Item 1A. Risk Factors

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In our report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 25, 2022, we identify under Item 1A important factors which could affect our financial performance and could cause our actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Form 10-Q. See the section entitled Forward-Looking Statements located on page 46 of this Form 10-Q. We may also refer to such disclosure to identify factors that may cause results to differ from those expressed in other forward-looking statements made in oral presentations, including telephone conferences and/or webcasts open to the public.

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The discussion below provides updates and additions to the risk factors and should be read together with the full list of risk factors set forth in the Form 10-K.

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Our significant non-U.S. operations expose us to global economic, political and legal risks that could impact our profitability.

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We have significant operations outside the United States, including joint ventures and other alliances. We conduct business in approximately 170 countries and, in 2021, approximately 48% of our net sales originated outside the United States. There are inherent risks in our international operations, including:

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	●	exchange controls and currency restrictions;

	●	currency fluctuations and devaluations;

	●	tariffs and trade barriers;

	●	export duties and quotas;

	●	changes in the availability and pricing of raw materials, energy and utilities;

	●	changes in local economic conditions;

	●	changes in laws and regulations, including the imposition of economic or trade sanctions affecting international commercial transactions;

	●	impact from Brexit and the possibility of similar events in other EU member states;

	●	difficulties in managing international operations and the burden of complying with international and foreign laws;

	●	requirements to include local ownership or management in our business;

	●	economic and business objectives that differ from those of our joint venture partners;

	●	exposure to possible expropriation, nationalization or other government actions;

	●	restrictions on our ability to repatriate dividends from our subsidiaries;

	●	unsettled political conditions, military action, civil unrest, acts of terrorism, force majeure, war or other armed conflict; and

	●	countries whose governments have been hostile to U.S.-based businesses.

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In light of Russia’s invasion of Ukraine and the United States’ and other countries’ sanctions against Russia, we announced in April 2022 that we will focus our Russian business on operations that are essential to life, providing minimal support for our healthcare, life sciences, food and beverage and certain water businesses. We may further narrow our presence in Russia depending on developments in the conflict or otherwise. Our Russian operations represented approximately 1% of our 2021 annual sales. In the first quarter of 2022, we recorded pre-tax charges of $18.0 million related to recoverability risk of certain assets in both Russia and Ukraine. Depending on

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developments, we may incur further charges relating to our Russia and Ukraine businesses. The conflict in Ukraine may escalate and/or expand in scope and the broader consequences of this conflict, which have included and/or may in the future include sanctions, embargoes, regional instability and geopolitical shifts; potential retaliatory action by the Russian government against companies, including us, such as nationalization of foreign businesses in Russia; and increased tensions between the United States and countries in which we operate cannot be predicted, nor can we predict the conflict’s impact on the global economy and on our business and financial results. The Russia and Ukraine conflict may also heighten many other risks disclosed in our report on Form 10-K, any of which could materially and adversely affect our business and financial results. Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including increased inflation, constraints on the availability of commodities, supply chain disruption and decreased business spending; disruptions to our or our business partners’ global technology infrastructure, including through cyber-attack or cyber-intrusion; adverse changes in international trade policies and relations; claims, litigation and regulatory enforcement; our ability to implement and execute our business strategy; terrorist activities; our exposure to foreign currency fluctuations; reputational risk; and constraints, volatility, or disruption in the capital markets.

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Additionally, changes in U.S. or foreign government policy on international trade, including the imposition or continuation of tariffs, could materially and adversely affect our business. In 2018, the U.S. imposed tariffs on certain imports from China and other countries, resulting in retaliatory tariffs by China and other countries. While the U.S. and China signed a Phase One trade agreement in January 2020, which included the suspension and rollback of tariffs, the U.S. Senate subsequently passed legislation in 2021 aimed at countering China’s technical ambitions and similar legislation was introduced in the House in 2022. Any new tariffs imposed by the U.S., China or other countries or any additional retaliatory measures by any of these countries, could increase our costs, reduce our sales and earnings or otherwise have an adverse effect on our operations.

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Further, our operations outside the United States require us to comply with a number of United States and non-U.S. laws and regulations, including anti-corruption laws such as the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act, as well as U.S. and non-U.S. economic sanctions regulations. We have internal policies and procedures relating to such laws and regulations; however, there is risk that such policies and procedures will not always protect us from the misconduct or reckless acts of employees or representatives, particularly in the case of recently acquired operations that may not have significant training in applicable compliance policies and procedures. Violations of such laws and regulations could result in disruptive investigations, significant fines and sanctions, which could have a material adverse effect on our consolidated results of operations, financial position or cash flows.

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Also, because of uncertainties regarding the interpretation and application of laws and regulations and the enforceability of intellectual property and contract rights, we face risks in some countries that our intellectual property rights and contract rights would not be enforced by local governments. We are also periodically faced with the risk of economic uncertainty, which has impacted our business in some countries. Other risks in international business also include difficulties in staffing and managing local operations, including managing credit risk to local customers and distributors.

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Our overall success as a global business depends, in part, upon our ability to succeed in differing economic, social, legal and political conditions. We may not continue to succeed in developing and implementing policies and strategies that are effective in each location where we do business, which could have a material adverse effect on our consolidated results of operations, financial position or cash flows.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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​	​	​	​	​	​		​	​	Number of shares	​	​	Maximum number of
​	​	Total	​	​	​		​	​	purchased as part	​	​	shares that may
​	​	number of	​	​	Average price		​	​	of publicly	​	​	yet be purchased
​	​	shares	​	​	paid per		​	​	announced plans	​	​	under the plans
Period	​	purchased	(1)​	​	share		(2)​	​	or programs	(3)​	​	or programs	(3)​
January 1-31, 2022		188,500	​	​	$	192.5547	​	​	188,500	​		5,661,687	​
February 1-28, 2022		705,649	​	​	​	181.9776	​	​	621,900	​		5,039,787	​
March 1-31, 2022		652,600	​	​	​	172.2329	​	​	652,600	​		4,387,187	​
Total		1,546,749	​		$	179.1552	​		1,463,000	​		4,387,187	​

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(1)	Includes 83,749 shares reacquired from employees and/or directors as swaps for the cost of stock options, or shares surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.

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(2)	The average price paid per share includes brokerage commissions associated with publicly announced plan purchases plus the value of such other reacquired shares.

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(3)	As announced on February 24, 2015, our Board of Directors authorized the repurchase of up to 20,000,000 shares. Subject to market conditions, we expect to repurchase all shares under the open authorizations, for which no expiration date has been established, in open market or privately negotiated transactions, including pursuant to Rule 10b5-1.

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Item 3. Defaults Upon Senior Securities

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Not applicable.

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Item 4. Mine Safety Disclosures

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Not applicable.

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