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Waters Corp.$209.99($.19)(.09%)

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 Waters Reports Fourth Quarter and Full Year 2016 Financial Results
   Tuesday, January 24, 2017 6:50:00 AM ET

--Quarterly sales grew 7% as reported (9% in constant currency)

--Growth was balanced across all customer and product categories

--Asia Pacific and Europe led strong global growth

--Fourth quarter capped strong full year performance

Waters Corporation (WAT ) reported fourth quarter 2016 sales of $629 million, a 7% increase versus sales of $587 million in the fourth quarter of 2015. Foreign currency translation reduced sales growth by 2% in the quarter. On a GAAP basis, earnings per diluted share (EPS) for the fourth quarter was up 17% to $2.15 compared to $1.83 for the fourth quarter of 2015. On a non-GAAP basis, including the adjustments in the attached reconciliation, EPS increased 13% to $2.21 from $1.96 in the fourth quarter of 2015. A description and reconciliation of GAAP to non-GAAP EPS is attached and can be found on the Company’s website at http://www.waters.com under the caption "Investors."



For the full year, sales for the Company were $2,167 million, up 6% compared with sales of $2,042 million in 2015. Foreign currency translation reduced sales growth by 1% in the year. On a GAAP basis, EPS for 2016 was up 13% to $6.41 compared to $5.65 in 2015. On a non-GAAP basis and including adjustments in the attached reconciliation, EPS increased 12% to $6.62 in 2016 as compared to $5.89 in 2015.

Commenting on the Company’s performance, Christopher J. O’Connell, President and Chief Executive Officer said, "I am pleased to report that our fourth quarter featured broad-based sales growth across our major markets, and balance across all product lines. The global Waters team executed well throughout 2016 and delivered strong financial results, while we continued to invest for future growth."

Unless otherwise noted, sales growth percentages are presented on an as reported basis and are the same as the sales growth percentages presented on a constant currency basis, each of which are detailed in the attached reconciliation of GAAP to non-GAAP sales.

Results from the Company’s markets in the quarter were highlighted by 4% sales growth (6% in constant currency) from the broadly defined pharmaceutical market, 13% sales growth (14% in constant currency) from the industrial market, and 5% sales growth (6% in constant currency) from the governmental and academic market. For the full year, sales to the pharmaceutical market grew 9% (10% in constant currency), sales to the industrial market grew 6%, and sales to the governmental and academic market fell 4% (3% in constant currency).

Geographically, sales during the quarter grew 16% in Asia, 5% in Europe (9% in constant currency), and 1% in the Americas (2% in constant currency). For the full year, sales grew 13% in Asia (12% in constant currency), 4% in Europe (6% in constant currency), and 2% in the Americas (3% in constant currency).

The Company’s recurring revenues, the combination of service and chemistry consumables, posted 7% sales growth (8% in constant currency), while instrument system sales grew 7% (9% in constant currency) in the quarter. For the full year, the Company’s recurring revenues grew 8%, while instrument system sales grew by 4% (6% in constant currency).

As communicated in a prior press release, Waters Corporation will webcast its fourth quarter 2016 financial results conference call this morning, January 24, 2017 at 8:00 a.m. eastern time. To listen to the call, connect to www.waters.com, choose "Investors" and click on the "Live Webcast." A replay will be available through January 31, 2017 at midnight eastern time, similarly by webcast and also by phone at 203-369-1050.

About Waters Corporation

Waters Corporation (WAT ) develops and manufactures advanced analytical science technologies for laboratory-dependent organizations. For more than 50 years, the Company has pioneered a connected portfolio of separations science, laboratory information management, mass spectrometry and thermal analysis systems.

Non-GAAP Financial Measures

This press release contains financial measures, such as constant currency growth rate, adjusted operating income, adjusted earnings per diluted share and adjusted operating income, among others, which are considered "non-GAAP" financial measures under applicable U.S. Securities and Exchange Commission rules and regulations. These non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with generally accepted accounting principles (GAAP). The Company’s definition of these non-GAAP measures may differ from similarly titled measures used by others. The non-GAAP financial measures used in this press release adjust for specified items that can be highly variable or difficult to predict. The Company generally uses these non-GAAP financial measures to facilitate management’s financial and operational decision-making, including evaluation of Waters Corporation’s historical operating results, comparison to competitors’ operating results and determination of management incentive compensation. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of factors and trends affecting Waters Corporation’s business. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables accompanying this release.

CAUTIONARY STATEMENT

This release may contain "forward-looking" statements regarding future results and events. For this purpose, any statements that are not statements of historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words, "feels", "believes", "anticipates", "plans", "expects", "intends", "suggests", "appears", "estimates", "projects", and similar expressions, whether in the negative or affirmative, are intended to identify forward-looking statements. The Company’s actual future results may differ significantly from the results discussed in the forward-looking statements within this release for a variety of reasons, including and without limitation, foreign exchange rate fluctuations potentially affecting translation of the Company’s future non-U.S. operating results; the impact on demand among the Company’s various market sectors from economic, sovereign and political uncertainties; the affect on the Company’s financial results from the United Kingdom voting to exit the European Union; fluctuations in expenditures by the Company’s customers, in particular large pharmaceutical companies; introduction of competing products by other companies and loss of market share; pressures on prices from competitors and/or customers; regulatory, economic and competitive obstacles to new product introductions; other changes in demand from the effect of mergers and acquisitions by the Company’s customers; increased regulatory burdens as the Company’s business evolves, especially with respect to the U.S. Food and Drug Administration and U.S. Environmental Protection Agency, among others; shifts in taxable income in jurisdictions with different effective tax rates; the outcome of tax examinations or changes in respective country legislation affecting the Company’s effective tax rate; the ability to access capital, maintain liquidity and service our debt in volatile market conditions, particularly in the U.S., as a large portion of the Company’s cash is held and operating cash flows are generated outside the U.S.; environmental and logistical obstacles affecting the distribution of products and risks associated with lawsuits and other legal actions, particularly involving claims for infringement of patents and other intellectual property rights. Such factors and others are discussed more fully in the sections entitled "Forward-Looking Statements" and "Risk Factors" of the Company’s annual report on Form 10-K for the year ended December 31, 2015 as filed with the Securities and Exchange Commission, which "Forward-Looking Statements" and "Risk Factors" discussions are incorporated by reference in this release. The forward-looking statements included in this release represent the Company’s estimates or views as of the date of this release and should not be relied upon as representing the Company’s estimates or views as of any date subsequent to the date of this release.

 
                                                                     Waters Corporation and Subsidiaries
                                                       Condensed Preliminary Unclassified Consolidated Balance Sheets
                                                                        (In thousands and unaudited)
                                                                          
                                                                                                                                                        
                                                                                                                                                        
                                                                                           December 31, 2016                                              December 31, 2015
                                                                                          -------------------                                          ----------------------
                                                                                                                                                        
                                                                                                                                                        
Cash, cash equivalents and investments                                                           $ 2,813,032                                                    $  2,399,263
Accounts receivable                                                                                  489,340                                                         468,315
Inventories                                                                                          262,682                                                         263,415
Property, plant and equipment, net                                                                   337,118                                                         333,355
Intangible assets, net                                                                               207,055                                                         218,022
Goodwill                                                                                             352,080                                                         356,864
Other assets                                                                                         200,752                                                         229,443
   Total assets                                                                                  $ 4,662,059                                                    $  4,268,677
                                                                                                                                                        
                                                                                                                                                        
Notes payable and debt                                                                           $ 1,827,263                                                    $  1,668,336
Other liabilities                                                                                    532,847                                                         541,490
   Total liabilities                                                                               2,360,110                                                       2,209,826
                                                                                                                                                        
Total equity                                                                                       2,301,949                                                       2,058,851
   Total liabilities and equity                                                                  $ 4,662,059                                                    $  4,268,677
                                                                                                                                                        
 
                                                                                                                                                   Waters Corporation and Subsidiaries
                                                                                                                                                  Consolidated Statements of Operations
                                                                                                                                                  (In thousands, except per share data)
                                                                                                                                                               (Unaudited)
                                                                                                                                          
                                                                                                                                                                                                                                                                                                    
                                                                                                                    Three Months Ended                                                                                                                                       Twelve Months Ended
                                                                                      -------------------------------------------------------------------------------                                                               -----------------------------------------------------------------------------------------------------
                                                                                       December 31, 2016                                            December 31, 2015                                                                 December 31, 2016                                                       December 31, 2015
                                                                                      -------------------                                          ------------------                                                               ---------------------                                          --------------------------------------
                                                                                                                                                                                                                                                                                                    
Net sales                                                                                $ 628,787                                                     $ 586,610                                                                       $ 2,167,423                                                      $ 2,042,332
                                                                                                                                                                                                                                                                                                    
Costs and operating expenses:
  Cost of sales                                                                            251,579                                                       237,915                                                                           891,453                                                          842,672
  Selling and administrative expenses                                                      130,238                                                       128,681                                                                           513,031                                                          495,747
  Research and development expenses                                                         32,753                                                        28,336                                                                           125,187                                                          118,545
  Acquired in-process research and development                                                   -                                                         3,855                                                                                 -                                                            3,855
  Purchased intangibles amortization                                                         2,358                                                         2,576                                                                             9,889                                                           10,123
  Litigation provisions                                                                      3,524                                                         3,939                                                                             3,524                                                            3,939
                                                                                                                                                                                                                                                                                                    
     Operating income                                                                      208,335                                                       181,308                                                                           624,339                                                          567,451
                                                                                                                                                                                                                                                                                                    
Interest expense, net                                                                       (5,756 )                                                      (6,070 )                                                                         (24,225 )                                                        (25,532 )
                                                                                                                                                                                                                                                                                                    
     Income from operations before income taxes                                            202,579                                                       175,238                                                                           600,114                                                          541,919
                                                                                                                                                                                                                                                                                                    
Provision for income taxes                                                                  28,201                                                        24,184                                                                            78,611                                                           72,866
                                                                                                                                                                                                                                                                                                    
     Net income                                                                          $ 174,378                                                     $ 151,054                                                                       $   521,503                                                      $   469,053
                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                    
Net income per basic common share                                                        $    2.17                                                     $    1.85                                                                       $      6.46                                                      $      5.70
                                                                                                                                                                                                                                                                                                    
Weighted-average number of basic common shares                                              80,366                                                        81,650                                                                            80,786                                                           82,336
                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                    
Net income per diluted common share                                                      $    2.15                                                     $    1.83                                                                       $      6.41                                                      $      5.65
                                                                                                                                                                                                                                                                                                    
Weighted-average number of diluted common shares and equivalents                            80,954                                                        82,382                                                                            81,417                                                           83,087
                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                     Waters Corporation and Subsidiaries
                                                                                                                                                                                                                                     Reconciliation of GAAP to Adjusted Non-GAAP
                                                                                                                                                                                                                                     Net Sales by Operating Segment, Products & Services, Geography
                                                                                                                                                                                                                                     and Markets
                                                                                                                                                                                                                                     Three Months Ended December 31, 2016 and December 31, 2015
                                                                                                                                                                                                                                     (In thousands)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Constant
                                                                                                                                                                                    Three Months Ended                                                                                                                                Percent                                                                          Currency                                                                                  Currency
                                                                                                                              -------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           December 31, 2016                                                                    December 31, 2015                                                                                     Change                                                                            Impact                                                                                Growth Rate (a)
                                                                                                                              -------------------------------------------                                          ------------------------------------------                                                               ---------------------------                                          -----------------------------------------------------                                          ------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
NET SALES - OPERATING SEGMENT
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Waters                                                                                                                                           $              554,226                                                               $              509,393                                                                                      9 %                                                               $     (8,057 )                                                                                           10 %
TA                                                                                                                                                               74,561                                                                               77,217                                                                                     (3 %)                                                                      (789 )                                                                                           (2 %)
                                                                                                                                                                                                                                                                                                                        
                                                                                                                              -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- --------------------------------
Total                                                                                                                                            $              628,787                                                               $              586,610                                                                                      7 %                                                               $     (8,846 )                                                                                            9 %
                                                                                                                              ==================== ====================                                            ==================== ====================                                                                                                                                     ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
NET SALES - PRODUCTS & SERVICES
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Instruments                                                                                                                                      $              352,717                                                               $              329,568                                                                                      7 %                                                               $     (6,370 )                                                                                            9 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Service                                                                                                                                                         185,969                                                                              173,196                                                                                      7 %                                                                     (2,999 )                                                                                            9 %
Chemistry                                                                                                                                     90,101                                                            83,846                                                                                      7 %                                                     523                                                                           7 %
                                                                                                                              -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- ---------- --------------------
Total Recurring                                                                                                                                                 276,070                                                                              257,042                                                                                      7 %                                                                     (2,476 )                                                                                            8 %
                                                                                                                                                                                                                                                                                                                        
                                                                                                                              -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- --------------------------------
Total                                                                                                                                            $              628,787                                                               $              586,610                                                                                      7 %                                                               $     (8,846 )                                                                                            9 %
                                                                                                                              ==================== ====================                                            ==================== ====================                                                                                                                                     ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
NET SALES - GEOGRAPHY
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Americas                                                                                                                                         $              222,422                                                               $              219,676                                                                                      1 %                                                               $     (1,189 )                                                                                            2 %
Europe                                                                                                                                                          180,717                                                                              171,967                                                                                      5 %                                                                     (6,912 )                                                                                            9 %
Asia                                                                                                                                                            225,648                                                                              194,967                                                                                     16 %                                                                       (745 )                                                                                           16 %
                                                                                                                                                                                                                                                                                                                        
                                                                                                                              -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- --------------------------------
Total                                                                                                                                            $              628,787                                                               $              586,610                                                                                      7 %                                                               $     (8,846 )                                                                                            9 %
                                                                                                                              ==================== ====================                                            ==================== ====================                                                                                                                                     ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
NET SALES - MARKETS
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Pharmaceutical                                                                                                                                   $              335,075                                                               $              320,764                                                                                      4 %                                                               $     (5,274 )                                                                                            6 %
Industrial                                                                                                                                                      210,899                                                                              186,708                                                                                     13 %                                                                     (2,404 )                                                                                           14 %
Government & Academic                                                                                                                                            82,813                                                                               79,138                                                                                      5 %                                                                     (1,168 )                                                                                            6 %
                                                                                                                                                                                                                                                                                                                        
                                                                                                                              -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- --------------------------------
Total                                                                                                                                            $              628,787                                                               $              586,610                                                                                      7 %                                                               $     (8,846 )                                                                                            9 %
                                                                                                                              ==================== ====================                                            ==================== ====================                                                                                                                                     ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
       
-------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

(a) The Company believes that referring to comparable constant currency growth rates is a useful way to evaluate the underlying performance of Waters Corporation’s net sales. Constant currency growth rate, a non-GAAP financial measure, measures the change in net sales between current and prior year periods, ignoring the impact of foreign currency exchange rates during the current period. See description of non-GAAP financial measures contained in this release.

                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                          Waters Corporation and Subsidiaries
                                                                                                                                                                                                                                                          Reconciliation of GAAP to Adjusted Non-GAAP
                                                                                                                                                                                                                                                          Net Sales by Operating Segment, Products & Services, Geography
                                                                                                                                                                                                                                                          and Markets
                                                                                                                                                                                                                                                          Twelve Months Ended December 31, 2016 and December 31, 2015
                                                                                                                                                                                                                                                          (In thousands)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Constant
                                                                                                                                                                                                         Twelve Months Ended                                                                                                                               Percent                                                                          Currency                                                                                  Currency
                                                                                                                                                   -------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                December 31, 2016                                                                    December 31, 2015                                                                                     Change                                                                            Impact                                                                                Growth Rate (a)
                                                                                                                                                   -------------------------------------------                                          ------------------------------------------                                                               ---------------------------                                          -----------------------------------------------------                                          ------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                     NET SALES - OPERATING SEGMENT
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                     Waters                                                                                                                                           $            1,928,063                                                               $            1,806,868                                                                                      7 %                                                               $    (12,733 )                                                                                            7 %
                     TA                                                                                                                                                              239,360                                                                              235,464                                                                                      2 %                                                                       (880 )                                                                                            2 %
                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                   -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- --------------------------------
                     Total                                                                                                                                            $            2,167,423                                                               $            2,042,332                                                                                      6 %                                                               $    (13,613 )                                                                                            7 %
                                                                                                                                                   ==================== ====================                                            ==================== ====================                                                                                                                                     ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                     NET SALES - PRODUCTS & SERVICES
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                     Instruments                                                                                                                                      $            1,114,883                                                               $            1,067,315                                                                                      4 %                                                               $    (11,654 )                                                                                            6 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                     Service                                                                                                                                                         707,127                                                                              657,076                                                                                      8 %                                                                     (4,848 )                                                                                            8 %
                     Chemistry                                                                                                                                    345,413                                                           317,941                                                                                      9 %                                                   2,889                                                                           8 %
                                                                                                                                                   -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- ---------- --------------------
                     Total Recurring                                                                                                                                               1,052,540                                                                              975,017                                                                                      8 %                                                                     (1,959 )                                                                                            8 %
                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                   -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- --------------------------------
                     Total                                                                                                                                            $            2,167,423                                                               $            2,042,332                                                                                      6 %                                                               $    (13,613 )                                                                                            7 %
                                                                                                                                                   ==================== ====================                                            ==================== ====================                                                                                                                                     ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                     NET SALES - GEOGRAPHY
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                     Americas                                                                                                                                         $              807,182                                                               $              790,483                                                                                      2 %                                                               $     (4,287 )                                                                                            3 %
                     Europe                                                                                                                                                          577,257                                                                              555,886                                                                                      4 %                                                                     (9,352 )                                                                                            6 %
                     Asia                                                                                                                                                            782,984                                                                              695,963                                                                                     13 %                                                                         26                                                                                             12 %
                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                   -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- --------------------------------
                     Total                                                                                                                                            $            2,167,423                                                               $            2,042,332                                                                                      6 %                                                               $    (13,613 )                                                                                            7 %
                                                                                                                                                   ==================== ====================                                            ==================== ====================                                                                                                                                     ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                     NET SALES - MARKETS
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                     Pharmaceutical                                                                                                                                   $            1,206,316                                                               $            1,106,229                                                                                      9 %                                                               $     (9,827 )                                                                                           10 %
                     Industrial                                                                                                                                                      690,119                                                                              653,213                                                                                      6 %                                                                     (1,281 )                                                                                            6 %
                     Government & Academic                                                                                                                                           270,988                                                                              282,890                                                                                     (4 %)                                                                    (2,505 )                                                                                           (3 %)
                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                   -------------------- --------------------                                            -------------------- --------------------                                                                                                                                     -------------------- --------------------------------
                     Total                                                                                                                                            $            2,167,423                                                               $            2,042,332                                                                                      6 %                                                               $    (13,613 )                                                                                            7 %
                                                                                                                                                   ==================== ====================                                            ==================== ====================                                                                                                                                     ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                            
                     -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

(a) The Company believes that referring to comparable constant currency growth rates is a useful way to evaluate the underlying performance of Waters Corporation’s net sales. Constant currency growth rate, a non-GAAP financial measure, measures the change in net sales between current and prior year periods, ignoring the impact of foreign currency exchange rates during the current period. See description of non-GAAP financial measures contained in this release.

                                                                                                                                                                                                                                     Waters Corporation and Subsidiaries
                                                                                                                                                                                                                                     Reconciliation of GAAP to Adjusted Non-GAAP Financials
                                                                                                                                                                                                                                     Quarters and Twelve Months Ended December 31, 2016 and December
                                                                                                                                                                                                                                     31, 2015
                                                                                                                                                                                                                                     (In thousands, except per share data)
                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             Income from
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             Operations
                                                                                                                                                                                           Selling &                                                                                  Research &                                                                                                                                                           Operating                                                                           before                                                                          Provision for                                                                                                                                                                         Diluted
                                                                                                                                                                                        Administrative                                                                                Development                                                                         Operating                                                                         Income                                                                             Income                                                                             Income                                                                                       Net                                                                                  Earnings
                                                                                                                                                                       Expenses(a)                                                              Expenses(a)                                                       Income                                                                         Percentage                                                         Taxes                                                           Taxes                                                                  Income                                                              per Share
                                                                                                                                                            -------------------- -----------------------------                                          -------------------- -----------------------------                                          -------------------- ---------                                                                ---------------------------                                          -------------------- -----------                                           -------------------- ----------------------------                                          -------------------- -----------------------------                                          -------------------- --------------------
Quarter Ended December 31, 2016
------------------------------------------------------------------------
GAAP                                                                                                                                                                           $ 136,120                                                                                   $  32,753                                                                                   $   208,335                                                                 33.1 %                                                                                 $     202,579                                                              $ 28,201                                                                                   $ 174,378                                                                                   $                 2.15
Adjustments:
                       Purchased intangibles                                                                                                                                      (2,358 )                                                                                         -                                                                                         2,358                                                                  0.4 %                                                                                         2,358                                                                   661                                                                                       1,697                                                                                                     0.02
                       amortization (b)
                       Restructuring costs,                                                                                                                                         (304 )                                                                                         -                                                                                           304                                                                  0.0 %                                                                                           304                                                                   312                                                                                          (8 )                                                                                                      -
                       asset impairments,
                       acquisition-related costs
                       & certain other items (d)
                       Litigation provisions (f)                                                                                                                                  (3,524 )                                                                                         -                                                                                         3,524                                                                  0.6 %                                                                                         3,524                                                                 1,321                                                                                       2,203                                                                                                     0.03
                       Certain income                                                                                                                               -                                                     -                                                       -                                                 -                                                         -                                               (739 )                                                                    739                                                               0.01
                       tax items (g)
                                                                                                                                                            -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ---------                                           -------------------- ----- --------------------                                           -------------------- -----------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- --------------------
Adjusted Non-GAAP                                                                                                                                                              $ 129,934                                                                $  32,753                                                                $   214,521                                              34.1 %                                                                                 $     208,765                                                              $ 29,756                                                                $ 179,009                                                                $                 2.21
                                                                                                                                                            ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== =========                                           ==================== ===== ====================                                           ==================== ===========                                           ==================== ====== ====================                                           ==================== ======= ====================                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
Quarter Ended December 31, 2015
------------------------------------------------------------------------
GAAP                                                                                                                                                                           $ 135,196                                                                                   $  32,191                                                                                   $   181,308                                                                 30.9 %                                                                                 $     175,238                                                              $ 24,184                                                                                   $ 151,054                                                                                   $                 1.83
Adjustments:
                       Purchased intangibles                                                                                                                                      (2,576 )                                                                                         -                                                                                         2,576                                                                  0.4 %                                                                                         2,576                                                                   729                                                                                       1,847                                                                                                     0.02
                       amortization (b)
                       Restructuring costs,                                                                                                                                       (2,435 )                                                                                         -                                                                                         2,435                                                                  0.4 %                                                                                         2,435                                                                   606                                                                                       1,829                                                                                                     0.02
                       asset impairments,
                       acquisition-related costs
                       & certain other items (d)
                       Acquired in-process research and development (e)                                                                                                                -                                                                                      (3,855 )                                                                                       3,855                                                                  0.7 %                                                                                         3,855                                                                   786                                                                                       3,069                                                                                                     0.04
                       Litigation provisions (f)                                                                                                                                  (3,939 )                                                                                         -                                                                                         3,939                                                                  0.7 %                                                                                         3,939                                                                 1,478                                                                                       2,461                                                                                                     0.03
                       Certain income                                                                                                                               -                                                     -                                                       -                                                 -                                                         -                                               (959 )                                                                    959                                                               0.01
                       tax items (g)
                                                                                                                                                            -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ---------                                           -------------------- ----- --------------------                                           -------------------- -----------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- --------------------
Adjusted Non-GAAP                                                                                                                                                              $ 126,246                                                                $  28,336                                                                $   194,113                                              33.1 %                                                                                 $     188,043                                                              $ 26,824                                                                $ 161,219                                                                $                 1.96
                                                                                                                                                            ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== =========                                           ==================== ===== ====================                                           ==================== ===========                                           ==================== ====== ====================                                           ==================== ======= ====================                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
Twelve Months Ended December 31, 2016
------------------------------------------------------------------------
GAAP                                                                                                                                                                           $ 526,444                                                                                   $ 125,187                                                                                   $   624,339                                                                 28.8 %                                                                                 $     600,114                                                              $ 78,611                                                                                   $ 521,503                                                                                   $                 6.41
Adjustments:
                       Purchased intangibles                                                                                                                                      (9,889 )                                                                                         -                                                                                         9,889                                                                  0.5 %                                                                                         9,889                                                                 2,864                                                                                       7,025                                                                                                     0.09
                       amortization (b)
                       Stock award                                                                                                                                                (7,085 )                                                                                         -                                                                                         7,085                                                                  0.3 %                                                                                         7,085                                                                 2,657                                                                                       4,428                                                                                                     0.05
                       modification (c)
                       Restructuring costs,                                                                                                                                       (6,856 )                                                                                         -                                                                                         6,856                                                                  0.3 %                                                                                         6,856                                                                 2,812                                                                                       4,044                                                                                                     0.05
                       asset impairments,
                       acquisition-related costs
                       & certain other items (d)
                       Litigation provisions (f)                                                                                                                                  (3,524 )                                                                                         -                                                                                         3,524                                                                  0.2 %                                                                                         3,524                                                                 1,321                                                                                       2,203                                                                                                     0.03
                       Certain income                                                                                                                               -                                                     -                                                       -                                                 -                                                         -                                                135                                                  (135 )                                                                                   -
                       tax items (g)
                                                                                                                                                            -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ---------                                           -------------------- ----- --------------------                                           -------------------- -----------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- --------------------
Adjusted Non-GAAP                                                                                                                                                              $ 499,090                                                                $ 125,187                                                                $   651,693                                              30.1 %                                                                                 $     627,468                                                              $ 88,400                                                                $ 539,068                                                                $                 6.62
                                                                                                                                                            ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== =========                                           ==================== ===== ====================                                           ==================== ===========                                           ==================== ====== ====================                                           ==================== ======= ====================                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
Twelve Months Ended December 31, 2015
------------------------------------------------------------------------
GAAP                                                                                                                                                                           $ 509,809                                                                                   $ 122,400                                                                                   $   567,451                                                                 27.8 %                                                                                 $     541,919                                                              $ 72,866                                                                                   $ 469,053                                                                                   $                 5.65
Adjustments:
                       Purchased intangibles                                                                                                                                     (10,123 )                                                                                         -                                                                                        10,123                                                                  0.5 %                                                                                        10,123                                                                 2,888                                                                                       7,235                                                                                                     0.09
                       amortization (b)
                       Restructuring costs,                                                                                                                                       (7,455 )                                                                                         -                                                                                         7,455                                                                  0.4 %                                                                                         7,455                                                                 2,377                                                                                       5,078                                                                                                     0.06
                       asset impairments,
                       acquisition-related costs
                       & certain other items (d)
                       Acquired in-process research and development (e)                                                                                                                -                                                                                      (3,855 )                                                                                       3,855                                                                  0.2 %                                                                                         3,855                                                                   786                                                                                       3,069                                                                                                     0.04
                       Litigation provisions (f)                                                                                                                                  (3,939 )                                                                                         -                                                                                         3,939                                                                  0.2 %                                                                                         3,939                                                                 1,478                                                                                       2,461                                                                                                     0.03
                       Certain income                                                                                                                               -                                                     -                                                       -                                                 -                                                         -                                             (2,326 )                                                                  2,326                                                               0.03
                       tax items (g)
                                                                                                                                                            -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ---------                                           -------------------- ----- --------------------                                           -------------------- -----------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- --------------------
Adjusted Non-GAAP                                                                                                                                                              $ 488,292                                                                $ 118,545                                                                $   592,823                                              29.0 %                                                                                 $     567,291                                                              $ 78,069                                                                $ 489,222                                                                $                 5.89
                                                                                                                                                            ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== =========                                           ==================== ===== ====================                                           ==================== ===========                                           ==================== ====== ====================                                           ==================== ======= ====================                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
 
------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

(a) Selling & administrative expenses include purchased intangibles amortization and litigation provisions. Research & development expenses include acquired in-process research and development. (b) The Purchased intangibles amortization, a non-cash expense, was excluded to be consistent with how management evaluates the performance of its core business against historical operating results and the operating results of competitors over periods of time. (c) The non-cash expense associated with accelerating the vesting of certain stock awards was excluded as the Company believes these expenses are not indicative of normal operating costs. (d) Restructuring costs, asset impairments, acquisition-related costs and certain other items were excluded as the Company believes that the cost to consolidate operations and reduce overhead; the cost to complete acquisitions; the non-cash expense to record asset impairments and certain other income or expense items are not normal and do not represent future ongoing business expenses of a specific function or geographic location of the Company. (e) Acquired In-Process Research and Development was excluded as it relates to milestone payments associated with a licensing arrangement for mass spectrometry that the Company believes is infrequent, unusual and not indicative of its normal business operations. (f) Litigation Provisions were excluded as these costs are isolated, unpredictable and not expected to recur regularly. (g) Certain income tax items were excluded as these non-cash expenses and benefits represent updates in management’s assessment of ongoing examinations or other tax items that are not indicative of the Company’s normal or future income tax expense.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170124005421r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170124005421/en/

SOURCE: Waters Corporation

Waters Corporation 
John Lynch, 508-482-2314 
Vice President, Treasurer and Investor Relations


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