Waters (WAT) Risk Factor Changes

The amount of indebtedness that the Company assumed as a result of the BDS Business Acquisition is substantial.

Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on our business and operations, including Company sales and cash flow.

The preparation of consolidated financial statements in conformity with U.S.

Defending or otherwise responding to these matters can divert the Company’s management’s attention and may cause it to incur significant expenses.

There is shifting focus from certain investors, customers, consumers, employees and other stakeholders concerning sustainability matters.

Regulators globally are increasingly imposing greater fines and penalties for privacy and data protection violations, and the European Union, as an example, has enacted a broad data protection regulation with fines ba…

The Company could suffer significant damage to its brand and reputation if a security incident resulted in unauthorized access to, acquisition of, or modification to the Company’s technology infrastructure, research a…

The Company is in the business of designing, manufacturing, selling and servicing analytical instruments to life science, pharmaceutical, biochemical, industrial, nutritional safety and environmental, academic and gov…

In the event of such an incident, the Company may suffer interruptions in service, loss of assets or data or reduced functionality.

Implementing our business strategy requires specialized engineering and other talent, as our revenues are highly dependent on technological and product innovations.

As of December 31, 2025, the net carrying value of the Company’s goodwill and other intangible assets totaled approximately $1.9 billion.

The Company has a Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026.

Governments in the jurisdictions in which the Company operates implement changes to tax laws and regulations from time to time.

The Company derives a portion of its revenue from direct and indirect sales to U.S.

Certain components or modules of the Company’s LC and MS instruments are manufactured by outside contractors, including the manufacturing of LC instrument systems and related components by contract manufacturing firms…

In addition, price increases from these suppliers, including as a result of any imposed tariffs, could have an adverse effect on the Company’s margins.

Our worldwide enterprise resource planning (“ERP”) system is integral to our ability to accurately and efficiently maintain our books and records, record transactions, coordinate resource allocation between our manufa…

In the normal course of business, the Company may engage in discussions with third parties relating to possible acquisitions, strategic investments, joint ventures and divestitures.

Laws and regulations arising from the use and development of AI technology present additional uncertainties and risks to the Company.

The Company continues to integrate artificial intelligence (“AI”), including generative AI, into its business operations and products and research further uses and opportunities for AI development.

Despite testing prior to the release and throughout the lifecycle of a product or service, the detection and correction of any manufacturing errors, or errors in released software or hardware, can be time consuming an…

In addition, the Company’s products are subject to rapid changes in technology.

The analytical instrument market, and, in particular, the portion related to the Company’s HPLC, UPLC, LC-MS, light scattering, thermal analysis, rheometry and calorimetry product lines, is highly competitive.

The demand for the Company’s products is dependent upon the size of the markets for its products; the timing and level of capital spending and expenditures of the Company’s customers; changes in governmental regulatio…

From time to time, the Company enters into certain foreign currency exchange contracts that are intended to offset some of the market risk associated with sales denominated in foreign currencies.

Additionally, the U.S.

In particular, China’s government continues to play a significant role in regulating industry development by imposing sector-specific policies, and it maintains control over China’s economic growth through setting mon…

In 2025, the Company’s total net sales from China increased 10% as compared to 2024 after decreasing by 10% in 2024 as compared to 2023.

manufacturing operations in Ireland and the U.K., as well as key subcontractors providing manufacturing and support that are located in Singapore.

In addition, the Company’s credit facilities contain financial and restrictive covenants that could limit the Company’s ability to, among other things, make dividend or other payments, secure other indebtedness, enter…

Sustainability issues, including those related to climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

The Company’s financial results may be subject to changing application of tax law and tax audit examinations.

The Company’s sales would deteriorate if the Company’s outside contractors failed to provide necessary components or modules or develop certain intellectual property.

Issues and uncertainties related to the development, deployment and use of AI in the Company’s business operations and products may result in harm to the Company’s reputation, regulatory action or legal liability.

The Company’s financial results will be subject to changes in customer demand, which may decrease for a number of reasons, many beyond the Company’s control.

The Company’s international operations may be negatively affected by political events, wars or terrorism, economic conditions, foreign currency fluctuation and regulatory changes which could have a material adverse ef…

Risks Related to the Macroeconomic Conditions

Debt covenants, and the Company’s failure to comply with them, could negatively impact the Company’s capital and financial results.

The Company had $1.6 billion in debt and $325 million in cash, cash equivalents and investments as of December 31, 2024.

The Company’s financial condition and results of operations could be adversely affected if the Company is unable to maintain a sufficient level of cash flow.

The Company is subject to the rules of the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which require disclosure as to whether certain materials (tantalum, tin, gold and tungsten), known as…

vulnerabilities exposed by them, as well as to lawsuits, regulatory investigations, claims or legal liability including contractual liability, costs and expenses owed to customers and business partners.

The operation of the Company requires managerial and operational expertise.

The loss of key members of management and the risks inherent in succession planning could adversely affect the Company’s results of operations or financial condition.

We may not be able to attract and retain qualified employees.

The Company manufactures LC instruments at facilities in Milford, Massachusetts and through a subcontractor in Singapore; precision chemistry separation columns at its facilities in Taunton, Massachusetts and Wexford,…

A successful product liability claim brought against the Company in excess of, or outside the coverage of, the Company’s insurance coverage could have a material adverse effect on our business, financial condition and…

The Company’s software or hardware may contain coding or manufacturing errors that could impact their function, performance and security, and result in other negative consequences.

The Company’s corporate strategy is fundamentally based on winning through organic innovation and deep application expertise.

The demand for the Company’s products is dependent upon the size of the markets for its LC, LC-MS, light scattering, thermal analysis, rheometry and calorimetry products; the timing and level of capital spending and e…

Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on the Company’s business and operations.

Additionally, the U.S.

Accounting related to revenue recognition, goodwill and intangible assets, income taxes, uncertain tax positions, litigation, business combinations and asset acquisitions and inventory valuation involves significant j…

shareholders of the Company to take certain actions, see the section entitled “Anti-takeover Effects of the Delaware General Corporation Law and Our Certificate of Incorporation and Bylaws” in the Description of Regis…

In addition, as a Delaware corporation, the Company will generally be subject to provisions of Delaware law, including the DGCL.

the ability of the Board of Directors to issue shares of preferred stock (in one or more series) and to establish the number of shares to be included in each such series, and to fix the designations, powers, preferenc…

the ability of the Board of Directors to amend the Bylaws; and

the right of the Board of Directors to elect a director to fill a vacancy created by the resignation, death or removal of a director or resulting from any increase in the authorized number of directors;

advance notice procedures which the Company’s shareholders must comply with to nominate candidates to the Board of Directors or to propose matters to be acted upon at a shareholders’ meeting;

the requirement that a special meeting of the Company’s shareholders may only be called by the Board of Directors, the Chairman of the Board of Directors or the Company’s President and Chief Executive Officer, or by t…

the requirement that any action required or permitted to be taken by the Company’s shareholders must be effected at a duly called annual or special meeting of shareholders and may not be effected by written consent in…

The Charter and the Bylaws contain certain provisions that may discourage, delay, or prevent a change of control with respect to the Company or changes to the Board of Directors or management.

The Charter and Bylaws contain certain provisions that will limit the ability of shareholders of the Company to take certain actions, and that could delay or discourage takeover attempts that shareholders may consider…

The exclusive forum provisions in the Bylaws may limit the ability of a shareholder to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other employ…

“internal corporate claim” as that term is defined in Section 115 of the DGCL.

The Bylaws require that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware, to the fullest extent permitted by law, shall be the sole and e…

The Company’s Amended and Restated Bylaws (the “Bylaws”) include exclusive forum provisions, which could limit shareholders’ ability to obtain a favorable judicial forum for disputes with the Company or its respective…

From time to time, the Company and its subsidiaries are subject to or otherwise responsible for a variety of litigation and other legal and regulatory proceedings in the ordinary course of business, as well as regulat…

The Company is subject to or otherwise responsible for a variety of litigation and other legal and regulatory proceedings in the ordinary course of business that can adversely affect our business, results of operation…

Sustainability issues, including those related to climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

The Company may be harmed by improper conduct of any of our employees, agents or business partners.

Increasing global protectionism also impedes the Company’s ability to compete with local companies.

Changes in governmental regulations and compliance failures could harm the Company’s business.

RISKS RELATED TO COMPLIANCE, REGULATORY OR LEGAL MATTERS

lose confidence in the Company’s ability to deliver quality and reliable products or services.

If the Company’s security measures are compromised or fail to adequately protect its technology infrastructure, research and development efforts or manufacturing operations, the Company’s products and services may be…

Any prolonged disruption to the Company’s technology infrastructure, at any of its facilities, could have a material adverse effect on the Company’s business strategy, results of operations or financial condition.

Disruption, cyber-attack or unforeseen problems with the security, maintenance or upgrade of the Company’s information and web-based systems could have an adverse effect on the Company’s business strategy, results of…

RISKS RELATED TO CYBERSECURITY AND DATA PRIVACY

Certain foreign employees of the Company are represented by works councils, unions or similar non-U.S.

Moreover, these workforce reductions could expose us to potential litigation, severance costs, reputational damage and loss of key personnel.

Our future success depends, in part, upon the continued service of our executive officers and other key management and technical personnel (such as research and development, technical sales and support, field service,…

RISKS RELATED TO HUMAN CAPITAL MANAGEMENT

changes in use of our assets, changes in the structure of our business, divestitures, market capitalization declines or increases in associated discount rates can impair the Company’s goodwill and other intangible ass…

The Company may be required to recognize impairment charges for our goodwill and other intangible assets.

On July 4, 2025, the U.S.

The Company’s financial results may be subject to changing application of tax law and tax audit examinations.

and conditions that are not applicable to private contracts.

The Company is subject to laws and regulations governing government contracts, and failure to address these laws and regulations or comply with government contracts could harm its business by leading to a reduction in…

The Company’s business could be harmed by actions of third-party sales intermediaries and other third parties that sell our products.

The Company’s sales would deteriorate if the Company’s outside contractors failed to provide necessary components or modules or develop certain intellectual property.

The Company will explore alternative routes, transportation modes and the lead time for replenishment to preempt and mitigate risks associated with sourcing supply, but no assurance can be given that these efforts wil…

Most of the raw materials, components and supplies purchased by the Company are available from several suppliers; however, a number of items including specialized products are purchased from limited or single sources…

The Company’s business would suffer if the Company were unable to acquire adequate sources of supply.

Failure to adequately protect intellectual property could have materially adverse effects on the Company’s results of operations or financial condition.

to require significant investment of human and financial resources, and we may experience significant increases to inherent costs and risks associated with such a transition, including capital expenditures, additional…

The Company manufactures its products at various facilities in the U.S.

Disruption of operations, including at the Company’s manufacturing facilities, or disruption or failure of the Company’s key technology systems could have a material impact on the Company’s business, results of operat…

The Company may face risks associated with previous or future acquisitions, strategic investments, joint ventures and divestitures.

AI can lead to unintended consequences, including the generation of outputs that appear correct but are factually inaccurate or misleading, or that result in unintended biases and discriminatory outcomes, or are other…