have greater consequences should we experience a system disruption.

We have key manufacturing facilities located in China, [removed: Europe] [added: Europe,] and the United States.

We purchase most of our raw materials, [removed: components] [added: components,] and supplies from multiple suppliers.

A prolonged downturn or additional consolidation in the pharmaceutical, food and [removed: beverage] [added: beverage,] and chemical industries could adversely affect our operating results.

Our products are used extensively in the pharmaceutical, food and [removed: beverage] [added: beverage,] and chemical industries.

In addition, the capital spending policies of our customers in these and other industries are based on a variety of factors we cannot control, including the resources available for purchasing equipment, the spending priorities among various types of [removed: equipment] [added: equipment,] and policies regarding capital expenditures.

Our effective tax rates could be adversely affected by changes in the mix of earnings by jurisdiction, changes in tax laws or tax rates, changes in the valuation of deferred tax assets and [removed: liabilities] [added: liabilities,] and material adjustments from tax audits.

Any changes in corporate income tax rates or regulations, on repatriation of dividends or capital, [added: or] on transfer [removed: pricing] [added: pricing,] as well as changes in the interpretation of existing tax laws and regulations in the jurisdictions in which we [removed: operate] [added: operate,] could adversely affect our cash flow and increase our overall tax burden, which would negatively affect our profitability.

This exposes us to various risks, including competitive pressure, concentration of sales volumes, credit [removed: risks] [added: risks,] and compliance risks.

In recent years, a number of countries have experienced outbreaks of the H1N1 influenza (swine flu) or, in the Asia Pacific region, outbreaks of SARS and/or avian influenza (bird [removed: flu).][added: flu), and more recently, Ebola outbreaks in parts of Africa.]

Outbreaks of infectious diseases such as these, particularly in North America, Europe, [removed: China] [added: China,] or other locations significant to our operations, could adversely affect general commercial activity, which could have a material adverse effect on our financial condition, results of operations, [removed: business] [added: business,] or prospects.

We may pursue acquisitions of complementary product lines, [removed: technologies] [added: technologies,] or businesses.

Acquisitions involve numerous risks, including difficulties in integrating the acquired operations, [removed: technologies] [added: technologies,] and products; diversion of management’s attention from other business concerns; and potential departures of key employees of the acquired company.

If we successfully identify acquisitions in the future, completing such acquisitions may result in new issuances of our stock that may be dilutive to current owners, increases in our debt and contingent [removed: liabilities] [added: liabilities,] and additional amortization expense related to intangible assets.

[added: In addition, we may not be able] to identify, successfully [removed: complete] [added: complete,] or integrate potential acquisitions in the future.

Our success depends on our ability to obtain and enforce patents on our technology, maintain our [removed: trademarks] [added: trademarks,] and protect our trade secrets.

If we are unsuccessful in such litigation, we may have to pay damages, stop the infringing [removed: activity] [added: activity,] and/or obtain a license.

We are subject to various environmental laws and regulations [added: and] incur expenditures in complying with environmental laws and regulations.

We may be adversely affected by [removed: new] regulations relating to conflict minerals.

In August 2012, the SEC adopted [removed: new] disclosures and reporting requirements for companies whose products contain certain minerals and their derivatives, namely tin, tantalum, [removed: tungsten] [added: tungsten,] or gold, known as conflict minerals.

The implementation of these [removed: new] requirements could adversely affect the sourcing, [removed: availability] [added: availability,] and pricing of materials used in the manufacturing of our products.

These [removed: new] requirements also could have the effect of limiting the pool of suppliers from which we source these minerals, and we may be unable to obtain conflict-free minerals at prices similar to the past, which could increase our costs and adversely affect our manufacturing operations and our profitability.

These regulations govern a wide variety of activities relating to our products, from design and development, product safety, labeling, manufacturing, promotion, [removed: sales] [added: sales,] and distribution.

We do business in Russia and Crimea.

Sanctions imposed on business in these regions will likely affect the economies and our business in these regions.

The notional amount and average forward rate of our foreign currency forward contracts is Euro 86 million and 1.21 for contracts that mature in 2015, and Euro 67 million and 1.19 for contracts that mature in 2016, respectively.

The Swiss National Bank's abandonment of the euro exchange rate floor resulted in an immediate strengthening of the Swiss franc against the euro and U.S. dollar.

We also estimate a 1% strengthening of the Swiss franc against the U.S. dollar would reduce our earnings before tax by approximately $0.5 million to $0.7 million annually in addition to the previously mentioned strengthening of the Swiss franc against the euro impact.

The most significant of these currency exposures is the Chinese Renminbi.

Our net sales to external customers in China decreased 8% in 2013 versus the previous year in local currencies primarily related to weaker market conditions.

As a result, we face numerous regional or

In addition, we may not be able

These types of events and resulting analysis could result in

A few factors help us manage these exchange rate risks.

The floor has effectively stopped the strengthening of the Swiss franc beyond the 1.20 level.

We do not know how long the Swiss National Bank will maintain this exchange rate floor.

The forward contracts expire in January 2015.

We operate a global [removed: business,] [added: business] with sales that are diversified by geographic region, product [removed: range] [added: range,] and customer.

Net sales in U.S. dollars increased by [removed: 2%] [added: 4%] in [removed: 2013] [added: 2014] and [removed: by 1%] [added: 2%] in [removed: 2012.][added: 2013.]

Excluding the effect of currency exchange rate fluctuations, or in local currencies, net sales increased [removed: 1%] [added: 5%] in [removed: 2013] [added: 2014] and [removed: 4%] [added: 1%] in [removed: 2012.][added: 2013.]

[removed: However, we] [added: We] expect to continue to benefit from our strong global leadership positions, diversified customer base, robust product offering, investment in emerging [removed: markets] [added: markets, significant installed base,] and the impact of our global sales and marketing programs.

Examples of these programs include identifying and investing in growth [added: and market penetration] opportunities, improving our lead generation and lead nurturing processes, [removed: further penetrating our market segments] and more effectively pricing our products and services.

With respect to our end-user markets, we experienced increased results during [removed: 2013] [added: 2014] versus the prior year in our laboratory-related [removed: end-user] markets, such as pharmaceutical and biotech [removed: customers] [added: customers,] as well as the laboratories of chemical companies and food and beverage companies.

[removed: However, demand] [added: Demand] from these markets was [removed: partially][added: generally strong during 2014.]

Overall, Chinese market conditions for our [added: industrial-related] products were weak during [added: 2014 and] 2013 related to overcapacity in certain end-user segments and a reduction of credit availability for many local Chinese customers.

Our [removed: industrial] [added: industrial- related] products are especially sensitive to changes in economic growth.

Traditionally the spending levels in this sector have experienced more volatility than our other customer sectors due to the timing of customer project activity [removed: or] [added: and] new [removed: regulation.][added: regulations.]

In [removed: 2014,] [added: 2015,] we expect to continue to pursue the overall business growth strategies which we have followed in recent years:

We [added: also] aim to gain market share by implementing sophisticated sales and marketing programs and leveraging our extensive customer databases.

Our comprehensive service [removed: offerings also] [added: offerings, and our initiatives to globalize and harmonize these offerings,] help us further penetrate developed markets.

Emerging markets, comprising Asia (excluding Japan), Eastern Europe, Latin America, the Middle [removed: East] [added: East,] and Africa, account for approximately [removed: 35%] [added: 36%] of our total net sales.

We have over a 25-year track record in China, and our sales in Asia have grown more than [removed: 17%] [added: 16%] on a compound annual growth basis in local currencies since 1999.

We are pleased with our accomplishments in China and in recent years have expanded our territory coverage into second-tier cities with new branch offices, additional [removed: dealers] [added: dealers,] and more service professionals.

Chinese market conditions for our [added: industrial] products [removed: were] [added: also continued to be] weak in [removed: 2013] [added: 2014] related to overcapacity in certain end-user segments and a reduction of credit availability for many local Chinese customers.

Within [removed: China] [added: China,] we are redeploying resources and sales and marketing efforts to the [removed: faster- growing] [added: faster-growing] segments of pharma, food [removed: safety] [added: safety,] and environment.

[added: We believe the long-term growth of these] segments will be favorably impacted by the Chinese government's emphasis on science, high-value [removed: industries] [added: industries,] and product quality.

We expect our laboratory, process [removed: analytics] [added: analytics,] and product inspection businesses will particularly benefit from these segments.

[removed: For example, we] [added: We] have [added: also] initiated various restructuring programs over the past few years in response to [removed: weakening] [added: weak] market conditions.

[removed: We] [added: For example, we] have [removed: also] focused on reallocating resources and better aligning our cost structure to support [added: our investments in market penetration initiatives,] higher growth [removed: areas] [added: areas,] and opportunities for margin improvement.

We seek to pursue acquisitions that may leverage our global sales and service network, respected brand, extensive distribution [removed: channels] [added: channels,] and technological leadership.

We have identified life sciences, product [removed: inspection] [added: inspection,] and process analytics as three key areas for acquisitions.

Net sales were [removed: $2,379.0] [added: $2,486.0] million for the year ended December 31, [removed: 2013,] [added: 2014,] compared to [removed: $2,341.5] [added: $2,379.0] million in [removed: 2012] [added: 2013] and [removed: $2,309.3] [added: $2,341.5] million in [removed: 2011.][added: 2012.]

This represents increases of [removed: 2%] [added: 4%] in [removed: 2013,] [added: 2014] and [removed: 1%] [added: 2%] in [removed: 2012] [added: 2013] in U.S. dollars and [removed: 1%] [added: 5%] and [removed: 4%] [added: 1%] in local currencies, respectively.

In [removed: 2013,] [added: 2014,] our net sales by geographic destination increased in U.S. dollars by [removed: 3%] [added: 5%] in [added: both] the Americas and [removed: 6% in] Europe and [removed: decreased 5%] [added: 3%] in Asia/Rest of World.

In local currencies, our net sales by geographic destination increased in [removed: 2013] [added: 2014] by [removed: 3%] [added: 6%] in [removed: both] the [removed: Americas and] [added: Americas, 5% in] Europe, [removed: while net sales] [added: and 4%] in Asia/Rest of [removed: World decreased 4%.][added: World.]

Net sales in local currencies for Asia/Rest of World for the year ended December 31, [removed: 2013] [added: 2014] were reduced by approximately 1%, due to the exit of certain industrial-related businesses in China.

As described in Note [removed: 18] [added: 16] to our audited consolidated financial statements, our net sales comprise product sales of precision instruments and related services.

Service revenues are primarily derived from repair and other services, including regulatory compliance qualification, calibration, certification, preventative [removed: maintenance] [added: maintenance,] and spare parts.

Net sales of products increased [removed: 1%] [added: 4%] in [added: both] U.S. dollars and [removed: were flat in] local currencies during [removed: 2013] [added: 2014] and increased by 1% in U.S. dollars and [removed: 4%] [added: were flat] in local currencies in [removed: 2012.][added: 2013.]

Service revenue (including spare parts) increased by [removed: 6%] [added: 7%] in [removed: U. S.] [added: U.S.] dollars and [removed: 5%] [added: 8%] in local currencies in [removed: 2013,] [added: 2014,] and [removed: 1%] [added: 6%] and 5% in U.S. dollars and local currencies, respectively, in [removed: 2012.][added: 2013.]

Net sales of our laboratory-related products, which represented approximately [removed: 46%] [added: 47%] of our total net sales in [removed: 2013,] [added: 2014,] increased by [removed: 3%] [added: 6%] in both U.S. dollars and local currencies during [removed: 2013.][added: 2014.]

Net sales of our industrial-related products, which represented approximately [removed: 45%] [added: 44%] of our total net sales in [removed: 2013, were flat] [added: 2014, increased 4%] in [added: both] U.S. dollars and [removed: decreased 1% in] local currencies during [removed: 2013.][added: 2014.]

Net sales [removed: in] [added: of] our food retailing products, which represented approximately 9% of our total net sales in [removed: 2013,] [added: 2014,] increased by [removed: 3%] [added: 2%] in [added: both] U.S. dollars and [removed: 1% in] local currencies during [removed: 2013.][added: 2014.]

The increase in net sales [added: in local currencies] of our food retailing [removed: markets included strong volume growth] [added: products during 2014 is driven by increased project activity] in [added: Europe, offset in part by reduced sales in] the Americas due to [removed: increased] [added: the timing of] project activity.

Gross profit as a percentage of net sales was [removed: 53.9%] [added: 54.7%] for [removed: 2013,] [added: 2014,] compared to [removed: 53.0%] [added: 53.9%] for [removed: 2012] [added: 2013] and [removed: 52.8%] [added: 53.0%] for [removed: 2011.][added: 2012.]

Gross profit as a percentage of net sales for products was [removed: 57.3%] [added: 58.1%] for [removed: 2013,] [added: 2014,] compared to [removed: 56.2%] [added: 57.3%] for [removed: 2012] [added: 2013] and [removed: 56.3%] [added: 56.2%] for [removed: 2011.][added: 2012.]

Gross profit as a percentage of net sales for services (including spare parts) was [removed: 41.6%] [added: 42.8%] for [removed: 2013,] [added: 2014,] compared to [removed: 40.9%] [added: 41.7%] for [removed: 2012] [added: 2013] and [removed: 39.4%] [added: 40.9%] for [removed: 2011.][added: 2012.]

Net sales growth during 2014 benefited from improved market conditions, especially in the United States.

We remain cautious about our sales growth outlook as global market conditions remain uncertain, especially in certain emerging markets (including China), as well as parts of Europe.

We also experienced increased demand from universities and government-funded research institutions.

Our industrial markets, especially product inspection, were favorably impacted by our customer's focus on brand protection and food safety.

Core-industrial products also experienced improved market conditions in the Americas and Europe, but were adversely impacted in 2014 by a decline in our Chinese industrial-related sales.

Our food retailing markets experienced modest growth during 2014, primarily driven by strong project activity in Europe, offset in part by reduced sales in the Americas due to the timing of project

activity.

For example, we are in the process of adding approximately 200 field sales and service resources to pursue under-penetrated market opportunities.

We estimate that we have the largest installed base of weighing instruments in the world, and we continue to invest in sales and marketing activities aimed at increasing the proportion of our installed base that is under service contract.

Overall, market conditions in emerging markets improved during 2014 but remain below our long-term expectations.

We experienced a 3% increase in emerging market local currency sales during 2014 versus the prior year, offset in part by reduced sales volume in Russia.

The increase in net sales of our laboratory-related products is principally driven by increased volume and favorable price realization in most categories.

The increase in net sales of our industrial-related products includes increased volume and favorable price realization in most product categories, particularly in product inspection.

Net sales in 2014 were offset in part by the exit of certain industrial-related businesses in China, which decreased industrial-related sales in local currency by 1%.

Overall Chinese market conditions for our industrial-related products remain weak.

The increase in our research and development spending levels reflects the timing of research and development project activity.

The increase includes higher cash incentive compensation and increased investments in our field sales organization as compared to the prior year, partially offset by lower employee benefit costs.

Amortization expense

Amortization expense was $29.2 million and $24.5 million for 2014 and 2013, respectively.

The increase in amortization expense is primarily related to recent investment in information technology, including the Company's Blue Ocean program.

| Net sales to external customers | $ | 755,922 | | | $ | 718,671 | | | $ | 697,956 | | | 5% | | 3% |

| Segment profit | $ | 134,045 | | | $ | 137,837 | | | $ | 138,894 | | | (3)% | | (1)% |

The decrease in segment profit primarily related to a reduction in inter-segment royalty income, increased sales and service investments, and higher cash incentive expense, offset in part by increased net sales.

| Net sales | $ | 598,402 | | | $ | 568,144 | | | $ | 530,847 | | | 5% | | 7% |

| Segment profit | $ | 170,764 | | | $ | 147,990 | | | $ | 127,011 | | | 15% | | 17% |

The increase in local currency net sales to external customers includes particularly strong volume growth in analytical instruments and core-industrial products.

Segment profit includes the impact of increased inter-segment royalty income and net sales, partially offset by unfavorable currency and increased cash incentive compensation.

| | 2014 | | | | 2013 | | | | 2012 | | | | Increase (Decrease) in % (1) 2014 vs. 2013 | | Increase (Decrease) in %(1) 2013 vs. 2012 |

The increase in total net sales and net sales to external customers includes volume increases and favorable price realization across most product categories.

Segment profit benefited from increased net sales, offset in part by increased sales and service investments, higher cash incentive expense, and unfavorable currency.

| | 2014 | | | | 2013 | | | | 2012 | | | | Increase (Decrease) in % (1)2014 vs. 2013 | | Increase (Decrease) in %(1) 2013 vs. 2012 |

Overall Chinese market conditions for our industrial-related products remain weak.

Growth in China can be expected to be volatile and the timing of a recovery is uncertain.

The increase in segment profit includes increased net sales, favorable business mix, and increased price realization, offset in part by investments in sales and service.

| | 2014 | | | | 2013 | | | | 2012 | | | | Increase (Decrease) in % (1)2014 vs. 2013 | | Increase (Decrease) in % (1) 2013 vs. 2012 |

| Net sales | $ | 471,565 | | | $ | 452,960 | | | $ | 447,727 | | | 4% | | 1% |

| Net sales to external customers | $ | 464,038 | | | $ | 446,652 | | | $ | 442,594 | | | 4% | | 1% |

The increase in 2014 is primarily due to a reduction in working capital, particularly accounts receivable, offset in part by the timing of tax and higher cash incentive payments.

We were in compliance with these covenants at December 31, 2014.

3.84% Senior Notes and 4.24% Senior Notes

Net sales growth during 2013 was particularly impacted by weak global market conditions, particularly in China, as further described below.

Global market conditions remain uncertain and accordingly, we are cautious regarding our net sales growth outlook.

Demand from these markets increased during 2013, in our developed markets.

offset by reduced demand from universities and government-funded research institutions, as well as difficult market conditions in China.

Our industrial markets, especially core-industrial products, were adversely impacted in 2013 by a deterioration in global market conditions, especially in China.

Our food retailing markets experienced modest growth during 2013, related to increases in the Americas and Asia/Rest of World, offset by a decline in Europe.

The net sales increases were primarily related to increased project activity in the Americas, offset in part by unfavorable economic conditions in Europe.

We estimate that we have the largest installed base of weighing instruments in the world.

However, market conditions (especially in China) deteriorated during 2013 and we experienced a 2% decline in emerging market local currency sales during 2013 versus the prior year, primarily related to a reduction in Chinese sales volume.

We believe the long-term growth of these

For example, during 2011 we acquired an x-ray inspection solutions business in the United States and a vision inspection solutions business in Germany, both of which have been integrated into our end-of-line product inspection systems offering.

Net sales of our laboratory-related products included strong growth in Europe, which is partly related to an easier prior year comparison.

These results were partially offset by a slight decline in sales volume in Asia / Rest of World, particularly China, primarily related to difficult market conditions and a challenging prior period comparison.

Net sales growth during the year also reflected modest growth in most product categories, which included favorable price realization.

The decrease in net sales of our industrial-related products included volume declines in Asia/Rest of World (particularly China) primarily due to unfavorable market conditions.

In addition, the exit of certain businesses in China reduced net sales in our industrial-related products by approximately 1% for the year ended December 31, 2013.

We also experienced a volume decline in core-industrial products in the Americas and Asia/Rest of World, offset in part by strong growth in product inspection related to higher sales volume and favorable price realization.

These results were partly offset by decreased sales volume in Europe primarily related to unfavorable market conditions.

Our research and development spending levels reflect the timing of projects and product launch activities, offset by benefits from our increased activities in low-cost countries.

Selling, general and administrative expenses include increased sales and marketing investments, including product launch activity, offset in part by benefits from our cost reduction activities.

During 2011 we recorded a discrete tax item resulting in net tax benefits of $3.8 million primarily related to the favorable resolution of certain prior year tax matters.

The discrete tax item had the effect of lowering our annual effective tax rate by 1% in 2011.

| Net sales to external customers | $ | 720,568 | | | $ | 699,361 | | | $ | 665,245 | | | 3% | | 5% |

| Segment profit | $ | 138,366 | | | $ | 138,894 | | | $ | 121,398 | | | 0% | | 14% |

These results were offset in part by a modest decline in core-industrial products due to reduced sales volume.

| Net sales | $ | 567,208 | | | $ | 530,847 | | | $ | 555,308 | | | 7% | | (4)% |

| Segment profit | $ | 151,743 | | | $ | 133,691 | | | $ | 113,997 | | | 14% | | 17% |

Segment profit includes increased sales volume, favorable inter-segment price realization and royalty income, increased productivity, reduced material costs and benefits from our cost reduction initiatives, offset in part by unfavorable currency exchange rate fluctuations.

Total net sales and net sales to external customers for 2013 in local currencies primarily reflect strong growth in laboratory-related products due to increased sales volume and favorable price realization, partially offset by a sales volume decline in food retailing while industrial-related sales remained flat versus the prior year.

Segment profit benefited from increased sales volume, favorable price realization and favorable currency exchange rate fluctuations.

Overall, Chinese market conditions for our products were weak in 2013 related to overcapacity in certain end-user segments and a reduction of credit availability for many local Chinese customers.

The decrease in segment profit for 2013 primarily includes reduced sales volume to external customers, increased research and development activities, and higher sales and marketing expenditures, offset by reduced material costs, favorable price realization and improved business mix.

| Net sales | $ | 455,930 | | | $ | 447,727 | | | $ | 425,971 | | | 2% | | 5% |

| Net sales to external customers | $ | 449,622 | | | $ | 441,189 | | | $ | 419,623 | | | 2% | | 5% |

The increase in local currencies total net sales and net sales to external customers reflects increased growth in most product categories, especially product inspection and laboratory-related products.

These results were partially offset by a sales volume decline in food retailing.

The increase in segment profit in 2013 is primarily due to increased sales volume and favorable business mix, partially offset by cost transfers of certain internal support functions from other segments and unfavorable currency exchange rate fluctuations.

As previously mentioned, global market conditions were weak during 2013, particularly in China.

The increase in 2013 is primarily due to decreased cash incentive payments of approximately $25 million as compared to 2012 as well as increased deferred revenue and customer prepayments, offset in part by timing of accounts receivables, increased inventory levels and higher pension payments.

The increase in 2012 resulted principally from increased net earnings and working capital benefits related to decreased inventory levels and the timing of accounts receivable, partially offset by the timing of payables.

Specifically, we are the largest provider of weighing instruments for use in laboratory, [removed: industrial] [added: industrial,] and food retailing applications.

We are also a leading provider of analytical instruments for use in life science, reaction engineering and real-time analytic systems used in drug and chemical compound [removed: development] [added: development,] and process analytics instruments used for in-line measurement in production processes.

In addition, we are the largest supplier of end-of-line inspection systems used in production and packaging for food, [removed: pharmaceutical] [added: pharmaceutical,] and other industries.

Our business is geographically diversified, with net sales in [removed: 2013] [added: 2014] derived 35% from both Europe and North and South America and 30% from Asia and other countries.

We have five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese [removed: Operations] [added: Operations,] and Other.

See Note [removed: 18] [added: 16] to the audited consolidated financial statements and Item 7.

We make a wide variety of precision laboratory instruments in the sample preparation, synthesis, analytical bench [removed: top] [added: top,] and material characterization areas.

Our portfolio includes laboratory balances, liquid pipetting solutions, titrators, [removed: thermal] [added: physical] value analyzers, thermal analysis [removed: systems] [added: systems,] and other analytical instruments, such as moisture analyzers and density refractometers.

The laboratory instruments business accounted for approximately [removed: 46%] [added: 47%] of our net sales in [added: 2014 and 46% in] both 2013 and [removed: 2012 and 45% in 2011.][added: 2012.]

Laboratory balances are primarily used in the pharmaceutical, food, chemical, cosmetics, [removed: academia] [added: academia,] and other industries.

Rainin develops, [removed: manufactures] [added: manufactures,] and distributes advanced pipettes, tips and accessories, including single- and multi-channel manual and electronic pipettes.

Rainin’s principal end markets are pharmaceutical, [removed: biotech] [added: biotech,] and academia.

Titrators measure the chemical composition of samples and are used in environmental and research laboratories as well as in quality control labs in the pharmaceutical, food and [removed: beverage] [added: beverage,] and other industries.

Thermal analysis systems measure material properties as a function of temperature, such as weight, dimension, energy [removed: flow] [added: flow,] and viscoelastic properties.

LabX, our PC-based laboratory software platform, manages and analyzes data generated by our balances, titrators, pH meters, moisture [removed: analyzers] [added: analyzers,] and other analytical instruments.

Our on-line measurement [removed: technologies] [added: technologies,] based on infrared and laser light [removed: scattering enables] [added: scattering, enable] customers to monitor chemical reactions and crystallization processes in real time in the lab and plant.

Our process analytics business provides instruments for the in-line measurement of liquid and gas parameters used primarily in the production process of pharmaceutical, biotech, beverage, microelectronics, [removed: chemical] [added: chemical,] and refining companies, as well as power plants.

Our solutions include sensor technology for measuring pH, dissolved oxygen, carbon dioxide, conductivity, turbidity, ozone, total organic carbons, [added: sodium, and silica, as well as laser analyzers for gas measurement.]

[removed: Intelligent sensor diagnostics] capabilities enable improved asset management solutions for our customers to reduce process downtime and maintenance costs.

With a worldwide network of specialists, we support customers in critical process applications, [removed: compliance] [added: compliance,] and systems integration questions.

We manufacture numerous industrial weighing instruments and related terminals and offer dedicated software solutions for the pharmaceutical, chemical, [removed: food] [added: food,] and other industries.

We supply automatic identification and data capture solutions, which integrate in-motion weighing, [removed: dimensioning] [added: dimensioning,] and identification technologies for transport, shipping and logistics customers.

The industrial instruments business accounted for approximately [removed: 45%] [added: 44%] of our net sales in [removed: 2013, 2012] [added: 2014] and [removed: 2011.][added: 45% in both 2013 and 2012.]

We supply automatic identification and data capture solutions, which integrate in-motion weighing, [removed: dimensioning] [added: dimensioning,] and identification technologies.

With these solutions, customers can measure the weight and cubic volume of packages for appropriate billing, [removed: logistics] [added: logistics,] and quality control.

Increasing safety and consumer protection requirements are driving the need for more sophisticated end-of-line product inspection systems (e.g., for use in food processing and packaging, [removed: pharmaceutical] [added: pharmaceutical,] and other industries).

X-ray-based vision inspection is used to detect metallic contamination in metallized packaging and many types of non-metallic contamination, such as glass, calcified bone, [removed: stones] [added: stones,] and pits.

Our camera-based vision inspection solutions provide in-line inspection of package quality, [removed: labels] [added: labels,] and content, which are needs for food and beverage, consumer [removed: goods] [added: goods,] and pharmaceutical companies.

Supermarkets, [removed: hypermarkets] [added: hypermarkets,] and other food retail businesses make use of multiple weighing and food labeling solutions for handling fresh goods (such as meats, vegetables, [removed: fruits] [added: fruits,] and cheeses).

We offer networked scales and software, which can integrate backroom, counter, [removed: self-service] [added: self-service,] and checkout functions and can incorporate fresh goods item data into a supermarket’s overall food item and inventory management system.

In addition, we offer stand-alone scales for basic counter weighing and pricing, price [removed: finding] [added: finding,] and printing.

The customer benefits of our retail solutions are in the areas of enterprise-wide article and price management, [removed: merchandising] [added: merchandising,] and regulatory compliance.

The retail business accounted for approximately 9% of our net sales in [removed: both 2013 and 2012] [added: 2014, 2013,] and [removed: 10% in 2011.][added: 2012.]

Our principal customers include companies in the following key end markets: the life science industry (pharmaceutical and biotech companies, as well as independent research organizations); food and beverage producers; food retailers; chemical, specialty [removed: chemicals] [added: chemicals,] and cosmetics companies; the transportation and logistics industry; the metals industry; the electronics industry; and the academic community.

Ohaus-branded products target markets, such as the educational market, in which customers are interested in lower cost, a more limited set of [removed: features] [added: features,] and less comprehensive support and service.

We have a diversified customer base, with no single customer accounting for more than 1% of [removed: 2013] [added: 2014] net sales.

Market organizations also work closely with our producing organizations (described below) by providing feedback on manufacturing and product development initiatives, new product and application [removed: ideas] [added: ideas,] and information about key market segments.

At December 31, [removed: 2013,] [added: 2014,] our sales and service group consisted of approximately [removed: 6,200] [added: 6,500] employees in sales, marketing and customer service (including related administration) and post-sales technical service, located in [removed: 36] [added: 38] countries.

We have a unique offering to our pharmaceutical customers in promoting the use of our instruments in compliance with FDA and other international regulations, and we can provide these services [removed: regardless of the customer’s location] [added: to most customers' locations] around the world.

Service (representing service contracts, on demand [removed: services] [added: services,] and replacement parts) accounted for approximately 22% of our net sales in [added: both 2014 and] 2013 and 21% in [removed: both 2012 and 2011.][added: 2012.]

Intelligent sensor diagnostics

In 2014, we published our latest sustainability report, which measures progress and highlights accomplishments since our last report in 2011.

We followed the Global Reporting Initiative G4 guidelines.

Our GreenMT program is designed to help save energy and resources and at the same time realize financial benefits.

We will continue to implement the program in additional locations over the coming years.

Although there are a large number of regulatory agencies across our

global competitors.

sodium and silica, as well as laser analyzers for gas measurement.

We produced our first sustainability report in 2011 which outlined our GreenMT program launched in 2010 to improve our understanding of how our business affects the environment.

We have gathered data to understand the magnitude of the global greenhouse gas or CO2 footprint generated not only by our fuel and electricity use, but also by the products we sell and our use of supply chains.

We expect to implement the program in Germany and additional operations in the U.S. over the next two years.

In 2010, testing of indoor air at certain buildings within the site led to the installation of a vapor intrusion mitigation system at one building.

We are not currently involved in any legal proceeding that we believe could have a material adverse effect upon our financial condition, results of [removed: operations] [added: operations,] or cash flows.

See the disclosure [added: in Item 1] above under “Environmental Matters.”

| | | For the fiscal year ended December 31, [removed: 2013] [added: 2014] |

As of January 31, [removed: 2014] [added: 2015] there were [removed: 29,389,802] [added: 28,127,235] shares of the registrant’s Common Stock, $0.01 par value per share, outstanding.

The aggregate market value of the shares of Common Stock held by non-affiliates of the registrant on June 30, [removed: 2013] [added: 2014] (based on the closing price for the Common Stock on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, [removed: 2013)] [added: 2014)] was approximately [removed: $6.0] [added: $7.3] billion.

FOR THE FISCAL YEAR ENDED [removed: December] [added: DECEMBER] 31, [removed: 2013][added: 2014]

| [Item [removed: 1.](#s58BD473057568103533738C8E5FD8AD5)] [added: 1.](#sED048B33810A4BF7CDA0A0FA66F6A1D5)] | [removed: [Business](#s58BD473057568103533738C8E5FD8AD5)] [added: [Business](#sED048B33810A4BF7CDA0A0FA66F6A1D5)] | [removed: [4](#s58BD473057568103533738C8E5FD8AD5)] [added: [4](#sED048B33810A4BF7CDA0A0FA66F6A1D5)] |

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| [Item [removed: 2.](#s85B97F0600684C83F19538C8E67AC9FF)] [added: 2.](#s5AFB689D86E5B850FC1EA0FA676BE628)] | [removed: [Properties](#s85B97F0600684C83F19538C8E67AC9FF)] [added: [Properties](#s5AFB689D86E5B850FC1EA0FA676BE628)] | [removed: [23](#s85B97F0600684C83F19538C8E67AC9FF)] [added: [23](#s5AFB689D86E5B850FC1EA0FA676BE628)] |

| [Item [removed: 3.](#s4DBE17C34466B927AE1038C8E6993259)] [added: 3.](#sE25A7874867A88958856A0FA678FE5D3)] | [Legal [removed: Proceedings](#s4DBE17C34466B927AE1038C8E6993259)] [added: Proceedings](#sE25A7874867A88958856A0FA678FE5D3)] | [removed: [23](#s4DBE17C34466B927AE1038C8E6993259)] [added: [23](#sE25A7874867A88958856A0FA678FE5D3)] |

| | [Executive Officers of the [removed: Registrant](#s4DBE17C34466B927AE1038C8E6993259)] [added: Registrant](#sE25A7874867A88958856A0FA678FE5D3)] | [removed: [23](#s4DBE17C34466B927AE1038C8E6993259)] [added: [23](#sE25A7874867A88958856A0FA678FE5D3)] |

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| [Item [removed: 6.](#s12A4EED8468C5866EC6338C8E725D79E)] [added: 6.](#s43210149DDA45B7227B0A0FA67F851E4)] | [Selected Financial [removed: Data](#s12A4EED8468C5866EC6338C8E725D79E)] [added: Data](#s43210149DDA45B7227B0A0FA67F851E4)] | [removed: [26](#s12A4EED8468C5866EC6338C8E725D79E)] [added: [27](#s43210149DDA45B7227B0A0FA67F851E4)] |

| [Item [removed: 7.](#s964EBA73E014AA31951F38C8E0239DBA)] [added: 7.](#sCCE8FD4DBF7282B5004EA0FA616E01C7)] | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s964EBA73E014AA31951F38C8E0239DBA)] [added: Operations](#sCCE8FD4DBF7282B5004EA0FA616E01C7)] | [removed: [27](#s964EBA73E014AA31951F38C8E0239DBA)] [added: [28](#sCCE8FD4DBF7282B5004EA0FA616E01C7)] |

| [Item [removed: 7A.](#sC5D9CCADAE79F25421DD38C8E7C1C9BC)] [added: 7A.](#s9B4C166CD5D6661F9CC5A0FA6893C305)] | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#sC5D9CCADAE79F25421DD38C8E7C1C9BC)] [added: Risk](#s9B4C166CD5D6661F9CC5A0FA6893C305)] | [removed: [43](#sC5D9CCADAE79F25421DD38C8E7C1C9BC)] [added: [44](#s9B4C166CD5D6661F9CC5A0FA6893C305)] |

| [Item [removed: 8.](#s1086F2162CE1A70F9D0138C8E7D18D0F)] [added: 8.](#sFC8003C2CA7FEB95E0D6A0FA689417B2)] | [Financial Statements and Supplementary [removed: Data](#s1086F2162CE1A70F9D0138C8E7D18D0F)] [added: Data](#sFC8003C2CA7FEB95E0D6A0FA689417B2)] | [removed: [44](#s1086F2162CE1A70F9D0138C8E7D18D0F)] [added: [45](#sFC8003C2CA7FEB95E0D6A0FA689417B2)] |

| [Item [removed: 9.](#s89515B1075ECC8EB13D638C8E7D12BA8)] [added: 9.](#s256F0B371CA96FE3D445A0FA689646F0)] | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s89515B1075ECC8EB13D638C8E7D12BA8)] [added: Disclosure](#s256F0B371CA96FE3D445A0FA689646F0)] | [removed: [44](#s89515B1075ECC8EB13D638C8E7D12BA8)] [added: [45](#s256F0B371CA96FE3D445A0FA689646F0)] |

| [Item [removed: 9A.](#s1C0920E26C3BE983246E38C8E7F0B417)] [added: 9A.](#s1024C7DBD7F48A723B1EA0FA68BF183B)] | [Controls and [removed: Procedures](#s1C0920E26C3BE983246E38C8E7F0B417)] [added: Procedures](#s1024C7DBD7F48A723B1EA0FA68BF183B)] | [removed: [44](#s1C0920E26C3BE983246E38C8E7F0B417)] [added: [45](#s1024C7DBD7F48A723B1EA0FA68BF183B)] |

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| [PART [removed: III](#sD3A36E79E144B1EB089F38C8E83E1424)] [added: III](#s7086931658DFD5C8DBC9A0FA693D09AC)] | | |

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| [Item [removed: 11.](#s000FAD22F3169D79202938C8E89CC47C)] [added: 11.](#sDA2D5955FE52991F483AA0FA6983E0BC)] | [Executive [removed: Compensation](#s000FAD22F3169D79202938C8E89CC47C)] [added: Compensation](#sDA2D5955FE52991F483AA0FA6983E0BC)] | [removed: [46](#s000FAD22F3169D79202938C8E89CC47C)] [added: [47](#sDA2D5955FE52991F483AA0FA6983E0BC)] |

| [Item [removed: 12.](#s3BDD6B59909CD6CA2F0A38C8E8CA16A2)] [added: 12.](#sD864CCB37FB1C3B1287DA0FA69A58992)] | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s3BDD6B59909CD6CA2F0A38C8E8CA16A2)] [added: Matters](#sD864CCB37FB1C3B1287DA0FA69A58992)] | [removed: [46](#s3BDD6B59909CD6CA2F0A38C8E8CA16A2)] [added: [47](#sD864CCB37FB1C3B1287DA0FA69A58992)] |

| [Item [removed: 13.](#s7927073E671E02498C6938C8E8EA0CA8)] [added: 13.](#sD04AD04C3A38D8284F08A0FA69E5FC55)] | [Certain Relationships and Related Transactions and Director [removed: Independence](#s7927073E671E02498C6938C8E8EA0CA8)] [added: Independence](#sD04AD04C3A38D8284F08A0FA69E5FC55)] | [removed: [46](#s7927073E671E02498C6938C8E8EA0CA8)] [added: [48](#sD04AD04C3A38D8284F08A0FA69E5FC55)] |

| [Item [removed: 14.](#sE046867B7D57A408800838C8E918563D)] [added: 14.](#s5143CA8589CD6061834BA0FA6A0796EA)] | [Principal Accounting Fees and [removed: Services](#sE046867B7D57A408800838C8E918563D)] [added: Services](#s5143CA8589CD6061834BA0FA6A0796EA)] | [removed: [47](#sE046867B7D57A408800838C8E918563D)] [added: [48](#s5143CA8589CD6061834BA0FA6A0796EA)] |

| [Item [removed: 15.](#sA996914D157F5A4B80C638C8E9666B8A)] [added: 15.](#s0F63BBF35DE9DD7EEA6DA0FA6A597D11)] | [Exhibits and Financial Statement [removed: Schedules](#sA996914D157F5A4B80C638C8E9666B8A)] [added: Schedules](#s0F63BBF35DE9DD7EEA6DA0FA6A597D11)] | [removed: [47](#sA996914D157F5A4B80C638C8E9666B8A)] [added: [48](#s0F63BBF35DE9DD7EEA6DA0FA6A597D11)] |

You can identify forward-looking statements by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” [removed: “potential”] [added: “potential,”] or “continue.”

We make forward-looking statements about future events or our future financial performance, including earnings and sales growth, earnings per share, strategic plans and contingency plans, growth opportunities or economic downturns, our ability to respond to changes in market conditions, planned research and development efforts and product introductions, adequacy of facilities, access to and the costs of raw materials, shipping and supplier costs, gross margins, customer demand, our competitive position, capital expenditures, cash flow, tax-related matters, compliance with [removed: laws] [added: laws,] and effects of acquisitions.

10-K 1 mtd_10kx12312014.htm FORM 10-K

Im Langacher 44

| [PART I](#s005E4B6F4633029B088CA0FA66A66383) | | |

| [PART II](#sF78472B39090B71388D4A0FA67BFABAD) | | |

| [PART IV](#sCEA86C2EB09B5EC5E250A0FA6A28245E) | | |

| [SIGNATURES](#s3FACF91D2C04BA692C61A0FA6A7C956E) | | [49](#s3FACF91D2C04BA692C61A0FA6A7C956E) |

10-K 1 mtd_10kx12312013.htm 10-K

Im Langacher, P.O. Box MT-100

| [PART I](#s70045AA28ABE7CC2C41238C8E5DE1B08) | | |

| [PART II](#sAB3D7E8B9A03F0095F8E38C8E6D7F5CA) | | |

| [PART IV](#sDF567F4AB6156B5C554A38C8E9388B29) | | |

| [SIGNATURES](#sADF4F46B5743421DFF6638C8E995BEE9) | | [48](#sADF4F46B5743421DFF6638C8E995BEE9) |

The properties listed below serve primarily as manufacturing [removed: facilities] [added: facilities, or shared service centers] and also typically have a certain amount of space for service, sales and [removed: marketing] [added: marketing,] and administrative activities.

| [removed: Bedford,] [added: Billerica,] Massachusetts | | Leased | | U.S. Operations |

| Warsaw, Poland | | Building Leased | | Other Operations |

| ChengDu, China | | Buildings Owned; | | Chinese Operations |

| | | Land Leased | | |

At January 31, [removed: 2014,] [added: 2015,] there were [removed: 65] [added: 61] holders of record of common stock and [removed: 29,389,802] [added: 28,127,235] shares of common stock outstanding.

We estimate we have approximately [removed: 43,485] [added: 34,757] beneficial owners of common stock.

However, we will evaluate this policy on a periodic basis taking into account our results of operations, financial condition, capital requirements, including potential acquisitions, our share repurchase program, the taxation of dividends to our [removed: shareholders] [added: shareholders,] and other factors deemed relevant by our Board of Directors.

The following graph compares the cumulative total returns (assuming reinvestment of dividends) on $100 invested on December 31, [removed: 2008] [added: 2009] through December 31, [removed: 2013] [added: 2014] in our common stock, the Standard & Poor’s 500 Composite Stock Index (S&P 500 Index) and the SIC Code 3826 Index — Laboratory Analytical Instruments.

[removed: ][added: ]

The share repurchases are expected to be funded from existing cash balances, [removed: borrowings] [added: borrowings,] and cash generated from operating activities.

Repurchases will be made through open market transactions, and the amount and timing of repurchases will depend on business and market conditions, stock price, trading restrictions, the level of acquisition [removed: activity] [added: activity,] and other factors.

We have purchased [removed: 21.5] [added: 23.1] million common shares since the inception of the program in 2004 through December 31, [removed: 2013,] [added: 2014,] at a total cost of [removed: $2.1] [added: $2.5] billion.

During the years ended December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] we spent [removed: $295.0] [added: $414.0] million and [removed: $278.7] [added: $295.0] million on the repurchase of [removed: 1,321,577] [added: 1,617,499] shares and [removed: 1,637,827] [added: 1,321,577] shares at an average price per share of [removed: $223.18] [added: $255.93] and [removed: $170.13,] [added: $223.18,] respectively.

| 2014 | | | | | | | |

| Fourth Quarter | $ | 305.89 | | | $ | 233.85 | |

| Third Quarter | $ | 272.84 | | | $ | 249.99 | |

| Second Quarter | $ | 253.18 | | | $ | 223.80 | |

| First Quarter | $ | 255.85 | | | $ | 231.19 | |

| | 12-31-09 | 12-31-10 | 12-31-11 | 12-31-12 | 12-31-13 | 12-31-14 |

| Mettler-Toledo | $100 | $144 | $141 | $184 | $231 | $288 |

| S&P 500 Index | $100 | $115 | $117 | $136 | $180 | $205 |

| SIC Code 3826 Index | $100 | $128 | $105 | $138 | $210 | $241 |

| October 1 to October 31, 2014 | | 149,554 | | | $ | 246.60 | | | 149,554 | | | $ | 559,017 | |

| November 1 to November 30, 2014 | | 129,835 | | | 276.81 | | | | 129,835 | | | 523,075 | | |

| December 1 to December 31, 2014 | | 151,895 | | | 294.25 | | | | 151,895 | | | 478,376 | | |

| Total | | 431,284 | | | $ | 272.48 | | | 431,284 | | | $ | 478,376 | |

We have a $3 billion share repurchase program, of which there was $478.4 million remaining to be repurchased under the program as of December 31, 2014.

| 2012 | | | | | | | |

| Fourth Quarter | $ | 195.00 | | | $ | 161.80 | |

| Third Quarter | $ | 177.44 | | | $ | 148.68 | |

| Second Quarter | $ | 185.08 | | | $ | 150.57 | |

| First Quarter | $ | 189.67 | | | $ | 152.19 | |

Historically, we have not paid dividends on our common stock.

However, the Company will evaluate this policy on a periodic basis taking into account our results of operations, financial condition, capital requirements, including potential acquisitions, our share repurchase program, the taxation of dividends to our shareholders and other factors deemed relevant by our Board of Directors.

| | 12-31-08 | 12-31-09 | 12-31-10 | 12-31-11 | 12-31-12 | 12-31-13 |

| Mettler-Toledo | $100 | $156 | $224 | $219 | $287 | $360 |

| S&P 500 Index | $100 | $126 | $146 | $149 | $172 | $228 |

| SIC Code 3826 Index | $100 | $148 | $188 | $154 | $202 | $306 |

| October 1 to October 31, 2013 | | 97,996 | | | $ | 242.82 | | | 97,996 | | | $ | 946,141 | |

| November 1 to November 30, 2013 | | 99,752 | | | 246.53 | | | | 99,752 | | | 921,547 | | |

| December 1 to December 31, 2013 | | 119,431 | | | 244.23 | | | | 119,431 | | | 892,376 | | |

| Total | | 317,179 | | | $ | 244.52 | | | 317,179 | | | $ | 892,376 | |

We have a $3 billion share repurchase program, which includes an additional $750 million that was authorized by the Board of Directors during 2013.

As of December 31, 2013, there was $892 million of remaining common shares authorized to be repurchased under the program.

| | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | |

| Net sales | $ | [removed: 2,378,972] [added: 2,485,983] | | | $ | [removed: 2,341,528] [added: 2,378,972] | | | $ | [removed: 2,309,328] [added: 2,341,528] | | | $ | [removed: 1,968,178] [added: 2,309,328] | | | $ | [removed: 1,728,853] [added: 1,968,178] | |

| Cost of sales | [removed: 1,096,946] [added: 1,127,233] | | | | [removed: 1,100,473] [added: 1,097,041] | | | | [removed: 1,091,054] [added: 1,100,473] | | | | [removed: 930,982] [added: 1,091,054] | | | | [removed: 839,516] [added: 930,982] | | |

| Gross profit | [removed: 1,282,026] [added: 1,358,750] | | | | [removed: 1,241,055] [added: 1,281,931] | | | | [removed: 1,218,274] [added: 1,241,055] | | | | [removed: 1,037,196] [added: 1,218,274] | | | | [removed: 889,337] [added: 1,037,196] | | |

| Research and development | [removed: 116,346] [added: 123,297] | | | | [removed: 112,530] [added: 116,346] | | | | [removed: 116,139] [added: 112,530] | | | | [removed: 97,028] [added: 116,139] | | | | [removed: 89,685] [added: 97,028] | | |

| Selling, general and administrative | [removed: 692,788] [added: 728,582] | | | | [removed: 684,026] [added: 692,693] | | | | [removed: 703,632] [added: 684,026] | | | | [removed: 588,726] [added: 703,632] | | | | [removed: 505,177] [added: 588,726] | | |

| Amortization | [removed: 24,539] [added: 29,185] | | | | [removed: 21,357] [added: 24,539] | | | | [removed: 17,808] [added: 21,357] | | | | [removed: 14,842] [added: 17,808] | | | | [removed: 11,844] [added: 14,842] | | |

| Interest expense | [removed: 22,711] [added: 24,537] | | | | [removed: 22,764] [added: 22,711] | | | | [removed: 23,226] [added: 22,764] | | | | [removed: 20,057] [added: 23,226] | | | | [removed: 25,117] [added: 20,057] | | |

| Restructuring charges(a) | [removed: 19,830] [added: 5,915] | | | | [removed: 16,687] [added: 19,830] | | | | [removed: 5,912] [added: 16,687] | | | | [removed: 4,866] [added: 5,912] | | | | [removed: 31,368] [added: 4,866] | | |

| Other charges (income), net(b) | [removed: 3,103] [added: 2,230] | | | | [removed: 1,090] [added: 3,103] | | | | [removed: 2,380] [added: 1,090] | | | | [removed: 4,164] [added: 2,380] | | | | [removed: 1,384] [added: 4,164] | | |

| Earnings before taxes | [removed: 402,709] [added: 445,004] | | | | [removed: 382,601] [added: 402,709] | | | | [removed: 349,177] [added: 382,601] | | | | [removed: 307,513] [added: 349,177] | | | | [removed: 224,762] [added: 307,513] | | |

| Provision for taxes(c) | [removed: 96,615] [added: 106,763] | | | | [removed: 91,754] [added: 96,615] | | | | [removed: 79,684] [added: 91,754] | | | | [removed: 75,365] [added: 79,684] | | | | [removed: 52,169] [added: 75,365] | | |

| Net earnings | $ | [removed: 306,094] [added: 338,241] | | | $ | [removed: 290,847] [added: 306,094] | | | $ | [removed: 269,493] [added: 290,847] | | | $ | [removed: 232,148] [added: 269,493] | | | $ | [removed: 172,593] [added: 232,148] | |

| Net earnings | $ | [removed: 10.22] [added: 11.71] | | | $ | [removed: 9.37] [added: 10.22] | | | $ | [removed: 8.45] [added: 9.37] | | | $ | [removed: 6.98] [added: 8.45] | | | $ | [removed: 5.12] [added: 6.98] | |

| Weighted average number of common shares | [removed: 29,945,954] [added: 28,890,771] | | | | [removed: 31,044,532] [added: 29,945,954] | | | | [removed: 31,897,779] [added: 31,044,532] | | | | [removed: 33,280,463] [added: 31,897,779] | | | | [removed: 33,716,353] [added: 33,280,463] | | |

| Net earnings | $ | [removed: 9.96] [added: 11.44] | | | $ | [removed: 9.14] [added: 9.96] | | | $ | [removed: 8.21] [added: 9.14] | | | $ | [removed: 6.80] [added: 8.21] | | | $ | [removed: 5.03] [added: 6.80] | |

| Weighted average number of common and common equivalent shares | [removed: 30,728,482] [added: 29,571,308] | | | | [removed: 31,824,077] [added: 30,728,482] | | | | [removed: 32,839,365] [added: 31,824,077] | | | | [removed: 34,140,097] [added: 32,839,365] | | | | [removed: 34,290,771] [added: 34,140,097] | | |

| Cash and cash equivalents | $ | [removed: 111,874] [added: 85,263] | | | $ | [removed: 101,702] [added: 111,874] | | | $ | [removed: 235,601] [added: 101,702] | | | $ | [removed: 447,577] [added: 235,601] | | | $ | [removed: 85,031] [added: 447,577] | |

| Working capital(d) | [removed: 263,572] [added: 201,441] | | | | [removed: 242,141] [added: 254,992] | | | | [removed: 201,718] [added: 242,141] | | | | [removed: 166,034] [added: 201,718] | | | | [removed: 156,369] [added: 166,034] | | |

| Total assets | [removed: 2,152,819] [added: 2,009,110] | | | | [removed: 2,022,288] [added: 2,152,819] | | | | [removed: 2,114,910] [added: 2,022,288] | | | | [removed: 2,199,544] [added: 2,114,910] | | | | [removed: 1,641,089] [added: 2,199,544] | | |

| Long-term debt | [removed: 395,960] [added: 335,790] | | | | [removed: 347,131] [added: 395,960] | | | | [removed: 476,715] [added: 347,131] | | | | [removed: 670,301] [added: 476,715] | | | | [removed: 203,590] [added: 670,301] | | |

| Other non-current liabilities(e) | [removed: 193,170] [added: 218,108] | | | | [removed: 240,886] [added: 193,170] | | | | [removed: 209,945] [added: 240,886] | | | | [removed: 174,469] [added: 209,945] | | | | [removed: 189,593] [added: 174,469] | | |

| Shareholders’ equity(f) | [removed: 935,052] [added: 719,595] | | | | [removed: 827,219] [added: 935,052] | | | | [removed: 781,137] [added: 827,219] | | | | [removed: 771,584] [added: 781,137] | | | | [removed: 711,138] [added: 771,584] | | |

| (a) | Restructuring charges primarily relate to our global cost reduction [removed: program initiated in 2008 as well as additional cost reduction measures initiated during 2012 and 2013.] [added: programs.] See Note [removed: 15] [added: 13] to the audited consolidated financial statements. |

| (b) | Other charges (income), net consists primarily of interest income, (gains) losses from foreign currency [removed: transactions] [added: transactions,] and other items. Other charges (income), net in 2010 also includes a $4.4 million ($3.8 million after-tax) charge associated with the sale of our retail software business for in-store item and inventory management solutions. This amount was partially offset by a benefit from unrealized contingent consideration from a previous acquisition totaling $1.2 million ($1.2 million after-tax). |

| (c) | The provision for taxes for [removed: 2011, 2010] [added: 2011] and [removed: 2009] [added: 2010] includes discrete tax items resulting in a net tax benefit of $3.8 [removed: million, $5.2 million,] [added: million] and [removed: $8.3] [added: $5.2] million, respectively, primarily related to the favorable resolution of certain prior year tax matters. |

| (e) | Other non-current liabilities consist of pension and other post-retirement liabilities, plus certain other non-current liabilities. See Note [removed: 13] [added: 11] to the audited consolidated financial statements. |

| (f) | No dividends were paid during the five-year period ended December 31, [removed: 2013.] [added: 2014.] |

Under the supervision and with the participation of our management, including the Chief Executive Officer, Principal Financial [removed: Officer] [added: Officer,] and Principal Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report.

Based upon that evaluation, the Chief Executive Officer, Principal Financial [removed: Officer] [added: Officer,] and Principal Accounting Officer have concluded that these disclosure controls and procedures are effective.

There were no changes in our internal control over financial reporting during the quarter ended December 31, [removed: 2013] [added: 2014] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2013.][added: 2014.]

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework [removed: (1992).][added: (2013).]

Based on our assessment, we concluded that, as of December 31, [removed: 2013,] [added: 2014,] the Company’s internal control over financial reporting is effective.

| Olivier A. Filliol | | [removed: 47] [added: 48] | | President and Chief Executive Officer |

| William P. Donnelly | | [removed: 52] [added: 53] | | Executive Vice President |

| Thomas Caratsch | | [removed: 55] [added: 56] | | Head of Laboratory |

| Christian Magloth | | [removed: 48] [added: 49] | | Head of Human Resources |

| Michael Heidingsfelder | | [removed: 53] [added: 54] | | Head of Industrial |

| Simon Kirk | | [removed: 54] [added: 55] | | Head of Product Inspection |

| Marc de [removed: la] [added: La] Guéronnière | | [removed: 50] [added: 51] | | Head of European [added: and North American] Market Organizations |

| Waldemar Rauch | | [removed: 51] [added: 52] | | Head of Process Analytics |

Mr. Filliol served as Head of Global Sales, [removed: Service] [added: Service,] and Marketing of the Company from April 2004 to December 2007, and Head of Process Analytics of the Company from June 1999 to December 2007.

Prior to joining the Company, he was a Strategy Consultant with the international consulting firm Bain & Company, working in the Geneva, [removed: Paris] [added: Paris,] and Sydney offices.

He previously served as Chief Financial Officer of the Company since 1997, except for a [removed: two year] [added: two-year] period when he ran the Company’s Product Inspection and Pipette businesses.

Mr. Donnelly is responsible for Investor Relations, Finance, Supply Chain Management, Information [removed: Technology] [added: Technology,] and the Company’s Blue Ocean Program.

Prior to joining the [removed: Company] [added: Company,] he served as Head of Human Resources of Straumann, a leading global medical devices company listed on the Swiss stock exchange, from April 2006 to September 2010.

Prior to joining the [removed: company,] [added: Company,] Mr. Heidingsfelder held various management positions within the Freudenberg Group from 2004 to March 2012 in Europe, [removed: Asia] [added: Asia,] and the Americas, including Chief Operating Officer, Americas, and General Manager, China.

Previously, he was a Partner of Roland Berger Strategy Consultants in the [removed: US] [added: U.S.] and Europe.

Previously he worked at Schindler where he served since 2008 as Chief Executive Officer of Jardine Schindler Group, a [added: joint venture responsible for all of Schindler's operations in Southeast Asia.]

He has also held various management positions at Eaton Corporation, Owens Corning, Imperial Chemical [removed: Industries] [added: Industries,] and British Railways Board.

Marc de [removed: la] [added: La] Guéronnière has been Head of European Market Organizations of the Company since January [removed: 2008.][added: 2008 and Head of North American Market Organizations since April 2014.]

He has served as Operating Manager since March 2004, was named Head of Process Analytics Division in January [removed: 2008] [added: 2008,] and joined the Group Management Committee in July 2011.

Prior to joining the [removed: Company] [added: Company,] he worked in R&D at Siemens in Germany and held various technical management positions with Atomika Instruments in Germany as well as with Endress + Hauser Flowtec, a leading Swiss supplier of industrial measurement and automation equipment.

Our Chief Executive Officer, Principal Financial [removed: Officer] [added: Officer,] and Principal Accounting Officer also provide certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 in connection with our quarterly and annual financial statement filings with the Securities and Exchange Commission.

The remaining information called for by this item is incorporated by reference from the discussion in the sections “Proposal One: Election of Directors,” “Board of Directors — General Information,” “Board of Directors — [removed: Operation”] [added: Operation,”] and “Additional Information — Section 16(a) Beneficial Ownership Reporting Compliance” in the [removed: 2014] [added: 2015] Proxy Statement.

joint venture responsible for all of Schindler's operations in Southeast Asia.

The information appearing in the sections captioned “Board of Directors — General Information — Director Compensation,” “Compensation Discussion and Analysis,” “Compensation Committee [removed: Report”] [added: Report,”] and “Additional Information — Compensation Committee Interlocks and Insider Participation” in the [removed: 2014] [added: 2015] Proxy Statement is incorporated by reference herein.

The information appearing in the section “Share Ownership” in the [removed: 2014] [added: 2015] Proxy Statement is incorporated by reference herein.

Information appearing in “Securities Authorized for Issuance under Equity Compensation Plans as of December 31, [removed: 2013”] [added: 2014”] is included within Note [removed: 12] [added: 10] to the financial statements.

Director Independence — The information in the section “Board of Directors — General Information — Independence of the Board” in the [removed: 2014] [added: 2015] Proxy Statement is incorporated by reference herein.

Information appearing in the section “Audit Committee Report” in the [removed: 2014] [added: 2015] Proxy Statement is hereby incorporated by reference.

(a) Exhibits, Financial [removed: Statements] [added: Statements,] and Schedules:

Date: February [removed: 7, 2014][added: 6, 2015]

| 10.20 | Mettler-Toledo International Inc. 2004 Equity Incentive [removed: Plan(7)] [added: Plan(8)] |

| 10.21 | Mettler-Toledo International Inc. 2007 Share Plan, effective February 7, [removed: 2008(8)] [added: 2008(9)] |

| 10.22 | Mettler-Toledo International Inc. 2013 Equity Incentive [removed: Plan(9)] [added: Plan(10)] |

| 10.31 | Regulations of the POBS PLUS — Incentive Scheme for Senior Management of Mettler Toledo, effective as of November, [removed: 2006(10)] [added: 2006(11)] |

| 10.32 | Regulations of the POBS PLUS — Incentive Scheme for Members of the Group Management of Mettler Toledo, effective as of January, [removed: 2009(10)] [added: 2009(11)] |

| 10.50 | Employment Agreement between Thomas Caratsch and Mettler-Toledo International Inc., dated as of December 4, [removed: 2007(8)] [added: 2007(9)] |

| 10.51 | Employment Agreement between Marc de [removed: la] [added: La] Guéronnière and Mettler-Toledo International Inc., dated as of January 27, [removed: 2011(11)] [added: 2011(12)] |

| 10.53 | Employment Agreement between Olivier Filliol and Mettler-Toledo International Inc., dated as of November 1, [removed: 2007(12)] [added: 2007(13)] |

| 10.54 | Employment Agreement between Michael Heidingsfelder and Mettler-Toledo International Inc., dated as of November 30, 2011 [removed: (15)] [added: (16)] |

| 10.55 | Employment Agreement between Simon Kirk and Mettler-Toledo International Inc., dated as of November 28, [removed: 2011(15)] [added: 2011(16)] |

| 10.56 | Employment Agreement between Christian Magloth and Mettler-Toledo International Inc., dated as of March 22, [removed: 2010(11)] [added: 2010(12)] |

| 10.57 | Employment Agreement between Waldemar Rauch and Mettler-Toledo International Inc., dated as of June 10, [removed: 2011(14)] [added: 2011(15)] |

| 10.58 | Employment Agreement between Robert Spoerry and Mettler-Toledo International Inc., dated as of November 1, [removed: 2007(12)] [added: 2007(13)] |

| 10.59 | Form of Tax Equalization Agreement between Messrs. Caratsch, Filliol, Spoerry, [removed: von Arb, Widmer] and Kirk and Mettler-Toledo International Inc., dated October 10, [removed: 2007(8)] [added: 2007(9)] |

| [removed: (7)] [added: (8)] | Incorporated by reference to the Company’s Form DEF 14-A filed March 29, 2004 |

| [removed: (8)] [added: (9)] | Incorporated by reference to the Company’s Report on Form 10-K dated February 15, 2008 |

| [removed: (9)] [added: (10)] | Incorporated by reference to the Company's Registration Statement on Form S-8 dated July 26, 2013 (Reg. No. 333-190181) |

| [removed: (10)] [added: (11)] | Incorporated by reference to the Company’s Report on Form 10-K dated February 13, 2009 |

| [removed: (11)] [added: (12)] | Incorporated by reference to the Company's Report on Form 10-K dated February 16, 2010 |

| [removed: (12)] [added: (13)] | Incorporated by reference to the Company’s Report on Form 8-K dated November 1, 2007 |

| [removed: (13)] [added: (14)] | Incorporated by reference to the Company’s Report on Form 10-K dated March 4, 2002 |

| [removed: (14)] [added: (15)] | Incorporated by reference to the Company's Report on Form 10-K dated February 13, 2012 |

| [removed: (15)] [added: (16)] | Incorporated by reference to the Company's Report on Form 10-K dated February 8, 2013 |

| [Report of Independent Registered Public Accounting [removed: Firm](#s46B3F28B602FD97678E338C8EA1249D0)] [added: Firm](#s6AC898272F1170727046A0FA6AE018E3)] | [removed: F- [2](#s46B3F28B602FD97678E338C8EA1249D0)] [added: F-2] |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 2013, 2012] [added: 2014, 2013] and [removed: 2011](#s6672A6FF3E9E1A7D8E5F38C8D76C0021)] [added: 2012](#sC7091D7A4DB34513DC61A0FA586A7F3A)] | [removed: F- [3](#s6672A6FF3E9E1A7D8E5F38C8D76C0021)] [added: F-3] |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2013, 2012] [added: 2014, 2013] and [removed: 2011](#sE75A7169A1D39EDACF3F38C8D6825E04)] [added: 2012](#sB8C86486AA7708D9CBE8A0FA57AF8170)] | [removed: F- [4](#sE75A7169A1D39EDACF3F38C8D6825E04)] [added: F-4] |

| [Consolidated Balance Sheets as of December 31, [removed: 2013] [added: 2014] and [removed: 2012](#s027D7E9EB970066B5EC138C8D71E20FA)] [added: 2013](#sA6B4FB39BB04AA760EC9A0FA558DC21B)] | [removed: F- [5](#s027D7E9EB970066B5EC138C8D71E20FA)] [added: F-5] |

| [Consolidated Statements of Shareholders’ Equity for the years ended December 31, [removed: 2013, 2012] [added: 2014, 2013] and [removed: 2011](#s32CFE2B1C7C9F12657C438C8D75D2FA8)] [added: 2012](#s55CF276F46CCA7180240A0FA59156271)] | [removed: F- [6](#s32CFE2B1C7C9F12657C438C8D75D2FA8)] [added: F-6] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2013, 2012] [added: 2014, 2013] and [removed: 2011](#sE7323BF57FA1773C650638C8D6B1EFE8)] [added: 2012](#sC0A4390E577ECBA0C6D0A0FA552FA62A)] | [removed: F- [7](#sE7323BF57FA1773C650638C8D6B1EFE8)] [added: F-7] |

| [Notes to the Consolidated Financial [removed: Statements](#sC4831C666F65DBFC3F2338C8EB2B2C40)] [added: Statements](#s96E27C2FAE9F59C6A3D4A0FA6C2BB815)] | [removed: F- [8](#sC4831C666F65DBFC3F2338C8EB2B2C40)] [added: F-8] |

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, [removed: 2013] [added: 2014] and December 31, [removed: 2012,] [added: 2013,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2013] [added: 2014] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2013,] [added: 2014,] based on criteria established in Internal Control — Integrated Framework [removed: (1992)] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

| | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Total net sales | [removed: 2,378,972] [added: 2,485,983] | | | | [removed: 2,341,528] [added: 2,378,972] | | | | [removed: 2,309,328] [added: 2,341,528] | | |

| Research and development | [removed: 116,346] [added: 123,297] | | | | [removed: 112,530] [added: 116,346] | | | | [removed: 116,139] [added: 112,530] | | |

| Selling, [removed: general] [added: general,] and administrative | [removed: 692,788] [added: 728,582] | | | | [removed: 684,026] [added: 692,693] | | | | [removed: 703,632] [added: 684,026] | | |

| Amortization | [removed: 24,539] [added: 29,185] | | | | [removed: 21,357] [added: 24,539] | | | | [removed: 17,808] [added: 21,357] | | |

| Interest expense | [removed: 22,711] [added: 24,537] | | | | [removed: 22,764] [added: 22,711] | | | | [removed: 23,226] [added: 22,764] | | |

| 10.14 | Note Purchase Agreement dated as of June 27, 2014 by and among Mettler-Toledo International Inc., Babson Capital Management LLC, Cigna Investments, Inc. and Teachers Insurance and Annuity Association of America. (7) |

| (7) | Incorporated by reference to the Company's Report on Form 8-K dated July 2, 2014 |

February 6, 2015

| Products | $ | 1,930,497 | | | $ | 1,860,893 | | | $ | 1,852,192 | |

| Service | 555,486 | | | | 518,079 | | | | 489,336 | | |

| Products | 809,537 | | | | 795,225 | | | | 811,204 | | |

| Service | 317,696 | | | | 301,816 | | | | 289,269 | | |

| Gross profit | 1,358,750 | | | | 1,281,931 | | | | 1,241,055 | | |

| Net earnings | $ | 338,241 | | | $ | 306,094 | | | $ | 290,847 | |

| Goodwill | 444,085 | | | | 455,842 | | |

| Exercise of stock options and restricted stock units | 373,431 | | | — | | | | — | | | | 39,374 | | | | (18,327 | | ) | | — | | | | 21,047 | | |

| Repurchases of common stock | (1,617,499 | ) | | — | | | | — | | | | (414,000 | | ) | | — | | | | — | | | | (414,000 | | ) |

| Net earnings | — | | | — | | | | — | | | | — | | | | 338,241 | | | | — | | | | 338,241 | | |

| Other comprehensive income (loss), net of tax | — | | | — | | | | — | | | | — | | | | — | | | | (177,913 | | ) | | (177,913 | | ) |

| Balance at December 31, 2014 | 28,243,007 | | | $ | 448 | | | $ | 670,418 | | | $ | (2,095,656 | ) | | $ | 2,357,334 | | | $ | (212,949 | ) | | $ | 719,595 | |

| Net earnings | $ | 338,241 | | | $ | 306,094 | | | $ | 290,847 | |

| Amortization | 29,185 | | | | 24,539 | | | | 21,357 | | |

respective jurisdictions in which the Company operates.

Revenue is recognized on these

In May 2014, the FASB issued ASU 2014-09, to ASC 606 "Revenue from Contracts with Customers." ASU 2014-09 provides authoritative guidance clarifying the principles for recognizing revenue and developing a common revenue standard for U.S. GAAP.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.

Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized.

The guidance becomes effective for the Company for the year beginning January 1, 2017.

The Company is currently evaluating the impact the adoption of this guidance will have on the consolidated results of operations, financial position, and disclosures.

similar tax loss carryforward, or a tax credit carryforward exists.

| | 2014 | | | | 2013 | | |

| | $ | 204,531 | | | $ | 210,414 | |

In January 2015 we increased the notional amount of the Company's cash flow hedges to a total notional value and average forward rate of Euro 86 million and 1.21 for contracts that mature in 2015, and Euro 67 million and 1.19 for contracts that mature in 2016, prior to the Swiss National Bank's abandonment of its previously established exchange rate floor of 1.20 Swiss francs per euro.

The cash flow hedges are recorded gross at fair value in the consolidated balance sheet at December 31, 2014 and 2013, respectively, and disclosed in Note 5 to the consolidated financial statements.

Amounts reclassified into other comprehensive income and the effective portions of the cash flow hedges are further disclosed in Note 9 to the consolidated financial statements.

A derivative loss of

The fair value of the Company's fixed interest rate debt was estimated using Level 2 inputs, primarily discounted cash flow models, based on estimated current rates offered for similar debt under current market conditions for the Company.

The fair value of the Company's debt exceeds the carrying value by approximately $17.8 million and $4.2 million at December 31, 2014 and 2013, respectively.

| | 2014 | | | | 2013 | | |

| | 934,772 | | | | 933,150 | | |

| | $ | 511,462 | | | $ | 514,438 | |

| | 2014 | | | | 2013 | | |

| | 2014 | | | | | | | | | | | | 2013 | | | | | | | | | | |

| Other | 1,573 | | | | (1,083 | | ) | | 490 | | | | 757 | | | | (659 | | ) | | 98 | | |

| | $ | 174,573 | | | $ | (61,789 | ) | | $ | 112,784 | | | $ | 171,772 | | | $ | (57,354 | ) | | $ | 114,418 | |

| | |

| --- | --- |

February 7, 2014

| | | | | | | | | | | | |

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

| Products | $ | 1,862,026 | | | $ | 1,852,192 | | | $ | 1,826,891 | |

| Service | 516,946 | | | | 489,336 | | | | 482,437 | | |

| 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 | | |

| | | | | | | | |

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

| 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 | | ) |

| Net earnings | — | | | — | | | | — | | | | — | | | | 269,493 | | | | — | | | | 269,493 | | |

| Other investing activities | — | | | | — | | | | (903 | | ) |

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 amendments will be effective for public entities for annual periods beginning after December 15, 2013.

The Company is currently

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.

| | $ | 210,414 | | | $ | 198,939 | |

For additional disclosures on the fair value of financial instruments, see Note 6 to the consolidated financial statements.

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.

Through December 31, 2013, the hedge ineffectiveness related to this instrument was not material.

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.