The occurrence of the U.S. dollar against other currenciesany one of these events could have had in the past, and may have in the future, a material adverse effect on our operating marginsbusiness, financial condition or result of operations or cause a significant decrease in our liquidity and profitability.impair our ability to pay amounts due on our indebtedness.

Economic, social and political conditions, laws, practices and local customs vary widely among the countries, particularly in emerging markets, in which we sell our products. Our operations outside the United Statesin emerging markets, particularly China, are subject to a number of heightened risks and potential costs, including lower profit margins, less stringent protection of intellectual property and economic, political and social uncertainty in countries in which we operate, especially in emerging markets.  These and other risks may have a material adverse effect on our operations in any particular country and on our business as a whole.uncertainty. For example, many emerging markets have currencies that fluctuate substantially. If currencies devalue and we cannot offset with price increases, our products may become less profitable. Inflation in emerging markets also can make our products less profitable and increase our exposure to credit risks. We have previously experienced currency fluctuations, unstable social and political conditions, inflation and volatile economic conditions in emerging markets, which have impacted our profitability in the pastemerging markets in several marketswhich we operate and we may experience such impacts in the future.

The current economicRegulatory clearance and financial crisis appearsapproval processes for our products are expensive, time-consuming and uncertain, and the failure to be affecting manyobtain and maintain required regulatory clearances and approvals could prevent us from commercializing our products.

Our businesses are subject to varying degrees of governmental regulation in the marketscountries in which we operate.  As aoperate, and the general trend is toward increasingly stringent regulation. The exercise of broad regulatory powers by the FDA continues to result there is a risk that consumers may reduce their expenditures on prescription drugs, over-the-counter healthcarein increases in the amounts of testing and documentation required for the commercialization of regulated products and a corresponding increase in the expense of product introduction. Similar trends are also evident in the EU and in other healthcare spending to help cope with hard economic times.  In addition, governments may come under increasing pressure to reduce healthcare expenditures as a result of lower revenue and increased demand for other government services during this financial crisis.  Both of these items could have a negative impact on our sales and profits.

The process of developing new products and obtaining necessary FDA clearance or approval, CE marking, or other regulatory marketing authorization is lengthy, expensive, and uncertain. Our potential products could take a significantly longer time than we expect to a specific approved manufacturing facility.  If we failgain marketing authorization or may never gain such marketing authorization. Regulatory authorities may require additional testing or clinical data to produce enoughsupport marketing authorization, delaying authorization and market entry of our products. Even if the FDA or another regulatory agency or notified body approves a product, atthe approval may limit the indicated uses for a facility,product, may otherwise limit our ability to promote, sell and distribute a product or if our manufacturing process at that facility is disrupted, wemay require post-

marketing studies or impose other post-marketing obligations. We may be unable to deliver thatobtain the necessary regulatory clearances or approvals for any product to our customers on a timely basis.  A failure to deliver products on a timely basis could leador at all. If a regulatory authority delays authorization of a potentially significant product, our market value and operating results may decline. Similarly, if we are unable to customer dissatisfaction and damage our reputation.  Significant delays in the deliveryobtain regulatory approval or CE marking of our products, we will not be able to market these products, which would result in a decrease in our sales.

We may be unable to successfully maintain the registrations, licenses, clearances or a delayother authorizations we have received or may receive in the deliveryfuture. We also routinely make minor modifications to our products, labeling, instructions for use, manufacturing process and packaging that may trigger a requirement to notify regulatory authorities or to update such registrations or authorizations. This may subsequently require us to manage multiple versions of a keyindividual products around the world, depending on the status of any re-registration approvals. Managing such multiple versions may require additional inventory in the form of "bridging stock", extensive redress operations and inventory increases that could exceed our manufacturing capacity or supply chain ability at the time. This could result in prolonged product alsoshortages that could negatively impact our sales, both in terms of any unavailable products and profitability.the potential loss of customers that opt for another supplier.

SomeThe manufacture of our products is highly regulated and complex.

The manufacture of our product portfolio is complex and heavily regulated by governmental health authorities around the world, including the FDA. Whether our products are manufactured at our own dedicated manufacturing facilities or assembled by third parties, under contract.  Business conditionswe must ensure that all manufacturing processes comply with current Good Manufacturing Practices, quality system requirements, and regulatory actionsother applicable regulations, as well as with our own high quality standards. In recent years, health authorities have substantially intensified their scrutiny of manufacturers' compliance with such requirements.

Any significant failure by us or our third-party suppliers to comply with these requirements or the health authorities' expectations may cause us to shut down our production facilities or production lines or we could be prevented from importing our products from one country to another. Moreover, if we fail to properly plan for manufacturing capacity, the complexity of our manufacturing process could lead to recalls of products assembled or manufactured by these companies, may result in delays in shipments of such products or may cause these contractorsa long lead time to abandon their contract manufacturing agreements.increase capacity. Any of these occurrencesevents could lead to product shortages, or to our being entirely unable to supply products to customers and consumers for an extended period of time. Such shortages or shutdowns have led to, and could continue to lead to, significant losses of sales revenue and to potential third-party litigation. In addition, health authorities have in some cases imposed significant penalties for such failures to comply with regulatory requirements. A failure to comply fully with regulatory requirements could also lead to a negative impact on salesdelay in the approval of new products to be manufactured at the impacted site.

We may be subject to penalties if we fail to comply with post-approval legal and profitability.

The research, development, testing, manufacturing, sale and marketing of our products are subject to extensive governmental regulation. Government regulation includes inspection of and controls over testing, manufacturing, safety and environmental controls, efficacy, labeling, advertising, marketing, promotion, record keeping, tracking, reporting, the sale and distribution of pharmaceutical products,distributing, import, export, samples, and electronic records and electronic signatures.  We

Among other requirements, we are also subjectrequired to government regulationcomply with respectapplicable adverse event and malfunction reporting requirements for our products. For example, for our medical device products, in the US, we are required to report to the prices we chargeFDA any incident in which one of our marketed devices may have caused or contributed to a death or serious injury or has malfunctioned and the rebates we offermalfunction of the device or pay to customers, including rebates paid to certain governmental entities.  Government regulation substantially increases the cost of developing, manufacturing and selling our products.

also present a risk of consumer class action or consumer protection litigation and competitor challenges. In the past, we have had to change or discontinue promotional materials because of regulatory agency requests, and we are exposed to that possibility in the futurefuture.

Failure to comply with statutes and also toregulations administered by the possibility of new civil monetary penalties that have been established for violative promotion of drug products to consumers.

If any of these items were to occur, it could result in unanticipated expenditures to address or defend such actions, could harm our reputation and FDA regulations.  In addition, certaincould adversely affect our business, financial condition and results of our products must comply with child-resistant packaging requirements under the Poison Prevention Packaging Act and Consumer Product Safety Commission regulations.operations.

We are subject to various global laws pertaining to healthcare fraud and abuse, including anti-kickback laws and physician self-referral laws. For example, the US federal healthcare program anti-kickback statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering, arranging for or recommending the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs. These US laws have been interpreted to apply to arrangements between medical device manufacturers, on the one hand, and prescribers, purchasers, formulary managers and other healthcare-related professionals, on the other hand. The US government may assert that a claim including items or services resulting from a violation of the Social Security Act, as amended, the Foreign Corrupt Practices Act, the False Claims Act, as

In recent years, the US government and several US states in the United States, including California, Connecticut, Maine, Massachusetts, Minnesota, Nevada, New Hampshire, New Mexico, Texas, Vermont and West Virginia, as well as the District of Columbia, have enacted legislation requiring pharmaceuticalmedical device companies to establish marketing compliance programs and file other periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their sales representatives, as well as prohibiting pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing.reports. Similar legislation is being considered in other states and at the federal level in the United States.US states. Many of these requirements are new and their breadth and application is uncertain, and most apply onlyavailable guidance is limited. We could face enforcement action, fines and other penalties and could receive adverse publicity, all of which could harm our business, if it is alleged that we have failed to drugs; however, certain legislation (e.g., California, Connecticut, Massachusetts, Nevadafully comply with such laws and Vermont)regulations. Similarly, if the physicians or other providers or entities that we do business with are found to have not complied with applicable laws, they may be subject to sanctions, which could also applies to devices.

Depending on the circumstances, failure to meet these applicable legal and regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing product approvals, private "qui tam" actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into supply contracts, including government contracts, any of which could have a material adverse effect on our business, financial condition.condition or results of operations.

Company—4.B. Business Overview—Government Regulation—Product Approval and Monitoring" the EU has made recent changes to its regulatory regime. In addition, several countries that did not have regulatory requirements for medical devices have established such requirements in recent years, and other countries have expanded, or plan to expand, their existing regulations. While harmonization of global regulations has been pursued, requirements continue to differ significantly among countries. Further, the FDA is also pursuing various efforts to modernize its regulation of devices, including potential changes to the 510(k) pathway such as limiting reliance on older predicate devices and establishing an alternative 510(k) pathway that permits reliance on objective performance criteria. We expect this global regulatory environment to continue to evolve, which could impact the cost of, the time needed to approve, and ultimately, our ability to maintain existing approvals or obtain future approvals for, our products.

We are subject to numerous national and local environmental, health and safety laws and regulations, including relating to the discharge of regulated materials into the environment, human health and safety, laboratory procedures and the generation, handling, use, storage, treatment, release and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these hazardous materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our generation, handling, use, storage, treatment, release or disposal of hazardous materials or wastes, we could be held liable for any resulting damages, and any liability could materially adversely affect our business, operating results or financial condition. Our insurance may not provide adequate coverage against potential liabilities. If we fail to comply with applicable environmental, health and safety laws and regulations, we may face significant administrative, civil or criminal fines, penalties or other sanctions. In addition, we may incur substantial costs to comply with current or future environmental, health and safety laws and regulations, which have tended to become more stringent over time, including any potential laws and regulations that may be implemented in the future to address global climate change concerns. Compliance with current or future environmental, health and safety laws and regulations may increase our costs or impair our research, development or production efforts.

In recent years, tax authorities around the world have increased their scrutiny of company tax filings, and have become more rigid in exercising any discretion they may have. As part of this, the Organization for Economic Co-operation and Development ("OECD") has proposed certain changes to the International tax standards that have resulted and will continue to result in local tax law changes under its Base Erosion and Profit Shifting ("BEPS") Action Plans to address issues of transparency, coherence and substance. Most recently, the OECD has released its plans for proposing further amendments to the international tax standards, including a new attribution of the right to tax corporate profits where customers are located and a mechanism ensuring that all corporate profits would be subject to governmental, regulatorya minimum taxation level.

We carry a significant amount of goodwill and other legal proceedingsintangible assets on our consolidated balance sheet, primarily due to the value of the Alcon brand name, but also intangible assets associated with our technologies, acquired research and development, currently marketed products, and marketing know-how. As a result, we may incur significant impairment charges if the fair value of the intangible assets and the groupings of cash generating units containing goodwill would be less than their carrying value on our consolidated balance sheet at any point in time.

Alcon brand name), acquired research projects not ready for use, and acquired development projects not yet ready for use are subject to impairment review at least annually. We review other long-lived assets for impairment when there is an indication that an impairment may have occurred.

For a significant negative effectdetailed discussion of how we determine whether an impairment has occurred, what factors could result in an impairment and the impact of impairment charges on our results of operations.operations, see "Note 3. Selected Accounting Policies—Goodwill and intangible assets—Impairment of goodwill, Alcon brand name and definite lived intangible assets" to our Consolidated Financial Statements included elsewhere in this Annual Report.

We have previously announced that we expect to incur costs of $500 million in connection with our separation from Novartis. We have also previously announced that we expect to incur costs of $300 million and realize savings of $200 to $225 million on an annualized run rate by 2023 in connection with our transformation program. While we believe that these estimates are obligatedreasonable under the circumstances, they are subject to complysignificant uncertainties, some of which are beyond our control. In addition, we may not be able to obtain the estimated cost savings and benefits that were initially anticipated in connection with our transformation program in a timely manner or at all. Should any of these estimates or underlying assumptions change or prove to have been incorrect, it could adversely affect our results of operations.

Increasingly, in addition to the lawsimportance of eachtheir financial performance, companies are being judged by their performance on a variety of environmental, social and governance ("ESG") matters, which are considered to contribute to the long-term sustainability of companies’ performance.

A variety of organizations measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized. In addition, investment in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of such ESG measures to their investment decisions. Topics taken into account in such assessments include, among others, the company’s efforts and impacts on climate change and human rights, ethics and compliance with law, and the role of the many countriescompany’s board of directors in which we operate, coveringsupervising various sustainability issues. In addition to the topics typically considered in such assessments, in the healthcare industry, issues of the public’s ability to access our products and solutions are of particular importance.

We actively manage a broad range of activities.  Despite our efforts, any failure to comply with law could lead to substantial liabilities that may not be covered by insurance, and could affectsuch ESG matters, taking into consideration their expected impact on the sustainability of our business and reputation.

Novartis will continue to provide support for certain of our key business functions until April 2021 pursuant to a Transitional Services Agreement and certain other agreements. Any failure or significant downtime in our own financial, administrative or other support systems or in the Novartis financial, administrative or other support systems during the transitional period in which Novartis provides us with support could negatively impact our results of operations or cash flows,prevent us from paying our suppliers and associates, executing business combinations and foreign currency transactions or performing administrative or other services on a timely basis, which could negatively affect our results of operations.

In particular, our day-to-day business operations rely on our information technology systems. For example, our production facilities utilize information technology to increase efficiencies and limit costs. Furthermore, a significant portion of the communications among our personnel, customers and suppliers take place on our information technology platforms. While the transfer of information technology systems from Novartis to us has commenced, we expect that the full transfer to be complex, time consuming and costly. There is also a risk of data loss in the process of transferring information technology. As a result of our reliance on information technology systems, the cost of such information technology integration and transfer and any such loss of key data could have an adverse effect on our business, financial condition and results of operations.

In the future, your percentage ownership in Alcon may be diluted because of equity issuances from acquisitions, capital markets transactions or otherwise, including equity awards that we may grant to our directors, officers and associates under our associate participation plans. These additional issuances will have a dilutive effect on our earnings per share, which could adversely affect the market price of our commonshares.

Our maintenance of two exchange listings could result in pricing differentials of our ordinary shares between the two exchanges.

Our shares trade on the NYSE in US dollars and on the SIX in Swiss francs, which may result in price differentials between the two exchanges for a variety of factors, including fluctuations in the US dollar/Swiss franc exchange rate and differences in trading schedules.

Although Alcon expects that it will recommend the payment of a regular cash dividend based upon the prior year’s core net income, we may not pay or declare dividends in the future. The declaration, timing, and amount of any dividends to be affectedpaid by speculation concerningAlcon will be subject to the potential outcomeapproval of shareholders at the relevant General Meeting of shareholders. The determination by the Board as to whether to recommend a dividend and the approval of any such proposed dividend by the shareholders will depend upon many factors, including our financial condition, earnings, corporate strategy, capital requirements of our operating subsidiaries, covenants, legal proceedings.requirements and other factors deemed relevant by the Board and shareholders.

We are a foreign private issuer and, as a result, we are not subject to governmental oversightUS proxy rules and associated civilare subject to Securities Exchange Act of 1934 ("Exchange Act") reporting obligations that, to some extent, are more lenient and criminal enforcementless frequent than those of a US domestic public company.

Furthermore, we prepare our financial statements under IFRS. There are, and may continue to be, certain significant differences between IFRS and US Generally Accepted Accounting Principles, or US GAAP, including but not limited to potentially significant differences related to the accounting and disclosure requirements relating to drugassociate benefits, nonfinancial assets, taxation and medical device advertising, promotionimpairment of long-lived assets. As a result, our financial information and marketing,reported earnings for historical or future periods could be significantly different if they were prepared in accordance with US GAAP, and such enforcement is evolvingyou may not be able to meaningfully compare our financial statements under IFRS with those companies that prepare financial statements under US GAAP.

We are a foreign private issuer and intensifying.  Other parties, includingtherefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to US domestic issuers. To maintain our status as a foreign private plaintiffs, also are commonly bringing suit against pharmaceuticalissuer, either (a) a majority of our shares must be directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors may not be United States citizens or residents, (ii) more than 50 percent of our assets cannot be located in the United States and medical device companies, alleging off-label marketing(iii) our business must be administered principally outside the United States.

If we were to lose our foreign private issuer status, we would be required to comply with the Exchange Act reporting and other violations.  Givenrequirements applicable to US domestic issuers, which are more detailed and extensive than the significant risks associated with such enforcement and suits, we have adopted enhanced compliance controls over our advertising, marketing and promotional activities, among other areas.  However, there remains substantial risk in this area given evolving enforcement theories and increasing claims brought by governmental and private parties.requirements for

Swiss law reserves for approval by shareholders certain corporate actions over which a board of directors would have authority in some other jurisdictions. For example, shareholders must approve the payment of dividends and cancellation of treasury shares. Swiss law also requires that our product candidates and could limitshareholders themselves resolve to, or make more burdensomeauthorize our abilityBoard of Directors to, commercialize any approved products.

We are incorporated in Switzerland and Swiss law governs our internal corporate affairs.

Switzerland and the United States do not have a treaty providing for reciprocal recognition and enforcement of judgments in civil and commercial matters. The rightsrecognition and enforcement of holdersa judgment of our common sharesthe courts of the United States in Switzerland are governed by Swiss corporate law and by our Articles of Association.  In particular, Swiss corporate law limits the ability of a shareholder to challenge resolutions or actions of our board of directors in court.  Shareholders generally are not permitted to file a suit to reverse a decision or action by directors but are permitted to seek damages for breaches of fiduciary duty.  Shareholder claims against a director for breach of fiduciary duty would, as a matter of Swiss law, have to be brought at our place of incorporationprinciples set forth in the Canton of Zug,Swiss Federal Act on Private International Law. This statute provides in principle that a judgment rendered by a non-Swiss court may be enforced in Switzerland or at the domicile of the involved director.  In addition, under Swiss law, any claims by shareholders against us must be brought exclusively at our place of incorporation.only if: