Ametek Inc.

02/17/2026 | Press release | Distributed by Public on 02/17/2026 12:43

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
This report includes forward-looking statements based on the Company's current assumptions, expectations and projections about future events. When used in this report, the words "believes," "anticipates," "may," "expect," "intend," "estimate," "project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. In this report, the Company discloses important factors that could cause actual results to differ materially from management's expectations. For more information on these and other factors, see "Forward-Looking Information" herein.
The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with "Item 1A. Risk Factors," and the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
Business Overview
The Company benefits from its strategic initiatives under the AMETEK Growth Model's four key strategies: Operational Excellence, Strategic Acquisitions, Global & Market Expansion and New Products. In 2025, the Company posted record sales, operating income, net income, diluted earnings per share, orders, and backlog, as well as strong operating cash flow. Positive market trends, the Company's backlog, contributions from recent acquisitions, and benefits from the continued implementation of the AMETEK Growth Model had a positive impact on 2025 results.
Highlights in 2025 were:
•Net sales for 2025 were a record $7,401.1 million, an increase of $459.9 million or 6.6%, compared with net sales of $6,941.2 million in 2024.
•Net income for 2025 was a record $1,480.1 million, an increase of $104.0 million or 7.6%, compared with $1,376.1 million in 2024.
•Diluted earnings per share for 2025 were a record $6.40, an increase of $0.47 or 7.9%, compared with $5.93 per diluted share in 2024.
•Orders for 2025 were a record $7,579.4 million, an increase of $769.1 million or 11.3%, compared with $6,810.3 million in 2024. The Company's backlog of unfilled orders at December 31, 2025 was a record $3,581.5 million.
•Cash provided by operating activities totaled $1,801.8 million in 2025. Free cash flow (cash flow provided by operating activities less capital expenditures) was $1,671.6 million in 2025.
•During 2025, the Company spent $933.2 million in cash, net of cash acquired, to purchase two businesses:
•In January 2025, AMETEK acquired Kern Microtechnik ("Kern"), a leading manufacturer of high-precision machining and optical inspection solutions.
•In July 2025, AMETEK acquired FARO Technologies ("FARO"), a leading provider of 3D measurement and imaging solutions.
•EBITDA (earnings before interest, income taxes, depreciation, and amortization) was a record $2,296.9 million in 2025, compared with $2,151.7 million in 2024.
•In 2025, the Company repurchased approximately 2.3 million shares of its common stock for $443.0 million, compared with $212.0 million used for repurchases of approximately 1.2 million shares in 2024.
•The Company continued its emphasis on investment in research, development and engineering, spending $382.8 million in 2025. Approximately 27% of sales in 2025 were from products introduced in the past three years.
Recent Trends
During 2025, the United States government announced additional tariffs and trade restrictions on goods imported into the U.S. from various nations. Our businesses have been proactive in addressing the potential impacts of tariffs, including targeted pricing initiatives, strategic adjustments to our global supply chains, and leveraging our worldwide manufacturing footprint to localize production and adapt to changing demand patterns. The recent tariff modifications did not materially impact our results for 2025, however, as the situation continues to evolve, we cannot be certain of the outcome, which could adversely impact demand for our products, costs, inflation, customers, suppliers, and the overall global economy. We continue to monitor and analyze the impacts of the tariffs and will continue to implement appropriate actions as necessary to mitigate their effects.
Results of Operations
The following "Results of Operations of the year ended December 31, 2025 compared with the year ended December 31, 2024" section presents an analysis of the Company's consolidated operating results displayed in the Consolidated Statement of Income. A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission on February 20, 2025.
For the year ended December 31, 2025 , the Company recorded $37.3 million of pre-tax acquisition-related costs related to the FARO acquisition, which are comprised of one-time transactions costs and ongoing integration costs. Acquisition-related integration costs of $25.3 million were recorded in Cost of sales and primarily include employee severance, change in control costs, and fair-value inventory adjustments. One-time acquisition-related transaction costs of $12.0 million were recorded in Other (expense) income, net and primarily include investment banker fees and representation and warranty insurance costs.
Results of Operations for the year ended December 31, 2025 compared with the year ended December 31, 2024
Net sales for 2025 were $7,401.1 million, an increase of $459.9 million or 6.6%, compared with net sales of $6,941.2 million in 2024. The increase in net sales for 2025 was due to a 4% increase from acquisitions, a 2% organic sales increase, as well as a 1% favorable effect of foreign currency translation. EIG net sales were $4,919.1 million in 2025, an increase of 5.6%, compared with $4,659.9 million in 2024. EMG net sales were $2,482.0 million in 2025, an increase of 8.8%, compared with $2,281.3 million in 2024.
Total international sales for 2025 were $3,570.5 million or 48.2% of net sales, an increase of $278.8 million or 8.5%, compared with international sales of $3,291.7 million or 47.4% of net sales in 2024. The increase in international sales was primarily driven by contributions from recent acquisitions and increased demand in all regions. Export shipments from the United States, which are included in total international sales, were $2,041.2 million in 2025, an increase of $160.4 million or 8.5%, compared with $1,880.8 million in 2024.
Orders for 2025 were $7,579.4 million, an increase of $769.1 million or 11.3% compared with $6,810.3 million in 2024. The increase in orders was due to a 4% increase from acquisitions, a 4% organic order increase, as well as a 3% favorable effect of foreign currency translation. The Company's backlog of unfilled orders at December 31, 2025 was a record $3,581.5 million, an increase of $178.3 million or 5.2%, compared with $3,403.2 million at December 31, 2024.
Cost of sales for 2025 was $4,733.7 million or 64.0% of net sales, an increase of $269.0 million or 6.0%, compared with $4,464.7 million or 64.3% of net sales for 2024. The cost of sales increase was primarily due to the net sales increase discussed above.
Segment operating income for 2025 was $2,026.0 million, an increase of $141.1 million or 7.5%, compared with segment operating income of $1,884.9 million in 2024. Segment operating income, as a percentage of net sales, increased to 27.4% in 2025, compared with 27.2% in 2024. Segment operating income and operating margins in 2025 were negatively impacted 60 basis points by the dilutive impact of recent acquisitions and 30 basis points from acquisition-related integration costs. Segment operating income and operating margins in 2024 included $29.2 million of acquisition-related integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 40 basis points. Excluding the dilutive impact of the recent acquisitions, acquisition-related integration costs, and the Paragon acquisition-related integration costs, segment operating margins increased 70 basis points compared to 2024, due to the continued benefits from the Company's Operational Excellence initiatives.
Selling, general and administrative expenses for 2025 were $757.1 million or 10.2% of net sales, an increase of $60.2 million or 8.6%, compared with $696.9 million or 10.0% of net sales in 2024. Selling expenses increased primarily due to the increase in net sales discussed above. General and administrative expenses for 2025 were $115.7 million, compared with $105.3 million in 2024.
Consolidated operating income was $1,910.3 million or 25.8% of net sales for 2025, an increase of $130.7 million or 7.3%, compared with $1,779.6 million or 25.6% of net sales in 2024.
Interest expense was $81.3 million for 2025, a decrease of $31.7 million or 28.1%, compared with $113.0 million in 2024. Higher borrowings under the revolving credit facility related to the December 2023 Paragon acquisition resulted in higher interest expense in 2024.
Other expense, net was $30.7 million for 2025, compared with $5.1 million of other expense in 2024. Other expense increased in 2025 primarily due to $12.0 million of acquisition-related transaction costs and increased environmental spend, compared to 2024.
The effective tax rate for 2025 was 17.7%, compared with 17.2% in 2024. See Note 9 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further details.
Net income for 2025 was $1,480.1 million, an increase of $104.0 million or 7.6%, compared with $1,376.1 million in 2024.
Diluted earnings per share for 2025 were $6.40, an increase of $0.47 or 7.9%, compared with $5.93 per diluted share in 2024.
Segment Results
EIG's net sales totaled a record $4,919.1 million for 2025, an increase of $259.2 million or 5.6%, compared with $4,659.9 million in 2024. The net sales increase was due to a 6% increase from acquisitions and a 1% favorable effect of foreign currency translation, partially offset by a 1% organic sales decrease.
EIG's operating income was a record $1,447.1 million for 2025, an increase of $18.7 million or 1.3%, compared with $1,428.4 million in 2024. EIG's operating margins were 29.4% of net sales for 2025, compared with 30.7% of net sales in 2024. EIG's operating income was negatively impacted 100 basis points by the dilutive impact of recent acquisitions and 50 basis points for acquisition-related integration costs in 2025. Excluding the dilutive impact of recent acquisitions and acquisition-related integration costs, EIG's operating margins increased 20 basis points in 2025 compared to 2024 due to the sales increase discussed above, as well as continued benefits from the Company's Operational Excellence initiatives.
EMG's net sales totaled a record $2,482.0 million for 2025, an increase of $200.7 million or 8.8%, compared with $2,281.3 million in 2024. The net sales increase was due to an 8% organic sales increase and a 1% favorable effect of foreign currency translation.
EMG's operating income was a record $578.9 million for 2025, an increase of $122.4 million or 26.8%, compared with $456.5 million in 2024. EMG's operating margins were 23.3% of net sales for 2025, compared with 20.0% of net sales in 2024. EMG's operating income and operating margins for 2024 included $29.2 million of acquisition-related integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 130 basis points. Excluding the Paragon acquisition-related integration costs, EMG operating margins increased 200 basis points compared to 2024, due to the sales increase discussed above, as well as the continued benefits from the Company's Operational Excellence initiatives.
Liquidity and Capital Resources
Cash provided by operating activities totaled $1,801.8 million in 2025, a decrease of $27.0 million or 1.5%, compared with cash provided by operating activities of $1,828.8 million in 2024. The decrease in cash provided by operating activities for 2025 was primarily due to higher working capital investments, partially offset by higher net income.
Free cash flow (cash flow provided by operating activities less capital expenditures) was $1,671.6 million in 2025, compared with $1,701.7 million in 2024. EBITDA (earnings before interest, income taxes, depreciation and amortization) was $2,296.9 million in 2025, compared with $2,151.7 million in 2024. Free cash flow and EBITDA are presented because the Company is aware that they are measures used by third parties in evaluating the Company. (See "Non-GAAP Financial Measures" for a reconciliation of U.S. GAAP measures to comparable non-GAAP measures).
Cash used by investing activities totaled $1,062.8 million in 2025, compared with cash used by investing activities of $244.8 million in 2024. In 2025, the Company paid $933.2 million, net of cash acquired, to purchase Kern Microtechnik and FARO Technologies, compared to $117.5 million, net of cash acquired, to purchase Virtek Vision International in 2024. Additions to property, plant and equipment totaled $130.2 million in 2025, compared with $127.1 million in 2024.
Cash used by financing activities totaled $686.3 million in 2025, compared with $1,602.5 million of cash used by financing activities in 2024. At December 31, 2025, total debt, net was $2,283.3 million, compared with $2,079.7 million at December 31, 2024. In 2025, total borrowings increased by $6.4 million, compared with a decrease of $1,189.7 million in 2024. At December 31, 2025, the Company had available borrowing capacity of $1,489.2 million under its revolving credit facility, excluding the $700 million accordion feature. At December 31, 2025, the Company had $18.8 million outstanding on the revolver.
On January 6, 2025, the Company established a commercial paper program under which it may issue short-term, unsecured commercial paper notes. Amounts available under the commercial paper program may be borrowed, repaid and re-borrowed, with the aggregate face or principal amount of the notes outstanding under the commercial paper program at any time not to exceed $2.3 billion. The notes have maturities of up to 364 days from the date of issue. At December 31, 2025, the Company had $740.0 million outstanding under its commercial paper program.
In the second quarter of 2025, the Company paid in full, at maturity, a $50.0 million in aggregate principal amount of 3.91% senior notes. In the third quarter of 2025, the Company paid in full, at maturity, a $100.0 million in aggregate principal amount of 3.96% senior notes. In the fourth quarter of 2025, the Company paid in full, at maturity, a $275.0 million in aggregate principal amount of 4.18% senior notes. The debt-to-capital ratio was 17.7% at December 31, 2025 and December 31, 2024. The net debt-to-capital ratio (total debt, net less cash and cash equivalents divided by the sum of net debt and stockholders' equity) was 14.7% at December 31, 2025, compared with 15.0% at December 31, 2024. The net debt-to-capital ratio is presented because the Company is aware that this measure is used by third parties in evaluating the Company. (See "Non-GAAP Financial Measures" for a reconciliation of U.S. GAAP measures to comparable non-GAAP measures).
In 2025, the Company repurchased approximately 2.3 million shares of its common stock for $443.0 million, compared with $212.0 million used for repurchases of approximately 1.2 million shares in 2024. Effective February 7, 2025, the Company's Board of Directors approved a $1.25 billion share repurchase authorization. The new
authorization replaces the previous $1 billion share repurchase authorization approved in May 2022. At December 31, 2025, $807.0 million was available under the Company's Board of Directors authorization for future share repurchases.
Additional financing activities for 2025 included cash dividends paid of $285.3 million, compared with $258.8 million in 2024. Effective February 7, 2025, the Company's Board of Directors approved an 11% increase in the quarterly cash dividend on its common stock to $0.31 per share from $0.28 per share. Proceeds from the exercise of employee stock options were $36.4 million in 2025, compared with $66.9 million in 2024.
As a result of all of the Company's cash flow activities in 2025, cash and cash equivalents at December 31, 2025 totaled $458.0 million, compared with $374.0 million at December 31, 2024. At December 31, 2025, the Company had $374.5 million in cash outside the United States, compared with $361.5 million at December 31, 2024. The Company utilizes this cash to fund its international operations, as well as to acquire international businesses. The Company is in compliance with all covenants, including financial covenants, for all of its debt agreements. The Company believes it has sufficient cash-generating capabilities from domestic and unrestricted foreign sources, available credit facilities and access to long-term capital funds to enable it to meet its operating needs and contractual obligations for the foreseeable future.
Acquisition subsequent to December 31, 2025
In January 2026, the Company acquired LKC Technologies, a leading provider of innovative technology to enable effective diagnosis and management of ophthalmic conditions. LKC Technologies will join EIG.
Subsequent Event
Effective February 12, 2026, the Company's Board of Directors approved a 10% increase in the quarterly cash dividend on its common stock to $0.34 per share from $0.31 per share.
Contractual Obligations and Other Commitments
Material contractual obligations arising in the normal course of business primarily consist of purchase obligations, long-term debt and related interest payments, and leases. See Note 10 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on the nature and timing of debt obligations.
Leases expire over a range of years from 2026 to 2040.Most of the leases contain renewal or purchase options, subject to various terms and conditions. See Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on the nature and timing of lease obligations.
Purchase obligations primarily consist of contractual commitments to purchase certain inventories at fixed prices. At December 31, 2025, the Company had $669.0 million of purchase obligations due within one year and $46.6 million of purchase obligations due in more than one year.
The Company has standby letters of credit and surety bonds of $197.9 million related to performance and payment guarantees at December 31, 2025. Based on experience with these arrangements, the Company believes that any obligations that may arise will not be material to its financial position.
Non-GAAP Financial Measures
EBITDA represents earnings before interest, income taxes, depreciation and amortization. EBITDA is presented because the Company is aware that it is used by rating agencies, securities analysts, investors and other parties in evaluating the Company. It should not be considered, however, as an alternative to operating income as an indicator of the Company's operating performance or as an alternative to cash flows as a measure of the Company's overall liquidity as presented in the Company's consolidated financial statements. Furthermore, EBITDA measures shown for the Company may not be comparable to similarly titled measures used by other companies. The following table presents the reconciliation of net income reported in accordance with U.S. generally accepted accounting principles ("GAAP") to EBITDA:
Year Ended December 31,
2025 2024 2023
(In millions)
Net income $ 1,480.1 $ 1,376.1 $ 1,313.2
Add (deduct):
Interest expense 81.3 113.0 81.8
Interest income (5.5) (5.8) (11.1)
Income taxes 318.2 285.4 293.2
Depreciation 145.5 135.3 122.5
Amortization 277.3 247.7 215.1
Total adjustments 816.8 775.6 701.5
EBITDA $ 2,296.9 $ 2,151.7 $ 2,014.7
Free cash flow represents cash flow from operating activities less capital expenditures. Free cash flow is presented because the Company is aware that it is used by rating agencies, securities analysts, investors and other parties in evaluating the Company. The following table presents the reconciliation of cash flow from operating activities reported in accordance with U.S. GAAP to free cash flow:
Year Ended December 31,
2025 2024 2023
(In millions)
Cash provided by operating activities $ 1,801.8 $ 1,828.8 $ 1,735.3
Deduct: Capital expenditures (130.2) (127.1) (136.2)
Free cash flow $ 1,671.6 $ 1,701.7 $ 1,599.1
Net debt represents total debt, net minus cash and cash equivalents. Net debt is presented because the Company is aware that it is used by rating agencies, securities analysts, investors and other parties in evaluating the Company. The following table presents the reconciliation of total debt, net reported in accordance with U.S. GAAP to net debt:
December 31,
2025 2024
(In millions)
Total debt, net $ 2,283.3 $ 2,079.7
Less: Cash and cash equivalents (458.0) (374.0)
Net debt 1,825.3 1,705.7
Stockholders' equity 10,628.8 9,655.3
Capitalization (net debt plus stockholders' equity) $ 12,454.0 $ 11,361.0
Net debt as a percentage of capitalization 14.7 % 15.0 %
Internal Reinvestment
Capital Expenditures
Capital expenditures were $130.2 million or 1.8% of net sales in 2025, compared with $127.1 million or 1.8% of net sales in 2024. Capital expenditures in 2026 are expected to be approximately 2% of net sales, with a continued emphasis on spending to improve productivity.
Research, Development and Engineering
The Company is committed to, and has consistently invested in, research, development and engineering activities to design and develop new and improved products and solutions. Research, development and engineering costs were $382.8 million in 2025, $371.9 million in 2024 and $351.7 million in 2023. These amounts included research and development expenses of $236.1 million, $236.6 million and $220.8 million in 2025, 2024, and 2023, respectively. All such expenditures were directed toward the development of new products and solutions and the improvement of existing products and solutions.
Environmental Matters
Information with respect to environmental matters is set forth in Note 13 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
Critical accounting policies are those policies that can have a significant impact on the presentation of the Company's financial condition and results of operations and that require the use of complex and subjective estimates based on the Company's historical experience and management's judgment. Because of the uncertainty inherent in such estimates, actual results may differ materially from the estimates used. Below are the policies used in preparing the Company's financial statements that management believes are the most dependent upon the application of estimates and assumptions. A complete list of the Company's significant accounting policies is in Note 1 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
•Business Combinations. The Company allocates the purchase price of an acquired company, including when applicable, the acquisition date fair value of contingent consideration between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Third party appraisal firms and other consultants are engaged to assist management in determining the fair values of certain assets acquired and liabilities assumed. In the absence of a third party appraisal, the Company uses internal valuation estimates based on pertinent data from comparable prior acquisitions. Estimating fair values requires significant judgments, estimates and assumptions, including but not limited to: discount rates, future cash flows and the economic lives of trade names, technology, and customer relationships. These estimates are based on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.
•Goodwill and Other Intangible Assets. Goodwill and other intangible assets with indefinite lives, primarily trademarks and trade names, are not amortized; rather, they are tested for impairment at least annually. The Company performs either a qualitative or quantitative analysis to determine if it is more likely than not that the fair values of its reporting units are less than the respective carrying values of those reporting units.
When testing goodwill for impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not the estimated fair value of a reporting unit is less than its carrying amount. If the Company performs a qualitative assessment and determines that an impairment is more likely than not, then
performance of a quantitative impairment test is required. In conducting a qualitative assessment, the Company analyzes actual and forecasted net sales and selling profit for each reporting unit, as well as historical performance and the results of prior quantitative tests performed. Additionally, the Company assesses critical areas that may impact its business, including macroeconomic conditions, industry and market conditions, cost factors, or any relevant events and factors that may impact projected financial results.
If performed, the quantitative goodwill impairment test uses a discounted cash flow analysis to determine the fair value of each reporting unit, which considers cash flows discounted at an appropriate discount rate. The annual goodwill impairment test requires the Company to make a number of assumptions and estimates concerning future levels of revenue growth, operating margins, depreciation, amortization and working capital requirements, which are based on the Company's long-range plan and are considered level 3 inputs. The discount rate is an estimate of the overall after-tax rate of return required by a market participant whose weighted average cost of capital includes both equity and debt, including a risk premium. While the Company uses the best available information to prepare its cash flow and discount rate assumptions, actual future cash flows or market conditions could differ significantly resulting in future impairment charges related to recorded goodwill balances.
The impairment test for indefinite-lived intangibles other than goodwill (primarily trademarks and trade names) consists of a comparison of the estimated fair value of the indefinite-lived intangible asset to the carrying value of the asset as of the impairment testing date. The Company can elect to perform a qualitative analysis to determine if it is more likely than not that the fair values of its indefinite-lived intangible assets are less than the respective carrying values of those assets. The Company elected to bypass the performing the qualitative screen. The Company may elect to perform the qualitative analysis in future periods. The Company estimates the fair value of its indefinite-lived intangibles using the relief from royalty method using level 3 inputs, which is a widely used valuation technique for such assets. The fair value derived from the relief from royalty method is determined by applying a royalty rate to a projection of net revenues discounted using an appropriate discount rate. Each royalty rate is determined based on the profitability of the trade name to which it relates and observed market royalty rates. Certain impairment models have discount rates calculated based on a debt/equity cost of capital. While the Company uses the best available information to prepare its cash flow and discount rate assumptions, actual future cash flows or market conditions could differ significantly resulting in future impairment charges related to recorded intangible balances. While there are always changes in assumptions to reflect changing business and market conditions, the Company's overall methodology and the population of assumptions used have remained unchanged.
The Company's acquisitions have generally included a significant goodwill component and the Company expects to continue to make acquisitions. At December 31, 2025, goodwill and other indefinite-lived intangible assets totaled $8,274.1 million or 51.5% of the Company's total assets. The Company completed its required annual impairment tests in the fourth quarter of 2025 and determined that the carrying values of the Company's goodwill and indefinite-lived intangibles were not impaired. There can be no assurance that goodwill or indefinite-lived intangibles impairment will not occur in the future.
•Income Taxes. The process of providing for income taxes and determining the related balance sheet accounts requires management to assess uncertainties, make judgments regarding outcomes and utilize estimates. The Company conducts a broad range of operations around the world and is therefore subject to complex tax regulations in numerous international taxing jurisdictions, resulting at times in tax audits, disputes and potential litigation, the outcome of which is uncertain. Management must make judgments currently about such uncertainties and determine estimates of the Company's tax assets and liabilities. To the extent the final outcome differs, future adjustments to the Company's tax assets and liabilities may be necessary.
The Company assesses the realizability of its deferred tax assets, taking into consideration the Company's forecast of future taxable income, available net operating loss carryforwards and available tax planning
strategies that could be implemented to realize the deferred tax assets. Based on this assessment, management must evaluate the need for, and the amount of, valuation allowances against the Company's deferred tax assets. To the extent facts and circumstances change in the future, adjustments to the valuation allowances may be required.
The Company assesses the uncertainty in its tax positions by applying a minimum recognition threshold which a tax position is required to meet before a tax benefit is recognized in the financial statements. Once the minimum threshold is met, using a more likely than not standard, a series of probability estimates is made for each item to properly measure and record a tax benefit. The tax benefit recorded is generally equal to the highest probable outcome that is more than 50% likely to be realized after full disclosure and resolution of a tax examination. The underlying probabilities are determined based on the best available objective evidence such as recent tax audit outcomes, published guidance, external expert opinion, or by analogy to the outcome of similar issues in the past. There can be no assurance that these estimates will ultimately be realized given continuous changes in tax policy, legislation and audit practice. The Company recognizes interest and penalties accrued related to uncertain tax positions in income tax expense.
Recent Accounting Pronouncements
See Note 2, Recent Accounting Pronouncements, to the Company's Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recently issued accounting pronouncements.
Forward-Looking Information
Certain matters discussed in this Form 10-K are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 ("PSLRA"), which involve risk and uncertainties that exist in the Company's operations and business environment and can be affected by inaccurate assumptions, or by known or unknown risks and uncertainties. Many such factors will be important in determining the Company's actual future results. The Company wishes to take advantage of the "safe harbor" provisions of the PSLRA by cautioning readers that numerous important factors in some cases have caused, and in the future could cause, the Company's actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. Some, but not all, of the factors or uncertainties that could cause actual results to differ from present expectations are set forth above and under Item 1A. Risk Factors. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, subsequent events or otherwise, unless required by the securities laws to do so.
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