Item 1. Unaudited Financial Statements

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Item 1. Unaudited Financial Statements

PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended				Nine Months Ended
	October 3, 2021		October 4, 2020		October 3, 2021		October 4, 2020
	(In thousands, except per share data)
Product revenue	$	785,869	$	736,846	$	2,365,180	$	1,763,881
Service revenue	380,815		227,179		1,337,664		664,258
Total revenue	1,166,684		964,025		3,702,844		2,428,139
Cost of product revenue	365,497		299,785		1,070,632		746,469
Cost of service revenue	169,351		136,795		530,036		398,858
Total cost of revenue	534,848		436,580		1,600,668		1,145,327
Selling, general and administrative expenses	339,047		225,249		872,276		654,844
Research and development expenses	68,608		50,131		194,648		148,566
Restructuring and other costs, net	2,211		4,059		13,018		11,075
Operating income from continuing operations	221,970		248,006		1,022,234		468,327
Interest and other expense, net	60,302		14,249		54,027		35,054
Income from continuing operations before income taxes	161,668		233,757		968,207		433,273
Provision for income taxes	33,883		57,021		215,111		85,609
Income from continuing operations	127,785		176,736		753,096		347,664

Loss on disposition of discontinued operations before income taxes	—		—		—		—
Provision for income taxes on discontinued operations and dispositions	47		37		123		138
Loss from discontinued operations and dispositions	(47)		(37)		(123)		(138)
Net income	$	127,738	$	176,699	$	752,973	$	347,526
Basic earnings per share:
Income from continuing operations	$	1.12	$	1.58	$	6.67	$	3.12
Loss from discontinued operations and dispositions	(0.00)		(0.00)		(0.00)		(0.00)
Net income	$	1.12	$	1.58	$	6.67	$	3.12
Diluted earnings per share:
Income from continuing operations	$	1.11	$	1.57	$	6.65	$	3.11
Loss from discontinued operations and dispositions	(0.00)		(0.00)		(0.00)		(0.00)
Net income	$	1.11	$	1.57	$	6.65	$	3.10
Weighted average shares of common stock outstanding:
Basic	114,508		111,684		112,836		111,378
Diluted	115,022		112,292		113,307		111,935
Cash dividends declared per common share	$	0.07	$	0.07	$	0.21	$	0.21

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

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended				Nine Months Ended
	October 3, 2021		October 4, 2020		October 3, 2021		October 4, 2020
	(In thousands)
Net income	$	127,738	$	176,699	$	752,973	$	347,526
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of income taxes	(53,758)		72,862		(114,339)		55,837


Unrealized (loss) gain on securities, net of income taxes	(1)		43		104		42
Other comprehensive (loss) income	(53,759)		72,905		(114,235)		55,879
Comprehensive income	$	73,979	$	249,604	$	638,738	$	403,405

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

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	October 3, 2021		January 3, 2021
	(In thousands, except share and per share data)
Current assets:
Cash and cash equivalents	$	487,373	$	402,036
Accounts receivable, net	947,805		1,155,109

Inventories	645,419		514,567
Other current assets	170,207		167,208

Total current assets	2,250,804		2,238,920
Property, plant and equipment, net	537,710		368,304
Operating lease right-of-use assets	208,661		207,236
Intangible assets, net	4,160,736		1,365,693
Goodwill	7,420,271		3,447,114
Other assets, net	321,667		333,048

Total assets	$	14,899,849	$	7,960,315
Current liabilities:
Current portion of long-term debt	$	4,485	$	380,948
Accounts payable	320,435		327,325

Accrued expenses and other current liabilities	820,109		943,916

Total current liabilities	1,145,029		1,652,189
Long-term debt	5,099,077		1,609,701
Long-term liabilities	1,512,153		774,531
Operating lease liabilities	185,005		188,402

Total liabilities	7,941,264		4,224,823
Commitments and contingencies (see Note 14)
Stockholders’ equity:
Preferred stock—$1 par value per share, authorized 1,000,000 shares; none issued or outstanding	—		—
Common stock—$1 par value per share, authorized 300,000,000 shares; issued and outstanding 126,200,000 shares and 112,090,000 shares at October 3, 2021 and January 3, 2021, respectively	126,200		112,090
Capital in excess of par value	2,742,750		148,101
Retained earnings	4,235,831		3,507,262
Accumulated other comprehensive loss	(146,196)		(31,961)
Total stockholders’ equity	6,958,585		3,735,492
Total liabilities and stockholders’ equity	$	14,899,849	$	7,960,315

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

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	For the Nine-Month Period Ended October 3, 2021
	Common Stock Amount		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	(In thousands)
Balance, January 3, 2021	$	112,090	$	148,101	$	3,507,262	$	(31,961)	$	3,735,492
Net income	—		—		379,305		—		379,305
Other comprehensive loss	—		—		—		(72,211)		(72,211)
Dividends	—		—		(7,846)		—		(7,846)
Exercise of employee stock options and related income tax benefits	95		4,892		—		—		4,987
Issuance of common stock for employee stock purchase plans	—		8		—		—		8
Purchases of common stock	(295)		(42,484)		—		—		(42,779)
Issuance of common stock for long-term incentive program	176		4,274		—		—		4,450
Stock compensation	—		899		—		—		899
Balance, April 4, 2021	$	112,066	$	115,690	$	3,878,721	$	(104,172)	$	4,002,305
Net income	—		—		245,930		—		245,930
Other comprehensive income	—		—		—		11,735		11,735
Dividends	—		—		(7,826)		—		(7,826)
Exercise of employee stock options and related income tax benefits	128		9,070		—		—		9,198
Issuance of common stock for employee stock purchase plans	11		1,613		—		—		1,624
Purchases of common stock	(209)		(29,936)		—		—		(30,145)
Issuance of common stock for long-term incentive program	24		4,998		—		—		5,022
Stock compensation	5		1,959		—		—		1,964
Balance, July 4, 2021	$	112,025	$	103,394	$	4,116,825	$	(92,437)	$	4,239,807
Net income	—		—		127,738		—		127,738
Other comprehensive loss	—		—		—		(53,759)		(53,759)
Dividends	—		—		(8,732)		—		(8,732)
Issuance of common stock for business combination, net of issuance costs	14,067		2,624,077		—		—		2,638,144
Exercise of employee stock options and related income tax benefits	107		8,773		—		—		8,880

Purchases of common stock	(1)		(89)		—		—		(90)
Issuance of common stock for long-term incentive program	2		5,114		—		—		5,116
Stock compensation	—		1,481		—		—		1,481
Balance, October 3, 2021	$	126,200	$	2,742,750	$	4,235,831	$	(146,196)	$	6,958,585

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	For the Nine-Month Period Ended October 4, 2020
	Common Stock Amount		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	(In thousands)
Balance, December 29, 2019	$	111,140	$	90,357	$	2,811,973	$	(199,646)	$	2,813,824
Impact of adopting ASU 2016-13	—		—		(1,328)		—		(1,328)
Net income	—		—		33,665		—		33,665
Other comprehensive loss	—		—		—		(78,681)		(78,681)
Dividends	—		—		(7,779)		—		(7,779)
Exercise of employee stock options and related income tax benefits	21		1,085		—		—		1,106
Issuance of common stock for employee stock purchase plans	14		1,242		—		—		1,256
Purchases of common stock	(66)		(6,276)		—		—		(6,342)
Issuance of common stock for long-term incentive program	197		2,831		—		—		3,028
Stock compensation	—		997		—		—		997
Balance, April 5, 2020	$	111,306	$	90,236	$	2,836,531	$	(278,327)	$	2,759,746
Net income	—		—		137,162		—		137,162
Other comprehensive income	—		—		—		61,655		61,655
Dividends	—		—		(7,803)		—		(7,803)
Exercise of employee stock options and related income tax benefits	175		8,792		—		—		8,967
Issuance of common stock for employee stock purchase plans	14		1,291		—		—		1,305
Purchases of common stock	(4)		(323)		—		—		(327)
Issuance of common stock for long-term incentive program	2		5,123		—		—		5,125
Stock compensation	8		1,625		—		—		1,633
Balance, July 5, 2020	$	111,501	$	106,744	$	2,965,890	$	(216,672)	$	2,967,463
Net income	—		—		176,699		—		176,699
Other comprehensive income	—		—		—		72,905		72,905
Dividends	—		—		(7,839)		—		(7,839)
Exercise of employee stock options and related income tax benefits	369		17,085		—		—		17,454
Issuance of common stock for employee stock purchase plans	—		26		—		—		26
Purchases of common stock	(1)		(158)		—		—		(159)
Issuance of common stock for long-term incentive program	9		4,176		—		—		4,185
Stock compensation	—		947		—		—		947
Balance, October 4, 2020	$	111,878	$	128,820	$	3,134,750	$	(143,767)	$	3,231,681

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

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended
	October 3, 2021		October 4, 2020
	(In thousands)
Operating activities:
Net income	$	752,973	$	347,526
Loss from discontinued operations and dispositions, net of income taxes	123		138
Income from continuing operations	753,096		347,664
Adjustments to reconcile income from continuing operations to net cash provided by continuing operations:
Stock-based compensation	18,957		19,770
Restructuring and other costs, net	13,018		11,075
Depreciation and amortization	232,935		182,521
(Gain) Loss on disposition of businesses and assets, net	(1,970)		886

Change in fair value of contingent consideration	1,553		(8,807)

Amortization of deferred debt financing costs and accretion of discounts	3,224		2,559
Change in fair value of financial securities	(8,566)		—
Asset impairment	3,868		—
Amortization of acquired inventory revaluation	14,728		1,757
Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired:
Accounts receivable, net	242,386		(67,695)

Inventories	6,316		(120,934)
Accounts payable	(37,002)		16,391

Accrued expenses and other	(167,385)		24,893
Net cash provided by operating activities of continuing operations	1,075,158		410,080


Investing activities:
Capital expenditures	(67,459)		(57,391)
Purchases of investments	(19,130)		(9,559)

Proceeds from disposition of businesses and assets	1,460		2,423
Proceeds from surrender of life insurance policies	—		131
Cash paid for acquisitions, net of cash, cash equivalents and restricted cash acquired	(3,967,678)		(3,702)
Net cash used in investing activities of continuing operations	(4,052,807)		(68,098)


Financing activities:
Payments on borrowings	(1,191,125)		(515,210)
Proceeds from borrowings	1,144,282		257,000
Proceeds from term loan	500,000		—
Payments of senior unsecured notes	(339,605)		—
Proceeds from sale of senior unsecured notes	3,086,095		—
Payments of debt financing and equity issuance costs	(30,983)		—
Settlement of cash flow hedges	(1,459)		(2,089)
Net payments on other credit facilities	(12,731)		(8,124)
Payments for acquisition-related contingent consideration	—		(5,200)
Proceeds from issuance of common stock under stock plans	22,760		27,528
Purchases of common stock	(73,013)		(6,829)
Dividends paid	(23,539)		(23,381)
Net cash provided by (used in) financing activities of continuing operations	3,080,682		(276,305)


Effect of exchange rate changes on cash, cash equivalents and restricted cash	(16,584)		832

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Net increase in cash, cash equivalents and restricted cash	86,449		66,509
Cash, cash equivalents and restricted cash at beginning of period	402,613		191,894
Cash, cash equivalents and restricted cash at end of period	$	489,062	$	258,403

Supplemental disclosures of cash flow information
Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows:
Cash and cash equivalents	$	487,373	$	258,293
Restricted cash included in other current assets	1,689		110

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	489,062	$	258,403

Supplemental disclosures of non-cash investing and financing activities:
Equity issued for business combination, net of issuance costs	$	2,638,369	$	—
Contingent consideration accrued in business combination	34,131		—
Other liability incurred in business combination	7,767		—

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

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PERKINELMER, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by PerkinElmer, Inc. (the “Company”), in accordance with accounting principles generally accepted in the United States of America (the “U.S.” or the "United States") and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information in the footnote disclosures of the financial statements has been condensed or omitted where it substantially duplicates information provided in the Company’s latest audited consolidated financial statements, in accordance with the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in its Annual Report on Form 10-K for the fiscal year ended January 3, 2021, filed with the SEC (the “2020 Form 10-K”). The balance sheet amounts at January 3, 2021 in this report were derived from the Company’s audited 2020 consolidated financial statements included in the 2020 Form 10-K. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods indicated. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for the three and nine months ended October 3, 2021 and October 4, 2020, respectively, are not necessarily indicative of the results for the entire fiscal year or any future period.

The Company’s fiscal year ends on the Sunday nearest December 31. The Company reports fiscal years under a 52/53 week format and as a result, certain fiscal years will contain 53 weeks. The fiscal year ending January 2, 2022 ("fiscal year 2021") will include 52 weeks, and the fiscal year ended January 3, 2021 ("fiscal year 2020") included 53 weeks.

Recently Adopted and Issued Accounting Pronouncements: From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the "FASB") and are adopted by the Company as of the specified effective dates. Unless otherwise discussed, such pronouncements did not have or will not have a significant impact on the Company’s consolidated financial position, results of operations and cash flows or do not apply to the Company’s operations.

In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 eliminates certain exceptions and adds guidance to reduce complexity in accounting for income taxes. Specifically, this guidance: (1) removes the intraperiod tax allocation exception to the incremental approach; (2) removes the ownership changes in investments exception in determining when a deferred tax liability is recognized after an investor in a foreign entity transitions to or from the equity method of accounting and applies this provision on a modified retrospective basis through a cumulative-effect adjustment to retained earnings at the beginning of the period of adoption; and (3) removes the exception to using the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. ASU 2019-12 also simplifies accounting principles by making other changes, including requiring an entity to: (1) evaluate whether a step-up in tax basis of goodwill relates to a business combination or a separate transaction; (2) make a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax and to apply this provision retrospectively to all periods presented; and (3) recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and apply this provision either retrospectively for all periods presented or on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The provisions of this guidance (except as specifically mentioned above) are to be applied prospectively upon their effective date. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020, and interim periods within those years. In accordance with ASU 2019-12, the Company adopted the guidance beginning on January 4, 2021. The adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

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Note 2: Revenue

Disaggregation of revenue

In the following tables, revenue is disaggregated by primary geographical markets, primary end-markets and timing of revenue recognition. The tables also include a reconciliation of the disaggregated revenue with the reportable segments' revenue.


	Reportable Segments
	Three Months Ended
	October 3, 2021						October 4, 2020
	Discovery & Analytical Solutions		Diagnostics		Total		Discovery & Analytical Solutions		Diagnostics		Total
	(In thousands)
Primary geographical markets
Americas	$	217,117	$	280,367	$	497,484	$	173,992	$	213,347	$	387,339
Europe	135,940		220,264		356,204		115,281		198,205		313,486
Asia	159,822		153,174		312,996		134,350		128,850		263,200
	$	512,879	$	653,805	$	1,166,684	$	423,623	$	540,402	$	964,025

Primary end-markets
Diagnostics	$	—	$	653,805	$	653,805	$	—	$	540,402	$	540,402
Life sciences	320,067		—		320,067		251,929		—		251,929
Applied markets	192,812		—		192,812		171,694		—		171,694
	$	512,879	$	653,805	$	1,166,684	$	423,623	$	540,402	$	964,025

Timing of revenue recognition
Products and services transferred at a point in time	$	374,147	$	554,332	$	928,479	$	293,460	$	518,867	$	812,327
Services transferred over time	138,732		99,473		238,205		130,163		21,535		151,698
	$	512,879	$	653,805	$	1,166,684	$	423,623	$	540,402	$	964,025

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	Reportable Segments
	Nine Months Ended
	October 3, 2021						October 4, 2020
	Discovery & Analytical Solutions		Diagnostics		Total		Discovery & Analytical Solutions		Diagnostics		Total
	(In thousands)
Primary geographical markets
Americas	$	599,170	$	1,049,659	$	1,648,829	$	503,490	$	475,113	$	978,603
Europe	416,974		732,784		1,149,758		337,435		429,671		767,106
Asia	464,173		440,084		904,257		372,095		310,335		682,430
	$	1,480,317	$	2,222,527	$	3,702,844	$	1,213,020	$	1,215,119	$	2,428,139

Primary end-markets
Diagnostics	$	—	$	2,222,527	$	2,222,527	$	—	$	1,215,119	$	1,215,119
Life sciences	905,949		—		905,949		734,782		—		734,782
Applied markets	574,368		—		574,368		478,238		—		478,238
	$	1,480,317	$	2,222,527	$	3,702,844	$	1,213,020	$	1,215,119	$	2,428,139

Timing of revenue recognition
Products and services transferred at a point in time	$	1,079,119	$	1,676,041	$	2,755,160	$	827,270	$	1,149,166	$	1,976,436
Services transferred over time	401,198		546,486		947,684		385,750		65,953		451,703
	$	1,480,317	$	2,222,527	$	3,702,844	$	1,213,020	$	1,215,119	$	2,428,139

Major Customer Concentration

Revenues from one customer in the Company's Diagnostics segment represent approximately $94.8 million and $492.8 million of the Company's total revenue for the three and nine months ended October 3, 2021, respectively.

Contract Balances

Contract assets: The unbilled receivables (contract assets) primarily relate to the Company's right to consideration for work completed but not billed at the reporting date. The unbilled receivables are transferred to trade receivables when billed to customers. Contract assets are generally classified as current assets and are included in "Accounts receivable, net" in the consolidated balance sheets. The balance of contract assets as of October 3, 2021 and January 3, 2021 were $57.8 million and $59.5 million, respectively. The amount of unbilled receivables recognized at the beginning of the period that were transferred to trade receivables during the nine months ended October 3, 2021 was $48.9 million. The increase in unbilled receivables during the nine months ended October 3, 2021 as a result of recognition of revenue before billing to customers, excluding amounts transferred to trade receivables during the period, amounted to $47.2 million.

Contract liabilities: The contract liabilities primarily relate to the advance consideration received from customers for products and related installation for which transfer of control has not occurred at the balance sheet date. Contract liabilities are classified as either current in "Accounts payable" or "Accrued expenses and other current liabilities" or as long-term in "Long-term liabilities" in the consolidated balance sheets based on the timing of when the Company expects to recognize revenue. The balance of contract liabilities as of October 3, 2021 and January 3, 2021 were $209.6 million and $238.1 million, respectively. The additions to contract liabilities during the nine months ended October 3, 2021 due to cash received, excluding amounts recognized as revenue during the period, was $51.3 million. The amount of revenue recognized during the nine months ended October 3, 2021 that was included in the contract liability balance at the beginning of the period was $79.8 million.

Contract costs: The Company recognizes the incremental costs of obtaining a contract with a customer as an asset if it expects the benefit of those costs to be longer than one year. The Company determined that certain sales incentive programs meet the requirements to be capitalized. Total capitalized costs to obtain a contract were immaterial during the period and are included in other current and long-term assets on the consolidated balance sheets. The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year

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or less. These costs include the Company's internal sales force compensation program, as the Company determined that annual compensation is commensurate with annual sales activities.

Transaction price allocated to the remaining performance obligations

The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. The estimated revenue expected to be recognized beyond one year in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the period are not material to the Company. The remaining performance obligations primarily include noncancelable purchase orders and noncancelable software subscriptions and cloud service contracts.

Note 3: Business Combinations

Acquisitions in fiscal year 2021

Acquisition of BioLegend, Inc. The Company completed the acquisition of BioLegend, Inc. ("BioLegend") and paid an aggregate consideration of $5.7 billion, net of cash acquired of $292.4 million, reflecting preliminary working capital and other adjustments (the "Aggregate Consideration") that are subject to final adjustments following the closing. The Aggregate Consideration was paid in a combination of $3.3 billion in cash and shares of the Company's common stock having a fair value of approximately $2.6 billion based on the $187.56 per share closing price of the Company's common stock on the New York Stock Exchange on September 17, 2021 (the "Stock Consideration"). The Stock Consideration consisted of 14,066,799 shares of the Company's common stock. The cash consideration was funded through a combination of $2.3 billion in proceeds from the issuance of senior unsecured notes, $500.0 million in proceeds from the Company's term loan credit facility and $310.0 million in proceeds from the Company's revolving credit facility and available cash on hand of $252.6 million. BioLegend is recognized as a leading, global provider of life science antibodies and reagents, headquartered in San Diego, California, with approximately 700 employees. The operations for this acquisition will be reported within the results of the Company's Discovery & Analytical Solutions segment from the acquisition date. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforce acquired, which is not tax deductible. Identifiable definite-lived intangible assets, such as core technology, trade names, customer relationships and clone library, acquired as part of this acquisition had a weighted average amortization period of 16.3 years.

BioLegend's revenue and net loss for the period from the acquisition date to October 3, 2021 were $12.1 million and $6.2 million, respectively. The following unaudited pro forma information presents the combined financial results for the Company and BioLegend as if the acquisition of BioLegend had been completed at the beginning of fiscal year 2020:


	Nine Months Ended		Fiscal Year Ended
	October 3, 2021		January 3, 2021
	(In millions, except per share data)
Pro Forma Statement of Operations Information:
Revenue	$	3,943	$	4,025
Income from continuing operations	797		552
Basic earnings per share:
Income from continuing operations	$	6.28	$	4.39
Diluted earnings per share:
Income from continuing operations	$	6.26	$	4.37

The unaudited pro forma information for fiscal years 2021 and 2020 have been calculated after applying the Company's accounting policies and the impact of acquisition date fair value adjustments. The fiscal year 2021 unaudited pro forma income from continuing operations was adjusted to exclude approximately $43.2 million of acquisition-related transaction costs and $23.3 million of bridge financing and debt pre-issuance hedging costs that were recognized in expense in the quarter. The fiscal year 2020 pro forma income from continuing operations was adjusted to include these acquisition-related transaction costs and the nonrecurring expenses related to the bridge financing and debt pre-issuance hedging costs and fair value adjustments. These pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain

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adjustments, such as fair value adjustment to inventory, increased interest expense on debt obtained to finance the transaction, and increased amortization for the fair value of acquired intangible assets.

The pro forma information does not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the combination occurred at the beginning of each period presented, or of future results of the consolidated entities. The actual results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

Other acquisitions in 2021. During the first nine months of fiscal year 2021, the Company also completed the acquisition of six other businesses for aggregate consideration of $1.2 billion. The acquired businesses include Oxford Immunotec Global PLC, a company based in Abingdon, UK with approximately 275 employees, for a total consideration of $590.9 million and Nexcelom Bioscience Holdings, LLC, a company based in Lawrence, Massachusetts with approximately 130 employees, for a total consideration of $267.1 million, and four other businesses, which were acquired for a total consideration of $296.0 million. The excess of the purchase price over the fair value of the acquired businesses' net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as employee workforces acquired, and has been allocated to goodwill, which is not tax deductible. Identifiable definite-lived intangible assets, such as core technology, trade names, and customer relationships, acquired as part of these acquisitions had a weighted average amortization period of 12.4 years.

The total purchase price for the acquisitions in fiscal year 2021 has been allocated to the estimated fair values of assets acquired and liabilities assumed as follows:


	Preliminary
	BioLegend		Other
	(In thousands)
Fair value of business combination:
Cash payments	$	3,335,753	1,118,884
Common stock issued	2,638,369		—
Other liability	6,857		910
Contingent consideration	—		34,131

Less: cash acquired	(292,377)		(195,010)
Total	$	5,688,602	$	958,915
Identifiable assets acquired and liabilities assumed:
Current assets	$	184,541	$	73,933
Property, plant and equipment	147,200		26,507
Other assets	9,330		15,564
Identifiable intangible assets:
Core technology and clone library	782,400		285,609
Trade names and patents	38,000		39,620
Licenses	8,979		—
Customer relationships and backlog	1,714,800		141,170

Goodwill	3,511,498		527,402
Deferred taxes	(669,906)		(86,471)
Deferred revenue	—		(1,197)
Debt assumed	—		(4,628)
Liabilities assumed	(38,240)		(58,594)
Total	$	5,688,602	$	958,915

Acquisitions in fiscal year 2020

During the fiscal year 2020, the Company completed the acquisition of four businesses for aggregate consideration of $438.9 million. The acquired businesses were Horizon Discovery Group plc, a company based in Cambridge, UK with approximately 400 employees, which was acquired on December 23, 2020 for a total consideration of $399.8 million (£296.0

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million), and three other businesses, which were acquired for a total consideration of $39.1 million. The excess of the purchase price over the fair value of the acquired businesses' net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforces acquired, and has been allocated to goodwill, which is not tax deductible. Identifiable definite-lived intangible assets, such as core technology, trade names, customer relationships and in-process research and development, acquired as part of these acquisitions had a weighted average amortization period of 11.0 years.

The total purchase price for the acquisitions in fiscal year 2020 has been allocated to the estimated fair values of assets acquired and liabilities assumed as follows:


	Preliminary
	(In thousands)
Fair value of business combination:
Cash payments	$	437,661
Other liability	1,660

Working capital and other adjustments	(384)
Less: cash acquired	(26,840)
Total	$	412,097
Identifiable assets acquired and liabilities assumed:
Current assets	$	35,532
Property, plant and equipment	20,302
Other assets	18,114
Identifiable intangible assets:
Core technology	65,730
Trade names	5,580


Customer relationships	108,523
In-process research and development ("IPR&D")	10,700
Goodwill	221,960
Deferred taxes	(27,142)
Deferred revenue	(2,031)

Liabilities assumed	(45,171)
Total	$	412,097

The preliminary allocations of the purchase prices for acquisitions are based upon initial valuations. The Company's estimates and assumptions underlying the initial valuations are subject to the collection of information necessary to complete its valuations within the measurement periods, which are up to one year from the respective acquisition dates. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, assets and liabilities related to income taxes and related valuation allowances, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair values of the net assets acquired at the acquisition dates during the measurement periods. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition dates that, if known, would have resulted in the recognition of those assets and liabilities as of those dates. These adjustments will be made in the periods in which the amounts are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. All changes that do not qualify as adjustments made during the measurement periods are also included in current period earnings.

The allocations of the purchase prices for acquisitions are based on estimates of the fair value of the net assets acquired and are subject to adjustment upon finalization of the purchase price allocations. The accounting for business combinations requires estimates and judgments as to expectations for future cash flows of the acquired business, and the allocation of those cash flows to identifiable intangible assets, in determining the estimated fair values for assets acquired and liabilities assumed.

As of October 3, 2021, the Company may have to pay contingent consideration related to acquisitions with open contingency periods of up to $90.7 million. As of October 3, 2021, the Company has recorded contingent consideration obligations of $37.2 million, of which $4.2 million was recorded in accrued expenses and other current liabilities, and $33.0

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million was recorded in long-term liabilities. As of January 3, 2021, the Company had recorded contingent consideration obligations with an estimated fair value of $3.0 million, of which $2.9 million was recorded in accrued expenses and other current liabilities, and $0.1 million was recorded in long-term liabilities. The expected maximum earnout period for acquisitions with open contingency periods does not exceed 7.2 years from October 3, 2021, and the remaining weighted average expected earnout period at October 3, 2021 was 6.8 years. If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the condensed consolidated financial statements could result in a possible impairment of the intangible assets and goodwill, require acceleration of the amortization expense of definite-lived intangible assets or the recognition of additional contingent consideration which would be recognized as a component of operating expenses from continuing operations.

Total acquisition and divestiture-related costs for the three and nine months ended October 3, 2021 were $72.5 million and $87.6 million, respectively. These amounts included $2.1 million and $13.8 million of incentive award associated with the Company's acquisition of Meizheng Group for the three and nine months ended October 3, 2021, respectively. Net foreign exchange gain, and bridge financing and debt pre-issuance hedging costs, related to the Company's acquisitions for the nine months ended October 3, 2021 amounted to $5.4 million and $23.6 million, respectively. Total acquisition and divestiture-related costs for the three and nine months ended October 4, 2020 were $0.2 million and $7.4 million, respectively. These amounts included $0.2 million and $6.9 million of incentive award associated with the Company's acquisition of Meizheng Group for the three and nine months ended October 4, 2020, respectively. These acquisition and divestiture-related costs were expensed as incurred and recorded in selling, general and administrative expenses and interest and other expense, net in the Company's consolidated statements of operations.

Note 4: Restructuring and Other Costs, Net

The Company implemented restructuring plans in the first, second and third quarters of fiscal year 2021 consisting of workforce reductions principally intended to realign resources to emphasize growth initiatives and integrate new acquisitions (the "Q1 2021 Plan", "Q2 2021 Plan" and "Q3 2021 Plan", respectively). The Company implemented a restructuring plan in the third quarter of fiscal year 2020 consisting of workforce reductions principally intended to realign resources to emphasize growth initiatives (the "Q3 2020 Plan"). The Company implemented a restructuring plan in the first quarter of fiscal year 2020 consisting of workforce reductions and closure of excess facilities principally intended to realign resources to emphasize growth initiatives (the "Q1 2020 Plan"). Details of the plans initiated in previous years (the “Previous Plans”) are discussed more fully in Note 5 to the audited consolidated financial statements in the 2020 Form 10-K.

The following table summarizes the reductions in headcount, the initial restructuring or contract termination charges by reporting segment, and the dates by which payments were substantially completed, or the dates by which payments are expected to be substantially completed, for restructuring actions implemented during fiscal years 2021 and 2020 in continuing operations:


	Workforce Reductions					Closure of Excess Facility				Total			(Expected) Date Payments Substantially Completed by
	Headcount Reduction	Discovery & Analytical Solutions		Diagnostics		Discovery & Analytical Solutions		Diagnostics				Severance		Excess Facility

	(In thousands, except headcount data)

Q3 2021 Plan	39	$	420	$	366	$	—	$	—	$	786		Q2 FY2022		—
Q2 2021 Plan	25	968		564		—		—		1,532			Q1 FY2022		—
Q1 2021 Plan	77	3,941		1,615		—		—		5,556			Q4 FY2021		—
Q3 2020 Plan	23	2,080		901		—		—		2,981			Q2 FY2021		—
Q1 2020 Plan	32	2,312		1,134		92		682		4,220			Q4 FY2020		Q1 FY2022

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The Company has terminated various contractual commitments in connection with certain disposal activities and has recorded charges for the costs of terminating these contracts before the end of their terms and the costs that will continue to be incurred for the remaining terms without economic benefit to the Company. The Company recorded net pre-tax charges of $0.4 million in the Discovery & Analytical Solutions segment during the nine months ended October 3, 2021 as a result of these contract terminations.

The Company recorded pre-tax charges of $1.3 million and $3.7 million associated with relocating facilities during the three and nine months ended October 3, 2021, respectively, in the Discovery & Analytical Solutions segment. The Company recorded pre-tax charges of $0.2 million and $0.4 million associated with relocating facilities during the three and nine months ended October 3, 2021, respectively, in the Diagnostics segment. The Company expects to make payments on these relocation activities through end of fiscal year 2022.

Note 5: Interest and Other Expense, Net

Interest and other expense, net, consisted of the following:


	Three Months Ended				Nine Months Ended
	October 3, 2021		October 4, 2020		October 3, 2021		October 4, 2020
	(In thousands)
Interest income	$	(544)	$	(205)	$	(1,322)	$	(662)
Interest expense including costs of bridge financing	43,531		12,057		74,407		37,308


Change in fair value of financial securities	19,365		—		(8,566)		—
Other (income) expense, net	(2,050)		2,397		(10,492)		(1,592)
Total interest and other expense, net	$	60,302	$	14,249	$	54,027	$	35,054

Foreign currency transaction (gains) were $(1.1) million and $(0.5) million for the three and nine months ended October 3, 2021, respectively. Foreign currency transaction (gains) losses were $(1.9) million and $1.6 million for the three and nine months ended October 4, 2020, respectively. Net losses from forward currency hedge contracts were $4.8 million and $3.3 million for the three and nine months ended October 3, 2021, respectively. Net losses from forward currency hedge contracts were $6.0 million and $1.9 million for the three and nine months ended October 4, 2020, respectively.

Note 6: Inventories

Inventories consisted of the following:


	October 3, 2021		January 3, 2021
	(In thousands)
Raw materials	$	217,175	$	205,022
Work in progress	72,988		35,160
Finished goods	355,256		274,385
Total inventories	$	645,419	$	514,567

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Note 7: Debt

The Company’s debt consisted of the following:


	October 3, 2021
	Outstanding Principal		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Net Carrying Amount
	(In thousands)
Long-Term Debt:
Senior Unsecured Revolving Credit Facility	$	111,962	$	—	$	(4,075)	$	107,887
Unsecured Term Loan Credit Facility	500,000		—		(1,069)		498,931
0.550% Senior Unsecured Notes due in 2023	500,000		(174)		(2,849)		496,977
0.850% Senior Unsecured Notes due in 2024	800,000		(485)		(5,964)		793,551
1.875% Senior Unsecured Notes due in 2026 ("2026 Notes")	579,750		(2,715)		(2,406)		574,629
1.900% Senior Unsecured Notes due in 2028	500,000		(357)		(4,788)		494,855
3.3% Senior Unsecured Notes due in 2029 ("2029 Notes")	850,000		(2,299)		(6,363)		841,338
2.55% Senior Unsecured Notes due in 2031	400,000		(128)		(3,351)		396,521
2.250% Senior Unsecured Notes due in 2031	500,000		(1,508)		(4,927)		493,565
3.625% Senior Unsecured Notes due in 2051	400,000		(4)		(4,324)		395,672
Other Debt Facilities, non-current	5,151		—		—		5,151
Total Long-Term Debt	$	5,146,863	$	(7,670)	$	(40,116)	$	5,099,077
Current Portion of Long-term Debt:

Other Debt Facilities, current	4,485		—		—		4,485
Total	$	5,151,348	$	(7,670)	$	(40,116)	$	5,103,562


	January 3, 2021
	Outstanding Principal		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Net Carrying Amount
	(In thousands)
Long-Term Debt:
Senior Unsecured Revolving Credit Facility	$	158,595	$	—	$	(2,621)	$	155,974
2026 Notes	610,750		(3,253)		(2,782)		604,715
2029 Notes	850,000		(2,496)		(6,908)		840,596


Other Debt Facilities, non-current	8,416		—		—		8,416
Total Long-Term Debt	$	1,627,761	$	(5,749)	$	(12,311)	$	1,609,701
Current Portion of Long-term Debt:
0.6% Senior Unsecured Notes due in 2021 ("2021 Notes")	366,450		(16)		(229)		366,205
Other Debt Facilities, current	14,743		—		—		14,743
Total	$	2,008,954	$	(5,765)	$	(12,540)	$	1,990,649

Senior Unsecured Revolving Credit Facility. On August 24, 2021, the Company terminated its previous senior unsecured revolving credit facility and entered into a new senior unsecured revolving credit facility with a five-year term and a borrowing capacity of $1.5 billion available through August 24, 2026. As of October 3, 2021, undrawn letters of credit in the aggregate amount of $11.0 million were treated as issued and outstanding when calculating the borrowing availability under the facility. As of October 3, 2021, the Company had $1.4 billion available for additional borrowing under the facility. Borrowings will

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bear interest, payable quarterly or, if earlier, at the end of any interest period, at the Company's option at either (a) the base rate (as defined in the credit agreement), or (b) the eurocurrency rate (a publicly published rate), in each case plus a percentage spread based on the credit rating of the Company's debt. The base rate is the highest of (a) the Federal Funds Rate (as defined in the credit agreement) plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate," and (c) the Eurocurrency Rate plus 1.00%. The Eurocurrency margin as of October 3, 2021 was 101.5 basis points. The weighted average Eurocurrency interest rate as of October 3, 2021 was 0.02%, resulting in a weighted average effective Eurocurrency Rate, including the margin, of 1.03%, which was the interest applicable to the borrowings outstanding as of October 3, 2021. The credit agreement for the new facility contains customary affirmative, negative and financial covenants and events of default. The financial covenants include a debt-to-capital ratio that remains applicable for so long as the Company's debt is rated as investment grade. In the event that the Company's debt is not rated as investment grade, the debt-to-capital ratio covenant is replaced with leverage ratio and interest coverage ratio covenants.

Unsecured Term Loan Credit Facility. The Company entered into an unsecured delayed draw term loan credit facility on August 11, 2021 that provided for $500.0 million of term loans available through the earlier of (i) the consummation of the Company's acquisition of BioLegend (with such transaction acquiring BioLegend being the “Acquisition”) and (ii) the date that is five (5) business days after October 25, 2021, and as could be extended through January 31, 2022 in the event that the outside date under the definitive agreement with respect to the Acquisition was extended. On September 16, 2021, the Company borrowed the full $500.0 million from the term loan facility and used the proceeds to partially fund the Acquisition. The interest rates under the senior unsecured term loan credit facility are at either (a) the base rate, as described in the credit agreement, or (b) the eurocurrency rate (a publicly published rate), in each case plus a percentage spread based on the credit rating of the Company’s debt. The base rate is the highest of (a) the Federal Funds Rate (as defined in the credit agreement) plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate," and (c) the Eurocurrency Rate plus 1.00%. The Eurocurrency margin as of October 3, 2021 was 113.0 basis points. The weighted average Eurocurrency interest rate as of October 3, 2021 was 0.08%, resulting in a weighted average effective Eurocurrency Rate, including the margin, of 1.21%, which was the interest applicable to the borrowings outstanding as of October 3, 2021. The credit agreement for the facility contains customary affirmative, negative and financial covenants and events of defaults which are substantially similar to those contained in the senior unsecured revolving credit facility.

0.550% Senior Unsecured Notes due in 2023. On September 10, 2021, the Company issued $500.0 million aggregate principal amount of senior unsecured notes due in 2023 (the "2023 Notes”) in a registered public offering and received $499.8 million of net proceeds from the issuance. The 2023 Notes were issued at 99.964% of the principal amount, which resulted in a discount of $0.2 million. The 2023 Notes mature in September 2023 and bear interest at an annual rate of 0.550%. Interest on the 2023 Notes is payable semi-annually on March 15th and September 15th each year. The Company may not redeem the 2023 Notes prior to September 15, 2022. On or after September 15, 2022 (twelve months prior to their maturity date), the Company may redeem the 2023 Notes in whole at any time or in part from time to time, at its option, at a redemption price equal to 100% of the principal amount of the 2023 Notes to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. Upon a change of control repurchase event (as defined in the indenture governing the 2023 Notes) of the Company, the Company will, in certain circumstances, make an offer to repurchase the 2023 Notes at a price equal to 101% of their principal amount plus any accrued and unpaid interest to, but excluding, the date of repurchase.

0.850% Senior Unsecured Notes due in 2024. On September 10, 2021, the Company issued $800.0 million aggregate principal amount of senior unsecured notes due in 2024 (the "2024 Notes”) in a registered public offering and received $799.5 million of net proceeds from the issuance. The 2024 Notes were issued at 99.938% of the principal amount, which resulted in a discount of $0.5 million. The 2024 Notes mature in September 2024 and bear interest at an annual rate of 0.850%. Interest on the 2024 Notes is payable semi-annually on March 15th and September 15th each year. The Company may not redeem the 2024 Notes prior to September 15, 2022. On or after September 15, 2022 (twenty-four months prior to their maturity date), the Company may redeem the 2024 Notes in whole at any time or in part from time to time, at its option, at a redemption price equal to 100% of the principal amount of the 2024 Notes to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. Upon a change of control repurchase event (as defined in the indenture governing the 2024 Notes) of the Company, the Company will, in certain circumstances, make an offer to repurchase the 2024 Notes at a price equal to 101% of their principal amount plus any accrued and unpaid interest to, but excluding, the date of repurchase.

1.900% Senior Unsecured Notes due in 2028. On September 10, 2021, the Company issued $500.0 million aggregate principal amount of senior unsecured notes due in 2028 (the "2028 Notes”) in a registered public offering and received $499.6 million of net proceeds from the issuance. The 2028 Notes were issued at 99.928% of the principal amount, which resulted in a discount of $0.4 million. The 2028 Notes mature in September 2028 and bear interest at an annual rate of 1.900%. Interest on the 2028 Notes is payable semi-annually on March 15th and September 15th each year. On or after July 15, 2028 (two months prior to their maturity date), the Company may redeem the 2028 Notes in whole at any time or in part from time to time, at its option, at a redemption price equal to 100% of the principal amount of the 2028 Notes to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. Upon a change of control repurchase event (as defined in the indenture governing the 2028 Notes) of the Company, the Company will, in certain circumstances, make an offer to repurchase

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the 2028 Notes at a price equal to 101% of their principal amount plus any accrued and unpaid interest to, but excluding, the date of repurchase.

2.55% Senior Unsecured Notes due in 2031. On March 8, 2021, the Company issued $400.0 million aggregate principal amount of senior unsecured notes due in 2031 (the "March 2031 Notes”) in a registered public offering and received $399.9 million of net proceeds from the issuance. The March 2031 Notes were issued at 99.965% of the principal amount, which resulted in a discount of $0.1 million. The March 2031 Notes mature in March 2031 and bear interest at an annual rate of 2.55%. Interest on the March 2031 Notes is payable semi-annually on March 15th and September 15th each year. Prior to December 15, 2030 (three months prior to their maturity date), the Company may redeem the March 2031 Notes in whole at any time or in part from time to time, at its option, at a redemption price equal to the greater of (1) 100% of the principal amount of the March 2031 Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued but unpaid as of the date of redemption) assuming that the March 2031 Notes matured on December 15, 2030, discounted to the date of redemption on a semi-annual basis (assuming a 360-day year of twelve 30-day months), at the Treasury Rate (as defined in the indenture governing the March 2031 Notes) plus 15 basis points, plus accrued and unpaid interest thereon to, but excluding, the date of redemption. At any time on or after December 15, 2030, the Company may redeem the March 2031 Notes, in whole or in part, at the Company’s option, at a redemption price equal to 100% of the principal amount of the March 2031 Notes due to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. Upon a change of control repurchase event (as defined in the indenture governing the March 2031 Notes) of the Company, the Company will, in certain circumstances, make an offer to repurchase the March 2031 Notes at a price equal to 101% of their principal amount plus any accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

2.250% Senior Unsecured Notes due in 2031. On September 10, 2021, the Company issued $500.0 million aggregate principal amount of senior unsecured notes due in September 2031 (the "September 2031 Notes”) in a registered public offering and received $498.5 million of net proceeds from the issuance. The September 2031 Notes were issued at 99.697% of the principal amount, which resulted in a discount of $1.5 million. The September 2031 Notes mature in September 2031 and bear interest at an annual rate of 2.250%. Interest on the September 2031 Notes is payable semi-annually on March 15th and September 15th each year. On or after June 15, 2031 (three months prior to their maturity date), the Company may redeem the September 2031 Notes in whole at any time or in part from time to time, at its option, at a redemption price equal to 100% of the principal amount of the September 2031 Notes to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. Upon a change of control repurchase event (as defined in the indenture governing the September 2031 Notes) of the Company, the Company will, in certain circumstances, make an offer to repurchase the September 2031 Notes at a price equal to 101% of their principal amount plus any accrued and unpaid interest to, but excluding, the date of repurchase.

3.625% Senior Unsecured Notes due in 2051. On March 8, 2021, the Company issued $400.0 million aggregate principal amount of senior unsecured notes due in 2051 (the "2051 Notes”) in a registered public offering and received $400.00 million of net proceeds from the issuance. The 2051 Notes were issued at 99.999% of the principal amount, which resulted in a discount of $4,000. The 2051 Notes mature in March 2051 and bear interest at an annual rate of 3.625%. Interest on the 2051 Notes is payable semi-annually on March 15th and September 15th each year. Prior to September 15, 2050 (six months prior to their maturity date), the Company may redeem the 2051 Notes in whole at any time or in part from time to time, at its option, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2051 Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued but unpaid as of the date of redemption) assuming that the 2051 Notes matured on September 15, 2050, discounted to the date of redemption on a semi-annual basis (assuming a 360-day year of twelve 30-day months), at the Treasury Rate (as defined in the indenture governing the 2051 Notes) plus 20 basis points, plus accrued and unpaid interest thereon to, but excluding, the date of redemption. At any time on or after September 15, 2050, the Company may redeem the 2051 Notes, in whole or in part, at the Company’s option, at a redemption price equal to 100% of the principal amount of the 2051 Notes due to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. Upon a change of control repurchase event (as defined in the indenture governing the 2051 Notes) of the Company, the Company will, in certain circumstances, make an offer to repurchase the 2051 Notes at a price equal to 101% of their principal amount plus any accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

Note 8: Earnings Per Share

Basic earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding during the period less restricted unvested shares. Diluted earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding plus all potentially dilutive common stock equivalents,

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primarily shares issuable upon the exercise of stock options using the treasury stock method. The following table reconciles the number of shares utilized in the earnings per share calculations:


	Three Months Ended		Nine Months Ended
	October 3, 2021	October 4, 2020	October 3, 2021	October 4, 2020
	(In thousands)
Number of common shares—basic	114,508	111,684	112,836	111,378
Effect of dilutive securities:
Stock options	365	477	367	476
Restricted stock awards	149	131	104	81
Number of common shares—diluted	115,022	112,292	113,307	111,935
Number of potentially dilutive securities excluded from calculation due to antidilutive impact	90	—	237	294

Antidilutive securities include outstanding stock options with exercise prices and average unrecognized compensation cost in excess of the average fair market value of common stock for the related period. Antidilutive options were excluded from the calculation of diluted net income per share and could become dilutive in the future.

Note 9: Segment Information

The Company discloses information about its operating segments based on the way that management organizes the segments within the Company for making operating decisions and assessing financial performance. The Company evaluates the performance of its operating segments based on revenue and operating income. Intersegment revenue and transfers are not significant. The accounting policies of the operating segments are the same as those described in Note 1 to the audited consolidated financial statements in the 2020 Form 10-K.

The principal products and services of the Company's two operating segments are:

Discovery & Analytical Solutions. Provides products and services targeted towards the life sciences and applied markets.
Diagnostics. Develops diagnostics, tools and applications focused on clinically-oriented customers, especially within the reproductive health, immunodiagnostics and applied genomics markets. The Diagnostics segment serves the diagnostics market.

The Company has included the expenses for its corporate headquarters, such as legal, tax, audit, human resources, information technology, and other management and compliance costs, as well as the activity related to the mark-to-market adjustment on postretirement benefit plans, as “Corporate” below. The Company has a process to allocate and recharge expenses to the reportable segments when these costs are administered or paid by the corporate headquarters based on the extent to which the segment benefited from the expenses. These amounts have been calculated in a consistent manner and are included in the Company’s calculations of segment results to internally plan and assess the performance of each segment for all purposes, including determining the compensation of the business leaders for each of the Company’s operating segments.

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Revenue and operating income (loss) from continuing operations by operating segment are shown in the table below:


	Three Months Ended				Nine Months Ended
	October 3, 2021		October 4, 2020		October 3, 2021		October 4, 2020
	(In thousands)
Discovery & Analytical Solutions
Product revenue	$	318,456	$	245,556	$	903,796	$	686,529
Service revenue	194,423		178,067		576,521		526,491
Total revenue	512,879		423,623		1,480,317		1,213,020
Operating income from continuing operations	7,146		42,689		114,248		110,632
Diagnostics
Product revenue	467,413		491,290		1,461,384		1,077,352
Service revenue	186,392		49,112		761,143		137,767
Total revenue	653,805		540,402		2,222,527		1,215,119
Operating income from continuing operations	237,903		223,819		965,650		413,710
Corporate
Operating loss from continuing operations	(23,079)		(18,502)		(57,664)		(56,015)
Continuing Operations
Product revenue	785,869		736,846		2,365,180		1,763,881
Service revenue	380,815		227,179		1,337,664		664,258
Total revenue	1,166,684		964,025		3,702,844		2,428,139
Operating income from continuing operations	221,970		248,006		1,022,234		468,327
Interest and other expense, net (see Note 5)	60,302		14,249		54,027		35,054
Income from continuing operations before income taxes	$	161,668	$	233,757	$	968,207	$	433,273

Note 10: Stockholders’ Equity

Comprehensive Income:

The components of accumulated other comprehensive loss consisted of the following:


	October 3, 2021		January 3, 2021
	(In thousands)
Foreign currency translation adjustments, net of income taxes	$	(145,276)	$	(30,937)
Unrecognized prior service costs, net of income taxes	(747)		(747)

Unrealized net losses on securities, net of income taxes	(173)		(277)
Accumulated other comprehensive loss	$	(146,196)	$	(31,961)

Stock Repurchases:

On July 31, 2020, the Company's Board of Directors (the "Board") authorized the Company to repurchase shares of common stock for an aggregate amount up to $250.0 million under a stock repurchase program (the "Repurchase Program"). The Repurchase Program will expire on July 27, 2022 unless terminated earlier by the Board and may be suspended or discontinued at any time. During the nine months ended October 3, 2021, the Company repurchased 433,000 shares of common stock under the Repurchase Program for an aggregate cost of $62.6 million. As of October 3, 2021, $187.4 million remained available for aggregate repurchases of shares under the Repurchase Program.

In addition, the Board has authorized the Company to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to the Company’s equity incentive plans and to satisfy obligations related to the exercise of stock options made pursuant to the Company's equity incentive plans. During the three months ended October 3, 2021, the Company repurchased 512 shares of common stock for this purpose at an aggregate cost of $0.1 million. During the nine months ended October 3, 2021, the Company repurchased 70,925 shares of common stock for this purpose at an aggregate cost of $10.4 million. The

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repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.

Dividends:

The Board declared a regular quarterly cash dividend of $0.07 per share for each of the first three quarters of fiscal year 2021 and in each quarter of fiscal year 2020. At October 3, 2021, the Company had accrued $8.8 million for dividends declared on July 23, 2021 for the third quarter of fiscal year 2021 that will be paid on November 12, 2021. On October 27, 2021, the Company announced that the Board had declared a quarterly dividend of $0.07 per share for the fourth quarter of fiscal year 2021 that will be payable in February 2022. In the future, the Board may determine to reduce or eliminate the Company’s common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.

Note 11: Goodwill and Intangible Assets, Net

The Company tests goodwill and non-amortizing intangible assets at least annually for possible impairment. Accordingly, the Company completes the annual testing of impairment for goodwill and non-amortizing intangible assets on the later of January 1 or the first day of each fiscal year. In addition to its annual test, the Company regularly evaluates whether events or circumstances have occurred that may indicate a potential impairment of goodwill or non-amortizing intangible assets.

The process of testing goodwill for impairment involves the determination of the fair value of the applicable reporting units. The test consists of the comparison of the fair value to the carrying value of the reporting unit to determine if the carrying value exceeds the fair value. If the carrying value of the reporting unit exceeds its fair value, an impairment loss in an amount equal to that excess is recognized up to the amount of goodwill*.* The Company performed its annual impairment testing for its reporting units as of January 4, 2021, its annual impairment testing date for fiscal year 2021. The Company concluded that there was no goodwill impairment, and the fair value exceeded the carrying value by more than 20% for each reporting unit, except for the Company's Tulip reporting unit which had a fair value that was between 10% and 20% more than its carrying value. The range of the long-term terminal growth rates for the Company’s reporting units was 3% to 5% for the fiscal year 2021 impairment analysis. The range for the discount rates for the reporting units was 8.0% to 12.5%. Keeping all other variables constant, a 10% change in any one of these input assumptions for the various reporting units, except for the Tulip reporting unit, would still allow the Company to conclude that there was no impairment of goodwill. As of January 4, 2021, the Company's Tulip reporting unit, which had a goodwill balance of $77.8 million, was at increased risk of an impairment charge given its ongoing weakness due to the impact of COVID-19; however, it is currently performing according to plan.

The Company has consistently employed the income approach to estimate the current fair value when testing for impairment of goodwill. A number of significant assumptions and estimates are involved in the application of the income approach to forecast operating cash flows, including markets and market share, sales volumes and prices, costs to produce, tax rates, capital spending, discount rates and working capital changes. Cash flow forecasts are based on approved business unit operating plans for the early years’ cash flows and historical relationships in later years. The income approach is sensitive to changes in long-term terminal growth rates and the discount rates. The long-term terminal growth rates are consistent with the Company’s historical long-term terminal growth rates, as the current economic trends are not expected to affect the long-term terminal growth rates of the Company. The Company corroborates the income approach with a market approach.

Non-amortizing intangibles are also subject to an annual impairment test. The Company has consistently employed the relief from royalty model to estimate the current fair value when testing for impairment of non-amortizing intangible assets. The impairment test consists of a comparison of the fair value of the non-amortizing intangible asset with its carrying amount. If the carrying amount of a non-amortizing intangible asset exceeds its fair value, an impairment loss in an amount equal to that excess is recognized up to the amount of the amortizing intangible asset. In addition, the Company evaluates the remaining useful life of its non-amortizing intangible asset at least annually to determine whether events or circumstances continue to support an indefinite useful life. If events or circumstances indicate that the useful life of the Company's non-amortizing intangible asset is no longer indefinite, the asset will be tested for impairment. This intangible asset will then be amortized prospectively over its estimated remaining useful life and accounted for in the same manner as other intangible assets that are subject to amortization. The Company performed its annual impairment testing as of January 4, 2021 and concluded that there was no impairment of its non-amortizing intangible asset. An assessment of the recoverability of amortizing intangible assets takes place when events have occurred that may give rise to an impairment. No such events occurred during the first nine months of fiscal year 2021.

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The changes in the carrying amount of goodwill for the nine months ended October 3, 2021 were as follows:


	Discovery & Analytical Solutions		Diagnostics		Consolidated
	(In thousands)
Balance at January 3, 2021	$	1,755,887	$	1,691,227	$	3,447,114
Foreign currency translation	(35,336)		(34,507)		(69,843)

Acquisitions, earn-outs and other	3,720,017		322,983		4,043,000
Balance at October 3, 2021	$	5,440,568	$	1,979,703	$	7,420,271

Identifiable intangible asset balances by category were as follows:


	October 3, 2021		January 3, 2021
	(In thousands)
Patents	$	31,037	$	30,855
Less: Accumulated amortization	(28,641)		(28,440)
Net patents	2,396		2,415
Trade names and trademarks	171,976		98,661
Less: Accumulated amortization	(55,853)		(48,806)
Net trade names and trademarks	116,123		49,855
Licenses	68,297		58,700
Less: Accumulated amortization	(54,069)		(52,452)
Net licenses	14,228		6,248
Core technology	1,842,229		789,799
Less: Accumulated amortization	(458,426)		(398,992)
Net core technology	1,383,803		390,807
Customer relationships	3,184,009		1,357,660
Less: Accumulated amortization	(616,332)		(522,820)
Net customer relationships	2,567,677		834,840
In-process research and development	5,925		10,944
Net amortizable intangible assets	4,090,152		1,295,109
Non-amortizing intangible asset:
Trade name	70,584		70,584
Total	$	4,160,736	$	1,365,693

Total amortization expense related to definite-lived intangible assets was $71.0 million and $184.7 million for the three and nine months ended October 3, 2021, respectively, and $48.9 million and $142.9 million for the three and nine months ended October 4, 2020, respectively. Estimated amortization expense related to amortizable intangible assets for each of the next five years is $101.1 million for the remainder of fiscal year 2021, $414.3 million for fiscal year 2022, $403.1 million for fiscal year 2023, $390.9 million for fiscal year 2024, and $363.3 million for fiscal year 2025.

Note 12: Derivatives and Hedging Activities

The Company uses derivative instruments as part of its risk management strategy only, and includes derivatives utilized as economic hedges that are not designated as hedging instruments. By nature, all financial instruments involve market and credit risks. The Company enters into derivative instruments with major investment grade financial institutions and has policies to monitor the credit risk of those counterparties. The Company does not enter into derivative contracts for trading or other speculative purposes, nor does the Company use leveraged financial instruments. Approximately 70% of the Company’s

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business is conducted outside of the United States, generally in foreign currencies. As a result, fluctuations in foreign currency exchange rates can increase the costs of financing, investing and operating the business.

In the ordinary course of business, the Company enters into foreign exchange contracts for periods consistent with its committed exposures to mitigate the effect of foreign currency movements on transactions denominated in foreign currencies. The intent of these economic hedges is to offset gains and losses that occur on the underlying exposures from these currencies, with gains and losses resulting from the forward currency contracts that hedge these exposures. Transactions covered by hedge contracts include intercompany and third-party receivables and payables. The contracts are primarily in European and Asian currencies, have maturities that do not exceed 12 months, have no cash requirements until maturity, and are recorded at fair value on the Company’s condensed consolidated balance sheets. The unrealized gains and losses on the Company’s foreign currency contracts are recognized immediately in interest and other expense, net. The cash flows related to the settlement of these hedges are included in cash flows from operating activities within the Company’s condensed consolidated statement of cash flows.

Principal hedged currencies include the Australian Dollar, British Pound, Euro, Indian Rupee, Singapore Dollar and Swedish Krona. The Company held forward foreign exchange contracts, designated as economic hedges, with U.S. dollar equivalent notional amounts totaling $398.6 million, $808.0 million and $406.3 million at October 3, 2021, January 3, 2021 and October 4, 2020, respectively, and the fair value of these foreign currency derivative contracts was insignificant. The gains and losses realized on these foreign currency derivative contracts are not material. The duration of these contracts was generally 30 days or less during each of the nine months ended October 3, 2021 and October 4, 2020.

In addition, in connection with certain intercompany loan agreements utilized to finance its acquisitions and stock repurchase program, the Company enters into forward foreign exchange contracts intended to hedge movements in foreign exchange rates prior to settlement of such intercompany loans denominated in foreign currencies. The Company records these hedges at fair value on the Company’s condensed consolidated balance sheets. The unrealized gains and losses on these hedges, as well as the gains and losses associated with the remeasurement of the intercompany loans, are recognized immediately in interest and other expense, net. The cash flows related to the settlement of these hedges are included in cash flows from financing activities within the Company’s condensed consolidated statement of cash flows.

The outstanding forward exchange contracts designated as economic hedges, which were intended to hedge movements in foreign exchange rates prior to the settlement of certain intercompany loan agreements included combined U.S. Dollar notional amounts of $548.7 million as of October 3, 2021, combined Euro notional amounts of €33.4 million and combined U.S. Dollar notional amounts of $499.0 million as of January 3, 2021, and combined U.S. Dollar notional amounts of $156.2 million as of October 4, 2020. The net gains and losses on these derivatives, combined with the gains and losses on the remeasurement of the hedged intercompany loans were not material for each of the three and nine months ended October 3, 2021 and October 4, 2020. The Company received $2.9 million and paid $2.1 million during the nine months ended October 3, 2021 and October 4, 2020, respectively, from the settlement of these hedges.

During fiscal year 2018, the Company designated a portion of the 2026 Notes to hedge its net investments in certain foreign subsidiaries. Unrealized translation adjustments from a portion of the 2026 Notes were included in the foreign currency translation component of accumulated other comprehensive income ("AOCI"), which offsets translation adjustments on the underlying net assets of foreign subsidiaries. The cumulative translation gains or losses will remain in AOCI until the foreign subsidiaries are liquidated or sold. As of October 3, 2021, the total notional amount of the 2026 Notes that was designated to hedge net investments in foreign subsidiaries was €299.7 million. The unrealized foreign exchange (gains) losses recorded in AOCI related to the net investment hedge were $(7.5) million and $(26.6) million for the three and nine months ended October 3, 2021, respectively, and $23.4 million and $24.8 million for the three and nine months ended October 4, 2020, respectively.

During fiscal year 2019, the Company entered into a cross-currency swap designated as a net investment hedge to hedge the Euro currency exposure of the Company’s net investment in certain foreign subsidiaries. This agreement is a contract to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. Changes in the fair value of this swap are recorded in equity as a component of AOCI in the same manner as foreign currency translation adjustments. In assessing the effectiveness of this hedge, the Company uses a method based on changes in spot rates to measure the impact of the foreign currency exchange rate fluctuations on both its foreign subsidiary net investment and the related swap. Under this method, changes in the fair value of the hedging instrument other than those due to changes in the spot rate are initially recorded in AOCI as a translation adjustment, and then are amortized into other (income) expense, net in the condensed consolidated statement of operations using a systematic and rational method over the instrument’s term. Changes in the fair value associated with the effective portion (i.e. those changes due to the spot rate) are recorded in AOCI as a translation adjustment and are released and recognized in earnings only upon the sale or liquidation of the hedged net investment. The cross-currency swap has an initial notional value of €197.4 million, or $220.0 million, and matures on November 15, 2021.

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Interest on the cross-currency swap is payable semi-annually, in Euro, on May 15th and November 15th of each year based on the Euro notional value and a fixed rate of 2.47%. The Company receives interest in U.S. dollars on May 15th and November 15th of each year based on the U.S. dollar equivalent of the Euro notional value and a fixed rate of 5.00%. At October 3, 2021, the fair value of the cross-currency swap was a $8.5 million loss, which was recorded in AOCI.

During fiscal year 2020, the Company entered into a forward foreign exchange contracts, designated as cash flow hedges, to hedge the 2021 Notes. The effective portion of the gain or loss of the cash flow hedges were reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affected earnings. During the second quarter of fiscal year 2021, the Company redeemed all of its outstanding 2021 Notes and settled the forward foreign exchange contracts that were designated as cash flow hedges. The unrealized foreign exchange losses (gains) recorded in earnings related to the cash flow hedges were $9.5 million for the nine months ended October 3, 2021, and $(10.5) million and $(14.3) million for each of the three and nine months ended October 4, 2020.

During fiscal year 2021, the Company entered into forward foreign exchange contracts, designated as a cash flow hedge, to hedge a portion of the 2026 Notes. The effective portion of the gain or loss of the cash flow hedge will be reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings. As of October 3, 2021, the total notional amount of the forward foreign exchange contracts that was designated as cash flow hedges was €197.4 million. The unrealized foreign exchange losses recorded in earnings related to the cash flow hedge were $5.0 million and $4.2 million for the three and nine months ended October 3, 2021.

On July 26, 2021, the Company entered into two interest rate swaption agreements (together, the “Swaptions”) with expiration dates of September 30, 2021 in anticipation of issuing notes to fund the acquisition of BioLegend. The first swaption had a term of 2 months and hedged an anticipated 10-year note offering, with a notional value of $500.0 million. The second swaption had a term of 2 months and hedged an anticipated 7-year note offering, with a notional value of $500.0 million. The Company designated the Swaptions as qualifying hedging instruments and accounted for these derivatives as cash flow hedges.

On September 8, 2021, the Company sold both swaptions, and as a result, recognized a loss of $8.2 million in interest and other expense, net for the three and nine months ended October 3, 2021. The Company also recorded other comprehensive income of $3.8 million, which will be amortized to interest and other expense (income), net over the 7 and 10 year terms, respectively of the related permanent financing.

The Company does not expect any material net pre-tax gains or losses to be reclassified from accumulated other comprehensive loss into interest and other expense, net within the next twelve months.

Note 13: Fair Value Measurements

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents, derivatives, marketable securities and accounts receivable. The Company believes it had no significant concentrations of credit risk as of October 3, 2021.

The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during the nine months ended October 3, 2021. The Company’s financial assets and liabilities carried at fair value are primarily comprised of marketable securities, derivative contracts used to hedge the Company’s currency risk, and acquisition-related contingent consideration. The Company has not elected to measure any additional financial instruments or other items at fair value.

Valuation Hierarchy: The following summarizes the three levels of inputs required to measure fair value. For Level 1 inputs, the Company utilizes quoted market prices as these instruments have active markets. For Level 2 inputs, the Company utilizes quoted market prices in markets that are not active, broker or dealer quotations, or utilizes alternative pricing sources with reasonable levels of price transparency. For Level 3 inputs, the Company utilizes unobservable inputs based on the best information available, including estimates by management primarily based on information provided by third-party fund managers, independent brokerage firms and insurance companies. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.

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The following tables show the assets and liabilities carried at fair value measured on a recurring basis as of October 3, 2021 and January 3, 2021 classified in one of the three classifications described above:


			Fair Value Measurements at October 3, 2021 Using:
	Total Carrying Value at October 3, 2021		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Marketable securities	$	45,744	$	45,744	$	—	$	—
Foreign exchange derivative assets	808		—		808		—
Foreign exchange derivative liabilities	(21,294)		—		(21,294)		—
Contingent consideration	(37,225)		—		—		(37,225)


			Fair Value Measurements at January 3, 2021 Using:
	Total Carrying Value at January 3, 2021		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Marketable securities	$	2,154	$	2,154	$	—	$	—
Foreign exchange derivative assets	31,248		—		31,248		—
Foreign exchange derivative liabilities	(21,413)		—		(21,413)		—
Contingent consideration	(2,953)		—		—		(2,953)

Level 1 and Level 2 Valuation Techniques: The Company’s Level 1 and Level 2 assets and liabilities are comprised of investments in equity and fixed-income securities as well as derivative contracts. For financial assets and liabilities that utilize Level 1 and Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including common stock price quotes, foreign exchange forward prices and bank price quotes. Below is a summary of valuation techniques for Level 1 and Level 2 financial assets and liabilities.

Marketable securities: Include equity and fixed-income securities measured at fair value using the quoted market prices in active markets at the reporting date.

Foreign exchange derivative assets and liabilities: Include foreign exchange derivative contracts that are valued using quoted forward foreign exchange prices at the reporting date. The Company’s foreign exchange derivative contracts are subject to master netting arrangements that allow the Company and its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these arrangements have been presented in the Company's condensed consolidated balance sheet on a net basis and are recorded in other assets. As of both October 3, 2021 and January 3, 2021, none of the master netting arrangements involved collateral.

Level 3 Valuation Techniques: The Company’s Level 3 liabilities are comprised of contingent consideration related to acquisitions. For liabilities that utilize Level 3 inputs, the Company uses significant unobservable inputs. Below is a summary of valuation techniques for Level 3 liabilities.

Contingent consideration: Contingent consideration is measured at fair value at the acquisition date using projected milestone dates, discount rates, probabilities of success and projected revenues (for revenue-based considerations). Projected risk-adjusted contingent payments are discounted back to the current period using a discounted cash flow model.

The fair values of contingent consideration are calculated on a quarterly basis based on a collaborative effort of the Company’s operations, finance and accounting groups, as appropriate. Potential valuation adjustments are made as additional information becomes available, including the progress towards achieving the revenue targets as compared to initial projections, with the impact of such adjustments being recorded in the Company's consolidated statements of operations.

As of October 3, 2021, the Company may have to pay contingent consideration, related to acquisitions with open contingency periods, of up to $90.7 million. The expected maximum earnout period for the acquisitions with open contingency periods does not exceed 7.2 years from October 3, 2021, and the remaining weighted average expected earnout period at October 3, 2021 was 6.8 years.

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A reconciliation of the beginning and ending Level 3 net liabilities for contingent consideration is as follows:


	Three Months Ended				Nine Months Ended
	October 3, 2021		October 4, 2020		October 3, 2021		October 4, 2020
	(In thousands)
Balance at beginning of period	$	(3,334)	$	(13,726)	$	(2,953)	$	(35,481)
Additions	(33,431)		—		(33,431)		—
Amounts paid and foreign currency translation	615		(144)		711		10,165
Reclassified to other current liabilities for achieved milestones	—		13,692		—		13,692
Change in fair value (included within selling, general and administrative expenses)	(1,075)		(2,639)		(1,552)		8,807
Balance at end of period	$	(37,225)	$	(2,817)	$	(37,225)	$	(2,817)

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturities of these assets and liabilities. If measured at fair value, cash and cash equivalents would be classified as Level 1.

The Company's outstanding senior unsecured notes had a fair value of $4,675.9 million and a carrying value of $4,487.1 million as of October 3, 2021. The Company's outstanding senior unsecured notes had a fair value of $1,984.3 million and a carrying value of $1,811.5 million as of January 3, 2021. The fair values of the outstanding senior unsecured notes were estimated using market quotes from brokers and were based on current rates offered for similar debt, which are Level 2 measurements.

The Company’s other debt facilities, including the Company's senior revolving and term loan credit facilities, had an aggregate carrying value of $616.5 million and $179.1 million as of October 3, 2021 and January 3, 2021, respectively. As of October 3, 2021, these included bank loans in the aggregate amount of $9.6 million bearing fixed interest rates between 1.1% and 8.9% and a bank loan in the amount of $0.02 million bearing a variable interest rate based on the Euribor rate plus a margin of 1.5%. The Company had no change in credit standing during the first nine months of fiscal year 2021. Consequently, the carrying value approximates fair value and were classified as Level 2.

As of October 3, 2021, there has not been any significant impact to the fair value of the Company’s derivative liabilities due to credit risk. Similarly, there has not been any significant adverse impact to the Company’s derivative assets based on the evaluation of its counterparties’ credit risks.

Note 14: Contingencies

The Company is conducting a number of environmental investigations and remedial actions at current and former locations of the Company and, along with other companies, has been named a potentially responsible party (“PRP”) for certain waste disposal sites. The Company accrues for environmental issues in the accounting period that the Company’s responsibility is established and when the cost can be reasonably estimated. The Company has accrued $12.2 million and $12.9 million as of October 3, 2021 and January 3, 2021, respectively, which represents its management’s estimate of the cost of the remediation of known environmental matters and does not include any potential liability for related personal injury or property damage claims. These amounts were included in accrued expenses and other current liabilities. The Company's environmental accrual is not discounted and does not reflect the recovery of any material amounts through insurance or indemnification arrangements. The cost estimates are subject to a number of variables, including the stage of the environmental investigations, the magnitude of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations. For sites where the Company has been named a PRP, management does not currently anticipate any additional liability to result from the inability of other significant named parties to contribute. The Company expects that the majority of such accrued amounts could be paid out over a period of up to ten years. As assessment and remediation activities progress at each individual site, these liabilities are reviewed and adjusted to reflect additional information as it becomes available. There have been no environmental problems to date that have had, or are expected to have, a material adverse effect on the Company’s condensed consolidated financial statements. While it is possible that a loss exceeding the amounts recorded in the condensed consolidated financial statements may be incurred, the potential exposure is not expected to be materially different from those amounts recorded.

The Company is subject to various claims, legal proceedings and investigations covering a wide range of matters that arise in the ordinary course of its business activities. Although the Company has established accruals for potential losses that it believes are probable and reasonably estimable, in the opinion of the Company’s management, based on its review of the

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information available at this time, the total cost of resolving these contingencies at October 3, 2021 would not have a material adverse effect on the Company’s condensed consolidated financial statements. However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to the Company.

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