WATERS CORP DE
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 25, 2025
WAT$457.60+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-27.
0001193125-24-047491
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0001193125-25-034579
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 117 current paragraphs.
57 unchanged; 45 reworded; 11 added; 13 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Instrument system sales decreased 6% in 2024 as compared to 2023 and 7% in 2023 as compared to 2022 as a result of weaker customer demand in most geographies, driven primarily by the 15% and 30% decline in our China instrument sales, respectively. Excluding China, the Company’s instrument system sales declined 4% in 2024 and grew 1% in 2023. Wyatt’s instrument system sales added 2% and 4% to the Company’s instrument system sales growth in 2024 and 2023, respectively.
Current report
Operating income was $826 million in 2024, up from $818 million in 2023 as the cost savings from recent workforce reductions and the absence of the $26 million in severance costs associated with the workforce reduction incurred in 2023 were offset by higher annual incentive compensation, a full year of amortization associated with the Wyatt acquisition and merit increases in 2024. In addition, foreign currency translation lowered operating income by $43 million.
Current report
Operating income of $818 million in 2023 declined $55 million from the operating income of $873 million in 2022 as a result of the $26 million severance costs associated with the workforce reductions and the additional expenses associated with the Wyatt acquisition relating to purchased intangible amortization of $27 million, retention agreement costs of $19 million and due diligence costs of $13 million. These costs were partially offset by the cost savings from the workforce reductions and lower electronic components costs and freight costs. In addition, the negative effect of foreign currency translation lowered operating income by approximately $23 million during 2023.
Current report
In July 2024, the Company entered into a private Master Note Facility Agreement (the “Shelf Agreement”) with NYL Investors LLC (“NYL”) pursuant to which the Company may, at its option, authorize the issuance and sale of senior promissory notes (the “Shelf Notes”) up to an aggregate principal amount of $200 million. The purchase of any Shelf Notes is in the sole discretion of NYL. Any Shelf Notes sold or issued pursuant to the Shelf Agreement will mature no more than 15 years after the issuance date and will bear interest on the unpaid balance from the issuance date at the rates specified in the Shelf Agreement.
Current report
In 2024, sales growth was flat as compared to 2023 and sales declined by 1% in 2023 as compared to 2022. During these periods, the Company’s sales in most geographies grew positively, except in China and Japan. The sales growth outside of China was led by India where sales increased 15% and 2% in 2024 and 2023, respectively. China’s sales declined by 10% and 22% in 2024 and 2023, respectively, and were primarily driven by lower demand for our instrument systems and chemistry products resulting from increased government regulations and lower spending by our customers due to macroeconomic conditions. Excluding China, the Company’s sales increased 2% and 5% in 2024 and 2023, respectively. Foreign currency translation decreased sales growth by 1% in both 2024 and 2023. Wyatt sales increased the Company’s sales growth by 1% and 3% in 2024 and 2023, respectively, and added 3% to the U.S. sales.
Current report
In 2024, sales increased 1% in the U.S. and 4% in Europe, while decreasing 4% in Asia, with the effect of foreign currency translation increasing sales growth in Europe by 1% and decreasing sales growth in Asia by 4%. The decrease in Asia sales growth is driven by the decline in China’s sales and the effect of foreign currency translation which decreased Japan’s sales growth by 7%.
Current report
Selling and administrative expenses decreased 6% and increased 12% in 2024 and 2023, respectively, as the cost savings from the recent workforce reductions and the absence of costs incurred in the prior year relating to severance charges in connection with the 2023 workforce reduction and the Wyatt acquisition-related due diligence costs were partially offset by an increase in annual incentive compensation expenses.
Current report
Litigation Provisions
Current report
The Company incurred $12 million of litigation provisions of 2024, primarily related to a patent litigation settlement.
Current report
Net interest expense in 2024 decreased $10 million as compared to 2023 due to the average outstanding debt in these periods being impacted by the timing of the borrowings to fund the Wyatt acquisition, which closed in May 2023, as well as the timing of the repayment of $1 billion of debt since the completion of the acquisition.
Current report
In July 2024, the Company entered into the Shelf Agreement with NYL pursuant to which the Company may, at its option, authorize the issuance and sale of Shelf Notes up to an aggregate amount of $200 million. The purchase of any Shelf Notes is in the sole discretion of NYL. Any Shelf Notes sold or issued pursuant to the Shelf Agreement will mature no more than 15 years after the issuance date and will bear interest on the unpaid balance from the issuance date at the rates specified in the Shelf Agreement. The Company entered into the Shelf Agreement to increase its borrowing capacity for general corporate purposes. The Company has not issued any Shelf Notes pursuant to the Shelf Agreement through the date of these financial statements.
Removed paragraphs (13)
Previous report
The Company’s net sales decreased 1% in 2023 as compared to 2022 and increased 7% in 2022 as compared to 2021. The Company’s sales in 2023 were negatively impacted by a 22% reduction of sales in China due to lower customer demand for our products. The sales growth in 2022 was driven by strong customer demand across most major geographies, end markets and product categories. Excluding China, the Company’s sales growth increased 5% and 6% in 2023 and 2022, respectively. Foreign currency translation decreased sales growth by 1% and 5% in 2023 and 2022, respectively. The Wyatt acquisition increased sales growth by 3% in 2023.
Previous report
Instrument system sales decreased 7% in 2023 as compared to 2022 and increased 11% in 2022 as compared to 2021. In 2023, the decrease in instrument system sales resulted from weaker customer demand in China, which was partially offset by sales growth in the U.S. and Europe. Excluding China, the Company’s instrument system sales grew 1%. In addition, Wyatt’s instrument system sales added 4% to the Company’s instrument system sales growth. In 2022, the increase was driven by the broad-based increase in customer demand across all existing and newly introduced LC, LC-MS, and Thermal Analysis instrument system sales. Foreign currency translation decreased instrument system sales growth by 1% and 5% in 2023 and 2022, respectively.
Previous report
Operating income was $818 million in 2023, a decrease of 6% as compared to 2022. This decrease in operating income was primarily due to higher salary expenses related to merit compensation, $26 million in severance-related costs associated with a workforce reduction and costs related to the Wyatt acquisition, including $13 million in due diligence costs, $27 million of intangible asset amortization and $19 million of costs associated with retention agreements. The negative effect of foreign currency translation lowered operating income by approximately $23 million during 2023.
Previous report
In July 2023, the Company made organizational changes to better align its resources with its growth and innovation strategies, resulting in a worldwide workforce reduction that impacted approximately 5% of the Company’s employees. The Company incurred approximately $26 million of severance-related costs and paid approximately $19 million of severance-related costs in 2023, with the remaining costs to be paid in the first half of 2024. The Company estimates that the savings from this reduction in workforce will be approximately $48 million on an annual basis.
Previous report
Operating income was $873 million in 2022, an increase of 6% as compared to 2021. This increase was primarily a result of the increase in sales volume and pricing increases, partially offset by higher electronic component and freight inflationary costs and the negative effect of foreign currency translation. The effect of foreign currency translation lowered operating income by approximately $71 million during 2022.
Previous report
Operating income as a percentage of sales was 27.7%, 29.4% and 29.5% in 2023, 2022 and 2021, respectively.
Previous report
During 2023, the Company funded the Wyatt acquisition with a combination of cash on hand and borrowings under its revolving credit facility. The Company’s outstanding debt on December 31, 2023 was $2.4 billion, a change of $0.8 billion from December 31, 2022, which resulted in the Company’s interest expense in 2023 increasing by $50 million to $99 million.
Previous report
On March 3, 2023, the Company entered into an agreement to amend the credit agreement governing its revolving credit facility (the “2023 Amendment”). The 2023 Amendment increases the borrowing capacity by $200 million to an aggregate total borrowing capacity of $2.0 billion.
Previous report
The sales growth in 2022 was broad-based across most major regions. Foreign currency translation decreased total sales growth by 5% in 2022 as the U.S. dollar strengthened significantly against all other major currencies. The geographies that were the most negatively impacted by the strengthening of the U.S. dollar in 2022 were Europe and Japan, as the weakening of the euro and Japanese yen lowered sales growth in Europe and Japan by 10% and 17%, respectively. China sales increased 8% in 2022, with foreign currency translation decreasing China sales growth by 2% in 2022. This increase in China sales was driven by strong customer demand for our products and services despite the negative impact that the COVID-19 pandemic had on our business in China in 2022.
Previous report
In 2022, sales to pharmaceutical customers increased 5%, driven by strong growth in most major regions, partially offset by the negative impact from foreign currency translation which decreased pharmaceutical sales by 5%. Combined sales to industrial customers increased 10%, with foreign currency translation decreasing sales growth by 5%. Combined sales to academic and government customers increased 7%, with foreign currency translation decreasing academic and government sales growth by 6%.
Previous report
In 2022, Waters products and service sales increased 6%, with foreign currency translation decreasing Waters sales growth by 6%. Waters instrument system sales grew 11%, with foreign currency translation lowering sales growth by 5%. The increase in the Waters instrument system sales can be attributed to strong customer demand for our existing products as well as growing contributions made by recent product introductions. The increase in Waters chemistry consumables sales was primarily due to the strong demand in most major geographies, partially offset by the negative impact from foreign currency translation which decreased sales by 5%. Waters service sales increased due to higher service demand billing, particularly in China and the United States, partially offset by the negative impact from foreign currency translation which decreased by 6%.
Previous report
In 2021, the Company executed a settlement agreement to resolve patent infringement litigation with Bruker Corporation and Bruker Daltronik GmbH regarding their timsTOF product line. In connection with the settlement, the Company is entitled to receive $10 million in guaranteed payments, including minimum royalty payments. In 2021, the Company recorded an unrealized gain of $10 million due to an observable change in the fair value of an existing investment that the Company does not have the ability to exercise significant influence over.
Previous report
In 2022, the Company received $10 million in proceeds and made $1 million of investments in certain equity investments. In 2021, the Company made $2 million of investments in certain equity investments.
Reworded paragraphs (45)
Previous wording
On May 16, 2023, the Company completed the acquisition of Wyatt Technology, LLC and its three operating subsidiaries, Wyatt Technology Europe GmbH, Wyatt Technology France and Wyatt Technology UK Ltd. (collectively, “Wyatt”), for a total purchase price of $1.3 billion in cash. Wyatt is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories, and services. The acquisition will expand Waters portfolio and increase exposure to large molecule applications. The Company financed this transaction with a combination of cash on its balance sheet and borrowings under its revolving credit facility. The Company’s financial results for the year ended December 31, 2023 include the financial results of the Wyatt acquisition from the acquisition date.
Current wording
On May 16, 2023, the Company completed the acquisition of Wyatt Technology, LLC and its three operating subsidiaries, Wyatt Technology Europe GmbH, Wyatt Technology France and Wyatt Technology UK Ltd. (collectively, “Wyatt”), for a total purchase price of $1.3 billion in cash. Wyatt is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories and services. The acquisition has expanded Waters’ portfolio and increased our exposure to large molecule applications. The Company financed this transaction with a combination of cash on its balance sheet and borrowings under its revolving credit facility. The Company’s financial results for the year ended December 31, 2024 include the financial results of Wyatt for the full year, while the financial results for the year ended December 31, 2023 only included seven-and-a-half months of Wyatt’s financial results as the closing of the acquisition occurred during the second quarter of 2023.
Previous wording
In 2023, sales decreased 1% as compared to 2022, primarily as a result of a 22% decrease in China sales during 2023, which was partially offset by broad-based sales growth across most other major regions. The decline in China sales was primarily driven by lower demand for our instrument systems and chemistry products resulting from increased government regulations and lower spending by our customers due to weak economic conditions in China. Excluding China, the Company’s sales increased 5% and 6% in 2023 and 2022, respectively. Foreign currency translation decreased sales growth by 1% and 5% in 2023 and 2022, respectively.
Current wording
The Company’s net sales were flat in 2024 as compared to 2023 and decreased 1% in 2023 as compared to 2022 as the Company’s sales growth in most major geographies was offset by a 10% and a 22% reduction in sales in China, respectively. The decline in China sales were primarily driven by lower demand for our instrument systems and chemistry products as a result of increased government regulations and lower spending by our customers due to macroeconomic conditions. Excluding China, the Company’s sales growth increased 2% and 5% in 2024 and 2023, respectively. Foreign currency translation decreased sales growth by 1% in both 2024 and 2023. Wyatt sales increased the Company’s sales growth by 1% and 3% in 2024 and 2023, respectively.
Previous wording
Recurring revenues (combined sales of precision chemistry consumables and services) increased 6% and 3% in 2023 and 2022, respectively. Recurring revenues were negatively impacted by foreign currency translation in 2023 and 2022, which decreased sales by 1% and 6%, respectively.
Current wording
Recurring revenues (combined sales of precision chemistry consumables and services) increased 5% and 6% in 2024 and 2023, respectively. Foreign currency translation decreased recurring revenues sales growth by 1% in both 2024 and 2023.
Previous wording
The Company’s effective tax rates were 12.8%, 15.5% and 14.1% for 2023, 2022 and 2021, respectively. Net income per diluted share was $10.84, $11.73 and $11.17 in 2023, 2022 and 2021, respectively.
Current wording
The Company’s effective tax rates were 15.5%, 12.8% and 15.5% for 2024, 2023 and 2022, respectively. Net income per diluted share was $10.71, $10.84 and $11.73 in 2024, 2023 and 2022, respectively.
Previous wording
The Company generated $603 million, $612 million and $747 million of net cash flows provided by operating activities in 2023, 2022 and 2021, respectively. The decrease in 2023 operating cash flow was primarily a result of lower sales volumes, higher income tax payments and higher incentive compensation payments in 2023 as compared to 2022.
Current wording
The Company generated $762 million, $603 million and $612 million of net cash flow from operating activities in 2024, 2023 and 2022, respectively. The increase in cash flows from operating activities in 2024 was driven by lower annual incentive bonus payments and an improvement in working capital in the current year. The decrease in 2023 operating cash flow was primarily a result of lower sales volumes, higher income tax payments and higher incentive compensation payments in 2023 as compared to 2022.
Previous wording
Net cash used in investing activities included $1.3 billion for the Wyatt acquisition in 2023 and capital expenditures related to property, plant, equipment and software capitalization of $161 million, $176 million and
Current wording
Net cash used in investing activities included capital expenditures related to property, plant, equipment and software capitalization of $142 million, $161 million and $176 million in 2024, 2023 and 2022, respectively. The decline in 2024 is primarily due to the completion of the Company’s new manufacturing facilities. In addition, net cash used in investing activities in 2023 included $1.3 billion for the Wyatt acquisition.
Previous wording
In December 2023, the Company’s Board of Directors authorized the extension of the existing share repurchase program through January 21, 2025. The Company’s remaining authorization is $1.0 billion. During the years ended December 31, 2023, 2022 and 2021, the Company repurchased $58 million, $616 million and $640 million of the Company’s outstanding common stock, respectively, under the share repurchase programs. While the Company believes that it has the financial flexibility to fund these share repurchases, as well as to invest in research, technology and business acquisitions, given current cash levels and debt borrowing capacity, it has temporarily suspended its share repurchases due to its acquisition of Wyatt in the second quarter of 2023.
Current wording
In December 2024, the Company’s Board of Directors authorized the extension of the existing share repurchase program through January 21, 2028. The Company’s remaining authorization is $1.0 billion. The Company believes that it has the financial flexibility to fund these share repurchases, as well as to invest in research, technology and business acquisitions to further grow the Company’s sales and profits, given current cash and investment levels and debt borrowing capacity.
Previous wording
In 2023, sales to pharmaceutical customers decreased 3%, primarily driven by weakness in customer demand in China, with foreign currency translation decreasing pharmaceutical sales growth by 1% and Wyatt contributing 3% to the Company’s pharmaceutical sales growth. Combined sales to industrial customers, which include material characterization, food, environmental and fine chemical markets, were flat in 2023, with foreign currency translation decreasing industrial sales growth by 1% and Wyatt contributing 1% to industrial sales growth. Combined sales to academic and government customers increased 13% in 2023, with foreign currency translation decreasing academic and government sales growth by 1% and Wyatt contributing 4% to academic and government sales growth. Sales to our academic and government customers are highly dependent on when institutions receive funding to purchase our instrument systems and, as such, sales can vary significantly from period to period.
Current wording
In 2023, sales to pharmaceutical customers decreased 3%, primarily driven by weakness in customer demand in China, with foreign currency translation decreasing pharmaceutical sales growth by 1% and Wyatt sales contributing 3% to the Company’s pharmaceutical sales growth. Combined sales to industrial customers, which include material characterization, food, environmental and fine chemical markets, were flat in 2023, with foreign currency translation decreasing industrial sales growth by 1% and Wyatt contributing 1% to industrial sales growth. Combined sales to academic and government customers increased 13% in 2023, with foreign currency translation decreasing academic and government sales growth by 1% and Wyatt sales contributing 4% to academic and government sales growth.
Previous wording
Waters products and service sales decreased 1% and 6% in 2023 and 2022, respectively, with the effect of foreign currency translation decreasing Waters sales growth by 1% and 6% in 2023 and 2022, respectively. The Wyatt acquisition increased Waters products and service sales by approximately 3% in 2023. Waters instrument system sales (LC and MS technology-based) decreased 8% in 2023, primarily driven by weaker customer demand in China. Excluding China, the Company’s instrument system sales were flat as compared to 2022. In addition, Wyatt’s instrument system sales contributed 5% to Waters instrument system sales growth in 2023. Waters chemistry consumables sales were significantly impacted by the lower customer demand in China for our products. Excluding China, the Company’s chemistry sales grew 7% in 2023. This sales growth was primarily due to the continued strong demand in most major geographies, driven by the uptake in columns and application-specific testing kits to pharmaceutical customers, partially offset by the negative impact from foreign currency translation, which decreased chemistry sales growth by 1% in 2023. Waters service sales increased 7% in 2023 due to higher service demand billing, partially offset by the negative impact from foreign currency translation, which decreased service sales growth by 1% in 2023. Wyatt service revenues added 2% to Waters service revenue growth in 2023.
Current wording
Waters instrument system sales (LC and MS technology-based) decreased 8% in 2023, primarily driven by weaker customer demand in China. Excluding China, the Company’s instrument system sales were flat as compared to 2022. In addition, Wyatt’s instrument system sales contributed 5% to Waters instrument system sales growth in 2023. Waters chemistry consumables sales were significantly impacted by the lower customer demand in China for our products. Excluding China, the Company’s chemistry sales grew 7% in 2023. This sales growth was primarily due to the continued strong demand in most major geographies, driven by the uptake in columns and application-specific testing kits to pharmaceutical customers, partially offset by the negative impact from foreign currency translation, which decreased chemistry sales growth by 1% in 2023. Waters service sales increased 7% in 2023 due to higher service demand billing, partially offset by the negative impact from foreign currency translation, which decreased service sales growth by 1% in 2023. Wyatt service revenues added 2% to Waters service revenue growth in 2023.
Previous wording
TA instrument system and service sales increased 3% and 10% in 2023 and 2022, respectively. Foreign currency translation had minimal impact on sales growth in 2023 and decreased sales growth by 6% in 2022. In
Current wording
TA instrument system and service sales growth was flat and grew 3% in 2024 and 2023, respectively. Foreign currency translation decreased sales growth by 1% and had a minimal impact on sales growth in 2023. In 2024, sales growth was broad-based across most major geographies, partially offset by weakness in China. The growth outside of China was primarily driven by strong customer demand for our thermal analysis instruments and services.
Previous wording
Cost of sales decreased 4% in 2023 as compared to 2022, primarily due to the change in sales mix and the lower material and freight costs. In 2022, cost of sales increased 8% as compared to 2021, primarily due to the increase in sales volumes during the year as well as an increase in electronic component and freight inflationary costs.
Current wording
Cost of sales were flat in 2024 as compared to 2023, primarily due to the change in sales mix and the impact of foreign exchange. In 2023, cost of sales decreased 4% as compared to 2022, primarily due to the change in sales mix and the lower material and freight costs.
Previous wording
Cost of sales is affected by many factors, including, but not limited to, foreign currency translation, product mix, product costs of instrument systems and amortization of software platforms. At current foreign currency exchange rates, the Company expects foreign currency translation to be neutral to gross profit during 2024.
Current wording
Cost of sales is affected by many factors, including, but not limited to, foreign currency translation, product mix, product costs of instrument systems and amortization of software platforms. At current foreign currency exchange rates, the Company expects foreign currency translation to be negative to gross profit during 2025.
Previous wording
Selling and administrative expenses increased 12% and 5% in 2023 and 2022, respectively. The increase in 2023 is primarily driven by severance-related costs in connection with a reduction in workforce, which increased expenses by 4%; the Wyatt acquisition due diligence and integration costs, which increased expenses by 2%; and the Wyatt acquisition-related retention expense, which increased expenses by 3%. These increases were partially offset by lower incentive compensation costs. The increase in selling and administrative expenses in 2022 as compared to 2021 can be attributed to higher salary merit and variable incentive compensation costs due to an increase in the number of employees. The effect of foreign currency translation had minimal impact on selling and administrative expenses in 2023 and decreased expenses by 4% in 2022.
Current wording
The increase in 2023 is primarily driven by severance-related costs in connection with a reduction in workforce, which increased expenses by 4%; the Wyatt acquisition due diligence and integration costs, which increased expenses by 2%; and the Wyatt acquisition-related retention expense, which increased expenses by 3%. These increases were partially offset by lower incentive compensation costs. The increase in selling and administrative expenses in 2023 as compared to 2022 can be attributed to higher salary merit and variable incentive compensation costs due to an increase in the number of employees. The effect of foreign currency translation had minimal impact on selling and administrative expenses in 2024 and 2023.
Previous wording
As a percentage of net sales, selling and administrative expenses were 24.9%, 22.1% and 22.5% for 2023, 2022, and 2021, respectively.
Current wording
As a percentage of net sales, selling and administrative expenses were 23.3%, 24.9% and 22.1% for 2024, 2023, and 2022, respectively.
Previous wording
Research and development expenses decreased 1% and increased 5% in 2023 and 2022, respectively. The decrease in research and development expenses in 2023 can be attributed to increases from merit compensation and costs associated with new products and the development of new technology initiatives, being offset by lower incentive compensation costs. The impact of foreign currency exchange decreased expenses by 1% and 3% in 2023 and 2022, respectively.
Current wording
Research and development expenses increased 5% and decreased 1% in 2024 and 2023, respectively. The increase in research and development expenses in 2024 can be attributed to increases from merit compensation and costs associated with new products and the development of new technology initiatives, being partially offset by lower incentive compensation costs. The impact of foreign currency exchange increased expenses by 3% and decreased expenses by 1% in 2024 and 2023, respectively.
Previous wording
The increase in purchased intangible amortization of $26 million in 2023 can be attributed to the Wyatt acquisition intangible assets.
Current wording
The increase in purchased intangible amortization of $15 million and $26 million in 2024 and 2023, respectively, can be attributed to the timing of the Wyatt acquisition in May of 2023 as 2024 includes a full year of the amortization from the Wyatt acquisition intangible assets.
Previous wording
In 2022, the Company sold equity an equity investment for $10 million in cash and recorded a gain on the sale of approximately $7 million in other income, net on the statement of operations. The Company also incurred $6 million in losses on an equity investment within other income, net on the statement of operations.
Current wording
In 2022, the Company sold an equity investment for $10 million in cash and recorded a gain on the sale of approximately $7 million in other income, net on the statement of operations. The Company also incurred $6 million in losses on an equity investment in 2022 within other income, net on the statement of operations.
Previous wording
Net interest expense in 2023 increased $44 million as compared to 2022 due to the additional borrowings by the Company to fund the Wyatt acquisition in 2023. Net interest expense in 2022 increased $5 million as compared to 2021 due to the lower interest income benefit from the lower notional amount of interest rate cross currency swap agreements.
Current wording
Net interest expense in 2023 increased $44 million as compared to 2022 due to the additional borrowings by the Company to fund the Wyatt acquisition in 2023.
Previous wording
The four principal jurisdictions in which the Company manufactures are the U.S., Ireland, the U.K. and Singapore, where the statutory tax rates were 21%, 12.5%, 25% and 17%, respectively, as of December 31, 2023. The Company has a new Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026. Prior to April 1, 2021, the Company had a tax exemption on income arising from qualifying activities in Singapore based upon the achievement of certain contractual milestones, which the Company met as of December 31, 2020 and maintained through March 2021. The effect of applying the concessionary income tax rates rather than the statutory tax rate to income arising from qualifying activities in Singapore increased the Company’s net income by $16 million, $20 million and $20 million, and increased the Company’s net income per diluted share by $0.27, $0.33 and $0.32 for the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
The four principal jurisdictions in which the Company manufactures are the U.S., Ireland, the U.K. and Singapore, where the statutory tax rates were 21%, 12.5%, 25% and 17%, respectively, as of December 31, 2024. The Company has a new Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026. Prior to April 1, 2021, the Company had a tax exemption on income arising from qualifying activities in Singapore based upon the achievement of certain contractual milestones, which the Company met as of December 31, 2020 and maintained through March 2021. The effect of applying the concessionary income tax rates rather than the statutory tax rate to income arising from qualifying activities in Singapore increased the Company’s net income by $14 million, $16 million and $20 million, and increased the Company’s net income per diluted share by $0.24, $0.27 and $0.33 for the years ended December 31, 2024, 2023 and 2022, respectively.
Previous wording
The Company’s effective tax rate for the years ended December 31, 2023, 2022 and 2021 was 12.8%, 15.5% and 14.1%, respectively.
Current wording
The Company’s effective tax rate for the years ended December 31, 2024, 2023 and 2022 was 15.5%, 12.8% and 15.5%, respectively.
Previous wording
The 2021 effective tax rate differed from the U.S. federal statutory tax rate primarily due to the jurisdictional mix of earnings, a $10 million provision related to the GILTI tax and a tax benefit of $7 million on stock-based compensation.
Current wording
The 2024 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, a $5 million provision related to the GILTI tax and a tax benefit of $3 million on stock-based compensation.
Previous wording
Effective starting in 2024, various foreign jurisdictions are beginning to implement aspects of the guidance issued by the Organization for Economic Co-operation and Development related to the new Pillar Two system of global minimum tax rules. The Company does not believe these changes in tax law will have a material impact on the Company’s financial position, results of operations and cash flows in 2024. The Company continues to monitor the adoption of the Pillar Two rules in additional jurisdictions.
Current wording
Effective starting in 2024, various foreign jurisdictions are beginning to implement aspects of the guidance issued by the Organization for Economic Co-operation and Development related to the new Pillar Two system of global minimum tax rules. These changes in tax law did not have a material impact on the Company’s financial position, results of operations and cash flows in 2024. As of the date of this Annual Report, the Company does not anticipate that the Pillar Two tax rules will have a material impact on future periods.
Previous wording
Net cash provided by operating activities was $603 million, $612 million and $747 million in 2023, 2022 and 2021, respectively. The decrease in 2023 operating cash flow was primarily a result of lower net income, higher inventory levels, higher income tax payments and higher incentive compensation payments in 2023 as compared to 2022. The changes within net cash provided by operating activities include the following significant changes in the sources and uses of net cash provided by operating activities, in addition to the changes in net income:
Current wording
Net cash provided by operating activities was $762 million, $603 million and $612 million in 2024, 2023 and 2022, respectively. The increase in 2024 operating cash flow was primarily a result of lower inventory levels, partially offset by lower net income. The changes within net cash provided by operating activities include the following significant changes in the sources and uses of net cash provided by operating activities, in addition to the changes in net income:
Previous wording
Net cash used in investing activities totaled $1.4 billion, $108 million and $232 million in 2023, 2022 and 2021, respectively. Additions to fixed assets and capitalized software were $161 million, $176 million and $161 million in 2023, 2022 and 2021, respectively. The cash flows from investing activities in 2023, 2022 and 2021 include $16 million, $32 million and $49 million, respectively, of capital expenditures related to the major expansion of the Company’s precision chemistry consumable operations in the United States. The Company has incurred costs of $248 million on this newstate-of-the-art facility, which is substantially complete as of December 31, 2023.
Current wording
Net cash used in investing activities totaled $144 million, $1.4 billion and $108 million in 2024, 2023 and 2022, respectively. Additions to fixed assets and capitalized software were $142 million, $161 million and $176 million in 2024, 2023 and 2022, respectively. The cash flows from investing activities in 2023 and 2022 include $16 million and $32 million, respectively, of capital expenditures related to the major expansion of the Company’s precision chemistry consumable operations in the United States.
Previous wording
During 2023, 2022 and 2021, the Company purchased $2 million, $11 million and $280 million of investments, respectively, while $2 million, $78 million and $218 million of investments matured, respectively, and were used for financing activities described below.
Current wording
During 2024, 2023 and 2022, the Company purchased $4 million, $2 million and $11 million of investments, respectively, while $4 million, $2 million and $78 million of investments matured, respectively, and were used for financing activities described below.
Previous wording
In 2023, the Company completed the acquisition of Wyatt for a total purchase price of $1.3 billion in cash. Wyatt is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories, and services. The acquisition will expand Waters’ portfolio and increase exposure to large molecule applications.
Current wording
In 2023, the Company completed the acquisition of Wyatt for a total purchase price of $1.3 billion in cash. Wyatt is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories, and services. The acquisition has expanded Waters’ portfolio and increased our exposure to large molecule applications.
Previous wording
There were no business acquisitions in 2022 and 2021.
Current wording
There were no business acquisitions in 2024.
Previous wording
The Company entered into a credit agreement in September 2021 governing the Company’s five-year, $1.8 billion revolving facility that matures in September 2026. On March 3, 2023, in anticipation of closing of the Wyatt acquisition, the Company entered into an agreement to amend the credit agreement governing its revolving credit facility (the “2023 Amendment”). The 2023 Amendment increases the borrowing capacity by $200 million to an aggregate total borrowing capacity of $2.0 billion. As of December 31, 2023, the Company had a total of $2.4 billion in outstanding debt, which consisted of $1.3 billion in outstanding senior unsecured notes and $1.1 billion in borrowings under its credit agreement. The Company’s net debt borrowings as of December 31, 2023, 2022 and 2021 were $780 million, $60 million and $160 million higher than as of December 31, 2022, 2021 and 2020, respectively.
Current wording
The Company has a credit agreement with an aggregate borrowing capacity of $2.0 billion. As of December 31, 2024, the Company had a total of $1.6 billion in outstanding debt, which consisted of $1.3 billion in outstanding senior unsecured notes and $0.4 billion borrowed under its credit agreement. The Company’s net debt borrowings as of December 31, 2024 were $730 million lower than as of December 31, 2023, while the net borrowings as of December 31, 2023 and 2022 were $780 million and $60 million higher than as of December 31, 2022 and 2021, respectively.
Previous wording
As of December 31, 2023, the Company has entered into three-year interest rate cross-currency swap derivative agreements with a notional value $625 million to hedge the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated andyen-denominated net asset investments. As a result of entering into these agreements, the Company lowered net interest expense by approximately $11 million, $9 million and $15 million in 2023, 2022 and 2021, respectively. The Company anticipates that these swap agreements will lower net interest expense by approximately $7 million in 2024.
Current wording
As of December 31, 2024, the Company has entered into three-year interest rate cross-currency swap derivative agreements with a notional value of $625 million to hedge the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated andyen-denominated net asset investments. As a result of entering into these agreements, the Company lowered net interest expense by approximately $9 million, $11 million and $9 million in 2024, 2023 and 2022, respectively. The Company anticipates that these swap agreements will lower net interest expense by approximately $9 million in 2025.
Previous wording
In December 2023, the Company’s Board of Directors authorized the extension of the existing share repurchase program through January 21, 2025. The Company’s remaining authorization is $1.0 billion. During 2023, 2022 and 2021, the Company repurchased $58 million, $616 million and $640 million, respectively, of the Company’s outstanding common stock under authorized share repurchase programs. In addition, the Company repurchased $12 million, $11 million and $9 million of common stock related to the vesting of restricted stock units during 2023, 2022 and 2021, respectively.
Current wording
In December 2024, the Company’s Board of Directors authorized the extension of the existing share repurchase program through January 21, 2028. The Company’s remaining authorization is $1.0 billion. During 2023 and 2022, the Company repurchased $58 million and $616 million, respectively, of the Company’s outstanding common stock under authorized share repurchase programs. The Company did not make any open market share repurchases in 2024. In addition, the Company repurchased $13 million, $12 million and $11 million of common stock related to the vesting of restricted stock units during 2024, 2023 and 2022, respectively.
Previous wording
The Company received $30 million, $43 million and $56 million of proceeds from the exercise of stock options and the purchase of shares pursuant to the Company’s employee stock purchase plan during 2023, 2022 and 2021, respectively.
Current wording
The Company received $30 million, $30 million and $43 million of proceeds from the exercise of stock options and the purchase of shares pursuant to the Company’s employee stock purchase plan during 2024, 2023 and 2022, respectively.
Previous wording
The Company had cash, cash equivalents and investments of $396 million as of December 31, 2023. The majority of the Company’s cash and cash equivalents are generated from foreign operations, with $321 million held by foreign subsidiaries at December 31, 2023, of which $233 million was held in currencies other than U.S. dollars.
Current wording
The Company had cash, cash equivalents and investments of $325 million as of December 31, 2024. The majority of the Company’s cash and cash equivalents are generated from foreign operations, with $275 million held by foreign subsidiaries at December 31, 2024, of which $226 million was held in currencies other than U.S. dollars.
Previous wording
Long-term debt. As of December 31, 2023, the Company had $2.4 billion of cash requirements for the principal on long-term debt that will mature and be paid as follows: $50 million in 2024; $1.5 billion in 2026; $50 million in 2028; $300 million in 2029; $50 million in 2030 and $400 million in 2031.
Current wording
Long-term debt. As of December 31, 2024, the Company had $1.6 billion of cash requirements for the principal on long-term debt that will mature and be paid as follows: $830 million in 2026; $50 million in 2028; $300 million in 2029; $50 million in 2030 and $400 million in 2031.
Previous wording
Interest on Senior Unsecured Notes. As of December 31, 2023, the Company had $189 million of cash requirements for the interest on senior unsecured notes that is to be paid as follows: $39 million in 2024; $38 million in 2025; $32 million in 2026; $25 million in 2027; $23 million in 2028; $20 million in 2029; $10 million in 2030; and $2 million in 2031. See also Note 9 in the Notes to the Consolidated Financial Statements for financial information about interest payable.
Current wording
Interest on Senior Unsecured Notes. As of December 31, 2024, the Company had $150 million of cash requirements for the interest on senior unsecured notes that is to be paid as follows: $38 million in 2025; $32 million in 2026; $25 million in 2027; $23 million in 2028; $20 million in 2029; $10 million in 2030; and $2 million in 2031. See also Note 8 in the Notes to the Consolidated Financial Statements for financial information about interest payable.
Previous wording
2017 Tax Act liabilities. As a result of the 2017 Tax Act, the Company incurred a Transition Toll Tax, that would be paid over an eight-year period, starting in 2018, and will not accrue interest. As of December 31, 2023, the Company had a remaining cash requirement of $216 million of which $96 million and $120 million will be paid in 2024 and 2025, respectively. See also Note 10 in the Notes to the Consolidated Financial Statements for financial information about tax liabilities.
Current wording
2017 Tax Act liabilities. As a result of the 2017 Tax Act, the Company incurred a Transition Toll Tax, that would be paid over an eight-year period, starting in 2018, and will not accrue interest. As of December 31, 2024, the Company had a remaining cash requirement of $120 million which will be paid in 2025. See also Note 9 in the Notes to the Consolidated Financial Statements for financial information about tax liabilities.
Previous wording
Operating Leases. The Company’s cash requirements for future lease payments were approximately $93 million as of December 31, 2023. See also Note 12 in the Notes to the Consolidated Financial Statements for financial information about lease liabilities.
Current wording
Operating Leases. The Company’s cash requirements for future lease payments were approximately $81 million as of December 31, 2024. See also Note 11 in the Notes to the Consolidated Financial Statements for financial information about lease liabilities.
Previous wording
Long-term Software Contract Commitments. For contracts the Company is committed to that are not cancelable without penalties. The Company’s contractual obligation with these vendors was approximately $22 million as of December 31, 2023.
Current wording
Long-term Software Contract Commitments. For contracts the Company is committed to that are not cancelable without penalties, the Company’s contractual obligations were approximately $94 million as of December 31, 2024. In December 2024, the Company’s Board of Directors approved the implementation of a new ERP system. The Company anticipates spending approximately $130 million over the next three years in connection with the implementation of the new ERP system. The Company expects to use existing cash and its credit facility to fund the ERP implementation.
Previous wording
Wyatt Retention Agreements. In conjunction with the Wyatt acquisition, the Company entered into retention agreements with certain employees, in which the Company agreed to pay a total of $40 million by the end of the second anniversary of the acquisition date provided the employees remain employed over that period of time.
Current wording
Wyatt Retention Agreements. In conjunction with the Wyatt acquisition, the Company entered into retention agreements with certain employees, in which the Company agreed to pay a total of $40 million by the end of the second anniversary of the acquisition date provided the employees remain employed over that period of time. As of December 31, 2024 the Company’s remaining future obligations associated with the Wyatt retention agreements were $20 million.
Previous wording
The Company’s deferred revenue liabilities at December 31, 2023 of $324 million on the consolidated balance sheets consist of instrument service contract obligations and customer payments received in advance, prior to transfer of control of the instrument. The Company records deferred revenue primarily related to its service contracts, where consideration is billable at the beginning of the service period.
Current wording
The Company’s deferred revenue liabilities at December 31, 2024 of $320 million on the consolidated balance sheets consist of instrument service contract obligations and customer payments received in advance, prior to transfer of control of the instrument. The Company records deferred revenue primarily related to its service contracts, where consideration is billable at the beginning of the service period.
Previous wording
The Company values all of its inventories at the lower of cost or net realizable value on afirst-in, first-out basis (“FIFO”). The Company estimates revisions to its inventory valuations based on technical obsolescence, historical demand, projections of future demand, including in the Company’s current backlog of orders, and industry and market conditions. If actual future demand or market conditions are less favorable than those projected by management, additional write-downs may be required. The Company’s inventory balance at December 31, 2023 was recorded at its net realizable value of $516 million, which is net of write-downs of $41 million.
Current wording
The Company values all of its inventories at the lower of cost or net realizable value on afirst-in, first-out basis (“FIFO”). The Company estimates revisions to its inventory valuations based on technical obsolescence, historical demand, projections of future demand, including in the Company’s current backlog of orders, and industry and market conditions. If actual future demand or market conditions are less favorable than those projected by management, additional write-downs may be required. The Company’s inventory balance at December 31, 2024 was recorded at its net realizable value of $477 million, which is net of write-downs of $42 million.
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Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
In 2024, sales to pharmaceutical customers increased 1% as compared to 2023 as the 18% increase in India’s sales was offset by the 11% decline in China’s sales. Combined sales to industrial customers, which include material characterization, food, environmental and fine chemical markets, were flat in 2024 as the 7% sales growth in the U.S. was primarily offset by a 9% decline in China’s sales. Combined sales to academic and government customers decreased 6% in 2024 as sales declined in most major geographies, except for Europe and India where sales grew 1% and 27%, respectively. Sales to our academic and government customers are highly dependent on when institutions receive funding to purchase our instrument systems and, as such, sales can vary significantly from period to period.
Current report — wording carried from elsewhere
Waters products and service sales were flat and decreased by 1% in 2024 and 2023, respectively, with the effect of foreign currency translation decreasing Waters sales growth by 1% in both 2024 and 2023. Wyatt sales increased Waters products and service sales by approximately 1% in 2024. Waters instrument system sales (LC and MS technology-based) decreased 7% in 2024, primarily driven by weaker customer demand in China where Waters instrument sales declined 12%. Excluding China, the Company’s instrument system sales decreased 4% as compared to 2023. In addition, Wyatt’s instrument system sales contributed 3% to Waters instrument system sales growth in 2024. Waters chemistry consumables sales growth was due to the continued demand in most major geographies driven by the uptake in columns and application-specific testing kits to pharmaceutical customers, partially offset by weaker demand in China and the negative impact from foreign currency translation, which decreased chemistry sales growth by 1% in 2024.
Current report — wording carried from elsewhere
Waters service sales increased 6% in 2024 due to higher service demand billing, partially offset by the negative impact from foreign currency translation, which decreased service sales growth by 1% in 2024. Wyatt service revenues added 1% to Waters service revenue growth in 2024.
Current report — wording carried from elsewhere
In 2023, Waters products and service sales decreased 1% with the effect of foreign currency translation decreasing Waters sales growth by 1% in 2023. Wyatt products and service sales increased Waters products and service sales by approximately 3% in 2023.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
$161 million in 2023, 2022 and 2021, respectively. The cash flows used in investing activities in 2023, 2022 and 2021 included $16 million, $32 million, and $49 million, respectively, of capital expenditures related to the major expansion of the Company’s precision chemistry consumable operations in the United States.
Previous report — wording carried elsewhere
2023, sales growth was broad-based across most major geographies, partially offset by weakness in China and the rest of Asia. These increases were primarily driven by strong customer demand for our thermal analysis instruments and services.