Charles River Laboratories International (CRL) 10-K risk factor changes: FY2017 vs FY2016

Similarly, economic factors and industry trends that affect our clients in these industries also affect their research [removed: and development budgets and, consequentially, our business as well.]

A portion of [removed: revenue] [added: revenue, predominantly] in our RMS [removed: segment] [added: segment,] is derived from clients at academic institutions and research laboratories whose funding is partially dependent on both the level and timing of funding from government sources such as the U.S. National Institutes of Health (NIH) and similar domestic and international agencies, which can be difficult to forecast.

[added: Government] funding of research and development is subject to the political process, which is inherently fluid and unpredictable.

In March 2010, the U.S. Congress enacted healthcare reform [removed: legislation] [added: legislation, the Patient Protection and Affordable Care Act, or the ACA,] intended over time to expand health insurance coverage and impose health industry cost containment measures.

Specific legislative and regulatory proposals discussed during and after the election that may have a material impact on us or our clients include, but are not limited to, appeal or reform of the [removed: Health Care Reform Act;] [added: ACA;] and modifications to international trade policy, public company reporting requirements, environmental regulation and antitrust enforcement.

[removed: The presence of these infectious agents in our animal production facilities and certain service] operations could disrupt our contaminant-free research model and fertile egg production as well as our animal services businesses including GEMS, harm our reputation for contaminant-free production, and result in decreased sales.

While this does not require the complete clean-up, renovation, and disinfection of the [removed: barrier] room, it would likely result in inventory loss, additional start-up costs and possibly reduced sales.

In addition, regulations and guidance worldwide concerning the production and use of laboratory animals for research purposes continue to [removed: be updated.][added: evolve.]

[removed: Some] [added: Notwithstanding, some] of these [removed: new] standards require additional operating and capital expenses that will impact not only us and our industry competitors, but clients in the biomedical research [removed: community through both changes in the pricing of goods and services and changes in their own operations.][added: community.]

The loss, reduction in scope or delay of a large contract or the loss or delay of multiple contracts could materially adversely affect our business, although our contracts frequently entitle us to receive the costs of [removed: winding down the terminated projects, as well as all fees earned by us up to the time of termination.]

As of December [removed: 31, 2016,] [added: 30, 2017,] the carrying amount of goodwill and other intangibles on our consolidated balance sheet was [removed: $1,182.0] [added: $1,174.7] million.

| • | [removed: potential trade restrictions,] exchange controls, adverse tax consequences, and legal restrictions on the repatriation of funds into the U.S.; |

| • | difficulties and costs associated with staffing and managing foreign operations, including risks of work stoppages and/or strikes, as well as violations of local laws or anti-bribery laws such as the U.S. Foreign Corrupt Practices Act, the [removed: UK] [added: U.K.] Bribery Act, and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; |

| • | exposure to business disruption or property damage due to geographically unique natural [removed: disasters;] [added: disasters (including within the U.S.);] |

For example, as mentioned above, we are subject to compliance with the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to foreign [added: government officials for the purpose of obtaining or retaining business.]

The scientific and research communities continue to explore methods to develop improved [removed: models] [added: cellular] and [added: animal model] systems that would [removed: improve] [added: increase] the translation [removed: of cellular and animal models] to human studies and vice-versa and possibly replace or supplement the use of traditional living animals as test platforms in biomedical research.

There is an increasing push to focus on in vitro technologies such that employ human [removed: materials,] [added: biospecimens,] stem cell [removed: technology,] [added: technologies,] and [removed: other model creation technology.][added: genome editing.]

[removed: For example,] [added: (f/k/a] ChanTest [removed: Corporation] [added: Corporation)] has a well-developed program to evaluate the [removed: cardiac properties] [added: utility] of induced pluripotent stem cell-derived [removed: cardiomyocytes.][added: cardiomyocytes, advanced in vitro models and “organ-on-a-chip” technologies.]

[removed: We may not be successful in commercializing these methods, and, furthermore, revenues from these new] [added: Successful commercialization of alternatives to traditional research] models [removed: and approaches if successfully developed] may not [added: be sufficient to fully] offset reduced sales or profits from research models.

The products and services which we provide our clients are essential to the drug discovery, development and manufacturing processes, and [added: a significant amount] are [removed: almost universally] mandated by law.

Notwithstanding, certain special interest groups categorically object [removed: to the use of animals for valid research purposes.]

[removed: More generally, our] competitors or others might develop technologies, services or products that are more effective or commercially attractive than our current or future technologies, services, or products, or that render our technologies, services, or products less competitive or obsolete.

These or other changes in [removed: the] U.S. tax laws could [removed: increase] [added: impact] our [added: profits,] effective tax [removed: rate which would affect our profitability.][added: rate, and cash flows.]

We have substantial operations in [removed: Canada] [added: Canada, Ireland] and the United Kingdom which currently benefit from favorable corporate tax arrangements.

We receive substantial tax credits in Canada, from both the Canadian federal and Quebec governments, and the U.K. Any reduction in the availability or amount of these tax credits [added: or increase to tax rates] due to tax law changes or outcomes of tax controversies could have a material adverse effect on our profits, cash [removed: flow,] [added: flows,] and effective tax rate.

This initiative has resulted in proposed and enacted changes to tax laws in various countries including France, Germany, [added: Luxembourg,] and the U.K. Future changes to tax laws or interpretation of tax laws resulting from the BEPS project could increase our effective tax rate, which would affect our profitability.

In our DSA and Manufacturing businesses, we attempt to reduce these risks by contractual risk transfer provisions entitling us to be indemnified [added: by our clients and] subject to a limitation of liability, by insurance maintained by our clients and/or by us, and by various regulatory requirements we must follow in connection with our business.

We also often contractually indemnify our clients (subject to a limitation of liability), similar to the way they indemnify us, and we may be materially [removed: adversely affected if we have to fulfill our indemnity obligations.]

In recent [removed: years] [added: years,] we implemented a project to replace many of our numerous legacy business systems at certain sites worldwide with an enterprise wide, integrated enterprise resource planning (ERP) system.

[removed: On] [added: In] February [removed: 6,] 2017, we entered into a settlement agreement with IDEXX, which [removed: involved] [added: included a license to us of] the [added: relevant technology, the] withdrawal by IDEXX of their complaint and withdrawal by us of [removed: the IPR.][added: our inter partes review filing.]

[removed: We have no] [added: While we recently entered into an] employment agreement with Mr. [removed: Foster or other] [added: Foster, most] members of our [removed: non-European based] senior [removed: management.][added: management do not have employment agreements.]

On June 23, 2016, the U.K. held a referendum in which voters approved an exit from the European Union (E.U.), referred to as “Brexit.” As a result of the referendum, [removed: it is expected that] the British government [removed: will begin negotiating] [added: continues to negotiate] the terms of the U.K.’s future relationship with the E.U. The decision by referendum to withdraw the U.K. from the E.U. [removed: has] caused significant [added: volatility in global stock markets and currency exchange rate fluctuations.]

and development budgets and, consequentially, our business as well.

Regulatory monitoring authorities such as the FDA, Medicines and Healthcare Products Regulatory Agency and OECD have increased their emphasis on the management of computerized systems to ensure data integrity.

New guidance related to the need for data integrity compliance programs have recently been released and we may require additional efforts for validation, audit trail review and archiving activities.

To assure that we have proper regulatory oversight over our electronic records, a dedicated quality function reviews our computerized system practices to ensure that appropriate record controls are in place and that a robust audit strategy confirms requirements for compliance.

In addition, the FDA’s recently applicable SEND (Standardization for Exchange of Nonclinical Data) standards which apply to our customers’ NDA (and as of December 18, 2017, IND) submissions require us to provide electronic data in specific formats that will allow for more efficient, higher quality regulatory reviews.

Accordingly, our customers expect us to timely deliver their nonclinical data compliant with SEND.

Non-compliance with any of these expectations could lead to official action by a government authority, damage to our reputation and a potential loss of business.

The presence of these infectious agents in our animal production facilities and certain service

The current Executive Branch of the U.S. government has disclosed a key initiative as being to repeal or substantially unwind the ACA.

winding down the terminated projects, as well as all fees earned by us up to the time of termination.

On February 12, 2018, we entered into a definitive agreement to acquire MPI Research, a non-clinical CRO, providing comprehensive testing services to biopharmaceutical and medical device companies worldwide.

If consummated, this transaction will be the largest acquisition in nearly fifteen years.

Refer to Item 8, “Financial Statements and Other Supplementary Data” in this Annual Report on Form 10-K for more details.

| • | compliance with import requirements and other trade regulations. |

Changes in E.U. privacy and data protection regulations could have a material adverse impact on our operations.

The General Data Protection Regulation (GDPR) becomes effective in May 2018 and will replace the 1995 Data Protection Directive.

The GDPR will impose heightened obligations on businesses that control and manage the personal data of E.U. citizens.

The penalties for non-compliance are significant, including up to four percent of global revenue.

Our facilities could be damaged or disrupted by natural disasters or other catastrophic events which could adversely affect our reputation, financial position, results of operations and cash flows.

While we have taken precautions to mitigate production and service interruptions at our global facilities, a major catastrophe, such as a hurricane, tornado, earthquake, flood, wildfire or other natural disaster (or other unanticipated displacement) at or near any of our facilities could result in physical damage to our properties, including closure, resulting in a prolonged interruption of our business.

A disruption resulting from any one of these events could cause significant delays in shipments of our products, reduce our capacity to provide services, eradicate unique manufacturing capabilities and, ultimately, result in the loss of revenue and customers.

Any of these factors could have a material adverse effect on our reputation, financial position, results of operations, and cash flows.

For example, Charles River Laboratories Cleveland, Ind.

to the use of animals for valid research purposes.

As of December 30, 2017, we had $1.1 billion of debt and in connection with our plan to acquire MPI Research (See Note 17 “Subsequent Event”, included in the Notes to Consolidated Financial Statements elsewhere in this Form 10-K), we announced our intention to increase our debt level by approximately $830 million by obtaining a commitment letter for a bridge loan facility.

We are evaluating fixed-rate debt financing alternatives which could be used to finance the acquisition and for general corporate purposes.

More generally, our

On December 22, 2017, President Trump signed into law significant U.S. tax law changes (U.S. Tax Reform) which reduces the U.S. federal statutory tax rate, broadens the corporate tax base through the elimination or reduction of deductions, exclusions, and credits, limits the ability of U.S. corporations to deduct interest expense, and transitions to a territorial tax system which will allow for the repatriation of foreign earnings to the U.S. with a 100% federal dividends received deduction prospectively.

In addition, U.S. Tax Reform requires a one-time transitional tax on foreign cash equivalents and previously unremitted earnings.

Several of the new provisions enacted as part of U.S. Tax Reform require clarification and guidance from the Internal Revenue Service (IRS) and Treasury Department.

adversely affected if we have to fulfill our indemnity obligations.

Government

In addition, the recent presidential and congressional elections in the U.S. may result in significant changes in, and uncertainty with respect to, legislation, regulation and government policy.

Notably, the European Directive 2010/63/EU requires new standards for animal housing and accommodations that require implementation by 2017.

In April 2016, we acquired WIL Research, a premier provider of safety assessment and contract development manufacturing services to biopharmaceutical, agricultural, and industrial chemical companies worldwide.

This transaction was our largest acquisition in over ten years.

| • | import and export licensing requirements. |

government officials for the purpose of obtaining or retaining business.

However, the increasing availability and utility of these in vitro models is partially offset by these technologies facilitating the creation of humanized, highly specialized and specific disease-mimicking models we can produce.

As of December 31, 2016, we had $1.2 billion of debt.

In the U.S., there are several proposals to reform corporate tax law that are currently under consideration.

These proposals include reducing the corporate statutory tax rate, broadening the corporate tax base through the elimination or reduction of deductions, exclusions, and credits, implementing a territorial regime of taxation, limiting the ability of U.S. corporations to deduct interest expense, modifying the foreign tax credit rules, and reducing the ability to defer U.S. tax on offshore earnings.

We filed our answer to the complaint on July 21, 2016.

In addition, on July 29, 2016, we initiated an inter partes review (IPR) procedure with the United States Patent and Trademark Office challenging the validity of the IDEXX patents.

volatility in global stock markets and currency exchange rate fluctuations, including the strengthening of the U.S. dollar against foreign currencies.

Our industry has a history of patent and other intellectual property litigation, which can be costly.

Our industry has a history of intellectual property litigation.

On July 31, 2015, IDEXX Laboratories, Inc. and IDEXX Distribution, Inc. filed a complaint in the United States District Court for the District of Delaware alleging we infringed three recently issued patents related to a dried blood spot sample collection method used in determining the presence or absence of an infectious disease in a population of rodents.

Legal proceedings relating to intellectual property can be expensive, take significant time, and divert management’s attention from other business concerns, regardless of the outcome of the litigation.

On February 6, 2017, we entered into a settlement agreement with IDEXX, which involved the withdrawal by IDEXX of their complaint and withdrawal by us of the IPR.

Certain percentage changes [removed: from period over period] may not recalculate due to rounding.

For [added: over] 70 years, we have been in the business of providing the research models required in research and development of new drugs, devices, and therapies.

Over this time, we have built upon our original core competency of laboratory animal medicine and science (research model technologies) to develop a diverse portfolio of discovery and safety assessment services, both Good Laboratory Practice (GLP) and non-GLP, [removed: which are able] [added: that enable us] to support our clients from target identification through non-clinical development.

Our client base includes all [removed: of the] major global biopharmaceutical companies, many biotechnology companies, CROs, agricultural and industrial chemical companies, life science companies, veterinary medicine companies, contract manufacturing [removed: organizations,] [added: companies,] medical device companies, and diagnostic and other commercial entities, as well as leading hospitals, academic institutions, and government agencies around the world.

We currently operate approximately [removed: 75] [added: 80] facilities in 23 countries worldwide, which numbers exclude our Insourcing Solutions (IS) sites.

The demand for our products and services increased in fiscal year [removed: 2016.][added: 2017.]

Many of our large biopharmaceutical clients have [removed: refocused on] [added: continued to increase investments in] their drug discovery and early-stage development [removed: efforts, after a period of greater emphasis on late-stage programs] [added: efforts and have strengthened their relationships with both CROs, like Charles River, and biotechnology companies] to [removed: bring] [added: assist them in bringing] new drugs to market.

In addition, small and mid-size biopharmaceutical clients benefited from the continued strength in the biotechnology funding environment in fiscal year [removed: 2016,] [added: 2017,] from capital markets, partnering with large biopharmaceutical companies, and investment by venture capital.

Our full service, early-stage portfolio continued to lead to additional client discussions in fiscal year [removed: 2016] [added: 2017] regarding strategic relationships, where clients seek to outsource larger portions of their early-stage drug research programs to us.

The primary result of these trends was improved demand for our [removed: safety assessment] [added: Safety Assessment] services in fiscal year [removed: 2016,] [added: 2017,] particularly from biotechnology clients.

This improvement led to increased capacity utilization in our [removed: safety assessment] [added: Safety Assessment] facilities, [removed: with utilization approaching optimal levels.][added: which remained well utilized in fiscal year 2017.]

Price also improved [removed: moderately] [added: slightly] in fiscal year [removed: 2016,] [added: 2017,] as industry capacity utilization continued to increase.

Demand for our products and services that support our clients’ manufacturing activities was also robust in fiscal year [removed: 2016.][added: 2017.]

Our Biologics [removed: Testing Solutions (Biologics)] business continued to benefit from increased demand for services associated with the growing proportion of biologic drugs in the pipeline and on the market.

We have enhanced our Discovery Services capabilities over the past [removed: three] [added: four] years to enable us to work with clients at the earliest stages of the discovery process.

[removed: We believe this is due to the fact that large] [added: Large] biopharmaceutical companies [added: continue to] have significant internal discovery capabilities, on which they can choose to rely.

In order for large biopharmaceutical clients to [added: increasingly outsource more work to us, we must continue to]

[removed: increasingly outsource more work to us, we must continue to] demonstrate that our services can augment and accelerate our clients’ drug discovery [removed: process.][added: processes.]

[removed: We implemented] [added: The] business [removed: changes,] [added: changes that we implemented in fiscal year 2016,] including a small site consolidation and realignment of sales [removed: strategies, in fiscal year 2016] [added: strategies] in our early discovery business [removed: to expedite this process.][added: have been successful resulting in the stabilization of the business in fiscal year 2017 and in attracting new clients, including a growing base of biotechnology clients.]

Demand for [removed: research models] [added: our Research Models] and [removed: services improved modestly] [added: Services was stable] in fiscal year [removed: 2016.][added: 2017.]

We [removed: remain] [added: are] confident [removed: in the long-term drivers of this business because] [added: that] research models and services [added: will] remain essential tools for our clients’ drug discovery and early-stage development [removed: efforts.][added: efforts, and the RMS business will continue to be an important source of cash flow generation for us.]

Fiscal [removed: year] [added: Year 2017 Compared to Fiscal Year] 2016 [removed: acquisitions included:]

[removed: We report our performance in] [added: Our] three reportable [removed: segments:] [added: segments are] Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Support (Manufacturing).

[removed: WIL Research’s safety assessment business is reported in our DSA reportable segment and its] [added: The] CDMO business [removed: created a new operating segment, Contract Manufacturing, that is reported] [added: was acquired in April 2016] as part of [added: the acquisition of WIL Research and was reported in] our Manufacturing reportable segment.

Our RMS [added: reportable] segment includes the Research Models and Research Model Services businesses.

Research Model Services [removed: includes three business units:] [added: includes:] Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered research models; Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; and [removed: IS,] [added: Insourcing Solutions (IS),] which provides [added: colony] management of our clients’ research operations (including recruitment, training, staffing, and management services).

Our DSA [added: reportable] segment includes services required to take a drug through the early development process including discovery services, which are non-regulated services to assist clients with the identification, screening, and selection of a lead compound for drug development, and regulated and non-regulated [added: (GLP and non-GLP)] safety assessment services.

Our Manufacturing [added: reportable] segment includes Microbial Solutions, which [removed: includes] [added: provides] in vitro (non-animal) lot-release testing [removed: products and] [added: products,] microbial [removed: detection, conventional and rapid quality control testing of sterile and non-sterile biopharmaceutical and consumer] [added: detection] products, and species identification services; [removed: Biologics,] [added: Biologics Testing Services (Biologics),] which performs specialized testing of biologics; Avian Vaccine Services (Avian), which supplies specific-pathogen-free [removed: fertile] chicken eggs and chickens; and [removed: Contract Manufacturing,] [added: contract development and manufacturing (CDMO) services,] which, until we divested this business on February 10, 2017, [removed: specialized in] [added: allowed us to provide] formulation design and development, manufacturing, and analytical and stability testing for small molecules.

A 53rd week was included in [added: the fourth quarter of] fiscal year 2016, which is occasionally necessary to align with a December 31 calendar year-end.

[removed: These] estimates and assumptions are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future.

We believe that [removed: our] [added: the] application of [removed: the following] [added: our] accounting policies, each of which require significant judgments and estimates on the part of management, are the most critical to aid in fully understanding and evaluating our reported financial results.

Our significant accounting policies are more fully described in Note 1, “Description of Business and Summary of Significant Accounting Policies”, to our consolidated financial statements contained in Item 8, “Financial Statements and [removed: Other] Supplementary Data” in this Annual Report on Form 10-K.

[added: In cases where] performance spans reporting periods, revenue of fixed fee contracts is recognized as services are performed, measured on the ratio of outputs or performance obligations completed to the total contractual outputs or performance obligations to be provided.

We [removed: would] defer revenue until completion of customer acceptance testing if we are not able to demonstrate the ability to meet such acceptance criteria.

[removed: In those circumstances where a milestone is not substantive, we recognize as revenue, on] the [removed: date the] milestone is achieved, an amount equal to the applicable percentage of the performance period that had elapsed as of the date the milestone was achieved, with the balance being deferred and recognized over the remaining period of performance.

As of December [removed: 31, 2016,] [added: 30, 2017,] we had no significant milestones that were deemed substantive.

[removed: The Company records] [added: We record] shipping charges billed to customers in total revenue and [removed: records] [added: record] shipping costs in cost of revenue (excluding amortization of intangible assets) for all periods presented.

We evaluate uncertain tax positions on a quarterly basis and consider various factors, that include, but are not limited [added: to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position.]

If the carrying values of the net assets assigned to the reporting units exceed the fair values of the reporting units, then the second step [added: of the impairment test is performed in order to determine the implied fair value of our goodwill.]

In fiscal years [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] we performed the first step of the two-step goodwill impairment test for our reporting units.

Recent Acquisitions and Divestiture

Our recent acquisitions and divestiture are described below.

On February 12, 2018, we entered into a definitive agreement to acquire MPI Research, a non-clinical CRO, providing comprehensive testing services to biopharmaceutical and medical device companies worldwide.

Acquiring MPI Research will enhance our position as a leading global early-stage CRO by strengthening our ability to partner with clients across the drug discovery and development continuum.

The transaction is expected to close early in the second quarter of 2018, subject to regulatory approvals and customary closing conditions.

The preliminary purchase price will be approximately $800 million in cash, subject to customary closing adjustments.

The acquisition and associated fees are expected to be financed through an expansion of our credit facility and cash.

We entered into a commitment letter, pursuant to which we will be provided up to $830 million under a bridge loan facility.

This business is expected to be reported as part of our DSA reportable segment.

In the

event the agreement is terminated under specified circumstances, we may be required to pay a termination fee of $48 million, increasing to $56 million based on other specific circumstances.

On January 11, 2018, we acquired KWS BioTest Limited (KWS BioTest), a CRO specializing in in vitro and in vivo discovery testing services for immuno-oncology, inflammatory and infectious diseases.

The acquisition enhances our discovery expertise, with complementary offerings that provide our customers with additional tools in the active therapeutic research areas of oncology and immunology.

The purchase price for KWS BioTest was $20.3 million in cash, subject to certain post-closing adjustments that may change the purchase price, and was funded by our various borrowings.

In addition to the initial purchase price, the transaction includes aggregate, undiscounted contingent payments of up to £3.0 million (approximately $4.1 million based on recent exchange rates), based on future performance.

This business will be reported as part of our DSA reportable segment.

On August 4, 2017, we acquired Brains On-Line, a leading CRO providing critical data that advances novel therapeutics for the treatment of central nervous system (CNS) diseases.

Brains On-Line strategically expands our existing CNS capabilities and establishes us as a single-source provider for a broad portfolio of discovery CNS services.

The purchase price for Brains On-Line was $21.3 million in cash, subject to certain post-closing adjustments.

In addition to the initial purchase price, the transaction includes potential additional payments of up to €6.7 million (approximately $7.9 million based on recent exchange rates), based on future performance.

The Brains On-Line business is reported as part of our DSA reportable segment.

On February 10, 2017, we completed the divestiture of our CDMO business to Quotient Clinical Ltd., based in London, England for $75.0 million in proceeds, net of cash, cash equivalents, and working capital adjustments.

Following a strategic review that was finalized subsequent to December 31, 2016, we determined that the CDMO business was not optimized within our portfolio at its current scale, and that the capital could be better deployed in other long-term growth opportunities.

In order to accommodate increasing client demand, we continued to open small amounts of new capacity in fiscal year 2017.

In fiscal year 2017, demand in our Discovery Services business was stable.

The completion of a few large, integrated early discovery projects from biopharmaceutical clients in fiscal year 2016 was largely offset with improving demand from biotechnology clients as many of these clients either initiated or continued to work with us on integrated programs and other projects.

Demand for our in vivo discovery services continued to increase in fiscal year 2017, and we acquired Brains On-Line in August 2017 to enhance our position as the premier single-source provider for a broad portfolio of discovery CNS services.

In addition, we acquired KWS BioTest Limited in January 2018 to enhance our discovery expertise, with complementary offerings that provide our customers with additional tools in the active therapeutic research areas of oncology and immunology.

To support this increased demand, we continue to expand the capacity of our Biologics business.

Demand for research models in mature markets outside of China declined modestly, partially offset by improved pricing.

The continued effect of the consolidation of internal infrastructure within our large biopharmaceutical clients and a longer-term trend towards more efficient use of research models has led to reduced demand for research models.

Demand for research models in China continued to be robust in fiscal year 2017, as clients in this growing market continue to value our high-quality research models.

To accommodate increased demand, we opened a new research models facility in China in late 2017.

Demand for research models services also improved in fiscal year 2017, particularly for our GEMS and IS businesses.

Overview of Results of Operations and Liquidity

Revenue for fiscal year 2017 was $1,857.6 million compared to $1,681.4 million in fiscal year 2016.

The 2017 increase as compared to the corresponding period in 2016 was $176.2 million, or 10.5%, and was primarily due to growth in our DSA and Manufacturing segments, as discussed in the above “Business Trends” section.

In fiscal year 2017, our operating income and operating income margin were $287.5 million and 15.5%, respectively, compared with $237.4 million and 14.1%, respectively, in fiscal year 2016.

The increase in operating income and operating income margin was primarily due to increased demand in our DSA and Manufacturing segments, the effects of our recent acquisitions, and various productivity initiatives.

Net income attributable to common shareholders decreased to $123.4 million in fiscal year 2017, from $154.8 million in the corresponding period of 2016.

In view of client demand, we expanded our global footprint and reinforced our scientific leadership in safety assessment services by acquiring WRH, Inc. (WIL Research) in April 2016.

We also opened small amounts of new capacity in fiscal year 2016, including the re-opening of our Charles River Massachusetts facility.

To enhance our ability to support biologic and biosimilar development, we acquired Blue Stream Laboratories, Inc. (Blue Stream) in June 2016.

In fiscal year 2016, demand from biotechnology clients was strong for discovery services, but demand from larger biopharmaceutical clients fluctuated, particularly for our early discovery capabilities.

Demand for our in vivo discovery services continued to increase in fiscal year 2016, and we acquired Agilux Laboratories, Inc. (Agilux) in September 2016 to strengthen our bioanalytical services offering, and reinforce the linkage between our discovery and safety assessment capabilities.

Acquisitions

| | |

| --- | --- |

| • | On April 4, 2016, we acquired WIL Research, a provider of safety assessment and contract development and manufacturing (CDMO) services to biopharmaceutical and agricultural and industrial chemical companies worldwide. The acquisition enhanced our position as a leading global early-stage CRO by strengthening our ability to partner with clients across the drug discovery and development continuum. The purchase price for WIL Research was $604.8 million, including assumed liabilities of $0.4 million, and was funded by cash on hand and borrowings on our amended credit facility. |

| | |

| --- | --- |

| • | On June 27, 2016, we acquired Blue Stream, an analytical CRO supporting the development of complex biologics and biosimilars. Combining Blue Stream with our existing discovery, safety assessment, and biologics capabilities creates a leading provider with the ability to support biologic and biosimilar development from characterization through clinical testing and commercialization. The purchase price for Blue Stream was $11.7 million, including $3.0 million in contingent consideration, and was subject to certain customary adjustments. The acquisition was funded by borrowings on our revolving credit facility. |

| | |

| --- | --- |

| • | On September 28, 2016, we acquired Agilux, a CRO that provides a suite of integrated discovery small and large molecule bioanalytical services, drug metabolism and pharmacokinetic (DMPK) services, and pharmacology services. The acquisition supports our strategy to offer clients a broader, integrated portfolio that provides services continuously from the earliest stages of drug research through the nonclinical development process. The purchase price for Agilux was $64.9 million in cash and was funded by borrowings on our revolving credit facility. |

We aggregate our operating segments into a reportable segment if (a) they have similar economic characteristics; (b) they are similar in the in the nature of the products or services, nature of the production process, type or class of customer for their products and services, methods used to distribute their products and services and nature of the regulatory environment; and (c) the aggregation helps users better understand our performance.

In the second quarter of 2016, we acquired WIL Research.

On February 10, 2017, we divested the CDMO business.

In addition, amounts due to changes in our market strategy for certain services and resulting information provided to the Chief Operating Decision Maker were reclassified from our RMS reportable segment to our Manufacturing reportable segment, including revenue of $2.8 million and $3.7 million for fiscal years 2015 and 2014, respectively, and operating income of $0.5 million and $0.6 million for fiscal years 2015 and 2014, respectively.

We reported segment results on this basis for all periods presented in this Annual Report on Form 10-K.

The revised reportable segments are as follows:

| | | |

| --- | --- | --- |

| | | |

| Research Models and Services | Discovery and Safety Assessment | Manufacturing Support |

| Research Models | Discovery Services | Microbial Solutions |

| Research Model Services | Safety Assessment | Avian |

| | | Biologics |

| | | Contract Manufacturing |

The additional week was included in the fourth quarter.

In cases where

to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position.

As of December 31, 2016, our non-U.S. subsidiaries’ undistributed foreign earnings included in consolidated retained earnings were $704.6 million.

As of the end of fiscal year 2016, our policy with respect to the undistributed earnings of our non-U.S. subsidiaries is to maintain an indefinite reinvestment assertion as they are required to fund needs outside of the U.S. and cannot be repatriated in a manner that is substantially tax-free.

This assertion is made on a jurisdiction by jurisdiction basis and takes into account the liquidity requirements in both the U.S. and our foreign subsidiaries.

If we decide to repatriate funds to the U.S. in the future to execute our growth initiatives or to fund any other liquidity needs, the resulting tax consequences could negatively impact our results of operations through a higher effective tax rate and dilution of our earnings.

On December 18, 2015, the U.S. enacted the Consolidated Appropriations Act, which reinstated and extended the controlled foreign corporation look-through rules through the fiscal year 2019.

This rule allows us to access Chinese and Canadian cash in a more tax-efficient manner and utilize the cash outside of the U.S. without triggering residual U.S. tax.

As such, we are accruing foreign withholding taxes to reflect this change for the years in which the rules are reinstated.

of the impairment test is performed in order to determine the implied fair value of our goodwill.

As of December [removed: 31, 2016,] [added: 30, 2017,] our debt portfolio was comprised primarily of floating interest rate borrowings.

A 100-basis point increase in interest rates would increase our annual pre-tax interest expense by [removed: approximately $12.1] [added: $11.0] million.

The principal functional currencies of the Company’s foreign subsidiaries are the Euro, British Pound, [removed: and] Canadian [removed: Dollar.][added: Dollar, Chinese Yuan Renminbi, and Japanese Yen.]

During fiscal year [removed: 2016,] [added: 2017,] the most significant drivers of foreign currency translation adjustment [removed: that] the Company recorded as part of other comprehensive income (loss) were the Euro, British Pound, Canadian Dollar, [removed: and to a lesser extent, the] Chinese Yuan [removed: Renminbi] [added: Renminbi,] and Japanese Yen.

As the U.S. dollar strengthens against other currencies, [removed: particularly as a result of Brexit and other recent developments,] the value of our non-U.S. revenue, expenses, assets, liabilities, and cash flows will generally decline when reported in U.S. dollars.

The impact to net income as a result of a U.S. dollar strengthening will be partially mitigated by the value of non-U.S. [removed: expense,] [added: expenses,] which will [removed: also] decline when reported in U.S. dollars.

As the U.S. dollar weakens versus other currencies, the value of the non-U.S. [removed: revenue and] [added: revenue,] expenses, assets, liabilities, and cash flows will generally increase when reported in U.S. dollars.

For fiscal year [removed: 2016,] [added: 2017,] our revenue would have [removed: decreased] [added: increased] by approximately [removed: $65.9] [added: $72.0] million and our operating income would have [removed: decreased] [added: increased] by approximately [removed: $2.8] [added: $5.2] million, [removed: respectively,] if the U.S. dollar exchange rate [removed: would have] [added: had] strengthened by [removed: 10%] [added: 10%,] with all other variables held constant.

During fiscal year [removed: 2016,] [added: 2017,] we utilized foreign exchange contracts, principally to hedge certain balance sheet exposures resulting from currency fluctuations.

No foreign currency contracts were open as of December 30, 2017.

For example, we may use forward-looking statements when addressing topics such as: goodwill and asset impairments still under review; future demand for drug discovery and development products and services, including the outsourcing of these services; our expectations regarding stock repurchases, including the number of shares to be repurchased, expected timing and duration, the amount of capital that may be expended and the treatment of repurchased shares; present spending trends and other cost reduction activities by our clients; future actions by our management; the outcome of contingencies; changes in our business strategy, business practices and methods of generating revenue; the development and performance of our services and products; market and industry conditions, including competitive and pricing trends; our strategic relationships with leading pharmaceutical companies and venture capital limited partnerships, and opportunities for future similar arrangements; our cost structure; the impact of completed and in-process acquisitions (including Argenta, BioFocus, VivoPath, ChanTest, Sunrise, Celsis, Oncotest, WIL Research, Blue Stream, [added: Agilux, Brains On-Line, KWS BioTest,] and [removed: Agilux)] [added: MPI Research)] and the timing of closing of in-process acquisitions; our expectations with respect to revenue growth and operating synergies (including the impact of specific actions intended to cause related improvements); the impact of specific actions intended to improve overall operating efficiencies and profitability (and our ability to accommodate future demand with our infrastructure), including gains and losses attributable to businesses we plan to close, consolidate or divest; changes in our expectations regarding future stock option, restricted stock, performance share units and other equity grants to employees and directors; expectations with respect to foreign currency exchange; assessing (or changing our assessment of) our tax positions for financial statement purposes; and our liquidity.

Our stock is traded on the New York Stock Exchange under the symbol “CRL” and is included in the Standard & Poor's MidCap [removed: 400] [added: 400, 1000] and Composite 1500 indices, the Dow Jones U.S. [removed: Biotechnology] [added: Health Care] Index, the NYSE Arca Biotechnology Index, the NYSE [removed: Composite and Healthcare Sector indices,] [added: Composite,] and many of the Russell indices, among others.

Development activities, which follow, and which can take up to 7 [removed: to10] [added: to 10] years, are directed at demonstrating the safety, tolerability, and clinical efficacy of the selected drug candidates.

For [added: over] 70 years, we have been in the business of providing the research models required in research and development of new drugs, devices, and therapies.

We currently operate [removed: 75] [added: approximately 80] facilities in 23 countries worldwide, which numbers exclude our Insourcing Solutions (IS) sites.

In [removed: 2016,] [added: 2017,] our total revenue was [removed: $1.7] [added: $1.9] billion and our operating income from continuing operations, before income taxes, was [removed: $222.9] [added: $297.0] million.

With over 150 different strains, we continue to maintain our position as [removed: the] [added: a] global leader in the production and sale of the most widely used rodent research model strains, principally genetically and microbiologically defined purpose-bred rats and mice.

We maintain multiple production centers, including barrier rooms and/or isolator facilities, on three [added: continents (North America, Europe, and Asia).]

In [removed: 2016,] [added: 2017,] RMS accounted for [removed: 29.4%] [added: 26.6%] of our total revenue and approximately 3,200 of our employees, including approximately [removed: 110] [added: 100] science professionals with advanced degrees.

Our DSA business segment provides services that enable our clients to outsource their innovative drug discovery research, their related drug development activities, and [added: their] regulatory-required [added: regulatory] safety [removed: assessment] [added: testing] of potential new drugs, industrial [removed: chemicals,] and [removed: agrochemicals] [added: agricultural chemicals and medical devices] to us.

Additionally, outsourcing to Charles River provides companies access to scientific expertise that they may not have internally or [added: otherwise] available to them.

We are the largest provider of drug discovery, non-clinical development, and safety testing services worldwide and offer a comprehensive portfolio of services required for regulatory submission of pharmaceuticals, [removed: chemicals,] and [removed: agrochemicals.][added: industrial and agricultural]

We have extensive expertise in the discovery of small molecule clinical candidates and in the design, execution, and reporting of safety assessment studies for [removed: both] [added: numerous types of compounds including] small and large [removed: molecules] [added: molecule pharmaceuticals, industrial] and [removed: argochemicals.][added: agricultural chemicals, biocides and medical devices.]

Our DSA segment represented [removed: 49.8%] [added: 52.8%] of our total revenue in [removed: 2016] [added: 2017] and employed approximately [removed: 5,900] [added: 6,400] of our employees including approximately [removed: 960] [added: 1,000] science professionals with advanced degrees.

Our Avian Vaccine Services business provides specific-pathogen-free (SPF) fertile chicken [removed: eggs and] [added: eggs, SPF] chickens [added: and diagnostic products] used [removed: in the] [added: to] manufacture [removed: of live viruses.][added: vaccines.]

In [removed: 2016,] [added: 2017,] Manufacturing accounted for [removed: 20.9%] [added: 20.7%] of our total revenue from continuing operations and approximately [removed: 1,400] [added: 1,500] of our employees, including approximately [removed: 140] [added: 100] science professionals with advanced degrees.

In recent years, we have focused our efforts on [removed: unifying our businesses and] improving the efficiency of our global operations to enhance our ability to support our key clients.

A significant portion of this business [removed: is comprised of] [added: involves] the commercial production and sale of research models, principally purpose-bred rats and mice for use by researchers.

Our research models are bred and maintained in [removed: a variety of] controlled environments, which are designed to ensure that the models are free of specific viral and bacterial agents and other contaminants that can disrupt research operations and distort research results.

Certain of our research models are [removed: proprietary, disease-specific] [added: proprietary] rodent models used to research treatments for diseases such as diabetes, obesity, [removed: cardiovascular] [added: cardiovascular, cancer] and kidney disease.

We [added: create,] breed and maintain research models [removed: purchased or purposefully created] [added: required] by our clients for biomedical research activities.

The creation of a genetically engineered model (GEM) is a critical scientific event, but it is only the first step in the discovery [removed: process.][added: process, and our scientists can advise clients on how to efficiently create custom models utilizing together with in-licensed technologies and approaches to modify the genome.]

We monitor and analyze the health profiles of [added: our clients’] research models and [removed: cell lines used] [added: research biologics] by [removed: our clients.][added: providing infectious agents and pathology assessment.]

We developed this capability internally in order to address the [removed: diagnostic needs] [added: quality control] of our [removed: own] research model business.

We are able to serve as [removed: their] [added: our clients’] sole-source testing laboratory, or as an alternative source supporting our clients’ internal laboratory capabilities.

We believe we are the reference laboratory of choice for health [removed: testing] [added: assessment] of laboratory research models and an industry leader in the field of [added: laboratory] animal diagnostics.

We offer a full spectrum of discovery services from identification of a novel druggable target, followed by high-throughput screening and [removed: medical] [added: medicinal] chemistry, through delivery of non-clinical drug and therapeutic candidates ready for safety assessment.

Our Early Discovery service capabilities include: target discovery and [removed: validation,] [added: validation (which includes custom in vivo and in vitro genome editing),] hit identification, medicinal chemistry, [added: scale-up chemistry] and testing how a drug is absorbed, distributed in the body, metabolized, and excreted (ADME).

We also offer ion channel testing [removed: and in vitro cardiac safety assessment services,] for both discovery and non-clinical purposes.

In September 2016, we acquired [removed: Agilux Laboratories, Inc. (Agilux),] [added: Agilux,] a CRO that provides a suite of integrated discovery small and large molecule bioanalytical services, drug metabolism and pharmacokinetic services, and pharmacology services.

In support of non-clinical drug safety testing, our clients are required to demonstrate appropriate [removed: exposure,] stability in the collected [added: biological] sample, pharmacokinetics of their drug or compound in circulation, the presence of metabolites, and, with biologics, the presence or absence of anti-drug antibodies.

After performing sample analysis in support of non-clinical studies, we [added: also] have the [removed: opportunity] [added: capabilities] to capture the benefits of bridging the non-clinical bioanalysis with subsequent clinical development.

Pharmacokinetics refers to [added: the] understanding [added: of] what the body does to a drug or compound [removed: once administered,] [added: administered at therapeutic dose levels,] including the process by which the drug is absorbed, distributed in the body, metabolized and excreted [removed: (ADME); toxicokinetics refers to the same understanding as applied at higher doses that may result in adverse effects.][added: (ADME).]

In support of non-clinical drug safety testing, our clients are required to demonstrate that the test article as formulated does not have the potential to prolong the cardiac QT [removed: interval.][added: interval, effects on CNS and respiratory system.]

We have the assays (both in vitro and in vivo) and can perform the screening for this demonstration that is required [removed: for an investigational new drug submission.][added: prior to the commencement of clinical trials.]

We have expertise in the design and execution of development programs in support of [removed: both] chemically-derived (small molecule) and biotechnology-derived (large molecule) pharmaceuticals.

[removed: Once] [added: For human pharmaceutical candidates, once] a lead molecule is selected, toxicology studies are required to support clinical trials in humans and new drug registrations.

[removed: These] [added: Toxicology] studies [added: performed for any of these compounds] are typically performed [added: using] in [added: vitro and in vivo] research models to identify any potential adverse effects that a compound has on an organism over a variety of doses and over various time periods.

| • | a broad offering of in vitro and in vivo capabilities and study types designed to identify possible safety risks for potential [added: human and animal] therapeutics, industrial [removed: chemicals,] [added: chemicals] and agrochemicals as they [removed: transition] [added: progress] from discovery [removed: into regulated drug development, toxicology, and human clinical testing, or as they are submitted for] [added: to] regulatory registration; |

| • | [removed: all the standard] [added: a broad offering of] in vitro and in vivo studies in support of general toxicology (acute, sub-acute, and chronic studies), genetic toxicology, safety pharmacology, and carcinogenicity bioassays that are required for [removed: either] regulatory submissions supporting “first-in-human” to “first-to-the-market” [removed: strategies, or] [added: strategies] for [removed: national chemical registration;] [added: potential human therapeutics;] |

chemicals.

Through our phenotyping platforms we can also design and conduct the relevant studies and tests allowing characterization of the generated models.

Our genome editing capabilities enable us to develop more translational research models designed to enhance scientific understanding and improve

the efficiency and effectiveness of the drug discovery process.

In addition to providing these services to our clients at our research laboratories, we also provide some of these services at our clients’ laboratories with Charles River scientists as an in-sourcing service model.

In August 2017, we acquired Brains On-Line (BOL), a leading CRO that provides critical data that advances novel therapeutics for the treatment of central nervous system (CNS) diseases.

This acquisition strategically expands our existing CNS capabilities and establishes us as a single-source provider for a broad portfolio of discovery CNS services.

In January 2018, we acquired KWS BioTest (KWS), a leading CRO specializing in in vitro and in vivo discovery testing services for immuno-oncology and inflammatory and infectious diseases.

The addition of KWS enhances our discovery expertise, with complementary offerings that provide our clients with additional tools in the active therapeutic research areas of oncology and immunology.

Toxicokinetics refers to the same understanding as applied at higher doses that may result in adverse effects.

We also support safety studies to test chemicals, industrial chemical, agrochemicals and medical devices.

For industrial chemicals and agrochemicals, safety studies are performed to identify potential risks to humans and the environment and are required for regulatory registration.

We expect to see expanded use of this rapid endotoxin testing technology as clients transition from traditional methods to our rapid cartridge technology.

In 2017, we launched our Cortex software that provides an integrated solution to securely consolidate, query and analyze data.

experience in project management.

For example, during the past year:

| • | We launched a multi-year strategic partnership with Nimbus Therapeutics to advance new programs spanning the disease areas of immunology, metabolic disorders and oncology from the discovery phase through to Investigational New Drug submission. |

| • | We extended our longstanding, strategic, integrated drug discovery partnership with Chiesi Farmaceutici SpA in the field of respiratory disease. Through this continued partnership, we provide Chiesi an extensive portfolio of integrated drug discovery capabilities, including medicinal chemistry, ADME/DMPK studies, pharmaceuticals, in vitro assays, in vivo models and safety pharmacology studies to help identify and test Chiesi’s candidates for preclinical development. |

In August 2017, we acquired Brains On-Line (BOL), a leading CRO that provides critical data that advances novel therapeutics for the treatment of central nervous system (CNS) diseases.

In January 2018, we acquired KWS, a leading CRO specializing in in vitro and in vivo discovery testing services for immuno-oncology and inflammatory and infectious diseases.

Separately, facilities using live vertebrate animals in research funded by the U.S. Public Health Service (PHS) must

Regulatory monitoring authorities such as the FDA, Medicines and Healthcare products Regulatory Agency and OECD countries have indicated an increased emphasis on the management of computerized systems to ensure data integrity.

New guidance related to the need for data integrity compliance programs have recently been released and may require additional efforts by CRL for validation, audit trail review and archiving activities to be considered.

To assure that we have proper regulatory oversight over electronic records, a dedicated quality function reviews computerized system practices to ensure that appropriate record controls are in place and that a robust audit strategy confirms requirements for compliance.

| | |

| --- | --- |

| | |

| --- | --- |

To assure these compliance

Birgit Girshick, age 48, joined us in 1989 and has held positions of increasing responsibility in our RMS Germany and RMS Avian Vaccine businesses.

In 2004, Ms. Girshick was promoted to General Manager of the RMS Avian Vaccine Services business.

She was named Executive Director, RMS Process Improvement in 2009, and Corporate Vice President, Global Biopharmaceutical Services in 2010.

In 2013, Ms. Girshick was promoted to Corporate Senior Vice President, Research Models and Biologics Testing Solutions.

In 2016, Ms. Girshick was tasked with leading the integration of WIL Research into our Safety Assessment business.

Also in 2016, Ms. Girshick assumed the role of Corporate Senior Vice President, Global Discovery Services.

In February 2018, Ms. Girshick was appointed Corporate Executive Vice President, Discovery and Safety Assessment.

Our clients reduce their costs, increase their speed, and improve their productivity and effectiveness in early-stage discovery and development by using our broad portfolio of products and services.

In April 2016, we acquired WRH, Inc. (WIL Research).

WIL Research’s safety assessment business is reported in our DSA reportable segment and its contract development and manufacturing (CDMO) services business created a new operating segment, Contract Manufacturing, which is reported as part of our Manufacturing reportable segment.

We divested the CDMO business on February 10, 2017.

The revised reportable segments are as follows:

| | | |

| --- | --- | --- |

| | | |

| Research Models and Services | Discovery and Safety Assessment | Manufacturing Support |

| Research Models | Discovery Services | Microbial Solutions |

| Research Model Services | Safety Assessment | Avian |

| | | Biologics |

| | | Contract Manufacturing |

continents (North America, Europe, and Asia).

In addition, we offer custom in vivo and in vitro genome editing.

With this technology, we are able to develop more translational research models designed to improve the efficiency and effectiveness of the drug discovery process.

This acquisition supports our strategy to offer clients a broader, integrated portfolio that provides services continuously from the earliest stages of drug research through the non-clinical development process.

We anticipate our clients' demand for rapid testing methods will continue to increase as they respond to the FDA's Process Analytical Technology (PAT) Initiative, as well as move to faster, simpler testing methods for their technicians.

In 2013, we launched the first fully automated robotic system developed specifically for high-volume endotoxin testing: Endosafe®-Nexus™.

We expect to see expanded use of this rapid endotoxin testing technology in non-traditional areas such as renal dialysis, nuclear and compounding pharmacies, and cellular therapy.

Contract Manufacturing.

Through our acquisition of WIL Research in April 2016, we acquired its QS Pharma subsidiary.

This business specializes in contract formulation development and manufacturing (including analytical services and stability testing) with a focus on high potency compounds, oral solid and liquid dose formulations, and manufacturing.

On February 10, 2017, we divested this business.

For additional information, see Note 17, “Subsequent Events” included in Item 8, “Financial Statements and Other Supplementary Data” in this Annual Report on Form 10-K.

For example, in 2016, we extended the term of our longstanding integrated drug discovery alliance with Genentech, a member of the Roche Group.

Through this alliance, we provide Genentech early discovery services, including medicinal chemistry, in vitro and in vivo biology, structural biology, and computer-aided drug design to help identify promising candidates for non-clinical development.

And, in 2015, we extended the term of our collaboration with AstraZeneca for outsourced regulated safety assessment, and development drug metabolism and pharmacokinetics until 2020.

of services and integrated services where we work hand in hand with our customers to design, plan, and manage integrated projects and programs.

In 2015, we acquired Celsis Group Limited., a leading provider of rapid bacterial detection systems for sterile and non-sterile quality control testing in the biopharmaceutical and consumer products industries.

In June, we acquired Blue Stream, an analytical CRO supporting the development of complex biologics and biosimilars.

In September, we acquired Agilux, a CRO that provides a suite of integrated discovery small and large molecule bioanalytical services, drug metabolism and pharmacokinetic services, and pharmacology services.

Our acquisition strategy also takes into account geographic as well as strategic expansion of existing core services.

For example, in 2015, we acquired Oncotest, a Germany-based CRO providing discovery services for oncology, which complements our existing In Vivo Discovery businesses in the U.S. and Finland, and Sunrise, a producer of SPF fertile chicken eggs and chickens used in the manufacture of live viruses.

For example, in 2016, we committed to invest $10 million in BioMotiv, LLC, the therapeutic accelerator company associated with The Harrington Project for Discovery and Development.

Through this agreement, we will be the preferred drug discovery and non-clinical development partner for BioMotiv’s portfolio of technologies and companies.

stage portfolio.

quality and regulatory compliance.

In May 2013, with the assistance of the law firm of Davis Polk & Wardwell LLP, we commenced an investigation into inaccurate billing with respect to certain government contracts.

This issue had been reported to our senior management by a Charles River employee.

We promptly reported these matters to the relevant government contracting officers, the Department of Health and Human Services’ Office of the Inspector General, and the Department of Justice, and we are cooperating with these agencies to ensure the proper repayment and resolution of this matter.

The investigation confirmed that our RMS business

segment billed the Department of Health and Human Services for certain work that had not been performed with respect to a small subset of our government contracts.

It has been determined that when employees regularly assigned to work in research model barrier rooms associated with these contracts were absent, other employees' names would be substituted on time-keeping records associated with the relevant contracts.

We billed the government for the hours associated with these substitute employees, despite the fact that, in many cases, these employees did not perform any services in connection with the relevant government contracts.

Based on the findings of the investigation to date, we believe that this conduct was limited to our research model facilities in Raleigh, North Carolina, and Kingston, New York.

We previously identified approximately $1.5 million of excess amounts billed on these contracts, and recorded a liability for such amount.

Based on our ongoing discussions with the government, we have recorded an additional charge of $0.3 million during the fiscal year 2016.

Our best estimate, which totals $1.8 million, may be subject to change based on the terms of any final settlement with the Department of Justice and the Department of Health and Human Services’ Office of the Inspector General.

We have already taken appropriate steps to prevent this conduct from recurring, and will consider additional remedial measures following the conclusion of the matter.

In July 2015, IDEXX filed a complaint in the United States District Court for the District of Delaware alleging we have infringed three (3) recently issued patents related to a blood spot sample collection method used in determining the presence or absence of an infectious disease in a population of rodents.

On September 21, 2015, we timely filed a motion to dismiss the complaint on the grounds that all of the claims are directed to unpatentable subject matter and therefore are invalid.

On October 7, 2015, IDEXX filed an amended complaint, which substantially asserted the same patents and infringement allegations as asserted in the original complaint, and on October 26, 2015, we timely filed a motion to dismiss this amended complaint.

The hearing on the motion to dismiss was held on January 12, 2016.

On July 1, 2016, the Court issued an opinion denying the motion to dismiss.

We filed our answer to the complaint on July 21, 2016.

In addition, on July 29, 2016, we initiated an inter partes review (IPR) procedure with the United States Patent and Trademark Office, challenging the validity of the IDEXX patents.

On February 6, 2017, we entered into a settlement agreement with IDEXX, which involved the withdrawal by IDEXX of their complaint and withdrawal by us of the IPR.

| FOR THE FISCAL YEAR ENDED DECEMBER [removed: 31, 2016] [added: 30, 2017] | |

[removed: ][added: ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer”,] “smaller reporting [added: company”, and “emerging growth] company” in Rule 12b-2 of the Exchange Act.

| Large accelerated filer ý | | Accelerated filer o | | Non-accelerated filer o (Do not check if smaller reporting company) | [removed: | Smaller reporting company o |]

On [removed: June 25, 2016,] [added: July 1, 2017,] the aggregate market value of the Registrant’s voting common stock held by non-affiliates of the Registrant was approximately [removed: $3,735,593,230.][added: $4,728,183,315.]

As of January [removed: 27, 2017,] [added: 26, 2018,] there were [removed: 47,372,995] [added: 47,428,916] shares of the Registrant’s common stock outstanding, $0.01 par value per share.

Portions of the Registrant’s definitive Proxy Statement for its [removed: 2017] [added: 2018] Annual Meeting of Shareholders scheduled to be held on May [removed: 9, 2017,] [added: 8, 2018,] which will be filed with the Securities and Exchange Commission (SEC) not later than 120 days after December [removed: 31, 2016,] [added: 30, 2017,] are incorporated by reference into Part III of this Annual Report on Form 10-K.

With the exception of the portions of the [removed: 2017] [added: 2018] Proxy Statement expressly incorporated into this Annual Report on Form 10-K by reference, such document shall not be deemed filed as part of this Form 10-K.

FOR FISCAL YEAR [removed: 2016][added: 2017]

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| 1B | [Unresolved Staff [removed: Comments](#s4E3358645B395A6F86328099ECA51457)] [added: Comments](#sDB1C4F2975835776AB164A6454B2126A)] | [removed: [25](#s4E3358645B395A6F86328099ECA51457)] [added: [25](#sDB1C4F2975835776AB164A6454B2126A)] |

| 3 | [Legal [removed: Proceedings](#s6DE7B315CB1B51DCB544AF2A8FAB4292)] [added: Proceedings](#s7F9743983A135BABB24B700C59E1D8DC)] | [removed: [25](#s6DE7B315CB1B51DCB544AF2A8FAB4292)] [added: [26](#s7F9743983A135BABB24B700C59E1D8DC)] |

| 4 | Mine Safety Disclosures | [removed: [26](#s1C709975D25F523C868B978F8A6A62A4)] [added: [26](#sD9D2DE5BB2945D8EBE576627FAF3CC75)] |

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| 8 | [Financial Statements and Supplementary [removed: Data](#s08FFA36CCBB858628725F424B09ACAB4)] [added: Data](#s3BB79365FA8E5DBB9B57ADC735995631)] | [removed: [48](#s08FFA36CCBB858628725F424B09ACAB4)] [added: [49](#s3BB79365FA8E5DBB9B57ADC735995631)] |

| 9 | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sD99876B5B2E3548EA249823E9C9B38E3)] [added: Disclosure](#s27065596F11359A3B8C2AABF86495B76)] | [removed: [100](#sD99876B5B2E3548EA249823E9C9B38E3)] [added: [102](#s27065596F11359A3B8C2AABF86495B76)] |

| 9A | [Controls and [removed: Procedures](#sCDEF4C253EEB584C93F4355F0620FB62)] [added: Procedures](#s6958A33DC2CB508FBE98D1CCE1A7931F)] | [removed: [100](#sCDEF4C253EEB584C93F4355F0620FB62)] [added: [102](#s6958A33DC2CB508FBE98D1CCE1A7931F)] |

| 10 | [Directors, Executive Officers and Corporate [removed: Governance](#s5B59C348694C543D9CF0C505E03C6D63)] [added: Governance](#s71455A30232555DD8E22E516A46422AE)] | [removed: [101](#s5B59C348694C543D9CF0C505E03C6D63)] [added: [103](#s71455A30232555DD8E22E516A46422AE)] |

| 12 | [Security Ownership of Certain Beneficial Owners and Management and Related [removed: Stockholder](#s292C8C755A485532901CC011E6F7925B)] [added: Stockholder](#sA56B4EB74FF057B2B5FBF6E9C3D0F466)] Matters | [removed: [101](#s292C8C755A485532901CC011E6F7925B)] [added: [103](#sA56B4EB74FF057B2B5FBF6E9C3D0F466)] |

| 13 | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sB6628E6B2725564D87F3864F36C1DB09)] [added: Independence](#sCF5E3C7E933551AA85DEEB91398B2377)] | [removed: [101](#sB6628E6B2725564D87F3864F36C1DB09)] [added: [103](#sCF5E3C7E933551AA85DEEB91398B2377)] |

| 14 | [Principal Accountant Fees and [removed: Services](#sC5364F21618059BAB2A00EB6AD5D9DF4)] [added: Services](#s7F600ECF29BB577280450CE1595256B0)] | [removed: [101](#sC5364F21618059BAB2A00EB6AD5D9DF4)] [added: [103](#s7F600ECF29BB577280450CE1595256B0)] |

| 15 | [Exhibits and Financial Statement [removed: Schedules](#s282A9C3E2BA1530BA167CEE3E8ACB4DF)] [added: Schedules](#s2A63922AF0D65784860B61D7EF0B1D1B)] | [removed: [102](#s282A9C3E2BA1530BA167CEE3E8ACB4DF)] [added: [104](#s2A63922AF0D65784860B61D7EF0B1D1B)] |

10-K 1 crl1230201710-k.htm 10-K

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

| Smaller reporting company o | | Emerging growth company o | | |

If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

| 1 | [Business](#s1C677B8C865D5F45A26AAABB3532DBE1) | [1](#s1C677B8C865D5F45A26AAABB3532DBE1) |

| 2 | [Properties](#sE5145F09ABFA57F48E903DD50CFA3523) | [25](#sE5145F09ABFA57F48E903DD50CFA3523) |

| 9B | [Other Information](#sDBAD204B5F5850FE9E83668E8F987ECD) | [102](#sDBAD204B5F5850FE9E83668E8F987ECD) |

| 11 | [Executive Compensation](#s2A5BEA488BC552A78A9FD852BB7F38A3) | [103](#s2A5BEA488BC552A78A9FD852BB7F38A3) |

| 16 | Form 10-K Summary | [104](#s4E13D47429ED57F39A52989A22A994B6) |

| Signatures | | [105](#s708AE9F5B5495CF2BAEC7BF7C031E6A4) |

| Exhibit Index | | [107](#s853DE612D17C5FA2BA65DF92858CC155) |

10-K 1 crl1231201610-k.htm 10-K

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| --- | --- | --- | --- | --- | --- | --- |

| | | | | | | |

| 1 | [Business](#s52426AB212515DD39B4FBC1D8C659512) | [1](#s52426AB212515DD39B4FBC1D8C659512) |

| 2 | [Properties](#s71D5E67918A75BD1AF3BAE234813807D) | [25](#s71D5E67918A75BD1AF3BAE234813807D) |

| 9B | [Other Information](#s90013BC06381537ABAF049EBDDC5E54B) | [100](#s90013BC06381537ABAF049EBDDC5E54B) |

| 11 | [Executive Compensation](#s3D3EE336B5F75E5A9205045C176DE13D) | [101](#s3D3EE336B5F75E5A9205045C176DE13D) |

| 16 | Form 10-K Summary | [102](#s79fa21135c354e6aae4208c7e5ae9c1e) |

| Signatures | | [103](#s5A2E5D30D2E15F4FB822AD2BF98F4046) |

| Exhibit Index | | [104](#sA21F7F4F9C605EE09B0905B9E4575FE8) |

Capacity at our Safety Assessment businesses within our DSA segment is primarily based on physical room infrastructure designed towards meeting specific scientific and regulatory requirements.

| First quarter (through January [removed: 27, 2017)] [added: 26, 2018)] | $ | [removed: 82.89] [added: 112.47] | | | $ | [removed: 75.25] [added: 104.00] | |

| Fiscal [removed: 2015] [added: 2018] | High | | | | Low | | |

There were no equity securities that were not registered under the Securities Act of 1933, as amended, sold during fiscal year [removed: 2016.][added: 2017.]

As of January [removed: 27, 2017,] [added: 26, 2018,] there were [removed: approximately 380] [added: 353] registered shareholders of the outstanding shares of common stock.

The following table provides information relating to our purchases of shares of our common stock during the fourth quarter of [removed: 2016:][added: fiscal 2017:]

| Total | [removed: 502] [added: 89] | | | | | | | — | | | | | |

In July 2010, our Board of Directors authorized a $500.0 million stock repurchase program, and subsequently approved increases to the program of $250.0 million in fiscal year 2010, $250.0 million in fiscal year [removed: 2013 and] [added: 2013,] $150.0 million in fiscal year 2014, [added: and $150.0 million in fiscal year 2017,] for an aggregate authorization of [removed: $1,150.0 million.][added: $1.3 billion.]

During the fourth quarter of fiscal year [removed: 2016,] [added: 2017,] we did not repurchase any shares of common stock under our Rule 10b5-1 Purchase Plan or in open market trading.

Additionally, our stock-based compensation plans permit the netting of common stock upon vesting of restricted stock, [removed: performance share units, and] restricted stock [added: units, and performance share] units in order to satisfy individual [removed: minimum] statutory tax withholding requirements.

The following stock performance graph compares the annual percentage change in the Company’s cumulative total shareholder return on its Common Stock during a period commencing on December [removed: 31, 2011] [added: 29, 2012] and ending on December [removed: 31, 2016] [added: 30, 2017] (as measured by dividing (1) the sum of (A) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (B) the difference between the Company’s share price at the end and the beginning of the measurement period; by (2) the share price at the beginning of the measurement period) with the cumulative total return of the S&P 500 Index and the S&P 500 Health Care Index during such period.

[removed: ][added: ]

| | [removed: 2011 | | | |] 2012 | | | | 2013 | | | | 2014 | | | | 2015 | | | | 2016 | | | [added: | 2017 | | |]

| First quarter | $ | 91.57 | | | $ | 75.25 | |

| Second quarter | 102.32 | | | | 86.44 | | |

| Third quarter | 109.59 | | | | 94.15 | | |

| Fourth quarter | 119.05 | | | | 99.12 | | |

| | | | | | | | | | | | (in thousands) | | |

| October 1, 2017 to October 28, 2017 | — | | | $ | — | | | — | | | $ | 129,105 | |

| October 29, 2017 to November 25, 2017 | — | | | — | | | | — | | | 129,105 | | |

| November 26, 2017 to December 30, 2017 | 89 | | | 104.20 | | | | — | | | 129,096 | | |

| Charles River Laboratories International, Inc. | $ | 100 | | | $ | 145 | | | $ | 174 | | | $ | 217 | | | $ | 207 | | | $ | 297 | |

| S&P 500 | 100 | | | | 132 | | | | 151 | | | | 153 | | | | 171 | | | | 208 | | |

| S&P 500 Health Care | 100 | | | | 141 | | | | 177 | | | | 190 | | | | 184 | | | | 225 | | |

| First quarter | $ | 84.69 | | | $ | 63.22 | |

| Second quarter | 80.30 | | | | 68.59 | | |

| Third quarter | 78.50 | | | | 63.75 | | |

| Fourth quarter | 80.44 | | | | 59.99 | | |

| For the period | | | | | | | | | | | (in thousands) | | |

| September 25, 2016 to October 22, 2016 | 482 | | | $ | 83.34 | | | — | | | $ | 69,694 | |

| October 23, 2016 to November 19, 2016 | — | | | — | | | | — | | | 69,694 | | |

| November 20, 2016 to December 31, 2016 | 20 | | | 71.10 | | | | — | | | 69,694 | | |

| Charles River Laboratories International, Inc. | $ | 100 | | | $ | 135 | | | $ | 195 | | | $ | 235 | | | $ | 293 | | | $ | 279 | |

| S&P 500 | 100 | | | | 116 | | | | 154 | | | | 175 | | | | 177 | | | | 198 | | |

| S&P 500 Health Care | 100 | | | | 118 | | | | 167 | | | | 209 | | | | 223 | | | | 217 | | |

A 53rd week was included in [added: the fourth quarter of] fiscal year 2016, which is occasionally necessary to align with a December 31 calendar year-end.

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Total revenue | $ | [removed: 1,681,432] [added: 1,857,601] | | | $ | [removed: 1,363,302] [added: 1,681,432] | | | $ | [removed: 1,297,662] [added: 1,363,302] | | | $ | [removed: 1,165,528] [added: 1,297,662] | | | $ | [removed: 1,129,530] [added: 1,165,528] | |

| Income from continuing operations, net of income taxes | [removed: 156,086] [added: 125,586] | | | | [removed: 152,037] [added: 156,086] | | | | [removed: 129,924] [added: 152,037] | | | | [removed: 105,416] [added: 129,924] | | | | [removed: 102,118] [added: 105,416] | | |

| Income (loss) from discontinued operations, net of income taxes | [removed: 280] [added: (137] | | [added: )] | | [removed: (950] [added: 280] | | [removed: )] | | [removed: (1,726] [added: (950] | | ) | | [removed: (1,265] [added: (1,726] | | ) | | [removed: (4,252] [added: (1,265] | | ) |

| Basic | $ | [removed: 3.28] [added: 2.60] | | | $ | [removed: 3.23] [added: 3.28] | | | $ | [removed: 2.76] [added: 3.23] | | | $ | [removed: 2.18] [added: 2.76] | | | $ | [removed: 2.12] [added: 2.18] | |

| Diluted | $ | [removed: 3.22] [added: 2.54] | | | $ | [removed: 3.15] [added: 3.22] | | | $ | [removed: 2.70] [added: 3.15] | | | $ | [removed: 2.15] [added: 2.70] | | | $ | [removed: 2.10] [added: 2.15] | |

| Depreciation and amortization | $ | [removed: 126,658] [added: 131,159] | | | $ | [removed: 94,881] [added: 126,658] | | | $ | [removed: 96,445] [added: 94,881] | | | $ | [removed: 96,636] [added: 96,445] | | | $ | [removed: 81,275] [added: 96,636] | |

| Capital expenditures | [removed: 55,288] [added: 82,431] | | | | [removed: 63,252] [added: 55,288] | | | | [removed: 56,925] [added: 63,252] | | | | [removed: 39,154] [added: 56,925] | | | | [removed: 47,534] [added: 39,154] | | |

| Cash and cash equivalents | $ | [removed: 117,626] [added: 163,794] | | | $ | [removed: 117,947] [added: 117,626] | | | $ | [removed: 160,023] [added: 117,947] | | | $ | [removed: 155,927] [added: 160,023] | | | $ | [removed: 109,685] [added: 155,927] | |

| Total [removed: assets(1)] [added: assets] | [removed: 2,711,800] [added: 2,929,922] | | | | [removed: 2,068,497] [added: 2,711,800] | | | | [removed: 1,870,578] [added: 2,068,497] | | | | [removed: 1,623,438] [added: 1,870,578] | | | | [removed: 1,577,111] [added: 1,623,438] | | |

| Long-term debt, net and capital [removed: leases(1)] [added: leases] | [removed: 1,207,696] [added: 1,114,105] | | | | [removed: 845,997] [added: 1,207,696] | | | | [removed: 740,557] [added: 845,997] | | | | [removed: 635,226] [added: 740,557] | | | | [removed: 520,712] [added: 635,226] | | |

| Redeemable noncontrolling interest | [removed: 14,659] [added: 16,609] | | | | [removed: 28,008] [added: 14,659] | | | | [removed: 28,419] [added: 28,008] | | | | [removed: 20,581] [added: 28,419] | | | | [removed: —] [added: 20,581] | | |

Refer to Note 2, “Business [removed: Acquisitions”] [added: Acquisitions and Divestiture”] included in Item 8, “Financial Statements and [removed: Other] Supplementary Data” in this Annual Report on Form 10-K for additional information concerning the impact of our recent acquisitions.

The additional week was included in the fourth quarter.

| | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | |

| (1) During the second quarter of 2015, we elected early adoption of Accounting Standards Update (ASU) 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” and applied the changes retrospectively to all prior periods. During the fourth quarter of 2015, we elected early adoption of ASU 2015-17, “Balance Sheet Classification of Deferred Taxes,” and applied the changes retrospectively to all prior periods. Prior years’ amounts have been updated to conform to current presentation. | | | | | | | | | | | | | | | | | | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#s4B042E949D8B5ADB89A3997B6A32CFC6)] [added: Firm](#s17CE96C900545CC491A6E63B16A02653)] | [removed: [49](#s4B042E949D8B5ADB89A3997B6A32CFC6)] [added: [50](#s17CE96C900545CC491A6E63B16A02653)] |

| Consolidated Statements of Income for fiscal years [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: [50](#s4635FC4D74F351E8A83550DE2749637C)] [added: [52](#s733A9DFC826B50B5B5E1566E03DF0BB1)] |

| Consolidated Statements of Comprehensive Income for fiscal years [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: [51](#sD5351ED2F49852EAB09C873F5CA015CE)] [added: [53](#s1C3F8A5E5E1C503A853669B9E8F9F8AC)] |

| Consolidated Balance Sheets as of December [removed: 31, 2016] [added: 30, 2017] and December [removed: 26, 2015] [added: 31, 2016] | [removed: [52](#s15B0B1072A1E53818E5D7F759866C4AC)] [added: [54](#s36959B6DE584523183DC0266F10A206E)] |

| Consolidated Statements of Cash Flows for fiscal years [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: [53](#s041F88BFC32F5DD897DF8E5450957B54)] [added: [55](#s2275925CAD545DC5BF69B15CABFF5056)] |

| Consolidated Statements of Changes in Equity for fiscal years [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: [55](#sF41585397A365F3B9356462A0C560694)] [added: [57](#sD01B76E17AAB5016B3049E07F77A2C91)] |

| [Notes to Consolidated Financial [removed: Statements](#s006708107EB850C0944069E7D014D3EF)] [added: Statements](#sF272A979C27E58CD91F6601357BDB6FF)] | [removed: [56](#s006708107EB850C0944069E7D014D3EF)] [added: [58](#sF272A979C27E58CD91F6601357BDB6FF)] |

In our opinion, the [removed: accompanying] consolidated [removed: balance sheets and the related consolidated] [added: financial] statements [removed: of income, comprehensive income, changes in equity and cash flows] [added: referred to above] present fairly, in all material respects, the financial position of [removed: Charles River Laboratories International, Inc. and its subsidiaries at] [added: the Company as of] December [removed: 31, 2016] [added: 30, 2017] and December [removed: 26, 2015,] [added: 31, 2016,] and the results of [removed: their] [added: its] operations and [removed: their] [added: its] cash flows for each of the three years in the period ended December [removed: 31, 2016] [added: 30, 2017] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December [removed: 31, 2016,] [added: 30, 2017,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the [removed: Committee of Sponsoring Organizations of the Treadway Commission (COSO).][added: COSO.]

The Company's management is responsible for these [added: consolidated] financial statements, for maintaining effective internal control over financial [removed: reporting] [added: reporting,] and for its assessment of the effectiveness of internal control over financial reporting, included in [removed: Management's] [added: Management’s] Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on [removed: these] [added: the Company’s consolidated] financial statements and on the Company's internal control over financial reporting based on our [removed: integrated] audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the [added: consolidated] financial statements are free of material [removed: misstatement] [added: misstatement, whether due to error or fraud,] and whether effective internal control over financial reporting was maintained in all material respects.

Our audits [removed: of the financial statements] [added: also] included [removed: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing] [added: evaluating] the accounting principles used and significant estimates made by management, [removed: and] [added: as well as] evaluating the overall [added: presentation of the consolidated] financial [removed: statement presentation.][added: statements.]

[removed: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit] preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

As described in [removed: Management's] [added: Management’s] Report on Internal Control over Financial Reporting, management has excluded [removed: WRH, Inc., Blue Stream Laboratories, Inc., and Agilux Laboratories, Inc.] [added: Brains On-Line] from its assessment of internal control over financial reporting as of December [removed: 31, 2016] [added: 30, 2017] because [removed: they were] [added: it was] acquired by the Company [added: in a purchase business combination] during [removed: 2016.][added: 2017.]

We have also excluded [removed: WRH, Inc., Blue Stream Laboratories, Inc., and Agilux Laboratories, Inc.] [added: Brains On-Line] from our audit of internal control over financial reporting.

| | [added: |] Fiscal Year | | | | | | | | | [removed: | |]

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Service revenue | $ | [removed: 1,130,733] [added: 1,298,298] | | | $ | [removed: 858,244] [added: 1,130,733] | | | $ | [removed: 797,765] [added: 858,244] | |

| Product revenue | [removed: 550,699] [added: 559,303] | | | | [removed: 505,058] [added: 550,699] | | | | [removed: 499,897] [added: 505,058] | | |

| Total revenue | [removed: 1,681,432] [added: 1,857,601] | | | | [removed: 1,363,302] [added: 1,681,432] | | | | [removed: 1,297,662] [added: 1,363,302] | | |

| Cost of services provided (excluding amortization of intangible assets) | [removed: 757,732] [added: 865,618] | | | | [removed: 568,227] [added: 757,732] | | | | [removed: 558,578] [added: 568,227] | | |

| Cost of products sold (excluding amortization of intangible assets) | [removed: 277,034] [added: 289,669] | | | | [removed: 263,983] [added: 277,034] | | | | [removed: 266,424] [added: 263,983] | | |

| Selling, general and administrative | [removed: 367,548] [added: 373,446] | | | | [removed: 300,414] [added: 367,548] | | | | [removed: 269,033] [added: 300,414] | | |

| Amortization of intangible assets | [removed: 41,699] [added: 41,370] | | | | [removed: 24,229] [added: 41,699] | | | | [removed: 25,957] [added: 24,229] | | |

| Operating income | [removed: 237,419] [added: 287,498] | | | | [removed: 206,449] [added: 237,419] | | | | [removed: 177,670] [added: 206,449] | | |

| Interest income | [removed: 1,314] [added: 690] | | | | [removed: 1,043] [added: 1,314] | | | | [removed: 1,154] [added: 1,043] | | |

| Interest expense | [removed: (27,709] [added: (29,777] | | ) | | [removed: (15,072] [added: (27,709] | | ) | | [removed: (11,950] [added: (15,072] | | ) |

| Other [removed: income (expense),] [added: income,] net | [removed: 11,897] [added: 38,544] | | | | [removed: 3,008] [added: 11,897] | | | | [removed: 10,721] [added: 3,008] | | |

| Income from continuing operations, before income taxes | [removed: 222,921] [added: 296,955] | | | | [removed: 195,428] [added: 222,921] | | | | [removed: 177,595] [added: 195,428] | | |

| Provision for income taxes | [removed: 66,835] [added: 171,369] | | | | [removed: 43,391] [added: 66,835] | | | | [removed: 47,671] [added: 43,391] | | |

| Income from continuing operations, net of income taxes | [removed: 156,086] [added: 125,586] | | | | [removed: 152,037] [added: 156,086] | | | | [removed: 129,924] [added: 152,037] | | |

| Income (loss) from discontinued operations, net of income taxes | [removed: 280] [added: (137] | | [added: )] | | [removed: (950] [added: 280] | | [removed: )] | | [removed: (1,726] [added: (950] | | ) |

| Net income | [removed: 156,366] [added: 125,449] | | | | [removed: 151,087] [added: 156,366] | | | | [removed: 128,198] [added: 151,087] | | |

| Less: Net income attributable to noncontrolling interests | [removed: 1,601] [added: 2,094] | | | | [removed: 1,774] [added: 1,601] | | | | [removed: 1,500] [added: 1,774] | | |

| Net income attributable to common shareholders | $ | [removed: 154,765] [added: 123,355] | | | $ | [removed: 149,313] [added: 154,765] | | | $ | [removed: 126,698] [added: 149,313] | |

| Continuing operations attributable to common shareholders | $ | [removed: 3.28] [added: 2.60] | | | $ | [removed: 3.23] [added: 3.28] | | | $ | [removed: 2.76] [added: 3.23] | |

| Discontinued operations | $ | [removed: 0.01] [added: —] | | | $ | [removed: (0.02] [added: 0.01] | [removed: )] | | $ | [removed: (0.04] [added: (0.02] | ) |

| Net income attributable to common shareholders | $ | [removed: 3.29] [added: 2.60] | | | $ | [removed: 3.21] [added: 3.29] | | | $ | [removed: 2.72] [added: 3.21] | |

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Charles River Laboratories International, Inc. and its subsidiaries as of December 30, 2017 and December 31, 2016, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 30, 2017, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 30, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Basis for Opinions

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Brains On-Line is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting each represent less than 1% of the related consolidated financial statement amounts as of and for the year ended December 30, 2017.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit

February 13, 2018

We have served as the Company’s auditor since 1999.

| Goodwill | 804,906 | | | | 787,517 | | |

| Gain on divestiture | (10,577 | | ) | | — | | | | — | | |

| Impairment charges | 17,239 | | | | 6,717 | | | | 196 | | |

| Other, net | (389 | | ) | | 5,613 | | | | 2,352 | | |

| Long-term payable on Transition Tax (Notes 3 and 9) | 61,038 | | | | — | | | | — | | |

| Other assets and liabilities, net | 7,322 | | | | 11,933 | | | | 32,227 | | |

| Net cash provided by operating activities | 318,074 | | | | 316,899 | | | | 306,833 | | |

| Proceeds from sale of investments | 9,128 | | | | 47,652 | | | | 19,743 | | |

| Proceeds from divestiture | 72,462 | | | | — | | | | — | | |

| Net cash used in investing activities | (72,586 | | ) | | (692,672 | | ) | | (327,616 | | ) |

| Other, net | (4,858 | | ) | | (18,204 | | ) | | (4,330 | | ) |

| Net cash (used in) provided by financing activities | (208,476 | | ) | | 380,756 | | | | (7,258 | | ) |

| Cash, cash equivalents, and restricted cash, beginning of period | 119,894 | | | | 119,963 | | | | 162,575 | | |

| Cash, cash equivalents, and restricted cash, end of period | $ | 166,331 | | | $ | 119,894 | | | $ | 119,963 | |

| Restricted cash included in Other current assets | 592 | | | | 532 | | | | 271 | | |

| Restricted cash included in Other assets | 1,945 | | | | 1,736 | | | | 1,745 | | |

| Cash, cash equivalents, and restricted cash, end of period | $ | 166,331 | | | $ | 119,894 | | | $ | 119,963 | |

| Net income | — | | | — | | | | — | | | | 123,355 | | | | — | | | | — | | | — | | | | 123,355 | | | | 1,179 | | | | 124,534 | | |

| Other comprehensive income | — | | | — | | | | — | | | | — | | | | 109,033 | | | | — | | | — | | | | 109,033 | | | | — | | | | 109,033 | | |

| Dividends declared to noncontrolling interest | — | | | — | | | | — | | | | — | | | | — | | | | — | | | — | | | | — | | | | (1,209 | | ) | | (1,209 | | ) |

| Acquisition of treasury shares | — | | | — | | | | — | | | | — | | | | — | | | | 1,155 | | | (106,909 | | ) | | (106,909 | | ) | | — | | | | (106,909 | | ) |

| December 30, 2017 | 87,495 | | | $ | 875 | | | $ | 2,560,192 | | | $ | 288,658 | | | $ | (144,731 | ) | | 40,093 | | | $ | (1,659,914 | ) | | $ | 1,045,080 | | | $ | 2,327 | | | $ | 1,047,407 | |

See “Newly Adopted Accounting Pronouncements” below for further discussion.

The Company’s RMS reportable segment includes the Research Models and Research Model Services businesses.

Research Models includes the commercial production and sale of small research models, as well as the supply of large research models.

Research Model Services includes: Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered research models; Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; and Insourcing Solutions (IS), which provides colony management of its clients’ research operations (including recruitment, training, staffing, and management services).

The Company’s DSA reportable segment includes services required to take a drug through the early development process including discovery services, which are non-regulated services to assist clients with the identification, screening, and selection of a lead compound for drug development, and regulated and non-regulated (GLP and non-GLP) safety assessment services.

The Company’s Manufacturing reportable segment includes Microbial Solutions, which provides in vitro (non-animal) lot-release testing products, microbial detection products, and species identification services; Biologics Testing Services (Biologics), which performs specialized testing of biologics; Avian Vaccine Services (Avian), which supplies specific-pathogen-free chicken eggs and chickens; and contract development and manufacturing (CDMO) services, which, until the Company divested this business on February 10, 2017, allowed it to provide formulation design and development, manufacturing, and analytical and stability testing for small molecules.

WRH, Inc., Blue Stream Laboratories, Inc., and Agilux Laboratories, Inc. are wholly-owned subsidiaries whose total assets and total revenues represent 7.8 percent and 11.1 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2016.

February 14, 2017

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| Noncontrolling interests | 2,357 | | | | 4,489 | | |

| Amortization of debt issuance costs and discounts | 2,831 | | | | 2,380 | | | | 1,725 | | |

| Other, net | 9,499 | | | | 168 | | | | (982 | | ) |

| Other assets | (6,215 | | ) | | 850 | | | | (5,145 | | ) |

| Deferred revenue | 14,580 | | | | 6,274 | | | | 22,244 | | |

| Accrued liabilities | (11,487 | | ) | | 14,069 | | | | 8,284 | | |

| Taxes payable and prepaid taxes | (1,800 | | ) | | (3,906 | | ) | | (7,090 | | ) |

| Other liabilities | 331 | | | | (3,659 | | ) | | (9,253 | | ) |

| Net cash provided by operating activities | 300,375 | | | | 288,234 | | | | 252,132 | | |

| Proceeds from sale of investments and distributions from venture capital investments | 53,954 | | | | 27,072 | | | | 21,000 | | |

| Net cash used in investing activities | (686,370 | | ) | | (320,287 | | ) | | (297,990 | | ) |

| Other, net | (8,234 | | ) | | 7,476 | | | | 5,360 | | |

| Net cash provided by financing activities | 390,726 | | | | 4,548 | | | | 61,414 | | |

| Cash and cash equivalents, beginning of period | 117,947 | | | | 160,023 | | | | 155,927 | | |

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| December 28, 2013 | 82,523 | | | $ | 825 | | | $ | 2,206,155 | | | $ | (265,473 | ) | | $ | 5,357 | | | 34,969 | | | $ | (1,305,880 | ) | | $ | 640,984 | | | $ | 3,093 | | | $ | 644,077 | |

| Net income | — | | | — | | | | — | | | | 126,698 | | | | — | | | | — | | | — | | | | 126,698 | | | | 645 | | | | 127,343 | | |

| Adjustment of redeemable noncontrolling interest to fair value | — | | | — | | | | (7,425 | | ) | | — | | | | — | | | | — | | | — | | | | (7,425 | | ) | | — | | | | (7,425 | | ) |

| Tax benefit associated with stock issued under employee compensation plans | — | | | — | | | | 4,301 | | | | — | | | | — | | | | — | | | — | | | | 4,301 | | | | — | | | | 4,301 | | |

| Acquisition of treasury shares | — | | | — | | | | — | | | | — | | | | — | | | | 2,207 | | | (117,380 | | ) | | (117,380 | | ) | | — | | | | (117,380 | | ) |

The additional week was included in the fourth quarter.

Based on their evaluation, required by paragraph (b) of Rules 13a-15 or 15d-15, promulgated by the Securities Exchange Act of 1934, as amended (Exchange Act), the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and [removed: procedures] [added: procedures,] as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange [removed: Act] [added: Act,] are effective, at a reasonable assurance level, as of December [removed: 31, 2016,] [added: 30, 2017,] to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms.

In designing and evaluating the disclosure controls and procedures, our management [removed: recognized] [added: recognizes] that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objectives, and management necessarily was required to apply its judgment in designing and evaluating the controls and procedures.

Based on our assessment and those criteria, management concluded that the Company maintained effective internal control over financial reporting as of December [removed: 31, 2016.][added: 30, 2017.]

We have excluded the [added: Brains On-Line] business [removed: acquisitions] [added: acquisition] completed during fiscal year [removed: 2016, including WRH, Inc., Blue Stream Laboratories, Inc., and Agilux Laboratories, Inc.,] [added: 2017] from the assessment of the effectiveness of internal control over financial reporting as of December [removed: 31, 2016.][added: 30, 2017.]

The acquired [removed: businesses are] [added: business is a] wholly-owned [removed: subsidiaries] [added: subsidiary] whose total assets and total [removed: revenues collectively] [added: revenue each] represent [removed: 7.8% and 11.1%, respectively,] [added: less than 1.0%] of the related consolidated financial statement amounts as of and for fiscal year ended December [removed: 31, 2016.][added: 30, 2017.]

The effectiveness of our internal control over financial reporting as of December [removed: 31, 2016,] [added: 30, 2017,] has been audited by PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm, as stated in their report which [removed: is included] [added: appears] in Item 8, “Financial Statements and [removed: Other] Supplementary Data” in this Annual Report on Form 10-K.

During the fourth quarter of [removed: 2016,] [added: 2017,] the Company continued to execute a plan to centralize certain accounting transaction processing functions to internal shared service centers.

There were no other [added: material] changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of the Exchange Act Rules 13a-15 or 15d-15 that occurred during the fourth quarter of [removed: 2016] [added: 2017] that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

This planned effort is expected to continue in subsequent quarters.

The information required by this Item regarding our directors and compliance with Section 16(a) of the Exchange Act by our officers and directors will be included in the [removed: 2017] [added: 2018] Proxy Statement under the sections captioned “Nominees for Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” and is incorporated herein by reference thereto.

The information required by this Item regarding our corporate governance will be included in the [removed: 2017] [added: 2018] Proxy Statement under the section captioned “Corporate Governance” and is incorporated herein by reference thereto.

The information required by this Item regarding the audit committee of the Board of Directors and financial experts will be included in the [removed: 2017] [added: 2018] Proxy Statement under the section captioned “The Board of Directors and its Committees-Audit Committee and Financial Experts” and is incorporated herein by reference thereto.

The information required by this Item will be included in the [removed: 2017] [added: 2018] Proxy Statement under the sections captioned [removed: “2016] [added: “2017] Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation and Related Information,” “Compensation Committee Interlocks and Insider Participation” and “Report of Compensation Committee,” and is incorporated herein by reference thereto.

The information required by this Item will be included in the [removed: 2017] [added: 2018] Proxy Statement under the sections captioned “Beneficial Ownership of Securities” and “Equity Compensation Plan Information” and is incorporated herein by reference thereto.

The information required by this Item will be included in the [removed: 2017] [added: 2018] Proxy Statement under the sections captioned “Related Person Transaction Policy” and “Corporate Governance-Director Qualification Standards; Director Independence” and is incorporated herein by reference thereto.

The information required by this Item will be included in the [removed: 2017] [added: 2018] Proxy Statement under the section captioned “Statement of Fees Paid to Independent Registered Public Accounting Firm” and is incorporated herein by reference thereto.

| Date: | February [removed: 14, 2017] [added: 13, 2018] | Corporate Executive Vice [removed: President, Chief Financial Officer] [added: President] and Chief [removed: Accounting] [added: Financial] Officer | |

| By: | /s/ JAMES C. FOSTER | [removed: President,] [added: Chairman and] Chief Executive Officer [removed: and Chairman] | February [removed: 14, 2017] [added: 13, 2018] |

| By: | /s/ DAVID R. SMITH | Corporate Executive Vice [removed: President, Chief] [added: President and] | February [removed: 14, 2017] [added: 13, 2018] |

| | David R. Smith | [removed: Financial Officer and] Chief [removed: Accounting] [added: Financial] Officer | |

| By: | /s/ ROBERT J. BERTOLINI | Director | February [removed: 14, 2017] [added: 13, 2018] |

| By: | /s/ STEPHEN D. CHUBB | Director | February [removed: 14, 2017] [added: 13, 2018] |

| By: | /s/ GEORGE E. MASSARO | Director | February [removed: 14, 2017] [added: 13, 2018] |

| By: | /s/ DEBORAH [added: T.] KOCHEVAR | Director | February [removed: 14, 2017] [added: 13, 2018] |

| | Deborah [added: T.] Kochevar | | |

| By: | /s/ GEORGE M. MILNE, JR. | Director | February [removed: 14, 2017] [added: 13, 2018] |

| By: | /s/ C. RICHARD REESE | Director | February [removed: 14, 2017] [added: 13, 2018] |

| By: | /s/ CRAIG B. THOMPSON | Director | February [removed: 14, 2017] [added: 13, 2018] |

| By: | /s/ RICHARD F. WALLMAN | Director | February [removed: 14, 2017] [added: 13, 2018] |

| 3.1 | [removed: Second] [added: [Second] Amended and Restated Certificate of Incorporation of Charles River Laboratories International, Inc. dated June 5, [removed: 2000] [added: 2000](http://www.sec.gov/Archives/edgar/data/1100682/000091205700029480/ex-3_1.txt)] | | S-1/A | June 23, 2000 | 3.1 |

| 3.2 | [removed: Fifth] [added: [Fifth] Amended and Restated By-Laws of Charles River Laboratories International, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1100682/000129993316002465/exhibit1.htm)] | | 8-K | May 16, 2016 | 3.2 |

| 4.1 | [removed: Form] [added: [Form] of Common Stock certificate, $0.01 par value, of Charles River Laboratories International, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1100682/000091205700029480/ex-4_1.txt)] | | S-1 | June 23, 2000 | 4.1 |

| 4.2 | [removed: Charles] [added: [Charles] River Laboratories International, Inc. Form of Performance Share Unit granted under the 2007 Incentive [removed: Plan] [added: Plan](http://www.sec.gov/Archives/edgar/data/1100682/000144530513000358/crl12292012-ex44.htm)] | | 10-K | February 27, 2013 | 4.4 |

| 4.3 | [removed: Charles] [added: [Charles] River Laboratories International, Inc. Form of Performance Share Unit granted under the 2016 Incentive [removed: Plan] [added: Plan](http://www.sec.gov/Archives/edgar/data/1100682/000110068217000003/crl1231201610-kxex43.htm)] | [removed: X] | [added: 10-K] | [added: February 14, 2017] | [added: 4.3] |

| 10.1* | [removed: Charles] [added: [Charles] River Laboratories International, Inc. 2007 Incentive Plan, as [removed: amended] [added: amended](http://www.sec.gov/Archives/edgar/data/1100682/000162828015000785/crl12272014-ex1013.htm)] | | 10-K | February 17, 2015 | 10.13 |

| 10.2* | [removed: Charles] [added: [Charles] River Laboratories International, Inc. 2016 Incentive [removed: Plan] [added: Plan](http://www.sec.gov/Archives/edgar/data/1100682/000110068216000013/crl6252016ex101.htm)] | | 10-Q | August 3, 2016 | 10.1 |

| 10.3* | [removed: Charles] [added: [Charles] River Laboratories International, Inc. Form of Stock Option granted under the 2007 Incentive Plan, as [removed: amended] [added: amended](http://www.sec.gov/Archives/edgar/data/1100682/000104746908001507/a2182759zex-10_17.htm)] | | 10-K | February 20, 2008 | 10.17 |

| 10.4* | [removed: Charles] [added: [Charles] River Laboratories International, Inc. Form of Stock Option granted under the 2016 Incentive [removed: Plan] [added: Plan](http://www.sec.gov/Archives/edgar/data/1100682/000110068217000003/crl1231201610-kxex104.htm)] | [removed: X] | [added: 10-K] | [added: February 14, 2017] | [added: 10.4] |

| 10.5* | [removed: Charles] [added: [Charles] River Laboratories International, Inc. Form of Restricted Stock Award granted under the 2007 Incentive Plan, as [removed: amended] [added: amended](http://www.sec.gov/Archives/edgar/data/1100682/000104746908001507/a2182759zex-10_18.htm)] | | 10-K | February 20, 2008 | 10.18 |

| 10.6* | [removed: Charles] [added: [Charles] River Laboratories International, Inc. Form of Restricted Stock Unit granted under the 2007 Incentive [removed: Plan] [added: Plan](http://www.sec.gov/Archives/edgar/data/1100682/000110068217000003/crl1231201610-kxex106.htm)] | [removed: X] | [added: 10-K] | [added: February 14, 2017] | [added: 10.6] |

| 10.7* | [removed: Charles] [added: [Charles] River Laboratories International, Inc. Form of Restricted Stock Unit granted under the 2016 Incentive [removed: Plan] [added: Plan](http://www.sec.gov/Archives/edgar/data/1100682/000110068217000003/crl1231201610-kxex107.htm)] | [removed: X] | [added: 10-K] | [added: February 14, 2017] | [added: 10.7] |

| 10.8* | [removed: Charles] [added: [Charles] River Corporate Officer Separation Plan dated April 30, [removed: 2010] [added: 2010](http://www.sec.gov/Archives/edgar/data/1100682/000104746910006917/a2199599zex-10_1.htm)] | | 10-Q | August 3, 2010 | 10.1 |

| 10.9* | [removed: Form] [added: [Form] of Change in Control [removed: Agreement] [added: Agreement](http://www.sec.gov/Archives/edgar/data/1100682/000104746909001689/a2190829zex-10_7.htm)] | | 10-K | February 23, 2009 | 10.7 |

| 10.10* | [removed: Executive] [added: [Executive] Incentive Compensation Plan dated January 1, [removed: 2016] [added: 2016](http://www.sec.gov/Archives/edgar/data/1100682/000110068216000006/crl12262015-ex104.htm)] | | 10-K | February 12, 2016 | 10.4 |

| 10.11* | [removed: Charles] [added: [Charles] River Laboratories International, Inc. Non-Employee Directors Deferral Plan dated April 5, [removed: 2016] [added: 2016](http://www.sec.gov/Archives/edgar/data/1100682/000110068216000010/crl3262016ex101.htm)] | | 10-Q | May 4, 2016 | 10.1 |

| 10.12* | [removed: Charles] [added: [Charles] River Laboratories, Inc. Executive Life Insurance/Supplemental Retirement Income [removed: Plan] [added: Plan](http://www.sec.gov/Archives/edgar/data/1100682/000104746905005909/a2152761zex-10_23.txt)] | | 10-K | March 9, 2005 | 10.23 |

| 10.13* | [removed: Charles] [added: [Charles] River Laboratories amended and restated Deferred Compensation Plan, as [removed: amended] [added: amended](http://www.sec.gov/Archives/edgar/data/1100682/000151851912000030/crl12312011-ex101.htm)] | | 10-K | February 27, 2012 | 10.11 |

| 10.14* | [removed: Amended] [added: [Amended] and Restated Deferred Compensation Plan Document dated July 17, [removed: 2012] [added: 2012](http://www.sec.gov/Archives/edgar/data/1100682/000144530512002523/crl06302012-ex101.htm)] | | 10-Q | August 7, 2012 | 10.1 |

| 10.15* | [removed: Letter] [added: [Letter] Agreements with Davide Molho dated May 22, [removed: 2009] [added: 2009](http://www.sec.gov/Archives/edgar/data/1100682/000104746911001182/a2202149zex-10_17.htm)] | | 10-K | February 23, 2011 | 10.17 |

| 10.16* | [removed: Agreement] [added: [Agreement] between Thomas Ackerman and Charles River Laboratories, Inc. dated February 25, [removed: 2015] [added: 2015](http://www.sec.gov/Archives/edgar/data/1100682/000129993315000318/exhibit1.htm)] | | 8-K | February 27, 2015 | 99.10 |

| 10.17* | [removed: Agreement] [added: [Agreement] between David Smith and Charles River Laboratories, Inc. dated March 3, [removed: 2015] [added: 2015](http://www.sec.gov/Archives/edgar/data/1100682/000110068216000006/crl12262015-ex1016.htm)] | | 10-K | February 12, 2016 | 10.16 |

| 10.18 | [removed: Charles] [added: [Charles] River Laboratories International, Inc. Seventh Amended and Restated Credit Agreement dated March 30, [removed: 2016] [added: 2016](http://www.sec.gov/Archives/edgar/data/1100682/000095010316012408/dp64764_ex1001.htm)] | | 8-K | April 5, 2016 | 10.1 |

| 21.1 | [removed: Subsidiaries] [added: [Subsidiaries] of Charles River Laboratories International, [removed: Inc.] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1100682/000110068218000005/crl1230201710-kxex211.htm)] | X | | | |

| 31.1 | [removed: Rule] [added: [Rule] 13a-14(a)/15d-14(a) Certification of Chief Executive [removed: Officer] [added: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068218000005/crl1230201710-kxex311.htm)] | X | | | |

| 31.2 | [removed: Rule] [added: [Rule] 13a-14(a)/15d-14(a) Certification of Chief Financial [removed: Officer] [added: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068218000005/crl1230201710-kxex312.htm)] | X | | | |

| 32.1 | [removed: Section] [added: [Section] 1350 Certification of the Chief Executive Officer and Chief Financial [removed: Officer] [added: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068218000005/crl1230201710-kxex321.htm)] | X | | | |

| By: | /s/ MICHAEL G. KNELL | Corporate Senior Vice President and | February 13, 2018 |

| | Michael G. Knell | Chief Accounting Officer | |

| By: | /s/ MARTIN MACKAY | Director | February 13, 2018 |

| | Martin Mackay | | |

| By: | /s/ JEAN-PAUL MANGEOLLE | Director | February 13, 2018 |

| | Jean-Paul Mangeolle | | |

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| 2.1 | [Agreement and Plan of Merger, dated as of February 12, 2018, by and among Charles River Laboratories International, Inc., Forest Acquisition Corporation, ACP Mountain Holdings, Inc. and Avista Capital Partners IV GP, LP](http://www.sec.gov/Archives/edgar/data/1100682/000095010318001926/dp86745_ex0201.htm) | | 8-K | February 13, 2018 | 2.1 |

| 2.2 | [Commitment Letter dated as of February 12, 2018 between Charles River Laboratories International, Inc. and JPMorgan Chase Bank, N.A.](http://www.sec.gov/Archives/edgar/data/1100682/000095010318001926/dp86745_ex0202.htm) | | 8-K | February 13, 2018 | 2.2 |

| 10.19* | [Employment Agreement by and Between James C. Foster and the Company dated February 12, 2018](http://www.sec.gov/Archives/edgar/data/1100682/000129993318000144/exhibit2.htm) | | 8-K | February 13, 2018 | 99.2 |

| 23.1 | [Consent of PricewaterhouseCoopers LLP](https://www.sec.gov/Archives/edgar/data/1100682/000110068218000005/crl1230201710-kxex231.htm) | X | | | |

| 23.1 | Consent of PricewaterhouseCoopers LLP | X | | | |