ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended December 31, 2018.
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
Oregon
|
|
93-0708501
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
27700 SW Parkway Avenue, Wilsonville, Oregon
|
|
97070
|
(Address of principal executive offices)
|
|
(Zip code)
|
Title of Each Class
|
|
Name of Each Exchange
on Which Registered
|
Common Stock, $0.01 par value
|
|
NASDAQ Global Select Market
|
Large accelerated filer
x
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
|
PART I
|
||
Item 1
|
||
Item 1A
|
||
Item 1B
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
PART II
|
||
Item 5
|
||
Item 6
|
||
Item 7
|
||
Item 7A
|
||
Item 8
|
||
Item 9
|
||
Item 9A
|
||
Item 9B
|
||
PART III
|
||
Item 10
|
||
Item 11
|
||
Item 12
|
||
Item 13
|
||
Item 14
|
||
PART IV
|
||
Item 15
|
||
Item 16
|
||
ITEM 1.
|
BUSINESS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
the imposition of and changes to governmental licensing restrictions and controls impacting our technology and products;
|
•
|
restrictions and prohibitions on the export of technology and products, including any applicable changes in regulation prohibiting the sale of certain of our products to certain end users without a license;
|
•
|
international trade restrictions;
|
•
|
difficulty in collecting receivables and governmental restrictions with respect to currency;
|
•
|
inadequate protection of intellectual property;
|
•
|
labor union activities;
|
•
|
changes in tariffs and taxes;
|
•
|
restrictions on repatriation of earnings;
|
•
|
restriction on the importation and exportation of goods and services;
|
•
|
risks, costs, impacts and obligations associated with the United States Foreign Corrupt Practices Act ("FCPA"), and other anti-bribery and anti-corruption laws applicable to us, and laws applicable to global trade and United States exports and costs and penalties from violations of such laws and related regulations, including the costs associated with required remedial and other increased compliance activity;
|
•
|
difficulties in staffing and managing international operations; and
|
•
|
instability in economic or political conditions, inflation, recession, actual or anticipated military or political conflicts, and potential impact due to the upcoming exit of the United Kingdom (the "U.K.") from the European Union (the "EU"), colloquially referred to as "Brexit".
|
•
|
the timing, number and size of orders from, and shipments to, our customers, as well as the relative mix of those orders;
|
•
|
variations in the volume of orders for a particular product or product line in a particular fiscal quarter;
|
•
|
the size and timing of new contract awards;
|
•
|
the timing of the release of government funds for procurement of our products; and
|
•
|
the timing of orders and shipments within a given fiscal quarter.
|
•
|
the seasonal pattern of contracting by the United States government and certain foreign governments;
|
•
|
the desire of customers to take delivery of equipment prior to fiscal year ends due to funding considerations; and
|
•
|
the tendency of commercial enterprises to utilize fully annual capital budgets prior to expiration.
|
•
|
the jurisdictions in which profits are determined to be earned and taxed;
|
•
|
the resolution of issues arising from tax audits with various tax authorities;
|
•
|
changes in the valuation of our deferred tax assets and liabilities;
|
•
|
adjustments to estimated taxes upon finalization of various tax returns;
|
•
|
increases in expenses not deductible for tax purposes;
|
•
|
changes in available tax credits;
|
•
|
changes in share-based compensation expense;
|
•
|
changes in tax laws or the interpretation of such tax laws and changes in generally accepted accounting principles;
|
•
|
changes in foreign tax rates or agreed upon foreign taxable base; and/or
|
•
|
the repatriation of earnings from outside the United States for which we have not previously provided for United States taxes.
|
Location
|
Owned
|
|
Leased
|
||
|
(Square feet in Thousands)
|
||||
Wilsonville (Portland), Oregon
|
154
|
|
|
—
|
|
North Billerica (Boston), Massachusetts
|
133
|
|
|
—
|
|
Täby (Stockholm), Sweden
|
205
|
|
|
—
|
|
Elkridge (Baltimore), Maryland
|
—
|
|
|
109
|
|
Nashua, New Hampshire
|
140
|
|
|
—
|
|
Tallinn, Estonia
|
46
|
|
|
—
|
|
Goleta (Santa Barbara), California
|
169
|
|
|
—
|
|
Fareham (Portsmouth), United Kingdom
|
63
|
|
|
—
|
|
Stillwater, Oklahoma
|
—
|
|
|
28
|
|
Meer (Antwerp), Belgium
|
—
|
|
|
17
|
|
Richmond (Vancouver) British Columbia, Canada
|
—
|
|
|
52
|
|
Havlstad, Norway
|
—
|
|
|
25
|
|
Rosh Haayin, Israel
|
—
|
|
|
9
|
|
Other
|
131
|
|
|
521
|
|
Total
|
1,041
|
|
|
761
|
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||||
FLIR Systems, Inc.
|
|
$
|
100.00
|
|
|
$
|
108.67
|
|
|
$
|
95.76
|
|
|
$
|
125.36
|
|
|
$
|
163.98
|
|
|
$
|
155.06
|
|
S&P 500 Index
|
|
100.00
|
|
|
113.69
|
|
|
115.26
|
|
|
129.05
|
|
|
157.22
|
|
|
150.33
|
|
||||||
S&P 500 Electronic Equipment Instruments &
Components Index
|
|
100.00
|
|
|
123.06
|
|
|
114.69
|
|
|
142.65
|
|
|
193.13
|
|
|
169.00
|
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
|
|
Maximum Number of Shares that May Yet Be Purchased at December 31, 2018 Under the Plans or Programs(2)
|
|||||
February 1 to February 28, 2018
|
280,036
|
|
|
$
|
48.95
|
|
|
280,036
|
|
|
|
|
March 1 to March 31, 2018
|
1,441,895
|
|
|
$
|
49.41
|
|
|
1,441,895
|
|
|
|
|
April 1 to April 30, 2018
|
100,626
|
|
|
$
|
49.71
|
|
|
100,626
|
|
|
|
|
June 1 to June 30, 2018
|
155,996
|
|
|
$
|
64.10
|
|
|
155,996
|
|
|
|
|
November 1 to November 30, 2018
|
3,007,585
|
|
|
$
|
47.80
|
|
|
3,007,585
|
|
|
|
|
Total
|
4,986,138
|
|
|
$
|
48.88
|
|
|
4,986,138
|
|
|
10,013,862
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year Ended December 31,
(1)
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
49.3
|
|
|
52.3
|
|
|
53.8
|
|
Gross margin
|
50.7
|
|
|
47.7
|
|
|
46.2
|
|
Operating expenses:
|
|
|
|
|
|
|||
Research and development
|
9.9
|
|
|
9.5
|
|
|
8.9
|
|
Selling, general and administrative
|
21.8
|
|
|
20.8
|
|
|
19.4
|
|
Restructuring expenses
|
0.3
|
|
|
—
|
|
|
0.1
|
|
Loss on sale of business
|
0.8
|
|
|
1.3
|
|
|
—
|
|
Total operating expenses
|
32.8
|
|
|
31.6
|
|
|
28.4
|
|
Earnings from operations
|
17.9
|
|
|
16.1
|
|
|
17.8
|
|
Interest expense
|
0.9
|
|
|
0.9
|
|
|
1.1
|
|
Interest income
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
Other (income) expense, net
|
(0.0)
|
|
|
(0.2
|
)
|
|
0.2
|
|
Earnings before income taxes
|
17.3
|
|
|
15.5
|
|
|
16.6
|
|
Income tax provision
|
1.4
|
|
|
9.5
|
|
|
6.6
|
|
Net earnings
|
15.9
|
%
|
|
6.0
|
%
|
|
10.0
|
%
|
(1)
|
Totals may not recompute due to rounding.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
$
|
717.9
|
|
|
$
|
672.1
|
|
|
$
|
552.6
|
|
Earnings from operations
|
216.9
|
|
|
199.9
|
|
|
156.7
|
|
|||
Operating margin
|
30.2
|
%
|
|
29.7
|
%
|
|
28.4
|
%
|
|||
Backlog
|
164
|
|
|
191
|
|
|
164
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
$
|
663.4
|
|
|
$
|
629.1
|
|
|
$
|
616.8
|
|
Earnings from operations
|
199.7
|
|
|
179.2
|
|
|
176.7
|
|
|||
Operating margin
|
30.1
|
%
|
|
28.5
|
%
|
|
28.7
|
%
|
|||
Backlog
|
391
|
|
|
394
|
|
|
371
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
$
|
394.4
|
|
|
$
|
499.2
|
|
|
$
|
492.8
|
|
Earnings from operations
|
57.4
|
|
|
56.1
|
|
|
52.7
|
|
|||
Operating margin
|
14.6
|
%
|
|
11.2
|
%
|
|
10.7
|
%
|
|||
Backlog
|
47
|
|
|
66
|
|
|
56
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1 – 3
Years
|
|
3 – 5
Years
|
|
More than
5 Years
|
||||||||||
Long-term debt, including interest
|
$
|
458,203
|
|
|
$
|
13,281
|
|
|
$
|
444,922
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating leases
|
39,853
|
|
|
10,561
|
|
|
15,553
|
|
|
7,828
|
|
|
5,911
|
|
|||||
Licensing rights
|
412
|
|
|
412
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Post-retirement obligations
|
3,278
|
|
|
418
|
|
|
818
|
|
|
776
|
|
|
1,266
|
|
|||||
Other obligations
|
1,116
|
|
|
1,116
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
502,862
|
|
|
$
|
25,788
|
|
|
$
|
461,293
|
|
|
$
|
8,604
|
|
|
$
|
7,177
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Statement
|
Page
|
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
$
|
1,775,686
|
|
|
$
|
1,800,434
|
|
|
$
|
1,662,167
|
|
Cost of goods sold
|
875,368
|
|
|
941,658
|
|
|
895,046
|
|
|||
Gross profit
|
900,318
|
|
|
858,776
|
|
|
767,121
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
176,281
|
|
|
170,735
|
|
|
147,537
|
|
|||
Selling, general and administrative
|
386,869
|
|
|
373,867
|
|
|
322,435
|
|
|||
Restructuring expenses
|
4,854
|
|
|
625
|
|
|
1,431
|
|
|||
Loss on sale of business
|
13,708
|
|
|
23,588
|
|
|
—
|
|
|||
Total operating expenses
|
581,712
|
|
|
568,815
|
|
|
471,403
|
|
|||
Earnings from operations
|
318,606
|
|
|
289,961
|
|
|
295,718
|
|
|||
Interest expense
|
16,147
|
|
|
16,804
|
|
|
18,071
|
|
|||
Interest income
|
(3,901
|
)
|
|
(1,764
|
)
|
|
(1,402
|
)
|
|||
Other (income) expense, net
|
(743
|
)
|
|
(4,144
|
)
|
|
3,092
|
|
|||
Earnings before income taxes
|
307,103
|
|
|
279,065
|
|
|
275,957
|
|
|||
Income tax provision
|
24,678
|
|
|
171,842
|
|
|
109,331
|
|
|||
Net earnings
|
$
|
282,425
|
|
|
$
|
107,223
|
|
|
$
|
166,626
|
|
|
|
|
|
|
|
||||||
Net earnings per share:
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
2.05
|
|
|
$
|
0.78
|
|
|
$
|
1.22
|
|
Diluted earnings per share
|
$
|
2.01
|
|
|
$
|
0.77
|
|
|
$
|
1.20
|
|
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Net earnings
|
$
|
282,425
|
|
|
$
|
107,223
|
|
|
$
|
166,626
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Change in minimum liability for pension plans, net of tax effects of ($138), $477 and $48, respectively
|
(338
|
)
|
|
1,271
|
|
|
102
|
|
|||
Fair value adjustment on interest rate swap contracts
|
—
|
|
|
187
|
|
|
(16
|
)
|
|||
Realized gain on interest rate swap contracts reclassified to earnings
|
—
|
|
|
(494
|
)
|
|
—
|
|
|||
Unrealized gain on available-for-sale investments
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||
Foreign currency translation adjustments
|
(35,394
|
)
|
|
51,631
|
|
|
(40,911
|
)
|
|||
Total other comprehensive (loss) income
|
(35,732
|
)
|
|
52,591
|
|
|
(40,825
|
)
|
|||
Comprehensive income
|
$
|
246,693
|
|
|
$
|
159,814
|
|
|
$
|
125,801
|
|
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except for par value)
|
|||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
512,144
|
|
|
$
|
519,090
|
|
Accounts receivable, net
|
323,746
|
|
|
346,687
|
|
||
Inventories
|
352,107
|
|
|
372,183
|
|
||
Assets held for sale, net
|
2,032
|
|
|
67,344
|
|
||
Prepaid expenses and other current assets
|
102,618
|
|
|
81,915
|
|
||
Total current assets
|
1,292,647
|
|
|
1,387,219
|
|
||
Property and equipment, net
|
247,407
|
|
|
263,996
|
|
||
Deferred income taxes, net
|
100,620
|
|
|
21,001
|
|
||
Goodwill
|
904,571
|
|
|
909,811
|
|
||
Intangible assets, net
|
146,845
|
|
|
168,130
|
|
||
Other assets
|
89,152
|
|
|
59,869
|
|
||
Total assets
|
$
|
2,781,242
|
|
|
$
|
2,810,026
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
95,496
|
|
|
$
|
106,389
|
|
Deferred revenue
|
32,703
|
|
|
25,614
|
|
||
Accrued payroll and related liabilities
|
81,118
|
|
|
71,310
|
|
||
Accrued product warranties
|
15,204
|
|
|
15,024
|
|
||
Advance payments from customers
|
19,691
|
|
|
20,672
|
|
||
Accrued expenses
|
41,761
|
|
|
37,089
|
|
||
Accrued income taxes
|
13,855
|
|
|
64,136
|
|
||
Liabilities held for sale
|
—
|
|
|
39,544
|
|
||
Other current liabilities
|
16,186
|
|
|
15,155
|
|
||
Total current liabilities
|
316,014
|
|
|
394,933
|
|
||
Long-term debt
|
421,948
|
|
|
420,684
|
|
||
Deferred income taxes
|
22,927
|
|
|
12,496
|
|
||
Accrued income taxes
|
76,435
|
|
|
87,483
|
|
||
Pension and other long-term liabilities
|
67,132
|
|
|
59,872
|
|
||
Commitments and contingencies (Notes 13 and 14)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued at December 31, 2018 or 2017
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 500,000 shares authorized, 135,516 and 138,869 shares issued at December 31, 2018 and 2017, respectively, and additional paid-in capital
|
1,355
|
|
|
91,162
|
|
||
Retained earnings
|
2,024,523
|
|
|
1,856,756
|
|
||
Accumulated other comprehensive loss
|
(149,092
|
)
|
|
(113,360
|
)
|
||
Total shareholders’ equity
|
1,876,786
|
|
|
1,834,558
|
|
||
Total liabilities and shareholders' equity
|
$
|
2,781,242
|
|
|
$
|
2,810,026
|
|
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)
|
|||||||||||||||||||
|
Common Stock and
Additional
Paid-in Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Earnings
(Loss)
|
|
Total
Shareholders'
Equity
|
|
|||||||||||
|
Shares
|
|
Amount
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2015
|
137,350
|
|
|
$
|
1,374
|
|
|
$
|
1,773,267
|
|
|
$
|
(125,126
|
)
|
|
$
|
1,649,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings for the year
|
—
|
|
|
—
|
|
|
166,626
|
|
|
—
|
|
|
166,626
|
|
|
||||
Income tax benefit of common stock options exercised
|
—
|
|
|
1,329
|
|
|
—
|
|
|
—
|
|
|
1,329
|
|
|
||||
Repurchase of common stock
|
(2,132
|
)
|
|
(24,222
|
)
|
|
(41,835
|
)
|
|
—
|
|
|
(66,057
|
)
|
|
||||
Common stock issued pursuant to stock-based compensation plans, net of shares withheld for taxes
|
1,116
|
|
|
5,985
|
|
|
—
|
|
|
—
|
|
|
5,985
|
|
|
||||
Stock-based compensation
|
—
|
|
|
27,673
|
|
|
—
|
|
|
—
|
|
|
27,673
|
|
|
||||
Dividends paid
|
—
|
|
|
—
|
|
|
(65,920
|
)
|
|
—
|
|
|
(65,920
|
)
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,825
|
)
|
|
(40,825
|
)
|
|
||||
Balance, December 31, 2016
|
136,334
|
|
|
12,139
|
|
|
1,832,138
|
|
|
(165,951
|
)
|
|
1,678,326
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings for the year
|
—
|
|
|
—
|
|
|
107,223
|
|
|
—
|
|
|
107,223
|
|
|
||||
Common stock issued pursuant to stock-based compensation plans, net of shares withheld for taxes
|
2,535
|
|
|
47,510
|
|
|
—
|
|
|
—
|
|
|
47,510
|
|
|
||||
Stock-based compensation
|
—
|
|
|
31,513
|
|
|
—
|
|
|
—
|
|
|
31,513
|
|
|
||||
Dividends paid
|
—
|
|
|
—
|
|
|
(82,605
|
)
|
|
—
|
|
|
(82,605
|
)
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
52,591
|
|
|
52,591
|
|
|
||||
Balance, December 31, 2017
|
138,869
|
|
|
91,162
|
|
|
1,856,756
|
|
|
(113,360
|
)
|
|
1,834,558
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Adoption of ASC 606 and ASU 2016-16
(1)
|
—
|
|
|
—
|
|
|
80,280
|
|
|
—
|
|
|
80,280
|
|
|
||||
Net earnings for the year
|
—
|
|
|
—
|
|
|
282,425
|
|
|
—
|
|
|
282,425
|
|
|
||||
Repurchase of common stock
|
(4,986
|
)
|
|
(136,891
|
)
|
|
(106,815
|
)
|
|
—
|
|
|
(243,706
|
)
|
|
||||
Common stock issued pursuant to stock-based compensation plans, net of shares withheld for taxes
|
1,633
|
|
|
12,896
|
|
|
—
|
|
|
—
|
|
|
12,896
|
|
|
||||
Stock-based compensation
|
—
|
|
|
34,188
|
|
|
—
|
|
|
—
|
|
|
34,188
|
|
|
||||
Dividends paid
|
—
|
|
|
—
|
|
|
(88,123
|
)
|
|
—
|
|
|
(88,123
|
)
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,732
|
)
|
|
(35,732
|
)
|
|
||||
Balance, December 31, 2018
|
135,516
|
|
|
$
|
1,355
|
|
|
$
|
2,024,523
|
|
|
$
|
(149,092
|
)
|
|
$
|
1,876,786
|
|
|
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
CASH PROVIDED BY OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
282,425
|
|
|
$
|
107,223
|
|
|
$
|
166,626
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
66,462
|
|
|
71,010
|
|
|
57,513
|
|
|||
Stock-based compensation arrangements
|
34,170
|
|
|
31,018
|
|
|
27,797
|
|
|||
Loss on net assets held for sale
|
—
|
|
|
23,588
|
|
|
—
|
|
|||
Deferred income taxes
|
14,604
|
|
|
25,968
|
|
|
5,613
|
|
|||
Other, net
|
(483
|
)
|
|
(31,256
|
)
|
|
11,992
|
|
|||
Increase (decrease) in cash, net of acquisitions, resulting from changes in:
|
|
|
|
|
|
||||||
Accounts receivable
|
29,057
|
|
|
(7,758
|
)
|
|
(10,704
|
)
|
|||
Inventories
|
17,425
|
|
|
(32,961
|
)
|
|
51,170
|
|
|||
Prepaid expenses
|
(3,427
|
)
|
|
1,217
|
|
|
(7,706
|
)
|
|||
Other assets
|
2,663
|
|
|
12,027
|
|
|
(10,750
|
)
|
|||
Accounts payable
|
(22,449
|
)
|
|
21,558
|
|
|
(33,465
|
)
|
|||
Deferred revenue
|
8,081
|
|
|
(9,220
|
)
|
|
2,928
|
|
|||
Accrued payroll and other liabilities
|
6,599
|
|
|
17,076
|
|
|
(10,147
|
)
|
|||
Accrued income taxes
|
(74,888
|
)
|
|
84,352
|
|
|
66,302
|
|
|||
Pension and other long-term liabilities
|
13,918
|
|
|
(5,590
|
)
|
|
2,582
|
|
|||
Net cash provided by operating activities
|
374,157
|
|
|
308,252
|
|
|
319,751
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Additions to property and equipment
|
(30,773
|
)
|
|
(42,109
|
)
|
|
(35,940
|
)
|
|||
Business acquisitions, net of cash acquired
|
(26,764
|
)
|
|
—
|
|
|
(419,203
|
)
|
|||
Proceeds from sale of assets
|
3,017
|
|
|
3,686
|
|
|
7,331
|
|
|||
Proceeds from sale of business
|
25,920
|
|
|
—
|
|
|
—
|
|
|||
Minority interest investments
|
(15,500
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used by investing activities
|
(44,100
|
)
|
|
(38,423
|
)
|
|
(447,812
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Net proceeds of long-term debt, including current portion
|
—
|
|
|
—
|
|
|
524,560
|
|
|||
Repayment of long-term debt
|
—
|
|
|
(97,500
|
)
|
|
(367,435
|
)
|
|||
Repurchase of common stock
|
(243,706
|
)
|
|
—
|
|
|
(66,057
|
)
|
|||
Dividends paid
|
(88,123
|
)
|
|
(82,605
|
)
|
|
(65,920
|
)
|
|||
Proceeds from shares issued pursuant to stock-based compensation plans
|
29,124
|
|
|
58,241
|
|
|
11,966
|
|
|||
Tax paid for net share exercises and issuance of vested restricted stock units
|
(16,228
|
)
|
|
(10,731
|
)
|
|
(5,991
|
)
|
|||
Other financing activities
|
(11
|
)
|
|
(17
|
)
|
|
13
|
|
|||
Net cash (used) provided by financing activities
|
(318,944
|
)
|
|
(132,612
|
)
|
|
31,136
|
|
|||
Effect of exchange rate changes on cash
|
(18,059
|
)
|
|
20,524
|
|
|
(14,511
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(6,946
|
)
|
|
157,741
|
|
|
(111,436
|
)
|
|||
Cash and cash equivalents, beginning of year
|
519,090
|
|
|
361,349
|
|
|
472,785
|
|
|||
Cash and cash equivalents, end of year
|
$
|
512,144
|
|
|
$
|
519,090
|
|
|
$
|
361,349
|
|
Note 1.
|
Nature of Business and Significant Accounting Policies
|
Note 1.
|
Nature of Business and Significant Accounting Policies - (Continued)
|
Note 1.
|
Nature of Business and Significant Accounting Policies - (Continued)
|
Note 1.
|
Nature of Business and Significant Accounting Policies - (Continued)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator for earnings per share:
|
|
|
|
|
|
||||||
Net earnings for basic and diluted earnings per share
|
$
|
282,425
|
|
|
$
|
107,223
|
|
|
$
|
166,626
|
|
Denominator for earnings per share:
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding
|
137,815
|
|
|
137,456
|
|
|
137,138
|
|
|||
Assumed exercise of stock options and vesting of restricted stock awards, net of shares assumed reacquired under the treasury stock method
|
2,394
|
|
|
2,190
|
|
|
1,359
|
|
|||
Diluted shares outstanding
|
140,209
|
|
|
139,646
|
|
|
138,497
|
|
Note 1.
|
Nature of Business and Significant Accounting Policies - (Continued)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash paid for:
|
|
|
|
|
|
||||||
Interest
|
$
|
14,183
|
|
|
$
|
15,394
|
|
|
$
|
15,815
|
|
Taxes
|
$
|
83,259
|
|
|
$
|
72,340
|
|
|
$
|
32,465
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of goods sold
|
$
|
3,157
|
|
|
$
|
2,665
|
|
|
$
|
3,103
|
|
Research and development
|
6,697
|
|
|
5,068
|
|
|
4,815
|
|
|||
Selling, general and administrative
|
24,316
|
|
|
23,285
|
|
|
19,879
|
|
|||
Stock-based compensation expense before income taxes
|
$
|
34,170
|
|
|
$
|
31,018
|
|
|
$
|
27,797
|
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Capitalized in inventory
|
$
|
1,080
|
|
|
$
|
1,062
|
|
|
$
|
567
|
|
Note 1.
|
Nature of Business and Significant Accounting Policies - (Continued)
|
|
2018
|
|
2017
|
|
2016
|
|||
Stock option awards:
|
|
|
|
|
|
|||
Risk-free interest rate
|
—
|
|
|
1.8
|
%
|
|
0.9
|
%
|
Expected dividend yield
|
—
|
|
|
1.6
|
%
|
|
1.6
|
%
|
Expected term
|
—
|
|
|
6.0 years
|
|
|
4.3 years
|
|
Expected volatility
|
—
|
|
|
26.6
|
%
|
|
25.6
|
%
|
Performance-based restricted stock awards:
|
|
|
|
|
|
|||
Expected dividend yield
|
1.2
|
%
|
|
1.6
|
%
|
|
1.6
|
%
|
Discount for illiquidity
|
—
|
|
|
—
|
|
|
9.9
|
%
|
Market-based restricted stock awards:
|
|
|
|
|
|
|||
Risk-free interest rate
|
—
|
|
|
—
|
|
|
0.9
|
%
|
Expected dividend yield
|
—
|
|
|
—
|
|
|
1.6
|
%
|
Expected term
|
—
|
|
|
—
|
|
|
4.0 years
|
|
Expected volatility
|
—
|
|
|
—
|
|
|
25.8
|
%
|
Expected volatility of S&P 500
|
—
|
|
|
—
|
|
|
25.0
|
%
|
Discount for illiquidity
|
—
|
|
|
—
|
|
|
9.9
|
%
|
Employee stock purchase plan:
|
|
|
|
|
|
|||
Risk-free interest rate
|
2.3
|
%
|
|
1.0
|
%
|
|
0.5
|
%
|
Expected dividend yield
|
1.3
|
%
|
|
1.6
|
%
|
|
1.5
|
%
|
Expected term
|
6 months
|
|
|
6 months
|
|
|
6 months
|
|
Expected volatility
|
26.4
|
%
|
|
20.9
|
%
|
|
27.0
|
%
|
Discount for illiquidity
|
10.5
|
%
|
|
10.5
|
%
|
|
10.5
|
%
|
Note 1.
|
Nature of Business and Significant Accounting Policies - (Continued)
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Stock option awards:
|
|
|
|
|
|
||||||
Weighted average grant date fair value per share
|
—
|
|
|
$
|
8.55
|
|
|
$
|
5.68
|
|
|
Total fair value of awards granted
|
—
|
|
|
$
|
2,824
|
|
|
$
|
4,716
|
|
|
Total fair value of awards vested
|
$
|
2,529
|
|
|
$
|
4,203
|
|
|
$
|
4,407
|
|
Total intrinsic value of options exercised
|
$
|
24,652
|
|
|
$
|
20,631
|
|
|
$
|
6,170
|
|
Restricted stock unit awards:
|
|
|
|
|
|
||||||
Weighted average grant date fair value per share
|
$
|
52.79
|
|
|
$
|
35.90
|
|
|
$
|
28.86
|
|
Total fair value of awards granted
|
$
|
40,675
|
|
|
$
|
37,906
|
|
|
$
|
28,603
|
|
Total fair value of awards vested
|
$
|
48,705
|
|
|
$
|
27,489
|
|
|
$
|
21,130
|
|
Employee stock purchase plan:
|
|
|
|
|
|
||||||
Weighted average grant date fair value per share
|
$
|
10.01
|
|
|
$
|
7.66
|
|
|
$
|
6.33
|
|
Total fair value of shares estimated to be issued
|
$
|
1,330
|
|
|
$
|
1,087
|
|
|
$
|
923
|
|
Note 1.
|
Nature of Business and Significant Accounting Policies - (Continued)
|
|
|
Pension Plans
Items
|
|
Available-For-Sale Items
|
|
Foreign
Currency
Items
|
|
Total
|
||||||||
Balance, December 31, 2017
|
|
$
|
(344
|
)
|
|
$
|
(4
|
)
|
|
$
|
(113,012
|
)
|
|
$
|
(113,360
|
)
|
Other comprehensive income (loss) before reclassifications, net of tax
|
|
(338
|
)
|
|
—
|
|
|
(35,394
|
)
|
|
(35,732
|
)
|
||||
Amounts reclassified from accumulated other comprehensive earnings (loss), net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net current period other comprehensive income (loss), net of tax
|
|
(338
|
)
|
|
—
|
|
|
(35,394
|
)
|
|
(35,732
|
)
|
||||
Balance, December 31, 2018
|
|
$
|
(682
|
)
|
|
$
|
(4
|
)
|
|
$
|
(148,406
|
)
|
|
$
|
(149,092
|
)
|
Note 1.
|
Nature of Business and Significant Accounting Policies - (Continued)
|
|
Balance at December 31, 2017
|
|
Adjustments Due to ASC 606
|
|
Adjustments Due to ASU 2016-16
|
|
Balance at January 1, 2018
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Accounts receivable, net
|
$
|
346,687
|
|
|
$
|
981
|
|
|
$
|
—
|
|
|
$
|
347,668
|
|
Inventories
|
372,183
|
|
|
(524
|
)
|
|
—
|
|
|
371,659
|
|
||||
Deferred income taxes, net
|
21,001
|
|
|
—
|
|
|
74,367
|
|
|
95,368
|
|
||||
Other assets
|
59,869
|
|
|
—
|
|
|
(1,005
|
)
|
|
58,864
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Deferred revenue
|
25,614
|
|
|
(788
|
)
|
|
—
|
|
|
24,826
|
|
||||
Deferred income taxes
|
12,496
|
|
|
290
|
|
|
2,067
|
|
|
14,853
|
|
||||
Pension and other long-term liabilities
|
59,872
|
|
|
—
|
|
|
(8,030
|
)
|
|
51,842
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Shareholders' Equity
|
|
|
|
|
|
|
|
||||||||
Retained earnings
|
1,856,756
|
|
|
955
|
|
|
79,325
|
|
|
1,937,036
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
1,775,686
|
|
|
$
|
1,773,938
|
|
|
$
|
1,748
|
|
Cost of goods sold
|
875,368
|
|
|
874,993
|
|
|
375
|
|
|||
Income tax provision
|
24,678
|
|
|
24,389
|
|
|
289
|
|
|||
Net earnings
|
282,425
|
|
|
281,341
|
|
|
1,084
|
|
|
December 31, 2018
|
||||||||||
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
Balance Sheet
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable, net
|
$
|
323,746
|
|
|
$
|
321,017
|
|
|
$
|
2,729
|
|
Inventories
|
352,107
|
|
|
352,482
|
|
|
(375
|
)
|
|||
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Deferred revenue
|
32,703
|
|
|
32,703
|
|
|
—
|
|
|||
Deferred income taxes
|
22,927
|
|
|
22,348
|
|
|
579
|
|
|||
|
|
|
|
|
|
||||||
Equity
|
|
|
|
|
|
||||||
Retained earnings
|
2,024,523
|
|
|
2,022,748
|
|
|
1,775
|
|
Note 1.
|
Nature of Business and Significant Accounting Policies - (Continued)
|
Note 2.
|
Revenue
|
Note 3.
|
Fair Value of Financial Instruments
|
Level 1 – quoted prices in active markets for identical securities as of the reporting date;
|
Level 2 – other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and observable market prices for identical instruments that are traded in less active markets; and
|
Level 3 – significant inputs that are generally less observable than objective sources, including our own assumptions in determining fair value.
|
Note 3.
|
Fair Value of Financial Instruments - (Continued)
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
European euro
|
$
|
61,452
|
|
|
$
|
34,800
|
|
Canadian dollar
|
19,685
|
|
|
7,426
|
|
||
Brazilian real
|
8,598
|
|
|
7,794
|
|
||
Swedish kroner
|
3,608
|
|
|
59,373
|
|
||
Australian dollar
|
1,131
|
|
|
2,817
|
|
||
British pound sterling
|
609
|
|
|
34,317
|
|
||
Japanese yen
|
405
|
|
|
3,362
|
|
||
Other
|
408
|
|
|
3,095
|
|
||
|
$
|
95,896
|
|
|
$
|
152,984
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Prepaid Expenses and Other Current Assets
|
|
Other Current Liabilities
|
|
Prepaid Expenses and Other Current Assets
|
|
Other Current Liabilities
|
||||||||
Foreign exchange contracts
|
$
|
431
|
|
|
$
|
951
|
|
|
$
|
1,760
|
|
|
$
|
579
|
|
Note 5.
|
Accounts Receivable
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Allowance for doubtful accounts, beginning of year
|
$
|
7,630
|
|
|
$
|
6,457
|
|
|
$
|
6,853
|
|
Charges to costs and expenses
|
879
|
|
|
2,303
|
|
|
1,460
|
|
|||
Write-offs of uncollectible accounts, net of recoveries
|
(3,985
|
)
|
|
(1,505
|
)
|
|
(1,661
|
)
|
|||
Business disposals
|
(593
|
)
|
|
—
|
|
|
—
|
|
|||
Currency translation adjustments
|
353
|
|
|
375
|
|
|
(195
|
)
|
|||
Allowance for doubtful accounts, end of year
|
$
|
4,284
|
|
|
$
|
7,630
|
|
|
$
|
6,457
|
|
Note 6.
|
Inventories
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Raw material and subassemblies
|
$
|
214,164
|
|
|
$
|
210,615
|
|
Work-in-progress
|
43,096
|
|
|
47,400
|
|
||
Finished goods
|
94,847
|
|
|
114,168
|
|
||
|
$
|
352,107
|
|
|
$
|
372,183
|
|
|
Estimated
Useful Life
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||||
Land
|
—
|
|
$
|
21,595
|
|
|
$
|
22,765
|
|
Buildings
|
30 years
|
|
171,406
|
|
|
167,645
|
|
||
Machinery and equipment
|
3 to 7 years
|
|
287,596
|
|
|
275,688
|
|
||
Office equipment and other
|
3 to 10 years
|
|
100,210
|
|
|
104,064
|
|
||
|
|
|
580,807
|
|
|
570,162
|
|
||
Less accumulated depreciation
|
|
|
(333,400
|
)
|
|
(306,166
|
)
|
||
|
|
|
$
|
247,407
|
|
|
$
|
263,996
|
|
Note 8.
|
Goodwill
|
|
January 1,
|
||
|
2018
|
||
Industrial
|
$
|
389,575
|
|
Government and Defense
|
291,229
|
|
|
Commercial
|
229,007
|
|
|
|
$
|
909,811
|
|
Balance, December 31, 2016
|
$
|
801,406
|
|
|
Goodwill from acquisitions
|
96,431
|
|
||
Classification as asset held for sale
|
(13,090
|
)
|
||
Currency translation adjustments
|
25,064
|
|
||
Balance, December 31, 2017
|
909,811
|
|
||
Goodwill from acquisitions
|
9,228
|
|
||
Currency translation adjustments
|
(14,468
|
)
|
||
Balance, December 31, 2018
|
$
|
904,571
|
|
Note 8.
|
Goodwill - (Continued)
|
|
Weighted
Average
Estimated
Useful Life
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||||
Product technology
|
10 years
|
|
$
|
117,563
|
|
|
$
|
123,474
|
|
Customer relationships
|
11 years
|
|
73,260
|
|
|
73,382
|
|
||
Trademarks and trade name portfolios
|
12 years
|
|
7,220
|
|
|
9,606
|
|
||
Trade name portfolio not subject to amortization
|
indefinite
|
|
32,076
|
|
|
32,076
|
|
||
In-process research and development
|
3 years
|
|
6,272
|
|
|
5,602
|
|
||
Other
|
7 years
|
|
1,638
|
|
|
1,929
|
|
||
Acquired identifiable intangibles
|
|
|
238,029
|
|
|
246,069
|
|
||
Less accumulated amortization
|
|
|
(93,154
|
)
|
|
(80,841
|
)
|
||
Net acquired identifiable intangibles
|
|
|
144,875
|
|
|
165,228
|
|
||
Patents
|
7 years
|
|
6,086
|
|
|
6,112
|
|
||
Less accumulated amortization
|
|
|
(4,253
|
)
|
|
(3,399
|
)
|
||
Net patents
|
|
|
1,833
|
|
|
2,713
|
|
||
Acquired in-place leases and other
|
10 years
|
|
446
|
|
|
456
|
|
||
Less accumulated amortization
|
|
|
(309
|
)
|
|
(267
|
)
|
||
Net acquired in-place leases and other
|
|
|
137
|
|
|
189
|
|
||
|
|
|
$
|
146,845
|
|
|
$
|
168,130
|
|
2019
|
$
|
23,918
|
|
2020
|
22,049
|
|
|
2021
|
19,588
|
|
|
2022
|
18,726
|
|
|
2023
|
15,426
|
|
Note 10.
|
Credit Agreement
|
Note 11.
|
Accrued Product Warranties
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Accrued product warranties, beginning of year
|
$
|
18,052
|
|
|
$
|
20,845
|
|
|
$
|
16,514
|
|
Amounts paid for warranty services
|
(17,347
|
)
|
|
(16,764
|
)
|
|
(19,592
|
)
|
|||
Warranty provisions for products sold
|
17,888
|
|
|
14,422
|
|
|
22,928
|
|
|||
Business acquisition
|
8
|
|
|
—
|
|
|
1,215
|
|
|||
Currency translation adjustments and other
|
(18
|
)
|
|
(451
|
)
|
|
(220
|
)
|
|||
Accrued product warranties, end of year
|
$
|
18,583
|
|
|
$
|
18,052
|
|
|
$
|
20,845
|
|
|
|
|
|
|
|
||||||
Current accrued product warranties, end of year
|
$
|
15,204
|
|
|
$
|
15,024
|
|
|
$
|
17,476
|
|
Long-term accrued product warranties, end of year
|
$
|
3,379
|
|
|
$
|
3,028
|
|
|
$
|
3,369
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Unsecured notes
|
$
|
425,000
|
|
|
$
|
425,000
|
|
Unamortized discounts and issuance costs of unsecured notes
|
(3,052
|
)
|
|
(4,316
|
)
|
||
|
$
|
421,948
|
|
|
$
|
420,684
|
|
Note 13.
|
Commitments
|
|
Net
Operating
Leases
|
|
Other
Contractual
Obligations
|
||||
2019
|
$
|
10,561
|
|
|
$
|
1,528
|
|
2020
|
8,270
|
|
|
—
|
|
||
2021
|
7,283
|
|
|
—
|
|
||
2022
|
4,894
|
|
|
—
|
|
||
2023
|
2,934
|
|
|
—
|
|
||
Thereafter
|
5,911
|
|
|
—
|
|
||
Total minimum payments
|
$
|
39,853
|
|
|
$
|
1,528
|
|
Note 14.
|
Contingencies
|
Note 15.
|
Income Taxes
|
Note 15.
|
Income Taxes - (Continued)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Current tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
17,900
|
|
|
$
|
112,673
|
|
|
$
|
36,771
|
|
State
|
5,980
|
|
|
5,035
|
|
|
5,785
|
|
|||
Foreign
|
(16,008
|
)
|
|
19,689
|
|
|
64,109
|
|
|||
|
7,872
|
|
|
137,397
|
|
|
106,665
|
|
|||
Deferred tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
1,273
|
|
|
34,857
|
|
|
1,404
|
|
|||
State
|
235
|
|
|
473
|
|
|
267
|
|
|||
Foreign
|
15,298
|
|
|
(885
|
)
|
|
995
|
|
|||
|
16,806
|
|
|
34,445
|
|
|
2,666
|
|
|||
Total income tax provision
|
$
|
24,678
|
|
|
$
|
171,842
|
|
|
$
|
109,331
|
|
Note 15.
|
Income Taxes - (Continued)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets, non-current
|
100,620
|
|
|
21,001
|
|
||
Deferred tax liabilities, non-current
|
(22,927
|
)
|
|
(12,496
|
)
|
||
Net deferred tax assets
|
$
|
77,693
|
|
|
$
|
8,505
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Accrued liabilities and allowances
|
$
|
19,783
|
|
|
$
|
20,425
|
|
Tax credit and loss carry-forwards
|
30,831
|
|
|
30,979
|
|
||
Stock-based compensation
|
12,461
|
|
|
11,715
|
|
||
Inventory basis differences
|
10,749
|
|
|
8,555
|
|
||
Deferred revenue
|
2,900
|
|
|
2,732
|
|
||
Intangible assets
|
20,882
|
|
|
—
|
|
||
Unremitted earnings of foreign subsidiaries
|
2,121
|
|
|
—
|
|
||
Other assets
|
1,156
|
|
|
2,527
|
|
||
Gross deferred tax assets
|
100,883
|
|
|
76,933
|
|
||
Valuation allowance
|
(3,196
|
)
|
|
(3,392
|
)
|
||
Total deferred tax assets, net
|
97,687
|
|
|
73,541
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
—
|
|
|
(29,117
|
)
|
||
Property and equipment
|
(14,070
|
)
|
|
(16,499
|
)
|
||
Unremitted earnings of foreign subsidiaries
|
—
|
|
|
(15,100
|
)
|
||
Other liabilities
|
(5,924
|
)
|
|
(4,320
|
)
|
||
Total deferred tax liabilities
|
(19,994
|
)
|
|
(65,036
|
)
|
||
Net deferred tax assets
|
$
|
77,693
|
|
|
$
|
8,505
|
|
Note 15.
|
Income Taxes - (Continued)
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Statutory federal tax rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
(Decrease) increase in rates resulting from:
|
|
|
|
|
|
|||
State taxes
|
2.5
|
|
|
1.8
|
|
|
2.3
|
|
Difference between statutory rate and foreign effective rate
|
(0.2
|
)
|
|
(10.7
|
)
|
|
(11.3
|
)
|
Foreign, federal and state income tax credits
|
(1.5
|
)
|
|
(2.0
|
)
|
|
(1.2
|
)
|
European Union state aid matter
|
(10.8
|
)
|
|
0.1
|
|
|
14.4
|
|
United States transition tax
|
(3.4
|
)
|
|
23.8
|
|
|
—
|
|
Tax rate change on deferred items
|
—
|
|
|
5.1
|
|
|
—
|
|
Unremitted earnings of foreign subsidiaries
|
—
|
|
|
5.4
|
|
|
—
|
|
Other
|
0.4
|
|
|
3.1
|
|
|
0.4
|
|
Effective tax rate
|
8.0
|
%
|
|
61.6
|
%
|
|
39.6
|
%
|
Note 15.
|
Income Taxes - (Continued)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of year
|
$
|
77,275
|
|
|
$
|
51,851
|
|
|
$
|
14,967
|
|
Increases related to current year tax positions
|
—
|
|
|
17,264
|
|
|
40,840
|
|
|||
Increases related to prior year tax positions
|
2,229
|
|
|
5,022
|
|
|
456
|
|
|||
Lapse of statute of limitations
|
(1,558
|
)
|
|
(1,260
|
)
|
|
(4,070
|
)
|
|||
Settlements
|
(40,514
|
)
|
|
(986
|
)
|
|
(342
|
)
|
|||
Change due to currency translation
|
(4,227
|
)
|
|
5,384
|
|
|
—
|
|
|||
Balance, end of year
|
$
|
33,205
|
|
|
$
|
77,275
|
|
|
$
|
51,851
|
|
Note 16.
|
Stock-based Compensation
|
|
Shares
(in thousands)
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Outstanding at December 31, 2017
|
3,212
|
|
|
$
|
29.66
|
|
|
5.4
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(959
|
)
|
|
29.47
|
|
|
|
|
|
|||
Forfeited
|
(97
|
)
|
|
31.16
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
2,156
|
|
|
$
|
29.67
|
|
|
4.7
|
|
$
|
29,903
|
|
Exercisable at December 31, 2018
|
1,970
|
|
|
$
|
29.28
|
|
|
4.4
|
|
$
|
28,091
|
|
Vested and expected to vest at December 31, 2018
|
2,147
|
|
|
$
|
29.66
|
|
|
4.7
|
|
$
|
29,812
|
|
|
Shares
(in thousands)
|
|
Weighted
Average Grant
Date Fair Value
|
|||
Outstanding at December 31, 2017
|
2,013
|
|
|
$
|
31.86
|
|
Granted
|
771
|
|
|
52.83
|
|
|
Vested
|
(812
|
)
|
|
31.17
|
|
|
Forfeited
|
(221
|
)
|
|
34.47
|
|
|
Outstanding at December 31, 2018
|
1,751
|
|
|
$
|
40.77
|
|
Note 16.
|
Stock-based Compensation - (Continued)
|
Note 17.
|
Other Employee Benefit Plans
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net earnings (loss)
|
$
|
(338
|
)
|
|
$
|
1,286
|
|
|
$
|
78
|
|
Prior service cost
|
—
|
|
|
(15
|
)
|
|
24
|
|
|||
|
$
|
(338
|
)
|
|
$
|
1,271
|
|
|
$
|
102
|
|
Note 17.
|
Other Employee Benefit Plans - (Continued)
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation at January 1
|
$
|
10,149
|
|
|
$
|
11,419
|
|
Interest costs
|
96
|
|
|
386
|
|
||
Actuarial loss (gain)
|
22
|
|
|
(1,720
|
)
|
||
Benefits paid
|
(6,230
|
)
|
|
(310
|
)
|
||
Foreign currency changes
|
(327
|
)
|
|
374
|
|
||
Benefit obligation at December 31
|
$
|
3,710
|
|
|
$
|
10,149
|
|
Fair value of plan assets at December 31
|
$
|
—
|
|
|
$
|
—
|
|
Unfunded status at December 31
|
$
|
3,710
|
|
|
$
|
10,149
|
|
Amounts recognized in the Consolidated Balance Sheets:
|
|
|
|
||||
Current liabilities
|
$
|
293
|
|
|
$
|
6,262
|
|
Non-current liabilities
|
$
|
3,417
|
|
|
$
|
3,887
|
|
|
Year Ended December 31,
|
||||
|
2018
|
|
2017
|
||
Net periodic benefit cost:
|
|
|
|
||
SERP:
|
|
|
|
||
Discount rate
|
2.75
|
%
|
|
4.00
|
%
|
Rate of increase in compensation levels
|
n/a
|
|
|
3.00
|
%
|
Defined benefit pension plan for employees outside the United States:
|
|
|
|
||
Discount rate
|
1.75
|
%
|
|
2.00
|
%
|
Funded status and projected benefit obligation:
|
|
|
|
||
SERP:
|
|
|
|
||
Discount rate
|
3.40
|
%
|
|
2.75
|
%
|
Rate of increase in compensation levels
|
n/a
|
|
|
n/a
|
|
Defined benefit pension plan for employees outside the United States:
|
|
|
|
||
Discount rate
|
1.75
|
%
|
|
1.75
|
%
|
Note 17.
|
Other Employee Benefit Plans - (Continued)
|
2019
|
$
|
418
|
|
2020
|
412
|
|
|
2021
|
406
|
|
|
2022
|
390
|
|
|
2023
|
386
|
|
|
Five years thereafter
|
1,266
|
|
|
|
$
|
3,278
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest costs
|
96
|
|
|
386
|
|
|
397
|
|
|||
Net amortization and deferral
|
63
|
|
|
235
|
|
|
260
|
|
|||
Settlement gain
|
(608
|
)
|
|
—
|
|
|
—
|
|
|||
Net periodic pension (income) cost
|
$
|
(449
|
)
|
|
$
|
621
|
|
|
$
|
657
|
|
Note 18.
|
Operating Segments and Related Information - (Continued)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue—External Customers:
|
|
|
|
|
|
||||||
Industrial
|
$
|
717,882
|
|
|
$
|
672,120
|
|
|
$
|
552,580
|
|
Government and Defense
|
663,436
|
|
|
629,147
|
|
|
616,777
|
|
|||
Commercial
|
394,368
|
|
|
499,167
|
|
|
492,810
|
|
|||
|
$
|
1,775,686
|
|
|
$
|
1,800,434
|
|
|
$
|
1,662,167
|
|
Revenue—Intersegments:
|
|
|
|
|
|
||||||
Industrial
|
$
|
19,482
|
|
|
$
|
21,747
|
|
|
$
|
19,874
|
|
Government and Defense
|
11,409
|
|
|
11,283
|
|
|
10,344
|
|
|||
Commercial
|
20,056
|
|
|
14,942
|
|
|
17,277
|
|
|||
Eliminations
|
(50,947
|
)
|
|
(47,972
|
)
|
|
(47,495
|
)
|
|||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Segment operating income:
|
|
|
|
|
|
||||||
Industrial
|
$
|
216,880
|
|
|
$
|
199,903
|
|
|
$
|
156,749
|
|
Government and Defense
|
199,702
|
|
|
179,160
|
|
|
176,749
|
|
|||
Commercial
|
57,399
|
|
|
56,066
|
|
|
52,659
|
|
|||
|
$
|
473,981
|
|
|
$
|
435,129
|
|
|
$
|
386,157
|
|
Note 18.
|
Operating Segments and Related Information - (Continued)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Consolidated segment operating income
|
$
|
473,981
|
|
|
$
|
435,129
|
|
|
$
|
386,157
|
|
Unallocated corporate expenses
|
(106,994
|
)
|
|
(87,184
|
)
|
|
(65,012
|
)
|
|||
Amortization of purchased intangible assets
|
(24,524
|
)
|
|
(27,391
|
)
|
|
(18,266
|
)
|
|||
Amortization of acquisition-related inventory step-up
|
—
|
|
|
(1,992
|
)
|
|
(3,230
|
)
|
|||
Restructuring charges
|
(8,203
|
)
|
|
(625
|
)
|
|
(1,431
|
)
|
|||
Loss on sale of business
|
(13,708
|
)
|
|
(23,588
|
)
|
|
—
|
|
|||
Other charges
|
(1,946
|
)
|
|
(4,388
|
)
|
|
(2,500
|
)
|
|||
Consolidated earnings from operations
|
318,606
|
|
|
289,961
|
|
|
295,718
|
|
|||
Interest and non-operating expense, net
|
(11,503
|
)
|
|
(10,896
|
)
|
|
(19,761
|
)
|
|||
Consolidated earnings before income taxes
|
$
|
307,103
|
|
|
$
|
279,065
|
|
|
$
|
275,957
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Operating segment assets:
|
|
|
|
||||
Net accounts receivable, inventories and demonstration assets:
|
|
|
|
||||
Industrial
|
$
|
266,457
|
|
|
$
|
287,439
|
|
Government and Defense
|
307,041
|
|
|
332,044
|
|
||
Commercial
|
137,560
|
|
|
136,941
|
|
||
|
$
|
711,058
|
|
|
$
|
756,424
|
|
Goodwill
(1)
:
|
|
|
|
||||
Industrial
|
391,603
|
|
|
—
|
|
||
Government and Defense
|
284,188
|
|
|
—
|
|
||
Commercial
|
228,780
|
|
|
—
|
|
||
|
$
|
904,571
|
|
|
—
|
|
|
Total operating segment assets
|
$
|
1,615,629
|
|
|
$
|
756,424
|
|
|
|
|
|
||||
Assets not allocated:
|
|
|
|
||||
Cash, cash equivalents and restricted cash
|
$
|
512,144
|
|
|
$
|
519,090
|
|
Assets held for sale, net
|
2,032
|
|
|
67,344
|
|
||
Prepaid expenses and other current assets
|
67,413
|
|
|
44,361
|
|
||
Property and equipment, net
|
247,407
|
|
|
263,996
|
|
||
Deferred income taxes
|
100,620
|
|
|
21,001
|
|
||
Goodwill
(1)
|
—
|
|
|
909,811
|
|
||
Intangible assets, net
|
146,845
|
|
|
168,130
|
|
||
Other assets
|
$
|
89,152
|
|
|
$
|
59,869
|
|
Total assets
|
$
|
2,781,242
|
|
|
$
|
2,810,026
|
|
Note 18.
|
Operating Segments and Related Information - (Continued)
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
|
Industrial
|
|
Government and Defense
|
|
Commercial
|
|
Total
|
|
Industrial
|
|
Government and Defense
|
|
Commercial
|
|
Total
|
||||||||||||||||
United States
|
$
|
364,443
|
|
|
$
|
420,032
|
|
|
$
|
150,052
|
|
|
$
|
934,527
|
|
|
$
|
314,910
|
|
|
$
|
379,356
|
|
|
$
|
262,172
|
|
|
$
|
956,438
|
|
Europe
|
130,901
|
|
|
89,725
|
|
|
156,227
|
|
|
376,853
|
|
|
140,265
|
|
|
92,021
|
|
|
143,188
|
|
|
375,474
|
|
||||||||
Asia
|
159,150
|
|
|
55,160
|
|
|
40,850
|
|
|
255,160
|
|
|
156,201
|
|
|
36,484
|
|
|
34,362
|
|
|
227,047
|
|
||||||||
Middle East/Africa
|
18,089
|
|
|
85,726
|
|
|
27,240
|
|
|
131,055
|
|
|
18,183
|
|
|
87,633
|
|
|
21,980
|
|
|
127,796
|
|
||||||||
Canada/Latin America
|
45,299
|
|
|
12,793
|
|
|
19,999
|
|
|
78,091
|
|
|
42,561
|
|
|
33,653
|
|
|
37,465
|
|
|
113,679
|
|
||||||||
|
$
|
717,882
|
|
|
$
|
663,436
|
|
|
$
|
394,368
|
|
|
$
|
1,775,686
|
|
|
$
|
672,120
|
|
|
$
|
629,147
|
|
|
$
|
499,167
|
|
|
$
|
1,800,434
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
United States government
|
$
|
511,094
|
|
|
$
|
466,304
|
|
|
$
|
416,341
|
|
Note 19.
|
Business Acquisitions and Divestitures
|
Note 19.
|
Business Acquisitions and Divestitures - (Continued)
|
Cash acquired
|
$
|
2,994
|
|
Other tangible assets and liabilities, net
|
35,127
|
|
|
Net deferred taxes
|
(2,438
|
)
|
|
Identifiable intangible assets
|
39,800
|
|
|
Goodwill
|
183,678
|
|
|
Total purchase price
|
$
|
259,161
|
|
|
Estimated
Useful Life |
|
Amount
|
||
Developed technology
|
10.0 years
|
|
$
|
23,100
|
|
Customer relationships
|
7.0 years
|
|
13,200
|
|
|
Backlog
|
1.0 year
|
|
2,300
|
|
|
Non-Competition Agreements
|
5.0 years
|
|
1,000
|
|
|
Other
|
n/a
|
|
200
|
|
|
|
|
|
$
|
39,800
|
|
Note 19.
|
Business Acquisitions and Divestitures - (Continued)
|
Cash acquired
|
$
|
11,706
|
|
Other tangible assets and liabilities, net
|
(900
|
)
|
|
Net deferred taxes
|
(4,250
|
)
|
|
Identifiable intangible assets
|
31,400
|
|
|
Goodwill
|
96,431
|
|
|
Total purchase price
|
$
|
134,387
|
|
|
Estimated
Useful Life |
|
Amount
|
||
Developed technology
|
8 years
|
|
$
|
23,400
|
|
Customer relationships
|
7 years
|
|
3,500
|
|
|
Patents
|
8 years
|
|
3,100
|
|
|
Trade name
|
8 years
|
|
1,400
|
|
|
|
|
|
$
|
31,400
|
|
Note 19.
|
Business Acquisitions and Divestitures - (Continued)
|
Accounts receivable, net
|
$
|
20,414
|
|
Inventories
|
43,050
|
|
|
Other current assets
|
1,031
|
|
|
Property and equipment, net
|
4,888
|
|
|
Intangible assets, net
|
8,359
|
|
|
Goodwill
|
13,090
|
|
|
Loss on net assets held for sale
|
(23,488
|
)
|
|
Assets held for sale, net
|
$
|
67,344
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
39,544
|
|
Liabilities held for sale
|
$
|
39,544
|
|
Note 20.
|
Shareholders’ Equity
|
Note 21.
|
Restructuring Costs
|
Note 22.
|
Subsequent Events
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
FLIR SYSTEMS, INC.
(In thousands, except per share data)
|
|||||||||||||||
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Q1
|
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Q2
|
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Q3
|
|
Q4
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||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
439,618
|
|
|
$
|
452,707
|
|
|
$
|
434,898
|
|
|
$
|
448,463
|
|
Gross profit
|
217,914
|
|
|
232,551
|
|
|
222,074
|
|
|
227,779
|
|
||||
Net earnings
(1)
|
39,195
|
|
|
71,563
|
|
|
73,151
|
|
|
98,516
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
0.28
|
|
|
$
|
0.52
|
|
|
$
|
0.53
|
|
|
$
|
0.72
|
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Diluted earnings per share
|
$
|
0.28
|
|
|
$
|
0.51
|
|
|
$
|
0.52
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
406,814
|
|
|
$
|
434,124
|
|
|
$
|
464,712
|
|
|
$
|
494,784
|
|
Gross profit
|
191,321
|
|
|
206,732
|
|
|
222,891
|
|
|
237,832
|
|
||||
Net earnings (loss)
(2)
|
42,571
|
|
|
51,413
|
|
|
63,529
|
|
|
(50,290
|
)
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
$
|
0.31
|
|
|
$
|
0.38
|
|
|
$
|
0.46
|
|
|
$
|
(0.36
|
)
|
Diluted earnings (loss) per share
|
$
|
0.31
|
|
|
$
|
0.37
|
|
|
$
|
0.46
|
|
|
$
|
(0.36
|
)
|
(1)
|
Net earnings for the fourth quarter of 2018 includes $15.0 million for the costs of a regulatory settlement and a discrete tax benefit of $33.1 million for the cancellation of Belgium tax assessments issued as part of the European Commission's decision regarding state aid.
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(2)
|
Net earnings for the fourth quarter of 2017 includes a discrete tax charge of $94.4 million associated with US Tax Cuts and Jobs Act enacted in December 2017 and a loss on net assets held for sale of $23.6 million.
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ITEM 9.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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ITEM 9A.
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CONTROLS AND PROCEDURES
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ITEM 9B.
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OTHER INFORMATION
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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ITEM 11.
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EXECUTIVE COMPENSATION
|
ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
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ITEM 14.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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Number
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Description
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2.1
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2.2
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3.1
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3.2
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3.3
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4.1
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4.2
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4.3
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4.4
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4.5
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4.6
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10.1
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10.2
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10.3
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10.4
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10.5
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10.6
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10.7
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10.8
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10.9
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10.10
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10.11
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10.12
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10.13
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10.14
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10.15
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10.16
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10.17
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10.18
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10.19
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10.20
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10.21
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10.22
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21.0
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|
23.0
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31.1
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31.2
|
|
32.1
|
32.2
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
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(1)
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This exhibit constitutes a management contract or compensatory plan or arrangement.
|
|
FLIR SYSTEMS, INC.
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||
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(Registrant)
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||
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By:
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/s/ C
AROL
P. L
OWE
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|
|
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Carol P. Lowe
Executive Vice President and Chief Financial Officer
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Signature
|
|
Title
|
/
S
/ J
AMES
J. C
ANNON
|
|
President, Chief Executive Officer and Director
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James J. Cannon
|
|
|
|
|
|
/
S
/ C
AROL
P. L
OWE
|
|
Executive Vice President and Chief Financial Officer
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Carol P. Lowe
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|
(Principal Financial Officer)
|
|
|
|
/
S
/ B
RIAN
E. H
ARDING
|
|
Vice President and Corporate Controller
|
Brian E. Harding
|
|
(Principal Accounting Officer)
|
|
|
|
/
S
/ E
ARL
R. L
EWIS
|
|
Chairman of the Board of Directors
|
Earl R. Lewis
|
|
|
|
|
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/
S
/ J
OHN
D. C
ARTER
|
|
Director
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John D. Carter
|
|
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/
S
/ W
ILLIAM
W. C
ROUCH
|
|
Director
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William W. Crouch
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|
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/
S
/ C
ATHERINE
A. H
ALLIGAN
|
|
Director
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Catherine A. Halligan
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/
S
/ A
NGUS
L. M
ACDONALD
|
|
Director
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Angus L. Macdonald
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|
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|
/
S
/ M
ICHAEL
T. S
MITH
|
|
Director
|
Michael T. Smith
|
|
|
|
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|
/
S
/ C
ATHY
A. S
TAUFFER
|
|
Director
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Cathy A. Stauffer
|
|
|
|
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/s/ R
OBERT
S. T
YRER
|
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Director
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Robert S. Tyrer
|
|
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/
S
/ J
OHN
W. W
OOD
, J
R
.
|
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Director
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John W. Wood, Jr.
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|
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/
S
/ S
TEVEN
E. W
YNNE
|
|
Director
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Steven E. Wynne
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|
|
ARTICLE I ARTICLE IDEFINITIONS AND ACCOUNTING TERMS
|
1
|
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||
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1.01
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Defined Terms
|
1
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|
|
1.02
|
Other Interpretive Provisions
|
7
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|
|
1.03
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Exchange Rates; Currency Equivalents
|
7
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|
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1.04
|
Change of Currency
|
8
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|
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1.05
|
Times of Day
|
8
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|
|
1.06
|
Letter of Credit Amounts
|
8
|
|
ARTICLE II THE LETTER OF CREDIT
|
8
|
|
||
|
2.01
|
The Letter of Credit
|
8
|
|
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2.02
|
Interest
|
12
|
|
|
2.03
|
Computation of Fees; Retroactive Adjustments of Applicable Rate
|
12
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|
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2.04
|
Evidence of Debt
|
13
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|
|
2.05
|
Payments Generally
|
13
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|
|
2.06
|
Termination
|
13
|
|
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY
|
14
|
|
||
|
3.01
|
Taxes
|
14
|
|
|
3.02
|
Increased Cost and Reduced Return; Capital Adequacy
|
14
|
|
|
3.03
|
Matters Applicable to all Requests for Compensation
|
15
|
|
|
3.04
|
Survival
|
15
|
|
ARTICLE IV CONDITIONS PRECEDENT
|
15
|
|
||
|
4.01
|
Conditions of Effectiveness
|
15
|
|
|
4.02
|
Conditions to all Credit Extensions
|
16
|
|
ARTICLE V II REPRESENTATIONS AND WARRANTIES
|
16
|
|
||
|
5.01
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Incorporated Representations and Warranties
|
17
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|
|
5.02
|
Beneficial Ownership Certification
|
17
|
|
|
5.03
|
No Plan Assets
|
18
|
|
ARTICLE VI AFFIRMATIVE COVENANTS
|
18
|
|
||
|
6.01
|
Incorporated Affirmative Covenants
|
18
|
|
|
6.02
|
Use of Proceeds
|
18
|
|
ARTICLE VII NEGATIVE COVENANTS
|
19
|
|
||
|
7.01
|
Incorporated Negative Covenants
|
19
|
|
|
7.02
|
Use of Proceeds
|
20
|
|
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES
|
20
|
|
||
|
8.01
|
Events of Default
|
20
|
|
|
8.02
|
Remedies Upon Event of Default
|
22
|
|
|
8.03
|
Application of Funds
|
22
|
|
ARTICLE IX MISCELLANEOUS
|
22
|
|
||
|
9.01
|
Amendments, Etc
|
22
|
|
|
9.02
|
Notices; Effectiveness; Electronic Communications
|
22
|
|
|
9.03
|
No Waiver; Cumulative Remedies
|
23
|
|
|
9.04
|
Expenses; Indemnity; and Damage Waiver
|
23
|
|
|
9.05
|
Payments Set Aside
|
25
|
|
|
9.06
|
Successors and Assigns
|
25
|
|
|
9.07
|
Treatment of Certain Information; Confidentiality
|
25
|
|
|
9.08
|
Set-off
|
26
|
|
|
9.09
|
Interest Rate Limitation
|
26
|
|
|
9.10
|
Counterparts; Integration; Effectiveness
|
27
|
|
|
9.11
|
Survival of Representations and Warranties
|
27
|
|
|
9.12
|
Severability
|
27
|
|
|
9.13
|
[Reserved]
|
27
|
|
|
9.14
|
Governing Law; Jurisdiction; Etc
|
27
|
|
|
9.15
|
Waiver of Right to Trial by Jury
|
28
|
|
|
9.16
|
No Advisory or Fiduciary Responsibility
|
28
|
|
|
9.17
|
USA PATRIOT Act Notice; Beneficial Ownership Regulation
|
29
|
|
|
9.18
|
Judgment Currency
|
29
|
|
|
9.19
|
Electronic Execution
|
29
|
|
Pricing Tier
|
Consolidated
Total Leverage Ratio |
Letter of Credit Fee
|
1
|
> 2.25 to 1.0
|
1.825%
|
2
|
> 1.75 to 1.0 but
<
2.25 to 1.0
|
1.45%
|
3
|
> 1.25 to 1.0 but
<
1.75 to 1.0
|
1.20%
|
4
|
<
1.25 to 1.0
|
1.10%
|
•
|
FLIR Commercial Systems, Inc., a California, USA Corporation
|
•
|
FLIR Government Systems, Inc., a Delaware, USA Corporation
|
•
|
FLIR Detection, Inc., a Delaware, USA Corporation
|
•
|
FLIR Surveillance, Inc., a Delaware, USA Corporation
|
•
|
FLIR Integrated Imaging Solutions,, a Canadian Corporation
|
•
|
FSI Holdings CV, a Netherlands Corporation
|
•
|
FLIR Systems BV, a Netherlands Corporation
|
•
|
FLIR Systems Holding AB, a Sweden Corporation
|
•
|
FLIR Systems AB, a Sweden Corporation
|
•
|
FLIR Systems Trading Belgium BVBA, a Belgium Corporation
|
•
|
RIHL Ltd., a United Kingdom Corporation
|
•
|
Raymarine UK Ltd., a United Kingdom Corporation
|
1.
|
I have reviewed this annual report on Form 10-K of FLIR Systems, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control of financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date February 27, 2019
|
|
/
S
/ J
AMES
J. C
ANNON
|
|
|
James J. Cannon
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of FLIR Systems, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control of financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date February 27, 2019
|
|
/
S
/ C
AROL
P. L
OWE
|
|
|
Carol P. Lowe
|
|
|
Executive Vice President and Chief Financial Officer
|
Date February 27, 2019
|
|
/
S
/ J
AMES
J. C
ANNON
|
|
|
James J. Cannon
|
|
|
President and Chief Executive Officer
|
Date February 27, 2019
|
|
/
S
/ C
AROL
P. L
OWE
|
|
|
Carol P. Lowe
|
|
|
Chief Financial Officer
|