Financial Performance - Total assets increased to $6,406 million in 2024, up from $5,693 million in 2023, representing a growth of 12.5%[282] - Sales for 2024 reached $5,193 million, a 3.4% increase from $5,021 million in 2023[284] - Gross profit improved to $3,105 million in 2024, compared to $2,901 million in 2023, marking an increase of 7.0%[284] - Net earnings for 2024 were $833 million, slightly down from $839 million in 2023, reflecting a decrease of 0.7%[288] - Research and development expenses rose to $253 million in 2024, up from $225 million in 2023, indicating an increase of 12.4%[284] - Retained earnings significantly increased to $917 million in 2024, compared to $178 million in 2023, showing a growth of 415.7%[290] - Total equity grew to $2,045 million in 2024, up from $1,389 million in 2023, representing a rise of 47.3%[282] - The company reported a comprehensive income of $716 million in 2024, down from $839 million in 2023, a decrease of 14.7%[288] - Long-term debt decreased slightly to $2,599 million in 2024 from $2,629 million in 2023, a reduction of 1.1%[282] - Cash and equivalents increased to $1,101 million in 2024, up from $762 million in 2023, reflecting a growth of 44.5%[282] - Net cash provided by operating activities was $875 million in 2024, down from $963 million in 2023, while cash used in investing activities increased to $434 million from $55 million in 2023[293] - The company reported total revenues of $5.193 billion for the year ended December 31, 2024, a 3.4% increase from $5.021 billion in 2023[354] - Recurring revenue for 2024 was $3.149 billion, while nonrecurring revenue was $2.044 billion[354] Goodwill and Acquisitions - As of December 31, 2024, Veralto's total goodwill was $2.7 billion, with no impairment recorded during the year[276] - The Company acquired TraceGains for approximately $349 million, resulting in $240 million of goodwill recorded[339][340] - In 2024, the Company completed three additional acquisitions for a total consideration of approximately $14 million, recording $3 million of goodwill[341] - Goodwill as of December 31, 2024, amounted to $2.693 billion, an increase from $2.533 billion in 2023[391] Internal Control and Compliance - The company assessed the effectiveness of its internal control over financial reporting as of December 31, 2024, concluding it was effective[255] - The independent auditor issued an unqualified opinion on the effectiveness of Veralto's internal control over financial reporting as of December 31, 2024[260] - The company’s management used the COSO framework for assessing internal control effectiveness[255] - TraceGains, acquired in 2024, represented less than 1% of total consolidated amounts and was excluded from the internal control assessment[256] - The company maintains compliance with various U.S. regulations, including the International Traffic in Arms Regulations and Export Administration Regulations[10] Segment Performance - The company operates through two segments: Water Quality and Product Quality & Innovation, focusing on essential technology solutions for global challenges[295] - Water Quality segment sales increased to $3,138 million in 2024, up 3.3% from $3,039 million in 2023[362] - Product Quality & Innovation segment sales rose to $2,055 million in 2024, a 3.7% increase from $1,982 million in 2023[362] - The total operating profit for the company was $1,208 million in 2024, up 6.0% from $1,140 million in 2023[362] - Operating profit for the Water Quality segment improved to $768 million in 2024, a 5.2% increase from $730 million in 2023[362] Debt and Financing - The Company issued approximately $2.1 billion in senior unsecured notes in September 2023, with maturity dates ranging from 2026 to 2033[401] - The Company entered into a five-year unsecured revolving credit facility with a committed amount of $1.5 billion, with no outstanding amounts as of December 31, 2024[407] - The carrying amount of long-term debt as of December 31, 2024, was $2,599 million, with a fair value of $2,638 million, compared to a carrying amount of $2,629 million and a fair value of $2,710 million in 2023[397] - The Company’s current credit rating as of December 31, 2024, is Baa1/BBB, with a facility fee of 9.0 basis points under the credit facility[408] Tax and Legal Matters - The effective income tax rate for 2024 was 23.3%, slightly lower than 23.4% in 2023[369] - The Company reported a net deferred tax liability of $12 million as of December 31, 2024, down from $73 million in 2023[370] - As of December 31, 2024, unrecognized tax benefits totaled $156 million, up from $97 million in 2023, reflecting a significant increase[375] - The Company recognized approximately $7 million of net tax expense from potential interest and penalties during 2024, compared to a net tax benefit of $1 million in 2023[375] - The company did not believe that ongoing legal proceedings would materially affect its business or financial statements[64] Stock-Based Compensation - The Company recorded a stock-based compensation expense of $65 million in 2024, compared to $55 million in 2023[293] - A total of 22 million shares of Veralto common stock have been authorized for issuance under the Stock Plan, with approximately 14 million shares remaining available as of December 31, 2024[443] - Stock options under the Stock Plan generally vest pro rata over a four to five-year period and terminate 10 years from the grant date[444] - RSUs granted under the Stock Plan vest pro rata over a four to five-year period, with certain senior management receiving performance-based RSUs[445] - PSUs issued under the Stock Plan can vest at 0% to 200% of the target share amount based on performance targets over a three-year period[446] Pension and Retirement Plans - The Company measures its pension and postretirement plans' funded status at the end of the fiscal year, recognizing any changes in funded status in comprehensive income[331] - The projected benefit obligation (PBO) decreased from $171 million in 2023 to $162 million in 2024, reflecting a year-over-year change in benefit plans with PBOs exceeding plan assets[419] - The fair value of plan assets decreased from $135 million in 2023 to $127 million in 2024, indicating a decline in the funded status of the pension plans[427] - The accumulated benefit obligation (ABO) decreased from $157 million in 2023 to $149 million in 2024, also showing a reduction in obligations exceeding plan assets[420] - The net periodic pension cost decreased from $4 million in 2023 to $2 million in 2024, reflecting changes in service and interest costs[422]
Veralto (VLTO) - 2024 Q4 - Annual Report