Avantor, Inc.

Notes to 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 financial statements have been prepared in accordance with the rules and regulations of the SEC for annual reports and GAAP. The financial statements include the accounts of Avantor, Inc., its consolidated subsidiaries, and those business entities in which we maintain a controlling interest.

Principles of consolidation

All intercompany balances and transactions have been eliminated from the financial statements.

Use of estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates.

2. Summary of significant accounting policies

Earnings per share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the reporting period.

Diluted earnings per share is computed based on the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares we could have repurchased with the proceeds from the issuance of the potentially dilutive shares. In the event that preferred shares are issued and outstanding, preferred dividends are added back to net income available to common stockholders, provided that inclusion of the preferred securities is not anti‑dilutive.

Segment reporting

Effective January 1, 2024, we changed our operating model and reporting segment structure from three reportable segments totwo reportable segments: Laboratory Solutions and Bioscience Production. This structure aligns with how our Chief Executive Officer, who is our CODM, measures segment operating performance and allocates resources across our operating segments.

None of our customers contributed more than 5% to our net sales, and we disclose net sales for the following product categories: proprietary and third-party.

We disclose geographic data for our largest country, the United States, as a percentage of consolidated net sales. No other countries were individually material. We disclose property and equipment by geographic area because many of these assets cannot be readily moved and are illiquid, subjecting them to geographic risk. None of our other long-lived assets are subject to significant geopolitical risk. We do not manage total assets on a segment basis and as a result the Company does not report asset information by segment. Segment information about interest expense, income tax expense or benefit and other significant non-cash items other than depreciation and amortization, are not disclosed because they are not included in the segment profitability measurement nor are they otherwise provided to our CODM on a regular basis.

Cash and cash equivalents

Cash equivalents are comprised of highly-liquid investments with original maturities of three months or less. Bank overdrafts are classified as current liabilities, and changes to bank overdrafts are presented as a financing activity on our consolidated statements of cash flows.

Accounts receivable and allowance for current expected credit losses

Substantially all of our accounts receivable are trade accounts that are recorded at the invoiced amount and generally do not bear interest. Accounts receivable are presented net of an allowance for current expected credit losses. We consider many factors in estimating our allowance including the age of our receivables, historical collections experience, customer types, creditworthiness and economic trends. Account balances are written off against the allowance when we determine it is probable that the receivable will not be recovered.

Inventory

Inventory consists of merchandise inventory related to our distribution business and finished goods, raw materials and work in process related to our manufacturing business. Goods are removed from inventory as follows:

•Merchandise inventory purchased by certain U.S. subsidiaries using the last-in, first-out method.

•All other merchandise inventory using the first-in, first-out method.

•Manufactured inventories using an average cost method.

Inventory is valued at the lower of cost or net realizable value. Cost for manufactured goods is determined using standard costing methods to estimate raw materials, labor and overhead consumed. Variances from actual cost are recorded to inventory at period-end. Cost for other inventory is based on amounts invoiced by suppliers plus freight. If net realizable value is less than carrying value, we reduce the carrying amount to net realizable value and record a loss in cost of sales.

Property, plant and equipment

Property, plant and equipment are stated at cost. Depreciation is recognized using the straight-line method over estimated useful lives often toforty years for buildings and related improvements, three toten years for machinery and equipment andthree tofifteen years for capitalized software. Leasehold improvements are depreciated on a straight-line basis over the shorter of the estimated useful lives of the assets or the estimated remaining life of the lease. Depreciation is classified as cost of sales or SG&A expense based on the nature of the underlying asset.

Software development costs are capitalized as property, plant and equipment once the preliminary project stage is completed and management commits to funding the project if it is probable that the project will be completed for its intended use. Preliminary project planning and training costs related to software are expensed as incurred.

Impairment of long-lived assets

Long-lived assets include property, plant and equipment, finite-lived intangible assets and certain other assets. For impairment testing purposes, long-lived assets may be grouped with working capital and other types of assets or liabilities if they generate cash flows on a combined basis.

We evaluate long-lived assets or asset groups for impairment whenever events or changes in circumstances indicate a potential inability to recover their carrying amounts. Impairment is determined by comparing their carrying value to their estimated undiscounted future cash flows. If long-lived assets or asset groups are impaired, the loss is measured as the amount by which their carrying values exceed their fair value.

Goodwill and other intangible assets

Goodwill represents the excess of the price of an acquired business over the aggregate fair value of its identifiable net assets. Other intangible assets consist of both finite-lived and indefinite-lived intangible assets.

Goodwill and other indefinite-lived intangible assets are tested annually for impairment on October 1 of each year and whenever an impairment indicator arises. Goodwill impairment testing is performed at the reporting unit level.

As described above, 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. As a result of the reorganization, our goodwill was reassigned to reporting units affected using a relative fair value approach similar to that used when a portion of a reporting unit is disposed of, to the new reporting units making up our Laboratory Solutions and Bioscience Production reporting segments.

Our finite-lived intangible assets are tested for impairment whenever an impairment indicator arises. Examples of impairment indicators include unexpected adverse business conditions, economic factors, unanticipated technological changes or competitive activities, loss of key personnel and acts or anticipated acts by governments and courts.

The impairment analysis for goodwill and indefinite-lived intangible assets consists of an optional qualitative assessment potentially followed by a quantitative analysis. If we determine that the carrying value of a reporting unit or an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded for the excess.

Indefinite-lived intangible assets are not amortized. Annually, we evaluate whether these assets continue to have indefinite lives, considering whether they have any legal, regulatory, contractual, competitive or economic limitations and whether they are expected to contribute to the generation of cash flows indefinitely.

Finite-lived intangible assets are amortized over their estimated useful lives on a straight-line basis, with customer relationships amortized over lives often totwenty years, tradenames amortized over lives often tofifteen years and other finite-lived intangible assets amortized over lives offive totwenty years. Amortization is classified in SG&A expenses. We reevaluate the estimated useful lives of our finite-lived intangible assets annually.

Restructuring and severance charges

Restructuring plans are designed to improve gross margins and reduce operating costs over time. We typically incur up-front charges to implement these plans related to employee severance, facility closure and other actions:

•Employee severance and related — Employee severance programs can be voluntary or involuntary. Voluntary severances are recorded at their reasonably estimated amount when associates accept severance offers. Involuntary severances covered by plan or statute are recorded at estimated amounts when probable and reasonably estimable. Judgment is required to determine probability and whether the amount can be reasonably estimated. Involuntary severances requiring significant continuing service are measured at fair value as of the termination date and recognized on a straight-line basis over the service period.

•Facility closure — On the date we cease using a facility, facility leased assets are tested for impairment in the same way as other long-lived assets. The remaining lease expense is recognized between the period that we commit to cease use of a facility and the date we exit.

•Other — Other charges may be incurred to write down assets, divest businesses or for other reasons and are accounted for under applicable GAAP as described elsewhere in these policies.

Restructuring and severance charges are classified as SG&A expenses or cost of sales depending on the nature of the expense. Accrued restructuring and severance charges are classified as employee-related or current liabilities if we anticipate settlement within one year, otherwise they are included in other liabilities.

Contingencies

Our business exposes us to various contingencies including compliance with environmental laws and regulations, legal exposures related to the manufacture and sale of products and other matters. Loss contingencies are reflected in the financial statements based on our assessments of their expected outcome or resolution:

•They are recognized as liabilities on our balance sheet if the potential loss is probable and the amount can be reasonably estimated.

•They are disclosed if the potential loss is material and considered at least reasonably possible.

Significant judgment is required to determine probability and whether the amount can be reasonably estimated. Due to uncertainties related to these matters, accruals are based only on the information available at the time. As additional information becomes available, we reassess potential liabilities and may revise our previous estimates.

Debt

Borrowings under lines of credit are stated at their face amount. Borrowings under term debt and through the issuance of notes are stated at their face amounts net of unamortized deferred financing costs, including any original issue discounts or premiums.

The accounting for financing costs depends on whether debt is newly issued, extinguished or modified. That determination is made on an individual lender basis when the lenders are part of a syndication. When new debt is issued, financing costs and discounts are deferred and recognized as interest expense through maturity of the debt. When debt is extinguished, unamortized deferred financing costs and discounts are written off and presented as a loss on extinguishment of debt. When debt is modified, new financing costs and prior unamortized deferred financing costs may be either (i) immediately recognized as interest expense, other expense, or SG&A expense or (ii) deferred and recognized as interest expense through maturity of the modified debt, depending on the type of cost and whether the modification was substantial or insubstantial.

Borrowings and repayments under lines of credit are short-term in nature and presented on the statement of cash flows on a net basis.

Equity

Stockholders’ equity or deficit comprises common stock and treasury stock. Our accounting policies for these instruments are as follows:

•Common stock is presented at par value plus additional paid-in amounts, net of issuance costs. Distributions are accounted for as reductions to common stock including paid-in capital and are classified as financing activities on the statement of cash flows.

•Upon issuance, paid-in capital is allocated among host stock instruments on a relative fair value basis.

•Treasury stock is accounted for under the cost method. When shares are repurchased, the cost of the shares, including any related transaction costs, is recorded as a reduction of stockholders’ equity. Shares held in treasury are excluded from common shares outstanding and therefore reduce the weighted‑average number of shares outstanding used in the calculation of both basic and diluted earnings per share. When treasury shares are reissued, the difference between the reissuance price and the recorded cost of those shares is recognized in additional paid-in capital.

Costs directly associated with new equity issuances are recorded as other current assets until the issuances are completed or abandoned. If the issuance is completed, the costs are reclassified to stockholders’ equity and presented as a reduction of proceeds received. If the issuance is abandoned, the costs are reclassified to SG&A expenses. Costs associated with secondary equity offerings under a registration rights agreement are recorded as SG&A expenses.

Disclosures about certain classes of stock are provided in the footnotes and not stated separately on the balance sheet or statement of stockholders’ equity when those presentations are not deemed to be material.

Revenue recognition

We recognize revenue by applying a five-step process: (i) identify the contract with a customer, (ii) identify the performance obligation in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue as the performance obligations are satisfied by transferring control of the performance obligation through delivery of a promised product or service to a customer.

Control of a performance obligation may transfer to the customer either at a point in time or over time depending on an evaluation of the specific facts and circumstances for each contract, including the terms and conditions of the contract as agreed with the customer, as well as the nature of the products or services to be provided. The substantial majority of our net sales are recognized at a point in time based upon the delivery of products to customers pursuant to purchase orders. We recognize service revenues and sales of certain of our custom-manufactured products over time as control passes to the customer concurrent with our performance. We are able to fulfill most purchase orders rapidly, and service and custom-manufacturing cycles are short. As a result, we do not record material contract assets or liabilities, nor do we have material unfulfilled performance obligations.

We have elected to use the practical expedient not to adjust the transaction price of a contract for the effects of a significant financing component if, at the inception of the contract, we expect that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

Some customer contracts include variable consideration, such as rebates and prebates, some of which depend upon our customers meeting specified performance criteria, such as a purchasing level over a period of time. We use judgment to estimate the value of these pricing arrangements at each reporting date and record contract assets or liabilities to the extent that estimated values are recognized at a different time than the revenue for the related products. When estimating variable consideration, we also apply judgment when considering the probability of whether a reversal of revenue could occur and only recognize revenue subject to this constraint.

The only significant costs we incur to obtain contracts are related to sales commissions. These commissions are primarily based on purchase order amounts, not recoverable and not applicable to periods greater than one year. We elected to apply the practical expedient to expense these costs as incurred as if the amortization period of the asset that would have otherwise been recognized is one year or less.

Performance obligations following the delivery of products, such as rights of return and warranties, are not material. No other types of revenue arrangements were material to our consolidated financial statements.

Classification of expenses — cost of sales

Cost of sales includes the cost of the product, depreciation of production assets, supplier rebates, shipping and receiving charges and inventory adjustments. For manufactured products, the cost of the product includes direct and indirect manufacturing costs, plant administrative expenses and the cost of raw materials consumed in the manufacturing process.

Classification of expenses — selling, general and administrative

Selling, general and administrative expenses include personnel and facility costs, amortization of intangible assets, depreciation of non-production assets, research and development costs, advertising expense, promotional charges and other charges related to our global operations. Research and development expenses were not material for the periods presented.

Employee benefit plans

Some of our employees participate in defined benefit plans that we sponsor. We present these plans as follows due to their differing geographies, characteristics and actuarial assumptions:

•U.S. plans— Our U.S. plans are closed to participants who joined the Company after 2018, and annual accruals of future pension benefits for participating employees are not material to our financial statements. One of our two U.S. plans was terminated during 2025, as discussed in note 17.

•Non-U.S. plans— We sponsor eight plans covering employees in various countries that we acquired from VWR in 2017. Most of these plans continue to accrue future pension benefits for participating employees.

•Medical plan— We provide a post-retirement medical plan for certain U.S. employees. The plan is closed to new employees, and annual accruals of future pension benefits for participating employees are not material to our financial statements.

We sponsor a number of other defined benefit plans in various countries that are not material individually or in the aggregate and therefore are not included in our disclosures. Defined contribution and other employee benefit plans are also not material.

The cost of our defined benefit plans is incurred systematically over expected employee service periods. We use actuarial methods and assumptions to determine expense each period and the value of projected benefit obligations. Actuarial changes in the projected value of defined benefit obligations are deferred to AOCI and recognized in earnings systematically over future periods. The portion of cost attributable to continuing employee service is included in SG&A expenses. The rest of the cost is included in other income or expense, net.

Stock-based compensation expense

Some of our management and directors are compensated with stock-based awards. Stock-based compensation expense is included in SG&A expenses on the statement of operations.

Stock options and RSUs

We measure the expense of stock options and RSUs based on their grant-date fair values. Awards that vest based on continued service are recognized as compensation expense on a straight-line basis over the requisite service period. For awards that are contingent upon the achievement of a performance condition, compensation expense is recognized over the performance period based on the probability of achievement. Awards with market conditions are measured at grant‑date fair value using valuation techniques that incorporate the likelihood of achieving the market condition, and the resulting expense is recognized over the requisite service period regardless of whether the market condition is ultimately satisfied. We recognize forfeitures of unvested awards as they occur by reversing any expense previously recorded in the period of forfeiture. Upon exercise or vesting of awards, we issue new shares of common stock.

The grant-date fair value of stock options is measured using the Black-Scholes pricing model, which incorporates assumptions based on the terms of each stock option agreement, the expected behavior of grant recipients, and our own and selected peer company data. Through the year ended December 31, 2024, due to limited trading history, we estimated volatility using a peer group methodology over a period equal to the expected life of the stock options. Beginning in 2025, after sufficient trading history became available, we adopted a blended volatility methodology that combines Avantor’s historical volatility with that of a peer group to provide a more stable and representative input. The risk-free interest rate is based on U.S. Treasury observed market rates, continuously compounded over the expected life. The expected life of stock options is estimated as the midpoint between the weighted-average vesting period and the contractual term.

The grant-date fair value for RSUs in which the vesting condition is based only on continuing service is measured using the quoted closing price of our common stock on the grant date. The grant-date fair value of awards with performance conditions is also measured using the quoted closing price of our common stock on the grant date, adjusted for the probability of achieving the specified performance targets. For awards that contain market conditions, we determine the grant‑date fair value using a Monte Carlo valuation model.

Award modifications

When stock-based compensation arrangements are modified, we treat the modification as an exchange of the original award for a new award and immediately recognize expense for the incremental value of the new award. The incremental value is measured as the excess of the fair value of new awards over the fair value of the original awards, each based on circumstances and assumptions as of the modification date. Fair value is measured using the same methods previously described. We have not had any such modifications for the periods presented in these financial statements.

Income taxes

Our worldwide income is subject to the income tax regulations of many governments. Income tax expense is calculated using an estimated global rate with recognition of deferred tax assets and liabilities for expected temporary differences between taxable and reported income. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income when those temporary differences are expected to reverse. We record a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.

Income tax regulations change from time to time. The effect of a change in tax law on deferred tax assets and liabilities is recognized as a cumulative adjustment to income tax expense or benefit in the period of enactment. The effect of a change in tax law on the income tax expense or benefit itself is recognized prospectively for the applicable tax years.

Income tax regulations can be complex, requiring us to interpret tax law and take positions. Upon audit, tax authorities may challenge our positions. We regularly assess the outcome of potential examinations and only recognize positions that are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is more likely than not of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs, as a result of information that arises or when a tax position is effectively settled. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of interest expense in our consolidated financial statements.

Fair value measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a measurement date. We classify fair value measurements based on the lowest of the following levels that is significant to the measurement:

•Level 1 — Quoted prices in active markets for identical assets or liabilities

•Level 2 — Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability

•Level 3 — Inputs that are unobservable for the asset or liability based on our evaluation of the assumptions market participants would use in pricing the asset or liability

We exercise considerable judgment when estimating fair value, particularly when evaluating what assumptions market participants would likely make. The use of different assumptions or estimation methodologies could have a material effect on the estimated fair values.

Foreign currency translation

Our operations span the globe, so we are impacted by changes in foreign currency exchange rates. We determine the functional currency of our subsidiaries based upon the primary currency used to generate and expend cash, which is usually the currency of the country in which the subsidiary is located. For subsidiaries with functional currencies other than the U.S. dollar, assets and liabilities are translated into U.S. dollars using period-end exchange rates, and revenues, expenses, income and losses of our subsidiaries are translated into U.S. dollars using monthly average exchange rates. The resulting foreign currency translation gains or losses are deferred as AOCI and reclassified to earnings only upon sale or liquidation of those businesses.

Gains and losses related to the remeasurement of debt and intercompany financing into functional currencies are reported in earnings as other income or expense, net. When foreign currency-denominated debt is designated as a hedge of our net investments in non-U.S denominated subsidiaries, gains and losses are reported in AOCI as part of the cumulative translation adjustment. Gains and losses associated with the remeasurement of operating assets and liabilities into functional currencies are reported within the applicable component of operating income.

Leases

We primarily enter into real estate leases for manufacturing, warehousing and commercial office space to support our global operations. We also enter into vehicle and equipment leases to support those operations.

We determine if an arrangement is a lease at inception. Short-term leases, defined as having an initial term of twelve months or less, are expensed as incurred and not recorded on the balance sheet. We record the value of all other leased property and the related obligations as assets and liabilities on the balance sheet. Information about the amount and classification of lease assets and liabilities is included in note 23.

At inception, lease assets and liabilities are measured at the present value of future lease payments over the lease term. As most of our leases do not provide an implicit rate, we exercise judgment in selecting the incremental borrowing rate based on the information available at inception to determine the present value of future payments. Operating lease assets are further adjusted for lease incentives and initial direct costs.

Our lease terms may include options to extend or terminate the lease. We exercise judgment to calculate the term of those leases when extension or termination options are present and include such options in the calculation of the lease term when it is reasonably certain that we will exercise those options. Operating lease expense is recognized on a straight-line basis over the lease term, except for variable rent which is expensed as incurred. Short-term lease and variable rent expense was immaterial to the financial statements and has been included within operating lease expense. Finance lease expense includes depreciation, which is recognized on a straight-line basis over the expected life of the leased asset and interest expense.

Some of our lease agreements include both lease and non-lease components. We account for those components separately for real estate leases and as a combined single lease component for all other types of leases.

Business combinations

We account for business acquisitions under the accounting standards for business combinations. The results of each acquisition are included in our consolidated results as of the acquisition date and the purchase price of an acquisition is allocated to tangible and intangible assets and assumed liabilities based on their estimated fair values. Any excess of the fair value consideration transferred over the estimated fair values of the identifiable net assets acquired is recognized as goodwill.

Any purchase price that is considered contingent consideration is measured at its estimated fair value at the acquisition date. Contingent consideration is remeasured at the end of each reporting period, with changes in estimated fair value being recorded through SG&A expense within our statement of operations.

Derivatives and hedging

We use derivative instruments primarily to manage currency exchange and interest rate risks and recognize them as either assets or liabilities which are measured at fair value.

•Cash flow hedges — We use interest rate derivatives to add stability to interest expense and to manage our exposure to interest rate movements. For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative is recorded in AOCI and reclassified into earnings in the same period(s) during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.

•Net Investment hedges — We use foreign currency-denominated debt and cross-currency swaps to hedge our net investments in foreign operations against adverse movements in exchange rates. 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 in the event the hedged net investment is either sold or substantially liquidated.

3. New accounting standards

Income Taxes

In December 2023, the FASB issued ASU 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. Accordingly, we adopted this standard on a retrospective basis within our annual report for the year ended December 31, 2025. Adoption resulted in expanded disclosures within our income tax footnote, primarily related to the annual effective tax rate reconciliation and income taxes paid. Refer to note 20 for these disclosures.

Disaggregation of Income Statement Expenses (DISE)

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), requiring additional disclosure of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

The amendments in this update are effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of this standard on our financial statements.

Other

There were no other 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

In March 2024, the SEC adopted final rules to enhance and standardize climate-related disclosures in registration statements and annual reports. On April 4, 2024, the SEC voluntarily stayed the effectiveness of these rules pending judicial review, and on March 27, 2025, the SEC withdrew its defense of the rules in ongoing litigation. As a result, the rules remain subject to a stay and their future applicability is uncertain. We continue to monitor developments and will evaluate the impact of any final requirements on our disclosures and related processes.

4. Divestitures

We completed the sale of our Clinical Services business, a component of the Company’s Laboratory Solutions reportable segment, on October 17, 2024. In the fourth quarter of 2024, we received gross proceeds of approximately $595.0 million. In connection with the sale, we recorded a gain of $446.6 million in the consolidated statements of operations for the year ended December 31, 2024. During the year ended December 31, 2025, we recorded a $(5.1) million post-closing purchase price adjustment to the originally recognized gain on sale in the consolidated statements of operations. The Clinical Services business was not classified as a discontinued operation because it did not represent a strategic shift that would have a major effect on our operations or financial results.

5. Earnings per share

The following table presents the reconciliation of basic and diluted (loss) earnings per share for the years ended December 31, 2025, 2024 and 2023:

Certain stock options and RSUs are not included in the diluted earnings (loss) per share calculation when the effect would have been anti-dilutive. The number of anti-dilutive shares not included were 14.5 million,5.9 million and 12.9 million for the year ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively.

6. Risks and uncertainties

Remeasurement of foreign-denominated debt and intercompany borrowings

Our operations span the globe. To fund those operations, we have entered into significant Euro-denominated indebtedness (see note 14), and we have also established intercompany borrowings among our subsidiaries that are denominated in various currencies. Changes in foreign currency exchange rates, particularly the Euro, have required us to record gains and losses, some of which have been significant, to remeasure the debt and the intercompany borrowings into functional currencies of the subsidiaries holding them.

Our intercompany capitalization structure and derivative and hedging instruments are intended to mitigate substantially all of our net Euro financing exposure in future periods. We expect to record gains and losses related to intercompany borrowings denominated in other currencies. Historically, the remeasurement of borrowings denominated in currencies other than the Euro has not been material.

Impairment testing

On January 1, 2024, in connection with the Company’s reporting segment structure change, we performed quantitative impairment testing of goodwill for each of our reporting units. We did not record any impairment charges as each reporting unit had a fair value that was in excess of its carrying value.

As a result of sustained decreases in our publicly quoted share price and market capitalization, as well as changes in the operating results of our Distribution reporting unit, formerly referred to as our Buy Sell Lab reporting unit, we conducted an interim goodwill impairment test as of September 30, 2025. Based on this test, the carrying amount of the Distribution reporting unit exceeded its fair value, resulting in a non-deductible, non-cash goodwill impairment charge of $785.0 million, recorded in the consolidated statements of operations for the three months ended September 30, 2025. Following the impairment, the carrying value of the Distribution reporting unit equals its estimated fair value.

Future goodwill impairment charges may be required if market conditions, projected operating results, or other key valuation assumptions deteriorate. Changes in forecasted results, discount rates, or other inputs used to estimate fair value could materially impact valuations and increase the risk of impairment in subsequent periods. We did not record any goodwill impairments during the years ended December 31, 2024 and December 31, 2023.

Collective bargaining arrangements

As of December 31, 2025, approximately 5% of our employees in North America were represented by unions, and a majority of our employees in Europe are represented by workers’ councils or unions.

7. Segment financial information

Effective January 1, 2024, we changed our operating model and reporting segment structure intotwo 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 CODM changed the measure used to evaluate segment profitability from Adjusted EBITDA to Adjusted Operating Income. The CODM uses this metric predominantly in the annual budget, forecasting and performance monitoring processes. All segment disclosures for 2023 reflect the changes to our reportable segments.

The following tables present information by reportable segment:

1. Adjusted cost of sales excludes $0.6 million and $12.1 million of non-GAAP adjustments for the years ended December 31, 2025 and December 31, 2024, respectively, primarily related to restructuring and severance as described in more detail within the non-GAAP reconciliation presented below. There were no such non-GAAP adjustments to cost of sales for the year ended December 31, 2023.

2. Adjusted operating expenses excludes $1,203.4 million, $(7.1) million and $515.4 million of non-GAAP adjustments, for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively, primarily related to gain on sale of business, amortization, impairment charges, restructuring and severance charges and transformation expenses as described in more detail within the non-GAAP reconciliation presented below.

The following table presents depreciation and amortization by reportable segment:

Information about our segments’ assets and capital expenditures is not disclosed because this information is not provided to our CODM.

The amounts above exclude inter-segment activity because it is not material. All of the net sales presented for each segment are from external customers.

The following table presents the reconciliation of Adjusted Operating Income, our segment profitability measure, to (Loss) income before income taxes, the nearest measurement under GAAP:

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. These expenses recognized in 2024 & 2025 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.

4. Represents charges and legal costs, net of recoveries, in connection with certain litigation and other contingencies that are unrelated to our core operations and not reflective of on-going business and operating results.

5. Represents other stock-based compensation expense (benefit), $6.7 million of severance and transition costs associated with the replacement of our Chief Executive Officer in 2025, and other costs.

6. As described in notes 10 and 11.

7. The amount reported in 2024 reflects the gain on the sale of our Clinical Services business. The amount reported in 2025 reflects post‑closing purchase price adjustments related to that sale. The sale of the Clinical Services business is further described in note 4.

The following table presents net sales by product category:

The following table presents information by geographic area:

8. Supplemental disclosures of cash flow information

The following tables present supplemental disclosures of cash balances:

1. Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions: $8.9 million in Luxembourg and $7.7 million in Belgium for the year ended December 31, 2025 and $24.9 million in Switzerland for the year ended December 31, 2023.

2. Inventory

The following table presents the components of inventory:

10. Property, plant and equipment

The following table presents the components of property, plant and equipment:

Depreciation expense was $109.1 million in 2025, $105.7 million in 2024 and $94.6 million in 2023.

In the second quarter of 2023, persistently high customer inventory in the end markets served by Ritter and an overall slowdown in research activity caused Ritter’s revenue to decline compared to prior expectations. Due to these circumstances, we performed an impairment test of the Ritter asset group, which resulted in a fair value that was lower than its carrying value. As a result, we recorded an impairment charge of $54.4 million on Ritter’s property, plant & equipment in the second quarter of 2023. This charge impacted our Laboratory Solutions reportable segment.

Our impairment test was performed as of June 30, 2023 and utilized our then latest estimates of Ritter’s projected cash flows, including revenues, gross margin, SG&A expenses, capital expenditures to maintain the acquired assets, and investments in debt free net working capital, as well as current market assumptions for the discount rate.

11. Goodwill and other intangible assets

Goodwill

As described in note 2, 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 reporting units are Distribution (formerly referred to as Buy Sell Lab), Laboratory Specialty Products (formerly referred to as Proprietary Lab), Laboratory Services (formerly referred to as Services), Manufactured Products, Controlled Environment Consumables (formerly referred to as Buy Sell Production), and NuSil. 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 reassigned goodwill as of January 1, 2024 to align to our new segment structure by using a relative fair value approach as required under GAAP. We tested goodwill for impairment immediately before and after the reorganization of our reporting structure; no impairment was identified.

The following table presents goodwill by our reportable segments, on the effective date of the change:

As described in note 6, as a result of sustained decreases in our publicly quoted share price and market capitalization as well as changes in the operating results of our Distribution reporting unit, we conducted an interim test of our goodwill as of September 30, 2025.

We estimate the fair value of reporting units using a weighted average of two valuation methods based on a discounted cash flows method and a guideline public company method. These valuation methods require management to make various assumptions, including, but not limited to, future profitability, cash flows, including revenues, gross margin, SG&A expenses, capital expenditures, and investments in debt free net working capital, current market assumptions for the discount rates, weighting of valuation methods and the selection of comparable publicly traded companies. Variations in any of these assumptions could result in materially different calculations of fair value.

Based on the results of the impairment test, the carrying amount of our Distribution reporting unit exceeded its fair value, resulting in a non-deductible, non-cash goodwill impairment charge of $785.0 million, which was recorded in the consolidated statement of operations. We did not identify impairment of any other long-lived assets in this reporting unit. The remaining reporting units tested were not impaired, as their estimated fair values exceeded their respective carrying amounts as of the interim testing date.

Following the impairment charge, the carrying value of the Distribution reporting unit is equal to its estimated fair value. Recognition of additional impairment charges may be required in future periods if market conditions, projected results, or other valuation assumptions deteriorate further.

Since October 1, 2025 is our designated annual impairment testing date, management performed the required procedures to reassess impairment as of that date, including a review of key assumptions, market indicators, and other relevant factors. No conditions were identified that differed materially from those considered in the September 30, 2025 interim analysis. Accordingly, the conclusions reached in that interim test remained appropriate, and no additional impairment was recorded as of October 1, 2025.

The following tables present changes in goodwill by reportable segment:

Other intangible assets

The following table presents the components of other intangible assets:

1. As of December 31, 2025 and December 31, 2024, accumulated impairment losses on Customer relationships were $65.9 million and on Other were $40.5 million, totaling $106.4 million.

Amortization expense was $301.1 million in 2025, $299.8 million in 2024 and $307.7 million in 2023.

We recorded an impairment charge of $106.4 million on Ritter’s finite-lived intangible assets in the second quarter of 2023 in connection with the impairment of Ritter’s property, plant & equipment, as previously discussed in note 10. This charge impacted our Laboratory Solutions reportable segment.

The following table presents estimated future amortization:

12. Restructuring

The following table presents restructuring and severance expenses by plan:

Restructuring and severance charges are classified as SG&A expenses or cost of sales depending on the nature of the expense.

2024 restructuring program

The 2024 restructuring program is a part of the Company’s multi-year cost transformation initiative designed to right-size the Company’s cost base and optimize its footprint and organizational structure with a focus on driving cost improvement and productivity. During 2025, we recognized a $(5.3) million non‑cash adjustment that reduced the previously recorded 2024 restructuring accrual, primarily reflecting updates to expected severance and other exit costs that were no longer required. No additional material charges were incurred in 2025, and we do not expect to incur additional material charges related to this program in future periods.

The following table presents information about expenses under the 2024 restructuring program for the periods covered under this report in which the plan was active:

Other charges in the table above primarily relate to the write-downs of the carrying value of assets that we have disposed of under the program.

The following table presents changes to accrued employee severance and related expenses under the 2024 restructuring program, which are primarily classified as employee-related current liabilities:

13. 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:

Mallinckrodt indemnification

In 2010, New Mountain Capital acquired us from Covidien plc in accordance with a stock purchase agreement dated May 25, 2010. At that time, we were organized as Mallinckrodt Baker, Inc. or MBI. Pursuant to the terms of that agreement, we are entitled to various levels of indemnification with respect to environmental liabilities involving the former MBI operations. In 2013, in connection with the Covidien plc divestiture of Mallinckrodt Group S.a.r.l and Mallinckrodt LLC, together “Mallinckrodt,” and by a second amendment to the stock purchase agreement dated June 6, 2013, but effective upon the consummation of the divestiture, Covidien plc assigned its obligations as described herein to Mallinckrodt, and Mallinckrodt assumed those obligations from Covidien plc subject to a continuing guarantee by Covidien International Finance, S.A (“CIFSA”). As a result of the stock purchase agreement and assignment, Mallinckrodt is contractually obligated to indemnify and defend us for all off-site environmental liabilities (for example, Superfund or CERCLA liabilities) arising from the pre-closing disposal of chemicals or wastes by former MBI operations.

In connection with environmental liabilities arising from pre-closing noncompliance with environmental laws, Mallinckrodt became contractually obligated to reimburse us for a percentage of the total liability, with such reimbursements made through disbursements from a $30.0 million environmental escrow established at the time of the closing. Specifically, Mallinckrodt became responsible for reimbursement of 80% of the total costs up to $40.0 million of such environmental liabilities. Mallinckrodt became responsible for reimbursement of 50% of the next $40.0 million of such environmental liabilities. If such environmental liabilities exceed $80.0 million in the aggregate, Mallinckrodt became responsible for reimbursement of 100% of such liabilities up to the next $30.0 million in the aggregate. Currently, reimbursements are 80% of the amounts spent by us, with reimbursements and settlements to date exceeding $12.0 million. In addition, in connection with operation and maintenance activities required pursuant to administrative consent orders and subsequently issued remedial action permits involving our Phillipsburg, New Jersey, facility, amounts in excess of a small annual threshold are also subject to reimbursement, currently at the 80% level.

In 2023, Mallinckrodt initiated bankruptcy proceedings under Chapter 11 of the Bankruptcy Code and notified us that it was seeking to reject the 2010 stock purchase agreement and its obligations thereunder. As noted above, Mallinckrodt’s obligations under the 2010 stock purchase agreement were guaranteed by CIFSA, who has agreed to honor its indemnity obligations going forward.

Other noteworthy matters

The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. This matter is covered by the indemnification arrangement previously described. At December 31, 2025, our accrued obligation under this order is $2.3 million, which is calculated based on expected cash payments discounted at rates ranging from 3.4% to 4.8% between 2026 and 2045. The undiscounted amount of that obligation is $3.5 million.

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 December 31, 2025, our balance sheet includes a liability of $1.2 million for remediation and monitoring costs. That liability is estimated primarily on discounted expected remediation payments and is not materially different from its undiscounted amount.

Manufacture and sale of products

Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings.

We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements.

We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

Litigation

The Company and certain current and former officers and directors have been named as defendants in two putative securities class action lawsuits filed in the United States District Court for the Eastern District of Pennsylvania on October 30, 2025, and November 25, 2025, respectively. The complaints allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 related to alleged misleading or false statements concerning Avantor’s competitive position and the purported effects of increased competition, as well as other aspects of the Company’s business, operations, and management. The lawsuits seek unspecified damages, attorneys’ fees, and other relief. The Company disputes the claims and intends to vigorously defend against them.

At this time, the outcome of this matter cannot be predicted, and management cannot reasonably estimate the possible loss or range of loss, if any.

Adverse developments in this litigation could result in significant costs or damages; however, based on the information currently available, management does not believe the resolution of this matter will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

At December 31, 2025, 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. Debt

The following table presents information about our debt:

1. SOFR includes credit spread adjustment.

The following table presents mandatory future repayments of debt principal:

Interest expense, net includes interest income of $42.2 million, $75.1 million and $65.2 million for the year ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively. The interest income for the year ended December 31, 2025, December 31, 2024 and December 31, 2023, primarily relates to income on our interest rate swaps and cross currency swaps discussed in note 21.

Credit facilities

The following table presents availability under our revolving credit facility:

In June 2023, we amended the revolving credit facility to increase its funding limit to $975.0 million and extended the term to June 29, 2028. We capitalized $2.3 million of fees in connection with this transaction.

In October 2025, we amended the revolving credit facility to increase its funding limit to $1,400.0 million and extended the term to October 9, 2030. We capitalized $3.8 million of fees in connection with this transaction. Refer to the “Senior secured credit facilities” section below for further discussion of this amendment.

Receivables facility

In October 2025, we terminated our receivables facility, which had a funding limit of $400.0 million. The cost associated with terminating this arrangement was not material.

Senior secured credit facilities

On December 31, 2025, the senior secured credit facilities consisted of a $1,400.0 million revolving credit facility that matures on October 9, 2030, a $645.2 million term loan facility that matures on October 9, 2032 and a $469.2 million term loan facility that matures on October 9, 2030. The revolving credit facility allows us to issue letters of credit and short-term notes. Borrowings under the facilities are guaranteed by substantially all of our domestic subsidiaries and secured by substantially all of their assets. The senior secured credit facilities bear interest at variable rates. The margin on the revolving credit facility decreases if certain net leverage ratios are achieved. Various other immaterial fees are payable under the facilities.

In October 2025, we completed a refinancing that included the issuance of €400.0 million and €550.0 million of senior secured term loans, maturing in October 2030 and October 2032, respectively. These loans bear interest at EURIBOR plus 150 basis points and EURIBOR plus 250 basis points, respectively. The proceeds from these issuances, along with cash on hand, were used to repay our outstanding U.S. dollar term loans B-6, Euro term loans B-4 and B-5, the remaining 2.625% secured notes, and the receivables facility. We capitalized $8.0 million of fees and expensed $4.4 million of fees in connection with this transaction.

In connection with the refinancing, we amended our revolving credit facility to obtain an additional $425.0 million in available funding, increasing the total availability under the facility to $1,400.0 million. The revolving credit facility will mature in October 2030.

Both the newly issued senior secured term loans and the amended revolving credit facility include covenants that we consider to be usual and customary. As part of the refinancing and the addition of the new €400.0 million term loan, (i) the leverage-based financial covenant in the credit facility agreement became a full-time financial maintenance covenant, whereas previously it had been a “springing covenant”, and (ii) a new consolidated interest coverage ratio financial maintenance covenant was added to the credit facilities agreement, in both cases on usual and customary terms for facility agreements governing these types of senior secured term loan and revolving credit facilities. As of December 31, 2025, our net leverage and consolidated interest coverage ratio were within the covenant requirements.

We are required to make additional prepayments if: (i) we generate excess cash flows, as defined, at specified percentages that decline if certain net leverage ratios are achieved; or (ii) we receive cash proceeds from certain types of asset sales or debt issuances. No additional required prepayments have become due since the inception of the credit facilities.

We may also prepay the term loans at our option. In 2025 and 2024, we made optional prepayments of $449.4 million and $526.4 million, respectively, of Euro term loans and $80.8 million and $690.0 million, respectively, of U.S. dollar term loans. In connection with the 2025 and 2024 prepayments, we recorded losses on extinguishment of debt of $1.1 million and $10.9 million, respectively, for the proportional write-off of related unamortized deferred financing costs.

15. Equity

The following table presents the equity capitalization of Avantor, Inc.:

Common stock

Each share of common stock entitles the holder toone vote for applicable matters. Holders are entitled to receive dividends declared by the board of directors and a pro rata share of assets available for distribution after satisfaction of the rights of the preferred stockholders.

Share purchase program

In October 2025, our Board of Directors authorized the repurchase of up to $500.0 million of our common stock, exclusive of fees, commissions and related transaction expenses. Repurchases may be funded through our available cash, borrowings under existing credit facilities or other financing arrangements approved by the Board of Directors.

Management is authorized to repurchase our common stock on the open market or in privately negotiated transactions, through one or more Rule 10b5-1 trading plans, Rule 10b-18 repurchase programs, accelerated share repurchase programs, including any collateral arrangements, or a combination thereof. The timing, manner, price and amount of repurchases will be determined by management depending upon economic, market and other conditions. The repurchase program may be modified, suspended, or terminated at any time. Shares repurchased under the program are held as treasury stock.

During the fourth quarter of 2025, we repurchased $75.0 million of our common stock (6.6 million shares). As of December 31, 2025, $425.0 million remained available for repurchase under the program.

16. Accumulated other comprehensive income (loss)

The following table presents changes in the components of AOCI:

The reclassifications effects shown above were immaterial to the financial statements and were made to either cost of sales, SG&A expense, other (expense) income, net or interest expense depending upon the nature of the underlying transaction. The income tax effects in 2025 and 2024 on foreign currency translation were due to our net investment hedge and cross-currency swap discussed in note 21.

17. Employee benefit plans

We sponsor many defined benefit plans across the globe. Those plans have resulted in significant obligations to pay benefits to current and former employees, many of which are at least partially funded with plan assets. Unless required otherwise, we typically seek to close the defined benefit plans to new participants. Defined benefit plans do not materially impact our earnings, and as a result, certain disclosures have been omitted.

We approved the termination of one of our two U.S. pension plans during 2024. The pension liability was partially settled in December 2024 due to lump sum distribution payments of $54.2 million to plan participants. We recorded $9.3 million of pension termination costs for the year ended December 31, 2024, which are included in other income or expenses as discussed in note 19.

The remaining pension liability was settled in 2025, primarily through the purchase of annuity contracts totaling $97.7 million. As a result of the settlement, we recorded $16.3 million of pension termination costs in 2025, which were primarily recognized in other income or expense.

The remaining pension surplus from the plan was used by the Company, as prescribed by applicable regulations, to fund a Qualified Replacement Plan, which will primarily fund future non-elective contributions to the Avantor U.S. 401(k) defined contribution plan.

The following table presents changes in benefit obligations and plan assets and the funded status of our plans:

1. The amount reported for the year ended December 31, 2025, primarily reflects the transfer of the remaining pension surplus from the terminated U.S. Pension Plan to fund a Qualified Replacement Plan.

The following table presents other balance sheet information for defined benefit plans:

The following table presents the assumptions used to determine the benefit obligation:

Actuarial gains for the year ended December 31, 2025 were primarily attributable to higher discount rates (excluding the terminated U.S. plan) and increases in lump‑sum conversion rates for the U.S. plans. Additional gains resulted from lower inflation assumptions. These favorable impacts were partially offset by experience losses in the non‑U.S. plans during the year. For 2024, increases in discount rates in both the U.S. and U.K. generated most of the actuarial gains in the U.S. and non‑U.S. pension plan obligations. These gains were partially offset by experience losses in the U.S. related to annuity purchases completed as part of the plan termination process. Non‑U.S. plans also recorded experience gains in 2024 due to involuntary terminations. Actuarial losses in the U.S. postretirement medical plan in 2025 were driven primarily by unfavorable experience and a decrease in the discount rate, compared to 2024, when actuarial gains were mainly attributable to favorable experience.

The following table presents future benefits expected to be paid:

We do not expect to make any material contributions to our defined benefit plans in 2026.

The following table presents the allocation of plan assets:

1. Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

For periods prior to the plan’s termination, the U.S. pension plan’s investment strategy focused on aligning the duration of plan assets with the duration of benefit obligations. This strategy utilized diversified fixed‑income funds to hedge movements in the discount rate, with investments primarily in long‑duration, investment‑grade corporate bonds across industrial, financial, and utility sectors. Surplus assets were invested in equity funds. The plan was fully settled and terminated in 2025, and therefore no U.S. pension plan assets remained invested as of December 31, 2025.

For the non-U.S. plans, in many cases we enter into insurance contracts to guarantee payment of benefits for an annual fee. Otherwise, our primary investment strategy is to seek a return on plan assets sufficient to achieve our long-term funding objectives. To seek this return, we invest significantly in global equity funds and secondarily in fixed income funds to mitigate inflation and interest rate risk. These funds primarily invest in inflation-linked and other types of government bonds. We estimate the expected long-term rate of return on plan assets in a similar manner to the U.S. plans.

The following table presents changes to plan assets of non-U.S. plans that were measured using unobservable inputs:

18. Stock-based compensation

The following table presents the components of stock-based compensation expense:

At December 31, 2025, unvested awards have remaining expense of $67.1 million to be recognized over a weighted average period of 1.5 years.

We recognized a reduction to income tax expense as a result of tax benefits associated with our stock-based compensation plans of $3.0 million, $5.9 million and $5.0 million, in 2025, 2024 and 2023, respectively.

Our stock-based compensation awards have been issued under a succession of plans sponsored by the ultimate parent of our business, which is currently Avantor, Inc. In connection with our IPO, we adopted the 2019 Plan. The 2019 Plan provides for up to 23.5 million shares of common stock to be issued in the form of stock options, RSUs or other equity-based awards or cash-based awards. The 2019 Plan also provides for 1% annual increases to the number of shares of common stock available for issuance unless reduced by our Board of Directors. At December 31, 2025,43.7 million shares were available for future issuance. The 2019 Plan will automatically terminate on May 17, 2029, and no award under the plan may be granted after this date.

Stock options

The following table presents information about outstanding stock options:

During 2025, we granted stock options with a contractual life often years that vest annually over two tothree years, as specified in the underlying grant agreements, subject to the recipient continuously providing service to us through each applicable vesting period.

The following table presents weighted-average information about stock options granted:

The following table presents other information about stock options:

RSUs

The following table presents information about unvested RSUs:

During 2025, we granted RSUs that vest annually over one tothree years, as specified in the underlying grant agreements, 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 $2.8 million, $9.3 million and $3.1 million, for the years ended December 31, 2025, 2024 and 2023, respectively.

The fair value of RSUs that vested in 2025, 2024 and 2023 was $32.4 million, $31.0 million and $29.5 million, respectively.

19. Other income or expense, net

The following table presents the components of other income or expense, net:

Most of the net foreign currency remeasurement (loss) gain from financing activities was caused by the volatility of the U.S. dollar on unhedged intercompany loan positions as disclosed in note 6. Other income or expense related to our defined benefit plans primarily relates to pension termination charges as described in note 17, and the expected returns on defined benefit plan assets.

20. Income taxes

The following table presents detail about captions appearing on the statements of operations:

The following table reconciles the income tax provision calculated at the United States federal corporate rate to the amounts presented in the statements of operations:

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1. State taxes in California, Massachusetts, Pennsylvania, and Maryland make up the majority (greater than 50 percent) of the tax effect in this category.

Deferred taxes

The following table presents the components of deferred tax assets and liabilities:

The (decrease) increase to the valuation allowance was $(24.0) million in 2025, $8.0 million in 2024 and $26.4 million in 2023.

At December 31, 2025, $132.1 million of the valuation allowances presented above relate to foreign net operating loss carryforwards that are not expected to be realized. We evaluate the realization of deferred tax assets by considering such factors as the reversal of existing taxable temporary differences, expected profitability by tax jurisdiction and available carryforward periods. The extent and timing of any such reversals will influence the extent of tax benefits recognized in a particular year. Should applicable losses, credits and deductions ultimately be realized, the resulting reduction in the valuation allowance would generally be recognized as an income tax benefit.

Uncertain tax positions

We file federal income tax returns in the United States and other tax returns in various states and international jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. In these cases, we evaluate our tax position using the recognition threshold and the measurement analysis in accordance with the accounting guidance. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit recognized in our financial statements. Tax years are subject to examination in the United States since 2021 at the federal level, since 2017 for certain states and in certain international jurisdictions since 2014.

The following table reflects changes to the reserve for uncertain tax positions, excluding accrued interest and penalties:

At December 31, 2025, December 31, 2024 and December 31, 2023, the total amount of unrecognized tax benefits that, if recognized, would reduce income tax expense and the effective tax rate by $79.1 million, $31.3 million and $50.8 million, respectively.

Accrued interest and penalties related to the reserve for uncertain tax positions were $11.1 million at December 31, 2025, $7.2 million at December 31, 2024 and $8.2 million at December 31, 2023.

The development of reserves for uncertain tax positions requires judgments about tax issues, potential outcomes and the timing of settlement discussions with tax authorities. If we were to prevail on all uncertain tax positions, we would recognize an income tax benefit.

Deferred tax treatment of retained goodwill

The Company completed the sale of its Clinical Services business on October 17, 2024. Under ASC 350-20-40-3, the Company determined the amount of goodwill that was deconsolidated in the sale by allocating goodwill between the Clinical Services business and the Company. The goodwill that was retained from the Clinical Services business by the Company has been treated as non-deductible goodwill, which creates a permanent basis difference for tax purposes for which no deferred tax liability has been provided.

Deferred tax treatment of goodwill impairment

In the third quarter of 2025, the Company recorded a goodwill impairment charge of $785.0 million related to our Distribution reporting unit, formerly referred to as our Buy Sell reporting unit. The impairment charge was recorded against “Component 2 goodwill”, which relates to book goodwill exceeding the amount that is tax‑deductible resulting in the goodwill being non-deductible as a permanent difference.

Other matters

Undistributed earnings of foreign subsidiaries that are deemed to be permanently reinvested amount to $2,776.2 million at December 31, 2025. In addition to the one-time transition tax imposed on all accumulated foreign undistributed earnings through December 31, 2017, undistributed earnings of foreign subsidiaries as of December 31, 2025 may still be subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply. We assert indefinite reinvestment related to investments in foreign subsidiaries. It is not practicable to calculate the unrecognized deferred tax liability on undistributed foreign earnings due to the complexity of the hypothetical calculation.

At December 31, 2025, we had federal net operating loss carryforwards of $3.1 million that have indefinite expirations and state net operating loss carryforwards of $70.8 million that expire at various times through 2041. In addition, we had foreign net operating loss carryforwards of $560.5 million, which predominantly have indefinite expirations.

On July 4, 2025, the U.S. enacted H.R. 1, commonly referred to as the One Big Beautiful Bill Act (“Act”). As a result of the Act, our current cash tax obligations were reduced by approximately $43.0 million due to changes to several provisions, including the reinstatement of immediate expensing for domestic research and development expenditures, the extension of 100% bonus depreciation for qualified properties and the relaxation of limitations on the deductibility of business interest expense. The impact on income tax expense resulting from the Act was immaterial.

21. 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 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 immaterial amount will be reclassified as an increase to interest expense.

In April of 2023, we executed an interest rate swap with a notional amount of $100.0 million to convert SOFR based floating rate interest to fixed rate interest. The swap was designated as a cash flow hedge and was intended to mitigate exposure to fluctuations in interest rates.

During the quarter ended December 31, 2025, the hedging relationship for the $100.0 million interest rate swap became ineffective because the forecasted transaction was deemed no longer probable of occurring. As a result, hedge accounting was discontinued, and an immaterial gain was reclassified from AOCI into earnings. Following the discontinuation of hedge accounting, we terminated the interest rate swap and received an immaterial amount of cash proceeds in October 2025.

During the quarter ended September 30, 2024, the hedging relationship for our existing $750.0 million interest rate swap became ineffective because the forecasted transaction was deemed no longer probable of occurring. As a result, hedge accounting was discontinued, and a $6.2 million gain wasreclassified from AOCI into earnings. Following the discontinuation of hedge accounting, we terminated the interest rate swap and received $6.2 million of cash proceeds in October 2024.

As of December 31, 2025, we had no outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk.

Effect of cash flow hedge accounting on AOCI

The table below presents the effect of cash flow hedge accounting on AOCI for the years ended December 31, 2025 and 2024.

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 years ended December 31, 2025 and 2024.

Net investment hedges

We are exposed to foreign currency exchange rate fluctuations on the investments we hold in foreign entities, specifically related to the risk of changes in the EUR-USD exchange rates affecting our net investment in EUR-functional-currency consolidated subsidiaries.

For derivatives designated as net investment hedges, gains and losses are recorded in AOCI as part of the cumulative translation adjustment. These amounts are reclassified from AOCI into earnings only when the hedged net investment is sold or substantially liquidated.

As of December 31, 2025, we had the following outstanding foreign currency derivatives that were used to hedge our net investments in foreign operations:

As of December 31, 2024, we held a cross-currency swap with a notional amount of $750.0 million, which was scheduled to mature in April 2025. In April 2025, prior to maturity, we executed a transaction to amend and extend the original swap. The liability position of the original cross-currency swap was blended and rolled into three separate cross-currency swap agreements, each with a notional amount of $250.0 million, maturing in April 2027, April 2028, and April 2029, respectively.

Our cross-currency swaps involve the receipt of functional-currency fixed-rate amounts from a counterparty in exchange for making foreign-currency fixed-rate payments over the life of the agreement.

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 years ended December 31, 2025 and 2024.

The Company did not reclassify any other deferred gains or losses related to net investment hedges from accumulated other comprehensive income (loss) to earnings for the years ended December 31, 2025 and 2024 other than those mentioned above.

The table below presents the fair value of our derivative financial instruments as well as their classification on the Balance Sheet as of December 31, 2025 and 2024:

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. In October 2024, we de-designated these notes as a net investment hedge. The de-designation had no impact on earnings because accumulated gains or losses on a net investment hedge are only reclassified into earnings upon a liquidation event or deconsolidation of the hedged foreign subsidiary.

In November 2025, we designated €144.0 million of our outstanding €400.0 million 3.875% senior unsecured notes as a hedge of our net investment in certain European operations.

For instruments that are designated and qualify as net investment hedges, remeasurement gains or losses on the foreign-currency denominated debt are recorded as a component of AOCI. Net investment hedge effectiveness is assessed based on changes 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. For all periods presented, the net investment hedge was equal to the designated portion of our European operations and was considered perfectly effective.

The accumulated gain related to the foreign currency denominated debt designated as a net investment hedge, classified within the foreign currency translation adjustment component of AOCI, was $3.0 million and $6.0 million as of December 31, 2025 and December 31, 2024, respectively.

The amount of loss related to the foreign currency denominated debt designated as a net investment hedge, classified within the foreign currency translation adjustment component of other comprehensive income or loss, is presented below:

22. Financial instruments and fair value measurements

Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and debt.

Certain financial and non-financial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

As discussed in note 10 and 11, during the second quarter of 2023, property, plant and equipment, customer relationships and developed technology related to Ritter were deemed to be impaired and their carrying values were reduced to estimated fair values of $25.9 million, $31.4 million and $19.3 million, respectively. This was the result of an impairment charge of $160.8 million. We estimated the fair value of these assets using Level 3 inputs, which included a discounted cash flow analysis.

As discussed in note 11, during the third quarter of 2025, goodwill associated with our Distribution reporting unit was determined to be impaired. As a result, the carrying amount was reduced to its estimated fair value of $3,500.0 million, resulting in an impairment charge of $785.0 million. We estimated the fair value of the Distribution reporting unit using Level 3 inputs under the fair value hierarchy, which included a discounted cash flow analysis and a guideline public company method.

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:

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.

23. Leases

The following table presents lease assets and liabilities and their balance sheet classification:

The following tables present information about lease expense:

(1)Operating lease expense for 2025 and 2024 includes $16.5 million and $14.6 million, respectively, classified as cost of sales and $43.3 million and $43.6 million classified within SG&A expenses, respectively.

(2)Finance lease expense consists primarily of amortization of finance lease assets that is classified within SG&A expenses.

The following table presents future payments due under leases reconciled to lease liabilities:

24. Subsequent Events

In February 2026, the Company announced its intention to implement a new operating model and reporting segment structure effective January 1, 2026. Under the new structure, the Company will report its financial results through two segments: VWR Distribution & Services and Bioscience & Medtech Products. This realignment reflects the Company’s updated management structure and the manner in which the CODM will assess performance and allocate resources beginning in 2026.

These changes to the reporting segment structure do not affect the Company’s consolidated financial statements for the year ended December 31, 2025. Comparative prior‑period segment information will be recast in future filings to conform to the new segment presentation.

25. Condensed unconsolidated financial information of Avantor, Inc.

Pursuant to SEC regulations, the following presents condensed unconsolidated financial information of the registrant, Avantor, Inc.

The following condensed unconsolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto because certain applicable disclosures are provided there. In these condensed unconsolidated financial statements, all of our subsidiaries are wholly-owned for the periods presented and presented as investments of Avantor, Inc. under the equity method. Under that method, the equity interest in subsidiaries’ assets and liabilities is stated as a net non current asset at historical cost on the balance sheet.

No statements of operations are included because Avantor, Inc. only had equity in the earnings or loss of its subsidiaries for the periods presented in amounts equal to our consolidated net income or loss.

Condensed unconsolidated balance sheets

Condensed unconsolidated statements of cash flows

26. Valuation and qualifying accounts

The following table presents changes to our valuation and qualifying accounts:

(1)For the allowance for expected credit losses, deductions represent bad debts charged off, net of recoveries.