Waters (WAT) 10-K risk factor changes: FY2022 vs FY2021

RISKS RELATED TO [removed: THE CORONAVIRUS][added: CYBERSECURITY]

[removed: pandemic has caused significant volatility and continued spread throughout] [added: In particular,] the [removed: United States and globally, which] [added: COVID-19 pandemic] has disrupted and may continue to disrupt the Company’s business.

The Company operates in over 35 countries, including those in the regions most impacted by the [added: COVID-19 pandemic.]

In [removed: response,] [added: response to the COVID-19 pandemic,] governments of most countries, including the United States, as well as private businesses, [removed: have] implemented numerous measures attempting to contain and mitigate the effects of [added: COVID-19.]

Such measures have had and are expected to continue to have adverse impacts on the United States and foreign economies of uncertain severity and duration, and have had and may continue to have a negative impact on the Company’s operations, including Company [removed: sales, supply chain] [added: sales] and cash flow.

[added: For example, the COVID-19] pandemic has and may continue to have a significant impact on our supply chain if our manufacturing facilities or those of third parties to whom we outsource certain manufacturing processes, the distribution centers where our inventory is managed or the operations of our logistics and other service providers are disrupted, temporarily closed or experience worker shortages.

[added: The COVID-19] pandemic has caused the Company to take measures to modify its business practices.

We have invested in maintaining safe work environments for our employees by, among other things, adding work from home flexibility, adjusting attendance policies to encourage those who are sick to stay at [removed: home, increasing cleaning protocols across all work locations, initiating regular communications regarding the impacts of the][added: home and establishing new physical distancing and safety procedures for employees.]

The Company may take further actions as may be required by government authorities or that the Company determines are in the best interests of, among others, its employees, customers, [removed: distributors] [added: third-party sales intermediaries] and suppliers.

[added: In addition, as Company employees work from home] and access the Company’s systems remotely, the Company may be subject to heightened security risks, including the risks of cyber-attacks.

[removed: processes] [added: Although we are in re-opening phases] for our corporate and other facilities, such [removed: processes] [added: re-openings] may face future closure requirements.

There is no certainty that the [removed: Company] [added: Company’s] measures will be sufficient to mitigate the risks posed by [added: COVID-19, and the Company’s ability to perform critical functions could be adversely impacted.]

[removed: The] [added: *The] Company’s international operations may be negatively affected by political events, wars or [removed: terrorism] [added: terrorism, economic conditions] and regulatory changes, related to either a specific country or a larger region.

These potential political, currency and economic disruptions, as well as foreign currency exchange rate fluctuations, could have a material adverse effect on the Company’s results of operations or financial [removed: condition.][added: condition.*]

Approximately [removed: 72%] [added: 70%] and [removed: 71%] [added: 72%] of the Company’s net sales in [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively, were outside of the United States and were primarily denominated in foreign currencies.

As a result, a significant portion of the Company’s sales and operations are subject to certain risks, including adverse developments in the political, regulatory and economic environment, in particular, uncertainty regarding possible changes to foreign and domestic trade policy; the effect of the U.K.’s exit from the European Union as well as the financial difficulties and debt burden experienced by a number of European countries; [removed: the instability and potential] impact [added: and costs] of [removed: war] [added: terrorism] or [removed: terrorism;] [added: war, in particular as a result of] the [added: ongoing conflict between Russia and Ukraine, and the possibility of further escalation resulting in new geopolitical and regulatory instability; the] instability and possible dissolution of the [removed: Euro] [added: euro] as a single currency; sudden movements in a country’s foreign exchange rates due to a change in a country’s sovereign risk profile or foreign exchange regulatory practices; [removed: tariffs and other] trade [removed: barriers;] [added: protection measures including embargoes, sanctions and tariffs; differing tax laws and changes in those laws; restrictions on investments and/or limitations regarding foreign ownership; nationalization of private enterprises which may result in] the [added: confiscation of assets; credit risk and uncertainties regarding the collectability of accounts receivable; the] impact of global health pandemics and epidemics, such as [added: COVID-19; difficulties in protecting intellectual property; difficulties in staffing and managing foreign operations; and associated adverse operational, contractual and tax consequences.]

Significant increases or decreases in the value of the U.S. dollar relative to certain foreign currencies, particularly the [removed: Euro,] [added: euro,] Japanese [removed: yen and] [added: yen,] British [removed: pound,] [added: pound and Chinese renminbi,] could have a material adverse effect or benefit on the Company’s results of operations or financial condition.

[removed: Global] [added: *Global] economic conditions may [removed: decrease] [added: have an adverse effect on the] demand [removed: for] [added: for, and supply of,] the Company’s products and harm the Company’s financial [removed: results.][added: results.*]

The Company is a global business that may be adversely affected by changes in global economic [removed: conditions.][added: conditions such as changes in the rate of inflation (including the cost of raw materials, commodities and supplies) and interest rates.]

These changes in global economic [removed: conditions, both inside and outside the U.S.,] [added: conditions] may affect the demand [removed: for] [added: for, and supply of,] the Company’s products and services.

[removed: Disruption] [added: *Disruption] in worldwide financial markets could adversely impact the Company’s access to capital and financial [removed: condition.][added: condition.*]

Financial markets in the U.S., Europe and Asia have experienced times of extreme disruption, including, among other things, sharp increases in the cost of new capital, credit rating downgrades and bailouts, severely [added: diminished capital availability and severely reduced liquidity in money markets.]

Any future deterioration or prolonged disruption in financial markets or financial institutions in which the Company participates may impair the Company’s ability to access its existing cash, utilize its existing syndicated bank credit facility funded by such financial [removed: institutions, and impair its ability to] [added: institutions or] access sources of new [removed: capital.][added: capital, which it may need to meet its capital needs.]

[removed: The] [added: *The] Company’s financial results are subject to changes in customer demand, which may decrease for a number of reasons, many beyond the Company’s [removed: control.][added: control.*]

[added: The demand for the Company’s products is dependent upon the size of the markets for its LC, LC-MS,] thermal analysis, rheometry and calorimetry products; the timing and level of capital spending and expenditures of the Company’s customers; changes in governmental regulations, particularly [added: those] affecting drug, food and drinking water testing; funding available to academic, governmental and research institutions; general economic conditions and the rate of economic growth in the Company’s major markets; and competitive considerations.

The Company typically experiences an increase in sales in its fourth quarter as a result of purchasing habits for capital goods by customers that tend to exhaust their spending budgets by calendar [removed: year end.][added: year-end.]

However, there can be no assurance that the Company will effectively forecast customer demand and appropriately [removed: allocated] [added: allocate] research and development expenditures to products with high growth and high margin prospects.

[removed: Additionally, the] [added: The] analytical instrument market [removed: may,] [added: may also,] from time to time, experience low sales growth.

Approximately [removed: 60% and] 59% [added: and 60%] of the Company’s net sales in [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively, were to worldwide pharmaceutical [removed: and biotechnology companies,] [added: accounts,] which may be periodically subject to unfavorable market conditions and consolidations.

[removed: Competitors] [added: *Competitors] may introduce more effective or less expensive products than the Company’s, which could result in decreased sales.

The competitive landscape may transform as a result of potential changes in ownership, mergers and continued consolidations among the Company’s competitors, which could harm the Company’s [removed: business.][added: business.*]

The analytical instrument [removed: market] [added: market,] and, in particular, the portion related to the Company’s HPLC, UPLC, [added: LC-MS, thermal analysis, rheometry and calorimetry product lines, is highly competitive.]

[removed: Strategies] [added: *Strategies] for organic growth require developing new technologies and bringing these new technologies to market, which could negatively impact the Company’s financial [removed: results.][added: results.*]

The future development of these new products will require a significant amount of spending over [added: the next few years before any significant, robust sales will be realized.]

Furthermore, these new products will be sold into both the [added: non-clinical and clinical markets, and any new products requiring FDA clearance may take longer to bring to market.]

[removed: The] [added: *The] Company’s software or hardware may contain coding or manufacturing errors that could impact their function, performance and security, and result in other negative [removed: consequences.][added: consequences.*]

[removed: Disruption] [added: *Disruption] of operations at the Company’s manufacturing facilities could harm the Company’s financial [removed: condition.][added: condition.*]

The Company manufactures LC instruments at facilities in Milford, Massachusetts and through a subcontractor in Singapore; precision chemistry separation columns at its facilities in Taunton, Massachusetts and Wexford, Ireland; MS products at its facilities in Wilmslow, England, Solihull, England and Wexford, Ireland; thermal analysis and rheometry products at its facilities in New Castle, [removed: Delaware] [added: Delaware;] and other instruments and consumables at various other locations as a result of the Company’s acquisitions.

Any prolonged disruption to the operations at any of these facilities, whether due to labor difficulties, destruction of or damage to any facility or other reasons, could [added: harm our customer relationships, impede our ability to generate sales and] have a material adverse effect on the Company’s results of operations or financial condition.

[removed: Failure] [added: *Failure] to adequately protect intellectual property could have materially adverse effects on the Company’s results of operations or financial [removed: condition.][added: condition.*]

During 2022, the U.S. dollar strengthened significantly against all other major currencies in the world, which resulted in foreign currency exchange rate fluctuations negatively impacting the Company’s sales growth by 5% and earnings per diluted share growth by 9% or $1.00.

##### [Table of Contents](#toc)

In 2022, the Company generated approximately 19% of its total net sales from China.

China’s government continues to play a significant role in regulating industry development by imposing sector-specific policies, and it maintains control over China’s economic growth through setting monetary policy and determining treatment of particular industries or companies.

Accordingly, our financial position or results of operations can be adversely influenced by political, economic, legal, compliance, social and business conditions in China generally.

From time to time, the Company enters into certain foreign currency exchange contracts that are intended to offset some of the market risk associated with sales denominated in foreign currencies.

We cannot predict the effectiveness of these transactions or their impact upon our future operating results, and from time to time they may negatively affect our quarterly earnings.

*Public health crises, epidemics or pandemics, such as the continuing COVID-19 pandemic have had, and could in the future have, a negative impact on the Company’s business and operations.*

Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on our business and operations.

While these restrictions have been lifted or eased in many jurisdictions, a resurgence of COVID-19 in certain countries, particularly in China, has resulted in an increased number of cases, and may slow, halt or reverse the reopening process.

##### [Table of Contents](#toc)

The degree to which COVID-19 or any other public health crisis ultimately affects the Company’s business, financial results and operations will depend on future developments, which are highly uncertain and cannot be predicted.

##### [Table of Contents](#toc)

In addition, the Company’s products are subject to rapid changes in technology.

Rapidly changing technology could make some or all of our product lines obsolete unless the Company is able to continually improve our existing products and develop new products.

If the Company fails to develop and introduce products in a timely manner in response to changing technology, market demands or the requirements of our customers, the Company’s product sales may decline, and we could experience an adverse effect on our results of operations or financial condition.

*The Company may face risks associated with previous or future acquisitions, strategic investments, joint ventures and divestitures.*

In the normal course of business, the Company may engage in discussions with third parties relating to possible acquisitions, strategic investments, joint ventures and divestitures.

The Company may pursue transactions that complement or augment its existing products and services.

Such transactions involve numerous risks, including difficulties in integrating the acquired operations, technologies and products; diversion of management’s attention from other business concerns; inability to predict financial results; potential departures of key employees of the acquired company; and difficulties in effectively transferring divested businesses and liabilities.

If the Company successfully identifies acquisitions in the future, completing such acquisitions may result in new issuances of the Company’s stock that may be dilutive to current owners; increases in the Company’s debt and contingent liabilities; and additional amortization expense related to intangible assets.

Acquired businesses may also expose the Company to new risks and new markets, and the Company may have difficulty addressing these risks in a cost-effective and timely manner.

Any of these transaction-related risks could have a material adverse effect on the Company’s profitability.

In addition, the Company may not be able to identify, successfully complete, or integrate potential acquisitions in the future.

Even if the Company can do so, it cannot be sure that these acquisitions will have a positive impact on the Company’s business or operating results.

##### [Table of Contents](#toc)

A successful product liability claim brought against the Company in excess of, or outside the coverage of, the Company’s insurance coverage could have a material adverse effect on our business, financial condition and results of operations.

The Company may not be able to maintain product liability insurance on acceptable terms, if at all, and insurance may not provide adequate coverage against potential liabilities.

Our success depends on our ability to obtain, maintain, and enforce patents on our technology, maintain our trademarks, and protect our trade secrets.

In the event that a claim relating to intellectual property is asserted against the Company, or third parties hold pending or issued patents that relate to the Company’s products or technology, the Company may seek licenses to such intellectual property or challenge those patents.

However, the Company may be unable to obtain these licenses on commercially reasonable terms, if at all, and the challenge of the patents may be unsuccessful.

The Company’s failure to obtain the necessary licenses or other rights could impact the sale, manufacture, or distribution of its products and, therefore, could have a material adverse effect on its results of operations and financial condition.

The Company also relies on trade secrets and proprietary know-how with which it seeks to protect its products, in part, by confidentiality agreements with its collaborators, employees and consultants.

These agreements may not adequately protect the Company’s trade secrets and other proprietary rights.

These agreements may be breached, and the Company may not have adequate remedies for any breach.

In addition, the Company’s trade secrets may otherwise become known or be independently developed by its competitors.

##### [Table of Contents](#toc)

Consolidation among such suppliers could also result in other limited or sole-source suppliers for the Company in the future.

Disruption of these sources could have, at a minimum, a temporary adverse effect on shipments and the financial results of the Company.

In addition, price increases from these suppliers could have an adverse effect on the Company’s margins.

Risk Factors

(COVID-19)

PANDEMIC

The adverse effects of the continuing

COVID-19

pandemic and an indeterminate recovery period has negatively affected the Company’s business and operations, and may continue to negatively impact the Company’s business and operations, the nature and extent of such impact is highly uncertain.

The impact of the global

pandemic over the last two years has resulted in a widespread public health crisis.

The

pandemic.

COVID-19.

In addition, in the event of a sustained downturn in customer demand or other economic conditions due to the

pandemic could result in material charges related to bad debt or inventory write-offs, restructuring charges, or impairments of long-lived assets, including both tangible and intangible assets.

Furthermore, such a sustained downturn in financial markets and asset values could adversely affect the Company’s cost of capital, liquidity and access to capital markets.

pandemic, establishing new physical distancing and safety procedures for employees, modifying workplaces as appropriate and implementing protocols to address actual and suspected

cases and potential exposure.

In addition, as Company employees work from home

Although we are in

re-opening

COVID-19,

and the Company’s ability to perform critical functions could be adversely impacted.

The degree to which

ultimately affects the Company’s business, financial results and operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, including the effect of the emergence of variants of the virus, its severity, the actions to contain the virus or treat its impact, the availability, distribution, acceptance and efficacy of a vaccine, and how quickly and to what extent normal economic and operating conditions can resume.

COVID-19;

difficulties in staffing and managing foreign operations; and associated adverse operational, contractual and tax consequences.

diminished capital availability and severely reduced liquidity in money markets.

The demand for the Company’s products is dependent upon the size of the markets for its LC,

LC-MS,

thermal analysis, rheometry and calorimetry product lines, is highly competitive and subject to rapid changes in technology.

the next few years before significant, robust sales will be realized.

non-clinical

and clinical markets, and any new products requiring FDA clearance may take longer to bring to market.

pre-tax

income between tax jurisdictions, changing application of tax law and tax audit examinations.

been successful in hiring, our employees.

RISKS RELATED TO CYBERSECURITY AND DATA PRIVACY

web-based

systems could have an adverse effect on the Company’s operations and financial condition.

For example, in December 2021, a vulnerability named “Log4Shell” was reported for the widely used Java logging library, Apache Log4j 2.

We have reviewed the use of this library within our software product portfolio and in our IT environment and have taken steps to mitigate the vulnerability.

The Company has two operating segments: [removed: Waters][added: WatersTM and TATM.]

Waters products and services primarily consist of [removed: high performance] [added: high-performance] liquid chromatography (“HPLC”), [removed: ultra performance] [added: ultra-performance] liquid chromatography [removed: (“UPLC][added: (“UPLCTM” and, together with HPLC, referred to as “LC”), mass spectrometry (“MS”) and precision chemistry consumable products and related services.]

Both the Company’s domestic and international operations have been and continue to be affected by the ongoing global [added: COVID-19 pandemic that has led to volatility and uncertainty in the U.S. and international markets.]

[added: The Company is actively managing its business to respond to the COVID-19 impact; however, the Company cannot reasonably estimate the length or severity of the COVID-19] pandemic, including the effect of the emergence of variants of the virus, or the related response, or the extent to which the disruption may materially impact the Company’s business, consolidated financial position, consolidated results of operations or consolidated cash flows in the future.

[added: The COVID-19] pandemic has not [removed: materially impacted] [added: had a material impact on] the Company’s manufacturing facilities or those of the third parties to whom it outsources certain manufacturing processes, the distribution centers where [removed: its] [added: the] inventory is [removed: managed,] [added: managed] or the operations of its logistics and other service providers.

[removed: pandemic,] [added: The Company has taken decisive] and [added: appropriate actions throughout the COVID-19 pandemic and] continues to take proactive measures to guard the health of its global employee base and the safety of all customer interactions.

The Company’s operating results are as follows for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] (dollars in thousands, except per share data):

| | | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | [removed: % change] [added: *% change*] | | | | | | |

| | | [removed: 2021] [added: 2022] | | | | [removed: 2020] [added: 2021] | | | | [removed: 2019] [added: 2020] | | | | [removed: 2021] [added: *2022] vs. [removed: 2020] [added: 2021*] | | | | [removed: 2020] [added: *2021] vs. [removed: 2019] [added: 2020*] | | |

| Product sales | | $ | [removed: 1,822,070] [added: 1,988,169] | | | $ | [removed: 1,497,333] [added: 1,822,070] | | | $ | [removed: 1,567,189] [added: 1,497,333] | | | | [removed: 22] [added: *9*] | [removed: %] [added: *%*] | | | [removed: (4] [added: *22*] | [removed: %)] [added: *%*] |

| Service sales | | | [removed: 963,804] [added: 983,787] | | | | [removed: 868,032] [added: 963,804] | | | | [removed: 839,407] [added: 868,032] | | | | [removed: 11] [added: *2*] | [removed: %] [added: *%*] | | | [removed: 3] [added: *11*] | [removed: %] [added: *%*] |

| Total net sales | | | [removed: 2,785,874] [added: 2,971,956] | | | | [removed: 2,365,365] [added: 2,785,874] | | | | [removed: 2,406,596] [added: 2,365,365] | | | | [removed: 18] [added: *7*] | [removed: %] [added: *%*] | | | [removed: (2] [added: *18*] | [removed: %)] [added: *%*] |

| Cost of sales | | | [removed: 1,156,533] [added: 1,248,182] | | | | [removed: 1,006,689] [added: 1,156,533] | | | | [removed: 1,010,700] [added: 1,006,689] | | | | [removed: 15] [added: *8*] | [removed: %] [added: *%*] | | | [removed: —] [added: *15*] | [removed: %] [added: *%*] |

| Selling and administrative expenses | | | [removed: 626,968] [added: 658,026] | | | | [removed: 553,698] [added: 626,968] | | | | [removed: 534,791] [added: 553,698] | | | | [removed: 13] [added: *5*] | [removed: %] [added: *%*] | | | [removed: 4] [added: *13*] | [removed: %] [added: *%*] |

| Research and development expenses | | | [removed: 168,358] [added: 176,190] | | | | [removed: 140,777] [added: 168,358] | | | | [removed: 142,955] [added: 140,777] | | | | [removed: 20] [added: *5*] | [removed: %] [added: *%*] | | | [removed: (2] [added: *20*] | [removed: %)] [added: *%*] |

| Purchased intangibles amortization | | | [removed: 7,143] [added: 6,366] | | | | [removed: 10,587] [added: 7,143] | | | | [removed: 9,693] [added: 10,587] | | | | [removed: (33] [added: *(11*] | [removed: %)] [added: *%)*] | | | [removed: 9] [added: *(33*] | [removed: %] [added: *%)*] |

| Asset impairments | | | — | | | | [removed: 6,945] [added: —] | | | | [removed: —] [added: 6,945] | | | | [removed: (100] [added: *] | [removed: %)] [added: *] | | | [removed: *] [added: *] | [removed: *] [added: *] |

| Litigation provision | | | [removed: 5,165] [added: —] | | | | [removed: 1,180] [added: 5,165] | | | | [removed: —] [added: 1,180] | | | | [removed: 338] [added: *] | [removed: %] [added: *] | | | [removed: *] [added: *] | [removed: *] [added: *] |

| Operating income | | | [removed: 821,707] [added: 873,395] | | | | [removed: 645,489] [added: 821,707] | | | | [removed: 708,457] [added: 645,489] | | | | [removed: 27] [added: *6*] | [removed: %] [added: *%*] | | | [removed: (9] [added: *27*] | [removed: %)] [added: *%*] |

| [removed: Operating] [added: *Operating] income as a % of [removed: sales] [added: sales*] | | | [removed: 29.5] [added: *29.4*] | [removed: %] [added: *%*] | | | [removed: 27.3] [added: *29.5*] | [removed: %] [added: *%*] | | | [removed: 29.4] [added: *27.3*] | [removed: %] [added: *%*] | | | | | | | | |

| Other income (expense), net | | | [removed: 17,203] [added: 2,228] | | | | [removed: (1,775] [added: 17,203] | [removed: )] | | | [removed: (3,586] [added: (1,775] | ) | | | [removed: *] [added: *(87*] | [removed: *] [added: *%)*] | | | [removed: 51] [added: *] | [removed: %] [added: *] |

| Interest expense, net | | | [removed: (32,717] [added: (37,777] | ) | | | [removed: (32,800] [added: (32,717] | ) | | | [removed: (26,632] [added: (32,800] | ) | | | [removed: —] [added: *15*] | [removed: %] [added: *%*] | | | [removed: (23] [added: *—*] | [removed: %)] |

| Income before income taxes | | | [removed: 806,193] [added: 837,846] | | | | [removed: 610,914] [added: 806,193] | | | | [removed: 678,239] [added: 610,914] | | | | [removed: 32] [added: *4*] | [removed: %] [added: *%*] | | | [removed: (10] [added: *32*] | [removed: %)] [added: *%*] |

| Provision for income taxes | | | [removed: 113,350] [added: 130,091] | | | | [removed: 89,343] [added: 113,350] | | | | [removed: 86,041] [added: 89,343] | | | | [removed: 27] [added: *15*] | [removed: %] [added: *%*] | | | [removed: 4] [added: *27*] | [removed: %] [added: *%*] |

| Net income | | $ | [removed: 692,843] [added: 707,755] | | | $ | [removed: 521,571] [added: 692,843] | | | $ | [removed: 592,198] [added: 521,571] | | | | [removed: 33] [added: *2*] | [removed: %] [added: *%*] | | | [removed: (12] [added: *33*] | [removed: %)] [added: *%*] |

| Net income per diluted common share | | $ | [removed: 11.17] [added: 11.73] | | | $ | [removed: 8.36] [added: 11.17] | | | $ | [removed: 8.69] [added: 8.36] | | | | [removed: 34] [added: *5*] | [removed: %] [added: *%*] | | | [removed: (4] [added: *34*] | [removed: %)] [added: *%*] |

[added: |] [added: |] Percentage not meaningful [added: |]

The Company’s net sales increased [removed: approximately 18%] [added: 7%] in [removed: 2021] [added: 2022] as compared to [removed: 2020,] [added: 2021,] and [removed: decreased 2%] [added: 18%] in [removed: 2020] [added: 2021] as compared to [removed: 2019.][added: 2020.]

The [removed: increase in] sales [added: growth] in [added: 2022 and] 2021 [removed: can be attributed to the] [added: was driven by] strong [removed: sales performance] [added: customer demand] across most major geographies, end markets, and product [removed: categories due to customer demand continuing to return to][added: categories.]

Instrument system sales increased [added: 11% and] 23% in [removed: 2021] [added: 2022] and [removed: decreased 8% in 2020.][added: 2021, respectively.]

[removed: pandemic] [added: In 2021, the increase in Waters products and service sales was due to customer demand increasing to pre-pandemic] levels as customer laboratories and manufacturing facilities continued to return to normal operations.

Foreign currency translation [removed: had minimal impact on] [added: decreased] instrument system sales [added: growth by 5%] in [removed: 2021] [added: 2022] and [removed: increased] [added: had minimal impact on] sales [removed: by 1%] [added: growth] in [removed: 2020.][added: 2021.]

Geographically, the [added: Company’s] sales growth in [added: 2022 and] 2021 was broad-based across [removed: the world, and was due to customer demand continuing to increase to][added: most major regions.]

[added: In 2021, the increase in TA products and service sales was also due to customer demand increasing to pre-pandemic] levels as customer laboratories and manufacturing facilities continued to return to normal operations.

Foreign currency translation increased [added: total] sales [added: growth] by [removed: 1% and 3%] [added: 2%] in [removed: Asia and Europe, respectively.][added: 2021.]

Sales to pharmaceutical customers increased [removed: 20%] [added: 5%] and [removed: 2%] [added: 20%] in [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively, with foreign currency translation [removed: positively impacting] [added: decreasing pharmaceutical] sales by [removed: 1%] [added: 5%] in [removed: both 2021] [added: 2022] and [removed: 2020.][added: increasing sales by 1% in 2021.]

[removed: Foreign] [added: The effect of foreign] currency translation [removed: added 4% to Europe] [added: decreased TA’s] sales growth [added: by 6%] in [added: 2022 and increased sales by 1% in] 2021.

Combined sales to industrial customers, which include material characterization, food, environmental and fine chemical markets, increased [added: 10% and] 17% in [removed: 2021] [added: 2022] and [removed: decreased 2% in 2020,] [added: 2021, respectively,] with foreign currency translation [added: decreasing sales growth by 5% in 2022 and] increasing sales [added: growth] by 2% [removed: and 1%] in [removed: 2021 and 2020, respectively.][added: 2021.]

Combined sales to academic and government customers increased 7% in [removed: 2021] [added: both 2022] and [removed: decreased 16% in 2020,] [added: 2021,] with foreign currency translation [removed: increasing] [added: decreasing academic and government] sales [added: growth] by [removed: 2%] [added: 6%] in [removed: 2021] [added: 2022] and [removed: having minimal impact on] [added: increasing] sales [added: growth by 2%] in [removed: 2020.][added: 2021.]

Sales to our academic and [removed: governmental] [added: government] customers are highly dependent on when institutions receive funding to purchase our instrument systems and, as such, sales can vary significantly from period to period.

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| Acquired in-process research and development | | | 9,797 | | | | — | | | | — | | | | * | * | | | * | * |

| --- | --- |

The increase in sales in 2021 was also impacted by the increase in demand for our products and services as our customers returned to pre-pandemic levels of operations.

Foreign currency translation decreased total sales growth by 5% in 2022 as the U.S. dollar strengthened significantly against all other major currencies in the world, which negatively impacted our sales and operating profits.

Such increases were attributable to the broad-based increase in customer demand across all existing and newly introduced LC, LC-MS and Thermal Analysis instrument system sales.

Recurring revenues (combined sales of precision chemistry consumables and services) increased 3% and 13% in 2022 and 2021, respectively, with foreign currency translation decreasing sales growth by 6% in 2022 and increasing sales growth by 2% in 2021.

Operating income was $873 million in 2022, an increase of 6% as compared to 2021.

This increase was primarily a result of the increase in sales volume and pricing increases, partially offset by higher electronic component and freight inflationary costs and the negative effect of foreign currency translation.

The effect of foreign currency translation lowered operating income by approximately $71 million during 2022.

##### [Table of Contents](#toc)

During 2021, the effect of foreign currency translation increased operating income by approximately $19 million.

The decrease in 2022 operating cash flow was primarily a result of higher inventory levels, slower cash collections and higher incentive compensation payments in 2022 compared to 2021.

In December 2022, the Company’s Board of Directors amended and extended this repurchase program’s term by one year such that it shall now expire on January 21, 2024 and increased the total authorization level by $750 million to $4.8 billion.

During the years ended December 31, 2022 and 2021, the Company repurchased $616 million and $640 million of the Company’s outstanding common stock, respectively, under authorized share repurchase programs.

On February 14, 2023, the Company entered into an agreement to acquire all issued and outstanding equity interests of Wyatt Technology for $1.4 billion in cash at closing, subject to customary adjustments.

Wyatt Technology is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories and services.

The Company will finance this acquisition through cash on its balance sheet and existing borrowing capacity that is available on its revolving credit facility.

The agreement contains certain customary termination rights, including the right of the sellers to terminate this transaction if it has not been completed by June 14, 2023, subject to automatic extension to August 14, 2023 if certain regulatory approvals are not obtained by such date.

If this were to occur, the Company would be required to pay the sellers a one-time fee in the amount of $15 million if the agreement is validly terminated and not consummated in accordance with the closing conditions set forth in the agreement.

This transaction is expected to close in the second quarter of 2023, subject to regulatory approvals and other customary closing conditions.

##### [Table of Contents](#toc)

Foreign currency translation decreased total sales growth by 5% in 2022 as the U.S. dollar strengthened significantly against all other major currencies.

The geographies that were the most negatively impacted by the strengthening of the U.S. dollar in 2022 were Europe and Japan, as the weakening of the euro and Japanese yen lowered sales growth in Europe and Japan by 10% and 17%, respectively, in 2022.

In 2022, sales increased 5% in Asia, 14% in the Americas, and were flat in Europe, with the effect of foreign currency translation decreasing sales growth by 7% in Asia, and 10% in Europe.

China sales increased 8% in 2022 with foreign currency translation decreasing China sales growth by 2% in 2022.

This increase in China sales was driven by strong customer demand for our products and services despite the negative impact that the COVID-19 pandemic had on our business in China in 2022.

The latest COVID-19 pandemic lockdowns and reopening in China made it difficult to conduct normal business operations in 2022, and the Company’s future sales growth may be negatively impacted if future lockdowns were to occur for a prolonged period in the future.

| | | Year Ended December 31, | | | | | | | | | | | | *% change* | | | | | | |

| | | 2022 | | | | 2021 | | | | 2020 | | | | *2022 vs. 2021* | | | | *2021 vs. 2020* | | |

| Total net sales | | $ | 2,971,956 | | | $ | 2,785,874 | | | $ | 2,365,365 | | | | *7* | *%* | | | *18* | *%* |

##### [Table of Contents](#toc)

The sales growth in 2021 for each customer class was driven by the increased demand as our customers returned to pre-pandemic levels of operations.

The pharmaceutical sales growth in 2022 was driven by strong growth in most major regions, partially offset by the negative impact from foreign currency translation.

| | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | *% change* | | | | | | |

Waters instrument system sales (LC and MS technology-based) grew 11% and 22% in 2022 and 2021, respectively, with foreign currency translation lowering sales growth by 5% in 2022.

The increase in the Waters instrument system sales in 2022 and 2021 can be attributed to the strong customer demand for our existing products as well as the introduction of our new ArcTM HPLC, ACQUITYTM Premier and XEVOTM TQ Absolute products.

Waters service sales increased due to higher service demand billing, particularly in China and the United States, partially offset by the negative impact from foreign currency translation which decreased by 6%.

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| | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | *% change* | | | | | | |

Management

s Discussion and Analysis of Financial Condition and

Results of Operations

TM

and TA

” and, together with HPLC, referred to as “LC”), mass spectrometry (“MS”) and precision chemistry consumable products and related services.

COVID-19

Pandemic

pandemic that has led to volatility and uncertainty in the U.S. and international markets.

The Company is actively managing its business to respond to the

impact; however, the Company cannot reasonably estimate the length or severity of the

The

The Company also did not see material disruptions or delays in shipments of certain materials or components of its products.

However, the current logistic and supply chain issues being experienced throughout the world have made it more difficult for us to manage our operations and as such we cannot provide any assurances that any further disruptions in the logistics and supply chains will not have a material impact on our future financial results and cashflows.

The Company has taken decisive and appropriate actions throughout the

pandemic continues to be fluid with uncertainties and risks across the global economy.

During 2020, the Company took a proactive approach managing through this unpredictability and implemented a series of cost reduction actions, which included temporary salary reductions, furloughs and reductions in

non-essential

spending and other working capital reductions in order to preserve liquidity and enhance financial flexibility.

These cost reductions were completed by the end of 2020 and reduced the Company’s spending by approximately $100 million in 2020.

The majority of these cost saving actions were reinstated at the beginning of 2021, which negatively impacted the Company’s cashflows in 2021 and also attributed to the increase in expenses as a result of the normalization of these costs.

pre-pandemic

normal operations.

Foreign currency translation increased sales by 2% and less than 1% in 2021 and 2020, respectively.

The Company’s recent acquisitions did not have material impacts on sales growth.

Unless otherwise noted, sales growth or decline percentages are presented as compared with the same period in the prior year.

In 2021, the increase in instrument system sales was attributable to customer demand continuing to increase to

pre-COVID-19

This strength in 2021 was broad-based, particularly in LC,

LC-MS

and TA instrument system sales.

Recurring revenues (combined sales of precision chemistry consumables and services) increased 13% and 4% in 2021 and 2020, respectively, as a result of a larger installed base of customers and higher billing demand for service sales.

In 2020, recurring revenues were impacted by the interruption of business activities and the uncertainty caused by

the COVID-19 pandemic.

Recurring revenues were positively impacted by foreign currency translation in 2021 and 2020, which increased sales by 2% and 1%, respectively.

In 2021, the strong sales performance was broad-based across all regions, with sales increasing 20% in Asia, 16% in the Americas, and 17% in Europe.

The sales declines in 2020 were broad-based across the world, except for Europe, and were due to the weaker demand and disruption of business activities caused by

the COVID-19 lockdowns.

The pharmaceutical sales growth was driven by strong double-digit growth in all major regions, including 45% in China, 26% in India, 17% in the Americas and 15% in Europe as strong customer demand continued to recover to

levels.

[removed: Derivative Transactions][added: *Derivative Transactions*]

The Company is exposed to currency price risk on foreign currency exchange rate fluctuations when it translates its [added: non-U.S. dollar foreign subsidiaries’ financial statements into U.S. dollars, and when any of the Company’s subsidiaries purchase or sell products or services in a currency other than its own currency.]

The Company’s principal strategies in managing exposures to changes in foreign currency exchange rates are to (1) naturally hedge the foreign-currency-denominated liabilities on the Company’s balance sheet against corresponding assets of the same currency, such that any changes in liabilities due to fluctuations in foreign currency exchange rates are typically offset by corresponding changes in assets and (2) mitigate foreign exchange risk exposure of international operations by hedging the variability in the movement of foreign currency exchange rates on a portion of its [removed: Euro-denominated] [added: euro-denominated and yen-denominated] net asset investments.

[removed: Foreign] [added: *Foreign] Currency Exchange [removed: Contracts][added: Contracts*]

[removed: Interest] [added: *Interest] Rate Cross-Currency Swap [removed: Agreements][added: Agreements*]

As of December 31, [removed: 2021,] [added: 2022,] the Company had three-year interest rate cross-currency swap derivative agreements with a notional value of [removed: $230] [added: $585] million to hedge the variability in the movement of foreign currency exchange rates on a portion of its [removed: Euro-denominated] [added: euro-denominated and yen-denominated] net asset investments.

Under hedge accounting, the change in fair value of the derivative that relates to changes in the foreign currency spot rate are recorded in the currency translation adjustment in other comprehensive income and remain in accumulated [added: other] comprehensive income in stockholders’ equity [removed: (deficit)] until the sale or substantial liquidation of the foreign operation.

| | | [removed: December] [added: December] 31, [removed: 2021] [added: 2022] | | | | | | | | [removed: December] [added: December] 31, [removed: 2020] [added: 2021] | | | | | | |

| | | [removed: Notional Value] [added: Notional Value] | | | | [removed: Fair Value] [added: Fair Value] | | | | [removed: Notional Value] [added: Notional Value] | | | | [removed: Fair Value] [added: Fair Value] | | |

| Other current assets | | $ | [removed: 55,309] [added: 42,047] | | | $ | [removed: 504] [added: 231] | | | $ | [removed: 66,690] [added: 55,309] | | | $ | [removed: 836] [added: 504] | |

| Other current liabilities | | $ | [removed: 9,000] [added: 13,450] | | | $ | [removed: 195] [added: 98] | | | $ | [removed: 20,000] [added: 9,000] | | | $ | [removed: 185] [added: 195] | |

| Other liabilities | | $ | [removed: 230,000] [added: 185,000] | | | $ | [removed: 5,363] [added: 4,783] | | | $ | [removed: 560,000] [added: 230,000] | | | $ | [removed: 44,996] [added: 5,363] | |

| Accumulated other comprehensive [removed: loss] [added: income (loss)] | | | | | | $ | [removed: 15,944] [added: 10,026] | | | | | | | $ | [removed: 44,996] [added: (15,944] | [added: )] |

| | | [removed: Financial Statement Classification] [added: Financial Statement Classification] | | | | | | | | | | | | |

| | | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | |

| | | [removed: 2021] [added: 2022] | | | | [removed: 2020] [added: 2021] | | | | [removed: 2019] [added: 2020] | | | | |

| Realized (losses) gains on closed contracts | | Cost of sales | | $ | [removed: (1,973] [added: (3,855] | ) | | $ | [removed: 1,444] [added: (1,973] | [added: )] | | $ | [removed: (3,552] [added: 1,444] | [removed: )] |

| Unrealized (losses) gains on open contracts | | Cost of sales | | | [removed: (343] [added: (176] | ) | | | [removed: 1,663] [added: (343] | [added: )] | | | [removed: (1,292] [added: 1,663] | [removed: )] |

| Cumulative net pre-tax (losses) gains | | Cost of sales | | $ | [removed: (2,316] [added: (4,031] | ) | | $ | [removed: 3,107] [added: (2,316] | [added: )] | | $ | [removed: (4,844] [added: 3,107] | [removed: )] |

| Interest earned | | Interest income | | $ | [removed: 11,084] [added: 8,872] | | | $ | [removed: 15,296] [added: 11,084] | | | $ | [removed: 11,709] [added: 15,296] | |

| Unrealized gains (losses) on open contracts | | Accumulated other comprehensive loss | | $ | [removed: 29,052] [added: 25,969] | | | $ | [removed: (44,996] [added: 29,052] | [removed: )] | | $ | [removed: 4,485] [added: (44,996] | [added: )] |

[added: Assuming a hypothetical adverse change of 10% in year-end] exchange rates (a strengthening of the U.S. dollar), the fair market value of the foreign currency exchange contracts outstanding as of December 31, [removed: 2021] [added: 2022] would [removed: decrease][added: increase pre-tax earnings by approximately $6 million.]

[added: Assuming a hypothetical adverse change of 10% in year-end] exchange rates (a strengthening of the U.S. dollar), the fair market value of the interest rate cross-currency swap agreements outstanding as of December 31, [removed: 2021] [added: 2022] would increase by approximately [removed: $23] [added: $57] million and would be recorded to foreign currency translation in other comprehensive income within stockholders’ equity (deficit).

The related impact on interest income would not have a material effect on [added: pre-tax earnings.]

As of December 31, [removed: 2021,] [added: 2022,] the carrying value of the Company’s cash and cash equivalents approximated fair value.

As of December 31, [removed: 2021,] [added: 2022,] the Company estimates that a hypothetical adverse change of 100 basis points across all maturities would not have a material effect on the fair market value of its portfolio.

As of December 31, [removed: 2021] [added: 2022] and [removed: 2020, $440] [added: 2021, $472] million out of [removed: $569] [added: $481] million and [removed: $364] [added: $440] million out of [removed: $443] [added: $569] million, respectively, of the Company’s total cash, cash equivalents and investments were held by foreign subsidiaries.

In addition, [removed: $298] [added: $336] million out of [removed: $569] [added: $481] million and [removed: $254] [added: $298] million out of [removed: $443] [added: $569] million of cash, cash equivalents and investments were held in currencies other than the U.S. dollar at December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively.

As of December 31, [removed: 2021,] [added: 2022,] the Company had no holdings in auction rate securities or commercial paper issued by structured investment vehicles.

[added: Assuming a hypothetical adverse change of 10% in year-end] exchange rates (a strengthening of the U.S. dollar), the fair market value of the Company’s cash, cash equivalents and investments held in currencies other than the U.S. dollar as of December 31, [removed: 2021] [added: 2022] would decrease by approximately [removed: $30] [added: $34] million, of which the majority would be recorded to foreign currency translation in other comprehensive income within stockholders’ equity.

| Other assets | | $ | 400,000 | | | $ | 19,163 | | | $ | — | | | $ | — | |

##### [Table of Contents](#toc)

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Quantitative and Qualitative Disclosures About Market Risk

non-U.S.

dollar foreign subsidiaries’ financial statements into U.S. dollars, and when any of the Company’s subsidiaries purchase or sell products or services in a currency other than its own currency.

Assuming a hypothetical adverse change of 10% in

year-end

pre-tax

earnings by approximately $5 million.

earnings.

[removed: ,”] [added: Waters Corporation (the “Company,” “WatersTM,”] “we,” “our,” or “us”) is a specialty measurement company that operates with a fundamental underlying purpose to advance the science that enables our customers to enhance human health and well-being.

The Company primarily designs, manufactures, sells and services [removed: high performance] [added: high-performance] liquid chromatography (“HPLC”), ultra-performance liquid chromatography [removed: (“UPLC][added: (“UPLCTM” and together with HPLC, referred to as “LC”) and mass spectrometry (“MS”) technology systems and support products, including chromatography columns, other consumable products and comprehensive post-warranty service plans.]

These systems are complementary products that are frequently employed together [added: (“LC-MS”) and sold as integrated instrument systems using common software platforms.]

In addition, the Company designs, manufactures, sells and services thermal analysis, rheometry and calorimetry instruments through its TA [removed: Instruments][added: InstrumentsTM (“TA”) product line.]

The Company’s products are used by pharmaceutical, [added: clinical,] biochemical, industrial, nutritional safety, environmental, academic and governmental customers working in research and development, quality assurance and other laboratory applications.

[added: LC-MS] instruments combine a liquid phase sample introduction and separation system with mass spectrometric compound identification and quantification.

Waters Corporation became a [removed: publicly-traded] [added: publicly traded] company with its initial public offering (“IPO”) in November 1995.

[removed: High Performance] [added: *High-Performance] and [removed: Ultra Performance] [added: Ultra-Performance] Liquid [removed: Chromatography][added: Chromatography*]

[added: The most significant end-use] markets for HPLC are those served by the pharmaceutical and life science industries.

Waters also has in vitro diagnostic [removed: (IVD)] labelled products that are used as general-purpose instruments for clinical diagnostic applications, such as newborn screening and therapeutic drug management, in countries where these products are registered.

In 2004, Waters introduced a novel technology that the Company describes as [removed: ultra performance] [added: ultra-performance] liquid chromatography that utilizes a packing material with small, uniform diameter particles and a specialized instrument, the ACQUITY [removed: UPLC][added: UPLCTM, to accommodate the increased pressure and narrower chromatographic bands that are generated by these small and tightly packed particles.]

The Company also introduced the ACQUITY UPLC PLUS series in 2018, consisting of [added: the H-Class PLUS, H-Class PLUS Bio and I-Class PLUS systems, which incorporate foundational enhancements into the legacy systems.]

Waters manufactures LC instruments that are offered in configurations that allow for varying degrees of automation, from component configured systems for academic teaching and research applications to fully automated systems for regulated and high sample throughput testing, and that have a variety of detection technologies, from optical-based ultra-violet [removed: (“UV”)] absorbance, refractive index and fluorescence detectors to a suite of [added: MS-based detectors, optimized for certain analyses.]

[added: In 2019, the Company introduced the ACQUITYTM Advanced Polymer ChromatographyTM] System, which is the first fully solvent-compatible UPLC system to perform size exclusion, gradient polymer elution and solvent compatible reversed-phase liquid chromatographic separations on a single platform.

[added: The all-in-one] system gives research scientists greater analytical versatility and speed when conducting research on next-generation polymers.

[added: In 2020, the Company introduced the Waters ArcTM] HPLC System, a new HPLC system for routine testing in the pharmaceutical, food, academic and materials markets.

In 2021, the Company introduced the new ACQUITY PREMIER LC solution and the Arc Premier System both featuring Waters’ [removed: MaxPeak][added: MaxPeakTM High Performance Surface (“HPS”) technology.]

[added: MaxPeakTM] HPS technology, which was first introduced with [removed: the]

[added: the Company’s introduction of ACQUITYTM] PREMIER Columns in 2020, is a surface technology that forms a barrier between the sample and the metal surfaces of both the system and column, eliminating the need for system passivation, mitigating the loss of metal-sensitive analytes and yielding higher quality data in less time and effort.

The primary consumable products for LC [added: instruments] are chromatography columns.

In 2019, the Company introduced the BioResolv SCX mAb Columns and [removed: VanGuard][added: VanGuardTM FIT Cartridge technologies.]

These new cation exchange column lines with specialized consumables are designed to simplify and improve the characterization and monitoring of monoclonal antibody [removed: (mAb)] [added: (“mAb”)] therapeutics, as well as enable mAb charge-variant analyses as required by the World Health Organization, the FDA and the International Conference on Harmonization for confirming the efficacy and safety of biologics and biosimilars with discovery, development and manufacturing applications.

The columns are for use with any brand of UPLC system and can measurably improve data quality by mitigating the loss of sample analytes due to [added: analyte-to-surface interactions.]

The Company’s precision chemistry consumable products also include environmental and nutritional safety testing products, including Certified Reference Materials [removed: (“CRM”s)] and Proficiency Testing [removed: (“PT”)] products.

The Company [removed: expects the acquisition] [added: anticipates that full integration of Andrew Alliance will allow us] to positively impact our customers’ workflows by improving the repeatability, performance and speed of laboratory operations and chemistry workflows.

[removed: Mass] [added: *Mass] Spectrometry and Liquid Chromatography-Mass [removed: Spectrometry][added: Spectrometry*]

A wide variety of instrumental designs fall within the overall category of MS instrumentation, including devices that incorporate quadrupole, ion trap, [added: time-of-flight (“Tof”), magnetic sector and ion mobility technologies.]

Furthermore, these technologies are often used in tandem [added: to maximize the speed and/or efficacy of certain experiments.]

[added: The Company’s smaller-sized] mass spectrometers, such as the single quadrupole detector [removed: (“SQD”)] and the tandem quadrupole detector (“TQD”), are often referred to as LC “detectors” and are typically sold as part of an LC system or as an LC system upgrade.

[added: Larger quadrupole systems, such as the XevoTM TQ and Xevo TQ-S] instruments, are used primarily for experiments performed for late-stage drug development, including clinical trial testing.

[added: Quadrupole time-of-flight (“Q-Tof”) instruments, such as the Company’s SYNAPTTM G2-S,] are often used to analyze the role of proteins in disease processes, an application sometimes referred to as “proteomics”.

LC and MS are typically embodied within an analytical system tailored for either a dedicated class of analyses or as a [removed: general purpose] [added: general-purpose] analytical device.

In response to this development and to further promote the high utilization of these hybrid instruments, the Company has organized its Waters operating segment to develop, manufacture, sell and service integrated [added: LC-MS systems.]

[added: In 2019, the Company introduced the BioAccordTM] system, a liquid chromatography-mass spectrometry solution that expands access to high-resolution [added: time-of-flight mass spectrometry capabilities.]

Also in 2019, the Company introduced the Cyclic IMS system, which seamlessly integrates cyclic ion mobility technology into a high-performance research-grade [added: time-of-flight mass spectrometer.]

The Company also reinforced its tandem quadrupole mass spectrometry portfolio during the current year with upgrades to the Xevo [added: TQ-S micro and the introduction of the new Xevo TQ-S cronos.]

[added: The Xevo TQ-S] micro features new performance enhancements that bring the quantitation of highly polar, ionic compounds in food to a higher level.

[added: The Xevo TQ-S] cronos is a new, tandem quadrupole mass spectrometer [removed: purposely-built] [added: purposely built] for routine quantitation of large numbers of small-molecule organic compounds over a wide concentration range.

[added: The Xevo TQ-S micro and the Xevo TQ-S] cronos are also well suited to meet regulatory requirements for pesticide residue analysis, the monitoring for contaminants in processed foods, identifying drugs of abuse, and performing impurity profiling of pharmaceuticals.

[added: In 2020, the Company introduced the new RADIANTM ASAPTM System, a novel direct mass detector engineered for non-mass] spectrometry experts to conduct fast and accurate analyses of solids and liquids with minimal sample prep.

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In 2018, the Company introduced the ACQUITY ARCTM Bio System, a versatile, iron-free, bio-inert, quaternary liquid chromatograph specifically engineered to improve bioseparation analytical methods.

##### [Table of Contents](#toc)

In 2020, Waters introduced ACQUITYTM PREMIER Columns, a new family of premium sub-2-micron columns featuring MaxPeakTM HPS technology.

##### [Table of Contents](#toc)

Also in 2021, the Company released the ACQUITY RDa™ Detector featuring SmartMS™, the company’s newest Tof MS designed to improve the ease and reliability of small

##### [Table of Contents](#toc)

In 2022, the Company introduced the new Xevo™ TQ Absolute system, the most sensitive and compact benchtop tandem mass spec in its class.

The Company introduced the new Xevo™ G3 quadrupole time-of-flight (“QTof”) mass spectrometer with CONFIRM Sequence—a new oligonucleotide sequencing confirmation app for the waters_connect™ software platform and an electrospray ionization source for the high-resolution Waters™ SELECT SERIES™ Multi-Reflecting Time-of-Flight mass spectrometer.

In addition to the cash paid at closing there was an earn out provision in which the Company would have to pay an additional $2 million to the shareholders of ISS if certain revenue and customer account conditions are achieved in the two years subsequent to the acquisition date.

This contingent consideration is recorded as a liability.

As of the balance sheet date the earn out period has been completed.

In 2022, the Company introduced a new Per-and Polyfluoroalkyl Substances (“PFAS”) quantitation workflow enabled by enhancements to its waters_connect™ for quantitation software and the Company introduced Extraction+ Connected Device, a new software-controlled product for the Waters™ Andrew+™ Pipetting Robot that automates the preparation of biological, food, forensics and environmental samples by solid phase extraction.

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a global perspective.

##### [Table of Contents](#toc)

In 2022, TA introduced the Powder Rheology Accessory, which enables our Discovery Hybrid Rheometers to characterize the behavior of powders during storage, dispensing, processing and end-use.

The Powder Rheology Accessory provides relevant property and processing measurements for battery electrode coatings to prevent defects that cause cell failure and pharmaceutical tablets to prevent instabilities of API blends.

In 2022, TA introduced Polymer Workflow Guided Methods, which provides walk up and use functionality by codifying polymer workflows.

Guided Methods leverages the power of AutoPilot and enables novice users to quickly learn and use the instrument to set up test methods, run tests, and execute analyses across our Thermal Analysis and Rheology product lines.

Although the Company transacts business with various government agencies, no government contract is of such magnitude that a renegotiation of profits or termination of the contract at the election of the government agency would have a material adverse effect on the Company’s financial results.

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respectively.

3:2016.

##### [Table of Contents](#toc)

See Item 1A, Risk Factors – Public health crises, epidemics or pandemics, such as the continuing COVID-19 pandemic have had, and could in the future have, a negative impact on the Company’s business and operations.

##### [Table of Contents](#toc)

In addition, management periodically assesses succession planning for certain key positions and reviews our workforce to identify high potential employees for future growth and development.

In 2021, we hired our first Director of Diversity, Equity and Inclusion to help strategize and focus Waters’ inclusivity efforts.

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The Company is providing its website address solely for the information of investors.

The Company does not intend the address to be an active link or to otherwise incorporate the contents of the website, including any reports that are noted in this annual report on Form 10-K as being posted on the website, into this annual report on Form 10-K (this “Annual Report”).

Investors and others should note that we may announce material information to our investors using our investor relations website (ir.waters.com), SEC filings, press releases, public conference calls and webcasts.

We use these channels, as well as social media, to communicate with our investors and the public about our Company, our business and other issues.

It is possible that the information that we post on these channels could be deemed to be material information.

We therefore encourage investors to visit these websites from time to time.

##### [Table of Contents](#toc)

This Annual Report, including the information incorporated by reference herein, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

| | • | | current global economic, sovereign and political conditions and uncertainties, including the effect of new or proposed tariff or trade regulations, changes in inflation and interest rates, the impacts and costs of war, in particular as a result of the ongoing conflict between Russia and Ukraine, and the possibility of further escalation resulting in new geopolitical and regulatory instability, the United Kingdom’s exit from the European Union and the Chinese government’s ongoing tightening of restrictions on procurement by government-funded customers; |

Business

Waters Corporation (the “Company,” “Waters

TM

” and together with HPLC, referred to as “LC”) and mass spectrometry (“MS”) technology systems and support products, including chromatography columns, other consumable products and comprehensive post-warranty service plans.

(“LC-MS”)

and sold as integrated instrument systems using common software platforms.

(“TA”) product line.

LC-MS

The most significant

end-use

, to accommodate the increased pressure and narrower chromatographic bands that are generated by these small and tightly packed particles.

In 2018, the Company introduced the ACQUITY ARC

Bio System, a versatile,

iron-free, bio-inert, quaternary

liquid chromatograph specifically engineered to improve bioseparation analytical methods.

the H-Class

PLUS, H-Class PLUS

Bio

and I-Class PLUS

systems, which incorporate foundational enhancements into the legacy systems.

MS-based

detectors, optimized for certain analyses.

In 2019, the Company introduced the ACQUITY

Advanced Polymer Chromatography

The

all-in-one

In 2020, the Company introduced the Waters Arc

High Performance Surface (“HPS”) technology.

MaxPeak

Company’s introduction of ACQUITY

FIT Cartridge technologies.

In 2020, Waters introduced ACQUITY

PREMIER Columns, a new family of premium

sub-2-micron

columns featuring MaxPeak

HPS technology.

analyte-to-surface

interactions.

time-of-flight

(“Tof”), magnetic sector and ion mobility technologies.

From time to time, the Company and its subsidiaries are involved in various [removed: litigation] [added: lawsuits, claims, investigations and proceedings covering a wide range of] matters [removed: arising] [added: that arise] in the ordinary course of business.

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.

Legal Proceedings

For the fiscal year ended December 31, [removed: 2021][added: 2022]

| Common [removed: Stock ,] [added: Stock,] par value $0.01 per share | | WAT | | New York Stock [removed: Exchange ,] [added: Exchange,] Inc. |

Yes [added: ☑ No ☐]

Yes ☐ No [added: ☑]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 [removed: days][added: days.]

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such [removed: files][added: files).]

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit [added: report.]

Yes [added: ☑ No] ☐

Indicate the number of shares outstanding of the registrant’s common stock as of February [removed: 18, 2022: 60,515,620][added: 24, 202]

Portions of the registrant’s definitive proxy statement that will be filed for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders are incorporated by reference in Part III.

ANNUAL REPORT ON FORM [added: 10-K]

| Item No. | | | | | | [removed: Page] [added: Page] | | |

| | 1A. | | | [Risk [removed: Factors](#tx208871_3)] [added: Factors](#txa412746_3)] | | | [removed: 16] [added: 14] | |

| | 1B. | | | [Unresolved Staff [removed: Comments](#tx208871_4)] [added: Comments](#txa412746_4)] | | | [removed: 25] [added: 26] | |

| | 3. | | | [Legal [removed: Proceedings](#tx208871_6)] [added: Proceedings](#txa412746_6)] | | | 27 | |

| | 4. | | | [Mine Safety [removed: Disclosures](#tx208871_7)] [added: Disclosures](#txa412746_7)] | | | 27 | |

| | 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#tx208871_10)] [added: Securities](#txa412746_9)] | | | 28 | |

| | 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#tx208871_12)] [added: Operations](#txa412746_11)] | | | 31 | |

| | 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#tx208871_13)] [added: Risk](#txa412746_12)] | | | [removed: 48] [added: 45] | |

| | 8. | | | [Financial Statements and Supplementary [removed: Data](#tx208871_14)] [added: Data](#txa412746_13)] | | | [removed: 51] [added: 47] | |

| | | | | [Report of Independent Registered Public Accounting Firm (PCAOB ID [removed: 238)](#tx208871_15)] [added: 238)](#txa412746_14)] | | | [removed: 52] [added: 48] | |

| | 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#tx208871_16)] [added: Disclosure](#txa412746_15)] | | | [removed: 102] [added: 96] | |

| | 9A. | | | [Controls and [removed: Procedures](#tx208871_17)] [added: Procedures](#txa412746_16)] | | | [removed: 102] [added: 96] | |

| | 9B. | | | [Other [removed: Information](#tx208871_18)] [added: Information](#txa412746_17)] | | | [removed: 102] [added: 96] | |

| | 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#tx208871_19)] [added: Inspections](#txa412746_18)] | | | [removed: 102] [added: 96] | |

| | | | | [removed: [PART III](#tx208871_20)] [added: [PART III](#txa412746_19)] | | | | |

| | 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#tx208871_21)] [added: Governance](#txa412746_20)] | | | [removed: 102] [added: 96] | |

| | 11. | | | [Executive [removed: Compensation](#tx208871_22)] [added: Compensation](#txa412746_21)] | | | [removed: 104] [added: 98] | |

| | 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#tx208871_23)] [added: Matters](#txa412746_22)] | | | [removed: 104] [added: 98] | |

| | 13. | | | [Certain Relationships and Related [removed: Transactions,] [added: Transactions] and Director [removed: Independence](#tx208871_24)] [added: Independence](#txa412746_24)] | | | [removed: 105] [added: 98] | |

| | 14. | | | [Principal Accountant Fees and [removed: Services](#tx208871_25)] [added: Services](#txa412746_25)] | | | [removed: 105] [added: 99] | |

| | 15. | | | [Exhibits and Financial Statement [removed: Schedules](#tx208871_27)] [added: Schedules](#txa412746_27)] | | | [removed: 106] [added: 100] | |

| | 16. | | | [Form 10-K [removed: Summary](#tx208871_28)] [added: Summary](#txa412746_28)] | | | [removed: 110] [added: 103] | |

##### [Table of Contents](#toc)

34 Maple Stree

Yes ☑ No ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to

§240.10D-1(b).

Yes ☐ No ☑

of the registrant as of July 1, 2022: $20,209,471,189.

3: 58,943,567

##### [Table of Contents](#toc)

| | | | | [PART I](#txa412746_1) | | | | |

| | 1. | | | [Business](#txa412746_2) | | | 1 | |

| | 2. | | | [Properties](#txa412746_5) | | | 26 | |

| | | | | [PART II](#txa412746_8) | | | | |

| | 6. | | | [Reserved](#txa412746_10) | | | 31 | |

| | | | | [PART IV](#txa412746_26) | | | | |

| | | | | [Signatures](#txa412746_29) | | | 104 | |

##### [Table of Contents](#toc)

34 Maple Street

☑ No ☐

).

| | | | | | | |

report.

No

of the registrant as of July 3, 202

: $21,855,696,546.

10-K

| | | | | [PART I](#tx208871_1) | | | | |

| | 1. | | | [Business](#tx208871_2) | | | 3 | |

| | 2. | | | [Properties](#tx208871_5) | | | 26 | |

| | | | | [PART II](#tx208871_9) | | | | |

| | 6. | | | [Reserved](#tx208871_11) | | | 31 | |

| | | | | [Information About Our Executive Officers](#tx208871_8) | | | 102 | |

| | | | | [PART IV](#tx208871_26) | | | | |

| | | | | [Signatures](#tx208871_29) | | | 111 | |

Unresolved Staff Comments

Waters Corporation operates 19 United States facilities and [removed: 69] [added: 70] international facilities, including field offices.

[removed: Primary] [added: *Primary] Facility Locations [removed: (1)][added: (1)*]

| Location | | [removed: Function (2) | | Owned/Leased] [added: Function (2)] | | [added: Owned/Leased] |

| Golden, CO | | M, R, S, D, A | | [removed: |] Leased | [removed: |]

| New Castle, DE | | M, R, S, D, A | | [removed: |] Owned | [removed: |]

| Franklin, MA | | D | | [removed: |] Leased | [removed: |]

| Milford, MA | | M, R, S, A | | [removed: |] Owned | [removed: |]

| Taunton, MA | | M, R | | [removed: |] Owned | [removed: |]

| Cambridge, MA | | R, S | | [removed: |] Leased | [removed: |]

| Eden Prairie, MN | | M, R, S, D, A | | [removed: |] Leased | [removed: |]

| Nixa, MO | | M, S, D, A | | [removed: |] Leased | [removed: |]

| Lindon, UT | | M, R, S, D, A | | [removed: |] Leased | [removed: |]

| Beijing, China | | S, A | | [removed: |] Leased | [removed: |]

| Shanghai, China | | [added: R,] S, A | | [removed: |] Leased | [removed: |]

| Solihull, England | | M, A | | [removed: |] Owned | [removed: |]

| Wilmslow, England | | M, R, S, D, A | | [removed: |] Owned | [removed: |]

| St. Quentin, France | | S, A | | [removed: |] Leased | [removed: |]

| [removed: Huellhorst,] [added: Hüllhorst,] Germany | | M, R, S, D, A | | [removed: |] Owned | [removed: |]

| Hong Kong | | S, A | | [removed: |] Leased | [removed: |]

| Wexford, Ireland | | M, R, D, A | | [removed: |] Owned | [removed: |]

| Bangalore, India | | M, S, D, A | | [removed: |] Owned | [removed: |]

| Etten-Leur, Netherlands | | S, D, A | | [removed: |] Owned | [removed: |]

| Brasov, Romania | | R, A | | [removed: |] Leased | [removed: |]

| Singapore | | R, S, D, A | | [removed: |] Leased | [removed: |]

The Company operates and maintains 9 field offices in the United States and [removed: 56] [added: 57] field offices abroad in addition to sales offices in the primary facilities listed above.

[removed: Field] [added: *Field] Office Locations [removed: (3)][added: (3)*]

| | | | | |

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

##### [Table of Contents](#toc)

| United States | | International | | | | |

Properties

| [removed: Item 5: Market] [added: Item 5:] | [added: *Market] for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities] [added: Securities*] |

The Company’s common stock is registered under the [removed: Securities] Exchange Act [removed: of 1934, as amended (the “Exchange Act”),] and is listed on the New York Stock Exchange under the symbol “WAT”.

As of February [removed: 19, 2022,] [added: 24, 2023,] the Company had 75 common stockholders of record.

The Company has not made any sales of unregistered equity securities in the years ended December 31, [removed: 2021, 2020 or 2019.][added: 2022, 2021 and 2020.]

[removed: The] [added: *The] following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act [removed: of 1933, as amended (“Securities Act”),] or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such [removed: filing.][added: filing.*]

The following graph compares the cumulative total return on $100 invested as of December 31, [removed: 2016] [added: 2017] (the last day of public trading of the Company’s common stock in fiscal year [removed: 2016)] [added: 2017)] through December 31, [removed: 2021] [added: 2022] (the last day of public trading of the common stock in fiscal year [removed: 2021)] [added: 2022)] in the Company’s common stock, the NYSE Market Index, the SIC Code 3826 Index and the S&P 500 Index.

COMPARISON OF CUMULATIVE TOTAL RETURN SINCE DECEMBER 31, [removed: 2016][added: 2017]

[removed: ][added: ]

| | | [removed: 2016] [added: 2017] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2019] [added: 2020] | | | | [removed: 2020] [added: 2021] | | | | [removed: 2021] [added: 2022] | | |

The following table provides information about purchases by the Company during the [added: last] three months [removed: ended December 31, 2021] of [added: 2022 of] equity securities registered by the Company under the Exchange Act (in thousands, except per share data):

| Period | | [removed: Total] [added: Total] Number of Shares Purchased [removed: (1)] [added: (1)] | | | | [removed: Average] [added: Average] Price Paid per [removed: Share] [added: Share] | | | | [removed: Total] [added: Total] Number of Shares Purchased as Part of Publicly Announced [removed: Programs] [added: Programs] | | | | [removed: Maximum] [added: Maximum] Dollar Value of Shares that May Yet Be Purchased Under the Programs [removed: (2)] [added: (2)] | | |

| (1) | The Company repurchased [removed: less than one] [added: approximately two] thousand shares of common stock at a cost of less than $1 million related to the vesting of restricted stock during the [added: last] three months [removed: ended December 31, 2021.] [added: of 2022.] |

| (2) | In January 2019, the Company’s Board of Directors authorized the Company to repurchase up to $4 billion of its outstanding common stock in open market or private transactions over a two-year period. This program replaced the remaining amounts available under the pre-existing authorization. In December 2020, the Company’s Board of Directors authorized the extension of the share repurchase program through January 21, 2023. [added: In December 2022, the Company’s Board of Directors amended and extended this repurchase program’s term by one year such that it shall now expire on January 21, 2024 and increases the total authorization level to $4.8 billion, an increase of $750 million.] The size and timing of these purchases, if any, will depend on our stock price and market and business conditions, as well as other factors. |

##### [Table of Contents](#toc)

##### [Table of Contents](#toc)

| WATERS CORPORATION | | | 100.00 | | | | 97.65 | | | | 120.94 | | | | 128.07 | | | | 192.87 | | | | 177.33 | |

| NYSE MARKET INDEX | | | 100.00 | | | | 91.05 | | | | 114.28 | | | | 122.26 | | | | 147.54 | | | | 133.75 | |

| SIC CODE INDEX | | | 100.00 | | | | 95.62 | | | | 125.72 | | | | 148.85 | | | | 191.58 | | | | 156.89 | |

| S&P 500 INDEX | | | 100.00 | | | | 109.38 | | | | 135.10 | | | | 179.41 | | | | 220.97 | | | | 147.77 | |

##### [Table of Contents](#toc)

| October 2, 2022 to October 29, 2022 | | | 174 | | | $ | 282.93 | | | | 174 | | | $ | 368,795 | |

| October 30, 2022 to November 26, 2022 | | | 147 | | | $ | 318.78 | | | | 147 | | | $ | 321,997 | |

| November 27, 2022 to December 31, 2022 | | | 154 | | | $ | 342.87 | | | | 154 | | | $ | 269,297 | |

| Total | | | 475 | | | $ | 313.46 | | | | 475 | | | $ | 269,297 | |

##### [Table of Contents](#toc)

Mine Safety Disclosures

| WATERS CORPORATION | | | 100.00 | | | | 143.75 | | | | 140.38 | | | | 173.86 | | | | 184.11 | | | | 277.25 | |

| NYSE MARKET INDEX | | | 100.00 | | | | 118.73 | | | | 108.10 | | | | 135.68 | | | | 145.16 | | | | 175.18 | |

| SIC CODE INDEX | | | 100.00 | | | | 121.83 | | | | 116.49 | | | | 153.17 | | | | 181.35 | | | | 233.41 | |

| S&P 500 INDEX | | | 100.00 | | | | 139.02 | | | | 142.44 | | | | 200.67 | | | | 275.70 | | | | 372.23 | |

| October 3, 2021 to October 30, 2021 | | | 145 | | | $ | 351.92 | | | | 145 | | | $ | 989,582 | |

| October 31, 2021 to November 27, 2021 | | | 141 | | | $ | 348.42 | | | | 141 | | | $ | 940,385 | |

| November 28, 2021 to December 31, 2021 | | | 162 | | | $ | 346.16 | | | | 162 | | | $ | 884,561 | |

| Total | | | 448 | | | $ | 348.74 | | | | 448 | | | $ | 884,561 | |

Reserved

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in [added: Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).]

[removed: ,] [added: Based on] our [added: evaluation under the framework in Internal Control — Integrated Framework (2013), our] management, including our chief executive officer and chief financial officer, concluded that our internal control over financial reporting was effective as of December 31, [removed: 2021.][added: 2022.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2021] [added: 2022] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included [removed: herein.]

We have audited the accompanying consolidated balance sheets of Waters Corporation and its subsidiaries (the “Company”) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity (deficit) and of cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included [removed: in the accompanying Management’s Report on Internal Control Over Financial Reporting.][added: i]

| [removed: /s/ PricewaterhouseCoopers] [added: /s/PricewaterhouseCoopers] LLP |

[removed: | February 24,] 2022 [removed: |]

| | | [added: 2022 | | | |] 2021 | | | | 2020 | | |

| Cash and cash equivalents [added: at beginning of period] | | [removed: $] | 501,234 | | | [removed: $] | 436,695 | | [added: | | 335,715 | |]

| Investments | | | [removed: 68,051] [added: 862] | | | | [removed: 6,451] [added: 68,051] | |

| Accounts receivable, net | | | [removed: 612,648] [added: 722,892] | | | | [removed: 573,316] [added: 612,648] | |

| Inventories | | | [removed: 356,095] [added: 455,710] | | | | [removed: 304,281] [added: 356,095] | |

| Other current assets | | | [removed: 90,914] [added: 103,910] | | | | [removed: 80,290] [added: 90,914] | |

| Total current assets | | | [removed: 1,628,942] [added: 1,763,903] | | | | [removed: 1,401,033] [added: 1,628,942] | |

| Property, plant and equipment, net | | | [removed: 547,913] [added: 582,217] | | | | [removed: 494,003] [added: 547,913] | |

| Intangible assets, net | | | [removed: 242,401] [added: 227,399] | | | | [removed: 258,645] [added: 242,401] | |

| Goodwill | | | [removed: 437,865] [added: 430,328] | | | | [removed: 444,362] [added: 437,865] | |

| Operating lease assets | | | [removed: 84,734] [added: 86,506] | | | | [removed: 93,252] [added: 84,734] | |

| Other assets | | | [removed: 153,077] [added: 191,100] | | | | [removed: 148,625] [added: 153,077] | |

| Total assets | | $ | [removed: 3,094,932] [added: 3,281,453] | | | $ | [removed: 2,839,920] [added: 3,094,932] | |

| Notes payable and debt | | $ | [removed: —] [added: 50,000] | | | $ | [removed: 150,000] [added: —] | |

| Accounts payable | | | [removed: 96,799] [added: 93,302] | | | | [removed: 72,212] [added: 96,799] | |

| Accrued employee compensation | | | [removed: 101,192] [added: 103,300] | | | | [removed: 72,166] [added: 101,192] | |

| Deferred revenue and customer advances | | | [removed: 227,561] [added: 227,908] | | | | [removed: 198,240] [added: 227,561] | |

| Current operating lease liabilities | | | [removed: 27,906] [added: 26,429] | | | | [removed: 27,764] [added: 27,906] | |

| Accrued income taxes | | | [removed: 61,278] [added: 132,545] | | | | [removed: 76,558] [added: 61,278] | |

| Accrued warranty | | | [removed: 10,718] [added: 11,949] | | | | [removed: 10,950] [added: 10,718] | |

| Other current liabilities | | | [removed: 155,054] [added: 140,304] | | | | [removed: 197,093] [added: 155,054] | |

| Total current liabilities | | | [removed: 680,508] [added: 785,737] | | | | [removed: 804,983] [added: 680,508] | |

| Long-term debt | | | [removed: 1,513,870] [added: 1,524,878] | | | | [removed: 1,206,515] [added: 1,513,870] | |

| Long-term portion of retirement benefits | | | [removed: 64,027] [added: 38,203] | | | | [removed: 72,620] [added: 64,027] | |

| Long-term income tax liabilities | | | [removed: 319,547] [added: 248,496] | | | | [removed: 357,493] [added: 319,547] | |

| Long-term operating lease liabilities | | | [removed: 59,623] [added: 62,108] | | | | [removed: 68,197] [added: 59,623] | |

| Other long-term liabilities | | | [removed: 89,803] [added: 117,543] | | | | [removed: 97,968] [added: 89,803] | |

| Total long-term liabilities | | | [removed: 2,046,870] [added: 1,991,228] | | | | [removed: 1,802,793] [added: 2,046,870] | |

| Total liabilities | | | [removed: 2,727,378] [added: 2,776,965] | | | | [removed: 2,607,776] [added: 2,727,378] | |

| Commitments and contingencies (Notes [removed: 6,] 9, 10, 11, 12, 13 and [removed: 17)] [added: 17 )] | | | | | | | | |

herein

n the accompanying Ma

nagement’s Report on Internal Control Over Financial Reporting.

As described in Note 2 to the consolidated financial statements, the Company recognizes revenue upon transfer of control of promised products to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products.

Certain of the Company’s customers have terms where control of the product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery.

Product sales totaled $2.0 billion for the year ended December 31, 2022.

The principal consideration for our determination that performing procedures relating to product revenue recognition is a critical audit matter is the high degree of auditor effort in performing procedures related to the Company’s product revenue recognition.

These procedures included testing the effectiveness of controls relating to product revenue recognition.

These procedures also included, among others, evaluating the recognition of revenue for a sample of transactions by obtaining and inspecting source documents, such as invoices, customer purchase orders, shipping documents, and obtaining and inspecting evidence of remittance of cash payment from customers, as applicable, related to product revenue.

| February 27, 2023 |

| Cash and cash equivalents | | $ | 480,529 | | | $ | 501,234 | |

| Acquired in-process research and development | | | 9,797 | | | | — | | | | — | |

| Net income | | $ | 707,755 | | | $ | 692,843 | | | $ | 521,571 | |

| Net income | | $ | 707,755 | | | $ | 692,843 | | | $ | 521,571 | |

| In-process research and development and other non-cash charges | | | 10,003 | | | | — | | | | — | |

| Proceeds from (investments in) equity investments, net | | | 8,903 | | | | (1,788 | ) | | | (6,143 | ) |

| Net income | | | — | | | | — | | | | — | | | | 707,755 | | | | — | | | | — | | | | 707,755 | |

| Stock options exercised | | | 192 | | | | 2 | | | | 31,676 | | | | — | | | | — | | | | — | | | | 31,678 | |

| Treasury stock | | | — | | | | — | | | | — | | | | — | | | | (626,061 | ) | | | — | | | | (626,061 | ) |

| Stock-based compensation | | | 112 | | | | 1 | | | | 42,316 | | | | — | | | | — | | | | — | | | | 42,317 | |

| Balance December 31, 2022 | | | 162,425 | | | $ | 1,624 | | | $ | 2,199,824 | | | $ | 8,508,587 | | | $ | (10,063,975 | ) | | $ | (141,572 | ) | | $ | 504,488 | |

imil

ar foreign regulatory authorities and agencies.

\-19

and the related economic uncertainty adversely impacted sales of the Company for the year ended December

%,

million and

year-end.

, $

million out of $

million out of $

In addition, $

million out of $

million out of $

off-balance

sheet credit exposure related to its customers.

| December 31, 2022 | | $ | 13,228 | | | $ | — | | | $ | 6,509 | | | $ | (5,426 | ) | | $ | 14,311 | |

experienced significant credit losses.

10.5

For the years ended December 31, 2022, 2021 and 2020, variable costs

Internal Control

— Integrated Framework (2013)

issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on our evaluation under the framework in

Goodwill Impairment Assessment

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s consolidated goodwill balance was $438 million as of December 31, 2021.

Management tests for goodwill impairment using a fair-value approach at the reporting unit level annually, or earlier, if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The Company performs an annual goodwill impairment assessment for its reporting units as of December 31 each year.

Under the impairment assessment, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to the amount of the excess carrying amount of the reporting unit over its fair value.

This impairment is limited to the total amount of goodwill allocated to that reporting unit.

The fair value of reporting units was estimated using a discounted cash flows technique, which includes certain management assumptions, such as estimated future cash flows, estimated growth rates and discount rates.

As disclosed by management, the estimated fair value of the reporting units significantly exceeds the carrying value.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment is a critical audit matter are the significant judgment by management when developing the fair value measurement of the reporting units, which in turn led to a high degree of auditor judgment and effort in performing procedures and evaluating management’s significant assumptions related to the estimated growth rates.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Company’s reporting units.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimates; (ii) evaluating the appropriateness of the discounted cash flow models; (iii) testing the completeness and accuracy of underlying data used in the models; and (iv) evaluating the significant assumptions used by management related to the estimated growth rates.

Evaluating management’s

assumptions related to estimated revenue growth rates involved evaluating whether the growth rates used by management were reasonable considering the current and past performance of the reporting units and whether those growth rates were consistent with evidence obtained in other areas of the audit.

| Effect of the 2017 Tax Cuts and Jobs Act | | | — | | | | — | | | | (3,229 | ) |

| Investment in unaffiliated company | | | (1,788 | ) | | | (6,143 | ) | | | (8,843 | ) |

| Cash and cash equivalents at beginning of period | | | 436,695 | | | | 335,715 | | | | 796,280 | |

| Balance December 31, 2018 | | | 160,472 | | | $ | 1,605 | | | $ | 1,834,741 | | | $ | 5,995,205 | | | $ | (6,146,322 | ) | | $ | (117,971 | ) | | $ | 1,567,258 | |

| Net income | | | — | | | | — | | | | — | | | | 592,198 | | | | — | | | | — | | | | 592,198 | |

| Stock options exercised | | | 406 | | | | 4 | | | | 45,715 | | | | — | | | | — | | | | — | | | | 45,719 | |

| Treasury stock | | | — | | | | — | | | | — | | | | — | | | | (2,466,254 | ) | | | — | | | | (2,466,254 | ) |

| Stock-based compensation | | | 109 | | | | 1 | | | | 38,301 | | | | — | | | | — | | | | — | | | | 38,302 | |

pandemic has caused significant volatility and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

continued

The Company adopted new accounting guidance regarding the accounting for credit losses as of January 1, 2020 using a modified retrospective transition approach that was applied to the trade receivable balance as of January 1, 2020.

This new accounting guidance required the Company to move from an incurred loss model to a current expected credit loss (“CECL”) model.

Upon adoption, the Company recorded a net decrease of approximately $1 million to the Company’s stockholders’ deficit as of January 1, 2020.

, 2020

and 2019

balances are calculated using the CECL method and the December 31

, 2019

balance is calculated using the incurred loss method under legacy GAAP:

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

| December 31, 2019 | | $ | 7,663 | | | $ | — | | | $ | 4,701 | | | $ | (2,804 | ) | | $ | 9,560 | |

certain off-shore earnings

referred to as the Global

Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure

[added: *Evaluation of Disclosure] Controls and [removed: Procedures][added: Procedures*]

The Company’s chief executive officer and chief financial officer (principal executive officer and principal financial officer), with the participation of management, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in [added: Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this annual report on Form 10-K.]

Based on this evaluation, the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, [removed: 2021] [added: 2022] (1) to ensure that information required to be disclosed by the Company, including its consolidated subsidiaries, in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its chief executive officer and chief financial officer, to allow timely decisions regarding the required disclosure and (2) to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

[removed: Management’s] [added: *Management’s] Annual Report on Internal Control Over Financial [removed: Reporting][added: Reporting*]

See Management’s Report on Internal Control Over Financial Reporting in Item 8 on page [removed: 51] [added: 47] of this [removed: Form][added: Annual Report.]

[removed: Report] [added: *Report] of the Independent Registered Public Accounting [removed: Firm][added: Firm*]

See the report of PricewaterhouseCoopers LLP in Item 8 beginning on page [removed: 52] [added: 48] of this [removed: Form][added: Annual Report.]

[removed: Changes] [added: *Changes] in Internal Control Over Financial [removed: Reporting][added: Reporting*]

[added: No change was identified in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)] under the Exchange Act) during the quarter ended December 31, [removed: 2021] [added: 2022] that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Rules 13a-15(e)

and

15d-15(e)

under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this annual report on Form

10-K.

No change was identified in the Company’s internal control over financial reporting (as defined in

Rules 13a-15(f)

15d-15(f)

Other Information

| [removed: Item 10:] [added: Item 10:] | [removed: Directors,] [added: *Directors,] Executive Officers and Corporate [removed: Governance] [added: Governance*] |

Dr. Udit Batra, [removed: 51,] [added: 52,] was appointed a Director of the Company as well as President and CEO on September 1, 2020.

[removed: He most recently served as Chief Executive Officer of the Life Science business of Merck KGaA,] Darmstadt, Germany, which operates as MilliporeSigma in the United States and Canada, and as a member of its Executive Board, roles he held from 2014 and 2016, respectively, through July 2020.

[added: Prior to that, Dr. Batra] served as President and Chief Executive Officer of Merck KGaA, Darmstadt, Germany’s Consumer Health business.

Dr. Batra also served at the global consultancy McKinsey & Company across the healthcare, consumer and [added: non-profit sectors.]

Jianqing Bennett, [removed: 52,] [added: 53,] was appointed Senior Vice President of TA Instruments Division on May 1, 2021.

Amol Chaubal, [removed: 46,] [added: 47,] was appointed Chief Financial [removed: Officers] [added: Officer] of Waters Corporation on May 12, 2021.

[removed: Belinda Hyde, 51,] [added: Pratt, 53,] was appointed Senior Vice President, [removed: Global Human Resources of] Waters [removed: Corporation in January] [added: Division, on May 1,] 2021.

Information regarding the Company’s directors, any material changes to the process by which security holders may recommend nominees to the Board of Directors and the information required by the Item will be contained in our definitive proxy statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders, to be filed with the SEC not later than 120 days after the close of business of the fiscal year and is incorporated in this report by reference (the [removed: “2022] [added: “2023] Proxy Statement”), under the headings “Election of Directors”, “Directors Meetings and Board Committees”, “Corporate Governance”, “Report of the Audit Committee of the Board of Directors” and “Compensation of Directors and Executive Officers”.

Information regarding compliance with Section 16(a) of the Exchange Act is contained in the [removed: 2022] [added: 2023] Proxy Statement, under the heading “Delinquent Section 16(a) Reports”.

Information regarding the Company’s Audit Committee and Audit Committee Financial Expert is contained in the [removed: 2022] [added: 2023] Proxy Statement, under the headings “Report of the Audit Committee of the Board of Directors” and “Directors Meetings and Board Committees”.

The Company has adopted a Global Code of Business Conduct & Ethics (the “Code”) that applies to all of the Company’s employees (including its executive officers) and directors and that is in compliance with Item 406 of Regulation [added: S-K.]

In addition, the Code is available on the Company’s website, [added: https://www.waters.com, under the caption “Corporate Governance”.]

[removed: The Company intends to satisfy] the [removed: disclosure requirement regarding any amendment to, or waiver of a provision of, the] Code applicable to any executive officer or director by posting such information on its website.

The Company’s corporate governance guidelines and the charters of the audit committee, compensation committee and nominating and corporate governance committee of the Board of Directors are available on the Company’s website, [added: https://www.waters.com, under the caption “Corporate Governance”.]

| [removed: Item 11:] [added: Item 11:] | [removed: Executive Compensation] [added: *Executive Compensation*] |

This information is contained in the [removed: 2022] [added: 2023] Proxy Statement, under the headings “Compensation of Directors and Executive Officers”, “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report”.

He most recently served as Chief Executive Officer of the Life Science business of Merck KGaA,

##### [Table of Contents](#toc)

The Company intends to satisfy the disclosure requirement regarding any amendment to, or waiver of a provision of,

##### [Table of Contents](#toc)

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

| --- | --- |

Prior to that, Dr. Batra

non-profit

sectors.

Keeley Aleman, 45, was appointed Senior Vice President, General Counsel and Secretary in October of 2019.

Ms. Aleman joined Waters Corporation in 2006 as the Assistant General Counsel and held various legal roles focusing on business transactions, commercial strategies, international development, compliance, corporate governance and organizational matters.

Prior to joining Waters Corporation she held corporate associate positions at Goodwin Procter, LLP and Testa, Hurwitz & Thibeault, LLP.

She is responsible for all aspects of the Global Human Resources function including talent management, total rewards, HR business partners, HR operations and technology, employee engagement and diversity and inclusion.

Prior to joining Waters, Ms. Hyde served as the Chief Human Resources Officer for SPX FLOW, from July 2015 to December 2020, and Schnitzer Steel.

She has also held leadership roles in business and cultural transformation, executive development, talent management, compensation, benefits, training, internal communications and business partner support at companies such as Caltex Petroleum, Dell Technologies, Invitrogen and Celanese Corporation.

Ms. Hyde earned a Bachelor of Arts in psychology from the University of Texas, as well as both a master’s degree and doctorate in industrial and organizational psychology from the University of Houston.

Pratt, 52, was appointed Senior Vice President, Waters Division, on May 1, 2021.

Dan Welch, 60, was appointed Senior Vice President, Global Operations in July 2020 and was Vice President of Global Supply Chain since July 2019 and Senior Director, Supply Chain Management since August 2017.

Mr. Welch joined Waters Corporation in May 2012 as General Manager and Senior Director of Manufacturing Operations.

Prior to joining Waters Corporation, he held senior operations and engineering positions at semiconductor and solar energy companies.

Such information is incorporated herein by reference.