APTARGROUP INC

Previous wording

For the first three months of 2024, cost of sales as a percent of net sales decreased to 63.7% compared to 64.8% in the same period in 2023. This decrease is mainly due to an improved mix of our higher-margin Pharma products along with improved operational performance and cost management initiatives which reduced our overall expense. During the prior year, we also incurred additional expenses related to our injectables Enterprise Resource Planning ("ERP") system implementation which did not repeat during 2024.

Current wording

For the first six months of 2024, cost of sales as a percent of net sales decreased to 63.0% compared to 64.4% in the same period in 2023. This decrease is mainly due to an improved mix of our higher value Pharma products along with improved operational performance and cost management initiatives as discussed above. During the prior year period, we also incurred approximately $2 million of incremental costs related to our injectables Enterprise Resource Planning (“ERP”) system implementation which did not repeat during 2024.

Previous wording

Our selling, research & development and administrative expenses ("SG&A") increased by $4.9 million to $152.8 million in the first three months of 2024 compared to $147.9 million during the same period in 2023. Excluding changes in foreign currency rates, SG&A increased by approximately $4.0 million in the first three months of 2024 compared to the first three months of 2023. Incremental costs related to our acquisitions of iD SCENT and Gulf Closures were $0.4 million. Improvements from our cost management initiatives for the first three months of 2024 were more than offset by higher compensation costs, including accruals related to our current short-term incentive compensation arrangements and the timing of certain equity compensation programs expense recognition. SG&A as a percentage of net sales decreased to 16.7% in the first three months of 2024 compared to 17.2% in the same period in 2023.

Current wording

Our selling, research & development and administrative expenses (“SG&A”) increased by $12.8 million to $302.1 million in the first six months of 2024 compared to $289.4 million during the same period in 2023. Excluding changes in foreign currency rates, SG&A increased by approximately $13.1 million in the first six months of 2024 compared to the first six months of 2023. Incremental costs related to our acquisitions of iD SCENT and Gulf Closures were $0.4 million. As discussed above, improvements from our cost management initiatives for the first six months of 2024 were more than offset by higher compensation costs, including accruals related to our current short-term incentive compensation arrangements and the timing of certain equity compensation programs expense recognition along with the potential acquisition costs mentioned above. SG&A as a percentage of net sales increased to 16.6% in the first six months of 2024 compared to 16.5% in the same period in 2023.

Previous wording

Depreciation and amortization expenses increased by approximately $5.1 million to $64.3 million in the first three months of 2024 compared to $59.3 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately $4.7 million in the first three months of 2024 compared to the same period a year ago. Incremental depreciation and amortization costs related to our acquisitions of iD SCENT and Gulf Closures were $0.3 million. This increase is due to higher internal capital investments made during the current and prior years. Depreciation and amortization as a percentage of net sales increased to 7.0% in the first three months of 2024 compared to 6.9% in the same period of the prior year.

Current wording

Depreciation and amortization expenses increased by approximately $7.8 million to $129.3 million in the first six months of 2024 compared to $121.5 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately $7.9 million in the first six months of 2024 compared to the same period a year ago. Incremental depreciation and amortization costs related to our acquisitions of iD SCENT and Gulf Closures were $0.3 million. As discussed above, this increase is due to higher internal capital investments made during the prior years. Depreciation and amortization as a percentage of net sales increased to 7.1% in the first six months of 2024 compared to 6.9% in the same period of the prior year.

Previous wording

During the third quarter of 2022, we began an initiative to better leverage our fixed cost base through growth and cost reduction measures. For the three months ended March 31, 2024 and 2023, we recognized $3.5 million and $11.5 million of restructuring costs related to this initiative, respectively. The cumulative expense incurred as of March 31, 2024 was $55.2 million.

Current wording

During the third quarter of 2022, we began an initiative to better leverage our fixed cost base through growth and cost reduction measures. For the three and six months ended June 30, 2024, we recognized $2.3 million and $5.8 million of restructuring costs related to this initiative, respectively. For the three and six months ended June 30, 2023, we recognized $1.9 million and $13.5 million of restructuring costs related to this initiative, respectively. The cumulative expense incurred as of June 30, 2024 was $57.5 million.

Previous wording

Restructuring costs for the three months ended March 31, 2024 and 2023 were as follows:

Current wording

Restructuring costs for the three and six months ended June 30, 2024 and 2023 were as follows:

Previous wording

For the first three months of 2024, operating income increased approximately $28.1 million to $112.1 million compared to $83.9 million in the same period of the prior year. Excluding changes in foreign currency rates, operating income increased by approximately $26.7 million in the first three months of 2024 compared to the same period a year ago as our strong Pharma segment growth and the lower restructuring initiative expenses mentioned above was partially offset by higher SG&A and depreciation and amortization costs. Operating income as a percentage of net sales increased to 12.2% in the first three months of 2024 compared to 9.8% for the same period in the prior year.

Current wording

For the first six months of 2024, operating income increased approximately $37.6 million to $238.1 million compared to $200.5 million in the same period of the prior year. Excluding changes in foreign currency rates, operating income increased by approximately $37.4 million in the first six months of 2024 compared to the same period a year ago as income from our strong Pharma segment growth and improved operational performance and cost management initiatives drove the increase. Operating income as a percentage of net sales increased to 13.0% in the first six months of 2024 compared to 11.4% for the same period in the prior year.

Previous wording

Interest expense decreased $0.1 million to $10.2 million in the first three months of 2024 compared to the same period in 2023. This reduction is mainly due to the repayment of part of our outstanding debt using cash generated from operations over the past year. See Note 6 - Debt to the Condensed Consolidated Financial Statements for further details.

Current wording

Interest expense increased $0.3 million to $20.2 million in the first six months of 2024 compared to the same period in 2023. As discussed above, this increase is mainly related to higher rates on existing short term variable rate borrowings. See Note 6 - Debt to the Condensed Consolidated Financial Statements for further details.

Previous wording

Net other income increased $2.9 million to $2.4 million of income for the three months ended March 31, 2024 from $0.4 million of expense in the same period of the prior year. Interest income increased by approximately $2.2 million due to cash flow generated from operations over the past year. The remaining increase is mainly due to a $0.4 million increase in the fair value of our PureCycle investment during the first quarter of 2024 compared to the prior year period. This investment is recorded at fair value based on observable market prices for identical assets with the change in fair value being recorded as a net investment gain or loss in the Condensed Consolidated Statements of Income.

Current wording

Net other income decreased $1.7 million to $2.3 million of income in the second quarter of 2024 from $4.0 million of income in the same period of the prior year. Interest income increased by $2.5 million but was offset by lower gains on our Purecycle investment of $3.0 million. This investment is recorded at fair value based on observable market prices for identical assets with the change in fair value being recorded as a net investment gain or loss in the Condensed Consolidated Statements of Income.

Previous wording

The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings and related estimated full-year taxes, adjusted for the impact of discrete quarterly items. The effective tax rate for the three months ended March 31, 2024 and 2023, respectively, was 20.5% and 25.5%. The lower reported effective tax rate for the three months ended March 31, 2024 reflects a favorable mix of earnings, increased tax benefits from share-based compensation and tax incentives in certain non-US Jurisdictions from intellectual property development activities.

Current wording

The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings and related estimated full-year taxes, adjusted for the impact of discrete quarterly items. The effective tax rate for the three months ended June 30, 2024 and 2023, respectively, was 23.5% and 25.1%. The effective tax rate for the three months ended June 30, 2024 reflects a favorable mix of earnings. The effective tax rate for the six months ended June 30, 2024 and 2023, respectively, was 22.1% and 25.3%. The effective tax rate for the six months ended June 30, 2024 reflects a favorable mix of earnings, increased tax benefits from share-based compensation and tax incentives in certain non-U.S. jurisdictions from intellectual property development activities.

Previous wording

We reported net income attributable to AptarGroup, Inc. of $83.1 million and $54.8 million in the three months ended March 31, 2024 and 2023, respectively.

Current wording

We reported net income attributable to AptarGroup, Inc. of $90.5 million and $173.6 million in the three and six months ended June 30, 2024, respectively, compared to $83.1 million and $137.8 million for the same periods in the prior year.

Previous wording

Net sales for the first three months of 2024 increased by 14% to $407.3 million compared to $356.0 million in the first three months of 2023. Changes in currency rates positively impacted net sales by 1% during the first three months of 2024. Therefore, core sales increased by 13% in the first three months of 2024 compared to the same period in the prior year. Core sales to the prescription drug market increased 10% on continued strong demand for our allergic rhinitis, asthma, pain and emergency medicine systems. The 2% core sales growth in the consumer health care market was driven by higher demand for our nasal decongestant and saline rinse solutions. Core sales of our products to the injectables market improved by 54% primarily due to the prior year shutdown of operations for the implementation of our new ERP system. We also realized an increase in demand for our biologic and small molecule products which offsets the lower demand for our vaccine applications. Core sales of our active material science solutions increased 2% mainly on strong growth in our probiotics and oral solid dose applications. Digital health currently does not represent a significant percentage of the total Pharma sales.

Current wording

Net sales for the first six months of 2024 increased by 10% to $821.8 million compared to $746.7 million in the first six months of 2023. Changes in currency rates did not impact net sales during the first six months of 2024. Therefore, core sales increased by 10% in the first six months of 2024 compared to the same period in the prior year. Core sales to the prescription drug market increased 13% on continued strong demand for our allergic rhinitis, central nervous system, pain and emergency medicine systems and higher customer royalties. The 4% core sales growth in the consumer health care market was driven by higher demand for our eye care, nasal decongestant and saline rinse solutions. Core sales of our products to the injectables market improved by 14% primarily due to the prior year shutdown of operations for the implementation of our new ERP system. Core sales of our active material science solutions increased 4% mainly on growth in our probiotics and oral solid dose applications. Digital health currently does not represent a significant percentage of the total Pharma sales.

Previous wording

Adjusted EBITDA in the first three months of 2024 increased 21% to $132.2 million compared to $109.3 million in the same period of the prior year. This positive impact is mainly due to the strong core sales growth across all divisions as discussed above. During the prior year, we also incurred additional expenses related to our injectables ERP system implementation which did not repeat. Overall, our Adjusted EBITDA margin improved to 32.5% in the first three months of 2024 compared to 30.7% in the first three months of 2023.

Current wording

Adjusted EBITDA in the first six months of 2024 increased 16% to $273.7 million compared to $235.2 million in the same period of the prior year. This positive impact is mainly due to the strong core sales growth across all divisions. During the prior year, we also incurred additional expenses related to our injectables ERP system implementation which did not repeat. Overall, our Adjusted EBITDA margin improved to 33.3% in the first six months of 2024 compared to 31.5% in the first six months of 2023 on improved sales mix and higher customer royalties as mentioned above.

Previous wording

For the first three months of 2024, reported net sales of $327.3 million were slightly higher than the $326.4 million reported in the first three months of the prior year. Changes in currency rates positively impacted net sales by approximately 1% while our acquisition of iD SCENT did not have an impact on segment sales. Therefore, core sales decreased 1% in the first three months of 2024 compared to the same period in the prior year. While sales improved in North America, we realized softening demand in our other regions largely attributable to exceptionally strong demand in the prior year period, which sets a challenging benchmark for comparison. Core sales of our products to the beauty market during the first three months of 2024 were consistent with the first quarter of the prior year as higher sales of our facial skin care applications, especially in North America, more than compensated for softness in demand for our color cosmetic products. Sales of our products to the fragrance market also improved slightly over the prior year as we continued to see increasing demand in Europe and Latin America. Personal care core sales decreased 4% primarily due to lower sales of our sun care and personal cleansing applications. Core sales of our home care market products improved 2% on higher demand from our customers selling air care and automotive products.

Current wording

For the first six months of 2024, reported net sales of $648.8 million decreased 1% compared to $656.0 million reported in the first six months of the prior year. Changes in currency rates and our acquisition of iD SCENT did not have an impact on segment sales. Therefore, core sales decreased 1% in the first six months of 2024 compared to the same period in the prior year. While sales improved in North America, we experienced softer demand in Europe largely attributable to the exceptionally strong demand for beauty products in the prior year, which sets a challenging benchmark for comparison. Core sales of our products to the beauty market during the first six months of 2024 decreased 3% due to the difficult European comparisons to prior year mentioned above. Personal care core sales were consistent with prior year as higher sales of our body and skin care products were offset by lower sales of our sun care and personal cleansing applications. Core sales of our home care market products improved 6% on higher demand from our customers selling air care and automotive products.

Previous wording

Adjusted EBITDA in the first three months of 2024 increased 11% to $41.1 million compared to $37.2 million reported in the same period in the prior year. This increase is mainly due to improved operational performance along with benefits realized from our cost management initiatives . Therefore, our Adjusted EBITDA margin improved from 11.4% in the first three months of 2023 to 12.6% during the first three months of 2024.

Current wording

Adjusted EBITDA in the first six months of 2024 increased 7% to $85.8 million compared to $80.3 million reported in the same period in the prior year. Again, this increase is mainly due to improved operational performance along with benefits realized from our cost management initiatives, which more than compensated for the pass-through of lower input costs. Therefore, our Adjusted EBITDA margin improved from 12.2% in the first six months of 2023 to 13.2% during the first six months of 2024.

Previous wording

Net sales for the first three months of 2024 increased by 2% to $180.8 million compared to $177.6 million in the first three months of 2023. Changes in currency rates had no impact on net sales while our acquisition of Gulf Closures positively impacted net sales by 1%. Therefore, core sales increased by 1% in the first three months of 2024 compared to the same period in the prior year. Core sales to the food and personal care markets increased 3% and 2%, respectively, while core sales to the beverage market decreased 4% in the first three months of 2024 compared to the same period of the prior year. For the food market, we realized strong growth in our dry spices and food protection applications. The personal care market benefited from improving demand for our body and hair care products, mainly in North America. The beverage market experienced softness due to the timing of some of our customer's transition to our new tethered cap closures in compliance with European Union regulations.

Current wording

Net sales for the first six months of 2024 increased slightly to $354.9 million compared to $353.3 million in the first six months of 2023. Changes in currency rates and our acquisition of Gulf Closures had no significant impact on net sales. Therefore, core sales also increased slightly in the first six months of 2024 compared to the same period in the prior year. Core sales to the food and personal care markets were flat compared to prior year, while core sales to the beverage market increased 1% in the first six months of 2024 compared to the same period of the prior year as our European customers transition to our new tethered cap closures . Other sales increased 2% primarily on strong sales of our dish care products as mentioned above.

Previous wording

Adjusted EBITDA in the first three months of 2024 increased 4% to $27.2 million compared to $26.0 million reported in the same period of the prior year. Our profitability was positively impacted by a continued focus on operational improvements and containing costs. This led to our Adjusted EBITDA margin improving from 14.6% in the first three months of 2023 to 15.0% during the first three months of 2024.

Current wording

Adjusted EBITDA in the first six months of 2024 increased 1% to $54.3 million compared to $53.8 million reported in the same period of the prior year. Our profitability was positively impacted by a continued focus on operational improvements and containing costs. This led to our Adjusted EBITDA margin improving from 15.2% in the first six months of 2023 to 15.3% during the first six months of 2024.

Previous wording

Corporate & Other Adjusted EBITDA in the first three months of 2024 increased to $21.6 million of expense compared to $18.8 million of expense reported in the same period of the prior year. This increase is mainly related to higher incentive compensation costs, including accruals related to our current short-term incentive compensation program and the timing of equity compensation expense recognition including substantive vesting conditions for retirement eligible employees.

Current wording

Corporate & Other Adjusted EBITDA in the first six months of 2024 increased to $42.1 million of expense compared to $34.3 million of expense reported in the same period of the prior year. This increase is mainly related to the costs to evaluate potential acquisition targets and higher incentive compensation costs discussed above, including substantive vesting conditions for retirement eligible employees.

Previous wording

Because of our international presence, movements in exchange rates may have a significant impact on the translation of the financial statements of our foreign subsidiaries. Our primary foreign exchange exposure is to the euro, but we also have foreign exchange exposure to the Chinese yuan, Brazilian real, Mexican peso, Swiss franc and other Asian, European and South American currencies. A weakening U.S. dollar has an additive effect. Conversely, a strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on our financial statements. In some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Any changes in exchange rates on such inter-country sales could materially impact our results of operations. During the first quarter of 2024, the U.S. dollar weakened compared to all European currencies except the Russian ruble and most Latin American currencies, while it showed strength against most Asian currencies. This resulted in an additive impact on our translated results during the first quarter of 2024 when compared to the first quarter of 2023.

Current wording

Because of our international presence, movements in exchange rates may have a significant impact on the translation of the financial statements of our foreign subsidiaries. Our primary foreign exchange exposure is to the euro, but we also have foreign exchange exposure to the Chinese yuan, Brazilian real, Mexican peso, Swiss franc and other Asian, European and South American currencies. A weakening U.S. dollar has an additive effect. Conversely, a strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on our financial statements. In some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Any changes in exchange rates on such inter-country sales could materially impact our results of operations. During the second quarter ended June 30, 2024, the U.S. dollar was stronger compared to all currencies except the Swiss franc and the British pound, During the six months ended June 30, 2024, the U.S. dollar was stronger compared to all currencies except the Mexican peso, Swiss franc and the British pound. This resulted in a dilutive impact on our translated results during the second quarter and year-to-date period of 2024 when compared to the second quarter and year-to-date period of 2023.

Previous wording

Generally, we have incurred higher stock-based compensation expense in the first quarter compared with the rest of the fiscal year due to the timing and recognition of stock-based expense from substantive vesting for retirement eligible employees. As of March 31, 2024, our estimated stock option expense on a pre-tax basis for the year 2024 compared to 2023 is as follows:

Current wording

Generally, we have incurred higher stock-based compensation expense in the first quarter compared with the rest of the fiscal year due to the timing and recognition of stock-based expense from substantive vesting for retirement eligible employees. As of June 30, 2024, our estimated stock-based compensation expense on a pre-tax basis for the year 2024 compared to 2023 is as follows:

Previous wording

Cash and equivalents and restricted cash decreased to $199.8 million at March 31, 2024 from $223.6 million at December 31, 2023. Total short and long-term interest-bearing debt of $1.1 billion at March 31, 2024 was consistent with the $1.1 billion at December 31, 2023. The ratio of our Net Debt (interest-bearing debt less cash and cash equivalents) to Net Capital (stockholders’ equity plus Net Debt) decreased to 27.9% at March 31, 2024 from 28.3% at December 31, 2023. See the reconciliation under "Non-U.S. GAAP Measures."

Current wording

Cash and equivalents and restricted cash decreased to $221.5 million at June 30, 2024 from $223.6 million at December 31, 2023. Total short and long-term interest-bearing debt decreased from $1.14 billion at December 31, 2023 to $1.09 billion at June 30, 2024. The ratio of our Net Debt (interest-bearing debt less cash and cash equivalents) to Net Capital (stockholders’ equity plus Net Debt) decreased to 26.4% at June 30, 2024 from 28.3% at December 31, 2023. See the reconciliation under “Non-U.S. GAAP Measures.”

Previous wording

In the first three months of 2024, our operations provided approximately $92.3 million in net cash flow compared to $98.3 million for the same period a year ago. In both periods, cash flow from operations was primarily derived from earnings before depreciation and amortization.

Current wording

In the first six months of 2024, our operations provided approximately $235.9 million in net cash flow compared to $182.2 million for the same period a year ago. In both periods, cash flow from operations was primarily derived from earnings before depreciation and amortization.

Previous wording

We used $76.6 million in cash for investing activities during the first three months of 2024 compared to $89.2 million during the same period a year ago. Our investment in capital projects net of government grant proceeds decreased $2.2 million during the first three months of 2024 compared to the first three months of 2023.

Current wording

We used $145.0 million in cash for investing activities during the first six months of 2024 compared to $163.6 million during the same period a year ago. Our investment in capital projects net of government grant proceeds, decreased $11.1 million during the first six months of 2024 compared to the first six months of 2023.

Previous wording

Aptar has a revolving credit facility with a syndicate of banks which matures in June 2026. The revolving credit facility is subject to a maximum of two one-year extensions in certain circumstances, and provides for unsecured financing of up to $600 million available in the U.S. and to our wholly-owned UK subsidiary. The revolving credit facility can be drawn in various currencies including USD, EUR, GBP, and CHF to the equivalent of $600 million, which may be increased by up to $300 million subject to the satisfaction of certain conditions. As of March 31, 2024, $149.5 million was utilized under the revolving credit facility in the U.S. and no balance was utilized by our wholly-owned UK subsidiary. As of December 31, 2023, $36.5 million and €40.0 million ($44.2 million) was utilized under the revolving credit facility in the U.S. and no balance was utilized by our wholly-owned UK subsidiary.

Current wording

As of June 30, 2024, Aptar had a revolving credit facility with a syndicate of banks which matures in June 2026. The revolving credit facility was subject to a maximum of two one-year extensions in certain circumstances, and provided for unsecured financing of up to $600 million available in the U.S. and to our wholly-owned UK subsidiary. The revolving credit facility could be drawn in various currencies including USD, EUR, GBP, and CHF to the equivalent of $600 million, which could be increased by up to $300 million subject to the satisfaction of certain conditions. As of June 30, 2024, $130 million was utilized under the revolving credit facility in the U.S. and no balance was utilized by our wholly-owned UK subsidiary. As of December 31, 2023, $36.5 million and €40.0 million ($44.2 million) was utilized under the revolving credit facility in the U.S. and no balance was utilized by our wholly-owned UK subsidiary.

Previous wording

There are no compensating balance requirements associated with our revolving credit facility. Each borrowing under the revolving credit facility will bear interest at rates based on SOFR (in the case of USD), EURIBOR (in the case of EUR), SONIA (in the case of GBP), SARON (in the case of CHF), prime rates or other similar rates, in each case plus an applicable margin. The revolving credit facility also provides mechanics relating to a transition away from designated benchmark rates for other available currencies and the replacement of any such applicable benchmark by a replacement alternative benchmark rate or mechanism for loans made in the applicable currency. A facility fee on the total amount of the revolving credit facility is also payable quarterly, regardless of usage. The applicable margins for borrowings under the revolving credit facility and the facility fee percentage may change from time to time depending on changes in our consolidated leverage ratio. Credit facility balances are included in notes payable, revolving credit facility and overdrafts on the Condensed Consolidated Balance Sheets.

Current wording

There are no compensating balance requirements associated with our amended revolving credit facility. Each borrowing under the revolving credit facility will bear interest at rates based on SOFR (in the case of USD), EURIBOR (in the case of EUR), SONIA (in the case of GBP), SARON (in the case of CHF), prime rates or other similar rates, in each case plus an applicable margin. The amended revolving credit facility also provides mechanics relating to a transition away from designated benchmark rates for other available currencies and the replacement of any such applicable benchmark by a replacement alternative benchmark rate or mechanism for loans made in the applicable currency. A facility fee on the total amount of the amended revolving credit facility is also payable quarterly, regardless of usage. The applicable margins for borrowings under the amended revolving credit facility and the facility fee percentage may change from time to time depending on changes in our consolidated leverage ratio. Credit facility balances are included in notes payable, revolving credit facility and overdrafts on the Condensed Consolidated Balance Sheets.

Previous wording

(1)Definitions of ratios are included as part of the revolving credit facility agreement and private placement agreements.

Current wording

(1)Definitions of ratios are included as part of the amended revolving credit facility agreement and private placement agreements.

Previous wording

Based upon the above consolidated leverage ratio covenant, we would have the ability to borrow approximately an additional $1.4 billion before the 3.50 to 1.00 maximum ratio requirement would be exceeded.

Current wording

Based upon the above consolidated leverage ratio covenant, we would have the ability to borrow approximately an additional $1.5 billion before the 3.50 to 1.00 maximum ratio requirement would be exceeded.

Previous wording

On April 11, 2024, the Board of Directors declared a quarterly cash dividend of $0.41 per share payable on May 16, 2024 to stockholders of record as of April 25, 2024.

Current wording

On July 11, 2024, the Board of Directors declared an approximately 10% increase in the quarterly cash dividend of $0.45 per share payable on August 15, 2024 to stockholders of record as of July 25, 2024.

Previous wording

We expect earnings per share for the second quarter of 2024, excluding any restructuring expenses, changes in the fair value of equity investments and acquisition costs, to be in the range of $1.30 to $1.38 and this guidance is based on an effective tax rate range of 22% to 24%. Our 2024 estimated cash outlays for capital expenditures net of government grant proceeds are expected to be approximately $280 million to $300 million.

Current wording

We expect earnings per share for the third quarter of 2024, excluding any restructuring expenses, changes in the fair value of equity investments and acquisition costs, to be in the range of $1.38 to $1.46 and this guidance is based on an effective tax rate range of 23.5% to 25.5%. Our 2024 estimated cash outlays for capital expenditures net of government grant proceeds are expected to be approximately $280 million to $300 million.

Previous wording

•geopolitical conflicts worldwide including the invasion of Ukraine by the Russian military and the recent tension in the Middle East and the resulting indirect impact on demand from our customers selling their products into these countries, as well as rising input costs and certain supply chain disruptions;

Current wording

•geopolitical conflicts worldwide including the invasion of Ukraine by the Russian military and the recent events in the Middle East and the resulting indirect impact on demand from our customers selling their products into these countries, as well as rising input costs and certain supply chain disruptions;

Previous wording

•the availability of raw materials and components (particularly from sole sourced suppliers) as well as the financial viability of these suppliers;

Current wording

•the availability of raw materials and components (particularly from sole sourced suppliers for some of our Pharma solutions) as well as the financial viability of these suppliers;

Previous wording

•our ability to identify potential new acquisitions and to successfully acquire and integrate such operations, including the successful integration of the product/service offerings of the acquired entities into our existing portfolio;

Current wording

•our ability to identify potential new acquisitions and to successfully acquire and integrate such operations, including the successful integration of the businesses we have acquired;

Previous wording

•cybersecurity threats that could impact our networks and reporting systems;

Current wording

•cybersecurity threats against our systems and/or service providers that could impact our networks and reporting systems;