Item 1. Unaudited Financial Statements

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Item 1. Unaudited Financial Statements

REVVITY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended
	March 31, 2024		April 2, 2023
	(In thousands, except per share data)
Product revenue	$	565,755	$	592,280
Service revenue	84,165		82,585
Total revenue	649,920		674,865
Cost of product revenue	262,523		257,901
Cost of service revenue	32,350		35,598
Total cost of revenue	294,873		293,499
Selling, general and administrative expenses	260,571		248,557
Research and development expenses	50,360		56,690
Operating income from continuing operations	44,116		76,119
Interest and other expense, net	9,567		46,679
Income from continuing operations before income taxes	34,549		29,440
Provision for income taxes	5,853		4,595
Income from continuing operations	28,696		24,845



(Loss) income from discontinued operations	(2,683)		544,630
Net income	$	26,013	$	569,475

Basic earnings per share:
Income from continuing operations	$	0.23	$	0.20
(Loss) income from discontinued operations	(0.02)		4.31
Net income	$	0.21	$	4.51
Diluted earnings per share:
Income from continuing operations	$	0.23	$	0.20
(Loss) income from discontinued operations	(0.02)		4.31
Net income	$	0.21	$	4.50
Weighted average shares of common stock outstanding:
Basic	123,428		126,285
Diluted	123,538		126,469
Cash dividends declared per common share	$	0.07	$	0.07

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

REVVITY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)


	Three Months Ended
	March 31, 2024		April 2, 2023
	(In thousands)
Net income	$	26,013	$	569,475
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of income taxes:
Amounts recognized in other comprehensive income	(48,927)		52,008
Less: amounts reclassified to earnings	—		(90,814)
Net foreign currency translation adjustments, net of income taxes	(48,927)		142,822


Unrealized gain on securities, net of income taxes	265		294
Other comprehensive (loss) income	(48,662)		143,116
Comprehensive (loss) income	$	(22,649)	$	712,591

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

REVVITY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2024		December 31, 2023
	(In thousands, except share and per share data)
Current assets:
Cash and cash equivalents	$	998,081	$	913,163
Marketable securities	697,327		689,916
Accounts receivable, net	588,974		632,811
Inventories, net	414,029		428,062
Other current assets	360,929		337,139
Total current assets	3,059,340		3,001,091
Property, plant and equipment, net	503,964		509,654
Operating lease right-of-use assets	148,724		155,083
Intangible assets, net	2,919,145		3,022,321
Goodwill	6,503,897		6,533,550
Other assets, net	297,635		342,966
Total assets	$	13,432,705	$	13,564,665
Current liabilities:
Current portion of long-term debt	$	711,443	$	721,872
Accounts payable	183,532		204,121
Accrued expenses and other current liabilities	479,247		524,470
Total current liabilities	1,374,222		1,450,463
Long-term debt	3,164,994		3,177,770
Deferred taxes and long-term liabilities	919,795		930,946
Operating lease liabilities	127,198		132,747
Total liabilities	5,586,209		5,691,926
Commitments and contingencies (see Note 13)
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 123,492,000 shares and 123,426,000 shares at March 31, 2024 and December 31, 2023, respectively	123,492		123,426
Capital in excess of par value	2,421,778		2,416,793
Retained earnings	5,626,580		5,609,212
Accumulated other comprehensive loss	(325,354)		(276,692)
Total stockholders’ equity	7,846,496		7,872,739
Total liabilities and stockholders’ equity	$	13,432,705	$	13,564,665

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

REVVITY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	For the Three-Month Period Ended March 31, 2024
	Common Stock Shares	Common Stock Amount		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
		(In thousands)
Balance, December 31, 2023	123,426	$	123,426	$	2,416,793	$	5,609,212	$	(276,692)	$	7,872,739
Net income	—	—		—		26,013		—		26,013
Other comprehensive loss	—	—		—		—		(48,662)		(48,662)
Dividends	—	—		—		(8,645)		—		(8,645)
Exercise of employee stock options	75	75		4,036		—		—		4,111

Purchases of common stock	(103)	(103)		(10,653)		—		—		(10,756)
Issuance of common stock for long-term incentive program	94	94		9,041		—		—		9,135
Stock compensation	—	—		2,561		—		—		2,561
Balance, March 31, 2024	123,492	$	123,492	$	2,421,778	$	5,626,580	$	(325,354)	$	7,846,496


	For the Three-Month Period Ended April 2, 2023
	Common Stock Shares	Common Stock Amount		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
		(In thousands)
Balance, January 1, 2023	126,300	$	126,300	$	2,753,055	$	4,951,018	$	(447,497)	$	7,382,876

Net income	—	—		—		569,475		—		569,475
Other comprehensive income	—	—		—		—		143,116		143,116
Dividends	—	—		—		(8,841)		—		(8,841)
Exercise of employee stock options	9	9		514		—		—		523

Purchases of common stock	(516)	(516)		(67,013)		—		—		(67,529)
Issuance of common stock for long-term incentive program	188	188		10,970		—		—		11,158
Stock compensation	—	—		3,032		—		—		3,032
Balance, April 2, 2023	125,981	$	125,981	$	2,700,558	$	5,511,652	$	(304,381)	$	8,033,810

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

REVVITY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended
	March 31, 2024		April 2, 2023
	(In thousands)
Operating activities:
Net income	$	26,013	$	569,475
Loss (income) from discontinued operations, net of income taxes	2,683		(544,630)
Income from continuing operations	28,696		24,845
Adjustments to reconcile income from continuing operations to net cash provided by continuing operations:
Stock-based compensation	11,692		9,893
Restructuring and other costs, net	12,356		3,096
Depreciation and amortization	107,802		109,008
Change in fair value of contingent consideration	6,173		(1,360)
Amortization of deferred debt financing costs and accretion of discounts	1,736		1,792
Change in fair value of financial securities	806		(2,768)
Debt extinguishment income	—		(3,345)
Unrealized foreign exchange (gain) loss	(377)		26,095



Changes in assets and liabilities which provided (used) cash:
Accounts receivable, net	37,189		34,424
Inventories	7,209		(18,520)
Accounts payable	(18,227)		(4,895)
Accrued expenses and other	(44,909)		(106,591)
Net cash provided by operating activities of continuing operations	150,146		71,674
Net cash used in operating activities of discontinued operations	(2,583)		(8,211)
Net cash provided by operating activities	147,563		63,463
Investing activities:
Capital expenditures	(17,844)		(20,946)

Purchases of marketable securities	—		(193,454)

Purchases of notes receivable	(337)		—
Cash paid for acquisitions, net of cash acquired	—		(686)
Net cash used in investing activities of continuing operations	(18,181)		(215,086)
Net cash provided by investing activities of discontinued operations	—		2,079,588
Net cash (used in) provided by investing activities	(18,181)		1,864,502
Financing activities:




Payments of senior unsecured notes	—		(49,603)



Net (payments) proceeds of other credit facilities	(10,811)		7,867
Payments for acquisition-related contingent consideration	(8,749)		(1,475)
Proceeds from issuance of common stock under stock plans	3,943		523
Purchases of common stock	(10,756)		(61,656)
Dividends paid	(8,640)		(8,841)


Net cash used in financing activities	(35,013)		(113,185)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(9,277)		(16,969)
Net increase in cash, cash equivalents and restricted cash	85,092		1,797,811


Cash, cash equivalents and restricted cash at beginning of period	914,373		470,746
Cash, cash equivalents and restricted cash at end of period	$	999,465	$	2,268,557

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	$	998,081	$	2,267,183
Restricted cash included in other current assets	1,384		1,019
Restricted cash included in other assets	—		355

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	999,465	$	2,268,557

Supplemental disclosures of non-cash investing and financing activities:

Consideration receivable from sale of business	$	—	$	261,317

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

REVVITY, 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 Revvity, 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 December 31, 2023, filed with the SEC (the “2023 Form 10-K”). The balance sheet amounts at December 31, 2023 in this report were derived from the Company’s audited 2023 consolidated financial statements included in the 2023 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 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 months ended March 31, 2024 and April 2, 2023, respectively, are not necessarily indicative of the results for the entire fiscal year or any future period.

In March 2023, the Company completed the previously announced sale of certain assets and the equity interests of certain entities constituting the Company’s Applied, Food and Enterprise Services businesses (the “Business”). The Business is reported for all periods as discontinued operations in the Company’s condensed consolidated financial statements.

Note 2: Revenue

Disaggregation of revenue

In the following tables, revenue is disaggregated by primary geographical markets and major goods and service lines.


	Reportable Segments
	Three Months Ended
	March 31, 2024						April 2, 2023
	Life Sciences		Diagnostics		Total		Life Sciences		Diagnostics		Total
	(In thousands)
Primary geographical markets
Americas	$	156,328	$	138,026	$	294,354	$	163,854	$	138,174	$	302,028
Europe	69,645		108,917		178,562		80,285		104,612		184,897
Asia	77,064		99,940		177,004		84,302		103,638		187,940
	$	303,037	$	346,883	$	649,920	$	328,441	$	346,424	$	674,865

Major goods/service lines
Life Sciences reagents	$	177,225	$	—	$	177,225	$	189,878	$	—	$	189,878
Life Sciences instruments	80,910		—		80,910		96,174		—		96,174
Life Sciences software	44,902		—		44,902		42,389		—		42,389
Reproductive health	—		123,875		123,875		—		122,121		122,121
Applied genomics	—		47,447		47,447		—		63,410		63,410
Immunodiagnostics	—		175,561		175,561		—		160,893		160,893
	$	303,037	$	346,883	$	649,920	$	328,441	$	346,424	$	674,865

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 condensed consolidated balance sheets.

Contract liabilities: The contract liabilities primarily relate to the advance consideration received from customers for products and related services 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 condensed consolidated balance sheets based on the timing of when the Company expects to recognize revenue. The contract liability balances at the beginning of each period presented were generally fully recognized in the subsequent three month period. The performance obligations that are unsatisfied (or partially unsatisfied) at the end of each period presented are not material to the Company.

Contract balances were as follows:


	March 31, 2024		December 31, 2023
	(In thousands)
Contract assets	$	54,577	$	52,648
Contract liabilities	(22,680)		(22,504)

Note 3: Discontinued Operations

On March 13, 2023, the Company completed the sale (the “Closing”) of the Business to PerkinElmer Topco, L.P. (formerly known as Polaris Purchaser, L.P.) (the “Purchaser”), a Delaware limited partnership owned by funds managed by affiliates of New Mountain Capital L.L.C. (the “Sponsor”), for an aggregate purchase price of up to $2.45 billion. The Company received approximately $2.13 billion in cash proceeds, before transaction costs and subject to post-closing adjustments. The Company is entitled to an additional $75.0 million in proceeds as consideration for the Company’s ceasing the use of the PerkinElmer brand and related trademarks and transferring them to the Purchaser. This consideration is expected to be received in installments through the first half of 2025. The discounted value of the $75.0 million was measured as $65.2 million and was included in the proceeds. In addition, the Company is entitled to additional consideration of up to $150.0 million that is contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital events related to the Business. The fair value of this element of consideration was determined to be $15.9 million and was included in the proceeds at Closing. The Company also recorded a receivable, included in Other current assets in the condensed consolidated balance sheets, of approximately $161.0 million as of March 31, 2024 for post-closing adjustments that is expected to be received during fiscal year 2024. The final amount of the receivable related to the post-closing adjustments is subject to change.

The Company has measured the gain on sale and related income tax provision, however, additional adjustments may arise that may impact the final measurement of the gain. The elements of the gain calculation that may result in adjustments include the measurement of the proceeds, including the settlement of the post-closing adjustments, as well as the related tax effects of such adjustments and the filing of tax returns for the period that includes the sale.

In connection and concurrent with the Closing, the Company also entered into a Transition Services Agreement (“TSA”) with the Purchaser for a period of up to 24 months from the Closing. The costs and amounts of reimbursements related to the TSA and other commercial transactions between the parties were not significant in fiscal year 2023 or the first quarter of fiscal year 2024 and the amounts in future periods are not expected to be significant.

The Business had been reported in the Company’s Discovery & Analytical Solutions segment, which is now referred to as the Life Sciences segment. The sale of the Business represented a strategic shift that has had a major effect on the Company’s operations and financial statements. Accordingly, the Business is reported for all periods as discontinued operations in the

Company’s consolidated financial statements. The following table summarizes the results of discontinued operations which are presented as (loss) income from discontinued operations in the Company’s condensed consolidated statements of operations:


	Three Months Ended
	March 31, 2024		April 2, 2023
	(In thousands)
Revenue	$	—	$	175,423
Cost of revenue	—		124,647
Selling, general and administrative expenses	—		74,794
Research and development expenses	—		10,434
Operating loss	—		(34,452)
Other (expense) income:
(Loss) gain on sale	(1,710)		866,919
Other income, net	—		913
Total other (expense) income	(1,710)		867,832
(Loss) income from discontinued operations before income taxes	(1,710)		833,380
Provision for income tax	973		288,750
(Loss) income from discontinued operations	$	(2,683)	$	544,630

Note 4: Interest and Other Expense, Net

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


	Three Months Ended
	March 31, 2024		April 2, 2023
	(In thousands)
Interest income	$	(20,086)	$	(5,272)
Interest expense	24,397		22,738


Change in fair value of financial securities	806		(2,768)
Other components of net periodic pension cost	1,917		2,189
Foreign exchange losses and other expense, net	2,533		29,792
Total interest and other expense, net	$	9,567	$	46,679

Note 5: Inventories, net

Inventories, net consisted of the following:


	March 31, 2024		December 31, 2023
	(In thousands)
Raw materials	$	194,263	$	197,268
Work in progress	69,377		69,176
Finished goods	150,389		161,618
Total inventories, net	$	414,029	$	428,062

Note 6: Debt

The Company’s debt consisted of the following:


	March 31, 2024
	Outstanding Principal		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Net Carrying Amount
	(In thousands)
Long-Term Debt:
Senior Unsecured Revolving Credit Facility	$	—	$	—	$	(1,785)	$	(1,785)
€500,000 Principal 1.875% Senior Unsecured Notes due in 2026	539,500		(1,266)		(1,154)		537,080
1.900% Senior Unsecured Notes due in 2028	500,000		(238)		(2,875)		496,887
3.3% Senior Unsecured Notes due in 2029	850,000		(1,662)		(4,601)		843,737
2.55% Senior Unsecured Notes due in March 2031	400,000		(98)		(2,557)		397,345
2.250% Senior Unsecured Notes due in September 2031	500,000		(1,175)		(3,353)		495,472
3.625% Senior Unsecured Notes due in 2051	400,000		(4)		(4,140)		395,856
Other Debt Facilities, non-current	402		—		—		402
Total Long-Term Debt	$	3,189,902	$	(4,443)	$	(20,465)	$	3,164,994
Current Portion of Long-term Debt:
0.850% Senior Unsecured Notes due in 2024 (“2024 Notes”)	711,479		(76)		(842)		710,561
Other Debt Facilities, current	882		—		—		882
Total Current Portion of Long-Term Debt	712,361		(76)		(842)		711,443
Total	$	3,902,263	$	(4,519)	$	(21,307)	$	3,876,437

At March 31, 2024, the Company had outstanding U.S. treasury securities with a carrying amount of $697.3 million whose proceeds upon maturity are intended to be utilized to repay the outstanding 2024 Notes due in September 2024 (see Note 12).

Note 7: 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, 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
	March 31, 2024	April 2, 2023
	(In thousands)
Number of common shares—basic	123,428	126,285
Effect of dilutive securities:
Stock options	58	151
Restricted stock awards	52	33
Number of common shares—diluted	123,538	126,469
Number of potentially dilutive securities excluded from calculation due to antidilutive impact	1,032	753

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 8: 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 as adjusted for certain items. Intersegment revenue and transfers are not significant. The accounting policies of the operating segments are the same as those described in Note 1, Nature of Operations and Accounting Policies, to the audited consolidated financial statements in the 2023 Form 10-K.

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

Life Sciences. Provides products and services targeted towards life sciences customers.
Diagnostics. Develops diagnostics, tools and applications focused on clinically-oriented customers, especially within the areas of reproductive health, emerging market diagnostics and applied genomics.

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 “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.

The primary financial measure by which the Company evaluates the performance of its segments is adjusted operating income, which consists of operating income excluding the effects of amortization of intangible assets, adjustments to operations arising from purchase accounting (primarily change in fair value of contingent consideration), acquisition and divestiture-related costs, and other costs that are not expected to recur or are of a non-cash nature, including primarily restructuring actions.

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


	Three Months Ended
	March 31, 2024		April 2, 2023
	(In thousands)
Revenues
Life Sciences	$	303,037	$	328,441
Diagnostics	347,092		346,630
Revenue purchase accounting adjustments	(209)		(206)
Total revenues	$	649,920	$	674,865

Segment Operating Income
Life Sciences	$	101,725	$	129,459
Diagnostics	75,430		74,432
Corporate	(11,361)		(14,697)
Subtotal reportable segments adjusted operating income	165,794		189,194
Amortization of intangible assets	(91,238)		(91,811)
Purchase accounting adjustments	(6,622)		914
Acquisition, divestiture and rebranding costs	(11,462)		(17,951)


Significant environmental matters	—		(1,132)
Restructuring and other, net	(12,356)		(3,095)
Operating income from continuing operations	44,116		76,119
Interest and other expense, net (see Note 4)	9,567		46,679
Income from continuing operations before income taxes	$	34,549	$	29,440

Note 9: Stockholders’ Equity

Comprehensive (Loss) Income:

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


	March 31, 2024		December 31, 2023
	(In thousands)
Foreign currency translation adjustments, net of income taxes	$	(324,605)	$	(275,678)
Unrecognized prior service costs, net of income taxes	(798)		(798)

Unrealized net gains (losses) on marketable securities, net of income taxes	49		(216)
Accumulated other comprehensive loss	$	(325,354)	$	(276,692)

Stock Repurchases:

On April 27, 2023, the Company's Board of Directors (the “Board”) authorized the Company to repurchase shares of common stock for an aggregate amount up to $600.0 million under a stock repurchase program (the “Repurchase Program”). The Repurchase Program will expire on April 26, 2025, unless terminated earlier by the Board and may be suspended or discontinued at any time. During the three months ended March 31, 2024, the Company repurchased 63,170 shares of common stock under the Repurchase Program for an aggregate cost of $6.6 million. As of March 31, 2024, $348.9 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 March 31, 2024, the Company repurchased 40,084 shares of common stock for this purpose at an aggregate cost of $4.2 million. The 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 the first quarter of fiscal year 2024 and in each quarter of fiscal year 2023. At March 31, 2024, the Company had accrued $8.6 million for dividends declared on January 25, 2024 for the first quarter of fiscal year 2024 that will be paid in May 2024. On April 25, 2024, the Company announced that the Board had declared a quarterly dividend of $0.07 per share for the second quarter of fiscal year 2024 that will be payable in August 2024. 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 10: Goodwill and Intangible Assets, Net

The Company tests goodwill at least annually for possible impairment. The Company completes the annual testing of impairment for goodwill 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.

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 1, 2024, its annual impairment testing date for fiscal year 2024. There were no impairments measured in the periods presented. While the Company believes that its estimates of current value are reasonable, if actual results differ from the estimates and judgments used, including such items as future cash flows and the volatility inherent in markets which the Company serves, impairment charges against the carrying value of those assets could be required in the future.

The changes in the carrying amount of goodwill for the three months ended March 31, 2024 were as follows:


	Life Sciences		Diagnostics		Consolidated
	(In thousands)
Balance at December 31, 2023	$	4,587,938	$	1,945,612	$	6,533,550
Foreign currency translation	(20,823)		(8,830)		(29,653)


Balance at March 31, 2024	$	4,567,115	$	1,936,782	$	6,503,897

Identifiable intangible asset balances by category were as follows:


	March 31, 2024		December 31, 2023
	(In thousands)
Patents	$	27,808	$	27,811
Less: Accumulated amortization	(26,159)		(26,072)
Net patents	1,649		1,739
Trade names and trademarks	144,206		145,542
Less: Accumulated amortization	(78,131)		(73,781)
Net trade names and trademarks	66,075		71,761
Licenses	26,908		27,018
Less: Accumulated amortization	(16,755)		(16,551)
Net licenses	10,153		10,467
Core technology	1,574,307		1,582,458
Less: Accumulated amortization	(639,010)		(607,814)
Net core technology	935,297		974,644
Customer relationships	2,825,635		2,842,531
Less: Accumulated amortization	(919,664)		(878,821)
Net customer relationships	1,905,971		1,963,710

Total	$	2,919,145	$	3,022,321

Total amortization expense related to amortizable intangible assets was $91.2 million and $91.8 million for the three months ended March 31, 2024 and April 2, 2023, respectively. Estimated amortization expense related to amortizable intangible assets for each of the next five years is $269.0 million for the remainder of fiscal year 2024, $333.4 million for fiscal year 2025, $327.2 million for fiscal year 2026, $300.2 million for fiscal year 2027, and $274.6 million for fiscal year 2028.

Note 11: 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 60% of the Company’s 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 Chinese Renminbi, British Pound, Euro and Singapore Dollar. The Company held forward foreign exchange contracts, designated as economic hedges, with U.S. dollar equivalent notional amounts totaling $426.6 million, $412.1 million and $291.4 million at March 31, 2024, December 31, 2023 and April 2, 2023, 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 three months ended March 31, 2024 and April 2, 2023.

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 March 31, 2024, the total notional amount of the 2026 Notes that was designated to hedge net investments in foreign subsidiaries was €498.6 million. The unrealized foreign exchange (gains) losses recorded in AOCI related to the net investment hedge were $(13.9) million and $9.3 million for the three months ended March 31, 2024 and April 2, 2023, respectively.

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 12: 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 March 31, 2024.

The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during the three months ended March 31, 2024. 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 and divestiture 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.

The following tables show the assets and liabilities carried at fair value measured on a recurring basis as of March 31, 2024 and December 31, 2023 classified in one of the three classifications described above:


			Fair Value Measurements at March 31, 2024 Using:
	Total Carrying Value at March 31, 2024		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Marketable securities - available for sale	$	13,655	$	13,655	$	—	$	—
Foreign exchange derivative assets	279		—		279		—
Foreign exchange derivative liabilities	(1,894)		—		(1,894)		—
Contingent consideration asset	14,890		—		—		14,890
Contingent consideration liabilities	(30,516)		—		—		(30,516)


			Fair Value Measurements at December 31, 2023 Using:
	Total Carrying Value at December 31, 2023		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Marketable securities - available for sale	$	13,913	$	13,913	$	—	$	—
Foreign exchange derivative assets	1,697		—		1,697		—
Foreign exchange derivative liabilities	(1,763)		—		(1,763)		—
Contingent consideration asset	14,890		—		—		14,890
Contingent consideration liabilities	(40,005)		—		—		(40,005)

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 - available for sale: Includes equity and mutual fund investments 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 March 31, 2024 and December 31, 2023, none of the master netting arrangements involved collateral.

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

Contingent consideration: Contingent consideration is measured at fair value at the disposition or acquisition date using projected milestone dates, discount rates, volatility, probabilities of success and projected achievement of financial targets, including revenues of the acquired business in many instances. Projected risk-adjusted contingent payments are discounted back to the current period using a discounted cash flow model.

The fair value of the contingent consideration asset was initially measured using a lattice model and recognized upon the sale of the Business on March 13, 2023. In accordance with the terms of the sale of the Business, the Company is entitled to receive up to $150.0 million that is contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital event related to the Business. Potential valuation adjustments may be made as additional information and market factors that impact the expected exit valuation of the Business becomes available, with the impact of such adjustments being recorded in the Company’s condensed consolidated statements of operations.

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


	Three Months Ended
	March 31, 2024		April 2, 2023
	(In thousands)
Balance at beginning of period	$	14,890	$	—
Amount recognized upon the sale of the Business	—		15,930
Change in fair value	—		—
Balance at end of period	$	14,890	$	15,930

The fair values of contingent consideration liabilities 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, with the impact of such adjustments being recorded in the Company’s condensed consolidated statements of operations.

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


	Three Months Ended
	March 31, 2024		April 2, 2023
	(In thousands)
Balance at beginning of period	$	(40,005)	$	(46,618)

Amounts paid and foreign currency translation	15,662		1,424

Change in fair value (included within selling, general and administrative expenses)	(6,173)		1,360
Balance at end of period	$	(30,516)	$	(43,834)

Financial Instruments Not Recorded at Fair Value

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 investments in U.S. treasury securities that are classified as held-to-maturity had a fair value of $696.3 million and a carrying value of $697.3 million as of March 31, 2024. The Company’s investments in U.S. treasury securities that are classified as held-to-maturity had a fair value of $688.7 million and a carrying value of $689.9 million as of December 31, 2023. The fair values were classified as Level 1.

The Company’s outstanding senior unsecured notes had a fair value of $3,450.8 million and a carrying value of $3,876.9 million as of March 31, 2024. The Company’s outstanding senior unsecured notes had a fair value of $3,474.5 million and a carrying value of $3,889.3 million as of December 31, 2023. 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 unsecured revolving credit facility, had an aggregate carrying value of $1.3 million and $10.3 million as of March 31, 2024 and December 31, 2023, respectively. The carrying value approximates fair value and were classified as Level 2.

Note 13: 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 $14.4 million and $14.1 million as of March 31, 2024 and December 31, 2023, 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, regulatory matters, 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 information available at this time, the total cost of resolving these contingencies at March 31, 2024 would not have a material adverse effect on the Company’s 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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