Mettler-Toledo(MTD) - 2020 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the company's unaudited interim consolidated financial statements and management's discussion and analysis for the period Item 1. Financial Statements This section presents the unaudited interim consolidated financial statements for Mettler-Toledo International Inc., including statements of operations, balance sheets, shareholders' equity, and cash flows, along with detailed notes on accounting policies, revenue, debt, and segment performance for the periods ended September 30, 2020 Interim Consolidated Statements of Operations and Comprehensive Income This section presents the unaudited interim consolidated statements of operations and comprehensive income for the specified periods Three Months Ended September 30, 2020 vs 2019 (in thousands) | Metric | 2020 | 2019 | Change (YoY) | | :-------------------------------- | :--- | :--- | :----------- | | Total Net Sales | $807,357 | $753,866 | +7.1% | | Gross Profit | $469,608 | $435,056 | +8.0% | | Net Earnings | $161,767 | $129,395 | +25.0% | | Basic EPS | $6.76 | $5.28 | +28.0% | | Diluted EPS | $6.68 | $5.20 | +28.5% | Nine Months Ended September 30, 2020 vs 2019 (in thousands) | Metric | 2020 | 2019 | Change (YoY) | | :-------------------------------- | :--- | :--- | :----------- | | Total Net Sales | $2,147,192 | $2,164,684 | -0.8% | | Gross Profit | $1,241,987 | $1,242,913 | -0.1% | | Net Earnings | $386,444 | $368,360 | +4.9% | | Basic EPS | $16.13 | $14.93 | +8.0% | | Diluted EPS | $15.92 | $14.67 | +8.5% | Interim Consolidated Balance Sheets This section presents the unaudited interim consolidated balance sheets as of the specified dates As of September 30, 2020 vs December 31, 2019 (in thousands) | Metric | Sep 30, 2020 | Dec 31, 2019 | Change | | :-------------------------------- | :----------- | :----------- | :------- | | Total Assets | $2,766,536 | $2,789,321 | -0.8% | | Total Liabilities | $2,323,469 | $2,368,541 | -1.9% | | Total Shareholders' Equity | $443,067 | $420,780 | +5.3% | | Cash and Cash Equivalents | $153,686 | $207,785 | -26.0% | | Inventories | $292,329 | $274,285 | +6.6% | Interim Consolidated Statements of Shareholders' Equity This section presents the unaudited interim consolidated statements of shareholders' equity for the specified periods - Shareholders' equity increased from $420,780 thousand at December 31, 2019, to $443,067 thousand at September 30, 2020, driven by net earnings of $386,444 thousand, partially offset by common stock repurchases of $(399,999) thousand[14][16][75] Interim Consolidated Statements of Cash Flows This section presents the unaudited interim consolidated statements of cash flows for the specified periods Nine Months Ended September 30, 2020 vs 2019 (in thousands) | Cash Flow Activity | 2020 | 2019 | Change (YoY) | | :-------------------------------- | :--- | :--- | :----------- | | Net cash provided by operating activities | $473,830 | $401,741 | +18.0% | | Net cash used in investing activities | $(70,045) | $(76,482) | +8.4% | | Net cash used in financing activities | $(457,436) | $(382,164) | -19.7% | | Net decrease in cash and cash equivalents | $(54,099) | $(57,576) | +6.0% | | Cash and cash equivalents, End of period | $153,686 | $120,534 | +27.5% | Notes to the Interim Consolidated Financial Statements This section provides detailed notes to the unaudited interim consolidated financial statements, explaining accounting policies and specific financial items 1. BASIS OF PRESENTATION This section outlines the company's business as a global supplier of precision instruments and services, including weighing instruments, analytical instruments, automated chemistry solutions, and inspection systems. It also states that the interim financial statements are unaudited, prepared in accordance with U.S. GAAP, and reflect management's necessary adjustments, with operating results not necessarily indicative of the full year - Mettler-Toledo International Inc. is a leading global supplier of precision instruments and services, manufacturing weighing instruments, analytical instruments, automated chemistry solutions, and metal detection/end-of-line inspection systems[17] - The interim consolidated financial statements are unaudited, prepared in accordance with U.S. GAAP, and include all wholly-owned subsidiaries[18] - Management's estimates and assumptions are subject to actual results differing due to uncertainties, including the magnitude and duration of the COVID-19 pandemic[20] 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This section details the company's significant accounting policies, including trade accounts receivable, inventory valuation (FIFO, lower of cost or net realizable value), goodwill and other intangible assets (annual impairment review, straight-line amortization), revenue recognition (product control transfer, service completion, contract period), lease accounting (operating leases, right-of-use assets), warranty provisions, employee termination benefits, share-based compensation, research and development expensing, and business combinations. It also lists recent accounting pronouncements - Inventories are valued at the lower of cost or net realizable value, generally using the first-in, first-out (FIFO) method, with adjustments for excess and obsolete items[23] - Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment annually, while other intangible assets are amortized on a straight-line basis[25][26] Amortization Expense (Nine Months Ended September 30, in thousands) | Type | 2020 | 2019 | | :-------------------------- | :--- | :--- | | Other intangible assets | $11,800 | $11,300 | | Capitalized software | $30,000 | $25,400 | - Revenue from products is recognized when a customer obtains control, typically upon shipment. Service revenue is recognized upon completion or ratably over the contract period[30][33] - Share-based compensation expense for the nine months ended September 30, 2020, was $13.2 million, compared to $13.3 million in 2019[40] - The company is evaluating the impact of ASU 2019-12 (Income Taxes) and ASU 2020-04 (Reference Rate Reform), while ASU 2016-13 (Credit Losses) and ASU 2018-15 (Internal-Use Software) had no material impact[44][46][47][48] 3. REVENUE This section disaggregates revenue by product, service, timing of recognition, geography, and product category. It shows an increase in total net sales for the three months ended September 30, 2020, driven by strong growth in China and laboratory-related products, while nine-month sales were slightly down due to COVID-19 impacts Total Net Sales (in thousands) | Period | 2020 (USD) | 2019 (USD) | YoY Change (USD) | YoY Change (Local Currency) | | :-------------------------- | :--------- | :--------- | :--------------- | :-------------------------- | | Three months ended Sep 30 | $807,357 | $753,866 | +7% | +6% | | Nine months ended Sep 30 | $2,147,192 | $2,164,684 | -1% | Flat | Revenue by Geographic Destination (Three Months Ended Sep 30, 2020 vs 2019, in thousands) | Region | 2020 | 2019 | YoY Change (USD) | YoY Change (Local Currency) | | :------------------ | :--- | :--- | :--------------- | :-------------------------- | | Americas | $304,963 | $298,304 | +2% | +3% | | Europe | $232,133 | $212,736 | +9% | +4% | | Asia / Rest of World | $270,261 | $242,826 | +11% | +10% | Revenue by Product Category (Three Months Ended Sep 30, 2020 vs 2019, in thousands) | Category | 2020 | 2019 | YoY Change (USD) | YoY Change (Local Currency) | | :-------------------------- | :--- | :--- | :--------------- | :-------------------------- | | Laboratory (54% of sales) | $430,516 | $388,441 | +11% | +9% | | Industrial (40% of sales) | $322,808 | $315,337 | +2% | +1% | | Retail (6% of sales) | $54,033 | $50,088 | +8% | +5% | - Deferred revenue and customer prepayments increased from $122.5 million at January 1, 2020, to $150.5 million at September 30, 2020[51] 4. FINANCIAL INSTRUMENTS This section describes the company's use of derivative financial instruments, primarily interest rate and cross-currency swap agreements to manage interest rate exposure, and foreign currency forward contracts to hedge short-term intercompany balances. These instruments are not used for trading purposes and are recorded at fair value - The company uses interest rate and cross-currency swap agreements to manage interest rate exposure and foreign currency forward contracts to economically hedge short-term intercompany balances, not for trading purposes[52][59] - Cash flow hedges include cross-currency swaps converting $150 million of borrowings into synthetic Swiss franc debt with fixed interest rates (0.82%, 0.95%, 0.78%) and an interest rate swap fixing $100 million of LIBOR-based borrowings at 2.25%[53][54][55][56] - Foreign currency forward contracts, not designated as hedging instruments, resulted in a net gain of $7.1 million for the three months ended September 30, 2020, and $0.1 million for the nine months ended September 30, 2020[60] 5. FAIR VALUE MEASUREMENTS This section details the fair value measurements of the company's financial instruments, primarily derivatives, which are categorized as Level 2 in the fair value hierarchy. Derivative assets totaled $5.2 million and liabilities $18.7 million as of September 30, 2020 Derivative Assets and Liabilities (in thousands) | Metric | Sep 30, 2020 | Dec 31, 2019 | | :-------------------- | :----------- | :----------- | | Derivative Assets | $5,167 | $1,568 | | Derivative Liabilities | $18,747 | $9,017 | - All assets and liabilities measured at fair value on a recurring basis are categorized as Level 2, based on observable market inputs[64] - The fair value of the company's debt exceeded its carrying value by approximately $52.2 million as of September 30, 2020[66] 6. INCOME TAXES This section reports the company's effective tax rates for the three and nine months ended September 30, 2020 and 2019, noting that the reported rates differ from the projected annual effective tax rate primarily due to the timing of excess tax benefits from stock option exercises Reported Tax Rate | Period | 2020 | 2019 | | :-------------------------- | :--- | :--- | | Three months ended Sep 30 | 21.4% | 23.6% | | Nine months ended Sep 30 | 19.4% | 18.2% | - The projected annual effective tax rate was 20.5% for 2020 and 20.0% for 2019, before non-recurring discrete tax items[67] - The difference between the projected and reported tax rates is primarily due to the timing of excess tax benefits associated with stock option exercises[67] 7. DEBT This section details the company's debt structure, including various Senior Notes and a Credit Agreement, totaling $1.22 billion as of September 30, 2020. It highlights the issuance of new Senior Notes in January 2020 and the designation of Euro-denominated debt as a net investment hedge to mitigate foreign currency risk - Total debt as of September 30, 2020, was $1,224,247 thousand, with long-term debt at $1,169,136 thousand[69] - In January 2020, the company issued $50 million Senior notes with a fixed interest rate of 3.19%, maturing January 24, 2035, to refinance existing indebtedness and for general corporate purposes[70] - Euro-denominated Senior Notes (EUR 125 million and EUR 135 million) are designated as a hedge of a portion of the net investment in euro-denominated foreign subsidiaries to reduce foreign currency risk[71] - An unrealized loss of $11.3 million related to this net investment hedge was recorded in other comprehensive income (loss) for the nine months ended September 30, 2020[71] 8. SHARE REPURCHASE PROGRAM AND TREASURY STOCK This section outlines the company's share repurchase program, with an additional $2.5 billion authorized in November 2020, bringing total availability to $0.9 billion as of September 30, 2020. The company repurchased $400 million worth of shares during the nine months ended September 30, 2020 - In November 2020, the Board of Directors authorized an additional $2.5 billion for the share repurchase program, with $0.9 billion remaining availability as of September 30, 2020[73] Share Repurchases (Nine Months Ended September 30) | Year | Amount Spent | Shares Repurchased | Average Price per Share | | :--- | :----------- | :----------------- | :---------------------- | | 2020 | $400 million | 475,530 | $841.14 | | 2019 | $558.7 million | 794,603 | $703.16 | - Since its inception in 2004, the company has purchased 29.1 million shares through September 30, 2020[74] 9. ACCUMULATED OTHER COMPREHENSIVE INCOME This section presents the components of comprehensive income and changes in accumulated other comprehensive income (AOCI), net of tax. For the nine months ended September 30, 2020, AOCI showed a net change of $(3.6) million, primarily influenced by unrealized losses on cash flow hedging arrangements and foreign currency translation adjustments Comprehensive Income, Net of Tax (Nine Months Ended September 30, in thousands) | Year | Amount | | :--- | :----- | | 2020 | $382,844 | | 2019 | $355,788 | - The net change in other comprehensive income (loss), net of tax, for the nine months ended September 30, 2020, was $(3,600) thousand, primarily due to unrealized losses on cash flow hedging arrangements and foreign currency translation adjustments[75] - The balance of accumulated other comprehensive loss as of September 30, 2020, was $(327,273) thousand[75] 10. EARNINGS PER COMMON SHARE This section provides the common equivalent shares included in the calculation of diluted weighted average common shares outstanding, noting the exclusion of anti-dilutive options and restricted stock units Common Equivalent Shares in Diluted EPS Calculation | Period | 2020 | 2019 | | :-------------------------- | :------- | :------- | | Three months ended Sep 30 | 302,932 | 392,911 | | Nine months ended Sep 30 | 309,044 | 425,627 | - Anti-dilutive outstanding options and restricted stock units were excluded from the diluted EPS calculation: 55,568 shares for Q3 2019, 56,371 shares for YTD 2020, and 64,649 shares for YTD 2019[83] 11. NET PERIODIC PENSION COST This section details the components of net periodic pension cost for the company's defined benefit pension plans and U.S. post-retirement medical plan. For the nine months ended September 30, 2020, total net periodic pension cost was $5.7 million, a decrease from $8.5 million in the prior year Total Net Periodic Pension Cost (Nine Months Ended September 30, in thousands) | Year | Amount | | :--- | :----- | | 2020 | $5,734 | | 2019 | $8,546 | - The company expects to make employer contributions of approximately $25.6 million to its non-U.S. pension plans during the year ended December 31, 2020[85] 12. RESTRUCTURING CHARGES This section reports the restructuring expenses incurred, primarily related to employee costs. For the nine months ended September 30, 2020, restructuring charges were $7.3 million, a decrease from $11.1 million in the prior year - Restructuring charges for the nine months ended September 30, 2020, were $7.3 million, primarily related to employee costs, a decrease from $11.1 million in 2019[87][96] - The accrual for restructuring activities as of September 30, 2020, was $8,019 thousand[87] 13. OTHER CHARGES (INCOME), NET This section details the components of other charges (income), net, which include non-service pension costs (benefits), foreign currency transaction gains/losses, and interest income. Non-service pension benefits significantly increased for both the three and nine months ended September 30, 2020 Non-Service Pension Benefits (in thousands) | Period | 2020 | 2019 | | :-------------------------- | :--- | :--- | | Three months ended Sep 30 | $3,100 | $1,200 | | Nine months ended Sep 30 | $9,000 | $3,500 | Other Charges (Income), Net (Nine Months Ended Sep 30, in thousands) | Year | Amount | | :--- | :------- | | 2020 | $(10,118) | | 2019 | $(4,253) | 14. SEGMENT REPORTING This section provides financial information disaggregated by the company's five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations, and Other. Segment performance is evaluated based on Segment Profit, which is gross profit less R&D and SG&A expenses - The company has five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations, and Other[89] Segment Profit (Nine Months Ended September 30, in thousands) | Segment | 2020 | 2019 | YoY Change | | :-------------------------- | :--- | :--- | :--------- | | U.S. Operations | $163,012 | $146,599 | +11.2% | | Swiss Operations | $164,060 | $156,361 | +4.9% | | Western European Operations | $91,406 | $77,842 | +17.4% | | Chinese Operations | $190,560 | $197,718 | -3.7% | | Other | $47,702 | $45,425 | +5.0% | | Total Segment Profit | $547,899 | $521,797 | +5.0% | Reconciliation of Earnings Before Taxes to Segment Profit (Nine Months Ended September 30, in thousands) | Metric | 2020 | 2019 | | :-------------------------- | :--- | :--- | | Earnings before taxes | $479,563 | $450,251 | | Amortization | $42,008 | $36,877 | | Interest expense | $29,111 | $27,776 | | Restructuring charges | $7,335 | $11,146 | | Other charges (income), net | $(10,118) | $(4,253) | | Segment profit | $547,899 | $521,797 | 15. CONTINGENCIES This section states that the company is involved in various legal proceedings, including environmental matters, but management does not expect them to have a material adverse effect on the company's financial condition, results of operations, or cash flows - The company is party to various legal proceedings, including environmental matters, incidental to the normal course of business[97] - Management does not expect any of these proceedings, individually or in aggregate, to have a material adverse effect on the company's financial condition, results of operations, or cash flows[97] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, condition, and liquidity, highlighting the impact of the COVID-19 pandemic, consolidated and segment-specific operating results, and capital resources for the three and nine months ended September 30, 2020 General This introductory section clarifies that the interim consolidated financial statements are unaudited and prepared under U.S. GAAP, and that operating results for the reported periods are not necessarily indicative of the full year. It also explains the use of local currency information as a non-GAAP measure for assessing business performance - Interim consolidated financial statements are unaudited and prepared in accordance with U.S. GAAP[100] - Operating results for the three and nine months ended September 30, 2020, are not necessarily indicative of the results to be expected for the full year[100] - Local currency information is provided as a non-GAAP financial measure to assess business performance and evaluate results between periods, excluding currency exchange rate fluctuations[101] COVID-19 Impact and Response This section details the significant impact of the COVID-19 pandemic on the company's global operations, including government restrictions, reduced customer demand, and supply chain disruptions. The company prioritized employee safety, maintained operational continuity for essential businesses, and implemented cost containment measures - The COVID-19 pandemic led to widespread government restrictions, impacting global operations and causing reduced customer demand[103] - The company prioritized employee safety, maintained operational continuity for essential businesses (life sciences, food manufacturing, chemicals, food retail, transportation/logistics), and adapted digital sales and service capabilities[104] - Temporary cost containment measures included reduced work hours, salary freezes, and voluntary senior leadership salary reductions[105] - COVID-19 negatively impacted business during the nine months ended September 30, 2020, primarily due to reduced global customer demand, with uncertainties remaining for future quarters[108] Results of Operations – Consolidated This section provides a consolidated overview of the company's financial performance, highlighting net sales, gross profit, and operating expenses. For the three months ended September 30, 2020, net sales increased 7% (6% in local currency), driven by improved customer demand, especially in China and laboratory products. For the nine months, net sales were flat in local currency, impacted by COVID-19. Gross profit percentage improved due to favorable pricing and cost savings - Net sales for the three months ended September 30, 2020, increased 7% in U.S. dollars and 6% in local currencies to $807.4 million, driven by improved customer demand, particularly in China and laboratory-related products[111][112] - Net sales for the nine months ended September 30, 2020, decreased 1% in U.S. dollars and were flat in local currencies, totaling $2.1 billion, negatively impacted by the COVID-19 pandemic[111][112] Gross Profit as a Percentage of Net Sales | Period | 2020 | 2019 | | :-------------------------- | :--- | :--- | | Three months ended Sep 30 | 58.2% | 57.7% | | Nine months ended Sep 30 | 57.8% | 57.4% | - The increase in gross profit percentage reflects favorable price realization, benefits from temporary cost savings measures, and material cost reductions, partially offset by higher transportation costs and unfavorable business mix[122] - Research and development expenses decreased 7% in local currencies for the three months and 9% for the nine months ended September 30, 2020, due to timing of project activity and cost savings[123] - Selling, general and administrative expenses decreased 1% in local currencies for the three months and 3% for the nine months ended September 30, 2020, due to cost savings initiatives[124] Results of Operations – by Operating Segment This section analyzes the financial performance of each of the company's five operating segments. U.S., Swiss, and Western European Operations showed segment profit increases for both three and nine-month periods, driven by cost savings and, for Q3, increased sales volume. Chinese Operations saw strong Q3 sales growth but a nine-month segment profit decline due to earlier sales decreases and unfavorable currency - U.S. Operations saw net sales to external customers increase 4% for Q3 2020 and remain flat for YTD 2020, with segment profit increasing 20% for Q3 and 11% for YTD, driven by cost savings and margin expansion[130][131] - Swiss Operations' net sales to external customers increased 11% in local currency for Q3 2020 but decreased 2% for YTD 2020. Segment profit increased 14% for Q3 and 5% for YTD, benefiting from cost savings and R&D timing[133][134][135] - Western European Operations' net sales to external customers were flat in local currency for Q3 2020 but decreased 4% for YTD 2020. Segment profit increased 24% for Q3 and 17% for YTD, due to cost savings, margin expansion, and R&D timing[137][138] - Chinese Operations experienced strong local currency net sales growth of 15% for Q3 2020, leading to an 11% segment profit increase. However, YTD 2020 segment profit decreased 4% due to earlier sales declines and unfavorable foreign currency translation[139][140][141][142] - Other Operations' net sales to external customers increased 5% in local currency for Q3 2020 and 1% for YTD 2020. Segment profit increased 31% for Q3 and 5% for YTD, reflecting cost savings and higher sales volume in Q3[144][145] Liquidity and Capital Resources This section discusses the company's ability to generate cash and meet its financial obligations. Cash provided by operating activities increased to $473.8 million for the nine months ended September 30, 2020, benefiting from strong cash collections and higher net earnings. The company maintains adequate liquidity with available borrowings and cash balances, and its debt covenants were in compliance - Cash provided by operating activities increased to $473.8 million for the nine months ended September 30, 2020, up from $401.7 million in 2019, driven by favorable working capital and higher net earnings[147] - Capital expenditures for the nine months ended September 30, 2020, were $57.4 million, down from $71.6 million in 2019[148] - As of September 30, 2020, the company had $700.7 million of additional borrowings available under its Credit Agreement and $153.7 million in cash and cash equivalents, and was in compliance with its debt covenants[149] - The Board of Directors authorized an additional $2.5 billion for the share repurchase program in November 2020, with $0.9 billion remaining availability as of September 30, 2020[153] - A 1% strengthening of the Swiss franc against the euro is estimated to reduce earnings before tax by approximately $1.6 million to $1.8 million annually[156] - A 1% weakening of the Chinese renminbi against the U.S. dollar is estimated to reduce earnings before tax by approximately $1.8 million to $2.0 million annually[157] Forward-Looking Statements Disclaimer This section advises against relying on forward-looking statements to predict actual results due to various risks and uncertainties, including the COVID-19 pandemic. It lists examples of forward-looking topics and emphasizes that actual results may differ materially - Investors should not rely on forward-looking statements to predict actual results, as actual performance may differ materially due to various risks and uncertainties, including the COVID-19 pandemic[160] - Forward-looking statements cover topics such as earnings and sales growth, strategic plans, market conditions, customer demand, supply chain, gross margins, capital expenditures, cash flow, tax matters, foreign currencies, acquisitions, and the impact of COVID-19[160] - The company does not intend to update or revise forward-looking statements in light of actual results[161] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there were no material changes in market risk disclosures from the company's Annual Report on Form 10-K for the year ended December 31, 2019, as of September 30, 2020 - As of September 30, 2020, there were no material changes in the information provided under Item 7A in the Company's Annual Report on Form 10-K for the year ended December 31, 2019[162] Item 4. Controls and Procedures This section confirms that management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of September 30, 2020, and concluded they were effective. No material changes in internal control over financial reporting occurred during the quarter - Management, including the Chief Executive Officer and Chief Financial Officer, evaluated and concluded that disclosure controls and procedures were effective as of September 30, 2020[163] - There were no changes in internal control over financial reporting during the quarter ended September 30, 2020, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[163] PART II. OTHER INFORMATION This section includes legal proceedings, risk factors, equity security sales, and other required disclosures Item 1. Legal Proceedings. This section states that there are no legal proceedings to report - No legal proceedings to report for the three and nine months ended September 30, 2020[166] Item 1A. Risk Factors. This section updates the risk factors, primarily focusing on the ongoing and potential negative impacts of the COVID-19 pandemic on the company's workforce, supply chain, customer demand, and overall global economy. It emphasizes the uncertainties regarding the extent and duration of these effects - The COVID-19 outbreak has negatively affected and will likely continue to affect various aspects of the business, including workforce, supply chain, and customer demand, making it more difficult and expensive to meet obligations[167] - The pandemic is expected to negatively affect the global economy and customer businesses, potentially resulting in delayed or reduced purchases and difficulties in meeting payment obligations[169] - During the nine months ended September 30, 2020, COVID-19 had a negative impact primarily related to reduced global customer demand, with uncertainties remaining about future sales volume and potential material effects on the business[170] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. This section provides details on the company's share repurchase activities. In November 2020, an additional $2.5 billion was authorized for the share repurchase program, which had $0.9 billion remaining as of September 30, 2020. The company repurchased $400 million worth of shares during the nine months ended September 30, 2020 - In November 2020, the Board of Directors authorized an additional $2.5 billion for the share repurchase program, which had $0.9 billion of remaining availability as of September 30, 2020[171] Issuer Purchases of Equity Securities (July 1 to September 30, 2020) | Period | Total Number of Shares Purchased | Average Price per Share | | :------------------------ | :----------------------------- | :---------------------- | | July 1 to July 31, 2020 | — | — | | August 1 to August 31, 2020 | 104,644 | $955.37 | | September 1 to September 30, 2020 | 102,725 | $973.69 | | Total | 207,369 | $964.44 | - During the nine months ended September 30, 2020, the company spent $400 million to repurchase 475,530 shares at an average price of $841.14 per share[172] Item 3. Defaults upon Senior Securities. This section states that there are no defaults upon senior securities to report - No defaults upon senior securities to report[172] Item 5. Other Information. This section states that there is no other information to report - No other information to report[172] Item 6. Exhibits. This section lists the exhibits filed with the Form 10-Q, including certifications from the CEO and CFO, XBRL instance documents, and taxonomy extension documents - Exhibits include certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002, along with various XBRL documents[175] SIGNATURE This section contains the signature of the Chief Financial Officer, certifying the report's submission - The report was signed on November 6, 2020, by Shawn P. Vadala, Chief Financial Officer[177]