Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | |
Jul. 01, 2017 | Jul. 28, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | WATERS CORP /DE/ | |
Entity Trading Symbol | WAT | |
Entity Central Index Key | 1,000,697 | |
Document Type | 10-Q | |
Document Fiscal Period Focus | Q2 | |
Document Period End Date | Jul. 1, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $ 14,672,588,076 | |
Entity Common Stock, Shares Outstanding | 79,823,570 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 01, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 567,255 | $ 505,631 |
Investments | 2,558,691 | 2,307,401 |
Accounts receivable, less allowances for doubtful accounts and sales returns of $9,585 and $8,657 at July 1, 2017 and December 31, 2016, respectively | 462,811 | 489,340 |
Inventories | 287,139 | 262,682 |
Other current assets | 71,339 | 70,391 |
Total current assets | 3,947,235 | 3,635,445 |
Property, plant and equipment, net | 338,860 | 337,118 |
Intangible assets, net | 219,092 | 207,055 |
Goodwill | 357,122 | 352,080 |
Other assets | 134,436 | 130,361 |
Total assets | 4,996,745 | 4,662,059 |
Current liabilities: | ||
Notes payable and debt | 225,233 | 125,297 |
Accounts payable | 71,055 | 67,740 |
Accrued employee compensation | 34,140 | 57,465 |
Deferred revenue and customer advances | 208,606 | 148,837 |
Accrued income taxes | 1,405 | 15,244 |
Accrued warranty | 12,864 | 13,391 |
Other current liabilities | 99,986 | 92,347 |
Total current liabilities | 653,289 | 520,321 |
Long-term liabilities: | ||
Long-term debt | 1,687,233 | 1,701,966 |
Long-term portion of retirement benefits | 72,381 | 72,568 |
Long-term income tax liabilities | 8,682 | 10,458 |
Other long-term liabilities | 56,521 | 54,797 |
Total long-term liabilities | 1,824,817 | 1,839,789 |
Total liabilities | 2,478,106 | 2,360,110 |
Commitments and contingencies (Notes 5, 6, 7 and 11) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.01 per share, 5,000 shares authorized, none issued at July 1, 2017 and December 31, 2016 | 0 | 0 |
Common stock, par value $0.01 per share, 400,000 shares authorized, 159,437 and 158,634 shares issued, 79,811 and 80,023 shares outstanding at July 1, 2017 and December 31, 2016, respectively | 1,594 | 1,586 |
Additional paid-in capital | 1,683,873 | 1,607,241 |
Retained earnings | 5,622,448 | 5,385,069 |
Treasury stock, at cost, 79,626 and 78,611 shares at July 1, 2017 and December 31, 2016, respectively | (4,641,501) | (4,475,667) |
Accumulated other comprehensive loss | (147,775) | (216,280) |
Total stockholders' equity | 2,518,639 | 2,301,949 |
Total liabilities and stockholders' equity | $ 4,996,745 | $ 4,662,059 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Jul. 01, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts and sales returns | $ 9,585 | $ 8,657 |
Preferred stock, par value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 159,437,000 | 158,634,000 |
Common stock, shares outstanding | 79,811,000 | 80,023,000 |
Treasury stock, shares | 79,626,000 | 78,611,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Income Statement [Abstract] | ||||
Product sales | $ 372,838 | $ 359,687 | $ 697,134 | $ 667,544 |
Service sales | 185,412 | 176,873 | 359,085 | 344,262 |
Total net sales | 558,250 | 536,560 | 1,056,219 | 1,011,806 |
Cost of product sales | 148,023 | 144,814 | 281,179 | 274,072 |
Cost of service sales | 81,604 | 75,565 | 159,543 | 147,458 |
Selling and administrative expenses | 130,190 | 129,581 | 260,714 | 258,932 |
Research and development expenses | 32,937 | 32,578 | 63,689 | 62,016 |
Litigation provisions | 10,018 | 10,018 | ||
Acquired in-process research and development | 5,000 | |||
Purchased intangibles amortization | 1,693 | 2,411 | 3,422 | 5,055 |
Total costs and operating expenses | 404,465 | 384,949 | 783,565 | 747,533 |
Operating income | 153,785 | 151,611 | 272,654 | 264,273 |
Interest expense | (14,083) | (10,983) | (26,808) | (21,102) |
Interest income | 8,370 | 4,827 | 15,713 | 8,914 |
Income from operations before income taxes | 148,072 | 145,455 | 261,559 | 252,085 |
Provision for income taxes | 16,250 | 17,238 | 24,180 | 29,816 |
Net income | $ 131,822 | $ 128,217 | $ 237,379 | $ 222,269 |
Net income per basic common share | $ 1.65 | $ 1.59 | $ 2.97 | $ 2.74 |
Weighted-average number of basic common shares | 79,979 | 80,804 | 80,029 | 81,043 |
Net income per diluted common share | $ 1.63 | $ 1.57 | $ 2.94 | $ 2.72 |
Weighted-average number of diluted common shares and equivalents | 80,756 | 81,455 | 80,769 | 81,663 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 131,822 | $ 128,217 | $ 237,379 | $ 222,269 |
Foreign currency translation | 38,241 | (31,485) | 67,382 | (15,434) |
Unrealized gains on investments before income taxes | 794 | 1,881 | 1,382 | 5,170 |
Income tax expense from unrealized gains on investments | (77) | (76) | (99) | (169) |
Unrealized gains on investments, net of tax | 717 | 1,805 | 1,283 | 5,001 |
Retirement liability adjustment before reclassifications | (1,075) | 501 | (1,531) | (499) |
Retirement liability amounts reclassified to selling and administrative expenses | 922 | 810 | 1,758 | 1,620 |
Retirement liability adjustment before income taxes | (153) | 1,311 | 227 | 1,121 |
Income tax expense from retirement liability adjustment | (43) | (613) | (387) | (891) |
Retirement liability adjustment, net of tax | (196) | 698 | (160) | 230 |
Other comprehensive income (loss) | 38,762 | (28,982) | 68,505 | (10,203) |
Comprehensive income | $ 170,584 | $ 99,235 | $ 305,884 | $ 212,066 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 237,379 | $ 222,269 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Stock-based compensation expense | 17,794 | 24,237 |
Deferred income taxes | 5,208 | 637 |
Depreciation | 30,796 | 26,055 |
Amortization of intangibles | 21,609 | 22,022 |
Excess tax benefit related to stock-based compensation plans | 3,517 | |
In-process research and development charge | 5,000 | |
Change in operating assets and liabilities: | ||
Decrease in accounts receivable | 41,945 | 32,318 |
Increase in inventories | (19,169) | (25,003) |
(Increase) decrease in other current assets | (9,253) | 2,812 |
Increase in other assets | (1,154) | (3,517) |
Decrease in accounts payable and other current liabilities | (34,802) | (41,100) |
Increase in deferred revenue and customer advances | 53,601 | 46,801 |
Increase in other liabilities | 2,306 | 9,374 |
Net cash provided by operating activities | 351,260 | 320,422 |
Cash flows from investing activities: | ||
Additions to property, plant, equipment and software capitalization | (35,358) | (49,696) |
Investment in unaffiliated company | (7,000) | |
Payments for intellectual property licenses | (5,000) | |
Purchases of investments | (1,554,769) | (1,205,035) |
Maturities and sales of investments | 1,308,275 | 987,060 |
Net cash used in investing activities | (293,852) | (267,671) |
Cash flows from financing activities: | ||
Proceeds from debt issuances | 85,000 | 400,177 |
Payments on debt | (64) | (310,239) |
Payments of debt issuance costs | (1,705) | |
Proceeds from stock plans | 58,182 | 23,272 |
Purchases of treasury shares | (165,834) | (172,392) |
Proceeds from (payments for) derivative contracts | 430 | (7,531) |
Net cash used in financing activities | (22,286) | (68,418) |
Effect of exchange rate changes on cash and cash equivalents | 26,502 | (8,616) |
Increase (decrease) in cash and cash equivalents | 61,624 | (24,283) |
Cash and cash equivalents at beginning of period | 505,631 | 487,665 |
Cash and cash equivalents at end of period | $ 567,255 | $ 463,382 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 01, 2017 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 1 Basis of Presentation and Summary of Significant Accounting Policies Waters Corporation (the “Company”) is a specialty measurement company that has pioneered chromatography, mass spectrometry and thermal analysis innovations serving the life, materials and food sciences for nearly 60 years. The Company primarily designs, manufactures, sells and services high performance liquid chromatography (“HPLC”), ultra performance liquid chromatography (“UPLC ® ” and together with HPLC, referred to as “LC”) and mass spectrometry (“MS”) technology systems and support products, including chromatography columns, other consumable products and comprehensive post-warranty service plans. These systems are complementary products that are frequently employed together (“LC-MS”) and sold as integrated instrument systems using a common software platform. LC is a standard technique and is utilized in a broad range of industries to detect, identify, monitor and measure the chemical, physical and biological composition of materials, and to purify a full range of compounds. MS instruments are used in drug discovery and development, including clinical trial testing, the analysis of proteins in disease processes (known as “proteomics”), nutritional safety analysis and environmental testing. LC-MS instruments combine a liquid phase sample introduction and separation system with mass spectrometric compound identification and quantification. In addition, the Company designs, manufactures, sells and services thermal analysis, rheometry and calorimetry instruments through its TA ® product line. These instruments are used in predicting the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals and viscous liquids for various industrial, consumer goods and healthcare products, as well as for life science research. The Company is also a developer and supplier of software-based products that interface with the Company's instruments, as well as other suppliers' instruments, and are typically purchased by customers as part of the instrument system. The Company's interim fiscal quarter typically ends on the thirteenth Saturday of each quarter. Since the Company's fiscal year end is December 31, the first and fourth fiscal quarters may have more or less than thirteen complete weeks. The Company's second fiscal quarters for 2017 and 2016 ended on July 1, 2017 and July 2, 2016 , respectively. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the instructions to the Quarterly Report on Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles (“GAAP”) in the United States of America. The consolidated financial statements include the accounts of the Company and its subsidiaries, which are wholly owned. All inter-company balances and tra nsactions have been eliminated. The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that aff ect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities at the dates of the financial statements. Actual amounts may differ from these estimates under different assumptions or conditions. It is management's opinion that the accompanying interim consolidated financial statements reflect all adjustments (which are normal and recurring) that are necessary for a fair statement of the results for the interim periods. The interim consolidated financial statements should be read in conjunction with the consolidated financial statem ents included in the Company's A nnual R eport on Form 10-K for the year ended December 31, 2016 , as filed with the U.S. Securities and Exchange Commission on February 24, 2017. Translation of Foreign Currencies For most of the Company's foreign operations, assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the balance sheet date, while revenues and expenses are translated at average exchange rates prevailing during the period. Any resulting translation gains or losses are included in accumulated other comprehensive income in the consolidated balance sheets. The functional currency of each of the Company's foreign operating subsidiaries is the local currency of that particular country, except for the Company's subsidiaries in Hong Kong, Singapore and the Cayman Islands, where the underlying transactional cash flows are denominated in currencies other than the respective local currency of domicile. The functional currency of the Hong Kong, Singapore and Cayman Islands subsidiaries is the U.S. dollar, based on the respective entity's cash flows. Cash, Cash Equivalents and Investments Cash equivalents represent highly liquid investments, with original maturities of 90 days or less, while investments with longer maturities are classified as investments. The Company maintains cash balances in various operating accounts in excess of federally insured limits, and in foreign subsidiary accounts in currencies other than the U.S. dollar . As of July 1, 2017 and December 31, 2016 , $3,081 million out of $3,126 million and $2,766 million out of $2,813 million, respectively, of the Company's total cash, cash equivalents and investments were held by foreign subsidiaries and may be subject to material tax effects on distribution to U.S. legal entities . In addition, $316 million out of $3,126 million and $261 million out of $2,813 million of cash, cash equivalents and investments were held in currencies other than the U.S. dollar at July 1, 2017 and December 31, 2016 , respectively . Other Investments During the six months ended July 1, 2017 , the Company made a $7 million investment in a developer of analytical system solutions used to make measurements, predict stability and accelerate product discovery in the routine analytic, process monitoring and quality control release processes for life science and biopharmaceutical markets. This investment will be accounted for under the cost method of accounting . Fair Value Measurements In accordance with the accounting standards for fair value measurements and disclosures, certain of the Company's assets and liabilities are measured at fair value on a recurring basis as of July 1, 2017 and December 31, 2016 . Fair values determined by Level 1 inputs utilize observable data , such as quoted prices in active markets. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points for which there is little or no market data, which require the reporting entity to develop its own assumptions. The following table represents the Company's assets and liabilities that are measured at fair value on a recurring basis at July 1, 2017 (in thousands) : Quoted Prices in Active Significant Markets Other Significant for Identical Observable Unobservable Total at Assets Inputs Inputs July 1, 2017 (Level 1) (Level 2) (Level 3) Assets: U.S. Treasury securities $ 626,587 $ - $ 626,587 $ - Foreign government securities 6,969 - 6,969 - Corporate debt securities 1,795,051 - 1,795,051 - Time deposits 295,845 - 295,845 - Equity securities 147 - 147 - Waters 401(k) Restoration Plan assets 32,200 32,200 - - Foreign currency exchange contracts 1,418 - 1,418 - Total $ 2,758,217 $ 32,200 $ 2,726,017 $ - Liabilities: Contingent consideration $ 3,014 $ - $ - $ 3,014 Foreign currency exchange contracts 11 - 11 - Total $ 3,025 $ - $ 11 $ 3,014 The following table represents the Company's assets and liabilities that are measured at fair value on a recu rring basis at December 31, 2016 (in thousands): Quoted Prices in Active Significant Markets Other Significant Total at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2016 (Level 1) (Level 2) (Level 3) Assets: U.S. Treasury securities $ 570,313 $ - $ 570,313 $ - Foreign government securities 17,991 - 17,991 - Corporate debt securities 1,643,838 - 1,643,838 - Time deposits 199,906 - 199,906 - Equity securities 147 - 147 - Waters 401(k) Restoration Plan assets 30,954 30,954 - - Foreign currency exchange contracts 60 - 60 - Total $ 2,463,209 $ 30,954 $ 2,432,255 $ - Liabilities: Contingent consideration $ 3,007 $ - $ - $ 3,007 Foreign currency exchange contracts 730 - 730 - Total $ 3,737 $ - $ 730 $ 3,007 Fair Value of 401(k) Restoration Plan Assets The 401(k) Restoration Plan is a nonqualified defined contribution plan and the assets were held in registered mutual funds and have been classified as Level 1. The fair values of the assets in this plan are determined through market and observable sources from daily quoted prices on nationally recognized securities exchanges. Fair Value of Cash Equivalents, Investment and Foreign Currency Exchange Contracts The fair values of the Company's cash equivalents, investments and foreign currency exchange contracts are determined through market and observable sources and have been classified as Level 2 . These assets and liabilities have been initially valued at the transaction price and subsequently valued , typically utilizing third-party pricing services. The pricing services use many inputs to determine value, including reportable trades, benchmark yields, credit spreads, broker/dealer quotes, current spot rates and other industry and economic events. The Company validates the prices provided by third-party pricing services by reviewing their pricing methods and obtaining market values from other pricing sources. After completing these validation procedures, the Company did not adjust or override any fair value measurements provided by third-party pricing services as of July 1, 2017 and December 31, 2016 . There were no transfers between the levels of the fair value hierarchy during the six months ended July 1, 2017 . Fair Value of Contingent Consideration The fair value of the Company's liability for contingent consideration relates to the July 2014 acquisition of Medimass Research, Development and Service Kft . and is determined using a probability-weighted discounted cash flow model, which uses significant unobservable inputs, and has been classified as Level 3. Subsequent changes in the fair value of the contingent consideration liability are recorded in the results of operations. The fair value of the contingent consideration liability associated with future earnout payments is based on several factors, including the estimated futu re results and a discount rate that reflects both the likelihood of achieving the estimated future results and the Company's creditworthiness. A change in any of these unobservable inputs can significantly change the fair value of the contingent consideration. Although there is no contractual limit, the fair value of future contingent consideration payments was estimated to be $3 million at both July 1, 2017 and December 31, 2016 , based on the Company's best estimate, as the earnout is based on future sales of certain products , some of which are currently in development, through 2034. There have been no changes in significant assumptions since December 31, 2016 and the change in fair value since then is primarily due to change in time value of money. Fair Value of Other Financial Instruments The Company's cash, accounts receivable, accounts payable and variable interest rate debt are recorded at cost , which approximates fair value due to their short-term nature . The carrying value of the Company's fixed interest rate debt was $610 million at both July 1, 2017 and December 31, 2016 . The fair value of the Company's fixed interest rate debt was estimated using 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 fixed interest rate debt was estimated to be $609 million and $603 million at July 1, 2017 and December 31, 2016 , respectively , using Level 2 inputs. Derivative Transactions The Company is a global company that operates in over 35 countries and, as a result, the Company ' s net sales, cost of sales, operating expenses and balance sheet amounts are significantly impacted by fluctuations in foreign currency exchange rates. The Company is exposed to currency price risk on foreign currency exchange rate fluctuations when it translates its non-U.S. dollar foreign subsidiaries ' financial statements into U.S. dollars, and when any of the Company ' s subsidiaries purchase or sell products or services in a currency other than its own currency. The Company ' s principal strategy in managing exposure to changes in foreign currency exchange rates is to naturally hedge the foreign-currency-denominated liabilities on the Company ' s balance sheet against corresponding assets of the same currency, such that any changes in liabilities due to fluctuations in foreign currency exchange rates are typically offset by corresponding changes in assets. The Company does not specifically enter into any derivatives that hedge foreign-currency-denominated assets, liabilities or commitments on its balance sheet, other than a portion of certain third-party accounts receivable and accounts payable, and the Company ' s net worldwide intercompany receivables and payables, which are eliminated in consolidation. The Company periodically aggregates its net worldwide balances by currency and then enters into foreign currency exchange contracts that mature within 90 days to hedge a portion of the remaining balance to minimize some of the Company ' s currency price risk exposure. The foreign currency exchange contracts are not designated for hedge accounting treatment. Principal hedged currenc ies include the Euro, Japanese y en, Britis h pound , Mexican peso and Brazilian real . At July 1, 2017 and December 31, 2016 , the Company held foreign currency exchange contracts with notional amounts totaling $122 million and $120 million, respectively. T he Company's foreign currency exchange contracts included in the consolid ated balance sheets are classified as follows (in thousands): July 1, 2017 December 31, 2016 Other current assets $ 1,418 $ 60 Other current liabilities $ 11 $ 730 The following is a summary of the activity included in cost of sales in the statements of operations related to the foreign currency exchange contracts (in thousands): Three Months Ended Six Months Ended July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Realized gains (losses) on closed contracts $ 1,868 $ (5,637) $ 430 $ (7,531) Unrealized gains (losses) on open contracts 2,209 (963) 2,077 (992) Cumulative net pre-tax gains (losses) $ 4,077 $ (6,600) $ 2,507 $ (8,523) Stockholders' Equity In Ma y 20 1 7 , the Company's Board of Directors authorized the Company to repurchase up to $ 1 b illion of its out standing common stock over a three -year period . During the six months ended July 1, 2017 , t he Company repurchased 1.0 million shares of the Company's outstanding common stoc k at a cost of $ 159 million under the May 201 4 and May 2017 authoriza tion s . During the six months ended July 2, 2016 , the Company repurchased 1.3 million shares of the Company's outstanding common stoc k at a cost of $ 166 million under the May 2014 authorization. As of July 1, 2017 , the Company purchased an aggregate of 5.5 million shares at a cost of $750 million under the May 2014 repurchase program, which is now completed. The Company has a total of $964 million authorized for future repurchases under the May 201 7 p lan . In addition, the Company repurchased $7 million and $6 million of common stock related to the vesting of restricted stock units during the six months ended July 1, 2017 and July 2, 2016 , respectively . The Company believes that it has the financial flexibility to fund these share repurchases given current cash levels and debt borrowing capacity, as well as to invest in research, technology and business acquisitions to further grow the Company's sales and profits. Product Warranty Costs The Company accrues estimated product warranty costs at the time of sale, which are included in cost of sales in the consolidated statements of operations. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component supplie r s, the Company's warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. The amount of the accrued warranty liability is based on historical inform ation, such as past experience, product failure rates, number of units repaired and estimated costs of material and labor. The liability is reviewed for re asonableness at least quarterly. The following is a summary of the activity of the Company's accrued warranty liability for the six months ended July 1, 2017 and July 2, 2016 (in thousands): Balance at Balance at Beginning Accruals for Settlements End of of Period Warranties Made Period Accrued warranty liability: July 1, 2017 $ 13,391 $ 3,842 $ (4,369) $ 12,864 July 2, 2016 $ 13,349 $ 4,297 $ (4,719) $ 12,927 Restructuring and Other Charges During the six months ended July 1, 2017 , the Company incurred $ 11 million of severance costs associated with the closure of a facility in Germany and costs associated with providing U.S. employees with an early retirement transition incentive. During the six months ended July 2, 2016 , the Company incurred $3 million of severance costs associated with an organizational restructuring. At July 1, 2017 , the Company had $ 5 million of severance costs accrued in other current liabilities. Acquired In-process Research and Development During the six months ended July 1, 2017 , the Company incurred a $5 million charge for acquired in-process research and development related to a milestone payment for the licensing of certain intellectual property relating to mass spectrometry technologies yet to be commercialized and for which there was no future alternative use as of the acquisition date. This licensing arrangement is significantly related to new, biologically-focused applications, as well as other applications, and require the Company to make additional future payments of up to $7 million if certain milestones are achieved, as well as royalties on future net sales. |
Marketable Securities
Marketable Securities | 6 Months Ended |
Jul. 01, 2017 | |
Marketable Securities [Abstract] | |
Marketable Securities | 2 Marketable Securities The Company's marketable securities within cash equivalents and investments included in the consolidated balance sheets are detailed as follows (in thousands): July 1, 2017 Amortized Unrealized Unrealized Fair Cost Gain Loss Value U.S. Treasury securities $ 627,443 $ 104 $ (960) $ 626,587 Foreign government securities 6,971 1 (3) 6,969 Corporate debt securities 1,794,831 1,463 (1,243) 1,795,051 Time deposits 295,845 - - 295,845 Equity securities 77 70 - 147 Total $ 2,725,167 $ 1,638 $ (2,206) $ 2,724,599 Amounts included in: Cash equivalents $ 165,909 $ - $ (1) $ 165,908 Investments 2,559,258 1,638 (2,205) 2,558,691 Total $ 2,725,167 $ 1,638 $ (2,206) $ 2,724,599 December 31, 2016 Amortized Unrealized Unrealized Fair Cost Gain Loss Value U.S. Treasury securities $ 570,695 $ 253 $ (635) $ 570,313 Foreign government securities 17,999 - (8) 17,991 Corporate debt securities 1,645,468 496 (2,126) 1,643,838 Time deposits 199,906 - - 199,906 Equity securities 77 70 - 147 Total $ 2,434,145 $ 819 $ (2,769) $ 2,432,195 Amounts included in: Cash equivalents $ 124,793 $ 1 $ - $ 124,794 Investments 2,309,352 818 (2,769) 2,307,401 Total $ 2,434,145 $ 819 $ (2,769) $ 2,432,195 The estimated fair value of marketable debt securities by maturity date is as follows (in thousands): July 1, 2017 December 31, 2016 Due in one year or less $ 1,591,388 $ 1,388,537 Due after one year through three years 837,219 843,605 Total $ 2,428,607 $ 2,232,142 |
Inventories
Inventories | 6 Months Ended |
Jul. 01, 2017 | |
Inventory Items, Net Of Reserves Alternative [Abstract] | |
Inventories Disclosure | 3 Inventories Inventories are classi fied as follows (in thousands): July 1, 2017 December 31, 2016 Raw materials $ 95,162 $ 95,430 Work in progress 16,970 16,585 Finished goods 175,007 150,667 Total inventories $ 287,139 $ 262,682 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 6 Months Ended |
Jul. 01, 2017 | |
Goodwill and Other Intangibles [Abstract] | |
Goodwill and Other Intangibles | 4 Goodwill and Other Intangibles The carrying amount of goodwill was $ 357 million and $ 352 million at July 1, 2017 and December 31, 2016 , respectively. During the six months ended July 1, 2017 , the effect of foreign currency translation increase d goodwill by $ 5 million . T he Company's intangible assets included in the consolidated balance sheets are detailed as follows (in thousands): July 1, 2017 December 31, 2016 Weighted- Weighted- Gross Average Gross Average Carrying Accumulated Amortization Carrying Accumulated Amortization Amount Amortization Period Amount Amortization Period Capitalized software $ 403,303 $ 257,347 5 years $ 355,973 $ 223,572 5 years Purchased intangibles 167,123 133,565 11 years 162,180 127,045 11 years Trademarks and IPR&D 13,781 - 13,544 - Licenses 5,401 4,260 6 years 4,632 3,851 6 years Patents and other intangibles 65,358 40,702 8 years 61,646 36,452 8 years Total $ 654,966 $ 435,874 7 years $ 597,975 $ 390,920 7 years During the six months ended July 1, 2017 , the effect of foreign currency translation increase d the gross carrying value of intangible assets and accumulated amortization for intangible assets by $37 million and $24 million, respectively. A mortization expe nse fo r intangible assets was $12 million and $11 million f or the three months ended July 1, 2017 and July 2, 2016 , respectively . A mortization expe nse for intangible assets was $22 million f or both the six months ended July 1, 2017 and July 2, 2016 . A mortization expense for intangible assets is estimated to be approximately $ 43 million per year for each of the next five year s. |
Debt
Debt | 6 Months Ended |
Jul. 01, 2017 | |
Debt [Abstract] | |
Debt Disclosure | 5 Debt In Ju ne 201 3 , the Company entered into a credit agreement that provides for a $ 1. 1 b illion revolving facility and a $ 3 00 million term loan facility. In April 2015, Waters Corporation entered into an amendment to th is a greement (the “Amended Credit Agreement”) . The A mended C redit A greement provides for an increase of the revolving commitments from $1.1 billion to $1.3 billion and extends the maturity of the original credit agreement from June 25, 2018 until April 23, 2020. The Company plans to use future proceeds from the revolving facility for general corporate purposes. The interest rates applicable to the Amended Credit Agreement are, at the Company's option, equal to either th e alternate base rate calculated daily (which is a rate per annum equal to the greatest of (a ) the prime rate in effect on such day, (b ) the federal funds effective rate in effect on such day plus 1/2 % per annum , or ( c ) the adjusted LIBO rate on such day (or if such day is not a business day, the immediately preceding business day) for a deposit in U.S. dollars with a maturity of one month plus 1% per annum) or the applicable 1, 2, 3 or 6 month adjusted LIBO rate, in each case, plus an interest rate margin based upon the Company's leverage ratio, which can range between 0 basis points to 12.5 basis points for alternate base rate loans and between 80 b asis points and 1 1 7 .5 basis points for adjusted LIBO rate loans . The facility fee on the Amended C redit Agreement ranges between 7 .5 basis points and 2 0 basis points. The Amended Credit Agreement requires that the Company comply with an interest coverage ratio test of not less than 3.50:1 as of the end of any fiscal quarter for any period of four consecutive fiscal quarters and a leverage ratio test of not more than 3.5 0 :1 as of the end of any fiscal quarter . In addition, the Amended Credit Agreement includes negative covenants , affirmative covenants, representations and warranties and events of default that are customary for investment grade credit facilities . A t July 1, 2017 , $125 million of the outstanding portion of the revolving facility was classified as short-term liabilities in the consolidated balance sheet due to the fact that the Company expects to repay this portion of the borrowing under the revolving line of credit within the next twelve months . The remaining $790 million of the outstanding portion of the revolving facility was classified as long-term liabilities in the consolidated balance sheet, as this portion is not expected to be repaid within the next twelve months. T he Company had a total of $700 million of outstanding senior unsecured notes as of July 1, 2017 and December 31, 2016 . Interest on the fixed rate senior unsecured notes is payable semi-annually each year. Interest on the floating rate senior unsecured notes is payable quarterly. The Company may prepay all or some of the senior unsecured notes at any time in an amount not less than 10% of the aggregate principal amount outstanding, plus the applicable make-whole amount or prepayment premium for Series H and J senior unsecured notes . In the event of a change in control of the Company (as defined in the note purchase agreement), the Company may be required to prepay the senior unsecured notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest. These senior unsecured notes require that the Company comply with an interest coverage ratio test of not less than 3.50:1 for any period of four consecuti ve fiscal quarters and a leverage ratio test of not more than 3.50:1 as of the end of any fiscal quarter . In addition, these senior unsecured notes include customary negative covenants , affirmative covenants, representations and warranties and events of default. T he Company had the following outstanding debt a t July 1, 2017 and December 31, 2016 (in thousands) : July 1, 2017 December 31, 2016 Foreign subsidiary lines of credit $ 233 $ 297 Senior unsecured notes - Series D - 3.22%, due March 2018 100,000 - Credit agreements 125,000 125,000 Total notes payable and debt 225,233 125,297 Senior unsecured notes - Series B - 5.00%, due February 2020 100,000 100,000 Senior unsecured notes - Series D - 3.22%, due March 2018 - 100,000 Senior unsecured notes - Series E - 3.97%, due March 2021 50,000 50,000 Senior unsecured notes - Series F - 3.40%, due June 2021 100,000 100,000 Senior unsecured notes - Series G - 3.92%, due June 2024 50,000 50,000 Senior unsecured notes - Series H - floating rate*, due June 2024 50,000 50,000 Senior unsecured notes - Series I - 3.13%, due May 2023 50,000 50,000 Senior unsecured notes - Series J - floating rate**, due May 2024 40,000 40,000 Senior unsecured notes - Series K - 3.44%, due May 2026 160,000 160,000 Credit agreements 1,090,000 1,005,000 Unamortized debt issuance costs (2,767) (3,034) Total long-term debt 1,687,233 1,701,966 Total debt $ 1,912,466 $ 1,827,263 * Series H senior unsecured notes bear interest at a 3-month LIBOR for that floating rate interest period plus 1.25%. ** Series J senior unsecured notes bear interest at a 3-month LIBOR for that floating rate interest period plus 1.45%. As of July 1, 2017 and December 31, 2016 , the Company had a total amount available to borrow under existing credit agreements of $ 383 million and $ 468 million, respectively, after outstanding letters of credit. The weighted-average interest rates applicable to the senior unsecured notes and c redit a greement borrowings collectively were 2.79% and 2.55% at July 1, 2017 and December 31, 2016 , respectively. As of July 1, 2017 , the Company was in compliance with all debt covenants. The Company and its foreign subsidiaries also had available short-term lines of credit totaling $ 82 million and $ 79 million at July 1, 2017 and December 31, 2016 , respectively, for the purpose of short-term borrowing and issuance of commercial guarantees. At July 1, 2017 and December 31, 2016 , the weighted-average interest rate s applicable to these short-term borrowings were 0.77% and 1.49% , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 01, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | 6 Income Taxes The four principal jurisdictions in which the Company manufactures are the U.S., Ireland, the U.K. and Singapore, where the Company's marginal effective tax rates were approximately 37.5%, 12.5%, 19.25% and 0%, respectively, as of July 1, 2017 . The Company has a contractual tax rate of 0% on qualifying activities in Singapore through March 2021, based upon the achievement of certain contractual milestones, which the Company expects to continue to meet. The current statutory tax rate in Singapore is 17%. For the first half of 2017 and 2016, the effect of applying the contractual tax rate rather than the statutory tax rate to income from qualifying activities in Singapore increased the Company's net income by $ 11 million and $10 million, respectively, and increased the Company's net income per diluted share by $0. 14 and $0.12, respectively. The Company's effective tax rate for the quarter was 11.0% and 11.9% for 2017 and 2016, respectively. Year-to-date, the Company's effective tax rate was 9.2% and 11.8% for 2017 and 2016, respectively. The decrease in the effective tax rate in 2017 as compared to 2016 can be primarily attributed to the adoption of new accounting guidance related to stock-based compensation, which decreased income tax expense by $ 4 million and $1 2 million for the three and six months ended July 1, 2017 , respectively, and decreased the Company's effective tax rate by 3.0 percentage points and 4.5 percentage points , respectively . See Note 13 for further information regarding the adoption of this standard. In addition, t he provision for income tax for the first quarter of 2016 included a quarter-specific tax benefit associated with modifications to certain stock-based compensation awards. The remaining differences between the effective tax rate in 2017 and 2016 can be primarily attributed to differences in the proportionate amounts of pre-tax income recognized in jurisdictions with different effective tax rates. The Company accounts for its uncertain tax return reporting positions in accordan ce with the accounting standards for income taxes, which require financial statement reporting of the expected future tax consequences of uncertain tax reporting positions on the presumption that all concerned tax authoriti es possess full knowledge of those tax reporting positions, as well as all of the pertinent facts and circumstances, but prohibit any discounting of u nrecognized tax benefits associated with those reporting positions for the time value of money . The Company classifie s interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes . The following is a summary of the activity of the Company's unrecognized tax benefits for the six months ended July 1, 2017 and July 2, 2016 (in thousands): July 1, 2017 July 2, 2016 Balance at the beginning of the period $ 9,964 $ 14,450 Net changes in uncertain tax benefits (1,870) (2,563) Balance at the end of the period $ 8,094 $ 11,887 With limited exceptions, the Company is no longer subject to tax audit examinations in significant jurisdictions for the years ended on or before December 31, 2012. However, carryforward tax attributes that were generated in years beginning on or before January 1, 2013 may still be adjusted upon examination by tax authorities if the attributes are utilized. The Company continuously monitors the lapsing of statutes of limitations on potential tax assessments for related changes in the measurement of unrecognized tax benefits, related net interest and penalties, and deferred tax a ssets and liabilities. As of July 1, 2017 , the Company expects to record additional reductions in the measurement of its unrecognized tax benefits and related net interest and penalties of approximately $3 million within the next twelve months due to potential tax audit settlements and the lapsing of statutes of limitations on potential tax assessments. The Company does not expect to record any other material reductions in the measurement of its unrecognized tax benefits within the next twelve months. |
Litigation
Litigation | 6 Months Ended |
Jul. 01, 2017 | |
Litigation [Abstract] | |
Litigation | 7 Litigation From time to time, the Company and its subsidiaries are involved in various litigation matters arising in the ordinary course of business. The Company believes it has meritorious arguments in its current litigation matters and believes any outcome, either individually or in the aggregate, will not be material to the Company's financial position, results of operations or cash flows. The Company has been engaged in patent litigation in Germany since 2005 . I n June 2017, the court issued a verdict against the Company and awarded the plaintiff damages , fees and interest . As a result of the court's judgment, the Company recorded a $ 10 million provision for damages and fees estimated to be incurred in connection with this litigation. The accrued patent litigation expense of $16 million and $7 million is in other current liabilities in the consolidated balance sheets at July 1, 2017 and December 31, 2016 , respectively . |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jul. 01, 2017 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 8 Stock-Based Compensation The Company maintains various shareholder-approved, stock-based compensation plans which allow for the issuance of incentive or non-qualified stock options, stock appreciation rights, restricted stock or other types of awards (e.g. restricted stock units and performance stock units). In the first quarter of 2017, the Company adopted new accounting guidance related to stock-based compensation, see Note 13 for further information regarding the adoption of this standard. The Company accounts for stock-based compensation costs in accordance with the accounting standards for stock-based compensation, which require that all share-based payments to employees be recognized in the statements of operations based on their grant date fair values. The Company recognizes the expense using the straight-line attribution method. The stock-based compensation expense recognized in the consolidated statements of operations is based on awards that ultimately are expected to vest; therefore, the amount of expense has been reduced for estimated forfeitures. The new stock-based compensation accounting guidance offers the option of recognizing forfeitures as they occur or estimating forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has elected to remain consistent with prior periods and estimate forfeitures at the time of grant and, if necessary, revise in subsequent periods in which actual forfeitures differ from those estimates. Forfeitures are estimated based on historical experience. If actual results differ significantly from these estimates, stock-based compensation expense and the Company's results of operations could be materially impacted. In addition, if the Company employs different assumptions in the application of these standards, the compensation expense that the Company records in the future periods may differ significantly from what the Company has recorded in the current period. The consolidated statements of operations for the three and six months ended July 1, 2017 and July 2, 2016 include the following stock-based compensation expense related to stock option awards, restricted stock awards, restricted stock unit awards, performance stock unit awards and the employee stock purchase plan (in thousands): Three Months Ended Six Months Ended July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Cost of sales $ 787 $ 656 $ 1,525 $ 1,327 Selling and administrative expenses 7,602 6,613 14,790 20,582 Research and development expenses 750 1,127 1,479 2,328 Total stock-based compensation $ 9,139 $ 8,396 $ 17,794 $ 24,237 During the six months ended July 2, 2016 , the Company recognized $7 million of stock-based compensation expense related to the modification of certain stock awards upon the retirement of senior executives. Stock Options In determining the fair value of the stock options, the Compan y makes a variety of assumptions and estimates, including volatility measures, expected yields and expected stock option lives. The fair value of each option grant was estimated on the date of grant using the Black- Scholes option pricing model. The Company uses implied volatility on its publicly-traded options as the basis for its estimate of expected volatility. The Company believes that implied volatility is the most appropriate indicator of expected volatility because it is generally reflective of historical volatility and expectations of how future volatility will differ from historical volatility. The expected life assumption for grants is based on historical experience for the population of non-qualified stock option exercises. The risk-free interest rate is the yield currently available on U.S. Treasury zero-coupon issues with a remaining term approximating the expected term used as the input to the Black- Scholes model. The relevant data used to determine the value of the stock options granted during the six months ended July 1, 2017 and July 2, 2016 are as follows: Six Months Ended Options Issued and Significant Assumptions Used to Estimate Option Fair Values July 1, 2017 July 2, 2016 Options issued (in thousands) 207 86 Risk-free interest rate 2.2% 1.5% Expected life in years 6 5 Expected volatility 0.232 0.286 Expected dividends - - Six Months Ended Weighted-Average Exercise Price and Fair Value of Options on the Date of Grant July 1, 2017 July 2, 2016 Exercise price $ 149.74 $ 122.65 Fair value $ 40.39 $ 34.63 T he following table summarizes stock option activity for the plans for the six months ended July 1, 2017 (in thousands, except per share data): Number of Shares Price per Share Weighted-Average Exercise Price Outstanding at December 31, 2016 2,697 $ 38.09 to $ 139.51 $ 106.55 Granted 207 $ 136.43 to $ 154.33 $ 149.74 Exercised (619) $ 41.20 to $ 134.37 $ 88.36 Canceled (44) $ 87.06 to $ 136.43 $ 114.38 Outstanding at July 1, 2017 2,241 $ 38.09 to $ 154.33 $ 115.41 Restricted Stock During the six months ended July 1, 2017 , the Company granted seven thousand shares of restricted stock. The weighted-average fair value per share of these awards on the grant date was $136.43 per share. Restricted Stock Units The following table summarizes the unvested restricted stock unit award activity for the six months ended July 1, 2017 (in thousands, except for per share data ): Shares Weighted-Average Price Unvested at December 31, 2016 453 $ 110.34 Granted 106 $ 154.23 Vested (131) $ 105.18 Forfeited (15) $ 115.34 Unvested at July 1, 2017 413 $ 123.06 Restricted stock units are generally granted annually in February and vest in equal annual insta llments over a five-year period. Performance Stock Units The Company's performance stock units are equity compensation awards with a market vesting condition based on the Company's Total Shareholder Return (“TSR”) relative to the TSR of the components of the S&P Health Care Index. TSR is the change in value of a stock price over time, including the reinvestment of dividends. The vesting schedule ranges from 0% to 200% of the target shares awarded. In determining the fair value of the performance stock units, the Company makes a variety of assumptions and estimates, including volatility measures, expected yields and expected terms. The fair value of each performance stock unit grant was estimated on the date of grant using the Monte Carlo simulation model. The Company uses implied volatility on its publicly-traded options as the basis for its estimate of expected volatility. The Company believes that implied volatility is the most appropriate indicator of expected volatility because it is generally reflective of historical volatility and expectations of how future volatility will differ from historical volatility. The expected life assumption for grants is based on the performance period of the underlying performance stock units. The risk-free interest rate is the yield currently available on U.S. Treasury zero-coupon issues with a remaining term approximating the expected term used as the input to the Monte Carlo simulation model. The correlation coefficient is used to model the way in which each company in the S&P Health Care Index tends to move in relation to each other during the performance period. The relevant data used to determine the value of the performance stock units granted during 2017 is as follows: Performance Stock Units Issued and Significant Assumptions Used to Estimate Fair Values 2017 Performance stock units issued in thousands 20 Risk-free interest rate 1.5% Expected life in years 3 Expected volatility 0.232 Average volatility of peer companies 0.261 Correlation coefficient 0.385 Expected dividends - The following table summarizes the unvested performance stock unit award activity for the three months ended July 1, 2017 (in thousands, except for per share data): Shares Weighted-Average Fair Value Unvested at December 31, 2016 27 $ 171.16 Granted 20 $ 198.78 Unvested at July 1, 2017 47 $ 184.40 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jul. 01, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 9 Earnings Per Share Basic and diluted earnings per share (“EPS”) calculations are detailed as follows (in th ousands, except per share data): Three Months Ended July 1, 2017 Net Income Weighted-Average Shares Per Share (Numerator) (Denominator) Amount Net income per basic common share $ 131,822 79,979 $ 1.65 Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities - 777 (0.02) Net income per diluted common share $ 131,822 80,756 $ 1.63 Three Months Ended July 2, 2016 Net Income Weighted-Average Shares Per Share (Numerator) (Denominator) Amount Net income per basic common share $ 128,217 80,804 $ 1.59 Effect of dilutive stock option, restricted stock and restricted stock unit securities - 651 (0.02) Net income per diluted common share $ 128,217 81,455 $ 1.57 Six Months Ended July 1, 2017 Net Income Weighted-Average Shares Per Share (Numerator) (Denominator) Amount Net income per basic common share $ 237,379 80,029 $ 2.97 Effect of dilutive stock option, restricted stock, performance stock unit and and restricted stock unit securities - 740 (0.03) Net income per diluted common share $ 237,379 80,769 $ 2.94 Six Months Ended July 2, 2016 Net Income Weighted-Average Shares Per Share (Numerator) (Denominator) Amount Net income per basic common share $ 222,269 81,043 $ 2.74 Effect of dilutive stock option, restricted stock and restricted stock unit securities - 620 (0.02) Net income per diluted common share $ 222,269 81,663 $ 2.72 For t he three and six months ended July 1, 2017 , the Company had 0.4 million and 0.5 million stock options that were antidilutive , respectively, due to having higher exercise prices than the Company's average stock price during the period. For t he three and six months ended July 2, 2016 , the Company had 0.8 million and 1.2 million stock options that were antidilutive , respectively . These securities were not included in the computation of diluted EPS. The effect of dilutive securities was calculated using the treasury stock method. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 6 Months Ended |
Jul. 01, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | 10 Accumulated Other Comprehensive Income The components of accumulated other comprehensive income are detailed as follows (in thousands): Currency Translation Unrealized Gain (Loss) on Retirement Plans Unrealized Gain (Loss) on Investments Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2016 $ (170,566) $ (43,894) $ (1,820) $ (216,280) Other comprehensive income (loss), net of tax 67,382 (160) 1,283 68,505 Balance at July 1, 2017 $ (103,184) $ (44,054) $ (537) $ (147,775) |
Retirement Plans
Retirement Plans | 6 Months Ended |
Jul. 01, 2017 | |
Retirement Plans [Abstract] | |
Retirement Plans | 11 Retirement Plans The Company sponsors various retirement plans. The summary of the components of net periodic pension costs for the plans for the three and six months ended July 1, 2017 and July 2, 2016 is as follows (in thousands): Three Months Ended July 1, 2017 July 2, 2016 U.S. U.S. Retiree Non-U.S. U.S. U.S. Retiree Non-U.S. Pension Healthcare Pension Pension Healthcare Pension Plans Plan Plans Plans Plan Plans Service cost $ 124 $ 170 $ 1,240 $ 94 $ 116 $ 1,250 Interest cost 1,696 159 368 1,745 135 429 Expected return on plan assets (2,487) (147) (414) (2,417) (130) (406) Net amortization: Prior service credit - - (47) - - (49) Net actuarial loss 734 - 235 667 - 192 Net periodic pension cost $ 67 $ 182 $ 1,382 $ 89 $ 121 $ 1,416 Six Months Ended July 1, 2017 July 2, 2016 U.S. U.S. Retiree Non-U.S. U.S. U.S. Retiree Non-U.S. Pension Healthcare Pension Pension Healthcare Pension Plans Plan Plans Plans Plan Plans Service cost $ 225 $ 273 $ 2,491 $ 188 $ 232 $ 2,468 Interest cost 3,415 309 726 3,490 270 850 Expected return on plan assets (5,150) (294) (816) (4,834) (260) (805) Net amortization: Prior service credit - - (93) - - (94) Net actuarial loss 1,385 - 466 1,334 - 380 Net periodic pension (benefit) cost $ (125) $ 288 $ 2,774 $ 178 $ 242 $ 2,799 D uring fiscal year 2017 , the Company expects to contribute a total of approximately $ 6 million to $ 11 million to the Company's defined benefit plans. |
Business Segment Information
Business Segment Information | 6 Months Ended |
Jul. 01, 2017 | |
Business Segment Information [Abstract] | |
Business Segment Information | 12 Business Segment Information The Company's business activities, for which discrete financial information is available, are regularly reviewed and evaluated by the chief operating decision maker . As a result of this evaluation, the Company determined that it has two operating segments: Waters ® and TA. The Waters operating segment is primarily in the business of designing, manufacturing, distributing and servicing LC and MS instruments, columns and other chemistry consumables that can be integrated and used along with other analytical instruments. The TA operating segment is primarily in the business of designing, manufacturing, distributing and servicing thermal analysis, rheometry and calorimetry instruments. The Company's two operating segments have similar economic characteristics; product processes; products and services; types and classes of customers; methods of distribution ; and regulatory environments. Because of these similarities, the two segments have been aggregated into one reporting segment for financial statement purposes. Please refer to the consolidated financial statements for financial information regarding the one reportable segment of the Company. Net sales for the Company's products and services are as follows for the three and six months ended July 1, 2017 and July 2, 2016 (in thousands): Three Months Ended Six Months Ended July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Product net sales: Waters instrument systems $ 238,548 $ 231,908 $ 436,337 $ 420,437 Chemistry 90,824 87,048 178,727 171,198 TA instrument systems 43,466 40,731 82,070 75,909 Total product sales 372,838 359,687 697,134 667,544 Service net sales: Waters service 168,408 159,775 326,142 311,289 TA service 17,004 17,098 32,943 32,973 Total service sales 185,412 176,873 359,085 344,262 Total net sales $ 558,250 $ 536,560 $ 1,056,219 $ 1,011,806 |
Recent Accounting Standard Chan
Recent Accounting Standard Changes and Developments | 6 Months Ended |
Jul. 01, 2017 | |
Recent Accounting Standard Changes and Developments [Abstract] | |
Recent Accounting Standard Changes and Developments | 13 Recent Accounting Standard Changes and Developments Recently Adopted Accounting Standards In July 2015, accounting guidance was issued which clarifies the measurement of inventory. The new guidance requires inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this standard as of January 1, 2017 and this standard did not have a material effect on the Company's financial position, results of operations and cash flows. In March 2016, accounting guidance was issued which simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2016. The new guidance is required to be adopted on a prospective basis for the statement of operations and the Company has elected to retrospectively apply the cash flow aspects of this new guidance. In addition, the Company has elected to continue to estimate forfeitures at the time of grant and update forfeiture estimates throughout the requisite service period. The Company adopted this standard as of January 1, 2017 and recognized an excess tax benefit related to stock-based compensation which decreased income tax expense for the three and six months ended July 1, 2017 by $4 million and $12 million, respectively, and added $0.0 5 and $ 0 .14 to net income per diluted share , respectively . These excess tax benefits were previously recorded in equity and there were no cumulative-effect adjustments to retained earnings as a result of the adoption of this standard. In addition, the Company reclassified $ 4 million of excess tax benefits related to stock-based compensation for the first six months of 2016 from cash flows from financing activities to cash flows from operating activities. Recently Issued Accounting Standards In May 2014, amended accounting guidance was issued regarding the recognition of revenue from contracts with customers. The objective of this guidance is to significantly enhance comparability and clarify principles of revenue recognition practices across entities, industries, jurisdictions and capital markets. This guidance was originally effective for annual and interim reporting periods beginning after December 15, 2016; however, the Financial Accounting Standards Board (“FASB”) amended the standard in August 2015 to delay the effective period date by one year to annual and interim periods beginning after December 15, 2017. Adoption prior to December 15, 2016 is not permitted. In March 2016, the FASB clarified the implementation guidance on principal versus agent considerations and, in April 2016, clarification was made regarding certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, additional guidance was issued related to disclosure of remaining performance obligations, as well as other amendments to guidance on collectibility , non-cash consideration and the presentation of sales and other similar taxes collected from customers. The Company does not intend to early adopt this accounting standard and will apply the modified-retrospective method. Based on a preliminary analysis, t he Company currently believes that the adoption of this standard will not have a material impact on the Company's financial position, results of operations and cash flows. In January 2016, accounting guidance was issued which primarily affects the classification and measurement of certain financial instruments, principally equity investments and certain financial liabilities. Under the new guidance, there will no longer be an available-for-sale classification for equity securities with readily determinable fair values. Changes to the fair value of equity investments will be recognized through earnings. Equity investments carried at cost should be adjusted for changes in observable prices, as applicable, and qualitatively assessed for impairment annually. Changes to the fair value of financial liabilities under the fair value option due to instrument specific credit risk will be recognized separately in other comprehensive income. The new guidance also requires financial assets and financial liabilities to be presented separately and grouped by measurement category in the notes to the financial statements. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017 and early adoption of certain provisions of this guidance is permitted. The Company currently does not expect that the adoption of this standard will have a material effect on the Company's financial position, results of operations and cash flows. In February 2016, accounting guidance was issued regarding the accounting for leases. This new comprehensive lease standard amends various aspects of existing accounting guidance for leases. The core principle of the new guidance will require lessees to present the assets and liabilities that arise from leases on their balance sheets. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company expects that the adoption of this standard will have a material effect on the Company's balance sheet classifications; however, it is not expected to have an overall material impact on the Company's results of operations and cash flows. In June 2016, accounting guidance was issued that modifies the recognition of credit losses related to financial assets, such as debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, and other financial assets that have the contractual right to receive cash. Current guidance requires the recognition of a credit loss when it is consider ed probable that a loss event ha s incurred. The new guidance requires the measurement of expected credit losses to be based upon relevant information, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the asset. As such, expected credit losses may be recognized sooner under the new guidance due to the broader range of information that will be required to determine credit loss estimates. The new guidance also amends the current other-than-temporary impairment model used for debt securities classified as available-for-sale. When the fair value of an available-for-sale debt security is below its amortized cost, the new guidance requires the total unrealized loss to be bifurcated into its credit and non-credit components. Any expected credit losses or subsequent recoveries will be recognized in earnings and any changes not considered credit related will continue to be recognized within other comprehensive income. This guidance is effective for annual and interim periods beginning after December 15, 2019. The Company currently does not expect that the adoption of this standard will have a material effect on the Company's financial position, results of operations and cash flows. In August 2016, accounting guidance was issued that clarifies the classification of certain cash flows. The new guidance addresses eight specific areas where current accounting guidance is either unclear or does not specifically address classification issues. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's cash flows. In October 2016, accounting guidance was issued regarding intra-entity transfers of assets other than inventory. The new guidance eliminates the deferral of tax effects on intra-entity transfers other than inventory and requires an entity to recognize the income tax consequences when the transfer occurs. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows. In January 2017, accounting guidance was issued that clarifies the definition of a business. The new guidance provides a more robust framework to use in determining when a set of assets and activities is a business, thus narrowing the definition and the amount of transactions accounted for as business combinations. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early application is permitted under certain circumstances. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows. In January 2017, accounting guidance was issued that simplifies the accounting for goodwill impairment. The guidance eliminates step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. This guidance is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted. The Company currently does not expect that the adoption of this standard will have a material effect on the Company's financial position, results of operations and cash flows. In March 2017, accounting guidance was issued regarding the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer disaggregate the service cost component from other components of net benefit cost, with service cost reported in the same line items as other compensation costs and the other components of net benefit costs presented outside income from operations. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows. In March 2017, accounting guidance was issued to amend the amortization period for certain purchased callable debt securities held at a premium. Specifically, the amortization period for certain callable debt securities will be shortened to end at the earliest call date. This guidance is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows . In May 2017, accounting guidance was issued that clarifies the accounting for a change to the terms or conditions of a share-based payment award. The standard provides more specific guidance for determining when a change to an award requires modification accounting and when it should be deemed purely administrative in nature. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows . |
Basis of Presentation and Sum20
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 01, 2017 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Nature of Operations | Waters Corporation (the “Company”) is a specialty measurement company that has pioneered chromatography, mass spectrometry and thermal analysis innovations serving the life, materials and food sciences for nearly 60 years. The Company primarily designs, manufactures, sells and services high performance liquid chromatography (“HPLC”), ultra performance liquid chromatography (“UPLC ® ” and together with HPLC, referred to as “LC”) and mass spectrometry (“MS”) technology systems and support products, including chromatography columns, other consumable products and comprehensive post-warranty service plans. These systems are complementary products that are frequently employed together (“LC-MS”) and sold as integrated instrument systems using a common software platform. LC is a standard technique and is utilized in a broad range of industries to detect, identify, monitor and measure the chemical, physical and biological composition of materials, and to purify a full range of compounds. MS instruments are used in drug discovery and development, including clinical trial testing, the analysis of proteins in disease processes (known as “proteomics”), nutritional safety analysis and environmental testing. LC-MS instruments combine a liquid phase sample introduction and separation system with mass spectrometric compound identification and quantification. In addition, the Company designs, manufactures, sells and services thermal analysis, rheometry and calorimetry instruments through its TA ® product line. These instruments are used in predicting the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals and viscous liquids for various industrial, consumer goods and healthcare products, as well as for life science research. The Company is also a developer and supplier of software-based products that interface with the Company's instruments, as well as other suppliers' instruments, and are typically purchased by customers as part of the instrument system. |
Fiscal Period | The Company's interim fiscal quarter typically ends on the thirteenth Saturday of each quarter. Since the Company's fiscal year end is December 31, the first and fourth fiscal quarters may have more or less than thirteen complete weeks. The Company's second fiscal quarters for 2017 and 2016 ended on July 1, 2017 and July 2, 2016 , respectively. |
Basis of Accounting | The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the instructions to the Quarterly Report on Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles (“GAAP”) in the United States of America. It is management's opinion that the accompanying interim consolidated financial statements reflect all adjustments (which are normal and recurring) that are necessary for a fair statement of the results for the interim periods. The interim consolidated financial statements should be read in conjunction with the consolidated financial statem ents included in the Company's A nnual R eport on Form 10-K for the year ended December 31, 2016 , as filed with the U.S. Securities and Exchange Commission on February 24, 2017. |
Use of Estimates | The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that aff ect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities at the dates of the financial statements. Actual amounts may differ from these estimates under different assumptions or conditions. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its subsidiaries, which are wholly owned. All inter-company balances and tra nsactions have been eliminated. |
Translation of Foreign Currencies | Translation of Foreign Currencies For most of the Company's foreign operations, assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the balance sheet date, while revenues and expenses are translated at average exchange rates prevailing during the period. Any resulting translation gains or losses are included in accumulated other comprehensive income in the consolidated balance sheets. The functional currency of each of the Company's foreign operating subsidiaries is the local currency of that particular country, except for the Company's subsidiaries in Hong Kong, Singapore and the Cayman Islands, where the underlying transactional cash flows are denominated in currencies other than the respective local currency of domicile. The functional currency of the Hong Kong, Singapore and Cayman Islands subsidiaries is the U.S. dollar, based on the respective entity's cash flows. |
Cash, Cash Equivalents and Investments Policy | Cash equivalents represent highly liquid investments, with original maturities of 90 days or less, while investments with longer maturities are classified as investments. |
Fair Value Measurements Policy | Fair Value Measurements In accordance with the accounting standards for fair value measurements and disclosures, certain of the Company's assets and liabilities are measured at fair value on a recurring basis as of July 1, 2017 and December 31, 2016 . Fair values determined by Level 1 inputs utilize observable data , such as quoted prices in active markets. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points for which there is little or no market data, which require the reporting entity to develop its own assumptions. Fair Value of Other Financial Instruments The Company's cash, accounts receivable, accounts payable and variable interest rate debt are recorded at cost , which approximates fair value due to their short-term nature . |
Derivatives Policy | The foreign currency exchange contracts are not designated for hedge accounting treatment. |
Product Warranty Costs | Product Warranty Costs The Company accrues estimated product warranty costs at the time of sale, which are included in cost of sales in the consolidated statements of operations. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component supplie r s, the Company's warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. The amount of the accrued warranty liability is based on historical inform ation, such as past experience, product failure rates, number of units repaired and estimated costs of material and labor. The liability is reviewed for re asonableness at least quarterly. |
Income Taxes (Policies)
Income Taxes (Policies) | 6 Months Ended |
Jul. 01, 2017 | |
Income Taxes [Abstract] | |
Income Tax Policy | The Company accounts for its uncertain tax return reporting positions in accordan ce with the accounting standards for income taxes, which require financial statement reporting of the expected future tax consequences of uncertain tax reporting positions on the presumption that all concerned tax authoriti es possess full knowledge of those tax reporting positions, as well as all of the pertinent facts and circumstances, but prohibit any discounting of u nrecognized tax benefits associated with those reporting positions for the time value of money . The Company classifie s interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes . |
Stock-Based Compensation (Polic
Stock-Based Compensation (Policies) | 6 Months Ended |
Jul. 01, 2017 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation Policy | The Company accounts for stock-based compensation costs in accordance with the accounting standards for stock-based compensation, which require that all share-based payments to employees be recognized in the statements of operations based on their grant date fair values. The Company recognizes the expense using the straight-line attribution method. The stock-based compensation expense recognized in the consolidated statements of operations is based on awards that ultimately are expected to vest; therefore, the amount of expense has been reduced for estimated forfeitures. The new stock-based compensation accounting guidance offers the option of recognizing forfeitures as they occur or estimating forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has elected to remain consistent with prior periods and estimate forfeitures at the time of grant and, if necessary, revise in subsequent periods in which actual forfeitures differ from those estimates. Forfeitures are estimated based on historical experience. If actual results differ significantly from these estimates, stock-based compensation expense and the Company's results of operations could be materially impacted. In addition, if the Company employs different assumptions in the application of these standards, the compensation expense that the Company records in the future periods may differ significantly from what the Company has recorded in the current period. Stock Options In determining the fair value of the stock options, the Compan y makes a variety of assumptions and estimates, including volatility measures, expected yields and expected stock option lives. The fair value of each option grant was estimated on the date of grant using the Black- Scholes option pricing model. The Company uses implied volatility on its publicly-traded options as the basis for its estimate of expected volatility. The Company believes that implied volatility is the most appropriate indicator of expected volatility because it is generally reflective of historical volatility and expectations of how future volatility will differ from historical volatility. The expected life assumption for grants is based on historical experience for the population of non-qualified stock option exercises. The risk-free interest rate is the yield currently available on U.S. Treasury zero-coupon issues with a remaining term approximating the expected term used as the input to the Black- Scholes model. Performance Stock Units In determining the fair value of the performance stock units, the Company makes a variety of assumptions and estimates, including volatility measures, expected yields and expected terms. The fair value of each performance stock unit grant was estimated on the date of grant using the Monte Carlo simulation model. The Company uses implied volatility on its publicly-traded options as the basis for its estimate of expected volatility. The Company believes that implied volatility is the most appropriate indicator of expected volatility because it is generally reflective of historical volatility and expectations of how future volatility will differ from historical volatility. The expected life assumption for grants is based on the performance period of the underlying performance stock units. The risk-free interest rate is the yield currently available on U.S. Treasury zero-coupon issues with a remaining term approximating the expected term used as the input to the Monte Carlo simulation model. The correlation coefficient is used to model the way in which each company in the S&P Health Care Index tends to move in relation to each other during the performance period. |
Earnings Per Share (Policies)
Earnings Per Share (Policies) | 6 Months Ended |
Jul. 01, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Policy | The effect of dilutive securities was calculated using the treasury stock method. |
Recent Accounting Standard Ch24
Recent Accounting Standard Changes and Develpments (Policies) | 6 Months Ended |
Jul. 01, 2017 | |
Recent Accounting Standard Changes and Developments [Abstract] | |
New Accounting Pronouncements | Recently Adopted Accounting Standards In July 2015, accounting guidance was issued which clarifies the measurement of inventory. The new guidance requires inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this standard as of January 1, 2017 and this standard did not have a material effect on the Company's financial position, results of operations and cash flows. In March 2016, accounting guidance was issued which simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2016. The new guidance is required to be adopted on a prospective basis for the statement of operations and the Company has elected to retrospectively apply the cash flow aspects of this new guidance. In addition, the Company has elected to continue to estimate forfeitures at the time of grant and update forfeiture estimates throughout the requisite service period. The Company adopted this standard as of January 1, 2017 and recognized an excess tax benefit related to stock-based compensation which decreased income tax expense for the three and six months ended July 1, 2017 by $4 million and $12 million, respectively, and added $0.0 5 and $ 0 .14 to net income per diluted share , respectively . These excess tax benefits were previously recorded in equity and there were no cumulative-effect adjustments to retained earnings as a result of the adoption of this standard. In addition, the Company reclassified $ 4 million of excess tax benefits related to stock-based compensation for the first six months of 2016 from cash flows from financing activities to cash flows from operating activities. Recently Issued Accounting Standards In May 2014, amended accounting guidance was issued regarding the recognition of revenue from contracts with customers. The objective of this guidance is to significantly enhance comparability and clarify principles of revenue recognition practices across entities, industries, jurisdictions and capital markets. This guidance was originally effective for annual and interim reporting periods beginning after December 15, 2016; however, the Financial Accounting Standards Board (“FASB”) amended the standard in August 2015 to delay the effective period date by one year to annual and interim periods beginning after December 15, 2017. Adoption prior to December 15, 2016 is not permitted. In March 2016, the FASB clarified the implementation guidance on principal versus agent considerations and, in April 2016, clarification was made regarding certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, additional guidance was issued related to disclosure of remaining performance obligations, as well as other amendments to guidance on collectibility , non-cash consideration and the presentation of sales and other similar taxes collected from customers. The Company does not intend to early adopt this accounting standard and will apply the modified-retrospective method. Based on a preliminary analysis, t he Company currently believes that the adoption of this standard will not have a material impact on the Company's financial position, results of operations and cash flows. In January 2016, accounting guidance was issued which primarily affects the classification and measurement of certain financial instruments, principally equity investments and certain financial liabilities. Under the new guidance, there will no longer be an available-for-sale classification for equity securities with readily determinable fair values. Changes to the fair value of equity investments will be recognized through earnings. Equity investments carried at cost should be adjusted for changes in observable prices, as applicable, and qualitatively assessed for impairment annually. Changes to the fair value of financial liabilities under the fair value option due to instrument specific credit risk will be recognized separately in other comprehensive income. The new guidance also requires financial assets and financial liabilities to be presented separately and grouped by measurement category in the notes to the financial statements. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017 and early adoption of certain provisions of this guidance is permitted. The Company currently does not expect that the adoption of this standard will have a material effect on the Company's financial position, results of operations and cash flows. In February 2016, accounting guidance was issued regarding the accounting for leases. This new comprehensive lease standard amends various aspects of existing accounting guidance for leases. The core principle of the new guidance will require lessees to present the assets and liabilities that arise from leases on their balance sheets. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company expects that the adoption of this standard will have a material effect on the Company's balance sheet classifications; however, it is not expected to have an overall material impact on the Company's results of operations and cash flows. In June 2016, accounting guidance was issued that modifies the recognition of credit losses related to financial assets, such as debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, and other financial assets that have the contractual right to receive cash. Current guidance requires the recognition of a credit loss when it is consider ed probable that a loss event ha s incurred. The new guidance requires the measurement of expected credit losses to be based upon relevant information, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the asset. As such, expected credit losses may be recognized sooner under the new guidance due to the broader range of information that will be required to determine credit loss estimates. The new guidance also amends the current other-than-temporary impairment model used for debt securities classified as available-for-sale. When the fair value of an available-for-sale debt security is below its amortized cost, the new guidance requires the total unrealized loss to be bifurcated into its credit and non-credit components. Any expected credit losses or subsequent recoveries will be recognized in earnings and any changes not considered credit related will continue to be recognized within other comprehensive income. This guidance is effective for annual and interim periods beginning after December 15, 2019. The Company currently does not expect that the adoption of this standard will have a material effect on the Company's financial position, results of operations and cash flows. In August 2016, accounting guidance was issued that clarifies the classification of certain cash flows. The new guidance addresses eight specific areas where current accounting guidance is either unclear or does not specifically address classification issues. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's cash flows. In October 2016, accounting guidance was issued regarding intra-entity transfers of assets other than inventory. The new guidance eliminates the deferral of tax effects on intra-entity transfers other than inventory and requires an entity to recognize the income tax consequences when the transfer occurs. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows. In January 2017, accounting guidance was issued that clarifies the definition of a business. The new guidance provides a more robust framework to use in determining when a set of assets and activities is a business, thus narrowing the definition and the amount of transactions accounted for as business combinations. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early application is permitted under certain circumstances. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows. In January 2017, accounting guidance was issued that simplifies the accounting for goodwill impairment. The guidance eliminates step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. This guidance is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted. The Company currently does not expect that the adoption of this standard will have a material effect on the Company's financial position, results of operations and cash flows. In March 2017, accounting guidance was issued regarding the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer disaggregate the service cost component from other components of net benefit cost, with service cost reported in the same line items as other compensation costs and the other components of net benefit costs presented outside income from operations. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows. In March 2017, accounting guidance was issued to amend the amortization period for certain purchased callable debt securities held at a premium. Specifically, the amortization period for certain callable debt securities will be shortened to end at the earliest call date. This guidance is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows . In May 2017, accounting guidance was issued that clarifies the accounting for a change to the terms or conditions of a share-based payment award. The standard provides more specific guidance for determining when a change to an award requires modification accounting and when it should be deemed purely administrative in nature. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations and cash flows . |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets And Liabilities | The following table represents the Company's assets and liabilities that are measured at fair value on a recurring basis at July 1, 2017 (in thousands) : Quoted Prices in Active Significant Markets Other Significant for Identical Observable Unobservable Total at Assets Inputs Inputs July 1, 2017 (Level 1) (Level 2) (Level 3) Assets: U.S. Treasury securities $ 626,587 $ - $ 626,587 $ - Foreign government securities 6,969 - 6,969 - Corporate debt securities 1,795,051 - 1,795,051 - Time deposits 295,845 - 295,845 - Equity securities 147 - 147 - Waters 401(k) Restoration Plan assets 32,200 32,200 - - Foreign currency exchange contracts 1,418 - 1,418 - Total $ 2,758,217 $ 32,200 $ 2,726,017 $ - Liabilities: Contingent consideration $ 3,014 $ - $ - $ 3,014 Foreign currency exchange contracts 11 - 11 - Total $ 3,025 $ - $ 11 $ 3,014 The following table represents the Company's assets and liabilities that are measured at fair value on a recu rring basis at December 31, 2016 (in thousands): Quoted Prices in Active Significant Markets Other Significant Total at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2016 (Level 1) (Level 2) (Level 3) Assets: U.S. Treasury securities $ 570,313 $ - $ 570,313 $ - Foreign government securities 17,991 - 17,991 - Corporate debt securities 1,643,838 - 1,643,838 - Time deposits 199,906 - 199,906 - Equity securities 147 - 147 - Waters 401(k) Restoration Plan assets 30,954 30,954 - - Foreign currency exchange contracts 60 - 60 - Total $ 2,463,209 $ 30,954 $ 2,432,255 $ - Liabilities: Contingent consideration $ 3,007 $ - $ - $ 3,007 Foreign currency exchange contracts 730 - 730 - Total $ 3,737 $ - $ 730 $ 3,007 |
Summary of Derivative Instruments by Risk Exposure [Abstract] | |
Gains (Losses) on Foreign Exchange Contracts | The following is a summary of the activity included in cost of sales in the statements of operations related to the foreign currency exchange contracts (in thousands): Three Months Ended Six Months Ended July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Realized gains (losses) on closed contracts $ 1,868 $ (5,637) $ 430 $ (7,531) Unrealized gains (losses) on open contracts 2,209 (963) 2,077 (992) Cumulative net pre-tax gains (losses) $ 4,077 $ (6,600) $ 2,507 $ (8,523) |
Fair Value of Forward Foreign Exchange Contracts | T he Company's foreign currency exchange contracts included in the consolid ated balance sheets are classified as follows (in thousands): July 1, 2017 December 31, 2016 Other current assets $ 1,418 $ 60 Other current liabilities $ 11 $ 730 |
Warranty Accrual Roll Forward [Abstract] | |
Warranty Accrual Roll Forward | The following is a summary of the activity of the Company's accrued warranty liability for the six months ended July 1, 2017 and July 2, 2016 (in thousands): Balance at Balance at Beginning Accruals for Settlements End of of Period Warranties Made Period Accrued warranty liability: July 1, 2017 $ 13,391 $ 3,842 $ (4,369) $ 12,864 July 2, 2016 $ 13,349 $ 4,297 $ (4,719) $ 12,927 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Marketable Securities [Abstract] | |
Schedule of Available-for-Sale Securities Reconciliation | The Company's marketable securities within cash equivalents and investments included in the consolidated balance sheets are detailed as follows (in thousands): July 1, 2017 Amortized Unrealized Unrealized Fair Cost Gain Loss Value U.S. Treasury securities $ 627,443 $ 104 $ (960) $ 626,587 Foreign government securities 6,971 1 (3) 6,969 Corporate debt securities 1,794,831 1,463 (1,243) 1,795,051 Time deposits 295,845 - - 295,845 Equity securities 77 70 - 147 Total $ 2,725,167 $ 1,638 $ (2,206) $ 2,724,599 Amounts included in: Cash equivalents $ 165,909 $ - $ (1) $ 165,908 Investments 2,559,258 1,638 (2,205) 2,558,691 Total $ 2,725,167 $ 1,638 $ (2,206) $ 2,724,599 December 31, 2016 Amortized Unrealized Unrealized Fair Cost Gain Loss Value U.S. Treasury securities $ 570,695 $ 253 $ (635) $ 570,313 Foreign government securities 17,999 - (8) 17,991 Corporate debt securities 1,645,468 496 (2,126) 1,643,838 Time deposits 199,906 - - 199,906 Equity securities 77 70 - 147 Total $ 2,434,145 $ 819 $ (2,769) $ 2,432,195 Amounts included in: Cash equivalents $ 124,793 $ 1 $ - $ 124,794 Investments 2,309,352 818 (2,769) 2,307,401 Total $ 2,434,145 $ 819 $ (2,769) $ 2,432,195 |
Investments Classified By Contractual Maturity Date | The estimated fair value of marketable debt securities by maturity date is as follows (in thousands): July 1, 2017 December 31, 2016 Due in one year or less $ 1,591,388 $ 1,388,537 Due after one year through three years 837,219 843,605 Total $ 2,428,607 $ 2,232,142 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Inventory Items, Net Of Reserves Alternative [Abstract] | |
Inventory, Net of Reserves | Inventories are classi fied as follows (in thousands): July 1, 2017 December 31, 2016 Raw materials $ 95,162 $ 95,430 Work in progress 16,970 16,585 Finished goods 175,007 150,667 Total inventories $ 287,139 $ 262,682 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Goodwill and Other Intangibles [Abstract] | |
Schedule of Intangible Assets by Major Class | T he Company's intangible assets included in the consolidated balance sheets are detailed as follows (in thousands): July 1, 2017 December 31, 2016 Weighted- Weighted- Gross Average Gross Average Carrying Accumulated Amortization Carrying Accumulated Amortization Amount Amortization Period Amount Amortization Period Capitalized software $ 403,303 $ 257,347 5 years $ 355,973 $ 223,572 5 years Purchased intangibles 167,123 133,565 11 years 162,180 127,045 11 years Trademarks and IPR&D 13,781 - 13,544 - Licenses 5,401 4,260 6 years 4,632 3,851 6 years Patents and other intangibles 65,358 40,702 8 years 61,646 36,452 8 years Total $ 654,966 $ 435,874 7 years $ 597,975 $ 390,920 7 years |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Debt [Abstract] | |
Schedule of Outstanding Debt | T he Company had the following outstanding debt a t July 1, 2017 and December 31, 2016 (in thousands) : July 1, 2017 December 31, 2016 Foreign subsidiary lines of credit $ 233 $ 297 Senior unsecured notes - Series D - 3.22%, due March 2018 100,000 - Credit agreements 125,000 125,000 Total notes payable and debt 225,233 125,297 Senior unsecured notes - Series B - 5.00%, due February 2020 100,000 100,000 Senior unsecured notes - Series D - 3.22%, due March 2018 - 100,000 Senior unsecured notes - Series E - 3.97%, due March 2021 50,000 50,000 Senior unsecured notes - Series F - 3.40%, due June 2021 100,000 100,000 Senior unsecured notes - Series G - 3.92%, due June 2024 50,000 50,000 Senior unsecured notes - Series H - floating rate*, due June 2024 50,000 50,000 Senior unsecured notes - Series I - 3.13%, due May 2023 50,000 50,000 Senior unsecured notes - Series J - floating rate**, due May 2024 40,000 40,000 Senior unsecured notes - Series K - 3.44%, due May 2026 160,000 160,000 Credit agreements 1,090,000 1,005,000 Unamortized debt issuance costs (2,767) (3,034) Total long-term debt 1,687,233 1,701,966 Total debt $ 1,912,466 $ 1,827,263 * Series H senior unsecured notes bear interest at a 3-month LIBOR for that floating rate interest period plus 1.25%. ** Series J senior unsecured notes bear interest at a 3-month LIBOR for that floating rate interest period plus 1.45%. |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Income Taxes [Abstract] | |
Unrecognized Tax Benefits Roll Forward | The following is a summary of the activity of the Company's unrecognized tax benefits for the six months ended July 1, 2017 and July 2, 2016 (in thousands): July 1, 2017 July 2, 2016 Balance at the beginning of the period $ 9,964 $ 14,450 Net changes in uncertain tax benefits (1,870) (2,563) Balance at the end of the period $ 8,094 $ 11,887 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Stock-Based Compensation [Abstract] | |
Schedule of Stock-Based Compensation Expense | The consolidated statements of operations for the three and six months ended July 1, 2017 and July 2, 2016 include the following stock-based compensation expense related to stock option awards, restricted stock awards, restricted stock unit awards, performance stock unit awards and the employee stock purchase plan (in thousands): Three Months Ended Six Months Ended July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Cost of sales $ 787 $ 656 $ 1,525 $ 1,327 Selling and administrative expenses 7,602 6,613 14,790 20,582 Research and development expenses 750 1,127 1,479 2,328 Total stock-based compensation $ 9,139 $ 8,396 $ 17,794 $ 24,237 |
Relevant Data Used to Determine the Value of Stock Options Granted During the Period | The relevant data used to determine the value of the stock options granted during the six months ended July 1, 2017 and July 2, 2016 are as follows: Six Months Ended Options Issued and Significant Assumptions Used to Estimate Option Fair Values July 1, 2017 July 2, 2016 Options issued (in thousands) 207 86 Risk-free interest rate 2.2% 1.5% Expected life in years 6 5 Expected volatility 0.232 0.286 Expected dividends - - Six Months Ended Weighted-Average Exercise Price and Fair Value of Options on the Date of Grant July 1, 2017 July 2, 2016 Exercise price $ 149.74 $ 122.65 Fair value $ 40.39 $ 34.63 |
Stock Options Outstanding Roll Forward | T he following table summarizes stock option activity for the plans for the six months ended July 1, 2017 (in thousands, except per share data): Number of Shares Price per Share Weighted-Average Exercise Price Outstanding at December 31, 2016 2,697 $ 38.09 to $ 139.51 $ 106.55 Granted 207 $ 136.43 to $ 154.33 $ 149.74 Exercised (619) $ 41.20 to $ 134.37 $ 88.36 Canceled (44) $ 87.06 to $ 136.43 $ 114.38 Outstanding at July 1, 2017 2,241 $ 38.09 to $ 154.33 $ 115.41 |
Restricted Stock Units Unvested Roll Forward | The following table summarizes the unvested restricted stock unit award activity for the six months ended July 1, 2017 (in thousands, except for per share data ): Shares Weighted-Average Price Unvested at December 31, 2016 453 $ 110.34 Granted 106 $ 154.23 Vested (131) $ 105.18 Forfeited (15) $ 115.34 Unvested at July 1, 2017 413 $ 123.06 |
Relevant Data Used to Determine the Value of Performance Shares | The relevant data used to determine the value of the performance stock units granted during 2017 is as follows: Performance Stock Units Issued and Significant Assumptions Used to Estimate Fair Values 2017 Performance stock units issued in thousands 20 Risk-free interest rate 1.5% Expected life in years 3 Expected volatility 0.232 Average volatility of peer companies 0.261 Correlation coefficient 0.385 Expected dividends - |
Performance Stock Units Unvested Roll Forward | The following table summarizes the unvested performance stock unit award activity for the three months ended July 1, 2017 (in thousands, except for per share data): Shares Weighted-Average Fair Value Unvested at December 31, 2016 27 $ 171.16 Granted 20 $ 198.78 Unvested at July 1, 2017 47 $ 184.40 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Earnings Per Share Reconciliation [Abstract] | |
Earnings Per Share Reconciliation | Basic and diluted earnings per share (“EPS”) calculations are detailed as follows (in th ousands, except per share data): Three Months Ended July 1, 2017 Net Income Weighted-Average Shares Per Share (Numerator) (Denominator) Amount Net income per basic common share $ 131,822 79,979 $ 1.65 Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities - 777 (0.02) Net income per diluted common share $ 131,822 80,756 $ 1.63 Three Months Ended July 2, 2016 Net Income Weighted-Average Shares Per Share (Numerator) (Denominator) Amount Net income per basic common share $ 128,217 80,804 $ 1.59 Effect of dilutive stock option, restricted stock and restricted stock unit securities - 651 (0.02) Net income per diluted common share $ 128,217 81,455 $ 1.57 Six Months Ended July 1, 2017 Net Income Weighted-Average Shares Per Share (Numerator) (Denominator) Amount Net income per basic common share $ 237,379 80,029 $ 2.97 Effect of dilutive stock option, restricted stock, performance stock unit and and restricted stock unit securities - 740 (0.03) Net income per diluted common share $ 237,379 80,769 $ 2.94 Six Months Ended July 2, 2016 Net Income Weighted-Average Shares Per Share (Numerator) (Denominator) Amount Net income per basic common share $ 222,269 81,043 $ 2.74 Effect of dilutive stock option, restricted stock and restricted stock unit securities - 620 (0.02) Net income per diluted common share $ 222,269 81,663 $ 2.72 |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The components of accumulated other comprehensive income are detailed as follows (in thousands): Currency Translation Unrealized Gain (Loss) on Retirement Plans Unrealized Gain (Loss) on Investments Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2016 $ (170,566) $ (43,894) $ (1,820) $ (216,280) Other comprehensive income (loss), net of tax 67,382 (160) 1,283 68,505 Balance at July 1, 2017 $ (103,184) $ (44,054) $ (537) $ (147,775) |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Retirement Plans [Abstract] | |
Defined Benefit Plan, Net Periodic Benefit Cost | The summary of the components of net periodic pension costs for the plans for the three and six months ended July 1, 2017 and July 2, 2016 is as follows (in thousands): Three Months Ended July 1, 2017 July 2, 2016 U.S. U.S. Retiree Non-U.S. U.S. U.S. Retiree Non-U.S. Pension Healthcare Pension Pension Healthcare Pension Plans Plan Plans Plans Plan Plans Service cost $ 124 $ 170 $ 1,240 $ 94 $ 116 $ 1,250 Interest cost 1,696 159 368 1,745 135 429 Expected return on plan assets (2,487) (147) (414) (2,417) (130) (406) Net amortization: Prior service credit - - (47) - - (49) Net actuarial loss 734 - 235 667 - 192 Net periodic pension cost $ 67 $ 182 $ 1,382 $ 89 $ 121 $ 1,416 Six Months Ended July 1, 2017 July 2, 2016 U.S. U.S. Retiree Non-U.S. U.S. U.S. Retiree Non-U.S. Pension Healthcare Pension Pension Healthcare Pension Plans Plan Plans Plans Plan Plans Service cost $ 225 $ 273 $ 2,491 $ 188 $ 232 $ 2,468 Interest cost 3,415 309 726 3,490 270 850 Expected return on plan assets (5,150) (294) (816) (4,834) (260) (805) Net amortization: Prior service credit - - (93) - - (94) Net actuarial loss 1,385 - 466 1,334 - 380 Net periodic pension (benefit) cost $ (125) $ 288 $ 2,774 $ 178 $ 242 $ 2,799 |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Business Segment Information [Abstract] | |
Revenue from External Customers by Products and Services | Net sales for the Company's products and services are as follows for the three and six months ended July 1, 2017 and July 2, 2016 (in thousands): Three Months Ended Six Months Ended July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016 Product net sales: Waters instrument systems $ 238,548 $ 231,908 $ 436,337 $ 420,437 Chemistry 90,824 87,048 178,727 171,198 TA instrument systems 43,466 40,731 82,070 75,909 Total product sales 372,838 359,687 697,134 667,544 Service net sales: Waters service 168,408 159,775 326,142 311,289 TA service 17,004 17,098 32,943 32,973 Total service sales 185,412 176,873 359,085 344,262 Total net sales $ 558,250 $ 536,560 $ 1,056,219 $ 1,011,806 |
Basis of Presentation and Sum36
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 36 Months Ended | |||
May 31, 2017 | Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | May 14, 2017 | Dec. 31, 2016 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |||||||
Long-term investments | $ 7,000,000 | $ 7,000,000 | |||||
Acquired in-process research and development | 5,000,000 | ||||||
Potential payments under licensing arrangements | 7,000,000 | $ 7,000,000 | |||||
Cash Equivalents and Investments [Line Items] | |||||||
Cash equivalents description | Cash equivalents represent highly liquid investments, with original maturities of 90 days or less, while investments with longer maturities are classified as investments. | ||||||
Cash, cash equivalents and investments | 3,126,000,000 | $ 3,126,000,000 | $ 2,813,000,000 | ||||
Derivative [Line Items] | |||||||
Foreign currency exposure | The Company is a global company that operates in over 35 countries and, as a result, the Company’s net sales, cost of sales, operating expenses and balance sheet amounts are significantly impacted by fluctuations in foreign currency exchange rates. | ||||||
Maturity period of foreign exchange contracts | The Company periodically aggregates its net worldwide balances by currency and then enters into foreign currency exchange contracts that mature within 90 days to hedge a portion of the remaining balance to minimize some of the Company’s currency price risk exposure. | ||||||
Notional amount of foreign exchange contracts | 122,000,000 | $ 122,000,000 | 120,000,000 | ||||
Realized gains (losses) on closed contracts | 1,868,000 | $ (5,637,000) | 430,000 | $ (7,531,000) | |||
Unrealized gains (losses) on open contracts | 2,209,000 | (963,000) | 2,077,000 | (992,000) | |||
Cumulative net pre-tax gains (losses) | 4,077,000 | (6,600,000) | 2,507,000 | (8,523,000) | |||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 2,724,599,000 | 2,724,599,000 | 2,432,195,000 | ||||
Debt [Line Items] | |||||||
Long-term debt | 1,687,233,000 | 1,687,233,000 | 1,701,966,000 | ||||
Warranty Accrual Roll Forward [Abstract] | |||||||
Accrued warranty liability, balance at beginning of period | 13,391,000 | 13,349,000 | |||||
Accruals for warranties | 3,842,000 | 4,297,000 | |||||
Settlements made | (4,369,000) | (4,719,000) | |||||
Accrued warranty liability, balance at end of period | 12,864,000 | $ 12,927,000 | 12,864,000 | 12,927,000 | |||
Restructuring and Related Activities [Abstract] | |||||||
Restructuring charges | 11,000,000 | $ 3,000,000 | |||||
Restructuring reserve | 5,000,000 | 5,000,000 | |||||
Fair Value Measurements, Recurring | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Waters 401(k) Restoration Plan assets | 32,200,000 | 32,200,000 | 30,954,000 | ||||
Forward foreign exchange contract assets | 1,418,000 | 1,418,000 | 60,000 | ||||
Fair value of total assets measured on a recurring basis | 2,758,217,000 | 2,758,217,000 | 2,463,209,000 | ||||
Contingent consideration | 3,014,000 | 3,014,000 | 3,007,000 | ||||
Forward foreign exchange contract liabilities | 11,000 | 11,000 | 730,000 | ||||
Fair value of total liabilities measured on a recurring basis | 3,025,000 | 3,025,000 | 3,737,000 | ||||
Fair Value Measurements, Recurring | Quoted Prices in Active Market for Identical Assets (Level 1) | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Waters 401(k) Restoration Plan assets | 32,200,000 | 32,200,000 | 30,954,000 | ||||
Fair value of total assets measured on a recurring basis | 32,200,000 | 32,200,000 | 30,954,000 | ||||
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Forward foreign exchange contract assets | 1,418,000 | 1,418,000 | 60,000 | ||||
Fair value of total assets measured on a recurring basis | 2,726,017,000 | 2,726,017,000 | 2,432,255,000 | ||||
Forward foreign exchange contract liabilities | 11,000 | 11,000 | 730,000 | ||||
Fair value of total liabilities measured on a recurring basis | 11,000 | 11,000 | 730,000 | ||||
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Contingent consideration | 3,014,000 | 3,014,000 | 3,007,000 | ||||
Fair value of total liabilities measured on a recurring basis | 3,014,000 | 3,014,000 | 3,007,000 | ||||
Held in currencies other than U.S. dollars [Member] | |||||||
Cash Equivalents and Investments [Line Items] | |||||||
Cash, cash equivalents and investments | 316,000,000 | $ 316,000,000 | 261,000,000 | ||||
Programs authorized by Board of Directors [Member] | |||||||
Stock Repurchase Program [Line Items] | |||||||
Treasury stock shares acquired | 1,000,000 | 1,300,000 | |||||
Treasury stock | $ 159,000,000 | $ 166,000,000 | |||||
Related to Vesting of Restricted Stock Units [Member] | |||||||
Stock Repurchase Program [Line Items] | |||||||
Treasury stock | 7,000,000 | $ 6,000,000 | |||||
May 2017 Program [Member] | |||||||
Stock Repurchase Program [Line Items] | |||||||
Stock repurchase program authorization amount | $ 1,000,000,000 | ||||||
Stock repurchase program remaining amount authorized for future purchases | 964,000,000 | 964,000,000 | |||||
Stock repurchase program period | 3 years | ||||||
May 2014 Program [Member] | |||||||
Stock Repurchase Program [Line Items] | |||||||
Treasury stock shares acquired | 5,500,000 | ||||||
Treasury stock | $ 750,000,000 | ||||||
US Treasury Securities | Fair Value Measurements, Recurring | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 626,587,000 | 626,587,000 | 570,313,000 | ||||
US Treasury Securities | Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 626,587,000 | 626,587,000 | 570,313,000 | ||||
Foreign Government Debt Securities | Fair Value Measurements, Recurring | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 6,969,000 | 6,969,000 | 17,991,000 | ||||
Foreign Government Debt Securities | Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 6,969,000 | 6,969,000 | 17,991,000 | ||||
Corporate Debt Securities | Fair Value Measurements, Recurring | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 1,795,051,000 | 1,795,051,000 | 1,643,838,000 | ||||
Corporate Debt Securities | Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 1,795,051,000 | 1,795,051,000 | 1,643,838,000 | ||||
Time Deposits | Fair Value Measurements, Recurring | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 295,845,000 | 295,845,000 | 199,906,000 | ||||
Time Deposits | Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 295,845,000 | 295,845,000 | 199,906,000 | ||||
Equity Securities | Fair Value Measurements, Recurring | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 147,000 | 147,000 | 147,000 | ||||
Equity Securities | Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis [Line Items] | |||||||
Marketable securities | 147,000 | 147,000 | 147,000 | ||||
Unsecured debt | Fixed interest rate [Member] | |||||||
Debt [Line Items] | |||||||
Long-term debt | 610,000,000 | 610,000,000 | 610,000,000 | ||||
Fair value of debt instrument | 609,000,000 | 609,000,000 | 603,000,000 | ||||
Held by foreign subsidiaries [Member] | |||||||
Cash Equivalents and Investments [Line Items] | |||||||
Cash, cash equivalents and investments | $ 3,081,000,000 | $ 3,081,000,000 | $ 2,766,000,000 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Dec. 31, 2016 |
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | $ 2,725,167 | $ 2,434,145 |
Unrealized Gain | 1,638 | 819 |
Unrealized Loss | (2,206) | (2,769) |
Fair Value | 2,724,599 | 2,432,195 |
Debt securities due in one year or less | 1,591,388 | 1,388,537 |
Debt securities due after one year through three years | 837,219 | 843,605 |
Total debt securities | 2,428,607 | 2,232,142 |
Cash Equivalents [Member] | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 165,909 | 124,793 |
Unrealized Gain | 1 | |
Unrealized Loss | (1) | |
Fair Value | 165,908 | 124,794 |
Investments [Member] | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 2,559,258 | 2,309,352 |
Unrealized Gain | 1,638 | 818 |
Unrealized Loss | (2,205) | (2,769) |
Fair Value | 2,558,691 | 2,307,401 |
US Treasury Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 627,443 | 570,695 |
Unrealized Gain | 104 | 253 |
Unrealized Loss | (960) | (635) |
US Treasury Securities | Fair Value Measurements, Recurring | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Fair Value | 626,587 | 570,313 |
Foreign Government Debt Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 6,971 | 17,999 |
Unrealized Gain | 1 | |
Unrealized Loss | (3) | (8) |
Foreign Government Debt Securities | Fair Value Measurements, Recurring | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Fair Value | 6,969 | 17,991 |
Corporate Debt Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 1,794,831 | 1,645,468 |
Unrealized Gain | 1,463 | 496 |
Unrealized Loss | (1,243) | (2,126) |
Corporate Debt Securities | Fair Value Measurements, Recurring | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Fair Value | 1,795,051 | 1,643,838 |
Time Deposits | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 295,845 | 199,906 |
Time Deposits | Fair Value Measurements, Recurring | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Fair Value | 295,845 | 199,906 |
Equity Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 77 | 77 |
Unrealized Gain | 70 | 70 |
Equity Securities | Fair Value Measurements, Recurring | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Fair Value | $ 147 | $ 147 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Dec. 31, 2016 |
Inventory Items, Net Of Reserves Alternative [Abstract] | ||
Raw materials | $ 95,162 | $ 95,430 |
Work in progress | 16,970 | 16,585 |
Finished goods | 175,007 | 150,667 |
Total inventories | $ 287,139 | $ 262,682 |
Goodwill and Other Intangible39
Goodwill and Other Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||||
Goodwill | $ 357,122 | $ 357,122 | $ 352,080 | ||
Goodwill foreign currency translation adjustments | 5,000 | ||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, accumulated amortization | 435,874 | $ 435,874 | $ 390,920 | ||
Finite-lived intangible assets, average useful life in years | 7 years | 7 years | |||
Indefinite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | 13,781 | $ 13,781 | $ 13,544 | ||
Intangible Assets [Line Items] | |||||
Intangible assets, gross | 654,966 | 654,966 | 597,975 | ||
Intangible assets, gross foreign currency translation adjustments | 37,000 | ||||
Intangible assets, accumulated amortization foreign currency translation adjustments | 24,000 | ||||
Amortization expense | 12,000 | $ 11,000 | 22,000 | $ 22,000 | |
Finite-Lived Intangible Assets Future Amortization Expense [Abstract] | |||||
Future amortization expense, year 1 | 43,000 | 43,000 | |||
Future amortization expense, year 2 | 43,000 | 43,000 | |||
Future amortization expense, year 3 | 43,000 | 43,000 | |||
Future amortization expense, year 4 | 43,000 | 43,000 | |||
Future amortization expense, year 5 | 43,000 | 43,000 | |||
Capitalized software [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | 403,303 | 403,303 | 355,973 | ||
Finite-lived intangible assets, accumulated amortization | 257,347 | $ 257,347 | $ 223,572 | ||
Finite-lived intangible assets, average useful life in years | 5 years | 5 years | |||
Purchased intangibles [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | 167,123 | $ 167,123 | $ 162,180 | ||
Finite-lived intangible assets, accumulated amortization | 133,565 | $ 133,565 | $ 127,045 | ||
Finite-lived intangible assets, average useful life in years | 11 years | 11 years | |||
Licenses [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | 5,401 | $ 5,401 | $ 4,632 | ||
Finite-lived intangible assets, accumulated amortization | 4,260 | $ 4,260 | $ 3,851 | ||
Finite-lived intangible assets, average useful life in years | 6 years | 6 years | |||
Patents and other intangibles [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | 65,358 | $ 65,358 | $ 61,646 | ||
Finite-lived intangible assets, accumulated amortization | $ 40,702 | $ 40,702 | $ 36,452 | ||
Finite-lived intangible assets, average useful life in years | 8 years | 8 years |
Debt (Details)
Debt (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2017 | Dec. 31, 2016 | Apr. 30, 2015 | Jun. 30, 2013 | |||
Debt [Line Items] | ||||||
Notes payable and debt | $ 225,233,000 | $ 125,297,000 | ||||
Long-term debt | 1,687,233,000 | 1,701,966,000 | ||||
Total debt | 1,912,466,000 | 1,827,263,000 | ||||
Line of Credit [Line Items] | ||||||
Foreign subsidiary lines of credit | 233,000 | 297,000 | ||||
Line of credit maximum borrowing capacity | $ 82,000,000 | $ 79,000,000 | ||||
Line of credit interest rate during the period | 0.77% | 1.49% | ||||
Long-Term Liabilities | ||||||
Debt [Line Items] | ||||||
Unamortized debt issuance costs | $ (2,767,000) | $ (3,034,000) | ||||
Senior unsecured notes - Series B [Member] | ||||||
Debt [Line Items] | ||||||
Stated interest rate on debt instrument | 5.00% | |||||
Long-term debt | $ 100,000,000 | 100,000,000 | ||||
Senior unsecured notes - Series D [Member] | ||||||
Debt [Line Items] | ||||||
Stated interest rate on debt instrument | 3.22% | |||||
Notes payable and debt | $ 100,000,000 | |||||
Long-term debt | 100,000,000 | |||||
Senior unsecured notes - Series E [Member] | ||||||
Debt [Line Items] | ||||||
Stated interest rate on debt instrument | 3.97% | |||||
Long-term debt | $ 50,000,000 | 50,000,000 | ||||
Senior unsecured notes - Series F [Member] | ||||||
Debt [Line Items] | ||||||
Stated interest rate on debt instrument | 3.40% | |||||
Long-term debt | $ 100,000,000 | 100,000,000 | ||||
Senior unsecured notes - Series G [Member] | ||||||
Debt [Line Items] | ||||||
Stated interest rate on debt instrument | 3.92% | |||||
Long-term debt | $ 50,000,000 | 50,000,000 | ||||
Senior unsecured notes - Series H [Member] | ||||||
Debt [Line Items] | ||||||
Interest rate terms on debt | * Series H senior unsecured notes bear interest at a 3-month LIBOR for that floating rate interest period plus 1.25%. | |||||
Long-term debt | [1] | $ 50,000,000 | 50,000,000 | |||
Senior unsecured notes - Series I [Member] | ||||||
Debt [Line Items] | ||||||
Stated interest rate on debt instrument | 3.13% | |||||
Long-term debt | $ 50,000,000 | 50,000,000 | ||||
Senior unsecured notes - Series J [Member] | ||||||
Debt [Line Items] | ||||||
Interest rate terms on debt | ** Series J senior unsecured notes bear interest at a 3-month LIBOR for that floating rate interest period plus 1.45%. | |||||
Long-term debt | $ 40,000,000 | [2] | 40,000,000 | |||
Senior unsecured notes - Series K [Member] | ||||||
Debt [Line Items] | ||||||
Stated interest rate on debt instrument | 3.44% | |||||
Long-term debt | $ 160,000,000 | 160,000,000 | ||||
Credit Agreements | ||||||
Debt [Line Items] | ||||||
Interest rate terms on debt | The interest rates applicable to the Amended Credit Agreement are, at the Company’s option, equal to either the alternate base rate calculated daily (which is a rate per annum equal to the greatest of (a) the prime rate in effect on such day, (b) the federal funds effective rate in effect on such day plus 1/2% per annum, or (c) the adjusted LIBO rate on such day (or if such day is not a business day, the immediately preceding business day) for a deposit in U.S. dollars with a maturity of one month plus 1% per annum) or the applicable 1, 2, 3 or 6 month adjusted LIBO rate, in each case, plus an interest rate margin based upon the Company’s leverage ratio, which can range between 0 basis points to 12.5 basis points for alternate base rate loans and between 80 basis points and 117.5 basis points for adjusted LIBO rate loans. | |||||
Debt facility fee | The facility fee on the Amended Credit Agreement ranges between 7.5 basis points and 20 basis points. | |||||
Debt covenant description | The Amended Credit Agreement requires that the Company comply with an interest coverage ratio test of not less than 3.50:1 as of the end of any fiscal quarter for any period of four consecutive fiscal quarters and a leverage ratio test of not more than 3.50:1 as of the end of any fiscal quarter. | |||||
Notes payable and debt | $ 125,000,000 | 125,000,000 | ||||
Long-term debt | 1,090,000,000 | 1,005,000,000 | ||||
Unused borrowing capacity | 383,000,000 | 468,000,000 | ||||
Credit Agreements | Term loan facility [Member] | ||||||
Debt [Line Items] | ||||||
Face value of debt | $ 300,000,000 | |||||
Credit Agreements | Revolving facilities [Member] | ||||||
Debt [Line Items] | ||||||
Face value of debt | $ 1,300,000,000 | $ 1,100,000,000 | ||||
Notes payable and debt | 125,000,000 | |||||
Long-term debt | $ 790,000,000 | |||||
Unsecured debt | ||||||
Debt [Line Items] | ||||||
Call feature on debt instrument | The Company may prepay all or some of the senior unsecured notes at any time in an amount not less than 10% of the aggregate principal amount outstanding, plus the applicable make-whole amount or prepayment premium for Series H and J senior unsecured notes. In the event of a change in control of the Company (as defined in the note purchase agreement), the Company may be required to prepay the senior unsecured notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest. | |||||
Debt covenant description | These senior unsecured notes require that the Company comply with an interest coverage ratio test of not less than 3.50:1 for any period of four consecutive fiscal quarters and a leverage ratio test of not more than 3.50:1 as of the end of any fiscal quarter. | |||||
Total debt | $ 700,000,000 | $ 700,000,000 | ||||
Credit Agreements and Unsecured Debt [Member] | ||||||
Debt [Line Items] | ||||||
Weighted-average interest rate | 2.79% | 2.55% | ||||
[1] | * Series H senior unsecured notes bear interest at a 3-month LIBOR for that floating rate interest period plus 1.25%. | |||||
[2] | ** Series J senior unsecured notes bear interest at a 3-month LIBOR for that floating rate interest period plus 1.45%. |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Effective Income Tax Rate Reconciliation, Percent [Line Items] | ||||
Income tax holiday amount | $ 11 | $ 10 | ||
Income tax holiday per share benefit | $ 0.14 | $ 0.12 | ||
Effective income tax rate | 11.00% | 11.90% | 9.20% | 11.80% |
United States [Member] | ||||
Effective Income Tax Rate Reconciliation, Percent [Line Items] | ||||
Marginal effective income tax rate | 37.50% | |||
Ireland [Member] | ||||
Effective Income Tax Rate Reconciliation, Percent [Line Items] | ||||
Marginal effective income tax rate | 12.50% | |||
United Kingdom [Member] | ||||
Effective Income Tax Rate Reconciliation, Percent [Line Items] | ||||
Marginal effective income tax rate | 19.25% | |||
Singapore [Member] | ||||
Effective Income Tax Rate Reconciliation, Percent [Line Items] | ||||
Marginal effective income tax rate | 0.00% | |||
Statutory tax rate | 17.00% | |||
ASU 2016-09 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Quantification of adoption of new accounting pronouncement or change in accounting principle | $ (4) | $ (12) | ||
Percentage point change in effective tax rate relating to new accounting pronouncement or change in accounting principle | (3) | (4.5) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | ||
Unrecognized tax benefits, balance at the beginning of the period | $ 9,964 | $ 14,450 |
Net changes in uncertain tax benefits | (1,870) | (2,563) |
Unrecognized tax benefits, balance at the end of the period | 8,094 | $ 11,887 |
Expected change in unrecognized tax benefits in the next twelve months | $ (3,000) |
Litigation (Details)
Litigation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jul. 01, 2017 | Jul. 01, 2017 | Dec. 31, 2016 | |
Litigation [Abstract] | |||
Litigation provisions | $ 10,018 | $ 10,018 | |
Accrued Patent Litigation | $ 16,000 | $ 16,000 | $ 7,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Stock Options Outstanding Roll Forward [Abstract] | ||||
Options outstanding at beginning of period | 2,697 | |||
Options granted | 207 | 86 | ||
Options exercised | (619) | |||
Options canceled | (44) | |||
Options outstanding at end of period | 2,241 | 2,241 | ||
Weighted-average exercise price of options outstanding at beginning of period | $ 106.55 | |||
Weighted-average exercise price of options granted | 149.74 | $ 122.65 | ||
Weighted-average exercise price of options exercised | 88.36 | |||
Weighted average exercise price of options canceled | 114.38 | |||
Weighted-average exercise price of options outstanding at end of period | $ 115.41 | $ 115.41 | ||
Stock-Based Compensation Allocation of Recognized Period Expense [Line Items] | ||||
Allocated stock-based compensation expense | $ 9,139,000 | $ 8,396,000 | $ 17,794,000 | $ 24,237,000 |
Incremental stock-based compensation cost due to acceleration of awards | $ 7,000,000 | |||
Minimum | ||||
Stock Options Outstanding Roll Forward [Abstract] | ||||
Weighted-average exercise price of options outstanding at beginning of period | $ 38.09 | |||
Weighted-average exercise price of options granted | 136.43 | |||
Weighted-average exercise price of options exercised | 41.20 | |||
Weighted average exercise price of options canceled | 87.06 | |||
Weighted-average exercise price of options outstanding at end of period | $ 38.09 | 38.09 | ||
Maximum | ||||
Stock Options Outstanding Roll Forward [Abstract] | ||||
Weighted-average exercise price of options outstanding at beginning of period | 139.51 | |||
Weighted-average exercise price of options granted | 154.33 | |||
Weighted-average exercise price of options exercised | 134.37 | |||
Weighted average exercise price of options canceled | 136.43 | |||
Weighted-average exercise price of options outstanding at end of period | $ 154.33 | $ 154.33 | ||
Stock Options | ||||
Stock-Based Compensation Fair Value Assumptions and Methodology [Abstract] | ||||
Fair value assumptions, risk free interest rate | 2.20% | 1.50% | ||
Fair value assumptions, expected life in years | 6 years | 5 years | ||
Fair value assumptions, expected volatility | 23.20% | 28.60% | ||
Fair value assumptions, expected dividends | $ 0 | $ 0 | ||
Weighted-average grant date fair value of options granted | $ 40.39 | $ 34.63 | ||
Restricted Stock Plan | ||||
Unvested Awards Roll Forward | ||||
Shares granted | 7 | |||
Weighted-average grant date fair value of shares granted | $ 136.43 | |||
Restricted Stock Unit Plan | ||||
Stock-Based Compensation by Award [Line Items] | ||||
Award vesting period | 5 years | |||
Unvested Awards Roll Forward | ||||
Unvested shares at beginning of period | 453 | |||
Shares granted | 106 | |||
Shares vested | (131) | |||
Shares forfeited | (15) | |||
Unvested shares at end of period | 413 | 413 | ||
Weighted-average grant date fair value of shares unvested at beginning of period | $ 110.34 | |||
Weighted-average grant date fair value of shares granted | 154.23 | |||
Weighted-average grant date fair value of shares vested | 105.18 | |||
Weighted-average grant date fair value of shares forfeited | 115.34 | |||
Weighted-average grant date fair value of shares unvested at end of period | $ 123.06 | $ 123.06 | ||
Performance Stock Unit Plan | ||||
Stock-Based Compensation Fair Value Assumptions and Methodology [Abstract] | ||||
Fair value assumptions, risk free interest rate | 1.50% | |||
Fair value assumptions, expected life in years | 3 years | |||
Fair value assumptions, expected volatility | 23.20% | |||
Fair value assumptions, expected volatility of peer companies | 26.10% | |||
Fair value assumptions, correlation coefficient | 38.50% | |||
Fair value assumptions, expected dividends | $ 0 | |||
Unvested Awards Roll Forward | ||||
Unvested shares at beginning of period | 27 | |||
Shares granted | 20 | |||
Unvested shares at end of period | 47 | 47 | ||
Weighted-average grant date fair value of shares unvested at beginning of period | $ 171.16 | |||
Weighted-average grant date fair value of shares granted | 198.78 | |||
Weighted-average grant date fair value of shares unvested at end of period | $ 184.40 | $ 184.40 | ||
Performance Stock Unit Plan | Minimum | ||||
Stock-Based Compensation by Award [Line Items] | ||||
Award vesting rights | 0.00% | |||
Performance Stock Unit Plan | Maximum | ||||
Stock-Based Compensation by Award [Line Items] | ||||
Award vesting rights | 200.00% | |||
Cost of sales [Member] | ||||
Stock-Based Compensation Allocation of Recognized Period Expense [Line Items] | ||||
Allocated stock-based compensation expense | $ 787,000 | 656,000 | $ 1,525,000 | $ 1,327,000 |
Selling and administrative expenses [Member] | ||||
Stock-Based Compensation Allocation of Recognized Period Expense [Line Items] | ||||
Allocated stock-based compensation expense | 7,602,000 | 6,613,000 | 14,790,000 | 20,582,000 |
Research and development expenses [Member] | ||||
Stock-Based Compensation Allocation of Recognized Period Expense [Line Items] | ||||
Allocated stock-based compensation expense | $ 750,000 | $ 1,127,000 | $ 1,479,000 | $ 2,328,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Earnings Per Share Reconciliation [Abstract] | ||||
Net income | $ 131,822 | $ 128,217 | $ 237,379 | $ 222,269 |
Net income per basic common share | $ 1.65 | $ 1.59 | $ 2.97 | $ 2.74 |
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities on earnings per share | (0.02) | (0.02) | (0.03) | (0.02) |
Net income per diluted common share | $ 1.63 | $ 1.57 | $ 2.94 | $ 2.72 |
Weighted-average number of basic common shares | 79,979 | 80,804 | 80,029 | 81,043 |
Effect of dilutive stock option, restricted stock and restricted stock unit securities on shares outstanding | 777 | 651 | 740 | 620 |
Weighted-average number of diluted common shares and equivalents | 80,756 | 81,455 | 80,769 | 81,663 |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 400 | 800 | 500 | 1,200 |
Accumulated Other Comprehensi46
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Accumulated Other Comprehensive Income [Line Items] | ||||
Accumulated other comprehensive loss, balance at the beginning of the period | $ (216,280) | |||
Other comprehensive income (loss), net of tax | $ 38,762 | $ (28,982) | 68,505 | $ (10,203) |
Accumulated other comprehensive loss, balance at the end of the period | (147,775) | (147,775) | ||
Currency Translation Adjustment | ||||
Accumulated Other Comprehensive Income [Line Items] | ||||
Accumulated other comprehensive loss, balance at the beginning of the period | (170,566) | |||
Other comprehensive income (loss), net of tax | 67,382 | |||
Accumulated other comprehensive loss, balance at the end of the period | (103,184) | (103,184) | ||
Unrealized Gain (Loss) on Retirement Plans | ||||
Accumulated Other Comprehensive Income [Line Items] | ||||
Accumulated other comprehensive loss, balance at the beginning of the period | (43,894) | |||
Other comprehensive income (loss), net of tax | (160) | |||
Accumulated other comprehensive loss, balance at the end of the period | (44,054) | (44,054) | ||
Unrealized Gain (Loss) on Investments | ||||
Accumulated Other Comprehensive Income [Line Items] | ||||
Accumulated other comprehensive loss, balance at the beginning of the period | (1,820) | |||
Other comprehensive income (loss), net of tax | 1,283 | |||
Accumulated other comprehensive loss, balance at the end of the period | $ (537) | $ (537) |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Minimum | ||||
Amounts Recognized in Other Comprehensive Income [Abstract] | ||||
Estimated future employer contributions in current fiscal year | $ 6,000 | |||
Maximum | ||||
Amounts Recognized in Other Comprehensive Income [Abstract] | ||||
Estimated future employer contributions in current fiscal year | 11,000 | |||
U.S. Pension Plans | ||||
Net Periodic Benefit Cost [Abstract] | ||||
Service cost | $ 124 | $ 94 | 225 | $ 188 |
Interest cost | 1,696 | 1,745 | 3,415 | 3,490 |
Expected return on plan assets | (2,487) | (2,417) | (5,150) | (4,834) |
Net amortization: Net actuarial loss | 734 | 667 | 1,385 | 1,334 |
Net periodic pension (benefit) cost | 67 | 89 | (125) | 178 |
U.S. Retiree Healthcare Plan | ||||
Net Periodic Benefit Cost [Abstract] | ||||
Service cost | 170 | 116 | 273 | 232 |
Interest cost | 159 | 135 | 309 | 270 |
Expected return on plan assets | (147) | (130) | (294) | (260) |
Net periodic pension (benefit) cost | 182 | 121 | 288 | 242 |
Non-U.S. Pension Plans | ||||
Net Periodic Benefit Cost [Abstract] | ||||
Service cost | 1,240 | 1,250 | 2,491 | 2,468 |
Interest cost | 368 | 429 | 726 | 850 |
Expected return on plan assets | (414) | (406) | (816) | (805) |
Net amortization: Prior service credit | (47) | (49) | (93) | (94) |
Net amortization: Net actuarial loss | 235 | 192 | 466 | 380 |
Net periodic pension (benefit) cost | $ 1,382 | $ 1,416 | $ 2,774 | $ 2,799 |
Business Segment Information (D
Business Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | |
Business Segment Information [Line Items] | ||||
Number of operating segments | 2 | |||
Number of reportable segments | 1 | |||
Product sales | $ 372,838 | $ 359,687 | $ 697,134 | $ 667,544 |
Service sales | 185,412 | 176,873 | 359,085 | 344,262 |
Total net sales | 558,250 | 536,560 | 1,056,219 | 1,011,806 |
Waters instrument systems [Member] | ||||
Business Segment Information [Line Items] | ||||
Product sales | 238,548 | 231,908 | 436,337 | 420,437 |
Chemistry [Member] | ||||
Business Segment Information [Line Items] | ||||
Product sales | 90,824 | 87,048 | 178,727 | 171,198 |
TA instrument systems [Member] | ||||
Business Segment Information [Line Items] | ||||
Product sales | 43,466 | 40,731 | 82,070 | 75,909 |
Waters service [Member] | ||||
Business Segment Information [Line Items] | ||||
Service sales | 168,408 | 159,775 | 326,142 | 311,289 |
TA service [Member] | ||||
Business Segment Information [Line Items] | ||||
Service sales | $ 17,004 | $ 17,098 | $ 32,943 | $ 32,973 |
Recent Accounting Standard Ch49
Recent Accounting Standard Changes and Developments (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income per diluted common share | $ 1.63 | $ 1.57 | $ 2.94 | $ 2.72 |
Accounting Standards Update 2016-09 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Quantification of adoption of new accounting pronouncement or change in accounting principle | $ (4) | $ (12) | ||
Net income per diluted common share | $ 0.05 | $ 0.14 | ||
Description of prior period information retrospectively adjusted as a result of new accounting pronouncement or change in accounting principle | In addition, the Company reclassified $4 million of excess tax benefits related to stock-based compensation for the first six months of 2016 from cash flows from financing activities to cash flows from operating activities. |