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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________ 
FORM 10-Q
_______________________________________ 
(Mark One)
ý☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 2017April 3, 2022
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 001-5075
_______________________________________ 
PerkinElmer, Inc.
(Exact name of Registrant as specified in its Charter)
_______________________________________ 
Massachusetts04-2052042
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)
940 Winter Street,Waltham,Massachusetts02451
(Address of principal executive offices)(Zip Code)
940 Winter Street
Waltham, Massachusetts 02451
(Address of principal executive offices) (Zip code)
(781) 663-6900
(Registrant’s telephone number, including area code)
_______________________________________ ______________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol (s)Name of each exchange on which registered
Common stock, $1 par value per sharePKIThe New York Stock Exchange
1.875% Notes due 2026PKI 21AThe New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý☑    No  ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,"filer”, “smaller reporting company,"company”, and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filerý☑Accelerated filer¨☐
Non-accelerated filer
¨ (Do not check if a smaller reporting company)
☐		Smaller reporting company¨☐
Emerging growth company
¨
☐
If an emerging growth company, indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨☐    No  ý☑
As of November 2, 2017,May 5, 2022, there were outstanding 110,225,251126,148,473 shares of common stock, $1 par value per share.


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TABLE OF CONTENTS
 
Page
PART I. FINANCIAL INFORMATION
Page
PART I. FINANCIAL INFORMATION
Item 1.
34
34
45
56
7
68
710
Item 2.
3225
3225
3325
3326
3828
4029
4431
44
Effects of Recently Adopted and Issued Accounting Pronouncements
4431
Item 3.
4532
Item 4.
4632
PART II. OTHER INFORMATION
Item 1.
4733
Item 1A.
4733
Item 2.
5442
Item 6.
5543
5644




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PART I. FINANCIAL INFORMATION


Item 1.Unaudited Financial Statements

Item 1.Unaudited Financial Statements

PERKINELMER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended Three Months Ended
October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016		 April 3,
2022		April 4,
2021
(In thousands, except per share data) (In thousands, except per share data)
Product revenue$354,819
 $334,894
 $1,043,534
 $1,016,221
Product revenue$866,945 $811,552 
Service revenue199,456
 179,595
 571,818
 532,526
Service revenue392,497 496,137 
Total revenue554,275
 514,489
 1,615,352
 1,548,747
Total revenue1,259,442 1,307,689 
Cost of product revenue165,160
 155,668
 501,468
 483,202
Cost of product revenue403,651 339,312 
Cost of service revenue120,293
 110,271
 347,948
 328,355
Cost of service revenue176,560 183,231 
Total cost of revenue285,453
 265,939
 849,416
 811,557
Total cost of revenue580,211 522,543 
Selling, general and administrative expenses150,859
 142,600
 443,896
 438,090
Selling, general and administrative expenses334,393 251,410 
Research and development expenses34,887
 29,513
 101,737
 91,352
Research and development expenses76,609 60,216 
Restructuring and contract termination charges, net3,269
 656
 12,920
 5,124
Restructuring and other costs, netRestructuring and other costs, net13,384 5,744 
Operating income from continuing operations79,807
 75,781
 207,383
 202,624
Operating income from continuing operations254,845 467,776 
Interest and other (income) expense, net(25,247) 11,263
 (8,446) 27,742
Interest and other expense (income), netInterest and other expense (income), net37,245 (12,706)
Income from continuing operations before income taxes105,054
 64,518
 215,829
 174,882
Income from continuing operations before income taxes217,600 480,482 
Provision for income taxes8,508
 10,601
 20,495
 21,465
Provision for income taxes40,597 101,139 
Income from continuing operations96,546
 53,917
 195,334
 153,417
Income from continuing operations177,003 379,343 
Income from discontinued operations before income taxes—
 5,447
 650
 18,564
(Loss) gain on disposition of discontinued operations before income taxes(206) 630
 180,171
 619
Loss on disposition of discontinued operations before income taxesLoss on disposition of discontinued operations before income taxes— — 
Provision for income taxes on discontinued operations and dispositions5,262
 1,867
 42,405
 3,150
Provision for income taxes on discontinued operations and dispositions41 38 
(Loss) income from discontinued operations and dispositions(5,468) 4,210
 138,416
 16,033
Loss from discontinued operations and dispositionsLoss from discontinued operations and dispositions(41)(38)
Net income$91,078
 $58,127
 $333,750
 $169,450
Net income$176,962 $379,305 
Basic earnings per share:       Basic earnings per share:
Income from continuing operations$0.88
 $0.49
 $1.78
 $1.40
Income from continuing operations$1.40 $3.39 
(Loss) income from discontinued operations and dispositions(0.05) 0.04
 1.26
 0.15
Loss from discontinued operations and dispositionsLoss from discontinued operations and dispositions(0.00)(0.00)
Net income$0.83
 $0.53
 $3.04
 $1.55
Net income$1.40 $3.39 
Diluted earnings per share:       Diluted earnings per share:
Income from continuing operations$0.87
 $0.49
 $1.77
 $1.39
Income from continuing operations$1.40 $3.37 
(Loss) income from discontinued operations and dispositions(0.05) 0.04
 1.25
 0.15
Loss from discontinued operations and dispositionsLoss from discontinued operations and dispositions(0.00)(0.00)
Net income$0.82
 $0.53
 $3.02
 $1.54
Net income$1.40 $3.37 
Weighted average shares of common stock outstanding:       Weighted average shares of common stock outstanding:
Basic110,003
 109,192
 109,788
 109,524
Basic126,137 112,028 
Diluted110,993
 110,078
 110,653
 110,372
Diluted126,635 112,495 
Cash dividends declared per common share$0.07
 $0.07
 $0.21
 $0.21
Cash dividends declared per common share$0.07 $0.07 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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PERKINELMER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
Three Months Ended
April 3,
2022		April 4,
2021
(In thousands)
Net income$176,962 $379,305 
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of income taxes(84,011)(72,305)
Unrealized (loss) gain on securities, net of income taxes(16)94 
Other comprehensive loss(84,027)(72,211)
Comprehensive income$92,935 $307,094 
 Three Months Ended Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Net income$91,078
 $58,127
 $333,750
 $169,450
Other comprehensive income (loss):       
Foreign currency translation adjustments9,805
 (9,441) 47,205
 (8,868)
Unrealized gains on securities, net of tax47
 9
 81
 39
Other comprehensive income (loss)9,852
 (9,432) 47,286
 (8,829)
Comprehensive income$100,930
 $48,695
 $381,036
 $160,621




















The accompanying notes are an integral part of these condensed consolidated financial statements.
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PERKINELMER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
October 1,
2017		 January 1,
2017		April 3,
2022		January 2,
2022
(In thousands, except share and per share data) (In thousands, except share and per share data)
Current assets:   Current assets:
Cash and cash equivalents$709,488
 $359,265
Cash and cash equivalents$669,755 $618,319 
Accounts receivable, net440,649
 425,588
Accounts receivable, net941,722 1,023,792 
Inventories295,176
 246,847
Inventories645,924 624,714 
Other current assets100,347
 99,246
Other current assets197,110 173,955 
Current assets of discontinued operations—
 58,985
Total current assets1,545,660
 1,189,931
Total current assets2,454,511 2,440,780 
Property, plant and equipment:   
At cost475,106
 427,903
Accumulated depreciation(317,441) (282,409)
Property, plant and equipment, net157,665
 145,494
Property, plant and equipment, net547,035 545,605 
Operating lease right-of-use assetsOperating lease right-of-use assets201,966 207,775 
Intangible assets, net441,425
 420,224
Intangible assets, net3,942,878 4,063,104 
Goodwill2,373,009
 2,247,966
Goodwill7,367,284 7,416,584 
Other assets, net221,196
 204,679
Other assets, net334,793 326,706 
Long-term assets of discontinued operations—
 68,389
Total assets$4,738,955
 $4,276,683
Total assets$14,848,467 $15,000,554 
Current liabilities:   Current liabilities:
Current portion of long-term debt$1,294
 $1,172
Current portion of long-term debt$3,729 $4,240 
Accounts payable163,735
 168,033
Accounts payable376,694 355,458 
Accrued restructuring and contract termination charges10,066
 7,479
Accrued expenses and other current liabilities420,263
 399,700
Accrued expenses and other current liabilities882,628 854,046 
Current liabilities of discontinued operations2,154
 26,971
Total current liabilities597,512
 603,355
Total current liabilities1,263,051 1,213,744 
Long-term debt1,109,269
 1,045,254
Long-term debt4,863,978 4,979,737 
Long-term liabilities496,145
 459,544
Long-term liabilities of discontinued operations—
 14,960
Deferred taxes and long-term liabilitiesDeferred taxes and long-term liabilities1,354,991 1,480,469 
Operating lease liabilitiesOperating lease liabilities180,105 185,359 
Total liabilities2,202,926
 2,123,113
Total liabilities7,662,125 7,859,309 
Commitments and contingencies (see Note 18)
 
Commitments and contingencies (see Note 14)Commitments and contingencies (see Note 14)00
Stockholders’ equity:   Stockholders’ equity:
Preferred stock—$1 par value per share, authorized 1,000,000 shares; none issued or outstanding—
 —
Preferred stock—$1 par value per share, authorized 1,000,000 shares; none issued or outstanding— — 
Common stock—$1 par value per share, authorized 300,000,000 shares; issued and outstanding 110,207,000 shares and 109,617,000 shares at October 1, 2017 and at January 1, 2017, respectively110,207
 109,617
Common stock—$1 par value per share, authorized 300,000,000 shares; issued and outstanding 126,140,000 shares and 126,241,000 shares at April 3, 2022 and January 2, 2022, respectivelyCommon stock—$1 par value per share, authorized 300,000,000 shares; issued and outstanding 126,140,000 shares and 126,241,000 shares at April 3, 2022 and January 2, 2022, respectively126,140 126,241 
Capital in excess of par value50,036
 26,130
Capital in excess of par value2,721,690 2,760,522 
Retained earnings2,429,361
 2,118,684
Retained earnings4,585,231 4,417,174 
Accumulated other comprehensive loss(53,575) (100,861)Accumulated other comprehensive loss(246,719)(162,692)
Total stockholders’ equity2,536,029
 2,153,570
Total stockholders’ equity7,186,342 7,141,245 
Total liabilities and stockholders’ equity$4,738,955
 $4,276,683
Total liabilities and stockholders’ equity$14,848,467 $15,000,554 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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PERKINELMER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSSTOCKHOLDERS’ EQUITY
(Unaudited)
 Nine Months Ended
 October 1,
2017		 October 2,
2016
 (In thousands)
Operating activities:   
Net income$333,750
 $169,450
Income from discontinued operations and dispositions, net of income taxes(138,416) (16,033)
Income from continuing operations195,334
 153,417
Adjustments to reconcile income from continuing operations to net cash provided by continuing operations:   
Restructuring and contract termination charges, net12,920
 5,124
Depreciation and amortization75,507
 74,507
Loss (gain) on disposition of businesses and assets, net301
 (5,562)
Stock-based compensation16,179
 13,449
Change in fair value of contingent consideration1,560
 9,678
Amortization of deferred debt financing costs and accretion of discount1,936
 1,507
Amortization of acquired inventory revaluation4,240
 396
Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired:   
Accounts receivable, net10,971
 5,081
Inventories(25,208) (14,022)
Accounts payable(12,459) 5,863
Accrued expenses and other(116,118) (68,248)
Net cash provided by operating activities of continuing operations165,163
 181,190
Net cash (used in) provided by operating activities of discontinued operations(4,806) 20,702
Net cash provided by operating activities160,357
 201,892
Investing activities:   
Capital expenditures(22,362) (24,411)
Settlement of cash flow hedges

60,420
 —
Proceeds from disposition of businesses—
 21,000
Proceeds from surrender of life insurance policies45
 44
Changes in restricted cash balances17,218
 (2,000)
Activity related to acquisitions, net of cash and cash equivalents acquired(123,578) (71,924)
Net cash used in investing activities of continuing operations(68,257) (77,291)
Net cash provided by (used in) investing activities of discontinued operations272,779
 (900)
Net cash provided by (used in) investing activities204,522
 (78,191)
Financing activities:   
Payments on borrowings(146,965) (804,507)
Proceeds from borrowings146,952
 375,507
Proceeds from sale of senior debt—
 546,190
Payments of debt financing costs—
 (7,868)
Settlement of cash flow hedges(11,539) 1,674
Net payments on other credit facilities(872) (835)
Payments for acquisition-related contingent consideration(8,940) (113)
Proceeds from issuance of common stock under stock plans14,004
 12,081
Purchases of common stock(3,480) (151,447)
Dividends paid(23,077) (23,131)
Net cash used in financing activities of continuing operations(33,917) (52,449)
Net cash used in financing activities of discontinued operations(533) (193)
Net cash used in financing activities(34,450) (52,642)
Effect of exchange rate changes on cash and cash equivalents19,794
 2,672
Net increase in cash and cash equivalents350,223
 73,731
Cash and cash equivalents at beginning of period359,265
 237,932
Cash and cash equivalents at end of period$709,488
 $311,663

For the Three-Month Period Ended April 3, 2022
Common
Stock
Shares		Common
Stock
Amount		Capital in
Excess of
Par Value		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
(In thousands)
Balance, January 2, 2022126,241 $126,241 $2,760,522 $4,417,174 $(162,692)$7,141,245 
Net income— — — 176,962 — 176,962 
Other comprehensive loss— — — — (84,027)(84,027)
Dividends— — — (8,905)— (8,905)
Exercise of employee stock options and related income tax benefits18 18 1,379 — — 1,397 
Purchases of common stock(307)(307)(55,285)— — (55,592)
Issuance of common stock for long-term incentive program188 188 12,282 — — 12,470 
Stock compensation— — 2,792 — — 2,792 
Balance, April 3, 2022126,140 $126,140 $2,721,690 $4,585,231 $(246,719)$7,186,342 

For the Three-Month Period Ended April 4, 2021
Common
Stock
Shares		Common
Stock
Amount		Capital in
Excess of
Par Value		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
(In thousands)
Balance, January 3, 2021112,090 $112,090 $148,101 $3,507,262 $(31,961)$3,735,492 
Net income— — — 379,305 — 379,305 
Other comprehensive loss— — — — (72,211)(72,211)
Dividends— — — (7,846)— (7,846)
Exercise of employee stock options and related income tax benefits95 95 4,892 — — 4,987 
Issuance of common stock for employee stock purchase plans— — 8 — — 8 
Purchases of common stock(295)(295)(42,484)— — (42,779)
Issuance of common stock for long-term incentive program176 176 4,274 — — 4,450 
Stock compensation— — 899 — — 899 
Balance, April 4, 2021112,066 $112,066 $115,690 $3,878,721 $(104,172)$4,002,305 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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PERKINELMER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
 April 3,
2022		April 4,
2021
 (In thousands)
Operating activities:
Net income$176,962 $379,305 
Loss from discontinued operations and dispositions, net of income taxes41 38 
Income from continuing operations177,003 379,343 
Adjustments to reconcile income from continuing operations to net cash provided by continuing operations:
Stock-based compensation15,262 5,157 
Restructuring and other costs, net13,384 5,744 
Depreciation and amortization120,052 70,186 
Change in fair value of contingent consideration693 240 
Amortization of deferred debt financing costs and accretion of discounts and debt extinguishment costs1,900 896 
Change in fair value of financial securities12,125 (19,298)
Amortization of acquired inventory revaluation16,868 2,981 
Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired:
Accounts receivable, net69,065 165,190 
Inventories(46,968)(15,008)
Accounts payable26,352 (5,048)
Accrued expenses and other(122,521)(116,883)
Net cash provided by operating activities of continuing operations283,215 473,500 
Investing activities:
Capital expenditures(29,431)(14,311)
Purchases of investments(22,995)(4,000)
Cash paid for acquisitions, net of cash, cash equivalents and restricted cash acquired(3,880)(443,543)
Net cash used in investing activities of continuing operations(56,306)(461,854)
Financing activities:
Payments on borrowings(220,000)(743,545)
Proceeds from borrowings220,000 584,000 
Payments of term loan(100,000)— 
Proceeds from sale of senior unsecured notes— 799,856 
Payments of debt financing and equity issuance costs— (7,882)
Settlement of cash flow hedges(762)6,005 
Net payments on other credit facilities(1,064)(9,799)
Proceeds from issuance of common stock under stock plans1,397 4,987 
Purchases of common stock(55,592)(42,779)
Dividends paid(8,837)(7,852)
Net cash (used in) provided by financing activities of continuing operations(164,858)582,991 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(10,636)(6,849)
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Net increase in cash, cash equivalents and restricted cash51,415 587,788 
Cash, cash equivalents and restricted cash at beginning of period619,337 402,613 
Cash, cash equivalents and restricted cash at end of period$670,752 $990,401 
Supplemental disclosures of cash flow information
Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows:
Cash and cash equivalents$669,755 $988,234 
Restricted cash included in other current assets997 2,167 
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows$670,752 $990,401 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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PERKINELMER, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Note 1: Basis of Presentation
The condensed consolidated financial statements included herein have been prepared by PerkinElmer, Inc. (the “Company”), in accordance with accounting principles generally accepted in the United States of America (the “U.S.” or the "United States") and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information in the footnote disclosures of the financial statements has been condensed or omitted where it substantially duplicates information provided in the Company’s latest audited consolidated financial statements, in accordance with the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in its Annual Report on Form 10-K for the fiscal year ended January 1, 2017,2, 2022, filed with the SEC (the “2016“2021 Form 10-K”). The balance sheet amounts at January 1, 20172, 2022 in this report were derived from the Company’s audited 20162021 consolidated financial statements included in the 20162021 Form 10-K. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods indicated. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for the three and nine months ended October 1, 2017April 3, 2022 and October 2, 2016,April 4, 2021, respectively, are not necessarily indicative of the results for the entire fiscal year or any future period.


The Company’s fiscal year ends
Note 2: Revenue

Disaggregation of revenue
In the following tables, revenue is disaggregated by primary geographical markets, primary end-markets and timing of revenue recognition.
Reportable Segments
Three Months Ended
April 3, 2022April 4, 2021
Discovery & Analytical SolutionsDiagnosticsTotalDiscovery & Analytical SolutionsDiagnosticsTotal
(In thousands)
Primary geographical markets
Americas$273,158 $327,936 $601,094 $175,115 $400,927 $576,042 
Europe158,238 198,168 356,406 135,458 311,743 447,201 
Asia170,970 130,972 301,942 144,036 140,410 284,446 
$602,366 $657,076 $1,259,442 $454,609 $853,080 $1,307,689 
Primary end-markets
Diagnostics$— $657,076 $657,076 $— $853,080 $853,080 
Life sciences412,409 — 412,409 277,201 — 277,201 
Applied markets189,957 — 189,957 177,408 — 177,408 
$602,366 $657,076 $1,259,442 $454,609 $853,080 $1,307,689 
Timing of revenue recognition
Products and services transferred at a point in time$461,314 $554,520 $1,015,834 $326,662 $615,106 $941,768 
Services transferred over time141,052 102,556 243,608 127,947 237,974 365,921 
$602,366 $657,076 $1,259,442 $454,609 $853,080 $1,307,689 
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Major Customer Concentration
Revenues from one customer in the Company's Diagnostics segment represent approximately $112.7 million and $205.6 million of the Company's total revenue for the three months ended April 3, 2022 and April 4, 2021, respectively.
On March 31, 2022, the Company was notified by the California Department of Public Health (“CDPH”) that, due to the decrease in COVID-19 cases and the related decreased need for testing for COVID-19, the CDPH intends to end its contract with the Company for the supply and operation of the Valencia Branch Laboratory effective on the Sunday nearest December 31.May 15, 2022. The Company reports fiscal years under a 52/53 week format andshall recognize the unamortized contract liability pertaining to the nonrefundable prepayment as a result, certain fiscal years will contain 53 weeks.revenue over the remaining period through May 15, 2022. As of March 31, 2022, the unamortized contract liability was $126.2 million. The fiscal year ending December 31, 2017 ("fiscal year 2017") will include 52 weeks, and the fiscal year ended January 1, 2017 ("fiscal year 2016") included 52 weeks.

Recently Adopted and Issued Accounting Pronouncements: From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the "FASB") and are adopted bycontract liability that the Company as of the specified effective dates. Unless otherwise discussed, such pronouncements did not have or will not have a significant impact on the Company’s consolidated financial position, results of operations and cash flows or do not applyexpects to the Company’s operations.

In August 2017, the FASB issued Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"), which amends the hedge accounting recognition and presentation requirementsrecognize in Topic 815. ASU 2017-12 makes targeted changes to the existing hedge accounting model to better align the entity’s financial reporting for hedging relationships with the entity’s risk management activities, and to reduce the complexity of, and simplify the application of, the hedge accounting model. Specifically, ASU 2017-12 expands the types of transactions eligible for hedge accounting, eliminates the requirement to separately measure and present hedge ineffectiveness, simplifies the way assessments of hedge ineffectiveness may be performed, relaxes the documentation requirements for entering into hedging positions, provides targeted improvements to fair value hedges of interest rate risk, and permits an entity to exclude the changerevenue in the fair value of cross-currency basis spreads in currency swaps from the assessment of hedge effectiveness. The standard also requires entities to provide new disclosures about the impact fair value and cash flow hedges have on the income statement and about cumulative basis adjustments arising from fair value hedges. The provisions of this guidance are to be applied using a modified retrospective approach to existing hedging relationships as of the adoption date. However, the transition provisions allow for certain elections at the date of adoption and entities may choose to apply any of the provided elections. ASU 2017-12 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted, including adoption in any interim period. The Company is evaluating the requirements of this guidance. The adoption is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting ("ASU 2017-09"), which amends the scope of modification accounting for share-based payment arrangements. ASU 2017-09 provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Topic 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. If an entity modifies its awards and concludes that it is not required to apply modification accounting under the standard, it must still consider whether the modification affects its application of other guidance. Additionally, if a significant modification does not result in incremental compensation cost, entities are required to disclose the “lack of” incremental compensation cost resulting from such significant modification. The standard also removes
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the guidance in Topic 718 stating that modification accounting is not required when an entity adds an antidilution provision as long as that modification is not made in contemplation of an equity restructuring. The provisions of this guidance are to be applied on a prospective basis to awards modified on or after the effective date. ASU 2017-09 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted, including adoption in any interim period. The Company is evaluating the requirements of this guidance. The adoption is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In March 2017, the FASB issued Accounting Standards Update No. 2017-07, Compensation - Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ("ASU 2017-07"), which amends the requirements in Topic 715 related to the income statement presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. ASU 2017-07 requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current employee compensation costs in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations, and disclose the income statement lines that contain the other components if they are not presented on appropriately described separate lines. Additionally, the standard requires that only the service-cost component of net benefit cost is eligible for capitalization (e.g., as part of inventory or property, plant, and equipment). The change in income statement presentation requires retrospective application, while the change in capitalized benefit cost is to be applied prospectively. ASU 2017-07 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The standard provides a practical expedient that permits entities to use the components of cost disclosed in prior years as a basis for the retrospective application of the new income statement presentation. Entities need to disclose the use of the practical expedient. The Company is evaluating the requirements of this guidance. The adoption is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles-Goodwill and Other Topic (Topic 350), Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which amends Topic 350 to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 requires that an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize the impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider the income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The provisions of this guidance are to be applied on a prospective basis. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company early adopted ASU 2017-04 and will apply the provisions of this standard in its interim or annual goodwill impairment tests subsequent to January 2, 2017.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business ("ASU 2017-01"), which amends Topic 805 to provide a screen to determine when a set of assets and liabilities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, the standard (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace missing elements. The standard provides a framework to assist entities in evaluating whether both an input and a substantive process are present. The standard also provides a framework that includes two sets of criteria to consider that depend on whether a set has outputs and a more stringent criteria for sets without outputs. Lastly, the standard narrows the definition of the term "output" so that the term is consistent with how outputs are described in Topic 606, Revenue from Contracts with Customers. The provisions of this guidance are to be applied prospectively. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted in limited circumstances. The Company is evaluating the requirements of this guidance. The adoption is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash ("ASU 2016-18"), which amends Topic 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of
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cash flows. The provisions of this guidance are to be applied using a retrospective transition method to each period presented. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company is evaluating the requirements of this guidance. The adoption is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740), Intra-entity Transfer of Assets Other than Inventory ("ASU 2016-16"). ASU 2016-16 removes the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The standard requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The provisions of this guidance are to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. ASU 2016-16 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company is evaluating the requirements of this guidance and has not yet determined the impact of its adoption on the Company's consolidated financial position, results of operations and cash flows.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230 and other topics. The provisions of this guidance are to be applied using a retrospective transition method to each period presented, and if it is impracticable to apply the amendments retrospectively for some of the issues, ASU 2016-15 allows the amendments for those issues to be applied prospectively as of the earliest date practicable. ASU 2015-16 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company is evaluating the requirements of this guidance and has not yet determined the impact of its adoption on the Company's consolidated financial position, results of operations and cash flows.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard requires entities to use the expected loss impairment model and will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance sheet credit exposures. Entities are required to estimate the lifetime “expected credit loss” for each applicable financial asset and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The standard also amends the impairment model for available-for-sale (“AFS”) debt securities and requires entities to determine whether all or a portion of the unrealized loss on an AFS debt security is a credit loss. An entity will recognize an allowance for credit losses on an AFS debt security as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment. The provisions of this guidance are to be applied using a modified-retrospective approach. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those years. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. The Company is evaluating the requirements of this guidance and has not yet determined the impact of its adoption on the Company's consolidated financial position, results of operations and cash flows.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases. The new guidance requires lessees to recognize a lease liability and right-of-use asset on the balance sheet for financing and operating leases. The provisions of this guidance are to be applied using a modified retrospective approach and are effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company is evaluating the requirements of this guidance and has not yet determined the impact of its adoption on the Company's consolidated financial position, results of operations and cash flows. The Company does not intend to early adopt the provisions of this standard.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory. Under this new guidance, companies that use inventory measurement methods other than last-in, first-out or the retail inventory method should measure inventory at the lower of cost and net realizable value. The provisions of this guidance are to be applied prospectively and are effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company adopted ASU 2015-11 at the beginning of the firstsecond quarter of fiscal year 2017. 2022 amounts to $117.8 million.
Contract Balances
Contract assets: The adoption did not have a material impact on the Company’s consolidated financial position, results of operations and cash flows.

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In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). Under this new guidance, an entity should use a five-step process to recognize revenue, depicting the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires new disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Subsequent to the issuance of the standard, the FASB decided to defer the effective date for one year to annual reporting periods beginning after December 15, 2017, with early adoption permitted for annual reporting periods beginning after December 15, 2016. In May 2016, the FASB also issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients ("ASU 2016-12"), which amended its revenue recognition guidance in ASU 2014-09 on transition, collectibility, non-cash consideration and the presentation of sales and other similar taxes. In April 2016, the FASB also issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing ("ASU 2016-10"), which amended its revenue recognition guidance in ASU 2014-09 on identifying performance obligations to allow entities to disregard items that are immaterial in the context of the contract, clarify when a promised good or service is separately identifiable (i.e., distinct within the context of the contract) and allow an entity to elect to account for the cost of shipping and handling performed after control of a good has been transferred to the customer as a fulfillment cost (i.e., an expense). ASU 2016-10 also clarifies how an entity should evaluate the nature of its promise in granting a license of intellectual property ("IP") and requires entities to classify IP in one of two categories: functional IP or symbolic IP, which will determine whether it recognizes revenue over time or at a point in time. ASU 2016-10 also address how entities should consider license renewals and restrictions and apply the exception for sales- and usage-based royalties received in exchange for licenses of IP. ASU 2016-12, ASU 2016-10 and ASU 2014-09 may be adopted either using a full retrospective approach or a modified retrospective approach. The Company is in the process of completing its evaluation of the impact of these standards upon adoption, but does not currently anticipate a material impact on the Company’s consolidated financial position, results of operations and cash flows. The Company intends to adopt these standards using the modified retrospective approach, and the Company does not intend to early adopt these standards.

The Company believes the key changes in the standard that impact revenue recognitionunbilled receivables (contract assets) primarily relate to the accountingCompany's right to consideration for certain transactions with multiple elements or “bundled” arrangements (for example, sales of software subscriptions or sales of licenseswork completed but not billed at the reporting date. The unbilled receivables are transferred to trade receivables when billed to customers. Contract assets are generally classified as current assets and maintenanceare included in "Accounts receivable, net" in the condensed consolidated balance sheets.
(In thousands)
Balance at January 2, 2022$72,117 
Transferred to trade receivables from unbilled receivables recognized at the beginning of the period(37,062)
Increases as a result of recognition of revenue before billing to customers, excluding amounts transferred to trade receivables during the period27,156 
Balance at April 3, 2022$62,211 
Contract liabilities: The contract liabilities primarily relate to the advance consideration received from customers for which the Company does not have vendor-specific objective evidence ("VSOE")products and related services for maintenance and/or support) because the requirement to have VSOE for undelivered elements under current accounting standards is eliminated under the new standard. Accordingly, the Company will be required to recognize the license revenue uponwhich transfer of control has not occurred at the balance sheet date. Contract liabilities are classified as either current in "Accounts payable" or "Accrued expenses and other current liabilities" or as long-term in "Long-term liabilities" in the condensed consolidated balance sheets based on the timing of when the applicable software, as comparedCompany expects to the current requirement of recognizing the entire sales price ratably over the maintenance period.recognize revenue.

(In thousands)
Balance at January 2, 2022$201,073 
Revenue recognized that was included in the contract liability balance at the beginning of the period(57,691)
Increases due to cash received, excluding amounts recognized as revenue during the period28,486 
Balance at April 3, 2022$171,868 

Note 2:3: Business Combinations
Acquisitions in fiscal year 20172022
During the first nine monthsquarter of fiscal year 2017,2022, the Company completed the acquisition of Tulip Diagnostics Private Limited (“Tulip”), a company based in Goa, India,two businesses for a totalaggregate consideration of $127.3$13.5 million. Identifiable definite-lived intangible assets, such as core technology, acquired as part of these acquisitions had a weighted average amortization period of 5 years.
Acquisitions in fiscal year 2021
Acquisition of BioLegend, Inc. In fiscal year 2021, the Company completed the acquisition of BioLegend, Inc. ("BioLegend") and paid an aggregate consideration of $5.7 billion, net of cash acquired of $292.4 million, reflecting working capital and other adjustments (the "Aggregate Consideration"). The Company hasAggregate Consideration was paid in a potential obligation to pay the shareholderscombination of Tulip up to INR1.6$3.3 billion currently equivalent to $24.6 million, which will be accounted for as compensation expense in cash and shares of the Company's financial statements overcommon stock having a two year periodfair value of approximately $2.6 billion based on the $187.56 per share closing price of the Company's common stock on the New York Stock Exchange on September 17, 2021 (the "Stock Consideration"). The Stock Consideration consisted of 14,066,799 shares of the Company's common stock. BioLegend is recognized as a leading, global provider of life science antibodies and reagents, headquartered in San Diego, California, with approximately 700 employees. The operations for this acquisition is excludedreported within the results of the Company's Discovery & Analytical Solutions segment from the purchase price allocation shown below.acquisition date. The excess of the purchase price over the fair value of the acquired business' net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforce acquired, and has been allocated to goodwill, which is not tax deductible. The Company has reported the operations for this acquisition within the results of the Company's Diagnostics segment from the acquisition date. Identifiable definite-lived intangible assets, such as core technology,
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trade names, and customer relationships and clone library, acquired as part of this acquisition had a weighted averageweighted-average amortization period of 11.4 16.3 years.

BioLegend's revenue and net loss from the acquisition date to January 2, 2022 were $91.7 million and $25.8 million, respectively. The net loss includes $47.0 million of amortization of intangible assets recognized in the acquisition as well as $16.6 million of amortization of fair value adjustment to acquired inventory. The following unaudited pro forma information presents the combined financial results for the Company and BioLegend as if the acquisition of BioLegend had been completed at the beginning of fiscal year 2020:
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Three Months Ended
April 4, 2021
(In thousands, except per share data)
Pro Forma Statement of Operations Information:
Revenue$1,385,114 
Income from continuing operations$370,624 
Basic earnings per share:
Income from continuing operations$2.94 
Diluted earnings per share:
Income from continuing operations$2.93 
The total purchase priceunaudited pro forma information for the acquisition in fiscal year 2017 has been allocated to the estimated fair values of assets acquired and liabilities assumed as follows:
 2017 Acquisition
 (In thousands)
Fair value of business combination: 
Cash payments$126,007
Other liability1,273
Less: cash acquired(2,429)
Total$124,851
Identifiable assets acquired and liabilities assumed: 
Current assets$15,825
Property, plant and equipment9,643
Other assets1,084
Identifiable intangible assets: 
Core technology3,500
Trade names3,000
Customer relationships43,000
Goodwill74,238
Deferred taxes(15,414)
Liabilities assumed(10,025)
Total$124,851
During the secondfirst quarter of fiscal year 2017,2021 has been calculated after applying the Company's accounting policies and the impact of acquisition date fair value adjustments. These pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments, such as increased interest expense on debt obtained to finance the transaction, and increased amortization for the fair value of acquired intangible assets.
The pro forma information does not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the combination occurred at the beginning of the period presented, or of future results of the consolidated entities. The actual results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
Other acquisitions in 2021. During fiscal year 2021, the Company entered into a Share Sale and Transfer Agreement with Prof. Dr. Winfried Stöcker (the “Controlling Shareholder”) and his affiliated investment holding company Stöcker Vermögensverwaltungsgesellschaft mbH & Co. KG (“Stöcker KG”), which together hold a majority equity interest in EUROIMMUN Medizinische Labordiagnostika AG (“EUROIMMUN”), pursuant to which the Company or a wholly owned subsidiaryalso completed the acquisition of the Company (the “Purchaser”) will acquire up to 100% of the outstanding securities of EUROIMMUN, and EUROIMMUN will become a subsidiary of the Purchaser (the “Acquisition”). In addition to the majority equity interest in EUROIMMUN that the Controlling Shareholder and Stöcker KG will exchangeseven other businesses for cash at the closing of the Acquisition, the Controlling Shareholder has undertaken to seek to enter into option agreements with all other shareholders in EUROIMMUN, which would, upon exercise by the Controlling Shareholder at the closing of the Acquisition result in such shareholders receiving the same per share price for their shares as will be received by the Controlling Shareholder and Stöcker KG. If the Acquisition is completed with 100% equity participation, EUROIMMUN’s shareholders will receive an aggregate consideration of €1.2 billion in cash, without interest thereon and subject to any tax withholding.$1.2 billion. The transaction is subject to customary closing conditions and is currently anticipated to close following the receipt of required standard regulatory approvals. EUROIMMUN isacquired businesses include Oxford Immunotec Global PLC, a company based in Lübeck, Germany, hasAbingdon, UK with approximately 2,400275 employees, and is widely recognized as a global leader in autoimmune testing and an emerging force in infectious disease and allergy testing.
Acquisitions in fiscal year 2016
During fiscal year 2016, the Company completed the acquisition of two businesses for a total consideration of $72.3$590.9 million and Nexcelom Bioscience Holdings, LLC, a company based in cash. The acquiredLawrence, Massachusetts with approximately 130 employees, for total consideration of $267.3 million, and five other businesses, were Bioo Scientific Corporation ("Bioo"), which waswere acquired for total consideration of $63.5 million in cash, and one other business acquired for a total consideration of $8.8 million in cash.$318.6 million. The excess of the purchase prices over the fair values of each of the acquired businesses' net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforce acquired. As a result of the acquisitions, the Company recordedworkforces acquired, and has been allocated to goodwill, of $42.8 million, which is not tax deductible, and intangible assets of $22.1 million. The Company has reported the operations for these acquisitions within the results of the Company's Diagnostics and Discovery & Analytical Solutions segments from the acquisition dates.deductible. Identifiable definite-lived intangible assets, such as core technology, trade names, and customer relationships, acquired as part of these acquisitions had a weighted averageweighted-average amortization period of 9.412.3 years.

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The total purchase price for the acquisitions in fiscal year 20162021 has been allocated to the estimated fair valuesvalue of assets acquired and liabilities assumed as follows:
2016 AcquisitionsBioLegendOther
(In thousands) (In thousands)
Fair value of business combination: Fair value of business combination:
Cash payments$72,497
Cash payments$3,336,115 1,128,584 
Common stock issuedCommon stock issued2,638,369 — 
Other liabilityOther liability6,857 2,910 
Contingent considerationContingent consideration— 45,031 
Working capital and other adjustments(261)Working capital and other adjustments— 183 
Less: cash acquired(2,152)Less: cash acquired(292,377)(195,010)
Total$70,084
Total$5,688,964 $981,698 
Identifiable assets acquired and liabilities assumed: Identifiable assets acquired and liabilities assumed:
Current assets$7,153
Current assets$184,704 $72,104 
Property, plant and equipment7,542
Property, plant and equipment147,200 26,507 
Other assetsOther assets9,330 15,564 
Identifiable intangible assets: Identifiable intangible assets:
Core technology6,600
Trade names570
Customer relationships14,900
Core technology and clone libraryCore technology and clone library782,400 290,089 
Trade names and patentsTrade names and patents38,000 39,626 
LicensesLicenses8,979 — 
Customer relationships and backlogCustomer relationships and backlog1,714,800 141,670 
Goodwill42,843
Goodwill3,510,710 550,023 
Deferred taxes(7,539)Deferred taxes(668,920)(86,100)
Deferred revenueDeferred revenue— (1,197)
Debt assumedDebt assumed— (4,628)
Liabilities assumed(1,985)Liabilities assumed(38,239)(61,960)
Total$70,084
Total$5,688,964 $981,698 
The preliminary allocations of the purchase prices for acquisitions are based upon initial valuations. The Company's estimates and assumptions underlying the initial valuations are subject to the collection of information necessary to complete its valuations within the measurement periods, which are up to one year from the respective acquisition dates. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, assets and liabilities related to income taxes and related valuation allowances, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair values of the net assets acquired at the acquisition dates during the measurement periods. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition dates that, if known, would have resulted in the recognition of those assets and liabilities as of those dates. These adjustments will be made in the periods in which the amounts are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. All changes that do not qualify as adjustments made during the measurement periods are also included in current period earnings. There were no material measurement period adjustments recognized in the current period.
AllocationsThe allocations of the purchase priceprices for acquisitions are based on estimates of the fair value of the net assets acquired and are subject to adjustment upon finalization of the purchase price allocations. The accounting for business combinations requires estimates and judgments as to expectations for future cash flows of the acquired business, and the allocation of those cash flows to identifiable intangible assets, in determining the estimated fair values for assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed, including contingent consideration, are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. Contingent consideration is measured at fair value at the acquisition date, based on the probability that revenue thresholds or product development milestones will be achieved during the earnout period, with changes in the fair value after the acquisition date affecting earnings to the extent it is to be settled in cash. Increases or decreases in the fair value of contingent consideration liabilities primarily result from changes in the estimated probabilities of achieving revenue thresholds, changes in discount rates or product development milestones during the earnout period.
During the third quarter of fiscal year 2017, the Company obtained information relevant to determining the fair values of certain tangible and intangible assets acquired, and liabilities assumed, related to recent acquisitions and adjusted its purchase price allocation. Based on this information, for the Bioo acquisition, the Company recognized a decrease in deferred tax liabilities, with a corresponding decrease in goodwill, of $0.7 million, and for the Tulip acquisition, the Company recognized an increase in liabilities assumed, with a corresponding increase in goodwill, of $1.8 million.
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As of October 1, 2017,April 3, 2022, the Company may have to pay contingent consideration related to an acquisitionacquisitions with an open contingency periodperiods of up to $83.0$111.3 million. As of October 1, 2017,April 3, 2022, the Company has recorded contingent consideration obligations with an estimated fair value of $64.7$49.8 million, of which $15.4$1.1 million was recorded in accrued expenses and other current liabilities, and $49.3$48.7 million was recorded in long-term liabilities. As of January 1, 2017,2, 2022, the Company had recorded contingent consideration obligations with an estimated fair value of $63.2$58.0 million, of which $15.4$1.3 million was recorded in accrued expenses and other
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current liabilities, and $47.8$56.7 million was recorded in long-term liabilities. The expected maximum earnout period for the acquisitionacquisitions with an open contingency periodperiods does not exceed 2.06.7 years from the acquisition date,April 3, 2022, and the remaining weighted average expected earnout period at October 1, 2017April 3, 2022 was 1.45.7 years. If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the condensed consolidated financial statements could result in a possible impairment of the intangible assets and goodwill, require acceleration of the amortization expense of definite-lived intangible assets or the recognition of additional contingent consideration which would be recognized as a component of operating expenses from continuing operations.
Total acquisition and divestiture-related costs (income) for the three and nine months ended October 1, 2017April 3, 2022 and April 4, 2021 were $(30.8)$20.5 million and $(30.1)$4.4 million, respectively. These amounts include $36.3included $7.5 million of stock compensation expense related to awards given to BioLegend employees for the three months ended April 3, 2022 and $42.0$5.4 million of net foreign exchange gain related to the foreign currency forward contractsCompany's acquisition of Oxford and $5.4 million of incentive award associated with the plannedCompany's acquisition of EUROIMMUNMeizheng Group for the three and nine months ended October 1, 2017, respectively. Total acquisition and divestiture-related costs for the three and nine months ended October 2, 2016 were $0.1 million and $0.6 million, respectively.April 4, 2021. These acquisition and divestiture-related costs were expensed as incurred and recorded in selling, general and administrative expenses and interest and other (income) expense, net in the Company's condensed consolidated statements of operations.


Note 3: Disposition of Businesses and Assets

As part of the Company’s continuing efforts to focus on higher growth opportunities, the Company has discontinued certain businesses. When the discontinued operations represent a strategic shift that will have a major effect on the Company's operations and financial statements, the Company has accounted for these businesses as discontinued operations and accordingly, has presented the results of operations and related cash flows as discontinued operations. Any business deemed to be a discontinued operation prior to the adoption of ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of An Entity, continues to be reported as a discontinued operation, and the results of operations and related cash flows are presented as discontinued operations for all periods presented. Any remaining assets and liabilities of these businesses have been presented separately, and are reflected within assets and liabilities of discontinued operations in the accompanying condensed consolidated balance sheets as of October 1, 2017 and January 1, 2017.
On May 1, 2017 (the "Closing Date"), the Company completed the sale of its Medical Imaging business to Varex Imaging Corporation ("Varex") pursuant to the terms of the Master Purchase and Sale Agreement, dated December 21, 2016 (the “Agreement”), by and between the Company and Varian Medical Systems, Inc. ("Varian") and the subsequent Assignment and Assumption Agreement, dated January 27, 2017, between Varian and Varex, pursuant to which Varian assigned its rights under the Agreement to Varex. On the Closing Date, the Company received consideration of approximately $277.4 million for the sale of the Medical Imaging business. During the third quarter of fiscal year 2017, the Company paid Varex $4.2 million to settle the post-closing working capital adjustment. During the nine months ended October 1, 2017, the Company recorded a pre-tax gain of $180.4 million and income tax expense of $42.2 million related to the sale of the Medical Imaging business in discontinued operations and dispositions. The corresponding tax liability was recorded within the other tax liabilities in the condensed consolidated balance sheet, and the Company expects to utilize tax attributes to minimize the tax liability.
Following the closing, the Company is providing certain customary transitional services during a period of up to 12 months. Commercial transactions between the parties following the closing of the transaction are not expected to be significant.
Beginning in the fourth quarter of fiscal year 2016, the Company presented its Medical Imaging business as discontinued operations in the Company's consolidated financial statements. Financial information in this report relating to the three and nine months ended October 2, 2016 has been retrospectively adjusted to reflect this discontinued operation. The results of discontinued operations during the three and nine months ended October 1, 2017 include the results of the Medical Imaging business through April 30, 2017.
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The summary pre-tax operating results of the discontinued operations were as follows for the three and nine months ended:
 Three Months Ended Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Revenue$—
 $33,635
 $44,343
 $110,859
Cost of revenue—
 21,386
 32,933
 71,870
Selling, general and administrative expenses—
 3,193
 5,869
 9,242
Research and development expenses—
 3,662
 4,891
 10,615
Restructuring and contract termination charges, net—
 (53) —
 568
Income from discontinued operations before income taxes$—
 $5,447
 $650
 $18,564

The table below provides a reconciliation of the carrying amounts of the major classes of assets and liabilities of the discontinued operations to the amounts presented separately in the consolidated balance sheets at October 1, 2017 and January 1, 2017.
 October 1,
2017		 January 1,
2017
 (In thousands)
Current assets of discontinued operations:   
Accounts receivable$—
 $28,400
Inventories—
 26,977
Prepaid income taxes

—
 425
Other current assets—
 3,183
Total current assets of discontinued operations—
 58,985
Property, plant and equipment, net—
 25,219
Intangible assets—
 3,292
Goodwill—
 38,794
Other assets, net—
 1,084
Long-term assets of discontinued operations—
 68,389
Total assets of discontinued operations$—
 $127,374
    
Current liabilities of discontinued operations:   
Accounts payable$—
 $16,770
Accrued restructuring and contract termination charges—
 209
Accrued expenses and other current liabilities2,154
 9,992
Total current liabilities of discontinued operations

2,154
 26,971
Deferred income taxes—
 7,851
Long-term liabilities—
 7,109
Total long-term liabilities—
 14,960
Total liabilities of discontinued operations$2,154
 $41,931

Note 4: Restructuring and Contract Termination Charges,Other Costs, Net

The Company has undertaken a series of restructuring actions related to the impact of acquisitions and divestitures, the alignment of the Company's operations with its growth strategy, the integration of its business units and its productivity initiatives. The current portion of restructuring and contract termination charges is recorded in accrued restructuring and contract termination charges and the long-term portion of restructuring and contract termination charges is recorded in long-
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term liabilities. The activities associated with these plans have been reported as restructuring and contract termination charges, net, as applicable, and are included as a component of income from continuing operations.

The Company implemented a restructuring plan in each of the first and third quartersquarter of fiscal year 20172022 consisting of workforce reductions principally intended to realign resources to emphasize growth initiatives and integrate new acquisitions (the "Q1 20172022 Plan" and "Q3 2017 Plan", respectively)). The Company implemented a restructuring planplans in the thirdeach quarter of fiscal year 20162021 consisting of workforce reductions principally intended to focusrealign resources on higherto emphasize growth product linesinitiatives and integrate new acquisitions (the "Q1 2021 Plan", "Q2 2021 Plan", "Q3 20162021 Plan"). The Company implemented a restructuring plan in the second quarter of fiscal year 2016 consisting of workforce reductions principally intended to focus resources on higher growth end markets (the "Q2 2016 and "Q4 2021 Plan"), respectively). Details of the plans initiated in previous years (the “Previous Plans”) are discussed more fully in Note 4, Restructuring and Other Costs, Net, to the audited consolidated financial statements in the 20162021 Form 10-K.

The following table summarizes the reductions in headcount, the initial restructuring or contract termination charges by operatingreporting segment, and the dates by which payments were substantially completed, or the dates by which payments are expected to be substantially completed, for restructuring actions implemented during fiscal years 20172022 and 2016 in continuing operations:2021:
 Workforce Reductions Closure of Excess Facility Total (Expected) Date Payments Substantially Completed by
 Headcount Reduction Discovery & Analytical Solutions Diagnostics Discovery & Analytical Solutions Diagnostics  Severance Excess Facility
       
 (In thousands, except headcount data)    
Q3 2017 Plan27 $1,321
 $1,021
 $—
 $—
 $2,342
 Q4 FY2018
—
Q1 2017 Plan90 5,000
 1,631
 33
 33
 6,697
 Q2 FY2018 Q2 FY2018
Q3 2016 Plan22 1,779
 41
 —
 —
 1,820
 Q4 FY2017 —
Q2 2016 Plan72 4,106
 561
 —
 —
 4,667
 Q3 FY2017 —
Workforce ReductionsClosure of Excess FacilityTotal(Expected) Date Payments Substantially Completed by
Headcount ReductionDiscovery & Analytical SolutionsDiagnosticsDiscovery & Analytical SolutionsDiagnosticsSeveranceExcess Facility
(In thousands, except headcount data)
Q1 2022 Plan81$5,832 $399 $— $— $6,231 Q4 FY2022—
Q4 2021 Plan313,139 77 150 — 3,366 Q3 FY2022Q1 FY2023
Q3 2021 Plan39420 366 — — 786 Q2 FY2022—
Q2 2021 Plan25968 564 — — 1,532 Q1 FY2022—
Q1 2021 Plan773,941 1,615 — — 5,556 Q4 FY2021—
The Company does not currently expect to incur any future charges for these plans. The Company expects to make payments under the Previous Plans for remaining residual lease obligations, with terms varying in length, through fiscal year 2022.

In connection with the termination ofhas terminated various contractual commitments in connection with certain disposal activities and has recorded charges for the costs of terminating these contracts before the end of their terms and the costs that will continue to be incurred for the remaining terms without economic benefit to the Company. The Company recorded additionalnet pre-tax charges of $0.4$6.3 million and $3.3 millionin the Discovery & Analytical Solutions segment during the three and nine months ended October 1, 2017,April 3, 2022 as a result of these contract terminations. The Company recorded net pre-tax gains of $0.4 million in the Diagnostics segment during the three months ended April 3, 2022 as a result of changes in estimates from prior contract terminations.
The Company recorded pre-tax charges of $1.3 million and $0.2 million associated with relocating facilities during the three months ended April 3, 2022 and April 4, 2021, respectively, in the Discovery & Analytical Solutions segment and $0.5 million during eachsegment. The Company expects to make payments on these relocation activities through end of the three and nine months ended October 1, 2017, in the Diagnostics segment.fiscal year 2022.

At October 1, 2017, the Company had $15.7 million recorded for accrued restructuring and contract termination charges, of which $10.1 million was recorded in short-term accrued restructuring and contract termination charges, $2.7 million was recorded in long-term liabilities, and $2.9 million was recorded in other reserves. At January 1, 2017, the Company had $10.5 million recorded for accrued restructuring and contract termination charges, of which $7.5 million was recorded in short-term accrued restructuring and contract termination charges and $3.0 million was recorded in long-term liabilities. The following table summarizes the Company's restructuring and contract termination accrual balances and related activity by restructuring plan, as well as contract termination accrual balances and related activity, during the nine months ended October 1, 2017:
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 Balance at January 1, 2017 2017 Charges 2017 Changes in Estimates, Net 2017 Amounts Paid Balance at October 1, 2017
 (In thousands)
Severance:         
Q3 2017 Plan$—
 $2,342
 $—
 $(34) $2,308
Q1 2017 Plan—
 6,631
 —
 (3,834) 2,797
Q3 2016 Plan1,208
 —
 —
 (990) 218
Q2 2016 Plan1,436
 —
 —
 (446) 990
          
Facility:         
Q1 2017 Plan—
 66
 —
 (9) 57
          
Previous Plans7,780
 927
 —
 (2,408) 6,299
Restructuring10,424
 9,966
 —
 (7,721) 12,669
Contract Termination117
 2,909
 45
 (25) 3,046
Total Restructuring and Contract Termination$10,541
 $12,875
 $45
 $(7,746) $15,715

Note 5: Interest and Other (Income) Expense, Net


Interest and other (income) expense, net, consisted of the following:
 Three Months Ended
 April 3,
2022		April 4,
2021
 (In thousands)
Interest income$(595)$(411)
Interest expense28,388 14,126 
Change in fair value of financial securities12,125 (19,298)
Other components of net periodic pension credit(2,362)(3,719)
Other income, net(311)(3,404)
Total interest and other expense (income), net$37,245 $(12,706)
 Three Months Ended Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Interest income$(802) $(124) $(1,512) $(361)
Interest expense10,974
 10,998
 32,510
 30,778
Loss (gain) on disposition of businesses and assets, net—
 —
 301
 (5,562)
Other (income) expense, net(35,419) 389
 (39,745) 2,887
Total interest and other (income) expense, net$(25,247) $11,263
 $(8,446) $27,742

Foreign currency transaction gains were $2.7 million and $5.4 million for the three and nine months ended October 1, 2017, respectively. Foreign currency transaction (gains) losses were $(1.6) million and $2.0 million for the three and nine months ended October 2, 2016, respectively. Net gains from forward currency hedge contracts were $32.7 million and $34.4 million for the three and nine months ended October 1, 2017, respectively. Net losses from forward currency hedge contracts were $2.1 million and $1.1 million for the three and nine months ended October 2, 2016, respectively. These amounts were included in other (income) expense, net.

Note 6: Inventories


Inventories as of October 1, 2017 and January 1, 2017 consisted of the following:
 October 1,
2017		 January 1,
2017
 (In thousands)
Raw materials$105,247
 $79,189
Work in progress9,935
 6,561
Finished goods179,994
 161,097
Total inventories$295,176
 $246,847

Note 7: Income Taxes

The Company regularly reviews its tax positions in each significant taxing jurisdiction in the process of evaluating its unrecognized tax benefits. The Company makes adjustments to its unrecognized tax benefits when: (i) facts and circumstances
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regarding a tax position change, causing a change in management’s judgment regarding that tax position; (ii) a tax position is effectively settled with a tax authority at a differing amount; and/or (iii) the statute of limitations expires regarding a tax position.
The total provision for income taxes included in the consolidated financial statements consisted of the following:
April 3,
2022		January 2,
2022
 (In thousands)
Raw materials$239,937 $229,356 
Work in progress77,667 69,744 
Finished goods328,320 325,614 
Total inventories$645,924 $624,714 

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 Three Months Ended Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Continuing operations$8,508
 $10,601
 $20,495
 $21,465
Discontinued operations and dispositions5,262
 1,867
 42,405
 3,150
Total$13,770
 $12,468
 $62,900
 $24,615
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Note 7: Debt
At October 1, 2017, the Company had gross tax effected unrecognized tax benefits of $29.0 million, of which $27.3 million, if recognized, would affect the continuing operations effective tax rate.
The remaining amount, if recognized, would affect discontinued operations.
The Company believes that it is reasonably possible that approximately $3.8 million of its uncertain tax positions at October 1, 2017, including accrued interest and penalties, and net of tax benefits, may be resolved over the next twelve months as a result of lapses in applicable statutes of limitations and potential settlements. Various tax years after 2010 remain open to examination by certain jurisdictions in which the Company has significant business operations, such as Finland, Germany, Italy, Netherlands, Singapore, the United Kingdom and the United States. The tax years under examination vary by jurisdiction.
During the first nine months of fiscal years 2017 and 2016, the Company recorded net discrete income tax benefits of $7.0 million and $7.1 million, respectively. The discrete tax benefits in the first nine months of fiscal year 2017 and 2016 included the recognition of excess tax benefits on stock compensation of $3.6 million and $4.0 million, respectively.
As a resultCompany’s debt consisted of the sale of the Medical Imaging business, the Company sold assets and liabilities of certain foreign operations, liquidated a related foreign entity and repatriated approximately $60.4 million of previously unremitted earnings. The Company has provided for the estimated taxes on the repatriation of these earnings and recorded a tax benefit of $0.1 million and a tax expense of $3.4 million in discontinued operations and dispositions for the three and nine months ended October 1, 2017, respectively. The Company expects to utilize tax attributes to minimize the cash taxes paid on the repatriation.following:
Taxes have not been provided for unremitted earnings that the Company continues to consider indefinitely reinvested, the determination of which is based on its future operational and capital requirements. The Company continues to maintain its indefinite reinvestment assertion with regards to the remaining unremitted earnings of its foreign subsidiaries, and therefore does not accrue U.S. tax for the repatriation of its remaining unremitted foreign earnings. As of October 1, 2017, the amount of foreign earnings that the Company has the intent and ability to keep invested outside the United States indefinitely and for which no U.S. tax cost has been provided was approximately $1.3 billion. It is not practical to calculate the unrecognized deferred tax liability on those earnings.

April 3,
2022
Outstanding PrincipalUnamortized Debt DiscountUnamortized Debt Issuance CostsNet Carrying Amount
(In thousands)
Long-Term Debt:
Senior Unsecured Revolving Credit Facility$— $— $(3,181)$(3,181)
Unsecured Term Loan Credit Facility400,000 — (477)399,523 
0.550% Senior Unsecured Notes due in 2023 ("2023 Notes")500,000 (131)(1,798)498,071 
0.850% Senior Unsecured Notes due in 2024 ("2024 Notes")800,000 (408)(4,519)795,073 
1.875% Senior Unsecured Notes due in 2026 ("2026 Notes")551,800 (2,341)(2,155)547,304 
1.900% Senior Unsecured Notes due in 2028 ("2028 Notes")500,000 (338)(4,078)495,584 
3.3% Senior Unsecured Notes due in 2029 ("2029 Notes")850,000 (2,199)(6,086)841,715 
2.55% Senior Unsecured Notes due in March 2031 ("March 2031 Notes")400,000 (123)(3,227)396,650 
2.250% Senior Unsecured Notes due in September 2031 ("September 2031 Notes")500,000 (1,458)(4,302)494,240 
3.625% Senior Unsecured Notes due in 2051 ("2051 Notes")400,000 (4)(4,333)395,663 
Other Debt Facilities, non-current3,336 — — 3,336 
   Total Long-Term Debt$4,905,136 $(7,002)$(34,156)$4,863,978 
Current Portion of Long-term Debt:
Other Debt Facilities, current3,729 — — 3,729 
   Total$4,908,865 $(7,002)$(34,156)$4,867,707 
Note 8: Debt

Senior Unsecured Revolving Credit Facility.  The Company's senior unsecured revolving credit facility provides for $1.0 billion of revolving loans and has an initial maturity of August 11, 2021. As of October 1, 2017, undrawn letters of credit in the aggregate amount of $11.4 million were treated as issued and outstanding when calculating the borrowing availability under the senior unsecured revolving credit facility. As of October 1, 2017, the Company had $988.6 million available for additional borrowing under the facility. The Company uses the senior unsecured revolving credit facility for general corporate purposes, which may include working capital, refinancing existing indebtedness, capital expenditures, share repurchases, acquisitions and strategic alliances. The interest rates under the senior unsecured revolving credit facility are based on the Eurocurrency rate or the base rate at the time of borrowing, plus a margin. The base rate is the higher of (i) the rate of interest in effect for such day as publicly announced from time to time by JP Morgan Chase Bank, N.A. as its "prime rate," (ii) the Federal Funds rate plus 50 basis points or (iii) an adjusted one-month Libor plus 1.00%. As of October 1, 2017, the senior unsecured revolving credit facility had no outstanding borrowings, and $3.6 million of unamortized debt issuance costs. As of January 1, 2017, the senior unsecured revolving credit facility had no outstanding borrowings, and $4.3 million of unamortized debt issuance costs. The credit agreement for the facility contains affirmative, negative and financial covenants and events of default. The financial covenants include a debt-to-capital ratio that remains applicable for so long as the Company's debt is rated as investment grade.
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January 2,
2022
Outstanding PrincipalUnamortized Debt DiscountUnamortized Debt Issuance CostsNet Carrying Amount
(In thousands)
Long-Term Debt:
Senior Unsecured Revolving Credit Facility$— $— $(3,362)$(3,362)
Unsecured Term Loan Credit Facility500,000 (14)(658)499,328 
2023 Notes500,000 (152)(2,093)497,755 
2024 Notes800,000 (447)(4,945)794,608 
2026 Notes568,600 (2,538)(2,280)563,782 
2028 Notes500,000 (348)(4,200)495,452 
2029 Notes850,000 (2,252)(6,234)841,514 
March 2031 Notes400,000 (126)(3,294)396,580 
September 2031 Notes500,000 (1,485)(4,380)494,135 
2051 Notes400,000 (4)(4,335)395,661 
Other Debt Facilities, non-current4,284 — — 4,284 
   Total Long-Term Debt$5,022,884 $(7,366)$(35,781)$4,979,737 
Current Portion of Long-term Debt:
Other Debt Facilities, current4,240 — — 4,240 
   Total$5,027,124 $(7,366)$(35,781)$4,983,977 
In the event that the Company's debt is not rated as investment grade, the debt-to-capital ratio covenant is replaced with a maximum consolidated leverage ratio covenant and a minimum consolidated interest coverage ratio covenant.

Senior Unsecured Term Loan Credit Facility. The Company entered into a senior unsecured term loan credit facility on August 11, 2017 that provides for $200.0 million of term loans and has an initial maturity of twelve months from the date of the initial draw. The Company plans to use the senior unsecured term loan facility for general corporate purposes, which may include financing for the planned acquisition of EUROIMMUN. The interest rates under the senior unsecured term loan credit facility are based on the Eurocurrency rate or the base rate at the time of the borrowing, plus a margin. The base rate is the higher of (i) the rate of interest in effect for such day as publicly announced from time to time by JP Morgan Chase Bank, N.A. as its "prime rate," (ii) the Federal Funds rate plus 50 basis points or (iii) an adjusted one-month Libor plus 1.00%. As of October 1, 2017, the senior unsecured term loan credit facility had no outstanding borrowings. The credit agreement for the facility contains affirmative, negative and financial covenants and events of defaults which are substantially similar to those contained in the senior unsecured revolving credit facility.
5% Senior Unsecured Notes due in 2021. On October 25, 2011, the Company issued $500.0 million aggregate principal amount of senior unsecured notes due in 2021 (the “2021 Notes”) in a registered public offering and received $496.9 million of net proceeds from the issuance. The 2021 Notes were issued at 99.372% of the principal amount, which resulted in a discount of $3.1 million. As of October 1, 2017, the 2021 Notes had an aggregate carrying value of $496.4 million, net of $1.5 million of unamortized original issue discount and $2.1 million of unamortized debt issuance costs. As of January 1, 2017, the 2021 Notes had an aggregate carrying value of $495.8 million, net of $1.7 million of unamortized original issue discount and $2.5 million of unamortized debt issuance costs. The 2021 Notes mature in November 2021 and bear interest at an annual rate of 5%. Interest on the 2021 Notes is payable semi-annually on May 15th and November 15th each year. Prior to August 15, 2021 (three months prior to their maturity date), the Company may redeem the 2021 Notes in whole or in part, at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of the 2021 Notes to be redeemed, plus accrued and unpaid interest, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest in respect to the 2021 Notes being redeemed, discounted on a semi-annual basis, at the Treasury Rate plus 45 basis points, plus accrued and unpaid interest. At any time on or after August 15, 2021 (three months prior to their maturity date), the Company may redeem the 2021 Notes, at its option, at a redemption price equal to 100% of the principal amount of the 2021 Notes to be redeemed plus accrued and unpaid interest. Upon a change of control (as defined in the indenture governing the 2021 Notes) and a contemporaneous downgrade of the 2021 Notes below investment grade, each holder of 2021 Notes will have the right to require the Company to repurchase such holder's 2021 Notes for 101% of their principal amount, plus accrued and unpaid interest.
1.875% Senior Unsecured Notes due 2026. On July 19, 2016, the Company issued €500.0 million aggregate principal amount of senior unsecured notes due in 2026 (the “2026 Notes”) in a registered public offering and received approximately €492.3 million of net proceeds from the issuance. The 2026 Notes were issued at 99.118% of the principal amount, which resulted in a discount of €4.4 million. The 2026 Notes mature in July 2026 and bear interest at an annual rate of 1.875%. Interest on the 2026 Notes is payable annually on July 19th each year. The proceeds from the 2026 Notes were used to pay in full the outstanding balance of the Company's previous senior unsecured revolving credit facility. As of October 1, 2017, the 2026 Notes had an aggregate carrying value of $581.5 million, net of $4.7 million of unamortized original issue discount and $4.4 million of unamortized debt issuance costs. As of January 1, 2017, the 2026 Notes had an aggregate carrying value of $517.8 million, net of $4.5 million of unamortized original issue discount and $4.8 million of unamortized debt issuance costs.
Prior to April 19, 2026 (three months prior to their maturity date), the Company may redeem the 2026 Notes in whole at any time or in part from time to time, at its option, at a redemption price equal to the greater of (i) 100% of the principal amount of the 2026 Notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest in respect to the 2026 Notes being redeemed, discounted on an annual basis, at the applicable Comparable Government Bond Rate (as defined in the indenture governing the 2026 Notes) plus 35 basis points; plus, in each case, accrued and unpaid interest. In addition, at any time on or after April 19, 2026 (three months prior to their maturity date), the Company may redeem the 2026 Notes, at its option, at a redemption price equal to 100% of the principal amount of the 2026 Notes due to be redeemed plus accrued and unpaid interest.
Upon a change of control (as defined in the indenture governing the 2026 Notes) and a contemporaneous downgrade of the 2026 Notes below investment grade, the Company will, in certain circumstances, make an offer to purchase the 2026 Notes at a price equal to 101% of their principal amount plus any accrued and unpaid interest.
Financing Lease Obligations. In fiscal year 2012, the Company entered into agreements with the lessors of certain buildings that the Company is currently occupying and leasing to expand those buildings. The Company provided a portion of the funds needed for the construction of the additions to the buildings, and as a result the Company was considered the owner of the buildings during the construction period. At the end of the construction period, the Company was not reimbursed by the lessors for all of the construction costs. The Company is therefore deemed to have continuing involvement and the leases
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qualify as financing leases under sale-leaseback accounting guidance, representing debt obligations for the Company and non-cash investing and financing activities. As a result, the Company capitalized $29.3 million in property, plant and equipment, net, representing the fair value of the buildings with a corresponding increase to debt. The Company has also capitalized $11.5 million in additional construction costs necessary to complete the renovations to the buildings, which were funded by the lessors, with a corresponding increase to debt. At October 1, 2017, the Company had $36.2 million recorded for these financing lease obligations, of which $1.3 million was recorded as short-term debt and $34.9 million was recorded as long-term debt. At January 1, 2017, the Company had $37.1 million recorded for these financing lease obligations, of which $1.2 million was recorded as short-term debt and $35.9 million was recorded as long-term debt. The buildings are being depreciated on a straight-line basis over the terms of the leases to their estimated residual values, which will equal the remaining financing obligation at the end of the lease term. At the end of the lease term, the remaining balances in property, plant and equipment, net and debt will be reversed against each other.

Note 9:8: Earnings Per Share

Basic earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding during the period less restricted unvested shares. Diluted earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding plus all potentially dilutive common stock equivalents, primarily shares issuable upon the exercise of stock options using the treasury stock method. The following table reconciles the number of shares utilized in the earnings per share calculations:
Three Months Ended Nine Months Ended Three Months Ended
October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016		 April 3,
2022		April 4,
2021
(In thousands) (In thousands)
Number of common shares—basic110,003
 109,192
 109,788
 109,524
Number of common shares—basic126,137 112,028 
Effect of dilutive securities:       Effect of dilutive securities:
Stock options735
 663
 669
 670
Stock options339 359 
Restricted stock awards255
 223
 196
 178
Restricted stock awards159 108 
Number of common shares—diluted110,993
 110,078
 110,653
 110,372
Number of common shares—diluted126,635 112,495 
Number of potentially dilutive securities excluded from calculation due to antidilutive impact14
 220
 377
 523
Number of potentially dilutive securities excluded from calculation due to antidilutive impact512 162 
Antidilutive securities include outstanding stock options with exercise prices and average unrecognized compensation cost in excess of the average fair market value of common stock for the related period. Antidilutive options were excluded from the calculation of diluted net income per share and could become dilutive in the future.


Note 10: Industry9: Segment Information

The Company discloses information about its operating segments based on the way that management organizes the segments within the Company for making operating decisions and assessing financial performance. The Company evaluates the performance of its operating segments based on revenue and operating income. Intersegment revenue and transfers are not
17

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significant. The accounting policies of the operating segments are the same as those described in Note 1, Nature of Operations and Accounting Policies,to the audited consolidated financial statements in the 20162021 Form 10-K.

Effective October 3, 2016, the Company realigned its businesses to better organize around customer requirements, positioning the Company to grow in attractive end markets and expand share with the Company's core product offerings. Diagnostics became a standalone operating segment and the Company formed a new operating segment, Discovery & Analytical Solutions. The results reported for the three and nine months ended October 1, 2017 reflect this new alignment of the Company's operating segments. Financial information in this report relating to the three and nine months ended October 2, 2016 has been retrospectively adjusted to reflect this change to the Company's operating segments.


The principal products and services of the Company's two2 operating segments are:
•Discovery & Analytical Solutions. Provides products and services targeted towards the environmental, industrial, food, life sciences research and laboratory servicesapplied markets.
•Diagnostics. Develops diagnostics, tools and applications focused on clinically-oriented customers, especially within the reproductive health, emerging market diagnosticsimmunodiagnostics and applied genomics markets. The Diagnostics segment serves the diagnostics market.
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The Company has included the expenses for its corporate headquarters, such as legal, tax, audit, human resources, information technology, and other management and compliance costs, as well as the activity related to the mark-to-market adjustment on postretirement benefit plans, as “Corporate” below. The Company has a process to allocate and recharge expenses to the reportable segments when these costs are administered or paid by the corporate headquarters based on the extent to which the segment benefited from the expenses. These amounts have been calculated in a consistent manner and are included in the Company’s calculations of segment results to internally plan and assess the performance of each segment for all purposes, including determining the compensation of the business leaders for each of the Company’s operating segments. During the first quarter of fiscal year 2017, the Company changed the manner in which certain shared functional costs are allocated to the operating segments. Segment financial information relating to the three and nine months ended October 2, 2016 has been retrospectively adjusted to reflect this change to the cost allocation methodology. Accordingly, for the three and nine months ended October 2, 2016, operating income from continuing operations from the Discovery & Analytical Solutions segment decreased by $2.1 million and $8.4 million, respectively, with a corresponding increase in operating income from continuing operations of the Diagnostics segment.
Revenue and operating income (loss) from continuing operations by operating segment are shown in the table below:
 Three Months Ended
 April 3,
2022		April 4,
2021
 (In thousands)
Discovery & Analytical Solutions
Product revenue$408,875 $267,255 
Service revenue193,491 187,354 
Total revenue602,366 454,609 
Operating income from continuing operations14,515 42,947 
Diagnostics
Product revenue458,070 544,297 
Service revenue199,006 308,783 
Total revenue657,076 853,080 
Operating income from continuing operations258,012 441,467 
Corporate
Operating loss from continuing operations(17,682)(16,638)
Continuing Operations
Product revenue866,945 811,552 
Service revenue392,497 496,137 
Total revenue1,259,442 1,307,689 
Operating income from continuing operations254,845 467,776 
Interest and other expense (income), net37,245 (12,706)
Income from continuing operations before income taxes$217,600 $480,482 

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 Three Months Ended Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Discovery & Analytical Solutions       
Product revenue$222,618
 $219,865
 $665,068
 $675,783
Service revenue162,764
 145,224
 465,202
 427,257
Total revenue385,382
 365,089
 1,130,270
 1,103,040
Operating income from continuing operations47,615
 46,051
 129,675
 127,137
Diagnostics       
Product revenue132,201
 115,029
 378,466
 340,438
Service revenue36,692
 34,371
 106,616
 105,269
Total revenue168,893
 149,400
 485,082
 445,707
Operating income from continuing operations44,054
 41,618
 115,105
 113,232
Corporate       
Operating loss from continuing operations(11,862) (11,888) (37,397) (37,745)
Continuing Operations       
Product revenue354,819
 334,894
 1,043,534
 1,016,221
Service revenue199,456
 179,595
 571,818
 532,526
Total revenue554,275
 514,489
 1,615,352
 1,548,747
Operating income from continuing operations79,807
 75,781
 207,383
 202,624
Interest and other (income) expense, net (see Note 5)(25,247) 11,263
 (8,446) 27,742
Income from continuing operations before income taxes$105,054
 $64,518
 $215,829
 $174,882

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Note 11:10: Stockholders’ Equity
Comprehensive Income:
The components of accumulated other comprehensive loss consisted of the following:
April 3,
2022		January 2,
2022
 (In thousands)
Foreign currency translation adjustments, net of income taxes$(245,821)$(161,810)
Unrecognized prior service costs, net of income taxes(842)(842)
Unrealized net losses on securities, net of income taxes(56)(40)
Accumulated other comprehensive loss$(246,719)$(162,692)
 October 1,
2017		 January 1,
2017
 (In thousands)
Foreign currency translation adjustments$(53,718) $(100,923)
Unrecognized prior service costs, net of income taxes399
 399
Unrealized net losses on securities, net of income taxes(256) (337)
Accumulated other comprehensive loss$(53,575) $(100,861)

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Stock Repurchases:
On July 27, 2016,31, 2020, the Company's Board of Directors (the "Board") authorized the Company to repurchase up to 8.0 million shares of common stock for an aggregate amount up to $250.0 million under a stock repurchase program (the "Repurchase Program"). The Repurchase Program will expire on July 26, 201827, 2022 unless terminated earlier by the Board and may be suspended or discontinued at any time. During the ninethree months ended October 1, 2017,April 3, 2022, the Company had norepurchased 240,000 shares of common stock repurchases under the Repurchase Program.Program for an aggregate cost of $43.4 million. As of October 1, 2017, 8.0April 3, 2022, $144.0 million shares remained available for repurchaseaggregate repurchases of shares under the Repurchase Program.
In addition, the Board has authorized the Company to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to the Company’s equity incentive plans and to satisfy obligations related to the exercise of stock options made pursuant to the Company's equity incentive plans. During the three months ended October 1, 2017,April 3, 2022, the Company repurchased 3,13267,107 shares of common stock for this purpose at an aggregate cost of $0.2$12.2 million. During the nine months ended October 1, 2017, the Company repurchased 73,672 shares of common stock for this purpose at an aggregate cost of $4.0 million. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.

Dividends:
The Board declared a regular quarterlyquarterly cash dividend of $0.07$0.07 per share for the first three quartersquarter of fiscal year 20172022 and in each quarter of fiscal year 2016.2021. At October 1, 2017,April 3, 2022, the Company had accrued $7.7$8.8 million for dividends declared on July 24, 2017January 27, 2022 for the thirdfirst quarter of fiscal year 20172022 that will be payablepaid on November 10, 2017.May 13, 2022. On October 27, 2017,April 28, 2022, the Company announced that the Board had declared a quarterly dividend of $0.07 per share for the fourthsecond quarter of fiscal year 20172022 that will be payable on February 9, 2018.in August 2022. In the future, the Board may determine to reduce or eliminate the Company’s common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.


Note 12: Stock Plans

In addition to the Company's Employee Stock Purchase Plan, the Company utilizes one stock-based compensation plan, the 2009 Incentive Plan (the “2009 Plan”). Under the 2009 Plan, 10.0 million shares of the Company's common stock are authorized for stock option grants, restricted stock awards, performance units and stock grants as part of the Company’s compensation programs. In addition to shares of the Company’s common stock originally authorized for issuance under the 2009 Plan, the 2009 Plan includes shares of the Company’s common stock previously granted under the Amended and Restated 2001 Incentive Plan and the 2005 Incentive Plan that were canceled or forfeited without the shares being issued.
The following table summarizes total pre-tax compensation expense recognized related to the Company’s stock options, restricted stock, performance restricted stock units, performance units and stock awards, included in the Company’s condensed consolidated statements of operations for the three and nine months ended October 1, 2017 and October 2, 2016:
 Three Months Ended Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Cost of revenue$357
 $284
 $898
 $778
Research and development expenses373
 202
 1,077
 602
Selling, general and administrative expenses3,682
 3,288
 14,204
 12,069
Total stock-based compensation expense$4,412
 $3,774
 $16,179
 $13,449
The total income tax benefit recognized in the condensed consolidated statements of operations for stock-based compensation was $1.9 million and $9.9 million for the three and nine months ended October 1, 2017, respectively. The total income tax benefit recognized in the condensed consolidated statements of operations for stock-based compensation was $2.3 million and $9.2 million for the three and nine months ended October 2, 2016, respectively. Stock-based compensation costs capitalized as part of inventory were $0.4 million and $0.3 million as of October 1, 2017 and October 2, 2016, respectively.
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Stock Options: The fair value of each option grant is estimated using the Black-Scholes option pricing model. The Company’s weighted-average assumptions used in the Black-Scholes option pricing model were as follows:
 Three and Nine Months Ended
 October 1,
2017		 October 2,
2016
Risk-free interest rate1.5% 1.2%
Expected dividend yield0.4% 0.6%
Expected term5 years
 5 years
Expected stock volatility22.4% 25.2%
The following table summarizes stock option activity for the nine months ended October 1, 2017:
 
Number
of
Shares
 
Weighted-
Average Exercise
Price
 
Weighted-Average
Remaining
Contractual Term
 
Total
Intrinsic
Value
 (In thousands)   (In years) (In millions)
Outstanding at January 1, 20172,287
 $37.64
    
Granted460
 53.77
    
Exercised(454) 30.88
    
Forfeited(11) 49.34
    
Outstanding at October 1, 20172,282
 $42.18
 4.1 $61.1
Exercisable at October 1, 20171,344
 $37.19
 3.0 $42.7
The weighted-average per-share grant-date fair value of options granted during the three and nine months ended October 1, 2017 was $14.32 and $11.79, respectively. The weighted-average per-share grant-date fair value of options granted during the three and nine months ended October 2, 2016 was $12.24 and $10.16, respectively. The total intrinsic value of options exercised during the three and nine months ended October 1, 2017 was $0.7 million and $12.8 million, respectively. The total intrinsic value of options exercised during the three and nine months ended October 2, 2016 was $3.6 million and $15.6 million, respectively. Cash received from option exercises for the nine months ended October 1, 2017 and October 2, 2016 was $14.0 million and $12.1 million, respectively.
The total compensation expense recognized related to the Company’s outstanding options was $1.1 million and $3.5 million for the three and nine months ended October 1, 2017, respectively, and $1.0 million and $3.4 million for the three and nine months ended October 2, 2016, respectively.
There was $7.3 million of total unrecognized compensation cost related to nonvested stock options granted as of October 1, 2017. This cost is expected to be recognized over a weighted-average period of 2.0 years.
Restricted Stock Awards: The following table summarizes restricted stock award activity for the nine months ended October 1, 2017:
 
Number of
Shares
 
Weighted-
Average
Grant-
Date Fair
Value
 (In thousands)  
Nonvested at January 1, 2017521
 $46.48
Granted227
 54.44
Vested(214) 45.89
Forfeited(21) 49.64
Nonvested at October 1, 2017513
 $50.11
The fair value of restricted stock awards vested during the three and nine months ended October 1, 2017 was $0.5 million and $9.8 million, respectively. The fair value of restricted stock awards vested during the three and nine months ended October 2, 2016 was $0.2 million and $8.0 million, respectively. The total compensation expense recognized related to the Company’s outstanding restricted stock awards was $2.3 million and $7.8 million for the three and nine months ended
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October 1, 2017, respectively, and $2.0 million and $6.9 million for the three and nine months ended October 2, 2016, respectively.
As of October 1, 2017, there was $15.9 million of total unrecognized compensation cost related to nonvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 1.7 years.
Performance Restricted Stock Units: As part of the Company's executive compensation program, the Company granted 54,337 performance restricted stock units during the nine months ended October 1, 2017 that will vest based on performance of the Company. The weighted-average per-share grant date fair value of performance restricted stock units granted during the nine months ended October 1, 2017 was $52.78. During the nine months ended October 1, 2017, no performance restricted stock units were forfeited. The total compensation expense recognized related to the performance restricted stock units was $0.2 million and $0.6 million for the three and nine months ended October 1, 2017, respectively. As of October 1, 2017, there were 54,337 performance restricted stock units outstanding.
Performance Units: As part of the Company's executive compensation program, the Company granted 49,845 and 72,164 performance units during the nine months ended October 1, 2017 and October 2, 2016, respectively. The weighted-average per-share grant-date fair value of performance units granted during the nine months ended October 1, 2017 and October 2, 2016 was $52.69 and $42.79, respectively. During the nine months ended October 1, 2017 and October 2, 2016, 15,139 and 19,584 performance units were forfeited, respectively. The total compensation expense recognized related to performance units was $0.8 million and $3.6 million for the three and nine months ended October 1, 2017, respectively, and $0.7 million and $2.4 million for the three and nine months ended October 2, 2016, respectively. As of October 1, 2017, there were 164,481 performance units outstanding and subject to forfeiture, with a corresponding liability of $6.5 million recorded in accrued expenses and other current liabilities.
Stock Awards: The Company’s stock award program provides an annual equity award to non-employee directors. The Company granted 1,598 and 1,821 shares to each non-employee member of the Board during the nine months ended October 1, 2017 and October 2, 2016, respectively. The weighted-average per-share grant-date fair value of the stock awards granted during the nine months ended October 1, 2017 and October 2, 2016 was $62.56 and $54.88, respectively. The total compensation expense recognized related to these stock awards was $0.7 million and $0.8 million for the nine months ended October 1, 2017 and October 2, 2016, respectively.
Employee Stock Purchase Plan: During the nine months ended October 1, 2017, the Company issued 18,483 shares of common stock under the Company's Employee Stock Purchase Plan at a weighted-average price of $64.73 per share. During the nine months ended October 2, 2016, the Company issued 23,898 shares of common stock under the Company's Employee Stock Purchase Plan at a weighted-average price of $49.80 per share. At October 1, 2017, an aggregate of 0.9 million shares of the Company’s common stock remained available for sale to employees out of the 5.0 million shares authorized by shareholders for issuance under this plan.

Note 13:11: Goodwill and Intangible Assets, Net
The Company tests goodwill and non-amortizing intangible assets at least annually for possible impairment. Accordingly, the Company completes the annual testing of impairment for goodwill and non-amortizing intangible assets on the later of January 1 or the first day of each fiscal year. In addition to its annual test, the Company regularly evaluates whether events or circumstances have occurred that may indicate a potential impairment of goodwill or non-amortizing intangible assets.
The process of testing goodwill for impairment involves the determination of the fair value of the applicable reporting units. The test consists of a two-step process. The first step is the comparison of the fair value to the carrying value of the reporting unit to determine if the carrying value exceeds the fair value. The second step measuresIf the amount of an impairment loss, and is only performed if the carrying value exceeds the fair value of the reporting unit.unit exceeds its fair value, an impairment loss in an amount equal to that excess is recognized up to the amount of goodwill. The Company performed its annual impairment testing for its reporting units as of January 2, 2017,3, 2022, its annual impairment testing date for fiscal year 2017.2022. The Company concluded based on the first step of the process that there was no goodwill impairment, and that the fair value exceeded the carrying value by more than 20.0%20% for each reporting unit, except forunit. For the Company's Informatics reporting unit which had a fair value that was less than 20% but greater than 10% more than its carrying value. Thefiscal year 2022 impairment analysis, the range of the long-term terminal growth rates for the Company’sCompany’s reporting units was 0.0%2% to 3.00% for5% and the fiscal year 2017 impairment analysis. The range forof the discount rates for the reporting units was 9.0%7% to 13.5%11.5%. Keeping all other variables constant, a 10.0%10% change in any one of these input assumptions for the various reporting units except for the Informatics reporting unit, would still allow the Company to conclude based on the first step of the process, that there was no impairment of goodwill. As of January 2, 2017, the Company's Informatics reporting unit, which had a goodwill balance of $211.0 million, was at increased risk of an impairment charge given its ongoing weakness due to a highly competitive industry. Despite the increased risk associated with this
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reporting unit, the Company does not currently expect a significant change in the key estimates or assumptions driving the fair value of this reporting unit that would lead to a material impairment charge.
The Company has consistently employed the income approach to estimate the current fair value when testing for impairment of goodwill. A number of significant assumptions and estimates are involved in the application of the income
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approach to forecast operating cash flows, including markets and market share, sales volumes and prices, costs to produce, tax rates, capital spending, discount rates and working capital changes. Cash flow forecasts are based on approved business unit operating plans for the early years’ cash flows and historical relationships in later years. The income approach is sensitive to changes in long-term terminal growth rates and the discount rates. The long-term terminal growth rates are consistent with the Company’s historical long-term terminal growth rates, as the current economic trends are not expected to affect the long-term terminal growth rates of the Company. The Company corroborates the income approach with a market approach.
The Company has consistently employed the relief from royalty model to estimate the current fair value when testing for impairment of non-amortizing intangible assets. The impairment test consists of a comparison of the fair value of the non-amortizing intangible asset with its carrying amount. If the carrying amount of a non-amortizing intangible asset exceeds its fair value, an impairment loss in an amount equal to that excess is recognized. In addition, the Company evaluates the remaining useful lives of its non-amortizing intangible assets at least annually to determine whether events or circumstances continue to support an indefinite useful life. If events or circumstances indicate that the useful lives of non-amortizing intangible assets are no longer indefinite, the assets will be tested for impairment. These intangible assets will then be amortized prospectively over their estimated remaining useful lives and accounted for in the same manner as other intangible assets that are subject to amortization. The Company performed its annual impairment testing as of January 2, 2017 and concluded that there was no impairment of non-amortizing intangible assets. An assessment of the recoverability of amortizing intangible assets takes place when events have occurred that may give rise to an impairment. No such events occurred during the first nine months of fiscal year 2017.
The changes in the carrying amount of goodwill for the ninethree months ended October 1, 2017April 3, 2022 were as follows:
Discovery & Analytical SolutionsDiagnosticsConsolidated
 (In thousands)
Balance at January 2, 2022$5,446,234 $1,970,350 $7,416,584 
        Foreign currency translation(38,132)(13,795)(51,927)
        Acquisitions, earn-outs and other(1,085)3,712 2,627 
Balance at April 3, 2022$5,407,017 $1,960,267 $7,367,284 
 
Discovery & Analytical Solutions

 Diagnostics Consolidated
 (In thousands)
Balance at January 1, 2017$1,303,936
 $944,030
 $2,247,966
        Foreign currency translation30,356
 23,394
 53,750
        Acquisitions and other(2,173) 73,466
 71,293
Balance at October 1, 2017$1,332,119
 $1,040,890
 $2,373,009
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Identifiable intangible asset balances at October 1, 2017 and January 1, 2017 by category were as follows:
October 1,
2017		 January 1,
2017		April 3,
2022		January 2,
2022
(In thousands) (In thousands)
Patents$39,952
 $39,901
Patents$31,025 $31,033 
Less: Accumulated amortization(34,421) (32,408)Less: Accumulated amortization(28,742)(28,693)
Net patents5,531
 7,493
Net patents2,283 2,340 
Trade names and trademarks44,188
 40,086
Trade names and trademarks168,225 170,983 
Less: Accumulated amortization(27,229) (24,017)Less: Accumulated amortization(64,762)(62,441)
Net trade names and trademarks16,959
 16,069
Net trade names and trademarks103,463 108,542 
Licenses51,637
 57,767
Licenses68,001 67,887 
Less: Accumulated amortization(41,978) (46,507)Less: Accumulated amortization(54,897)(54,315)
Net licenses9,659
 11,260
Net licenses13,104 13,572 
Core technology298,511
 304,187
Core technology1,841,179 1,834,177 
Less: Accumulated amortization(237,142) (233,720)Less: Accumulated amortization(527,001)(494,310)
Net core technology61,369
 70,467
Net core technology1,314,178 1,339,867 
Customer relationships425,472
 383,303
Customer relationships3,165,411 3,195,704 
Less: Accumulated amortization(229,944) (213,062)Less: Accumulated amortization(726,145)(673,425)
Net customer relationships195,528
 170,241
Net customer relationships2,439,266 2,522,279 
IPR&D86,992
 78,515
Less: Accumulated amortization(5,197) (4,405)
Net IPR&D81,795
 74,110
In-process research and developmentIn-process research and development— 5,920 
Net amortizable intangible assets370,841
 349,640
Net amortizable intangible assets3,872,294 3,992,520 
Non-amortizing intangible assets:   
Non-amortizing intangible asset:Non-amortizing intangible asset:
Trade name70,584
 70,584
Trade name70,584 70,584 
Total$441,425
 $420,224
Total$3,942,878 $4,063,104 
Total amortization expense related to definite-lived intangible assets was $17.7$102.7 million and $52.3$54.2 million for the three and nine months ended October 1, 2017, respectively,April 3, 2022 and $16.9 million and $53.9 million for the three and nine months ended October 2, 2016,April 4, 2021, respectively. Estimated amortization expense related to definite-livedamortizable intangible assets for each of the next five years is $17.5$309.3 million for the remainder of fiscal year 2017, $70.22022, $402.4 million for fiscal year 2018, $58.52023, $390.9 million for fiscal year 2019, $50.02024, $363.7 million for fiscal year 2020,2025, and $37.0$350.3 million for fiscal year 2021.2026.


Note 14: Warranty Reserves

The Company provides warranty protection for certain products usually for a period of one year beyond the date of sale. The majority of costs associated with warranty obligations include the replacement of parts and the time for service personnel to respond to repair and replacement requests. A warranty reserve is recorded based upon historical results, supplemented by management’s expectations of future costs. Warranty reserves are included in “Accrued expenses and other current liabilities” on the condensed consolidated balance sheets.
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A summary of warranty reserve activity for the three and nine months ended October 1, 2017 and October 2, 2016 is as follows:
 Three Months Ended Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Balance at beginning of period$9,088
 $9,596
 $9,012
 $9,843
Provision charged to income3,326
 3,585
 9,706
 11,037
Payments(3,488) (3,677) (10,625) (11,291)
Adjustments to previously provided warranties, net(730) (459) (215) (708)
Foreign currency translation and acquisitions117
 27
 435
 191
Balance at end of period$8,313
 $9,072
 $8,313
 $9,072

Note 15: Employee Postretirement Benefit Plans

The following table summarizes the components of net periodic pension credit for the Company’s various defined benefit employee pension and postretirement plans for the three and nine months ended October 1, 2017 and October 2, 2016:
 
Defined Benefit
Pension Benefits
 
Postretirement
Medical Benefits
 Three Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Service cost$1,231
 $1,094
 $23
 $25
Interest cost4,160
 4,701
 32
 35
Expected return on plan assets(6,568) (6,126) (279) (258)
Amortization of prior service costs(49) (54) —
 —
Net periodic benefit credit$(1,226) $(385) $(224) $(198)
        
 
Defined Benefit
Pension Benefits
 
Postretirement
Medical Benefits
 Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Service cost$3,667
 $3,282
 $69
 $75
Interest cost12,420
 14,158
 94
 107
Expected return on plan assets(19,609) (18,488) (836) (776)
Amortization of prior service costs(144) (163) —
 —
Net periodic benefit credit$(3,666) $(1,211) $(673) $(594)
During the nine months ended October 1, 2017 and October 2, 2016, the Company contributed $6.2 million and $7.6 million, respectively, in the aggregate, to pension plans outside of the United States.
The Company recognizes actuarial gains and losses, unless an interim remeasurement is required, in operating results in the fourth quarter of the year in which the gains and losses occur, in accordance with the Company's accounting method for defined benefit pension plans and other postretirement benefits as described in Note 1 of the Company's audited consolidated financial statements and notes included in its 2016 Form 10-K. Such adjustments for gains and losses are primarily driven by events and circumstances beyond the Company's control, including changes in interest rates, the performance of the financial markets and mortality assumptions.

Note 16:12: Derivatives and Hedging Activities

The Company uses derivative instruments as part of its risk management strategy only, and includes derivatives utilized as economic hedges that are not designated as hedging instruments. By nature, all financial instruments involve market and
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credit risks. The Company enters into derivative instruments with major investment grade financial institutions and has policies to monitor the credit risk of those counterparties. The Company does not enter into derivative contracts for trading or other speculative purposes, nor does the Company use leveraged financial instruments. Approximately 60% of the Company’s business is conducted outside of the United States, generally in foreign currencies. As a result, fluctuations in foreign currency exchange rates can increase the costs of financing, investing and operating the business.

In the ordinary course of business, the Company enters into foreign exchange contracts for periods consistent with its committed exposures to mitigate the effect of foreign currency movements on transactions denominated in foreign currencies. The intent of these economic hedges is to offset gains and losses that occur on the underlying exposures from these currencies, with gains and losses resulting from the forward currency contracts that hedge these exposures. Transactions covered by hedge contracts include intercompany and third-party receivables and payables. The contracts are primarily in European and Asian currencies, have maturities that do not exceed 12 months, have no cash requirements until maturity, and are recorded at fair value on the Company’s condensed consolidated balance sheets. The unrealized gains and losses on the Company’s foreign currency contracts are recognized immediately in interest and other expense, net. The cash flows related to the settlement of these hedges are included in cash flows from operating activities within the Company’s condensed consolidated statement of cash flows.

Principal hedged currencies include the Chinese Renminbi, British Pound, Euro, Singapore Dollar and Swedish Krona, Japanese Yen and Singapore Dollar.Krona. The Company held forward foreign exchange contracts, designated as economic hedges, with U.S. dollar equivalent notional amounts totaling $140.0$376.6 million, $137.5$371.9 million and $128.5$969.5 million at October 1, 2017,April 3, 2022, January 1, 20172, 2022 and October 2, 2016,April 4, 2021, respectively, and the fair value of these foreign currency derivative contracts was insignificant. The gains and losses realized on these foreign currency derivative contracts are not material. The duration of these contracts was generally 30 days or less during each of the ninethree months ended October 1, 2017April 3, 2022 and October 2, 2016.

April 4, 2021.
In addition, in connection with certain intercompany loan agreements utilized to finance its acquisitions and stock repurchase program, the Company enters into forward foreign exchange contracts intended to hedge movements in foreign exchange rates prior to settlement of such intercompany loans denominated in foreign currencies. The Company records these hedges at fair value on the Company’s condensed consolidated balance sheets. The unrealized gains and losses on these hedges, as well as the gains and losses associated with the remeasurement of the intercompany loans, are recognized immediately in interest and other expense, net. The cash flows related to the settlement of these hedges are included in cash flows from financing activities within the Company’s condensed consolidated statement of cash flows.

The outstanding forward exchange contracts designated as economic hedges, which were intended to hedge movements in foreign exchange rates prior to the settlement of certain intercompany loan agreements included combined EuroU.S. Dollar notional amounts of €19.0$360.2 million as of January 2, 2022, and combined U.S. Dollar notional amounts of $12.3$1,309.0 million as of October 1, 2017; combined Euro notional amounts of €58.6 million and combined Swedish Krona notional amounts of kr969.5 million as of January 1, 2017; and combined Euro notional amounts of €50.7 million and combined U.S. Dollar notional amounts of $9.2 million as of October 2, 2016.April 4, 2021. The net gains and losses on these derivatives, combined with the gains and losses on the remeasurement of the hedged intercompany loans were not material for each of the three and nine months ended October 1, 2017April 3, 2022 and October 2, 2016.April 4, 2021. The Company paid $11.5$0.8 million and $0.1received $6.0 million during the ninethree months ended October 1, 2017April 3, 2022 and October 2, 2016,April 4, 2021, respectively, from the settlement of these hedges.
In connection with the issuance of the 2026 Notes duringDuring fiscal year 2016,2018, the Company designated a portion of the 2026 Notes to hedge its net investments in certain foreign subsidiaries. Realized and unrealizedUnrealized translation adjustments from these hedgesa portion of the 2026 Notes were included in the foreign currency translation component of accumulated other comprehensive income ("AOCI"), which offsets translation adjustments on the underlying net assets of foreign subsidiaries. The cumulative translation gains or losses will remain in AOCI until the foreign subsidiaries are liquidated or sold. As of October 1, 2017,April 3, 2022, the total notional amount of foreign currency denominated debtthe 2026 Notes that was designated to hedge net investments in foreign subsidiaries was €495.9€497.2 million. The unrealized foreign exchange lossgains recorded in AOCI related to the net investment hedge was $19.5were $16.7 million and $63.1$21.6 million for the three and nine months ended October 1, 2017,April 3, 2022 and April 4, 2021, respectively.
On June 27, 2017, in connection with the planned acquisition of EUROIMMUN, the Company entered into several foreign currency forward contracts to purchase Euros to partly mitigate the currency exchange risk associated with the payment of the Euro-denominated purchase price. These currency forward contracts were not designated as hedging instruments and therefore the change in the derivative fair value was marked to market through the condensed consolidated statement of operations. The Company received $60.4 million during the third quarter of fiscal year 2017 from the settlement of these foreign currency forward contracts. The cash flows related to the settlement of these foreign currency forward contracts are included in cash flows from investing activities within the Company’s condensed consolidated statement of cash flows. The outstanding foreign currency forward contracts have an aggregate notional amount totaling $1.18 billion as of October 1, 2017.
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The net foreign exchange gain included in other (income) expense, net related to these foreign currency forward contracts was $36.3 million and $42.6 million for the three and nine months ended October 1, 2017, respectively.

The Company does not expect any material net pre-tax gains or losses to be reclassified from accumulated other comprehensive loss into interest and other expense, net within the next twelve months.


Note 17:13: Fair Value Measurements


Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents, derivatives, marketable securities and accounts receivable. The Company believes it had no significant concentrations of credit risk as of October 1, 2017.April 3, 2022.
The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during the ninethree months ended October 1, 2017.April 3, 2022. The Company’s financial assets and liabilities carried at fair
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value are primarily comprised of marketable securities, derivative contracts used to hedge the Company’s currency risk, and acquisition-related contingent consideration. The Company has not elected to measure any additional financial instruments or other items at fair value.
Valuation Hierarchy: The following summarizes the three levels of inputs required to measure fair value. For Level 1 inputs, the Company utilizes quoted market prices as these instruments have active markets. For Level 2 inputs, the Company utilizes quoted market prices in markets that are not active, broker or dealer quotations, or utilizes alternative pricing sources with reasonable levels of price transparency. For Level 3 inputs, the Company utilizes unobservable inputs based on the best information available, including estimates by management primarily based on information provided by third-party fund managers, independent brokerage firms and insurance companies. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.
The following tables show the assets and liabilities carried at fair value measured on a recurring basis as of October 1, 2017April 3, 2022 and January 1, 20172, 2022 classified in one of the three classifications described above:
  Fair Value Measurements at October 1, 2017 Using: Fair Value Measurements at April 3, 2022 Using:
Total Carrying Value at October 1, 2017 
Quoted Prices in
Active Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 Total Carrying Value at April 3, 2022Quoted Prices in
Active Markets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
(In thousands) (In thousands)
Marketable securities$2,049
 $2,049
 $—
 $—
Marketable securities$56,683 $56,683 $— $— 
Foreign exchange derivative assets195
 —
 195
 —
Foreign exchange derivative assets229 — 229 — 
Foreign exchange derivative liabilities(17,578) —
 (17,578) —
Foreign exchange derivative liabilities(1,258)— (1,258)— 
Contingent consideration(64,727) —
 —
 (64,727)Contingent consideration(49,828)— — (49,828)
 
 Fair Value Measurements at January 2, 2022 Using:
 Total Carrying Value at January 2, 2022Quoted Prices in
Active Markets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant
Unobservable 
Inputs
(Level 3)
 (In thousands)
Marketable securities$53,073 $53,073 $— $— 
Foreign exchange derivative assets3,765 — 3,765 — 
Foreign exchange derivative liabilities(3,463)— (3,463)— 
Contingent consideration(57,996)— — (57,996)
   Fair Value Measurements at January 1, 2017 Using:
 Total Carrying Value at January 1, 2017 
Quoted Prices in
Active Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable 
Inputs
(Level 3)
 (In thousands)
Marketable securities$1,678
 $1,678
 $—
 $—
Foreign exchange derivative assets1,208
 —
 1,208
 —
Foreign exchange derivative liabilities(1,370) —
 (1,370) —
Contingent consideration(63,201) —
 —
 (63,201)
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Level 1 and Level 2 Valuation Techniques:  The Company’s Level 1 and Level 2 assets and liabilities are comprised of investments in equity and fixed-income securities as well as derivative contracts. For financial assets and liabilities that utilize Level 1 and Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including common stock price quotes, foreign exchange forward prices and bank price quotes. Below is a summary of valuation techniques for Level 1 and Level 2 financial assets and liabilities.
Marketable securities:    Include equity and fixed-income securities measured at fair value using the quoted market prices in active markets at the reporting date.
Foreign exchange derivative assets and liabilities:    Include foreign exchange derivative contracts that are valued using quoted forward foreign exchange prices at the reporting date. The Company’s foreign exchange derivative contracts are subject to master netting arrangements that allow the Company and its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these arrangements have been presented in the Company's condensed consolidated balance sheet on a net basis and are recorded in other assets. As of both October 1, 2017April 3, 2022 and January 1, 2017,2, 2022, none of the master netting arrangements involved collateral.
Level 3 Valuation Techniques:  The Company’s Level 3 liabilities are comprised of contingent consideration related to acquisitions. For liabilities that utilize Level 3 inputs, the Company uses significant unobservable inputs. Below is a summary of valuation techniques for Level 3 liabilities.
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Contingent consideration:    Contingent consideration is measured at fair value at the acquisition date using projected milestone dates, discount rates, probabilities of success and projected revenues (for revenue-based considerations). Projected risk-adjusted contingent payments are discounted back to the current period using a discounted cash flow model.
During fiscal year 2015, the Company acquired Vanadis Diagnostics AB. Under the terms of the acquisition, the initial purchase consideration was $32.0 million, net of cash and the Company will be obligated to make potential future milestone payments, based on completion of a proof of concept, regulatory approvals and product sales, of up to $93.0 million ranging from 2016 to 2019. The fair value of the contingent consideration as of the acquisition date was estimated at $56.9 million. During the third quarter of fiscal year 2017, the Company updated the fair value of the contingent consideration and recorded a liability of $64.7 million as of October 1, 2017. The key assumptions used to determine the fair value of the contingent consideration as of October 1, 2017 included projected milestone dates of 2018 to 2019, discount rates ranging from 2.1% to 6.8%, conditional probabilities of success of each individual milestone ranging from 90% to 95% and cumulative probabilities of success for each individual milestone ranging from 65.8% to 95%. A significant delay in the product development (including projected regulatory milestone) achievement date in isolation could result in a significantly lower fair value measurement; a significant acceleration in the product development (including projected regulatory milestone) achievement date in isolation would not have a material impact on the fair value measurement; a significant change in the discount rate in isolation would not have a material impact on the fair value measurement; and a significant change in the probabilities of success in isolation could result in a significant change in fair value measurement.
The fair values of contingent consideration are calculated on a quarterly basis based on a collaborative effort of the Company’s regulatory, research and development, operations, finance and accounting groups, as appropriate. Potential valuation adjustments are made as additional information becomes available, including the progress towards completion of a proof of concept, regulatory approvals and product salesachieving the revenue targets as compared to initial projections, the impact of market competition and market landscape shifts from non-invasive prenatal testing products, with the impact of such adjustments being recorded in the Company's condensed consolidated statements of operations.
As of October 1, 2017, the Company may have to pay contingent consideration related to an acquisition with open contingency period of up to $83.0 million. The expected maximum earnout period for the acquisition with an open contingency period does not exceed 2.0 years from the acquisition date, and the remaining weighted average earnout period at October 1, 2017 was 1.4 years.
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A reconciliation of the beginning and ending Level 3 net liabilities for contingent consideration is as follows:
Three Months Ended Nine Months Ended Three Months Ended
October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016		 April 3,
2022		April 4,
2021
(In thousands) (In thousands)
Balance at beginning of period$(64,076) $(62,878) $(63,201) $(57,350)Balance at beginning of period$(57,996)$(2,953)
AdditionsAdditions(4,961)— 
Amounts paid and foreign currency translation—
 14
 34
 113
Amounts paid and foreign currency translation1,422 69 
Adjustments recognized in goodwillAdjustments recognized in goodwill12,400 — 
Change in fair value (included within selling, general and administrative expenses)(651) (4,051) (1,560) (9,678)Change in fair value (included within selling, general and administrative expenses)(693)(240)
Balance at end of period$(64,727) $(66,915) $(64,727) $(66,915)Balance at end of period$(49,828)$(3,124)
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturities of these assets and liabilities. If measured at fair value, cash and cash equivalents would be classified as Level 1.
As of October 1, 2017 and January 1, 2017, the Company’sThe Company's outstanding senior unsecured revolving credit facility, which provides for $1.0 billion of revolving loans, had no outstanding borrowings. The interest rate on the Company’s senior unsecured revolving credit facility is reset at least monthly to correspond to variable rates that reflect currently available terms and conditions for similar debt.
As of October 1, 2017, the Company’s senior unsecured term loan credit facility, which provides for $200.0 million of term loans, had no outstanding borrowings. The interest rate on the Company’s senior unsecured term loan credit facility will be reset at least monthly to correspond to variable rates that reflect currently available terms and conditions for similar debt. The Company had no change in credit standing during the first nine months of fiscal year 2017.
The Company's 2021 Notes, with a face value of $500.0 million, had an aggregate carrying value of $496.4 million, net of $1.5 million of unamortized original issue discount and $2.1 million of unamortized debt issuance costs as of October 1, 2017. The 2021 Notes had an aggregate carrying value of $495.8 million, net of $1.7 million of unamortized original issue discount and $2.5 million of unamortized debt issuance costs as of January 1, 2017. The 2021 Notesnotes had a fair value of $543.9$4,270.3 million and $539.2a carrying value of $4,464.3 million as of October 1, 2017 and January 1, 2017, respectively.April 3, 2022. The Company's outstanding senior unsecured notes had a fair value of $4,612.8 million and a carrying value of $4,479.5 million as of January 2, 2022. The fair values of the 2021 Notes isoutstanding senior unsecured notes were estimated using market quotes from brokers and iswere based on current rates offered for similar debt.debt, which are Level 2 measurements.
The Company’s other debt facilities, including the Company's 2026 Notes, with a face value of €500 million,senior revolving and term loan credit facilities, had an aggregate carrying value of $581.5 million, net of $4.7 million of unamortized original issue discount and $4.4 million of unamortized debt issuance costs as of October 1, 2017. The 2026 Notes had a fair value of €504.7$403.4 million and €507.5$504.5 million as of October 1, 2017April 3, 2022 and January 1, 2017, respectively. The fair value of the 2026 Notes is estimated using market quotes from brokers and is based on current rates offered for similar debt.
The Company's financing lease obligations had an aggregate carrying value of $36.2 million and $37.1 million as of October 1, 2017 and January 1, 2017,2, 2022, respectively. The carrying values of the Company's financing lease obligations approximated theirvalue approximates fair value as there has been minimal change in the Company's incremental borrowing rate.
As of October 1, 2017, the 2021 Notes, 2026 Notes and financing lease obligations were classified as Level 2.
As of October 1, 2017, there has not been any significant impact to the fair value of the Company’s derivative liabilities due to credit risk. Similarly, there has not been any significant adverse impact to the Company’s derivative assets based on the evaluation of its counterparties’ credit risks.

Note 18:14: Contingencies


The Company is conducting a number of environmental investigations and remedial actions at current and former locations of the Company and, along with other companies, has been named a potentially responsible party (“PRP”) for certain waste disposal sites. The Company accrues for environmental issues in the accounting period that the Company’s responsibility is established and when the cost can be reasonably estimated. The Company has accrued $9.8$12.0 million and $9.9$11.9 million as of October 1, 2017April 3, 2022 and January 1, 2017,2, 2022, respectively, which represents its management’s estimate of the cost of the remediation of known environmental matters and does not include any potential liability for related personal injury or property damage claims. These amounts were included in accrued expenses and other current liabilities. The Company's environmental accrual is not discounted and does not reflect the recovery of any material amounts through insurance or indemnification arrangements. The cost estimates are subject to a number of variables, including the stage of the environmental investigations, the magnitude
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of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations. For sites where the Company has been named a PRP, management does not currently anticipate any additional liability to result from the inability of other significant named parties to contribute. The Company expects that the majority of such accrued amounts could be paid out over a period of up to ten10 years. As assessment and remediation activities progress at each individual site, these liabilities are reviewed and adjusted to reflect additional information as it becomes available. There have been no environmental problems to date that have had, or are expected to have, a material adverse effect on the Company’s condensed consolidated financial statements. While it is possible that a loss exceeding the amounts recorded in the condensed consolidated financial statements may be incurred, the potential exposure is not expected to be materially different from those amounts recorded.
The Company is subject to various claims, legal proceedings and investigations covering a wide range of matters that arise in the ordinary course of its business activities. Although the Company has established accruals for potential losses that it
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believes are probable and reasonably estimable, in the opinion of the Company’s management, based on its review of the information available at this time, the total cost of resolving these contingencies at October 1, 2017April 3, 2022 would not have a material adverse effect on the Company’s condensed consolidated financial statements. However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to the Company.
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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
This quarterly report on Form 10-Q, including the following management’s discussion and analysis, contains forward-looking information that you should read in conjunction with the condensed consolidated financial statements and notes to the condensed consolidated financial statements that we have included elsewhere in this report. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “plans,” “anticipates,” “intends,” “expects,” “will” and similar expressions are intended to identify forward-looking statements. Our actual results may differ materially from the plans, intentions or expectations we disclose in the forward-looking statements we make. We have included important factors below under the heading “Risk Factors” in Part II, Item 1A. that we believe could cause actual results to differ materially from the forward-looking statements we make. We are not obligated to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.


Overview
We are a leading provider of products, services and solutions for the diagnostics, food, environmental, industrial, life sciences research and laboratory servicesapplied markets. Through our advanced technologies and differentiated solutions, we address critical issues that help to improve lives and the world around us.
We realigned our businesses at the beginning of the fourth quarter of fiscal year 2016 to better organize around customer requirements, positioning us to grow in attractive end markets and expand share with our core product offerings. Diagnostics became a standalone operating segment and we formed a new operating segment, Discovery & Analytical Solutions. The results reported for the three and nine months ended October 1, 2017 reflect this new alignment of our operating segments. Financial information in this report relating to the three and nine months ended October 2, 2016 has been retrospectively adjusted to reflect the change in our operating segments.
The principal products and services of our two operating segments are:
•Discovery & Analytical Solutions. Provides products and services targeted towards the environmental, industrial, food, life sciences research and laboratory servicesapplied markets.
•Diagnostics. Develops diagnostics, tools and applications focused on clinically-oriented customers, especially within the reproductive health, emerging market diagnosticsimmunodiagnostics and applied genomics markets. The Diagnostics segment serves the diagnostics market.
Overview of the ThirdFirst Quarter of Fiscal Year 2017
Our fiscal year ends on the Sunday nearest December 31. We report fiscal years under a 52/53 week format and as a result, certain fiscal years will contain 53 weeks. The fiscal year ending December 31, 2017 ("fiscal year 2017") will include 52 weeks, and the fiscal year ended January 1, 2017 ("fiscal year 2016") included 52 weeks.2022
Our overall revenue in the thirdfirst quarter of fiscal year 20172022 was $554.3$1,259.4 million and increased $39.8which decreased by $48.2 million, or 8%4%, as compared to the thirdfirst quarter of fiscal year 2016,2021, reflecting a decrease of $196.0 million, or 23%, in our Diagnostics segment revenue offset by an increase of $20.3$147.8 million, or 6%33%, in our Discovery & Analytical Solutions segment revenue and an increase of $19.5 million, or 13%,revenue. The decrease in our Diagnostics segment revenue.revenue for the first quarter of fiscal year 2022 was driven by a decrease in revenue from our COVID-19 product offerings of $239.7 million, which was partially offset by increase in revenue across our core portfolio of $43.7 million. Additionally, due to the decrease in COVID-19 cases and related decreased need for COVID-19 testing, the California Department of Public Health ("CDPH") notified us on March 31, 2022 that it intends to end its contract with us for the supply and operation of the Valencia Branch Laboratory effective on May 15, 2022. We shall recognize the unamortized contract liability pertaining to the nonrefundable prepayment as revenue over the remaining period through May 15, 2022. The increase in our Discovery & Analytical Solutions segment revenue for the thirdfirst quarter of fiscal year 20172022 was primarily due todriven by an increase of $15.7 million fromin our laboratory serviceslife sciences market revenue and an increase of $7.9 million from environmental, food and industrialapplied markets revenue, partially offset by a decrease of $3.3 million from our life sciences research market revenue.unfavorable changes in foreign exchange rates. The increase in our Diagnostics segmentlife sciences market revenue forwas the third quarterresult of fiscal year 2017 was primarily driven by growth in our emerging markets diagnostic offerings and sales of our applied genomics solutions.
In our Discovery & Analytical Solutions segment, we had an increase in revenue for the third quarter offrom businesses acquired in fiscal year 2017 as compared to the third quarter of fiscal year 2016. During the third quarter of fiscal year 2017, we continued to experience increased demand for our OneSource laboratory service business, which offers services designed to enable our customers to increase efficiencies and production time while reducing maintenance costs, all of which continue to be critical for them. We also experienced strong2021 along with organic growth in our environmental, foodpharmaceutical and industrialbiotechnology markets. In the life sciences research market, we experienced continued decline in sales of radioactive reagentsThe increase in our radio-nucleotide business.
Inapplied markets revenue was driven by increased demand from our Diagnostics segment, we experienced growthindustrial and food markets, which were partially offset by decreased demand from continued expansion in our newborn and infectious disease screening businesses, particularly in the emerging markets. Birth rates in the United States continue to stabilize and demand for greater access to newborn screening in rural areas outside the United States is also increasing, as evidenced by prenatal trends we saw during the third quarter of fiscal year 2017. We also experienced strong growth in our advanced genomics front-end sample prep business in the Americas.
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environmental market.
Our consolidated gross margins increased 19decreased 611 basis points in the thirdfirst quarter of fiscal year 2017,2022, as compared to the thirdfirst quarter of fiscal year 2016,2021, primarily due to increased amortization expense and decreased COVID-19 revenue partially offset by a favorable shift in product mix and benefits from our initiatives to improve our supply chain.service productivity. Our consolidated operating margins decreased 331,554 basis points in the thirdfirst quarter of fiscal year 2017,2022, as compared to the thirdfirst quarter of fiscal year 2016,2021, primarily due to increased costs related to amortization of acquired intangible assets, and investments in new product development partially offset by lower costs as a result of our cost containment and productivitygrowth initiatives.
We continue to believe that we are well positioned to take advantage of the spending trends in our end markets and to promote efficiencies in markets where current conditions may increase demand for certain services. Overall, we believe that our strategic focus on diagnosticspriorities and discovery and analytical solutions markets,recent acquisitions, coupled with our deep portfolioexpanded range of technologies and applications,product offerings, leading market positions, global scale, and financial strength will provide us with a foundation for continued revenue growth, strong margins and cash flows, and long-term earnings per share growth.



Critical Accounting Policies and Estimates
The preparation of condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, warranty costs, bad debts, inventories, accounting for business combinations, and dispositions, long-lived assets, income taxes, restructuring, pensions
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including goodwill and other postretirement benefits, contingenciesintangible assets and litigation.employee compensation and benefits. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Critical accounting policies are those policies that affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements. We believe our critical accounting policies include our policies regarding revenue recognition, warranty costs, allowances for doubtful accounts, inventory valuation, business combinations, valuevaluation of long-lived assets, including goodwill and other intangibles and employee compensation and benefits, restructuring activities, gains or losses on dispositions and income taxes.benefits.
For a more detailed discussion of our critical accounting policies and estimates, please refer to the Notes to our audited consolidated financial statements and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended January 1, 20172, 2022 (our “2016“2021 Form 10-K”), as filed with the Securities and Exchange Commission (the "SEC").Commission. There have been no significant changes in our critical accounting policies and estimates during the ninethree months ended October 1, 2017.April 3, 2022.


Consolidated Results of Continuing Operations
Revenue
Revenue for the three months ended October 1, 2017April 3, 2022 was $554.3$1,259.4 million, as compared to $514.5$1,307.7 million for the three months ended October 2, 2016, an increaseApril 4, 2021, a decrease of $39.8$48.2 million, or 8%approximately 4%, which includes an approximate 2% decrease in revenue attributable to unfavorable changes in foreign exchange rates, partially offset by a 10% increase in revenue attributable to acquisitions and a 1% increase in revenue attributable to favorable changes in foreign exchange rates.divestitures. The analysisanalysis in the remainder of this paragraph compares segment revenue for the three months ended October 1, 2017April 3, 2022 as compared to the three months ended October 2, 2016April 4, 2021 and includes the effect of foreign exchange rate fluctuations, acquisitions and divestitures. Our Diagnostics segment revenue was $657.1 million for the three months ended April 3, 2022, as compared to $853.1 million for the three months ended April 4, 2021, a decrease of $196.0 million, or 23%, primarily due to a decrease in revenue from our COVID-19 product offerings of $239.7 million and unfavorable changes in foreign exchange rates, which were partially offset by increase in revenue across our core portfolio of $43.7 million. Our Discovery & Analytical Solutions segment revenue was $385.4$602.4 million for the three months ended October 1, 2017,April 3, 2022, as compared to $365.1$454.6 million for the three months ended October 2, 2016,April 4, 2021, an increase of $20.3$147.8 million, or 6%33%, primarily due todriven by an increase of $15.7 millionin revenue from our laboratory services market revenue2021 acquisitions, and an increase of $7.9 million from environmental, foodin our life sciences market and industrialapplied markets revenue, partially offset by a decrease of $3.3 million from our life sciences research market revenue. Our Diagnostics segment revenue was $168.9 million for the three months ended October 1, 2017, as compared to $149.4 million for the three months ended October 2, 2016, an increase of $19.5 million, or 13%, due to continued expansionunfavorable changes in our newborn and infectious disease screening solutions and strong growth in applied genomics.foreign exchange rates. As a result of adjustments to deferred revenue related to certain acquisitions required by business combination accounting rules, we did not recognize $0.2 million of revenue for each of the three months ended October 1, 2017April 3, 2022 and October 2, 2016$1.2 million of revenue for the three months ended April 4, 2021 that otherwise would have been recorded by the acquired businesses during each of the respective periods.
Revenue for the nine months ended October 1, 2017 was $1,615.4 million, as compared to $1,548.7 million for the nine months ended October 2, 2016, an increase of $66.6 million, or 4%, which includes an approximate 2% increase in revenue attributable to acquisitions and divestitures and a 1% decrease in revenue attributable to unfavorable changes in foreign exchange rates. The analysis in the remainder of this paragraph compares segment revenue for the nine months ended October 1, 2017 as compared to the nine months ended October 2, 2016 and includes the effect of foreign exchange rate fluctuations, acquisitions and divestitures. Our Discovery & Analytical Solutions segment revenue was $1,130.3 million for the nine months ended October 1, 2017, as compared to $1,103.0 million for the nine months ended October 2, 2016, an increase of
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$27.2 million, or 2%, primarily due to an increase of $32.0 million from our laboratory services market revenue and an increase of $9.7 million from our environmental, food and industrial markets revenue, partially offset by a decrease of $14.5 million from our life sciences research market revenue. Our Diagnostics segment revenue was $485.1 million for the nine months ended October 1, 2017, as compared to $445.7 million for the nine months ended October 2, 2016, an increase of $39.3 million, or 9%, due to continued expansion in our newborn, maternal fetal health and infectious disease screening solutions. As a result of adjustments to deferred revenue related to certain acquisitions required by business combination accounting rules, we did not recognize $0.6 million of revenue for each of the nine months ended October 1, 2017 and October 2, 2016 that otherwise would have been recorded by the acquired businesses during each of the respective periods.
Cost of Revenue
Cost of revenue for the three months ended October 1, 2017April 3, 2022 was $285.5$580.2 million, as compared to $265.9$522.5 million for the three months ended October 2, 2016,April 4, 2021, an increase of $19.5$57.7 million, or 7%. As a percentage of revenue, cost of revenue decreased to 51.5% for the three months ended October 1, 2017, from 51.7% for the three months ended October 2, 2016, resulting in an increase in gross margin of 19 basis points to 48.5% for the three months ended October 1, 2017, from 48.3% for the three months ended October 2, 2016. Amortization of intangible assets increased and was $7.1 million for the three months ended October 1, 2017, as compared to $7.0 million for the three months ended October 2, 2016. Stock-based compensation expense was $0.4 million for the three months ended October 1, 2017, as compared to $0.3 million for the three months ended October 2, 2016. In addition to the above items, the overall increase in gross margin was primarily the result of a favorable shift in product mix and benefits from our initiatives to improve our supply chain.
Cost of revenue for the nine months ended October 1, 2017 was $849.4 million, as compared to $811.6 million for the nine months ended October 2, 2016, an increase of $37.9 million, or 5%approximately 11%. As a percentage of revenue, cost of revenue increased to 52.6%46.1% for the ninethree months ended October 1, 2017,April 3, 2022, from 52.4%40.0% for the ninethree months ended October 2, 2016,April 4, 2021, resulting in a decrease in gross margin of 18611 basis points to 47.4%53.9% for the ninethree months ended October 1, 2017,April 3, 2022, from 47.6%60.0% for the ninethree months ended October 2, 2016.April 4, 2021. Amortization of intangible assets decreased to $21.3increased and was $40.1 million for the ninethree months ended October 1, 2017,April 3, 2022, as compared to $23.3$20.3 million for the ninethree months ended October 2, 2016. Stock-based compensation expense was $0.9April 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $22.9 million for the ninethree months ended October 1, 2017, as compared to $0.8 million for the nine months ended October 2, 2016.April 3, 2022. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions added an incremental expense of $4.2$16.9 million for the ninethree months ended October 1, 2017,April 3, 2022, as compared to $0.4$3.0 million for the ninethree months ended October 2, 2016. In addition toApril 4, 2021. Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.1 million for the above items, thethree months ended April 3, 2022. The overall decrease in gross margin was primarily the result of an unfavorablepartially offset by a favorable shift in product mix partially offset by benefits from our initiatives to improve our supply chain.and service productivity.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended October 1, 2017April 3, 2022 were $150.9$334.4 million, as compared to $142.6$251.4 million for the three months ended October 2, 2016,April 4, 2021, an increase of $8.3$83.0 million,, or 5.8%33.0%. As a percentage of revenue, selling, general and administrative expenses decreasedincreased and were 27.2%26.6% for the three months ended October 1, 2017,April 3, 2022, as compared to 27.7%19.2% for the three months ended October 2, 2016.April 4, 2021. Amortization of intangible assets increased to $10.5and was $62.6 million for the three months ended October 1, 2017,April 3, 2022, as compared to $9.8$33.9 million for the three months ended October 2, 2016. Stock-based compensation expense was $3.7April 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $34.1 million for the three months ended October 1, 2017, as compared to $3.3 million for the three months ended October 2, 2016. Other purchaseApril 3, 2022. Purchase accounting adjustments added an incremental expense of $0.7 million for the three months ended October 1, 2017,April 3, 2022, which
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primarily consisted of a change in contingent consideration, as compared to $4.1$0.2 million for the three months ended October 2, 2016.April 4, 2021. Acquisition and divestiture-related expenses added an incremental expense of $5.4$17.4 million for the three months ended October 1, 2017,April 3, 2022, as compared to $0.1$9.7 million for the three months ended October 2, 2016.April 4, 2021. Legal costs for significant litigation matters and settlements were $0.4 million for the three months ended April 3, 2022. In addition to the above items, the increase in selling, general and administrative expenses was primarily due to higher commissions and marketing expenses, partially offset by lower costs as athe result of cost containmentcosts related to investments in people, digital capabilities, innovation, and productivity initiatives.
Selling, general and administrative expenses for the nine months ended October 1, 2017 were $443.9 million, as compared to $438.1 million for the nine months ended October 2, 2016, an increase of $5.8 million, or 1%. As a percentage of revenue, selling, general and administrative expenses decreased and were 27.5% for the nine months ended October 1, 2017, as compared to 28.3% for the nine months ended October 2, 2016. Amortization of intangible assets increased and was $30.7 million for the nine months ended October 1, 2017, as compared to $30.1 million for the nine months ended October 2, 2016. Stock-based compensation expense was $14.2 million for the nine months ended October 1, 2017, as compared to $12.1 million for the nine months ended October 2, 2016. Other purchase accounting adjustments added an incremental expense of $1.6 million for the nine months ended October 1, 2017, as compared to $9.7 million for the nine months ended October 2, 2016. Acquisition and divestiture-related expenses added an incremental expense of $11.7 million for the nine months ended October 1, 2017, as compared to $0.6 million for the nine months ended October 2, 2016. Other than the items listed above, selling, general and administrative expenses were generally consistent year over year.
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recent acquisitions.
Research and Development Expenses
Research and development expenses for the three months ended October 1, 2017April 3, 2022 were $34.9$76.6 million, as compared to $29.5$60.2 million for the three months ended October 2, 2016,April 4, 2021, an increase of $5.4$16.4 million,, or 18%27.2%. Research and development expenses from our recent acquisitions were $13.7 million for the three months ended April 3, 2022. As a percentage of revenue, research and development expenses increased and were 6.3%6.1% for the three months ended October 1, 2017,April 3, 2022, as compared to 5.7%4.6% for the three months ended October 2, 2016. AmortizationApril 4, 2021. Stock compensation related to our acquisitions added an incremental expense of intangible assets was$1.5 million for the three months ended April 3, 2022. Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.1 million for each of the three months ended October 1, 2017 and October 2, 2016. Stock-based compensation expense was $0.4 million for the three months ended October 1, 2017, as compared to $0.2 million for the three months ended October 2, 2016.April 3, 2022. The increase in research and development expenses was primarily the result ofdriven by our investments in new product development, which was partially offset by lower costs as a result of cost containment and productivity initiatives.
Research and development expenses for the nine months ended October 1, 2017 were $101.7 million, as compared to $91.4 million for the nine months ended October 2, 2016, an increase of $10.4 million, or 11%. As a percentage of revenue, research and development expenses increased and were 6.3% for the nine months ended October 1, 2017, as compared to 5.9% for the nine months ended October 2, 2016. Amortization of intangible assets decreased and was $0.2 million for the nine months ended October 1, 2017, as compared to $0.5 million for the nine months ended October 2, 2016. Stock-based compensation expense was $1.1 million for the nine months ended October 1, 2017, as compared to $0.6 million for the nine months ended October 2, 2016. The increase in research and development expenses was primarily the result of investments in new product development, which was partially offset by lower costs as a result of cost containment and productivity initiatives.

development.
Restructuring and Contract Termination Charges,Other Costs, Net

We have undertaken a series of restructuring actions related to the impact of acquisitions and divestitures, the alignment of our operations with our growth strategy, the integration of our business units and our productivity initiatives. The current portion of restructuring and contract termination charges is recorded in accrued restructuring and contract termination charges and the long-term portion of restructuring and contract termination charges is recorded in long-term liabilities. The activities associated with these plans have been reported as restructuring and contract termination charges, net, as applicable, and are included as a component of income from continuing operations.

We implemented a restructuring plan in each of the first and third quartersquarter of fiscal year 20172022 consisting of workforce reductions principally intended to realign resources to emphasize growth initiatives and integrate new acquisitions (the "Q1 20172022 Plan" and "Q3 2017", respectively)). We implemented a restructuring planplans in the thirdeach quarter of fiscal year 20162021 consisting of workforce reductions principally intended to focusrealign resources on higherto emphasize growth product linesinitiatives and integrate new acquisitions (the "Q1 2021 Plan", "Q2 2021 Plan", "Q3 20162021 Plan"). We implemented a restructuring plan in the second quarter of fiscal year 2016 consisting of workforce reductions principally intended to focus resources on higher growth end markets (the "Q2 2016 and "Q4 2021 Plan"), respectively). Details of the plans initiated in previous years (the “Previous Plans”) are discussed more fully in Note 4, Restructuring and Other Costs, Net, to theour audited consolidated financial statements in the 20162021 Form 10-K.

The following table summarizes the reductions in headcount, the initial restructuring or contract termination charges by operatingreporting segment, and the dates by which payments were substantially completed, or the dates by which payments are expected to be substantially completed, for restructuring actions implemented during fiscal years 20172022 and 2016 in continuing operations:2021:
 Workforce Reductions Closure of Excess Facility Total (Expected) Date Payments Substantially Completed by
 Headcount Reduction Discovery & Analytical Solutions Diagnostics Discovery & Analytical Solutions Diagnostics  Severance Excess Facility
       
 (In thousands, except headcount data)    
Q3 2017 Plan27 $1,321
 $1,021
 $—
 $—
 $2,342
 Q4 FY2018
—
Q1 2017 Plan90 5,000
 1,631
 33
 33
 6,697
 Q2 FY2018 Q2 FY2018
Q3 2016 Plan22 1,779
 41
 —
 —
 1,820
 Q4 FY2017 —
Q2 2016 Plan72 4,106
 561
 —
 —
 4,667
 Q3 FY2017 —

Workforce ReductionsClosure of Excess FacilityTotal(Expected) Date Payments Substantially Completed by
Headcount ReductionDiscovery & Analytical SolutionsDiagnosticsDiscovery & Analytical SolutionsDiagnosticsSeveranceExcess Facility
(In thousands, except headcount data)
Q1 2022 Plan81$5,832 $399 $— $— $6,231 Q4 FY2022—
Q4 2021 Plan313,139 77 150 — 3,366 Q3 FY2022Q1 FY2023
Q3 2021 Plan39420 366 — — 786 Q2 FY2022—
Q2 2021 Plan25968 564 — — 1,532 Q1 FY2022—
Q1 2021 Plan773,941 1,615 — — 5,556 Q4 FY2021—
We do not currently expect to incur any future charges for these plans. We expect to make payments under the Previous Plans for remaining residual lease obligations, with terms varying in length, through fiscal year 2022.

In connection with the termination ofterminated various contractual commitments wein connection with certain disposal activities and have recorded additionalcharges for the costs of terminating these contracts before the end of their terms and the costs that will continue to be incurred for the remaining terms without economic benefit to us. We recorded net pre-tax charges of $0.4$6.3 million and $3.3 millionin the Discovery & Analytical Solutions segment during the three and nine months ended October 1, 2017,April 3, 2022 as a result of these contract terminations. We recorded net pre-tax gains of $0.4 million in the Diagnostics segment during the three months ended April 3, 2022 as a result of changes in estimates from prior contract terminations.
We recorded pre-tax charges of $1.3 million and $0.2 million associated with relocating facilities during the three months ended April 3, 2022 and April 4, 2021, respectively, in the Discovery & Analytical Solutions segment and $0.5 million during eachsegment. We expect to make payments on these relocation activities through end of the three and nine months ended October 1, 2017, in the Diagnostics segment.fiscal year 2022.
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At October 1, 2017, we had $15.7 million recorded for accrued restructuring and contract termination charges, of which $10.1 million was recorded in short-term accrued restructuring and contract termination charges, $2.7 million was recorded in long-term liabilities and $2.9 million was recorded in other reserves. At January 1, 2017, we had $10.5 million recorded for accrued restructuring and contract termination charges, of which $7.5 million was recorded in short-term accrued restructuring and contract termination charges and $3.0 million was recorded in long-term liabilities. The following table summarizes our restructuring and contract termination accrual balances and related activity by restructuring plan, as well as contract termination accrual balances and related activity, during the nine months ended October 1, 2017:

 Balance at January 1, 2017 2017 Charges 2017 Changes in Estimates, Net 2017 Amounts Paid Balance at October 1, 2017
 (In thousands)
Severance:         
Q3 2017 Plan$—
 $2,342
 $—
 $(34) $2,308
Q1 2017 Plan—
 6,631
 —
 (3,834) 2,797
Q3 2016 Plan1,208
 —
 —
 (990) 218
Q2 2016 Plan1,436
 —
 —
 (446) 990
          
Facility:         
Q1 2017 Plan—
 66
 —
 (9) 57
          
Previous Plans7,780
 927
 —
 (2,408) 6,299
Restructuring10,424
 9,966
 —
 (7,721) 12,669
Contract Termination117
 2,909
 45
 (25) 3,046
Total Restructuring and Contract Termination$10,541
 $12,875
 $45
 $(7,746) $15,715


Interest and Other (Income) Expense, Net
Interest and other (income) expense, net, consisted of the following:
 Three Months Ended
 April 3,
2022		April 4,
2021
 (In thousands)
Interest income$(595)$(411)
Interest expense28,388 14,126 
Change in fair value of financial securities12,125 (19,298)
Other components of net periodic pension credit(2,362)(3,719)
Other income, net(311)(3,404)
Total interest and other expense (income), net$37,245 $(12,706)
 Three Months Ended Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Interest income$(802) $(124) $(1,512) $(361)
Interest expense10,974
 10,998
 32,510
 30,778
Loss (gain) on disposition of businesses and assets, net—
 —
 301
 (5,562)
Other (income) expense, net(35,419) 389
 (39,745) 2,887
Total interest and other (income) expense, net$(25,247) $11,263
 $(8,446) $27,742
InterestThe increase in interest and other expense (income) expense,, net, for the three months ended October 1, 2017 was an income of $25.2 million, as compared to an expense of $11.3 million for the three months ended October 2, 2016, a decrease of $36.5 million. The decrease in interest and other (income) expense, net, for the three months ended October 1, 2017,April 3, 2022, as compared to the three months ended October 2, 2016,April 4, 2021, was primarily due to an increase of $14.3 million in interest expense, which was the result of an overall increase in debt, a change in fair value of financial securities of $12.1 million that was recognized during the three months ended April 3, 2022 as compared to $(19.3) million that was recognized during the three months ended April 4, 2021, an increase in other components of net periodic pension credit of $1.4 million and a decrease in other (income) expenses,income, net by $35.8 million, which consisted primarily of net foreign exchange gain related to the remeasurement and settlement of the acquisition-related hedges of $36.3 million for the three months ended October 1, 2017.
Interest and other (income) expense, net, for the nine months ended October 1, 2017 was an income of $8.4 million, as compared to an expense of $27.7 million for the nine months ended October 2, 2016, a decrease of $36.2$3.1 million. The decrease in interest and other (income) expense, net, for the nine months ended October 1, 2017, as compared to the nine months ended October 2, 2016, was largely due to a decrease in other (income) expenses, net by $42.6 million which consisted primarily of net foreign exchange gain related to remeasurement and settlement of the acquisition-related hedges of $42.6 million and an increase in interest income of $1.2 million for the nine months ended October 1, 2017, as compared to the nine months ended October 2, 2016. This was partially offset by a net loss on disposition of businesses and assets of $0.3 million for the nine
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months ended October 1, 2017, as compared to a net gain of $5.6 million for the nine months ended October 2, 2016, and an increase of $1.7 million in interest expense for the nine months ended October 1, 2017, due to higher interest rates and an increase in debt issuance costs.
Provision for Income Taxes
For the three months ended October 1, 2017, theThe provision for income taxes from continuing operations was $8.5 million, as compared to $10.6$40.6 million for the three months ended October 2, 2016. For the nine months ended October 1, 2017, the provision for income taxes from continuing operations was $20.5 million,April 3, 2022, as compared to $21.5$101.1 million for the ninethree months ended October 2, 2016.April 4, 2021.
The effectiveeffective tax rate from continuing operations was 8.1% and 9.5%18.7% for the three and nine months ended October 1, 2017, respectively,April 3, 2022, as compared to 16.4% and 12.3%21.1% for the three and nine months ended October 2, 2016, respectively.April 4, 2021. The lower effective tax rate during the three months ended October 1, 2017,April 3, 2022, as compared to the three months ended October 2, 2016,April 4, 2021, was primarily due to certain lowermore income in higher tax rate jurisdictions projected to have higher income induring the first quarter of fiscal year 2017 as compared to fiscal year 20162021 and higher tax benefitsa one-time discrete expense of $1.5 million related to discrete items, which were $2.2 milliona tax accrual for foreign earnings that was recorded in the three months ended October 1, 2017, as compared to $1.7 million inApril 4, 2021.
During the first three months ended October 2, 2016. The lower effective tax rate during the nine months ended October 1, 2017, as compared to the nine months ended October 2, 2016, was due to certain lower tax rate jurisdictions projected to have higher income inof fiscal year 2017 as compared to fiscal year 2016.
As a result of the sale of our Medical Imaging business,years 2022 and 2021, we sold assets and liabilities of certain foreign operations, liquidated a related foreign entity and repatriated approximately $60.4 million of previously unremitted earnings. We provided for the estimated taxes on the repatriation of these earnings and recorded a taxnet discrete benefit of $0.1$0.6 million and aan income tax expense of $3.4$2.0 million, in discontinued operations and dispositions for the three and nine months ended October 1, 2017, respectively. We expect to utilizeThe discrete tax attributes to minimize the cash taxes paid on the repatriation.
Taxes have not been provided for unremitted earnings that we continue to consider indefinitely reinvested, the determination of which is based on our future operational and capital requirements. We continue to maintain our indefinite reinvestment assertion with regards to the remaining unremitted earnings of our foreign subsidiaries, and therefore do not accrue U.S. tax for the repatriation of our remaining unremitted foreign earnings. As of October 1, 2017, the amount of foreign earnings that we have the intent and ability to keep invested outside the United States indefinitely and for which no U.S. tax cost has been provided was approximately $1.3 billion. It is not practical to calculate the unrecognized deferred tax liability on those earnings.

Disposition of Businesses and Assets
As part of our continuing efforts to focus on higher growth opportunities, we have discontinued certain businesses. When the discontinued operations represent a strategic shift that will have a major effect on our operations and financial statements, we accounted for these businesses as discontinued operations, and accordingly, have presented the results of operations and related cash flows as discontinued operations. Any business deemed to be a discontinued operation prior to the adoption of ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of An Entity, continues to be reported as a discontinued operations, and the results of operations and related cash flows are presented as discontinued operations for all periods presented. Any remaining assets and liabilities of these businesses have been presented separately, and are reflected within assets and liabilities of discontinued operationsbenefits in the accompanying condensed consolidated balance sheets as of October 1, 2017 and January 1, 2017.
On May 1, 2017 (the "Closing Date"), we completed the sale of our Medical Imaging business to Varex Imaging Corporation ("Varex") pursuant to the terms of the Master Purchase and Sale Agreement, dated December 21, 2016 (the “Agreement”), by and between us and Varian Medical Systems, Inc. ("Varian") and the subsequent Assignment and Assumption Agreement, dated January 27, 2017, between Varian and Varex, pursuant to which Varian assigned its rights under the Agreement to Varex. On the Closing Date, we received consideration of approximately $277.4 million for the sale of our Medical Imaging business. During the thirdfirst quarter of fiscal year 2017, we paid Varex $4.22022 included excess tax benefits on stock compensation of $1.8 million, to settle the post-closing working capital adjustment. During the nine months ended October 1, 2017, we recorded a pre-tax gain of $180.4 million and incomepartially offset by tax expense of $42.2 million related to the sale of our Medical Imaging business in discontinued operations and dispositions. The corresponding tax liability was recorded within the other tax liabilities in the condensed consolidated balance sheet, and we expect to utilize tax attributes to minimize the tax liability.
Following the closing, we are providing certain customary transitional services during a period of up to 12 months. Commercial transactions between us and Varex following the closing of the transaction are not expected to be significant.
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The results of discontinued operations during the three and nine months ended October 1, 2017 include the results of the Medical Imaging business through April 30, 2017. The summary pre-tax operating results of the discontinued operation, were as followsaccruals for the three and nine months ended:
 Three Months Ended Nine Months Ended
 October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
 (In thousands)
Revenue$—
 $33,635
 $44,343
 $110,859
Cost of revenue—
 21,386
 32,933
 71,870
Selling, general and administrative expenses—
 3,193
 5,869
 9,242
Research and development expenses—
 3,662
 4,891
 10,615
Restructuring and contract termination charges, net—
 (53) —
 568
Income from discontinued operations before income taxes$—
 $5,447
 $650
 $18,564
Contingencies, Including Tax Matters
We are conducting a number of environmental investigations and remedial actions at our current and former locations and, along with other companies, have been named a potentially responsible party (“PRP”) for certain waste disposal sites. We accrue for environmental issues in the accounting period that our responsibility is established and when the cost can be reasonably estimated. We have accrued $9.8 million and $9.9 million as of October 1, 2017 and January 1, 2017, respectively, which represents our management’s estimate of the cost of the remediation of known environmental matters, and does not include any potential liability for related personal injury or property damage claims. These amounts were included in accrued expenses and other current liabilities. Our environmental accrual is not discounted and does not reflect the recovery of any material amounts through insurance or indemnification arrangements. The cost estimates are subject to a number of variables, including the stage of the environmental investigations, the magnitude of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations. For sites where we have been named a PRP, our management does not currently anticipate any additional liability to result from the inability of other significant named parties to contribute. We expect that the majority of such accrued amounts could be paid out over a period of up to ten years. As assessment and remediation activities progress at each individual site, these liabilities are reviewed and adjusted to reflect additional information as it becomes available. There have been no environmental problems to date that have had, or are expected to have, a material adverse effect on our condensed consolidated financial statements. While it is possible that a loss exceeding the amounts recorded in the condensed consolidated financial statements may be incurred, the potential exposure is not expected to be materially different from those amounts recorded.
Various tax years after 2010 remain open to examination by certain jurisdictions in which we have significant business operations, such as Finland, Germany, Italy, Netherlands, Singapore, the United Kingdom and the United States. The tax years under examination vary by jurisdiction. We regularly review our tax positions in each significant taxing jurisdiction in the process of evaluating our unrecognized tax benefits. We make adjustments to our unrecognized tax benefits when: (i) facts and circumstances regarding a tax position change, causing a change in management’s judgment regarding thatrate changes. The discrete tax position; (ii) a tax position is effectively settled with a tax authority; and/or (iii) the statute of limitations expires regarding a tax position.
We are subject to various claims, legal proceedings and investigations covering a wide range of matters that arisebenefits in the ordinary coursefirst quarter of our business activities. Although we have established accrualsfiscal year 2021 included various tax return to provision adjustments totaling $1.8 million and a $1.5 million accrual for potential losses that we believe are probable and reasonably estimable, in our opinion, basedforeign earnings, which were partially offset by excess tax benefits on our reviewstock compensation of the information available at this time, the total cost of resolving these contingencies at October 1, 2017 would not have a material adverse effect on our condensed consolidated financial statements. However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to us.$3.1 million.



Reporting Segment Results of Continuing Operations
Discovery & Analytical Solutions
Revenue for the three months ended October 1, 2017April 3, 2022 was $385.4$602.4 million, as compared to $365.1$454.6 million for the three months ended October 2, 2016,April 4, 2021, an increase of $20.3$147.8 million, or 6%33%, which includes an approximate 1%23% increase in revenue attributable to favorableacquisitions and divestitures and a 2% decrease in revenue attributable to unfavorable changes in foreign exchange rates. The life sciences market revenue increased by $135.2 million while the applied markets revenue increased by $12.5 million. The analysis in the remainder of this paragraph compares selected revenue by product typeend market for the three months ended October 1, 2017,April 3, 2022, as compared to the three months ended October 2, 2016,April 4, 2021, and includes the effect of foreign exchange fluctuations, acquisitions and divestitures. The increase in our life sciences revenue in our Discovery
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& Analytical Solutions segment was athe result of an increase of $15.7 million in our laboratory services market revenue and an increase of $7.9 million in revenue from environmental,businesses acquired in fiscal year 2021 along with organic growth in our pharmaceutical and biotechnology markets. The increase in our applied markets revenue was driven by increased demand from our industrial and food and industrial markets, which were partially offset by a decrease of $3.3 million in life sciences market revenue. In our laboratory services market, we continued to experience increaseddecreased demand for our OneSource laboratory service business as our OneSource team continues to drive industry leading growth with an expansion of services into existing customers coupled with a number of significant new customers wins. Infrom our environmental food and industrial markets, we experienced higher growth in our inorganic and food product offerings that was partially offset by continued weakness in our organic product offerings. In our life sciences market, we experienced a continued decline in sales of radioactive reagents in our radio-nucleotide business.
Revenue for the nine months ended October 1, 2017 was $1,130.3 million, as compared to $1,103.0 million for the nine months ended October 2, 2016, an increase of $27.2 million, or 2%, which includes an approximate 1% decrease in revenue attributable to unfavorable changes in foreign exchange rates. The analysis in the remainder of this paragraph compares selected revenue by product type for the nine months ended October 1, 2017, as compared to the nine months ended October 2, 2016, and includes the effect of foreign exchange fluctuations, acquisitions and divestitures. The increase in revenue in our Discovery & Analytical Solutions segment was a result of an increase of $32.0 million in our laboratory services market revenue, and an increase in environmental, food and industrial markets revenue of $9.7 million, partially offset by a decrease in life sciences market revenue of $14.5 million. In our laboratory services market, we had higher growth in our core environmental services. In our environmental, food and industrial markets, we experienced higher growth in our food and inorganic product offerings as a result of increased government regulation of soil and water and increased focus on food safety laws and mandatory testing, particularly in the emerging markets such as China, as well as in the Americas. In our life sciences market, we experienced a decline in revenue due to a softer than expected academic market in Europe due to funding pressures and issues with customer ordering patterns.market.
Operating income from continuing operations for the three months ended October 1, 2017April 3, 2022 was $47.6$14.5 million, as compared to $46.1$42.9 million for the three months ended October 2, 2016, an increaseApril 4, 2021, a decrease of $1.6$28.4 million, or 3%66%. Amortization of intangible assets was $12.8$67.7 million for the three months ended October 1, 2017,April 3, 2022, as compared to $12.3$20.4 million for the three months ended October 2, 2016. Restructuring and contract termination charges, net, were $1.7
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April 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $51.2 million for the three months ended October 1, 2017, as compared to $0.7April 3, 2022. Restructuring and other charges, net, were $13.4 million for the three months ended October 2, 2016. In additionApril 3, 2022, as compared to the above items, operating income increased$4.1 million for the three months ended October 1, 2017, as comparedApril 4, 2021. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions was $16.6 million for the three months ended October 2, 2016, as we continued to see the benefits from our cost containment initiatives partially offset by higher costs in research and development expenses and shift in product mix, with an increase in sales of lower gross margin product offerings.
Operating income from continuing operations for the nine months ended October 1, 2017 was $129.7 million,April 3, 2022, as compared to $127.1$1.1 million for the ninethree months ended October 2, 2016, an increase of $2.5 million, or 2%. Amortization of intangible assets was $37.5 million for the nine months ended October 1, 2017, as compared to $40.3 million for the nine months ended October 2, 2016. Restructuring and contract termination charges, net, were $9.7 million for the nine months ended October 1, 2017, as compared to $4.7 million for the nine months ended October 2, 2016.April 4, 2021. Acquisition and divestiture-related expenses, contingent consideration and other costs added an incremental expense of $0.4$14.0 million for each of the ninethree months ended October 1, 2017April 3, 2022, as compared to $7.0 million for the three months ended April 4, 2021. Legal costs for significant litigation matters and October 2, 2016. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions wassettlements were $0.4 million for the ninethree months ended October 2, 2016. In addition toApril 3, 2022. Excluding the factors noted above, items, operating income increased for the ninethree months ended October 1, 2017,April 3, 2022, as compared to the ninethree months ended October 2, 2016,April 4, 2021, primarily as we continued to see the benefits from our cost containment initiativesa result of higher sales volume and favorable product mix, partially offset by higher costsincreased investments in researchnew product development and development expenses and shift in product mix, with an increase in sales of lower gross margin product offerings.growth initiatives.
Diagnostics
Revenue for the three months ended October 1, 2017April 3, 2022 was $168.9$657.1 million, as compared to $149.4$853.1 million for the three months ended October 2, 2016, an increaseApril 4, 2021, a decrease of $19.5$196.0 million, or 13%23%, which includes a 2% decrease in revenue attributable to unfavorable changes in foreign exchange rates, partially offset by an approximate 7%3% increase in revenue attributable to acquisitions and divestitures and 1% increase in revenue attributable to favorable changes in foreign exchange rates.divestitures. As a result of adjustments to deferred revenue related to certain acquisitions required by business combination accounting rules, we did not recognize $0.2 million of revenue in our Diagnostics segment for each of the three months ended October 1, 2017April 3, 2022 and October 2, 2016April 4, 2021 that otherwise would have been recorded by the acquired businesses during each of the respective periods. InThe decrease in our diagnostics market, we experienced growth from continued expansion of our newborn and infectious disease screening solutions in key regions outside the United States, particularly in emerging markets such as China and India, as well as in South America. Birth rates in the United States continue to stabilize and demandDiagnostics segment revenue for greater access to newborn screening in rural areas outside the United States is also increasing, as evidenced by prenatal trends we saw during the three months ended October 1, 2017. We also had strong growthApril 3, 2022 was due to a decrease in revenue from our applied genomics offering, particularlyCOVID-19 product offerings of $239.7 million and unfavorable changes in foreign exchange rates, which were partially offset by increase in revenue across our core portfolio of $43.7 million. Due to the termination of our contract with CDPH, we shall recognize the unamortized contract liability pertaining to the nonrefundable prepayment as revenue over the remaining period through May 15, 2022. As of March 31, 2022, the unamortized contract liability was $126.2 million. The contract liability that we expect to recognize in revenue in the Americas, during the quarter.
Revenue for the nine months ended October 1, 2017 was $485.1second quarter of fiscal year 2022 amounts to $117.8 million as compared to $445.7 million for the nine months ended October 2, 2016, an increase of $39.3 million, or 9%, which includes an approximate 5% increase in revenue
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attributable to acquisitions and divestitures. As a result of adjustments to deferred revenue related to certain acquisitions required by business combination accounting rules, we did not recognize $0.6 million of revenue in our Diagnostics segment for each of the nine months ended October 1, 2017 and October 2, 2016 that otherwise would have been recorded by the acquired businesses during each of the respective periods. In our diagnostics market, we experienced growth from continued expansion of our newborn and infectious disease screening solutions in key regions outside the United States, particularly in emerging markets such as China and India, as well as in South America. Birth rates in the United States continue to stabilize and demand for greater access to newborn screening in rural areas outside the United States is also increasing, as evidenced by prenatal trends we saw during the nine months ended October 1, 2017..
Operating income from continuing operations for the three months ended October 1, 2017April 3, 2022 was $44.1$258.0 million, as compared to $41.6$441.5 million for the three months ended October 2, 2016, an increaseApril 4, 2021, a decrease of $2.4$183.5 million, or 6%42%. Amortization of intangible assets increased and was $4.9$34.9 million for the three months ended October 1, 2017,April 3, 2022, as compared to $4.6$33.7 million for the three months ended October 2, 2016. Restructuring and contract termination charges, net, were $1.5April 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $5.8 million for the three months ended October 1, 2017.April 3, 2022. Restructuring and other charges, net, was $1.6 million for the three months ended April 4, 2021. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions was $0.3 million for the three months ended April 3, 2022, as compared to $1.9 million for the three months ended April 4, 2021. Acquisition and divestiture-related expenses, contingent consideration and other costs added an incremental expense of $6.3$7.7 million for the three months ended October 1, 2017,April 3, 2022, as compared to $4.3$4.1 million for the three months ended October 2, 2016.April 4, 2021. Excluding the impact of thefactors noted above, items, operating income increaseddecreased for the three months ended October 1, 2017,April 3, 2022, as compared to the three months ended October 2, 2016,April 4, 2021, primarily dueas a result of lower sales volume related to strong reproductive health salesCOVID-19 product offerings and benefits from our initiatives to improve our supply chain.unfavorable product mix.
Operating income from continuing operations for the nine months ended October 1, 2017 was $115.1 million, as compared to $113.2 million for the nine months ended October 2, 2016, an increase of $1.9 million, or 2%. Amortization of intangible assets increased and was $14.8 million for the nine months ended October 1, 2017, as compared to $13.5 million for the nine months ended October 2, 2016. Restructuring and contract termination charges, net, were $3.2 million for the nine months ended October 1, 2017, as compared to $0.4 million for the nine months ended October 2, 2016. Acquisition and divestiture-related expenses, contingent consideration and other costs added an incremental expense of $13.5 million for the nine months ended October 1, 2017, as compared to $10.5 million for the nine months ended October 2, 2016. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions was $4.2 million for the nine months ended October 1, 2017. Excluding the impact of the above items, operating income increased for the nine months ended October 1, 2017, as compared to the nine months ended October 2, 2016, primarily due to strong reproductive health sales, favorable changes in product mix particularly in the Americas and APAC and benefits from our initiatives to improve our supply chain.

Liquidity and Capital Resources
We require cash to pay our operating expenses, make capital expenditures, make strategic acquisitions, service our debt and other long-term liabilities, repurchase shares of our common stock and pay dividends on our common stock. Our principal sources of funds are from our operations, borrowing capacity available under our senior unsecured credit facility and the capital markets, particularly theaccess to debt markets. We anticipate that our internal operations will generate sufficient cash to fund our operating expenses, capital expenditures, smaller acquisitions, interest payments on our debt and dividends on our common stock. However, we expect to use external sources to satisfy the balance of our debt when due, fund any larger acquisitions and other long-term liabilities, such as contributions to our postretirement benefit plans.
We and our subsidiaries may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly issued debt securities), in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness.
Principal factors that could affect the availability of our internally generated funds include:
•changes in sales due to weakness in markets in which we sell our products and services, and
•changes in our working capital requirements.requirements and capital expenditures.
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Principal factors that could affect our ability to obtain cash from external sources include:
•financial covenants contained in the financial instruments controlling our borrowings that limit our total borrowing capacity,
•increases in interest rates applicable to our outstanding variable rate debt,
•a ratings downgrade that could limit the amount we can borrow under our senior unsecured revolving credit facility and our overall access to the corporate debt market,
•increases in interest rates or credit spreads, as well as limitations on the availability of credit, whichthat affect our ability to borrow under future potential facilities on a secured or unsecured basis,
•a decrease in the market price for our common stock, and
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•volatility in the public debt and equity markets.
At October 1, 2017,April 3, 2022, we had cash and cash equivalents of $709.5$669.8 million,, of which $315.2which $532.0 million was held by our non-U.S. subsidiaries, and we had $988.6 million and $200.0 million$1.5 billion of additional borrowing capacity available under our senior unsecured revolving credit facility and senior unsecured term loan credit facility, respectively.facility. We had no other liquid investments at October 1, 2017.April 3, 2022.
We utilize a variety of tax planning and financing strategies to ensure that our worldwide cash is available in the locations in which it is needed. As a result of the sale of our Medical Imaging business, we sold assets and liabilities of certain foreign operations, liquidated a related foreign entity and repatriated approximately $60.4 million of previously unremitted earnings. We provided for the estimated taxes on the repatriation of these earnings and recorded a tax benefit of $0.1 million and a tax expense of $3.4 million in discontinued operations and dispositions during the three and nine months ended October 1, 2017, respectively. We expect to utilize tax attributes to minimize the cash taxes paid on the repatriation.
In addition to the $60.4 million we repatriated in fiscal year 2017, we would incur U.S. taxes on approximately $276.0 million of the $315.2 million of cash and cash equivalents held byuse our non-U.S. subsidiaries at October 1, 2017, if transferred to the U.S. without proper planning. We expect the accumulated non-U.S. cash balances, which may not be transferred to the U.S. without incurring U.S. taxes, will remainfor needs outside of the U.S. including foreign operations, capital investments, acquisitions and repayment of debt. In addition, we transfer cash to the U.S. using nontaxable returns of capital, distribution of previously taxed income, as well as dividends, where the related income tax cost is managed efficiently. We have accrued tax expense on the unremitted earnings of foreign subsidiaries as required by the Tax Cuts and Jobs Act of 2017 (the "Tax Act") and where the foreign earnings are not considered permanently reinvested. In accordance with the Tax Act, we are making scheduled annual cash payments on our accrued transition tax. As of the end of fiscal year 2021, we identified approximately $1.2 billion in earnings that we will meetno longer considered permanently reinvested. We intend to begin repatriating such earnings to the U.S. liquidity needs through future cash flows, use, in whole or in part, during fiscal year 2022, and have recorded a provision of approximately $37.1 million for the U.S. cash balances, external borrowings,federal, U.S. state and non-U.S. taxes that would fall due when such earnings are repatriated. No additional income tax expense has been provided for any remaining undistributed foreign earnings, or some combination ofany additional outside basis difference inherent in these sources.entities, as these amounts continue to be indefinitely reinvested.
On July 27, 2016,31, 2020, our Board of Directors (our(the "Board") authorized us to repurchase up to 8.0 million shares of common stock for an aggregate amount up to $250.0 million under a stock repurchase program (the "Repurchase Program"). The Repurchase Program will expire on July 26, 201827, 2022 unless terminated earlier by ourthe Board and may be suspended or discontinued at any time. During the ninethree months ended October 1, 2017,April 3, 2022, we had norepurchased 240,000 shares of common stock repurchases under the Repurchase Program.Program for an aggregate cost of $43.4 million. As of October 1, 2017, 8.0April 3, 2022, $144.0 million shares remained available for repurchaseaggregate repurchases of shares under the Repurchase Program.
In addition, our Board has authorized usAs of April 3, 2022, we may have to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to our equity incentive plans and to satisfy obligationspay contingent consideration related to acquisitions with open contingency periods of up to $111.3 million. As of April 3, 2022, we have recorded contingent consideration obligations of $49.8 million, of which $1.1 million was recorded in accrued expenses and other current liabilities, and $48.7 million was recorded in long-term liabilities. The expected maximum earnout period for acquisitions with open contingency periods does not exceed 6.7 years from April 3, 2022, and the exercise of stock options made pursuant to our equity incentive plans. During the three months ended October 1, 2017, we repurchased 3,132 shares of common stock for this purposeremaining weighted average expected earnout period at an aggregate cost of $0.2 million. During the nine months ended October 1, 2017, we repurchased 73,672 shares of common stock for this purpose at an aggregate cost of $4.0 million.
The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value. Any repurchased shares will be available for use in connection with corporate programs. If we elect to repurchase shares, the Repurchase Program will be funded using our existing financial resources, including cash and cash equivalents, and our senior unsecured revolving credit facility.April 3, 2022 was 5.7 years.
Distressed global financial markets could adversely impact general economic conditions by reducing liquidity and credit availability, creating increased volatility in security prices, widening credit spreads, increasing the cost of borrowings and decreasing valuations of certain investments. The widening of credit spreads may create a less favorable environment for certain of our businesses and may affect the fair value of financial instruments that we issue or hold. Increases in credit spreads, as well as limitations on the availability of credit at rates we consider to be reasonable, could affect our ability to borrow under future potential facilities on a secured or unsecured basis, which may adversely affect our liquidity and results of operations. In difficult global financial markets, we may be forced to fund our operations at a higher cost, or we may be unable to raise as much funding as we need to support our business activities.
Our pension plans have not experienced a material impact on liquidity or counterparty exposure due to the volatility and uncertainty in the credit markets. During the first ninethree months of fiscal year 2017,ended April 3, 2022, we contributed $6.2$1.7 million, in the aggregate, to our defined benefit pension plans outside of the United States, and expect to contribute an additional $0.2$5.3 million by the end of fiscal year 2017.2022. We could potentially have to make additional contributions in future periods for all pension plans. We expect to use existing cash and external sources to satisfy future contributions to our pension plans.
Our pension plans have not experienced a material impact on liquidity or counterparty exposure due to the volatility and uncertainty in the credit markets. We recognize actuarial gains and losses in operating results in the fourth quarter of the year in which the gains and losses occur, unless there is an interim remeasurement required for one of our plans. It is difficult to reliably predict the magnitude of such adjustments for gains and losses in fiscal year 2017. These adjustments are primarily driven by events and circumstances beyond our control, including changes in interest rates, the performance of the financial markets and mortality assumptions. To the extent the discount rates decrease or the value of our pension and postretirement investments decrease, a loss to operations will be recorded in fiscal year 2017. Conversely, to the extent the discount rates increase or the value of our pension and postretirement investments increase more than expected, a gain will be recorded in fiscal year 2017.
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Cash Flows
Operating Activities. Net cash provided by continuing operationsoperating activities was $165.2$283.2 million for the ninethree months ended October 1, 2017,April 3, 2022, as compared to $181.2$473.5 million for the ninethree months ended October 2, 2016,April 4, 2021, a decrease of $16.0 million.$190.3 million, primarily due to lower profitability and more cash used in working capital in the first quarter of fiscal year 2022 as compared to the prior period. The cash provided by operating activities for the ninethree months ended October 1, 2017April 3, 2022 was principally a result of income from continuing operations of $195.3$177.0 million, adjustedand adjustments for non-cash charges aggregating to $180.3 million, including depreciation and amortization of $75.5$120.1 million, stock-based compensation expense of $16.2 million, restructuring and contract termination charges, net of $12.9 million, change in fair value of contingent consideration of $1.6 million, and loss on disposition of businesses and assets, net of $0.3 million. These items were partially offset by a net cash decrease in accrued expenses, other assets and liabilities and other items of $109.9 million and a net cash decreaseusage in working capital of $26.7$74.1 million. Contributing to the net cash decrease in working capital for the nine months ended October 1, 2017, excluding the effect of foreign exchange rate fluctuations, was a decrease in accounts payable of $12.5 million and an increase in inventory of $25.2 million, which was partially offset by a decrease in accounts receivable of $11.0 million. The decrease in accounts receivable was a result of accounts receivable collections during the first nine months of fiscal year 2017. The decrease in accounts payable was primarily a result of the timing of disbursements during the first nine months of fiscal year 2017. The increase in inventory was primarily a result of expanding the amount of inventory held at sales locations within our Discovery & Analytical Solutions and Diagnostics segments to improve responsiveness to customer requirements and to facilitate the introduction of new products. Changes in accrued expenses, other assets and liabilities and other items decreased cash provided by operating activities by $109.9 million for the ninethree months ended October 1, 2017, as comparedApril 4, 2021 was principally a result of income from continuing operations of $379.3 million, and adjustments for non-cash charges aggregating to $66.3$65.9 million, forincluding depreciation and amortization of $70.2 million, partially offset by net cash provided by working capital of $28.3 million. During the ninethree months ended October 2, 2016. These changes primarily related to the timing of payments for pensions, taxes, restructuring, and salary and benefits.
Investing Activities. Net cash usedApril 3, 2022, we contributed $1.7 million, in the investing activitiesaggregate, to pension plans outside of our continuing operations was $68.3 million for the nine months ended October 1, 2017, as compared to $77.3 million for the nine months ended October 2, 2016, a decrease of $9.0 million. For the nine months ended October 1, 2017, the netUnited States.
Investing Activities. Net cash used in investing activities of our continuing operations was principally a result of $123.6$56.3 million of cash used for acquisitions and capital expenditures of $22.4 million. These items were partially offset bythe three months ended April 3, 2022, as compared to $461.9 million for the three months ended April 4, 2021, a decrease of $17.2 million in restricted cash, primarily related to$405.5 million. For the release of cash that was placed in escrow related to our acquisition of Tulip Diagnostics Private Limited and our sale of PerkinElmer Labs, Inc. during fiscal year 2016. During the ninethree months ended October 1, 2017, we received $60.4 million from settlement of acquisition-related foreign currency forward contracts. NetApril 3, 2022, the net cash used for capital expenditures was $24.4and acquisitions were $29.4 million and $3.9 million, respectively, as compared to $14.3 million and $443.5 million, respectively, for the ninethree months ended October 2, 2016.April 4, 2021. The capital expenditures in each period were primarily for manufacturing, software and other capital equipment purchases. In addition,During the three months ended April 3, 2022, purchases of investments were $23.0 million as compared to $4.0 million during the ninethree months ended October 2, 2016, we received $21.0 million, net of $2.0 million in restricted cash from the sale of businesses, and used $71.9 million in cash for acquisitions and investments.April 4, 2021.
Financing Activities. Net cash used in financing activities of our continuing operations was $33.9$164.9 million for the ninethree months ended October 1, 2017,April 3, 2022, as compared to $52.4net cash provided by financing activities of $583.0 million for the ninethree months ended October 2, 2016,April 4, 2021, a decrease in net cash provided by financing activities of $18.5$747.8 million. ForThe cash used in financing activities during the ninethree months ended October 1, 2017, we repurchased 73,672 sharesApril 3, 2022 was a result of payments on borrowings, payments of term loan, repurchases of our common stock, pursuant to our equity incentive plans, for a total costpayments of $3.5 million. This compares to repurchasesdividends, net payments on other credit facilities and settlement of 3.3 million shares of common stock, which includes 72,058 shares of our common stock pursuant to our equity incentive plans, forcash flow hedges. During the ninethree months ended October 2, 2016, for a total costApril 3, 2022, we made payments on our term loan facility of $151.4$100.0 million, including commissions. Proceeds from the issuance of common stock under stock plans was $14.0 million for the nine months ended October 1, 2017 as compared to $12.1 million for the nine months ended October 2, 2016. During the nine months ended October 1, 2017, our debt borrowings totaled $147.0of $584.0 million and proceeds from the sale of unsecured senior notes of $799.9 million, which were partially offset by debt payments of $147.0 million.$743.5 million and debt issuance costs of $7.9 million during the three months ended April 4, 2021. During the ninethree months ended October 2, 2016,April 3, 2022, we repurchased shares of our debt payments totaled $804.5common stock for a total cost of $55.6 million, which were partially offset by debt borrowings of $375.5 million. In addition, duringas compared to $42.8 million in the nineprior period. During the three months ended October 2, 2016, proceeds from the sale of our senior unsecured debt was $546.2April 3, 2022, we paid $8.8 million and we paidin dividends as compared to $7.9 million for debt issuance costs. We paid $23.1 million in dividends during each of the ninethree months ended October 1, 2017 and October 2, 2016. WeApril 4, 2021. During the three months ended April 3, 2022, we had net payments on other credit facilities of $0.9$1.1 million during each of the nine months ended October 1, 2017 and October 2, 2016. During the nine months ended October 1, 2017, we paid $11.5 million to settle foreign currency forward contracts, as compared to $1.7$9.8 million for the three months ended April 4, 2021. We paid $0.8 million in settlement of hedges during the three months ended April 3, 2022, as compared to $6.0 million in cash received from settlement of foreign currency forward contractshedges for the ninethree months ended October 2, 2016. DuringApril 4, 2021. The cash used in financing activities during the ninethree months ended October 1, 2017, we made $8.9April 3, 2022 was partially offset by proceeds from the issuance of common stock under our stock plans of $1.4 million in paymentsduring the three months ended April 3, 2022, as compared to $5.0 million for acquisition-related contingent consideration.the three months ended April 4, 2021.
Borrowing Arrangements
Senior Unsecured Revolving Credit Facility.  Our senior unsecured revolving credit facility provides for $1.0 billionDuring the first quarter of revolving loans and has an initial maturity of August 11, 2021. As of October 1, 2017, undrawn letters of credit infiscal year 2022, the aggregate amount of $11.4 million were treated as issued and outstanding when calculating the borrowing availability under the senior unsecured revolving credit facility. As of October 1, 2017, we had $988.6 million available for additional borrowing under the facility. We use the senior unsecured revolving credit facility for general corporate purposes, which may include working capital, refinancing existing indebtedness, capital expenditures, share repurchases, acquisitions and strategic alliances. The interest rates under the senior unsecured revolving credit facility are based on the Eurocurrency rate or the base rate at the time of borrowing, plus a margin. The base rate is the higher of (i) the rate of interest in effect for such day as publicly announced
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from time to time by JP Morgan Chase Bank, N.A. as its "prime rate," (ii) the Federal Funds rate plus 50 basis points or (iii) an adjusted one-month Libor plus 1.00%. As of October 1, 2017, the senior unsecured revolving credit facility had no outstanding borrowings, and $3.6Company repaid $100.0 million of unamortized debt issuance costs. As of January 1, 2017, the senior unsecured revolving credit facility had no outstanding borrowings, and $4.3 million of unamortized debt issuance costs. The credit agreement for the facility contains affirmative, negative and financial covenants and events of default. The financial covenants include a debt-to-capital ratio that remains applicable for so long as our debt is rated as investment grade. In the event that our debt is not rated as investment grade, the debt-to-capital ratio covenant is replaced with a maximum consolidated leverage ratio covenant and a minimum consolidated interest coverage ratio covenant. We were in compliance with all applicable covenants as of October 1, 2017.
Senior Unsecured Term Loan Credit Facility. We entered into a senior unsecured term loan credit facility on August 11, 2017 that provides for $200.0 million of term loans and has an initial maturity of twelve months from the date of the initial draw. We plan to use the senior unsecured term loan facility, for general corporate purposes, which may include financing for the planned acquisition of EUROIMMUN. The interest rates under the senior unsecured term loan credit facility are based on the Eurocurrency rate or the base rate at the time of the borrowing, plus a margin. The base rate is the higher of (i) the rate of interest in effect for such day as publicly announced from timeand subsequent to time by JP Morgan Chase Bank, N.A. as its "prime rate," (ii) the Federal Funds rate plus 50 basis points or (iii) an adjusted one-month Libor plus 1.00%. As of October 1, 2017, the senior unsecured term loan credit facility had no outstanding borrowings. The credit agreement for the facility contains affirmative, negative and financial covenants and events of defaults which are substantially similar to those contained in our senior unsecured revolving credit facility. We were in compliance with all applicable covenants as of October 1, 2017.
5% Senior Unsecured Notes due in 2021. On October 25, 2011, we issued $500.0 million aggregate principal amount of senior unsecured notes due in 2021 (the “2021 Notes”) in a registered public offering and received $496.9 million of net proceeds from the issuance. The 2021 Notes were issued at 99.372% of the principal amount, which resulted in a discount of $3.1 million. As of October 1, 2017, the 2021 Notes had an aggregate carrying value of $496.4 million, net of $1.5 million of unamortized original issue discount and $2.1 million of unamortized debt issuance costs. As of January 1, 2017, the 2021 Notes had an aggregate carrying value of $495.8 million, net of $1.7 million of unamortized original issue discount and $2.5 million of unamortized debt issuance costs. The 2021 Notes mature in November 2021 and bear interest at an annual rate of 5%. Interest on the 2021 Notes is payable semi-annually on May 15th and November 15th each year. Prior to August 15, 2021 (three months prior to their maturity date), we may redeem the 2021 Notes in whole or in part, at our option, at a redemption price equal to the greater of (i) 100% of the principal amount of the 2021 Notes to be redeemed, plus accrued and unpaid interest, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest in respect to the 2021 Notes being redeemed, discounted on a semi-annual basis, at the Treasury Rate plus 45 basis points, plus accrued and unpaid interest. At any time on or after August 15, 2021 (three months prior to their maturity date), we may redeem the 2021 Notes, at our option, at a redemption price equal to 100% of the principal amount of the 2021 Notes to be redeemed plus accrued and unpaid interest. Upon a change of control (as defined in the indenture governing the 2021 Notes) and a contemporaneous downgrade of the 2021 Notes below investment grade, each holder of 2021 Notes will have the right to require us to repurchase such holder's 2021 Notes for 101% of their principal amount, plus accrued and unpaid interest.
1.875% Senior Unsecured Notes due 2026. On July 19, 2016, we issued €500.0 million aggregate principal amount of senior unsecured notes due in 2026 (the “2026 Notes”) in a registered public offering and received approximately €492.3 million of net proceeds from the issuance. The 2026 Notes were issued at 99.118% of the principal amount, which resulted in a discount of €4.4 million. The 2026 Notes mature in July 2026 and bear interest at an annual rate of 1.875%. Interest on the 2026 Notes is payable annually on July 19th each year. The proceeds from the 2026 Notes were used to pay in full the outstanding balance of our previous senior unsecured revolving credit facility. As of October 1, 2017, the 2026 Notes had an aggregate carrying value of $581.5 million, net of $4.7 million of unamortized original issue discount and $4.4 million of unamortized debt issuance costs. As of January 1, 2017, the 2026 Notes had an aggregate carrying value of $517.8 million, net of $4.5 million of unamortized original issue discount and $4.8 million of unamortized debt issuance costs.
Prior to April 19, 2026 (three months prior to their maturity date), we may redeem the 2026 Notes in whole at any time or in part from time to time, at our option, at a redemption price equal to the greater of (i) 100% of the principal amount of the 2026 Notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest in respect to the 2026 Notes being redeemed, discounted on an annual basis, at the applicable Comparable Government Bond Rate (as defined in the indenture governing the 2026 Notes) plus 35 basis points; plus, in each case, accrued and unpaid interest. In addition, at any time on or after April 19, 2026 (three months prior to their maturity date), we may redeem the 2026 Notes, at our option, at a redemption price equal to 100% of the principal amount of the 2026 Notes due to be redeemed plus accrued and unpaid interest.
Upon a change of control (as defined in the indenture governing the 2026 Notes) and a contemporaneous downgrade of the 2026 Notes below investment grade, we will, in certain circumstances, make an offer to purchase the 2026 Notes at a price equal to 101% of their principal amount plus any accrued and unpaid interest.
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Financing Lease Obligations. In fiscal year 2012, we entered into agreements with the lessors of certain buildings that we are currently occupying and leasing to expand those buildings. We provided a portion of the funds needed for the construction of the additions to the buildings, and as a result we were considered the owner of the buildings during the construction period. At the end of first quarter, the construction period, we were not reimbursed by the lessors for allCompany has repaid an additional $230.0 million of the construction costs. We are therefore deemedterm loan facility. See Note 7, Debt, in the Notes to have continuing involvementCondensed Consolidated Financial Statements and Note 13, Debt, to our audited consolidated financial statements in the leases qualify as financing leases under sale-leaseback accounting guidance, representing debt obligations 2021 Form 10-K for us and non-cash investing and financing activities. As a result, we capitalized $29.3 million in property, plant and equipment, net, representing the fair valuedetailed discussion of the buildings with a corresponding increase to debt. We have also capitalized $11.5 million in additional construction costs necessary to complete the renovations to the buildings, which were funded by the lessors, with a corresponding increase to debt. At October 1, 2017, we had $36.2 million recorded for these financing lease obligations, of which $1.3 million was recorded as short-term debt and $34.9 million was recorded as long-term debt. At January 1, 2017, we had $37.1 million recorded for these financing lease obligations, of which $1.2 million was recorded as short-term debt and $35.9 million was recorded as long-term debt. The buildings are being depreciated on a straight-line basis over the terms of the leases to their estimated residual values, which will equal the remaining financing obligation at the end of the lease term. At the end of the lease term, the remaining balances in property, plant and equipment, net and debt will be reversed against each other.our borrowing arrangements.


Dividends
Our Board declared a regular quarterly cash dividend of $0.07 per share for the first three quartersquarter of fiscal year 20172022 and in each quarter of fiscal year 2016.2021. At October 1, 2017,April 3, 2022, we had accrued $7.7$8.8 million for dividends declared on July 24, 2017January 27, 2022 for the thirdfirst quarter of fiscal year 20172022 that will be payablepaid on November 10, 2017.May 13, 2022. On October 27, 2017,April 28, 2022, we announced that our Board had declared a quarterly dividend of $0.07 per share for the fourthsecond quarter of fiscal year 20172022 that will be payable on February 9, 2018.in August 2022. In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.


Contractual Obligations
Our contractual obligations, as described in the contractual obligations table contained in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 1, 2017 have changed due to new lease agreements for certain operating facilities.
During the nine months ended October 1, 2017, we entered into new lease agreements for certain operating facilities. Our total rental payments to the lessors are now expected to be $11.4 million for the remainder of fiscal year 2017, $29.0 million for fiscal year 2018, $22.1 million for fiscal year 2019, $16.8 million for fiscal year 2020, $14.5 million for fiscal year 2021 and $28.2 million in the aggregate thereafter. There have not been any other material changes during the first nine months of fiscal year 2017.

Effects of Recently Adopted and Issued Accounting Pronouncements

See Note 1, - BasisNature of PresentationOperations and Accounting Policies, to our audited consolidated financial statements in the Notes to Condensed Consolidated Financial Statements2021 Form 10-K for a summary of recently adopted new accounting pronouncements. We have not adopted any new accounting pronouncements during the three months ended April 3, 2022 and there were no recently issued accounting pronouncements.pronouncements that apply to our operations.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Market Risk. We are exposed to market risk, including changes in interest rates and currency exchange rates. To manage the volatility relating to these exposures, we enter into various derivative transactions pursuant to our policies to hedge against known or forecasted market exposures. We briefly describe several of the market risks we face below. The following disclosure isOur market risks are not materially different from the disclosure provided under the heading, Item 7A. “Quantitative and Qualitative DisclosureDisclosures About Market Risk,” in our 20162021 Form 10-K.
Foreign Exchange Risk. The potential change in foreign currency exchange rates offers a substantial risk to us, as approximately 60% of our business is conducted outside of the United States, generally in foreign currencies. Our risk management strategy currently uses forward contracts to mitigate certain balance sheet foreign currency transaction exposures. The intent of these economic hedges is to offset gains and losses that occur on the underlying exposures, with gains and losses resulting from the forward contracts that hedge these exposures. Moreover, we are able to partially mitigate the impact that fluctuations in currencies have on our net income as a result of our manufacturing facilities located in countries outside the United States, material sourcing and other spending which occur in countries outside the United States, resulting in natural hedges.

We do not enter into derivative contracts for trading or other speculative purposes, nor do we use leveraged financial instruments. Although we attempt to manage our foreign exchange risk through the above activities, when the U.S. dollar weakens against other currencies in which we transact business, sales and net income generally will be positively but not proportionately impacted. Conversely, when the U.S. dollar strengthens against other currencies in which we transact business, sales and net income will generally be negatively but not proportionately impacted.

In the ordinary course of business, we enter into foreign exchange contracts for periods consistent with our committed exposures to mitigate the effect of foreign currency movements on transactions denominated in foreign currencies. The intent of these economic hedges is to offset gains and losses that occur on the underlying exposures from these currencies, with gains and losses resulting from the forward currency contracts that hedge these exposures. Transactions covered by hedge contracts include intercompany and third-party receivables and payables. The contracts are primarily in European and Asian currencies, have maturities that do not exceed 12 months, have no cash requirements until maturity, and are recorded at fair value on our condensed consolidated balance sheets. The unrealized gains and losses on our foreign currency contracts are recognized immediately in interest and other expense, net. The cash flows related to the settlement of these hedges are included in cash flows from operating activities within our condensed consolidated statement of cash flows.

Principal hedged currencies include the British Pound, Euro, Swedish Krona, Japanese Yen and Singapore Dollar. We held forward foreign exchange contracts, designated as economic hedges, with U.S. dollar equivalent notional amounts totaling $140.0 million, $137.5 million and $128.5 million at October 1, 2017, January 1, 2017 and October 2, 2016, respectively, and the fair value of these foreign currency derivative contracts was insignificant. The gains and losses realized on these foreign currency derivative contracts are not material. The duration of these contracts was generally 30 days or less during each of the nine months ended October 1, 2017 and October 2, 2016.

In addition, in connection with certain intercompany loan agreements utilized to finance our acquisitions and stock repurchase program, we enter into forward foreign exchange contracts intended to hedge movements in foreign exchange rates prior to settlement of such intercompany loans denominated in foreign currencies. We record these hedges at fair value on our condensed consolidated balance sheets. The unrealized gains and losses on these hedges, as well as the gains and losses associated with the remeasurement of the intercompany loans, are recognized immediately in interest and other expense, net. The cash flows related to the settlement of these hedges are included in cash flows from financing activities within our condensed consolidated statement of cash flows.

The outstanding forward exchange contracts designated as economic hedges, which were intended to hedge movements in foreign exchange rates prior to the settlement of certain intercompany loan agreements, included combined Euro notional amounts of €19.0 million and combined U.S. Dollar notional amounts of $12.3 million as of October 1, 2017; combined Euro notional amounts of €58.6 million and combined Swedish Krona notional amounts of kr969.5 million as of January 1, 2017; and combined Euro notional amounts of €50.7 million and combined U.S. Dollar notional amounts of $9.2 million as of October 2, 2016. The net gains and losses on these derivatives, combined with the gains and losses on the remeasurement of the hedged intercompany loans, were not material for each of the three and nine months ended October 1, 2017 and October 2, 2016. We paid $11.5 million and $0.1 million during the nine months ended October 1, 2017 and October 2, 2016, respectively, from the settlement of these hedges.

In connection with the issuance of the 2026 Notes during fiscal year 2016, we designated the 2026 Notes to hedge our investments in certain foreign subsidiaries. Realized and unrealized translation adjustments from these hedges were included in
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the foreign currency translation component of accumulated other comprehensive income ("AOCI"), which offsets translation adjustments on the underlying net assets of foreign subsidiaries. The cumulative translation gains or losses will remain in AOCI until the foreign subsidiaries are liquidated or sold. As of October 1, 2017, the total notional amount of foreign currency denominated debt designated to hedge investments in foreign subsidiaries was €495.9 million. The unrealized foreign exchange loss recorded in AOCI related to the net investment hedge was $19.5 million and $63.1 million for the three and nine months ended October 1, 2017, respectively.
On June 27, 2017, in connection with the planned acquisition of EUROIMMUN, we entered into several foreign currency forward contracts to purchase Euros to partly mitigate the currency exchange risk associated with the payment of the Euro-denominated purchase price. These currency forward contracts were not designated as hedging instruments and therefore the change in the derivative fair value was marked to market through the condensed consolidated statement of operations. We received $60.4 million during the third quarter of fiscal year 2017 from the settlement of these foreign currency forward contracts. The cash flows related to the settlement of these foreign currency forward contracts are included in cash flows from investing activities within the Company’s condensed consolidated statement of cash flows. The outstanding foreign currency forward contracts have an aggregate notional amount totaling $1.18 billion as of October 1, 2017. The net foreign exchange gain included in other (income) expense, net related to these foreign currency forward contracts was $36.3 million and $42.6 million for the three and nine months ended October 1, 2017, respectively.

Foreign Currency Exchange Risk—Value-at-Risk Disclosure. We continue to measure foreign currency risk using the Value-at-Risk model described in Item 7A. “Quantitative and Qualitative DisclosureDisclosures About Market Risk,” in our 20162021 Form 10-K. The measures for our Value-at-Risk analysis have not changed materially.
Interest Rate Risk. As described above, our debt portfolio includes variable rate instruments. Fluctuations in interest rates can therefore have a direct impact on both our short-term cash flows, as they relate to interest, and our earnings. To manage the volatility relating to these exposures, we periodically enter into various derivative transactions pursuant to our policies to hedge against known or forecasted interest rate exposures.
Interest Rate Risk—Sensitivity. Our 20162021 Form 10-K presents sensitivity measures for our interest rate risk. The measures for our sensitivity analysis have not changed materially. More information is available in Item 7A. “Quantitative and Qualitative DisclosureDisclosures About Market Risk,” in our 20162021 Form 10-K for our sensitivity disclosure.



Item 4.Controls and Procedures
Item 4.Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of our fiscal quarter ended October 1, 2017.April 3, 2022. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensureprovide reasonable assurance that information required to be disclosed by athe company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of the end of our fiscal quarter ended October 1, 2017,April 3, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
No changeChanges in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended October 1, 2017April 3, 2022 that has materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.We have not experienced any material impact to our internal controls over financial reporting despite the fact that many of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the effect of the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.



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PART II. OTHER INFORMATION


Item 1.Legal Proceedings
Item 1.Legal Proceedings
We are subject to various claims, legal proceedings and investigations covering a wide range of matters that arise in the ordinary course of our business activities. Although we have established accruals for potential losses that we believe are probable and reasonably estimable, in the opinion of our management, based on its review of the information available at this time, the total cost of resolving these contingencies at October 1, 2017April 3, 2022 should not have a material adverse effect on our condensed consolidated financial statements. However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to us.


Item 1A.Risk Factors
Item 1A.Risk Factors
The following important factors affect our business and operations generally or affect multiple segments of our business and operations:
Risks Related to our Business Operations and Industry
If the markets into which we sell our products decline or do not grow as anticipated due to a decline in general economic conditions, or there are uncertainties surrounding the approval of government or industrial funding proposals, or there are unfavorable changes in government regulations, we may see an adverse effect on the results of our business operations.
Our customers include pharmaceutical and biotechnology companies, laboratories, academic and research institutions, public health authorities, private healthcare organizations, doctors and government agencies. Our quarterly revenue and results of operations are highly dependent on the volume and timing of orders received during the quarter. In addition, our revenues and earnings forecasts for future quarters are often based on the expected trends in our markets. However, the markets we serve do not always experience the trends that we may expect. Negative fluctuations in our customers’ markets, the inability of our customers to secure credit or funding, restrictions in capital expenditures, general economic conditions, cuts in government funding or unfavorable changes in government regulations would likely result in a reduction in demand for our products and services. In addition, government funding is subject to economic conditions and the political process, which is inherently fluid and unpredictable. Our revenues may be adversely affected if our customers delay or reduce purchases as a result of uncertainties surrounding the approval of government or industrial funding proposals. Such declines could harm our consolidated financial position, results of operations, cash flows and trading price of our common stock, and could limit our ability to sustain profitability.
    The pandemic caused by coronavirus disease 2019 (“COVID-19”) is having, and may continue to have, a negative effect on the demand for certain of our products and our global operations including our manufacturing capabilities, logistics and supply chain that may materially and adversely impact our business, financial conditions, results of operations and cash flows.
We face risks related to public health crises and pandemics, including the COVID-19 pandemic. The global impact of COVID-19 has resulted in an adverse impact on our operations, supply chains and distribution systems, as significant global mitigation measures, including government-directed quarantines, social distancing and shelter-in-place mandates, travel restrictions and/or bans, have been implemented, and in some areas relaxed, and then implemented again. Continued uncertainty with respect to the severity and duration of the COVID-19 pandemic has contributed to the volatility of financial markets. The COVID-19 pandemic has caused extended global economic disruption, and a global recession is possible.
We have experienced significant reductions in demand for certain of our products due to the COVID-19 pandemic and although the severity and duration of the COVID-19 pandemic cannot be reasonably estimated at this time, additional impacts that we may experience include, but are not limited to: fluctuations in our stock price due to market volatility; further decreases in demand for certain of our products; reduced profitability; large-scale supply chain disruptions impeding our ability to ship and/or receive product; potential interruptions of, or limitations on manufacturing operations imposed by local, state or federal governments; shortages of key raw materials or components; workforce absenteeism and distraction; labor shortages including those resulting from unwillingness to comply with vaccination or other requirements; customer credit concerns; cybersecurity risks and data accessibility disruptions due to remote working arrangements; reduced sources of liquidity; increased borrowing costs; fluctuations in foreign currency markets; potential impairment in the carrying value of goodwill; other asset impairment charges; increased obligations related to our pension and other postretirement benefit plans; and deferred tax valuation allowances.
The continually evolving development of the COVID-19 pandemic, and the extent to which mitigation measures will be effective, preclude any prediction as to its ultimate impact. However, we currently anticipate that business disruptions and
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market volatility resulting from the COVID-19 pandemic will continue to have a material adverse impact on the growth rate of certain of our businesses, and may also have a material adverse impact on our overall financial condition, results of operations and cash flows.
Our Diagnostics segment experienced an increase in revenue resulting from increased demand for our immunodiagnostics and applied genomics COVID-19 product offerings during fiscal years 2020 and 2021, as well as from the COVID-19 testing laboratory facilities we developed to service the State of California and the United Kingdom. The laboratory in the United Kingdom closed earlier in 2022 and the laboratory in the State of California is scheduled to close in the second quarter of 2022. As a result of these closures, and the general reduction in COVID-19 testing spending by our customers, we expect demand for these products and services to continue to decline during the remainder of fiscal year 2022, with revenue and valuation of our inventory largely contingent upon consumer demand for COVID-19 testing as well as our ability to develop and produce COVID-19 products.
Our growth is subject to global economic and political conditions, and operational disruptions at our facilities.
Our business is affected by global economic and political conditions as well as the state of the financial markets, particularly as the United States and other countries balance concerns around debt, inflation, growth and budget allocations in their policy initiatives. There can be no assurance that global economic conditions and financial markets will not worsen and that we will not experience any adverse effects that may be material to our consolidated cash flows, results of operations, financial position or our ability to access capital, such as the adverse effects resulting from a prolonged shutdown in government operations both in the United States and internationally. Our business is also affected by local economic environments, including inflation, recession, financial liquidity and currency volatility or devaluation. Political changes, including war or other conflicts, such as the current conflict in Ukraine, some of which may be disruptive, could interfere with our supply chain, our customers and all of our activities in a particular location.
While we take precautions to prevent production or service interruptions at our global facilities, a major earthquake, fire, flood, power loss or other catastrophic event that results in the destruction or delay of any of our critical business operations could result in our incurring significant liability to customers or other third parties, cause significant reputational damage or have a material adverse effect on our business, operating results or financial condition.
Certain of these risks can be hedged to a limited degree using financial instruments, or other measures, and some of these risks are insurable, but any such mitigation efforts are costly and may not always be fully successful. Our ability to engage in such mitigation efforts has decreased or become even more costly as a result of recent market developments.
If we do not introduce new products in a timely manner, we may lose market share and be unable to achieve revenue growth targets.
We sell many of our products in industries characterized by rapid technological change, frequent new product and service introductions, and evolving customer needs and industry standards. Many of the businesses competing with us in these industries have significant financial and other resources to invest in new technologies, substantial intellectual property portfolios, substantial experience in new product development, regulatory expertise, manufacturing capabilities, and established distribution channels to deliver products to customers. Our products could become technologically obsolete over time, or we
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may invest in technology that does not lead to revenue growth or continue to sell products for which the demand from our customers is declining, in which case we may lose market share or not achieve our revenue growth targets. The success of our new product offerings will depend upon several factors, including our ability to:
•accurately anticipate customer needs,
•innovate and develop new reliable technologies and applications,
•receive regulatory approvals in a timely manner,
•successfully commercialize new technologies in a timely manner,
•price our products competitively, and manufacture and deliver our products in sufficient volumes and on time, and
•differentiate our offerings from our competitors’ offerings.
Many of our products are used by our customers to develop, test and manufacture their products. We must anticipate industry trends and consistently develop new products to meet our customers’ expectations. In developing new products, we may be required to make significant investments before we can determine the commercial viability of the new product. If we fail to accurately foresee our customers’ needs and future activities, we may invest heavily in research and development of products that do not lead to significant revenue. We may also suffer a loss in market share and potential revenue if we are unable to commercialize our technology in a timely and efficient manner.
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In addition, some of our licensed technology is subject to contractual restrictions, which may limit our ability to develop or commercialize products for some applications.
We may not be able to successfully execute acquisitions or divestitures, license technologies, integrate acquired businesses or licensed technologies into our existing businesses, or make acquired businesses or licensed technologies profitable.
We have in the past supplemented, and may in the future supplement, our internal growth by acquiring businesses and licensing technologies that complement or augment our existing product lines, such as our recent acquisition of Tulip Diagnostics Private Limited in the first quarter of fiscal year 2017 or our planned acquisition of EUROIMMUN.BioLegend, Inc. However, we may be unable to identify or complete promising acquisitions or license transactions for many reasons, such as:
•competition among buyers and licensees,
•the high valuations of businesses and technologies,
•the need for regulatory and other approval, and
•our inability to raise capital to fund these acquisitions.
Some of the businesses we acquire may be unprofitable or marginally profitable, or may increase the variability of our revenue recognition. If, for example, we are unable to successfully commercialize products and services related to significant in-process research and development that we have capitalized, we may have to impair the value of such assets. Accordingly, the earnings or losses of acquired businesses may dilute our earnings. For these acquired businesses to achieve acceptable levels of profitability, we would have to improve their management, operations, products and market penetration. We may not be successful in this regard and may encounter other difficulties in integrating acquired businesses into our existing operations, such as incompatible management, information or other systems, cultural differences, loss of key personnel, unforeseen regulatory requirements, previously undisclosed liabilities or difficulties in predicting financial results. Additionally, if we are not successful in selling businesses we seek to divest, the activity of such businesses may dilute our earnings and we may not be able to achieve the expected benefits of such divestitures. As a result, our financial results may differ from our forecasts or the expectations of the investment community in a given quarter or over the long term.
To finance our acquisitions, we may have to raise additional funds, either through public or private financings. We may be unable to obtain such funds or may be able to do so only on terms unacceptable to us. We may also incur expenses related to completing acquisitions or licensing technologies, or in evaluating potential acquisitions or technologies, which may adversely impact our profitability.
We may not be successful in adequately protecting our intellectual property.
Patent and trade secret protection is important to us because developing new products, processes and technologies gives us a competitive advantage, although it is time-consuming and expensive. We own many United States and foreign patents and intend to apply for additional patents. Patent applications we file, however, may not result in issued patents or, if they do, the claims allowed in the patents may be narrower than what is needed to protect fully our products, processes and technologies. The expiration of our previously issued patents may cause us to lose a competitive advantage in certain of the products and
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services we provide. Similarly, applications to register our trademarks may not be granted in all countries in which they are filed. For our intellectual property that is protected by keeping it secret, such as trade secrets and know-how, we may not use adequate measures to protect this intellectual property.
Third parties may also challenge the validity of our issued patents, may circumvent or “design around” our patents and patent applications, or may claim that our products, processes or technologies infringe their patents. In addition, third parties may assert that our product names infringe their trademarks. We may incur significant expense in legal proceedings to protect our intellectual property against infringement by third parties or to defend against claims of infringement by third parties. Claims by third parties in pending or future lawsuits could result in awards of substantial damages against us or court orders that could effectively prevent us from manufacturing, using, importing or selling our products in the United States or other countries.
If we are unable to renew our licenses or otherwise lose our licensed rights, we may have to stop selling products or we may lose competitive advantage.
We may not be able to renew our existing licenses, or licenses we may obtain in the future, on terms acceptable to us, or at all. If we lose the rights to a patented or other proprietary technology, we may need to stop selling products incorporating that technology and possibly other products, redesign our products or lose a competitive advantage. Potential competitors could in-license technologies that we fail to license and potentially erode our market share.
Our licenses typically subject us to various economic and commercialization obligations. If we fail to comply with these obligations, we could lose important rights under a license, such as the right to exclusivity in a market, or incur losses for failing to comply with our contractual obligations. In some cases, we could lose all rights under the license. In addition, rights granted under the license could be lost for reasons out of our control. For example, the licensor could lose patent protection for a number of reasons, including invalidity of the licensed patent, or a third-party could obtain a patent that curtails our freedom to operate under one or more licenses.
If we do not compete effectively, our business will be harmed.
We encounter aggressive competition from numerous competitors in many areas of our business. We may not be able to compete effectively with all of these competitors. To remain competitive, we must develop new products and periodically enhance our existing products. We anticipate that we may also have to adjust the prices of many of our products to stay competitive. In addition, new competitors, technologies or market trends may emerge to threaten or reduce the value of entire product lines.
Our quarterly operating results could be subject to significant fluctuation, and we may not be able to adjust our operations to effectively address changes we do not anticipate, which could increase the volatility of our stock price and potentially cause losses to our shareholders.
Given the nature of the markets in which we participate, we cannot reliably predict future revenue and profitability. Changes in competitive, market and economic conditions may require us to adjust our operations, and we may not be able to make those adjustments or make them quickly enough to adapt to changing conditions. A high proportion of our costs are fixed in the short term, due in part to our research and development and manufacturing costs. As a result, small declines in sales could disproportionately affect our operating results in a quarter. Factors that may affect our quarterly operating results include:
•demand for and market acceptance of our products,
•competitive pressures resulting in lower selling prices,
•changes in the level of economic activity in regions in which we do business, including as a result of COVID-19 and other global health crises or pandemics,
•changes in general economic conditions or government funding,
•settlements of income tax audits,
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•expenses incurred in connection with claims related to environmental conditions at locations where we conduct or formerly conducted operations,
•contract termination and litigation costs,
•differing tax laws and changes in those laws, or changes in the countries in which we are subject to taxation,
•changes in our effective tax rate,
•changes in industries, such as pharmaceutical and biomedical,
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•changes in the portions of our revenue represented by our various products and customers,
•our ability to introduce new products,
•our competitors’ announcement or introduction of new products, services or technological innovations,
•costs of raw materials, labor, energy, supplies, transportation or supplies,other indirect costs,
•changes in healthcare or other reimbursement rates paid by government agencies and other third parties for certain of our products and services,
•our ability to realize the benefit of ongoing productivity initiatives,
•changes in the volume or timing of product orders,
•fluctuation in the expense related to the mark-to-market adjustment on postretirement benefit plans,
•changes in our assumptions underlying future funding of pension obligations,
•changes in assumptions used to determine contingent consideration in acquisitions, and
•changes in foreign currency exchange rates.
A significant disruption in third-party package delivery and import/export services, or significant increases in prices for those services, could interfere with our ability to ship products, increase our costs and lower our profitability.
We ship a significant portion of our products to our customers through independent package delivery and import/export companies, including UPS and Federal Express in the United States; TNT, UPS and DHL in Europe; and UPS in Asia. We also ship our products through other carriers, including commercial airlines, freight carriers, national trucking firms, overnight carrier services and the United States Postal Service. If one or more of the package delivery or import/export providers experiences a significant disruption in services or institutes a significant price increase, including a service disruption as a result of the COVID-19 pandemic, we may have to seek alternative providers and the delivery of our products could be prevented or delayed. Such events could cause us to incur increased shipping costs that could not be passed on to our customers, negatively impacting our profitability and our relationships with certain of our customers.
Disruptions in the supply of raw materials, certain key components and other goods from our limited or single source suppliers could have an adverse effect on the results of our business operations, and could damage our relationships with customers.
The production of our products requires a wide variety of raw materials, key components and other goods that are generally available from alternate sources of supply. However, certain critical raw materials, key components and other goods required for the production and sale of some of our principal products are available from limited or single sources of supply. We generally have multi-year contracts with no minimum purchase requirements with these suppliers, but those contracts may not fully protect us from a failure by certain suppliers to supply critical materials or from the delays inherent in being required to change suppliers and, in some cases, validate new raw materials. Such raw materials, key components and other goods can usually be obtained from alternative sources with the potential for an increase in price, decline in quality or delay in delivery. A prolonged inability to obtain certain raw materials, key components or other goods is possible and could have an adverse effect on our business operations, and could damage our relationships with customers. In addition, a global health crisis or pandemic such as the COVID-19 pandemic could have a significant adverse effect on our supply chain.
We are subject to the rules of the Securities and Exchange Commission requiring disclosure as to whether certain materials known as conflict minerals (tantalum, tin, gold, tungsten and their derivatives), which that may be contained in our products are mined from the Democratic Republic of the Congo and adjoining countries. As a result of these rules, we may incur additional costs in complying with the disclosure requirements and in satisfying those customers who require that the components used in our products be certified as conflict-free, and the potential lack of availability of these materials at competitive prices could increase our production costs.
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If we do not retain our key personnel, our ability to execute our business strategy will be limited.
Our success depends to a significant extent upon the continued service of our executive officers and key management and technical personnel, particularly our experienced engineers and scientists, and on our ability to continue to attract, retain, and motivate qualified personnel. The competition for these employees is intense. The loss of the services of key personnel could have a material adverse effect on our operating results. In addition, there could be a material adverse effect on us should the turnover rates for key personnel increase significantly or if we are unable to continue to attract qualified personnel. We do not maintain any key person life insurance policies on any of our officers or employees.
Our success also depends on our ability to execute leadership succession plans. The inability to successfully transition key management roles could have a material adverse effect on our operating results.
If we experience a significant disruption in, or breach in security of, our information technology systems or those of our customers, suppliers or other third parties, or cybercrime, resulting in inappropriate access to or inadvertent transfer of information or assets, or if we fail to implement new systems, software and technologies successfully, our business could be adversely affected.
We rely on several centralized information technology systems throughout our company to develop, manufacture and provide products and services, keep financial records, process orders, manage inventory, process shipments to customers and operate other critical functions. Our and our third-party service providers' information technology systems may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, catastrophes or other unforeseen events. If we were to experience a prolonged system disruption in the information technology systems that involve our interactions with customers, suppliers or other third parties, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business. In addition, security breaches of our information technology systems or cybercrime, resulting in inappropriate access to or inadvertent transfer of information or assets, could result in losses or misappropriation of assets or unauthorized disclosure of confidential information belonging to us or to our employees, partners, customers or suppliers, which could result in our suffering significant financial or reputational damage.
Our results of operations will be adversely affected if we fail to realize the full value of our intangible assets.
As of April 3, 2022, our total assets included $11.3 billion of net intangible assets. Net intangible assets consist principally of goodwill associated with acquisitions and costs associated with securing patent rights, trademark rights, customer relationships, core technology and technology licenses and in-process research and development, net of accumulated amortization. We test certain of these items—specifically all of those that are considered “indefinite-lived”—at least annually for potential impairment by comparing the carrying value to the fair market value of the reporting unit to which they are assigned. All of our amortizing intangible assets are also evaluated for impairment should events occur that call into question the value of the intangible assets.
Adverse changes in our business, adverse changes in the assumptions used to determine the fair value of our reporting units, or the failure to grow our Discovery & Analytical Solutions and Diagnostics segments may result in impairment of our intangible assets, which could adversely affect our results of operations.
Risks Related to our Intellectual Property
We may not be successful in adequately protecting our intellectual property.
Patent and trade secret protection is important to us because developing new products, processes and technologies gives us a competitive advantage, although it is time-consuming and expensive. We own many United States and foreign patents and intend to apply for additional patents. Patent applications we file, however, may not result in issued patents or, if they do, the claims allowed in the patents may be narrower than what is needed to protect fully our products, processes and technologies. The expiration of our previously issued patents may cause us to lose a competitive advantage in certain of the products and services we provide. Similarly, applications to register our trademarks may not be granted in all countries in which they are filed. For our intellectual property that is protected by keeping it secret, such as trade secrets and know-how, we may not use adequate measures to protect this intellectual property.
Third parties have in the past and may in the future also challenge the validity of our issued patents, may circumvent or “design around” our patents and patent applications, or claim that our products, processes or technologies infringe their patents. In addition, third parties may assert that our product names infringe their trademarks. We may incur significant expense in legal proceedings to protect our intellectual property against infringement by third parties or to defend against claims of infringement by third parties. Claims by third parties in pending or future lawsuits could result in awards of substantial damages against us or
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court orders that could effectively prevent us from manufacturing, using, importing or selling our products in the United States or other countries.
If we are unable to renew our licenses or otherwise lose our licensed rights, we may have to stop selling products or we may lose competitive advantage.
We may not be able to renew our existing licenses, or licenses we may obtain in the future, on terms acceptable to us, or at all. If we lose the rights to a patented or other proprietary technology, we may need to stop selling products incorporating that technology and possibly other products, redesign our products or lose a competitive advantage. Potential competitors could in-license technologies that we fail to license and potentially erode our market share.
Our licenses typically subject us to various economic and commercialization obligations. If we fail to comply with these obligations, we could lose important rights under a license, such as the right to exclusivity in a market, or incur losses for failing to comply with our contractual obligations. In some cases, we could lose all rights under the license. In addition, rights granted under the license could be lost for reasons out of our control. For example, the licensor could lose patent protection for a number of reasons, including invalidity of the licensed patent, or a third-party could obtain a patent that curtails our freedom to operate under one or more licenses.
Risks Related to Legal, Government and Regulatory Matters
The manufacture and sale of products and services may expose us to product and other liability claims for which we could have substantial liability.
We face an inherent business risk of exposure to product and other liability claims if our products, services or product candidates are alleged or found to have caused injury, damage or loss. We may be unable to obtain insurance with adequate levels of coverage for potential liability on acceptable terms or claims of this nature may be excluded from coverage under the terms of any insurance policy that we obtain. If we are unable to obtain such insurance or the amounts of any claims successfully brought against us substantially exceed our coverage, then our business could be adversely impacted.
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If we fail to maintain satisfactory compliance with the regulations of the United States Food and Drug Administration and other governmental agencies in the United States and abroad, we may be forced to recall products and cease their manufacture and distribution, and we could be subject to civil, criminal or monetary penalties.
Our operations are subject to regulation by different state and federal government agencies in the United States and other countries, as well as to the standards established by international standards bodies. If we fail to comply with those regulations or standards, we could be subject to fines, penalties, criminal prosecution or other sanctions. Some of our products are subject to regulation by the United States Food and Drug Administration and similar foreign and domestic agencies. These regulations govern a wide variety of product activities, from design and development to labeling, manufacturing, promotion, sales and distribution. If we fail to comply with those regulations or standards, we may have to recall products, cease their manufacture and distribution, and may be subject to fines or criminal prosecution.
We are also subject to a variety of laws, regulations and standards that govern, among other things, the importation and exportation of products, the handling, transportation and manufacture of toxic or hazardous substances, the collection, storage, transfer, use, disclosure, retention and other processing of personal data, and our business practices in the United States and abroad such as anti-bribery, anti-corruption and competition laws. This requires that we devote substantial resources to maintaining our compliance with those laws, regulations and standards. A failure to do so could result in the imposition of civil, criminal or monetary penalties having a material adverse effect on our operations.
Changes in governmental regulations may reduce demand for our products or increase our expenses.
We compete in markets in which we or our customers must comply with federal, state, local and foreign regulations, such as environmental, health and safety, data privacy and food and drug regulations. We develop, configure and market our products to meet customer needs created by these regulations. Any significant change in these regulations could reduce demand for our products or increase our costs of producing these products.
The healthcare industry is highly regulated and if we fail to comply with its extensive system of laws and regulations, we could suffer fines and penalties or be required to make significant changes to our operations which could have a significant adverse effect on the results of our business operations.
The healthcare industry, including the genetic screening market, is subject to extensive and frequently changing international and United States federal, state and local laws and regulations. In addition, legislative provisions relating to
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healthcare fraud and abuse, patient privacy violations and misconduct involving government insurance programs provide federal enforcement personnel with substantial powers and remedies to pursue suspected violations. We believe that our business will continue to be subject to increasing regulation as the federal government continues to strengthen its position on healthcare matters, the scope and effect of which we cannot predict. If we fail to comply with applicable laws and regulations, we could suffer civil and criminal damages, fines and penalties, exclusion from participation in governmental healthcare programs, and the loss of various licenses, certificates and authorizations necessary to operate our business, as well as incur liabilities from third-party claims, all of which could have a significant adverse effect on our business.
Risks Related to our Foreign Operations
Economic, political and other risks associated with foreign operations could adversely affect our international sales and profitability.
Because we sell our products worldwide, our businesses are subject to risks associated with doing business internationally. Our sales originating outside the United States represented the majority of our total revenue in the nine months ended October 1, 2017.fiscal year 2021. We anticipate that sales from international operations will continue to represent a substantial portion of our total revenue. In addition, many of our manufacturing facilities, employees and suppliers are located outside the United States. Accordingly, our future results of operations could be harmed by a variety of factors, including:
•changes in actual, or from projected, foreign currency exchange rates,
•a global health crisis of unknown duration, such as the COVID-19 pandemic,
•wars, conflicts, or other changes in a country’s or region’s political or economic conditions, particularly in developing or emerging markets,
•longer payment cycles of foreign customers and timing of collections in foreign jurisdictions,
embargoes, •trade protection measures including embargoes, sanctions and tariffs, such as the sanctions recently implemented by the U.S. and other governments on the Russian Federation and related parties, the extent and impact of which have yet to be fully determined,
•import or export licensing requirements and the associated potential for delays or restrictions in the shipment of our products or the receipt of products from our suppliers,
•policies in foreign countries benefiting domestic manufacturers or other policies detrimental to companies headquartered in the United States,
•differing tax laws and changes in those laws, or changes in the countries in which we are subject to tax,
•adverse income tax audit settlements or loss of previously negotiated tax incentives,
•differing business practices associated with foreign operations,
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•difficulty in transferring cash between international operations and the United States,
•difficulty in staffing and managing widespread operations,
•differing labor laws and changes in those laws,
•differing protection of intellectual property and changes in that protection,
•expanded enforcement of laws related to data protection and personal privacy,
•increasing global enforcement of anti-bribery and anti-corruption laws, and
•differing regulatory requirements and changes in those requirements.
If we do not retainThe United Kingdom's withdrawal from the European Union could adversely impact our key personnel, our ability to execute our business strategy will be limited.results of operations.
Our success depends to a significant extent upon the continued serviceNearly 10% of our executive officers and key management and technical personnel, particularly our experienced engineers and scientists,net sales from continuing operations in fiscal year 2021 came from the United Kingdom. Following the referendum vote in the United Kingdom in June 2016 in favor of leaving the European Union, on January 31, 2020, the country formally withdrew from the European Union (commonly referred to as “Brexit”) and, on our abilityDecember 24, 2020, the United Kingdom and the European Union entered into a Trade and Cooperation Agreement to govern the relationship between the United Kingdom and the European Union following Brexit. The potential effects of Brexit remain uncertain. Brexit has caused, and may continue to attract, retain,create, volatility in global stock markets and motivate qualified personnel. The competition for these employees is intense. The lossregional and global economic uncertainty particularly in the United Kingdom financial and banking markets. Weakening of economic conditions or economic uncertainties tend to harm our
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business, and if such conditions worsen in the servicesUnited Kingdom or in the rest of key personnel couldEurope, it may have a material adverse effect on our operating results. In addition, there could be a materialoperations and sales.
Any significant weakening of the Great Britain Pound to the U.S. dollar will have an adverse effectimpact on us shouldour European revenues due to the turnoverimportance of our sales in the United Kingdom. Currency exchange rates for key personnel increase significantly or if we are unablein the pound sterling and the euro with respect to each other and the U.S. dollar have already been adversely affected by Brexit and that may continue to attract qualified personnel. We do not maintain any key person life insurance policies on any of our officers or employees.be the case.
Our success also depends on our ability to execute leadership succession plans. The inability to successfully transition key management roles could have a material adverse effect on our operating results.
If we experience a significant disruption in, or breach in security of, our information technology systems or those of our customers, suppliers or other third parties, or inadvertent transfer of information, or if we fail to implement new systems, software and technologies successfully, our business could be adversely affected.
We rely on several centralized information technology systems throughout our company to develop, manufacture and provide products and services, keep financial records, process orders, manage inventory, process shipments to customers and operate other critical functions. Our information technology systems may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, catastrophes or other unforeseen events. If we were to experience a prolonged system disruption in the information technology systems that involve our interactions with customers, suppliers or other third parties, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business. In addition, security breaches of our information technology systems or inadvertent transfer of information could result in the misappropriation or unauthorized disclosure of confidential information belonging to us orRisks Related to our employees, partners, customers or suppliers, which could result in our suffering significant financial or reputational damage.Debt
We have a substantial amount of outstanding debt, which could impact our ability to obtain future financing and limit our ability to make other expenditures in the conduct of our business.
    
We have a substantial amount of debt and other financial obligations. Our debt level and related debt service obligations could have negative consequences, including:
•requiring us to dedicate significant cash flow from operations to the payment of principal and interest on our debt, which reduces the funds we have available for other purposes, such as acquisitions and stock repurchases;
•reducing our flexibility in planning for or reacting to changes in our business and market conditions; and
•exposing us to interest rate risk sinceas a portion of our debt obligations are at variable rates.rates;
In addition, we•increasing our foreign currency risk as a portion of our debt obligations are in denominations other than the US dollar; and
•increasing the chances of a downgrade of our debt ratings due to the amount or intended purpose of our debt obligations.
We may incur additional indebtedness in the future to meet future financing needs. If we add new debt, the risks described above could increase. In addition, the market for both public and private debt offerings could experience liquidity concerns and increased volatility as a result of the COVID-19 pandemic, which could ultimately increase our borrowing costs and limit our ability to obtain future financing.
Restrictions in our senior unsecured revolving credit facility, senior unsecured term loan credit facility and other debt instruments may limit our activities.
Our senior unsecured revolving credit facility, senior unsecured term loan credit facility, senior unsecured notes due in 20212023 ("20212023 Notes"), senior unsecured notes due in 2024 ("2024 Notes"), senior unsecured notes due in 2026 ("2026 Notes"), senior unsecured notes due in 2028 ("2028 Notes"), senior unsecured notes due in 2029 ("2029 Notes"), senior unsecured notes due in 2031 ("March 2031 Notes"), senior unsecured notes due in 2031 ("September 2031 Notes") and senior unsecured notes due in 20262051 ("20262051 Notes") include restrictive covenants that limit our ability to engage in activities that could otherwise benefit our company. These include restrictions on our ability and the ability of our subsidiaries to:
•pay dividends on, redeem or repurchase our capital stock,
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•sell assets,
•incur obligations that restrict our subsidiaries’ ability to make dividend or other payments to us,
•guarantee or secure indebtedness,
•enter into transactions with affiliates, and
•consolidate, merge or transfer all, or substantially all, of our assets and the assets of our subsidiaries on a consolidated basis.
We are also required to meet specified financial ratios under the terms of certain of our existing debt instruments. Our ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to prevailing economic conditions and other factors, including factors that are beyond our control, such as foreign exchange rates, interest rates, changes in technology and changes in the level of competition. In addition, if we are unable to maintain our investment grade credit rating, our borrowing costs would increase and we would be subject to different and potentially more restrictive financial covenants under some of our existing debt instruments.
Any future indebtedness that we incur may include similar or more restrictive covenants. Our failure to comply with any of the restrictions in our senior unsecured revolving credit facility, senior unsecured term loan credit facility, the 20212023 Notes, the 2024 Notes, the 2026 Notes, the 2028 Notes, the 2029 Notes, the March 2031 Notes, the September 2031 Notes, the 2051 Notes or
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any future indebtedness may result in an event of default under those debt instruments, which could permit acceleration of the debt under those debt instruments, and require us to prepay that debt before its scheduled due date under certain circumstances.
The United Kingdom’s vote in favorDiscontinuation, reform, or replacement of withdrawing fromLIBOR may adversely affect our variable rate debt.
Our indebtedness under our senior unsecured revolving credit facility and unsecured term loan credit facility bear interest at fluctuating interest rates, primarily based on the European Union could adversely impact our operations and make it more difficultLondon Interbank Offered Rate (“LIBOR”) for us to do business in Europe.
Nearly 3%deposits of our net sales from continuing operations in 2016 came fromU.S. dollars. In July 2017, the United Kingdom. FollowingKingdom Financial Conduct Authority (the authority that regulates LIBOR) announced that it intends to stop compelling banks to submit rates for the referendum votecalculation of LIBOR after 2021. The discontinuation date for submission and publication of rates for certain tenors of U.S. dollar LIBOR (1-month, 3-month, 6-month, and 12-month) was subsequently extended by the ICE Benchmark Administration (the administrator of LIBOR) until June 30, 2023. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2023. The Alternative Reference Rates Committee in the United Kingdom ("U.K."States has proposed that the Secured Overnight Financing Rate (“SOFR”), calculated using short-term repurchase agreements backed by U.S. Treasury securities, is the rate that represents best practice as the alternative to U.S. dollar LIBOR for use in June 2016 in favor of leaving the European Union (commonly referredderivatives and other financial contracts that are currently indexed to as “Brexit”), on March 29, 2017, the country formally notified the European Union of its intention to withdraw. It appears likelyLIBOR. If LIBOR is discontinued, reformed or replaced, we expect that this withdrawalour indebtedness under our senior unsecured revolving credit facility and unsecured term loan credit facility will involve a process of lengthy negotiations between the United Kingdom and European Union member states to determine the future terms of the United Kingdom’s relationship with the European Union. This could leadbe indexed to a period of considerable uncertaintyreplacement benchmark based on SOFR. Any such change could cause the effective interest rate under our senior unsecured revolving credit facility and volatility, particularlyunsecured term loan credit facility and our overall interest expense to increase, in relation to United Kingdom financial and banking markets. Weakening of economic conditions or economic uncertainties tend to harm our business, and if such conditions emerge in the U.K. or in the rest of Europe, itwhich event we may have a material adverse effect ondifficulties making interest payments and funding our operationsother fixed costs, and sales.
Any significant weakening of the Great Britain Pound (the “GBP”) to the U.S. dollar will have an adverse impact on our European revenues due to the importance of U.K. sales. Currency exchange rates in the pound sterling and the euro with respect to each other and the U.S. dollar have already been adversely affected by Brexit and thatavailable cash flow for general corporate requirements may continue to be the case. In addition, depending on the terms of Brexit, the United Kingdom could lose the benefits of global trade agreements negotiated by the European Union on behalf of its members, which may result in increased trade barriers which could make our doing business in Europe more difficult.
Our results of operations will be adversely affected if we failaffected.
Risks Related to realize the full valueOwnership of our intangible assets.
As of October 1, 2017, our total assets included $2.8 billion of net intangible assets. Net intangible assets consist principally of goodwill associated with acquisitions and costs associated with securing patent rights, trademark rights, customer relationships, core technology and technology licenses and in-process research and development, net of accumulated amortization. We test certain of these items—specifically all of those that are considered “non-amortizing”—at least annually for potential impairment by comparing the carrying value to the fair market value of the reporting unit to which they are assigned. All of our amortizing intangible assets are also evaluated for impairment should events occur that call into question the value of the intangible assets.
Adverse changes in our business, adverse changes in the assumptions used to determine the fair value of our reporting units, or the failure to grow our Discovery & Analytical Solutions and Diagnostics segments may result in impairment of our intangible assets, which could adversely affect our results of operations.
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Common Stock
Our share price will fluctuate.
Over the last several years, stock markets in general and our common stock in particular have experienced significant price and volume volatility. Both the market price and the daily trading volume of our common stock may continue to be subject to significant fluctuations due not only to general stock market conditions but also to a change in sentiment in the market regarding our operations and business prospects. In addition to the risk factors discussed above, the price and volume volatility of our common stock may be affected by:
•operating results that vary from our financial guidance or the expectations of securities analysts and investors,
•the financial performance of the major end markets that we target,
•the operating and securities price performance of companies that investors consider to be comparable to us,
•announcements of strategic developments, acquisitions and other material events by us or our competitors, and
•changes in global financial markets and global economies and general market conditions, such as interest or foreign exchange rates, inflation, freight costs, commodity and equity prices and the value of financial assets.assets, and
•changes to economic conditions arising from global health crises such as the COVID-19 pandemic.
Dividends on our common stock could be reduced or eliminated in the future.
On July 24, 2017,January 27, 2022, we announced that our Board of Directors (our "Board") had declared a quarterly dividend of $0.07 per share for the first quarter of fiscal year 2022 that will be paid on May 13, 2022. On April 28, 2022, we announced that our Board had declared a quarterly dividend of $0.07 per share for the thirdsecond quarter of fiscal year 20172022 that will be payable on November 10, 2017. On October 27, 2017, we announced that our Board had declared a quarterly dividend of $0.07 per share for the fourth quarter of fiscal year 2017 that will be payable on February 9, 2018.in August 2022. In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.


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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Stock Repurchases
The following table provides information with respect to the shares of common stock repurchased by us for the periods indicated.
 Issuer Repurchases of Equity Securities
Period
Total Number
of Shares
Purchased(1)
 
Average Price
Paid Per
Share
 
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs(2)
 
Maximum Number of
Shares that May Yet
Be Purchased
Under the Plans or
Programs
July 3, 2017 - July 30, 20171,966
 $69.46
 —
 8,000,000
July 31, 2017 - August 27, 2017261
 64.13
 —
 8,000,000
August 28, 2017 - October 1, 2017905
 68.72
 —
 8,000,000
Activity for quarter ended October 1, 20173,132
 $68.80
 —
 8,000,000
 Issuer Repurchases of Equity Securities
Period
Total Number
of Shares
Purchased(1)
Average Price
Paid Per
Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs(2)
Maximum Number (or Approximate Dollar Value)
Shares that May Yet
Be Purchased
Under the Plans or
Programs
January 3, 2022—February 6, 2022142 $178.47 — $187,415,787 
February 7, 2022—March 6, 2022305,804 181.06 240,000 144,044,365 
March 7, 2022—April 3, 20221,161 170.21 — 144,044,365 
Activity for quarter ended April 3, 2022307,107 $181.02 240,000 $144,044,365 
 ____________________
(1)Our Board of Directors ("our Board") has authorized us to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to our equity incentive plans and to satisfy obligations related to the exercise of stock options made pursuant to our equity incentive plans. During the third quarter of fiscal year 2017, the Company repurchased 3,132 shares of common stock for this purpose at an aggregate cost of $0.2 million. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.

(2)On July 27, 2016, our Board authorized us to repurchase up to 8.0 million shares of common stock under a stock repurchase program (the "Repurchase Program"). The Repurchase Program will expire on July 26, 2018 unless terminated earlier by our Board, and may be suspended or discontinued at any time. During the nine months ended October 1, 2017, we had no stock repurchases under the Repurchase Program. As of October 1, 2017, 8.0 million shares remained available for repurchase under the Repurchase Program.

(1)Our Board of Directors (our "Board") has authorized us to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to our equity incentive plans and to satisfy obligations related to the exercise of stock options made pursuant to our equity incentive plans. During the three months ended April 3, 2022, we repurchased 67,107 shares of common stock for this purpose at an aggregate cost of $12.2 million.


(2)On July 31, 2020, our Board authorized us to repurchase shares of common stock for an aggregate amount up to $250.0 million under a stock repurchase program (the "Repurchase Program"). The Repurchase Program will expire on July 27, 2022 unless terminated earlier by the Board and may be suspended or discontinued at any time. During the three months ended April 3, 2022, we repurchased 240,000 shares of common stock under the Repurchase Program for an aggregate cost of $43.4 million. As of April 3, 2022, $144.0 million remained available for aggregate repurchases of shares under the Repurchase Program.


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Item 6.Exhibits
Item 6.Exhibits
Exhibit
Number
Exhibit Name
10.1

10.2
31.1
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
32.1
101.INSInline XBRL Instance Document.Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Labels Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).
____________________________
Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language):
(i) Cover Page, Form 10-Q, Quarterly Report for the quarterly period ended April 3, 2022 (ii) Condensed Consolidated Statements of Operations for the three and nine months ended October 1, 2017April 3, 2022 and October 2, 2016, (ii)April 4, 2021, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 1, 2017April 3, 2022 and October 2, 2016, (iii)April 4, 2021, (iv) Condensed Consolidated Balance Sheets at October 1, 2017April 3, 2022 and January 1, 2017, (iv)2, 2022, (v) Condensed Consolidated StatementStatements of Stockholders' Equity for the three months ended April 3, 2022 and April 4, 2021, (vi) Condensed Consolidated Statements of Cash Flows for the ninethree months ended October 1, 2017April 3, 2022 and October 2, 2016,April 4, 2021, and (v)(vii) Notes to Condensed Consolidated Financial Statements.




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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
PERKINELMER, INC.
November 7, 2017May 10, 2022By:
/s/    FRANK A. WILSONJAMES M. MOCK
Frank A. Wilson
James M. Mock
Senior Vice President and

Chief Financial Officer

(Principal Financial Officer)
 
PERKINELMER, INC.
November 7, 2017May 10, 2022By:
/s/    ANDREW OKUN
Andrew Okun

Vice President, and Chief Accounting Officer
and Treasurer
(Principal Accounting Officer)



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