Avantor, Inc. (AVTR) 2024年年度報告「NYSE」.pdf

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1、ANNUAL REPORT2024We serve customers in 180 countries across three end markets:Avantor2024performance snapshotFULL YEARLaboratory Solutions$4,610MReported revenue$6.78BReported revenue$2,174MBioscience ProductionReported revenue$1,1991MAdjusted EBITDA$7682MFree cash flow1.See Reconciliations of non-G

2、AAP measures in our Annual Report on Form 10-K for a reconciliation of this non-GAAP measure.2.See Liquidity and capital resources-Historical cash flows in our Annual Report on Form 10-K for a reconciliation of this non-GAAP measure.3.Based on management estimates.4.Based on FY 2024 results.5.Top bi

3、ologics in 2024 based on estimated revenue.6.Anticipated top biologics in 2030 based on estimated revenue.Biopharma&HealthcareEducation&GovernmentAdvanced Technologies&Applied MSupporting every step of the scientific journey#1supplier of high-puritysilicone for medicalimplants#1global partner for

4、laboratoryconsumablesSpecified into90%ofexpected 2030 top 50biologics6#1global materialsprovider inbioprocessing60%revenue frombiopharma andhealthcare endmarkets485%recurring revenuefrom materials,consumables andservices4Global scale serving300,000labs in 180 countriesSpecified into85%of top20 co

5、mmercializedbiologics590%self-manufacturedproduction contentspecified intocustomers productsor processes$85Btotal addressablemarket3Our global network acceleratesinnovation at MICHAEL STUBBLEFIELDPresident and Chief Executive OfficerA message toour stockholdersTo our stockholders,customers and colle

6、agues:Thank you for your continued support of Avantor.Together,we are setting science in motion and driving innovation acrossthe life sciences and advanced technologies industries.Our roleis to empower progress,which we do every day in laboratoriesand production facilities across the globe.We are pr

7、ivileged topartner with the innovators,pioneers and disruptors workingtirelessly to create a better world.Avantors Business Model and Pivotal AchievementsIn 2024,we made significant progress towards fundamentallytransforming our company,enabling us to deliver even morevalue to the scientific communi

8、ty and to our stockholders.Westarted by implementing a new operating model to better alignour business with the structure and needs of our customers:Laboratory Solutions segment comprises approximatelytwo-thirds of our revenue and provides a comprehensiveset of products and services to scientists an

9、d techniciansin biopharma research,the academic environment andvarious diagnostic labs.We offer anything a scientist needsto perform precise and complex analytics in the lab includingvarious consumables,chemicals and reagents,glassware,plasticware and a host of equipment and instruments.High-value s

10、ervices and digital solutions are also key to ourportfolio.They optimize end-to-end operations and helpbuild the lab of the future.Today,we are the first or secondsupplier of choice in each lab solutions end market we serve.Our Bioscience Production segment leverages our deepmaterials science capabi

11、lities to customize ultra-high-purity materials suitable for our customers highly regulatedproduction platforms.This segment includes bioprocessing,custom formulations for medical implant applications andadvanced technology solutions.While biosciences compriseone-third of our revenue,it accounts for

12、 roughly half of ourprofitability.Together,our two business segments enable Avantor toseamlessly support customers across the entire research anddevelopment(R&D)continuum from lab to production.A key component of our value proposition is our ability to leverageunparalleled access in the lab to seed

13、custom proprietary materialsin our customers production environments.Our materials are thenspecified into our customers workflows,creating durable revenue andcash flow streams over time.In conjunction with the launch of Avantors new operating model,we announced a program to generate$300 million of r

14、un rate costsavings by the end of 2026,with a goal of$75 million in 2024.We arepleased to have significantly outperformed that target this year withan exit run rate of$165 million.These cost savings helped to drivemargin expansion and led to best-in-class free cash flow conversionof over 110%in fisc

15、al year 2024.In 2024,we also invested in building our capabilities to support ourgrowth strategy:We opened a new and expanded Innovation Center inBridgewater,N.J.,which serves as our corporate R&D headquarterscommitted to optimizing innovative biomanufacturing processes atscale.It is one of 14 innov

16、ation centers across the globe,all focusedon helping our customers deliver breakthrough discoveries tomarket faster and more efficiently.We completed a series of manufacturing and distribution centerexpansions and upgrades,including the largest manufacturinginvestment weve ever made to ensure we are

17、 prepared to meetincreased bioprocessing demand.The investments in automationand robotics will further enhance the operational flexibilityand agility of our distribution centers and strengthen oursustainability efforts.We launched our first Central Services Hub in the Bostonarea,designed to automate

18、 operational tasks for local biotechand biopharma companies and provide virtual assistance toresearchers at their lab bench.We accelerated innovation in digital capabilities across ourplatform.For example,we leveraged cutting-edge digitaltools and generative AI to launch a new service automatingoper

19、ational tasks and providing virtual assistance to researchersat their lab bench,alleviating capacity challenges faced by largepharma and biotech Finally,we made significant progress on our capital deploymentstrategy in 2024.Over the past two years,we have paid down over$2 billion in debt.This year,w

20、e took our net leverage to 3.2 timesadjusted EBITDA,down from approximately 4.0 times at the start ofthe year.We are well on our way to achieving our target net leverageof below 3.0 times adjusted EBITDA.Looking AheadIn 2025,we are confident in our ability to enhance organic growth.We serve attracti

21、ve end markets with the majority of our revenuescoming from biopharma and healthcare industries that haveproven their ability to deliver strong organic growth over time.In Lab Solutions,our growth strategy is focused on enhancingthe customer experience.We benefit from unique competitivedifferentiato

22、rs that customers increasingly value:deep partnershipsto understand their workflows,an extensive product and servicesportfolio and a global footprint with an efficient supply chain.We are dedicated to strengthening our market position by drivinginnovation in our R&D centers and cultivating strategic

23、 partnershipsto provide scientists with the products and services they need,anytime and anywhere.We view digital offerings as another key growth lever in the lab andwere continuing to strategically invest here,including by launching anew,more personalized e-commerce platform with dynamic searchcapab

24、ilities and unparalleled customer insights.In Bioscience Production,we are bringing innovative,integratedsolutions and systems to our customers to help address their mostpressing needs.We have prioritized robust penetration in excitingnew modalities,with particular strength in monoclonal antibodies,

25、biosimilars,antibody-drug conjugates and cell and gene therapy.Customer activity in that space is growing,driven by the promise ofemerging therapies.We are also actively progressing hundreds of innovation projects withcustomers in the medical implant space.Customers recognize ourability to offer tru

26、ly unique,ultra-high-purity formulations that aresafe for prolonged use inside the body.We continue to innovate toextend our competitive advantages in this area.In 2025,the pace of innovation continues to increase,as does theopportunity for us to help customers solve their most complexchallenges.Whe

27、ther in the lab or the production environment,weremain intently focused on setting science in motion to create a betterworld.I cant think of a more noble or important mission.On behalf of our 13,500 associates across the globe,thank you againfor your support of AForward-Looking StatementsSee“Caution

28、ary factors regarding forward-looking statements”and“Item 1A:Risk Factors”in the enclosed annual report on Form 10-K for a discussion of risksand uncertainties relating to the forward-looking statements contained herein.Such statements speak only as of the date of this Annual Report and,exceptto the

29、 extent required by applicable law,the Company does not assume anyobligation to update or revise any forward-looking statement,whether as aresult of new information,future events or otherwise.Non-GAAP Financial MeasuresAs appropriate,we supplement our results of operations determined inaccordance wi

30、th U.S.generally accepted accounting principles(“GAAP”)withcertain non-GAAP financial measurements that are used by management,and which we believe are useful to investors,as supplemental operationalmeasurements to evaluate our financial performance.These measurements should not be considered in iso

31、lation or as a substitutefor reported GAAP results because they may include or exclude certain itemsas compared to similar GAAP-based measurements,and such measurementsmay not be comparable to similarly titled measurements reported by othercompanies.Rather,these measurements should be considered as

32、an additionalway of viewing aspects of our operations that provide a more completeunderstanding of our business.We strongly encourage investors to review ourconsolidated financial statements in their entirety and not rely solely on anyone,single financial THIS PAGE INTENTIONALLY LEFT BLANKForm 10-KU

33、NITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGEACT OF 1934For the fiscal year ended December 31,2024TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934For the transi

34、tion period from _ to _Commission file number:001-38912Avantor,Inc.(Exact name of registrant as specified in its charter)Delaware82-2758923(State or other jurisdiction ofincorporation or organization)(I.R.S.employer identification no.)Radnor Corporate Center,Building One,Suite 200100 Matsonford Road

35、Radnor,Pennsylvania 19087(Address of principal executive offices)(zip code)610 386-1700(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading symbolExchange on which registeredCommon stock,$0.01 par valueAVTRNew York Sto

36、ck ExchangeSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of theSecurities Act.Yes NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Secti

37、on15(d)of the Act.Yes NoIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter periodthat the registrant was required to file such reports),and(2)has bee

38、n subject to such filing requirementsfor the past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data Filerequired to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during thepreceding 12 months(or for such shor

39、ter period that the registrant was required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“a

40、ccelerated filer,”“smaller reporting company,”and“emerging growthcompany”in Rule 12b-2 of the Exchange Act.Large Accelerated Filer Accelerated Filer Non-accelerated Filer Smaller reporting company Emerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elect

41、ed not to use theextended transition period for complying with any new or revised financial accounting standards providedpursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managementsassessment of the effectiveness

42、of its internal control over financial reporting under Section 404(b)of theSarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issuedits audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether thefinancial

43、statements of the registrant included in the filing reflect the correction of an error to previouslyissued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recoveryanalysis of incentive-based compensation received by any of the regis

44、trants executive officers during therelevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of theExchange Act).Yes NoThe aggregate market value of common stock held by our non-affiliates as of the last business day

45、of theregistrants most recently completed second fiscal quarter was$14,407,779,658.On February 3,2025,680,902,572 shares of common stock,$0.01 par value per share,were outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of our definitive proxy statement for our 2025 annual meeting of stockholder

46、s will be filed withthe SEC on or before 120 days after our 2024 fiscal year-end and are incorporated by reference into PartIII of this report.THIS PAGE INTENTIONALLY LEFT BLANKAvantor,Inc.and subsidiariesForm 10-K for the fiscal year ended December 31,2024Table of contentsPageGlossary.iiCautionary

47、factors regarding forward-looking statements.ivPART IItem 1.Business.1Item 1A.Risk factors.9Item 1B.Unresolved staff comments.24Item 1C.Cybersecurity24Item 2.Properties.25Item 3.Legal proceedings.25Item 4.Mine safety disclosures.26Information about our executive officers27PART IIItem 5.Market for re

48、gistrants common equity,related stockholder matters and issuerpurchases of equity securities.28Item 6.Reserved.30Item 7.Managements discussion and analysis of financial condition and results of operations30Item 7A.Quantitative and qualitative disclosures about market risk.47Item 8.Financial statemen

49、ts and supplementary data.48Item 9.Changes in and disagreements with accountants on accounting and financialdisclosure.48Item 9A.Controls and procedures.48Item 9B.Other information.50Item 9C.Disclosure regarding foreign jurisdictions that prevent inspections.50PART IIIItem 10.Directors,executive off

50、icers and corporate governance.51Item 11.Executive compensation.51Item 12.Security ownership of certain beneficial owners and management and relatedstockholder matters.51Item 13.Certain relationships and related transactions,and director independence.51Item 14.Principal accountant fees and services.

51、51PART IVItem 15.Exhibits and financial statement schedules.51Item 16.Form 10-K summary.57iGlossarythe Company,we,us,our.Avantor,Inc.and its subsidiaries.2019 Plan.the Avantor,Inc.2019 Equity Incentive Plan,a stock-based compensationplan.Adjusted EBITDA.our earnings or loss before interest,taxes,dep

52、reciation,amortization andcertain other adjustments.Adjusted OperatingIncome.our earnings or loss before interest,taxes,amortization and certain otheradjustments.AI.artificial intelligence.AMEA.Asia,Middle-East and Africa.AOCI.accumulated other comprehensive income or loss.ASC.Accounting Standards C

53、odification.BIS.the Bureau of Industry and Security.CERCLA.the Comprehensive Environmental Response Compensation and LiabilityAct.cGMP.Current Good Manufacturing Practice.CODM.chief operating decision maker.COVID-19.Coronavirus disease of 2019.DDTC.Directorate of Defense Trade controls.DEA.Drug Enfo

54、rcement Administration.DHHS.Department of Health and Human Service.EMA.European Medicines Agency.EPA.the U.S.Environmental Protection Agency.ERP.enterprise resource planning.EU.European Union.EURIBOR.the basic rate of interest used in lending between banks on the EuropeanUnion interbank market.FASB.

55、the Financial Accounting Standards Board of the United States.FCPA.the United States Foreign Corrupt Practices Act.FDA.United States Food and Drug Administration.GAAP.United States generally accepted accounting principles.GDPR.the General Data Protection Regulation.DescriptioniiICH Q7.the Internatio

56、nal Council for Harmonisation of Technical Requirements forPharmaceuticals for Human Use-Good Manufacturing PracticeGuidance for Active Pharmaceutical Ingredients.IPO.initial public offering.ISO.International Organization for Standardization or international equivalents.ITAR.the International Traffi

57、c In Arms Regulations.LIBOR.the basic rate of interest used in lending between banks on the Londoninterbank market.Long-Term.period other than Short Term.Masterflex.Masterflex LLC,a company we acquired in November 2021.MCPS.6.250%Series A Mandatory Convertible Preferred Stock.NAV.Net Asset Value.NuS

58、il.NuSil Acquisition Corp,NuSil Investments LLC and subsidiaries,abusiness organization with which we merged in 2016.NYSE.the New York Stock Exchange.OCI.other comprehensive income or loss.OEM.original engineering manufacturers.OFAC.the U.S.Department of The Treasurys Office of Foreign Assets Contro

59、l.OSHA.the U.S.Occupational Safety&Health Administration.Ritter.Ritter GmbH and affiliates,a company we acquired in June 2021.RSU.restricted stock units represent awards that will vest annually and awardsmay contain performance and market conditions.SEC.the United States Securities and Exchange Comm

60、ission.SG&A expenses.selling,general and administrative expenses.Short Term.period less than a year from the reporting date.SKU.stock keeping unit.SOFR.secured overnight financing rate.specialty procurement.product sales related to customer procurement services.VWR.VWR Corporation and its subsidiari

61、es,a company we acquired inNovember 2017.DescriptioniiiCautionary factors regarding forward-looking statementsThis report contains forward-looking statements within the meaning of Section 27A of the Securities Actof 1933 and Section 21E of the Securities Exchange Act of 1934,and are subject to the s

62、afe harborcreated thereby under the Private Securities Litigation Reform Act of 1995.All statements other thanstatements of historical fact included in this report are forward-looking statements.Forward-lookingstatements discuss our current expectations and projections relating to our financial cond

63、ition,results ofoperations,plans,including our cost transformation initiative,objectives,future performance andbusiness.These statements may be preceded by,followed by or include the words“aim,”“anticipate,”“assumption,”“believe,”“continue,”“estimate,”“expect,”“forecast,”“goal,”“guidance,”“intend,”“

64、likely,”“long-term,”“near-term,”“objective,”“opportunity,”“outlook,”“plan,”“potential,”“project,”“projection,”“prospects,”“seek,”“target,”“trend,”“can,”“could,”“may,”“should,”“would,”“will,”thenegatives thereof and other words and terms of similar meaning.Forward-looking statements are inherently su

65、bject to risks,uncertainties and assumptions;they are notguarantees of performance.You should not place undue reliance on these statements.We have basedthese forward-looking statements on our current expectations and projections about future events.Although we believe that our assumptions made in co

66、nnection with the forward-looking statements arereasonable,we cannot assure you that the assumptions and expectations will prove to be correct.You should understand that the following important factors,in addition to those discussed under Part I,Item 1A,“Risk factors”and Item 7,“Managements discussi

67、on and analysis of financial condition andresults of operations”could affect our future results and could cause those results or other outcomes todiffer materially from those expressed or implied in our forward-looking statements:disruptions to our operations;competition from other industry provider

68、s;our ability to implement our strategies for improving growth and optimizing costs;our ability to anticipate and respond to changing industry trends;adverse trends in consumer,business,and government spending;our dependence on sole or limited sources for some essential materials and components;our

69、ability to successfully value and integrate acquired businesses;our products satisfaction of applicable quality criteria,specifications and performance standards;our ability to maintain our relationships with key customers;our ability to maintain our relationships with distributors;our ability to ma

70、intain our customer base and our expected volume of customer orders;our ability to maintain and develop relationships with drug manufacturers and contractmanufacturing organizations;the impact of new laws,regulations,or other industry standards;ivchanges in the interest rate environment that increas

71、e interest on our borrowings;adverse impacts from currency exchange rates or currency controls imposed by any governmentin major areas where we operate or otherwise;our ability to implement and improve processing systems and prevent a compromise of ourinformation systems or personal data;our ability

72、 to protect our intellectual property and avoid third-party infringement claims;exposure to product liability and other claims in the ordinary course of business;our ability to develop new products responsive to the markets we serve;supply chain constraints and the availability of raw materials;our

73、ability to source certain of our products from certain suppliers;our ability to contain costs in an inflationary environment;our ability to avoid negative outcomes related to the use of chemicals;our ability to maintain highly skilled employees;our ability to maintain a competitive workforce;adverse

74、 impact of impairment charges on our goodwill and other intangible assets;currency fluctuations and uncertainties related to doing business outside the United States;our ability to obtain and maintain required regulatory clearances or approvals,which mayconstrain the commercialization of submitted p

75、roducts;our ability to comply with environmental,health and safety laws and regulations,or the impact ofany liability or obligation imposed under such laws or regulations;our indebtedness,which could adversely affect our financial condition or prevent us fromfulfilling our debt or contractual obliga

76、tions;our ability to generate sufficient cash flows or access sufficient additional capital to meet our debtobligations or to fund our other liquidity needs;andour ability to maintain an effective system of internal control over financial reporting.All forward-looking statements attributable to us o

77、r persons acting on our behalf are expressly qualified intheir entirety by the foregoing cautionary statements.In addition,all forward-looking statements speakonly as of the date of this report.We undertake no obligations to update or revise publicly any forward-looking statements,whether as a resul

78、t of new information,future events or otherwise other than asrequired under the federal securities laws.vTHIS PAGE INTENTIONALLY LEFT BLANKPART IItem 1.BusinessAt Avantor,everything we do is tied to our unique mission of setting science in motion to create a betterworld.We are a leading global provi

79、der of mission-critical products and services to customers in the biopharma,healthcare,education&government,and advanced technologies&applied materials industries.Ourbusiness model is grounded in supporting our customers from discovery to delivery and Avantor isembedded in virtually every stage of t

80、he most important research,scale-up and manufacturing activities inthe industries we serve.Our comprehensive offering provides scientists all they need to conduct their research:materials&consumables,equipment&instrumentation and services&specialty procurement.Our customer-centricinnovation model en

81、ables us to provide solutions for some of the most demanding applications,and weleverage our comprehensive offering and access to early-stage research to identify and develop contentand solutions that ultimately become specified into our customers approved production platforms.Ourbroad portfolio of

82、products and services,fully integrated business model and global supply chain enableus to support our customers journey every step of the way.We have a number of distinctive capabilities that set us apart from other companies in our space.Forexample,our global footprint offers extraordinary customer

83、 access,enabling us to serve more than300,000 customer locations in approximately 180 countries around the world.Our legacy began in 1904 with the founding of the J.T.Baker Chemical Company.In 2010,we wereacquired by New Mountain Capital from Covidien plc.Since then,we have expanded through a series

84、 oflarge acquisitions which have extended our global reach.In 2016,we merged with NuSil,a leadingsupplier of high-purity silicone products for the medical device and aerospace industries that was foundedin 1985.In 2017,we acquired VWR,a global manufacturer and distributor of laboratory and productio

85、nproducts and services founded in 1852.Avantor,Inc.was incorporated in Delaware in May 2017 in anticipation of the VWR acquisition.Wecompleted our initial public offering through Avantor,Inc.and listed our shares on the New York StockExchange in May 2019.1Business segmentsWe report financial results

86、 in two segments:Laboratory Solutions and Bioscience Production.Thefollowing chart presents the approximate mix of net sales for each of those segments during 2024:LaboratorySolutions68%BioscienceProduction32%Within our reportable segments,we sell materials&consumables,equipment&instrumentation ands

87、ervices&specialty procurement to customers in the biopharma&healthcare,education&governmentand advanced technologies&applied materials industries.We work with customers across thesesophisticated,science-driven industries that require innovation and adherence to the most demandingtechnical and regula

88、tory requirements.The following charts present the approximate mix of net sales foreach of these groups during 2024:Product groupProprietary 53%Third-party 47%Customer groupBiopharma&healthcare 63%Education&government11%Advancedtechnologies&appliedmaterials 26%2Products and servicesOur portfolio inc

89、ludes a comprehensive range of products and services that allows us to create customizedand integrated solutions for our customers.These products and services enable our customers to achieveprecise analytical results in their research,diagnostic,and quality assurance and quality control activities.W

90、e also provide mission-critical,high-purity materials and solutions to customers that support thedevelopment and production of their life-changing treatments.More than 86%of our net sales were fromproduct and service offerings that we consider to be recurring in nature.Our products and services are

91、asfollows:Materials&consumables include ultra-high purity chemicals and reagents,lab products andsupplies,highly specialized formulated silicone materials,customized excipients,customizedsingle-use assemblies,process chromatography resins and columns,analytical sample prep kitsand education and micr

92、obiology and clinical trial kits,and fluid handling tips.Some of these areproprietary products that we make while others are produced by third parties;Equipment&instrumentation include filtration systems,virus inactivation systems,incubators,analytical instruments,evaporators,ultra-low-temperature f

93、reezers,peristaltic pumps,biologicalsafety cabinets and critical environment supplies;andServices&specialty procurement include onsite lab and production,equipment,procurement andsourcing and biopharmaceutical material scale-up and development services.In aggregate,we provide millions of SKUs,includ

94、ing high value specialty products developed to exactingpurity and performance specifications.Our proprietary brands have been specified and trusted fordecades.Our e-commerce platform makes it easy for customers to do business with us and enables digitalmarketing efforts that position us to capture n

95、ew demand.All of our capabilities are underpinned by ourAvantor Business System which drives execution and continuous improvement.We manufacture productsthat meet or exceed the demanding requirements of our customers across a number of highly regulatedindustries.Our high-purity and ultra-high purity

96、 products,such as our J.T.Baker brand chemicals,aretrusted by life sciences and electronic materials customers around the world and can be manufactured atpurity levels as stringent as one part-per-trillion.Similarly,our NuSil brand of high-purity,customizedsilicones has been trusted for more than 30

97、 years by leading medical device manufacturers and aerospacecompanies.Our services organization of over 2,500 colleagues work side-by-side with our customers to support theirworkflows.Our traditional service offerings focus on the needs of laboratory scientists and includeprocurement,logistics,inven

98、tory and stock room management,chemical and equipment tracking andglassware autoclaving.In addition,we offer more complex and value-added scientific research supportand production services such as DNA extraction,media preparation,bioreactor servicing and compoundmanagement,and cleanroom control,moni

99、toring,maintenance and sanitization.CustomersWe benefit from longstanding customer relationships,and approximately 40%of our 2024 net sales camefrom customers that have had relationships with us for 15 years or more.We also have a diverse customerbase with no single end customer comprising more than

100、 5%of net sales.3SuppliersWe sell proprietary products we make and third-party products sourced from a wide variety of productsuppliers located across the globe.Many of our supplier relationships are based on contracts that vary ingeographic scope,duration,product and service type,and some include e

101、xclusivity provisions.Thoserelationships may include distribution,sales and marketing support as well as servicing of instrumentsand equipment.Many of our supplier relationships have been in place for more than twenty years.Sales channelsWe reach our customers throughout the Americas,Europe and AMEA

102、 via a well-trained global salesforce,comprehensive websites and targeted catalogs.Our sales force is comprised of approximately 3,500sales and sales support professionals,including over 200 sales specialists selected for their in-depthindustry and product knowledge.Our sales professionals include n

103、ative speakers for each of the countriesin which we operate,allowing us to have high impact interactions with our customers across the globe.Our e-commerce platform plays a vital role in how we conduct business with our customers.In 2024,approximately 76%of our transactions came from our digital cha

104、nnels.Our websites utilize searchanalytics and feature personalized search tools,customer specific web solutions and enhanced data thatoptimize our customers online purchasing experience with rich content and AI-based recommendationsand better integrate our customers processes with our own.Our websi

105、tes are designed to integrateacquisitions,drive geographical expansion and serve segmented market needs with ease.In addition,wehave introduced digital services and solutions that streamline lab procurement and operations and havebecome embedded into many customers laboratories,such as Avantors Inve

106、ntory Manager.InfrastructureWe have more than 200 facilities strategically located throughout the globe that include manufacturing,distribution,service and research&technology.We operate over 40 global manufacturing facilities,including 12 facilities that are cGMP compliant andhave been registered w

107、ith the FDA or comparable foreign regulatory authorities.Our facilities arestrategically located in North America,Europe and the AMEA region to facilitate supply chain efficiencyand proximity to customers.Our manufacturing capabilities include:(i)an ability to quickly changespecifications depending

108、on customer needs;(ii)our flexible unit operations,which allow for productionscalability,from laboratory pre-clinical development to large-volume commercialization;(iii)proprietarypurification technologies designed to ensure lot-to-lot consistency through ultra-low impurity levels;(iv)rigorous analy

109、tical quality control testing;and(v)robust regulatory and quality control procedures.Ourglobal network of distribution centers gives our customers security of supply and real-time flexibility.Wealso have 14 innovation centers that enable extensive collaboration and customization,critical elementsfor

110、 serving highly regulated,specification-driven applications.Information technologyWe have a highly automated suite of ERP systems that promote standardization and provide businessinsight.Our global web infrastructure provides seamless integration with our customers and suppliers.These ERP platforms

111、support rapid development and deployment of enhancements so that we mayquickly adapt to meet the technology needs of our customers and seamlessly integrate new acquisitions.We have made significant investments to implement common ERP and online platforms that enhance thecustomer experience and emplo

112、y network and data security architecture.4CompetitionWe operate in a highly competitive environment with a diverse and fragmented base of competitors,manyof whom focus on specific regions,customers,and/or segments.We focus on service and delivery,breadth of product line,customization capabilities,pr

113、ice,customer support,online capabilities and theability to meet the special and local needs of our customers.Competition is driven not only by the product quality and purity across industries we serve,but also bythe adaptability of the supplier as a developmental and commercial partner.We rely on ou

114、r scale,expertise,deep customer access,depth of product and value-added service offerings,marketing strategiesand sales force,acquisition strategy,financial profile and management team to deliver superior solutionsto our customers and provide extensive market channel access to our suppliers.Sustaina

115、bilityOur Science for Goodness sustainability platform enhances our framework for creating long-term valueby embedding sound environmental,social and governance practices into our business strategy.Theplatform also enables us to continually measure and report progress against four key commitment pil

116、lars,which are aligned with several of the United Nations Sustainable Development Goals.Our approach to sustainability is reflected in our people,the products we create,the transformativeservices we provide,and the integrity with which we serve our stockholders,business partners,suppliers,customers,

117、associates,and communities.Our efforts to build a more sustainable future include programsto monitor,measure,and set strategies to reduce greenhouse gas emissions,efficiently manage resourceuse,and reduce end of life impact of products.We directly engage our supply chain on these effortsthrough Avan

118、tors Responsible Supplier Program.The program enables collaboration with supplierpartners to identify sustainability challenges and solutions focused on four priority topic areas:climatechange,human rights,resource circularity,and natural resource conservation.As our program matures and we continue

119、to address the evolving expectations of stakeholders,wecompleted a double materiality assessment in 2024,and will use this information to refine our strategyand goal setting.In 2024,Avantor received several important accolades for our efforts:Avantor received a Bronze Medalfrom EcoVadis,a leader in

120、sustainability ratings,for a second year in a row;and achieved a score of 100on the Human Rights Campaign Foundations 2025 Corporate Equality Index(CEI)for the second year ina row;and was recognized as a“Best Place to Work for Disability Inclusion”from Disability:In for thefirst time.Employees and h

121、uman capital resourcesOur success depends on our ability to attract,retain and motivate highly qualified and diverse talent.Asof December 31,2024,we had approximately 13,500 employees located in over 30 different countries ina variety of roles.Approximately 5,300 of our associates were employed in t

122、he U.S.We believe that ourrelations with our employees are good.As of December 31,2024,approximately 5%of our employees inNorth America were represented by unions,and a majority of our employees in Europe were representedby workers councils or unions.We compete in the highly competitive life science

123、s industry.Attracting,developing and retaining talented people in technical,marketing,sales,research and other positions iscrucial to executing our strategy and our ability to compete effectively.Our ability to recruit and retainsuch talent depends on a number of factors,including a positive and inc

124、lusive work environment andculture,compensation and benefits,talent development and career growth and opportunities,and5protecting the health,safety and well-being of our associates.To that end,we invest in our associates inorder to be an employer of choice.Our associates reflect the communities in

125、which we live and work,thecustomers we serve,and possess a broad range of thought and experiences that have helped Avantorachieve our goal of setting science in motion to create a better world.People&cultureEnhancing our Associate Experience is a strategic priority for Avantor.Our values give our as

126、sociates afoundation for how we want to work together.Innovation,Customer-centricity,Accountability,Respect,and Excellence are the building blocks of our inclusive company culture and send a strong message to ourassociates,customers,suppliers,stockholders and communities:ICARE.In addition,our execut

127、iveleaders serve as sponsors of our Associate-Centric Teams(ACTs)in support of our diversity andinclusion initiatives.ACTs are employee resource groups that foster an inclusive work environment,buildconnections,create community,and promote career opportunities.Based on common interests,backgrounds o

128、r characteristics,ACTs are open to all associates.Additionally,Avantors TalentPhilosophy is a part of commitment to our associates and guides our managers in their role in supportingour people and our culture.Compensation and benefitsWe are committed to rewarding,supporting and developing the associ

129、ates who make it possible to deliveron our strategy.To that end,we offer a comprehensive total rewards program aimed at the varying health,home-life and financial needs of our diverse and global associates.Our total rewards package includesmarket-competitive pay,broad-based stock grants and bonuses,

130、healthcare benefits,retirement savingsplans,an employee stock purchase plan,paid time off and family leave,flexible work schedules,access towellness programs,free physicals and flu vaccinations,and an Employee Assistance Program and othermental health services.Growth and developmentWe invest signifi

131、cant resources to develop talent with the right capabilities to deliver the growth andinnovation needed to support our strategy.We offer associates and their managers numerous tools to helpin their personal and professional development,including our Avantor Career Hub which enablesassociates to high

132、light their skills,capture development plans,make connections and find newopportunities inside Avantor.We have a robust portfolio of learning solutions that can be accessed inmultiple formats and available to our global associates across various professional,personal andleadership development areas.

133、Each year,we host a Learning&Career week program which is availableto associates at all levels globally,and includes a diverse slate of learning opportunities,live sessions andon-demand resources designed to support the personal and professional growth and success of associates.In 2023,we hosted our

134、 first Avantor Leadership Experience for individuals at the Director,Vice Presidentand Senior Vice President level.In addition,we provide programs on the Avantor Business System,which drives excellence in people,processes and problem solving.These consistent lean leadershippractices empower associat

135、es to continuously improve and add value to our operations and customersolutions.We have aligned our performance management system through which 100%of our associatesreceive annual performance reviews,to support our culture of feedback to increase the focus oncontinuous learning and development.Our

136、Career Accelerator programs are focused on providingmanagement skills training to high-performing individual contributors and early career associates inunderrepresented ethnicities.Health,safety and well-being6We are committed to protecting the health,safety and well-being of our associates.Our appr

137、oach involvesenvironment,health and safety professionals and process engineers who identify risks and implementbehavioral solutions to prevent accidents before they occur.A robust auditing program is in place at everyfacility to ensure that we measure performance and drive continuous improvement.Our

138、 primary focus isto keep associates safe and free from injury.We do this through compliance with regulatory andinternational requirements,active monitoring of regulatory agencies for changing requirements,partnering with operational leaders to meet Environment,Health&Safety,Security&Sustainability(E

139、HSSS)requirements,and promoting effective communication throughout the organization.Intellectual propertyWe rely on intellectual property rights,nondisclosure and other contractual provisions and technicalmeasures to protect our offerings,services and intangible assets.Much of our intellectual prope

140、rty isknow-how and asset configurations that we treat as trade secrets.These proprietary rights are important toour ongoing operations.In some instances,we may license our technology to third parties or may elect tolicense intellectual property from others.We have applied in the United States and ce

141、rtain foreigncountries for registration of a number of trademarks,service marks and patents,some of which have beenregistered and issued.We also hold common law rights in various trademarks and service marks.Otherthan our Avantor,VWR,J.T.Baker,NuSil and Masterflex trademarks,we do not consider any p

142、articularpatent,trademark,license,franchise or concession to be material to our overall business.Government contractsWe conduct business with various government agencies and government contractors.As such,we aresubject to certain laws and regulations applicable to companies doing business with the g

143、overnment,aswell as with those concerning government contracts.Failure to address or comply with these laws andregulations could harm our business by leading to a renegotiation of profits or termination of the contractat the election of the government agency.For a discussion of risks related to gove

144、rnment contractingrequirements,refer to Part I,Item 1A,“Risk factors.”No government contract is of such a magnitude asto have a material adverse effect on our financial results.Government regulationOur facilities that engage in the manufacturing,packaging,distribution of material used inbiopharmaceu

145、tical and biomaterials production,as well as many of our products themselves,are subjectto extensive ongoing regulation by U.S.governmental authorities,the EMA and other global regulatoryauthorities.Certain of our subsidiaries are required to register with these agencies,or to apply for permitsand/o

146、r licenses with,and must comply with the operating,cGMP,quality and security standards ofapplicable domestic and foreign regulators,including the FDA,the DEA,the Bureau of Alcohol,Tobacco,Firearms and Explosives,DHHS,the equivalent agencies of EU member states,and comparableforeign,state and local a

147、gencies,as well as various accrediting bodies,each depending upon the type ofoperation and the locations of storage or sale of the products manufactured or services provided by thosesubsidiaries in the event of noncompliance.In order to maintain certain certifications of quality and safety standards

148、 for our manufacturing facilitiesand operations,we must comply with numerous regulatory systems,standards,guidance and otherrequirements,as appropriate,including,but not limited to,ICH Q7,the guidelines of the InternationalPharmaceutical Excipients Council,European in vitro diagnostic medical device

149、 directives,U.S.Pharmacopeia/National Formulary,as well as the European,British,Japanese,Indian and ChinesePharmacopeia,the Food Chemicals Codex and controlled substances regulations.7In addition,our operations,and some of the products we offer,are subject to a number of complex andstringent laws an

150、d regulations governing the production,handling,transportation and distribution ofchemicals,drugs and other similar products.We are subject to various federal,state,local,foreign andtransnational laws,regulations and recommendations,both in the U.S.and abroad,relating to safeworking conditions,good

151、laboratory and distribution practices,and the safe and proper use,transportationand disposal of hazardous or potentially hazardous substances.In addition,U.S.and international importand export laws and regulations,including those enforced by the U.S.Departments of Commerce,Stateand Treasury,OFAC and

152、 BIS,require us to abide by certain standards relating to the cross-border transitof finished goods,raw materials and supplies and the handling of related information.Our logisticsactivities must comply with the rules and regulations of the U.S.Department of Transportation,Department of Homeland Sec

153、urity,Department of Commerce,Department of Defense,and the FederalAviation Administration and similar foreign agencies.We are also subject to various other laws andregulations concerning the conduct of our foreign operations,including the FCPA and other anti-briberylaws as well as laws pertaining to

154、 the accuracy of our internal books and records.The costs associated with complying with the various applicable federal,state,local,foreign andtransnational regulations could be significant,and the failure to comply with such legal requirementscould have an adverse effect on our reputation,results o

155、f operations and financial condition.See Part I,Item 1A,“Risk factorsRisks related to regulation.”We are subject to audits by the FDA and othersimilar foreign regulatory bodies.To date,we have had no instances of noncompliance that have had amaterial impact on our operations.In addition to the regul

156、ations described above,as part of our aerospace and military offerings,we areregistered with the DDTC as a manufacturer and exporter of goods controlled by ITAR,and we aresubject to strict export control and prior approval requirements related to these goods.In connection withour NuSil brand product

157、s,we have one ITAR site registration and one ITAR product registration,and wemaintain control systems which enable ITAR compliance.With respect to our electronic materialsproducts,we adhere to applicable industry guidelines which set stringent quality criteria for our products,and we are subject to

158、import and export regulations and other restrictions regarding the safe use of theseproducts as well.We are also subject to various federal,state and international laws and regulations related to privacy anddata protection,including the EUs GDPR as well as the California Consumer Privacy Act of 2018

159、,whichbecame effective on January 1,2020(as amended by the California Privacy Rights Act,which took effecton January 1,2023,the“CPRA”).The interpretation and application of data privacy,cross-border datatransfers and data protection laws and regulations are often uncertain and are evolving in the U.

160、S.andinternationally,such as in the EU,China and other jurisdictions.We monitor pending and proposedlegislation and regulatory initiatives to ascertain their relevance to,and potential impact on,our businessand develop strategies to address regulatory trends and developments,including any required c

161、hanges toour privacy and data protection compliance programs and policies.Globally,we see a growing trendtoward data protection laws and regulations increasing in complexity and number,and we anticipate thatour obligations will expand commensurately.Environmental mattersWe are subject to various law

162、s and governmental regulations concerning environmental,safety and healthmatters,including employee safety and health,in the U.S.and other countries.U.S.federal environmentallegislation that affects us includes the Toxic Substances Control Act,the Resource Conservation andRecovery Act,the Clean Air

163、Act,the Clean Water Act,the Safe Drinking Water Act,and CERCLA.These laws and regulations govern,among other things,air emissions,wastewater discharges,the use,8handling and disposal of hazardous substances and wastes,soil and groundwater contamination and thegeneral health and safety of our associa

164、tes and the communities in which we operate.We are also subjectto regulation by OSHA concerning employee safety and health matters.The EPA,OSHA,and otherfederal and foreign or local agencies have the authority to promulgate regulations that may impact ouroperations.Under CERCLA,and analogous statute

165、s in local and foreign jurisdictions,current and former owners andoperators of contaminated land are strictly liable for the investigation and remediation of the land and fornatural resource damages that may result from releases of hazardous substances at or from the property.Liability under CERCLA

166、and analogous laws is strict,unlimited,joint,several,retroactive,may beimposed regardless of fault and may relate to historical activities or contamination not caused by thecurrent owner or operator.It is possible that facilities that we acquire or have acquired may expose us toenvironmental liabili

167、ties associated with historical site conditions that have not yet been discovered.In addition to the federal environmental laws that govern our operations,various states have beendelegated certain authority under the aforementioned federal statutes as well as having authority overthese matters under

168、 state laws.Many state and local governments have adopted environmental andemployee safety and health laws and regulations,some of which are similar to federal requirements.A number of our operations involve,in varying degrees,the handling,manufacturing,use or sale ofsubstances that are or could be

169、classified as toxic or hazardous materials within the meaning of applicablelaws.Consequently,some risk of environmental harm is inherent in our operations and products,as it iswith other companies engaged in similar businesses.For additional information about environmentalmatters,see note 13 to our

170、consolidated financial statements beginning on page F-1 of this report.Available informationWe file or furnish annual,quarterly and current reports,proxy statements and other documents with or tothe SEC.The public can obtain any documents that we file with or furnish to the SEC at www.sec.gov.You ma

171、y also access our press releases,financial information and reports filed with or furnished to theSEC through our own website at .Copies of any documents on our websitemay be obtained free of charge,and reports filed with or furnished to the SEC will be available as soon asreasonably practicable afte

172、r they are filed with or furnished to the SEC.The information found on ourwebsite is not part of this or any other report filed with or furnished to the SEC.Item 1A.Risk factorsRisks related to our business and our industrySignificant interruptions in our operations could harm our business,financial

173、 condition and results ofoperations.Any significant disruptions to the operations of our manufacturing or distribution centers or logisticsproviders for any reason,including labor relations issues,power interruptions,severe weather,destructionor damage or other circumstances beyond our control could

174、 have a significant impact on our operatingresults,including an increase to our operating expenses without coverage or compensation,or seriouslyharm our ability to fulfill our customers orders or deliver products on a timely basis,or both.We mustalso maintain sufficient production capacity to meet a

175、nticipated customer demand,which carries fixedcosts that we may not be able to offset if orders slow,which would adversely affect our operating9margins.If we are unable to manufacture our products consistently,in sufficient quantities,and on atimely basis,our net sales,gross margins and our other op

176、erating results will be materially and adverselyaffected.In addition,we have experienced problems with,or delays in,our production,shipping andlogistics capabilities that have resulted in delays in our ability to ship finished products,and there can beno assurance that we will not encounter such pro

177、blems in the future.Significant delays in ourmanufacturing,shipping or logistics processes could damage our customer relationships,cause disruptionto our customers and adversely affect our business,financial condition and operating results.We have been impacted by supply chain constraints and inflat

178、ionary pressuresWe have experienced challenges in sourcing certain products and raw materials as a result of globalsupply chain disruptions and have experienced inflationary pressures across all of our cost categories.While we have implemented pricing and productivity measures to combat these pressu

179、res,they maycontinue to adversely impact our results.We compete in highly competitive markets.Failure to compete successfully could adversely affect ourbusiness,financial condition and results of operations.We face competition across our products and the markets in which we operate,both domestically

180、 andinternationally.Competition is driven by proprietary technologies and know-how,capabilities,consistency of operational performance,quality,supply chain control,price,value and speed.Ourcompetitors range from regional companies,which may be able to more quickly respond to customersneeds because o

181、f geographic proximity,to large multinational companies,which may have greaterfinancial,marketing,operational and research and development resources than we do,allowing for a morerapid response with new,alternative or emerging technologies.In addition,consolidation trends in the biopharma and health

182、care industries have served to create fewercustomer accounts and to concentrate purchasing decisions for some customers,resulting in increasedpricing pressures.New competitors in low-cost manufacturing locations,particularly developing markets,may create increased pricing and competitive pressures a

183、nd impede our goal to grow in those markets.Failure to anticipate and respond to competitors actions may adversely affect our results of operationsand financial condition.It may be difficult for us to implement our strategies for improving growth and optimizing costs.Effective January 1,2024,we tran

184、sitioned to a new operating model consisting of two complementarybusiness segments,the Laboratory Solutions segment and the Bioscience Production segment.Inconjunction with our new operating model,we launched a multi-year cost transformation initiative,withthe objective to deliver approximately$300

185、million in annual gross run-rate savings by the end of 2026.We have also committed to certain significant restructuring activities in connection with the initiative.The initiative and restructuring activities are subject to a variety of known and unknown risks anduncertainties,including the potentia

186、l that we may not be able to successfully execute on the initiative orachieve the anticipated benefits and cost-saving opportunities,or that achieving such benefits andopportunities may take longer to realize than expected.If we are unable to achieve the expected benefitsfrom the initiative and mana

187、ge the effects of the restructuring activities,this could have an adverse effecton our business,results of operations and financial condition.As we refine our business model,we may also pursue divestitures in line with our new operating model.For example,in October 2024,we divested our Clinical Serv

188、ices business,a component of our LaboratorySolutions reportable segment.We also plan to continue expanding our commercial sales operations andscope and complexity of our business both domestically and internationally,while maintaining ourcommercial operations and administrative activities.Our abilit

189、y to manage our business and conduct our10global operations while also pursuing our strategies for improving growth and optimizing costs requiresconsiderable management attention and resources and is subject to the challenges of supporting a rapidlygrowing business in an environment of multiple lang

190、uages,cultures and customs,legal and regulatorysystems,alternative dispute systems and commercial markets.Our failure to implement these strategies ina cost-effective and timely manner could have an adverse effect on our business,results of operations andfinancial condition.Part of our growth strate

191、gy is to pursue strategic acquisitions,which will subject us to a variety of risksthat could harm our business.As part of our business strategy,we intend to continue to review,pursue and complete selectiveacquisition opportunities.There can be no assurances that we will be able to complete suitablea

192、cquisitions for a variety of reasons,including the identification of,and competition for,acquisitiontargets,the need for regulatory approvals,the inability of the parties to agree to the structure or purchaseprice of the transaction and the inability to finance the transaction on commercially accept

193、able terms.Inaddition,any completed acquisition will subject us to a variety of other risks,including:(i)potentialadverse effects on our business relationships with existing or future suppliers and other business partners(in particular,to the extent we consummate acquisitions that vertically integra

194、te portions of our business);(ii)the assumption of substantial actual or contingent liabilities,known or unknown,includingenvironmental liabilities;(iii)failure to meet expectations of future financial performance;(iv)delays orreductions in realizing expected synergies;(v)substantial unanticipated c

195、osts or other problemsassociated with acquired businesses or devoting time and capital to investigate a potential acquisition thatis not completed;(vi)failure to achieve intended objectives for a transaction;(vii)failure to retain keypersonnel,customers and suppliers of the acquired business;and(vii

196、i)adverse impacts resulting fromimpairment charges on goodwill,other intangible assets and tangible assets.These factors related to ouracquisition strategy,among others,could have an adverse effect on our business,financial condition andresults of operations.The customers we serve have experienced,a

197、nd will continue to experience,significant industry-relatedchanges that could adversely affect our business.Many of the customers we serve have experienced,and are expected to continue to experience,significantindustry-related changes,including reductions in governmental payments for biopharmaceutic

198、al products,expirations of significant patents,adverse changes in legislation or regulations regarding the delivery orpricing of general healthcare services or mandated benefits,and increased requirements on quality.General industry changes include:development of large and sophisticated group purcha

199、sing organizations and on-line auction sitesthat increase competition for,and reduce spending on,laboratory products;consolidation of biopharmaceutical companies resulting in a rationalization of researchexpenditures;increased regulatory scrutiny over drug production requiring safer raw materials;cu

200、stomers purchasing the products that we supply directly from our suppliers;andsignificant reductions in development and production activities.Some of our customers have implemented,or may in the future implement,certain measures describedabove in an effort to control and reduce costs.The ability of

201、our customers to develop new products to11replace sales decreases attributable to expirations of significant patents,along with the impact of otherpast or potential future changes in the industries we serve,may result in our customers significantlyreducing their purchases of products from us or the

202、prices they are willing to pay for those products.While we believe we will be able to adapt our business to maintain existing customer relationships anddevelop new customer relationships,if we are unsuccessful or untimely in these efforts,our results ofoperations may suffer.Our offerings are highly

203、complex,and,if our products do not satisfy applicable quality criteria,specifications and performance standards,we could experience lost sales,delayed or reducedmarket acceptance of our products,increased costs and damage to our reputation.The high-purity materials and customized solutions we offer

204、are highly exacting and complex due todemanding customer specifications and stringent regulatory and industry requirements.Our operatingresults depend on our ability to execute and,when necessary,improve our global quality control systems,including our ability to effectively train and maintain our e

205、mployees with respect to quality control.Afailure of our global quality control systems could result in problems with facility operations orpreparation or provision of defective or non-compliant products.Nearly all of our products aresubsequently incorporated into products sold to end users by our c

206、ustomers,and we have no control overthe manufacture and production of such products.Our success depends on our customers confidence that we can provide reliable,high-quality products.We believe that customers in our target markets are likely to be particularly sensitive to product defectsand errors.

207、Our reputation and the public image of our products and technologies may be impaired if ourproducts fail to perform as expected or fail to meet applicable quality criteria,specifications orperformance standards.If our products experience,or are perceived to experience,a material defect orerror,this

208、could result in loss or delay of net sales,damaged reputation,diversion of developmentresources,and increased insurance or warranty costs,any of which could harm our business.The loss of a significant number of customers or a significant reduction in customer orders couldreduce our net sales and har

209、m our operating results.Our operating results could be negatively affected by the loss of revenue from a significant number of ourcustomers,including direct distributors and end users.Though we often include pricing and volumeincentives in our contracts,our customers are generally not obligated to p

210、urchase any fixed quantities ofproducts,and they may stop placing orders with us at any time.If we experience a significant reduction incustomer orders,increased order deferrals,our sales could decline,and our operating results may not meetour expectations.In addition,if customers order our products

211、,but fail to pay on time or at all,ourliquidity and operating results could be adversely affected.Our contracts generally do not contain minimum purchase requirements,and we sell primarily on apurchase order basis.Therefore,our sales are subject to changes in demand from our customers,and thesechang

212、es have been material in the past.The level and timing of orders placed by our customers vary for anumber of reasons,including individual customer strategies,the introduction of new technologies,thedesire of our clients to reduce their exposure to any single supplier and general economic conditions.

213、Ifwe are unable to anticipate and respond to the demands of our customers,we may lose customers becausewe have an inadequate supply of raw materials with which to manufacture our products or insufficientcapacity in our sites.Alternatively,we may have excess inventory or excess capacity.Either of the

214、sefactors may have a material adverse effect on our business,financial position and operating results.12We are subject to risks associated with doing business globally,which may harm our business.We have global operations and derive a substantial portion of our net sales from customers outside of th

215、eUnited States.Accordingly,our international operations or those of our international customers could besubstantially affected by a number of risks arising from operating an international business,including:(i)limitations on repatriation of earnings;(ii)taxes on imports;(iii)the possibility that unf

216、riendly nations orgroups could boycott our products;(iv)general economic and political conditions in the markets wherewe operate,including changes in inflation and interest rates,instability in the global banking industry,rising energy prices,potential energy shortages and actual or anticipated mili

217、tary or political conflicts,such as the ongoing Ukraine/Russia or Israel/Hamas conflicts;(v)foreign currency exchange ratefluctuations;(vi)potential changes in diplomatic and trade relationships,including potential changesunder the second Trump administration and political and trade uncertainty in C

218、hina;(vii)a global healthcrisis;(viii)potential increased costs associated with overlapping tax structures;(ix)potential increasedreliance on third parties within less developed markets;(x)potential changes in trade restrictions,tariffsand exchange controls,such as tariffs that may be proposed by th

219、e second Trump administration andpotential retaliatory tariffs by other countries;(xi)more limited protection for intellectual property rightsin some countries;(xii)difficulties and costs associated with staffing and managing foreign operations;(xiii)difficulties in complying with a wide variety of

220、foreign laws and regulations and unexpectedchanges thereto;(xiv)expanded enforcement of laws related to data protection and personal privacy;(xv)the risk that certain governments may adopt regulations or take other actions that would have a directadverse impact on our business and market opportuniti

221、es,including nationalization of private enterprise;(xvi)violations of anti-bribery and anti-corruption laws,such as the FCPA;(xvii)violations of economicsanctions laws,such as the regulations enforced by OFAC;(xviii)longer accounts receivable cycles incertain foreign countries,whether due to cultura

222、l differences,exchange rate fluctuation or other factors;(xix)the credit risk of local customers and distributors;(xx)limitations on our ability to enforce legalrights and remedies with third parties or partners outside of the United States;(xxi)import and exportlicensing requirements and other rest

223、rictions,such as those imposed by OFAC,BIS,DDTC andcomparable regulatory agencies and policies of foreign governments;and(xxii)changes to ourdistribution networks.Changes in exchange rates can adversely affect our financial condition,results of operations and cashflows.A substantial amount of our re

224、venues is derived from international operations,and we anticipate that asignificant portion of our sales will continue to come from outside of the United States in the future.Ourconsolidated results of operations are comprised of many different functional currencies that translate intoour U.S.dollar

225、 reporting currency.The movement of the U.S.dollar against those functional currencies,particularly the Euro,has caused significant variability in our results in the past and may continue to do soin the future.The revenues we report with respect to our operations outside of the United States have be

226、enin the past and may be adversely affected by fluctuations in foreign currency exchange rates.Further,we have a substantial amount of Euro denominated indebtedness,as well as intercompany loansand short-term intercompany balances between entities with the Euro as their functional currency.Fluctuati

227、ons in the exchange rate between U.S.dollars and Euros may have a material adverse effect onour ability to repay such indebtedness.See Part I,Item 7A,“Quantitative and qualitative disclosures aboutmarket risk.”13Our business depends on our ability to use and access information systems,and any failur

228、e tosuccessfully maintain these systems or implement new systems to handle our changing needs couldmaterially harm our operations.Our businesses rely on sophisticated information systems:(i)to obtain,rapidly process,analyze,andmanage data to facilitate the purchase and distribution of thousands of i

229、nventory items from numerousdistribution centers;(ii)to receive,process,and ship orders on a timely basis;(iii)to account for otherproduct and service transactions with customers;(iv)to manage the accurate billing and collections forthousands of customers;and(v)to process payments to suppliers.We co

230、ntinue to make substantialinvestments in data centers and information systems.To the extent our information systems are notsuccessfully implemented or fail,or there are data center interruptions or outages,our business and resultsof operations may be adversely affected.Our business and results of op

231、erations may also be adverselyaffected if a third-party service provider does not perform satisfactorily,or if the information systems areinterrupted or damaged by unforeseen events,including due to the actions or inactions of third parties.While we have implemented cybersecurity and data protection

232、 measures,our efforts to minimize the risksand impacts of cyberattacks and protect our information systems may be insufficient and we mayexperience significant breaches or other failures or disruptions that could compromise our systems anddata and,ultimately,affect our business operations and our fi

233、nancial position or results of operations.New technology that could result in greater operational efficiency,such as the development and adoptionof AI and machine learning technology,may further exposure our systems and businesses to the risk ofcyberattacks.Like other companies,the systems and netwo

234、rks we maintain and third-party systems andnetworks we use have in the past been,and will likely in the future be,subject to or targets ofunauthorized or fraudulent access,including physical or electronic break-ins or unauthorized tampering,as well as attempted cyber and other security threats and o

235、ther attacks such as“denial of service”attacks,phishing,untargeted but sophisticated and automated attacks,ransomware,and other disruptive software.For example,as AI continues to evolve,cyber-attackers could also use AI to develop malicious code andsophisticated phishing attempts.We are also exposed

236、 to similar risks resulting from cyber-attacks that areexperienced by our third-party service providers.For example,we and many of the third-party serviceproviders we rely on use generative AI,which increases the risk that our confidential or proprietaryinformation or personal data could be inadvert

237、ently or maliciously exposed.Security breaches can alsooccur as a result of intentional or inadvertent actions by our employees,third-party service providers ortheir personnel or other parties.A failure,interruption,or breach of our systems,or those of our third-party service providers,as a resultof

238、 cyber-attacks or information security breaches,could disrupt our business,result in the disclosure ormisuse of confidential or proprietary information or personal data,damage our reputation,cause loss ofcustomers or revenue,increase our costs,result in litigation and/or regulatory action,and/or cau

239、se otherlosses,any of which may have a material adverse impact on our business operations and our financialposition or results of operations.Although we believe that we have robust information securityprocedures,controls and other safeguards in place,as cyber threats continue to evolve,we will bereq

240、uired to expend additional resources to continue to enhance our information security measures and/orto investigate and remediate information security vulnerabilities.Our actual or perceived failure to adequately protect personal data could adversely affect our business.Given the nature of our busine

241、ss,we collect and store confidential information that customers provide inorder to,among other things,purchase products and services and register on our website.14We are required to comply with increasingly complex and changing data privacy regulations both in theUnited States and beyond that regula

242、te the collection,use,sharing,and transfer of personal data.Many ofthese regulations also grant rights to individuals.Many foreign data privacy regulations(including GDPRin the EU)and certain state laws and regulations(including Californias CPRA)impose requirementsbeyond those enacted under federal

243、law including,in some instances,private rights of action.Forexample,the EU GDPR imposes more stringent data protection requirements,including a broader scopeof protected data,restrictions on cross-border transfers of personal data and more onerous breachreporting requirements,and greater penalties f

244、or non-compliance than the federal data protection laws.Other states and countries continue to enact similar legislation.We are also required to comply withexpanding and increasingly complex privacy and data protection regulations in the United States andabroad with respect to reporting adverse even

245、ts and additional requirements for avoiding or responding toan adverse event.We also have contractual obligations to our customers related to the protection ofpersonal data and compliance with privacy laws.While we have taken various measures and made significant efforts and investment and designed

246、ourpolicies,processes and systems to be robust,a failure,or perceived failure,by us to comply with anyapplicable regulatory requirements or orders,including but not limited to privacy,data protection,information security,or consumer protection-related privacy laws and regulations,in one or morejuris

247、dictions within the United States,the EU or elsewhere,could result in proceedings or actions againstus by governmental entities or individuals;subject us to significant fines,penalties,and/or judgments;require us to change our business practices;limit access to our products and services in certain c

248、ountries,incur substantial costs(even if we ultimately prevail)or otherwise adversely affect our business.Our inability to protect our intellectual property could adversely affect our business.In addition,thirdparties may claim that we infringe their intellectual property,and we could suffer signifi

249、cantlitigation or licensing expenses as a result.We rely on a variety of intellectual property rights,including patents,trademarks,copyrights and tradesecrets,to protect our proprietary technology and products.We place considerable emphasis on obtainingpatent or maintaining trade secret protection f

250、or significant new technologies,products and processesbecause of the length of time and expense associated with bringing new products and processes throughdevelopment and to the market.We may need to spend significant resources monitoring and enforcing our intellectual property rights andwe may not

251、be able to prove infringement by third parties.Our competitive position may be harmed if wecannot enforce our intellectual property rights.In some circumstances,we may choose to not pursueenforcement for business reasons.In addition,competitors might avoid infringement by designing aroundour intelle

252、ctual property rights or by developing non-infringing competing technologies.Intellectualproperty rights and our ability to enforce them may be unavailable or limited in some countries,whichcould make it easier for competitors to capture market share and could result in lost revenues.Our trademarks

253、are valuable assets and if we are unable to protect them from infringement,ourbusiness prospects may be harmed.Our brands,particularly our J.T.Baker,NuSil,VWR and Masterflex brands,are valuable assets.Therefore,we actively manage our trademark portfolio,including by maintaining registrations for lon

254、g-standing trademarks and applying to obtain trademark registrations for new brands.We also police ourtrademark portfolio against infringement.Our efforts to protect and defend our trademarks may fall shortor be unsuccessful against competitors or other third parties for a variety of reasons.To the

255、extent thatthird parties or distributors sell products that are counterfeit versions of our branded products,ourcustomers could inadvertently purchase products that are inferior.This could cause our customers to15refrain from purchasing our brands in the future and in turn could impair our brand equ

256、ity and adverselyaffect our sales.We are subject to product liability and other claims in the ordinary course of business.Our business involves risk of product liability,intellectual property claims and other claims in theordinary course of business arising from the products that we source from vari

257、ous manufacturers orproduce ourselves.Furthermore,there may be product liability risks that are unknown or which becomeknown in the future.Substantial,complex or extended litigation on any claim could cause us to incursignificant costs and distract our management.We maintain insurance policies and i

258、n some cases,oursuppliers,customers and predecessors of acquired companies have indemnified us against certain claims.We cannot assure you that our insurance coverage or indemnification agreements will be available in allpending or any future cases brought against us.Accordingly,we could be subject

259、to uninsured andunindemnified future liabilities requiring us to provide additional reserves to address such liabilities.Anunfavorable result in a case for which adequate insurance or indemnification is not available couldadversely affect our business,financial condition and results of operations.We

260、 must develop new products,adapt to rapid and significant technological change and respond tointroductions of new products by competitors to remain competitive.We sell our products in industries that are characterized by significant technological changes,frequentnew product and technology introducti

261、ons and enhancements and evolving industry standards.As a result,our customers needs are rapidly evolving.If we do not appropriately innovate and invest in newtechnologies,our offerings may become less desirable in the markets we serve,and our customers couldmove to new technologies offered by our c

262、ompetitors or make products themselves.Without the timelyintroduction of new products,services and enhancements,our offerings will likely become lesscompetitive over time,in which case,our competitive position,net sales and operating results couldsuffer.To the extent we fail to timely introduce new

263、and innovative products or services,adequatelypredict our customers needs or fail to obtain desired levels of market acceptance,our business maysuffer.Accordingly,we focus significant efforts and resources on the development and identification of newtechnologies,products and services that are attrac

264、tive to,and gain acceptance,in the markets we serveand further broaden our offerings.We have been and expect to continue to utilize AI and machinelearning in certain of our products and services.As with many technological innovations,there aresignificant risks and challenges involved in maintaining

265、and deploying these technologies,including risksrelated to cybersecurity,privacy and data use practices as well as related to accuracy issues,and there canbe no assurance that the use of such technologies will enhance our products or services or be beneficial toour business.Further,the regulatory la

266、ndscape surrounding AI is evolving and may impose restrictionsthat limit the usability or effectiveness of AI in our products and services and expose us to an increasedrisk of regulatory enforcement and litigation.We depend upon the availability of raw materials.Our operations depend upon our abilit

267、y to obtain high-quality raw materials meeting our specificationsand other requirements at reasonable prices,including various active pharmaceutical ingredients,components,compounds,excipients and other raw materials,many of which are sole-sourced due tomarket or customer demands.Our ability to main

268、tain an adequate supply of such materials and16components could be impacted by the availability and price of those raw materials and maintainingrelationships with key suppliers.Moreover,we are dependent upon the ability of our suppliers to provide materials and components thatmeet our specifications

269、,quality standards,other applicable criteria,and delivery schedules.Our suppliersfailure to provide expected raw materials or components that meet such criteria could adversely affectproduction schedules and contract profitability and negatively impact our results of operations.We depend upon mainta

270、ining our relationships with suppliers.We offer products from a wide range of suppliers.While there is generally more than one source ofsupply for most of the categories of third-party materials&consumables and equipment&instrumentation that we sell,we currently do not manufacture the majority of ou

271、r products and aredependent on these suppliers for access to those products.Our ability to sustain our gross margins has been,and will continue to be,dependent in part upon ourability to obtain favorable terms from our suppliers.These terms may change from time to time,and suchchanges could adversel

272、y affect our gross margins over time.In addition,our results of operations and cashflows could be adversely impacted by the acceleration of payment terms to our suppliers and/or theimposition of more restrictive credit terms and other contractual requirements.Our use of chemicals and chemical proces

273、ses is subject to inherent risk.We use chemical ingredients in the manufacture of certain of our products.Due to the nature of themanufacturing process itself,there is a risk of incurring liability for damages caused by or during thestorage or manufacture of both the chemical ingredients and the fin

274、ished products.The processes used incertain of our facilities typically involve large volumes of solvents and chemicals,creating the potentialfor fires,spills and other safety or environmental impacts.If any of these risks materialize,it could resultin significant remediation and other costs,potenti

275、al adverse regulatory actions and liabilities,any ofwhich could have an adverse effect on our business,results of operations and financial condition.In addition,the manufacturing,use,storage,and distribution of chemicals are subject to threats includingterrorism.We have several high-risk chemical fa

276、cilities that contain materials that could be stolen andused to make weapons.We could also be subject to an attack on our high-risk facilities that could cause asignificant number of deaths and injuries.Such an occurrence could also harm the environment,ourreputation and disrupt our operations.Clima

277、te change,and the legal or regulatory response thereto,may have a long-term impact on ourbusiness,financial condition and results of operations.We continue to focus on strategies and systems,such as reducing greenhouse gas emissions andpackaging waste,to address climate change.However,we face climat

278、e and environmental risks and theoccurrence of one or more unexpected events,including fires,tornadoes,tsunamis,hurricanes,earthquakes,drought,storms,sea level rise,floods,and other severe hazards or accidents in the UnitedStates,the United Kingdom,the EU or in other countries or regions in which we

279、 operate could adverselyaffect our operations and financial performance.Extreme weather,natural disasters,power outages,orother unexpected events could result in physical damage to,and complete or partial closure of,one ormore of our manufacturing or distribution centers;temporary or long-term disru

280、ption in the supply ofproducts;and/or disruption of our ability to deliver products to customers.Increasing concern overclimate change also may result in additional legal or regulatory requirements designed to reduce ormitigate the effects of carbon dioxide and other greenhouse gas emissions on the

281、environment.The17effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business,financial condition and results of operations.We also monitor rulesand regulations related to environmental,social and governance disclosure

282、obligations,which may exposeus to increased costs associated with additional reporting obligations.In addition,we have established andpublicly announced goals and commitments to reduce our carbon footprint,including targets to reducegreenhouse gas emissions(scope 1,scope 2 and scope 3).We have a bro

283、ad range of stakeholders,including our stockholders,employees and customers,some of whom increasingly focus onenvironmental,social and governance matters.If we are unable to achieve,or improperly report on ourprogress toward,our carbon footprint reduction goals and commitments,this may result in lit

284、igation and/or regulatory action as well as negative publicity,which could lead to the loss of business,adversereputational impacts,diluted market valuations and challenges in attracting and retaining customers andtalented employees.We are highly dependent on our senior management and key employees.

285、Our success depends on our ability to attract,motivate and retain highly qualified individuals.Competition for senior management and other key personnel in our industry is intense,and the pool ofsuitable candidates is limited.The failure to attract,retain and properly motivate members of our seniorm

286、anagement team and other key employees,or to find suitable replacements for them in the event ofdeath,illness or their desire to pursue other professional opportunities,could have a negative effect on ouroperating results.The indemnification provisions of acquisition agreements by which we have acqu

287、ired companies maynot fully protect us and as a result,we may face unexpected liabilities.Certain of the acquisition agreements by which we have acquired companies require the former owners toindemnify us against certain liabilities related to the operation of the company before we acquired it.Inmos

288、t of these agreements,however,the liability of the former owners is limited and certain formerowners may be unable to meet their indemnification responsibilities.We cannot assure you that theseindemnification provisions will protect us fully or at all,and as a result,we may face unexpectedliabilitie

289、s that adversely affect our financial statements.We face risks related to health epidemics and pandemics.We face risks related to health epidemics and pandemics,including risks related to any responses theretoby the federal,state or foreign governments,as well as customers and suppliers.A pandemic h

290、as in thepast and could in the future adversely affect our operations,supply chains and distribution network,andwe could experience and expect prolonged unpredictable reductions in supply and demand for certain ofour offerings similar to those experienced during the COVID-19 pandemic,as well as unpr

291、edictableincreases in demand for certain of our offerings similar to those experienced during the COVID-19pandemic.Further,it is possible that disruptions or delays in shipments of certain raw materials used inthe products we manufacture and in the finished goods that we sell globally could be simil

292、ar to thoseexperienced during the COVID-19 pandemic.The implementation of any government-mandatedvaccination or testing mandates may impact our ability to retain current employees and attract newemployees.Any extended disruption in our ability to service our customers could have a negative effecton

293、our operating results.Changes in tax law relating to multinational corporations could adversely affect our tax position.The U.S.Congress,foreign governments,and their agencies in non-U.S.jurisdictions where we and ouraffiliates do business,and the Organization for Economic Cooperation and Developmen

294、t(“OECD”),18continue to focus on issues related to the taxation of multinational corporations.As part of this focus,theOECD has introduced a framework to implement a 15%global minimum corporate tax rate.While it isuncertain whether the U.S.will enact legislation to adopt the minimum tax directive,ce

295、rtain countries inwhich we operate have adopted legislation and other countries are in the process of introducing legislationto implement the minimum tax directive.While we do not currently expect the minimum tax directive tohave a material impact on our effective tax rate,our analysis is ongoing as

296、 the OECD continues to releaseadditional guidance.There can be no assurance that these changes,and any further contemplated changeswhen finalized and adopted by countries,will not have an adverse impact on our provision for incometaxes.Due to the potential for changes to tax laws and regulations or

297、changes to the interpretation thereof,theambiguity of tax laws and regulations,the subjectivity of factual interpretations,the complexity of ourintercompany arrangements,uncertainties regarding the geographic mix of earnings in any particularperiod,and other factors,our estimates of effective tax ra

298、te and income tax assets and liabilities may beincorrect and our financial statements could be adversely affected.The impact of the factors referenced inthe first sentence of this paragraph may be substantially different from period-to-period.Certain of our businesses rely on relationships with coll

299、aborative partners and other third parties fordevelopment,supply and marketing of certain products and potential products,and suchcollaborative partners or other third parties could fail to perform sufficiently.We believe that for certain of our businesses,success in penetrating target markets depen

300、ds in part ontheir ability to develop and maintain collaborative relationships with other companies.Relying oncollaborative relationships is risky because,among other things,our collaborative partners may(i)notdevote sufficient resources to the success of our collaborations;(ii)fail to obtain regula

301、tory approvalsnecessary to continue the collaborations in a timely manner;(iii)be acquired by other companies andterminate our collaborative partnership or become insolvent;(iv)compete with us;(v)disagree with us onkey details of the collaborative relationship;(vi)have insufficient capital resources

302、;and(vii)decline torenew existing collaborations on acceptable terms.Because these and other factors may be beyond ourcontrol,the development or commercialization of our products involved in collaborative partnerships maybe delayed or otherwise adversely affected.If we or any of our collaborative pa

303、rtners terminate acollaborative arrangement,we may be required to devote additional resources to product development andcommercialization or we may need to cancel some development programs,which could adversely affectour business and financial statements.Risks related to regulationWe are required to

304、 comply with a wide variety of laws and regulations,and are subject to regulation byvarious federal,state and foreign agencies,and our failure to comply with existing and futureregulatory requirements could adversely affect our results of operations and financial condition.We compete in markets in w

305、hich we and our customers are subject to federal,state,local,internationaland transnational laws and regulations,including the operating,quality and security standards of theFDA,various state health departments,the DHHS,similar bodies of the EU and its member states andother comparable agencies arou

306、nd the world,and,in the future,any changes to such laws and regulationscould adversely affect us.We develop,configure and market our products to meet customer needs drivenby those regulations.Among other rules affecting us,we are subject to laws and regulations concerningcGMP and product safety.Our

307、subsidiaries may be required to register for permits and/or licenses with,and may be required to comply with,the laws and regulations of the FDA,the DHHS,the DEA,foreignagencies including the EMA,and other various state health departments and/or comparable state and19foreign agencies as well as cert

308、ain accrediting bodies depending upon the types of operations andlocations of distribution and sale of the products manufactured or services provided by those subsidiaries.Any significant change in regulations could reduce demand for our products or increase our expenses.Forexample,many of our produ

309、cts are marketed to the biopharma industry for use in discovering,developingand manufacturing drugs,or are sold as raw materials or components to drug device manufacturers or foruse in the manufacture of implantable devices.Changes in the domestic or foreign regulation of drugdiscovery,development o

310、r manufacturing processes or medical device manufacturing processes,oradverse findings concerning any health effects associated with these products,could have an adverseeffect on the demand for these products and could also result in legal liability and claims.We are also registered with the DDTC,as

311、 a manufacturer and exporter of goods controlled by ITAR,andwe are subject to strict export control and prior approval requirements related to these goods.Our failureto comply with ITAR and other export control laws and regulations,as well as economic sanctions,couldresult in penalties,loss,or suspe

312、nsion of contracts or other consequences.Any of these could adverselyaffect our operations and financial condition.Failure by us or by our customers to meet one or more ofthese various regulatory obligations could have adverse consequences in the event of material non-compliance.Compliance with rele

313、vant sanctions and export control laws could restrict our access to,andincrease the cost of obtaining,certain products and at times could interrupt our supply of importedinventory or our ability to service certain customers.Conversely,compliance with these regulatoryobligations may require us to inc

314、ur significant expenses.In addition,certain of our facilities are certified to ISO,including ISO 13485,ISO 9001,AS9100,ISO22000 and/or ISO 14001.These standards are voluntary quality management system standards,themaintenance of which indicates to customers certain quality and operational norms.Cust

315、omers may relyon contractual assurances that we make with respect to ISO certificates to transact business.Failure tocomply with these ISO standards can lead to observations of non-compliance or even suspension of ISOor Aerospace Standard(AS)certifications or European Community(EC)Declarations of Co

316、nformityCertificates by the registrar.If we were to lose ISO or AS certifications or EC Declarations ofConformity,we could lose sales and customers to competitors or other suppliers.We are also subject toperiodic inspections or audits by our customers.If these audits or inspections identify issues o

317、r thecustomer perceives there are issues,the customer may decide to cease purchasing products from us whichcould adversely affect our business.Our reputation,ability to do business and financial statements may be impaired by improper conductby any of our employees,agents or business partners.We cann

318、ot provide assurance that our internal controls and compliance systems will always protect usfrom acts committed by employees,agents or business partners of ours(or of businesses we acquire orpartner with)that would violate U.S.and/or non-U.S.laws,including the laws governing payments togovernment o

319、fficials,bribery,fraud,kickbacks and false claims,pricing,sales and marketing practices,conflicts of interest,competition,export and import compliance,money laundering and data privacy.Inparticular,the FCPA,the U.K.Bribery Act and similar anti-bribery laws in other jurisdictions generallyprohibit co

320、mpanies and their intermediaries from making improper payments for the purpose of obtainingor retaining business,and we operate in many parts of the world that have experienced corruption to somedegree.Any such improper actions or allegations of such acts could damage our reputation and subject usto

321、 civil or criminal investigations in the United States and in other jurisdictions and related stockholderlawsuits,could lead to substantial civil and criminal,monetary and non monetary penalties and couldcause us to incur significant legal and investigatory fees.In addition,the government in relevan

322、tjurisdictions may seek to hold us liable as a successor for violations committed by companies in which weinvest or that we acquire.We also rely on our suppliers to adhere to our supplier standards of conduct,20and material violations of such standards of conduct could occur that could have a materi

323、al effect on ourbusiness,reputation and financial statements.We are subject to laws and regulations governing government contracts,and failure to address theselaws and regulations or comply with government contracts could harm our business by leading to areduction in sales to these customers or pena

324、lties.We sell products to government entities and,as a result,we are subject to various statutes and regulationsthat apply to companies doing business with the government.The laws governing government contractsdiffer from the laws governing private contracts and government contracts may contain pric

325、ing terms andconditions that are not applicable to private contracts.We are also subject to investigation for compliancewith the regulations governing government contracts.A failure to comply with these regulations couldresult in suspension of these contracts,criminal,civil and administrative penalt

326、ies or debarment.We are subject to environmental,health and safety laws and regulations,and costs to comply with suchlaws and regulations,or any liability or obligation imposed under such laws or regulations,couldnegatively impact our business,financial condition and results of operations.We are sub

327、ject to a broad range of foreign,federal,state and local environmental,health and safety lawsand regulations,including those of the EPA,OSHA and equivalent local,state,and foreign regulatoryagencies in each of the jurisdictions in which we operate,and we may be fined or penalized for non-compliance.

328、In addition,contamination resulting from our current or past operations or from past uses ofland that we own or operate may trigger investigation or remediation obligations,which may have anadverse effect on our business,financial condition and results of operations.We cannot be certain thatidentifi

329、cation of presently unidentified environmental,health and safety conditions,new regulations,morevigorous enforcement by regulatory authorities or other unanticipated events will not arise in the futureand give rise to additional environmental liabilities,business interruptions,compliance costs or pe

330、nalties,which could have an adverse effect on our business,financial condition and results of operations.We currently incur costs and may incur additional costs related to remediation of alleged environmentaldamage associated with past or current waste disposal practices or other hazardous materials

331、 handling atproperty that we currently own or operate,or formerly owned or operated,or facilities to which wearranged for the disposal of hazardous substances.Our liabilities arising from past or future releases of,orexposures to,hazardous substances may exceed our estimates or adversely affect our

332、financial statementsand reputation and we may be subject to additional claims for cleanup or other environmental claims inthe future based on our past,present or future business activities,and we may not be able to recover anycosts under any of our indemnifications that we have.For additional inform

333、ation regarding environmentalmatters,see note 13 to our consolidated financial statements beginning on page F-1 of this report.Changes in corporate governance and public disclosure requirements and expectations could impactcompliance costs and the risks of noncompliance.We are subject to the rules and regulations promulgated by a number of governmental and self-regulatoryorganizations,including th