For DSA, ~~we believe we are~~both our Discovery Services and Safety Assessment businesses have numerous competitors. Discovery has hundreds of competitors, as it is a highly competitive and fragmented market. Safety Assessment has seven main competitors; one is part of ~~the two largest providers of preclinical services (inclusive of discovery and safety assessment services)~~a large public company in the ~~world, based on net service revenue.Our commercial competitors for discovery~~U.S.; one is a privately held company in the U.K.; one is a public company in China; two are privately held companies in the U.S.; one is privately held in Canada; and ~~safety assessment consist of both publicly~~one is privately held and privately owned companies, and it is estimated that the top ten participants (including us) account for a significant portion of the global outsourced discovery and safety assessment market, with the rest of the market remaining highly fragmented.in France. Our DSA segment also competes with in-house departments of pharmaceutical and biotechnology companies, universities, and teaching hospitals.

For Manufacturing, each of our underlying businesses has several competitors. ~~Biologics has three main~~In addition to many smaller competitors, ~~all of which are public companies - one in the U.S., one in China and one in the EU. Avian has two main competitors both of which are privately held (one in the U.S. and one in the EU). EMD~~Biologics has five main competitors, of which ~~four~~two are public companies in Europe, one is a private company in the U.S., one is a public company in China, and one is a public company in the U.S. Avian has one main competitor to its SPF eggs business, which is privately held in Europe, and numerous competitors for services provided through our specialized avian laboratory. Microbial Solutions has five main competitors, of which three are public companies in Europe and two are privately held in the U.S. Contract Manufacturing has five main competitors, of which two are public companies in the EUU.S. and ~~one is~~three are privately held in ~~the U.S.~~

We believe that the barriers to entry in a majority of our business units are generally high and present a significant impediment for new market participants, particularly in those areas which require substantial capital expenditures, trained and specialized personnel, and mandate GLP-compliant practices.Europe.

Industry Support and Animal Welfare

One of our core values is a concern for, and commitment to, animal welfare. We have been in the forefront of animal welfare improvements in our industry, and continue to show our commitment with special recognition programs for employees who demonstrate an extraordinary commitment in this critical aspect of our business. We created our own Humane Care Initiative, which is directed by our Animal Welfare and Training Group. The goal of the initiative is to assure that we continue as a worldwide leader in the humane care of laboratory animals and implementation of the 3Rs (Replacement, Reduction and Refinement). Laboratory animals are an important resource that further our knowledge of living systems and contribute to the discovery of life-saving drugs and procedures. We work hand-in-hand with the scientific community to understand how living conditions, handling procedures and stress play a role in the quality and efficiency of research. As ~~animal caregivers and~~ researchers, we are responsible to our clients and the public for the health and well-being of the animals in our care.

We are firmly committed to the 3Rs and ~~help~~ to ~~reduce~~reducing the number of animals used by emphasizing health and genetic integrity to decrease study data variability. Whenever possible, we use technological advances such as new diagnostic tests for screening pathogens in laboratory rodents, microsampling and in vitro assays. We also partner with customers to develop study designs decreasing the number of animals needed and suggesting pilot studies where appropriate. We also maintain a quarterly award recognizing our employees’ efforts to continually implement the 3Rs at our sites globally.

We support a wide variety of organizations and individuals working to further animal welfare as well as the interests of the biomedical research community. We fund scholarships to laboratory animal training programs, provide financial support to non-profit institutions that educate the public about the benefits of animal research and provide awards and prizes to outstanding leaders in the laboratory animal medicine field and the supporters of 3Rs.

Employees

As of December ~~27, 2014,~~31, 2016, we had approximately ~~7,900~~11,000 employees (including approximately ~~700~~1,200 science professionals with advanced degrees, including Ph.D.s, D.V.M.s and M.D.s). Our employees are not unionized in the ~~United States, although employees are represented by unions or works councils~~U.S. Employees at some of our European facilities are represented by works councils and/or unions, which is consistent with local customs for our industry. We believe we have good relationships with our employees, based on a number of factors including employee retention and ~~feedback.~~survey results.

Backlog

Our backlog for our RMS, DSA and Manufacturing reportable segments was ~~$115.7~~$88.0 million, ~~$310.5~~$551.8 million and ~~$27.5~~$39.5 million, respectively, atas of December ~~27, 2014,~~31, 2016, as compared to ~~$138.7~~$106.6 million, ~~$203.1~~$327.8 million and ~~$28.1~~$36.2 million, respectively, atas of December ~~28, 2013.~~26, 2015. Related services are performed over varying durations, from short to extended periods of time, which may be as long as several years. We maintain an order backlog to track anticipated revenue from studies and projects that either have not started, but are anticipated to begin in the near future, or are in process and have not been completed. We only recognize a

study or project in backlog after we have received written evidence of a client's intention to proceed. Canceled studies or projects are removed from backlog.

We believe our aggregate backlog as of any date is not necessarily a meaningful indicator of our future results for a variety of reasons. First, studies vary in duration (i.e., some studies or projects that are included in ~~2014~~December 31, 2016 backlog may be completed in ~~2015,~~2017, while others may be completed in later years). Second, the scope of studies or projects may change, which may either increase or decrease their value. Third, studies or projects included in backlog may be subject to bonus or penalty payments. Fourth, studies or projects may be terminated or delayed at any time by the client or regulatory authorities for a number of reasons, including the failure of a drug to satisfy safety and efficacy requirements, or a sponsor making a strategic decision that a study or service is no longer necessary. Delayed contracts remain in our backlog until a determination of whether to continue, modify, or cancel the study has been made. We cannot provide any assurance that we will be able to realize all or most of the net revenues included in backlog or estimate the portion to be filled in the current year.

Regulatory Matters

~~Regulatory Matters~~

As our business operates in a number of distinct operating environments and in a variety of locations worldwide, we are subject to numerous, and sometimes overlapping, regulatory environments.

The Animal Welfare Act (AWA) governs the care and use of certain species of animals used for research in the ~~United States~~U.S. other than laboratory rats, mice and chickens. As a result, most of our U.S. small animal research models activities and our avian vaccine services operations are not subject to regulation under the AWA. For regulated species, the AWA and the associated Animal Care regulations require producers and users of regulated species to provide veterinary care and to utilize specific husbandry practices such as cage size, shipping conditions, sanitation and ~~for certain species,~~ environmental enrichment to assure the welfare of these animals. Separately, facilities using live vertebrate animals in research funded by the U.S. Public Health Service (PHS) must also adhere to the PHS Policy on Humane Care and Use of Laboratory Animals and follow the Guide for the Care and Use of Laboratory Animals produced by the Institute for Laboratory Animal Research.

We comply with licensing and registration requirement standards set by the United States Department of Agriculture (USDA) and similar agencies in other countries such as the European Union, China, Japan, and Canada for the care and use of regulated species. Our animal production facilities in the U.S., our DSA facilities in the U.S., and Canada, and most of our DSA and RMS sites in the ~~European Union~~Europe are accredited by the Association for Assessment and Accreditation of Laboratory Animal Care International, a private, nonprofit, international organization that promotes the humane treatment of animals in science through voluntary accreditation and assessment programs.

Our import and export of animals and our operations in foreign countries are subject to international agreements and conventions, as well as a variety of national, regional, and local laws and regulations, which establish the standards for the humane treatment, care, handling, and transport of animals by dealers and research facilities.

We conduct ~~nonclinical~~non-clinical safety assessment studies to support the submissions for approval or licensing of our clients' products throughout the world. Many of these studies must comply with national statutory or regulatory requirements for Good Laboratory Practice (GLP). GLP regulations describe a quality system for the organizational process and the conditions under which ~~nonclinical~~non-clinical studies are planned, performed, monitored, recorded, reported and archived. GLP compliance is required by such regulatory agencies as the FDA, United States Environmental Protection Agency, European Medicines Agency, Medicines and Healthcare Products Regulatory Agency in the United Kingdom (U.K.), Health Products Regulatory Authority in Ireland, Health Canada and other similar ~~agencies~~monitoring authorities in the countries where we operate. GLP requirements are significantly harmonized throughout the world and our laboratories are capable of conducting studies in compliance with all necessary requirements.

Our Manufacturing ~~Support~~ businesses produce endotoxin test kits, reagents, cell banks used in research and biopharmaceutical production, clinical trial vaccines, ~~and~~ vaccine support products and provided GMP contract manufacturing of clinical and marketed products. Additionally, several of our laboratories conduct analytical testing such as identity, stability, sterility and potency testing in support of our clients' manufacturing ~~programs.~~programs working with our clients to fulfill their validation requirements as applicable. These activities are subject to regulation and consequently require these businesses to be inspected by the FDA and other national regulatory agencies under their respective current Good Manufacturing Practice (cGMP) regulations. These regulations require that we manufacture our products or perform testing in a prescribed manner with respect to cGMP compliance, and maintain records of our manufacturing, testing and control activities. In addition, the specific activities of some of our businesses require us to hold specialized licenses for the manufacture, distribution and/or marketing of particular ~~products~~products.

All of our sites are subject to licensing and regulation under international treaties and conventions, including national, regional and local laws relating toto:

the surface and air transportation of chemicals, biological reagents and laboratory specimens;

the handling, use, storage, and disposal of chemicals (including narcotics and psychotropic drugs)~~. Biological~~, biological reagents, laboratory specimens, hazardous waste, and radioactive materials;

the procurement, handling, use, storage, and disposal of human cells, tissues, and cellular and tissue based products for research purposes;

the safety and health of employees and visitors to our facilities; and

protection of the environment and general public.

ToGlobal compliance programs are centralized under a single group responsible for global quality programs and systems to ensure that all business sectors comply with applicable statutory and regulatory requirements and satisfy our ~~client~~clients’ expectations for

quality and regulatory compliance, we established a corporate regulatory affairs and compliance organization that oversees our corporate quality system and conducts regular audits of our quality assurance functions for all of our GLP, Good Clinical Practices and cGMP facilities.compliance. To assure these compliance obligations, we established quality assurance units ~~(QAU)~~(QAUs) in each of our ~~nonclinical laboratories.~~regulated businesses that require independent oversight. The QAUs operate independently from those individuals that direct and conduct studies, manufacturing or ~~manufacturing studies.~~analytical testing that studies that supports manufacturing.

Intellectual Property

We develop and implement computer software and technically derived procedures and products intended to maximize the quality and effectiveness of our services. Although our intellectual property rights are valuable to our success, we believe that such factors as the technical expertise, proprietary know-how, ability, and experience of our professionals are more important, and that, overall, these technological capabilities provide significant benefits to our clients. Where we consider it appropriate, steps are taken to protect our know-how through confidentiality agreements and registrations. In addition, we in-license technology and products from other companies when it enhances ~~both~~ our product and services businesses. In the future, in-licensing may become a larger initiative to enhance our offerings, particularly as we focus on therapeutic area expertise. With the exception of technology related to our ~~EMD~~Microbial Solutions testing business, ~~including Accugenix and the Endosafe-PTS,~~ we have no patents, trademarks, licenses, franchises, or concessions which are material and upon which any of our products or services are dependent.

Corporate Governance

We are committed to operating our business with integrity and accountability. We strive to meet or exceed all of the corporate governance standards established by the New York Stock Exchange, the ~~Securities and Exchange Commission,~~SEC, and the Federal government as implemented by the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Eight of the nine members of our Board of Directors are independent and have no significant financial, business, or personal ties to us or management and all of our board committees (with the exception of our Executive Committee and our Strategic Planning and Capital Allocation Committee) are composed entirely of independent directors. The Board adheres to our Corporate Governance Guidelines and a Code of Business Conduct and Ethics which has been communicated to employees and posted on our website. We are diligent in complying with established accounting principles and are committed to providing financial information that is transparent, timely, and accurate. We have a Related Person Transactions Policy designed to promote the timely identification of such transactions and to ensure we give appropriate consideration to any real or perceived conflicts in our commercial arrangements. We have a global process through which employees, either directly or anonymously, can notify management (and the Audit Committee of the Board of Directors) of alleged accounting and auditing concerns or violations including fraud. Our internal Disclosure Committee meets regularly and operates pursuant to formal disclosure procedures and guidelines which help to ensure that our public disclosures are accurate and timely. Copies of our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Related Person Transactions Policy are available on our website at ~~www.criver.com under~~www.ir.criver.com.

Executive Officers of the ~~“Investor Relations-Corporate Governance” caption.~~Registrant (pursuant to Instruction 3 to Item 401(b) of Regulation S-K)

Below are the names, ages and principal occupations of each of our current executive officers. All such persons have been elected to serve until their successors are elected and qualified or until their earlier resignation or removal.

James C. Foster, age 66, joined us in 1976 as General Counsel. During his tenure, Mr. Foster has held various staff and managerial positions, and was named our President in 1991, Chief Executive Officer in 1992 and our Chairman in 2000.

William D. Barbo, age 56, joined us in 1982 as a laboratory technician. Between 1982 and 2005, Mr. Barbo served in a variety of positions of increasing responsibilities. He was named Corporate Vice President of Research Models and Services in 2005, Corporate Senior Vice President of Global Sales and Marketing in 2010, and Corporate Executive Vice President and Chief Commercial Officer in October 2016.

David P. Johst, age 55, joined us in 1991 as Corporate Counsel and was named Vice President, Human Resources in 1995. He became Vice President, Human Resources and Administration in 1996, a Senior Vice President in 1999, and a Corporate Executive Vice President in 2005. He currently serves as our General Counsel and Chief Administrative Officer and is responsible for overseeing our corporate legal function, Human Resources department, and several other corporate staff departments. Prior to joining us, Mr. Johst was in private practice at the law firm of Hale and Dorr (now WilmerHale). Mr. Johst currently serves as a trustee of Mt. Ida College.

Davide Molho, age 47, joined our Italian operations in 1999 and was promoted to Director of Operations for RMS Italy in 2002. In 2005, his role was expanded to include French RMS operations and in 2007, he became Corporate Vice President, European Research Models and Services with responsibility for all European RMS operations. In July 2009, Dr. Molho was promoted to Corporate Senior Vice President, North American and European Research Models and Services. He was subsequently promoted to Corporate Executive Vice President and President, Global Research Models and Services in

December 2010. In 2011, Dr. Molho was named Corporate Executive Vice President, North America Operations and in December 2013, he was named Corporate Executive Vice President and President, Global RMS and DSA Operations.

David R. Smith, age 51, has served as our Corporate Executive Vice President and Chief Financial Officer since August 2015. He joined us as Corporate Vice President, Discovery Services through our acquisition of Argenta and BioFocus from Galapagos NV in March 2014 and was promoted to Corporate Senior Vice President, Global Discovery Services, in October 2014. At Galapagos, he served in various capacities, including as Chief Executive Officer of its Galapagos Services division and as Chief Financial Officer. Mr. Smith served as Chief Financial Officer for Cambridge University Hospitals from 2007 to 2013. Mr. Smith spent eight years at PricewaterhouseCoopers prior to joining AstraZeneca in 1997, where he spent the next nine years in various finance and business roles of increasingly greater responsibility.

Item 1A. Risk Factors

Set forth below, elsewhere in this Form 10-K and in other documents we file with the SEC are risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements contained in this Form 10-K. We note that factors set forth below, individually or in the aggregate, may cause our actual results to differ materially from expected and historical results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties.

The outsourcing trend in ~~preclinical~~non-clinical (discovery and safety assessment) stages of drug discovery and development may decrease, which could impair our growth.

Over the past decade, pharmaceutical and biotechnology companies have generally increased their outsourcing of ~~preclinical~~non-clinical research support activities, such as discovery and safety assessment. While many industry analysts expect the outsourcing trend to continue to increase for the next several years (although with different growth rates for different phases of drug discovery and development),decreases in such outsourcing may result in a diminished growth rate in the sales of any one or more of our service lines and may adversely affect our financial condition and results of operations. For additional discussion of the factors that we believe have recently been influencing outsourcing demand from our clients, please see the section entitled “Our Strategy” included elsewhere in this Form 10-K.

A reduction in research and development budgets at pharmaceutical and biotechnology companies may adversely affect our business.

Our clients include researchers at pharmaceutical and biotechnology companies. Our ability to continue to grow and win new business is dependent in large part upon the ability and willingness of the pharmaceutical and biotechnology industries to continue to spend on molecules in the ~~preclinical~~non-clinical phases of research and development (and in particular discovery and safety assessment) and to outsource the products and services we provide. Fluctuations in the expenditure amounts in each phase of the research and development budgets of these researchers and their organizations could have a significant effect on the demand for our products and services. Research and development budgets fluctuate due to changes in available resources, mergers of pharmaceutical and biotechnology companies, spending priorities (including available resources of our biotechnology clients, particularly those that are cash-negative, who may be highly focused on rationing their liquid assets in a challenging funding environment), general economic conditions, and institutional budgetary policies. Available funding for biotechnology clients in particular may be affected by the capital markets, investment objectives of venture capital investors, and priorities of biopharmaceutical industry sponsors.

Our business could be adversely affected by any significant decrease in drug research and development expenditures by pharmaceutical and biotechnology companies, as well as by academic institutions, government laboratories, or private foundations. ~~In particular, studies in recent years have indicated that a majority of academic researchers are anticipating reductions in their budgets.~~ Similarly, economic factors and industry trends that affect our clients in these industries also affect their research and development budgets and, consequentially, our business as well. The economic downturn has also negatively affected us to the extent that the spending by our global pharmaceutical clients has been directed towards their therapies in late-stage clinical rather than early-stage preclinical development as they work to replenish drug pipelines to offset the effect of patent expirations on sales. Furthermore, our clients (particularly larger biopharmaceutical companies) continue to search for ways to maximize the return on their investments with a focus on leaner research and development costs per drug candidate. For additional discussion of the factors that we believe have recently been influencing research and development budgets at our clients, please see the sections entitled “Our Strategy” and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Form 10-K.

A reduction or delay in government funding of research and development may adversely affect our business.

A portion of revenue in our RMS segment is derived from clients at academic institutions and research laboratories whose funding is partially dependent on both the level and timing of funding from government sources such as the U.S. National Institutes of Health (NIH) and similar domestic and international agencies, which can be difficult to forecast. Government

funding of research and development is subject to the political process, which is inherently fluid and unpredictable. Our ~~sales~~revenue may be adversely affected if our clients delay purchases as a result of uncertainties surrounding the approval of government budget proposals. Also, government proposals to reduce or eliminate budgetary deficits have sometimes included reduced allocations to the NIH and other government agencies that fund research and development activities. Other programs, such as homeland security or defense, or general efforts to reduce the federal budget deficit could be viewed by the U.S. government as a higher priority. These budgetary pressures may result in reduced allocations in the future to government agencies that fund research and development activities. ~~Although the Obama administration's stimulus packages in 2009 and 2010 included increases in NIH funding, NIH funding had otherwise remained fairly flat in recent years.~~ A reduction in government funding for the NIH or other government research agencies could adversely affect our business and our financial results. Also, there is no guarantee that NIH funding will be directed towards projects and studies that require use of our products and services.

~~Several of our product and service offerings are dependent on a limited source of supply, which if interrupted could adversely affect our business.~~

We depend on a limited international source of supply for certain products, such as large research models. Disruptions to their continued supply may arise from health problems, export or import laws/restrictions or embargoes, international trade regulations, foreign government or economic instability, severe weather conditions, increased competition amongst suppliers for models, disruptions to the air travel system, commercial disputes, supplier insolvency, or other normal-course or unanticipated events. Any disruption of supply could harm our business if we cannot remove the disruption or are unable to secure an alternative or secondary supply source on comparable commercial terms.

Changes in government regulation or in practices relating to the pharmaceutical or biotechnology industries, including potential ~~health care~~healthcare reform, could decrease the need for the services we provide.

Governmental agencies throughout the world, but particularly in the U.S., strictly regulate the drug development process. Our business involves helping pharmaceutical and biotechnology companies, among others, navigate the regulatory drug approval process. Accordingly, many regulations, and often new regulations, are expected to result in higher regulatory standards and often additional revenues for companies that service these industries. However, some changes in regulations, such as a relaxation in regulatory requirements or the introduction of streamlined or expedited drug approval procedures, or an increase in regulatory requirements that we have difficulty satisfying or that make our services less competitive, could eliminate or substantially reduce the demand for our services.

Although we believe we are currently in compliance in all material respects with national, regional, and local laws, as well as other accepted guidance used by oversight bodies (which include the USDA, the standards set by the International Air Transport Association, the Convention on International Trade in Endangered Species of Wild Fauna and Flora, U.S. Fish and Wildlife Service, The Centers for Disease Control, the Department of Transportation, the Department of State, the office of Laboratory Animal Welfare of NIH, the Drug Enforcement Agency, as well as numerous other ~~Canadian, European~~oversight agencies in Canada, Europe, and ~~Asian oversight agencies)~~Asia), failure to comply could subject us to denial of the right to conduct business, fines, criminal penalties, and other enforcement actions. In addition, if regulatory authorities were to mandate a significant reduction in safety assessment procedures which utilize laboratory animals (as has been advocated by certain groups), certain segments of our business could be materially adversely affected.

In March 2010, the U.S. Congress enacted ~~health care~~healthcare reform legislation intended over time to expand health insurance coverage and impose health industry cost containment measures. In June 2012, the U.S. Supreme Court upheld the constitutionality of this legislation. The Court’s decision allows implementation of key provisions impacting drug manufacturers going forward, including, but not limited to, (1) expansion of access to health insurance coverage, (2) expansion of the Medicaid program, (3) enactment of an industry fee on pharmaceutical companies, and (4) imposition of an excise tax on the sale of medical devices. Since the law and its implementation continue to face challenges in Congress and federal courts, and from certain state governments, opposition advocacy groups, and some small business organizations, as well as from the incoming president and his administration, we are uncertain as to the ultimate effects of this legislation on our business and are unable to predict what legislative proposals will be adopted in the future.

Implementation of ~~health care~~healthcare reform legislation may have certain benefits, but also may contain costs that could limit the profits that can be made from the development of new drugs. This could adversely affect research and development expenditures by pharmaceutical and biotechnology companies, which could in turn decrease the business opportunities available to us both in the U.S. and abroad. In addition, new laws or regulations may create a risk of liability, increase our costs, or limit our service offerings. Furthermore, if health insurers were to change their practices with respect to reimbursements for pharmaceutical products, our clients may spend less, or reduce their growth in spending on research and development.

~~The FDA is~~In addition, the recent presidential and congressional elections in the ~~process~~U.S. may result in significant changes in, and uncertainty with respect to, legislation, regulation and government policy. While it is not possible to predict whether and when any such changes will occur, changes at the local, state or federal level may significantly impact our domestic and foreign businesses and/or those of ~~reviewing~~our clients. Specific legislative and ~~modernizing~~regulatory proposals discussed during and after the ~~GLP regulations~~election that may have a material impact on us or our clients include, but are not limited to, ~~reflect current industry standards. As this may change some~~appeal or reform of the ~~GLP~~Health Care Reform Act; and modifications to international trade policy, public company reporting requirements, ~~the regulatory impact will not be known until the final regulations are issued.~~environmental regulation and antitrust enforcement.

We are at risk that changes in U.S. Government practices may negatively affect our business since it is a significant customer of ours. For example, in 2014, the National Cancer Institute (NCI) canceled a 10-year, $112 million contract that was originally initiated in 2006, which had two years remaining. Under the contract, we produced NCI research models for academic and government researchers. In an effort to mitigate the effect of the cancellation, we launched an outreach program to inform researchers that they could continue to obtain the NCI models from us, with no change in initial pricing or logistics. From a revenue standpoint, we received between $10 and $11 million annually to produce the models, and expect that we will retain approximately half of that amount from direct sales to researchers.

Contaminations in our animal populations can damage our inventory, harm our reputation for contaminant-free production, result in decreased sales and cause us to incur additional costs.

Our research models and fertile chicken eggs must be free of certain infectious agents such as certain viruses and bacteria because the presence of these contaminants can distort or compromise the quality of research results and could adversely impact human or animal health. The presence of these infectious agents in our animal production facilities and certain service operations could disrupt our contaminant-free research model and fertile egg production as well as our animal services businesses including GEMS, harm our reputation for contaminant-free production, and result in decreased sales.

~~Contaminations~~If they occur, contaminations typically require cleaning up, renovating, disinfecting, retesting, and restarting production or services. Such clean-ups result in inventory loss, clean-up and start-up costs, and reduced sales as a result of lost client orders and potentially credits for prior shipments. In addition to microbiological contaminations, the potential for genetic mix-ups or mis-matings also exists and

may require the restarting of the applicable colonies. While this does not require the complete clean-up, renovation, and disinfection of the barrier room, it would likely result in inventory loss, additional start-up costs and possibly reduced sales. Contaminations also expose us to risks that clients will request compensation for damages in excess of our contractual indemnification requirements. There also exists a risk that contaminations from models that we produce may affect our client's facilities, with similar impact to ~~them.~~them for which we could be liable for damages. In some cases, we may produce or import animals carrying infectious agents capable of causing disease in humans; and in the case of such a contamination or undiagnosed infection, there could be a possible risk of human exposure and infection.

We are also subject to similar contamination risks with respect to our large research models. While often we own these models, they may be maintained on our behalf at a site operated by the original provider. Accordingly, risk of contamination may be outside of our control, and we depend on the practices and protocols of third parties to ensure a contamination-free environment. A contamination may require extended CDC quarantine with subsequent reduced sales as a result of lost client orders as well as the potential for complete inventory loss and disinfection of the affected quarantine rooms. Furthermore, while we often negotiate for contractual risk indemnification, we may be exposed in the event of such contaminations if the third party does not fulfill its indemnification obligation or is unable to as a result of insolvency or other impediments.

All such contaminations described above are unanticipated and difficult to predict and could adversely impact our financial results. Many of our operations are comprised of complex mechanical systems which are subject to periodic failure, including aging fatigue. Such failures are unpredictable, and while we have made significant capital expenditures designed to create redundancy within these mechanical systems, strengthen our biosecurity, improve our operating procedures to protect against such contaminations, and replace impaired systems and equipment in advance of such events, failures and/or contaminations may still occur.

Any failure by us to comply with applicable regulations and related guidance could harm our reputation and operating results, and compliance with new regulations and guidance may result in additional costs.

Any failure on our part to comply with applicable regulations could result in the termination of ongoing research or the disqualification of data for submission to regulatory authorities. This could harm our reputation, our prospects for future work and our operating results. For example, the issuance of a notice of objectionable observations or a warning from the FDA based on a finding of a material violation by us for ~~Good Laboratory Practice~~GLP or ~~current Good Manufacturing Practice~~cGMP requirements could materially and adversely affect us. If our operations are found to violate any applicable law or other governmental regulations, we might be subject to civil and criminal penalties, damages and fines. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management's attention from the operation of our business and damage our reputation.

In addition, regulations and guidance worldwide concerning the production and use of laboratory animals for research purposes ~~continues~~continue to be updated. Notably, the European Directive 2010/63/EU requires new standards for animal housing and accommodations that require implementation by 2017. Some of these new standards require additional operating and capital expenses that will impact not only us and our industry competitors, but clients in the biomedical research community through both changes in the pricing of goods and services and changes in their own operations.

Similarly, guidance has been and continues to be developed for other areas that impact the biomedical research community on both a national and international basis including transportation, mandated contingency planning, euthanasia guidance, import and export requirements of biological materials, health monitoring requirements and the use of disinfectants.

We could experience a breach of the confidentiality of the information we hold or of the security of our computer systems.

We operate large and complex computer systems that contain significant amounts of client data. As a routine element of our business, we collect, analyze, and retain substantial amounts of data pertaining to the non-clinical studies we conduct for our clients. Unauthorized third parties could attempt to gain entry to such computer systems for the purpose of stealing data or disrupting the systems. We believe that we have taken appropriate measures to protect them from intrusion, and we continue to improve and enhance our systems in this regard, but in the event that our efforts are unsuccessful, we could suffer significant harm. Our contracts with our clients typically contain provisions that require us to keep confidential the information generated from these studies. In the event the confidentiality of such information was compromised, we could suffer significant harm.

Our revenue generating agreements contain termination and service reduction provisions or may otherwise terminate according to their term, which may result in less contract revenue than we anticipate.

Many of our agreements with both large and small clients, including those which underlie our strategic relationships with some of our more significant customers, provide for termination or reduction in scope with little or no notice. In addition, we sell our products and services to our competitors, and similarly they sell products and services to us. For instance, we have historically entered into, and currently are party to, contracts with certain of our competitors to distribute specialty research models in locations where our competitors may not have distribution capabilities.

Clients and/or competitors may elect to terminate their agreements with us for various reasons including:

the products being tested fail to satisfy safety requirements;

unexpected or undesired study results;

production problems resulting in shortages of the drug being tested;

a client's decision to forego or terminate a particular study;

establishment of alternative distribution channels by our competitors;

the loss of funding for the particular research study; or

general convenience/counterparty preference.

If a client or competitor terminates a contract with us, we are typically entitled under the terms of the contract to receive revenue earned to date as well as certain other costs and, in some cases, termination fees. Cancellation of a large contract or proximate delay, cancellation or conclusion of multiple contracts could materially adversely affect our business and, therefore, may adversely affect our operating results.

Many of our contracts are fixed price and may be delayed or terminated or reduced in scope for reasons beyond our control, or we may ~~under~~‑under‑price or overrun cost estimates with these contracts, potentially resulting in financial losses.

Many of our contracts provide for services on a fixed price or fee-for-service with a cap basis and, accordingly, we bear the financial risk if we initially under-price our contracts or otherwise overrun our cost estimates. In addition, these contracts may be terminated or reduced in scope either immediately or upon notice. Cancellations may occur for a variety of reasons, and often at the discretion of the client. The loss, reduction in scope or delay of a large contract or the loss or delay of multiple contracts could materially adversely affect our business, although our contracts frequently entitle us to receive the costs of winding down the terminated projects, as well as all fees earned by us up to the time of termination. Some contracts also entitle us to a predetermined termination fee and irrevocably committed costs/expenses.

~~We could experience a breach of the confidentiality of the information we hold or of the security~~Several of our ~~computer systems.~~product and service offerings are dependent on a limited source of supply, which if interrupted could adversely affect our business.

We ~~operate~~depend on a limited international source of supply for certain products, such as large ~~and complex computer systems that contain significant amounts~~research models. Disruptions to their continued supply may arise from health problems, export or import laws/restrictions or embargoes, international trade regulations, foreign government or economic instability, severe weather conditions, increased competition among suppliers for models, disruptions to the air travel system, activist campaigns, commercial disputes, supplier insolvency, or other normal-course or unanticipated events. Any disruption of ~~client data. As a routine element of~~supply could harm our business if we ~~collect, analyze~~cannot remove the disruption or are unable to secure an alternative or secondary supply source on comparable commercial terms.

If we are not successful in selecting and ~~retain substantial amounts of data pertaining to~~integrating the ~~preclinical studies~~businesses and technologies we ~~conduct for~~acquire, or in managing our ~~clients. Unauthorized third parties could attempt to gain entry to such computer systems for~~current and future divestitures, our business may suffer.

During the ~~purpose of stealing data or disrupting the systems. We believe that~~past fifteen years, we have ~~taken appropriate measures~~steadily expanded our business through numerous acquisitions. We plan to ~~protect them from intrusion, and we~~ continue to ~~improve~~acquire businesses and ~~enhance~~technologies and form strategic alliances. However, businesses and technologies may not be available on terms and conditions we find acceptable. We risk spending time and money investigating and negotiating with potential acquisition or alliance partners, but not completing transactions.

In April 2016, we acquired WIL Research, a premier provider of safety assessment and contract development manufacturing services to biopharmaceutical, agricultural, and industrial chemical companies worldwide. This transaction was our largest acquisition in over ten years.

Acquisitions and alliances involve numerous risks which may include:

difficulties in achieving business and financial success;

difficulties and expenses incurred in assimilating and integrating operations, services, products, technologies, or pre-existing relationships with our customers, distributors, and suppliers;

challenges with developing and operating new businesses, including those which are materially different from our existing businesses and which may require the development or acquisition of new internal capabilities and expertise;

potential losses resulting from undiscovered liabilities of acquired companies that are not covered by the indemnification we may obtain from the seller or the insurance we acquire in connection with the transaction;

loss of key employees;

the presence or absence of adequate internal controls and/or significant fraud in the financial systems ~~in this regard, but~~of acquired companies;

diversion of management's attention from other business concerns;

becoming subject to a more expansive regulatory environment;

acquisitions could be dilutive to earnings, or in the event of acquisitions made through the issuance of our common stock to the shareholders of the acquired company, dilutive to the percentage of ownership of our existing shareholders;

risks of not being able to overcome differences in foreign business practices, customs, and importation regulations, language, and other cultural barriers in connection with the acquisition of foreign companies;

new technologies and products may be developed which cause businesses or assets we acquire to become less valuable; and

risks that disagreements or disputes with prior owners of an acquired business, technology, service, or product may result in litigation expenses and diversion of our efforts are unsuccessful we could suffer significant harm. Our contracts with our clients typically contain provisions that require us to keep confidential the information generated from these studies. management's attention.

In the event that an acquired business, technology, or an alliance does not meet our expectations, our results of operations may be adversely affected.

Some of the ~~confidentiality~~same risks exist when we decide to sell a business, site, or product line. In addition, divestitures could involve additional risks, including the following:

difficulties in the separation of ~~such information was compromised,~~operations, services, products, and personnel;

diversion of management's attention from other business concerns; and

the need to agree to retain or assume certain current or future liabilities in order to complete the divestiture.

We continually evaluate the performance and strategic fit of our businesses. These and any divestitures may result in significant write-offs, including those related to goodwill and other intangible assets, which could have an adverse effect on our results of operations and financial condition. In addition, we ~~could suffer~~may encounter difficulty in finding buyers, or, alternative exit strategies at acceptable prices and terms, and in a timely manner. We may not be successful in managing these or any other significant ~~harm.~~risks that we encounter in divesting a business, site, or product line, and as a result, we may not achieve some or all of the expected benefits of the divestiture.

Impairment of goodwill or other intangible assets may adversely impact future results of operations.

We have intangible assets, including goodwill, ~~and other indefinite-lived intangibles~~ on our balance sheet due to our acquisitions of businesses. The initial identification and valuation of these intangible assets and the determination of the estimated useful lives at the time of acquisition involve use of management judgments and estimates. These estimates are based on, among other factors, ~~input from accredited valuation consultants, reviews~~projections of ~~projected future income~~ cash flows that arise from identifiable intangible assets of acquired businesses and ~~statutory regulations. The use of alternative estimates and assumptions might have increased or decreased the estimated fair value~~discount rates based on an analysis of our ~~goodwill~~weighted average cost of capital, adjusted for specific risks associated with the assets. Disruptions in global financial markets and deterioration of economic conditions could, among other things, impact the discount rate and other assumptions used in the valuations and actual cash flows arising from a particular intangible ~~assets that~~asset could ~~potentially~~vary from projected cash flows, which could imply different carrying values from those established at the dates of acquisition and which could result in ~~a different impact to our results~~impairment of ~~operations.~~such assets.

If the future growth and operating results of our business are not as strong as anticipated, overall macroeconomic or industry conditions deteriorate and/or our market capitalization declines, this could impact the assumptions used in ~~calculating~~establishing the ~~fair~~carrying value of goodwill or other ~~indefinite-lived intangibles.~~intangible assets. To the extent goodwill or other ~~indefinite-lived intangibles~~intangible assets are impaired, their carrying value will be written down to ~~its~~their implied fair ~~value~~values and a charge will be made to our income from continuing operations. Such an impairment charge could materially and adversely affect our operating results. As of December ~~27, 2014,~~31, 2016, the carrying amount of goodwill and other intangibles ~~was $500.0 million~~ on our consolidated balance ~~sheet.~~sheet was $1,182.0 million.

Our business is subject to risks relating to operating internationally.

A significant part of our revenue is derived from operations outside the U.S. Our international ~~revenues, which include revenues from our non-U.S. subsidiaries, have~~revenue represented approximately one-half of our total revenue in recent years.We expect that international ~~revenues~~revenue will continue to account for a significant percentage of our ~~revenues~~total revenue for the foreseeable future. There are a number of risks associated with our international business including:

foreign currencies we receive for sales and in which we record expenses outside the U.S. could be subject to unfavorable exchange rates with the U.S. dollar and reduce the amount of revenue and cash flow (and increase the amount of expenses) that we recognize and cause fluctuations in reported financial results;

certain contracts, particularly in Canada, are frequently denominated in currencies other than the currency in which we incur expenses related to those contracts, and where expenses are incurred in currencies other than those in which contracts are priced, fluctuations in the relative value of those currencies could have a material adverse effect on our results of operations;

general economic and political conditions in the markets in which we operate;

potential international conflicts, including terrorist acts;

potential trade restrictions, exchange controls, adverse tax consequences, and legal restrictions on the repatriation of funds into the U.S.;

difficulties and costs associated with staffing and managing foreign operations, including risks of work stoppages and/or strikes, as well as violations of local laws or anti-bribery laws such as the U.S. Foreign Corrupt Practices Act, the UK Bribery Act, and the ~~Organization for Economic Co-operation and Development (OECD)~~OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions;

unexpected changes in regulatory requirements;

the difficulties of compliance with a wide variety of foreign laws and regulations;

unfavorable labor regulations in foreign jurisdictions;

potentially negative consequences from changes in or interpretations of USU.S. and foreign tax laws;

exposure to business disruption or property damage due to geographically unique natural disasters;

longer accounts receivable cycles in certain foreign countries; and

import and export licensing requirements.

These risks, individually or in the aggregate, could have an adverse effect on our results of operations and financial condition. For example, as mentioned above, we are subject to compliance with the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to foreign

government officials for the purpose of obtaining or retaining business. While our employees, distributors and agents are required to comply with these laws, we cannot be sure that our internal policies and procedures will always protect us from violations of these laws despite our commitment to legal compliance and corporate ethics. The occurrence or allegation of these types of risks may adversely affect our business, performance, prospects, value, financial condition, and results of operations.

New technologies may be developed, validated, and increasingly used in biomedical research that could reduce demand for some of our products and services.

The scientific and research communities continue to explore methods to develop improved models and systems that would ~~replace or supplement the use of living animals as test platforms in biomedical research as well as~~ improve the translation of cellular and animal models to human studies and ~~vice-versa.~~vice-versa and possibly replace or supplement the use of traditional living animals as test platforms in biomedical research. Some companies have developed techniques in these areas that may have scientific ~~merit.~~merit to improve translation between species. In addition, technological improvements to existing or new processes, such as imaging and other translational biomarker technologies, could result in the refinement and utility for the number of animal research models necessary to improve the translation from ~~preclinical~~non-clinical to ~~human~~clinical studies. There is an increasing push to focus on in vitro technologies such asthat employ human materials, stem cell technology, and other model creation technology. However, the increasing availability and utility of these in vitro models is partially offset by these technologies facilitating the creation of humanized, highly specialized and specific ~~disease mimicking~~disease-mimicking models we can produce.

It is our strategy to explore ~~non-animal approaches~~these in vitro technologies to refine and potentially reduce the ~~need for~~utilization of animal models as these new methods become validated. For example, ChanTest Corporation has a well-developed program to evaluate the cardiac properties of induced pluripotent stem cell-derived cardiomyocytes. We may not be successful in commercializing these methods, and, furthermore, revenues from these new models and approaches if successfully developed may not offset reduced sales or profits from research models. In addition, alternative research methods could decrease the need for future research models, and we may not be able to develop new products effectively or in a timely manner to replace any lost sales. Lastly, other companies or entities may develop research models with characteristics different than the ones that we produce, and which may be viewed as more desirable by some of our clients.

Negative attention from special interest groups may impair our business.

The products and services which we provide our clients are essential to the drug discovery, development and manufacturing processes, and are almost universally mandated by law. Notwithstanding, certain special interest groups categorically object to the use of animals for valid research purposes. Historically, our core research model activities with rats, mice and other rodents have not been the subject of significant animal rights media attention. However, research activities with animals have been the subject of adverse attention, including shareholder proposals and attempts to disrupt air carriers from transporting research models, impacting the industry. This has included periodic demonstrations near facilities operated by us and at our annual meetings, as well as shareholder proposals we received for some of our past Annual Meetings of Shareholders. ~~In some instances, periodic demonstrations at our operating sites occur.~~ Any negative attention, threats or acts of vandalism directed against either our animal research activities or our third party service providers such as our airline carriers in the future could impair our ability to operate our business efficiently.

Our debt level could adversely affect our business and growth prospects.

18As of December 31, 2016, we had $1.2 billion of debt. Our debt could have significant adverse effects on our business, including making it more difficult for us to obtain additional financing on favorable terms; requiring us to dedicate a substantial portion of our cash flows from operations to the repayment of debt and the interest on this debt; limiting our ability to capitalize on significant business opportunities; and making us more vulnerable to rising interest rates. For additional information regarding our debt, please see Note 7, “Long-Term Debt and Capital Lease Obligations”, included in the Notes to Consolidated Financial Statements included elsewhere in this Form 10-K.

increasingly outsource more work to us, we must continue to demonstrate that our services can augment and accelerate our clients’ drug discovery process. We implemented business changes, including a small site consolidation and realignment of sales strategies, in fiscal year 2016 in our early discovery business to expedite this process. Demand for our in vivodiscovery services continued to increase in fiscal year 2016, and we acquired Agilux Laboratories, Inc. (Agilux) in September 2016 to strengthen our bioanalytical services offering, and reinforce the linkage between our discovery and safety assessment capabilities.

Demand for research models and services improved modestly in fiscal year 2016. We remain confident in the long-term drivers of this business because research models and services remain essential tools for our clients’ drug discovery and early-stage development efforts.

Acquisitions

~~During the fiscal year 2014, we~~We continued to make ~~a number of~~ strategic acquisitions designed to expand our portfolio of services to support the drug discovery and early-stage development continuum and position us as a market leader in the outsourced discovery services market. ~~The 2014~~Fiscal year 2016 acquisitions ~~include:~~included:

InOn April ~~2014,~~4, 2016, we acquired ~~100%~~WIL Research, a provider of ~~the shares of the United Kingdom (U.K.)-based entities Argenta~~safety assessment and ~~BioFocus,~~contract development and ~~certain related Dutch assets,~~manufacturing (CDMO) services to ~~form the core of our Early Discovery business. Through this transaction, we~~biopharmaceutical and agricultural and industrial chemical companies worldwide. The acquisition enhanced our position as a ~~full service,~~leading global early-stage CRO by strengthening our ability to partner with ~~integrated~~ ~~in vitro~~clients across the drug discovery and ~~in vivo~~ ~~capabilities from target discovery through preclinical development.~~development continuum. The ~~preliminary~~ purchase price for WIL Research was $604.8 million, including assumed liabilities of ~~the acquisition~~$0.4 million, and was ~~$183.1 million, net of~~funded by cash ~~acquired,~~on hand and ~~included contingent consideration.~~

borrowings on our amended credit facility.

InOn June ~~2014,~~27, 2016, we acquired ~~substantially all~~Blue Stream, an analytical CRO supporting the development of ~~the assets of VivoPath LLC (VivoPath), a~~complex biologics and biosimilars. Combining Blue Stream with our existing discovery, service company. The preliminary purchase price was $2.3 million, including contingent consideration that could become payable over the next three years based on the achievement of revenue growth targets.

~~In October 2014, we acquired ChanTest Corporation (ChanTest),~~safety assessment, and biologics capabilities creates a leading provider ~~of ion channel~~with the ability to support biologic and biosimilar development from characterization through clinical testing ~~services to the pharmaceutical~~ and ~~biotech industry.~~commercialization. The ~~preliminary~~ purchase price for Blue Stream was ~~$52.1~~$11.7 million, ~~net~~including $3.0 million in contingent consideration, and was subject to certain customary adjustments. The acquisition was funded by borrowings on our revolving credit facility.

On September 28, 2016, we acquired Agilux, a CRO that provides a suite of integrated discovery small and large molecule bioanalytical services, drug metabolism and pharmacokinetic (DMPK) services, and pharmacology services. The acquisition supports our strategy to offer clients a broader, integrated portfolio that provides services continuously from the earliest stages of drug research through the nonclinical development process. The purchase price for Agilux was $64.9 million in cash ~~acquired,~~ and ~~included contingent consideration.~~

was funded by borrowings on our revolving credit facility.

Segment Reporting

~~In the second quarter of 2014, following~~We report our acquisition of Argenta and BioFocus, we revised our reportable segments to ensure alignment with our view of the business. We reviewed the new and existing markets addressed by the business, the recently revised go-to-market strategy, long-term operating margins, and the discrete financial information available to our Chief Operating Decision Maker, and considered how our businesses aggregated based on these qualitative and quantitative factors. Based on this review, we identifiedperformance in three reportable segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Support (Manufacturing). We aggregate our operating segments into a reportable segment if (a) they have similar economic characteristics; (b) they are similar in the in the nature of the products or services, nature of the production process, type or class of customer for their products and services, methods used to distribute their products and services and nature of the regulatory environment; and (c) the aggregation helps users better understand our performance.

In the second quarter of 2016, we acquired WIL Research. WIL Research’s safety assessment business is reported in our DSA reportable segment and its CDMO business created a new operating segment, Contract Manufacturing, that is reported as part of our Manufacturing reportable segment. On February 10, 2017, we divested the CDMO business. In addition, amounts due to changes in our market strategy for certain services and resulting information provided to the Chief Operating Decision Maker were reclassified from our RMS reportable segment to our Manufacturing reportable segment, including revenue of $2.8 million and $3.7 million for fiscal years 2015 and 2014, respectively, and operating income of $0.5 million and $0.6 million for fiscal years 2015 and 2014, respectively.

We reported segment results on this basis for ~~the current period and retrospectively for~~ all ~~comparable prior periods.~~periods presented in this Annual Report on Form 10-K.

The revised reportable segments are as follows:



Research Models and Services	Discovery and Safety Assessment	Manufacturing Support
Research Models	Discovery Services⁽²⁾	~~Endotoxin and~~ Microbial ~~Detection~~Solutions
Research Model Services⁽¹⁾	Safety Assessment	Avian ~~Vaccine Services~~
		Biologics ~~Testing Solutions~~
		Contract Manufacturing

⁽¹⁾ ~~Research Model Services includes Genetically Engineered Models and Services (GEMS), Research Animal Diagnostic Services (RADS), and IS.~~

⁽²⁾ ~~Discovery Services includes both the Early Discovery and~~ ~~In Vivo~~ ~~Discovery businesses. Early Discovery includes Argenta, BioFocus, and ChanTest.~~

Our RMS segment includes the Research Models and Research Model Services businesses. Research Models includes the commercial production and sale of small research models, as well as the supply of large research models. Research Model Services includes three business units: ~~GEMS,~~Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered research models; ~~RADS,~~Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; and IS, which provides management of our clients’ research operations (including recruitment, training, staffing, and management services). Our DSA segment includes services required to take a drug through the early development process including discovery services, which are non-regulated services to assist clients with the identification, screening, and selection of a lead compound for drug development, and regulated and non-regulated safety assessment services. Our Manufacturing segment includes ~~Endotoxin and~~ Microbial ~~Detection (EMD),~~Solutions, which includesin vitro (non-animal) lot-release testing products and microbial detection, conventional and rapid quality control testing of sterile and non-sterile biopharmaceutical and consumer products, and species identification services; Biologics, ~~Testing Services (Biologics),~~ which performs specialized testing of ~~biologics and devices; and~~biologics; Avian Vaccine Services (Avian), which supplies specific-pathogen-free fertile chicken eggs and ~~chickens.~~chickens; and Contract Manufacturing, which, until we divested this business on February 10, 2017, specialized in formulation design and development, manufacturing, and analytical and stability testing for small molecules.

Fiscal Quarters

~~Prior~~Our fiscal year is typically based on 52-weeks, with each quarter composed of 13 weeks ending on the last Saturday on, or closest to, ~~recasting the reportable segments, the businesses were reported in two segments as follows:~~



~~Research Models and Services~~	~~Preclinical Services~~
~~Research Models~~ March 31, June 30, September 30, and December 31. A 53⁽³⁾	~~Discovery Services~~
~~Research Model Services~~ ⁽⁴⁾	~~Safety Assessment~~
~~Endotoxin and Microbial Detection~~	~~Biologics Testing Solutions~~

^(3)rd ~~Research Models~~week was included ~~Avian Vaccine Services.~~in fiscal year 2016, which is occasionally necessary to align with a December 31 calendar year-end. The additional week was included in the fourth quarter.

⁽⁴⁾Research Model Services included GEMS, RADS, IS and Discovery Research Services. As part of the segment revisions, the former Discovery Research Services was been folded into our Discovery Services business, previously located under the Preclinical Services segment.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S.). The preparation of these financial statements requires us to make certain estimates and assumptions that may affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reported periods and related disclosures. These estimates and assumptions are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on our historical experience, trends in the industry, and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions.

We believe that our application of the following accounting policies, each of which require significant judgments and estimates on the part of management, are the most critical to aid in fully understanding and evaluating our reported financial results. Our significant accounting policies are more fully described in Note 1, “Description of Business and Summary of Significant Accounting Policies”, to our consolidated financial statements ~~appearing elsewhere~~contained in Item 8, “Financial Statements and Other Supplementary Data” in this Annual Report on Form 10-K.

We believe the following represent our critical accounting policies and estimates used in the preparation of our financial statements:

Revenue Recognition

We recognize revenue when all of the following conditions are satisfied: persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, our price to the customer is fixed or determinable, and collectibility is reasonably assured.

Service revenue is generally evidenced by client contracts, which range in duration from a few weeks to a few years and typically take the form of an agreed upon rate per unit or fixed fee arrangements. Such contracts typically do not contain acceptance provisions based upon the achievement of certain study or laboratory testing results. Revenue of agreed upon rate per unit contracts is recognized as services are performed, based upon rates specified in the contract. In cases where

performance spans reporting periods, revenue of fixed fee contracts is recognized as services are performed, measured on the ratio of outputs or performance obligations completed to the total contractual outputs or performance obligations to be provided. Changes in estimated effort to complete the fixed fee contract are reflected in the period in which the change becomes known. Changes in scope of work are common, especially under long-term contracts, and generally result in a change in contract value. Once the parties have agreed to the changes in scope and renegotiated pricing terms, the contract value is amended and revenue is typically recognized as described above.

Most contracts are terminable by the client, either immediately or upon notice. These contracts often require payment to us of expenses to wind down the project, fees earned to date or, in some cases, a termination fee. Such payments are included in revenues when earned.

We recognize product revenue, net of allowances for estimated returns, rebates and discounts, when title and risk of loss pass to customers. When we sell equipment with specified acceptance criteria, we assess our ability to meet the acceptance criteria in order to determine the timing of revenue recognition. We would defer revenue until completion of customer acceptance testing if we are not able to demonstrate the ability to meet such acceptance criteria.

A portion of our revenue is from multiple-element arrangements that include multiple products and/or services as deliverables in a single arrangement, with each deliverable, or a combination of the deliverables, representing a separate unit of accounting. We allocate revenues to each element in a multiple-element arrangement based upon the relative selling price of each deliverable. Revenue allocated to each deliverable is then recognized when all revenue recognition criteria are met. Judgments as to the identification of deliverables, units of accounting, the allocation of consideration to the deliverable, and the appropriate timing of revenue recognition are critical with respect to these arrangements.

At the inception of each arrangement that includes milestone payments, we evaluate whether each milestone is substantive. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) our performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from our performance to achieve the milestone; (b) the consideration relates solely to past performance; and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. We evaluate factors such as the scientific, clinical, regulatory, and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required, and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. If a substantive milestone is achieved and collection of the related receivable is reasonably assured, we recognize revenue related to the milestone in its entirety in the period in which the milestone is achieved. If we were to achieve milestones that we consider substantive under any of our revenue arrangements, we may experience significant fluctuations in our revenue from quarter to quarter and year to year depending on the timing of achieving such substantive milestones. In those circumstances where a milestone is not substantive, we recognize as revenue, on the date the milestone is achieved, an amount equal to the applicable percentage of the performance period that had elapsed as of the date the milestone was achieved, with the balance being deferred and recognized over the remaining period of performance. As of December 31, 2016, we had no significant milestones that were deemed substantive.

The Company records shipping charges billed to customers in total revenue and records shipping costs in cost of revenue (excluding amortization of intangible assets) for all periods presented.

Income Taxes

We prepare and file income tax returns based on our interpretation of each jurisdiction’s tax laws and regulations. In preparing our consolidated financial statements, we estimate our income tax liability in each of the jurisdictions in which we operate by estimating our actual current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and financial reporting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Significant management judgment is required in assessing the realizability of our deferred tax assets. In performing this assessment, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In making this determination, under the applicable financial accounting standards, we are allowed to consider the scheduled reversal of deferred tax liabilities, projected future taxable income, and the effects of tax planning strategies. ~~Our estimates of future taxable income include,~~

~~among other items, our estimates of future income tax deductions related to the exercise of stock options.~~ In the event that actual results differ from our estimates, we adjust our estimates in future periods and we may need to establish a valuation allowance, which could materially impact our financial position and results of operations.

We account for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. We evaluate uncertain tax positions on a quarterly basis and consider various factors, that include, but are not limited

to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position. We adjust the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. Our liabilities for uncertain tax positions can be relieved only if the contingency becomes legally extinguished through either payment to the taxing authority or the expiration of the statute of limitations, the recognition of the benefits associated with the position meet the “more-likely-than-not” threshold or the liability becomes effectively settled through the ~~examination~~controversy process. We consider matters to be effectively settled once the taxing authority has completed all of its required or expected examination procedures, including all appeals and administrative reviews; we have no plans to appeal or litigate any aspect of the tax position; and we believe that it is highly unlikely that the taxing authority would re-examine the related tax position. We also accrue for potential interest and penalties related to unrecognized tax benefits in income tax expense.

As of December ~~27, 2014,~~31, 2016, our non-U.S. subsidiaries’ undistributed foreign earnings included in consolidated retained earnings ~~aggregated $271.0~~were $704.6 million. ~~All~~As of the end of fiscal year 2016, our policy with respect to the undistributed ~~foreign~~ earnings of our non-U.S. subsidiaries ~~exclusive~~is to maintain an indefinite reinvestment assertion as they are required to fund needs outside of ~~earnings that would result in little or no net income tax expense or which were previously taxed under current U.S. tax law, are reinvested indefinitely in operations outside~~ the U.S. and cannot be repatriated in a manner that is substantially tax-free. This ~~determination~~assertion is made on a jurisdiction by jurisdiction basis and takes into account the liquidity requirements in both the U.S. and ~~within~~ our foreign subsidiaries. If we decide to repatriate funds to the U.S. in the future to execute our growth initiatives or to fund any other liquidity needs, the resulting tax consequences ~~would~~could negatively impact our results of operations through a higher effective tax rate and dilution of our earnings.

On December 18, 2015, the U.S. enacted the Consolidated Appropriations Act, which reinstated and extended the controlled foreign corporation look-through rules through the fiscal year 2019. This rule allows us to access Chinese and Canadian cash in a more tax-efficient manner and utilize the cash outside of the U.S. without triggering residual U.S. tax. As such, we are accruing foreign withholding taxes to reflect this change for the years in which the rules are reinstated.

Goodwill and Intangible Assets

We use assumptions and estimates in determining the fair value of assets acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets, which represent a significant portion of the purchase price in many of our acquisitions, requires the use of significant judgment with regard to (i) the fair value; and (ii) whether such intangibles are amortizable or non-amortizable and, if the former, the period and the method by which the intangible asset will be amortized. We utilize commonly accepted valuation techniques, such as the income approach and the cost approach, as appropriate, in establishing the fair value of intangible assets. Typically, key assumptions include projections of cash flows that arise from identifiable intangible assets of acquired businesses as well as discount rates based on an analysis of our weighted average cost of capital, adjusted for specific risks associated with the assets.

We review definite-lived intangible assets for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. Actual cash flows arising from a particular intangible asset could vary from projected cash flows which could imply different carrying values from those established at the dates of acquisition and which could result in impairment of such asset.

During fiscal year 2016, we determined that the carrying values of certain DSA intangible assets were not recoverable and recorded an impairment charge of $1.9 million, which was included in costs of services provided (excluding amortization of intangible assets).

We evaluate goodwill ~~and indefinite-lived intangible assets~~ for impairment annually, during the fourth quarter, and when events occur or circumstances change that may reduce the fair value of the asset below its carrying amount. Events or circumstances that might require an interim evaluation include unexpected adverse business conditions, economic factors, unanticipated technological changes or competitive activities, loss of key personnel and acts by governments and courts. Estimates of future cash flows require assumptions related to revenue and operating income growth, asset-related expenditures, working capital levels and other factors. Different assumptions from those made in our analysis could materially affect projected cash flows and our evaluation of goodwill ~~and indefinite-lived intangible assets~~ for impairment.

We have the option to first assess qualitative factors to determine whether it is necessary to perform the two-step goodwill impairment test. If we elect this option and believe, as a result of the qualitative assessment, that it is more-likely-than-not that the carrying value of goodwill is not recoverable, the quantitative two-step impairment test is required; otherwise, no further testing is required. Alternatively, we may elect to not first assess qualitative factors and immediately perform the quantitative two-step impairment test. In the first step, we compare the fair value of our reporting units to their carrying values. If the carrying values of the net assets assigned to the reporting units exceed the fair values of the reporting units, then the second step

of the impairment test is performed in order to determine the implied fair value of our goodwill. If the carrying value of the reporting unit’s goodwill exceeds its implied fair value, then we would record an impairment loss equal to the difference.

In ~~the~~ fiscal years ~~2014, 2013~~2016, 2015 and ~~2012,~~2014, we performed the first step of the two-step goodwill impairment test for our reporting units. Fair value was determined by using a weighted combination of a market-based approach and an income approach, as this combination was deemed to be the most indicative of our fair value in an orderly transaction between market participants. Under the market-based approach, we utilized information about our Company as well as publicly available industry information to determine earnings multiples and sales multiples that are used to value our reporting units. Under the income approach, we determined fair value based on the estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of the reporting unit and the rate of return an outside investor would expect to earn.

Our 2016, 2015 and 2014 ~~2013 and 2012~~ impairment ~~test~~tests indicated that goodwill ~~and other intangible assets were~~was not impaired.

In ~~2014,~~the second quarter of 2016, we revised the composition of our reportable segments to align with ~~our new~~the view of the business following ~~the Argenta~~our acquisition of WIL Research. See Note 1, "Description of Business and ~~BioFocus acquisition.~~Summary of Significant Accounting Policies." As a result, ~~of this reorganization,~~ goodwill was allocated from our ~~prior~~RMS reportable ~~segments~~segment to our ~~new~~Manufacturing reportable ~~segments~~segment based on the fair value of each business group within its original reporting unit relative to the fair value of that reporting unit. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment existed.

Valuation and Impairment of Long-Lived Assets

Long-lived assets to be held and used, including property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. Factors we consider important which could trigger an impairment review include, but are not limited to, the following:

significant underperformance relative to expected historical or projected future operating results;

significant negative industry or economic trends; or

significant changes or developments in strategy or operations that negatively affect the utilization of our long-lived assets.

Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset, net of any sublease income, if applicable, and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written-down to their fair values. We measure any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in our current business model. Significant judgments are required to estimate future cash flows, including the selection of appropriate discount rates and other assumptions. We may also estimate fair value based on market prices for similar assets, as appropriate. Changes in these estimates and assumptions could materially affect the determination of fair value for these assets. ~~During the fiscal year 2014, we did not record any significant impairment charges to long-lived assets.~~

Pension and Other ~~Retiree~~Post-Retirement Benefit Plans

Several of our U.S. and non-U.S. subsidiaries sponsor defined benefit pension and other ~~retiree~~post-retirement benefit plans. We recognize the funded status of our defined benefit pension and other postretirement benefit plans as an asset or liability. This amount is defined as the difference between the fair value of plan assets and the benefit obligation. We measure plan assets and benefit obligations as of the date of our fiscal year end.

The cost and obligations of these arrangements are calculated using many assumptions to estimate the benefits that the employee earns while working, the amount of which cannot be completely determined until the benefit payments cease. Major assumptions used in the accounting for these employee benefit plans include the expected return on plan assets, withdrawal and mortality rates, discount rate, and rate of increase in employee compensation levels. Assumptions are determined based on our data and appropriate market indicators, and are evaluated each year as of the plans’ measurement date. Should any of these assumptions change, they would have an effect on net periodic pension costs and the unfunded benefit obligation.

The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the projected benefit obligations. In determining the expected long-term rate of return on plan assets, we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance.

The discount rate reflects the rate we would have to pay to purchase high-quality investments that would provide cash sufficient to settle our current pension obligations. In the fiscal year 2014, as part of our annual review of assumptions for our U.S. pension and retiree benefit plans, we selected the discount rate based on a cash-flow matching analysis using Towers Watson’s proprietary Bond:Link tool. Prior to the fiscal year 2014, we employed a cash-flow matching methodology, which

used the spot yield curve underlying the Citigroup Index. The refined estimation technique permits us to more closely match cash flows to the expected payments to participants than would be possible with the previously used yield curve model. We believe such a refinement results in an estimate of the discount rate that more accurately reflects the settlement value for plan obligations than the yield curve methodology used in prior years, as it provides the ability to review the quality and diversification of the portfolio to select the bond issues that would settle the obligation in an optimal manner. This refinement reduced our benefit obligations as of December 27, 2014 by $5.5 million.

The rate of compensation increase reflects the expected annual salary increases for the plan participants based on historical experience and the current employee compensation strategy.

In ~~the~~ fiscal year ~~2014, for our U.S. plans, we adopted new mortality tables (RP-2014) and a~~2016, new mortality improvement ~~scale (MP-2014),~~scales were issued in the U.S. reflecting a decline in longevity projection from the 2015 releases that we adopted, which ~~increased~~decreased our benefit obligations by ~~$6.0~~$1.3 million as of December ~~27, 2014. We previously used~~31, 2016. In fiscal year 2015, new mortality improvement scales were issued in the ~~RP-2000 mortality tables with mortality improvements projected using Scale AA to 2021 for annuitants~~U.S. and ~~to 2029 for non-annuitants. In addition, for our U.K. plans,~~ the ~~mortality table was updated to S2 Series (SAPS) using~~United Kingdom (U.K.) reflecting a decline in longevity projection from the ~~CMI 2013 core projection with a 1.25% per annum long-term mortality improvement. This update increased~~2014 releases that we adopted, which decreased our benefit obligations by ~~$1.9~~$3.3 million as of December 27, 2014. Prior to the fiscal year 2014, we used the S1 Series (SAPS) mortality table and the CMI 2009 core projection with a 1.25% per annum long-term improvement. The new mortality information reflects improved life expectancies and an expectation that the trend will continue.26, 2015.

~~Stock-based~~Stock-Based Compensation

We grant stock options, restricted stock, restricted stock units, and performance share units (PSUs) to employees, and stock options, restricted stock, and restricted stock units to non-employee directors under stock-based compensation plans. We make certain assumptions in order to value and record expense associated with awards made under our stock-based compensation arrangements. Changes in these assumptions may lead to variability with respect to the timing and amount of expense we recognize in connection with share-based payments.

Determining the appropriate valuation model and related assumptions requires judgment. The fair value of stock options granted is calculated using the Black-Scholes model and the fair value of PSUs is calculated using a lattice model with a Monte Carlo simulation, both of which require the use of subjective assumptions including volatility and expected term, among others.

Determining the appropriate amount to expense based on the anticipated achievement of PSU’s performance targets requires judgment, including forecasting the achievement of future financial targets. The estimate of expense is revised periodically based on the probability of achieving the required performance targets. The cumulative impact of any changes to our estimates is reflected in the period of change.

We also estimate forfeitures over the requisite service period when recognizing share-based compensation expense based on historical rates and forward looking factors; these estimates are adjusted to the extent that actual forfeitures differ, or are expected to materially differ, from our estimates.

New Accounting Pronouncements

For a discussion of new accounting pronouncements, refer to Note 1, “Description of Business and Summary of Significant Accounting Policies” to our consolidated financial statements ~~included~~contained in Item 8, “Financial Statements and Other Supplementary Data,” in this Annual Report on Form 10-K.

Results of Operations

Fiscal Year ~~2014~~2016 Compared to Fiscal Year ~~2013~~2015

Revenue

The following table presents consolidated revenue by reportable segment:

Fiscal Year Ended
December 27, 2014 December 28, 2013 $ Change % Change Impact of FX
(in millions, except percentages)
Research models and services $ 507.4
$ 511.3
$ (3.9 ) (0.8 )% (0.7 )%
Discovery and safety assessment 538.2
432.4
105.8
24.5 % 0.3 %
Manufacturing support 252.1
221.8
30.3
13.7 % 0.2 %
Total revenue $ 1,297.7
$ 1,165.5
$ 132.2
11.3 % (0.1 )%



	Fiscal Year
	2016		2015		$ change		% change		Impact of FX

	(in millions, except percentages)
RMS	$	494.0	$	470.4	$	23.6	5.0	%	(0.2	)%
DSA	836.6		612.2		224.4		36.7	%	(2.7	)%
Manufacturing	350.8		280.7		70.1		25.0	%	(0.8	)%
Total revenue	$	1,681.4	$	1,363.3	$	318.1	23.3	%	(1.5	)%

Revenue for ~~the~~ fiscal year ~~2014~~2016 increased ~~$132.2~~$318.1 million, or ~~11.3%~~23.3%, compared with ~~the~~ fiscal year ~~2013. Reported revenue decreased due to~~2015. The negative effect of changes in foreign currency ~~translation~~exchange rates decreased revenue by ~~$1.7~~$20.0 million, or ~~0.1%~~1.5%, when compared to the prior ~~period.~~year.

RMS revenue ~~decreased $3.9~~increased $23.6 million due to ~~lower~~higher research ~~models~~model services ~~and research models~~ revenue ~~primarily~~ in North America, Europe, and Japan and ~~Europe. Additionally,~~higher research model revenue in North America, Europe, and Asia; partially offset by the ~~fiscal year 2013 includes a $1.5 million revenue adjustment related to inaccurate billings with respect to certain government contracts. See Note 12, "Commitments and Contingencies."~~negative effect of changes in foreign currency exchange rates.

DSA revenue increased ~~$105.8~~$224.4 million due to ~~an increase in the Discovery Services business, which includes the Argenta and BioFocus acquisition that contributed $71.4 million to revenue growth, as well as~~ higher revenue in the Safety Assessment ~~business.~~business, primarily as a result of the WIL Research acquisition that contributed $163.5 million to revenue growth, and increased study volume, mix of services, and pricing in our legacy business; and higher revenue in Discovery Services’ In Vivo business, which includes the acquisitions of Oncotest and Agilux that contributed $14.6 million to revenue growth; partially offset by lower Early Discovery revenue due primarily to softer demand from global clients; and the negative effect of changes in foreign currency exchange rates.

Manufacturing revenue increased ~~$30.3~~$70.1 million ~~driven~~due to higher revenue in the Microbial Solutions business, which includes the acquisition of the Celsis business that contributed $17.9 million to revenue growth; higher revenue in the Biologics business, which includes the Blue Stream acquisition that contributed $4.1 million to revenue growth; higher revenue in the Avian business, primarily due to the acquisition of the Sunrise business that contributed $4.9 million to revenue growth; and Contract Manufacturing revenue related to the CDMO services of WIL Research acquired in April 2016 that contributed $12.6 million to revenue growth; partially offset by ~~broad-based~~the negative effect of changes in foreign currency exchange rates.

The following table presents consolidated revenue by type:



	Fiscal Year
	2016		2015		$ change		% change

	(in millions, except percentages)
Service revenue	$	1,130.7	$	858.2	$	272.5	31.7	%
Product revenue	550.7		505.1		45.6		9.0	%
Total revenue	$	1,681.4	$	1,363.3	$	318.1	23.3	%

Service revenue increased $272.5 million due to higher revenue in the Safety Assessment business, primarily as a result of the WIL Research acquisition that contributed $163.5 million to service revenue growth, ~~across all three~~and increased study volume, mix of services, and pricing in our legacy business; and higher revenue in Discovery Services’ In Vivo business, which includes the acquisitions of Oncotest and Agilux that contributed $14.6 million to revenue growth; Contract Manufacturing revenue related to the CDMO services of WIL Research acquired in April 2016 that contributed $12.6 million to revenue growth; higher revenue in the Biologics business, which includes the Blue Stream acquisition that contributed $4.1 million to revenue growth; and higher research model services revenue in North America, Europe, and Japan; partially offset by lower Early Discovery revenue due primarily to softer demand from global clients; and the negative effect of changes in foreign currency exchange rates.

Product revenue increased $45.6 million due to higher revenue in Microbial Solutions and Avian, which included the acquisitions of the Celsis and Sunrise businesses, ~~particularly~~respectively, and in total contributed $22.1 million to product revenue growth; and higher research model revenue in North America, Europe, and Asia; partially offset by the ~~EMD business.~~negative effect of changes in foreign currency exchange rates.

Cost of Services Provided and Products Sold (Excluding Amortization of Intangible Assets)

The following table presents consolidated cost of services provided and ~~Services Provided~~products sold (excluding amortization of intangible assets) by reportable segment:

Fiscal Year Ended
December 27, 2014 December 28, 2013 $ Change % Change
(in millions, except percentages)
Research models and services $ 317.2
$ 331.8
$ (14.6 ) (4.4 )%
Discovery and safety assessment 387.3
325.6
61.7
18.9 %
Manufacturing support 120.5
113.2
7.3
6.4 %
Total cost of products sold and services provided $ 825.0
$ 770.6
$ 54.4
7.1 %



	Fiscal Year
	2016		2015		$ change		% change

	(in millions, except percentages)
RMS	$	292.8	$	284.2	$	8.6	3.0	%
DSA	572.4		407.0		165.4		40.6	%
Manufacturing	169.5		141.0		28.5		20.3	%
Total cost of services provided and products sold (excluding amortization of intangible assets)	$	1,034.7	$	832.2	$	202.5	24.3	%

Cost of services provided and products sold ~~and services provided (costs)~~(excluding amortization of intangible assets) (Costs) for ~~the~~ fiscal year ~~2014~~2016 increased ~~$54.4~~$202.5 million, or ~~7.1%~~24.3%, compared with ~~the~~ fiscal year ~~2013.~~2015. Costs as a percentage of revenue for ~~the~~ fiscal year ~~2014~~2016 were ~~63.6%~~61.5%, ~~a decrease~~an increase of ~~2.5%~~0.5%, from ~~66.1%~~61.0% for ~~the~~ fiscal year ~~2013. The costs above include asset impairments, which were previously presented separately in our consolidated statement of income.~~2015.

RMS ~~costs decreased $14.6~~Costs increased $8.6 million due primarily to the growth of the business, partially offset by cost savings achieved as a result of ~~lower accelerated depreciation expense associated with global~~our efficiency ~~initiatives in our research models business.~~initiatives. RMS ~~costs~~Costs as a percentage of revenue for ~~the~~ fiscal year ~~2014~~2016 were ~~62.5%~~59.3%, a decrease of ~~2.4%~~1.1%, from ~~64.9%~~60.4% for ~~the~~ fiscal year ~~2013, the result of global efficiency initiatives in our research models business.~~2015.

DSA ~~costs~~Costs increased ~~$61.7~~$165.4 million due primarily to ~~a $49.1 million~~an increase in ~~Discovery Services costs,~~Safety Assessment Costs, which ~~includes~~included a higher cost base due to the ~~Argenta~~acquisition of WIL Research, the growth of the legacy business; an increase in Discovery Services Costs, which included a higher cost base due to the acquisitions of Oncotest and ~~BioFocus acquisition,~~Agilux; a charge of $1.9 million related to an impairment of certain intangibles; and a ~~$12.6~~restructuring charge of $9.4 million ~~increase~~related to the consolidation of small DSA facilities in ~~Safety Assessment costs, as a result~~the U.S., Ireland, and the U.K.; partially offset by the favorable effect of ~~increased revenues.~~changes in foreign currency exchange rates. DSA ~~costs~~Costs as a percentage of revenue for ~~the~~ fiscal year ~~2014~~2016 were ~~72.0%~~68.4%, ~~a decrease~~an increase of ~~3.3%~~1.9%, from ~~75.3%~~66.5% for ~~the~~ fiscal year ~~2013 as a result~~2015, primarily due to the acquisition of ~~leverage of fixed costs from higher revenues.~~WIL Research.

Manufacturing ~~costs~~Costs increased ~~$7.3~~$28.5 million due primarily ~~as a result~~to an increase in Biologics Costs resulting from the growth of ~~higher revenue for each~~the business and the acquisition of ~~our~~Blue Stream; an increase in Contract Manufacturing ~~businesses.~~Costs related to the CDMO services of WIL Research acquired in April 2016; an increase in Microbial Solutions Costs resulting from the acquisition of Celsis and the growth of the legacy business; and an increase in Avian Costs, primarily due to the acquisition of the Sunrise business; partially offset by $4.1 million due to lower amortization of inventory fair value adjustments related to the Celsis acquisition. Manufacturing ~~costs~~Costs as a percentage of revenue for ~~the~~ fiscal year ~~2014~~2016 were ~~47.8%~~48.3%, a decrease of ~~3.2%~~1.9%, from ~~51.0%~~50.2% for ~~the~~ fiscal year ~~2013,~~2015.

The following table presents consolidated cost of services provided and products sold (excluding amortization of intangible assets) by type:



	Fiscal Year
	2016		2015		$ change		% change

	(in millions, except percentages)
Cost of services provided	$	757.7	$	568.2	$	189.5	33.4	%
Cost of products sold	277.0		264.0		13.0		4.9	%
Total cost of services provided and products sold (excluding amortization of intangible assets)	$	1,034.7	$	832.2	$	202.5	24.3	%

Cost of services provided increased $189.5 million due to an increase in Safety Assessment Costs, which included a higher cost base due to the acquisition of WIL Research, the growth of the legacy business; an increase in Discovery Services Costs, which included a higher cost base due to the acquisitions of Oncotest and Agilux; a charge of $1.9 million related to an impairment of certain intangibles; a restructuring charge of $9.4 million related to the consolidation of small DSA facilities in the U.S., Ireland, and the U.K.; higher Biologics Costs resulting from the growth of the business and the acquisition of Blue Stream; an increase in Contract Manufacturing Costs related to the CDMO services of WIL Research acquired in April 2016; and increased research model services costs due to growth in the business; partially offset by the favorable effect of changes in foreign currency exchange rates primarily related to the Safety Assessment and Discovery Services businesses.

Cost of products sold increased $13.0 million due primarily to higher Microbial Solutions Costs as a result of ~~leverage~~the acquisition of ~~fixed~~Celsis and the growth of the legacy business; higher Avian Costs, primarily due to the acquisition of the Sunrise business; and

higher research model costs ~~from higher revenue.~~due to growth in the business; partially offset by $4.1 million due to lower amortization of inventory fair value adjustments related to the Celsis acquisition and savings associated with global efficiency initiatives in the research models business.

Selling, General and Administrative Expenses

Fiscal Year Ended
December 27, 2014 December 28, 2013 $ Change % Change
(in millions, except percentages)
Research models and services $ 66.2
$ 60.0
$ 6.2
10.3 %
Discovery and safety assessment 63.1
49.7
13.4
27.0 %
Manufacturing support 47.6
42.0
5.6
13.3 %
Unallocated corporate 92.1
74.0
18.1
24.5 %
Total selling, general and administrative $ 269.0
$ 225.7
$ 43.3
19.2 %



	Fiscal Year
	2016		2015		$ change		% change

	(in millions, except percentages)
RMS	$	62.5	$	62.1	$	0.4	0.5	%
DSA	98.3		69.2		29.1		42.0	%
Manufacturing	65.1		57.9		7.2		12.5	%
Unallocated corporate	141.6		111.2		30.4		27.4	%
Total selling, general and administrative	$	367.5	$	300.4	$	67.1	22.3	%

Selling, general and administrative expenses (SG&A) for ~~the~~ fiscal year ~~2014~~2016 increased ~~$43.3~~$67.1 million, or ~~19.2%~~22.3%, compared with ~~the~~ fiscal year ~~2013.~~2015. SG&A as a percentage of revenue for ~~the~~ fiscal year ~~2014~~2016 was ~~20.7%~~21.9%, ~~an increase~~a decrease of ~~1.3%~~0.1%, from ~~19.4%~~22.0% for ~~the~~ fiscal year ~~2013.~~2015.

The increase in RMS SG&A of ~~$6.2~~$0.4 million was related to an increase of ~~$2.5~~$1.3 million in ~~compensation, benefits~~external consulting and other ~~employee related~~service expenses; ~~the recording of $1.6 million in charges related to an arbitration award in favor of a large model supplier;~~ an increase of $0.5 million in severance due to consolidation plans in the U.S. and Japan; and an increase of $2.6 million in other expenses; partially offset by a decrease of $1.0 million due to a gain on the sale of facility impacted by a consolidation plan. RMS SG&A as a percentage of revenue for the fiscal year 2014 was 13.0%, an increase of 1.3%, from 11.7% for the fiscal year 2013.

The increase in DSA SG&A of $13.4 million was related to an increase of $5.5 million in compensation, benefits and other employee related expenses; an increase of $1.9 million in severance; an increase of $1.2 million in operating expenses, including information technology infrastructure and facility expenses; an increase of ~~$0.8~~$0.3 million in compensation, benefits, and other employee-related expenses; and an increase of $0.2 million in stock-based compensation ~~primarily related to our new hire grants~~expense; partially offset by a decrease of $0.8 million in severance expense; a decrease of $0.3 million in costs associated with the evaluation and ~~our annual stock-based grants made~~integration of acquisitions; a decrease of $0.2 million in ~~February 2014;~~bad debt expense; and ~~an increase~~a decrease of ~~$4.0~~$0.6 million in other ~~expenses; all of which were primarily due to the Argenta and BioFocus acquisition. DSA~~expenses. RMS SG&A as a percentage of revenue for ~~the~~ fiscal year ~~2014~~2016 was ~~11.7%~~12.6%, ~~an increase~~a decrease of ~~0.2%~~0.6%, from ~~11.5%~~13.2% for ~~the~~ fiscal year ~~2013.~~2015.

The increase in ~~Manufacturing~~DSA SG&A of ~~$5.6~~$29.1 million was related to an increase of ~~$3.8~~$12.5 million in compensation, benefits, and other ~~employee related~~employee-related expenses; an increase of ~~$1.8~~$5.9 million in operating expenses, including information technology infrastructure and facility expenses; ~~and~~ an increase of ~~$0.5~~$5.7 million in stock-based compensation, primarily related to our new hire grants and our annual stock-based grants made in February 2014; partially offset by a decrease of $0.5 million in other expenses. Manufacturing SG&A as a percentage of revenue for the fiscal year 2014 was 18.9%, consistentcosts associated with the ~~fiscal year 2013.~~

~~The increase in unallocated corporate SG&A~~evaluation and integration of ~~$18.1 million was related to~~acquisitions; an increase of ~~$7.4~~$2.9 million in ~~compensation, benefits and other employee related expenses;~~severance expense; an increase of $5.1 million of stock-based compensation, primarily related to our new hire grants, our annual stock-based grants made in February 2014 and increased expense recognized for performance stock units whose payout is based upon our financial performance; an increase of $4.8$1.5 million in external consulting and other service expenses; an increase of ~~$4.5~~$1.3 million in depreciation expense; an increase of $1.2 million in stock-based compensation expense; and an increase of $0.3 million in other expenses; partially offset by a decrease of $2.2 million in bad debt expense. DSA SG&A as a percentage of revenue for fiscal year 2016 was 11.8%, an increase of 0.5%, from 11.3% for fiscal year 2015.

The increase in Manufacturing SG&A of $7.2 million was related to an increase of $6.7 million in compensation, benefits, and other employee-related expenses; an increase of $1.2 million in external consulting and other service expenses; an increase of $1.0 million in operating expenses, including information technology infrastructure and facility expenses; an increase of $0.7 million in stock-based compensation; and an increase of $0.6 million in other expenses; partially offset by a decrease of $1.8 million in severance expense; a decrease of $1.0 million in costs associated with the evaluation and integration of acquisitions; and a decrease of $0.2 million in depreciation expense. Manufacturing SG&A as a percentage of revenue for fiscal year 2016 was 18.6%, a decrease of 2.0%, from 20.6% for fiscal year 2015.

The increase in unallocated corporate SG&A of $30.4 million was related to an increase of ~~$1.4~~$8.0 million in external consulting and other service expenses; ~~partially offset by a reduction~~an increase of ~~$5.1~~$6.2 million in compensation, benefits, and other employee-related expenses; an increase of $4.8 million in information technology ~~related~~expenses; an increase of $4.0 million in costs associated with the evaluation and integration of acquisitions; an increase of $1.5 million in stock-based compensation; an increase of $1.0 million in depreciation expense; and an increase of $4.9 million in other expenses.

Amortization of Intangible AssetsAmortization of intangibles for ~~the~~ fiscal year ~~2014~~2016 was ~~$26.0~~$41.7 million, an increase of ~~$8.2~~$17.5 million, or ~~46.1%~~72.1%, from ~~$17.8~~$24.2 million for ~~the~~ fiscal year ~~2013,~~2015, due primarily ~~as a result of~~to certain intangibles acquired in connection with the ~~Argenta~~Agilux, Blue Stream, WIL Research, Oncotest, Celsis, and ~~BioFocus acquisition.~~Sunrise acquisitions.

Interest IncomeInterest income, which represents earnings on held cash, cash equivalents, and time deposits was ~~$1.2~~$1.3 million for ~~the~~ fiscal year ~~2014,~~2016, an increase of ~~$0.5~~$0.3 million, or ~~71.4%~~26.0%, compared to ~~$0.7~~$1.0 million for ~~the~~ fiscal year ~~2013.~~2015.

Interest ExpenseInterest expense for ~~the~~ fiscal year ~~2014~~2016 was ~~$12.0~~$27.7 million, ~~a decrease~~an increase of ~~$9.0~~$12.6 million, or ~~42.9%~~83.8%, compared to ~~$21.0~~$15.1 million for ~~the~~ fiscal year ~~2013.~~2015. The ~~decrease~~increase was primarily due to the write-off of a portion of debt issuance costs in connection with the modification of our $1.3B Credit Facility, a higher average debt balance outstanding as a result of ~~the retirement late in the second quarter~~business

acquisitions, a higher average interest rate as a result of ~~the fiscal year 2013 of our senior convertible debentures, which lowered our effective~~a higher leverage ratio, and an increased interest ~~rate.~~expense related to capital leases.

Other Income (Expense), NetOther income (expense), net, was ~~$10.7~~a net other income of $11.9 million for ~~the~~ fiscal year ~~2014,~~2016, an increase of ~~$3.5~~$8.9 million, or ~~48.6%~~295.5%, compared to ~~$7.2~~a net other income of $3.0 million for ~~the~~ fiscal year ~~2013.~~2015. The increase in other income (expense), net was driven by the absence of an expense of $10.4 million due to a reversal of the indemnification asset associated with a previous acquisition in the corresponding period in 2015; an increase of $6.5 million in gains on our venture capital investments ~~in limited partnerships~~ accounted for under the equity ~~method, which increased $3.4~~method; a higher net gain of $2.1 million on life insurance policy investments; a $0.7 million gain on remeasurement of previously held equity interest in an entity acquired in a step acquisition; and an increase of $0.6 million in other activity; partially offset by the absence of a bargain purchase gain of $9.9 million associated with the acquisition of Sunrise in May 2015; and a ~~non-cash~~$1.5 million charge recorded in connection with the modification of the option to purchase the remaining 13% equity interest in Vital River.

Income Taxes Income tax expense was $66.8 million for fiscal year 2016, an increase of $23.4 million, compared to $43.4 million for fiscal year 2015. Our effective tax rate was 30.0% in the fiscal year 2016, compared to 22.2% in the fiscal year 2015. The increase was primarily driven by non-deductible expenses associated with acquisitions and restructurings. In addition, we recognized a reduction in unrecognized tax benefits and related interest of $10.4 million due to the expiration of the statute of limitations associated with pre-acquisition tax positions on the forgiveness of debt and a non-taxable bargain purchase gain of $9.9 million associated with the acquisition of Sunrise in the fiscal year 2015.

Fiscal Year 2015 Compared to Fiscal Year 2014

Revenue

The following table presents consolidated revenue by reportable segment:



	Fiscal Year
	2015		2014		$ change			% change		Impact of FX

	(in millions, except percentages)
RMS	$	470.4	$	503.7	$	(33.3	)	(6.6	)%	(6.3	)%
DSA	612.2		538.2		74.0			13.7	%	(3.4	)%
Manufacturing	280.7		255.8		24.9			9.7	%	(7.6	)%
Total revenue	$	1,363.3	$	1,297.7	$	65.6		5.1	%	(5.3	)%

Revenue for fiscal year 2015 increased $65.6 million, or 5.1%, compared with fiscal year 2014. The negative effect of changes in foreign currency exchange rates decreased revenue by $69.4 million, or 5.3%, when compared to the prior period.

RMS revenue decreased $33.3 million due primarily to the negative effect of changes in foreign currency exchange rates. Excluding the impact of foreign exchange rates, RMS revenue decreased slightly due to lower research model services revenue and lower research models revenue in Japan; partially offset by higher research models revenue in North America, China, and Europe.

DSA revenue increased $74.0 million due to higher revenue in the Safety Assessment business, as a result of increased study volume; higher revenue in the Discovery Services business, primarily as a result of the Argenta, BioFocus, ChanTest, and Oncotest acquisitions that contributed $27.0 million to revenue growth; partially offset by the negative effect of changes in foreign currency exchange rates.

Manufacturing revenue increased $24.9 million, as higher revenue for Microbial Solutions and Avian, which include the Celsis and Sunrise acquisitions, respectively, was partially offset by the negative effect of changes in foreign currency exchange rates.

The following table presents consolidated revenue by type:



	Fiscal Year
	2015		2014		$ change		% change

	(in millions, except percentages)
Service revenue	$	858.2	$	797.8	$	60.4	7.6	%
Product revenue	505.1		499.9		5.2		1.0	%
Total revenue	$	1,363.3	$	1,297.7	$	65.6	5.1	%

Service revenue increased $60.4 million due to higher revenue in the Safety Assessment business, as a result of increased study volume; and higher revenue in the Discovery Services business, which included the acquisitions of Argenta, BioFocus,

ChanTest, and Oncotest that contributed $27.0 million to service revenue growth; partially offset by lower revenue in our research model services and the negative effect of changes in foreign currency exchange rates.

Product revenue increased $5.2 million due to higher revenue for Microbial Solutions and Avian, which include the acquisitions of Celsis and Sunrise, respectively, that contributed $16.7 million to product revenue growth; higher research models revenue in North America, China, and Europe; partially offset by lower revenue in our research models and the negative effect of changes in foreign currency exchange rates.

Cost of Services Provided and Products Sold (Excluding Amortization of Intangible Assets)

The following table presents consolidated cost of services provided and products sold (excluding amortization of intangible assets) by reportable segment:



	Fiscal Year
	2015		2014		$ change			% change

	(in millions, except percentages)
RMS	$	284.2	$	314.7	$	(30.5	)	(9.7	)%
DSA	407.0		387.3		19.7			5.1	%
Manufacturing	141.0		123.0		18.0			14.6	%
Total cost of services provided and products sold (excluding amortization of intangible assets)	$	832.2	$	825.0	$	7.2		0.9	%

Costs for fiscal year 2015 increased $7.2 million, or 0.9%, compared with fiscal year 2014. Costs as a percentage of revenue for fiscal year 2015 were 61.0%, a decrease of 2.6%, from 63.6% for fiscal year 2014.

RMS costs decreased $30.5 million due primarily to favorable effect of changes in foreign currency exchange rates, cost savings achieved as a result of our efficiency initiatives, and reduced restructuring costs. RMS costs as a percentage of revenue for fiscal year 2015 were 60.4%, a decrease of 2.1%, from 62.5% for fiscal year 2014.

DSA costs increased $19.7 million due primarily to an increase in Discovery Services costs, which included a higher cost base due to the acquisitions of Argenta, BioFocus, ChanTest, and Oncotest; partially offset by the favorable effect of changes in foreign currency exchange rates. Safety Assessment costs increased due to higher costs resulting from the growth of the business, partially offset by the favorable effect of changes in foreign currency exchanges rates. DSA costs as a percentage of revenue for fiscal year 2015 were 66.5%, a decrease of 5.5%, from 72.0% for fiscal year 2014, primarily due to improved operating leverage as a result of increased study volume in our Safety Assessment business.

Manufacturing costs increased $18.0 million due primarily to the Celsis and Sunrise acquisitions, partially offset by the favorable effect of changes in foreign currency exchange rates. Manufacturing costs as a percentage of revenue for fiscal year 2015 were 50.2%, an increase of 2.1%, from 48.1% for fiscal year 2014.

The following table presents consolidated cost of services provided and products sold (excluding amortization of intangible assets) by type:



	Fiscal Year
	2015		2014		$ change			% change

	(in millions, except percentages)
Cost of services provided	$	568.2	$	558.6	$	9.6		1.7	%
Cost of products sold	264.0		266.4		(2.4		)	(0.9	)%
Total cost of services provided and products sold (excluding amortization of intangible assets)	$	832.2	$	825.0	$	7.2		0.9	%

Cost of services provided increased $9.6 million due to a higher cost base, as a result of the acquisitions of Argenta, BioFocus, ChanTest, and Oncotest as well as increased Safety Assessment revenues; partially offset by the favorable effect of changes in foreign currency exchange rates and lower costs for our research model services as a result of lower revenue.

Cost of products sold decreased $2.4 million due to savings associated with global efficiency initiatives, reduced restructuring costs and the favorable effect of changes in foreign currency exchange rates; partially offset by increased costs as a result of the acquisitions of Sunrise and Celsis.

Selling, General and Administrative Expenses



	Fiscal Year
	2015		2014		$ change			% change

	(in millions, except percentages)
RMS	$	62.1	$	65.7	$	(3.6	)	(5.5	)%
DSA	69.2		63.1		6.1			9.7	%
Manufacturing	57.9		48.1		9.8			20.4	%
Unallocated corporate	111.2		92.1		19.1			20.7	%
Total selling, general and administrative	$	300.4	$	269.0	$	31.4		11.7	%

SG&A for fiscal year 2015 increased $31.4 million, or 11.7%, compared with fiscal year 2014. SG&A as a percentage of revenue for fiscal year 2015 was 22.0%, an increase of 1.3%, from 20.7% for fiscal year 2014.

The decrease in RMS SG&A of $3.6 million was related to a decrease of $1.4 million in external consulting and other service expenses; a decrease of $1.2 million in depreciation expense; a decrease of $1.1 million in compensation, benefits and other employee related expenses; and a decrease of $0.4 million in other expenses; partially offset by an increase of $0.5 million in stock-based compensation, primarily related to our annual stock-based grants made in the first quarter of 2015, which included a new retirement vesting provision. RMS SG&A as a percentage of revenue for fiscal year 2015 was 13.2%, an increase of 0.1%, from 13.1% for fiscal year 2014.

The increase in DSA SG&A of $6.1 million was related to an increase of $5.9 million in compensation, benefits and other employee related expenses; an increase of $1.4 million in external consulting and other service expenses; an increase of $0.4 million in operating expenses, including information technology infrastructure and facility expenses; an increase of $0.4 million in bad debt expense; and an increase of $0.3 million in depreciation expense; partially offset by a decrease of $1.8 million in severance expense and a decrease of $0.5 million in other expenses. DSA SG&A as a percentage of revenue for fiscal year 2015 was 11.3%, a decrease of 0.4%, from 11.7% for fiscal year 2014.

The increase in Manufacturing SG&A of $9.8 million was related to an increase of $4.8 million in compensation, benefits and other employee related expenses; an increase of $1.7 million in external consulting and other service expenses; an increase of $1.6 million in severance expense; an increase of $1.0 million in operating expenses, including information technology infrastructure and facility expenses; an increase of $0.9 million in depreciation expense; and an increase of $0.5 million in stock-based compensation, primarily related to our annual stock-based grants made in the first quarter of 2015, which included a new retirement vesting provision; partially offset by a decrease of $0.7 million in other expenses. Manufacturing SG&A as a percentage of revenue for fiscal year 2015 was 20.6%, an increase of 1.8% from 18.8% for fiscal year 2014.

The increase in unallocated corporate SG&A of $19.1 million was related to an increase of $7.3 million in stock-based compensation, primarily related to our annual stock-based grants made in the first quarter of 2015, which included a new retirement vesting provision and the modification of certain stock-based awards as part of executive retirement transitions; an increase of $7.3 million in costs associated with the evaluation and integration of acquisitions and compensation costs related to business acquisitions; an increase of $2.2 million in compensation, benefits and other employee-related expenses; an increase of $2.0 million in external consulting and other service expenses; an increase of $1.9 million in information technology related expenses; and an increase of $0.4 million in other expenses; partially offset by a decrease of $2.0 million in contingent consideration related to business acquisitions.

Amortization of Intangible Assets Amortization of intangibles for fiscal year 2015 was $24.2 million, a decrease of $1.8 million, or 6.7%, from $26.0 million for fiscal year 2014, due primarily to certain intangibles acquired in connection with several Discovery Services and Safety Assessment businesses becoming fully amortized and the effect of changes in foreign currency exchange rates, partially offset by an increase due to recent acquisitions, primarily Argenta, BioFocus, ChanTest, Sunrise, Celsis and Oncotest.

Interest Income Interest income, which represents earnings on held cash, cash equivalents, and time deposits, was $1.0 million for fiscal year 2015, a decrease of $0.2 million, or 9.4%, compared to $1.2 million for fiscal year 2014.

Interest Expense Interest expense for fiscal year 2015 was $15.1 million, an increase of $3.1 million, or 26.1%, compared to $12.0 million for fiscal year 2014. The increase was due primarily to the write-off of a portion of debt issuance costs in connection with the modification of our $970M Credit Facility in April 2015, interest expense related to new capital leases, and overall higher average debt due to additional borrowings related to business acquisitions.

Other Income (Expense), Net Other income (expense), net was net other income of $3.0 million for fiscal year 2015, a decrease of $7.7 million, or 71.9%, compared to net other income of $10.7 million for fiscal year 2014. The decrease in other

income (expense), net was driven by a decrease of $10.4 million due to a reversal of the indemnification asset associated with a pre-acquisition tax position and corresponding unrecognized tax benefit; a decrease of $5.5 million in income from our venture capital investments accounted for under the equity method; and the absence of a noncash gain of $2.1 million related to assets assumed at our Frederick, Maryland, facility following the termination of a customer contract, which was recorded in fiscal year 2014; partially offset by a bargain purchase gain of $9.8 million associated with the ~~impact~~acquisition of ~~foreign exchange~~Sunrise and an increase of $0.5 million from other ~~activity of $2.0 million.~~activity.

Income TaxesIncome tax expense was $43.4 million in ~~the~~ fiscal year ~~2014 increased $14.8~~2015, a decrease of $4.3 million compared ~~with the~~to $47.7 million for fiscal year ~~2013.~~2014. Our effective tax rate was 26.8% in the fiscal year 2014, compared to 23.8% in the fiscal year 2013. The increase was primarily attributable to current-year tax law changes, including a statutory 25% decrease in the Canadian Scientific Research and Experimental Development (SR&ED) credit and an increase in the limitation of deductibility of interest expense in France. In addition, the effective tax rate for the fiscal year 2014 reflected a discrete tax cost of $1.6 million related to the nondeductible transaction costs incurred in the fiscal year 2014 for the acquisition of the Early Discovery businesses and a discrete tax cost of $1.2 million related to the write-off of deferred tax assets as a result of the reorganization of the Company's RMS U.K. entities. These increases were partially offset by a $2.1 million release of an uncertain tax position resulting from an ability to offset tax on a capital gain from an investment in a limited partnership. The fiscal year 2013 effective tax rate includes a discrete tax detriment of $2.0 million related to the ongoing transfer pricing controversy with the Canadian Revenue Authority (CRA).

~~Fiscal Year 2013 Compared to Fiscal Year 2012~~

~~Revenue~~

Fiscal Year Ended
December 28, 2013 December 29, 2012 $ Change % Change Impact of FX
(in millions, except percentages)
Research models and services $ 511.3
$ 521.6
$ (10.3 ) (2.0 )% (1.7 )%
Discovery and safety assessment 432.4
408.9
23.5
5.7 % (0.6 )%
Manufacturing support 221.8
199.0
22.8
11.5 % 1.1 %
Total revenue $ 1,165.5
$ 1,129.5
$ 36.0
3.2 % (0.8 )%

Revenue for the fiscal year 2013 increased $36.0 million, or 3.2%, compared with the fiscal year 2012. Reported revenue decreased due to foreign currency translation by $9.0 million, or 0.8%, when compared to the prior period.

RMS revenue decreased by $10.3 million due to lower research models revenue in the U.S., Europe and Japan due primarily to infrastructure reductions by our global biopharmaceutical clients, partially offset by the inclusion of Vital River, which was acquired in the fiscal year 2013. Additionally, the fiscal year 2013 included a $1.5 million revenue adjustment related to inaccurate billings with respect to certain government contracts. See Note 12, "Commitments and Contingencies."

~~DSA revenue increased $23.5 million due to higher demand from global pharmaceutical and mid-tier biotechnology clients as well as a more favorable mix of longer-term services.~~

~~Manufacturing revenue increased $22.8 million due to higher sales of legacy EMD products globally and the inclusion of a full year of Accugenix services (an EMD service provider acquired in 2012).~~

~~Cost of Products Sold and Services Provided~~

Fiscal Year Ended
December 28, 2013 December 29, 2012 $ Change % Change
(in millions, except percentages)
Research models and services $ 331.8
$ 323.3
$ 8.5
2.6 %
Discovery and safety assessment 325.6
311.0
14.6
4.7 %
Manufacturing support 113.2
103.1
10.1
9.8 %
Total cost of products sold and services provided $ 770.6
$ 737.4
$ 33.2
4.5 %

Costs for the fiscal year 2013 increased $33.2 million, or 4.5%, compared with the fiscal year 2012. Costs as a percentage of revenue for the fiscal year 2013 were 66.1%, an increase of 0.8%, from 65.3% for the fiscal year 2012. The costs above include assets impairments which were previously presented separately in our consolidated statement of income.

RMS costs increased $8.5 million, primarily the result of accelerated depreciation expense at our California facility, which contributed $13.5 million to the increase and the inclusion of Vital River, acquired in January 2013, which contributed $10.5

million to the increase, partially offset by declines in cost of products in our research models business due to lower volume. RMS costs as a percentage of revenue for the fiscal year 2013 were 64.9%, an increase of 2.9%, from 62.0% for the fiscal year 2012, the result of the lower revenue in our U.S., Europe and Japan research model business along with accelerated depreciation expense at our California facility.

DSA costs increased $14.6 million due to an increase in Safety Assessment costs as a result of increased revenues. DSA costs as a percentage of revenue for the fiscal year 2013 were 75.3%, a decrease of 0.8%, from 76.1% for the fiscal year 2012 due to higher volume of services provided and the benefit of efficiency initiatives.

Manufacturing costs increased $10.1 million, primarily as a result of higher EMD revenue. Manufacturing costs as a percentage of revenue for the fiscal year 2013 were 51.0%, a decrease of 0.8%, from 51.8% in the fiscal year 2012 as a result of leverage of fixed costs from higher revenue.

~~Selling, General and Administrative Expenses~~

Fiscal Year Ended
December 28, 2013 December 29, 2012 $ Change % Change
(in millions, except percentages)
Research models and services $ 60.0
$ 53.5
$ 6.5
12.1 %
Discovery and safety assessment 49.7
49.8
(0.1 ) (0.2 )%
Manufacturing support 42.0
33.7
8.3
24.6 %
Unallocated corporate 74.0
71.2
2.8
3.9 %
Total selling, general and administrative $ 225.7
$ 208.2
$ 17.5
8.4 %

SG&A for the fiscal year 2013 increased $17.5 million, or 8.4%, compared with the fiscal year 2012. SG&A as a percentage of revenue for the fiscal year 2013 was 19.4%, an increase of 1.0%, from 18.4% for the fiscal year 2012.

The increase in RMS SG&A of $6.5 million was related to an increase of $2.2 million in compensation, benefits and other employee related expenses; an increase of $1.8 million in bad debt expense; an increase of $0.8 million in stock-based compensation expense; an increase of $0.8 million in severance charges; and an increase of $1.4 million in other expenses; partially offset by a decrease of $0.5 million in operating costs, including information technology and facility costs. RMS SG&A as a percentage of revenue for the fiscal year 2013 was 11.7%, an increase of 1.4%, from 10.3% for the fiscal year 2012.

DSA SG&A remained substantially flat year over year due to a decrease of $2.0 million in compensation, benefits and other employee related expenses and a decrease of $1.1 million in operating costs, including information technology and facilities costs; offset by an increase of $3.0 million in other expenses. DSA SG&A as a percentage of revenue for the fiscal year 2013 was 11.5%, a decrease of 0.7%, from 12.2% for the fiscal year 2012.

The increase in Manufacturing SG&A of $8.3 million was primarily related to an increase of $5.1 million in compensation, benefits and other employee related expenses; an increase of $1.0 million in bad debt expense; an increase of $0.9 million in operating costs, including information technology and facility expenses; and an increase of $1.3 million in other expenses. Manufacturing SG&A as a percentage of revenue for the fiscal year 2013 was 18.9%, an increase of 2.0%, from 16.9% for the fiscal year 2012.

The increase in unallocated corporate SG&A of $2.8 million was related to an increase of $3.1 million in compensation, benefits and other employee related expenses; an increase of $1.7 million in stock-based compensation; and an increase of $1.2 million in external consulting and other service expense; partially offset by a decrease of $2.0 million of costs associated with the evaluation and integration of acquisitions; a decrease of $1.0 million decrease in information technology related expenses; and a decrease of $0.2 million in other expenses.

~~Amortization of Intangible Assets~~ ~~Amortization of intangibles for the fiscal year 2013 was $17.8 million, a decrease of $0.3 million, or 1.7%, from $18.1 million for the fiscal year 2012.~~

~~Interest Income~~ Interest income, which represents earnings on held cash, cash equivalents, and time deposits, was $0.7 million for the fiscal year 2013, an increase of $0.1 million, or 16.7%, compared to $0.6 million for the fiscal year 2012.

~~Interest Expense~~ Interest expense for the fiscal year 2013 was $21.0 million, a decrease of $12.3 million, or 36.9%, compared to $33.3 million for the fiscal year 2012. The decrease was due to lower interest rates on our debt as a result of our debt refinancing in May 2013 and the associated retirement of our senior convertible debentures22.2% in fiscal year ~~2013.~~

~~Other Income (Expense), Net~~ ~~Other income (expense), net was $7.2 million for the~~2015, compared to 26.8% in fiscal year ~~2013, an increase of $10.5 million, or 318.2%, compared to $(3.3) million for the fiscal year 2012.~~2014. The ~~increase in other income (expense), net was driven by our investments in limited partnerships accounted for under the equity method.~~

~~Income Taxes~~ Income tax expense for the fiscal year 2013 increased $5.3 million, compared with the fiscal year 2012. Our effective tax rate was 23.8% in the fiscal year 2013, compared to 21.3% in the fiscal year 2012. The increase of 2.5% in the effective tax rate for the fiscal year 2013decrease was primarily attributable to a ~~discrete~~$10.4 million reduction in unrecognized tax ~~detriment of $2.0 million~~benefits and related interest due to ~~an adjustment related to~~ the ~~ongoing transfer pricing controversy~~expiration of the statute of limitations associated with pre-acquisition tax positions on the ~~CRA, a reduction in research and development tax benefits by $1.8 million arising from the adoption~~forgiveness of a new refundable research and development credit provided for in a U.K. tax law change that was enacted in the fiscal year 2013, $1.4 million of costs from a new French tax law enacted in the fiscal year 2013 that applied retroactively to the fiscal year 2012 that limits the deductibility of interest by our French affiliates,debt and a ~~discrete tax cost~~non-taxable bargain purchase gain of ~~$0.5~~$9.8 million ~~related to nondeductible transaction costs incurred in 2012 for~~associated with the acquisition of ~~Vital River, which closed~~Sunrise. These benefits were offset by a tax accrual of $6.6 million of withholding taxes in ~~the first quarter~~order to access cash from our Canadian and Chinese operations for use outside of the fiscal year 2013. These costs were partially offset by increased benefits from the domestic production deduction of $0.6 million and reduced unbenefitted tax losses of $0.6 million. The fiscal year 2012 effective tax rate reflects a benefit from the settlement of the tax litigation related to the 2003 and 2004 SR&ED credits claimed by our Safety Assessment services facility in Montreal.U.S.

Liquidity and Capital Resources

We currently require cash to fund our working capital needs, pension obligations, capital expansion, ~~and~~ acquisitions, and to pay our debt obligations. Our principal sources of liquidity have been our cash flows from operations, supplemented by long-term borrowings. Based on our current business plan, we believe that our existing funds, when combined with cash generated from operations and our access to financing resources, are sufficient to fund our operations for the foreseeable future.

The following table presents our cash, ~~and~~ cash equivalents and ~~time deposits held in the U.S. and by foreign subsidiaries:~~investments:

December 27, 2014 December 28, 2013
(in millions)
Cash and cash equivalents
Held in the U.S. $ 10.0
$ 8.0
Held by non-U.S. subsidiaries 150.0
147.9
Total cash and cash equivalents 160.0
155.9
Time deposits held in the U.S. 2.8
—
Time deposits held by non-US subsidiaries 13.4
11.2
Total cash and cash equivalents and time deposits $ 176.2
$ 167.1



	December 31, 2016		December 26, 2015

	(in millions)
Cash and cash equivalents:
Held in the U.S. entities	$	10.6	$	3.6
Held in non-U.S. entities	107.0		114.3
Total cash and cash equivalents	117.6		117.9
Investments:
Held in the U.S. entities	—		4.5
Held in non-U.S. entities	3.8		16.0
Total cash, cash equivalents and investments	$	121.4	$	138.4

Borrowings

~~On May 29, 2013,~~In April 2015, we amended and restated our ~~previous credit agreement and entered into a $970.0 million agreement (the $970M Credit Facility). The~~ $970M Credit Facility, ~~has~~creating a ~~maturity date of May 2018 and~~$1.3 billion facility ($1.3B Credit Facility) that provides for a ~~$420.0~~$400.0 million ~~U.S.~~ term loan facility and a ~~$550.0~~$900.0 million multi-currency revolving ~~credit~~ facility. The interest rates applicable to term loans and revolving loans under the Company’s $1.3B Credit Facility were, at our option, equal to either the alternate base rate (which is the higher of (1) the prime rate, (2) the federal funds rate plus 0.5% or (3) the one-month adjusted LIBOR rate plus 1%) or the adjusted LIBOR rate, plus an interest rate margin based upon our leverage ratio.

On March 30, 2016, we amended and restated our $1.3B Credit Facility, creating a $1.65 billion credit facility ~~may be drawn~~($1.65B Credit Facility) which (1) extends the maturity date for the credit facility and (2) makes certain other amendments in ~~U.S. Dollars, Euros, Pound Sterling, or Japanese Yen, subject~~connection with our acquisition of WIL Research. The $1.65B Credit Facility provides for up to ~~sub-limits by currency.~~approximately $1.65 billion in financing, including a $650.0 million term loan facility and a $1.0 billion multi-currency revolving facility. The term loan facility matures in 19 quarterly installments, with the last installment due March 30, 2021. The revolving facility matures on March 30, 2021, and requires no scheduled payment before that date. Under specified circumstances, we have the ability to ~~expand~~increase the term ~~loan~~loans and/or revolving line of credit ~~facility~~ by up to ~~$350.0 million. The U.S. term loan matures~~$500.0 million in ~~20 quarterly installments through May 2018. The revolving credit facility matures in May 2018 and requires no scheduled payment before this date. The interest rates on~~ the ~~$970M Credit Facility are variable and are based on an applicable published rate plus a spread determined by our leverage ratio.~~aggregate.

Amounts outstanding under the ~~$970M~~$1.65B Credit Facility were as follows as of December ~~27, 2014~~31, 2016 and December ~~28, 2013:~~

26, 2015:


					December 31, 2016		December 26, 2015
	December 27, 2014		December 28, 2013
	(in millions)				(in millions)
Term loans	$	378.0	$	409.5	$	633.8	$	390.0
Revolving credit facility	375.5		253.3		578.8		446.0
Total	$	753.5	$	662.8	$	1,212.6	$	836.0

The interest rates applicable to term loan and revolving loans under the $1.65B Credit Facility are, at our option, equal to either the base rate (which is the higher of (1) the prime rate, (2) the federal funds rate plus 0.50%, or (3) the one-month adjusted LIBOR rate plus 1%) or the adjusted LIBOR rate, plus an interest rate margin based upon our leverage ratio.

Repurchases of Common Stock

In July 2010, our Board of Directors authorized a $500.0 million stock repurchase program, and subsequently approved increases for an aggregate authorization of $1,150.0 million. During ~~the~~ fiscal year ~~2014~~,2016, we ~~repurchased approximately 2,093,000~~did not repurchase any shares ~~at a cost~~under our authorized stock repurchase program. As of ~~$110.6 million. At~~ December ~~27, 2014,~~31, 2016, we had ~~$178.5~~$69.7 million remaining on the authorized stock repurchase program.

Our stock-based compensation plans permit the netting of common stock upon vesting of restricted stock, PSUs, and restricted stock units in order to satisfy individual minimum statutory tax withholding requirements. During fiscal year 2016, we acquired approximately 0.2 million shares for $12.3 million.

Cash Flows

The following table presents our net cash provided by operating activities:


										Fiscal Year
	Fiscal Year Ended									2016			2015		2014
	December 27, 2014			December 28, 2013			December 29, 2012
	(in millions)									(in millions)
Income from continuing operations	$	129.9		$	105.4		$	102.1		$	156.1		$	152.0	$	129.9
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities	126.0			129.0			131.7			174.3			126.6		126.0
Changes in assets and liabilities	(3.8		)	(25.4		)	(25.8		)	(30.0		)	9.6		(3.8		)
Net cash provided by operating activities	$	252.1		$	209.0		$	208.0		$	300.4		$	288.2	$	252.1

12. FOREIGN CURRENCY CONTRACTS

The Company enters into foreign exchange forward contracts to limit its foreign currency exposure related to intercompany loans that are not of a long-term investment nature. These contracts are recorded at fair value in the Company’s consolidated balance sheet and are not designated as hedging instruments. Any gains or losses on such contracts are immediately recognized in other income (expense), net, and are largely offset by the remeasurement of the underlying intercompany loan balances.

The Company did not have any foreign currency contracts open as of December 31, 2016. The notional amount and fair value of the Company’s foreign currency forward contracts as of December 26, 2015 were as follows:



Notional Amount		Fair Value		Balance Sheet Location

(in thousands)
$	88,483	$	15	Other current assets

The following table summarizes gains (losses) recognized on foreign exchange forward contracts related to intercompany loans denominated in British Pounds and Euros on the Company’s consolidated statement of income:



	Fiscal Year
Location of Gain (Loss)	2016		2015

	(in thousands)
Other income (expense), net	$	3,373	$	(4,917	)

The forward contracts outstanding as of December 26, 2015 had durations of approximately 3 months.

13. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company rents laboratory and office space, land, vehicles and certain equipment under ~~non-cancelable~~non-cancellable operating leases. These lease agreements contain various clauses for renewal at the ~~Company's~~Company’s option and, in certain cases, rent escalation

~~CHARLES RIVER LABORATORIES INTERNATIONAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

clauses. Rental expense under these leases amounted to $21.8 million, $23.4 million and $14.2 million ~~$16.7 million and~~ ~~$18.2 million~~in ~~the~~ fiscal years ~~2014~~, ~~2013~~2016, 2015 and ~~2012~~,2014, respectively. In addition to rent, the leases may require the Company to pay additional amounts for taxes, insurance, maintenance and other operating expenses.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December ~~27, 2014,~~31, 2016, minimum rental commitments under ~~non-cancelable~~non-cancellable leases, net of income from subleases, for each of the next five years and total thereafter were as follows:


	Minimum lease payments		Minimum Lease Payments
	(in thousands)		(in thousands)
2015	$	12,102
2016	9,854
2017	7,331		$	23,410
2018	4,284		20,273
2019	3,577		17,119
2020			13,254
2021			8,104
Thereafter	7,769		19,116
Total	$	44,917	$	101,276

Insurance

The Company maintains ~~various~~certain insurance policies that maintain large deductibles up to ~~$0.5~~approximately $5.0 million,, some with or without stop-loss limits, depending on market availability. Insurance policies at certain locations are based on a percentage of the insured assets, for which deductibles for certain property may exceed ~~$0.5~~$5.0 million in the event of a catastrophic event.

Litigation

Various lawsuits, claims and proceedings of a nature considered normal to its business are pending against the Company. While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing matters would have a material adverse effect on the Company’s business or financial condition.

In July 2015, IDEXX Laboratories, Inc. and IDEXX Distribution, Inc. (collectively, IDEXX) filed a complaint in the United States District Court for the District of Delaware alleging the Company has infringed three recently issued patents related to a blood spot sample collection method used in determining the presence or absence of an infectious disease in a population of rodents. On September 21, 2015, the Company timely filed a motion to dismiss the complaint on the grounds that all of the claims are directed to unpatentable subject matter and therefore are invalid. On October 7, 2015, IDEXX filed an amended complaint, which substantially asserted the same patents and infringement allegations as asserted in the original complaint, and on October 26, 2015, the Company timely filed a motion to dismiss this amended complaint. The hearing on the motion to dismiss was held on January 12, 2016. On July 1, 2016, the Court issued an opinion denying the motion to dismiss. The Company filed its answer to the complaint on July 21, 2016. In addition, on July 29, 2016, the Company initiated an inter partes review (IPR) procedure with the United States Patent and Trademark Office challenging the validity of the IDEXX patents. On February 6, 2017, we entered into a settlement agreement with IDEXX, which involved the withdrawal by IDEXX of their complaint and withdrawal by us of the IPR.

In May 2013, the Company commenced an investigation into inaccurate billing with respect to certain government contracts. The Company promptly reported these matters to the relevant government contracting officers, the Department of Health and Human ~~Services'~~Services’ Office of the Inspector General, and the Department of Justice, and the Company is cooperating with these agencies to ensure the proper repayment and resolution of this matter. The Company previously identified approximately $1.5 million inof excess amounts billed on these contracts since January 1, 2007, and ~~reserved~~recorded a liability for such amount. ~~Because of the early stage of~~Based on its ongoing discussions with the government, ~~and complex nature of this matter,~~ the Company ~~believes that it is reasonably possible that~~has recorded an additional ~~losses~~charge of $0.3 million during the fiscal year 2016. The Company’s best estimate, which totals $1.8 million, may be ~~incurred. However, it cannot at this time estimate~~subject to change based on the ~~potential range~~terms of ~~loss beyond~~any final settlement with the ~~current reserve~~Department of ~~$1.5 million.~~

In July 2012, a Mauritius supplier of large animal models submitted an Application for Arbitration with The Permanent Secretariat, The Permanent Court of Arbitration, The Mauritius Chamber of Commerce and Industry in Port Louis, Mauritius. The supplier asserted that the Company failed to pay certain invoicesJustice and the supplier was therefore permitted to terminate the supply agreement. The Company filed a counterclaim asserting that the supplier had failed to meet its contractual obligations under the supply agreement. The arbitration hearing relating to this contract dispute took place in Mauritius from August 2013Department of Health and ~~final arguments were presented in March 2014. In May 2014 and August 2014, the arbitrator issued the final rulings, ordering the Company to pay the supplier (1) the sum of $1.2 million and (2) all~~Human Services’ Office of the ~~supplier's arbitration costs, in each case with interest. In September 2014, the Company paid the supplier $1.6 million in accordance with the arbitration ruling.~~

Inspector General.

Guarantees

The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with directors and officers, business partners, contractors, landlords, and customers. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date the Company has not incurred

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

material costs to defend lawsuits or settle claims related to these indemnification ~~provisions~~provisions. As a result, the estimated fair value of these obligations is minimal.

Purchase Obligations

The Company enters into unconditional purchase obligations, in the ordinary course of business, that include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancellable at any time without penalty. The aggregate amount of the Company’s unconditional purchase obligations totaled $86.2 million as of December 31, 2016.

14. RESTRUCTURING AND ASSET IMPAIRMENTS

Workforce Reductions

The Company periodically implements workforce reductions to improve operating efficiency at various sites. The following table provides a rollforward of the Company’s severance and retention costs liability:



	December 31, 2016			December 26, 2015			December 27, 2014

	(in thousands)
Balance, beginning of period	$	2,969		$	2,666		$	2,782
Expense	8,454			6,173			7,792
Payments / utilization	(7,473		)	(5,820		)	(7,900		)
Foreign currency adjustments	(270		)	(50		)	(8		)
Balance, end of period	$	3,680		$	2,969		$	2,666

As of December 31, 2016 and December 26, 2015, $3.6 million and $2.6 million of severance and retention costs liability, respectively, was included in accrued compensation and $0.1 million and $0.3 million, respectively, was included in other ~~than guaranties~~long-term liabilities on the Company's consolidated balance sheets.

The following table presents severance and retention costs by classification on the consolidated statements of income:



	Fiscal Year
	2016		2015		2014

	(in thousands)
Cost of services provided and products sold (excluding amortization of intangible assets)	$	4,717	$	735	$	3,342
Selling, general and administrative	3,737		5,438		4,450
Total severance and retention costs	$	8,454	$	6,173	$	7,792

The following presents severance and retention costs by reportable segment:



	Fiscal Year
	2016		2015		2014

	(in thousands)
RMS	$	759	$	1,338	$	4,593
DSA	7,689		1,068		2,912
Manufacturing	6		1,639		166
Unallocated corporate	—		2,128		121
Total severance and retention costs	$	8,454	$	6,173	$	7,792

Facilities

In fiscal year 2016, the Company commenced a consolidation of small DSA facilities in the U.S., Ireland, and the United Kingdom. As a result, an asset impairment charge of $9.4 million was recorded related to the consolidation plans.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In fiscal year 2015, the Company commenced a consolidation of certain RMS facilities in the U.S., Europe, and Japan. As a result, an asset impairment charge of $1.8 million was recorded related to the consolidation plans.

~~Phase I clinical business. See Note 14, “Discontinued Operations.”~~In fiscal year 2014, the Company committed to plans to consolidate certain research model operations in the U.S., Japan, and Europe. As a result, the ~~estimated fair value~~Company recorded $2.2 million of ~~these obligations,~~asset impairments and other ~~than liabilities~~charges and $4.3 million of accelerated depreciation related to certain facilities impacted by the ~~Phase I clinical business, is minimal.~~consolidation plans. Also, in fiscal year 2014, the Company recorded a gain of $1.0 million on the sale of a European facility.

~~13. BUSINESS~~15. SEGMENT AND GEOGRAPHIC INFORMATION

The Company revised its reportable segments during ~~2014~~fiscal year 2016 to align with its view of the business following its acquisition of ~~Argenta and BioFocus.~~WIL Research. See Note 1, ~~"Description~~“Description of Business and Summary of Significant Accounting Policies."” The Company reported segment results on this basis retrospectively for all comparable prior periods. Asset information on a reportable segment basis is not disclosed as this information is not separately identified and internally reported to the Company’s Chief Operating Decision Maker.

The following table presents revenue and other financial information by reportable ~~segment.~~segment:


	Fiscal Year Ended						Fiscal Year
	December 27, 2014		December 28, 2013		December 29, 2012		2016		2015		2014
	(in thousands)
Research Models and Services
							(in thousands)
RMS
Revenue	$	507,327	$	511,350	$	521,633	$	494,037	$	470,411	$	503,656
Gross margin	190,092		179,493		198,291
Operating income	121,376		116,737		143,783		136,365		120,973		120,736
Total assets	375,415		460,594		411,874
Long-lived assets	138,021		161,027		172,641
Depreciation and amortization	27,512		41,837		26,725		20,853		22,526		27,309
Capital expenditures	18,749		16,717		27,077		11,642		17,398		18,669
Discovery and Safety Assessment
DSA
Revenue	$	538,218	$	432,378	$	408,908	$	836,593	$	612,173	$	538,218
Gross margin	150,970		106,766		97,908
Operating income	69,749		47,413		35,688		138,157		121,981		69,749
Total assets	1,088,171		766,243		760,370
Long-lived assets	408,280		394,741		414,584
Depreciation and amortization	47,138		37,720		41,001		71,816		46,812		47,138
Capital expenditures	19,759		12,561		10,051		27,493		30,333		19,759
Manufacturing Support
Manufacturing
Revenue	$	252,117	$	221,800	$	198,989	$	350,802	$	280,718	$	255,788
Gross margin	131,598		108,643		95,882
Operating income	78,620		61,227		57,519		104,543		74,675		79,260
Total assets	274,952		246,467		228,804
Long-lived assets	71,367		66,352		64,254
Depreciation and amortization	14,092		17,079		13,549		25,566		18,129		14,295
Capital expenditures	15,541		9,876		10,407		12,247		9,814		15,621



(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER ~~27, 2014~~31, 2016
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO



Delaware		06-1397316
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
251 Ballardvale Street Wilmington, Massachusetts		01887
(Address of Principal Executive Offices)		~~01887~~ (Zip Code)



Title of each class		Name of each exchange on which registered
Common Stock, $0.01 par value		New York Stock Exchange



Large accelerated filer ý	Accelerated filer o	Non-accelerated filer o (Do not check if smaller reporting company)	Smaller reporting company o


Fiscal 2015	High		Low
First quarter (through January 30, 2015)	$	70.73	$	63.22
Fiscal 2014	High		Low
Fiscal 2017					High		Low
First quarter (through January 27, 2017)					$	82.89	$	75.25
Fiscal 2016					High		Low
First quarter	$	62.50	$	52.41	$	81.61	$	65.70
Second quarter	61.92		49.60		87.95		73.42
Third quarter	61.49		52.02		89.18		75.54
Fourth quarter	66.11		55.47		84.53		67.20
Fiscal 2013	High		Low
Fiscal 2015					High		Low
First quarter	$	46.90	$	36.50	$	84.69	$	63.22
Second quarter	45.90		40.28		80.30		68.59
Third quarter	48.73		41.05		78.50		63.75
Fourth quarter	53.81		44.12		80.44		59.99


Item		Page		Page
	PART I		PART I
1	Business	1	Business	1
1A	Risk Factors	13	Risk Factors	15
1B	Unresolved Staff Comments	22	Unresolved Staff Comments	25
2	Properties	22	Properties	25
3	Legal Proceedings	23	Legal Proceedings	25
4	Mine Safety Disclosures	23	Mine Safety Disclosures	26
	Supplementary Item. Executive Officers of the Registrant (pursuant to Instruction 3 to Item 401(b) of Regulation S-K)	23
	PART II		PART II
5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
6	Selected Consolidated Financial Data	27	Selected Consolidated Financial Data	29
7	Management's Discussion and Analysis of Financial Condition and Results of Operations	28	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
7A	Quantitative and Qualitative Disclosures about Market Risk	41	Quantitative and Qualitative Disclosures about Market Risk	46
8	Financial Statements and Supplementary Data	42	Financial Statements and Supplementary Data	48
9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	86	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	100
9A	Controls and Procedures	86	Controls and Procedures	100
9B	Other Information	86	Other Information	100
	PART III		PART III
10	Directors, Executive Officers and Corporate Governance	87	Directors, Executive Officers and Corporate Governance	101
11	Executive Compensation	87	Executive Compensation	101
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	87	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	101
13	Certain Relationships and Related Transactions, and Director Independence	88	Certain Relationships and Related Transactions, and Director Independence	101
14	Principal Accountant Fees and Services	88	Principal Accountant Fees and Services	101
	PART IV		PART IV
15	Exhibits and Financial Statement Schedules	89	Exhibits and Financial Statement Schedules	102
16			Form 10-K Summary	102

Signatures	Signatures	90	Signatures	103
Exhibit Index	Exhibit Index	91	Exhibit Index	104


•	the occasional extra week (“53^rdweek”) that we recognize in a fiscal year (and fourth fiscal quarter thereof) due to our fiscal year ending on the last Saturday in December; and



	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
September 28, 2014 to October 25, 2014	286	$	59.74	—	$	178,455
October 26, 2014 to November 22, 2014	252	63.16		—	178,455
November 23, 2014 to December 27, 2014	—	—		—	178,455
Total:	538			—



	Fiscal Year
	2011		2012		2013		2014		2015		2016
Charles River Laboratories International, Inc.	$	100	$	135	$	195	$	235	$	293	$	279
S&P 500	100		116		154		175		177		198
S&P 500 Health Care	100		118		167		209		223		217



	December 26, 2009	December 25, 2010	December 31, 2011	December 29, 2012	December 28, 2013	December 27, 2014
Charles River Laboratories International, Inc.	100.00	108.31	82.92	111.89	161.80	195.05
S&P 500	100.00	115.06	117.49	136.30	180.44	205.14
NASDAQ Pharmaceutical	100.00	104.24	117.69	161.80	271.53	349.75



	Fiscal Year Ended
	12/27/2014			12/28/2013			12/29/2012			12/31/2011			12/25/2010
	(in thousands)
Statement of Income Data:
Total revenue	$	1,297,662		$	1,165,528		$	1,129,530		$	1,142,647		$	1,133,416
Goodwill impairment ⁽¹⁾	—			—			—			—			305,000
Asset impairment ⁽¹⁾	312			4,202			3,548			7,492			91,378
Termination fee ⁽²⁾	—			—			—			—			30,000
Income (loss) from continuing operations, net of income taxes	129,924			105,416			102,118			115,522			(334,105		)
Loss from discontinued operations, net of income taxes	(1,726		)	(1,265		)	(4,252		)	(5,545		)	(8,012		)
Common Share Data:
Earnings (loss) per common share from continuing operations:
Basic	$	2.76		$	2.18		$	2.12		$	2.26		$	(5.25	)
Diluted	$	2.70		$	2.15		$	2.10		$	2.24		$	(5.25	)
Other Data:
Depreciation and amortization	$	96,445		$	96,636		$	81,275		$	85,230		$	93,649
Capital expenditures	56,925			39,154			47,534			49,143			42,860
Balance Sheet Data (at end of period):
Cash and cash equivalents	$	160,023		$	155,927		$	109,685		$	68,905		$	179,160
Working capital	310,728			305,516			143,005			209,046			293,114
Goodwill	321,077			230,701			208,609			197,561			198,438
Total assets	1,885,192			1,632,756			1,586,344			1,558,320			1,733,373
Total debt and capital lease obligations	777,862			663,789			666,520			717,945			700,852
Total equity attributable to common shareholders	672,203			640,984			600,805			525,583			687,423


~~(1)~~	~~The 2010 impairment charges were primarily related to our then Preclinical Services business segment, which is now included in our DSA business segment.~~


~~(2)~~	~~The fee was the result of the termination of the proposed WuXi Pharmatech (Cayman) Inc. acquisition.~~



	Payments Due by Period
	Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		After 5 Years
	(in millions)
Notes payable ⁽¹⁾	$	753.8	$	31.7	$	115.5	$	606.6	$	—
Operating leases ⁽²⁾	44.9		12.1		17.2		7.8		7.8
Build-to-suit leases ⁽³⁾	68.6		2.0		5.4		5.4		55.8
Capital leases	1.0		0.2		0.8		—		—
Pension and supplemental retirement benefits ⁽⁴⁾	128.8		7.5		27.9		25.0		68.4
Redeemable noncontrolling interest ⁽⁵⁾	28.4		—		28.4		—		—
Commitment to limited partnership investments accounted for under the equity method ⁽⁶⁾	45.4		45.4		—		—		—
Contingent consideration ⁽⁷⁾	10.5		6.7		3.8		—		—
Total contractual cash obligations	$	1,081.4	$	105.6	$	199.0	$	644.8	$	132.0


⁽¹⁾	Notes payable includes the principal payments on our debt.


⁽²⁾	We lease properties and equipment for use in our operations. In addition to rent, the leases may require us to pay additional amounts for taxes, insurance, maintenance, and other operating expenses. Amounts reflected within the table detail future minimum rental commitments under non-cancellable operating leases for each of the periods presented.


~~(4)~~	We maintain defined benefit pension plans and other postretirement benefit plans as discussed in Note 10, "Employee Benefit Plans" included in this report. In the above table we have included the discounted estimated benefit payments we


~~(5)~~	The estimated cash obligation for redeemable noncontrolling interest ~~which is exercisable by the non-controlling interest holders in 2016 at fair value,~~ is based on the ~~estimated fair value~~amount that would be paid if settlement occurred as of the ~~interest~~balance sheet date based on the contractually defined redemption value as of December ~~27, 2014.~~31, 2016.


~~(6)~~ ⁽⁴⁾	The timing of the remaining capital commitment payments to ~~limited partnership investments~~venture capital funds is subject to the procedures of the ~~general partner~~limited liability partnerships and ~~is therefore estimated by management.~~limited liability companies; the above table reflects the earliest possible date the payment can be required under the relevant agreements.


~~(7)~~ ⁽⁵⁾	In connection with ~~our purchase of Argenta and BioFocus, VivoPath and ChanTest,~~business acquisitions, we agreed to make additional payments of up to ~~$10.5~~$3.8 million based upon the achievement of certain financial targets. The contingent consideration obligation included in the table above has not been probability adjusted or discounted.





~~Consolidated Financial Statements:~~
	Report of Independent Registered Public Accounting Firm	4349
	Consolidated Statements of Income for ~~the~~ fiscal years ~~ended December 27,~~2016, 2015 and 2014 ~~December 28, 2013 and December 29, 2012~~	4450
	Consolidated Statements of Comprehensive Income for ~~the~~ fiscal years ~~ended December 27,~~2016, 2015 and 2014 ~~December 28, 2013 and December 29, 2012~~	4551
	Consolidated Balance Sheets as of December ~~27, 2014~~31, 2016 and December ~~28, 2013~~26, 2015	4652
	Consolidated Statements of Cash Flows for ~~the~~ fiscal years ~~ended December 27,~~2016, 2015 and 2014 ~~December 28, 2013 and December 29, 2012~~	4753
	Consolidated Statements of Changes in Equity for ~~the~~ fiscal years ~~ended December 27,~~2016, 2015 and 2014 ~~December 28, 2013 and December 29, 2012~~	4955
	Notes to Consolidated Financial Statements	5056


	Fiscal Year Ended									Fiscal Year
	December 27, 2014			December 28, 2013			December 29, 2012			2016			2015			2014
Service revenue	$	797,765		$	689,166		$	661,586		$	1,130,733		$	858,244		$	797,765
Product revenue	499,897			476,362			467,944			550,699			505,058			499,897
Total revenue	1,297,662			1,165,528			1,129,530			1,681,432			1,363,302			1,297,662
Costs and expenses:
Cost of services provided	558,578			497,876			479,742
Cost of products sold	266,424			272,750			257,707
Cost of services provided (excluding amortization of intangible assets)										757,732			568,227			558,578
Cost of products sold (excluding amortization of intangible assets)										277,034			263,983			266,424
Selling, general and administrative	269,033			225,695			208,248			367,548			300,414			269,033
Amortization of intangible assets	25,957			17,806			18,068			41,699			24,229			25,957
Operating income	177,670			151,401			165,765			237,419			206,449			177,670
Other income (expense):
Interest income	1,154			730			589			1,314			1,043			1,154
Interest expense	(11,950		)	(20,969		)	(33,342		)	(27,709		)	(15,072		)	(11,950		)
Other income (expense), net	10,721			7,165			(3,266		)	11,897			3,008			10,721
Income from continuing operations, before income taxes	177,595			138,327			129,746			222,921			195,428			177,595
Provision for income taxes	47,671			32,911			27,628			66,835			43,391			47,671
Income from continuing operations, net of income taxes	129,924			105,416			102,118			156,086			152,037			129,924
Loss from discontinued operations, net of income taxes	(1,726		)	(1,265		)	(4,252		)
Income (loss) from discontinued operations, net of income taxes										280			(950		)	(1,726		)
Net income	128,198			104,151			97,866			156,366			151,087			128,198
Less: Net income attributable to noncontrolling interests	(1,500		)	(1,323		)	(571		)	1,601			1,774			1,500
Net income attributable to common shareholders	$	126,698		$	102,828		$	97,295		$	154,765		$	149,313		$	126,698
Earnings (loss) per common share
Basic:
Continuing operations attributable to common shareholders	$	2.76		$	2.18		$	2.12		$	3.28		$	3.23		$	2.76
Discontinued operations	$	(0.04	)	$	(0.03	)	$	(0.09	)	$	0.01		$	(0.02	)	$	(0.04	)
Net income attributable to common shareholders	$	2.72		$	2.15		$	2.03		$	3.29		$	3.21		$	2.72
Diluted:
Continuing operations attributable to common shareholders	$	2.70		$	2.15		$	2.10		$	3.22		$	3.15		$	2.70
Discontinued operations	$	(0.04	)	$	(0.03	)	$	(0.09	)	$	0.01		$	(0.02	)	$	(0.04	)
Net income attributable to common shareholders	$	2.66		$	2.12		$	2.01		$	3.23		$	3.13		$	2.66














See Notes to Consolidated Financial Statements.										See Notes to Consolidated Financial Statements.


	Redeemable Noncontrolling Interest			Common Stock			Additional Paid-In Capital				Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)				Treasury Stock					Total Equity Attributable to Common Shareholders			Noncontrolling Interest				Total Equity			Common stock			Additional Paid-In Capital				Retained Earnings (Accumulated Deficit)				Accumulated Other Comprehensive Income (Loss)			Treasury Stock					Total Equity Attributable to Common Shareholders			Noncontrolling Interests			Total Equity
	Redeemable Noncontrolling Interest			Shares	Amount					Shares				Accumulated Other Comprehensive Income (Loss)			Amount					Shares	Total Equity Attributable to Common Shareholders			Noncontrolling Interest			Amount						Shares	Additional Paid-In Capital			Amount													Total Equity Attributable to Common Shareholders			Noncontrolling Interests			Total Equity
December 31, 2011	$	—		78,474	$	785	Additional Paid-In Capital			$	Accumulated Deficit	2,056,921		$	(465,596	)		$	4,593		29,598		$	(1,071,120	)	$	525,583			Total Equity		$	1,780	$	527,363
Components of comprehensive income, net of income taxes:
Net income	—			—	—		—				97,295			—				—		—			97,295			571				97,866
Other comprehensive income	—			—	—		—				—			2,010				—		—			2,010			44				2,054
Total comprehensive income	—																						99,305			615				99,920
Tax benefit associated with stock issued under employee compensation plans	—			—	—		125				—			—				—		—			125			—				125
Issuance of stock under employee compensation plans	—			1,134	11		18,415				—			—				—		—			18,426			—				18,426
Acquisition of treasury shares	—			—	—		—				—			—				1,790		(64,489		)	(64,489		)	—				(64,489		)
Stock-based compensation	—			—	—		21,855				—			—				—		—			21,855			—				21,855
December 29, 2012	—			79,608	796		2,097,316				(368,301		)	6,603				31,388		(1,135,609		)	600,805			2,395				603,200
Components of comprehensive income, net of income taxes:
Net income	687			—	—		—				102,828			—				—		—			102,828			636				103,464
Other comprehensive income (loss)	367			—	—		—				—			(1,246		)		—		—			(1,246		)	62				(1,184		)
Total comprehensive income	1,054																						101,582			698				102,280
Redeemable noncontrolling interest acquired in business acquisition	8,963			—	—		—				—			—				—		—			—			—				—
Adjustment of redeemable noncontrolling interest to fair value	10,564			—	—		(10,564		)		—			—				—		—			(10,564		)	—				(10,564		)
Tax benefit associated with stock issued under employee compensation plans	—			—	—		1,069				—			—				—		—			1,069			—				1,069
Issuance of stock under employee compensation plans	—			2,915	29		93,792				—			—				—		—			93,821			—				93,821
Acquisition of treasury shares	—			—	—		—				—			—				3,581		(170,271		)	(170,271		)	—				(170,271		)
Stock-based compensation	—			—	—		24,542				—			—				—		—			24,542			—				24,542
December 28, 2013	20,581			82,523	825		2,206,155				(265,473		)	5,357				34,969		(1,305,880		)	640,984			3,093				644,077			82,523	$	825	$	2,206,155			Retained Earnings (Accumulated Deficit)		$	(265,473	Accumulated Other Comprehensive Income (Loss)		)	$	5,357		34,969		$	(1,305,880	)	$	640,984		$	3,093		$	644,077
Components of comprehensive income, net of income taxes:
Net income	855			—	—		—				126,698			—				—		—			126,698			645				127,343			—	—		—				126,698				—			—		—			126,698			645			127,343
Other comprehensive loss	(442		)	—	—		—				—			(79,604		)		—		—			(79,604		)	(14		)		(79,618		)	—	—		—				—				(79,604		)	—		—			(79,604		)	(14		)	(79,618		)
Total comprehensive income	413																						47,094			631				47,725
Adjustment of redeemable noncontrolling interest to fair value	7,425			—	—		(7,425		)		—			—				—		—			(7,425		)	—				(7,425		)	—	—		(7,425		)		—				—			—		—			(7,425		)	—			(7,425		)
Tax benefit associated with stock issued under employee compensation plans	—			—	—		4,301				—			—				—		—			4,301			—				4,301			—	—		4,301				—				—			—		—			4,301			—			4,301
Issuance of stock under employee compensation plans	—			1,980	20		73,574				—			—				—		—			73,594			—				73,594			1,980	20		73,574				—				—			—		—			73,594			—			73,594
Acquisition of treasury shares	—			—	—		—				—			—				2,207		(117,380		)	(117,380		)	—				(117,380		)	—	—		—				—				—			2,207		(117,380		)	(117,380		)	—			(117,380		)
Stock-based compensation	—			—	—		31,035				—			—				—		—			31,035			—				31,035			—	—		31,035				—				—			—		—			31,035			—			31,035
December 27, 2014	$	28,419		84,503	$	845	$	2,307,640			$	(138,775	)	$	(74,247	)		37,176		$	(1,423,260	)	$	672,203		$	3,724			$	675,927		84,503	845		2,307,640				(138,775		)		(74,247		)	37,176		(1,423,260		)	672,203			3,724			675,927
Net income																																	—	—		—				149,313				—			—		—			149,313			936			150,249
Other comprehensive loss																																	—	—		—				—				(61,301		)	—		—			(61,301		)	(171		)	(61,472		)
Adjustment of redeemable noncontrolling interest to fair value																																	—	—		183				—				—			—		—			183			—			183
Tax benefit associated with stock issued under employee compensation plans																																	—	—		10,608				—				—			—		—			10,608			—			10,608
Issuance of stock under employee compensation plans																																	961	10		39,407				—				—			—		—			39,417			—			39,417
Acquisition of treasury shares																																	—	—		—				—				—			1,590		(117,478		)	(117,478		)	—			(117,478		)
Stock-based compensation																																	—	—		40,122				—				—			—		—			40,122			—			40,122
December 26, 2015																																	85,464	855		2,397,960				10,538				(135,548		)	38,766		(1,540,738		)	733,067			4,489			737,556
Net income																																	—	—		—				154,765				—			—		—			154,765			924			155,689
Other comprehensive loss																																	—	—		—				—				(118,216		)	—		—			(118,216		)	(154		)	(118,370		)
Dividends declared to noncontrolling interests																																	—	—		—				—				—			—		—			—			(2,902		)	(2,902		)
Adjustment of redeemable noncontrolling interest to fair value																																	—	—		1,690				—				—			—		—			1,690			—			1,690
Purchase of additional equity in redeemable noncontrolling interest																																	—	—		1,593				—				—			—		—			1,593			—			1,593
Tax benefit associated with stock issued under employee compensation plans																																	—	—		9,274				—				—			—		—			9,274			—			9,274
Issuance of stock under employee compensation plans																																	837	8		23,212				—				—			—		—			23,220			—			23,220
Acquisition of treasury shares																																	—	—		—				—				—			172		(12,267		)	(12,267		)	—			(12,267		)
Stock-based compensation																																	—	—		43,642				—				—			—		—			43,642			—			43,642
December 31, 2016																																	86,301	$	863	$	2,477,371			$	165,303			$	(253,764	)	38,938		$	(1,553,005	)	$	836,768		$	2,357		$	839,125






See Notes to Consolidated Financial Statements.																																	See Notes to Consolidated Financial Statements.



~~Research Models and Services~~	~~Preclinical Services~~
~~Research Models~~ ⁽³⁾	~~Discovery Services~~
~~Research Model Services~~ ⁽⁴⁾	~~Safety Assessment~~
~~Endotoxin and Microbial Detection~~	~~Biologics Testing Solutions~~



	Estimated ~~useful lives~~Useful Lives
	(in years)
Land	Indefinite
Buildings	20 - 40
Machinery and equipment	3 - 20
Furniture and fixtures	5 - 10
Computer hardware and software	3 - 8
Vehicles	3 - 5
~~Leasehold improvements~~	~~Lesser of useful life or lease term~~



	October 29, 2014
	(in thousands)
Current assets (excluding cash)	4,648
Property, plant and equipment	1,579
Definite-lived intangible assets	23,920
Goodwill	34,927
Current liabilities	(3,515		)
Long-term liabilities	(9,486		)
Total purchase price allocation	$	52,073



	October 29, 2014		Weighted average amortization life
	(in thousands)		(in years)
Client relationships	$	19,000	13
Other intangible assets	4,920		9
Total definite-lived intangible assets	$	23,920


	April 1, 2014			September 28, 2016
	(in thousands)			(in thousands)
Current assets (excluding cash)	$	31,257
Trade receivables (contractual amount of $4,799)				$	4,799
Other current assets (excluding cash)				1,509
Property, plant and equipment	21,008			3,907
Other long-term assets	11,549			11
Definite-lived intangible assets	104,270			21,900
Goodwill	66,330			43,899
Current liabilities	(14,299		)	(3,987		)
Long-term liabilities	(36,973		)	(10,013		)
Total purchase price allocation	$	183,142		$	62,025



	June 27, 2016
	(in thousands)
Trade receivables (contractual amount of $1,104)	$	1,104
Other current assets (excluding cash)	15
Property, plant and equipment	912
Other long-term assets	187
Definite-lived intangible assets	1,230
Goodwill	10,477
Current liabilities	(1,132		)
Long-term liabilities	(1,044		)
Total purchase price allocation	$	11,749


	April 1, 2014		Weighted average amortization life	Definite-Lived Intangible Assets		Weighted Average Amortization Life
	(in thousands)		(in years)	(in thousands)		(in years)
Client relationships	$	94,000	18	$	650	10
Backlog	5,700		1
Trademark and trade names	1,170		3
Leasehold interests	1,000		13
Other intangible assets	2,400		19	580		5
Total definite-lived intangible assets	$	104,270		$	1,230	7



	April 4, 2016
	(in thousands)
Trade receivables (contractual amount of $48,625)	$	48,157
Inventories	2,296
Other current assets (excluding cash)	3,814
Property, plant and equipment	129,066
Other long-term assets	1,060
Definite-lived intangible assets	164,800
Goodwill	330,602
Deferred revenue	(39,103		)
Other current liabilities	(27,386		)
Long-term liabilities	(35,915		)
Total purchase price allocation	$	577,391



	November 18, 2015
	(in thousands)
Trade receivables (contractual amount of $3,546)	$	3,520
Inventories	129
Other current assets (excluding cash)	706
Property, plant and equipment	2,528
Definite-lived intangible assets	13,330
Goodwill	22,894
Other long-term assets	250
Current liabilities	(3,456		)
Long-term liabilities	(4,470		)
Total purchase price allocation	$	35,431



	July 24, 2015
	(in thousands)
Trade receivables (contractual amount of $5,410)	$	5,288
Inventories	10,103
Other current assets (excluding cash)	13,269
Property, plant and equipment	4,639
Definite-lived intangible assets	118,140
Goodwill	105,550
Other long-term assets	537
Current debt	(9,766		)
Other current liabilities	(7,136		)
Long-term liabilities	(28,388		)
Total purchase price allocation	$	212,236



	May 5, 2015
	(in thousands)
Trade receivables (contractual amount of $995)	$	965
Inventories	1,518
Other current assets (excluding cash)	973
Property, plant and equipment	13,698
Definite-lived intangible assets	3,400
Current liabilities	(925		)
Long-term liabilities	(250		)
Fair value of net assets acquired	19,379
Bargain purchase gain	(9,821		)
Total purchase price allocation	$	9,558



	Fiscal Year
	2014
	(in thousands, except per share amounts)
	(unaudited)
Revenue	$	1,322,771
Net income attributable to common shareholders	128,195
Earnings per common share:
Basic	$	2.75
Diluted	$	2.70