10-Q 1 avtr-20240331.htm 10-Q avtr-20240331
false000172248212-312024Q1http://fasb.org/us-gaap/2024#OtherAssetsCurrenthttp://fasb.org/us-gaap/2024#OtherAssetsCurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#OtherAssetsCurrenthttp://fasb.org/us-gaap/2024#OtherAssetsCurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesCurrent41937100017224822024-01-012024-03-3100017224822024-04-22xbrli:shares00017224822024-03-31iso4217:USD00017224822023-12-3100017224822023-01-012023-03-31iso4217:USDxbrli:shares0001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-12-310001722482us-gaap:RetainedEarningsMember2023-12-310001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001722482us-gaap:RetainedEarningsMember2024-01-012024-03-310001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2024-01-012024-03-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2024-03-310001722482us-gaap:RetainedEarningsMember2024-03-310001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-12-310001722482us-gaap:RetainedEarningsMember2022-12-310001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-3100017224822022-12-310001722482us-gaap:RetainedEarningsMember2023-01-012023-03-310001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-01-012023-03-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-03-310001722482us-gaap:RetainedEarningsMember2023-03-310001722482us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-3100017224822023-03-31avtr:segment0001722482avtr:LaboratorySolutionsSegmentMember2024-01-012024-03-310001722482avtr:LaboratorySolutionsSegmentMember2023-01-012023-03-310001722482avtr:BioscienceProductionSegmentMember2024-01-012024-03-310001722482avtr:BioscienceProductionSegmentMember2023-01-012023-03-310001722482us-gaap:OperatingSegmentsMemberavtr:LaboratorySolutionsSegmentMember2024-01-012024-03-310001722482us-gaap:OperatingSegmentsMemberavtr:LaboratorySolutionsSegmentMember2023-01-012023-03-310001722482us-gaap:OperatingSegmentsMemberavtr:BioscienceProductionSegmentMember2024-01-012024-03-310001722482us-gaap:OperatingSegmentsMemberavtr:BioscienceProductionSegmentMember2023-01-012023-03-310001722482us-gaap:CorporateNonSegmentMember2024-01-012024-03-310001722482us-gaap:CorporateNonSegmentMember2023-01-012023-03-310001722482avtr:BusinessExitCostsAndEmployeeSeveranceMember2024-01-012024-03-310001722482avtr:BusinessExitCostsAndEmployeeSeveranceMember2023-01-012023-03-310001722482avtr:ExternalAdvisorsMember2024-01-012024-03-310001722482avtr:ExternalAdvisorsMember2023-01-012023-03-310001722482avtr:ProprietaryMaterialsAndConsumablesMember2024-01-012024-03-310001722482avtr:ProprietaryMaterialsAndConsumablesMember2023-01-012023-03-310001722482avtr:ThirdPartyMaterialsAndConsumablesMember2024-01-012024-03-310001722482avtr:ThirdPartyMaterialsAndConsumablesMember2023-01-012023-03-310001722482avtr:LaboratorySolutionsSegmentMember2023-12-310001722482avtr:BioscienceProductionSegmentMember2023-12-310001722482us-gaap:CustomerRelationshipsMember2024-03-310001722482us-gaap:CustomerRelationshipsMember2023-12-310001722482us-gaap:TradeNamesMember2024-03-310001722482us-gaap:TradeNamesMember2023-12-310001722482us-gaap:OtherIntangibleAssetsMember2024-03-310001722482us-gaap:OtherIntangibleAssetsMember2023-12-310001722482us-gaap:EnvironmentalIssueMemberstpr:NJ2024-03-310001722482srt:MinimumMemberus-gaap:EnvironmentalIssueMemberstpr:NJ2024-03-31xbrli:pure0001722482us-gaap:EnvironmentalIssueMembersrt:MaximumMemberstpr:NJ2024-03-310001722482us-gaap:EnvironmentalIssueMembercountry:PL2024-03-310001722482us-gaap:SecuredDebtMember2024-01-012024-03-310001722482us-gaap:SecuredDebtMember2024-03-310001722482us-gaap:SecuredDebtMember2023-12-310001722482avtr:MediumTermNotes2Point87PercentEUROTermLoanMemberus-gaap:LineOfCreditMember2024-01-012024-03-310001722482avtr:MediumTermNotes2Point87PercentEUROTermLoanMemberus-gaap:LineOfCreditMember2024-03-310001722482avtr:MediumTermNotes2Point87PercentEUROTermLoanMemberus-gaap:LineOfCreditMember2023-12-310001722482avtr:MediumTermNotes2Point37PercentEUROTermLoanMemberus-gaap:LineOfCreditMember2024-01-012024-03-310001722482avtr:MediumTermNotes2Point37PercentEUROTermLoanMemberus-gaap:LineOfCreditMember2024-03-310001722482avtr:MediumTermNotes2Point37PercentEUROTermLoanMemberus-gaap:LineOfCreditMember2023-12-310001722482us-gaap:LineOfCreditMemberavtr:MediumTermNotes2Point25PercentUSDTermLoanMember2024-01-012024-03-310001722482us-gaap:LineOfCreditMemberavtr:MediumTermNotes2Point25PercentUSDTermLoanMember2024-03-310001722482us-gaap:LineOfCreditMemberavtr:MediumTermNotes2Point25PercentUSDTermLoanMember2023-12-310001722482us-gaap:SeniorNotesMemberavtr:TwoPointSixHundredAndTwentyFivePercentSecuredMemberMember2024-03-310001722482us-gaap:SeniorNotesMemberavtr:TwoPointSixHundredAndTwentyFivePercentSecuredMemberMember2023-12-310001722482avtr:MediumTermLoan3Point875PercentDueNovember212024Instrument1Memberus-gaap:SeniorNotesMember2024-03-310001722482avtr:MediumTermLoan3Point875PercentDueNovember212024Instrument1Memberus-gaap:SeniorNotesMember2023-12-310001722482us-gaap:SeniorNotesMemberavtr:MediumTermLoan3Point875PercentDueNovember212024Instrument2Member2024-03-310001722482us-gaap:SeniorNotesMemberavtr:MediumTermLoan3Point875PercentDueNovember212024Instrument2Member2023-12-310001722482avtr:SeniorUnsecuredNotes4Point625PercentDueJuly152028Memberus-gaap:SeniorNotesMember2024-03-310001722482avtr:SeniorUnsecuredNotes4Point625PercentDueJuly152028Memberus-gaap:SeniorNotesMember2023-12-310001722482us-gaap:CapitalLeaseObligationsMember2024-03-310001722482us-gaap:CapitalLeaseObligationsMember2023-12-310001722482avtr:OtherDebtMember2024-03-310001722482avtr:OtherDebtMember2023-12-310001722482us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2024-03-3100017224822022-10-250001722482us-gaap:SecuredDebtMemberus-gaap:AssetNotPledgedAsCollateralMember2024-03-310001722482us-gaap:LineOfCreditMemberus-gaap:SubsequentEventMemberavtr:MediumTermNotes2Point25PercentUSDTermLoanMember2024-04-022024-04-020001722482us-gaap:LineOfCreditMemberus-gaap:MediumTermNotesMember2024-01-012024-03-310001722482us-gaap:AccumulatedTranslationAdjustmentMember2023-12-310001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2023-12-310001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-12-310001722482us-gaap:AccumulatedTranslationAdjustmentMember2024-01-012024-03-310001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2024-01-012024-03-310001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-01-012024-03-310001722482us-gaap:AccumulatedTranslationAdjustmentMember2024-03-310001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2024-03-310001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-03-310001722482us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-12-310001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-12-310001722482us-gaap:AccumulatedTranslationAdjustmentMember2023-01-012023-03-310001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2023-01-012023-03-310001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-01-012023-03-310001722482us-gaap:AccumulatedTranslationAdjustmentMember2023-03-310001722482us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2023-03-310001722482us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-03-310001722482us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001722482us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001722482us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001722482us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001722482avtr:OtherStockBasedAwardMember2024-01-012024-03-310001722482avtr:OtherStockBasedAwardMember2023-01-012023-03-310001722482us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001722482us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001722482us-gaap:LiabilityMember2024-01-012024-03-310001722482us-gaap:LiabilityMember2023-01-012023-03-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-12-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2024-01-012024-03-310001722482us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2024-03-310001722482us-gaap:RestrictedStockUnitsRSUMember2023-12-310001722482us-gaap:RestrictedStockUnitsRSUMember2024-03-310001722482us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2024-03-31avtr:instrument0001722482us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2024-01-012024-03-310001722482us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2023-01-012023-03-310001722482us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:CashFlowHedgingMember2024-01-012024-03-310001722482us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:CashFlowHedgingMember2023-01-012023-03-310001722482us-gaap:CashFlowHedgingMember2024-01-012024-03-310001722482us-gaap:CashFlowHedgingMember2023-01-012023-03-310001722482us-gaap:NetInvestmentHedgingMemberus-gaap:CrossCurrencyInterestRateContractMember2024-03-31iso4217:EUR0001722482us-gaap:NetInvestmentHedgingMemberus-gaap:CrossCurrencyInterestRateContractMember2024-01-012024-03-310001722482us-gaap:NetInvestmentHedgingMemberus-gaap:CrossCurrencyInterestRateContractMember2023-01-012023-03-310001722482us-gaap:NetInvestmentHedgingMemberus-gaap:InterestIncomeMemberus-gaap:CrossCurrencyInterestRateContractMember2024-01-012024-03-310001722482us-gaap:NetInvestmentHedgingMemberus-gaap:InterestIncomeMemberus-gaap:CrossCurrencyInterestRateContractMember2023-01-012023-03-310001722482us-gaap:NetInvestmentHedgingMember2024-01-012024-03-310001722482us-gaap:NetInvestmentHedgingMember2023-01-012023-03-310001722482us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001722482us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001722482us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001722482us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001722482us-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001722482us-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001722482us-gaap:ForeignExchangeContractMemberavtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001722482avtr:ForeignCurrencyDenominatedDebtMemberavtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001722482avtr:ForeignCurrencyDenominatedDebtMemberavtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001722482us-gaap:NetInvestmentHedgingMemberavtr:ForeignCurrencyDenominatedDebtMemberavtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001722482us-gaap:NetInvestmentHedgingMemberavtr:ForeignCurrencyDenominatedDebtMemberavtr:ThreePointEightHundredAndSeventyFivePercentUnsecuredMemberMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-01-012023-03-310001722482avtr:ChristopheCouturierMember2024-01-012024-03-310001722482avtr:ChristopheCouturierMemberavtr:ChristopheCouturierTradingArrangementCommonStockThroughStockOptionsMember2024-03-310001722482avtr:ChristopheCouturierMemberavtr:ChristopheCouturierTradingArrangementCommonStockMember2024-03-310001722482avtr:JamesBramwellMember2024-01-012024-03-310001722482avtr:JamesBramwellMemberavtr:JamesBramwellTradingArrangementCommonStockThroughStockOptionsMember2024-03-310001722482avtr:JamesBramwellMemberavtr:JamesBramwellTradingArrangementCommonStockMember2024-03-310001722482avtr:JamesBramwellMemberavtr:JamesBramwellTradingArrangementCommonStockThroughStockOptionsMember2024-01-012024-03-31


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 March 31, 2024
 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

avantorlogoa08.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 April 22, 2024, 679,266,323 shares of common stock, $0.01 par value per share, were outstanding.



Avantor, Inc. and subsidiaries
Form 10-Q for the quarterly period ended March 31, 2024

i

Glossary
Description
we, us, ourAvantor, Inc. and its subsidiaries
Adjusted EBITDAour earnings or loss before interest, taxes, depreciation, amortization and certain other adjustments
Adjusted Operating Incomeour earnings or loss before interest, taxes, amortization and certain other adjustments
Annual Reportour annual report on Form 10-K for the year ended December 31, 2023
AOCIaccumulated other comprehensive income or loss
EURIBORthe basic rate of interest used in lending between banks on the European Union interbank market
FASBthe Financial Accounting Standards Board of the United States
GAAPUnited States generally accepted accounting principles
long-termperiod other than short-term
M&AMergers and Acquisitions
OCIother comprehensive income or loss
RitterRitter GmbH and affiliates, a company we acquired in June 2021
RSUrestricted stock units represent awards that will vest annually and awards that contain performance and market conditions
SECthe United States Securities and Exchange Commission
SG&A expensesselling, general and administrative expenses
SOFRsecured overnight financing rate
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 within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. 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,” “projection,” “prospects,” “continue,” “goal,” “objective,” “opportunity,” “near-term,” “long-term,” “assumption,” “project,” “guidance,” “target,” “trend,” “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 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 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 maintain our customer base and our expected volume of customer orders;
our ability to maintain and develop relationships with drug manufacturers and contract manufacturing organizations;
iii

the impact of new laws, regulations, or other industry standards;
changes in the interest rate environment that increase interest on our borrowings;
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 or personal data;
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;
supply chain constraints and 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;
currency fluctuations and uncertainties related to doing business outside the United States;
our ability to obtain and maintain required regulatory clearances or approvals, which 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, which could adversely affect our financial condition or 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 effective 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)
March 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents$234.9 $262.9 
Accounts receivable, net of allowances of $37.7 and $35.0
1,129.7 1,150.2 
Inventory810.6 828.1 
Other current assets145.9 143.7 
Total current assets2,321.1 2,384.9 
Property, plant and equipment, net of accumulated depreciation and impairment charges of $635.4 and $616.9
739.7 737.5 
Other intangible assets, net (see note 7)
3,662.9 3,775.3 
Goodwill, net of accumulated impairment losses of $38.8 and $38.8
5,672.0 5,716.7 
Other assets367.7 358.3 
Total assets$12,763.4 $12,972.7 
Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt$299.1 $259.9 
Accounts payable573.4 625.9 
Employee-related liabilities133.0 133.1 
Accrued interest40.7 50.2 
Other current liabilities395.7 411.2 
Total current liabilities1,441.9 1,480.3 
Debt, net of current portion5,023.9 5,276.7 
Deferred income tax liabilities600.6 612.8 
Other liabilities360.7 350.3 
Total liabilities7,427.1 7,720.1 
Commitments and contingencies (see note 8)
Stockholders’ equity:
Common stock including paid-in capital, 679.2 and 676.6 shares issued and outstanding
3,881.4 3,830.1 
Accumulated earnings
1,551.9 1,491.5 
Accumulated other comprehensive loss
(97.0)(69.0)
Total stockholders’ equity5,336.3 5,252.6 
Total liabilities and stockholders’ equity$12,763.4 $12,972.7 

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 March 31,
2024
2023
Net sales$1,679.8 $1,780.3 
Cost of sales1,109.3 1,155.5 
Gross profit570.5 624.8 
Selling, general and administrative expenses424.2 393.6 
Operating income
146.3 231.2 
Interest expense, net(64.3)(73.7)
Loss on extinguishment of debt(2.5)(2.3)
Other income, net
1.1 0.6 
Income before income taxes
80.6 155.8 
Income tax expense
(20.2)(34.3)
Net income
$60.4 $121.5 
Earnings per share:
Basic$0.09 $0.18 
Diluted$0.09 $0.18 
Weighted average shares outstanding:
Basic678.1 674.7 
Diluted681.4 678.1 

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 March 31,
2024
2023
Net income
$60.4 $121.5 
Other comprehensive (loss) income:
Foreign currency translation — unrealized (loss) gain
(22.0)16.9 
Derivative instruments:
Unrealized gain (loss)
9.8 (0.1)
Reclassification of gain into earnings
(8.5)(6.5)
Activity related to defined benefit plans(0.2)(4.9)
Other comprehensive (loss) income before income taxes
(20.9)5.4 
Income tax effect(7.1)5.2 
Other comprehensive (loss) income
(28.0)10.6 
Comprehensive income$32.4 $132.1 
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
Common stock including paid-in capitalAccumulated earningsAOCITotal
SharesAmount
Balance at December 31, 2023
676.6 $3,830.1 $1,491.5 $(69.0)$5,252.6 
Comprehensive income (loss)
— — 60.4 (28.0)32.4 
Stock-based compensation expense— 12.4 — — 12.4 
Stock option exercises and other common stock transactions2.6 38.9 — — 38.9 
Balance at March 31, 2024
679.2 $3,881.4 $1,551.9 $(97.0)$5,336.3 
Balance at December 31, 2022
674.3 $3,785.3 $1,170.4 $(100.3)$4,855.4 
Comprehensive income
— — 121.5 10.6 132.1 
Stock-based compensation expense— 12.6 — — 12.6 
Stock option exercises and other common stock transactions0.8 (5.5)— — (5.5)
Balance at March 31, 2023
675.1 $3,792.4 $1,291.9 $(89.7)$4,994.6 
    
See accompanying notes to the unaudited condensed consolidated financial statements.
5

Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of cash flows
(in millions)
Three months ended March 31,
2024
2023
Cash flows from operating activities:
Net income
$60.4 $121.5 
Reconciling adjustments:
Depreciation and amortization99.6 101.1 
Stock-based compensation expense
12.7 12.7 
Provision for accounts receivable and inventory24.0 12.5 
Deferred income tax benefit
(17.9)(26.4)
Amortization of deferred financing costs3.0 3.4 
Loss on extinguishment of debt2.5 2.3 
Foreign currency remeasurement loss
5.3 1.8 
Changes in assets and liabilities:
Accounts receivable2.7 (52.2)
Inventory(11.0)7.1 
Accounts payable(43.6)0.6 
Accrued interest(9.5)(10.5)
Other assets and liabilities9.3 44.1 
Other4.1 1.5 
Net cash provided by operating activities
141.6 219.5 
Cash flows from investing activities:
Capital expenditures(34.7)(28.0)
Other0.5 0.7 
Net cash used in investing activities
(34.2)(27.3)
Cash flows from financing activities:
Debt borrowings41.2  
Debt repayments(210.3)(269.5)
Proceeds received from exercise of stock options45.5 2.6 
Shares repurchased to satisfy employee tax obligations for vested stock-based awards(6.6)(8.1)
Net cash used in financing activities
(130.2)(275.0)
Effect of currency rate changes on cash and cash equivalents(5.7)4.8 
Net change in cash, cash equivalents and restricted cash(28.5)(78.0)
Cash, cash equivalents and restricted cash, beginning of period287.7 396.9 
Cash, cash equivalents and restricted cash, end of period$259.2 $318.9 
See accompanying notes to the unaudited condensed consolidated financial statements.
6

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.
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.
Segment Reporting
Effective January 1, 2024, we changed our operating model and reporting segment structure from three reportable segments to two reportable segments: Laboratory Solutions and Bioscience Production. This structure aligns with how our Chief Executive Officer, who is our chief operating decision maker, measures segment operating performance and allocates resources across our operating segments.
2.    New accounting standards and climate change related update by SEC
Segment Reporting
In November 2023, the FASB issued Accounting Standards Update 2023-07, Improvements to Reportable Segment Disclosures, which amends the existing segment reporting guidance (ASC Topic 280) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment and a description of its composition, the title and position of the chief operating decision maker and an explanation of how the chief operating decision maker uses the reported
7

measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.
The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of this standard on our financial statement disclosures.
Income Taxes
In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures, which amends the existing income taxes guidance (ASC Topic 740) to require additional disclosures surrounding annual rate reconciliation, income taxes paid and other income tax related disclosures.
The amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of this standard on our financial statement disclosures.
Other
There were no new accounting standards that we expect to have a material impact on our financial position or results of operations upon adoption.
Adoption of rules to enhance and standardize climate-related disclosures for Investors
On March 6, 2024, the SEC adopted final rules to require registrants to disclose certain climate-related information in registration statements and annual reports.
On April 4, 2024, the SEC issued an order staying the final rules pending completion of judicial review of the petitions challenging the final rules. The order does not amend the compliance dates contemplated by the final rules, which are applicable to the Company for fiscal years beginning with the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2025. We are currently evaluating the impact of our pending adoption of these requirements on our financial statement disclosures.
8

3.    Earnings per share
The following table presents the reconciliation of basic and diluted earnings per share for the three months ended March 31, 2024:
(in millions, except per share data)
Three months ended March 31, 2024
Earnings (numerator)
Weighted average shares outstanding (denominator)
Earnings per share
Basic$60.4 678.1 $0.09 
Dilutive effect of stock-based awards 3.3 
Diluted$60.4 681.4 $0.09 
The following table presents the reconciliation of basic and diluted earnings per share for the three months ended March 31, 2023:
(in millions, except per share data)
Three months ended March 31, 2023
Earnings (numerator)Weighted average shares outstanding (denominator)Earnings per share
Basic$121.5 674.7 $0.18 
Dilutive effect of stock-based awards 3.4 
Diluted$121.5 $678.1 $0.18 
4.    Segment financial information
As described in note 1, effective January 1, 2024, we changed our operating model and reporting segment structure into two reportable business segments: Laboratory Solutions and Bioscience Production. Corporate costs are managed on a standalone basis, certain of which are allocated to our reportable segments.
In connection with this change, our chief operating decision maker changed the measure used to evaluate segment profitability from Adjusted EBITDA to Adjusted Operating Income. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change.
9

The following table presents information by reportable segment:
(in millions)
Three months ended March 31,
2024
2023
Net sales:
Laboratory Solutions$1,157.1 $1,203.0 
Bioscience Production522.7 577.3 
Total$1,679.8 $1,780.3 
Adjusted Operating Income:
Laboratory Solutions$148.2 $172.2 
Bioscience Production126.9 167.5 
Corporate(16.7)(16.6)
Total$258.4 $323.1 
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 net income, the nearest measurement under GAAP, to Adjusted Operating Income :
(in millions)
Three months ended March 31,
2024
2023
Net income
$60.4 $121.5 
Interest expense, net64.3 73.7 
Income tax expense
20.2 34.3 
Loss on extinguishment of debt2.5 2.3 
Other income, net
(1.1)(0.6)
Operating income
146.3 231.2 
Amortization75.3 78.4 
Other stock-based compensation expense
0.3 0.1 
Integration-related expenses1
 8.7 
Restructuring and severance charges2
23.2 4.7 
Transformation expenses3
13.3  
Adjusted Operating Income$258.4 $323.1 
━━━━━━━━━
1.Represents direct costs incurred with third parties and the accrual of a long-term retention incentive 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.
2.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related
10

exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.
3.Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.
The following table presents net sales by product category:
(in millions)
Three months ended March 31,
2024
2023
Proprietary$883.5 $952.2 
Third-party796.3 828.1 
Total$1,679.8 $1,780.3 
5.    Supplemental disclosures of cash flow information
The following table presents supplemental disclosures of cash flow information:
(in millions)
March 31, 2024
December 31, 2023
Cash and cash equivalents$234.9 $262.9 
Restricted cash classified as other assets24.3 24.8 
Total$259.2 $287.7 
At March 31, 2024 and December 31, 2023, amounts included in restricted cash primarily represent funds held in escrow to satisfy a long-term retention incentive related to the acquisition of Ritter.
(in millions)
Three months ended March 31,
2024
2023
Cash flows from operating activities:
Cash paid for income taxes, net$17.1 $13.6 
Cash paid for interest, net, excluding financing leases69.2 79.5 
Cash paid for interest on finance leases1.3 1.2 
Cash paid under operating leases11.2 10.4 
Cash flows from financing activities:
Cash paid under finance leases1.4 1.2 
11

6.    Inventory
The following table presents the components of inventory:
(in millions)
March 31, 2024
December 31, 2023
Merchandise inventory$465.0 $503.5 
Finished goods105.0 91.0 
Raw materials166.1 167.2 
Work in process74.5 66.4 
Total$810.6 $828.1 
7.    Goodwill and other intangible assets
Goodwill
As described in note 1, we reorganized our segment reporting structure effective January 1, 2024. The segment reporting reorganization also resulted in a change to our reporting units for the purpose of goodwill impairment testing. Our new reporting units are Manufactured Products, Buy Sell Production, NuSil, Buy Sell Lab, Proprietary Lab and Services. As a result of the reorganization, our goodwill was reassigned to the new reporting units making up our Laboratory Solutions and Bioscience Production reporting segments.
We have reassigned goodwill as of January 1, 2024 to align to our new segment structure by using a relative fair value approach. We tested goodwill for impairment immediately before and after the realignment; no impairment was identified.
The following table presents goodwill by our reportable segments, on the effective date of the change:
Laboratory SolutionsBioscience ProductionTotal
Goodwill, gross$3,842.0 $1,913.5 $5,755.5 
Accumulated impairment losses(18.4)(20.4)(38.8)
Goodwill, net$3,823.6 $1,893.1 $5,716.7 
12

Other intangible assets
The following table presents the components of other intangible assets:
(in millions)
March 31, 2024
December 31, 2023
Gross value
Accumulated amortization and impairment1
Carrying valueGross value
Accumulated amortization and impairment1
Carrying value
Customer relationships$4,829.6 $1,713.8 $3,115.8 $4,883.2 $1,670.3 $3,212.9 
Trade names356.0 230.0 126.0 359.7 228.3 131.4 
Other632.2 303.4 328.8 635.5 296.8 338.7 
Total finite-lived$5,817.8 $2,247.2 3,570.6 $5,878.4 $2,195.4 3,683.0 
Indefinite-lived92.3 92.3 
Total$3,662.9 $3,775.3 
━━━━━━━━━
1.As of March 31, 2024 and December 31, 2023, accumulated impairment losses on Customer relationships were $65.9 million and on Other were $40.5 million totaling $106.4 million.
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 against 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 March 31, 2024, our accrued obligation under this order is $2.4 million, which is calculated based on expected cash payments discounted at rates ranging from 4.2% to 5.1% between 2024 and 2046. The undiscounted amount of that obligation is $3.8 million. We are indemnified against any losses incurred in this matter as stipulated through the agreement and guaranty 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 March 31, 2024, our balance sheet includes a liability of $1.1 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.
13

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 March 31, 2024, 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.
14

9.    Debt
The following table presents information about our debt:
(dollars in millions)
March 31, 2024
December 31, 2023
Interest termsRateAmount
Receivables facility
SOFR1 plus 0.80%
6.23%
$262.2 $221.0 
Senior secured credit facilities:
Euro term loans B-4
EURIBOR plus 2.50%
6.33%
424.4 630.1 
Euro term loans B-5
EURIBOR plus 2.00%
5.83%
341.0 350.4 
U.S. dollar term loans B-5
SOFR1 plus 2.25%
7.68%
772.4 787.6 
2.625% secured notesfixed rate
2.625%
701.4 718.7 
3.875% unsecured notesfixed rate
3.875%
800.0 800.0 
3.875% unsecured notesfixed rate
3.875%
431.6 442.3 
4.625% unsecured notesfixed rate
4.625%
1,550.0 1,550.0 
Finance lease liabilities68.2 68.3 
Other9.7 11.6 
Total debt, gross5,360.9 5,580.0 
Less: unamortized deferred financing costs(37.9)(43.4)
Total debt$5,323.0 $5,536.6 
Classification on balance sheets:
Current portion of debt$299.1 $259.9 
Debt, net of current portion5,023.9 5,276.7 
━━━━━━━━━
1.SOFR includes credit spread adjustment.
Interest expense, net includes interest income of $17.9 million and $14.5 million for the three months ended March 31, 2024 and March 31, 2023, respectively. The interest income primarily relates to income on our interest rate swaps and cross currency swaps. Refer to note 14 to the unaudited consolidated financial statements for more information.
Credit facilities
The following table presents availability under our credit facilities:
(in millions)
March 31, 2024
Receivables facilityRevolving credit facilityTotal
Capacity$320.5 $975.0 $1,295.5 
Undrawn letters of credit outstanding(14.9) (14.9)
Outstanding borrowings(262.2) (262.2)
Unused availability$43.4 $975.0 $1,018.4 

Capacity under the receivables facility is calculated as the lower of eligible borrowing base or facility limit of $400.0 million. Eligible borrowing base is determined as total available accounts receivable less
15

ineligible accounts receivable and other adjustments. At March 31, 2024, total available accounts receivable under the receivables facility were $538.3 million.
Senior secured credit facilities
On April 2, 2024, we amended the credit agreement to reprice the U.S. Dollar term loan under our senior secured credit facilities. Pursuant to the agreement, the interest rate applicable to the U.S. Dollar term loan reduced from SOFR plus a spread of 2.25% per annum to SOFR plus a spread of 2.00% per annum. The principal amount of U.S. Dollar term loan outstanding immediately prior to the amendment and the outstanding principal amount of U.S. Dollar term loan immediately following the amendment each totaled $772.4 million. The final stated maturity of the U.S. Dollar term loan remains November 6, 2027. The costs to complete the amendment were not material.
During the quarter ended March 31, 2024, we made prepayments of $10.0 million on our U.S. dollar term loan B-5 that matures on November 6, 2027 and prepayments of $190.6 million on our Euro term loan B-4 that matures on June 10, 2028. In connection with these prepayments, we expensed $2.5 million of previously unamortized deferred financing costs as a loss on extinguishment of debt.
Debt covenants
Our debt agreements include representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities include a financial covenant that becomes applicable for periods in which we have drawn more than 35% of our revolving credit facility under the senior secured credit facilities. In this circumstance, we are not permitted to have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined in our credit agreements. As we had not drawn more than 35% of our revolving credit facility in this period, this covenant was not applicable at March 31, 2024.
16

10.    Accumulated other comprehensive income or loss
The following table presents changes in the components of AOCI:
(in millions)
Foreign currency translationDerivative instrumentsDefined benefit plansTotal
Balance at December 31, 2023
$(82.8)$12.6 $1.2 $(69.0)
Unrealized (loss) gain
(22.0)9.8 (0.2)(12.4)
Reclassification of gain into earnings
 (8.5) (8.5)
Change due to income taxes(6.9)(0.3)0.1 (7.1)
Balance at March 31, 2024
$(111.7)$13.6 $1.1 $(97.0)
Balance at December 31, 2022
$(131.3)$19.9 $11.1 $(100.3)
Unrealized gain (loss)
16.9 (0.1)(4.9)11.9 
Reclassification of gain into earnings
 (6.5) (6.5)
Change due to income taxes2.7 1.6 0.9 5.2 
Balance at March 31, 2023
$(111.7)$14.9 $7.1 $(89.7)
The reclassifications effects shown above were immaterial to the financial statements and were made to either cost of sales, SG&A expense or interest expense depending upon the nature of the underlying transaction. The income tax effects in the three months ended March 31, 2024 on foreign currency translation were due to our net investment hedge and cross-currency swap discussed in note 14.
11.    Stock-based compensation
The following table presents the components of stock-based compensation expense:
(in millions)
Award Classification
Three months ended March 31,
2024
2023
Stock optionsEquity$3.1 $3.6 
RSUsEquity8.8 8.7 
OtherBoth0.8 0.4 
Total$12.7 $12.7 
Award classification:
Equity$12.4 $12.6 
Liability0.3 0.1 
At March 31, 2024, unvested awards under our plans have remaining stock-based compensation expense of $116.4 million to be recognized over a weighted average period of 1.9 years.
17

Stock options
The following table presents information about outstanding stock options:
(options and intrinsic value in millions)
Number of optionsWeighted average exercise price per optionAggregate intrinsic valueWeighted average remaining term
Balance at December 31, 2023
16.4 $21.37 
Granted0.7 24.35 
Exercised(2.0)21.92 
Forfeited(0.4)24.40 
Balance at March 31, 2024
14.7 $21.34 $70.8 5.5 years
Expected to vest3.1 25.11 5.2 8.9 years
Vested11.6 20.34 65.6 4.7 years
During the three months ended March 31, 2024, we granted stock options that have a contractual life of ten years and will vest annually over three years, subject to the recipient continuously providing service to us through such date.
RSUs
The following table presents information about unvested RSUs:
(awards in millions)
Number of awardsWeighted average grant date fair value per award
Balance at December 31, 2023
4.0 $26.35 
Granted2.0 25.81 
Vested(0.8)27.16 
Forfeited(0.1)30.81 
Balance at March 31, 2024
5.1 $26.64 
During the three months ended March 31, 2024, we granted RSUs that will vest annually over three years, subject to the recipient continuously providing service to us throughout the vesting period. Certain of those awards contain performance and market conditions that impact the number of shares that will ultimately vest. We recorded expense on such awards of $2.1 million and $2.3 million for the three months ended March 31, 2024 and March 31, 2023, respectively.
18

12.    Other income or expense, net
The following table presents the components of other income or expense, net:
(in millions)
Three months ended March 31,
2024
2023
Net foreign currency gain from financing activities
$0.8 $0.2 
Income related to defined benefit plans
0.3 0.4 
Other income, net
$1.1 $0.6 
13.    Income taxes
The following table presents the relationship between income tax expense and income before income taxes:
(in millions)
Three months ended March 31,
2024
2023
Income before income taxes
$80.6$155.8
Income tax expense
(20.2)(34.3)
Effective income tax rate25.1 %22.0 %
Income tax expense in the quarter is based upon the estimated income for the full year. The composition of the income in different countries and adjustments, if any, in the applicable quarterly periods influences our expense.
The relationship between pre-tax income and income tax expense is affected by the impact of losses for which we cannot claim a tax benefit, non-deductible expenses, and other items that increase tax expense without a relationship to income, such as withholding taxes and changes with respect to uncertain tax positions.
The change in the effective tax rate for the three months ended March 31, 2024 when compared to the three months ended March 31, 2023, is primarily due to valuation allowances against deferred tax assets not expected to be realized.
14.    Derivative and hedging activities
Hedging instruments:
We engage in hedging activities to reduce our exposure to foreign currency exchange rates and interest rates. Our hedging activities are designed to manage specific risks according to our strategies, as summarized below, which may change from time to time. Our hedging activities consist of the following:
Economic hedges — We are exposed to changes in foreign currency exchange rates on certain of our euro-denominated term loans and notes that move inversely from our portfolio of euro-denominated intercompany loans. The currency effects for these non-derivative instruments are recorded through earnings in the period of change and substantially offset one another;
Other hedging activities — Certain of our subsidiaries hedge short-term foreign currency denominated business transactions, external debt and intercompany financing transactions using
19

foreign currency forward contracts. These activities were not material to our consolidated financial statements.
Cash flow hedges of interest rate risk
Our objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. 
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $17.0 million will be reclassified as a reduction to interest expense.
As of March 31, 2024, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
(dollars in millions)
Interest rate derivativeNumber of instrumentsNotional
Interest rate swaps2$850.0 
Effect of cash flow hedge accounting on AOCI
The table below presents the effect of cash flow hedge accounting on AOCI for the three months ended March 31, 2024 and March 31, 2023.
(in millions)
Hedging relationshipsAmount of gain or (loss) recognized in OCI on DerivativeLocation of gain or (loss) reclassified from AOCI into incomeAmount of gain or (loss) reclassified from AOCI into income
Three months ended March 31,
Three months ended March 31,
2024
2023
2024
2023
Interest rate products
$6.7 $(3.5)
Interest expense, net
$5.3 $3.1 
Total$6.7 $(3.5)$5.3 $3.1 

Effect of cash flow hedge accounting on the income statement
The table below presents the effect of our derivative financial instruments on the statement of operations for the three months ended March 31, 2024 and March 31, 2023.
20

Three months ended March 31,
2024
2023
(in millions)Interest expense, netInterest expense, net
Total amounts of line items presented in the statements of operations where the effects of cash flow hedges are recorded$(64.3)$(73.7)
Amount of gain reclassified from AOCI into income$5.3 $3.1 
Net investment hedges
We are exposed to fluctuations in foreign exchange rates on investments we hold in foreign entities, specifically our net investment in Avantor Holdings B.V., a EUR-functional-currency consolidated subsidiary, against the risk of changes in the EUR-USD exchange rate.
For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in AOCI as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated.
As of March 31, 2024, we had the following outstanding foreign currency derivatives that were used to hedge net investments in foreign operations:
(value in millions)
Foreign currency derivative
Number of instruments
Notional sold
Notional purchased
Cross-currency swaps
1 732.1 $750.0 
Effect of net investment hedges on AOCI and the income statement
The table below presents the effect of our net investment hedges on AOCI and the statement of operations for the three months ended March 31, 2024 and March 31, 2023.
(in millions)
Hedging relationships
Amount of gain or (loss) recognized in OCI on Derivative
Location of gain or (loss) recognized in income on Derivative (amount excluded from effectiveness testing)
Amount of gain or (loss) recognized in income on Derivative (amount excluded from effectiveness testing)
Three months ended March 31,
Three months ended March 31,
2024
2023
2024
2023
Cross currency swaps
$20.9 $(7.2)
Interest expense, net
$3.2 $3.2 
Total$20.9 $(7.2)$3.2 $3.2 
21

The Company did not reclassify any other deferred gains or losses related to cash flow hedges from accumulated other comprehensive income (loss) to earnings for the three months ended March 31, 2024 and March 31, 2023.
The table below presents the fair value of our derivative financial instruments as well as their classification on the Balance Sheet as of March 31, 2024 and December 31, 2023:

Derivative assets
Derivative liabilities
March 31, 2024
December 31, 2023
March 31, 2024
December 31, 2023
(in millions)
Balance sheet location
Fair value
Balance sheet location
Fair value
Balance sheet location
Fair value
Balance sheet location
Fair value
Derivatives designated as hedging instruments:
Interest rate products
Other current assets
$18.0 
Other current assets
$16.6 
Other current liabilities
$ 
Other current liabilities
$ 
Foreign exchange products
Other current assets
 
Other current assets
 
Other current liabilities
(37.5)
Other current liabilities
(55.2)
Total
$18.0 $16.6 $(37.5)$(55.2)
Non-derivative financial instruments which are designated as hedging instruments:
We designated all of our outstanding €400.0 million 3.875% senior unsecured notes, issued on July 17, 2020, and maturing on July 15, 2028, as a hedge of our net investment in certain of our European operations. For instruments that are designated and qualify as net investment hedges, the foreign currency transactional gains or losses are reported as a component of AOCI. The gains or losses would be reclassified into earnings upon a liquidation event or deconsolidation of a hedged foreign subsidiary.
Net investment hedge effectiveness is assessed based upon the change in the spot rate of the foreign currency denominated debt. The critical terms of the foreign currency notes match the portion of the net investments designated as being hedged. At March 31, 2024, the net investment hedge was equal to the designated portion of the European operations and was considered to be perfectly effective.
The accumulated gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of AOCI was $20.0 million and $9.3 million as of March 31, 2024 and December 31, 2023, respectively.
The amount of (gain) loss related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of other comprehensive
22

income or loss for the three months ended March 31, 2024 and March 31, 2023 are presented below:
(in millions)
Three months ended March 31,
2024
2023
Net investment hedges$(10.7)$7.5 

15.    Financial instruments and fair value measurements
Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and debt.
Assets and liabilities for which fair value is only disclosed
The carrying amount of cash and cash equivalents was the same as its fair value and is a Level 1 measurement. The carrying amounts for trade accounts receivable and accounts payable approximated fair value due to their short-term nature and are Level 2 measurements.
The following table presents the gross amounts, which exclude unamortized deferred financing costs, and the fair values of debt instruments:
(in millions)
March 31, 2024
December 31, 2023
Gross amountFair valueGross amountFair value
Receivables facility$262.2 $262.2 $221.0 $221.0 
Senior secured credit facilities:
Euro term loans B-4424.4 425.5 630.1 630.9 
Euro term loans B-5341.0 342.3 350.4 351.1 
U.S. dollar term loans B-5772.4 774.3 787.6 791.0 
2.625% secured notes701.4 685.7 718.7 705.3 
3.875% unsecured notes800.0 720.4 800.0 727.3 
3.875% unsecured notes431.6 420.6 442.3 434.3 
4.625 % unsecured notes1,550.0 1,469.3 1,550.0 1,489.1 
Finance lease liabilities68.2 68.2 68.3 68.3 
Other9.7 9.7 11.6 11.6 
Total$5,360.9 $5,178.2 $5,580.0 $5,429.9 
The fair values of debt instruments are based on standard pricing models that take into account the present value of future cash flows, and in some cases private trading data, which are level 2 measurements.
Item 2.    Management’s discussion and analysis of financial condition and results of operations
This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those contained in or implied by any forward-looking statements. See “Cautionary factors regarding forward-looking statements.”
23

Basis of presentation
This discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes. Pursuant to SEC rules for reports covering interim periods, we have prepared this discussion and analysis to enable you to assess material changes in our financial condition and results of operations since December 31, 2023, the date of our Annual Report. Therefore, we encourage you to read this discussion and analysis in conjunction with the Annual Report.
Overview
During the three months ended March 31, 2024, we recorded net sales of $1,679.8 million, net income of $60.4 million, Adjusted EBITDA of $283.0 million and Adjusted Operating Income of $258.4 million. Net sales decreased by 5.6%, which included a 6.3% decline in organic sales compared to the same period in 2023. See “Reconciliations of non-GAAP measures” for reconciliations of net income to Adjusted EBITDA and Adjusted Operating Income, and net income margin to Adjusted EBITDA margin and Adjusted Operating Income margin. See “Results of operations” for a reconciliation of net sales growth (decline) to organic net sales growth (decline).
Segment Change
Effective January 1, 2024, we changed our operating model and reporting segment structure from three
reportable segments to two reportable segments, Laboratory Solutions and Bioscience Production. This structure aligns with how our Chief Executive Officer, who is our chief operating decision maker, intends to measure segment operating performance and allocate resources across our operating segments. This reportable segment change has no impact on our consolidated operating results.
In connection with the operating model and reporting structure change, our chief operating decision
maker changed the measure used to evaluate segment profitability from Adjusted EBITDA to Adjusted Operating Income. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change.
Factors and current trends affecting our business and results of operations
The following updates the factors and current trends disclosed in the Annual Report. These updates may affect our performance and financial condition in future periods.
Our business continues to be impacted by the transition from the global coronavirus pandemic
Customer demand and required inventory levels continue to normalize in the transition from the COVID-19 pandemic. For a discussion of this trend and associated economic disruptions, and the actual operational and financial impacts that we experienced through December 31, 2023, see “Part II—Item 7—Management's discussion and analysis of financial condition and results of operations” in the Annual Report.
We have been impacted by supply chain constraints and inflationary pressures
We have experienced inventory fluctuations and build up at customers as a result of global supply chain disruptions and have experienced inflationary pressures across all of our cost categories. While we have implemented pricing and productivity measures to combat these pressures, they may continue to adversely impact our results.
24

Fluctuations in foreign currency rates impact our results
Our consolidated results of operations are comprised of many different functional currencies that translate into our U.S. Dollar reporting currency. The movement of the U.S. Dollar against those functional currencies, particularly the Euro, has caused significant variability in our results and may continue to do so in the future.
Key indicators of performance and financial condition
To evaluate our performance, we monitor a number of key indicators. As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles (“GAAP”) with certain non-GAAP financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These measures should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measures, and such measures may not be comparable to similarly titled measures reported by other companies. Rather, these measures should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business.
The key indicators that we monitor are as follows:
Net sales, gross margin, operating income, operating income margin, net income or loss and net income or loss margin. These measures are discussed in the section entitled “Results of operations”;
Organic net sales growth, which is a non-GAAP measure discussed in the section entitled “Results of operations.” Organic net sales growth (decline) eliminates from our reported net sales change the impacts of revenues from any acquired businesses that have been owned for less than one year and changes in foreign currency exchange rates. We believe that this measurement is useful to investors as a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented. This measurement is used by our management for the same reason. Reconciliations to the change in reported net sales, the most directly comparable GAAP financial measure, are included in the section entitled “Results of operations”;
Adjusted EBITDA and Adjusted EBITDA margin,, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted EBITDA is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) depreciation expense, (v) losses on extinguishment of debt, (vi) charges associated with the impairment of certain assets, (vii) and certain other adjustments. Adjusted EBITDA margin is Adjusted EBITDA divided by net sales as determined under GAAP. We believe that these measurements are useful as a way to analyze the underlying trends in our business consistently across the periods presented. These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;
Adjusted Operating Income and Adjusted Operating Income margin, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted operating income is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) losses on extinguishment of debt, (v) charges associated with the impairment of certain assets, (vi) and certain other adjustments. This
25

measurement is our segment reporting profitability measure under generally accepted accounting principles. Adjusted Operating Income margin is Adjusted Operating Income divided by net sales as determined under GAAP. We believe that these measurements are useful to investors as a way to analyze the underlying trends in our business consistently across the periods presented. These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial measures, to Adjusted Operating Income and Adjusted Operating Income margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;
Cash flows from operating activities, which we discuss in the section entitled “Liquidity and capital resources—Historical cash flows”;
Free cash flow, which is a non-GAAP measure, is equal to our cash flows from operating activities, plus acquisition-related costs paid in the period, less capital expenditures. We believe that this measurement is useful to investors as it provides a view on the Company’s ability to generate cash for use in financing or investing activities. This measurement is used by management for the same reason. A reconciliation of cash flows from operating activities, the most directly comparable GAAP financial measure, to free cash flow, is included in the section entitled “Liquidity and capital resources—Historical cash flows.”
Results of operations
We present results of operations in the same way that we manage our business, evaluate our performance and allocate our resources. We also provide discussion of net sales and Adjusted Operating Income by segment: Laboratory Solutions and Bioscience Production. Corporate costs are managed on a standalone basis, certain of which are allocated to our reportable segments.
Executive summary
(dollars in millions)
Three months ended March 31,Change
20242023
Net sales$1,679.8 $1,780.3 $(100.5)
Gross margin34.0 %35.1 %(110) bps
Operating income$146.3 $231.2 $(84.9)
Operating income margin8.7 %13.0 %(430) bps
Net income
$60.4 $121.5 $(61.1)
Net income margin3.6 %6.8 %(320) bps
Adjusted EBITDA$283.0 $346.2 $(63.2)
Adjusted EBITDA margin16.8 %19.4 %(260) bps
Adjusted Operating Income$258.4 $323.1 $(64.7)
Adjusted Operating Income margin15.4 %18.1 %(270) bps

The first quarter net sales decline was driven by decreases in both segments primarily due to reduced customer demand. Unfavorable product mix contributed to contraction in gross margin. Softness in sales volume and unfavorable product mix drove Adjusted EBITDA and Adjusted Operating Income margin contraction.
26

Net Sales
Three months ended
(in millions)
Three months ended March 31,
Reconciliation of net sales growth (decline) to organic net sales growth (decline)
Net sales growth (decline)Foreign currency impactOrganic net sales growth (decline)
2024
2023
Laboratory Solutions$1,157.1 $1,203.0 $(45.9)$9.0 $(54.9)
Bioscience Production522.7 577.3 (54.6)3.0 (57.6)
Total$1,679.8 $1,780.3 $(100.5)$12.0 $(112.5)
Net sales decreased $100.5 million or 5.6%, which included $12.0 million or 0.7% of favorable foreign currency impact. Organic net sales decreased by $112.5 million or 6.3%.
In the Laboratory Solutions segment, net sales decreased $45.9 million or 3.8%, which included $9.0 million or 0.7% of favorable foreign currency impact. Organic net sales decreased $54.9 million or 4.5%. Sales decline was primarily driven by decreased demand in biopharma and healthcare end markets.
In the Bioscience Production segment, net sales decreased $54.6 million or 9.5%, which included $3.0 million or 0.5% of favorable foreign currency impact. Organic net sales decreased by $57.6 million or 10.0%. Sales decline was primarily driven by decreased demand in biopharma and healthcare end markets.
Gross margin
Three months ended March 31,
Change
2024
2023
Gross margin34.0 %35.1 %(110) bps
Three months ended
Gross margin for the three months ended March 31, 2024 contracted by 110 basis points resulting primarily from unfavorable product mix.
Operating income
(in millions)
Three months ended March 31,
Change
2024
2023
Gross profit$570.5 $624.8 $(54.3)
Operating expenses424.2 393.6 30.6 
Operating income
$146.3 $231.2 $(84.9)
Three months ended
Operating income decreased primarily from lower gross profit, as previously discussed and higher operating expenses driven by restructuring and severance charges, transformation expenses and inflationary pressures on salary expenses.
27

Net income
(in millions)
Three months ended March 31,
Change
2024
2023
Operating income
$146.3 $231.2 $(84.9)
Interest expense, net(64.3)(73.7)9.4 
Loss on extinguishment of debt(2.5)(2.3)(0.2)
Other income, net
1.1 0.6 0.5 
Income tax expense
(20.2)(34.3)14.1 
Net income
$60.4 $121.5 $(61.1)
Three months ended
Net income decreased primarily due to lower operating income, as previously discussed, partially offset by lower interest expense on account of debt repayments made over the last twelve months and lower income tax expense due to lower income before income taxes.
Adjusted EBITDA and Adjusted EBITDA margin
For a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to net income and net income margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-GAAP financial measures.”
(dollars in millions)
Three months ended March 31,
Change
2024
2023
Adjusted EBITDA
283.0346.2(63.2)
Adjusted EBITDA margin16.8 %19.4 %(260) bps
Three months ended
Adjusted EBITDA decreased by $63.2 million or 18.3%, which included a favorable foreign currency translation impact of $1.0 million or 0.3%.The remaining decline was $64.2 million or 18.6% primarily driven by lower sales volume and unfavorable product mix.
28

Adjusted Operating Income and Adjusted Operating Income margin
For a reconciliation of Adjusted Operating Income and Adjusted Operating Income margin to net income and net income margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-GAAP financial measures.”
(dollars in millions)
Three months ended March 31,
Change
2024
2023
Adjusted Operating Income:
Laboratory Solutions$148.2$172.2$(24.0)
Bioscience Production126.9167.5(40.6)
Corporate(16.7)(16.6)(0.1)
Total$258.4$323.1$(64.7)
Adjusted Operating Income margin15.4 %18.1 %(270) bps
Adjusted Operating Income decreased $64.7 million or 20.0%, which included a favorable foreign currency translation impact of $0.9 million or 0.3%. The remaining decline was $65.6 million or 20.3% which is further discussed below.
In the Laboratory Solutions segment, Adjusted Operating Income declined $24.0 million or 13.9%, or 13.7% when adjusted for unfavorable foreign currency translation impact. The decrease was due to lower sales volume.
In the Bioscience Production segment, Adjusted Operating Income declined $40.6 million or 24.2%, or 24.3% when adjusted for favorable foreign currency translation impact. The decrease was driven primarily by lower sales volume.
In Corporate, Adjusted Operating Income decreased $0.1 million or 0.6%, due to immaterial offsetting factors.
29

Reconciliations of non-GAAP financial measures
The following table presents the reconciliation of net income and net income margin to Adjusted EBITDA and Adjusted EBITDA margin, respectively:
(dollars in millions)
Three months ended March 31,
2024
2023
$%$%
Net income
$60.4 3.6 %$121.5 6.8 %
Interest expense, net64.3 3.8 %73.7 4.1 %
Income tax expense
20.2 1.2 %34.3 2.0 %
Depreciation and amortization99.6 5.9 %101.1 5.6 %
Loss on extinguishment of debt2.5 0.1 %2.3 0.1 %
Net foreign currency gain from financing activities
(0.8)— %(0.2)— %
Other stock-based compensation expense
0.3 — %0.1 — %
Integration-related expenses1
— — %8.7 0.5 %
Restructuring and severance charges2
23.2 1.4 %4.7 0.3 %
Transformation expenses3
13.3 0.8 %— — %
Adjusted EBITDA$283.0 16.8 %$346.2 19.4 %
━━━━━━━━━
1.Represents direct costs incurred with third parties and the accrual of a long-term retention incentive 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.
2.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.
3.Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.
30

The following table presents the reconciliation of net income and net income margin to Adjusted Operating Income and Adjusted Operating Income margin, respectively:
(dollars in millions)
Three months ended March 31,
2024
2023
$%$%
Net income
$60.4 3.6 %$121.5 6.8 %
Interest expense, net64.3 3.8 %73.7 4.1 %
Income tax expense
20.2 1.2 %34.3 2.0 %
Loss on extinguishment of debt2.5 0.1 %2.3 0.1 %
Other income, net
(1.1)— %(0.6)— %
Operating income
146.3 8.7 %231.2 13.0 %
Amortization75.3 4.5 %78.4 4.3 %
Other stock-based compensation expense
0.3 — %0.1 — %
Integration-related expenses1
— — %8.7 0.5 %
Restructuring and severance charges2
23.2 1.4 %4.7 0.3 %
Transformation expenses3
13.3 0.8 %— — %
Adjusted Operating Income$258.4 15.4 %$323.1 18.1 %
━━━━━━━━━
1.Represents direct costs incurred with third parties and the accrual of a long-term retention incentive 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.
2.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.
3.Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.
Liquidity and capital resources
We fund short-term cash requirements primarily from operating cash flows and credit facilities. Most of our long-term financing is from indebtedness. For the three months ended March 31, 2024, we generated $141.6 million of cash from operating activities, ended the quarter with $234.9 million of cash and cash equivalents and our availability under our credit facilities was $1,018.4 million. We have no debt repayments due in the next twelve months other than required term loan payments of $18.6 million considering the effect of repricing of the U.S. Dollar term loan as described in note 9 to our unaudited consolidated financial statements and receivables facility borrowing of $262.2 million.
31

Liquidity
The following table presents our primary sources of liquidity:
(in millions)
March 31, 2024
Receivables facilityRevolving credit facilityTotal
Unused availability under credit facilities:
Capacity$320.5 $975.0 $1,295.5 
Undrawn letters of credit outstanding(14.9)— (14.9)
Outstanding borrowings(262.2)— (262.2)
Unused availability$43.4 $975.0 $1,018.4 
Cash and cash equivalents234.9 
Total liquidity$1,253.3 
Some of our credit line availability depends upon maintaining a sufficient borrowing base of eligible accounts receivable. We believe that we have sufficient capital resources to meet our liquidity needs.
Our debt agreements include representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities include a financial covenant that becomes applicable for periods in which we have drawn more than 35% of our revolving credit facility under the senior secured credit facilities. In this circumstance, we are not permitted to have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined in our credit agreements. As we had not drawn more than 35% of our revolving credit facility in this period, this covenant was not applicable at March 31, 2024.
At March 31, 2024, $222.7 million or 94.8% of our $234.9 million in cash and cash equivalents was held by our non-U.S. subsidiaries and may be subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply.
32

Historical cash flows
The following table presents a summary of cash provided by (used in) various activities:
(in millions)
Three months ended March 31,
Change
20242023
Operating activities:
Net income$60.4 $121.5 (61.1)
Non-cash items1
129.2 107.4 21.8 
Working capital changes2
(50.0)(39.8)(10.2)
All other2.0 30.4 (28.4)
Total$141.6 $219.5 $(77.9)
Investing activities$(34.2)$(27.3)$