Item 16. Form 10-K Summary

None.

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. and certain other financial institutions, dated as of June 15, 2018(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 dated 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(11)
10.24	Form of Performance Share Unit Agreement(11)
10.25	Performance Stock Option Agreement(11)
10.26	Form of Stock Option Agreement Directors(11)
10.27	Form of Stock Option Agreement CEO(11)
10.28	Form of Stock Option Agreement NEOs(11)
10.31	Regulations of the POBS PLUS — Incentive Scheme for Senior Management of Mettler Toledo, effective as of November, 2006(12)
10.32	Regulations of the POBS PLUS — Incentive Scheme for Members of the Group Management of Mettler Toledo, effective as of January, 2009(12)
10.50	Employment Agreement between Peter Aggersbjerg and Mettler-Toledo International Inc., dated as of December 15, 2017(14)
10.51	Employment Agreement between Marc de La Guéronnière and Mettler-Toledo International Inc., dated as of January 27, 2011(13)
10.52	Employment Agreement between William Donnelly and Mettler-Toledo International Inc., 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(15)
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(13)
10.57	Employment Agreement between Gerhard Keller and Mettler-Toledo International Inc., dated as of April 27, 2018(17)
10.58	Employment Agreement between Shawn P. Vadala and Mettler-Toledo International Inc., dated as of October 24, 2016(11)
10.59	Form of Tax Equalization Agreement between Messrs. Filliol, Kirk, Magloth, and Spoerry, and Mettler-Toledo International Inc., dated October 10, 2007(9)
10.60	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 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 June 21, 2018

(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 2, 2017

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

(13)	Incorporated by reference to the Company's Report on Form 10-K dated February 16, 2011

(14)	Incorporated by reference to the Company's Report on Form 10-K dated February 8, 2018

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

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

(17)	Incorporated by reference to the Company's Report on Form 10-Q dated July 27, 2018

*	Filed herewith

E- 2

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 8, 2019

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/ Shawn P. Vadala		Chief Financial Officer
Shawn P. Vadala
/s/ Olivier A. Filliol		Director
Olivier A. Filliol
/s/ Wah-Hui Chu		Director
Wah-Hui Chu
/s/ Elisha Finney		Director
Elisha Finney
/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

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, 2018, 2017, and 2016	F-4
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017, and 2016	F-5
Consolidated Balance Sheets as of December 31, 2018 and 2017	F-6
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2018, 2017, and 2016	F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017, and 2016	F-8
Notes to the Consolidated Financial Statements	F-9

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Mettler-Toledo International Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Mettler-Toledo International Inc. and its subsidiaries ("the Company") as of December 31, 2018 and 2017 and the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2018, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, 2018 appearing on page S-1 (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018 based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, 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 the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. 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.

F-2

Definition and Limitations of Internal Control over Financial Reporting

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 8, 2019

We have served as the Company’s auditor since 2005.

F-3

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31

(In thousands, except share data)

	2018				2017				2016
Net sales
Products	$	2,300,075			$	2,135,051			$	1,957,879
Service	635,511				590,002				550,378
Total net sales	2,935,586				2,725,053				2,508,257
Cost of sales
Products	914,086				831,355				765,608
Service	337,122				317,947				304,917
Gross profit	1,684,378				1,575,751				1,437,732
Research and development	141,071				128,308				119,196
Selling, general, and administrative	812,802				794,861				745,358
Amortization	47,524				42,671				36,052
Interest expense	34,511				32,785				28,026
Restructuring charges	18,420				12,772				6,235
Other charges (income), net	(21,808		)		(9,868		)		(1,328		)
Earnings before taxes	651,858				574,222				504,193
Provision for taxes	139,247				198,250				119,823
Net earnings	$	512,611			$	375,972			$	384,370
Basic earnings per common share:
Net earnings	$	20.33			$	14.62			$	14.49
Weighted average number of common shares	25,215,674				25,713,575				26,517,768
Diluted earnings per common share:
Net earnings	$	19.88			$	14.24			$	14.22
Weighted average number of common and common equivalent shares	25,781,324				26,393,783				27,023,905

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

F-4

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31

(In thousands, except share data)

	2018				2017				2016
Net earnings	$	512,611			$	375,972			$	384,370
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(32,573		)		83,982				(57,928		)
Unrealized gains (losses) on cash flow hedging arrangements:
Unrealized gains (losses)	(658		)		1,424				(513		)
Effective portion of (gains) losses included in net earnings	2,441				(273		)		(4,735		)
Defined benefit pension and post-retirement plans:
Net actuarial gains (losses)	(23,326		)		(10,378		)		(47,788		)
Plan amendments and prior service cost	(780		)		12,056				—
Amortization of actuarial (gains) losses and plan amendments and prior service cost	14,366				14,873				16,730
Impact of foreign currency	3,522				(12,092		)		5,885
Total other comprehensive income (loss), net of tax	(37,008		)		89,592				(88,349		)
Comprehensive income	$	475,603			$	465,564			$	296,021

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

F-5

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED BALANCE SHEETS

As of December 31

(In thousands, except share data)

	2018				2017
ASSETS
Current assets:
Cash and cash equivalents	$	178,110			$	148,687
Trade accounts receivable, less allowances of $15,469 in 2018 and $15,549 in 2017	535,528				528,615
Inventories	268,821				255,390
Other current assets and prepaid expenses	63,401				74,031
Total current assets	1,045,860				1,006,723
Property, plant, and equipment, net	717,526				668,271
Goodwill	534,780				539,838
Other intangible assets, net	217,308				226,718
Deferred tax assets, net	35,066				41,425
Other non-current assets	68,307				66,830
Total assets	$	2,618,847			$	2,549,805
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	196,641			$	167,627
Accrued and other liabilities	156,449				152,834
Accrued compensation and related items	152,516				170,159
Deferred revenue and customer prepayments	105,381				107,166
Taxes payable	73,777				72,210
Short-term borrowings and current maturities of long-term debt	49,670				19,677
Total current liabilities	734,434				689,673
Long-term debt	985,021				960,170
Deferred tax liabilities, net	48,818				51,230
Other non-current liabilities	260,511				301,452
Total liabilities	2,028,784				2,002,525
Commitments and contingencies (Note 17)
Shareholders’ equity:
Preferred stock, $0.01 par value per share; authorized 10,000,000 shares	—				—
Common stock, $0.01 par value per share; authorized 125,000,000 shares; issued 44,786,011 and 44,786,011 shares, outstanding 24,921,963 and 25,541,393 shares at December 31, 2018 and 2017, respectively	448				448
Additional paid-in capital	764,717				747,138
Treasury stock at cost (19,864,048 and 19,244,618 shares at December 31, 2018 and 2017, respectively)	(3,814,604		)		(3,368,182		)
Retained earnings	3,941,916				3,433,282
Accumulated other comprehensive income (loss)	(302,414		)		(265,406		)
Total shareholders’ equity	590,063				547,280
Total liabilities and shareholders’ equity	$	2,618,847			$	2,549,805

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

F-6

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, 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
Exercise of stock options and restricted stock units	270,413			—				—				38,586				(9,937		)		—				28,649
Repurchases of common stock	(749,254	)		—				—				(399,997		)		—				—				(399,997		)
Share-based compensation	—			—				16,582				—				—				—				16,582
Effect of accounting change	—			—				—				—				1,539				—				1,539
Net earnings	—			—				—				—				375,972				—				375,972
Other comprehensive income (loss), net of tax	—			—				—				—				—				89,592				89,592
Balance at December 31, 2017	25,541,393			$	448			$	747,138			$	(3,368,182	)		$	3,433,282			$	(265,406	)		$	547,280
Exercise of stock options and restricted stock units	183,379			—				—				28,577				(3,977		)		—				24,600
Repurchases of common stock	(802,809	)		—				—				(474,999		)		—				—				(474,999		)
Share-based compensation	—			—				17,579				—				—				—				17,579
Net earnings	—			—				—				—				512,611				—				512,611
Other comprehensive income (loss), net of tax	—			—				—				—				—				(37,008		)		(37,008		)
Balance at December 31, 2018	24,921,963			$	448			$	764,717			$	(3,814,604	)		$	3,941,916			$	(302,414	)		$	590,063

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

F-7

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31

(In thousands)

	2018				2017				2016
Cash flows from operating activities:
Net earnings	$	512,611			$	375,972			$	384,370
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	37,167				33,458				32,743
Amortization	47,524				42,671				36,052
Deferred tax (benefit) provision	2,302				(2,745		)		1,878
Share-based compensation	17,579				16,582				15,306
U.S. tax reform charge (Note 14)	3,597				71,982				—
Acquisition gain (Note 4)	(18,674		)		—				—
Non-cash pension settlement charge	—				—				8,189
Other	(2,559		)		(3,151		)		181
Increase (decrease) in cash resulting from changes in:
Trade accounts receivable, net	(19,540		)		(38,985		)		(52,151		)
Inventories	(21,195		)		(13,680		)		(12,431		)
Other current assets	622				(6,251		)		291
Trade accounts payable	33,671				11,885				9,633
Taxes payable	(1,528		)		13,615				(3,072		)
Accruals and other	(26,572		)		14,972				39,769
Net cash provided by operating activities	565,005				516,325				460,758
Cash flows from investing activities:
Proceeds from sale of property, plant, and equipment	8,190				11,973				423
Purchase of property, plant, and equipment	(142,726		)		(127,426		)		(123,957		)
Acquisitions	(5,527		)		(108,445		)		(111,381		)
Net hedging settlements on intercompany loans	1,119				6,554				3,459
Net cash used in investing activities	(138,944		)		(217,344		)		(231,456		)
Cash flows from financing activities:
Proceeds from borrowings	940,615				1,244,195				905,774
Repayments of borrowings	(876,324		)		(1,185,172		)		(594,178		)
Proceeds from exercise of stock options	24,600				28,649				25,471
Repurchases of common stock	(474,999		)		(399,997		)		(499,992		)
Other financing activities	(1,914		)		(7,205		)		(680		)
Net cash used in financing activities	(388,022		)		(319,530		)		(163,605		)
Effect of exchange rate changes on cash and cash equivalents	(8,616		)		10,562				(5,910		)
Net increase (decrease) in cash and cash equivalents	29,423				(9,987		)		59,787
Cash and cash equivalents:
Beginning of period	148,687				158,674				98,887
End of period	$	178,110			$	148,687			$	158,674
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	34,451			$	33,333			$	28,025
Taxes	$	132,410			$	109,730			$	92,586

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

F-8

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, the United Kingdom, and Mexico. 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.

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-9

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 evaluations of 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 whether the 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 whether 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 (asset group) 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 and eventually disposition of that asset (asset group) are less than the asset’s carrying value, with the loss measured as the difference between carrying value and estimated 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.

In accordance with the Tax Cuts and Jobs Act, the Company treats taxes due on future Global Intangible Low-Taxed Income ("GILTI") inclusions in U.S. taxable income as a current period expense when incurred.

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 weighted 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 or relates to intercompany notes that are long-term in nature.

Revenue Recognition

Product revenue is recognized from contracts with customers when a customer has obtained control of a product. The Company considers control to have transferred based upon shipping terms. To the extent the Company’s contracts have a separate performance obligation, revenue related to any post-shipment

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

performance obligation is deferred until completed. Shipping and handling costs charged to customers are included in total net sales and the associated expense is a component of cost of sales. Certain products are also sold through indirect distribution channels whereby the distributor assumes any further obligations to the end customer. Revenue is recognized on these distributor arrangements upon transfer of control to the distributor. Contracts do not contain variable pricing arrangements that are retrospective, except for rebate programs. Rebates are estimated based on expected sales volumes and offset against revenue at the time such revenue is recognized. 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. The related provisions for estimated returns and rebates are immaterial to the consolidated financial statements.

Certain of the Company’s product arrangements include separate performance obligations, primarily related to installation. Such performance obligations are accounted for separately when the deliverables have stand-alone value and the satisfaction of the undelivered performance obligations is probable and within the Company's control. The allocation of revenue between the performance obligations is based on the observable stand-alone selling prices at the time of the sale in accordance with a number of factors including service technician billing rates, time to install, and geographic location.

Software is generally not considered a distinct performance obligation with the exception of a few small software applications. The Company generally does not sell software products without the related hardware instrument as the software is embedded in the product. 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.

Service revenue not under contract is recognized upon the completion of the service performed. Revenue from spare parts sold on a stand-alone basis is recognized when control is transferred to the customer, which is generally at the time of shipment or delivery. Revenue from service contracts is recognized ratably over the contract period using a time-based method. 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.

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.

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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 565,650, 680,208, and 506,137 common equivalent shares in the calculation of diluted weighted average number of common shares for the years ended December 31, 2018, 2017, and 2016, respectively, relating to outstanding stock options and restricted stock units.

Outstanding options and restricted stock units to purchase or receive 63,019, 9,824, and 102,017 shares of common stock for the years ended December 31, 2018, 2017, and 2016, 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 6, 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 underlying hedged item. 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 interest rate swap agreements and cross currency swaps in order to manage its exposure to changes in interest rates. The differential paid or received on interest rate swap agreements is recognized as incurred in interest expense over the life of the hedge agreements. 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 initially 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

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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 observable market data for similar assets and liabilities.

Business Combinations and Asset Acquisitions

The Company accounts for business acquisitions under the accounting standards for business combinations. The results of each acquisition are included in the Company's consolidated results as of the acquisition date. The purchase price of an acquisition is allocated to tangible and intangible assets and assumed liabilities based on their estimated fair values and any consideration in excess of the net assets acquired is recognized as goodwill. Acquisition transaction costs are expensed when incurred.

In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the expected contingent payments as of the acquisition date. Subsequent changes in the fair value of the contingent consideration are recorded to other charges (income), net.

Recent Accounting Pronouncements

On January 1, 2018, the Company retrospectively implemented ASU 2017-07 to ASC 715 "Compensation - Retirement Benefits," which requires the Company to report the non-service cost components of net periodic benefit cost (pension cost) in other charges (income), net. These amounts were previously reported in selling, general, and administrative, cost of sales, and research and development in the consolidated statement of operations. Non-service pension benefits were $6.2 million, $4.0 million, and $9.8 million for December 31, 2018, 2017, and 2016, respectively.

In February 2016 and July 2018, the FASB issued ASU 2016-02 and ASU 2018-11 to ASC 842 "Leases." The new accounting standard requires operating leases, which were historically off balance sheet, to be recognized on the balance sheet as a right-of-use asset and a lease liability. The Company has identified its leases by asset class and has elected to adopt the practical expedients package, which allows a company to not reassess the Company’s prior conclusions about lease identification, lease classification, and initial direct costs. The Company also expects to elect the short-term lease recognition exemption and the practical expedient to not separate nonlease components from lease components for real estate and other equipment. The Company will adopt the guidance January 1, 2019 using a modified retrospective approach without adjusting comparative periods. The Company has completed its assessment of the new standard and expects to recognize a right-of-use asset and a corresponding lease liability of approximately $90-$100 million.

In February 2018, the FASB issued ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" which allowed companies to reclassify certain stranded tax effects as a result of the Tax Cuts and Jobs Act of 2017 in accumulated other comprehensive income to retained earnings. The reclassification is optional, and therefore, the Company has elected to not reclassify it's stranded tax effects.

3.	REVENUE

On January 1, 2018, the Company adopted ASC 606 "Revenue from Contracts with Customers" and all the related amendments using the modified retrospective method, whereby the adoption did not impact

F-14

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

any prior periods. The effect of adopting the new standard did not require any cumulative effect adjustment to retained earnings as of January 1, 2018. There was no impact to our consolidated statements of operations, balance sheet, or statement of cash flows as of and for the period ended December 31, 2018.

The Company disaggregates revenue from contracts with customers by product, service, timing of revenue recognition, and geography. A summary by the Company’s reportable segments follows for the twelve months ended December 31, 2018:

Twelve months ended December 31, 2018	U.S. Operations				Swiss Operations				Western European Operations				Chinese Operations				Other Operations				Total
Product Revenue	$	769,971			$	106,400			$	517,855			$	475,025			$	430,824			$	2,300,075
Service Revenue:
Point in time	196,314				19,430				134,052				38,528				100,638				488,962
Over time	41,512				8,234				66,881				11,556				18,366				146,549
Total	$	1,007,797			$	134,064			$	718,788			$	525,109			$	549,828			$	2,935,586

The Company's global revenue mix by product category is laboratory (51% of sales), industrial (41% of sales), and retail (8% of sales). The Company's product revenue by reportable segment is proportionately similar to the Company's global mix except the Company's Swiss Operations, which is largely comprised of laboratory products while the Company's Chinese Operations has a slightly higher percentage of industrial products. A breakdown of the Company's sales by product category for the year ended December 31 follows:

	2018
Laboratory	$	1,504,600
Industrial	1,211,362
Retail	219,624
Total net sales	$	2,935,586

In certain circumstances, our reporting units sell directly into other geographies. A breakdown of net sales to external customers by geographic customer destination, net for the year ended December 31 follows:

	2018
Total Americas	$	1,105,956
Total Europe	908,773
Total Asia/Rest of World	920,857
Total	$	2,935,586

The payment terms in the Company’s contracts with customers do not exceed one year and therefore contracts do not contain a significant financing component. In most cases, after appropriate credit evaluations, payments are due in arrears and are recognized as receivables. Unbilled revenue is recorded when performance obligations have been satisfied, but not yet billed to the customer. Unbilled revenue as of December 31, 2018 was $12.4 million and is included within accounts receivable. Deferred revenue and customer prepayments are recorded when cash payments are received or due in advance of the performance obligation being satisfied. Deferred revenue primarily includes prepaid service contracts, as well as deferred installation.

F-15

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

Changes in the components of deferred revenue and customer prepayments during the period are as follows:

		Deferred Revenue and Customer Pre-payments
Beginning balances as of December 31, 2017		$	107,166
Customer pre-payments/deferred revenue		619,257
Revenue recognized		(618,002		)
Foreign currency translation		(3,040		)
Ending balance as of December 31, 2018		$	105,381

The Company generally expenses sales commissions when incurred because the contract period is one year or less. These costs are recorded within selling, general, and administrative expenses. The Company has not disclosed the value of unsatisfied performance obligations other than customer prepayments and deferred revenue as most contracts have an expected length of one year or less and amounts greater than one year are immaterial.

4. ACQUISITIONS

In 2018, the Company incurred cumulative acquisition payments totaling $5.5 million. The Company recorded $4.9 million of identified intangibles primarily pertaining to technology and patents in connection with these acquisitions, which will be amortized on a straight-line basis over 10 years. Goodwill recorded in connection with these acquisitions totaled $0.6 million.

In September 2017, the Company acquired all of the shares of Biotix, Inc., a U.S.-based manufacturer and distributor of plastic consumables associated with pipettes, including tips, tubes, and reagent reservoirs used in the life sciences market. The initial cash payment was $105 million plus an initial contingent consideration obligation with an estimated fair value at the acquisition date of $30.7 million. The contingent consideration was initially determined using a Monte Carlo simulation based on a forecast of future results. The Company settled the obligation for cash consideration of $10 million (that will be paid in the first quarter of 2019) and the release of certain indemnifications that resulted in a one-time gain of $18.7 million in 2018. Goodwill recorded in connection with the acquisition totaled $51.7 million, which is included in the Company's U.S. Operations segment. Identified intangible finite-life assets acquired include customer relationships of $49.5 million, technology and patents of $8.0 million, indefinite-life tradenames of $7.1 million, and other intangibles of $0.6 million. The identifiable finite-life intangible assets will be amortized on a straight-line basis over periods ranging from 5 to 18 years and the annual aggregate amortization expense is estimated at $3.7 million. Net tangible assets acquired were $18.8 million and recorded at fair value in the consolidated financial statements.

In 2017, the Company also incurred cumulative additional acquisition payments totaling $3.8 million. The Company recorded $3.1 million of identified intangibles primarily pertaining to technology and patents in connection with these acquisitions, which will be amortized on a straight-line basis over 12 years. Goodwill recorded in connection with these acquisitions totaled $0.3 million.

In 2016, the Company incurred total acquisition payments of $111.4 million, including the acquisition of substantially all of the assets of Henry Troemner LLC (Troemner) for an aggregate purchase price of $95.8 million. The Company recorded $60.1 million of identified intangibles primarily pertaining to customer relationships and technology and patents in connection with these acquisitions, which will be

F-16

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

amortized on a straight-line basis over 3 to 25 years. Goodwill recorded in connection with these acquisitions totaled $41.3 million.

5. INVENTORIES

Inventory consisted of the following at December 31:

	2018				2017
Raw materials and parts	$	122,945			$	118,790
Work-in-progress	47,098				43,035
Finished goods	98,778				93,565
Total inventory	$	268,821			$	255,390

6. 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, 2018, the interest payments associated with 72% 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 10, 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 7.

Cash Flow Hedges

In June 2017, the Company entered into a cross currency swap arrangement designated as a cash flow hedge. The agreement converts $100 million of borrowings under the Company's credit facility into synthetic Swiss franc debt which allows the Company to effectively change the floating rate LIBOR-based interest payment to a fixed Swiss franc income of 0.01%. The swap began in June 2017 and matures in June 2019.

In June 2013, the Company entered into 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 borrowings under the Company's credit agreement to a fixed obligation of 2.52% beginning in October 2015 and matures in October 2020.

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

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

borrowings under the Company's credit agreement to a fixed obligation of 2.25% which began 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, 2018 and 2017 and are disclosed in Note 7 to the consolidated financial statements. Amounts reclassified from 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 gain of $1.8 million based upon interest rates at December 31, 2018 is expected to be reclassified from other comprehensive

F-17

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

income (loss) to earnings in the next twelve months. Through December 31, 2018, 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, 2018 and 2017, as disclosed in Note 7 to the consolidated financial statements. The Company recognized in other charges (income) a net loss of $1.2 million and a net gain of $9.4 million during the years ended December 31, 2018 and 2017, respectively, which offset the related net transaction gains (losses) associated with these contracts. At December 31, 2018 and 2017, these contracts had a notional value of $436.7 million and $394.8 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.

7. FAIR VALUE MEASUREMENTS

At December 31, 2018 and 2017, the Company had derivative assets totaling $3.2 million and $1.9 million, respectively, and derivative liabilities totaling $1.1 million and $2.4 million, respectively. The fair values of the interest rate swap agreements, the cross currency swap agreement, 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, 2018 and 2017.

The Company had $9.0 million and $5.6 million of cash equivalents at December 31, 2018 and 2017, respectively, the fair value of which is determined through quoted and corroborated prices in active markets. The fair value of cash equivalents approximates cost.

The 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 carrying value of the Company's fixed interest rate debt exceeds the fair value by approximately $1.5 million as of December 31, 2018, while the fair value of the Company's fixed interest rate debt exceeded the carrying value by approximately $6.6 million as of December 31, 2017.

F-18

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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, 2018 and 2017:

	December 31, 2018																December 31, 2017
	Total				Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3
Assets:
Cash equivalents	$	9,026			$	—			$	9,026			$	—			$	5,616			$	—			$	5,616			$	—
Interest rate swap agreements	545				—				545				—				—				—				—				—
Cross currency swap agreements	1,154				—				1,154				—				—				—				—				—
Foreign currency forward contracts not designated as hedging instruments	1,534				—				1,534				—				1,912				—				1,912				—
Total	$	12,259			$	—			$	12,259			$	—			$	7,528			$	—			$	7,528			$	—
Liabilities:
Interest rate swap agreements	$	27			$	—			$	27			$	—			$	1,292			$	—			$	1,292			$	—
Cross currency swap agreement	—				—				—				—				106				—				106				—
Foreign currency forward contracts not designated as hedging instruments	1,059				—				1,059				—				986				—				986				—
Total	$	1,086			$	—			$	1,086			$	—			$	2,384			$	—			$	2,384			$	—

8. PROPERTY, PLANT, AND EQUIPMENT, NET

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

	2018				2017
Land	$	58,072			$	58,046
Building and leasehold improvements	317,636				300,850
Machinery and equipment	386,504				382,233
Computer software	470,976				436,249
Property, plant, and equipment, gross	1,233,188				1,177,378
Less accumulated depreciation and amortization	(515,662		)		(509,107		)
Property, plant, and equipment, net	$	717,526			$	668,271

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

9. GOODWILL AND OTHER INTANGIBLE ASSETS

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

	2018				2017
Balance at beginning of year	$	539,838			$	476,378
Goodwill acquired	558				52,229
Foreign currency translation	(5,616		)		11,231
Balance at year end	$	534,780			$	539,838

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 there had been no impairment of these assets through December 31, 2018. The Company identified no triggering events or other circumstances which indicated the carrying amount of goodwill or intangibles assets may not be recoverable.

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

	2018												2017
	Gross Amount				Accumulated Amortization				Intangibles, Net				Gross Amount				Accumulated Amortization				Intangibles, Net
Customer relationships	$	197,942			$	(49,887	)		$	148,055			$	198,527			$	(41,794	)		$	156,733
Proven technology and patents	73,880				(42,750		)		31,130				70,311				(38,890		)		31,421
Tradenames (finite life)	4,504				(2,874		)		1,630				4,518				(2,807		)		1,711
Tradenames (indefinite life)	35,500				—				35,500				35,562				—				35,562
Other	3,684				(2,691		)		993				3,490				(2,199		)		1,291
	$	315,510			$	(98,202	)		$	217,308			$	312,408			$	(85,690	)		$	226,718

The Company recognized amortization expense associated with the above intangible assets of $14.3 million, $11.5 million, and $8.3 million for the years ended December 31, 2018, 2017, and 2016, respectively. The annual aggregate amortization expense based on the current balance of other intangible assets is estimated at $13.9 million for 2019, $13.5 million for 2020, $12.9 million for 2021, $12.4 million for 2022, and $12.3 million for 2023. 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 $13.3 million, $10.0 million after tax, $10.9 million, $7.1 million after tax, and $7.4 million, $5.0 million after tax, for the years ended December 31, 2018, 2017, and 2016, respectively.

In addition to the above amortization, the Company recorded amortization expense associated with capitalized software of $33.0 million, $31.0 million, and $27.5 million for the years ended December 31, 2018, 2017, and 2016, respectively.

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

10. DEBT

Debt consisted of the following at December 31:

	2018				2017
3.67% $50 million Senior Notes due December 17, 2022	$	50,000			$	50,000
4.10% $50 million Senior Notes due September 19, 2023	50,000				50,000
3.84% $125 million Senior Notes due September 19, 2024	125,000				125,000
4.24% $125 million Senior Notes due June 25, 2025	125,000				125,000
1.47% EUR 125 million Senior Notes due June 17, 2030	143,053				149,736
Senior notes debt issuance costs, net	(1,234		)		(1,438		)
Total Senior Notes	491,819				498,298
$1.1 billion Credit Agreement, interest at LIBOR plus 87.5 basis points(1)	493,202				461,872
Other local arrangements	49,670				19,677
Total debt	1,034,691				979,847
Less: current portion	(49,670		)		(19,677		)
Total long-term debt	$	985,021			$	960,170

(1) See Note 6 for additional disclosures on the financial instruments associated with the Credit Agreement.

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, 2018.

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.

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, 2018.

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

F-21

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 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 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, 2018.

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% fifteen-year Senior Notes ("1.47% Euro 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 in other comprehensive income (loss) related to this net investment hedge an unrealized gain of $6.7 million and an unrealized loss of $18.2 million for the years ended December 31, 2018 and 2017, respectively.

Interest on the 1.47% Senior Notes is payable in June and December each year. 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 customary grace periods, as applicable. The Company was in compliance with its covenants at December 31, 2018.

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

Credit Agreement

On June 15, 2018, the Company entered into an amended $1.1 billion Credit Agreement (the "Credit Agreement"), which amended its $800 million Amended and Restated Credit Agreement (the "Prior Credit Agreement"). As of December 31, 2018, the Company had $600.7 million of availability remaining under its 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 June 15, 2023. 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-22

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 June 15, 2018. The Company must also pay facility fees that are tied to its leverage ratio. The Credit Agreement contains covenants that are the same as those contained in the Prior Credit Agreement, with which the Company was in compliance as of December 31, 2018. The Company is required to maintain a ratio of funded debt to consolidated EBITDA of 3.5 to 1.0 or less and an interest coverage ratio of 3.5 to 1.0 or greater. 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 capitalized $2.0 million in financing fees in other long-term assets during 2018 associated with the Credit Agreement which will be amortized to interest expense through 2023.

Other Local Arrangements

In April 2018, two of the Company's non-U.S. pension plans issued loans totaling $39.6 million (Swiss franc 38 million) to a wholly owned subsidiary of the Company. The loans have the same terms and conditions which include an interest rate of Swiss franc LIBOR plus 87.5 basis points, a maturity date of April 2019, and a one year mutual renewal term and, as such, are classified as short-term debt on the Company's consolidated balance sheet. The proceeds were used to repay outstanding amounts on the Company's credit facility.

The Company’s weighted average interest rate was 3.3% for the years ended December 31, 2018 and 2017.

11. SHAREHOLDERS’ EQUITY

Common Stock

The number of authorized shares of the Company’s common stock is 125,000,000 shares with a par value of $0.01 per share. Holders of the Company’s common stock are entitled to one vote per share. At December 31, 2018, 3,252,712 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.

F-23

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

Share Repurchase Program

In November 2018, the Company's Board of Directors authorized an additional $2.0 billion to the share repurchase program which has $2.1 billion of remaining availability as of December 31, 2018. The share repurchases are expected to be funded from cash generated from operating activities, borrowings, and cash balances. 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 27.5 million common shares since the inception of the program in 2004 through December 31, 2018, at a total cost of $4.4 billion. During the years ended December 31, 2018 and 2017, the Company spent $475 million and $400 million on the repurchase of 802,809 shares and 749,254 shares at an average price per share of $591.65 and $533.84, respectively. The Company reissued 183,379 shares and 270,413 shares held in treasury for the exercise of stock options and restricted stock units during 2018 and 2017, respectively.

Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income by component for the period ended December 31, 2018 and 2017:

	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, 2016	$	(115,322	)		$	(2,232	)		$	(237,444	)		$	(354,998	)
Other comprehensive income (loss), net of tax:
Net unrealized actuarial gains (loss), prior service costs, and plan amendments	—				—				1,678				1,678
Net unrealized gains (loss) on cash flow hedging arrangements	—				1,424				—				1,424
Foreign currency translation adjustment	83,982				—				(12,092		)		71,890
Amounts recognized from accumulated other comprehensive income (loss), net of tax	—				(273		)		14,873				14,600
Net change in other comprehensive income (loss), net of tax	83,982				1,151				4,459				89,592
Balance at December 31, 2017	$	(31,340	)		$	(1,081	)		$	(232,985	)		$	(265,406	)
Other comprehensive income (loss), net of tax:
Net unrealized actuarial gains (loss), prior service costs, and plan amendments	—				—				(24,106		)		(24,106		)
Net unrealized gains (loss) on cash flow hedging arrangements	—				(658		)		—				(658		)
Foreign currency translation adjustment	(32,573		)		—				3,522				(29,051		)
Amounts recognized from accumulated other comprehensive income (loss), net of tax	—				2,441				14,366				16,807
Net change in other comprehensive income (loss), net of tax	(32,573		)		1,783				(6,218		)		(37,008		)
Balance at December 31, 2018	$	(63,913	)		$	702			$	(239,203	)		$	(302,414	)

F-24

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 month period ended December 31, 2018 and 2017:

		2018				2017				Location of Amounts Recognized in Earnings
Effective portion of losses (gains) on cash flow hedging arrangements:
Interest rate swap agreements		$	539			$	1,679			Interest expense
Cross currency swap		2,212				(1,416		)		(a)
Total before taxes		2,751				263
Provision for taxes		310				536				Provision for taxes
Total, net of taxes		$	2,441			$	(273	)
Recognition of defined benefit pension and post-retirement items:
Recognition of actuarial losses, plan amendments, prior service cost, and settlement charge before taxes		$	18,756			$	20,137			(b)
Provision for taxes		4,390				5,264				Provision for taxes
Total, net of taxes		$	14,366			$	14,873

(a)	The cross currency swap reflects an unrealized loss of $0.8 million recorded in other charges (income) that was offset by the underlying unrealized gain on the hedged debt. The cross currency swap also reflects a realized gain of $3.0 million recorded in interest expense.

(b)	These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and post-retirement cost. See Note 13 for additional details for the year ended December 31, 2018.

12. EQUITY INCENTIVE PLAN

The Company’s equity incentive plan provides employees and directors of the Company additional incentives to join and/or remain in the service of the Company as well as to maintain and enhance the long-term performance and profitability of the Company. The Company’s 2013 equity incentive plan was approved by shareholders on May 2, 2013 and provides that 2 million shares of common stock, plus any 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-25

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, 2017 through December 31, 2018:

	Number of Options			Weighted Average Exercise Price		Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2017	1,008,476			$232.99		$392.2
Granted	43,943			595.31
Exercised	(163,120	)		150.81
Forfeited	(41,469	)		369.93
Outstanding at December 31, 2018	847,830			$260.88		$264.0
Options exercisable at December 31, 2018	676,202			$208.01		$242.8

The following table details the weighted average remaining contractual life of options outstanding at December 31, 2018 by range of exercise prices:

Number of Options Outstanding			Weighted Average Exercise Price		Remaining Contractual Life of Options Outstanding		Options Exercisable
74,868			$90.76		0.8		74,868
86,140			$133.00		1.8		86,140
214,451			$159.78		3.3		214,451
113,906			$244.99		4.9		113,906
358,465			$392.68		7.4		186,837
847,830					4.9		676,202

As of the date granted, the weighted average grant-date fair value of the options granted during the years ended December 31, 2018, 2017, and 2016 was $189.78, $206.56, and $118.31, respectively.

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

	2018			2017			2016
Risk-free interest rate	3.09	%		2.00	%		1.26	%
Expected life in years	5.9			5.8			5.7
Expected volatility	26	%		28	%		29	%
Expected dividend yield	—			—			—

The total intrinsic value of options exercised during the years ended December 31, 2018, 2017, and 2016 was approximately $74.3 million, $105.6 million, and $69.5 million, respectively.

The total fair value of options vested during the years ended December 31, 2018, 2017, and 2016 was approximately $6.9 million, $8.3 million, and $7.4 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 is recognized over the five-year vesting provisions based upon the probability of the performance condition being met.

F-26

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, 2017 through December 31, 2018:

	Number of Restricted Stock Units			Aggregate Intrinsic Value (in millions)		Number of Performance Share Units			Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2017	56,389			$34.9		8,050			$5.0
Granted	16,380					4,912
Vested	(20,259	)				—
Forfeited	(3,258	)				(148	)
Outstanding at December 31, 2018	49,252			$27.8		12,814			$7.2

The weighted average grant-date fair value of the restricted stock units granted during years ended 2018 and 2017 was $595.31 and $671.60 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 $9.6 million for 2018 and $8.7 million for 2017 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, 2018, 2017, and 2016 was approximately $7.2 million, $6.8 million, and $6.3 million, respectively. Approximately $6.8 million and $6.5 million of compensation expense was recognized during the years ended December 31, 2018 and 2017, respectively.

The Company granted performance share units with a market condition during 2018 and 2017, respectively. Grantees of performance share units will be eligible to receive shares of the Company's common stock depending upon the Company's 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 to 200% 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:

	2018			2017
Risk-free interest rate	3.03	%		1.73	%
Expected life in years	3.0			3.0
Expected volatility	26	%		28	%
Expected dividend yield	—			—

As of the date granted, the fair value of the performance share units granted was $733.35 for 2018 and $844.39 for 2017, respectively. The total fair value of the performance share units on the date of the grant was $3.6 million for 2018 and $3.0 million for 2017 and will be recorded as compensation expense on a straight-line basis over the three-year period.

At December 31, 2018, a total of 2,182,289 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, 2018, the unrecorded deferred share-based compensation balance related to stock options, restricted stock units, and performance share units was $51.3 million and will be recognized using a straight-line method over an estimated weighted average amortization period of 2.3 years.

F-27

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

13. BENEFIT PLANS

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

Certain subsidiaries sponsor defined contribution plans. Benefits are determined and funded annually based upon the terms of the plans. Amounts recognized as cost under these plans amounted to $18.9 million, $17.2 million, and $15.4 million for the years ended December 31, 2018, 2017, and 2016, 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, 2018 and 2017:

	U.S. Pension Benefits								Non-U.S. Pension Benefits								Other Benefits								Total
	2018				2017				2018				2017				2018				2017				2018				2017
Change in benefit obligation:
Benefit obligation at beginning of year	$	142,571			$	138,155			$	918,478			$	838,277			$	2,673			$	2,985			$	1,063,722			$	979,417
Service cost, gross	1,090				565				30,721				29,600				—				—				31,811				30,165
Interest cost	4,242				4,374				8,630				8,511				66				70				12,938				12,955
Actuarial losses (gains)	(10,019		)		6,979				(40,469		)		33,036				(167		)		18				(50,655		)		40,033
Plan amendments and other	—				—				974				(15,153		)		(8		)		137				966				(15,016		)
Benefits paid	(7,682		)		(7,502		)		(36,379		)		(30,356		)		(378		)		(537		)		(44,439		)		(38,395		)
Impact of foreign currency	—				—				(17,860		)		54,563				—				—				(17,860		)		54,563
Benefit obligation at end of year	$	130,202			$	142,571			$	864,095			$	918,478			$	2,186			$	2,673			$	996,483			$	1,063,722
Change in plan assets:
Fair value of plan assets at beginning of year	$	111,567			$	104,103			$	808,215			$	716,169			$	—			$	—			$	919,782			$	820,272
Actual return on plan assets	(8,419		)		14,869				(34,102		)		49,055				—				—				(42,521		)		63,924
Employer contributions	75				97				26,032				22,961				227				400				26,334				23,458
Plan participants’ contributions	—				—				15,176				13,503				151				137				15,327				13,640
Benefits paid	(7,682		)		(7,502		)		(36,379		)		(30,356		)		(378		)		(537		)		(44,439		)		(38,395		)
Impact of foreign currency and other	—				—				(11,532		)		36,883				—				—				(11,532		)		36,883
Fair value of plan assets at end of year	$	95,541			$	111,567			$	767,410			$	808,215			$	—			$	—			$	862,951			$	919,782
Funded status	$	(34,661	)		$	(31,004	)		$	(96,685	)		$	(110,263	)		$	(2,186	)		$	(2,673	)		$	(133,532	)		$	(143,940	)

F-28

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
	2018				2017				2018				2017				2018				2017				2018				2017
Other non-current assets	$	—			$	—			$	46,014			$	40,493			$	—			$	—			$	46,014			$	40,493
Accrued and other liabilities	(110		)		(88		)		(4,884		)		(4,990		)		(431		)		(411		)		(5,425		)		(5,489		)
Pension and other post-retirement liabilities	(34,551		)		(30,916		)		(137,815		)		(145,766		)		(1,755		)		(2,262		)		(174,121		)		(178,944		)
Accumulated other comprehensive loss (income)	61,344				61,819				260,820				254,870				(910		)		(2,365		)		321,254				314,324
Total	$	26,683			$	30,815			$	164,135			$	144,607			$	(3,096	)		$	(5,038	)		$	187,722			$	170,384

The following amounts have been recognized in accumulated other comprehensive income (loss), before taxes, at December 31, 2018 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	$	—			$	(22,541	)		$	—			$	(22,541	)		$	(17,873	)
Actuarial losses (gains)	61,344				283,361				(910		)		343,795				266,332
Total	$	61,344			$	260,820			$	(910	)		$	321,254			$	248,459

The following changes in plan assets and benefit obligations were recognized in other comprehensive income (loss), before taxes, for the year ended December 31, 2018:

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Benefits				Total				Total, After Tax
Net actuarial losses (gains)	$	5,329			$	24,637			$	(167	)		$	29,799			$	23,326
Plan amendment	—				974				—				974				780
Amortization of:
Actuarial (losses) gains	(5,804		)		(21,521		)		1,250				(26,075		)		(20,173		)
Plan amendments and prior service cost	—				6,947				372				7,319				5,807
Impact of foreign currency	—				(5,087		)		—				(5,087		)		(3,522		)
Total	$	(475	)		$	5,950			$	1,455			$	6,930			$	6,218

The accumulated benefit obligations at December 31, 2018 and 2017 were $130.2 million and $142.6 million, respectively, for the U.S. defined benefit pension plan and $731.4 million and $785.7 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, 2018 were $189.2 million, $179.0 million, and $46.5 million, respectively.

F-29

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.
	2018			2017			2018			2017
Discount rate	4.11	%		3.49	%		1.22	%		0.97	%
Compensation increase rate	n/a			n/a			0.87	%		0.87	%
Expected long-term rate of return on plan assets	6.50	%		6.50	%		3.84	%		3.86	%

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.
	2018			2017			2016			2018			2017			2016
Discount rate	3.49	%		3.97	%		4.27	%		0.97	%		0.98	%		1.31	%
Compensation increase rate	n/a			n/a			n/a			0.87	%		0.85	%		1.03	%
Expected long-term rate of return on plan assets	6.50	%		6.75	%		7.25	%		3.86	%		4.09	%		4.58	%

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

	U.S.												Non-U.S.												Other Benefits												Total
2018				2017				2016				2018				2017				2016				2018				2017				2016				2018				2017				2016
Service cost, net	$	1,090			$	565			$	432			$	15,545			$	16,341			$	16,804			$	—			$	—			$	—			$	16,635			$	16,906			$	17,236
Interest cost on projected benefit obligations	4,242				4,374				4,428				8,630				8,511				10,664				66				70				76				12,938				12,955				15,168
Expected return on plan assets	(6,929		)		(6,737		)		(7,781		)		(31,005		)		(30,349		)		(33,168		)		—				—				—				(37,934		)		(37,086		)		(40,949		)
Recognition of actuarial losses/(gains) and prior service costs	5,804				6,556				7,606				14,575				16,247				12,923				(1,623		)		(2,674		)		(4,567		)		18,756				20,129				15,962
Settlement charge	—				—				7,963				—				—				—				—				—				—				—				—				7,963
Net periodic pension cost / (benefit)	$	4,207			$	4,758			$	12,648			$	7,745			$	10,750			$	7,223			$	(1,557	)		$	(2,604	)		$	(4,491	)		$	10,395			$	12,904			$	15,380

The amounts remaining in accumulated other comprehensive income (loss) that are expected to be recognized as a component of net periodic pension cost during 2019 are as follows:

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Benefits				Total
Plan amendments and prior service costs	$	—			$	(6,798	)		$	—			$	(6,798	)
Actuarial losses (gains)	2,374				21,630				(691		)		23,313
Total	$	2,374			$	14,832			$	(691	)		$	16,515

The projected post-retirement benefit obligation was principally determined using discount rates of 2.65% in 2018 and 2.55% in 2017. Net periodic post-retirement benefit cost was principally determined using discount rates of 3.15% in 2018, 3.41% in 2017, and 3.54% in 2016. The health care cost trend rate was 6.4% in 2018, 7.0% in 2017, and 7.5% in 2016, decreasing to 4.50% in 2027. 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-30

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 is 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, 2018																December 31, 2017
	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	$	111,484			$	—			$	—			$	111,484			$	154,751			$	—			$	—			$	154,751
Equity Securities:
Mettler-Toledo Stock	2,436				—				—				2,436				3,154				—				—				3,154
Equity Mutual Funds:
U.S.(1)	4,989				22,569				—				27,558				6,011				27,984				—				33,995
International(2)	68,544				45,892				—				114,436				80,836				61,341				—				142,177
Emerging Markets(3)	95,146				692				—				95,838				100,346				1,096				—				101,442
Fixed Income Securities:
Corporate/Government Bonds(4)	71,644				—				—				71,644				72,334				—				—				72,334
Fixed Income Mutual Funds:
Insurance Contracts(5)	—				22,852				1,461				24,313				—				23,421				1,514				24,935
Core Bond(6)	95,493				54,448				—				149,941				136,157				57,499				—				193,656
Real Asset Mutual Funds:
Real Estate(7)	83,879				13,838				—				97,717				79,218				8,836				—				88,054
Commodities(8)	40,267				—				—				40,267				37,302				—				—				37,302
Other Types of Investments:
Debt Securities (9)	38,616				—				—				38,616				—				—				—				—
Global Allocation Funds(10)	11,195				10,562				—				21,757				11,781				12,545				—				24,326
Insurance Linked Securities(11)	18,664				—				—				18,664				12,147				—				—				12,147
Total assets in fair value hierarchy	$	642,357			$	170,853			$	1,461			$	814,671			$	694,037			$	192,722			$	1,514			$	888,273
Investments measured at net asset value:
International(2)													2,792																—
Emerging Markets (3)													4,889																5,950
Multi-Strategy Fund of Hedge Funds (12)													40,599																25,559
Total pension assets at fair value													$	862,951															$	919,782

---

F-31

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

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

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

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

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

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

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

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

(9)	Represents a loan to a wholly owned subsidiary of the Company. See Note 10 for additional disclosure.

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

(11)	Represents a broadly diversified portfolio of assets that carry exposure to insurance risks, particularly insurance linked securities.

(12)

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 roll-forward of activity for the years ended December 31, 2018 and 2017 for Level 3 asset categories:

	Commodities				Insurance Contract				Total
Balance at December 31, 2016	$	5,594			$	1,300			$	6,894
Actual return on plan assets related to assets held at end of year	—				21				21
Sales	(5,711		)		(98		)		(5,809		)
Purchases	—				108				108
Impact of foreign currency	117				183				300
Balance at December 31, 2017	$	—			$	1,514			$	1,514
Actual return on plan assets related to assets held at end of year	—				14				14
Sales	—				(85		)		(85		)
Purchases	—				82				82
Impact of foreign currency	—				(64		)		(64		)
Balance at December 31, 2018	$	—			$	1,461			$	1,461

There were no transfers between any asset levels during the years ended December 31, 2018 and 2017.

F-32

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
2019	$	8,051			$	43,494			$	431			$	51,976
2020	8,247				43,111				249				51,607
2021	8,396				45,220				231				53,847
2022	8,546				43,543				207				52,296
2023	8,698				44,397				180				53,275
2024-2028	43,532				222,671				666				266,869

In 2019, the Company expects to make employer pension contributions of approximately $25.3 million to its non-U.S. pension plan and employer contributions of approximately $0.4 million to its U.S. post-retirement medical plan.

14. TAXES

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

	2018				2017				2016
United States	$	60,043			$	45,105			$	37,363
Non-United States	591,815				529,117				466,830
Earnings before taxes	$	651,858			$	574,222			$	504,193

The provisions for taxes consist of:

	Current				Deferred				Total
Year ended December 31, 2018:
United States federal	$	3,422			$	(4,699	)		$	(1,277	)
State and local	5,073				(161		)		4,912
Non-United States	128,450				7,162				135,612
Total	$	136,945			$	2,302			$	139,247
Year ended December 31, 2017:
United States federal	$	55,660			$	10,173			$	65,833
State and local	361				3,471				3,832
Non-United States	144,974				(16,389		)		128,585
Total	$	200,995			$	(2,745	)		$	198,250
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

F-33

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

The provisions for tax expense differed from the amounts computed by applying the United States federal income tax rate of 21% for the year ended December 31, 2018 and 35% for the years ended December 31, 2017 and 2016 to earnings before taxes as a result of the following:

	2018				2017				2016
Expected tax	$	136,890			$	200,978			$	176,467
United States state and local income taxes, net of federal income tax benefit	2,787				376				3,064
Net effect of U.S. tax reform (see below)	3,597				71,982				—
Non-United States income taxes at other than U.S. federal rate	12,710				(43,691		)		(65,917		)
Excess tax benefits from stock option exercises	(13,836		)		(35,171		)		—
Effect of Biotix contingent consideration settlement	(4,394		)		—				—
Other, net	1,493				3,776				6,209
Total provision for taxes	$	139,247			$	198,250			$	119,823

The Company's reported effective tax rate was 21.4% in 2018, 34.5% in 2017, and 23.8% in 2016. As discussed below, the provision for income taxes included charges of $3.6 million in 2018 and $72 million in 2017 related to the Tax Cuts and Jobs Act ("the Act") which had the effect of increasing our effective tax rate by 0.6% and 12.5% in 2018 and 2017, respectively. The 2018 effective tax rate also included a benefit of 0.7% associated with the one-time gain related to the settlement of the Biotix contingent consideration.

On December 22, 2017, the Act significantly revised U.S. corporate income tax law. The Act included, among other things, a reduction in the U.S. federal corporate income tax rate from 35% to 21% effective for taxable years beginning after December 31, 2017, and the implementation of a modified territorial tax system that included a one-time transition tax on deemed repatriated earnings of foreign subsidiaries ("Transition Tax") that is payable over a period of up to eight years.

The Company recorded charges of $3.6 million in 2018 and $72 million in 2017 relating to the Act. Of these amounts, $62 million is expected to be payable over a period of up to eight years of which $46 million is included as a component of other non-current liabilities, $8 million is included in deferred tax liabilities, $4 million is included in taxes payable and $4.2 million has been paid. The components of the Company's charges included:

•

Cash charges of $62 million for un-repatriated foreign earnings due to the estimated Transition Tax of $54 million, and $8 million of foreign withholding taxes, and U.S. federal, state, and local taxes related to the reassessment of planned repatriation of certain foreign earnings that were previously determined to be permanently reinvested. All other undistributed earnings were considered permanently reinvested.

•	A non-cash charge of $13 million primarily related to changes in the treatment of certain deferred tax items and other non-cash items. The effect of remeasuring the U.S. net deferred tax balances resulting from the reduction of the U.S. income tax rate from 35% to 21% was immaterial.

The Company's accounting for the above items was based upon reasonable estimates of the tax effects of the Act, and its evaluation of recently issued regulatory guidance. During the fourth quarter of 2018, additional regulatory guidance was issued which clarified, among other things, the definition of cash equivalents used in the computation of the Transition Tax. As a result, the Company recorded a charge of $3.6 million during the year ended December 31, 2018 that primarily related to an increase in

F-34

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

the Transition Tax obligation. The increased Transition Tax is payable over a period of eight years beginning in 2018. In January 2019, further interpretive regulatory guidance was issued relating to Transition Tax. The Company has yet to complete its analysis of this recently issued guidance, but does not expect a material impact to its financial position, results of operations, or cash flows.

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:

	2018				2017
Deferred tax assets:
Inventory	$	15,078			$	13,779
Accrued and other liabilities	65,879				62,175
Accrued post-retirement benefit and pension costs	50,496				55,545
Net operating loss and tax credit carryforwards	30,696				32,247
Other	17,397				12,099
Total deferred tax assets	179,546				175,845
Less valuation allowance	(15,084		)		(12,857		)
Total deferred tax assets less valuation allowance	164,462				162,988
Deferred tax liabilities:
Inventory	4,890				4,730
Property, plant, and equipment	47,451				50,440
Acquired intangibles amortization	66,386				66,755
Prepaid post-retirement benefit and pension costs	31,473				27,747
International earnings	18,680				23,121
Unrealized currency gains	9,334				—
Total deferred tax liabilities	178,214				172,793
Net deferred tax (liability) asset	$	(13,752	)		$	(9,805	)

The increase in the valuation allowance during 2018 is primarily attributable to increases in valuation allowances against the Company's foreign tax credit carryforwards. Upon adoption of ASU 2016-09 in the first quarter of 2017, the Company recorded $69 million in additional deferred tax assets related primarily to U.S. tax credit carryforwards which arose directly from tax deductions for share-based compensation arrangements, against which a full valuation allowance was recorded in the first quarter and subsequently released in the fourth quarter, along with $11 million of other pre-existing valuation allowances, in connection with the determination of the Transition Tax related to the Act as described above.

The Company continues to record 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.

F-35

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

	2018				2017
Unrecognized tax benefits at beginning of year	$	24,090			$	20,240
Increases related to current tax positions	7,638				2,484
Increases (decreases) related to prior year tax positions	(605		)		1,434
Decreases relating to taxing authority settlements	(4,454		)		(856		)
Decreases resulting from a lapse of the applicable statute of limitations	(505		)		(186		)
Other, net	(488		)		974
Unrecognized tax benefits at end of year	$	25,676			$	24,090

Included in the balance of unrecognized tax benefits at December 31, 2018 and 2017 were $25.7 million and $24.1 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, 2018 and 2017 was $3.7 million and $2.8 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.

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 tax costs associated with the repatriation of such foreign earnings other than non-U.S. withholding taxes, certain state taxes and U.S. taxes on currency gains, if any for which a deferred tax liability has been recorded. All other undistributed earnings not subject to the Transition Tax, any additional outside basis difference inherent in these entities and the contributed capital of our foreign subsidiaries, 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 and additional outside basis differences in these entities due to the complexity of the calculation and the uncertainty regarding assumptions necessary to compute the tax.

As of December 31, 2018, the major jurisdictions for which the Company is subject to examinations are Germany for years after 2015, the United States after 2014, France after 2017, Switzerland after 2016, the United Kingdom after 2016, and China after 2017. Additionally, the Company is currently under examination in various taxing jurisdictions in which it conducts business operations. While the Company has not yet received any material assessments from these taxing authorities, the Company believes that adequate amounts of taxes and related interest and penalties have been provided for any adverse adjustments as a result of these examinations and that the ultimate outcome of these examinations will not result in a material impact on the Company’s consolidated results of operations or financial position.

15. RESTRUCTURING CHARGES

During the past few years, we initiated cost reduction measures. For the years ended December 31, 2018 and 2017, we have incurred $18.4 million and $12.8 million, respectively, of restructuring expenses

F-36

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

which primarily comprise employee related costs. Liabilities related to restructuring activities are included in accrued and other liabilities in the consolidated balance sheet.

A roll-forward of the Company’s accrual for restructuring activities for the years ended December 31, 2018 and 2017 is as follows:

		Total
Balance at December 31, 2016		$	9,531
Restructuring charges		12,772
Cash payments / utilization		(12,663		)
Impact of foreign currency		980
Balance at December 31, 2017		$	10,620
Restructuring charges		18,420
Cash payments / utilization		(20,820		)
Impact of foreign currency		(248		)
Balance at December 31, 2018		$	7,972

16. OTHER CHARGES (INCOME), NET

Other charges (income), net consisted of net income of $21.8 million, $9.9 million and $1.3 million in 2018, 2017 and 2016, respectively. Other charges (income), net includes non-service pension costs (benefits), net (gains) losses from foreign currency transactions and hedging activities, interest income, and other items. Non-service pension benefits were $6.2 million, $4.0 million and $9.8 million in 2018, 2017 and 2016, respectively. Other charges (income), net in 2018 also includes a one-time gain of $18.7 million associated with the settlement of the Biotix acquisition contingent consideration, as well as a one-time legal charge of $3.0 million. Other charges (income), net includes $1.7 million and $1.1 million of acquisition costs during 2017 and 2016, respectively. Other charges (income), net for 2017 also includes a one-time gain of $3.4 million relating to the sale of a facility in Switzerland in connection with our initiative to consolidate certain Swiss operations into a new facility, while 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.

F-37

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

17. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain of its facilities and equipment under operating leases. The future minimum lease payments under non-cancelable operating leases are as follows at December 31, 2018:

2019	$	32,113
2020	23,771
2021	16,986
2022	9,855
2023	7,435
Thereafter	5,081
Total	$	95,241

Rent expense for operating leases amounted to $38.9 million, $36.9 million, and $34.9 million for the years ended December 31, 2018, 2017, and 2016, 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.

18. SEGMENT REPORTING

The Company has five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations, and Other. U.S. Operations represent certain of the Company’s marketing and producing organizations located in the United States. Western European Operations include the Company’s marketing and producing organizations in Western Europe, excluding operations located in Switzerland. Swiss Operations include marketing and producing organizations located in Switzerland as well as extensive R&D operations that are responsible for the development, production, and marketing of precision instruments, including weighing, analytical, and measurement technologies for use in a variety of 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.

F-38

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

For the Year Ended December 31, 2018		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		$	1,007,798			$	104,458			$	1,112,256			$	161,615			$	10,425			$	2,113,268			$	(27,896	)		$	410,021
Swiss Operations		134,064				628,529				762,593				202,027				5,835				1,471,625				(1,123		)		21,994
Western European Operations		718,788				176,995				895,783				122,574				4,173				983,809				(16,879		)		87,242
Chinese Operations		525,109				242,452				767,561				270,668				7,869				1,237,248				(13,248		)		644
Other(a)		549,827				6,543				556,370				78,317				3,774				319,070				(8,342		)		14,879
Eliminations and Corporate(b)		—				(1,158,977		)		(1,158,977		)		(104,696		)		5,091				(3,506,173		)		(75,238		)		—
Total		$	2,935,586			$	—			$	2,935,586			$	730,505			$	37,167			$	2,618,847			$	(142,726	)		$	534,780

For the Year Ended December 31, 2017		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		$	944,825			$	99,117			$	1,043,942			$	177,705			$	7,659			$	1,937,688			$	(38,969	)		$	409,520
Swiss Operations		133,925				563,083				697,008				174,447				5,551				1,374,150				(19,589		)		22,171
Western European Operations		673,776				170,820				844,596				123,841				4,052				1,805,294				(7,094		)		91,927
Chinese Operations		452,617				232,882				685,499				231,860				7,168				1,068,811				(13,246		)		690
Other(a)		519,910				7,934				527,844				72,681				3,474				310,667				(4,131		)		15,530
Eliminations and Corporate(b)		—				(1,073,836		)		(1,073,836		)		(127,952		)		5,554				(3,946,805		)		(44,397		)		—
Total		$	2,725,053			$	—			$	2,725,053			$	652,582			$	33,458			$	2,549,805			$	(127,426	)		$	539,838

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				129,001				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				64,146				3,461				277,476				(4,540		)		14,218
Eliminations and Corporate(b)		—				(1,019,539		)		(1,019,539		)		(133,095		)		6,062				(2,893,996		)		(36,757		)		—
Total		$	2,508,257			$	—			$	2,508,257			$	573,178			$	32,743			$	2,166,777			$	(123,957	)		$	476,378

(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.

F-39

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

A reconciliation of earnings before taxes to segment profit follows:

	2018				2017				2016
Earnings before taxes	$	651,858			$	574,222			$	504,193
Amortization	47,524				42,671				36,052
Interest expense	34,511				32,785				28,026
Restructuring charges	18,420				12,772				6,235
Other charges (income), net	(21,808		)		(9,868		)		(1,328		)
Segment profit	$	730,505			$	652,582			$	573,178

During 2018, restructuring charges of $18.4 million were recognized, of which $11.0 million, $4.0 million, $2.8 million, $0.3 million, and $0.3 million relate to the Company’s U.S., Swiss, Western European, Chinese, and Other Operations, respectively. Restructuring charges of $12.8 million were recognized in 2017, of which $6.2 million, $1.8 million, $3.0 million, $0.8 million, and $1.0 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:

	2018				2017				2016
Laboratory	$	1,504,600			$	1,358,493			$	1,225,000
Industrial	1,211,362				1,158,335				1,067,858
Retail	219,624				208,225				215,399
Total net sales	$	2,935,586			$	2,725,053			$	2,508,257

F-40

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

	Net Sales												Property, Plant, and Equipment, Net
	2018				2017				2016				2018				2017
United States	$	933,419			$	888,241			$	815,153			$	234,395			$	220,401
Other Americas	172,537				162,672				153,607				2,946				3,406
Total Americas	1,105,956				1,050,913				968,760				237,341				223,807
Germany	205,296				192,126				182,644				48,030				49,376
France	141,513				130,427				118,681				7,810				6,386
United Kingdom	70,378				64,361				61,513				17,347				19,617
Switzerland	65,377				63,090				62,115				293,388				259,007
Other Europe	426,209				399,923				374,008				12,791				8,050
Total Europe	908,773				849,927				798,961				379,366				342,436
China	506,360				439,373				374,996				87,643				92,269
Rest of World	414,497				384,840				365,540				13,176				9,759
Total Asia/Rest of World	920,857				824,213				740,536				100,819				102,028
Total	$	2,935,586			$	2,725,053			$	2,508,257			$	717,526			$	668,271

F-41

METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

19. QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial data for the years ended December 31, 2018 and 2017 are as follows:

	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
2018
Net sales	$	660,821			$	721,996			$	734,846			$	817,923
Gross profit	$	374,933			$	412,625			$	419,254			$	477,566
Net earnings	$	93,304			$	111,468			$	126,653			$	181,186
Basic earnings per common share:
Net earnings	$	3.66			$	4.41			$	5.04			$	7.25
Weighted average number of common shares	25,468,323				25,299,414				25,126,061				24,975,303
Diluted earnings per common share:
Net earnings	$	3.58			$	4.31			$	4.93			$	7.11
Weighted average number of common and common equivalent shares	26,095,647				25,867,383				25,683,365				25,490,270
Market price per share:
High	$	692.30			$	595.14			$	617.94			$	645.33
Low	$	566.87			$	546.43			$	559.44			$	524.03
2017
Net sales	$	594,567			$	653,656			$	698,799			$	778,031
Gross profit	$	343,389			$	375,612			$	400,975			$	455,775
Net earnings	$	92,466			$	101,580			$	104,950			$	76,976
Basic earnings per common share:
Net earnings	$	3.57			$	3.94			$	4.10			$	3.01
Weighted average number of common shares	25,932,112				25,751,374				25,613,433				25,562,542
Diluted earnings per common share:
Net earnings	$	3.48			$	3.84			$	3.99			$	2.93
Weighted average number of common and common equivalent shares	26,586,061				26,439,529				26,303,529				26,229,052
Market price per share:
High	$	486.90			$	601.16			$	635.17			$	689.11
Low	$	414.52			$	473.87			$	571.25			$	606.80

F-42

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, 2018		$	15,549			$	1,167			$	(678	)		$	569			$	15,469
Year ended December 31, 2017		$	14,234			$	1,403			$	1,005			$	1,093			$	15,549
Year ended December 31, 2016		$	14,435			$	1,087			$	(760	)		$	528			$	14,234
Deferred tax valuation allowance:
Year ended December 31, 2018		$	12,857			$	—			$	3,023			$	796			$	15,084
Year ended December 31, 2017		$	10,730			$	9,513			$	72,170			$	79,556			$	12,857
Year ended December 31, 2016		$	25,435			$	—			$	—			$	14,705			$	10,730

---

Note (A)

For accounts receivable, amounts comprise currency translation adjustments.

For deferred tax valuation allowance in 2018, 2017, and 2016, amounts relate primarily to changes in foreign tax credit carryforwards and R&D credit carryforwards.

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 2017 and 2016 relates primarily to decreases in foreign tax credit and R&D credit carryforwards. Amounts in 2017 include certain excess tax benefits resulting from the adoption of ASU 2016-09, offset by the effects of the 2017 Tax Act.

S- 1