Table of Contents

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBERSeptember 30, 20152016, OR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ________________
Commission File Number: 1-13595
Mettler-Toledo International Inc.

(Exact name of registrant as specified in its charter)

Delaware 13-3668641
(State or other jurisdiction of (I.R.S Employer Identification No.)
incorporation or organization)  
1900 Polaris Parkway
Columbus, Ohio 43240
and
Im Langacher, P.O. Box MT-100
CH 8606 Greifensee, Switzerland

 (Address of principal executive offices)
(Zip Code)

1-614-438-4511 and +41-44-944-22-11

(Registrant's telephone number, including area code)

not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   X  No ___

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web-site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   X  No ___             
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer.  X Accelerated filer __ Non-accelerated filer __ (Do not check if a smaller reporting company)Smaller reporting company __     

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ___ No  X 

The Registrant had 27,356,83826,235,560 shares of Common Stock outstanding at September 30, 20152016.
 




METTLER-TOLEDO INTERNATIONAL INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q

  PAGE
  
   
 
   
  
   
 

   
 
Interim Consolidated Statements of Operations and Comprehensive Income for the nine months ended September 30, 20152016 and 20142015
   
 
Interim Consolidated Balance Sheets as of September 30, 20152016 and December 31, 20142015
   
 
Interim Consolidated Statements of Shareholders’ Equity for the nine months ended September 30, 20152016 and the twelve months ended December 31, 20142015
   
 
Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015
   
 
   
   
   
   
  
   
   
   
   
   
   
   




PART I. FINANCIAL INFORMATION
Item 1.Financial Statements

METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Three months ended September 30, 20152016 and 20142015
(In thousands, except share data)
(unaudited)

September 30,
2015
 September 30,
2014
September 30,
2016
 September 30,
2015
Net sales      
Products$469,548
 $488,829
$508,963
 $469,548
Service134,606
 140,271
141,635
 134,606
Total net sales604,154
 629,100
650,598
 604,154
Cost of sales      
Products188,673
 206,227
203,150
 188,673
Service75,952
 79,322
77,954
 75,952
Gross profit339,529
 343,551
369,494
 339,529
Research and development29,711
 30,352
30,139
 29,711
Selling, general and administrative175,546
 186,499
187,680
 175,546
Amortization7,767
 7,198
9,087
 7,767
Interest expense7,029
 5,991
7,167
 7,029
Restructuring charges2,561
 1,050
1,494
 2,561
Other charges (income), net(8) 625
603
 (8)
Earnings before taxes116,923
 111,836
133,324
 116,923
Provision for taxes28,062
 26,840
31,992
 28,062
Net earnings$88,861
 $84,996
$101,332
 $88,861
      
Basic earnings per common share:      
Net earnings$3.23
 $2.96
$3.84
 $3.23
Weighted average number of common shares27,547,734
 28,732,152
26,375,468
 27,547,734
      
Diluted earnings per common share:      
Net earnings$3.16
 $2.89
$3.77
 $3.16
Weighted average number of common and common equivalent shares28,113,287
 29,408,614
26,888,810
 28,113,287
      
Comprehensive income, net of tax (Note 9)$48,248
 $44,540
$117,704
 $48,248


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

- 3 -


METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Nine months ended September 30, 20152016 and 20142015
(In thousands, except share data)
(unaudited)

September 30,
2015
 September 30,
2014
September 30,
2016
 September 30,
2015
Net sales      
Products$1,332,154
 $1,379,655
$1,392,860
 $1,332,154
Service389,758
 408,900
405,698
 389,758
Total net sales1,721,912
 1,788,555
1,798,558
 1,721,912
Cost of sales      
Products536,466
 586,883
552,329
 536,466
Service224,200
 237,304
229,252
 224,200
Gross profit961,246
 964,368
1,016,977
 961,246
Research and development87,966
 91,974
89,813
 87,966
Selling, general and administrative523,392
 541,793
544,399
 523,392
Amortization22,929
 21,575
26,166
 22,929
Interest expense20,696
 17,613
20,619
 20,696
Restructuring charges5,188
 4,447
4,579
 5,188
Other charges (income), net(858) 1,348
8,492
 (858)
Earnings before taxes301,933
 285,618
322,909
 301,933
Provision for taxes72,464
 68,549
76,315
 72,464
Net earnings$229,469
 $217,069
$246,594
 $229,469
      
Basic earnings per common share:      
Net earnings$8.24
 $7.47
$9.25
 $8.24
Weighted average number of common shares27,833,541
 29,056,663
26,644,938
 27,833,541
      
Diluted earnings per common share:      
Net earnings$8.07
 $7.30
$9.08
 $8.07
Weighted average number of common and common equivalent shares28,443,478
 29,747,321
27,153,450
 28,443,478
      
Comprehensive income, net of tax (Note 9)$204,380
 $176,076
$246,840
 $204,380


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

- 4 -


METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED BALANCE SHEETS
As of September 30, 20152016 and December 31, 20142015
(In thousands, except share data)
(unaudited)

September 30,
2015
 December 31,
2014
September 30,
2016
 December 31,
2015
ASSETS
Current assets:      
Cash and cash equivalents$123,299
 $85,263
$146,133
 $98,887
Trade accounts receivable, less allowances of $15,704 at September 30, 2015   
and $15,961 at December 31, 2014390,540
 435,648
Trade accounts receivable, less allowances of $15,127 at September 30, 2016   
and $14,435 at December 31, 2015414,607
 411,420
Inventories225,542
 204,531
239,985
 214,383
Current deferred tax assets, net62,754
 62,341
71,629
 67,483
Other current assets and prepaid expenses66,180
 61,647
73,748
 70,642
Total current assets868,315
 849,430
946,102
 862,815
Property, plant and equipment, net513,568
 511,462
527,477
 517,229
Goodwill448,342
 444,085
482,144
 446,284
Other intangible assets, net114,355
 112,784
169,117
 115,252
Non-current deferred tax assets, net27,206
 30,273
22,734
 22,873
Other non-current assets81,760
 61,076
73,406
 52,186
Total assets$2,053,546
 $2,009,110
$2,220,980
 $2,016,639
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:      
Trade accounts payable$136,565
 $145,896
$129,650
 $142,075
Accrued and other liabilities126,684
 120,530
126,599
 127,645
Accrued compensation and related items120,843
 136,107
135,568
 136,414
Deferred revenue and customer prepayments88,547
 82,219
113,340
 88,829
Taxes payable76,255
 59,297
70,993
 63,241
Current deferred tax liabilities23,460
 18,677
22,920
 22,435
Short-term borrowings and current maturities of long-term debt21,061
 116,164
21,779
 14,488
Total current liabilities593,415
 678,890
620,849
 595,127
Long-term debt601,731
 335,790
826,022
 575,138
Non-current deferred tax liabilities63,883
 56,727
65,341
 71,365
Other non-current liabilities208,165
 218,108
208,251
 194,552
Total liabilities1,467,194
 1,289,515
1,720,463
 1,436,182
Commitments and contingencies (Note 15)

 



 

Shareholders’ equity:      
Preferred stock, $0.01 par value per share; authorized 10,000,000 shares
 

 
Common stock, $0.01 par value per share; authorized 125,000,000 shares;      
issued 44,786,011 and 44,786,011 shares; outstanding 27,356,838 and   
28,243,007 shares at September 30, 2015 and December 31, 2014, respectively448
 448
issued 44,786,011 and 44,786,011 shares; outstanding 26,235,560 and   
27,090,118 shares at September 30, 2016 and December 31, 2015, respectively448
 448
Additional paid-in capital682,184
 670,418
725,597
 697,570
Treasury stock at cost (17,429,173 shares at September 30, 2015 and 16,543,004 shares at December 31, 2014)(2,434,460) (2,095,656)
Treasury stock at cost (18,550,451 shares at September 30, 2016, and 17,695,893 shares at December 31, 2015)(2,893,292) (2,543,229)
Retained earnings2,576,218
 2,357,334
2,934,167
 2,692,317
Accumulated other comprehensive income (loss)(238,038) (212,949)(266,403) (266,649)
Total shareholders’ equity586,352
 719,595
500,517
 580,457
Total liabilities and shareholders’ equity$2,053,546
 $2,009,110
$2,220,980
 $2,016,639


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

- 5 -


METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Nine months ended September 30, 20152016 and twelve months ended December 31, 20142015
(In thousands, except share data)
(unaudited)

                          
    Additional Paid-in Capital     Accumulated Other Comprehensive Income (Loss)      Additional Paid-in Capital     Accumulated Other Comprehensive Income (Loss)  
Common Stock Treasury Stock Retained Earnings  Common Stock Treasury Stock Retained Earnings  
Shares Amount TotalAccumulated Other Comprehensive Income (Loss)Shares Amount TotalAccumulated Other Comprehensive Income (Loss)
Balance at December 31, 201329,487,075
 $448
 $653,250
 $(1,721,030) $2,037,420
 $(35,036) 
Balance at December 31, 201428,243,007
 $448
 $670,418
 $(2,095,656) $2,357,334
 $(212,949) 
Exercise of stock options and restricted                          
stock units373,431
 
 
 39,374
 (18,327) 
 21,047
403,908
 
 
 47,393
 (17,837) 
 29,556
Repurchases of common stock(1,617,499) 
 
 (414,000) 
 
 (414,000)(1,556,797) 
 
 (494,966) 
 
 (494,966)
Tax benefit resulting from exercise of                          
certain employee stock options
 
 3,557
 
 
 
 3,557

 
 12,929
 
 
 
 12,929
Share-based compensation
 
 13,611
 
 
 
 13,611

 
 14,223
 
 
 
 14,223
Net earnings
 
 
 
 338,241
 
 338,241

 
 
 
 352,820
 
 352,820
Other comprehensive income (loss),                          
net of tax
 
 
 
 
 (177,913) (177,913)
 
 
 
 
 (53,700) (53,700)
Balance at December 31, 201428,243,007
 $448
 $670,418
 $(2,095,656) $2,357,334
 $(212,949) $719,595
Balance at December 31, 201527,090,118
 $448
 $697,570
 $(2,543,229) $2,692,317
 $(266,649) $580,457
Exercise of stock options and restricted                          
stock units281,627
 
 
 32,419
 (10,585) 
 21,834
193,517
 
 
 24,931
 (4,744) 
 20,187
Repurchases of common stock(1,167,796) 
 
 (371,223) 
 
 (371,223)(1,048,075) 
 
 (374,994) 
 
 (374,994)
Tax benefit resulting from exercise of                          
certain employee stock options
 
 1,418
 
 
 
 1,418

 
 17,166
 
 
 
 17,166
Share-based compensation
 
 10,348
 
 
 
 10,348

 
 10,861
 
 
 
 10,861
Net earnings
 
 
 
 229,469
 
 229,469

 
 
 
 246,594
 
 246,594
Other comprehensive income (loss),                          
net of tax (Note 9)
 
 
 
 
 (25,089) (25,089)
 
 
 
 
 246
 246
Balance at September 30, 201527,356,838
 $448
 $682,184
 $(2,434,460) $2,576,218
 $(238,038) $586,352
Balance at September 30, 201626,235,560
 $448
 $725,597
 $(2,893,292) $2,934,167
 $(266,403) $500,517
                          


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

- 6 -


METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, 20152016 and 20142015
(In thousands)
(unaudited)

September 30,
2015
 September 30,
2014
September 30,
2016
 September 30,
2015
Cash flows from operating activities:      
Net earnings$229,469
 $217,069
$246,594
 $229,469
Adjustments to reconcile net earnings to net cash provided by operating activities:      
Depreciation24,978
 25,469
24,527
 24,978
Amortization22,929
 21,575
26,166
 22,929
Deferred tax benefit(3,245) (6,102)(11,078) (3,245)
Excess tax benefits from share-based payment arrangements(1,418) (10,459)(17,166) (1,418)
Share-based compensation10,348
 9,784
10,861
 10,348
Non-cash pension settlement charge8,189
 
Other165
 99
6
 165
Increase (decrease) in cash resulting from changes in:      
Trade accounts receivable, net26,123
 43,313
4,721
 26,123
Inventories(27,014) (18,024)(19,857) (27,014)
Other current assets402
 9,714
(3,558) 402
Trade accounts payable(5,355) (13,180)(11,984) (5,355)
Taxes payable17,449
 (9,391)6,577
 17,449
Accruals and other(5,005) 8,371
26,149
 (5,005)
Net cash provided by operating activities289,826
 278,238
290,147
 289,826
Cash flows from investing activities:      
Proceeds from sale of property, plant and equipment281
 433
361
 281
Purchase of property, plant and equipment(56,756) (61,408)(51,234) (56,756)
Acquisitions(10,969) (3,385)(109,681) (10,969)
Net hedging settlements on intercompany loans(5,563) 182
2,031
 (5,563)
Net cash used in investing activities(73,007) (64,178)(158,523) (73,007)
Cash flows from financing activities:      
Proceeds from borrowings550,002
 512,977
709,988
 550,002
Repayments of borrowings(374,891) (438,529)(455,913) (374,891)
Proceeds from stock option exercises21,834
 14,045
20,187
 21,834
Repurchases of common stock(371,223) (296,476)(374,994) (371,223)
Excess tax benefits from share-based payment arrangements1,418
 10,459
17,166
 1,418
Debt issuance costs(432) (941)
Acquisition contingent consideration paid(572) 
Other financing activities(680) (1,004)
Net cash used in financing activities(173,864) (198,465)(84,246) (173,864)
Effect of exchange rate changes on cash and cash equivalents(4,919) (1,158)(132) (4,919)
Net increase (decrease) in cash and cash equivalents38,036
 14,437
47,246
 38,036
Cash and cash equivalents:      
Beginning of period85,263
 111,874
98,887
 85,263
End of period$123,299
 $126,311
$146,133
 $123,299


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

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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 20152016 – Unaudited
(In thousands, except share data, unless otherwise stated)



1.BASIS OF PRESENTATION
Mettler-Toledo International Inc. ("Mettler-Toledo" or the "Company") is a leading global supplier of precision instruments and services. The Company manufactures weighing instruments for use in laboratory, industrial, packaging, logistics and food retailing applications. The Company also manufactures several related analytical instruments and provides automated chemistry solutions used in drug and chemical compound discovery and development. In addition, the Company manufactures metal detection and other end-of-line inspection systems used in production and packaging and provides solutions for use in certain process analytics applications. The Company's primary manufacturing facilities are located in China, Germany, Switzerland, the United Kingdom and the United States. The Company's principal executive offices are located in Columbus, Ohio and Greifensee, Switzerland.
The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all entities in which the Company has control, which are its wholly-owned subsidiaries. The interim consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20142015.
The accompanying interim consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. Operating results for the three and nine months ended September 30, 20152016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2015.2016.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates. A discussion of the Company’s critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20142015.
All intercompany transactions and balances have been eliminated.
Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Trade Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts represents the Company’s best estimate of probable credit losses in its existing trade accounts receivable. The Company determines the allowance based upon a review of both specific accounts for collection and the age of the accounts receivable portfolio.

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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 20152016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

Inventories
Inventories are valued at the lower of cost or net realizable value. Cost, which includes direct materials, labor and overhead, is generally determined using the first in, first out (FIFO) method. The estimated net realizable value is based on assumptions for future demand and related pricing. Adjustments to the cost basis of the Company’s inventory are made for excess and obsolete items based on usage, orders and technological obsolescence. If actual market conditions are less favorable than those projected by management, reductions in the value of inventory may be required.
Inventories consisted of the following:
September 30,
2015
 December 31,
2014
September 30,
2016
 December 31,
2015
Raw materials and parts$101,655
 $97,969
$109,599
 $98,252
Work-in-progress42,184
 34,973
43,179
 35,100
Finished goods81,703
 71,589
87,207
 81,031
$225,542
 $204,531
$239,985
 $214,383
Goodwill and Other Intangible Assets
Goodwill, representing the excess of purchase price over the net asset value of companies acquired, and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The annual evaluation for goodwill and indefinite-lived intangible assets are generally based on an assessment of qualitative and quantitative factors to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount.
Other intangible assets include indefinite-lived assets and assets subject to amortization. Where applicable, amortization is charged on a straight-line basis over the expected period of benefit. The straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. The Company assesses the initial acquisition of intangible assets in accordance with the provisions of ASC 805 "Business Combinations" and the continued accounting for previously recognized intangible assets and goodwill in accordance with the provisions of ASC 350 "Intangible - Goodwill and Other" and ASC 360 "Property, Plant and Equipment".
Other intangible assets consisted of the following:
September 30, 2015 December 31, 2014September 30, 2016 December 31, 2015
Gross
Amount
 
Accumulated
Amortization
 Intangibles, Net 
Gross
Amount
 
Accumulated
Amortization
 Intangibles, Net
Gross
Amount
 
Accumulated
Amortization
 Intangibles, Net 
Gross
Amount
 
Accumulated
Amortization
 Intangibles, Net
Customer relationships$98,211
 $(29,836) $68,375
 $98,325
 $(28,159) $70,166
$146,592
 $(33,615) $112,977
 $98,175
 $(30,836) $67,339
Proven technology and patents50,349
 (31,957) 18,392
 45,588
 (30,761) 14,827
59,756
 (34,681) 25,075
 52,938
 (32,444) 20,494
Tradename (finite life)4,215
 (2,250) 1,965
 4,140
 (1,786) 2,354
4,301
 (2,507) 1,794
 4,200
 (2,158) 2,042
Tradename (indefinite life)24,805
 
 24,805
 24,947
 
 24,947
28,338
 
 28,338
 24,814
 
 24,814
Other2,109
 (1,291) 818
 1,573
 (1,083) 490
2,771
 (1,838) 933
 2,111
 (1,548) 563
$179,689
 $(65,334) $114,355
 $174,573
 $(61,789) $112,784
$241,758
 $(72,641) $169,117
 $182,238
 $(66,986) $115,252

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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 20152016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

The Company recognized amortization expense associated with the above intangible assets of $1.5$2.2 million and $1.6$1.5 million for the three months ended September 30, 20152016 and 2014,2015, respectively and $4.7$5.8 million and $4.8$4.7 million for the nine months ended September 30, 20152016 and 2014,2015, respectively. The annual aggregate amortization expense based on the current balance of other intangible assets is estimated at $6.2 million for 2015, $6.1$8.2 million for 2016,, $5.7 $9.8 million for 2017,, $5.5 $9.4 million for 2018,, $5.2 $9.0 million for 2019, $8.7 million for 2020 and $4.9$8.1 million for 2020.2021. Purchased intangible amortization was $1.3$2.0 million,, $0.9 $1.3 million after tax, and $1.5$1.3 million,, $1.0 $0.9 million after tax, for the three months ended September 30, 20152016 and 2014,2015, respectively and $4.2$5.2 million,, $2.9 $3.5 million after tax, and $4.2$4.2 million,, $2.8 $2.9 million after tax, for the nine months ended September 30, 20152016 and 2014,2015, respectively.
In addition to the above amortization, the Company recorded amortization expense associated with capitalized software of $6.2$6.8 million and $5.5$6.2 million for the three months ended September 30, 20152016 and 2014,2015, respectively and $18.1$20.2 million and $16.7$18.1 million for the nine months ended September 30, 20152016 and 2014,2015, respectively.
Revenue Recognition
Revenue is recognized when title to a product has transferred and any significant customer obligations have been fulfilled. Standard shipping terms are generally FOB shipping point in most countries and, accordingly, title and risk of loss transfers upon shipment. In countries where title cannot legally transfer before delivery, the Company defers revenue recognition until delivery has occurred. The Company generally maintains the right to accept or reject a product return in its terms and conditions and also maintains appropriate accruals for outstanding credits. Shipping and handling costs charged to customers are included in total net sales and the associated expense is recorded in cost of sales for all periods presented. Other than a few small software applications, the Company does not sell software products without the related hardware instrument as the software is embedded in the instrument. The Company’s products typically require no significant production, modification or customization of the hardware or software that is essential to the functionality of the products. To the extent the Company’s solutions have a post-shipment obligation, such as customer acceptance, revenue is deferred until the obligation has been completed. The Company defers product revenue where installation is required, unless such installation is deemed perfunctory. The Company also sometimes enters into certain arrangements that require the separate delivery of multiple goods and/or services. These deliverables are accounted for separately if the deliverables have standalone value and the performance of undelivered items is probable and within the Company's control. The allocation of revenue between the separate deliverables is typically based on the relative selling price at the time of the sale in accordance with a number of factors including service technician billing rates, time to install and geographic location.
Further, certain products are also sold through indirect distribution channels whereby the distributor assumes any further obligations to the customer upon title transfer. Revenue is recognized on these products upon transfer of title and risk of loss to its distributors. Distributor discounts are offset against revenue at the time such revenue is recognized.
Service revenue not under contract is recognized upon the completion of the service performed. Spare parts sold on a stand-alone basis are recognized upon title and risk of loss transfer which is generally at the time of shipment. Revenues from service contracts are recognized ratably over the contract period. These contracts represent an obligation to perform repair and other services including regulatory compliance qualification, calibration, certification and preventative maintenance on a customer’s pre-defined equipment over the contract period. Service contracts are separately priced and payment is typically received from the customer at the beginning of the contract period.
Warranty
The Company generally offers one-yearone-year warranties on most of its products. Estimated productProduct warranties are recorded at the time revenue is recognized. While the Company engages in extensive product quality

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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 20152016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

product quality programs and processes, its warranty obligations are affected by product failure rates, material usage and service costs incurred in correcting a product failure.
Employee Termination Benefits
In situations where contractual termination benefits exist, the Company records accruals for employee termination benefits when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable. All other employee termination arrangements are recognized and measured at their fair value at the communication date unless the employee is required to render additional service beyond the legal notification period, in which case the liability is recognized ratably over the future service period.
Share-Based Compensation
The Company recognizes share-based compensation expense within selling, general and administrative in the consolidated statements of operations and other comprehensive income with a corresponding offset to additional paid-in capital in the consolidated balance sheet. The Company recorded $3.4$3.6 million and $10.3$10.9 million of share-based compensation expense for the three and nine months ended September 30, 2015,2016, respectively, compared to $3.3$3.4 million and $9.8$10.3 million for the corresponding periods in 2014.2015.
Research and Development
Research and development costs primarily consist of salaries, consulting and other costs. The Company expenses these costs as incurred.

Recent Accounting Pronouncements
In May 2014, the FASB issued ASU 2014-09, to ASC 606 "Revenue from Contracts with Customers." ASU 2014-09 provides authoritative guidance clarifying the principles for recognizing revenue and developing a common revenue standard for U.S. GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The guidance becomes effective for the Company for the year beginning January 1, 2018. We are currently evaluating the impact the adoption of this guidance will have on the Company's consolidated results of operations, financial position, and disclosures.
In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers," which amends ASU 2014-09. The ASU provides guidance for assessing collectability, presentation of sales taxes, noncash considerations, and completed contract modifications at transition. The guidance becomes effective for the Company for the year beginning January 1, 2018. We are currently evaluating the impact the adoption of this guidance will have on the Company's consolidated results of operations, financial position, and disclosures.
In May 2016, the FASB issued ASU 2016-10, "Revenue from Contracts with Customers," which amends ASU 2014-09. The ASU provides guidance for identifying performance obligations as they pertain to immaterial promised goods or services, shipping and handling activities, and identifying when promises represent performance obligations. The guidance becomes effective for the Company for the year beginning January 1, 2018. We are currently evaluating the impact the adoption of this guidance will have on the Company's consolidated results of operations, financial position, and disclosures.

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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows," which clarifies how certain cash receipts and cash payments are classified in the statement of cash flows. The new guidance must be applied retrospectively and becomes effective for the year beginning January 1, 2018 with early adoption permitted. The Company is currently evaluating the impact of this guidance on our financial statements and the timing of adoption.
In March 2016, the FASB issued ASU 2016-09, to ASC 718 "Compensation - Stock Compensation." The guidance allows for the simplification related to several aspects of the accounting for share-based payment transactions, including income tax consequences, the accounting for forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance can be applied either on a retrospective or prospective basis and becomes effective for annual periods beginning after December 15, 2016. We are currently evaluating the impact the adoption of this guidance will have on the Company's consolidated results of operations, financial position, and disclosures.
In February 2016, the FASB issued ASU 2016-02 to ASC 842 "Leases." The accounting guidance primarily requires lessees to recognize most leases on their balance sheet as a right to use asset and a lease liability, with the exception of short term leases. A lessee will continue to recognize lease expense on a straight-line basis for leases classified as operating leases. The guidance becomes effective for fiscal years beginning after December 15, 2018 and must be applied on a retrospective basis with early adoption permitted. The Company is currently evaluating the impact of this guidance on our financial statements and the timing of adoption.
In November 2015, the FASB issued ASU 2015-17, to ASC 740 "Income Taxes." The guidance simplifies the balance sheet classification of deferred taxes. The new guidance requires that all deferred tax balances be presented as non-current. This change, which can be early adopted, conforms U.S. GAAP to IFRS. The guidance becomes effective for the Company for the year beginning January 1, 2017. The adoption of this guidance would have reduced current assets and increased non-current assets by approximately $71.6 million and reduced current liabilities and increased non-current liabilities by approximately $22.9 million on the Company's consolidated balance sheet at September 30, 2016.
In May 2015, the FASB issued ASU 2015-07, to ASC 820 "Fair Value Measurements." ASU 2015-07 removes the requirement to categorize investments using the net asset value per share method within the fair value hierarchy. The Company will adopt the guidance in the fourth quarter of 2016, which will have an immaterial impact on the consolidated financial statements.
3.ACQUISITIONS
In September 2015,August 2016, the Company consummated acquisitions totaling $16.6 million, includingacquired substantially all of the acquisitionassets of Henry Troemner, LLC, (Troemner) a real-time monitoring water purity technologysupplier of lab equipment, weights and weight calibration based in the United States for an estimated aggregate purchase price of $14.7$95.8 million that will be integratedincluded into the Company's process analytics productlaboratory instrument offering. The Company may be required to pay additional cash consideration related to an earn-out period. Goodwill recorded in connection with the acquisition totaled $8.7$33.8 million, which is included in the Company's U.S. Operations segment. The Company identified intangible assets which included customer relationships of $43.9 million, tradename of $3.4 million, technology and patents of $2.9 million and other intangibles of $0.5 million. The identifiable intangible assets will be amortized on a straight-line basis over periods ranging from 3 to 25 years and the annual aggregate amortization expense is estimated at $2.7 million. Net tangible assets acquired were $11.3 million and are recorded at fair value in the consolidated financial statements.
In 2016, the Company also incurred additional acquisitions payments totaling $13.9 million. Goodwill recorded in connection with these acquisitions totaled $5.8 million. The Company also recorded $6.8$7.7 million of identified intangibles primarily pertaining to technologycustomer relationships in connection with thethese acquisitions, which will be amortized on a straight-line basis over 10 to 15 years.

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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL INSTRUMENTSSTATEMENTS
At September 30, 2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

4.FINANCIAL INSTRUMENTS
The Company has limited involvement with derivative financial instruments and does not use them for trading purposes. The Company enters into certain interest rate swap agreements in order to manage its exposure to changes in interest rates. The amount of the Company's fixed obligation interest payments may change based upon the expiration dates of its interest rate swap agreements and the level and composition of its debt. The Company also enters into certain foreign currency forward contracts to limit the Company's exposure to currency fluctuations on the respective hedged items. As also mentioned in Note 7, the Company has designated its euro denominated debt as a hedge of a portion of its net investment in euro-denominated foreign operations. For additional disclosures on the fair value of financial instruments, see Note 5.
Cash Flow Hedges
In July 2012, theThe Company began enteringhas entered into foreign currency forward contracts, designated as cash flow hedges, to hedge certain forecasted intercompany sales denominated in euro with its Swiss-based business. TheIn January 2015, prior to the Swiss National Bank's abandonment of its previously established exchange rate of 1.20 Swiss franc per euro, the Company increased the notional amount of foreign currencythe cash flow hedges to a total notional value and average forward contracts outstanding at September 30,

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Tablerate of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

2015 were $29.9Euro 86 million (Euro 26.7 million)and 1.21 for contracts that maturematured in 2015 and $74.5Euro 67 million (Euro 66.5 million)and 1.19 for contracts that mature in 2016. The notional amount of foreign currency forward contracts outstanding at September 30, 2016 were $23.1 million (Euro 20.6 million) and $73 million (Euro 67 million) at December 31, 2014 was $87.0 million (Euro 72.0 million) for contracts that mature in 2015. The gross amount recognized in other comprehensive income (loss) during the three months periodmonth periods ended September 30, 20152016 and 20142015 was a loss of $6.1$0.2 million and a gain of $0.5loss $6.1 million, respectively. The gross amount recognized in other comprehensive income (loss) during the nine monthsmonth period ended September 30, 20152016 and 20142015 was a gainloss of $18.1$0.5 million and $0.9a gain $18.1 million, respectively.
The Company has an interest rate swap agreement designated as a cash flow hedge. The agreement is a swap which has the effect of changing the floating rate LIBOR-based interest payments associated with $100$50 million in forecasted borrowings under the Company’s credit facility to a fixed obligation of 3.24%2.52%. The swap began in October 2010 and matures in October 2015.
In June 2013, the Company entered into a forward-starting interest rate swap agreement, designated as a cash flow hedge. The agreement will change the floating rate LIBOR-based interest payments associated with $50 million in forecasted borrowings under the Company's credit agreement to a fixed obligation of 2.52% beginning in October 2015 and matures in October 2020.
In March 2015, the Company entered into a forward-starting interest rate swap agreement. The agreement will change the floating rate LIBOR-based interest payments associated with $100 million in forecasted borrowings under the Company's credit agreement to a fixed obligation of 2.25% beginning in February 2017 and matures in February 2022.
The Company's cash flow hedges are recorded gross at fair value in the consolidated balance sheet at September 30, 20152016 and December 31, 2014,2015, respectively, and disclosed in Note 5.5 to the consolidated financial statements. Amounts reclassified into other comprehensive income and the effective portions of the cash flow hedges are further disclosed in Note 9.9 to the consolidated financial statements. A derivative gain of $5.0$0.5 million based upon interest rates and foreign currency rates at September 30, 2015,2016, is expected to be reclassified from other comprehensive income (loss) to earnings in the next 12twelve months. Through September 30, 2015,2016, no hedge ineffectiveness has occurred in relation to the cash flow hedges.
Other Derivatives
The Company enters into foreign currency forward contracts in order to economically hedge short-term trade and non-trade intercompany balances largely denominated in Swiss franc, other major European currencies, and the Chinese Renminbi with its foreign businesses. In accordance with U.S. GAAP, these contracts are considered “derivatives not designated as hedging instruments.” Gains or losses on these instruments are reported in current earnings. The foreign currency forward contracts are recorded at fair value in the consolidated balance sheet at September 30, 20152016 and December 31, 2014,2015, respectively, and disclosed in Note 5. The amount recognized in other charges (income) during the three

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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

months ended September 30, 2016 was insignificant to the consolidated financial statements. The Company recognized in other charges (income), a net gain of $4.7 million and a net loss of $2.0 million during the three months ended September 30, 2015, and 2014, respectively, and a net loss of $4.8$0.7 million and $3.0$4.8 million during the nine months months ended September 30, 20152016 and 2014,2015, respectively. The gains and losses are primarily offset by the underlying transaction gains and losses on the related intercompany balances. At September 30, 20152016 and December 31, 2014,2015, these contracts had a notional value of $335.5$319.4 million and $325.4$318.7 million, respectively.    
5.    FAIR VALUE MEASUREMENTS
At September 30, 20152016 and December 31, 20142015, the Company had derivative assets totaling $10.1$2.8 million and $2.2$8.2 million, respectively, and derivative liabilities totaling $6.5$9.4 million and $5.6$4.7 million, respectively. The fair values of the interest rate swap agreements, foreign currency forward contracts designated as cash flow hedges and foreign currency forward contracts that economically hedge short-term intercompany balances are estimated based upon inputs from current valuation information obtained from dealer quotes and priced with observable market assumptions and appropriate valuation adjustments

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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

for credit risk. The Company has evaluated the valuation methodologies used to develop the fair values by dealers in order to determine whether such valuations are representative of an exit price in the Company’s principal market. In addition, the Company uses an internally developed model to perform testing on the valuations received from brokers. The Company has also considered both its own credit risk and counterparty credit risk in determining fair value and determined these adjustments were insignificant at September 30, 20152016 and December 31, 20142015.
At September 30, 20152016 and December 31, 20142015, the Company had $17.3$19.6 million and $14.2$18.8 million of cash equivalents, respectively, the fair value of which is determined through quoted and corroborated prices in active markets. The fair value of cash equivalents approximates cost.
The fair value of the Company's fixed interest rate debt was estimated using Level 2 inputs, primarily discounted cash flow models, based on estimated current rates offered for similar debt under current market conditions for the Company. The fair value of the Company's debt exceeds the carrying value by approximately $24.7 million as of September 30, 2016. The carrying value of the Company's debt exceeds the fair value by approximately $6.9 million as of September 30, 2015. The fair value of the Company's debt exceeds the carrying value by approximately $17.8$9.2 million as of December 31, 2014, respectively.2015.
Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement consists of observable and unobservable inputs that reflect the assumptions that a market participant would use in pricing an asset or liability.

A fair value hierarchy has been established that categorizes these inputs into three levels:
Level 1:Quoted prices in active markets for identical assets and liabilities
Level 2:Observable inputs other than quoted prices in active markets for identical assets and liabilities
Level 3:Unobservable inputs

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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

The following table presents for each of these hierarchy levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 20152016 and December 31, 20142015::
 September 30, 2015 December 31, 2014 September 30, 2016 December 31, 2015
 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3
Assets:                                
Cash equivalents $17,326
 $
 $17,326
 $
 $14,188
 $
 $14,188
 $
 $19,592
 $
 $19,592
 $
 $18,755
 $
 $18,755
 $
Foreign currency forwards contracts designed as cash flow hedges 9,182
 
 9,182
 
 567
 
 567
 
Foreign currency forward contracts designated as cash flow hedges 2,067
 
 2,067
 
 7,056
 
 7,056
 
Foreign currency forward contracts not designated as hedging instruments 880
 
 880
 
 1,611
 
 1,611
 
 693
 
 693
 
 1,166
 
 1,166
 
Total $27,388
 $
 $27,388
 $
 $16,366
 $
 $16,366
 $
 $22,352
 $
 $22,352
 $
 $26,977
 $
 $26,977
 $
                                
Liabilities:                                
Interest rate swap agreements $5,746
 $
 $5,746
 $
 $3,768
 $
 $3,768
 $
 $9,184
 $
 $9,184
 $
 $4,092
 $
 $4,092
 $
Foreign currency forward contracts not designated as hedging instruments 782
 
 782
 
 1,799
 
 1,799
 
 247
 
 247
 
 625
 
 625
 
Total $6,528
 $
 $6,528
 $
 $5,567
 $
 $5,567
 $
 $9,431
 $
 $9,431
 $
 $4,717
 $
 $4,717
 $



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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

6.    INCOME TAXES
The provision for taxes is based upon using the Company's projected annual effective tax rate of 24% before discrete items for both the three and nine month periods ended September 30, 20152016 and 2014.2015.

7.    DEBT
Debt consisted of the following at September 30, 20152016:
September 30, 2015September 30, 2016
U.S. Dollar Other Principal Trading Currencies TotalU.S. Dollar Other Principal Trading Currencies Total
3.67% $50 million Senior Notes due December 17, 202250,000
 
 50,000
$50,000
 $
 $50,000
4.10% $50 million Senior Notes due September 19, 202350,000
 
 50,000
50,000
 
 50,000
3.84% $125 million Senior Notes due September 19, 2024125,000
 
 125,000
125,000
 
 125,000
4.24% $125 million Senior Notes due June 25, 2025125,000
 
 125,000
125,000
 
 125,000
1.47% EUR 125m Senior Notes due July 17, 2030
 139,962
 139,962
$800 million Credit Agreement, interest at LIBOR plus 75 basis points100,000
 11,769
 111,769
1.47% EUR 125 million Senior Notes due June 17, 2030
 140,131
 140,131
Debt issuance costs, net(1,301) (392) (1,693)
Total Senior Notes348,699
 139,739
 488,438
$800 million Credit Agreement, interest at LIBOR plus 87.5 basis points295,325
 42,259
 337,584
Other local arrangements283
 20,778
 21,061

 21,779
 21,779
Total debt450,283
 172,509
 622,792
644,024
 203,777
 847,801
Less: current portion(283) (20,778) (21,061)
 (21,779) (21,779)
Total long-term debt$450,000
 $151,731
 $601,731
$644,024
 $181,998
 $826,022
As of September 30, 20152016, the Company had $683.4457.0 million of availability remaining under its Credit Agreement. The Company was in compliance with its covenants at

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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015.2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

1.47% Euro Senior Notes
The Company has designated the 1.47% Euro Senior Notes as a hedge of a portion of its net investment in euro-denominated foreign subsidiaries to reduce foreign currency risk associated with the net investment in these operations. Changes in the carrying value of this debt resulting from fluctuations in the euro to U.S. dollar exchange rate are recorded as foreign currency translation adjustments within other comprehensive income (loss). The unrealized gain (loss) recorded in other comprehensive income (loss) related to this net investment hedge was a loss of $2.0 million and a gain $0.3 million for the three months ended September 30, 2016 and 2015, respectively, and a loss of $3.6 million and a gain $0.3 million for the nine month periods ended September 30, 2015.2016 and 2015, respectively.

4.24% Senior Notes
In June 2014, the Company entered into an agreement to issue and sell $250 million of ten-year Senior Notes in a private placement. The Company issued $125 million with a fixed interest rate of 3.84% ("3.84% Senior Notes") in September 2014 and issued an additional $125 million with a fixed interest rate of 4.24% ("4.24% Senior Notes") in June 2015. The Senior Notes are senior unsecured obligations of the Company. The 4.24% Senior Notes were used to repay $100 million of 6.30% Senior Notes which were due June 25, 2015.

8.    SHARE REPURCHASE PROGRAM AND TREASURY STOCK
AsThe Company has a share repurchase program of which there was $1.1 billion common shares remaining to be repurchased under the program as of September 30, 2015, the Company had $107.2 million of remaining availability under the Company's share repurchase program. In November 2015, the Company's Board of Directors authorized an additional $1.5 billion to the share repurchase program.2016. The share repurchases are expected to be

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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

funded from cash balances, borrowings and cash generated from operating activities. Repurchases will be made through open market transactions, and the amount and timing of purchases will depend on business and market conditions, the stock price, trading restrictions, the level of acquisition activity and other factors.
The Company has purchased 24.225.7 million shares since the inception of the program in 2004 through September 30, 20152016. During the nine months ended September 30, 20152016 and 20142015, the Company spent $371.2375.0 million and $296.5371.2 million on the repurchase of 1,167,7961,048,075 shares and 1,186,2151,167,796 shares at an average price per share of $317.86357.77 and $249.91317.86, respectively. The Company also reissued 281,627193,517 shares and 246,551281,627 shares held in treasury for the exercise of stock options and issuance of restricted stock units during the nine months ended September 30, 20152016 and 20142015, respectively.

9.    ACCUMULATED OTHER COMPREHENSIVE INCOME
The following table presents changes in accumulated other comprehensive income by component for the nine months ended September 30, 20152016 and 2014:2015:
 Currency Translation Adjustment, Net of Tax 
Net Unrealized
Gain (Loss) on
Cash Flow Hedging Arrangements,
Net of Tax
 
Pension and Post-Retirement Benefit Related Items,
Net of Tax
 Total
Balance at December 31, 2014$(4,960) $(1,944) $(206,045) $(212,949)
Other comprehensive income (loss), net of tax:       
Unrealized gains (losses) on cash flow hedging arrangements
 13,547
 
 13,547
Foreign currency translation adjustment(40,823) (1,832) 3,146
 (39,509)
Amounts recognized from accumulated other comprehensive income (loss), net of tax
 (6,082) 6,955
 873
Net change in other comprehensive income (loss), net of tax(40,823) 5,633
 10,101
 (25,089)
Balance at September 30, 2015$(45,783) $3,689
 $(195,944) $(238,038)
Currency Translation Adjustment, Net of Tax 
Net Unrealized
Gain (Loss) on
Cash Flow Hedging Arrangements,
Net of Tax
 
Pension and Post-Retirement Benefit Related Items,
Net of Tax
 TotalCurrency Translation Adjustment, Net of Tax 
Net Unrealized
Gain (Loss) on
Cash Flow Hedging Arrangements,
Net of Tax
 
Pension and Post-Retirement Benefit Related Items,
Net of Tax
 Total
Balance at December 31, 2013$77,915
 $(2,433) $(110,518) $(35,036)
Balance at December 31, 2015$(57,394) $3,016
 $(212,271) $(266,649)
Other comprehensive income (loss), net of tax:
 
 
 
       
Unrealized gains (losses) on cash flow hedging arrangements
 (445) 
 (445)
Amounts recognized in accumulated other comprehensive income (loss), net of tax
 (3,760) (4,545) (8,305)
Foreign currency translation adjustment(47,483) 30
 4,644
 (42,809)162
 (217) (2,071) (2,126)
Amounts recognized from accumulated other comprehensive income (loss), net of tax
 1,075
 1,186
 2,261

 (3,121) 13,798
 10,677
Net change in other comprehensive income (loss), net of tax(47,483) 660
 5,830
 (40,993)162
 (7,098) 7,182
 246
Balance at September 30, 2014$30,432
 $(1,773) $(104,688) $(76,029)
Balance at September 30, 2016$(57,232) $(4,082) $(205,089) $(266,403)


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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 20152016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

 Currency Translation Adjustment, Net of Tax 
Net Unrealized
Gain (Loss) on
Cash Flow Hedging Arrangements,
Net of Tax
 
Pension and Post-Retirement Benefit Related Items,
Net of Tax
 Total
Balance at December 31, 2014$(4,960) $(1,944) $(206,045) $(212,949)
Other comprehensive income (loss), net of tax:
 
 
 
Unrealized gains (losses) on cash flow hedging arrangements
 13,547
 
 13,547
Foreign currency translation adjustment(40,823) (1,832) 3,146
 (39,509)
Amounts recognized from accumulated other comprehensive income (loss), net of tax
 (6,082) 6,955
 873
Net change in other comprehensive income (loss), net of tax(40,823) 5,633
 10,101
 (25,089)
Balance at September 30, 2015$(45,783) $3,689
 $(195,944) $(238,038)

The following table presents amounts recognized from accumulated other comprehensive income (loss) for the three and nine month periods ended September 30:
 Three months ended September 30,   Three months ended September 30,  
 2015 2014 Location of Amounts Recognized in Earnings 2016 2015 Location of Amounts Recognized in Earnings
Effective portion of (gains) / losses on cash flow hedging arrangements:          
Interest rate swap agreements $777
 $787
 Interest expense $258
 $777
 Interest expense
Foreign currency forward contracts (2,816) (247) Cost of sales - products (1,601) (2,816) Cost of sales - products
Total before taxes (2,039) 540
  (1,343) (2,039) 
Provision for taxes (278) 253
 Provision for taxes (229) (278) Provision for taxes
Total, net of taxes $(1,761) $287
  $(1,114) $(1,761) 
          
Recognition of defined benefit pension and post-retirement items:          
Recognition of actuarial losses, plan amendments and prior service cost, before taxes $2,675
 $719
 (a)
Recognition of actuarial losses and prior service cost, before taxes $3,996
 $2,675
 (a)
Provision for taxes 761
 313
 Provision for taxes 1,033
 761
 Provision for taxes
Total, net of taxes $1,914
 $406
  $2,963
 $1,914
 
(a) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and post-retirement cost. See Note 11 for additional details for the three and nine months ended September 30, 20152016 and 2014.2015.

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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

 Nine months ended September 30,   Nine months ended September 30,  
 2015 2014 Location of Amounts Recognized in Earnings 2016 2015 Location of Amounts Recognized in Earnings
Effective portion of (gains) / losses on cash flow hedging arrangements:          
Interest rate swap agreements $2,312
 $2,333
 Interest expense $784
 $2,312
 Interest expense
Foreign currency forward contracts (9,439) (453) Cost of sales - products (4,532) (9,439) Cost of sales - products
Total before taxes (7,127) 1,880
  (3,748) (7,127) 
Provision for taxes (1,045) 805
 Provision for taxes (627) (1,045) Provision for taxes
Total, net of taxes $(6,082) $1,075
  $(3,121) $(6,082) 
          
Recognition of defined benefit pension and post-retirement items:          
Recognition of actuarial losses, plan amendments and prior service cost, before taxes $9,545
 $2,131
 (a)
Recognition of actuarial losses, settlement loss and prior service cost, before taxes $19,964
 $9,545
 (a)
Provision for taxes 2,590
 945
 Provision for taxes 6,166
 2,590
 Provision for taxes
Total, net of taxes $6,955
 $1,186
  $13,798
 $6,955
 
(a) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and post-retirement cost. See Note 11 for additional details for the three and nine months ended September 30, 20152016 and 2014.2015.

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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

Comprehensive income (loss), net of tax consisted of the following as of September 30:
Three Months Ended Nine Months EndedThree Months Ended Nine Months Ended
2015 2014 2015 20142016 2015 2016 2015
Net earnings$88,861
 $84,996
 $229,469
 $217,069
$101,332
 $88,861
 $246,594
 $229,469
Other comprehensive income (loss), net of tax(40,613) (40,456) (25,089) (40,993)16,372
 (40,613) 246
 (25,089)
Comprehensive income, net of tax$48,248
 $44,540
 $204,380
 $176,076
$117,704
 $48,248
 $246,840
 $204,380
10.    EARNINGS PER COMMON SHARE
In accordance with the treasury stock method, the Company has included the following common equivalent shares in the calculation of diluted weighted average number of common shares outstanding for the three and nine month periods ended September 30, solely relating to outstanding stock options and restricted stock units:
2015 20142016 2015
Three months ended565,553
 676,462
513,342
 565,553
Nine months ended609,937
 690,658
508,512
 609,937
Outstanding options and restricted stock units to purchase or receive 95,83284,293 and 105,57095,832 shares of common stock for the three month periods ended September 30, 20152016 and 2014,2015, respectively, and options and restricted stock units to purchase or receive 95,88484,712 and 135,85895,884 for the nine month periods ended September 30, 20152016 and 2014,2015, respectively, have been excluded from the calculation of diluted weighted average of common and common equivalent shares as such options and restricted stock units would be anti-dilutive.


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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

11.    NET PERIODIC BENEFIT COST
Net periodic pension cost for the Company’s defined benefit pension plans and U.S. post-retirement medical plan includes the following components for the three months ended September 30:
U.S. Pension Benefits Non-U.S. Pension Benefits Other U.S. Post-retirement Benefits TotalU.S. Pension Benefits Non-U.S. Pension Benefits Other U.S. Post-retirement Benefits Total
2015 2014 2015 2014 2015 2014 2015 20142016 2015 2016 2015 2016 2015 2016 2015
Service cost, net$211
 $223
 $4,772
 $3,856
 $
 $43
 $4,983
 $4,122
$103
 $211
 $4,216
 $4,772
 $
 $
 $4,319
 $4,983
Interest cost on projected benefit obligations1,607
 1,599
 3,554
 5,380
 35
 60
 5,196
 7,039
1,014
 1,607
 2,542
 3,554
 19
 35
 3,575
 5,196
Expected return on plan assets(2,395) (2,137) (9,228) (9,372) 
 
 (11,623) (11,509)(1,868) (2,395) (8,177) (9,228) 
 
 (10,045) (11,623)
Recognition of prior service cost
 
 (1,675) (1,009) (469) (195) (2,144) (1,204)
 
 (1,288) (1,675) (469) (469) (1,757) (2,144)
Recognition of actuarial losses/(gains)1,906
 1,200
 3,756
 1,082
 (843) (359) 4,819
 1,923
1,907
 1,906
 4,519
 3,756
 (673) (843) 5,753
 4,819
Net periodic pension cost/(credit)$1,329
 $885
 $1,179
 $(63) $(1,277) $(451) $1,231
 $371
$1,156
 $1,329
 $1,812
 $1,179
 $(1,123) $(1,277) $1,845
 $1,231


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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

Net periodic pension cost for the Company’s defined benefit pension plans and U.S. post-retirement medical plan includes the following components for the nine months ended September 30:

U.S. Pension Benefits Non-U.S. Pension Benefits Other U.S. Post-retirement Benefits TotalU.S. Pension Benefits Non-U.S. Pension Benefits Other U.S. Post-retirement Benefits Total
2015 2014 2015 2014 2015 2014 2015 20142016 2015 2016 2015 2016 2015 2016 2015
Service cost, net$628
 $669
 $14,228
 $11,741
 $
 $129
 $14,856
 $12,539
$328
 $628
 $12,606
 $14,228
 $
 $
 $12,934
 $14,856
Interest cost on projected benefit obligations4,823
 4,797
 10,623
 16,383
 104
 180
 15,550
 21,360
3,414
 4,823
 7,967
 10,623
 57
 104
 11,438
 15,550
Expected return on plan assets(7,183) (6,411) (27,867) (28,512) 
 
 (35,050) (34,923)(5,912) (7,183) (25,020) (27,867) 
 
 (30,932) (35,050)
Recognition of prior service cost
 
 (3,632) (3,079) (1,408) (585) (5,040) (3,664)
 
 (3,856) (3,632) (1,408) (1,408) (5,264) (5,040)
Recognition of actuarial losses/(gains)5,720
 3,600
 11,393
 3,272
 (2,528) (1,077) 14,585
 5,795
5,699
 5,720
 13,585
 11,393
 (2,019) (2,528) 17,265
 14,585
Settlement charge7,963
 
 
 
 
 
 7,963
 
Net periodic pension cost/(credit)$3,988
 $2,655
 $4,745
 $(195) $(3,832) $(1,353) $4,901
 $1,107
$11,492
 $3,988
 $5,282
 $4,745
 $(3,370) $(3,832) $13,404
 $4,901

As previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2014,2015, the Company expects to make employer contributions of approximately $19.619.4 million to its non-U.S. pension plans and employer contributions of approximately $0.70.5 million to its U.S. post-retirement medical plan during the year ended December 31, 2015.2016. These estimates may change based upon several factors, including fluctuations in currency exchange rates, actual returns on plan assets and changes in legal requirements.

In February 2016 the Company offered former employees a one-time option to receive a lump sum distribution of their vested pension plan benefits. Based upon the eligible participant acceptance, $14.6 million was paid from plan assets to these former employees in the second quarter of 2016 with a corresponding decrease in the benefit obligation. The Company incurred a one-time non-cash settlement charge recorded in other charges (income), net during the second quarter of 2016 of approximately $8.2 million, of which $8.0 million, $4.9 million after tax, was reclassified from accumulated other comprehensive income.


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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

12.    RESTRUCTURING CHARGES
For the three and nine months ended September 30, 20152016, the Company has incurred $2.61.5 million and $5.24.6 million, respectively of restructuring expenses which primarily comprised of employee-related costs. Liabilities related to restructuring activities are included in accrued and other liabilities in the consolidated balance sheet.
A rollforward of the Company’s accrual for restructuring activities for the nine months ended September 30, 20152016 is as follows:
 Total Total
Balance at December 31, 2014 $8,436
Balance at December 31, 2015 $12,211
Restructuring charges 5,188
 4,579
Cash payments and utilization (3,602) (6,304)
Impact of foreign currency (574) (27)
Balance at September 30, 2015 $9,448
Balance at September 30, 2016 $10,459

13.    OTHER CHARGES (INCOME), NET
Other charges (income), net consists primarilyfor the three and nine months ended September 30, 2016 includes a one-time non-cash pension settlement charge of interest income,$8.2 million related to a lump sum offering to former employees of our U.S. pension plan. Other charges (income), net also includes (gains) losses from foreign currency transactions and hedging activity, interest income, acquisition transaction costs and other items.



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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

14.    SEGMENT REPORTING
As disclosed in Note 16 to the Company's consolidated financial statements for the year ended December 31, 20142015, the Company has determined there are five reportable segments:  U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other.
The Company evaluates segment performance based on Segment Profit (gross profit less research and development and selling, general and administrative expenses, before amortization, interest expense, restructuring charges, other charges (income), net and taxes).
The following tables show the operations of the Company’s operating segments:
Net Sales to Net Sales to     As of September 30,Net Sales to Net Sales to     As of September 30,
For the three months endedExternal Other Total Net Segment 2015External Other Total Net Segment 2016
September 30, 2015Customers Segments Sales Profit Goodwill
September 30, 2016Customers Segments Sales Profit Goodwill
U.S. Operations$217,713
 $21,221
 $238,934
 $40,529
 $317,525
$235,715
 $20,151
 $255,866
 $43,779
 $356,089
Swiss Operations32,867
 107,196
 140,063
 39,772
 22,130
32,390
 127,569
 159,959
 36,854
 22,280
Western European Operations150,523
 32,495
 183,018
 26,789
 94,659
159,025
 43,816
 202,841
 30,218
 87,403
Chinese Operations96,716
 49,499
 146,215
 41,665
 709
99,349
 62,368
 161,717
 51,669
 669
Other (a)106,335
 2,014
 108,349
 13,400
 13,319
124,119
 1,770
 125,889
 16,721
 15,703
Eliminations and Corporate (b)
 (212,425) (212,425) (27,883) 

 (255,674) (255,674) (27,566) 
Total$604,154
 $
 $604,154
 $134,272
 $448,342
$650,598
 $
 $650,598
 $151,675
 $482,144


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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

Net Sales to Net Sales to     Net Sales to Net Sales to     
For the nine months endedExternal Other Total Net Segment External Other Total Net Segment 
September 30, 2015Customers Segments Sales Profit 
September 30, 2016Customers Segments Sales Profit 
U.S. Operations$599,283
 $62,353
 $661,636
 $101,719
 $640,618
 $61,884
 $702,502
 $114,046
 
Swiss Operations97,325
 308,998
 406,323
 109,996
 90,075
 374,863
 464,938
 107,673
 
Western European Operations442,742
 87,395
 530,137
 70,476
 450,940
 121,308
 572,248
 74,711
 
Chinese Operations274,178
 138,253
 412,431
 111,080
 277,182
 166,948
 444,130
 134,229
 
Other (a)308,384
 4,959
 313,343
 32,372
 339,743
 4,824
 344,567
 41,064
 
Eliminations and Corporate (b)
 (601,958) (601,958) (75,755) 
 (729,827) (729,827) (88,958) 
Total$1,721,912
 $
 $1,721,912
 $349,888
 $1,798,558
 $
 $1,798,558
 $382,765
 

(a)Other includes reporting units in Eastern Europe, Latin America, Southeast Asia and other countries.
(b)Eliminations and Corporate includes the elimination of inter-segment transactions and certain corporate expenses and intercompany investments, which are not included in the Company’s operating segments.

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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

Net Sales to Net Sales to     As of September 30,Net Sales to Net Sales to     As of September 30,
For the three months endedExternal Other Total Net Segment 2014External Other Total Net Segment 2015
September 30, 2014Customers Segments Sales Profit (c) Goodwill
September 30, 2015Customers Segments Sales Profit Goodwill
U.S. Operations$196,241
 $20,058
 $216,299
 $30,695
 $308,112
$217,831
 $21,221
 $239,052
 $40,547
 $317,525
Swiss Operations35,375
 112,544
 147,919
 35,924
 22,748
32,847
 122,399
 155,246
 39,358
 22,130
Western European Operations174,089
 32,076
 206,165
 29,612
 103,844
149,996
 45,403
 195,399
 26,594
 94,659
Chinese Operations107,907
 41,416
 149,323
 43,472
 741
96,717
 57,544
 154,261
 44,958
 709
Other (a)115,488
 1,864
 117,352
 13,148
 14,094
106,763
 2,014
 108,777
 13,464
 13,319
Eliminations and Corporate (b)
 (207,958) (207,958) (26,151) 

 (248,581) (248,581) (30,649) 
Total$629,100
 $
 $629,100
 $126,700
 $449,539
$604,154
 $
 $604,154
 $134,272
 $448,342

Net Sales to Net Sales to     Net Sales to Net Sales to     
For the nine months endedExternal Other Total Net Segment External Other Total Net Segment 
September 30, 2014Customers Segments Sales Profit (c) 
September 30, 2015Customers Segments Sales Profit 
U.S. Operations$553,590
 $61,969
 $615,559
 $84,715
 $600,917
 $62,353
 $663,270
 $101,964
 
Swiss Operations102,522
 328,932
 431,454
 100,069
 96,851
 355,492
 452,343
 108,892
 
Western European Operations504,172
 88,950
 593,122
 74,173
 439,717
 124,709
 564,426
 69,377
 
Chinese Operations299,450
 114,358
 413,808
 113,756
 274,178
 160,724
 434,902
 119,571
 
Other (a)328,821
 4,946
 333,767
 33,236
 310,249
 4,959
 315,208
 32,652
 
Eliminations and Corporate (b)
 (599,155) (599,155) (75,348) 
 (708,237) (708,237) (82,568) 
Total$1,788,555
 $
 $1,788,555
 $330,601
 $1,721,912
 $
 $1,721,912
 $349,888
 

(a)Other includes reporting units in Eastern Europe, Latin America, Southeast Asia and other countries.
(b)Eliminations and Corporate includes the elimination of inter-segment transactions and certain corporate expenses and intercompany investments, which are not included in the Company’s operating segments.
(c)2014 Segment profit between the U.S., Swiss, and Chinese Operations has been reclassified to conform to the current period.

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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2016 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

A reconciliation of earnings before taxes to segment profit for the three and nine month periods ended September 30 follows:

Three Months Ended Nine Months EndedThree Months Ended Nine Months Ended
2015 2014 2015 20142016 2015 2016 2015
Earnings before taxes$116,923
 $111,836
 $301,933
 $285,618
$133,324
 $116,923
 $322,909
 $301,933
Amortization7,767
 7,198
 22,929
 21,575
9,087
 7,767
 26,166
 22,929
Interest expense7,029
 5,991
 20,696
 17,613
7,167
 7,029
 20,619
 20,696
Restructuring charges2,561
 1,050
 5,188
 4,447
1,494
 2,561
 4,579
 5,188
Other charges (income), net(8) 625
 (858) 1,348
603
 (8) 8,492
 (858)
Segment profit$134,272
 $126,700
 $349,888
 $330,601
$151,675
 $134,272
 $382,765
 $349,888

During the three months ended September 30, 20152016, restructuring charges of $1.5 million were recognized, of which $0.6 million, $0.3 million, $0.5 million and $0.1 million related to the Company’s U.S., Swiss, Western European and Other Operations, respectively. Restructuring charges of $2.6 million were recognized during the three months ended September 30, 2015, of which $0.6 million, $1.9 million, and $0.1 million related to the Company’s Swiss, Western European and Chinese Operations, respectively. Restructuring charges of $1.14.6 million were recognized during the threenine months ended September 30, 20142016, of which $0.11.7 million, $0.40.9 million, $1.7 million, $0.1 million, and $0.5$0.2 million related to the Company’s U.S., Swiss, Western European, Chinese, Operations, and Other Operations,

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Table of Contents
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2015 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

respectively. Restructuring charges of $5.2 million were recognized during the nine months ended September 30, 2015, of which $0.1 million, $1.7 million, $2.4 million, $0.4 million, and $0.6 million related to the Company’s U.S., Swiss, Western European, Chinese, and Other Operations, respectively. Restructuring charges of $4.4 million were recognized during the nine months ended September 30, 2014, of which $1.7 million, $0.6 million, $1.0 million, $0.4 million and $0.70.6 million related to the Company’s U.S., Swiss, Western European, Chinese and Other Operations, respectively.

15.    CONTINGENCIES
The Company is party to various legal proceedings, including certain environmental matters, incidental to the normal course of business. Management does not expect that any of such proceedings, either individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

- 21 -


Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Unaudited Interim Consolidated Financial Statements included herein.
General
Our interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Operating results for the three and nine months ended September 30, 20152016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2015.2016.
Changes in local currency exclude the effect of currency exchange rate fluctuations. Local currency amounts are determined by translating current and previous year consolidated financial information at an index utilizing historical currency exchange rates. We believe local currency information provides a helpful assessment of business performance and a useful measure of results between periods. We do not, nor do we suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We present non-GAAP financial measures in reporting our financial results to provide investors with an additional analytical tool to evaluate our operating results.
We also include in the discussion below disclosures of immaterial qualitative factors that are not quantified. Although the impact of such factors is not considered material, we believe these disclosures can be useful in evaluating our operating results.
Results of Operations – Consolidated
The following tables set forth certain items from our interim consolidated statements of operations for the three and nine month periods ended September 30, 20152016 and 20142015 (amounts in thousands).
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2015 2014 2015 20142016 2015 2016 2015
(unaudited) % (unaudited) % (unaudited) % (unaudited) %(unaudited) % (unaudited) % (unaudited) % (unaudited) %
Net sales$604,154
 100.0
 $629,100
 100.0 $1,721,912
 100.0
 $1,788,555
 100.0$650,598
 100.0 $604,154
 100.0
 $1,798,558
 100.0 $1,721,912
 100.0
Cost of sales264,625
 43.8
 285,549
 45.4 760,666
 44.2
 824,187
 46.1281,104
 43.2 264,625
 43.8
 781,581
 43.5 760,666
 44.2
Gross profit339,529
 56.2
 343,551
 54.6 961,246
 55.8
 964,368
 53.9369,494
 56.8 339,529
 56.2
 1,016,977
 56.5 961,246
 55.8
Research and development29,711
 4.9
 30,352
 4.8 87,966
 5.1
 91,974
 5.130,139
 4.6 29,711
 4.9
 89,813
 5.0 87,966
 5.1
Selling, general and administrative175,546
 29.1
 186,499
 29.6 523,392
 30.4
 541,793
 30.3187,680
 28.8 175,546
 29.1
 544,399
 30.3 523,392
 30.4
Amortization7,767
 1.3
 7,198
 1.1 22,929
 1.3
 21,575
 1.29,087
 1.4 7,767
 1.3
 26,166
 1.5 22,929
 1.3
Interest expense7,029
 1.1
 5,991
 1.0 20,696
 1.2
 17,613
 1.07,167
 1.1 7,029
 1.1
 20,619
 1.1 20,696
 1.2
Restructuring charges2,561
 0.4
 1,050
 0.2 5,188
 0.3
 4,447
 0.21,494
 0.3 2,561
 0.4
 4,579
 0.2 5,188
 0.3
Other charges (income), net(8) 
 625
 0.1 (858) 
 1,348
 0.1603
 0.1 (8) 
 8,492
 0.5 (858) 
Earnings before taxes116,923
 19.4
 111,836
 17.8 301,933
 17.5
 285,618
 16.0133,324
 20.5 116,923
 19.4
 322,909
 17.9 301,933
 17.5
Provision for taxes28,062
 4.7
 26,840
 4.3 72,464
 4.2
 68,549
 3.931,992
 4.9 28,062
 4.7
 76,315
 4.2 72,464
 4.2
Net earnings$88,861
 14.7
 $84,996
 13.5 $229,469
 13.3
 $217,069
 12.1$101,332
 15.6 $88,861
 14.7
 $246,594
 13.7 $229,469
 13.3

Net sales
Net sales were $604.2$650.6 million and $629.1$604.2 million for the three months ended September 30, 20152016 and 2014,2015, respectively, and $1.722$1.799 billion and $1.789$1.722 billion for the nine months ended September 30, 20152016 and 2014.2015. This represents a decreasean increase of 8% and 4% in U.S. dollars for both the three and nine months ended September 30, 2015.2016. Excluding the effect of currency exchange rate fluctuations, or in local currencies, net sales increased 3%9% and 4%6% for the three and nine months ended September 30, 2015, as compared2016. The Troemner acquisition contributed approximately 1% to prior year comparable periods. Currency exchange rate fluctuations negatively impactedour net

sales as most of our non-U.S. dollar trading currencies, especiallyfor the euro, have weakened against the U.S. dollar.three months ended September 30, 2016. While market conditions remain stable in most parts of the world,are currently favorable, we see unfavorable market conditions in China, Russia and Brazil, where customer investments have slowed due to a variety of economic factors. We remain cautious about

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regarding our sales growth outlook asgiven the timing of a market stabilization or recoveryuncertainty in these three countries remains uncertain.global markets.
Net sales by geographic destination for the three and nine months ended September 30, 20152016 in U.S. dollars increased in the Americas 8%7% and 6%, in Europe decreased 13% for both periods,7% and 3%, and in Asia/Rest of World decreased 8%10% and 4%, respectively. Our net sales by geographic destination for the three and nine months ended September 30, 20152016 in local currencies increased in the Americas 10% and 7%, for both periods, in Europe 1%8% and 3%4%, and in Asia/Rest of World decreased 1%11% and increased 1%8%, respectively. NetExcluding the Troemner acquisition, our local currency net sales were impacted by significant sales declinesgrowth in China, Russia and Brazil.the Americas for the three months ended September 30, 2016 was 6%. A discussion of sales by operating segment is included below.
As described in Note 16 to our consolidated financial statements for the year ended December 31, 2014,2015, our net sales comprise product sales of precision instruments and related services. Service revenues are primarily derived from repair and other services, including regulatory compliance qualification, calibration, certification, preventative maintenance and spare parts.
Net sales of products decreased 4%increased 8% in U.S. dollars and increased 3%10% in local currencies for the three months ended September 30, 20152016 and decreased 3% in U.S. dollars and increased 4% local currencies for the nine months ended September 30, 2015, compared to the corresponding periods in 2014. Service revenue (including spare parts) decreased by 4% in U.S. dollars and increased 5% in local currencies for the three months ended September 30, 2015 and decreased 5% in U.S. dollars and increased 4% in local currencies for the nine months ended September 30, 2015, compared to the corresponding periods in 2014.
Net sales of our laboratory-related products, which represented approximately 48% of our total net sales decreased 1% in U.S. dollars and increased 7% in local currencies for both the three and nine months ended September 30, 2015. The local currency increase in net sales of our laboratory-related products for the three and nine months ended September 30, 2015 was driven by strong volume and favorable price realization in most product categories, including strong growth in pipettes, and laboratory balances for the three month period. These results were offset in part by significant sales volume declines in Brazil and Russia.
Net sales of our industrial-related products, which represented approximately 43% of our total net sales decreased 8% in U.S. dollars and 1% in local currencies for the three months ended September 30, 2015, and decreased 7% in U.S. dollars and were flat in local currencies for the nine months ended September 30, 2015, compared to the corresponding prior year periods. The decrease in local currency net sales of our industrial-related products for the three and nine months ended September 30, 2015 includes significant sales volume declines of industrial-related products in China, Russia and Brazil offset in part by strong growth in the United States primarily due to increased volume.
Net sales in our food retailing products, which represented approximately 9% of our total net sales, were flat in U.S. dollars and increased 7% in local currencies for the three months ended September 30, 2015, and decreased 2% in U.S. dollars and increased6% in local currencies for the nine months ended September 30, 2015,2016, compared to the corresponding prior year periods.periods in 2015. The increase inTroemner acquisition contributed approximately 1% to our net sales in local currencies of our food retailing products for the three months ended September 30, 2015 is driven2016. Service revenue (including spare parts) increased by 5% in U.S. dollars and 6% in local currencies for the three months ended September 30, 2016 and increased 4% in U.S. dollars and 6% in local currencies for the nine months ended September 30, 2016, compared to the corresponding periods in 2015. The Troemner acquisition contributed approximately 1% to our net sales of service for the three months ended September 30, 2016.
Net sales of our laboratory-related products and related services, which represented approximately 48% of our total net sales increased 8% in U.S. dollars and 9% in local currencies for the three months ended September 30, 2016 and increased 6% in U.S. dollars and 8% in local currencies for the nine months ended September 30, 2016. The local currency increase for the three and nine months ended September 30, 2016 included strong growth in most product categories. The Troemner acquisition contributed approximately 2% to our net sales of laboratory-related products and related services for the three months ended September 30, 2016.
Net sales of our industrial-related products and related services, which represented approximately 43% of our total net sales increased 7% in U.S. dollars and 8% in local currencies for the three months ended September 30, 2016, and increased 2% in U.S. dollars and 5% in local currencies for the nine months ended September 30, 2016. The local currency increase in our net sales of our industrial-related products and related services for the three months ended September 30, 2016 included particularly strong sales growth in product inspection and solid sales growth in our core industrial-related products and related services.
Net sales in our food retailing products and related services, which represented approximately 9% of our total net sales increased 12% in U.S. dollars and 13% in local currencies for the three months ended September 30, 2016, and increased 4% in U.S. dollars and 6% in local currencies for the nine months ended September 30, 2016. The local currency increase for the three months ended September 30, 2016 included particularly strong growth and project activity in Europe, the Americas, offset in part by reduced net sales in Europe.and Asia/Rest of World.
Gross profit
Gross profit as a percentage of net sales was 56.2%56.8% and 54.6%56.2% for the three months ended September 30, 20152016 and 2014,2015, respectively, and 55.8%56.5% and 53.9%55.8% for the nine months ended September 30, 2016 and 2015, and 2014, respectively.

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Gross profit as a percentage of net sales for products was 59.8%60.1% and 57.8%59.8% for the three months ended September 30, 20152016 and 2014,2015, respectively, and 59.7%60.3% and 57.5%59.7% for the nine months ended September 30, 20152016 and 2014,2015, respectively.
Gross profit as a percentage of net sales for services (including spare parts) was 43.6%45.0% and 43.5%43.6% for the three months ended September 30, 20152016 and 2014,2015, respectively, and 42.5%43.5% and 42.0%42.5% for the nine months ended September 30, 20152016 and 2014,2015, respectively.
The increase in gross profit as a percentage of net sales for the three and nine months ended September 30, 20152016 includes the benefit of hedging gains and currency translation,benefits from higher sales volume, favorable price realization, increased sales volume, and reduced material costs, partially offset in part by investments in our field service organization.
Research and development and selling, general and administrative expenses
Research and development expenses as a percentage of net sales was 4.9%4.6% and 4.8%4.9% for the three months ended September 30, 20152016 and 2014,2015, respectively, and was 5.0% and 5.1% for both the nine months ended September 30, 20152016 and 2014.2015. Research and development expenses decreased 2%increased 3% in U.S. dollars and increased 3%6% in local currencies for the three months ended September 30, 2015,2016, and decreased 4%increased 2% in U.S. dollars and increased 1%5% in local currencies for the nine months ended September 30, 2015,2016, respectively, compared to the corresponding periods in 2014,2015 relating to the timing of research and development project activity.
Selling, general and administrative expenses as a percentage of net sales were 29.1%28.8% and 29.6%29.1% for the three months ended September 30, 20152016 and 2014,2015, respectively, and werewas 30.3% and 30.4% and 30.3% for the nine months ended September 30, 20152016 and 2014.2015. Selling, general and administrative expenses decreasedincreased 6% in U.S. dollars and increased 1%8% in local currencies for the three months ended September 30, 2015,2016, and decreased 3%increased 4% in U.S. dollars and increased 3%6% in local currencies for the nine months ended September 30, 2015,2016, compared to the corresponding periods in 2014.2015. The local currency increase includes additionalhigher cash incentive expense, investments in our field sales organization and higher employee benefit costs,acquisitions, offset in part by lower cash incentive expense and benefits from our cost savings programs during the three months ended September 30, 2015.programs.
Amortization, interest expense, other charges (income), net and taxes
Amortization expense was $7.8$9.1 million and $7.2$7.8 million for the three months ended September 30, 20152016 and 2014,2015, respectively, and $22.9$26.2 million and $21.6$22.9 million for the nine months ended September 30, 20152016 and 2014,2015, respectively.
Interest expense was $7.0$7.2 million and $6.0$7.0 million for the three months ended September 30, 20152016 and 2014,2015, respectively, and $20.7$20.6 million and $17.6$20.7 million for the nine months ended September 30, 2016 and 2015, and 2014, respectively. The increase in interest expense for the three and nine month periods ended September 30, 2015 is primarily a result of an increase in average borrowings.
Other charges (income), net consist primarilyincludes a one-time non-cash pension settlement charge of $8.2 million related to a lump sum offering to former employees of our U.S. pension plan. Other charges (income), net also includes (gains) losses from foreign currency transactions and hedging activity, interest income, acquisition transaction costs and other items.

The provision for taxes is based upon using our projected annual effective tax rate of 24% before discrete items for the three and nine months periods ended September 30, 20152016 and 2014.2015. Our consolidated income tax rate is lower than the U.S. statutory rate primarily because of benefits from lower-taxed non-U.S. operations. The most significant of these lower-taxed operations are in Switzerland and China.


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Results of Operations – by Operating Segment

The following is a discussion of the financial results of our operating segments. We currently have five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other. A more detailed description of these segments is outlined in Note 16 to our consolidated financial statements for the year ended December 31, 2014.2015

U.S. Operations (amounts in thousands)
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2015 2014 % 2015 2014 %2016 2015 % 2016 2015 %
Total net sales$238,934
 $216,299
 10% $661,636
 $615,559
 7%$255,866
 $239,052
 7% $702,502
 $663,270
 6%
Net sales to external customers$217,713
 $196,241
 11% $599,283
 $553,590
 8%$235,715
 $217,831
 8% $640,618
 $600,917
 7%
Segment profit$40,529
 $30,695
 32% $101,719
 $84,715
 20%$43,779
 $40,547
 8% $114,046
 $101,964
 12%

Total net sales increased 10%7% and 7%6% for the three and nine months ended September 30, 20152016 compared with the corresponding periods in 2014.2015. Net sales to external customers increased 11%8% and 8%7% for both the three and nine months ended September 30, 2015,2016, respectively. The increaseNet sales in total net salesour U.S. operations benefited approximately 2% and net sales to external customers for1% from the three months ended September 30, 2015 reflects strong sales growth in most product categories.
Segment profit increased $9.8 million and $17.0 million forTroemner acquisition during the three and nine months ended September 30, 2015, respectively, compared to the corresponding periods in 2014.2016. The increase in segment profit for the three months ended September 30, 2015 primarily related to increased sales and benefits from our cost savings programs, offset in part by increased sales and service investments.
Swiss Operations (amounts in thousands)
 Three months ended September 30, Nine months ended September 30,
 2015 2014 
%1)
 2015 2014 
%1)
Total net sales$140,063
 $147,919
 (5)% $406,323
 $431,454
 (6)%
Net sales to external customers$32,867
 $35,375
 (7)% $97,325
 $102,522
 (5)%
Segment profit$39,772
 $35,924
 11 % $109,996
 $100,069
 10 %
1)Represents U.S. dollar growth for net sales and segment profit.

Total net sales decreased 5% in U.S. dollars and was flat in local currency for the three months ended September 30, 2015, compared to the corresponding periods in 2014, and decreased 6% in U.S. dollars and 1% in local currency for the nine months ended September 30, 2015. Net sales to external customers decreased 7% in U.S. dollars and 3% in local currency for the three months ended September 30, 2015 and decreased 5% in U.S. dollars and 1% in local currency for the nine months ended September 30, 2015, compared to the corresponding periods in 2014. The decrease in local currency net sales to external customers for the three month period ended September 30, 2015 includes volume declines in industrial-related products related to soft market conditions, offset in part by growth in our laboratory-related products.
Segment profit increased $3.8 million and $9.9 million for the three and nine month periods ended September 30, 2015, respectively, compared to the corresponding periods in 2014. Segment profit includes the benefit of currency hedging, the impact of favorable inter-segment price realization and reduced material costs, offset in part by unfavorable foreign currency translation.


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Western European Operations (amounts in thousands)
 Three months ended September 30, Nine months ended September 30,
 2015 2014 
%1)
 2015 2014 
%1)
Total net sales$183,018
 $206,165
 (11)% $530,137
 $593,122
 (11)%
Net sales to external customers$150,523
 $174,089
 (14)% $442,742
 $504,172
 (12)%
Segment profit$26,789
 $29,612
 (10)% $70,476
 $74,173
 (5)%
1)Represents U.S. dollar growth for net sales and segment profit.

Total net sales decreased 11% in U.S. dollars and increased 4% in local currencies for the three months ended September 30, 2015 and decreased 11% in U.S. dollars and increased 7% in local currencies for the nine months ended September 30, 2015, compared to the corresponding periods in 2014. Net sales to external customers decreased 14% in U.S. dollars and increased 2% in local currencies for the three months ended September 30, 2015, and decreased 12% in U.S. dollars and increased 6% in local currencies for the nine months ended September 30, 2015, compared to the corresponding periods in 2014. Totaltotal net sales and net sales to external customers for the three and nine months ended September 30, 2016 reflects strong sales growth in most product categories. The three month period includes particularly strong results in product inspection and food retailing project activity.
Segment profit increased $3.2 million and $12.1 million for the three and nine months ended September 30, 2016, respectively, compared to the corresponding periods in 2015, includes strong growth across most laboratory-related productsprimarily due to volume increasesincreased sales and favorable price realization,benefits from our margin expansion initiatives, offset in part by a declineincreased cash incentive expense and sales and service investments.
Swiss Operations (amounts in product inspectionthousands)
 Three months ended September 30, Nine months ended September 30,
 2016 2015 
%1)
 2016 2015 
%1)
Total net sales$159,959
 $155,246
 3 % $464,938
 $452,343
 3 %
Net sales to external customers$32,390
 $32,847
 (1)% $90,075
 $96,851
 (7)%
Segment profit$36,854
 $39,358
 (6)% $107,673
 $108,892
 (1)%
1)Represents U.S. dollar growth (decline) for net sales and segment profit.

Total net sales increased 3% in U.S. dollars and 7% in local currency for both the three and nine months ended September 30, 2016, compared to the corresponding periods in 2015. Net sales to external customers decreased 1% in U.S. dollars and were flat in local currency for the three months ended September 30, 2016 and decreased 7% in U.S. dollars and 5% in local currency for the nine months ended September 30, 2016, compared to the corresponding periods in 2015.

The decrease in local currency net sales to external customers for the nine month period ended September 30, 2016 primarily relates to soft market conditions in Switzerland.
Segment profit decreased $2.8$2.5 million and $3.7$1.2 million for the three and nine month periods ended September 30, 2015,2016, respectively, compared to the corresponding periods in 2014 primarily2015. The decrease in segment profit is due to unfavorable foreignlower currency translation and increased sales and service investments,hedging gains in the current year, offset in part by increased total net sales, in local currencies.benefits from our cost saving programs and reduced material costs.

Chinese
Western European Operations (amounts in thousands)
 Three months ended September 30, Nine months ended September 30,
 2015 2014 
%1)
 2015 2014 
%1)
Total net sales$146,215
 $149,323
 (2)% $412,431
 $413,808
 0 %
Net sales to external customers$96,716
 $107,907
 (10)% $274,178
 $299,450
 (8)%
Segment profit$41,665
 $43,472
 (4)% $111,080
 $113,756
 (2)%
1)Represents U.S. dollar growth for net sales and segment profit.

Total net sales decreased 2% in U.S. dollars and was flat in local currency for the three months ended September 30, 2015 and was flat in both U.S. dollars and local currency for the nine months ended September 30, 2015, compared to the corresponding periods in 2014. Net sales to external customers decreased 10% in U.S. dollars and 9% in local currency for the three months ended September 30, 2015 and decreased 8% in both U.S. dollars and local currency during the nine months ended September 30, 2015, compared to the corresponding periods in 2014. The decrease in net sales to external customers during the three and nine months ended September 30, 2015 reflects a significant sales volume decline in industrial-related products offset in part by growth in laboratory-related products and food retailing. Net sales to external customers in local currency for our industrial-related products decreased 19% for both the three and nine months ended September 30, 2015.

Segment profit decreased $1.8 million and $2.7 million for the three and nine month periods ended September 30, 2015, respectively, compared to the corresponding periods in 2014. The decrease in segment profit for the three and nine months ended September 30, 2015 includes a reduction in net sales to external customers, and increased sales and service investments, offset in part by favorable price realization and favorable business mix.


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Other (amounts in thousands)
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2015 2014 
%1)
 2015 2014 
%1)
2016 2015 
%1)
 2016 2015 
%1)
Total net sales$108,349
 $117,352
 (8)% $313,343
 $333,767
 (6)%$202,841
 $195,399
 4% $572,248
 $564,426
 1%
Net sales to external customers$106,335
 $115,488
 (8)% $308,384
 $328,821
 (6)%$159,025
 $149,996
 6% $450,940
 $439,717
 3%
Segment profit$13,400
 $13,148
 2 % $32,372
 $33,236
 (3)%$30,218
 $26,594
 14% $74,711
 $69,377
 8%
1)Represents U.S. dollar growth (decline) for net sales and segment profit.

Total net sales and net sales to external customers decreased 8%increased 4% in U.S. dollars and increased 7%6% in local currencies for the three months ended September 30, 20152016 and decreased 6%increased 1% in U.S. dollars and increased 5%3% in local currencies for the nine months ended September 30, 20152016, compared to the corresponding periods in 2014.2015. Net sales to external customers increased 6% in U.S. dollars and 8% in local currencies for the three months ended September 30, 2016, and increased 3% in both U.S. dollars and in local currencies for the nine months ended September 30, 2016, compared to the corresponding periods in 2015. Total net sales to external customers for the three months ended September 30, 2016 includes growth in most product categories, with particularly strong growth in food retailing project activity and strong growth in product inspection. Total net sales to external customers for the nine months ended September 30, 2016 includes strong growth in most laboratory-related products and related services offset in part by a decline in product inspection which faced a difficult prior year comparison.

Segment profit increased $3.6 million and $5.3 million for the three and nine month periods ended September 30, 2016, respectively, compared to the corresponding periods in 2015. The increase in segment profit includes the impact of increased sales and benefits from our margin expansion and cost savings initiatives and favorable currency translation fluctuations, offset by increased sales and service investments.

Chinese Operations (amounts in thousands)
 Three months ended September 30, Nine months ended September 30,
 2016 2015 
%1)
 2016 2015 
%1)
Total net sales$161,717
 $154,261
 5% $444,130
 $434,902
 2%
Net sales to external customers$99,349
 $96,717
 3% $277,182
 $274,178
 1%
Segment profit$51,669
 $44,958
 15% $134,229
 $119,571
 12%
1)Represents U.S. dollar growth for net sales and segment profit.

Total net sales increased 5% in U.S. dollars and 11% in local currency for the three months ended September 30, 2016 and increased 2% in U.S. dollars and 8% local currency for the nine months ended September 30, 2016, compared to the corresponding periods in 2015. Net sales to external customers increased 3% in U.S. dollars and 9% in local currency for the three months ended September 30, 2016 and increased 1% in U.S. dollars and 7% local currency during the nine months ended September 30, 2016, compared to the corresponding periods in 2015. The increase in local currency net sales to external customers during the three and nine months ended September 30, 2016 reflects strong growth in laboratory-related products and related services and modest growth in industrial-related products and related services. While we are pleased with our local currency sales growth in China, the outlook remains uncertain due to the risks in the Chinese economy.

Segment profit increased $6.7 million and $14.7 million for the three and nine month periods ended September 30, 2016, respectively, compared to the corresponding periods in 2015. The increase in segment profit for the three and nine months ended September 30, 2016 includes increased local currency sales and benefits from our cost savings initiatives.


Other (amounts in thousands)
 Three months ended September 30, Nine months ended September 30,
 2016 2015 
%1)
 2016 2015 
%1)
Total net sales$125,889
 $108,777
 16% $344,567
 $315,208
 9%
Net sales to external customers$124,119
 $106,763
 16% $339,743
 $310,249
 10%
Segment profit$16,721
 $13,464
 24% $41,064
 $32,652
 26%
1)Represents U.S. dollar growth for net sales and segment profit.

Total net sales increased 16% in U.S. dollars and 14% in local currency for the three months ended September 30, 2016 and increased 9% in U.S. dollars and 12% local currency for the nine months ended September 30, 2016, compared to the corresponding periods in 2015. Net sales to external customers increased 16% in U.S. dollars and 15% in local currency for the three months ended September 30, 2016 and increased 10% in U.S. dollars and 12% local currency during the nine months ended September 30, 2016, compared to the corresponding periods in 2015. The local currency increase in total net sales and net sales to external customers includes strong volume growth and increased price realization in several countries, offset in part by a significant sales volume declines in Russia and Brazil.countries.

Segment profit increased $0.3$3.3 million and decreased $0.9$8.4 million for the three and nine months ended September 30, 2015,2016, respectively, compared to the corresponding periods in 2014.2015. The increase in segment profit for the three months ended September 30, 2015 includesis primarily due to increased local currency sales, offset in part by unfavorable currency translation fluctuations and increased sales and service investments.
Liquidity and Capital Resources
Liquidity is our ability to generate sufficient cash flows from operating activities to meet our obligations and commitments. In addition, liquidity includes the ability to obtain appropriate financing. Currently, our financing requirements are primarily driven by working capital requirements, capital expenditures, share repurchases and acquisitions.
Cash provided by operating activities totaled $289.8$290.1 million during the nine months ended September 30, 2015,2016, compared to $278.2$289.8 million in the corresponding period in 2014. The increase2015. Cash provided by operating activity in 20152016 includes higherincreased net earnings and the timingincreased customer deposits of tax payments$16.0 million, offset by changes in the prior year, offset in part by the timing of accounts receivables collections in the prior yearof $21.4 million that are primarily related to timing and our increased cash incentive payments of approximately $14 million.local currency sales.
Capital expenditures are made primarily for investments in information systems and technology, machinery, equipment and the purchase and expansion of facilities. Our capital expenditures totaled $56.8$51.2 million for the nine months ended September 30, 20152016 compared to $61.4$56.8 million in the corresponding period in 2014.2015.
We continue to explore potential acquisitions. In connection with any acquisition, we may incur additional indebtedness. In September 2015,August 2016, we consummated acquisitions totaling $16.6 million, includingacquired substantially all of the acquisitionassets of Henry Troemner, LLC, (Troemner) a real-time monitoring water purity technologysupplier of lab equipment, weights and weight calibration based in the United States for an estimated aggregate purchase price of $14.7$95.8 million that will be integratedincluded into our process analytics productlaboratory instrument offering. We may be required to pay additional cash consideration related to an earn-out period. Goodwill recorded in connection with the acquisition totaled $8.7$33.8 million, which is included in the our U.S. Operations segment. We identified intangible assets which included customer relationships of $43.9 million, tradename of $3.4 million, technology and patents of $2.9 million and other intangibles of $0.5 million. The identifiable intangible assets will be amortized on a straight-line basis over periods ranging from 3 to 25 years and the annual aggregate amortization expense is estimated at $2.7 million. Net tangible assets acquired were $11.3 million and are recorded at fair value in the consolidated financial statements.
In 2016, we also incurred additional acquisitions payments totaling $13.9 million. Goodwill recorded in connection with these acquisitions totaled $5.8 million. We also recorded $6.8$7.7 million of identified intangibles primarily pertaining to technologycustomer relationships in connection with thethese acquisitions, which will be amortized on a straight-line basis over 10 to 15 years.

We plan to repatriate earnings from China, Switzerland, Germany, the United Kingdom and certain other countries in future years and expect the only additional cost associated with the repatriation of such earnings outside the United States will be any applicable withholding taxes. All other undistributed earnings are considered to be permanently reinvested. As of September 30, 2015,2016, we have an immaterial amount of cash and cash equivalents outside the United States where undistributed earnings are considered permanently reinvested. Accordingly, we believe the tax

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impact associated with repatriating our undistributed foreign earnings will not have a material effect on our liquidity.

Senior Notes and Credit Facility Agreement

Our debt consisted of the following at September 30, 2015:2016:
September 30, 2015September 30, 2016
U.S. Dollar Other Principal Trading Currencies TotalU.S. Dollar Other Principal Trading Currencies Total
3.67% $50 million Senior Notes due December 17, 202250,000
 
 50,000
$50,000
 $
 $50,000
4.10% $50 million Senior Notes due September 19, 202350,000
 
 50,000
50,000
 
 50,000
3.84% $125 million Senior Notes due September 19, 2024125,000
 
 125,000
125,000
 
 125,000
4.24% $125 million Senior Notes due June 25, 2025125,000
 
 125,000
125,000
 
 125,000
1.47% EUR 125m Senior Notes due July 17, 2030
 139,962
 139,962
$800 million Credit Agreement, interest at LIBOR plus 75 basis points100,000
 11,769
 111,769
1.47% EUR 125 million Senior Notes due June 17, 2030
 140,131
 140,131
Debt issuance costs, net(1,301) (392) (1,693)
Total Senior Notes348,699
 139,739
 488,438
$800 million Credit Agreement, interest at LIBOR plus 87.5 basis points295,325
 42,259
 337,584
Other local arrangements283
 20,778
 21,061

 21,779
 21,779
Total debt450,283
 172,509
 622,792
644,024
 203,777
 847,801
Less: current portion(283) (20,778) (21,061)
 (21,779) (21,779)
Total long-term debt$450,000
 $151,731
 $601,731
$644,024
 $181,998
 $826,022
As of September 30, 2015, we had $683.42016, approximately $457.0 million was available under our credit agreement.Credit Agreement. Changes in exchange rates between the currencies in which we generate cash flows and the currencies in which our borrowings are denominated affect our liquidity. In addition, because we borrow in a variety of currencies, our debt balances fluctuate due to changes in exchange rates.

We currently believe that cash flow from operating activities, together with liquidity available under our credit facility and local working capital facilities, will be sufficient to fund currently anticipated working capital needs and capital spending requirements for at least the foreseeable future.

Share Repurchase Program

AsWe have a share repurchase program of which there was $1.1 billion common shares remaining to be repurchased under the program as of September 30, 2015, we had $107.2 million of remaining availability under the Company's share repurchase program. In November 2015, the Company's Board of Directors authorized an additional $1.5 billion to the share repurchase program.2016. The share repurchases are expected to be funded from cash balances, borrowings and cash generated from operating activities.activities, borrowings, and existing cash balances. Repurchases will be made through open market transactions, and the amount and timing of purchases will depend on business and market conditions, the stock price, trading restrictions, the level of acquisition activity and other factors.

We have purchased 24.225.7 million shares since the inception of the program through September 30, 2015.2016. During the nine months ended September 30, 20152016 and 2014,2015, we spent $371.2$375.0 million and $296.5$371.2 million on the repurchase of 1,167,7961,048,075 shares and 1,186,2151,167,796 shares at an average price per share of $317.86$357.77 and $249.91,$317.86, respectively. We also reissued 281,627193,517 shares and 246,551

281,627 shares held in treasury for the exercise of stock options and issuance of restricted stock units during the nine months ended September 30, 20152016 and 2014,2015, respectively.


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Effect of Currency on Results of Operations
Our earnings are affected by changing exchange rates. We are most sensitive to changes in the exchange rates between the Swiss franc, euro, and U.S. dollar. We have more Swiss franc expenses than we do Swiss franc sales because we develop and manufacture products in Switzerland that we sell globally, and have a number of corporate functions located in Switzerland. When the Swiss franc strengthens against our other trading currencies, particularly the U.S. dollar and euro, our earnings go down. We also have significantly more sales in the euro than we do expenses. When the euro weakens against the U.S. dollar and Swiss franc, our earnings also go down.

We entered into foreign currency forward contracts that reduce our exposure from the Swiss franc strengthening against the euro through 2016. The notional amount and average forward rate of our foreign currency forward contracts at September 30, 20152016 is Euro 26.7 million and 1.20 for contracts that mature in 2015, and Euro 66.520.6 million and 1.19 for contracts that mature in 2016, respectively. In September 2011, the Swiss National Bank established an exchange rate floor of 1.2 Swiss francs per euro which was abandoned in January 2015 after we entered into the previously mentioned foreign currency forward contracts. The Swiss National Bank's abandonment of the euro exchange rate floor resulted in an immediate strengthening of the Swiss franc against the euro and U.S. dollar.2016. Absent these forward currency forward contracts, we estimate a 1% strengthening of the Swiss franc against the euro would reduce our earnings before tax by approximately $1.1$1.2 million to $1.3$1.4 million annually. We also estimate a 1% strengthening of the Swiss franc against the U.S. dollar would reduce our earnings before tax by approximately $0.5$0.4 million to $0.7$0.6 million annually in addition to the previously mentioned strengthening of the Swiss franc against the euro impact.
We also conduct business in many geographies throughout the world, including Asia Pacific, the United Kingdom, Eastern Europe, Latin America, and Canada. Fluctuations in these currency exchange rates against the U.S. dollar can also affect our operating results. The most significant of these currency exposures is the Chinese Renminbi. The impact on our earnings before tax of the Chinese Renminbi weakening 1% against the U.S. dollar is a reduction of approximately $0.7$0.3 million to $0.9$0.5 million annually.
In addition to the effects of exchange rate movements on operating profits, our debt levels can fluctuate due to changes in exchange rates, particularly between the U.S. dollar and the Euro. Based on our outstanding debt at September 30, 2015,2016, we estimate that a 10% weakening of the U.S. dollar against the currencies in which our debt is denominated would result in an increase of approximately $19.2$22.7 million in the reported U.S. dollar value of our debt.

Recent Accounting Pronouncements
In April 2015, the FASB issued ASU 2015-03, to ASC 835-30 "Interest - Imputation of Interest." ASU 2015-03 will require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. In August 2015, the FASB issued ASU 2015-15 and update to ASU 2015-03, which addresses the accounting for debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortized over the term of the arrangements. The guidance becomes effective for financial statements issued for fiscal years beginning January 1, 2016, with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on the consolidated financial position of the Company.
In May 2014, the FASB issued ASU 2014-09, to ASC 606 "Revenue from Contracts with Customers." ASU 2014-09 provides authoritative guidance clarifying the principles for recognizing revenue and developing a common revenue standard for U.S. GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. The guidance becomes effective for the Company for the

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year beginning January 1, 2018. We are currently evaluating the impact the adoption of this guidance will have on the consolidated results of operations, financial position and disclosures.

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Forward-Looking Statements Disclaimer
You should not rely on forward-looking statements to predict our actual results. Our actual results or performance may be materially different than reflected in forward-looking statements because of various risks and uncertainties. You can identify forward-looking statements by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue”.
We make forward-looking statements about future events or our future financial performance, including earnings and sales growth, earnings per share, strategic plans and contingency plans, growth opportunities or economic downturns, our ability to respond to changes in market conditions, planned research and development efforts and product introductions, adequacy of facilities, access to and the costs of raw materials, shipping and supplier costs, gross margins, customer demand, our competitive position , capital expenditures, cash flow, tax-related matters, compliance with laws, and effects of acquisitions.
Our forward-looking statements may not be accurate or complete, and we do not intend to update or revise them in light of actual results. New risks also periodically arise. Please consider the risks and factors that could cause our results to differ materially from what is described in our forward-looking statements. See in particular “Factors Affecting Our Future Operating Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 20142015 Annual Report on Form 10-K.

Item 3.Quantitative and Qualitative Disclosures About Market Risk
As of September 30, 20152016, there was no material change in the information provided under Item 7A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.2015.

Item 4.Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer, Principal Financial Officer and the Principal Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer, Principal Financial Officer, and Principal Accounting Officer, have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter ended September 30, 20152016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 


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PART II. OTHER INFORMATION

Item 1.
Legal Proceedings. None
Item 1A.Risk Factors.
For the nine months ended September 30, 20152016 there were no material changes from risk factors disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.2015.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
  (a)(b)(c)(d)
 Total Number of
Shares Purchased
Average Price Paid
per Share
Total Number of
Shares Purchased as Part of Publicly Announced Program
Approximate Dollar
Value (in thousands) of Shares that may yet be Purchased under the Program
 
 
 July 1 to July 30, 2015113,361
$340.18
113,361
$192,337
 August 1 to August 31, 2015132,441
$321.61
132,441
$149,740
 September 1 to September 30, 2015144,746
$294.20
144,746
$107,153
 Total390,548
$316.84
390,548
$107,153
  (a)(b)(c)(d)
 Total Number of
Shares Purchased
Average Price Paid
per Share
Total Number of
Shares Purchased as Part of Publicly Announced Program
Approximate Dollar
Value (in thousands) of Shares that may yet be Purchased under the Program
 
 
 July 1 to July 31, 201691,894
$379.09
91,894
$1,198,576
 August 1 to August 31, 2016116,981
$402.85
116,981
$1,151,448
 September 1 to September 30, 2016106,955
$402.31
106,955
$1,108,417
 Total315,830
$395.75
315,830
$1,108,417

AsWe have a share repurchase program of which there was $1.1 billion common shares remaining to be repurchased under the program as of September 30, 2015, the Company had $107.2 million of remaining availability under the Company's share repurchase program. In November 2015, the Company's Board of Directors authorized an additional $1.5 billion to the share repurchase program.2016. We have purchased 24.225.7 million shares since the inception of the program through September 30, 2015.2016.
During the nine months ended September 30, 20152016 and 2014,2015, we spent $371.2$375.0 million and $296.5$371.2 million on the repurchase of 1,167,7961,048,075 shares and 1,186,2151,167,796 shares at an average price per share of $317.86$357.77 and $249.91,$317.86, respectively. We also reissued 281,627193,517 shares and 246,551281,627 shares held in treasury for the exercise of stock options and issuance of restricted stock units during the nine months ended September 30, 20152016 and 2014,2015, respectively.

Item 3.
Defaults Upon Senior Securities. None
Item 5.
Other information. None
Item 6.
Exhibits. See Exhibit Index below.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
    
   Mettler-Toledo International Inc.
Date:November 6, 20154, 2016 By:  /s/ Shawn P. Vadala 
       
    Shawn P. Vadala 
    Chief Financial Officer  Principal Accounting Officer 


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EXHIBIT INDEX

Exhibit No. Description
    
 31.1*Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002
    
 31.2*Certification of the Executive Vice President Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002
    
 31.3*Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002
    
 32*Certification Pursuant to Section 906 of the Sarbanes — Oxley Act of 2002
    
 101.INS*XBRL Instance Document
    
 101.SCH*XBRL Taxonomy Extension Schema Document
    
 101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
    
 101.LAB*XBRL Taxonomy Extension Label Linkbase Document
    
 101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document
    
 101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
_______________________
*    Filed herewith

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