Liquidity and Capital Resources

Overview

At September 30, ~~2017,~~2020, we had a total of ~~$437.0~~$320.0 million in cash and cash equivalents, ~~$136.6~~$101.9 million of which ~~resided~~was in the United States and ~~$300.4~~$218.1 million was at our foreign subsidiaries, compared to cash and cash equivalents at December 31, ~~2016,~~2019 of ~~$361.3~~$284.6 million, of which ~~$98.3~~$77.8 million ~~resided~~was in the United States and ~~$263.0~~$206.8 million at our foreign subsidiaries. The increase in cash and cash equivalents during the nine months ended September 30, 2017, was primarily due to cash provided from operations of $209.3 million and proceeds of $44.2 million from shares issued under our stock compensation plans, partially offset by the pay down on our revolving credit facility of $97.5 million, capital expenditures of $31.9 million and dividend payments of $61.8 million.

Cash provided by operating activities during the nine months ended September 30, 2017, totaled $209.3 million, which primarily consisted of net earnings, adjusted for depreciation and amortization, stock-based compensation, other non-cash items and changes in working capital.

~~Cash used for investing activities for the nine months ended September 30, 2017, totaled $29.0 million, which primarily consisted of capital expenditures in the ordinary course of business.~~

Cash used by financing activities for the nine months ended September 30, 2017, totaled $124.6 million, which primarily consisted of repayment of borrowings under our revolving credit facility and the payment of quarterly dividends, partially offset by proceeds from share issuances pursuant to our stock plans.

On February 8, 2011, we entered into a Credit Agreement (“Credit Agreement”) with Bank of America, N.A., U.S. Bank National Association, JPMorgan Chase Bank N.A. and other Lenders. The Credit Agreement provides for a $200 million, five-year revolving line of credit. On April 5, 2013, the Credit Agreement was amended to extend the maturity of the revolving credit facility from April 8, 2016 to April 5, 2018, in addition to incorporating a $150 million term loan facility maturing April 5, 2019. On May 31, 2016, the Credit Agreement was further amended to increase the borrowing capacity to $500 million and to extend the maturity of the revolving credit facility from April 5, 2018 to May 31, 2021. The amendment also incorporated a revised schedule of fees and interest rate spreads. We have the right, subject to certain conditions, including approval of additional commitments by qualified lenders, to increase the revolving line of credit under the Credit Agreement by an additional $200 million until May 31, 2021. The Credit Agreement allows us and certain designated subsidiaries to borrow in United States dollars, European euros, Swedish kronor, British pound sterling, Japanese yen, Canadian dollars, Australian dollars, and other agreed upon currencies. Interest rates under the Credit Agreement are determined based on the type of borrowing. Interest associated with borrowings can be based on either the prime lending rate of Bank of America, N.A. or the published Eurocurrency rate (i.e. LIBOR). The borrowings have an applicable margin that ranges from 0.125 percent to 2.125 percent depending on the applicable base rate and our consolidated total leverage ratio. Including the respective spreads, the one-month Eurocurrency-based borrowing rate was 2.610 percent per annum and the prime lending-based borrowing rate was 4.625 percent per annum at September 30, 2017. The Credit Agreement requires us to pay a commitment fee on the amount of unused revolving commitments at a rate, based on our total leverage ratio, which ranges from 0.150 percent to 0.300 percent of unused revolving commitments. At September 30, ~~2017, the commitment fee on the amount~~2020 and December 31, 2019, we had outstanding debt of ~~unused revolving credit was 0.175 percent per annum. The Credit Agreement contains two financial covenants that require the maintenance~~$793.0 million and $676.9 million, respectively, which consists of ~~a total leverage ratio~~unsecured term loans and ~~an interest coverage ratio, with which the Company was in compliance at September 30, 2017. The credit facilities available under the Credit Agreement are unsecured.~~

~~On May 31, 2016, the Company drew down $105 million~~borrowings under the revolving credit facility that we entered into during 2019 (collectively referred to as the "Credit Agreement") and ~~repaid~~senior unsecured notes. On August 3, 2020, we issued and sold our $500.0 million senior unsecured notes maturing on August 1, 2030 (the “2030 Notes”) in an underwritten public offering. The aggregate net proceeds from the ~~term loan originally issued under the credit agreement dated April 5, 2013.~~offering were approximately $494.2 million after deducting underwriting fees, debt discount and transaction issuance costs. Interest ~~was accrued and paid monthly based~~ on the ~~one-month LIBOR rate. To manage the interest rate risk arising~~2030 Notes is payable semiannually in arrears on February 1 and August 1 of each year beginning on February 1, 2021. The net proceeds from the ~~variability~~sale of the 2030 Notes were used to redeem the outstanding $425.0 million senior unsecured notes due June 15, 2021 (the “2021 Notes”), and for general corporate purposes, which may include funding for working capital, investments in ~~monthly interest expense attributable to amounts drawn under~~our subsidiaries, capital expenditures, acquisitions, and stock repurchases. In connection with the ~~revolver,~~redemption of the ~~Company entered into two amortizing interest rate swaps with an aggregate of $105 million. The interest rate swaps were designated, and effective, as cash flow hedges.~~

~~During~~2021 Notes, during the ~~quarter~~three months ended September 30, ~~2017,~~2020, we recorded a $9.1 million loss on debt extinguishment on the ~~Company repaid all amounts outstanding under the revolving credit facility. Concurrently, the Company exited both interest rate swaps~~Consolidated Statements of Income. The Credit Agreement contains one financial covenant that requires maintenance of a consolidated total leverage ratio with which ~~had a combined notional value~~we complied at ~~the time of $86.3 million.~~September 30, 2020. We had ~~$16.9~~$10.8 million of letters of credit outstanding under the Credit Agreement at September 30, ~~2017,~~2020, which reduced the total ~~available~~availability under the revolving ~~credit~~commitments under the Credit Agreement.

~~In June 2016, we issued $425 million aggregate principal amount of our 3.125 percent senior unsecured notes due June 15, 2021 (the “Notes”). The net proceeds from the issuance~~ See Note 13, "Debt" of the Notes ~~were approximately $421.0 million, after deducting underwriting discounts and offering expenses, which are being amortized over~~to the Consolidated Financial Statements for more details.

On January 11, 2019, a ~~period~~standby letter of ~~five years. Interest on~~credit not to exceed Swedish kronor 2.2 billion, was issued under a new bilateral letter of credit reimbursement agreement ("L/C Agreement") to secure a payment guarantee required by the Swedish Tax Authority in order to grant the original respite from paying the tax reassessment described in Note 16, "Income Taxes" of the Notes ~~is payable semiannually in arrears on December 15 and June 15.~~to the Consolidated Financial Statements. The ~~proceeds~~outstanding amount of the L/C Agreement was equivalent to approximately $248.0 million at September 30, 2020. While outstanding amounts under the L/C Agreement do not reduce the available revolving credit from the ~~Notes were used~~Credit Agreement, they are considered indebtedness and influence the incremental debt capacity governed by our Credit Agreement covenants. The standby letter of credit was further amended on April 24, 2020 to ~~repay our 3.75 percent~~reflect the new respite.

senior unsecured notes that were due September 1, 2016, and are being used for general corporate purposes, which include working capital and capital expenditure needs, business acquisitions, and repurchasesWe repurchase shares of our common ~~stock.~~

~~On February 5, 2015,~~stock from time to time after considering market conditions and in accordance with repurchase limits authorized by our Board of ~~Directors authorized~~Directors. Under the share repurchase ~~of up to 15.0 million~~authorization, we may repurchase our shares ~~of our outstanding common stock. An aggregate of 6.3 million shares were repurchased under this~~periodically until the share repurchase authorization ~~which expired~~expires in February 2021, depending on ~~February 5, 2017. On February 8, 2017, our Board of Directors authorized the~~market conditions and other factors, and may do so in open market purchases. Our repurchase ~~of up to 15.0 million shares of our outstanding common stock. This authorization will expire on February 8, 2019.~~program may be suspended or discontinued at any time. As of September 30, ~~2017, no~~2020, the Company's total remaining number of shares ~~have been~~that may yet be repurchased under the ~~February 8, 2017 authorization.~~current authorization was approximately 8.3 million.

~~United States income taxes have not been provided for accumulated earnings~~

We paid dividends of ~~certain subsidiaries outside of~~$22.3 million and $67.3 million during the ~~United States as~~three and nine months ended September 30, 2020, respectively, and $22.8 million and $68.9 million during the three and nine months ended September 30, 2019, respectively.

For the next 12 months, we ~~currently intend~~anticipate that we will be able to ~~reinvest the earnings in~~meet our liquidity needs, including servicing our debt, through existing cash on hand, cash generated from operations and, other activities outside the United States indefinitely. Should we subsequently elect to repatriate such foreign earnings, we would need to accrue and pay United States income taxes, thereby reducing the amount of our cash.

~~We believe that~~if needed, amounts available on our existing ~~cash combined with the cash we anticipate generating from operating activities, and our available~~ credit facilities ~~and~~or financing available from other sources. However, as the impact of the COVID-19 pandemic on the global economy and our operations evolve, we will continue to assess our liquidity needs. An extended period of global supply chain and economic disruption could materially affect our business, results of operations, access to sources ~~will~~of liquidity and financial condition, and could materially adversely impact our customers or suppliers. In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. In addition to the acquisitions disclosed elsewhere herein, we have evaluated and expect to continue to evaluate possible transactions. Such transactions may be ~~sufficient to meet~~material and involve cash, our securities or the assumption or incurrence of additional indebtedness.

Summary of Cash Flows

The following table summarizes cash ~~requirements~~flow information for the ~~next twelve months. We do not have any significant commitments nor are we aware~~periods presented (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net cash provided by operating activities	$	82,174		$	153,524		$	196,189		$	276,825
Net cash used in investing activities	(9,894		)	(10,332		)	(36,832		)	(632,596		)
Net cash (used in) provided by financing activities	(90,946		)	(110,016		)	(119,849		)	145,365

Net cash provided by operating activities decreased $71.4 million for the three months ended September 30, 2020, when compared to the prior year quarter, primarily due to less favorable timing of ~~any significant events or conditions that are likely~~working capital changes partially offset by higher net earnings after adding back non-cash adjustments.

Net cash provided by operating activities decreased $80.6 million for the nine months ended September 30, 2020, when compared to ~~have a material impact~~the prior year, primarily due to less favorable timing of working capital changes as well as lower net earnings after adding back non-cash adjustments.

Net cash used in investing activities was relatively flat for the three months ended September 30, 2020, when compared to the prior year quarter.

Net cash used in investing activities decreased $595.8 million for the nine months ended September 30, 2020, when compared to the prior year, primarily due to cash paid for business acquisitions in the prior year.

Net cash used in financing activities decreased $19.1 million for the three months ended September 30, 2020, when compared to the prior year quarter, primarily due to repurchases of common stock totaling $75.0 million in the prior year quarter partially offset by lower net proceeds of $53.0 million on our ~~liquidity or capital resources.~~Credit Agreement and senior unsecured notes, which included the 2030 Notes proceeds that were issued and sold on August 3, 2020.

Net cash used in financing activities decreased $265.2 million for the nine months ended September 30, 2020, when compared to the prior year, primarily due to lower net proceeds of $229.0 million from our Credit Agreement and senior unsecured notes, which included the 2030 Notes proceeds that were issued and sold on August 3, 2020, an increase of $25.0 million in repurchases of common stock and lower proceeds of $13.5 million from shares issued.

Off-Balance Sheet Arrangements

As of September 30, ~~2017~~,2020, we leased our non-owned facilities under operating lease agreements. We also leased certain operating machinery and equipment and office equipment under operating lease agreements. Except for these operating lease agreements, we dodid not have any off-balance sheet arrangements that have or are likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

~~Recent Accounting Pronouncements~~

Recently Issued Accounting Pronouncements

~~In May 2014, the Financial~~For a discussion of these items, see Note 1, "Basis of Presentation and Accounting Standards Board (the "FASB") issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"), which establishes new guidance under which companies will recognize revenue to depictUpdates" of the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also provides for additional disclosure requirements. The FASB has recently issued several amendmentsNotes to the new standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. The amendments include (i) ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606)-Principal versus Agent Considerations, which was issued in March 2016, and clarifies the implementation guidance for principal versus agent considerations in ASU 2014-09, and (ii) ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606)-Identifying Performance Obligations and Licensing, which was issued in April 2016, and amends the guidance in ASU No. 2014-09 related to identifying performance obligations and accounting for licenses of intellectual property.Consolidated Financial Statements.

The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. While ASU 2014-09 was to be effective for annual periods and interim periods beginning after December 15, 2016, on July 9, 2015, the FASB approved the deferral of the effective date to periods beginning on or after December 15, 2017. Accordingly, the Company currently intends to adopt ASU 2014-09 on January 1, 2018. The Company currently plans to adopt using the modified retrospective approach.

The Company has made progress toward completing the evaluation of the potential changes from adopting the new standard on its financial reporting and disclosures. The Company has evaluated the impact of the standard on all of its revenue streams and most of its significant contracts. The Company has completed the assessment of the impact on its business processes, controls and systems. During the third quarter of 2017, the Company completed the design of the changes to our business processes, controls and systems. The Company plans to implement the changes in the fourth quarter of 2017. The Company has also begun quantifying the impact of the adoption of the standard on retained earnings as of January 1, 2017. However, the impact to retained earnings is not known at this time, as it will be dependent on the number, size, and complexity of contracts that have not been substantially completed as of December 31, 2017.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The amendments in this update require the identification of arrangements that should be accounted for as leases by lessees. In general, for lease arrangements exceeding a twelve-month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee. ASU 2016-02 requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted, and the Company currently intends to adopt ASU 2016-02 on January 1, 2019. The Company is assessing the impact ASU 2016-02 will have on its consolidated financial statements and expects that the primary impact upon adoption will be the recognition, on a discounted basis, of its minimum commitments under noncancelable operating leases on its consolidated balance sheets resulting in the recording of right of use assets and lease obligations.

In October 2016, the FASB issued Accounting Standards Update No. 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory” ("ASU 2016-16"). The amendments in this update eliminate the exception of recognizing, at the time of transfer, current and deferred income taxes for intra-entity asset transfers other than inventory. ASU 2016-16 is effective for interim and annual reporting periods beginning after December 15, 2017, and should be applied on a modified retrospective transition basis. The Company is currently planning to adopt ASU 2016-16 on January 1, 2018. The Company has estimated that there will be a remaining deferred tax benefit of $6.5 million recorded in prepaid expenses and other current assets and other assets as of December 31, 2017, which represents the tax benefit that was deferred in accordance with current GAAP. At adoption, the Company will recognize this amount through a cumulative-effect adjustment to retained earnings.

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"). The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. The Company currently intends to adopt ASU 2017-01 on January 1, 2018, and does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Updated No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The amendments in this update simplify the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized 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. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should 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 amendments in ASU 2017-04 are to be applied on a prospective basis and are not expected to have a material impact on the Company’s consolidated financial statements.

Critical Accounting Policies and Estimates

~~The Company reaffirms~~Preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Management believes the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. See Management's Discussion and Analysis and the discussion of critical accounting policies and ~~its~~ use of estimates as reported ~~in its Form 10-K for the fiscal year ended December 31, 2016, as described~~ in Note 1, "Nature of Business and Significant Accounting ~~Policies,"~~Policies" and Note 15, "Contingencies" of the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2019. Actual results in these areas could differ materially from management's estimates. There have been no significant changes in the Company's assumptions regarding critical accounting estimates during the first nine months ended September 30, 2020.

Contractual Obligations

There were no material changes to the Company's contractual obligations outside the ordinary course of its business during the ~~quarter~~nine months ended September 30, ~~2017.~~2020. The Company borrowed an additional $175.0 million and made payments of $126.0 million under the revolving credit facility during the nine months ended September 30, 2020.

~~Contingencies~~

On August 3, 2020, the Company issued and sold its $500.0 million senior unsecured notes maturing on August 1, 2030 (the “2030 Notes”) in an underwritten public offering. The aggregate net proceeds from the offering were approximately $494.2 million after deducting underwriting fees, debt discount and transaction issuance costs. Interest on the 2030 Notes is payable semiannually in arrears on February 1 and August 1 of each year beginning on February 1, 2021. The net proceeds from the sale of the 2030 Notes were used to redeem the Company's outstanding $425.0 million senior unsecured notes due June 15, 2021 (the “2021 Notes”), and for general corporate purposes, which may include funding for working capital, investments in Company's subsidiaries, capital expenditures, acquisitions, and stock repurchases. See Note ~~15, "Contingencies,"~~13, "Debt" of the Notes to the Consolidated Financial Statements for ~~a description~~more details.

Contingencies

See Note 15, "Contingencies" of ~~an ongoing lawsuit filed by Raytheon Company against FLIR Systems, Inc. and its subsidiary, FLIR Commercial Systems, Inc.,~~the Notes to the Consolidated Financial Statements for the disclosure of certain matters by the Company to the United States Department of State Office of Defense Trade Controls Compliance, communications to the Company from the United States Department of Commerce Bureau of Industry and Security, and the Company's current estimates of the range of potential loss associated with quality concerns identified by the Company regarding certain SkyWatch Surveillance ~~Towers.~~Towers, among other matters.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of September 30, ~~2017,~~2020, the Company has not experienced any changes in market risk exposure that would materially affect the quantitative and qualitative disclosures about market risk presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2019, other than the following:

Interest Rate Risk

The Company’s exposure to changes in market interest rates relates primarily to interest paid on the Company’s outstanding floating rate debt. The Company’s outstanding floating rate debt consists of amounts borrowed under our revolving loan facility as well as outstanding term loans. These borrowings bear interest at the respective Eurocurrency rate (e.g. LIBOR) plus a scheduled spread. Fluctuations in market interest rates will cause interest expense increases or decreases on such outstanding debt.

As our risk management objectives include mitigating the risk of changes in cash flows attributable to changes in the designated three-month Eurocurrency rate on the Company’s Swedish kronor term loan, the Company entered into a floored interest rate swap for the aggregate notional amount borrowed; changes in the cash flows of the interest rate swap is expected to exactly offset the changes in cash flows attributable to fluctuations in the three-month Eurocurrency-based interest payments. The net effect of the swap is to convert the floating interest rate basis to a fixed rate of 0.59 percent.

It is expected that a number of banks currently reporting information used to set LIBOR will stop doing so after 2021. Such an occurrence could cause LIBOR to stop publication or cause LIBOR to no longer be representative of the underlying market. We are engaged in regular dialogue with our lenders and derivatives counterparties to keep apprised of the proposed successor rates in each of the jurisdictions in which we may have a need to execute a financial transaction. Although progress has been made by the various working groups, we believe it is too early to accurately assess an impact of the LIBOR benchmark reform.

See Note 6, "Derivative Financial Instruments - Interest Rate Swap" and Note 13, "Debt" of the Notes to the Consolidated Financial Statements and Item 2 of Part I, "Management's Discussion and Analysis of Financial Condition and Results of Operations," for additional information on the Company's debt and interest rate risk.


ITEM 4.	CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of September 30, ~~2017,~~2020, the Company completed an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in Internal Control Over Financial Reporting

There ~~was~~have been no ~~change~~changes in the Company’s internal control over financial reporting that occurred during the Company’s ~~fiscal quarter~~three months ended September 30, ~~2017,~~2020, that ~~has~~have materially affected, or isare reasonably likely to materially affect, ~~such~~the Company's internal control over financial reporting.

PART II. OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS

The Company is subject to legal proceedings, claims and litigation arising in the ordinary course of its business. See Note 15, “Contingencies” of the Notes to the Consolidated Financial Statements for additional information on the Company’s legal proceedings.

ITEM 1A. RISK FACTORS

~~The following are important~~There have been no material changes from the risk factors ~~that could cause actual results or events to differ materially from those contained~~described in any forward-looking statements made by or on behalf of the Company. If we are unable to adequately respond to these risks and uncertainties, our business, financial condition and results of operations could be materially adversely affected. Additionally, we cannot be certain or give any assurance that any actions taken to reduce known risks and uncertainties will be effective.

~~Risks, Uncertainties and Other~~Part I, Item 1A. Risk Factors ~~Related to Our Business~~

~~We depend on the United States government for a material portion of our business and changes in government spending could adversely affect our business~~

~~We derive significant revenue from contracts or subcontracts funded by United States government agencies. A significant reduction~~ in the ~~purchase of our products by these agencies or contractors~~Company's Annual Report on Form 10-K for ~~these agencies would have a material adverse effect on our business. For~~ the ~~fiscal years~~year ended December 31, ~~2016, 2015~~2019 and 2014, approximately 25 percent, 21 percent and 20 percent, respectively, of our revenues were derived directly or indirectly from sales to the United States government and its agencies. The funding of contracts awarded to us depends on the overall United States government budget and appropriations process, which is beyond our control. In addition, at its discretion, the United States government may change its spending priorities and/or terminate, reduce or modify contracts.

~~Substantial uncertainty exists~~in Part II, Item 1A. Risk Factors in the spending levels and priorities of the United States government, particularly with respect to military expenditures. Continued and further reductions in military spending could have a material adverse effectCompany's subsequent Quarterly Reports on ~~our results from operations.~~Form 10-Q.

~~As a United States government supplier, we are subject to a number of procurement rules and regulations~~

Government contractors must comply with specific procurement regulations and other requirements and are subject to routine audits and investigations by United States government agencies. In addition, violations of these regulations or other unrelated laws and statutes can lead to debarment and other penalties. If we fail to comply with procurement rules and regulations and other laws and statutes, the results could include: reductions in the value of contracts; contract modifications or termination; the assessment of penalties and fines; and/or suspension or debarment from United States government contracting or subcontracting for a period of time or permanently. An adverse action by the United States government could also result in lost sales to non-governmental customers who might disqualify us as a result of such adverse action. The impairment or loss of our government contracts could have a material adverse effect on our business.

~~Operating margins may be negatively impacted by reduction in sales or by a change in the mix of products sold~~

Our expense levels are based, in part, on our expectations regarding future sales and these expenses are largely fixed in the short term. Some expenses, such as those related to research and development activities, would likely be maintained in the event of a sales downturn in order to maintain and enhance the long-term competitiveness of the Company. We maintain inventories of finished goods, components and raw materials at levels we believe are necessary to meet anticipated sales. Accordingly, we may not be able to reduce our costs in a timely manner to compensate for any unexpected shortfall between forecasted and actual sales. Any significant shortfall of sales may result in us carrying higher levels of inventories of finished goods, components and raw materials thereby increasing our risk of inventory obsolescence and corresponding inventory write-downs and write-offs. Our fixed costs, including facilities and information technology costs, compliance and public company costs, and depreciation and amortization related to previous acquisitions and capital expenditures, are significant and are difficult to reduce in the short term.

~~Our operating margins vary by product and substantial changes in the mix of products sold could also have a negative impact on our operating margins.~~

~~We may experience impairment in the value of our tangible and intangible assets~~

Our industry is subject to rapid changes in technology, which may result in unexpected obsolescence or impairment of our assets. Our intangible assets, including goodwill, represent a significant portion of our total assets. Most of these intangibles are the result of acquisitions in which the purchase price exceeded the value of the tangible assets acquired. We amortize certain of these intangibles over their anticipated useful life and review goodwill and indefinite-lived intangible assets for impairment annually or more frequently if warranted by events. To date we have not experienced any impairment of our intangible assets, but there can be no assurance that we will not experience such impairment in the future. In addition, certain of our tangible assets such as inventory and machinery and equipment may experience impairment in their value as a result of such events as the introduction of new products, changes in technology or changes in customer demand patterns. We depreciate our machinery and equipment at levels we believe are adequate; however, there can be no assurance that there will not be a future impairment that may have a material impact on our business, financial condition and results of operations.

~~Unfavorable results of legal proceedings could materially adversely affect us~~

We are subject to various legal proceedings and claims that have arisen out of the ordinary conduct of our business and are not yet resolved, and additional claims may arise in the future. Results of legal proceedings cannot be predicted with certainty. Regardless of merit, litigation may be both time-consuming and disruptive to our operations and could cause significant expense and diversion of management attention. From time to time, we are involved in lawsuits concerning intellectual property, torts, contracts, shareholder litigation, administrative and regulatory proceedings and other matters, as well as governmental inquiries and investigations, the outcomes of which may be significant to our results of operations and may limit our ability to engage in our business activities. In recognition of these considerations, we have and may in the future enter into material settlements to avoid ongoing costs and efforts in defending or pursuing a matter. Should we fail to prevail in certain matters, or should several of these matters be resolved against us in the same reporting period, we may be faced with significant monetary damages or injunctive relief against us that could adversely affect our business, financial condition, operating results and cash flows. While we have insurance related to our business operations, it may not apply to or fully cover liabilities we incur as a result of these lawsuits. We record accruals for liabilities where we believe a loss to be probable and reasonably estimable. However, our actual costs may differ materially from these estimates.

~~We face risks from international sales and business activities~~

We market and sell our products worldwide and international sales have accounted for, and are expected to continue to account for, a significant portion of our revenue. For the years ended December 31, 2016, 2015 and 2014, international sales accounted for 46 percent, 47 percent and 49 percent, respectively, of our total revenue. We also manufacture certain products and subassemblies in Europe and we have several contract manufacturing agreements with third parties in Europe and in Asia. Certain of these products, particularly our thermal and infrared products, are subject to substantial government regulation and licensing and end use restrictions throughout the world. Our international business activities are subject to a number of risks, including:

~~the imposition of and changes to governmental licensing restrictions and controls impacting our technology and products;~~

~~restrictions and prohibitions on the export of technology and products, including recent changes in regulation prohibiting the sale of certain of our products to certain end users without a license;~~

~~international trade restrictions;~~

~~difficulty in collecting receivables and governmental restrictions with respect to currency;~~

~~inadequate protection of intellectual property;~~

~~labor union activities;~~

~~changes in tariffs and taxes;~~

~~restrictions on repatriation of earnings;~~

~~restriction on the importation and exportation of goods and services;~~

risks, costs, impacts and obligations associated with the United States Foreign Corrupt Practices Act ("FCPA"), and other anti-bribery and anti-corruption laws applicable to us, and laws applicable to global trade and United States exports and

~~costs and penalties from violations of such laws and related regulations, including the costs associated with required remedial and other increased compliance activity;~~

~~difficulties in staffing and managing international operations; and~~

~~political and economic instability.~~

Some of these factors recently have had an adverse impact on our sales and operations and increased the Company’s cost of doing business and subjected the business to additional rules, policies and procedures that impacted the operation of the Company. No assurance can be given that these factors will not have a material adverse effect on our future international sales and operations and, consequently, on our business, financial condition and results of operations. Furthermore, compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business both in the United States and in international jurisdictions. These regulations include import and export laws, anti-competition laws, anti-corruption laws, such as the FCPA and the U.K. Bribery Act, and other local laws prohibiting corrupt payments to governmental officials, data privacy requirements, tax laws, and accounting, internal control and disclosure requirements. For example, on April 8, 2015, the Company and the Securities and Exchange Commission (“SEC”) entered into an agreement through entry of an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities and Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (the “SEC Order”). The SEC Order settled charges under the FCPA with respect to incidents of improper travel and gifts involving FLIR’s Middle East operation. Pursuant to the SEC Order, the Company is obligated to “cease and desist” from committing any future violations of the Securities Exchange Act of 1934, as amended. Violations of these laws and regulations could result in civil and criminal fines, penalties and sanctions against us, our officers or our employees, prohibitions on the conduct of our business and on our ability to offer our products and services in one or more countries, and could also materially affect our reputation, business and results of operations. In certain foreign jurisdictions, there is a higher risk of fraud or corruption and greater difficulty in maintaining effective internal controls and compliance programs. Further, although we have implemented and continue to implement policies and procedures designed to promote compliance with applicable laws and regulations, there can be no assurance that our employees, contractors or agents will not violate our policies or applicable laws and regulations. In addition, our international contracts may include industrial cooperation agreements requiring specific in-country purchases, investments, manufacturing agreements or other financial obligations, known as offset obligations, and may provide for penalties if we fail to meet such requirements. The impact of these factors is difficult to predict, but one or more of them could have a material adverse effect on our financial position, results of operations, or cash flows.

~~We face risks from currency fluctuations~~

Historically, currency fluctuations have affected our operating results. Changes in the value of foreign currencies in which our sales or costs incurred are denominated have in the past caused, and could in the future cause, fluctuations in our operating results. We seek to reduce our exposure to currency fluctuations by denominating, where possible, our international sales in United States dollars, by balancing expenses and revenues in various currencies and by undertaking limited hedging of forecasted currency exposures. With respect to international sales denominated in United States dollars, a decrease in the value of foreign currencies relative to the United States dollar could make our products less price competitive.

~~We may not be successful in obtaining the necessary export licenses to conduct operations abroad and the United States government may prevent proposed sales to foreign governments and customers~~

Export licenses and other authorizations are required from United States government agencies under the ITAR, the Export Administration Regulation (“EAR”), the Office of Foreign Assets Control (“OFAC”) Regulations, the Trading with the Enemy Act of 1917, the International Emergency Economic Powers Act (“IEEPA”), the Arms Export Control Act of 1976 (“AECA”), and other similar laws and regulations for the sale, use and export of many of our products and related data and services. Thermal and infrared products and technical data have been subject to the ITAR and EAR, historically under United States Munitions List (“USML”) Category XII and Commerce Control List (“CCL”) Category 6. Recently, the United States Government’s export reform effort resulted in the transition of various Company products from the USML to the CCL, shifting the licensing requirements and restrictions for products regulated by the Department of Commerce under the EAR. This transition has increased the licensing requirements and restrictions on some products and reduced the requirements and restrictions on others. We can give no assurance that we will be successful in obtaining the necessary licenses from the United States Department of State or Department of Commerce required to conduct our business as presently or historically conducted.

The United States export licensing environment has been affected by a number of factors, including but not limited to, the aftermath of 9/11, the rise of terrorism and the changing geopolitical environment, heightened tensions with other countries (which shift and evolve over time), and the United States reliance on the tactical advantage of the night-time war fighter. Some of these factors have affected the thermal imaging and infrared technology industry overall while others have impacted the Company directly. In addition, the Company’s 2014 submission to the United States Department of State Office of Defense Trade Controls Compliance (“DTCC”) pursuant to ITAR § 127.12(c), regarding the unauthorized export of technical data and defense services to dual and third country nationals in at least four facilities of the Company, have led to heightened scrutiny of export licenses for products in our markets and in some cases, has resulted in lengthened drafting and review periods for our license applications, including in countries where we have historically made significant sales. Subsequent engagement with the DTCC as part of the Company’s 2014 and related submissions and other communications concerning the Company’s licensing posture overall, highlight DTCC’s focus on the manner in which the Company handles exports of its products, technical data and services subject to the ITAR. In addition, concerns with respect to potential diversion of certain of the Company's products to prohibited end users and countries subject to economic and other sanctions implemented by the United States government has caused the United States Department of Commerce Bureau of Industry and Security to restrict recently the Company’s ability to sell 9hz thermal products without a license to customers in China not identified on a list maintained by the United States Department of Commerce.

Although we have taken actions and continue to take additional actions necessary to implement policies and procedures to promote an improved compliance culture and programs, there is no guarantee that our actions will be effective or that government agencies will not view our actions and programs with heightened scrutiny, including as a result of events outside the Company’s control. As a result, we may receive more restrictive provisos or limitations on new license requests, wholesale denials of our license requests, suspensions or terminations of our existing licenses, or delays in receiving new licenses resulting from requests for follow-up information, due diligence requests or additional limitations on our sale to third parties. We can give no assurance that we will be successful in obtaining necessary licenses required to facilitate our international business. Failures to obtain or delays in obtaining licenses may prevent or limit our ability to market, sell, export, or transfer our products outside the United States and has had and could continue to have a material adverse effect on our business and its operating results.

~~General economic conditions may adversely affect our business, operating results and financial condition~~

Our operations and performance depend significantly on worldwide economic conditions and their impact on levels of capital investment and consumer spending. Economic factors that could adversely influence demand for the Company’s products include uncertainty about global economic conditions leading to reduced levels of investment, changes in government spending levels and/or priorities, the size and availability of government budgets, customers’ and suppliers’ access to credit, consumer confidence and other macroeconomic factors affecting government, industrial or consumer spending behavior.

In recent years, our performance has been negatively impacted by reduced spending by United States government agencies, global economic weakness, and the Eurozone crisis. Continuation of the conditions that led to reduced spending and potential further reductions in spending globally by either consumers or government agencies could have a material adverse effect on our business, financial condition and results of operations.

~~Our primary markets are volatile and unpredictable~~

Our business depends on the demand for our products and solutions in a variety of commercial, industrial and government markets. In the past, the demand for our products in these markets has fluctuated due to a variety of factors, some of which are beyond our control, including:

~~the timing, number and size of orders from, and shipments to, our customers, as well as the relative mix of those orders;~~

~~variations in the volume of orders for a particular product or product line in a particular fiscal quarter;~~

~~the size and timing of new contract awards;~~

~~the timing of the release of government funds for procurement of our products; and~~

~~the timing of orders and shipments within a given fiscal quarter.~~

~~Seasonal fluctuations in our operating results are an outcome of:~~

~~the seasonal pattern of contracting by the United States government and certain foreign governments;~~

~~the desire of customers to take delivery of equipment prior to fiscal year ends due to funding considerations; and~~

~~the tendency of commercial enterprises to utilize fully annual capital budgets prior to expiration.~~

~~Competition in our markets is intense and our failure to compete effectively could adversely affect our business~~

Competition in the markets for our products is intense. The speed with which companies can identify new applications for thermal imaging, develop products to meet those needs and supply commercial quantities at low prices to the market are important competitive factors. We believe the principal competitive factors in our markets are product performance, price, customer service and training, product reputation, and effective marketing and sales efforts. Many of our competitors have greater financial, technical, research and development, and marketing resources than we do. All of these factors, as well as the potential for increased competition from new market entrants, require us to continue to invest in, and focus on, research and development and new product innovation. No assurance can be given that we will be able to compete effectively in the future and a failure to do so could have a material adverse effect on our business, financial condition and results of operations.

~~Our products may suffer from defects or errors leading to substantial product liability, damage or warranty claims~~

We include complex system designs and components in our products that may contain errors or defects, particularly when we incorporate new technology into our products or release new versions. If any of our products are defective, we might be required to redesign or recall those products or pay substantial damages or warranty claims. Such an event could result in significant expenses including expenses arising from product liability and warranty claims. It also could disrupt sales and affect our reputation and that of our products, which could have a material adverse effect on our business, financial condition and results of operations. As we expand our presence into new markets, we may face increased exposure to product liability claims. We maintain product liability insurance but cannot be certain that it will be sufficient or will continue to be available on acceptable terms.

~~Risks, Uncertainties and Other Factors Related to Our Technology and Intellectual Property~~

~~Our inability to protect our intellectual property and proprietary rights and avoid infringing the rights of others could harm our competitive position and our business~~

Our ability to compete successfully and achieve future revenue growth depends, in part, on our ability to protect our proprietary technology and operate without infringing the rights of others. To accomplish this, we rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality agreements and contractual provisions to protect our proprietary rights. Many of our proprietary rights are held in confidence as trade secrets and are not covered by patents, making them more difficult to protect. Although we currently hold worldwide patents covering certain aspects of our technologies and products, and we are actively pursuing additional patents, we cannot be certain that we will obtain additional patents or trademarks on our technology, products and trade names. Furthermore, we cannot be certain that our patents or trademarks will not be challenged or circumvented by our competitors or that measures taken by us to protect our proprietary rights will adequately deter their misappropriation or disclosure. Any failure by us to protect our intellectual property could have a material adverse effect on our business, financial condition and results of operations. Moreover, because intellectual property does not necessarily prevent our competitors from entering the markets we serve, there can be no assurance that we will be able to maintain our competitive advantage or that our competitors will not develop capabilities equal or superior to ours.

Litigation over patents and other intellectual property is common in our industry. We have been the subject of patent and other intellectual property litigation in the past and cannot be sure that we will not be subject to such litigation in the future. Similarly, there exists the possibility we will assert claims in litigation to protect our intellectual property. Lawsuits defending or prosecuting intellectual property claims and related legal and administrative proceedings could result in substantial expense to us and significant diversion of effort of our personnel. An adverse determination in a patent suit or in any other proceeding in which we are a party could subject us to significant liabilities, result in the loss of intellectual property rights we claim or impact our competitive position. Additionally, an adverse determination could require us to seek licenses from third parties. If such licenses are not available on commercially reasonable terms or at all, our business, financial condition and results of operations could be adversely affected.

Our future success will depend on our ability to respond to the rapid technological change in the markets in which we compete, our ability to introduce new or enhanced products and enter into new markets

The markets in which we compete are characterized by rapid technological developments and frequent new product introductions, enhancements and modifications. Our ability to develop new products and technologies that anticipate changing customer requirements, reduce costs and otherwise retain or enhance our competitive position in existing and new markets will be an important factor in our future results from operations. We will continue to make substantial capital expenditures and incur significant research and development costs to improve our manufacturing capability, reduce costs, and develop and introduce new products and enhancements. If we fail to develop and introduce new products and technologies in a timely manner, our business, financial condition and results of operations would be adversely affected. In addition, we cannot be certain that our new products and technologies will be successful or that customers will accept any of our new products.

~~Our business could be negatively impacted by cybersecurity threats and other security threats and technology disruptions~~

We face certain security threats and technology disruptions, including threats to our information technology infrastructure, attempts to gain access to our or our customers’ proprietary or classified information, threats to the physical security of our facilities and employees, threats of terrorism events, and failures of our technology tools and systems. We are subject to laws and rules issued by various agencies concerning safeguarding and maintaining infrastructure and physical security and information confidentiality. Our information technology networks and related systems are critical to the operation of our business and essential to our ability to successfully perform day-to-day operations. We are also involved with information technology systems for certain customers and other third parties, for which we face similar security threats as for our own. In particular, cybersecurity threats-which include, but are not limited to, computer viruses, spyware and malware, attempts to access information, denial of service attacks and other electronic security breaches-are persistent and evolve quickly. Such threats have increased in frequency, scope and potential impact in recent years. Further, a variety of technological tools and systems, including both company-owned information technology and technological services provided by outside parties, support our critical functions. These technologies, as well as our products, are subject to failure and the user’s inability to have such technologies properly supported, updated, expanded or integrated into other technologies and may contain open source and third party software which may unbeknownst to us contain defects or viruses that pose unintended risks to our customers. These risks if not effectively mitigated or controlled could materially harm our business or reputation. While we believe that we have implemented appropriate measures and controls, there can be no assurance that such actions will be sufficient to prevent disruptions to critical systems, unauthorized release of confidential information or corruption of data.

We require user names and passwords in order to access our information technology systems. We use encryption and authentication technologies designed to secure the transmission and storage of data and prevent access to our data or accounts. These security measures are subject to third-party security breaches, employee error, malfeasance, faulty password management or other irregularities. For example, third parties may attempt to induce by fraud employees or customers into disclosing user names, passwords or other sensitive information, which may in turn be used to access our information technology systems. These security systems cannot provide absolute security. To the extent we were to experience a breach of our systems and were unable to protect sensitive data, such a breach could materially damage business partner and customer relationships, and curtail or otherwise impact the use of our information technology systems. Moreover, if a security breach of our information technology system affects our computer systems or results in the release of personally identifiable or other sensitive information of customers, business partners, employees and other third parties, our reputation and brand could be materially damaged, use of our products and services could decrease, and we could be exposed to a risk of loss, litigation and potential liability.

Although we have in the past and continue to be subject to cybersecurity threats and other security threats and technology disruptions, to date none has had a material impact on our business, financial condition or results of operations. Nonetheless, in the future, these types of events could disrupt our operations and customer and other third party information technology systems. They also could require significant management attention and resources, negatively impact our reputation among our customers and the public and challenge our eligibility for future work on sensitive or classified systems, which could have a material adverse effect on our business, financial condition and results of operations.

~~Risks, Uncertainties and Other Factors Related to Our Corporate Structure and Organization~~

~~Our future success depends in part on attracting and retaining key senior management and qualified technical, sales and other personnel~~

Our future success depends in part on the efforts and continued services of our key executives and our ability to attract and retain qualified technical, sales and other personnel. Significant competition exists for such personnel and we cannot assure the retention of our key executives, technical and sales personnel or our ability to attract, integrate and retain other such personnel that may be required in the future. We cannot assure that employees will not leave and subsequently compete against us. If we are unable to attract and retain key personnel, our business, financial condition and results of operations could be adversely affected.

~~We must successfully manage a complex global organization~~

As we have grown, the size and scope of our worldwide operations have also increased substantially. We currently design, manufacture and market numerous product lines in locations worldwide. Significant management time and effort is required to manage effectively the increased complexity of the business and our failure to successfully do so could have a material adverse effect on our business, financial condition and results of operations. Our inability to continue to manufacture our products at one or more of our facilities as a result of, for example, a prolonged power outage, earthquake, fire or other natural disaster, or labor or political unrest, could prevent us from supplying products to our customers and could have a material adverse effect on our business, financial condition and results of operations.

~~We may be unable to integrate successfully recent or future acquisitions into our operations, thereby disrupting our business and harming our financial condition and results of operations~~

We have made twelve acquisitions of various sizes in the past five years. The integration of businesses, personnel, product lines and technologies can be difficult, time consuming and subject to significant risks. For example, we could lose key personnel from companies that we acquire, incur unanticipated costs, lose major sources of revenue, fail to integrate critical technologies, suffer business disruptions, fail to capture anticipated synergies, fail to establish satisfactory internal controls, or incur unanticipated liabilities. Any of these difficulties could disrupt our ongoing business, distract our management and employees, increase our expenses and decrease our revenue.

We frequently evaluate strategic opportunities available to us and it is likely that we will make additional acquisitions in the future. Such acquisitions may vary in size and complexity. Any future acquisitions are subject to the risks described above. Furthermore, we might assume or incur additional debt or issue additional equity securities to pay for future acquisitions. Additional debt may negatively impact our results and increase our financial risk, and the issuance of any additional equity securities could dilute our then existing shareholders’ ownership. No assurance can be given that we will realize anticipated benefits of any future acquisitions, or that any such acquisition or investment will not have a material adverse effect on our business, financial condition and results of operations.

We have indebtedness as a result of the issuance of our 3.125 percent senior unsecured notes (the “Notes”) and borrowings against our unsecured credit facility, and we are subject to certain restrictive covenants under our unsecured credit facility and the indenture governing the Notes which may limit our operational and financial flexibility

Our ability to meet our debt service obligations and comply with the financial covenants under our credit facility will be dependent upon our future performance, which will be subject to financial, business and other factors affecting our operations, many of which are beyond our control. Our inability to meet our debt service obligations or comply with the required covenants could result in a default under the credit facility or indenture. In the event of any such default, under the credit facility, the lenders thereunder could elect to declare all outstanding debt, accrued interest and fees under the facility to be due and immediately payable. In the event of any such default under our indenture, either the trustee or the holders of at least 25 percent of the outstanding principal amount of the Notes could declare the principal amount of all of the Notes to be due and payable immediately.

~~We may not be able to refinance our indebtedness on favorable terms, if at all, which could materially and adversely affect our liquidity and our ongoing results of operations.~~

Our ability to refinance indebtedness, including the Notes, will depend in part on our operating and financial performance, which, in turn, is subject to prevailing economic conditions and to financial, business, legislative, regulatory and other factors beyond our control. In addition, prevailing interest rates or other factors at the time of refinancing could increase our interest expense. A refinancing of our indebtedness, including the Notes, could also require us to comply with more onerous covenants and further restrict our business operations. Our inability to refinance our indebtedness or to do so upon favorable terms could materially and adversely affect our business, results of operations, financial condition and cash flows, and make us vulnerable to adverse industry and general economic conditions.

~~Changes in our effective income tax rate may have an adverse effect on our results of operations~~

We are subject to taxes in the United States and numerous foreign jurisdictions, including Belgium, where a number of our subsidiaries are organized. Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change. Our future effective tax rate could be affected by changes in the mix of earnings in countries with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in the enforcement environment, and changes in tax laws or their interpretations, including in the United States and in foreign jurisdictions. For example, in January 2016, the European Commission announced a decision concluding that certain rules under Belgian tax legislation are deemed to be incompatible with European Union regulations on state aid. As a result of this decision, the European Commission has directed the Belgian Government to recover past taxes from certain entities, reflective of disallowed state aid, which impacts one of the Company’s international subsidiaries. The Belgian Government announced they have appealed this decision and filed action for an annulment in the General Count of the European Union, and in July 2016 the Company filed a separate appeal with the General Court of the European Union. The Company recorded discrete tax expense of $39.6 million during 2016 related to this matter and on January 10, 2017, received tax assessments from the Belgium government for a similar amount. The Company has filed a complaint against the Belgian tax assessments, and the result of this complaint, the appeal with the General Court of the European Union, new information received from the Belgian Government, or other future events may cause the income tax provision associated with the decision to be entirely or partially reversed.

~~Our future effective tax rate may be adversely affected by a number of additional factors including:~~

~~the jurisdictions in which profits are determined to be earned and taxed;~~

~~the resolution of issues arising from tax audits with various tax authorities;~~

~~changes in the valuation of our deferred tax assets and liabilities;~~

~~adjustments to estimated taxes upon finalization of various tax returns;~~

~~increases in expenses not deductible for tax purposes;~~

~~changes in available tax credits;~~

~~changes in share-based compensation expense;~~

~~changes in tax laws or the interpretation of such tax laws and changes in generally accepted accounting principles;~~

~~changes in foreign tax rates or agreed upon foreign taxable base; and/or~~

~~the repatriation of earnings from outside the United States for which we have not previously provided for United States taxes.~~

Any significant increase in our future effective tax rates could adversely impact net income for future periods. In addition, the United States Internal Revenue Service (“IRS”) and other tax authorities regularly examine our income tax returns. Our financial condition and results of operations could be adversely impacted if any assessments resulting from the examination of our income tax returns by the IRS or other taxing authorities are not resolved in our favor.

~~State of Oregon law and our charter documents contain provisions that could discourage or prevent a potential takeover, even if the transaction would benefit our shareholders~~

Other companies may seek to acquire or merge with us. An acquisition or merger of our Company could result in benefits to our shareholders, including an increase in the value of our common stock. Some provisions of our Articles of Incorporation and Bylaws, including our ability to issue preferred stock without further action by our shareholders, as well as provisions of the State of Oregon law, may discourage, delay or prevent a merger or acquisition that a shareholder may consider favorable.


ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~During the three months ended September 30, 2020, the Company did not repurchase shares.

All share repurchases are subject to applicable securities laws and are at times and in amounts as management deems appropriate. The repurchases are through open market transactions under the authorization by our Board of Directors on February 7, 2019 to repurchase of up to 15.0 million shares of our outstanding common stock. This authorization will expire on February 7, 2021 and may be suspended or discontinued at any time.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.


ITEM 5.	OTHER INFORMATION

None.


ITEM 6.	EXHIBITS



Number	Description
~~10.1~~
4.1	^{Separation and ReleaseIndenture, dated as of Claims AgreementAugust 3, 2020, between FLIR Systems, Inc. and Thomas A. Surran effectiveU.S. Bank National Association, as of September 30, 2017.(1)}
~~10.2~~	^{Executive Officer Severance Plan Agreement between FLIR Systems, Inc. and Thomas A. Surran dated April 24, 2017.(1)}
~~10.3~~	^{FLIR Systems, Inc. Executive Officer Severance Plan, effective May 1, 2017.(1)}
~~10.4~~	^{Offer Letter (the “Offer Letter”) between FLIR Systems, Inc. and Carol P. Lowe dated as of October 16, 2017trustee (incorporated by reference to Exhibit 10.1 of4.1 to the Current Report on Form 8-K filed on October 24, 2017)August 4, 2020 (File Number 000-21918)).(1)}
~~10.5~~4.2	^{ChangeFirst Supplemental Indenture dated as of Control AgreementAugust 3, 2020, by and between FLIR Systems, Inc. and Carol P. Lowe attached to the Offer LetterU.S. Bank National Association, as Attachment Atrustee, including Form of 2.500% Notes due August 1, 2030 (incorporated by reference to Exhibit 10.2 of4.2 to the Current Report on Form 8-K filed on October 24, 2017)August 4, 2020 (File Number 000-21918)).(1)}
4.3	Form of 2.500% Note due August 1, 2030 (included in Exhibit 4.2 hereto).
31.1	^{Principal Executive Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 302.}
31.2	^{Principal Financial Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 302.}
32.1	^{Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.}
32.2	^{Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.}
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

~~____________~~

~~(1) This exhibit constitutes a management contract or compensatory plan or arrangement.~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		FLIR SYSTEMS, INC.

Date October ~~27, 2017~~30, 2020		/s/ ~~Shane R. Harrison~~Carol P. Lowe
		~~Shane R. Harrison~~Carol P. Lowe
		~~Sr.~~Executive Vice President ~~Corporate Development & Strategy~~ and ~~Interim~~ Chief Financial Officer
		(Duly Authorized and Principal Financial Officer)

3937



~~Oregon~~Delaware		93-0708501
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

27700 SW Parkway Avenue, ~~Wilsonville, Oregon~~		97070
Wilsonville,	Oregon	97070
(Address of principal executive offices)		(Zip Code)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	FLIR	NASDAQ	Global Select Stock Market



Large accelerated filer	x ☒	Accelerated filer	¨ ☐
Non-accelerated filer	¨ ☐	Smaller reporting company	¨ ☐
		Emerging growth company	¨ ☐



PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income - Three and Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019 (unaudited)	1
	Consolidated Statements of Comprehensive Income (Loss) - Three and Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019 (unaudited)	2
	Consolidated Balance Sheets - September 30, ~~2017~~2020 and December 31, ~~2016~~2019 (unaudited)	3
	Consolidated Statements of Shareholders' Equity - Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)	4
	Consolidated Statements of Cash Flows - Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019 (unaudited)	46
	Notes to the Consolidated Financial Statements (unaudited)	58
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2026
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2834
Item 4.	Controls and Procedures	2934
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	3035
Item 1A.	Risk Factors	3035
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3835
Item 3.	Defaults Upon Senior Securities	3835
Item 4.	Mine Safety Disclosures	3835
Item 5.	Other Information	3835
Item 6.	Exhibits	3836
Signature		3937

FLIR SYSTEMS, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (Unaudited)	FLIR SYSTEMS, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (Unaudited)												FLIR SYSTEMS, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2020			2019			2020			2019
Revenue	$	464,712		$	405,228		$	1,305,650		$	1,187,429		$	466,414		$	471,248		$	1,399,352		$	1,397,982
Cost of goods sold	241,821			213,852			684,706			635,041			237,500			241,501			698,870			700,966
Gross profit	222,891			191,376			620,944			552,388			228,914			229,747			700,482			697,016
Operating expenses:
Research and development	42,873			33,839			127,902			109,327			47,848			49,800			157,707			150,437
Selling, general and administrative	92,932			76,688			280,240			239,623			94,196			103,393			299,114			321,596
Restructuring expenses													293			2,166			28,779			5,776
Total operating expenses	135,805			110,527			408,142			348,950			142,337			155,359			485,600			477,809
Earnings from operations	87,086			80,849			212,802			203,438			86,577			74,388			214,882			219,207
Interest expense	3,819			5,736			12,744			13,543			7,273			7,582			21,196			20,370
Interest income	(488		)	(336		)	(1,114		)	(924		)	(55		)	(612		)	(531		)	(2,107		)
Loss on debt extinguishment													9,126			0			9,126			0
Other (income) expense, net	(778		)	241			(2,465		)	138			(9,688		)	292			78			938
Earnings before income taxes	84,533			75,208			203,637			190,681			79,921			67,126			185,013			200,006
Income tax provision	21,004			16,575			46,124			85,555			19,258			5,079			47,669			30,093
Net earnings	$	63,529		$	58,633		$	157,513		$	105,126		$	60,663		$	62,047		$	137,344		$	169,913

Net earnings per share:
Basic	$	0.46		$	0.43		$	1.15		$	0.76		$	0.46		$	0.46		$	1.04		$	1.26
Diluted	$	0.46		$	0.43		$	1.13		$	0.76		$	0.46		$	0.46		$	1.03		$	1.24

Weighted average shares outstanding:
Basic	137,849			136,963			137,030			137,438			131,125			134,741			131,848			135,264
Diluted	139,419			137,938			138,853			138,594			131,683			136,050			132,841			136,826



x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.



¨ ☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

FLIR SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except for par value) (Unaudited)	FLIR SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except for par value) (Unaudited)						FLIR SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except for par value) (Unaudited)

	September 30,			December 31,			September 30,			December 31,
	2017			2016			2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	436,961		$	361,349		$	319,995		$	284,592
Accounts receivable, net	345,542			352,020			310,989			318,652
Inventories	413,005			371,371			474,845			388,762
Prepaid expenses and other current assets	86,570			79,917			122,857			116,728
Total current assets	1,282,078			1,164,657			1,228,686			1,108,734
Property and equipment, net	270,023			271,785			255,457			255,905
Deferred income taxes, net	51,179			45,243			37,902			39,983
Goodwill	930,846			801,406			1,350,647			1,364,596
Intangible assets, net	183,677			168,460			211,206			247,514
Other assets	48,472			168,155			129,014			120,809
Total assets	$	2,766,275		$	2,619,706		$	3,212,912		$	3,137,541
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	127,420		$	114,225		$	148,026		$	158,033
Deferred revenue	29,015			34,420			25,802			28,587
Accrued payroll and related liabilities	67,759			52,874			88,097			72,476
Accrued product warranties	16,193			17,476			16,786			14,611
Advance payments from customers	19,260			26,019			13,631			28,005
Accrued expenses	47,528			34,022			35,421			40,815
Accrued income taxes	46,175			51,017			36,702			14,735
Other current liabilities	14,588			16,659			45,031			27,349
Current portion, long-term debt	—			15,000
Credit facility							65,000			16,000
Long-term debt, current portion							12,743			12,444
Total current liabilities	367,938			361,712			487,239			413,055
Long-term debt	420,369			501,921
Long-term debt, net of current portion							715,220			648,419
Deferred income taxes	14,569			2,331			38,148			53,544
Accrued income taxes	14,054			9,643			72,678			55,514
Pension and other long-term liabilities	59,827			65,773
Commitments and contingencies
Other long-term liabilities							90,761			95,576
Shareholders’ equity:
Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued at September 30, 2017, and December 31, 2016	—			—
Common stock, $0.01 par value, 500,000 shares authorized, 138,414 and 136,334 shares issued at September 30, 2017, and December 31, 2016, respectively, and additional paid-in capital	72,117			12,139
Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued at September 30, 2020, and December 31, 2019							0			0
Common stock, $0.01 par value, 500,000 shares authorized, 131,144 and 134,394 shares issued at September 30, 2020, and December 31, 2019, respectively, and additional paid-in capital							20,994			16,692
Retained earnings	1,927,875			1,832,138			1,964,104			2,020,686
Accumulated other comprehensive loss	(110,474		)	(165,951		)	(176,232		)	(165,945		)
Total shareholders’ equity	1,889,518			1,678,326			1,808,866			1,871,433
Total liabilities and shareholders' equity	$	2,766,275		$	2,619,706		$	3,212,912		$	3,137,541



	Common Stock and Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Earnings (Loss)			Total Shareholders' Equity
Balance, December 31, 2019	$	16,692		$	2,020,686		$	(165,945	)	$	1,871,433
Net earnings	0			15,424			0			15,424
Repurchase of common stock	(23,371		)	(126,629		)	0			(150,000		)
Common stock issued pursuant to stock-based compensation plans, net of shares withheld for taxes	580			0			0			580
Stock-based compensation	7,403			0			0			7,403
Dividends paid of $0.17 per share	0			(22,728		)	0			(22,728		)
Other comprehensive loss, net of taxes	0			0			(17,532		)	(17,532		)
Balance, March 31, 2020	1,304			1,886,753			(183,477		)	1,704,580
Net earnings	0			61,257			0			61,257
Common stock issued pursuant to stock-based compensation plans, net of shares withheld for taxes	(3,341		)	0			0			(3,341		)
Stock-based compensation	12,815			0			0			12,815
Dividends paid of $0.17 per share	0			(22,278		)	0			(22,278		)
Other comprehensive loss, net of taxes	0			0			(2,332		)	(2,332		)
Balance, June 30, 2020	10,778			1,925,732			(185,809		)	1,750,701
Net earnings	0			60,663			0			60,663
Common stock issued pursuant to stock-based compensation plans, net of shares withheld for taxes	(163		)	0			0			(163		)
Stock-based compensation	10,379			0			0			10,379
Dividends paid of $0.17 per share	0			(22,291		)	0			(22,291		)
Other comprehensive income, net of taxes	0			0			9,577			9,577
Balance, September 30, 2020	$	20,994		$	1,964,104		$	(176,232	)	$	1,808,866


Note 1.	Basis of Presentation and Accounting Standards Updates



	September 30, 2017				December 31, 2016
	Prepaid Expenses and Other Current Assets		Other Current Liabilities		Prepaid Expenses and Other Current Assets		Other Current Liabilities
Foreign exchange contracts	$	2,269	$	2,737	$	2,369	$	75



	September 30, 2020		December 31, 2019
Derivative instruments designated as cash flow hedges:
Interest Rate Swap	$	143,249	$	143,302
Derivative instruments designated as fair value hedges:
Currency Forward Contracts	255,000		340,000
Derivative instruments not formally designated as hedges:
Currency Forward Contracts	149,591		104,835



		September 30,		December 31,
	Classification	2020		2019
Derivative instruments designated as cash flow hedges:
Derivative instruments in asset positions:
Interest Rate Swap	Prepaid expense and other current assets	$	726	$	404
Derivative instruments in liability positions:
Interest Rate Swap	Other current liabilities	911		453
Interest Rate Swap	Other long-term liabilities	1,814		1,012
Derivative instruments designated as fair value hedges:
Derivative instruments in liability positions:
Currency forward contracts	Other current liabilities	2,831		454
Currency forward contracts	Other long-term liabilities	2,099		1,189
Derivative instruments not formally designated as hedges:
Derivative instruments in asset positions:
Currency forward contracts	Prepaid expenses and other current assets	142		3,010
Derivative instruments in liability positions:
Currency forward contracts	Other current liabilities	6,629		391



	September 30, 2020		December 31, 2019
Operating lease right-of-use assets	$	34,562	$	35,479
Operating lease liabilities	$	38,249	$	39,291



	Industrial Technologies		Defense Technologies			Consolidated
Balance, December 31, 2019	$	635,899	$	728,697		$	1,364,596
Adjustments to goodwill	0		(12,617		)	(12,617		)
Currency translation adjustments	4,266		(5,598		)	(1,332		)
Balance, September 30, 2020	$	640,165	$	710,482		$	1,350,647


Note 2.3.	Stock-based Compensation


Note 3.4.	Net Earnings Per Share


Note 4.5.	Fair Value of Financial Instruments



	September 30,		December 31,
	2017		2016
European euro	$	129,730	$	156,352
Swedish kroner	75,879		48,555
Canadian dollar	46,374		15,645
British pound sterling	24,954		33,862
Brazilian real	10,386		2,747
Australian dollar	1,960		1,653
Japanese yen	898		3,251
Other	896		—
	$	291,077	$	262,065



Balance, December 31, 2016	$	801,406
Goodwill from acquisitions	100,022
Currency translation adjustments	29,418
Balance, September 30, 2017	$	930,846



		September 30, 2020							December 31, 2019
	Maturity Date	Amount			Stated Rate		Effective Rate		Amount			Stated Rate		Effective Rate
Senior Unsecured Notes:
Senior 2030 Notes	August 1, 2030	$	500,000		2.500	%	2.630	%	$	0		0	%	0	%
Senior 2021 Notes ⁽¹⁾	June 15, 2021	0			0	%	0	%	425,000			3.125	%	3.343	%
Credit Agreement:
U.S. dollar term loan	March 29, 2024	92,500			1.470	%	1.732	%	96,250			1.945	%	2.196	%
Swedish kronor term loan	March 29, 2024	143,248			1.250	%	1.503	%	143,302			0.098	%	0.351	%
Revolving credit facility	March 29, 2024	65,000			1.397	%	1.397	%	16,000			1.799	%	1.799	%
Total		800,748							680,552
Unamortized discounts and issuance costs		(7,785		)					(3,689		)
Total debt		$	792,963						$	676,863
Reported as:
Credit facility		$	65,000						$	16,000
Long-term debt, current portion		12,743							12,444
Long-term debt, net of current portion		715,220							648,419
Total		$	792,963						$	676,863



Common stock and additional paid-in capital, December 31, 2016	$	12,139
Common stock issued pursuant to stock-based compensation plans, net	34,726
Stock-based compensation	25,252
Common stock and additional paid-in capital, September 30, 2017	$	72,117



	Tax Years:
United States Federal	~~2013 - 2015~~2016-2018
State of California	~~2013 - 2015~~2015-2018
State of Massachusetts	~~2013 - 2015~~2015-2018
State of Oregon	~~2013 - 2015~~2016-2018
Sweden	~~2012 - 2015~~2012-2018
United Kingdom	~~2012 - 2015~~2015-2018
Belgium	~~2011 - 2016~~2012-2018


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
	2017		2016		2017		2016		Industrial Technologies		Defense Technologies		Total		Industrial Technologies		Defense Technologies		Total
United States	$	250,755	$	229,350	$	696,612	$	647,938	$	127,594	$	134,518	$	262,112	$	362,232	$	362,165	$	724,397
Europe	91,529		71,949		265,842		240,656		73,031		24,312		$	97,343	216,197		69,733		$	285,930
Asia	56,416		42,639		170,061		133,877		53,991		11,214		$	65,205	188,329		39,292		$	227,621
Middle East/Africa	26,437		41,889		86,826		98,231		9,072		10,135		$	19,207	41,887		60,357		$	102,244
Canada/Latin America	39,575		19,401		86,309		66,727		17,431		5,116		$	22,547	49,087		10,073		$	59,160
	$	464,712	$	405,228	$	1,305,650	$	1,187,429	$	281,119	$	185,295	$	466,414	$	857,732	$	541,620	$	1,399,352



	Three Months Ended September 30, 2019						Nine Months Ended September 30, 2019
	Industrial Technologies		Defense Technologies		Total		Industrial Technologies		Defense Technologies		Total
United States	$	123,495	$	146,421	$	269,916	$	391,574	$	389,940	$	781,514
Europe	61,695		24,537		86,232		209,998		76,133		286,131
Asia	50,736		16,080		66,816		145,750		51,014		196,764
Middle East/Africa	7,395		24,571		31,966		23,046		60,793		83,839
Canada/Latin America	14,579		1,739		16,318		43,407		6,327		49,734
	$	257,900	$	213,348	$	471,248	$	813,775	$	584,207	$	1,397,982



			December 31, 2016
	September 30, 2017		(as reclassified)
United States	$	686,191	$	676,007
Europe	485,216		490,089
Canada/Latin America	253,051		235,921
Other foreign	8,560		7,789
	$	1,433,018	$	1,409,806



Cash acquired	$	6,687
Other tangible assets and liabilities	14,915
Net deferred taxes	(9,776		)
Identified intangible assets	102,740
Goodwill	271,365
Total purchase price	$	385,931



Cash acquired	$	2,994
Other tangible assets and liabilities, net	35,064
Net deferred taxes	(2,438		)
Identifiable intangible assets	39,800
Goodwill	183,741
Total purchase price	$	259,161



	Estimated Useful Life	Amount
Developed technology	5.0 years	$	60,400
In-process research and development	9.0 years	28,000
Trademarks and trade name	4.5 years	9,990
Backlog	1.0 year	3,850
Customer contracts	1.0 year	500
		$	102,740



	Estimated Useful Life	Amount
Developed technology	10 years	$	23,100
Customer relationships	7 years	13,200
Backlog	1 year	2,300
Non-Competition Agreements	5 years	1,000
Other	n/a	200
		$	39,800



Cash acquired	$	11,706
Other tangible assets and liabilities, net	(900		)
Net deferred taxes	(7,387		)
Identifiable intangible assets	31,400
Goodwill	99,269
Total purchase price	$	134,088



	Employee separation costs			Third party and other costs			Total
Balance at December 31, 2019	$	1,343		$	2,780		$	4,123
Accrual and accrual adjustments	17,151			11,628			28,779
Cash payments	(11,253		)	(14,121		)	(25,374		)
Balance at September 30, 2020	$	7,241		$	287		$	7,528



	Three Months Ended											Nine Months Ended
	September 30,						Dollar			Percent		September 30,						Dollar			Percent
	2020			2019			Change			Change		2020			2019			Change			Change
Revenue	$	466,414		$	471,248		$	(4,834	)	(1.0	)%	$	1,399,352		$	1,397,982		$	1,370		0.1	%
Cost of goods sold	237,500			241,501			(4,001		)	(1.7	)%	698,870			700,966			(2,096		)	(0.3	)%
Gross profit	228,914			229,747			(833		)	(0.4	)%	700,482			697,016			3,466			0.5	%
Research and development	47,848			49,800			(1,952		)	(3.9	)%	157,707			150,437			7,270			4.8	%
Selling, general and administrative	94,196			103,393			(9,197		)	(8.9	)%	299,114			321,596			(22,482		)	(7.0	)%
Restructuring expenses	293			2,166			(1,873		)	(86.5	)%	28,779			5,776			23,003			398.3	%
Earnings from operations	86,577			74,388			12,189			16.4	%	214,882			219,207			(4,325		)	(2.0	)%
Interest expense	7,273			7,582			(309		)	(4.1	)%	21,196			20,370			826			4.1	%
Interest income	(55		)	(612		)	557			(91.0	)%	(531		)	(2,107		)	1,576			(74.8	)%
Loss on debt extinguishment	9,126			—			9,126			NM		9,126			—			9,126			NM
Other (income) expense, net	(9,688		)	292			(9,980		)	NM		78			938			(860		)	(91.7	)%
Earnings before income taxes	79,921			67,126			12,795			19.1	%	185,013			200,006			(14,993		)	(7.5	)%
Income tax provision	19,258			5,079			14,179			279.2	%	47,669			30,093			17,576			58.4	%
Net earnings	$	60,663		$	62,047		$	(1,384	)	(2.2	)%	$	137,344		$	169,913		$	(32,569	)	(19.2	)%
Gross Margin	49.1		%	48.8		%						50.1		%	49.9		%