Item 15. Exhibits and Financial Statement Schedules

(a) Exhibits, Financial Statements, and Schedules:

1. Financial Statements. See Index to Consolidated Financial Statements included on page F-1.

2. Financial Statement Schedule. See Schedule II, which is included on page S-1.

3. 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 2, 2017

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/ Richard Francis		Director
Richard Francis
/s/ Connie L. Harvey		Director
Connie L. Harvey
/s/ Michael A. Kelly		Director
Michael A. Kelly
/s/ Hans Ulrich Maerki		Director
Hans Ulrich Maerki
/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 November 3, 2016(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 December 17, 2015(3)
10.11	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.(4)
10.12	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(5)
10.13	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. (6)
10.14	Note Purchase Agreement dates as of March 31, 2015 by and among Mettler-Toledo International Inc., Metropolitan Life Insurance Company, MetLife Insurance Company USA, OMI MLIC Investments Limited and Massachusetts Mutual Life Insurance Company.(7)
10.20	Mettler-Toledo International Inc. 2004 Equity Incentive Plan(8)
10.21	Mettler-Toledo International Inc. 2007 Share Plan, effective February 7, 2008(9)
10.22	Mettler-Toledo International Inc. 2013 Equity Incentive Plan(10)
10.23*	Form of Restricted Stock Unit Agreement
10.24*	Form of Performance Share Unit Agreement
10.25*	Performance Stock Option Agreement
10.26*	Form of Stock Option Agreement Directors
10.27*	Form of Stock Option Agreement CEO
10.28*	Form of Stock Option Agreement NEOs
10.31	Regulations of the POBS PLUS — Incentive Scheme for Senior Management of Mettler Toledo, effective as of November, 2006(11)
10.32	Regulations of the POBS PLUS — Incentive Scheme for Members of the Group Management of Mettler Toledo, effective as of January, 2009(11)
10.50	Employment Agreement between Thomas Caratsch and Mettler-Toledo International Inc., dated as of December 4, 2007(9)
10.51	Employment Agreement between Marc de La Guéronnière and Mettler-Toledo International Inc., dated as of January 27, 2011(12)
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(13)
10.54	Employment Agreement between Michael Heidingsfelder and Mettler-Toledo International Inc., dated as of November 30, 2011 (16)
10.55	Employment Agreement between Simon Kirk and Mettler-Toledo International Inc., dated as of November 28, 2011(16)
10.56	Employment Agreement between Christian Magloth and Mettler-Toledo International Inc., dated as of March 22, 2010(12)
10.57	Employment Agreement between Waldemar Rauch and Mettler-Toledo International Inc., dated as of June 10, 2011(15)
10.58	Employment Agreement between Robert Spoerry and Mettler-Toledo International Inc., dated as of November 1, 2007(13)
10.59*	Employment Agreement between Shawn P. Vadala and Mettler-Toledo International Inc., dated as of October 24, 2016
10.60	Form of Tax Equalization Agreement between Messrs. Caratsch, Filliol, Kirk, Magloth, and Spoerry, and Mettler-Toledo International Inc., dated October 10, 2007(9)
10.61	Amendment to Employment Agreement between William Donnelly and Mettler-Toledo International, Inc. dated November 3, 2016 (2)
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 November 8, 2016

(3)	Incorporated by reference to the Company’s Report on Form 8-K dated December 18, 2015

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

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

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

(7)	Incorporated by reference to the Company's Report on Form 8-K dated March 31, 2015

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

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

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

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

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

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

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

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

(16)	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, 2016, 2015, and 2014	F-3
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015, and 2014	F-4
Consolidated Balance Sheets as of December 31, 2016 and 2015	F-5
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2016, 2015, and 2014	F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015, and 2014	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. and its subsidiaries at December 31, 2016 and December 31, 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules appearing on page S-1 present 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, 2016, based on criteria established in Internal Control — Integrated Framework (2013) 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 schedules, 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.

As described in note 2 to the consolidated financial statements, the Company changed the manner in which it presents deferred tax assets and liabilities.

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 2, 2017

F - 2

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31

(In thousands, except share data)

	2016				2015				2014
Net sales
Products	$	1,957,879			$	1,865,884			$	1,930,497
Service	550,378				529,563				555,486
Total net sales	2,508,257				2,395,447				2,485,983
Cost of sales
Products	767,753				744,867				810,547
Service	304,917				298,587				316,686
Gross profit	1,435,587				1,351,993				1,358,750
Research and development	119,968				119,076				123,297
Selling, general, and administrative	732,622				700,810				728,582
Amortization	36,052				30,951				29,185
Interest expense	28,026				27,451				24,537
Restructuring charges	6,235				11,148				5,915
Other charges (income), net	8,491				(867		)		2,230
Earnings before taxes	504,193				463,424				445,004
Provision for taxes	119,823				110,604				106,763
Net earnings	$	384,370			$	352,820			$	338,241
Basic earnings per common share:
Net earnings	$	14.49			$	12.75			$	11.71
Weighted average number of common shares	26,517,768				27,680,918				28,890,771
Diluted earnings per common share:
Net earnings	$	14.22			$	12.48			$	11.44
Weighted average number of common and common equivalent shares	27,023,905				28,269,615				29,571,308

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)

	2016				2015				2014
Net earnings	$	384,370			$	352,820			$	338,241
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(57,928		)		(52,434		)		(82,875		)
Unrealized gains (losses) on cash flow hedging arrangements:
Unrealized gains (losses)	(513		)		13,221				(768		)
Effective portion of (gains) losses included in net earnings	(4,735		)		(8,261		)		1,257
Defined benefit pension and post-retirement plans:
Net actuarial gains (losses)	(47,788		)		(30,759		)		(106,837		)
Plan amendments and prior service cost	—				9,189				1,607
Amortization of actuarial (gains) losses and plan amendments and prior service cost	16,730				9,509				1,614
Impact of foreign currency	5,885				5,835				8,089
Total other comprehensive income (loss), net of tax	(88,349		)		(53,700		)		(177,913		)
Comprehensive income	$	296,021			$	299,120			$	160,328

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)

	2016				2015
ASSETS
Current assets:
Cash and cash equivalents	$	158,674			$	98,887
Trade accounts receivable, less allowances of $14,234 in 2016 and $14,435 in 2015	454,988				411,420
Inventories	222,047				214,383
Other current assets and prepaid expenses	61,075				70,642
Total current assets	896,784				795,332
Property, plant, and equipment, net	563,707				517,229
Goodwill	476,378				446,284
Other intangible assets, net	167,055				115,252
Deferred tax assets, net	33,951				33,051
Other non-current assets	28,902				52,187
Total assets	$	2,166,777			$	1,959,335
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	146,593			$	142,075
Accrued and other liabilities	133,167				127,647
Accrued compensation and related items	140,461				136,414
Deferred revenue and customer prepayments	100,330				88,829
Taxes payable	47,990				48,759
Short-term borrowings and current maturities of long-term debt	18,974				14,488
Total current liabilities	587,515				558,212
Long-term debt	875,056				575,138
Deferred tax liabilities, net	64,306				50,976
Other non-current liabilities	204,957				194,552
Total liabilities	1,731,834				1,378,878
Commitments and contingencies (Note 16)
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 26,020,234 and 27,090,118 shares at December 31, 2016 and 2015, respectively	448				448
Additional paid-in capital	730,556				697,570
Treasury stock at cost (18,765,777 and 17,695,893 shares at December 31, 2016 and 2015, respectively)	(3,006,771		)		(2,543,229		)
Retained earnings	3,065,708				2,692,317
Accumulated other comprehensive income (loss)	(354,998		)		(266,649		)
Total shareholders’ equity	434,943				580,457
Total liabilities and shareholders’ equity	$	2,166,777			$	1,959,335

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, 2013	29,487,075			$	448			$	653,250			$	(1,721,030	)		$	2,037,420			$	(35,036	)		$	935,052
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		)
Tax benefit resulting from exercise of certain employee stock options	—			—				3,557				—				—				—				3,557
Share-based compensation	—			—				13,611				—				—				—				13,611
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
Exercise of stock options and restricted stock units	403,908			—				—				47,393				(17,837		)		—				29,556
Repurchases of common stock	(1,556,797	)		—				—				(494,966		)		—				—				(494,966		)
Tax benefit resulting from exercise of certain employee stock options	—			—				12,929				—				—				—				12,929
Share-based compensation	—			—				14,223				—				—				—				14,223
Net earnings	—			—				—				—				352,820				—				352,820
Other comprehensive income (loss), net of tax	—			—				—				—				—				(53,700		)		(53,700		)
Balance at December 31, 2015	27,090,118			$	448			$	697,570			$	(2,543,229	)		$	2,692,317			$	(266,649	)		$	580,457
Exercise of stock options and restricted stock units	278,623			—				—				36,450				(10,979		)		—				25,471
Repurchases of common stock	(1,348,507	)		—				—				(499,992		)		—				—				(499,992		)
Tax benefit resulting from exercise of certain employee stock options	—			—				17,680				—				—				—				17,680
Share-based compensation	—			—				15,306				—				—				—				15,306
Net earnings	—			—				—				—				384,370				—				384,370
Other comprehensive income (loss), net of tax	—			—				—				—				—				(88,349		)		(88,349		)
Balance at December 31, 2016	26,020,234			$	448			$	730,556			$	(3,006,771	)		$	3,065,708			$	(354,998	)		$	434,943

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)

	2016				2015				2014
Cash flows from operating activities:
Net earnings	$	384,370			$	352,820			$	338,241
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	32,743				33,087				33,617
Amortization	36,052				30,951				29,185
Deferred tax provision	1,878				7,137				15,362
Excess tax benefits from share-based payment arrangements	(17,680		)		(12,929		)		(3,557		)
Share-based compensation	15,306				14,223				13,611
Non-cash pension settlement charge	8,189				—				—
Other	181				155				211
Increase (decrease) in cash resulting from changes in:
Trade accounts receivable, net	(52,151		)		1,625				7,492
Inventories	(12,431		)		(18,785		)		(9,302		)
Other current assets	291				(5,119		)		4,392
Trade accounts payable	9,633				1,698				6,298
Taxes payable	(3,072		)		2,879				(461		)
Accruals and other	39,769				19,126				(16,177		)
Net cash provided by operating activities	443,078				426,868				418,912
Cash flows from investing activities:
Proceeds from sale of property, plant, and equipment	423				949				728
Purchase of property, plant, and equipment	(123,957		)		(82,506		)		(89,388		)
Acquisitions	(111,381		)		(13,779		)		(5,784		)
Net hedging settlements on intercompany loans	3,459				(5,415		)		123
Net cash used in investing activities	(231,456		)		(100,751		)		(94,321		)
Cash flows from financing activities:
Proceeds from borrowings	905,774				741,864				628,832
Repayments of borrowings	(594,178		)		(594,477		)		(585,867		)
Proceeds from exercise of stock options	25,471				29,556				21,047
Repurchases of common stock	(499,992		)		(494,966		)		(414,000		)
Excess tax benefits from share-based payment arrangements	17,680				12,929				3,557
Acquisition contingent consideration paid	(471		)		(572		)		(859		)
Debt issuance costs	(209		)		(1,366		)		(941		)
Net cash used in financing activities	(145,925		)		(307,032		)		(348,231		)
Effect of exchange rate changes on cash and cash equivalents	(5,910		)		(5,461		)		(2,971		)
Net increase (decrease) in cash and cash equivalents	59,787				13,624				(26,611		)
Cash and cash equivalents:
Beginning of period	98,887				85,263				111,874
End of period	$	158,674			$	98,887			$	85,263
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	28,025			$	27,303			$	23,219
Taxes	$	92,586			$	85,458			$	95,143

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 factors to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount.

If the Company is unable to conclude that goodwill asset is not impaired after considering the totality of events and circumstances during its qualitative assessment, the Company performs the first step of the two-step impairment test by estimating the fair value of the goodwill asset and comparing the fair value to the carrying amount of the goodwill asset. If the carrying amount of the goodwill asset exceeds its fair value, then the Company performs the second step of the impairment test to measure the amount of the impairment loss, if any.

If the Company is unable to conclude that the indefinite-lived intangible asset is not impaired after considering the totality of events and circumstances, the Company performs an impairment test to measure the amount of the impairment loss, if any.

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 to be benefited. 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."

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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, their respective tax bases, and operating 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 or in certain circumstances as a component of other comprehensive income (loss) where the underlying item is considered a hedge of a net investment.

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

F - 10

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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, 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.

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 obligations are 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 506,137, 588,697, and 680,537 common equivalent shares in the calculation of diluted weighted average number of common

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

shares for the years ended December 31, 2016, 2015, and 2014, respectively, relating to outstanding stock options and restricted stock units.

Outstanding options and restricted stock units to purchase or receive 102,017, 112,562, and 127,995 shares of common stock for the years ended December 31, 2016, 2015, and 2014, 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.

Derivative Financial Instruments

The Company has 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 intercompany 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.

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

Recent Accounting Pronouncements

The FASB issued ASU 2014-09, ASU 2016-10 and ASU 2016-12 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. ASU 2016-10 provides guidance for identifying performance obligations as they pertain to immaterial promised goods or services, shipping and handling activities, and identifying when promises represent performance obligations. ASU 2016-12 provides guidance for assessing collectability, presentation of sales taxes, noncash considerations, and completed contract modifications at transition. The guidance becomes effective for the Company for the year beginning January 1, 2018. The Company is finalizing its evaluation of the impact of the adoption of this guidance and believes it will have an immaterial impact on the Company's consolidated results of operations and financial position. The estimated impact to the Company's results is expected to be immaterial because most of its performance obligations are satisfied at the time of title transfer and risk of loss to the customer which is generally upon shipment. In addition, contracts with end-customers typically do not exceed a year, and generally pertain to service contracts that represent an obligation to perform repair or other services on a customer's pre-defined equipment over the contract period. The Company also sometimes enters into contracts with end-customers that comprise arrangements that require separate delivery of multiple goods and/or services, including post-shipment obligations such as installation. Immaterial impacts from adopting the new standard include the recognition of certain revenue for performance obligations that were deferred until post-shipment obligations were completed. The number of performance obligations under the new standard is also not materially different from the Company's financial accounting and reporting model under the existing standard. The Company is still evaluating the adoption method it will elect upon implementation. The Company is also in the process of implementing appropriate changes to its business processes, systems and controls to support recognition and disclosures under the new standard.

In October 2016, the FASB issued ASU 2016-16, to ASC 740 "Income Taxes," which simplifies the recording of an inter-entity transfer of assets other than inventory. The new guidance requires that a company recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new guidance becomes effective for annual reporting periods beginning after December 15, 2017 and must be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the adoption period. The Company is currently evaluating the impact of this guidance on our financial statements and the timing of adoption.

In August 2016, the FASB issued ASU 2016-15, to ASC 230 "Statement of Cash Flows," which clarifies how certain cash receipts and cash payments are classified in the statement of cash flows. The new guidance must be applied retrospectively and becomes effective for the year beginning January 1, 2018 with early adoption permitted. The Company is currently evaluating the impact of this guidance on our financial statements and the timing of adoption.

In March 2016, the FASB issued ASU 2016-09, to ASC 718 "Compensation - Stock Compensation." The guidance allows for the simplification related to several aspects of the accounting for share-based payment transactions, including income tax consequences, the accounting for forfeitures, classification of

F - 13

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

awards as either equity or liabilities, and classification on the statement of cash flows. The guidance can be applied either on a retrospective or prospective basis and becomes effective for annual periods beginning after December 15, 2016. The Company will adopt the guidance in the first quarter of 2017. The primary impact of adoption will be the recognition of excess tax benefits within the provision for taxes rather than within shareholder's equity, which the Company will adopt on a prospective basis. The Company expects the adoption of this guidance will reduce its income tax rate by approximately 2% in 2017. In addition, the excess tax benefits from share-based payment arrangements will be classified as operating cash flows on the statement of cash flows.

In February 2016, the FASB issued ASU 2016-02 to ASC 842 "Leases." The accounting guidance primarily requires lessees to recognize most leases on their balance sheet as a right to use asset and a lease liability, with the exception of short term leases. A lessee will continue to recognize lease expense on a straight-line basis for leases classified as operating leases. The guidance becomes effective for fiscal years beginning after December 15, 2018 and must be applied on a retrospective basis with early adoption permitted. The Company is currently evaluating the impact of this guidance on our financial statements and the timing of adoption.

In December 2016, the Company adopted ASU 2015-07, to ASC 820 "Fair Value Measurements." ASU 2015-07 removes the requirement to categorize investments using the net asset value per share method within the fair value hierarchy. The Company adopted this guidance in the fourth quarter of 2016 which is disclosed in Note 12 of the financial statements. The adoption of this guidance did not have a material impact on the Company's consolidated financial position or disclosures.

In December 2016, the Company adopted ASU 2015-17, to ASC 740 "Income Taxes". The guidance simplifies the balance sheet classification of deferred taxes. The new guidance requires that all deferred tax balances be presented as non-current. The impact to the consolidated balance sheet at December 31, 2015 was a reduction of current assets by $67.5 million and a reduction of current liabilities by $36.9 million, respectively. The impact to total assets and total liabilities at December 31, 2015 was a reduction $57.4 million, respectively.

In March 2016, the Company adopted ASU 2015-03 and ASU 2015-15, to ASC 835 "Interest-Imputation of Interest." The accounting guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, but allows debt issuance costs related to line-of-credit arrangements to remain as an asset. The Company elected to continue to present unamortized debt issuance costs related to the credit facility as an other non-current asset. The Company applied the adoption of these standards retrospectively and reclassified $1.6 million and $1.8 million of unamortized debt issuance costs from other non-current assets to long-term debt as of December 31, 2016 and 2015, respectively. The adoption of this guidance did not have a material impact on the Company's consolidated financial position.

3. ACQUISITIONS

In the third quarter of 2016, the Company acquired substantially all of the assets of Henry Troemner, LLC, (Troemner) a supplier of lab equipment, weights and weight calibration based in the United States for an aggregate purchase price of $95.8 million that has been included into the Company's laboratory instrument offering. Goodwill recorded in connection with the acquisition totaled $33.8 million, which is included in the Company's U.S. Operations segment. The Company identified intangible assets which included customer relationships of $43.9 million, tradename of $3.4 million, technology and

F - 14

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

patents of $2.9 million and other intangibles of $0.5 million. The identifiable intangible assets will be amortized on a straight-line basis over periods ranging from 3 to 25 years and the annual aggregate amortization expense is estimated at $2.7 million. Net tangible assets acquired were $11.3 million and are recorded at fair value in the consolidated financial statements.

In 2016, the Company also incurred additional acquisition payments totaling $15.6 million. Goodwill recorded in connection with these acquisitions totaled $7.5 million. The Company also recorded $9.4 million of identified intangibles primarily pertaining to customer relationships in connection with these acquisitions, which will be amortized on a straight-line basis over 10 to 15 years.

4. INVENTORIES

Inventory consisted of the following at December 31:

	2016				2015
Raw materials and parts	$	100,408			$	98,252
Work-in-progress	41,454				35,100
Finished goods	80,185				81,031
Total Inventory	$	222,047			$	214,383

5. FINANCIAL INSTRUMENTS

The Company has limited involvement with derivative financial instruments and does not use them for trading purposes. The Company enters into certain interest rate swap agreements in order to manage its exposure to changes in interest rates. At December 31, 2016, the interest payments associated with 71% 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 certain foreign currency forward contracts to limit the Company's exposure to currency fluctuations on the respective hedged items. As also mentioned in Note 9, the Company has designated its euro-denominated debt as a hedge of a portion of its net investment in a euro denominated foreign subsidiary. For additional disclosures on the fair value of financial instruments, see Note 6.

Cash Flow Hedges

The Company previously entered into foreign currency forward contracts, designated as cash flow hedges, to hedge certain forecasted intercompany sales denominated in euro with its Swiss-based business. In January 2015, prior to the Swiss National Bank's abandonment of its previously established exchange rate of 1.20 Swiss franc per euro, the Company increased the notional amount of the cash flow hedges to a total notional value and average forward rate of Euro 86 million and 1.21 for contracts that matured in 2015 and Euro 67 million and 1.19 for contracts that matured in 2016. As of December 31, 2016 there were no foreign currency forward contracts outstanding. The notional amount of foreign currency forward contracts outstanding was $73 million (Euro 67 million) at December 31, 2015. The amount recognized in other comprehensive income (loss) during 2016 and 2015 was a loss of $0.3 million and a gain of $19.0 million, respectively.

The Company has an interest rate swap agreement designated as a cash flow hedge. The agreement is a swap which has the effect of changing 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 and matures in October 2020.

F - 15

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

In March 2015, the Company entered into a forward-starting interest rate swap agreement. The

agreement will change the floating rate LIBOR-based interest payments associated with $100 million in

forecasted borrowings under the Company's credit agreement to a fixed obligation of 2.25% beginning in

February 2017 and matures in February 2022.

The Company's cash flow hedges are recorded gross at fair value in the consolidated balance sheet at December 31, 2016 and 2015, and disclosed in Note 6 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 10 to the consolidated financial statements. A derivative loss of $1.1 million based upon interest rates at December 31, 2016 is expected to be reclassified from other comprehensive income (loss) to earnings in the next 12 months. Through December 31, 2016, no hedge ineffectiveness has occurred in relation to these cash flow hedges.

Other Derivatives

The Company enters into foreign currency forward contracts in order to economically hedge short-term trade and non-trade intercompany balances largely denominated in Swiss franc, other major European currencies, and the Chinese Renminbi 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 are recorded at fair value in the consolidated balance sheet at December 31, 2016 and 2015, as disclosed in Note 6 to the consolidated financial statements. The Company recognized in other charges (income), a net loss of $3.3 million and $5.3 million during the years ended December 31, 2016 and 2015, respectively. At December 31, 2016 and 2015, these contracts had a notional value of $353.0 million and $318.7 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, 2016 and 2015, the Company had derivative assets totaling $0.8 million and $8.2 million, respectively, and derivative liabilities totaling $5.8 million and $4.7 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, 2016 and 2015.

The Company had $21.5 million and $18.8 million of cash equivalents at December 31, 2016 and 2015, respectively, the fair value of which is determined through quoted and corroborated prices in active markets. The fair value of cash equivalents approximates cost.

F - 16

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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 $4.2 million as of December 31, 2016. The carrying value of the Company's debt exceeded the fair value by approximately $9.2 million as of December 31, 2015.

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

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, 2016 and 2015:

	December 31, 2016																December 31, 2015
	Total				Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3
Assets:
Cash equivalents	$	21,513			$	—			$	21,513			$	—			$	18,755			$	—			$	18,755			$	—
Foreign currency forward contracts designated as cash flow hedges	—				—				—				—				7,056				—				7,056				—
Foreign currency forward contracts not designated as hedging instruments	791				—				791				—				1,166				—				1,166				—
Total	$	22,304			$	—			$	22,304			$	—			$	26,977			$	—			$	26,977			$	—
Liabilities:
Interest rate swap agreements	$	3,630			$	—			$	3,630			$	—			$	4,092			$	—			$	4,092			$	—
Foreign currency forward contracts not designated as hedging instruments	2,123				—				2,123				—				625				—				625				—
Total	$	5,753			$	—			$	5,753			$	—			$	4,717			$	—			$	4,717			$	—

7. PROPERTY, PLANT, AND EQUIPMENT, NET

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

	2016				2015
Land	$	55,885			$	47,358
Building and leasehold improvements	247,883				211,490
Machinery and equipment	347,344				341,820
Computer software	372,065				353,556
Property, plant, and equipment, gross	1,023,177				954,224
Less accumulated depreciation and amortization	(459,470		)		(436,995		)
Property, plant, and equipment, net	$	563,707			$	517,229

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

8. GOODWILL AND OTHER INTANGIBLE ASSETS

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

	2016				2015
Balance at beginning of year	$	446,284			$	444,085
Goodwill acquired	41,308				9,773
Foreign currency translation	(11,214		)		(7,574		)
Balance at year end	$	476,378			$	446,284

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, 2016, there had been no impairment of these assets.

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

	2016												2015
	Gross Amount				Accumulated Amortization				Intangibles, Net				Gross Amount				Accumulated Amortization				Intangibles, Net
Customer relationships	$	147,466			$	(34,672	)		$	112,794			$	98,175			$	(30,836	)		$	67,339
Proven technology and patents	58,394				(35,128		)		23,266				52,938				(32,444		)		20,494
Tradenames (finite life)	4,182				(2,514		)		1,668				4,200				(2,158		)		2,042
Tradenames (indefinite life)	28,272				—				28,272				24,814				—				24,814
Other	2,871				(1,816		)		1,055				2,111				(1,548		)		563
	$	241,185			$	(74,130	)		$	167,055			$	182,238			$	(66,986	)		$	115,252

The Company recognized amortization expense associated with the above intangible assets of $8.3 million, $6.3 million, and $6.5 million for the years ended December 31, 2016, 2015, and 2014, respectively. The annual aggregate amortization expense based on the current balance of other intangible assets is estimated at $9.8 million for 2017, $9.5 million for 2018, $9.1 million for 2019, $8.8 million for 2020, and $8.2 million for 2021. 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 $7.4 million, $5.0 million after tax, $5.7 million, $3.9 million after tax, and $5.6 million, $3.9 million after tax, for the years ended December 31, 2016, 2015, and 2014, respectively.

In addition to the above amortization, the Company recorded amortization expense associated with capitalized software of $27.5 million, $24.4 million, and $22.4 million for the years ended December 31, 2016, 2015, and 2014, respectively.

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

9. DEBT

Debt consisted of the following at December 31:

	2016				2015
$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				50,000
$125 million Senior Notes, interest 3.84%, due September 19, 2024	125,000				125,000
$125 million Senior Notes, interest 4.24%, due June 25, 2025	125,000				125,000
Euro 125 million Senior Notes, interest 1.47%, due June 17, 2030	131,507				136,575
Debt issuance costs, net	(1,642		)		(1,846		)
Total Senior Notes	479,865				484,729
$800 million Credit Agreement, interest at LIBOR plus 87.5 basis points	395,191				90,409
Other local arrangements	18,974				14,488
Total debt	894,030				589,626
Less: current portion	(18,974		)		(14,488		)
Long-term debt	$	875,056			$	575,138

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 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 3.67% Senior Notes also contain customary events of default with customary grace periods, as applicable. The Company was in compliance with its covenants at December 31, 2016.

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

4.10% Senior Notes

In 2013, the Company issued and sold $50 million of 4.10% Senior Notes due September 19, 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 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 its covenants at December 31, 2016.

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

F - 19

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

3.84% Senior Notes and 4.24% Senior Notes

In the second quarter of 2014, the Company entered into an agreement to issue and sell $250 million of ten-year Senior Notes in a private placement. The Company issued $125 million with a fixed interest rate of 3.84% ("3.84% Senior Notes") in September 2014 and issued $125 million with a fixed interest rate of 4.24% ("4.24% Senior Notes") in June 2015. The Senior Notes are senior unsecured obligations of the Company. Interest on the 3.84% Senior Notes is payable semi-annually in March and September each year, beginning in March 2015. Interest on the 4.24% Senior Notes is payable semi-annually in June and December of each year, beginning in December 2015. The 4.24% Senior Notes were used to repay $100 million of 6.3% Senior Notes which were due June 25, 2015.

The 3.84% Senior Notes and 4.24% 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 3.84% Senior Notes and 4.24% Senior Notes also contain customary events of default with customary grace periods, as applicable. The Company was in compliance with its covenants at December 31, 2016.

Issuance costs approximating $0.9 million are being amortized to interest expense over the ten-year term of the Senior Notes.

1.47% Euro Senior Notes

In 2015, the Company issued in a private placement Euro 125 million with a fixed interest rate of 1.47% ("1.47% Euro Senior Notes") fifteen-year Senior Notes. The Euro Senior Notes are senior unsecured obligations of the Company. The Company has designated the 1.47% Euro Senior Notes as a hedge of a portion of its net investment in a euro denominated foreign subsidiary to reduce foreign currency risk associated with this net investment. Changes in the carrying value of this debt resulting from fluctuations in the euro to U.S. dollar exchange rate are recorded as foreign currency translation adjustments within other comprehensive income (loss). The Company recorded an unrealized gain in other comprehensive income (loss) related to this net investment hedge of $5.1 million and $3.6 million for the period ended December 31, 2016 and 2015, respectively.

Interest on the 1.47% Senior Notes is payable in June and December each year, beginning in December 2015. The 1.47% 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 1.47% Senior Notes also contain customary events of default with customer grace periods, as applicable. The Company was in compliance with its covenants at December 31, 2016.

Issuance costs approximating $0.4 million are being amortized to interest expense over the fifteen-year term of the Euro Senior Notes.

Credit Agreement

In 2015, the Company entered into an $800 million Credit Agreement (the "Credit Agreement"), which amended its $800 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 December 17, 2020. 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.

F - 20

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

Borrowings under the Credit Agreement bear interest at current market rates plus a margin based on the Company’s consolidated leverage ratio, which was set at LIBOR plus 87.5 basis points as of December 31, 2016. 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, 2016. 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 $0.1 million of debt extinguishment costs during 2015 related to the Prior Credit Agreement. The Company capitalized $1.1 million in financing fees during 2015 associated with the Credit Agreement which will be amortized to interest expense through 2020. As of December 31, 2016, approximately $399.6 million was available under the facility.

The Company’s weighted average interest rate was 3.7% and 4.7% for the years ended December 31, 2016 and 2015, respectively.

10. 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, 2016, 3,706,789 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.

Share Repurchase Program

The Company has a share repurchase program of which there was $983.4 million common shares remaining to be repurchased under the program as of December 31, 2016. 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 26.0 million common shares since the inception of the program in 2004 through December 31, 2016, at a total cost of $3.5 billion. During the years ended December 31, 2016 and 2015, the Company spent $500 million and $495 million on the repurchase of 1,348,507 shares and 1,556,797 shares at an average price per share of $370.75 and $317.92, respectively. The Company

F - 21

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

reissued 278,623 shares and 403,908 shares held in treasury for the exercise of stock options and restricted stock units during 2016 and 2015, respectively.

Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income by component for the period ended December 31, 2016 and 2015:

	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, 2014	$	(4,960	)		$	(1,944	)		$	(206,045	)		$	(212,949	)
Other comprehensive income (loss), net of tax:
Net unrealized actuarial gains (loss), prior service costs, and plan amendments	—				—				(21,570		)		(21,570		)
Net unrealized gains (loss) on cash flow hedging arrangements	—				13,221				—				13,221
Foreign currency translation adjustment	(52,434		)		—				5,835				(46,599		)
Amounts recognized from accumulated other comprehensive income (loss), net of tax	—				(8,261		)		9,509				1,248
Net change in other comprehensive income (loss), net of tax	(52,434		)		4,960				(6,226		)		(53,700		)
Balance at December 31, 2015	$	(57,394	)		$	3,016			$	(212,271	)		$	(266,649	)
Other comprehensive income (loss), net of tax:
Net unrealized actuarial gains (loss), prior service costs and plan amendments	—				—				(47,788		)		(47,788		)
Net unrealized gains (loss) on cash flow hedging arrangements	—				(513		)		—				(513		)
Foreign currency translation adjustment	(57,928		)		—				5,885				(52,043		)
Amounts recognized from accumulated other comprehensive income (loss), net of tax	—				(4,735		)		16,730				11,995
Net change in other comprehensive income (loss), net of tax	(57,928		)		(5,248		)		(25,173		)		(88,349		)
Balance at December 31, 2016	$	(115,322	)		$	(2,232	)		$	(237,444	)		$	(354,998	)

F - 22

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

The following table presents amounts recognized from accumulated other comprehensive income (loss) for the twelve months period ended December 31, 2016 and 2015:

		2016				2015				Location of Amounts Recognized in Earnings
Effective portion of losses (gains) on cash flow hedging arrangements:
Interest rate swap agreements		$	1,034			$	2,764			Interest expense
Foreign currency forward contracts		(6,756		)		(12,529		)		Cost of sales - products
Total before taxes		(5,722		)		(9,765		)
Provision for taxes		(987		)		(1,504		)		Provision for taxes
Total, net of taxes		$	(4,735	)		$	(8,261	)
Recognition of defined benefit pension and post-retirement items:
Recognition of actuarial losses, plan amendments, prior service cost, and settlement charge before taxes		$	23,925			$	13,018			(a)
Provision for taxes		7,195				3,509				Provision for taxes
Total, net of taxes		$	16,730			$	9,509

(a)	These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and post-retirement cost. See Note 12 for additional details for the year ended December 31, 2016.

11. 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 shares that remained available for grant under the Company's prior equity incentive plan as well as options outstanding that terminate without being exercised, may be the subject of awards. The plan provides for the grant of options, 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. Performance share units generally vest after a three-year period from the date of the grant based upon satisfaction of the performance condition. The compensation committee of the Board of Directors has generally granted restricted share units to participating managers and non-qualified stock options and performance share units 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.

F - 23

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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, 2015 through December 31, 2016:

	Number of Options			Weighted Average Exercise Price		Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2015	1,374,705			$162.29		$243.1
Granted	92,992			397.95
Exercised	(250,520	)		101.67
Forfeited	(1,696	)		294.14
Outstanding at December 31, 2016	1,215,481			$192.63		$274.6
Options exercisable at December 31, 2016	888,061			$152.23		$236.5

The following table details the weighted average remaining contractual life of options outstanding at December 31, 2016 by range of exercise prices:

Number of Options Outstanding			Weighted Average Exercise Price				Remaining Contractual Life of Options Outstanding		Options Exercisable
209,721			$	87.36			2.6		209,721
220,815			$	127.63			3.1		220,815
332,507			$	159.62			5.3		300,382
131,135			$	244.99			6.8		81,249
321,303			$	318.83			8.8		75,894
1,215,481							5.5		888,061

As of the date granted, the weighted average grant-date fair value of the options granted during the years ended December 31, 2016, 2015, and 2014 was $118.31, $92.81, and $77.64, respectively.

Such weighted average grant-date fair value was determined using the following assumptions:

	2016			2015			2014
Risk-free interest rate	1.26	%		1.65	%		1.66	%
Expected life in years	5.7			5.7			5.6
Expected volatility	29	%		28	%		28	%
Expected dividend yield	—			—			—

The total intrinsic value of options exercised during the years ended December 31, 2016, 2015, and 2014 was approximately $69.5 million, $90.7 million, and $66.9 million, respectively.

The total fair value of options vested during the years ended December 31, 2016, 2015, and 2014 was approximately $7.4 million, $8.6 million, and $6.4 million, respectively.

During the fourth quarter of 2016, the Company granted 12,678 performance-based options, with a grant-date fair value of $1.5 million. Compensation expense will be recognized over the five year vesting provisions based upon the probability of the performance condition being met.

F - 24

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

The following table summarizes all restricted stock unit and performance share unit activity from December 31, 2015 through December 31, 2016:

	Number of Restricted Stock Units			Aggregate Intrinsic Value (in millions)				Number of Performance Share Units			Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2015	82,074			$	27.8			—			$	—
Granted	20,916							4,532
Vested	(28,103	)						—
Forfeited	(4,340	)						—
Outstanding at December 31, 2016	70,547			$	29.5			4,532			$	1.9

The weighted average grant-date fair value of the restricted stock units granted during years ended 2016 and 2015 was $397.95 and $312.57 per unit, respectively, and the restricted units vest ratably primarily over a five-year period. The total fair value of the restricted stock units on the date of grant of $8.3 million for 2016 and $8.1 million for 2015 will be recorded as compensation expense on a straight-line basis over the vesting period. The total fair value of restricted stock units vested during the years ended December 31, 2016, 2015, and 2014 was approximately $6.3 million, $6.0 million, and $5.8 million, respectively. Approximately $6.4 million and $5.8 million of compensation expense was recognized during the years ended December 31, 2016 and 2015, respectively.

During the fourth quarter of 2016, the Company granted performance share units with a market condition. Grantees of performance shares units will be eligible to receive shares of the Company's common stock depending upon our total shareholder return relative to the performance of companies in the S&P 500 Healthcare and S&P 500 Industrials over a three-year period. The awards actually earned will range from zero percent to 200 percent of the targeted number of performance share units for the three-year performance period and will be paid, to the extent earned, in the fiscal quarter following the end of the applicable three-year performance period. These awards were valued using a Monte Carlo Simulation based on the following assumptions:

	2016
Risk-free interest rate	0.98	%
Expected life in years	3.0
Expected volatility	29	%
Expected dividend yield	—

As of the date granted, the fair value of the performance share units granted during 2016 was $470.17. The total fair value of the performance share units on the date of the grant was $2.1 million for 2016 and will be recorded as compensation expense on a straight-line basis over the 3-year period.

At December 31, 2016, a total of 2,305,033 shares of common stock were available for grant in the form of stock options, restricted stock units, or performance share units.

As of December 31, 2016, the unrecorded deferred share-based compensation balance related to stock options, restricted stock units and performance share units was $49.8 million and will be recognized using a straight-line method over an estimated weighted average amortization period of 2.4 years.

F - 25

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

12. 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 $15.4 million, $16.0 million, and $15.6 million for the years ended December 31, 2016, 2015, and 2014, 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, 2016 and 2015:

	U.S. Pension Benefits								Non-U.S. Pension Benefits								Other Benefits								Total
	2016				2015				2016				2015				2016				2015				2016				2015
Change in benefit obligation:
Benefit obligation at beginning of year	$	154,415			$	164,367			$	818,269			$	863,639			$	3,272			$	3,754			$	975,956			$	1,031,760
Service cost, gross	432				837				29,936				31,514				—				—				30,368				32,351
Interest cost	4,428				6,431				10,664				14,071				76				139				15,168				20,641
Actuarial losses (gains)	845				(10,145		)		42,786				(4,959		)		318				113				43,949				(14,991		)
Plan amendments and other	—				—				—				(12,391		)		150				163				150				(12,228		)
Benefits paid	(21,965		)		(7,075		)		(33,977		)		(49,010		)		(831		)		(897		)		(56,773		)		(56,982		)
Impact of foreign currency	—				—				(29,401		)		(24,595		)		—				—				(29,401		)		(24,595		)
Benefit obligation at end of year	$	138,155			$	154,415			$	838,277			$	818,269			$	2,985			$	3,272			$	979,417			$	975,956
Change in plan assets:
Fair value of plan assets at beginning of year	$	119,118			$	132,030			$	725,597			$	751,193			$	—			$	—			$	844,715			$	883,223
Actual return on plan assets	6,876				(5,907		)		15,927				(2,925		)		—				—				22,803				(8,832		)
Employer contributions	74				70				22,291				22,812				681				734				23,046				23,616
Plan participants’ contributions	—				—				13,277				12,850				150				163				13,427				13,013
Benefits paid	(21,965		)		(7,075		)		(33,977		)		(49,010		)		(831		)		(897		)		(56,773		)		(56,982		)
Impact of foreign currency and other	—				—				(26,946		)		(9,323		)		—				—				(26,946		)		(9,323		)
Fair value of plan assets at end of year	$	104,103			$	119,118			$	716,169			$	725,597			$	—			$	—			$	820,272			$	844,715
Funded status	$	(34,052	)		$	(35,297	)		$	(122,108	)		$	(92,672	)		$	(2,985	)		$	(3,272	)		$	(159,145	)		$	(131,241	)

F - 26

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
	2016				2015				2016				2015				2016				2015				2016				2015
Other non-current assets	$	—			$	—			$	10,530			$	32,786			$	—			$	—			$	10,530			$	32,786
Accrued and other liabilities	(92		)		(92		)		(4,293		)		(4,508		)		(467		)		(483		)		(4,852		)		(5,083		)
Pension and other post-retirement liabilities	(33,960		)		(35,205		)		(128,345		)		(120,950		)		(2,518		)		(2,789		)		(164,823		)		(158,944		)
Accumulated other comprehensive loss (income)	69,528				83,347				255,855				216,224				(5,057		)		(9,943		)		320,326				289,628
Total	$	35,476			$	48,050			$	133,747			$	123,552			$	(8,042	)		$	(13,215	)		$	161,181			$	158,387

The following amounts have been recognized in accumulated other comprehensive income (loss), before taxes, at December 31, 2016 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	$	—			$	(21,516	)		$	(1,151	)		$	(22,667	)		$	(17,480	)
Actuarial losses (gains)	69,528				277,371				(3,906		)		342,993				254,924
Total	$	69,528			$	255,855			$	(5,057	)		$	320,326			$	237,444

The following changes in plan assets and benefit obligations were recognized in other comprehensive income (loss), before taxes, for the year ended December 31, 2016:

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Benefits				Total				Total, After Tax
Net actuarial losses (gains)	$	1,750			$	60,026			$	319			$	62,095			$	47,788
Amortization of:
Actuarial (losses) gains	(15,569		)		(17,999		)		1,875				(31,693		)		(22,414		)
Plan amendments and prior service cost	—				5,076				2,692				7,768				5,684
Impact of foreign currency	—				(7,472		)		—				(7,472		)		(5,885		)
Total	$	(13,819	)		$	39,631			$	4,886			$	30,698			$	25,173

The accumulated benefit obligations at December 31, 2016 and 2015 were $138.2 million and $154.4 million, respectively, for the U.S. defined benefit pension plan and $818.9 million and $803.3 million, respectively, for all non-U.S. plans. Certain of the plans included within non-U.S. pension benefits have accumulated 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, 2016 were $214.1 million, $203.5 million, and $81.4 million, respectively.

F - 27

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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.
	2016			2015			2014			2016			2015			2014
Discount rate	3.97	%		4.27	%		4.00	%		0.98	%		1.31	%		1.65	%
Compensation increase rate	n/a			n/a			n/a			0.85	%		1.03	%		1.61	%
Expected long-term rate of return on plan assets	6.75	%		7.25	%		7.50	%		4.09	%		4.58	%		4.82	%

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.
	2016			2015			2014			2016			2015			2014
Discount rate	4.27	%		4.00	%		4.75	%		1.31	%		1.65	%		2.73	%
Compensation increase rate	n/a			n/a			n/a			1.03	%		1.61	%		1.61	%
Expected long-term rate of return on plan assets	7.25	%		7.50	%		7.50	%		4.58	%		4.82	%		4.87	%

Net periodic pension cost and net periodic post-retirement benefit for the defined benefit plans and U.S. post-retirement plan includes the following components for the years ended December 31:

	U.S.												Non-U.S.												Other Benefits												Total
2016				2015				2014				2016				2015				2014				2016				2015				2014				2016				2015				2014
Service cost, net	$	432			$	837			$	893			$	16,804			$	18,664			$	15,189			$	—			$	—			$	170			$	17,236			$	19,501			$	16,252
Interest cost on projected benefit obligations	4,428				6,431				6,396				10,664				14,071				21,445				76				139				240				15,168				20,641				28,081
Expected return on plan assets	(7,781		)		(9,575		)		(8,549		)		(33,168		)		(36,832		)		(37,361		)		—				—				—				(40,949		)		(46,407		)		(45,910		)
Recognition of actuarial losses/(gains) and prior service costs	7,606				7,626				4,800				12,923				10,639				292				(4,567		)		(5,247		)		(2,215		)		15,962				13,018				2,877
Settlement charge	7,963				—				—				—				—				—				—				—				—				7,963				—				—
Net periodic pension cost / (benefit)	$	12,648			$	5,319			$	3,540			$	7,223			$	6,542			$	(435	)		$	(4,491	)		$	(5,108	)		$	(1,805	)		$	15,380			$	6,753			$	1,300

The amounts remaining in accumulated other comprehensive income (loss) that are expected to be recognized as a component of net periodic pension cost during 2017 are as follows:

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Benefits				Total
Plan amendments and prior service costs	$	—			$	(4,984	)		$	(779	)		$	(5,763	)
Actuarial losses (gains)	6,555				22,236				(1,895		)		26,896
Total	$	6,555			$	17,252			$	(2,674	)		$	21,133

The projected post-retirement benefit obligation was principally determined using discount rates of 3.41% in 2016, 3.54% in 2015, and 4.00% in 2014. Net periodic post-retirement benefit cost was principally determined using discount rates of 3.54% in 2016, and 4.00% in 2015, and 4.75% in 2014. The health care cost trend rate was 7.5% in 2016, was 8.0% in 2015, and ranged from 7.75% to 8.50% in 2014, decreasing to 5.00% in 2022. A one-percentage-point change in health care cost trend rates would have an immaterial impact on total service and interest cost components and the post-retirement benefit obligation.

F - 28

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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 35-55% in equity securities, 18-28% in fixed income securities, and 20-40% in other types of investments. International plan assets relate primarily to the Company’s Swiss plan with target allocations of 24-45% 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.

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

	December 31, 2016																December 31, 2015
	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	$	131,468			$	—			$	—			$	131,468			$	86,135			$	—			$	—			$	86,135
Equity Securities:
Mettler-Toledo Stock	2,846				—				—				2,846				3,229				—				—				3,229
Equity Mutual Funds:
U.S.(1)	5,860				24,257				—				30,117				6,320				27,614				—				33,934
International(2)	54,760				52,404				—				107,164				41,982				50,748				—				92,730
Emerging Markets(3)	78,999				793				—				79,792				95,065				774				—				95,839
Fixed Income Securities:
Corporate/Government	69,578				—				—				69,578				91,533				—				—				91,533
Bonds(4)
Fixed Income Mutual Funds:
Insurance Contracts(5)	—				19,955				1,300				21,255				—				20,351				1,367				21,718
Core Bond(6)	121,884				52,955				—				174,839				138,073				37,099				—				175,172
Real Asset Mutual Funds:
Real Estate(7)	69,284				—				—				69,284				65,597				—				—				65,597
Commodities(8)	22,964				—				5,594				28,558				21,092				3,880				33,505				58,477
Other Types of Investments:
Global Allocation Funds(9)	11,981				11,285				—				23,266				12,661				13,605				—				26,266
Total assets in fair value hierarchy	$	569,624			$	161,649			$	6,894			$	738,167			$	561,687			$	154,071			$	34,872			$	750,630
Investments measured at net asset value:
Emerging Markets (3)													4,407																5,343
Multi-Strategy Fund of Hedge Funds (10)													77,698																88,742
Total pension assets at fair value													$	820,272															$	844,715

---

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

F - 29

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

(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 investments in underlying globally diversified hedge funds. Investments that are measured using the net asset value (NAV) per share practical expedient have not been categorized in the fair value hierarchy. The amounts presented above are intended to permit reconciliation of the fair value hierarchy to the fair value of total plan assets in order to determine the amounts included in the Consolidated Balance Sheet.

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 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, 2016 and 2015 for Level 3 asset categories:

	Commodities				Insurance Contract				Total
Balance at December 31, 2014	$	28,196			$	1,388			$	29,584
Actual return on plan assets:
Related to assets held at end of year	2,408				22				2,430
Purchases	2,911				99				3,010
Impact of foreign currency	(10		)		(142		)		(152		)
Balance at December 31, 2015	$	33,505			$	1,367			$	34,872
Actual return on plan assets:
Related to assets held at end of year	—				25				25
Related to assets sold during the year	(2,857		)		—				(2,857		)
Sales	(21,278		)		(38		)		(21,316		)
Impact of foreign currency	(3,776		)		(54		)		(3,830		)
Balance at December 31, 2016	$	5,594			$	1,300			$	6,894

There were no transfers between any asset levels during the years ended December 31, 2016 and 2015.

F - 30

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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
2017	$	7,693			$	40,407			$	467			$	48,567
2018	7,927				40,263				414				48,604
2019	8,120				39,952				381				48,453
2020	8,350				40,919				265				49,534
2021	8,472				39,001				239				47,712
2022-2027	43,902				192,274				860				237,036

In 2017, the Company expects to make employer pension contributions of approximately $18.9 million to its non-U.S. pension plan and employer contributions of approximately $0.5 million to its U.S. post-retirement medical plan.

In February 2016 the Company offered former employees a one-time option to receive a lump sum distribution of their vested pension plan benefits. Based upon the eligible participant acceptance, $14.6 million was paid from plan assets to these former employees in the second quarter of 2016 with a corresponding decrease in the benefit obligation. The Company incurred a one-time non-cash settlement charge recorded in other charges (income), net during the second quarter of 2016 of approximately $8.2 million, of which $8.0 million, $4.9 million after tax, was reclassified from accumulated other comprehensive income.

13. TAXES

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

	2016				2015				2014
United States	$	37,363			$	20,992			$	33,157
Non-United States	466,830				442,432				411,847
Earnings before taxes	$	504,193			$	463,424			$	445,004

F - 31

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

The provisions for taxes consist of:

	Current				Deferred				Total
Year ended December 31, 2016:
United States federal	$	20,116			$	(4,817	)		$	15,299
State and local	2,947				1,149				4,096
Non-United States	94,882				5,546				100,428
Total	$	117,945			$	1,878			$	119,823
Year ended December 31, 2015:
United States federal	$	11,071			$	3,029			$	14,100
State and local	2,164				617				2,781
Non-United States	90,232				3,491				93,723
Total	$	103,467			$	7,137			$	110,604
Year ended December 31, 2014:
United States federal	$	—			$	5,676			$	5,676
State and local	1,372				527				1,899
Non-United States	90,029				9,159				99,188
Total	$	91,401			$	15,362			$	106,763

The provisions for tax expense for the years ended December 31, 2016, 2015, and 2014 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:

	2016				2015				2014
Expected tax	$	176,467			$	162,198			$	155,751
United States state and local income taxes, net of federal income tax benefit	3,064				2,551				1,899
Change in valuation allowance	—				(1,098		)		(172		)
Non-United States income taxes at other than a 35% rate	(65,917		)		(54,798		)		(51,360		)
Other, net	6,209				1,751				645
Total provision for taxes	$	119,823			$	110,604			$	106,763

F - 32

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:

	2016				2015
Deferred tax assets:
Inventory	$	17,612			$	14,491
Accrued and other liabilities	93,379				89,605
Accrued post-retirement benefit and pension costs	72,004				59,175
Net operating loss and tax credit carryforwards	15,844				32,818
Other	10,326				9,778
Total deferred tax assets	209,165				205,867
Less valuation allowance	(10,730		)		(25,435		)
Total deferred tax assets less valuation allowance	198,435				180,432
Deferred tax liabilities:
Inventory	3,741				3,946
Property, plant, and equipment	56,718				57,373
Rainin intangibles amortization	77,295				71,388
Prepaid post-retirement benefit and pension costs	36,741				30,884
International earnings	19,575				14,998
Unrealized currency gains	34,720				19,768
Total deferred tax liabilities	228,790				198,357
Net deferred tax (liability) asset	$	(30,355	)		$	(17,925	)

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

	2016				2015
Unrecognized tax benefits at beginning of year	$	15,259			$	16,864
Increases related to current tax positions	7,824				2,676
Increases (decreases) related to prior year tax positions	(885		)		186
Decreases relating to taxing authority settlements	(794		)		(1,102		)
Decreases resulting from a lapse of the applicable statute of limitations	(896		)		(2,764		)
Other, net	(268		)		(601		)
Unrecognized tax benefits at end of year	$	20,240			$	15,259

Included in the balance of unrecognized tax benefits at December 31, 2016 and 2015 were $16.6 million and $12.0 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, 2016 and 2015 was $2.2 million and $1.9 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. The Company does not expect a change would have a material impact on its financial position, 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)

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 $14.7 million decrease in the total valuation allowance during 2016 is primarily attributable to changes in the foreign tax credit carryforward and foreign currency fluctuation.

The deferred tax assets and valuation allowance as of December 31, 2016 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. With the adoption of ASU 2016-09 in the first quarter of 2017, deferred tax assets will be recorded for previously unrecognized excess tax benefits outstanding at December 31, 2016 which we expect to be offset by a valuation allowance.

At December 31, 2016, 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 on which no U.S. deferred income taxes or foreign withholding taxes have been provided. It is not practicable to estimate the amount of deferred tax liability related to these undistributed earnings due to the complexity of the calculation and the uncertainty regarding assumptions necessary to compute the tax. As of December 31, 2016, we had an immaterial amount of cash and cash equivalents in foreign subsidiaries where undistributed earnings are considered permanently reinvested. Accordingly, we believe the impact associated with not repatriating our undistributed foreign earnings will not have a material effect on our liquidity.

As of December 31, 2016, the major jurisdictions for which the Company is subject to examinations are Germany for years after 2013, the United States after 2013, France after 2012, Switzerland after 2012, the United Kingdom after 2014, and China after 2013. 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.

14. RESTRUCTURING CHARGES

During the past few years, we initiated additional cost reduction measures in response to global economic conditions. For the years ended December 31, 2016 and 2015, we have incurred $6.2 million and $11.1 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 - 34

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, 2016 and 2015 is as follows:

		Total
Balance at December 31, 2014		$	8,436
Restructuring charges		11,148
Cash payments / utilization		(6,568		)
Impact of foreign currency		(805		)
Balance at December 31, 2015		12,211
Restructuring charges		6,235
Cash payments / utilization		(8,376		)
Impact of foreign currency		(539		)
Balance at December 31, 2016		$	9,531

15. OTHER CHARGES (INCOME), NET

Other charges (income), net for 2016 includes a one-time non-cash pension settlement charge of $8.2 million related to a lump sum offering to former employees of our U.S. pension plan and acquisition transaction costs of $1.1 million. Other charges (income), net also includes (gains) losses from foreign currency transactions and hedging activity, interest income, and other items.

16. 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, 2016:

2017	$	30,177
2018	25,814
2019	17,605
2020	13,040
2021	10,635
Thereafter	14,117
Total	$	111,388

Rent expense for operating leases amounted to $34.9 million, $33.2 million, and $34.9 million for the years ended December 31, 2016, 2015, and 2014, 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 - 35

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

17. 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 laboratory and industrial 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. Operations 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 reportable segments:

For the Year Ended December 31, 2016		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		$	867,962			$	90,580			$	958,542			$	161,539			$	6,094			$	1,747,338			$	(52,255	)		$	357,785
Swiss Operations		130,674				524,983				655,657				163,663				6,199				1,212,637				(7,260		)		21,239
Western European Operations		640,558				176,501				817,059				123,507				4,048				1,120,751				(6,857		)		82,500
Chinese Operations		386,541				219,766				606,307				187,924				6,879				702,571				(16,288		)		636
Other(a)		482,522				7,709				490,231				64,060				3,461				277,476				(4,540		)		14,218
Eliminations and Corporate(b)		—				(1,019,539		)		(1,019,539		)		(117,696		)		6,062				(2,893,996		)		(36,757		)		—
Total		$	2,508,257			$	—			$	2,508,257			$	582,997			$	32,743			$	2,166,777			$	(123,957	)		$	476,378

For the Year Ended December 31, 2015		Net Sales to External Customers				Net Sales to Other Segments				Total Net Sales (c)				Segment Profit (c)				Depreciation				Total Assets				Purchase of Property, Plant and Equipment				Goodwill
U.S. Operations		$	826,354			$	87,488			$	913,842			$	147,491			$	6,153			$	1,487,422			$	(7,113	)		$	317,856
Swiss Operations		133,684				498,642				632,326				160,763				6,488				1,134,648				(6,650		)		21,841
Western European Operations		620,128				165,532				785,660				107,424				4,076				1,010,639				(5,940		)		92,389
Chinese Operations		376,291				214,887				591,178				165,532				7,086				506,390				(14,770		)		692
Other(a)		438,990				8,087				447,077				50,821				2,883				260,276				(4,306		)		13,506
Eliminations and Corporate(b)		—				(974,636		)		(974,636		)		(99,924		)		6,401				(2,440,040		)		(43,727		)		—
Total		$	2,395,447			$	—			$	2,395,447			$	532,107			$	33,087			$	1,959,335			$	(82,506	)		$	446,284

F - 36

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, 2014		Net Sales to External Customers				Net Sales to Other Segments				Total Net Sales (c)				Segment Profit (c)				Depreciation				Total Assets				Purchase of Property, Plant and Equipment				Goodwill
U.S. Operations		$	757,243			$	90,463			$	847,706			$	123,278			$	6,068			$	1,368,835			$	(6,627	)		$	308,861
Swiss Operations		137,756				549,785				687,541				149,987				6,621				1,016,416				(6,567		)		21,873
Western European Operations		708,755				194,297				903,052				119,603				4,422				1,052,435				(5,581		)		99,341
Chinese Operations		415,474				164,083				579,557				163,832				6,746				813,052				(19,793		)		740
Other(a)		466,755				7,527				474,282				52,869				2,820				252,776				(3,315		)		13,270
Eliminations and Corporate(b)		—				(1,006,155		)		(1,006,155		)		(102,698		)		6,940				(2,529,982		)		(47,505		)		—
Total		$	2,485,983			$	—			$	2,485,983			$	506,871			$	33,617			$	1,973,532			$	(89,388	)		$	444,085

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

(c)	2015 and 2014 net sales and segment profit have been reclassified to conform to the current period.

A reconciliation of earnings before taxes to segment profit follows:

	2016				2015				2014
Earnings before taxes	$	504,193			$	463,424			$	445,004
Amortization	36,052				30,951				29,185
Interest expense	28,026				27,451				24,537
Restructuring charges	6,235				11,148				5,915
Other charges (income), net	8,491				(867		)		2,230
Segment profit	$	582,997			$	532,107			$	506,871

During 2016, restructuring charges of $6.2 million were recognized, of which $2.0 million, $1.5 million, $2.4 million, $0.2 million, and $0.2 million relate to the Company’s U.S., Swiss, Western European, Chinese, and Other Operations, respectively. Restructuring charges of $11.1 million were recognized in 2015, of which $0.6 million, $2.4 million, $2.6 million, $4.7 million, and $0.8 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 end-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:

	2016				2015				2014
Laboratory	$	1,225,000			$	1,154,905			$	1,161,207
Industrial	1,067,858				1,034,310				1,107,606
Retail	215,399				206,232				217,170
Total net sales	$	2,508,257			$	2,395,447			$	2,485,983

F - 37

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
	2016				2015				2014				2016				2015
United States	$	815,153			$	768,815			$	708,293			$	168,494			$	132,255
Other Americas	153,607				157,962				166,150				3,833				4,120
Total Americas	968,760				926,777				874,443				172,327				136,375
Germany	182,644				176,491				204,747				28,393				29,100
France	118,681				110,477				127,363				5,009				5,174
United Kingdom	61,513				71,679				77,271				12,631				15,854
Switzerland	62,115				64,622				71,347				246,312				233,763
Other Europe	374,008				349,178				398,645				6,511				6,158
Total Europe	798,961				772,447				879,373				298,856				290,049
China	374,996				362,950				404,293				83,713				82,528
Rest of World	365,540				333,273				327,874				8,811				8,277
Total Asia/Rest of World	740,536				696,223				732,167				92,524				90,805
Total	$	2,508,257			$	2,395,447			$	2,485,983			$	563,707			$	517,229

F - 38

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

18. QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial data for the years ended December 31, 2016 and 2015 are as follows:

	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
2016
Net sales	$	539,674			$	608,286			$	650,598			$	709,699
Gross profit	299,907				347,576				369,494				418,610
Net earnings	$	65,674			$	79,588			$	101,332			$	137,776
Basic earnings per common share:
Net earnings	$	2.44			$	2.99			$	3.84			$	5.27
Weighted average number of common shares	26,931,293				26,631,015				26,375,468				26,139,024
Diluted earnings per common share:
Net earnings	$	2.40			$	2.93			$	3.77			$	5.17
Weighted average number of common and common equivalent shares	27,421,019				27,143,284				26,888,810				26,631,269
Market price per share:
High	$	347.09			$	385.50			$	419.83			$	429.91
Low	$	298.14			$	347.76			$	363.19			$	397.73
2015
Net sales	$	535,701			$	582,057			$	604,154			$	673,535
Gross profit	298,805				322,912				339,529				390,747
Net earnings	$	63,051			$	77,557			$	88,861			$	123,351
Basic earnings per common share:
Net earnings	$	2.24			$	2.79			$	3.23			$	4.53
Weighted average number of common shares	28,115,220				27,843,905				27,547,734				27,228,026
Diluted earnings per common share:
Net earnings	$	2.19			$	2.73			$	3.16			$	4.44
Weighted average number of common and common equivalent shares	28,762,935				28,460,336				28,113,287				27,755,045
Market price per share:
High	$	331.84			$	343.44			$	346.92			$	345.75
Low	$	289.09			$	317.01			$	277.62			$	283.27

F - 39

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, 2016		$	14,435			$	1,087			$	(760	)		$	528			$	14,234
Year ended December 31, 2015		$	15,961			$	883			$	(2,302	)		$	107			$	14,435
Year ended December 31, 2014		$	14,856			$	2,453			$	(784	)		$	564			$	15,961
Deferred tax valuation allowance:
Year ended December 31, 2016		$	25,435			$	—			$	—			$	14,705			$	10,730
Year ended December 31, 2015		$	36,263			$	—			$	—			$	10,828			$	25,435
Year ended December 31, 2014		$	31,697			$	—			$	5,191			$	625			$	36,263

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Note (A)

For accounts receivable, amounts comprise currency translation adjustments.

For deferred tax valuation allowance in 2016, 2015, and 2014, 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 2016, 2015, and 2014 relates primarily to decreases in foreign tax credit carryforwards.

S- 1