10-Q 1 avtr-20220930.htm 10-Q avtr-20220930
false000172248212-312022Q3P3Yhttp://fasb.org/us-gaap/2022#OtherAssetsCurrenthttp://fasb.org/us-gaap/2022#OtherAssetsCurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherAssetsCurrenthttp://fasb.org/us-gaap/2022#OtherAssetsCurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrent00017224822022-01-012022-09-3000017224822022-10-20xbrli:shares00017224822022-09-30iso4217:USD00017224822021-12-3100017224822022-07-012022-09-3000017224822021-07-012021-09-3000017224822021-01-012021-09-30iso4217:USDxbrli:shares0001722482us-gaap:PreferredStockIncludingAdditionalPaidInCapitalMember2022-06-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-06-300001722482us-gaap:RetainedEarningsMember2022-06-300001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000017224822022-06-300001722482us-gaap:RetainedEarningsMember2022-07-012022-09-300001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-07-012022-09-300001722482us-gaap:PreferredStockIncludingAdditionalPaidInCapitalMember2022-09-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-09-300001722482us-gaap:RetainedEarningsMember2022-09-300001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001722482us-gaap:PreferredStockIncludingAdditionalPaidInCapitalMember2021-06-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-06-300001722482us-gaap:RetainedEarningsMember2021-06-300001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000017224822021-06-300001722482us-gaap:RetainedEarningsMember2021-07-012021-09-300001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-07-012021-09-300001722482us-gaap:PreferredStockIncludingAdditionalPaidInCapitalMember2021-09-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-09-300001722482us-gaap:RetainedEarningsMember2021-09-300001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-3000017224822021-09-300001722482us-gaap:PreferredStockIncludingAdditionalPaidInCapitalMember2021-12-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-12-310001722482us-gaap:RetainedEarningsMember2021-12-310001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001722482us-gaap:RetainedEarningsMember2022-01-012022-09-300001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-01-012022-09-300001722482us-gaap:PreferredStockIncludingAdditionalPaidInCapitalMember2022-01-012022-09-300001722482us-gaap:PreferredStockIncludingAdditionalPaidInCapitalMember2020-12-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2020-12-310001722482us-gaap:RetainedEarningsMember2020-12-310001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100017224822020-12-310001722482us-gaap:RetainedEarningsMember2021-01-012021-09-300001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-01-012021-09-3000017224822022-05-012022-05-31xbrli:pure00017224822022-05-310001722482avtr:MasterflexMember2021-11-012021-11-0100017224822022-04-012022-06-300001722482avtr:MasterflexMember2022-04-012022-06-3000017224822021-11-012021-11-010001722482avtr:MasterflexMember2021-11-010001722482us-gaap:CustomerRelationshipsMember2021-11-010001722482us-gaap:CustomerRelationshipsMember2021-11-012021-11-010001722482avtr:DevelopedTechnologyTubingMember2021-11-010001722482avtr:DevelopedTechnologyTubingMember2021-11-012021-11-010001722482avtr:DevelopedTechnologyPumpsMember2021-11-010001722482avtr:DevelopedTechnologyPumpsMember2021-11-012021-11-010001722482us-gaap:TrademarksMember2021-11-010001722482us-gaap:TrademarksMember2021-11-012021-11-0100017224822021-11-010001722482avtr:MasterflexMember2022-07-012022-09-300001722482avtr:MasterflexMember2022-01-012022-09-300001722482avtr:RitterGmbHMember2022-07-012022-09-300001722482avtr:RitterGmbHMember2022-01-012022-09-300001722482avtr:RitterGmbHAndMasterflexMember2022-07-012022-09-300001722482avtr:RitterGmbHAndMasterflexMember2021-07-012021-09-300001722482avtr:RitterGmbHAndMasterflexMember2022-01-012022-09-300001722482avtr:RitterGmbHAndMasterflexMember2021-01-012021-09-300001722482us-gaap:ConvertiblePreferredStockMember2021-07-012021-09-300001722482us-gaap:ConvertiblePreferredStockMember2021-01-012021-09-30avtr:segment0001722482avtr:AmericasSegmentMember2022-07-012022-09-300001722482avtr:AmericasSegmentMember2021-07-012021-09-300001722482avtr:AmericasSegmentMember2022-01-012022-09-300001722482avtr:AmericasSegmentMember2021-01-012021-09-300001722482avtr:EuropeSegmentMember2022-07-012022-09-300001722482avtr:EuropeSegmentMember2021-07-012021-09-300001722482avtr:EuropeSegmentMember2022-01-012022-09-300001722482avtr:EuropeSegmentMember2021-01-012021-09-300001722482avtr:AmeaMember2022-07-012022-09-300001722482avtr:AmeaMember2021-07-012021-09-300001722482avtr:AmeaMember2022-01-012022-09-300001722482avtr:AmeaMember2021-01-012021-09-300001722482us-gaap:CorporateNonSegmentMember2022-07-012022-09-300001722482us-gaap:CorporateNonSegmentMember2021-07-012021-09-300001722482us-gaap:CorporateNonSegmentMember2022-01-012022-09-300001722482us-gaap:CorporateNonSegmentMember2021-01-012021-09-300001722482avtr:ProprietaryMaterialsAndConsumablesMember2022-07-012022-09-300001722482avtr:ProprietaryMaterialsAndConsumablesMember2021-07-012021-09-300001722482avtr:ProprietaryMaterialsAndConsumablesMember2022-01-012022-09-300001722482avtr:ProprietaryMaterialsAndConsumablesMember2021-01-012021-09-300001722482avtr:ThirdPartyMaterialsAndConsumablesMember2022-07-012022-09-300001722482avtr:ThirdPartyMaterialsAndConsumablesMember2021-07-012021-09-300001722482avtr:ThirdPartyMaterialsAndConsumablesMember2022-01-012022-09-300001722482avtr:ThirdPartyMaterialsAndConsumablesMember2021-01-012021-09-300001722482avtr:ServicesAndSpecialtyProcurementMember2022-07-012022-09-300001722482avtr:ServicesAndSpecialtyProcurementMember2021-07-012021-09-300001722482avtr:ServicesAndSpecialtyProcurementMember2022-01-012022-09-300001722482avtr:ServicesAndSpecialtyProcurementMember2021-01-012021-09-300001722482avtr:EquipmentAndInstrumentationMember2022-07-012022-09-300001722482avtr:EquipmentAndInstrumentationMember2021-07-012021-09-300001722482avtr:EquipmentAndInstrumentationMember2022-01-012022-09-300001722482avtr:EquipmentAndInstrumentationMember2021-01-012021-09-300001722482us-gaap:CustomerRelationshipsMember2022-09-300001722482us-gaap:CustomerRelationshipsMember2021-12-310001722482us-gaap:TradeNamesMember2022-09-300001722482us-gaap:TradeNamesMember2021-12-310001722482us-gaap:OtherIntangibleAssetsMember2022-09-300001722482us-gaap:OtherIntangibleAssetsMember2021-12-310001722482stpr:NJus-gaap:EnvironmentalIssueMember2022-09-300001722482stpr:NJsrt:MinimumMemberus-gaap:EnvironmentalIssueMember2022-09-300001722482stpr:NJsrt:MaximumMemberus-gaap:EnvironmentalIssueMember2022-09-300001722482country:PLus-gaap:EnvironmentalIssueMember2022-09-300001722482us-gaap:SecuredDebtMember2022-01-012022-09-300001722482us-gaap:SecuredDebtMember2022-09-300001722482us-gaap:SecuredDebtMember2021-12-310001722482us-gaap:LineOfCreditMembercurrency:EURus-gaap:MediumTermNotesMember2022-01-012022-09-300001722482us-gaap:LineOfCreditMembercurrency:EURus-gaap:MediumTermNotesMember2022-09-300001722482us-gaap:LineOfCreditMembercurrency:EURus-gaap:MediumTermNotesMember2021-12-310001722482us-gaap:LineOfCreditMembercurrency:EURavtr:MediumTermNotes2Point87PercentEUROTermLoanMember2022-01-012022-09-300001722482us-gaap:LineOfCreditMembercurrency:EURavtr:MediumTermNotes2Point87PercentEUROTermLoanMember2022-09-300001722482us-gaap:LineOfCreditMembercurrency:EURavtr:MediumTermNotes2Point87PercentEUROTermLoanMember2021-12-310001722482us-gaap:LineOfCreditMembercurrency:EURavtr:MediumTermNotes2Point37PercentEUROTermLoanMember2022-01-012022-09-300001722482us-gaap:LineOfCreditMembercurrency:EURavtr:MediumTermNotes2Point37PercentEUROTermLoanMember2022-09-300001722482us-gaap:LineOfCreditMembercurrency:EURavtr:MediumTermNotes2Point37PercentEUROTermLoanMember2021-12-310001722482us-gaap:LineOfCreditMembercurrency:USDus-gaap:MediumTermNotesMember2022-01-012022-09-300001722482us-gaap:LineOfCreditMembercurrency:USDus-gaap:MediumTermNotesMember2022-09-300001722482us-gaap:LineOfCreditMembercurrency:USDus-gaap:MediumTermNotesMember2021-12-310001722482us-gaap:LineOfCreditMembercurrency:USDavtr:MediumTermNotes2Point25PercentUSDTermLoanMember2022-01-012022-09-300001722482us-gaap:LineOfCreditMembercurrency:USDavtr:MediumTermNotes2Point25PercentUSDTermLoanMember2022-09-300001722482us-gaap:LineOfCreditMembercurrency:USDavtr:MediumTermNotes2Point25PercentUSDTermLoanMember2021-12-310001722482us-gaap:SeniorNotesMemberavtr:TwoPointSixHundredAndTwentyFivePercentSecuredMemberMember2022-09-300001722482us-gaap:SeniorNotesMemberavtr:TwoPointSixHundredAndTwentyFivePercentSecuredMemberMember2021-12-310001722482avtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:SeniorNotesMember2022-09-300001722482us-gaap:SeniorNotesMemberavtr:MediumTermLoan3Point875PercentDueNovember212024Instrument1Member2022-09-300001722482us-gaap:SeniorNotesMemberavtr:MediumTermLoan3Point875PercentDueNovember212024Instrument1Member2021-12-310001722482us-gaap:SeniorNotesMemberavtr:MediumTermLoan3Point875PercentDueNovember212024Instrument2Member2022-09-300001722482us-gaap:SeniorNotesMemberavtr:MediumTermLoan3Point875PercentDueNovember212024Instrument2Member2021-12-310001722482us-gaap:SeniorNotesMemberavtr:SeniorUnsecuredNotes4Point625PercentDueJuly152028Member2022-09-300001722482us-gaap:SeniorNotesMemberavtr:SeniorUnsecuredNotes4Point625PercentDueJuly152028Member2021-12-310001722482us-gaap:CapitalLeaseObligationsMember2022-09-300001722482us-gaap:CapitalLeaseObligationsMember2021-12-310001722482avtr:OtherDebtMember2022-09-300001722482avtr:OtherDebtMember2021-12-310001722482us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-09-300001722482us-gaap:AssetNotPledgedAsCollateralMemberus-gaap:SecuredDebtMember2022-09-300001722482us-gaap:SubsequentEventMember2022-10-250001722482us-gaap:LineOfCreditMembercurrency:USDus-gaap:MediumTermNotesMember2022-07-012022-09-300001722482us-gaap:LineOfCreditMemberus-gaap:MediumTermNotesMember2022-07-012022-09-300001722482us-gaap:AccumulatedTranslationAdjustmentMember2022-06-300001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-06-300001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-06-300001722482us-gaap:AccumulatedTranslationAdjustmentMember2022-07-012022-09-300001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-07-012022-09-300001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-07-012022-09-300001722482us-gaap:AccumulatedTranslationAdjustmentMember2022-09-300001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-09-300001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-09-300001722482us-gaap:AccumulatedTranslationAdjustmentMember2021-06-300001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-06-300001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-06-300001722482us-gaap:AccumulatedTranslationAdjustmentMember2021-07-012021-09-300001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-07-012021-09-300001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-07-012021-09-300001722482us-gaap:AccumulatedTranslationAdjustmentMember2021-09-300001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-09-300001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-09-300001722482us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-12-310001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310001722482us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-09-300001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-01-012022-09-300001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-09-300001722482us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-12-310001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001722482us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-09-300001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-01-012021-09-300001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-09-300001722482us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001722482us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001722482us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001722482us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001722482us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001722482us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300001722482us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001722482us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001722482avtr:OtherStockBasedAwardMember2022-07-012022-09-300001722482avtr:OtherStockBasedAwardMember2021-07-012021-09-300001722482avtr:OtherStockBasedAwardMember2022-01-012022-09-300001722482avtr:OtherStockBasedAwardMember2021-01-012021-09-300001722482us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001722482us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001722482us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001722482us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001722482us-gaap:LiabilityMember2022-07-012022-09-300001722482us-gaap:LiabilityMember2021-07-012021-09-300001722482us-gaap:LiabilityMember2022-01-012022-09-300001722482us-gaap:LiabilityMember2021-01-012021-09-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-12-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-01-012022-09-300001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-09-300001722482us-gaap:RestrictedStockUnitsRSUMember2021-12-310001722482us-gaap:RestrictedStockUnitsRSUMember2022-09-300001722482srt:MinimumMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001722482srt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-3000017224822022-09-302022-09-300001722482us-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2022-09-30avtr:instrument0001722482us-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2022-07-012022-09-300001722482us-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2021-07-012021-09-300001722482us-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2022-01-012022-09-300001722482us-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2021-01-012021-09-300001722482us-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-07-012022-09-300001722482us-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2021-07-012021-09-300001722482us-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-01-012022-09-300001722482us-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2021-01-012021-09-300001722482us-gaap:CashFlowHedgingMember2022-07-012022-09-300001722482us-gaap:CashFlowHedgingMember2021-07-012021-09-300001722482us-gaap:CashFlowHedgingMember2022-01-012022-09-300001722482us-gaap:CashFlowHedgingMember2021-01-012021-09-300001722482us-gaap:NetInvestmentHedgingMemberus-gaap:CrossCurrencyInterestRateContractMember2022-09-300001722482us-gaap:NetInvestmentHedgingMemberus-gaap:CrossCurrencyInterestRateContractMember2022-07-012022-09-300001722482us-gaap:NetInvestmentHedgingMemberus-gaap:CrossCurrencyInterestRateContractMember2021-07-012021-09-300001722482us-gaap:NetInvestmentHedgingMemberus-gaap:InterestIncomeMemberus-gaap:CrossCurrencyInterestRateContractMember2022-07-012022-09-300001722482us-gaap:NetInvestmentHedgingMemberus-gaap:InterestIncomeMemberus-gaap:CrossCurrencyInterestRateContractMember2021-07-012021-09-300001722482us-gaap:NetInvestmentHedgingMember2022-07-012022-09-300001722482us-gaap:NetInvestmentHedgingMember2021-07-012021-09-300001722482us-gaap:NetInvestmentHedgingMemberus-gaap:CrossCurrencyInterestRateContractMember2022-01-012022-09-300001722482us-gaap:NetInvestmentHedgingMemberus-gaap:CrossCurrencyInterestRateContractMember2021-01-012021-09-300001722482us-gaap:NetInvestmentHedgingMemberus-gaap:InterestIncomeMemberus-gaap:CrossCurrencyInterestRateContractMember2022-01-012022-09-300001722482us-gaap:NetInvestmentHedgingMemberus-gaap:InterestIncomeMemberus-gaap:CrossCurrencyInterestRateContractMember2021-01-012021-09-300001722482us-gaap:NetInvestmentHedgingMember2022-01-012022-09-300001722482us-gaap:NetInvestmentHedgingMember2021-01-012021-09-300001722482us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2022-09-300001722482us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2021-12-310001722482us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300001722482us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001722482us-gaap:DesignatedAsHedgingInstrumentMember2022-09-300001722482us-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001722482us-gaap:NetInvestmentHedgingMemberus-gaap:CrossCurrencyInterestRateContractMember2022-07-012022-07-270001722482avtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-30iso4217:EUR0001722482avtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberavtr:ForeignCurrencyDenominatedDebtMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300001722482avtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberavtr:ForeignCurrencyDenominatedDebtMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001722482avtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:NetInvestmentHedgingMemberavtr:ForeignCurrencyDenominatedDebtMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-012022-09-300001722482avtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:NetInvestmentHedgingMemberavtr:ForeignCurrencyDenominatedDebtMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-07-012021-09-300001722482avtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:NetInvestmentHedgingMemberavtr:ForeignCurrencyDenominatedDebtMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-012022-09-300001722482avtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:NetInvestmentHedgingMemberavtr:ForeignCurrencyDenominatedDebtMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-09-30


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
━━━━━━━━━
FORM 10-Q
━━━━━━━━━
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 001-38912

avtr-20220930_g1.jpg
Avantor, Inc.
(Exact name of registrant as specified in its charter)
Delaware82-2758923
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
Radnor Corporate Center, Building One, Suite 200
100 Matsonford Road
Radnor, Pennsylvania 19087
(Address of principal executive offices) (zip code)
(610) 386-1700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolExchange on which registered
Common stock, $0.01 par valueAVTRNew York Stock Exchange




Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate 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,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ☒ Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer  Smaller reporting company  Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☒ No
On October 20, 2022, 674,204,414 shares of common stock, $0.01 par value per share, were outstanding.



Avantor, Inc. and subsidiaries
Form 10-Q for the quarterly period ended September 30, 2022

i

Glossary
Description
we, us, ourAvantor, Inc. and its subsidiaries
Adjusted EBITDAour earnings or loss before interest, taxes, depreciation, amortization and certain other adjustments
Annual Reportour annual report on Form 10-K for the year ended December 31, 2021
AMEAAsia, Middle-East and Africa
AOCIaccumulated other comprehensive income or loss
cGMPCurrent Good Manufacturing Practice
COVID-19Coronavirus disease of 2019
double-digitgreater than 10%
EURIBORthe basic rate of interest used in lending between banks on the European Union interbank market
GAAPUnited States generally accepted accounting principles
Goldman Sachsan investment banking firm and its affiliates
high single-digit7 - 9%
LIBORthe basic rate of interest used in lending between banks on the London interbank market
low single-digit1 - 3%
M&AMergers and Acquisitions
MCPS6.250% Series A Mandatory Convertible Preferred Stock
mid single-digit4 - 6%
OCIother comprehensive income
RSUrestricted stock unit
SECthe United States Securities and Exchange Commission
SG&A expensesselling, general and administrative expenses
Specialty procurementproduct sales related to customer procurement services
VWRVWR Corporation and its subsidiaries, a company we acquired in November 2017

ii

Cautionary factors regarding forward-looking statements
This report contains forward-looking statements. All statements other than statements of historical fact included in this report are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “outlook,” “plan,” “potential,” “project,” “projection,” “seek,” “can,” “could,” “may,” “should,” “would,” “will,” the negatives thereof and other words and terms of similar meaning.
Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, 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” in our Annual Report, as such risk factors may be updated from time to time in our periodic filings with the SEC and in this report, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:
disruptions to our operations;
competition from other industry providers;
our ability to implement our growth strategy;
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 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 consistent purchase volumes under purchase orders;
our ability to maintain and develop relationships with drug manufacturers and contract manufacturing organizations;
the impact of new laws, regulations, or other industry standards;
changes in the interest rate environment that increase interest on our borrowings;
iii

adverse impacts from currency exchange rates or currency controls imposed by any government in major areas where we operate or otherwise;
our ability to implement and improve processing systems and prevent a compromise of our information systems;
our ability 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;
the availability of raw materials;
our 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 impact of impairment charges on our goodwill and other intangible assets;
fluctuations and uncertainties related to doing business outside the United States;
our ability to obtain and maintain required regulatory clearances or approvals may constrain the commercialization of submitted products;
our ability to comply with environmental, health and safety laws and regulations, or the impact of any liability or obligation imposed under such laws or regulations;
our indebtedness could adversely affect our financial condition and prevent us from fulfilling our debt or contractual obligations;
our ability to generate sufficient cash flows or access sufficient additional capital to meet our debt obligations or to fund our other liquidity needs; and
our ability to maintain an adequate system of internal control over financial reporting.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this report. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.
iv

PART I — FINANCIAL INFORMATION
Item 1.    Financial statements
Avantor, Inc. and subsidiaries

1

Avantor, Inc. and subsidiaries
Unaudited condensed consolidated balance sheets
(in millions)
September 30, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents$265.6 $301.7 
Accounts receivable, net of allowances of $26.8 and $26.4
1,231.4 1,222.1 
Inventory905.0 872.0 
Other current assets158.1 81.4 
Total current assets2,560.1 2,477.2 
Property, plant and equipment, net of accumulated depreciation of $488.6 and $445.2
698.2 705.5 
Other intangible assets, net (see note 7)
4,099.0 5,140.3 
Goodwill5,511.4 5,341.1 
Other assets244.6 233.1 
Total assets$13,113.3 $13,897.2 
Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt$280.6 $45.2 
Accounts payable768.9 755.1 
Employee-related liabilities120.0 199.7 
Accrued interest38.6 49.8 
Other current liabilities343.8 401.0 
Total current liabilities1,551.9 1,450.8 
Debt, net of current portion5,907.5 6,978.0 
Deferred income tax liabilities728.4 913.0 
Other liabilities334.1 358.4 
Total liabilities8,521.9 9,700.2 
Commitments and contingencies (see note 8)
Stockholders’ equity:
MCPS including paid-in capital, 0.0 and 20.7 shares outstanding
 1,003.7 
Common stock including paid-in capital, 674.2 and 609.7 shares outstanding
3,774.5 2,752.6 
Accumulated earnings
1,028.7 483.9 
Accumulated other comprehensive loss
(211.8)(43.2)
Total stockholders’ equity4,591.4 4,197.0 
Total liabilities and stockholders’ equity$13,113.3 $13,897.2 

See accompanying notes to the unaudited condensed consolidated financial statements.
2

Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of operations
(in millions, except per share data)
Three months ended September 30,
Nine months ended September 30,
2022
2021
2022
2021
Net sales$1,856.5 $1,834.3 $5,717.4 $5,478.5 
Cost of sales1,205.8 1,218.4 3,729.1 3,623.3 
Gross profit650.7 615.9 1,988.3 1,855.2 
Selling, general and administrative expenses374.9 378.7 1,109.9 1,097.0 
Operating income
275.8 237.2 878.4 758.2 
Interest expense(67.3)(54.1)(196.0)(156.6)
Loss on extinguishment of debt(2.9) (10.8)(8.4)
Other income, net
2.7 3.4 4.8 19.8 
Income before income taxes
208.3 186.5 676.4 613.0 
Income tax expense
(41.3)(29.7)(131.6)(134.4)
Net income
167.0 156.8 544.8 478.6 
Accumulation of yield on preferred stock (16.1)(24.2)(48.4)
Net income available to common stockholders
$167.0 $140.7 $520.6 $430.2 
Earnings per share:
Basic$0.25 $0.24 $0.81 $0.74 
Diluted$0.25 $0.24 $0.80 $0.73 
Weighted average shares outstanding:
Basic674.1 588.5 643.0 584.1 
Diluted679.3 598.1 680.4 593.0 

See accompanying notes to the unaudited condensed consolidated financial statements.
3

Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of comprehensive income or loss
(in millions)
Three months ended September 30,
Nine months ended September 30,
2022
2021
2022
2021
Net income
$167.0 $156.8 $544.8 $478.6 
Other comprehensive loss:
Foreign currency translation — unrealized loss
(62.1)(38.2)(160.1)(55.2)
Derivative instruments:

Unrealized gain (loss)
20.7  27.7 (2.0)
Reclassification of loss (gain) into earnings
0.2 0.9 (1.1)3.0 
Activity related to defined benefit plans(0.1)0.6 4.4 1.0 
Other comprehensive loss before income taxes
(41.3)(36.7)(129.1)(53.2)
Income tax effect(22.2)(2.8)(39.5)(6.6)
Other comprehensive loss
(63.5)(39.5)(168.6)(59.8)
Comprehensive income
$103.5 $117.3 $376.2 $418.8 
See accompanying notes to the unaudited condensed consolidated financial statements.
4

Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of stockholders’ equity
(in millions)
Stockholders’ equity
MCPS including paid-in capitalCommon stock including paid-in capitalAccumulated earningsAOCITotal
SharesAmountSharesAmount
Balance at June 30, 2022
 $ 673.9 $3,756.1 $861.7 $(148.3)$4,469.5 
Comprehensive income
— — — — 167.0 (63.5)103.5 
Stock-based compensation expense— — — 13.7 — — 13.7 
Stock option exercises and other common stock transactions— — 0.3 4.7 — — 4.7 
Balance at September 30, 2022
 $ 674.2 $3,774.5 $1,028.7 $(211.8)$4,591.4 
Balance at June 30, 2021
20.7 $1,003.7 583.7 $1,747.7 $233.1 $1.4 $2,985.9 
Comprehensive income
— — — — 156.8 (39.5)117.3 
Issuance of stock, net of issuance costs— — 23.8 967.0 — — 967.0 
Stock-based compensation expense— — — 11.9 — — 11.9 
Accumulation of yield on preferred stock— — — (16.1)— — (16.1)
Stock option exercises and other common stock transactions— — 1.9 38.8 — — 38.8 
Balance at September 30, 2021
20.7 $1,003.7 609.4 $2,749.3 $389.9 $(38.1)$4,104.8 

See accompanying notes to the unaudited condensed consolidated financial statements.
5

Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of stockholders’ equity (continued)
(in millions)
Stockholders’ equity
MCPS including paid-in capitalCommon stock including paid-in capitalAccumulated earnings (deficit)AOCITotal
SharesAmountSharesAmount
Balance at December 31, 2021
20.7 $1,003.7 609.7 $2,752.6 $483.9 $(43.2)$4,197.0 
Comprehensive income
— — — — 544.8 (168.6)376.2 
Stock-based compensation expense— — — 39.1 — — 39.1 
Accumulation of yield on preferred stock— — (24.2)— — (24.2)
Stock option exercises and other common stock transactions— — 1.6 3.3 — — 3.3 
Conversion of MCPS into Common stock(20.7)(1,003.7)62.9 1,003.7 — —  
Balance at September 30, 2022
 $ 674.2 $3,774.5 $1,028.7 $(211.8)$4,591.4 
Balance at December 31, 2020
20.7 $1,003.7 580.1 $1,737.6 $(88.7)$21.7 $2,674.3 
Comprehensive income
— — — — 478.6 (59.8)418.8 
Issuance of stock, net of issuance costs— — 23.8 967.0 — — 967.0 
Stock-based compensation expense— — — 34.2 — — 34.2 
Accumulation of yield on preferred stock— — — (48.4)— — (48.4)
Stock option exercises and other common stock transactions— — 5.5 58.9 — — 58.9 
Balance at September 30, 2021
20.7 $1,003.7 609.4 $2,749.3 $389.9 $(38.1)$4,104.8 

See accompanying notes to the unaudited condensed consolidated financial statements.
6

Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of cash flows
(in millions)
Nine months ended September 30,
2022
2021
Cash flows from operating activities:
Net income
$544.8 $478.6 
Reconciling adjustments:
Depreciation and amortization304.8 275.1 
Stock-based compensation expense
35.8 37.0 
Provision for accounts receivable and inventory43.9 33.5 
Deferred income tax benefit
(61.8)(24.0)
Amortization of deferred financing costs12.1 11.7 
Loss on extinguishment of debt10.8 8.4 
Foreign currency remeasurement loss
4.9 5.4 
Changes in assets and liabilities:
Accounts receivable(99.0)(66.5)
Inventory(114.1)(117.8)
Accounts payable65.1 1.9 
Accrued interest(11.2)(17.5)
Other assets and liabilities(98.0)20.5 
Other, net(0.1)6.3 
Net cash provided by operating activities
638.0 652.6 
Cash flows from investing activities:
Capital expenditures(99.8)(71.1)
Cash paid for acquisitions, net of cash acquired(20.2)(1,168.9)
Cash proceeds from settlement of cross currency swap42.5  
Other1.0 1.8 
Net cash used in investing activities
(76.5)(1,238.2)
Cash flows from financing activities:
Debt borrowings245.0 1,134.6 
Debt repayments(783.0)(323.1)
Payments of debt refinancing fees and premiums (22.5)
Proceeds from issuance of stock, net of issuance costs 967.0 
Payments of dividends on preferred stock(32.4)(48.4)
Proceeds received from exercise of stock options16.4 76.4 
Shares repurchased to satisfy employee tax obligations for vested stock-based awards(13.1)(25.8)
Net cash (used in) provided by financing activities
(567.1)1,758.2 
Effect of currency rate changes on cash(33.7)(10.0)
Net change in cash, cash equivalents and restricted cash(39.3)1,162.6 
Cash, cash equivalents and restricted cash, beginning of period327.1 289.2 
Cash, cash equivalents and restricted cash, end of period$287.8 $1,451.8 
See accompanying notes to the unaudited condensed consolidated financial statements.
7

Avantor, Inc. and subsidiaries
Notes to unaudited condensed consolidated financial statements
1.    Nature of operations and presentation of financial statements
We are a global manufacturer and distributor that provides products and services to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries.
Basis of presentation
The accompanying condensed consolidated financial statements have been prepared pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year.
We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report. Those audited consolidated financial statements include a summary of our significant accounting policies.
Conversion of MCPS into Common Stock
In May of 2022, all outstanding shares of 6.250% Series A MCPS, par value $0.01 per share automatically converted into 62.9 million shares of our common stock, in accordance with their terms. The conversion rate for each share of MCPS was 3.0395 shares of our common stock, subject to receipt of cash in lieu of fractional shares, and was determined based on the price of our common stock on the date of conversion. No outstanding shares of the MCPS remained following the mandatory conversion.
Principles of consolidation
All intercompany balances and transactions have been eliminated from the financial statements.
Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates.
2.    Business combinations
For a description of the Company’s acquisitions for the period ending December 31, 2021, refer to note 4 in the Annual Report.
Acquisition of Masterflex
On November 1, 2021, we completed the acquisition of Masterflex for cash consideration of $2,845.3 million. In the first quarter of fiscal year 2022, we made an additional $15.3 million payment to taxing
8

authorities on behalf of the sellers to settle a pre-acquisition liability. In the second quarter of 2022, we made an additional $4.9 million payment to the sellers to adjust for final net working capital balances, bringing the total purchase price consideration to $2,865.5 million.
The fair value of the net assets acquired on November 1, 2021 included the following:
(in millions)
November 1, 2021
Inventory$45.7 
Property, plant & equipment9.8 
Other intangible assets664.2 
Goodwill2,168.8 
Other assets and liabilities
(3.3)
Deferred income taxes, net(19.7)
Total net assets$2,865.5 
The assets acquired and liabilities assumed are recorded at their fair values as part of our Americas operating segment as of November 1, 2021. The balances of the acquired assets and liabilities have been updated from our prior filings to reflect additional information relating to the fair values of acquired inventory, intangible asset, working capital, and related deferred taxes. The areas of purchase accounting that remain preliminary and subject to change are limited to assessing any deferred tax impacts.
The following table summarizes the fair value of intangible assets acquired on November 1, 2021 and their related weighted average amortization period:

(in millions)Fair valueWeighted average estimated life
Customer relationships$212.0 13.0 years
Developed technology - Tubing234.4 15.0 years
Developed technology - Pumps122.0 10.0 years
Trademark95.8 15.0 years
Total$664.2 
The goodwill represents intellectual capital and the acquired assembled workforce, which are other intangible assets that do not qualify for separate recognition. A portion of the goodwill is deductible for tax purposes.
Revenue from acquired companies
During the three and nine months ended September 30, 2022, Masterflex has generated revenues of $46.5 million and $178.7 million, respectively.
During the three and nine months ended September 30, 2022, Ritter has generated revenues of $39.6 million and $119.7 million, respectively.
9

Pro forma disclosures
The following unaudited pro forma combined financial information is provided for the three and nine months ended September 30, 2022 and 2021. The pro forma information is not necessarily indicative of the results of operations that actually would have occurred under the ownership and management of the Company.
(in millions)
Three months ended September 30,
Nine months ended September 30,
2022
2021
2022
2021
Revenue$1,856.5 $1,896.1 $5,717.4 $5,769.9 
Net income
167.0 150.9 544.8 452.3 
The unaudited pro forma combined financial information presented above includes the accounting effects of the Ritter and Masterflex acquisitions, including, to the extent applicable, amortization charges from acquired intangible assets, depreciation of property, plant and equipment that have been revalued, interest expense on debt acquired to finance the transactions, and the related tax effects.
10

3.    Earnings per share
The following table presents the reconciliation of basic and diluted earnings per share for the three and nine months ended September 30, 2022:
(in millions, except per share data)
Three months ended September 30, 2022Nine months ended September 30, 2022
Earnings (numerator)Weighted average shares outstanding (denominator)Earnings per shareEarnings (numerator)Weighted average shares outstanding (denominator)Earnings per share
Basic$167.0 674.1 $0.25 $520.6 643.0 $0.81 
Dilutive effect of stock-based awards 5.2  6.8 
Dilutive impact of MCPS  24.2 30.6 
Diluted$167.0 679.3 $0.25 $544.8 680.4 $0.80 
The following table presents the reconciliation of basic and diluted earnings per share for the three and nine months ended September 30, 2021:
(in millions, except per share data)
Three months ended September 30, 2021Nine months ended September 30, 2021
Earnings (numerator)Weighted average shares outstanding (denominator)Earnings per shareEarnings (numerator)Weighted average shares outstanding (denominator)Earnings per share
Basic$140.7 588.5 $0.24 $430.2 584.1 $0.74 
Dilutive effect of stock-based awards 9.6  8.9 
Diluted$140.7 598.1 $0.24 $430.2 593.0 $0.73 
For the three and nine months ended September 30, 2021, diluted earnings per share included accumulated yield on preferred stock of $16.1 million and $48.4 million, respectively, and excluded 62.9 million of common stock equivalents under the MCPS because they were anti-dilutive to the calculations.
4.    Segment financial information
We report three geographic segments based on customer location: Americas, Europe and AMEA. Each segment manufactures and distributes solutions for the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries. Corporate costs are managed on a standalone basis and not allocated to segments.
11

The following table presents information by reportable segment:
(in millions)
Three months ended September 30,
Nine months ended September 30,
2022
2021
2022
2021
Net sales:
Americas$1,123.2 $1,045.0 $3,423.2 $3,149.9 
Europe595.1 674.7 1,899.3 1,991.1 
AMEA138.2 114.6 394.9 337.5 
Total$1,856.5 $1,834.3 $5,717.4 $5,478.5 
Adjusted EBITDA:
Americas$262.3 $236.3 $846.3 $740.0 
Europe130.3 135.5 393.0 390.4 
AMEA35.7 29.5 101.1 80.5 
Corporate(44.3)(42.1)(129.2)(122.0)
Total$384.0 $359.2 $1,211.2 $1,088.9 
The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers.
The following table presents the reconciliation of Adjusted EBITDA from net income, the nearest measurement under GAAP:
(in millions)
Three months ended September 30,
Nine months ended September 30,
2022
2021
2022
2021
Net income
$167.0 $156.8 $544.8 $478.6 
Interest expense67.3 54.1 196.0 156.6 
Income tax expense
41.3 29.7 131.6 134.4 
Depreciation and amortization100.6 100.0 304.8 275.1 
Loss on extinguishment of debt2.9  10.8 8.4 
Net foreign currency (gain) loss from financing activities
(1.2)(0.8)(0.2)1.2 
Other stock-based compensation (benefit) expense
(1.6)1.6 (3.3)2.9 
Acquisition-related expenses1
 3.2  27.8 
Integration-related expenses2
6.4 7.9 13.6 8.4 
Purchase accounting adjustments3
 6.3 9.4 6.3 
Restructuring and severance charges4
1.3 0.4 3.7 2.2 
Receipt of disgorgement penalty5
   (13.0)
Adjusted EBITDA$384.0 $359.2 $1,211.2 $1,088.9 
12

━━━━━━━━━
1.Represents legal, accounting, investment banking and consulting fees incurred related to the acquisition of acquired companies.
2.Represents non-recurring direct costs incurred with third parties to integrate acquired companies. These expenses represent incremental costs and are unrelated to normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition.
3.Represents the non-cash reduction of contingent consideration related to the Ritter acquisition and the amortization of the purchase accounting adjustment to record inventory acquired from Masterflex and Ritter at fair value.
4.Reflects the incremental expenses incurred in the period related to initiatives to increase profitability and productivity. Typical costs included in this caption are employee severance, site-related exit costs, and contract termination costs.
5.As described in note 12.
The following table presents net sales by product line:
(in millions)
Three months ended September 30,
Nine months ended September 30,
2022
2021
2022
2021
Proprietary materials & consumables$727.4 $651.2 $2,216.7 $1,847.2 
Third party materials & consumables665.7 712.2 2,078.4 2,210.0 
Services & specialty procurement225.1 226.5 692.3 678.5 
Equipment & instrumentation238.3 244.4 730.0 742.8 
Total$1,856.5 $1,834.3 $5,717.4 $5,478.5 
5.    Supplemental disclosures of cash flow information
The following tables present supplemental disclosures of cash flow information:
(in millions)
September 30, 2022
December 31, 2021
Cash and cash equivalents$265.6 $301.7 
Restricted cash classified as other assets22.2 25.4 
Total$287.8 $327.1 
At September 30, 2022 and December 31, 2021, amounts included in restricted cash primarily represent funds held in escrow to satisfy a long term retention incentive related to the acquisition of Ritter GmbH.
(in millions)
Nine months ended September 30,
2022
2021
Cash flows from operating activities:
Cash paid for income taxes, net$182.3 $130.2 
Cash paid for interest, excluding financing leases187.0 154.3 
Cash paid for interest on finance leases3.8 3.8 
Cash paid under operating leases32.2 32.4 
Cash flows from financing activities:
Cash paid under finance leases3.5 3.5 
13


6.    Inventory
The following table presents the components of inventory:
(in millions)
September 30, 2022
December 31, 2021
Merchandise inventory$514.3 $562.9 
Finished goods145.7 102.6 
Raw materials188.6 156.1 
Work in process56.4 50.4 
Total$905.0 $872.0 

7.    Other intangible assets
The following table presents the components of other intangible assets:
(in millions)
September 30, 2022
December 31, 2021
Gross valueAccumulated amortizationCarrying valueGross valueAccumulated amortizationCarrying value
Customer relationships$4,668.3 $1,239.6 $3,428.7 $5,474.2 $1,121.6 $4,352.6 
Trade names344.9 193.0 151.9 505.1 194.1 311.0 
Other621.6 195.5 426.1 541.5 157.1 384.4 
Total finite-lived$5,634.8 $1,628.1 4,006.7 $6,520.8 $1,472.8 5,048.0 
Indefinite-lived92.3 92.3 
Total$4,099.0 $5,140.3 

8.    Commitments and contingencies
Our business involves commitments and contingencies related to compliance with environmental laws and regulations, the manufacture and sale of products and litigation. The ultimate resolution of contingencies is subject to significant uncertainty, and it is reasonably possible that contingencies could be decided unfavorably for us.
Environmental laws and regulations
Our environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in technology. We believe that known and unknown environmental matters, if not resolved favorably, could have a material effect on our financial position, liquidity and profitability. Matters to be disclosed are as follows:
The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. At September 30, 2022, our accrued obligation under this order is $2.6 million, which is calculated based on expected cash payments discounted at rates ranging from 3.8% in 2022 to 4.3% in 2045. The undiscounted amount of that obligation is $4.0 million.
14

We are indemnified against any losses incurred in this matter as stipulated through the agreement referenced in our Annual Report.
In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland. Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are also monitoring the condition of a closed landfill on that site. These matters are not covered by our indemnification arrangement because they relate to an operation we subsequently acquired. At September 30, 2022, our balance sheet includes a liability of $1.3 million for remediation and monitoring costs. That liability is estimated primarily on discounted expected remediation payments and is not materially different from its undiscounted amount.
Manufacture and sale of products
Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings.
We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements.
We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.
Litigation
At September 30, 2022, there was no outstanding litigation that we believe would result in material losses if decided against us, and we do not believe that there are any unasserted matters that are reasonably possible to result in a material loss.
15

9.    Debt
The following table presents information about our debt:
(dollars in millions)
September 30, 2022
December 31, 2021
Interest termsRateAmount
Receivables facility
LIBOR plus 0.90%
4.04%
$245.0 $ 
Senior secured credit facilities:
Euro term loans B-3
EURIBOR plus %
%
 133.9 
Euro term loans B-4
EURIBOR plus 2.75%
2.87%
585.3 684.9 
Euro term loans B-5
EURIBOR plus 2.25%
2.37%
314.4 367.9 
U.S. dollar term loans B-4
LIBOR plus %
%
 229.3 
U.S. dollar term loans B-5
LIBOR plus 2.25%
4.77%
1,648.4