SECURITIES
AND EXCHANGE COMMISSION
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þ
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ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Pennsylvania
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23-1210010
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer Identification Number)
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101
Gordon Drive, PO Box 645,
Lionville,
PA
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19341-0645
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(Address
of principal executive offices)
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(Zip
Code)
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Title
of each class
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Name
of each exchange on which registered
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Common
Stock, par value $.25 per share
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New
York Stock Exchange
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Large
accelerated filer
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þ
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Accelerated
filer
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o
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Non-accelerated
filer
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o
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(Do
not check if a smaller reporting company)
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Smaller
reporting company
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o
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Document
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Parts Into Which
Incorporated
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Proxy
Statement for the Annual Meeting of Shareholders to be held May 5,
2009
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Part
III
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Page
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PART
I
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3
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3
3
3
4
6
6
7
7
7
7
7
8
8
8
9
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9
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13
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14
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15
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15
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15
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PART
II
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17
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19
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21
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39
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41
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74
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74
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74
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PART
III
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75
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75
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75
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76
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76
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PART
IV
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77
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·
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Elastomeric
stoppers and discs, which serve as primary closures for pharmaceutical
vials.
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·
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Secondary
closures for pharmaceutical vials called Flip-Off® aluminum seals,
consisting of an aluminum seal and removable plastic button, and in some
applications, just an aluminum
seal.
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·
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Elastomeric
plungers, needle shields and tip caps to fit most standard prefilled
syringes and combination seals for dental cartridges and pen delivery
systems.
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·
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Pharmaceutical
containers, closures and
dispensers.
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·
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Enhanced
component processing: VeriSure™, Westar® RS (ready-to-sterilize) and
Westar® RU (ready-to-use).
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·
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Elastomeric
components for blood collection systems and flashback bulbs, injection
sites and sleeve stoppers for intravenous (IV) dispensing
systems.
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·
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Elastomer
and co-molded elastomer/plastic components for infusion and IV
systems.
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·
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Non-filled
syringe components.
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·
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Dropper
bulbs for applications such as eye, ear and nasal drops, diagnostic
products and dispensing systems.
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·
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Sterile
devices for the reconstitution, transfer and administration of drug
products, including patented products such as the Mixject™, Mix2Vial™ and
Vial Adapters.
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·
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Extractables
and leachables testing, package/container testing, method
development/validation, stability testing, process development and problem
resolution.
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·
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make
it difficult for us to obtain any necessary future financing for working
capital, capital expenditures, debt service requirements or other
purposes;
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·
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limit
our flexibility in planning for, or reacting to changes in, our business;
and
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·
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make
our financial results and share value more vulnerable in the event of a
downturn in our business.
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Pharmaceutical
Systems
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Manufacturing:
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Contract
Analytical Laboratory:
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North
American Operations
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North
American Operations
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United
States
Clearwater,
FL
(1)
Jersey
Shore, PA
Kearney,
NE
Kinston,
NC
Lititz,
PA
St.
Petersburg, FL
South
American Operations
Brazil
Sao
Paulo
European
Operations
Denmark
Horsens
England
St.
Austell
France
Le
Nouvion
Germany
Eschweiler
(1)
Stolberg
Serbia
Kovin
Asia
Pacific Operations
Singapore
Jurong
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United
States
Lionville,
PA
(2)
Maumee,
OH
Mold-and-Die
Tool Shops:
North
American Operations
United
States
Upper
Darby, PA
(2)
European
Operations
England
Bodmin
(2)
Tech
Group
Manufacturing:
North
American Operations
United
States
Frankfort,
IN
(2)
Grand
Rapids, MI
Montgomery,
PA
(2)
Phoenix,
AZ
(2)
Scottsdale,
AZ
(2)
(3)
Tempe,
AZ
(2)
Williamsport,
PA
Puerto
Rico
Cayey
European
Operations
Ireland
Dublin
(2)
(3)
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Name
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Age
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Position
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Joseph
E. Abbott
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56
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Vice
President and Corporate Controller
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Michael
A. Anderson
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53
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Vice
President and Treasurer
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Fabio
de Sampaio Dorio Filho
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45
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President,
Europe and Asia Pacific, Pharmaceutical Systems
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Steven
A. Ellers
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58
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President
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William
J. Federici
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49
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Vice
President and Chief Financial Officer
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John
R. Gailey III
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54
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Vice
President, General Counsel and Secretary
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Robert
S. Hargesheimer
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51
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President,
Tech Group
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Richard
D. Luzzi
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57
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Vice
President, Human Resources
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Donald
A. McMillan
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50
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President,
Americas, Pharmaceutical Systems
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Donald
E. Morel, Jr., Ph.D.
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51
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Chairman
of the Board and Chief Executive Officer
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Matthew
T. Mullarkey
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46
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Chief
Operating Officer
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First
Quarter
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Second
Quarter
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Third
Quarter
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Fourth
Quarter
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Year
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||||||||||||||||||||||||||||||||||||
High
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Low
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High
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Low
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High
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Low
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High
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Low
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High
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Low
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|||||||||||||||||||||||||||||||
2008
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45.47 | 36.96 | 48.92 | 43.04 | 52.00 | 42.26 | 49.60 | 29.52 | 52.00 | 29.52 | ||||||||||||||||||||||||||||||
2007
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52.25 | 41.31 | 54.83 | 45.23 | 51.98 | 37.87 | 43.85 | 35.20 | 54.83 | 35.20 |
Period
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Total
number of shares purchased
(1)(2)
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Average
price paid per share
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Total
number of shares purchased as part of publicly announced plans or
programs
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Maximum
number of shares that may yet be purchased under the plans or
programs
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||||||||||||
October
1 – 31, 2008
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343 | $ | 42.13 | - | - | |||||||||||
November
1 – 30, 2008
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758 | 37.49 | - | - | ||||||||||||
December
1 – 31, 2008
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6,292 | 37.72 | - | - | ||||||||||||
Total
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7,393 | $ | 37.90 | - | - |
(in
millions, except per share data)
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2008
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2007
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2006
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2005
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2004
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|||||||||||||||
SUMMARY
OF OPERATIONS
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Net
sales
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$ | 1,051.1 | $ | 1,020.1 | $ | 913.3 | $ | 699.7 | $ | 541.6 | ||||||||||
Operating
profit
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124.1 | 94.9 | 101.0 | 73.4 | 49.4 | |||||||||||||||
Income
from continuing operations
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86.0 | 71.2 | 61.5 | 46.0 | 34.3 | |||||||||||||||
(Loss)
income from discontinued operations
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- | (0.5 | ) | 5.6 | 0.4 | (14.1 | ) | |||||||||||||
Net
income
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$ | 86.0 | $ | 70.7 | $ | 67.1 | $ | 46.4 | $ | 20.2 | ||||||||||
Income
per share from continuing operations:
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||||||||||||||||||||
Basic
(1)
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$ | 2.65 | $ | 2.18 | $ | 1.91 | $ | 1.48 | $ | 1.14 | ||||||||||
Assuming
dilution (2)
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2.50 | 2.06 | 1.83 | 1.41 | 1.11 | |||||||||||||||
(Loss)
income per share from discontinued operations:
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||||||||||||||||||||
Basic
(1)
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- | (.02 | ) | .18 | .01 | (.47 | ) | |||||||||||||
Assuming
dilution (2)
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- | (.01 | ) | .17 | .01 | (.46 | ) | |||||||||||||
Average
common shares outstanding
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32.4 | 32.7 | 32.2 | 31.1 | 30.0 | |||||||||||||||
Average
shares assuming dilution
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36.1 | 36.2 | 33.6 | 32.5 | 30.8 | |||||||||||||||
Dividends
declared per common share
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$ | 0.58 | $ | 0.54 | $ | 0.50 | $ | 0.46 | $ | 0.43 | ||||||||||
YEAR-END
FINANCIAL POSITION
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||||||||||||||||||||
Cash
and cash equivalents
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$ | 87.2 | $ | 108.4 | $ | 47.1 | $ | 48.8 | $ | 68.8 | ||||||||||
Working
capital
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207.1 | 229.4 | 124.8 | 118.8 | 115.7 | |||||||||||||||
Total
assets
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1,168.7 | 1,185.6 | 918.2 | 833.5 | 657.8 | |||||||||||||||
Total
invested capital:
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||||||||||||||||||||
Total
debt
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386.0 | 395.1 | 236.3 | 281.0 | 160.8 | |||||||||||||||
Minority
interests
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- | 5.6 | 4.8 | 4.1 | - | |||||||||||||||
Shareholders’
equity
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487.1 | 485.3 | 414.5 | 339.9 | 306.8 | |||||||||||||||
Total
invested capital
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$ | 873.1 | $ | 886.0 | $ | 655.6 | $ | 625.0 | $ | 467.6 | ||||||||||
PERFORMANCE
MEASUREMENTS (3)
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||||||||||||||||||||
Gross
margin (a)
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28.8 | % | 28.6 | % | 29.0 | % | 28.1 | % | 29.5 | % | ||||||||||
Operating
profitability (b)
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11.8 | % | 9.3 | % | 11.1 | % | 10.5 | % | 9.1 | % | ||||||||||
Effective
tax rate
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21.6 | % | 19.9 | % | 29.1 | % | 29.0 | % | 27.2 | % | ||||||||||
Return
on invested capital (c)
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11.1 | % | 9.9 | % | 11.2 | % | 9.5 | % | 7.9 | % | ||||||||||
Net
debt-to-total invested capital (d)
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38.0 | % | 36.9 | % | 31.1 | % | 40.3 | % | 23.1 | % | ||||||||||
Research
and development expenses
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$ | 18.7 | $ | 16.1 | $ | 11.1 | $ | 7.9 | $ | 6.8 | ||||||||||
Operating
cash flow
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135.0 | 129.2 | 139.4 | 85.6 | 81.0 | |||||||||||||||
Stock
price range
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$ | 52.00-29.52 | $ | 54.83-35.20 | $ | 52.77-24.83 | $ | 29.99-18.58 | $ | 25.49-16.38 |
§
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Income
from continuing operations in 2008 includes a net pre-tax gain on contract
settlement proceeds of $4.2 million, restructuring and related charges of
$3.0 million and discrete income tax benefits of $3.5 million.
Collectively, these items totaled to a $1.2 million pre-tax benefit ($4.3
million after tax).
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§
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On
December 29, 2008, we purchased the remaining 10% minority ownership in
our Medimop subsidiary for $8.5 million, which resulted in a $5.4 million
reduction to the minority interest
balance.
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§
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2007
income from continuing operations includes the impact of the restructuring
charges at our Tech Group segment, an impairment loss on our Nektar
contract intangible asset for the Exubera device and our provisions for
Brazilian tax issues, totaling a $26.4 million pre-tax charge ($19.4
million, after tax). Our 2007 results also include the recognition of
discrete tax benefits totaling $8.2
million.
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§
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During
2007, we issued $161.5 million of convertible junior subordinated
debentures carrying a 4% coupon rate and due on March 15, 2047, resulting
in net cash proceeds of $156.3 million, after payment of underwriting and
other costs of $5.2 million. These debentures are convertible
into our common stock at any time at an initial conversion price of $56.07
per share. We have and may use the proceeds for general corporate
purposes, which include capital expenditures, working capital, possible
acquisitions of other businesses, technologies or products, repaying debt,
and repurchasing our common stock.
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§
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2006
income from continuing operations includes a pre-tax loss on
extinguishment of debt of $5.9 million ($4.1 million, net of tax) and a
gain on a tax refund of $0.6
million.
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§
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On
December 31, 2006, we adopted Statement of Financial Accounting Standard
No. 158, “Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and
132(R)” (“SFAS 158”), which requires the recognition of the overfunded or
underfunded status of a defined benefit postretirement plan as measured by
the difference between the fair value of plan assets and the benefit
obligation. The adoption of SFAS 158 resulted in a reduction of
shareholder’s equity of $19.7 million ($32.0 million pre-tax, less a $12.3
million deferred tax benefit) at December 31,
2006.
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§
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During
2005, we acquired the businesses of Monarch, TGI and Medimop. Our
financial statements include the results of acquired businesses for
periods subsequent to their acquisition
date.
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§
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2005
income from continuing operations includes incremental income tax expense
of $1.5 million associated with the repatriation of foreign sourced income
under the American Jobs Creation Act of 2004 and a reduction in an
estimate for restructuring costs which increased income from continuing
operations by $1.3 million.
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§
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On January
1, 2005 we adopted Statement of Financial Accounting Standard 123
“Share-Based Payment – Revised 2004” (“SFAS 123(R)”) which required the
recognition of compensation expense connected with our stock option and
employee stock purchase plan programs that did not require expense
recognition in 2004 and prior periods under previous accounting standards.
The application of SFAS 123 to the results of 2004 and 2003 would have
resulted in additional net of tax costs of $1.2 million and $1.5 million,
respectively.
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§
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2004
income from continuing operations includes incremental manufacturing costs
of $7.9 million (net of tax) in connection with the interim production
processes that were put in place following the Kinston accident, along
with Kinston related legal expenses of $1.2 million (net of tax);
restructuring charges related to the closure of a U.K. manufacturing plant
of $1.0 million; an affiliate real estate gain of $0.6 million; and $2.1
million of favorable tax adjustments resulting from a change in French tax
law extending the life of net operating loss carryforwards, the use of
U.S. foreign tax credits that were previously expected to expire
unutilized and the favorable resolution of several prior year tax
issues.
|
·
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Net
sales were $1,051 million, an increase of $31 million compared to the
prior year, principally resulting from improved pricing and favorable
foreign currency exchange rates. Net sales grew despite regulatory and
insurance reimbursement related constraints and the
discontinuation of certain products, which resulted in lost sales of
$63 million for both segments
combined.
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·
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Gross
profit was $11 million higher than the prior year, and gross margin
improved slightly to 28.8% due to improved productivity, partially offset
by higher raw materials and energy costs, and the impact of the lost sales
items which totaled $25 million.
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·
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Operating
profit was $29 million higher than the prior year, including certain items
that are not indicative of ongoing operations. Included in 2008 operating
profit was a net gain of $1 million resulting from contract settlement
proceeds less costs incurred and the Tech Group restructuring and related
costs. Operating profit in 2007 included charges totaling $26 million
which were not allocated to our reporting segments. These items are
addressed in more detail within the Results of Operations section
below.
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·
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Net
income from continuing operations for 2008 was $86 million, or $2.50 per
diluted share compared to $71 million, or $2.06 per diluted share, in the
prior year.
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·
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Our
financial position remains very strong, with net cash flow from operations
totaling $135 million in 2008, increasing 4.5% compared to the prior
year.
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·
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At
December 31, 2008 our total debt was $386 million compared with $395
million in the prior year, and our net debt-to-total invested capital was
38.0%.
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Year
Ended December 31,
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%
Change
|
|||||||||||||||||||
($
in millions)
|
2008
|
2007
|
2006
|
08/07 | 07/06 | |||||||||||||||
Pharmaceutical
Systems
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$ | 792.1 | $ | 741.8 | $ | 644.1 | 6.8 | % | 15.2 | % | ||||||||||
Tech
Group
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270.5 | 289.2 | 279.2 | (6.5 | )% | 3.6 | % | |||||||||||||
Intersegment
sales
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(11.5 | ) | (10.9 | ) | (10.0 | ) | - | - | ||||||||||||
Total
net sales
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$ | 1,051.1 | $ | 1,020.1 | $ | 913.3 | 3.0 | % | 11.7 | % |
Year
Ended December 31,
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%
Change
|
|||||||||||||||||||
($
in millions)
|
2008
|
2007
|
2006
|
08/07 | 07/06 | |||||||||||||||
Pharmaceutical
Systems:
|
||||||||||||||||||||
Gross
Profit
|
$ | 265.7 | $ | 256.3 | $ | 224.5 | 3.7 | % | 14.2 | % | ||||||||||
Gross
Margin
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33.5 | % | 34.5 | % | 34.8 | % | ||||||||||||||
Tech
Group:
|
||||||||||||||||||||
Gross
Profit
|
$ | 36.9 | $ | 35.5 | $ | 40.3 | 3.9 | % | (11.9 | )% | ||||||||||
Gross
Margin
|
13.7 | % | 12.3 | % | 14.4 | % | ||||||||||||||
Consolidated
gross profit
|
$ | 302.6 | $ | 291.8 | $ | 264.8 | 3.7 | % | 10.2 | % | ||||||||||
Consolidated
gross margin
|
28.8 | % | 28.6 | % | 29.0 | % |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Pharmaceutical
Systems
|
$ | 17.2 | $ | 14.0 | $ | 8.7 | ||||||
Tech
Group
|
1.5 | 2.1 | 2.4 | |||||||||
Total
R&D costs
|
$ | 18.7 | $ | 16.1 | $ | 11.1 |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Pharmaceutical
Systems SG&A costs
|
$ | 110.1 | $ | 98.3 | $ | 81.8 | ||||||
Pharmaceutical
Systems SG&A as a % of segment net sales
|
13.9 | % | 13.3 | % | 12.7 | % | ||||||
Tech
Group SG&A costs
|
$ | 17.9 | $ | 22.0 | $ | 19.3 | ||||||
Tech
Group SG&A as a % of segment net sales
|
6.6 | % | 7.6 | % | 6.9 | % | ||||||
Corporate
costs:
|
||||||||||||
General
corporate costs
|
$ | 18.9 | $ | 21.0 | $ | 23.8 | ||||||
Stock-based
compensation expense
|
6.4 | 5.1 | 14.5 | |||||||||
U.S.
pension plan expense
|
6.0 | 6.1 | 8.4 | |||||||||
Total
SG&A costs
|
$ | 159.3 | $ | 152.5 | $ | 147.8 | ||||||
Total
SG&A as a % of total net sales
|
15.2 | % | 14.9 | % | 16.2 | % |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Pharmaceutical
Systems
|
$ | 1.7 | $ | 2.1 | $ | 4.3 | ||||||
Tech
Group
|
(0.3 | ) | (0.2 | ) | 0.5 | |||||||
Corporate
|
0.3 | - | - | |||||||||
Unallocated
charges (credits):
|
||||||||||||
Impairment
charge, contract settlement and related gain, net
|
(4.2 | ) | 12.9 | - | ||||||||
Restructuring
and related charges
|
3.0 | 3.4 | - | |||||||||
Brazilian
excise tax and other charges
|
- | 10.1 | 0.1 | |||||||||
Total
unallocated charges (credits)
|
(1.2 | ) | 26.4 | 0.1 | ||||||||
Total
restructuring, impairment and other charges
|
$ | 0.5 | $ | 28.3 | $ | 4.9 |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Pharmaceutical
Systems
|
$ | 136.7 | $ | 141.9 | $ | 129.7 | ||||||
Tech
Group
|
17.8 | 11.6 | 18.1 | |||||||||
Corporate
and other unallocated costs:
|
||||||||||||
General
corporate costs
|
(19.2 | ) | (21.0 | ) | (23.9 | ) | ||||||
Stock-based
compensation costs
|
(6.4 | ) | (5.1 | ) | (14.5 | ) | ||||||
U.S.
pension expenses
|
(6.0 | ) | (6.1 | ) | (8.4 | ) | ||||||
Other
unallocated items
|
1.2 | (26.4 | ) | - | ||||||||
Consolidated
Operating Profit
|
$ | 124.1 | $ | 94.9 | $ | 101.0 |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Interest
expense
|
$ | 18.6 | $ | 16.4 | $ | 13.4 | ||||||
Capitalized
interest
|
(2.6 | ) | (1.9 | ) | (0.7 | ) | ||||||
Interest
income
|
(1.4 | ) | (6.0 | ) | (2.1 | ) | ||||||
Interest
expense, net
|
$ | 14.6 | $ | 8.5 | $ | 10.6 |
·
|
A
2008 agreement with the Republic of Singapore reduced our income tax rate
in that country for a period of 10 years, on a retroactive basis back to
July 2007, resulting in a $1.0 million tax
benefit.
|
·
|
A
2008 United Kingdom tax law change effectively eliminated a portion of our
capital allowance carryforwards, resulting in a $1.2 million increase in
our tax provision.
|
·
|
In
2008, we recognized a $3.4 million net tax provision benefit resulting
from the expiration of open audit years in various tax jurisdictions, and
$0.3 million in other discrete benefits including reversals of U.S. state
valuation allowances and provision adjustments for returns filed in
2008.
|
·
|
In
2007, we recognized a $3.2 million provision benefit related to tax
credits originally generated and fully reserved in previous
periods.
|
·
|
In
2007, we recognized a $3.7 million provision benefit principally resulting
from the revision of tax planning strategies and the completion of related
documentation supporting prior year R&D credits, and a $1.3 million
tax benefit due to the closure of certain U.S. federal and state tax audit
years.
|
·
|
2006
included a net $0.7 million favorable provision adjustment resulting from
the closure of the 2002 U.S. federal tax audit
year.
|
·
|
In
2006, we recognized a $0.4 million provision benefit from a tax refund
associated with the disposition of our former plastic molding facility in
Puerto Rico.
|
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Net
cash provided by operating activities
|
$ | 135.0 | $ | 129.2 | $ | 139.4 | ||||||
Net
cash used in investing activities
|
$ | (128.2 | ) | $ | (155.9 | ) | $ | (89.9 | ) | |||
Net
cash provided by (used in) financing activities
|
$ | (20.9 | ) | $ | 84.6 | $ | (60.2 | ) |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Cash
and cash equivalents
|
$ | 87.2 | $ | 108.4 | $ | 47.1 | ||||||
Working
capital
|
$ | 207.1 | $ | 229.4 | $ | 124.8 | ||||||
Current
ratio
|
2.3
to 1
|
2.3
to 1
|
1.8
to 1
|
|||||||||
Total
debt
|
$ | 386.0 | $ | 395.1 | $ | 236.3 | ||||||
Net
debt-to-total invested capital
|
38.0 | % | 36.9 | % | 31.1 | % |
Payments
Due By Period
|
||||||||||||||||||||
($
in millions)
|
Less
than 1 year
|
1
to 3 years
|
3
to 5 years
|
More
than 5 years
|
Total
|
|||||||||||||||
Purchase
obligations
|
$ | 12.6 | $ | 0.2 | $ | - | $ | - | $ | 12.8 | ||||||||||
Notes
payable and long-term debt
|
3.9 | 30.2 | 79.2 | 272.7 | 386.0 | |||||||||||||||
Interest
on long-term debt and interest rate swaps
(1)
|
16.2 | 31.6 | 26.2 | 224.9 | 298.9 | |||||||||||||||
Operating
lease obligations
|
11.2 | 18.6 | 11.3 | 20.2 | 61.3 | |||||||||||||||
Pensions/other
post-retirement obligations
|
13.1 | - | - | - | 13.1 | |||||||||||||||
Total
contractual obligations
|
$ | 57.0 | $ | 80.6 | $ | 116.7 | $ | 517.8 | $ | 772.1 |
(1)
|
For
fixed-rate long-term debt, interest was based on principal amounts and
fixed coupon rates at year end. Future interest payments on variable-rate
debt were calculated using principal amounts and the applicable ending
interest rate at year end. Interest on fixed-rate derivative instruments
was based on notional amounts and fixed interest rates contractually
obligated at year end.
|
($
in millions)
|
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
Carrying
Value
|
Fair
Value
|
||||||||||||||||||||||||
Current
Debt and Capital Leases:
|
||||||||||||||||||||||||||||||||
U.S.
dollar denominated
|
$ | 3.5 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 3.5 | $ | 3.5 | ||||||||||||||||
Average
interest rate – fixed
|
2.4 | % | - | - | - | - | - | |||||||||||||||||||||||||
Euro
denominated
|
$ | 0.4 | - | - | - | - | - | $ | 0.4 | $ | 0.4 | |||||||||||||||||||||
Average
interest rate – fixed
|
5.4 | % | - | - | - | - | - | |||||||||||||||||||||||||
Long-Term
Debt and Capital Leases:
|
||||||||||||||||||||||||||||||||
U.S.
dollar denominated (1)
|
- | - | - | $ | 50.0 | - | $ | 25.0 | $ | 75.0 | $ | 62.1 | ||||||||||||||||||||
Average
interest rate – variable
|
- | - | - | 4.3 | % | - | 4.4 | % | ||||||||||||||||||||||||
U.S.
dollar denominated
|
- | - | - | - | - | $ | 161.5 | $ | 161.5 | $ | 118.5 | |||||||||||||||||||||
Average
interest rate – fixed
|
- | - | - | - | - | 4.0 | % | |||||||||||||||||||||||||
Euro
denominated
|
- | - | $ | 0.3 | $ | 0.5 | $ | 28.7 | $ | 86.2 | $ | 115.7 | $ | 105.9 | ||||||||||||||||||
Average
interest rate – fixed
|
- | - | 5.5 | % | 5.3 | % | 4.2 | % | 4.4 | % | ||||||||||||||||||||||
Yen
denominated
|
- | - | $ | 29.9 | - | - | - | $ | 29.9 | $ | 28.6 | |||||||||||||||||||||
Average
interest rate – variable
|
- | - | 1.7 | % | - | - | - |
(in
millions, except per share data)
|
2008
|
2007
|
2006
|
|||||||||
Net
sales
|
$ | 1,051.1 | $ | 1,020.1 | $ | 913.3 | ||||||
Cost
of goods and services sold
|
748.5 | 728.3 | 648.5 | |||||||||
Gross
profit
|
302.6 | 291.8 | 264.8 | |||||||||
Research
and development
|
18.7 | 16.1 | 11.1 | |||||||||
Selling,
general and administrative expenses
|
159.3 | 152.5 | 147.8 | |||||||||
Restructuring
and other items
|
0.5 | 28.3 | 4.9 | |||||||||
Operating
profit
|
124.1 | 94.9 | 101.0 | |||||||||
Loss
on debt extinguishment
|
- | - | 5.9 | |||||||||
Interest
expense
|
16.0 | 14.5 | 12.7 | |||||||||
Interest
income
|
(1.4 | ) | (6.0 | ) | (2.1 | ) | ||||||
Income
before income taxes and minority interests
|
109.5 | 86.4 | 84.5 | |||||||||
Income
tax expense
|
23.7 | 17.2 | 24.6 | |||||||||
Minority
interests
|
0.6 | 0.5 | 0.3 | |||||||||
Income
from consolidated operations
|
85.2 | 68.7 | 59.6 | |||||||||
Equity
in net income of affiliated companies
|
0.8 | 2.5 | 1.9 | |||||||||
Income
from continuing operations
|
86.0 | 71.2 | 61.5 | |||||||||
(Loss)
income from discontinued operations, net of tax
|
- | (0.5 | ) | 5.6 | ||||||||
Net
income
|
$ | 86.0 | $ | 70.7 | $ | 67.1 | ||||||
Net
income per share:
|
||||||||||||
Basic:
|
||||||||||||
Continuing
operations
|
$ | 2.65 | $ | 2.18 | $ | 1.91 | ||||||
Discontinued
operations
|
- | (0.02 | ) | .18 | ||||||||
$ | 2.65 | $ | 2.16 | $ | 2.09 | |||||||
Assuming
dilution:
|
||||||||||||
Continuing
operations
|
$ | 2.50 | $ | 2.06 | $ | 1.83 | ||||||
Discontinued
operations
|
- | (0.01 | ) | .17 | ||||||||
$ | 2.50 | $ | 2.05 | $ | 2.00 | |||||||
Average
common shares outstanding
|
32.4 | 32.7 | 32.2 | |||||||||
Average
shares assuming dilution
|
36.1 | 36.2 | 33.6 |
(in
millions)
|
2008
|
2007
|
2006
|
|||||||||
Net
income
|
$ | 86.0 | $ | 70.7 | $ | 67.1 | ||||||
Other
comprehensive (loss) income, net of tax (tax amounts shown below for 2008,
2007, 2006, respectively):
|
||||||||||||
Foreign
currency translation adjustments
|
(37.5 | ) | 19.9 | 20.5 | ||||||||
Minimum
pension liability adjustments
|
- | - | (0.1 | ) | ||||||||
Defined
benefit pension and other postretirement plans:
|
||||||||||||
Prior
service cost arising during period, net of tax of $0, $(0.7) and
$0
|
- | (1.2 | ) | - | ||||||||
Net
actuarial (loss) gain arising during period, net of tax of $(21.6), $3.4
and $0
|
(34.9 | ) | 6.4 | - | ||||||||
Less:
amortization of actuarial loss, net of tax of $0.6, $1.0 and
$0
|
1.0 | 1.6 | - | |||||||||
Less:
amortization of prior service credit included in net periodic benefit
cost, net of tax of $(0.4), $(0.4) and $0
|
(0.6 | ) | (0.7 | ) | - | |||||||
Less:
amortization of transition obligation included in net periodic benefit
cost
|
0.1 | 0.1 | - | |||||||||
Net
unrealized (losses) gains on securities of affiliates, net of tax of
$(1.6), $(0.4) and $0.4
|
(2.2 | ) | (0.6 | ) | 0.6 | |||||||
Net
unrealized (losses) gains on derivatives, net of tax of $(2.8), $(1.3) and
$0.3
|
(4.4 | ) | (2.1 | ) | 0.4 | |||||||
Other
comprehensive (loss) income, net of tax
|
(78.5 | ) | 23.4 | 21.4 | ||||||||
Comprehensive
income
|
$ | 7.5 | $ | 94.1 | $ | 88.5 |
(in
millions, except per share data)
|
2008
|
2007
|
||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash,
including cash equivalents
|
$ | 87.2 | $ | 108.4 | ||||
Accounts
receivable, net
|
128.6 | 136.1 | ||||||
Inventories
|
115.7 | 111.8 | ||||||
Short-term
investments
|
4.3 | 21.0 | ||||||
Deferred
income taxes
|
5.1 | 5.3 | ||||||
Other
current assets
|
25.3 | 29.7 | ||||||
Total
current assets
|
366.2 | 412.3 | ||||||
Property,
plant and equipment
|
965.0 | 897.7 | ||||||
Less
accumulated depreciation and amortization
|
434.0 | 416.0 | ||||||
Property,
plant and equipment, net
|
531.0 | 481.7 | ||||||
Investments
in affiliated companies
|
33.6 | 31.7 | ||||||
Goodwill
|
105.3 | 109.2 | ||||||
Pension
asset
|
- | 13.0 | ||||||
Deferred
income taxes
|
63.7 | 61.0 | ||||||
Intangible
assets, net
|
50.0 | 55.0 | ||||||
Other
assets
|
18.9 | 21.7 | ||||||
Total
Assets
|
$ | 1,168.7 | $ | 1,185.6 | ||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Notes
payable and other current debt
|
$ | 3.9 | $ | 0.5 | ||||
Accounts
payable
|
67.6 | 80.4 | ||||||
Pension
and other postretirement benefits
|
2.0 | 1.8 | ||||||
Accrued
salaries, wages and benefits
|
42.3 | 38.1 | ||||||
Income
taxes payable
|
2.7 | 9.8 | ||||||
Taxes
other than income
|
7.0 | 17.7 | ||||||
Deferred
income taxes
|
0.9 | 2.5 | ||||||
Other
current liabilities
|
32.7 | 32.1 | ||||||
Total
current liabilities
|
159.1 | 182.9 | ||||||
Long-term
debt
|
382.1 | 394.6 | ||||||
Deferred
income taxes
|
20.4 | 46.6 | ||||||
Pension
and other postretirement benefits
|
86.0 | 40.1 | ||||||
Other
long-term liabilities
|
34.0 | 30.5 | ||||||
Total
Liabilities
|
681.6 | 694.7 | ||||||
Commitments
and contingencies (Note 17)
|
||||||||
Minority
interests
|
- | 5.6 | ||||||
Shareholders’
equity:
|
||||||||
Preferred
stock, 3.0 million shares authorized; no shares issued and outstanding in
2008 and 2007
|
- | - | ||||||
Common
stock, par value $.25 per share; 50.0 million shares authorized; shares
issued: 34.3 million in 2008 and 2007; shares outstanding: 32.7 million in
2008 and 32.3 million in 2007
|
8.6 | 8.6 | ||||||
Capital
in excess of par value
|
69.3 | 64.3 | ||||||
Retained
earnings
|
517.3 | 450.3 | ||||||
Accumulated
other comprehensive income
|
(44.9 | ) | 33.6 | |||||
Treasury
stock, at cost (1.6 million shares in 2008; 2.1 million shares in
2007)
|
(63.2 | ) | (71.5 | ) | ||||
Total
shareholders’ equity
|
487.1 | 485.3 | ||||||
Total
Liabilities and Shareholders’ Equity
|
$ | 1,168.7 | $ | 1,185.6 |
Common
Stock
|
Treasury
Stock
|
|||||||||||||||||||||||||||||||
(in
millions, except per share data)
|
Number
of shares
|
Common
Stock
|
Capital
in excess of par value
|
Retained
earnings
|
Accumulated
other comprehensive income (loss)
|
Number
of shares
|
Treasury
Stock
|
Total
|
||||||||||||||||||||||||
Balance,
December 31, 2005
|
34.3 | $ | 8.6 | $ | 39.3 | $ | 325.0 | $ | 8.9 | (2.6 | ) | $ | (41.9 | ) | $ | 339.9 | ||||||||||||||||
Net
income
|
67.1 | 67.1 | ||||||||||||||||||||||||||||||
Shares
issued under stock plans
|
2.6 | 1.2 | 10.0 | 12.6 | ||||||||||||||||||||||||||||
Shares
repurchased for employee tax withholdings
|
- | (1.3 | ) | (1.3 | ) | |||||||||||||||||||||||||||
Excess
tax benefit from stock option exercises
|
10.9 | 10.9 | ||||||||||||||||||||||||||||||
Cash
dividends declared ($0.50 per share)
|
(16.4 | ) | (16.4 | ) | ||||||||||||||||||||||||||||
Changes
– other comprehensive income
|
21.4 | 21.4 | ||||||||||||||||||||||||||||||
Adjustment
to initially apply SFAS 158, net of tax
|
(19.7 | ) | (19.7 | ) | ||||||||||||||||||||||||||||
Balance,
December 31, 2006
|
34.3 | $ | 8.6 | $ | 52.8 | $ | 375.7 | $ | 10.6 | (1.4 | ) | $ | (33.2 | ) | $ | 414.5 | ||||||||||||||||
Cumulative
effect of adoption of FIN 48 (Note 5)
|
21.6 | 21.6 | ||||||||||||||||||||||||||||||
Net
income
|
70.7 | 70.7 | ||||||||||||||||||||||||||||||
Shares
issued under stock plans
|
9.3 | 0.4 | 3.7 | 13.0 | ||||||||||||||||||||||||||||
Shares
purchased under stock repurchase program
|
(1.0 | ) | (39.4 | ) | (39.4 | ) | ||||||||||||||||||||||||||
Shares
repurchased for employee tax withholdings
|
(1.0 | ) | (0.1 | ) | (2.6 | ) | (3.6 | ) | ||||||||||||||||||||||||
Excess
tax benefit from stock option exercises
|
3.2 | 3.2 | ||||||||||||||||||||||||||||||
Cash
dividends declared ($0.54 per share)
|
(17.7 | ) | (17.7 | ) | ||||||||||||||||||||||||||||
Affiliate
adoption of SFAS 158, net of tax
|
(0.4 | ) | (0.4 | ) | ||||||||||||||||||||||||||||
Changes
– other comprehensive income
|
23.4 | 23.4 | ||||||||||||||||||||||||||||||
Balance,
December 31, 2007
|
34.3 | $ | 8.6 | $ | 64.3 | $ | 450.3 | $ | 33.6 | (2.1 | ) | $ | (71.5 | ) | $ | 485.3 | ||||||||||||||||
Net
income
|
86.0 | 86.0 | ||||||||||||||||||||||||||||||
Shares
issued under stock plans
|
(0.9 | ) | 0.6 | 13.5 | 12.6 | |||||||||||||||||||||||||||
Shares
repurchased for employee tax withholdings
|
(0.1 | ) | (5.2 | ) | (5.2 | ) | ||||||||||||||||||||||||||
Excess
tax benefit from stock option exercises
|
5.9 | 5.9 | ||||||||||||||||||||||||||||||
Cash
dividends declared ($0.58 per share)
|
(19.0 | ) | (19.0 | ) | ||||||||||||||||||||||||||||
Changes
– other comprehensive loss
|
(78.5 | ) | (78.5 | ) | ||||||||||||||||||||||||||||
Balance,
December 31, 2008
|
34.3 | $ | 8.6 | $ | 69.3 | $ | 517.3 | $ | (44.9 | ) | (1.6 | ) | $ | (63.2 | ) | $ | 487.1 |
(in
millions)
|
2008
|
2007
|
2006
|
|||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income
|
$ | 86.0 | $ | 70.7 | $ | 67.1 | ||||||
Adjustments
to reconcile net income to net cash provided by operating activities of
continuing operations:
|
||||||||||||
Loss
(gain) from discontinued operations, net of tax
|
- | 0.5 | (5.6 | ) | ||||||||
Depreciation
|
56.1 | 51.6 | 48.1 | |||||||||
Amortization
|
4.5 | 5.0 | 4.6 | |||||||||
Stock-based
compensation
|
6.4 | 5.1 | 14.5 | |||||||||
Loss
on sales of equipment and asset impairments
|
- | 13.7 | 4.0 | |||||||||
Deferred
income taxes
|
7.3 | (6.4 | ) | 4.9 | ||||||||
Pension
and other retirement plans
|
4.9 | 5.9 | 8.9 | |||||||||
Equity
in undistributed earnings of affiliates, net of dividends
|
(0.7 | ) | (2.4 | ) | (1.9 | ) | ||||||
Changes
in assets/liabilities, net of discontinued operations and
acquisitions:
|
||||||||||||
Decrease
(increase) in accounts receivable
|
1.9 | (20.5 | ) | 2.8 | ||||||||
Increase
in inventories
|
(13.4 | ) | (9.0 | ) | (22.8 | ) | ||||||
(Increase)
decrease in other current assets
|
(0.7 | ) | 3.9 | (3.1 | ) | |||||||
(Decrease)
increase in accounts payable
|
(3.3 | ) | 16.0 | 15.8 | ||||||||
Changes
in other assets and liabilities
|
(14.0 | ) | (4.9 | ) | 2.1 | |||||||
Net
cash provided by operating activities
|
135.0 | 129.2 | 139.4 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Capital
expenditures
|
(138.6 | ) | (129.4 | ) | (90.3 | ) | ||||||
Proceeds
from sale of investment
|
- | 0.7 | - | |||||||||
Acquisition
of 10% minority ownership in Medimop
|
(8.5 | ) | - | - | ||||||||
Acquisition
of patents and other assets
|
(0.5 | ) | (4.7 | ) | - | |||||||
Redemptions
(purchase) of investments, net
|
16.8 | (22.7 | ) | - | ||||||||
Other
|
2.6 | 0.2 | 0.4 | |||||||||
Net
cash used in investing activities
|
(128.2 | ) | (155.9 | ) | (89.9 | ) | ||||||
Cash
flows from financing activities:
|
||||||||||||
Issuance
of long-term debt
|
- | 156.3 | 100.1 | |||||||||
Prepayment
of senior notes
|
- | - | (100.0 | ) | ||||||||
Repayments
under revolving credit agreements, net
|
(12.3 | ) | (19.1 | ) | (57.7 | ) | ||||||
Changes
in other debt, including overdrafts
|
3.1 | 0.3 | (2.0 | ) | ||||||||
Dividend
payments
|
(18.6 | ) | (17.5 | ) | (15.9 | ) | ||||||
Shares
purchased under stock repurchase program
|
- | (39.4 | ) | - | ||||||||
Issuance
of common stock under employee stock plans
|
6.2 | 4.4 | 5.7 | |||||||||
Excess
tax benefit from stock option exercises
|
5.9 | 3.2 | 10.9 | |||||||||
Shares
repurchased for employee tax withholdings
|
(5.2 | ) | (3.6 | ) | (1.3 | ) | ||||||
Net
cash (used in) provided by financing activities
|
(20.9 | ) | 84.6 | (60.2 | ) | |||||||
Cash
flows from discontinued operations:
|
||||||||||||
Net
cash provided by operating activities
|
- | - | 4.4 | |||||||||
Net
cash provided by discontinued operations
|
- | - | 4.4 | |||||||||
Effect
of exchange rates on cash
|
(7.1 | ) | 3.4 | 4.6 | ||||||||
Net
(decrease) increase in cash and cash equivalents
|
(21.2 | ) | 61.3 | (1.7 | ) | |||||||
Cash
and cash equivalents at beginning of period
|
108.4 | 47.1 | 48.8 | |||||||||
Cash
and cash equivalents at end of period
|
$ | 87.2 | $ | 108.4 | $ | 47.1 | ||||||
Supplemental
cash flow information:
|
||||||||||||
Interest
paid, net of amounts capitalized
|
$ | 15.9 | $ | 12.2 | $ | 14.0 | ||||||
Income
taxes paid, net
|
$ | 25.0 | $ | 25.3 | $ | 15.0 | ||||||
Dividends
declared, not paid
|
$ | 4.9 | $ | 4.5 | $ | 4.3 |
($
in millions)
|
2008
|
2007
|
||||||
Finished
goods
|
$ | 46.9 | $ | 45.1 | ||||
Work
in process
|
18.8 | 16.5 | ||||||
Raw
materials
|
50.0 | 50.2 | ||||||
$ | 115.7 | $ | 111.8 |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Restructuring
and related charges
|
||||||||||||
Severance
and post-employment benefits
|
$ | 1.4 | $ | 2.0 | $ | - | ||||||
Asset
write-offs
|
1.0 | 1.1 | - | |||||||||
Other
|
0.6 | 0.3 | - | |||||||||
Total
restructuring and related charges
|
3.0 | 3.4 | - | |||||||||
Impairment
charges
|
- | 12.9 | 2.5 | |||||||||
Other
items:
|
||||||||||||
Contract
settlement and related costs (gain)
|
(4.2 | ) | - | - | ||||||||
Brazilian
excise and other tax related charges
|
- | 10.1 | 0.1 | |||||||||
Foreign
exchange losses
|
1.6 | 0.7 | 0.7 | |||||||||
Loss
on sales of equipment
|
0.7 | 1.1 | 1.5 | |||||||||
Other
|
(0.6 | ) | 0.1 | 0.1 | ||||||||
Total
other items
|
(2.5 | ) | 12.0 | 2.4 | ||||||||
Total
restructuring and other items
|
$ | 0.5 | $ | 28.3 | $ | 4.9 |
($
in millions)
|
Severance
and benefits
|
Other
Costs
|
Total
|
|||||||||
Balance,
December 31, 2006
|
$ | - | $ | - | $ | - | ||||||
Charges
|
2.0 | 1.4 | 3.4 | |||||||||
Non-cash
asset write-offs
|
- | (1.1 | ) | (1.1 | ) | |||||||
Cash
payments
|
(0.1 | ) | - | (0.1 | ) | |||||||
Balance,
December 31, 2007
|
1.9 | 0.3 | 2.2 | |||||||||
Charges
|
1.4 | 1.6 | 3.0 | |||||||||
Non-cash
asset write-offs
|
- | (0.6 | ) | (0.6 | ) | |||||||
Cash
payments
|
(3.1 | ) | (0.9 | ) | (4.0 | ) | ||||||
Balance,
December 31, 2008
|
$ | 0.2 | $ | 0.4 | $ | 0.6 |
($
in millions)
|
2008
|
2007
|
||||||
Balance
at January 1
|
$ | 10.2 | $ | 10.1 | ||||
Additions
for tax positions taken in the current year
|
0.3 | 0.7 | ||||||
Additions
for tax positions of prior years
|
0.8 | 0.7 | ||||||
Reduction
for expiration of statute of limitations
|
(3.4 | ) | (1.3 | ) | ||||
Balance
at December 31
|
$ | 7.9 | $ | 10.2 |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
U.S.
operations
|
$ | 27.4 | $ | 25.6 | $ | 17.8 | ||||||
International
operations
|
82.1 | 60.8 | 66.7 | |||||||||
Total
income before income taxes and minority interests
|
$ | 109.5 | $ | 86.4 | $ | 84.5 |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Current:
|
||||||||||||
Federal
|
$ | (2.8 | ) | $ | 0.5 | $ | 0.4 | |||||
State
|
- | - | (0.5 | ) | ||||||||
International
|
19.2 | 23.1 | 19.8 | |||||||||
Current
income tax provision
|
16.4 | 23.6 | 19.7 | |||||||||
Deferred:
|
||||||||||||
Federal
|
7.5 | 0.3 | 3.1 | |||||||||
International
|
(0.2 | ) | (6.7 | ) | 1.8 | |||||||
Deferred
income tax provision
|
7.3 | (6.4 | ) | 4.9 | ||||||||
Provision
for income taxes, continuing operations
|
$ | 23.7 | $ | 17.2 | $ | 24.6 |
($
in millions)
|
2008
|
2007
|
||||||
Current
assets
|
$ | 5.1 | $ | 5.3 | ||||
Noncurrent
assets
|
87.1 | 88.0 | ||||||
Noncurrent
valuation allowance
|
(23.4 | ) | (27.0 | ) | ||||
Current
liabilities
|
(0.9 | ) | (2.5 | ) | ||||
Noncurrent
liabilities
|
(20.4 | ) | (46.6 | ) | ||||
Deferred
tax asset
|
$ | 47.5 | $ | 17.2 |
($
in millions)
|
2008
|
2007
|
||||||
Deferred
tax assets
|
||||||||
Net
operating loss carryforwards
|
$ | 36.9 | $ | 32.2 | ||||
Tax
credit carryforwards
|
21.1 | 17.8 | ||||||
Restructuring
and impairment charges
|
0.2 | 5.2 | ||||||
Capital
loss carryforwards
|
1.1 | 1.4 | ||||||
Pension
and deferred compensation
|
47.4 | 15.2 | ||||||
Other
|
10.1 | 15.2 | ||||||
Valuation
allowance
|
(23.4 | ) | (27.0 | ) | ||||
Total
deferred tax assets
|
93.4 | 60.0 | ||||||
Deferred
tax liabilities:
|
||||||||
Accelerated
depreciation
|
40.1 | 34.7 | ||||||
Other
|
5.8 | 8.1 | ||||||
Total
deferred tax liabilities
|
45.9 | 42.8 | ||||||
Net
deferred tax asset
|
$ | 47.5 | $ | 17.2 |
2008
|
2007
|
2006
|
||||||||||
U.S.
statutory corporate tax rate
|
35.0 | % | 35.0 | % | 35.0 | % | ||||||
Tax
on international operations less than U.S. tax rate
|
(7.6 | ) | (4.2 | ) | (2.6 | ) | ||||||
Non-benefited
losses
|
0.5 | 2.5 | 1.5 | |||||||||
Reversal
of prior valuation allowance
|
(1.2 | ) | (4.2 | ) | (1.9 | ) | ||||||
Reversal
of reserves related to closed years
|
(3.1 | ) | (1.5 | ) | (1.4 | ) | ||||||
U.S.
tax on international earnings, net of foreign tax credits
|
(0.9 | ) | (4.1 | ) | (1.3 | ) | ||||||
State
income taxes, net of federal tax benefit
|
0.2 | (3.2 | ) | (3.4 | ) | |||||||
Other
|
(1.3 | ) | (0.4 | ) | 3.2 | |||||||
Effective
tax rate, continuing operations
|
21.6 | % | 19.9 | % | 29.1 | % |
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Pharmaceutical
packaging
|
$ | 622.8 | $ | 577.8 | $ | 495.8 | ||||||
Disposable
medical components
|
107.2 | 120.4 | 109.2 | |||||||||
Safety
and administration systems
|
33.1 | 25.5 | 21.0 | |||||||||
Laboratory
and other services
|
29.0 | 18.1 | 18.1 | |||||||||
Pharmaceutical
Systems
|
792.1 | 741.8 | 644.1 | |||||||||
Healthcare
devices
|
171.7 | 188.8 | 155.6 | |||||||||
Consumer
products
|
74.1 | 73.3 | 84.4 | |||||||||
Tooling
and other services
|
24.7 | 27.1 | 39.2 | |||||||||
Tech
Group
|
270.5 | 289.2 | 279.2 | |||||||||
Intersegment
sales
|
(11.5 | ) | (10.9 | ) | (10.0 | ) | ||||||
Net
sales
|
$ | 1,051.1 | $ | 1,020.1 | $ | 913.3 |
Sales
|
Property,
Plant and Equipment, Net
|
|||||||||||||||||||||||
($
in millions)
|
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
||||||||||||||||||
United
States
|
$ | 488.5 | $ | 496.4 | $ | 464.5 | $ | 238.9 | $ | 209.9 | $ | 185.3 | ||||||||||||
Germany
|
145.4 | 114.7 | 97.7 | 119.9 | 111.0 | 78.5 | ||||||||||||||||||
France
|
100.7 | 99.8 | 73.7 | 43.4 | 43.1 | 38.2 | ||||||||||||||||||
Other
European countries
|
211.5 | 193.6 | 174.4 | 72.6 | 70.8 | 51.5 | ||||||||||||||||||
Other
|
105.0 | 115.6 | 103.0 | 56.2 | 46.9 | 31.2 | ||||||||||||||||||
$ | 1,051.1 | $ | 1,020.1 | $ | 913.3 | $ | 531.0 | $ | 481.7 | $ | 384.7 |
($
in millions)
|
Pharmaceutical
Systems
|
Tech
Group
|
Corporate
and Eliminations
|
Consolidated
|
||||||||||||
2008
|
||||||||||||||||
Net
sales
|
$ | 792.1 | $ | 270.5 | $ | (11.5 | ) | $ | 1,051.1 | |||||||
Income
before income taxes and minority interests
|
136.7 | 17.8 | (45.0 | ) | 109.5 | |||||||||||
Segment
assets
|
816.3 | 227.5 | 124.9 | 1,168.7 | ||||||||||||
Capital
expenditures
|
129.2 | 9.0 | 0.4 | 138.6 | ||||||||||||
Depreciation
and amortization expense
|
43.9 | 14.9 | 1.8 | 60.6 | ||||||||||||
2007
|
||||||||||||||||
Net
sales
|
$ | 741.8 | $ | 289.2 | $ | (10.9 | ) | $ | 1,020.1 | |||||||
Income
before income taxes and minority interests
|
141.9 | 11.6 | (67.1 | ) | 86.4 | |||||||||||
Segment
assets
|
737.7 | 247.4 | 200.5 | 1,185.6 | ||||||||||||
Capital
expenditures
|
108.1 | 20.9 | 0.4 | 129.4 | ||||||||||||
Depreciation
and amortization expense
|
39.0 | 15.9 | 1.7 | 56.6 | ||||||||||||
2006
|
||||||||||||||||
Net
sales
|
$ | 644.1 | $ | 279.2 | $ | (10.0 | ) | $ | 913.3 | |||||||
Income
before income taxes and minority interests
|
129.7 | 18.1 | (63.3 | ) | 84.5 | |||||||||||
Segment
assets
|
576.7 | 248.2 | 93.3 | 918.2 | ||||||||||||
Capital
expenditures
|
62.3 | 26.7 | 1.3 | 90.3 | ||||||||||||
Depreciation
and amortization expense
|
34.4 | 16.6 | 1.7 | 52.7 |
($
and shares in millions)
|
2008
|
2007
|
2006
|
|||||||||
Income
from continuing operations
|
$ | 86.0 | $ | 71.2 | $ | 61.5 | ||||||
Discontinued
operations, net of tax
|
- | (0.5 | ) | 5.6 | ||||||||
Net
income, as reported, for basic net income per share
|
86.0 | 70.7 | 67.1 | |||||||||
Plus:
interest expense on convertible debt, net of tax
|
4.3 | 3.4 | - | |||||||||
Net
income for diluted net income per share
|
$ | 90.3 | $ | 74.1 | $ | 67.1 | ||||||
Weighted
average common shares outstanding
|
32.4 | 32.7 | 32.2 | |||||||||
Assumed
stock options exercised, based on the treasury stock
method
|
0.8 | 1.2 | 1.4 | |||||||||
Assumed
conversion of convertible debt, based on the if-converted
method
|
2.9 | 2.3 | - | |||||||||
Weighted
average shares assuming dilution
|
36.1 | 36.2 | 33.6 |
($
in millions)
|
2008
|
2007
|
||||||
Foreign
currency translation
|
$ | 16.0 | $ | 53.5 | ||||
Unrealized
(losses) gains on securities of affiliates
|
(0.9 | ) | 1.7 | |||||
Unrealized
losses on derivatives
|
(5.4 | ) | (1.0 | ) | ||||
Defined
benefit pension and other postretirement plans
|
(54.6 | ) | (20.6 | ) | ||||
$ | (44.9 | ) | $ | 33.6 |
($
in millions)
|
Pharmaceutical
Systems
|
Tech
Group
|
Total
|
|||||||||
Balance,
December 31, 2006
|
$ | 69.4 | $ | 33.4 | $ | 102.8 | ||||||
Foreign
currency translation
|
5.7 | 0.7 | 6.4 | |||||||||
Balance,
December 31, 2007
|
75.1 | 34.1 | 109.2 | |||||||||
Additions
|
3.1 | - | 3.1 | |||||||||
Foreign
currency translation
|
(6.9 | ) | (0.1 | ) | (7.0 | ) | ||||||
Balance,
December 31, 2008
|
$ | 71.3 | $ | 34.0 | $ | 105.3 |
2008
|
2007
|
|||||||||||||||||||||||
($
in millions)
|
Cost
|
Accumulated
Amortization
|
Net
|
Cost
|
Accumulated
Amortization
|
Net
|
||||||||||||||||||
Technology
and patents
|
$ | 10.7 | $ | (3.5 | ) | $ | 7.2 | $ | 10.8 | $ | (2.7 | ) | $ | 8.1 | ||||||||||
Trademarks
|
11.2 | (0.3 | ) | 10.9 | 11.4 | (0.3 | ) | 11.1 | ||||||||||||||||
Customer
relationships
|
29.3 | (6.0 | ) | 23.3 | 30.5 | (4.3 | ) | 26.2 | ||||||||||||||||
Customer
contracts
|
8.2 | (1.5 | ) | 6.7 | 8.3 | (1.1 | ) | 7.2 | ||||||||||||||||
Non-compete
agreements
|
3.9 | (2.0 | ) | 1.9 | 3.8 | (1.4 | ) | 2.4 | ||||||||||||||||
$ | 63.3 | $ | (13.3 | ) | $ | 50.0 | $ | 64.8 | $ | (9.8 | ) | $ | 55.0 |
($
in millions)
|
Expected
useful lives (years)
|
2008
|
2007
|
|||||||||
Land
|
$ | 9.5 | $ | 12.6 | ||||||||
Buildings
and improvements
|
5-50 | 220.7 | 215.1 | |||||||||
Machinery
and equipment
|
10-15 | 499.6 | 496.7 | |||||||||
Molds
and dies
|
4-7 | 73.1 | 72.1 | |||||||||
Computer
hardware and software
|
3-10 | 20.1 | 3.7 | |||||||||
Construction
in progress
|
142.0 | 97.5 | ||||||||||
$ | 965.0 | $ | 897.7 |
Location
|
Ownership
interest
|
||||
West
Pharmaceutical Services Mexico, S.A. de C.V.
|
Mexico
|
49 | % | ||
Aluplast
S.A. de C.V.
|
Mexico
|
49 | % | ||
Pharma
Tap S.A. de C.V.
|
Mexico
|
49 | % | ||
Daikyo
Seiko, Ltd. (“Daikyo”)
|
Japan
|
25 | % |
($
in millions)
|
2008
|
2007
|
||||||
Equity
companies
|
$ | 32.8 | $ | 30.6 | ||||
Cost
companies
|
0.8 | 1.1 | ||||||
$ | 33.6 | $ | 31.7 |
($
in millions)
|
2008
|
2007
|
||||||
Capital
leases, due 2011 (5.5%)
|
$ | 0.3 | $ | 0.5 | ||||
Capital
leases, due 2012 (5.3%)
|
0.5 | 0.7 | ||||||
Revolving
credit facility, due 2011 (1.7%)
|
29.9 | 36.9 | ||||||
Series
A floating rate notes, due 2012 (4.3%)
|
50.0 | 50.0 | ||||||
Series
B floating rate notes, due 2015 (4.4%)
|
25.0 | 25.0 | ||||||
Euro
note A, due 2013 (4.2%)
|
28.7 | 30.0 | ||||||
Euro
note B, due 2016 (4.4%)
|
86.2 | 90.0 | ||||||
Convertible
debt, due 2047 (4.0%)
|
161.5 | 161.5 | ||||||
$ | 382.1 | $ | 394.6 |
Pension
benefits
|
Other
retirement benefits
|
|||||||||||||||||||||||
($
in millions)
|
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
||||||||||||||||||
Net
periodic benefit cost:
|
||||||||||||||||||||||||
Service
cost
|
$ | 7.7 | $ | 7.7 | $ | 5.4 | $ | 0.8 | $ | 1.0 | $ | 1.0 | ||||||||||||
Interest
cost
|
14.2 | 13.3 | 13.2 | 0.8 | 0.9 | 0.8 | ||||||||||||||||||
Expected
return on assets
|
(16.6 | ) | (16.2 | ) | (14.8 | ) | - | - | - | |||||||||||||||
Amortization
of prior service (credit) cost
|
(1.1 | ) | (1.2 | ) | 0.7 | 0.1 | 0.1 | 0.1 | ||||||||||||||||
Amortization
of transition obligation
|
0.1 | 0.1 | 0.1 | - | - | - | ||||||||||||||||||
Recognized
actuarial losses
|
1.6 | 2.6 | 3.9 | - | - | - | ||||||||||||||||||
Net
periodic benefit cost
|
$ | 5.9 | $ | 6.3 | $ | 8.5 | $ | 1.7 | $ | 2.0 | $ | 1.9 |
Other
changes in plan assets and benefit obligations recognized in other
comprehensive income, pre-tax:
|
||||||||||||||||||||||||
Net
loss (gain) arising during period
|
$ | 56.8 | $ | (7.8 | ) | $ | - | $ | (0.3 | ) | $ | (2.0 | ) | $ | - | |||||||||
Prior
service cost arising during period
|
- | 1.9 | - | - | - | - | ||||||||||||||||||
Amortization
of prior service credit (cost)
|
1.1 | 1.2 | - | (0.1 | ) | (0.1 | ) | - | ||||||||||||||||
Amortization
of transition obligation
|
(0.1 | ) | (0.1 | ) | - | - | - | - | ||||||||||||||||
Amortization
of actuarial loss
|
(1.6 | ) | (2.6 | ) | - | - | - | - | ||||||||||||||||
Minimum
pension liability adjustments
|
- | - | 0.1 | - | - | - | ||||||||||||||||||
Total
recognized in other comprehensive income
|
$ | 56.2 | $ | (7.4 | ) | $ | 0.1 | $ | (0.4 | ) | $ | (2.1 | ) | $ | - | |||||||||
Total
recognized in net periodic benefit cost and other comprehensive
income
|
$ | 62.1 | $ | (1.1 | ) | $ | 8.6 | $ | 1.3 | $ | (0.1 | ) | $ | 1.9 |
Pension
benefits
|
Other
retirement benefits
|
|||||||||||||||||||||||
($
in millions)
|
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
||||||||||||||||||
U.S.
plans
|
$ | 4.3 | $ | 4.1 | $ | 6.5 | $ | 1.7 | $ | 2.0 | $ | 1.9 | ||||||||||||
International
plans
|
1.6 | 2.2 | 2.0 | - | - | - | ||||||||||||||||||
Net
periodic benefit cost
|
$ | 5.9 | $ | 6.3 | $ | 8.5 | $ | 1.7 | $ | 2.0 | $ | 1.9 |
Pension
benefits
|
Other
retirement benefits
|
|||||||||||||||
($
in millions)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Change
in benefit obligation:
|
||||||||||||||||
Benefit
obligation, January 1
|
$ | (231.7 | ) | $ | (226.6 | ) | $ | (14.1 | ) | $ | (14.6 | ) | ||||
Service
cost
|
(7.7 | ) | (7.7 | ) | (0.8 | ) | (1.0 | ) | ||||||||
Interest
cost
|
(14.2 | ) | (13.3 | ) | (0.8 | ) | (0.9 | ) | ||||||||
Participants’
contributions
|
- | - | (0.4 | ) | (0.4 | ) | ||||||||||
Actuarial
gain
|
11.4 | 9.4 | 0.4 | 2.0 | ||||||||||||
Amendments/transfers
in
|
(0.4 | ) | (1.7 | ) | - | - | ||||||||||
Benefits/expenses
paid
|
10.1 | 10.1 | 0.7 | 0.8 | ||||||||||||
Foreign
currency translation
|
7.3 | (1.9 | ) | - | - | |||||||||||
Benefit
obligation, December 31
|
$ | (225.2 | ) | $ | (231.7 | ) | $ | (15.0 | ) | $ | (14.1 | ) |
Pension
benefits
|
Other
retirement benefits
|
|||||||||||||||
($
in millions)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Change
in plan assets:
|
||||||||||||||||
Fair
value of assets, January 1
|
$ | 216.9 | $ | 210.5 | $ | - | $ | - | ||||||||
Actual
return on assets
|
(52.2 | ) | 14.0 | - | - | |||||||||||
Employer
contribution
|
2.4 | 2.0 | 0.3 | 0.4 | ||||||||||||
Participants’
contribution
|
- | - | 0.4 | 0.4 | ||||||||||||
Benefits/expenses
paid
|
(10.1 | ) | (10.1 | ) | (0.7 | ) | (0.8 | ) | ||||||||
Foreign
currency translation
|
(4.8 | ) | 0.5 | - | - | |||||||||||
Fair
value of plan assets, December 31
|
$ | 152.2 | $ | 216.9 | $ | - | $ | - | ||||||||
Funded
status at end of year
|
$ | (73.0 | ) | $ | (14.8 | ) | $ | (15.0 | ) | $ | (14.1 | ) |
Pension
benefits
|
Other
retirement benefits
|
|||||||||||||||
($
in millions)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Pension
asset
|
$ | - | $ | 13.0 | $ | - | $ | - | ||||||||
Current
liabilities
|
(0.9 | ) | (0.9 | ) | (1.1 | ) | (0.9 | ) | ||||||||
Noncurrent
liabilities
|
(72.1 | ) | (26.9 | ) | (13.9 | ) | (13.2 | ) | ||||||||
$ | (73.0 | ) | $ | (14.8 | ) | $ | (15.0 | ) | $ | (14.1 | ) |
Pension
benefits
|
Other
retirement benefits
|
|||||||||||||||
($
in millions)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Net
actuarial loss (gain)
|
$ | 98.5 | $ | 42.9 | $ | (1.9 | ) | $ | (1.6 | ) | ||||||
Transition
obligation
|
0.7 | 1.1 | - | - | ||||||||||||
Prior
service (credit) cost
|
(9.6 | ) | (10.6 | ) | 0.4 | 0.5 | ||||||||||
Accumulated
other comprehensive income
|
$ | 89.6 | $ | 33.4 | $ | (1.5 | ) | $ | (1.1 | ) |
($
in millions)
|
Domestic
Plans
|
International
Plans
|
Total
|
|||||||||
2009
|
$ | 11.8 | $ | 1.0 | $ | 12.8 | ||||||
2010
|
13.2 | 1.1 | 14.3 | |||||||||
2011
|
14.7 | 2.0 | 16.7 | |||||||||
2012
|
16.5 | 1.1 | 17.6 | |||||||||
2013
|
17.8 | 1.6 | 19.4 | |||||||||
2014
to 2018
|
111.6 | 9.1 | 120.7 | |||||||||
$ | 185.6 | $ | 15.9 | $ | 201.5 |
Pension
benefits
|
Other
retirement benefits
|
|||||||||||||||||||||||
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
|||||||||||||||||||
Discount
rate
|
6.22 | % | 5.86 | % | 5.52 | % | 6.00 | % | 5.70 | % | 5.65 | % | ||||||||||||
Rate
of compensation increase
|
4.85 | % | 4.73 | % | 4.68 | % | - | - | - | |||||||||||||||
Long-term
rate of return on assets
|
7.79 | % | 7.86 | % | 7.85 | % | - | - | - |
Pension
benefits
|
Other
retirement benefits
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Discount
rate
|
6.46 | % | 6.15 | % | 6.25 | % | 6.00 | % | ||||||||
Rate
of compensation increase
|
4.85 | % | 4.73 | % | - | - |
2008
|
2007
|
|||||||
Equity
securities
|
61 | % | 66 | % | ||||
Debt
securities
|
39 | % | 33 | % | ||||
Cash
|
- | 1 | % | |||||
100 | % | 100 | % |
Target
allocation
|
Allocation
range
|
|||||||
Equity
securities
|
65%
|
60%-70%
|
||||||
Debt
securities
|
35%
|
30%-40%
|
||||||
Other
|
0%
|
0%-5%
|
·
|
Level 1
:
Unadjusted quoted prices in active markets for identical assets or
liabilities.
|
·
|
Level 2
: Inputs
other than quoted prices that are observable for the asset or liability,
either directly or indirectly. These include quoted prices for similar
assets or liabilities in active markets and quoted prices for identical or
similar assets or liabilities in markets that are not
active.
|
·
|
Level 3
:
Unobservable inputs that reflect the reporting entity’s own
assumptions.
|
Basis
of Fair Value Measurements
|
||||||||||||||||
Balance
at
|
||||||||||||||||
December
31,
|
||||||||||||||||
($
in millions)
|
2008
|
Level
1
|
Level
2
|
Level
3
|
||||||||||||
Assets:
|
||||||||||||||||
Short-term
investments (a)
|
$ | 4.3 | $ | - | $ | 4.3 | $ | - | ||||||||
Deferred
compensation asset (b)
|
2.8 | 2.8 | - | - | ||||||||||||
Long-term
investments (a)
|
0.8 | - | 0.8 | - | ||||||||||||
$ | 7.9 | $ | 2.8 | $ | 5.1 | $ | - | |||||||||
Liabilities:
|
||||||||||||||||
Foreign
currency hedge contracts (c)
|
$ | 2.0 | $ | - | $ | 2.0 | $ | - | ||||||||
Interest
rate swap contracts (d)
|
8.2 | - | 8.2 | - | ||||||||||||
$ | 10.2 | $ | - | $ | 10.2 | $ | - |
(a)
|
Represents
our remaining investment in the Columbia Strategic Cash Portfolio Fund.
See discussion below regarding
valuation.
|
(b)
|
Included
in other assets. Valuation is based on quoted market prices in an active
market.
|
(c)
|
Included
in other current liabilities. Valued using quoted forward foreign exchange
rates and spot rates at the reporting
date.
|
(d)
|
Included
in other long-term liabilities. Valued using a discounted cash flow
analysis based on the terms of the contract and observable market inputs
(i.e. LIBOR, Eurodollar forward rates, and swap
spreads).
|
($
in millions)
|
2008
|
2007
|
2006
|
|||||||||
Stock
option and appreciation rights
|
$ | 3.3 | $ | 3.0 | $ | 2.4 | ||||||
Performance
vesting shares
|
1.8 | 3.2 | 3.5 | |||||||||
Performance
vesting units
|
0.1 | 0.1 | 0.2 | |||||||||
Performance
vesting shares/units dividend equivalents
|
0.1 | 0.1 | - | |||||||||
Employee
stock purchase plan
|
0.4 | 0.4 | 0.2 | |||||||||
Deferred
compensation plans
|
0.7 | (1.7 | ) | 8.2 | ||||||||
Total
stock-based compensation expense
|
$ | 6.4 | $ | 5.1 | $ | 14.5 |
(in
millions, except per share data)
|
2008
|
2007
|
2006
|
|||||||||
Options
outstanding, January 1
|
2.7 | 2.7 | 3.9 | |||||||||
Granted
|
0.5 | 0.3 | 0.3 | |||||||||
Exercised
|
(0.5 | ) | (0.2 | ) | (1.4 | ) | ||||||
Forfeited
|
(0.1 | ) | (0.1 | ) | (0.1 | ) | ||||||
Options
outstanding, December 31
|
2.6 | 2.7 | 2.7 | |||||||||
Options
exercisable, December 31
|
1.6 | 1.9 | 1.9 |
Weighted
Average Exercise Price
|
2008
|
2007
|
2006
|
|||||||||
Options
outstanding, January 1
|
$ | 21.89 | $ | 18.32 | $ | 15.44 | ||||||
Granted
|
42.50 | 44.96 | 33.30 | |||||||||
Exercised
|
14.09 | 15.10 | 13.69 | |||||||||
Forfeited
|
39.87 | 17.81 | 19.95 | |||||||||
Options
outstanding, December 31
|
$ | 29.91 | $ | 21.89 | $ | 18.32 | ||||||
Options
exercisable, December 31
|
$ | 20.64 | $ | 17.02 | $ | 15.12 |
2008
|
2007
|
2006
|
||||||||||
SARs
outstanding, January 1
|
40,339 | 22,154 | - | |||||||||
Granted
|
24,062 | 20,413 | 22,154 | |||||||||
Exercised
|
(4,208 | ) | (557 | ) | - | |||||||
Forfeited
|
(4,181 | ) | (1,671 | ) | - | |||||||
SARs
outstanding, December 31
|
56,012 | 40,339 | 22,154 | |||||||||
SARs
exercisable, December 31
|
10,196 | 4,979 | - | |||||||||
Weighted
Average Exercise Price
|
2008
|
2007
|
2006
|
|||||||||
SARs
outstanding, January 1
|
$ | 38.85 | $ | 32.59 | $ | - | ||||||
Granted
|
41.70 | 44.97 | 32.59 | |||||||||
Exercised
|
32.59 | 32.59 | - | |||||||||
Forfeited
|
40.39 | 32.59 | - | |||||||||
SARs
outstanding, December 31
|
$ | 40.43 | $ | 38.85 | $ | 32.59 | ||||||
SARs
exercisable, December 31
|
$ | 37.98 | $ | 32.59 | $ | - |
2008
|
2007
|
2006
|
||||||||||
Non-vested
PVS awards, January 1
|
261,131 | 275,145 | 319,899 | |||||||||
Granted
at target level
|
158,795 | 94,571 | 89,012 | |||||||||
Above
target awards
|
45,015 | 66,391 | 28,950 | |||||||||
Vested
and converted
|
(123,891 | ) | (171,891 | ) | (144,750 | ) | ||||||
Forfeited
|
(10,592 | ) | (3,085 | ) | (17,966 | ) | ||||||
Non-vested
PVS awards, December 31
|
330,458 | 261,131 | 275,145 | |||||||||
Weighted
Average Grant Date Fair Value
|
2008
|
2007
|
2006
|
|||||||||
Non-vested
PVS awards, January 1
|
$ | 34.81 | $ | 25.35 | $ | 21.00 | ||||||
Granted
at target level
|
42.45 | 44.96 | 32.69 | |||||||||
Above
target awards
|
24.86 | 19.41 | 19.41 | |||||||||
Vested
and converted
|
25.14 | 19.41 | 19.41 | |||||||||
Forfeited
|
40.28 | 28.79 | 22.67 | |||||||||
Non-vested
PVS awards, December 31
|
$ | 40.62 | $ | 34.81 | $ | 25.35 |
PVU
awards
|
Weighted
Average Grant Date Fair Value per award
|
|||||||
Non-vested
PVU awards, January 1
|
12,632 | $ | 38.29 | |||||
Granted
at target level
|
8,523 | 41.70 | ||||||
Above
target awards
|
- | - | ||||||
Vested
and converted
|
- | - | ||||||
Forfeited
|
(1,809 | ) | 37.73 | |||||
Non-vested
PVU awards, December 31
|
19,346 | $ | 39.85 |
Year
|
($
in millions)
|
|||
2009
|
$ | 11.2 | ||
2010
|
10.0 | |||
2011
|
8.6 | |||
2012
|
7.8 | |||
2013
|
3.5 | |||
Thereafter
|
20.2 | |||
Total
|
61.3 | |||
Less
sublease income
|
2.7 | |||
$ | 58.6 |
($
in millions, except per share data)
|
First
Quarter
(1)
|
Second
Quarter (2)
|
Third
Quarter (3)
|
Fourth
Quarter (4)
|
Full
Year
|
|||||||||||||||
2008
|
||||||||||||||||||||
Net
sales
|
$ | 270.7 | $ | 279.3 | $ | 256.2 | $ | 244.9 | $ | 1,051.1 | ||||||||||
Gross
profit
|
83.5 | 83.6 | 66.0 | 69.5 | 302.6 | |||||||||||||||
Income
from continuing operations
|
26.2 | 28.7 | 13.3 | 17.8 | 86.0 | |||||||||||||||
Discontinued
operations, net
|
- | - | - | - | - | |||||||||||||||
Net
income
|
$ | 26.2 | $ | 28.7 | $ | 13.3 | $ | 17.8 | $ | 86.0 | ||||||||||
Basic
earnings per share
|
||||||||||||||||||||
Continuing
operations
|
$ | 0.81 | $ | 0.89 | $ | 0.41 | $ | 0.54 | $ | 2.65 | ||||||||||
Discontinued
operations
|
- | - | - | - | - | |||||||||||||||
$ | 0.81 | $ | 0.89 | $ | 0.41 | $ | 0.54 | $ | 2.65 | |||||||||||
Diluted
earnings per share
|
||||||||||||||||||||
Continuing
operations
|
$ | 0.76 | $ | 0.82 | $ | 0.40 | $ | 0.52 | $ | 2.50 | ||||||||||
Discontinued
operations
|
- | - | - | - | - | |||||||||||||||
$ | 0.76 | $ | 0.82 | $ | 0.40 | $ | 0.52 | $ | 2.50 | |||||||||||
2007
|
||||||||||||||||||||
Net
sales
|
$ | 257.6 | $ | 263.7 | $ | 242.7 | $ | 256.1 | $ | 1,020.1 | ||||||||||
Gross
profit
|
80.4 | 76.7 | 64.3 | 70.4 | 291.8 | |||||||||||||||
Income
from continuing operations
|
26.5 | 26.5 | 12.2 | 6.0 | 71.2 | |||||||||||||||
Discontinued
operations, net
|
- | (0.5 | ) | - | - | (0.5 | ) | |||||||||||||
Net
income
|
$ | 26.5 | $ | 26.0 | $ | 12.2 | $ | 6.0 | $ | 70.7 | ||||||||||
Basic
earnings per share
|
||||||||||||||||||||
Continuing
operations
|
$ | 0.81 | $ | 0.80 | $ | 0.37 | $ | 0.19 | $ | 2.18 | ||||||||||
Discontinued
operations
|
- | (0.01 | ) | - | - | (0.02 | ) | |||||||||||||
$ | 0.81 | $ | 0.79 | $ | 0.37 | $ | 0.19 | $ | 2.16 | |||||||||||
Diluted
earnings per share
|
||||||||||||||||||||
Continuing
operations
|
$ | 0.77 | $ | 0.74 | $ | 0.36 | $ | 0.19 | $ | 2.06 | ||||||||||
Discontinued
operations
|
- | (0.01 | ) | - | - | (0.01 | ) | |||||||||||||
$ | 0.77 | $ | 0.73 | $ | 0.36 | $ | 0.19 | $ | 2.05 |
(1)
|
Net
income in the first quarter of 2008 included $0.7 million ($0.02 per
diluted share) of restructuring and related charges, a net gain on
contract settlement of $0.8 million ($0.03 per diluted share) and discrete
tax benefits of $1.1 million ($0.03 per diluted
share).
|
(2)
|
Second
quarter 2008 net income included $0.9 million ($0.02 per diluted share) of
restructuring and related charges in the second quarter of 2008 and a net
gain on contract settlement of $4.2 million ($0.11 per diluted share). Net
income in the second quarter of 2007 included discrete tax benefits
of $2.4 million ($0.06 per diluted
share).
|
(3)
|
In
the third quarter of 2008, net income from continuing operations included
contract settlement costs of $1.1 million ($0.03 per diluted share) and
discrete tax benefits of $2.2 million ($0.06 per diluted share). The third
quarter of 2007 net income included a discrete tax benefit of $4.1 million
($0.11 per diluted share) and our provision for Brazilian tax issues of
$6.4 million ($0.17 per diluted
share).
|
(4)
|
Net
income included $0.3 million ($0.01 per diluted share) of restructuring
and related charges in the fourth quarter of 2008, contract settlement
costs of $1.2 million ($0.04 per diluted share) and a discrete tax benefit
of $0.3 million ($0.01 per diluted share). Net income in the fourth
quarter of 2007 included a discrete tax benefit of $1.7 million ($0.04 per
diluted share), $2.3 million ($0.07 per diluted share) of restructuring
and related charges, an impairment loss on our Nektar customer contract
intangible asset of $8.4 million ($0.23 per diluted share) and our
provision for Brazilian tax issues of $2.3 million ($0.06 per diluted
share).
|
Plan
Category
|
Number
of Securities
to
be Issued Upon Exercise of Outstanding Options, Warrants
and
Rights (a)
|
Weighted-Average
Exercise
Price
of Outstanding Options,
Warrants
and Rights (b)
|
Number
of Securities Remaining
Available
for Future Issuance Under
Equity
Compensation Plans (Excluding
Securities
Reflected in Column (a)) (c)
|
Equity
compensation plans approved by security holders
|
2,608,580
(1)
|
$26.91
|
5,174,568
(2)
|
Equity
compensation plans not approved by security holders
|
-
|
-
|
-
|
Total
|
2,608,580
|
$26.91
|
5,174,568
|
(1)
|
Includes
445,721 outstanding stock options under the 2007 Omnibus Incentive
Compensation Plan, 1,319,837 outstanding stock options under the 2004
Stock-Based Compensation Plan, which was terminated in 2007, 791,022
outstanding stock options under the 1998 Key Employee Incentive
Compensation Plan, which was terminated in 2004, 52,000 outstanding
options under the 1999 Non-Qualified Stock Option Plan for Non-Employee
Directors, which was terminated in 2004. No future grants or awards
may be made under the terminated plans. Does not include
stock-equivalent units granted or credited to directors under the
Non-Qualified Deferred Compensation Plan for Non-Employee Directors
because such units are settled only in cash and do not involve the
issuance of any option, warrant or right to acquire the Company’s common
stock or other securities.
|
(2)
|
Represents
2,360,795 shares reserved under the Company’s Employee Stock Purchase Plan
and 2,813,773 shares remaining available for issuance under the 2007
Omnibus Incentive Compensation
Plan. The
estimated number of shares that could be issued for the current period
from the Employee Stock Purchase Plan is 1,145,000. This number of
shares is calculated by multiplying the 1,000 share per offering period
per participant limit by 1,145, the number of current participants in the
plan.
|
($
in millions)
|
Balance
at beginning of period
|
Charged
to costs and expenses
|
Deductions
(1)
|
Balance
at
end
of period
|
||||||||||||
For
the year ended December 31, 2008
|
||||||||||||||||
Allowances
deducted from assets
|
||||||||||||||||
Deferred
tax asset valuation allowance
|
$ | 27.0 | $ | 0.2 | $ | (3.8 | ) | $ | 23.4 | |||||||
Allowance
for doubtful accounts receivable
|
0.6 | 0.3 | (0.2 | ) | 0.7 | |||||||||||
Total
allowances deducted from assets
|
$ | 27.6 | $ | 0.5 | $ | (4.0 | ) | $ | 24.1 | |||||||
For
the year ended December 31, 2007
|
||||||||||||||||
Allowances
deducted from assets
|
||||||||||||||||
Deferred
tax asset valuation allowance
|
$ | 25.3 | $ | 4.9 | $ | (3.2 | ) | $ | 27.0 | |||||||
Allowance
for doubtful accounts receivable
|
0.9 | - | (0.3 | ) | 0.6 | |||||||||||
Total
allowances deducted from assets
|
$ | 26.2 | $ | 4.9 | $ | (3.5 | ) | $ | 27.6 | |||||||
For
the year ended December 31, 2006
|
||||||||||||||||
Allowances
deducted from assets
|
||||||||||||||||
Deferred
tax asset valuation allowance
|
$ | 24.3 | $ | 2.5 | $ | (1.5 | ) | $ | 25.3 | |||||||
Allowance
for doubtful accounts receivable
|
1.0 | 0.1 | (0.2 | ) | 0.9 | |||||||||||
Total
allowances deducted from assets
|
$ | 25.3 | $ | 2.6 | $ | (1.7 | ) | $ | 26.2 |
(1)
|
Includes
accounts receivable written off, translation adjustments and reversals of
prior year valuation allowances.
|
(a)
3.
|
Exhibits
- An index of the exhibits included in this Form 10-K Report or
incorporated by reference is contained on pages F-1 through
F-5. Exhibit numbers 10.1 through 10.55 are management
contracts or compensatory plans or
arrangements.
|
(b)
|
See
subsection (a) 3. above.
|
(c)
|
Financial
Statements of affiliates are omitted because they do not meet the tests of
a significant subsidiary at the 20%
level.
|
Signature
|
Title
|
Date
|
/s/ Donald E. Morel,
Jr., Ph.D
|
Director,
Chief Executive Officer and Chairman
|
February
24, 2009
|
Donald
E. Morel, Jr., Ph.D
|
of
the Board, (Principal Executive Officer)
|
|
/s/ Joseph E.
Abbott
|
Vice
President and Corporate Controller
|
February
24, 2009
|
Joseph
E. Abbott
|
(Principal
Accounting Officer)
|
|
/s/ William J.
Federici
|
Vice
President and Chief Financial Officer
|
February
24, 2009
|
William
J. Federici
|
(Principal
Financial Officer)
|
|
/s/ Thomas W.
Hofmann
|
Director
|
February
24, 2009
|
Thomas
W. Hofmann*
|
||
/s/ L. Robert
Johnson
|
Director
|
February
24, 2009
|
L.
Robert Johnson*
|
||
/s/ Paula A.
Johnson
|
Director
|
February
24, 2009
|
Paula
A. Johnson*
|
||
/s/ John P.
Neafsey
|
Director
|
February
24, 2009
|
John
P. Neafsey*
|
||
/s/ John H.
Weiland
|
Director
|
February
24, 2009
|
John
H. Weiland*
|
||
/s/ Anthony
Welters
|
Director
|
February
24, 2009
|
Anthony
Welters*
|
||
/s/ Geoffrey F.
Worden
|
Director
|
February
24, 2009
|
Geoffrey
F. Worden*
|
||
/s/ Robert C.
Young
|
Director
|
February
24, 2009
|
Robert
C. Young*
|
||
/s/ Patrick J.
Zenner
|
Director
|
February
24, 2009
|
Patrick
J. Zenner*
|
Exhibit
Number
|
Description
|
||
10.11 (2) |
Award
Letter dated July 28, 2008 between us and Matthew T. Mullarkey (relating
to the 2008-2010 performance period) incorporated by reference
from
our
Form
8-K dated July 28, 2008.
|
||
10.12
(2)
|
Severance
and Non-Competition Agreement dated July 28, 2008 between us and Matthew
T. Mullarkey incorporated by reference from our Form 8-K dated July 28,
2008.
|
||
10.13
(2)
|
Non-Competition
Agreement, dated as of October 5, 1994, between us and Steven A. Ellers,
incorporated by reference from our 2007 10-K report.
|
||
10.14
(2)
|
Employment
Agreement, dated as of April 30, 2002, between us and Donald E. Morel, Jr.
is incorporated by reference from our 10-Q report for the quarter ended
September 30, 2002.
|
||
10.15
(2)
|
Amendment
#1 to the Employment Agreement between us and Donald E. Morel, Jr., dated
as of December 19, 2008.
|
||
10.16
(2)
|
Non-Qualified
Stock Option Agreement, dated as of April 30, 2002 between us and Donald
E. Morel, Jr. is incorporated by reference from our 10-Q report for the
quarter ended September 30, 2002.
|
||
10.17
(2)
|
Supplemental
Employees' Retirement Plan, as amended and restated effective January 1,
2008.
|
||
10.18
(2)
|
Non-Qualified
Deferred Compensation Plan for Designated Employees, as amended and
restated effective January 1, 2008.
|
||
10.19
(2)
|
Deferred
Compensation Plan for Outside Directors, as amended and restated effective
January 1, 2008.
|
||
10.20
(2)
|
1998
Key Employee Incentive Compensation Plan, dated March 10, 1998 (now
terminated) is incorporated by reference from our 1997 10-K
report.
|
||
10.21
(2)
|
Amendment
No. 1 to 1998 Key Employees Incentive Compensation Plan, effective October
30, 2001 is incorporated by reference from our 2001 10-K
report.
|
||
10.22
(2)
|
2007
Omnibus Incentive Compensation Plan effective as of May 1, 2007,
incorporated by reference to Exhibit 99.1 of the Company’s Form 8-K dated
May 4, 2007.
|
||
10.23
(2)
|
2004
Stock-Based Compensation Plan (now terminated) is incorporated by
reference from our Proxy Statement for the 2004 Annual Meeting of
Shareholders.
|
||
10.24
(2)
|
Form
of Director 2004 Non-Qualified Stock Option Award Agreement, issued
pursuant to the 2004 Stock-Based Compensation Plan is incorporated by
reference from our 10-Q report for the quarter ended September 30,
2004.
|
||
10.25
(2)
|
Form
of Director 2004 Stock Unit Award Agreement, issued pursuant to the 2004
Stock-Based Compensation Plan is incorporated by reference from our 10-Q
report for the quarter ended September 30, 2004.
|
||
10.26
(2)
|
Form
of Director 2004 Non-Qualified Stock Option Agreement, issued pursuant to
the 2004 Stock-Based Compensation Plan is incorporated by reference from
our 10-Q report for the quarter ended September 30,
2004.
|
||
Exhibit
Number
|
Description
|
10.27
(2)
|
Form
of Executive 2005 Bonus and Incentive Share Award Notice is incorporated
by reference from our 10-Q report for the quarter ended September 30,
2005.
|
10.28
(2)
|
Form
of Executive 2005 Non-Qualified Stock Option Award Notice is incorporated
by reference from our 10-Q report for the quarter ended September 30,
2005.
|
10.29
(2)
|
Form
of Director 2005 Non-Qualified Stock Option Award Notice is incorporated
by reference from our 10-Q report for the quarter ended September 30,
2005.
|
10.30
(2)
|
Form
of Director 2005 Stock Unit Share Award Notice is incorporated by
reference from our 10-Q report for the quarter ended September 30,
2005.
|
10.31
(2)
|
Form
of Executive 2006 Bonus and Incentive Share Award is incorporated by
reference from our 10-Q report for the quarter ended March 31,
2006.
|
10.32
(2)
|
Form
of Executive 2006 Non-Qualified Stock Option Award is incorporated by
reference from our 10-Q report for the quarter ended March 31,
2006.
|
10.33
(2)
|
Form
of 2006 Performance-Vesting Restricted (“PVR”) Share Award is incorporated
by reference from our 10-Q report for the quarter ended March 31,
2006.
|
10.34
(2)
|
Form
of Director 2006 Non-Qualified Stock Option Award Notice is incorporated
by reference from our 10-Q report for the quarter ended June 30,
2006.
|
10.35
(2)
|
Form
of Director 2006 Stock Unit Award Notice is incorporated by reference from
our 10-Q report for the quarter ended June 30, 2006.
|
10.36
(2)
|
Form
of 2007 Bonus and Incentive Share Award, issued pursuant to the 2004
Stock-Based Compensation Plan, incorporated by reference from our 10-Q
report for the quarter ended March 31, 2007.
|
10.37
(2)
|
Form
of 2007 Non-Qualified Stock Option and Performance-Vesting Share Unit
Award, issued pursuant to the 2004 Stock-Based Compensation Plan,
incorporated by reference from our 10-Q report for the quarter ended March
31, 2007.
|
10.38
(2)
|
Form
of Director 2007 Deferred Stock Award, issued pursuant to the 2007 Omnibus
Incentive Compensation Plan, incorporated by reference from our 10-Q
report for the quarter ended June 30, 2007.
|
10.39
(2)
|
Form
of 2008 Bonus and Incentive Share Award, issued pursuant to the 2007
Omnibus Incentive Compensation Plan, incorporated by reference from our
10-Q report for the quarter ended March 31, 2008.
|
10.40
(2)
|
Form
of 2008 Non-Qualified Stock Option and Performance-Vesting Share Unit
Award, issued pursuant to the 2007 Omnibus Incentive Compensation Plan,
incorporated by reference from our 10-Q report for the quarter ended March
31, 2008.
|
10.41
(2)
|
Form
of Director 2008 Deferred Stock Award, issued pursuant to the 2007 Omnibus
Incentive Compensation Plan.
|
Exhibit
Number
|
Description
|
10.54
(3)
|
Share
and Interest Purchase Agreement, dated as of July 5, 2005, among us, West
Pharmaceutical Services of Delaware, Inc., Medimop Medical Projects, Ltd.,
Medimop USA LLC and Freddy Zinger is incorporated by reference from our
8-K report dated July 8, 2005.
|
10.55
|
Note
Purchase Agreement, dated as of July 28, 2005, among us and each of the
purchasers listed on Schedule A thereto, is incorporated by reference from
our 8-K report dated August 3, 2005.
|
12.
|
Computation
of Ratio of Earnings to Fixed Charges.
|
21.
|
Subsidiaries
of the Company.
|
23.
|
Consent
of Independent Registered Public Accounting Firm.
|
24.
|
Powers
of Attorney.
|
31.1
|
Certification
by the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification
by the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification
by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.2
|
Certification
by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
(1)
|
We
agree to furnish to the SEC, upon request, a copy of each instrument with
respect to issuances of long-term debt of the Company and its
subsidiaries.
|
(2)
|
Management
compensatory plan.
|
(3)
|
We
agree to furnish to the SEC, upon request, a copy of each exhibit to this
Share and Interest Purchase
Agreement.
|
(
4
)
|
Certain
portions of this exhibit have been omitted pursuant to a confidential
treatment request submitted to the
SEC.
|
(a)
|
Gross-Up
Payment
. Notwithstanding anything herein to the
contrary, if it is determined that any Payment would be subject to the
excise tax imposed by section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with
any interest or penalties thereon, is herein referred to as an ‘
Excise Tax’
),
then Executive shall be entitled to an additional payment (a ‘
Gross-Up
Payment
’) in an amount that will place Executive in the same
after-tax economic position that Executive would have enjoyed if the
Excise Tax had not applied to the
Payment.
|
(b)
|
Determination of
Gross-Up Payment
. Subject to the provisions of Section
4(c), all determinations required under this Section 4, including whether
a Gross-Up Payment is required, the amount of the Payments constituting
excess parachute payments, and the amount of the Gross-Up Payment, shall
be made by the accounting firm that was the Company's independent auditors
immediately prior to the Change in Control (or, in default thereof, an
accounting firm mutually agreed upon by the Company and Executive) (the
‘
Accounting
Firm’
), which shall provide detailed supporting calculations both
to Executive and the Company within fifteen days of the Change in Control,
the Termination Date or any other date reasonably requested by Executive
or the Company on which a determination under this Section 4 is necessary
or advisable. If the Accounting Firm determines that no Excise
Tax is payable by Executive, the Company shall cause the Accounting Firm
to provide Executive with an opinion that the Accounting Firm has
substantial authority under the Code and Regulations not to report an
Excise Tax on Executive's federal income tax return. Any
determination by the Accounting Firm shall be binding upon Executive and
the Company. If the initial Gross-Up Payment is insufficient to
cover the amount of the Excise Tax that is ultimately determined to be
owing by Executive with respect to any Payment (hereinafter an ‘
Underpayment
’),
the Company, after exhausting its remedies under Section 4(c) below, shall
pay to Executive an additional Gross-Up Payment in respect of the
Underpayment.
|
(c)
|
Timing of
Payment.
The Company shall pay to Executive the initial
Gross-Up Payment or any required Underpayment (i) if the Executive is a
‘specified employee’ within the meaning of Section 409A of the Code, on
the later of (A) the date that is at least six months after the date of
the Executive’s termination of employment or (B) the fifth business day
following the receipt by Executive and the Company of the Accounting
Firm's determination, or (ii) if the Executive is not a “specified
employee” within the meaning of Section 409A the fifth business day
following the receipt by Executive and the Company of the Accounting
Firm’s determination. Notwithstanding anything herein to the
contrary, any Gross-Up Payment or Underpayment must be paid on or before
the end of the Executive’s taxable year following the taxable year in
which the applicable Excise Tax is
payable.
|
(d)
|
Procedures
. Executive
shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of a
Gross-Up Payment. Such notice shall be given as soon as
practicable after Executive knows of such claim and shall apprise the
Company of the nature of the claim and the date on which the claim is
requested to be paid. Executive agrees not to pay the claim
until the expiration of the thirty-day period following the date on which
Executive notifies the Company, or such shorter period ending on the date
the Taxes with respect to such claim are due (the ‘
Notice
Period
’). If the Company notifies Executive in writing
prior to the expiration of the Notice Period that it desires to contest
the claim, Executive shall: (i) give the Company any
information reasonably requested by the Company relating to the claim;
(ii) take such action in connection with the claim as the Company may
reasonably request, including accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company and
reasonably acceptable to Executive; (iii) cooperate with the Company in
good faith in contesting the claim; and (iv) permit the Company to
participate in any proceedings relating to the claim. Executive
shall permit the Company to control all proceedings related to the claim
and, at its option, permit the Company to pursue or forgo any and all
administrative appeals, proceedings, hearings, and conferences with the
taxing authority in respect of such claim. If requested by the
Company, Executive agrees either to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner and to prosecute
such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts as the Company shall determine;
provided
,
however
, that, if the
Company directs Executive to pay such claim and pursue a refund, the
Company shall advance the amount of such payment to Executive on an
after-tax and interest-free basis (the "Advance"). The
Company's control of the contest related to the claim shall be limited to
the issues related to the Gross-Up Payment and Executive shall be entitled
to settle or contest, as the case may be, any other issues raised by the
Internal Revenue Service or other taxing authority. If the
Company does not notify Executive in writing prior to the end of the
Notice Period of its desire to contest the claim, the Company shall pay to
Executive an additional Gross-Up Payment in respect of the excess
parachute payments that are the subject of the claim, and Executive agrees
to pay the amount of the Excise Tax that is the subject of the claim to
the applicable taxing authority in accordance with applicable
law. The Advance, any additional Gross-Up Payments and the
reimbursement of any related costs, expenses or taxes payable under this
Section 4(d) and/or Section 4(f) shall be made on or before the end of the
Executive’s taxable year following the taxable year in which any
additional taxes are payable by the Executive or if no additional taxes
are payable the Executive’s taxable year following the taxable year in
which the audit or litigation is
closed.
|
(e)
|
Repayments
. If,
after receipt by Executive of an Advance, Executive becomes entitled to a
refund with respect to the claim to which such Advance relates, Executive
shall pay the Company the amount of the refund (together with any interest
paid or credited thereon after Taxes applicable thereto). If,
after receipt by Executive of an Advance, a determination is made that
Executive shall not be entitled to any refund with respect to the claim
and the Company does not promptly notify Executive of its intent to
contest the denial of refund, then the amount of the Advance shall not be
required to be repaid by Executive and the amount thereof shall offset the
amount of the additional Gross-Up Payment then owing to
Executive.
|
(f)
|
Further
Assurances
. The Company shall indemnify Executive and
hold Executive harmless, on an after-tax basis, from any costs, expenses,
penalties, fines, interest or other liabilities ("Losses") incurred by
Executive with respect to the exercise by the Company of any of its rights
under this Section 4, including any Losses related to the Company's
decision to contest a claim or any imputed income to Executive resulting
from any Advance or action taken on Executive's behalf by the Company
hereunder. Subject to the last sentence of Section 4(d), the
Company shall pay all legal fees and expenses incurred under this Section
4 and shall promptly reimburse Executive, or cause the Trust to reimburse
Executive, for the reasonable expenses incurred by Executive in connection
with any actions taken by the Company or required to be taken by Executive
hereunder. The Company shall also pay all of the fees and
expenses of the Accounting Firm, including the fees and expenses related
to the opinion referred to in Section
4(b).”
|
Executive
Officer
|
Agreement
|
Date
|
Joseph
E. Abbott
|
Change-in-Control
Agreement
|
May
1, 2003
|
Amendment
#1
|
December
19, 2008
|
|
Michael
A. Anderson
|
Second
Amended and Restated Change-in-Control Agreement
|
May
1, 2003
|
Amendment
#1
|
December
18, 2008
|
|
Steven
A. Ellers
|
Second
Amended and Restated Change-in-Control Agreement
|
March
25, 2000
|
Amendment
#1
|
May
1, 2001
|
|
Amendment
#2
|
December
22, 2008
|
|
William
J. Federici
|
Change-in-Control
Agreement
|
April
28, 2004
|
Amendment
#1
|
December
18, 2008
|
|
John
R. Gailey III
|
Second
Amended and Restated Change-in-Control Agreement
|
March
25, 2000
|
Amendment
#1
|
May
1, 2001
|
|
Amendment
#2
|
December
18, 2008
|
|
Robert
S. Hargesheimer
|
Change-in-Control
Agreement
|
May
1, 2003
|
Amendment
#1
|
December
19, 2008
|
|
Richard
D. Luzzi
|
Change-in-Control
Agreement
|
June
3, 2002
|
Amendment
#1
|
December
22, 2008
|
|
Donald
A. McMillan
|
Change-in-Control
Agreement
|
February
12, 2008
|
Matthew
T. Mullarkey
|
Change-in-Control
Agreement
|
July
28, 2008
|
(a)
|
Gross-Up
Payment
. Notwithstanding anything herein to the
contrary, if it is determined that any Payment would be subject to the
excise tax imposed by section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with
any interest or penalties thereon, is herein referred to as an ‘
Excise Tax’
),
then Employee shall be entitled to an additional payment (a ‘
Gross-Up
Payment
’) in an amount that will place Employee in the same
after-tax economic position that Employee would have enjoyed if the Excise
Tax had not applied to the Payment.
|
(b)
|
Determination of
Gross-Up Payment
. Subject to the provisions of Section
8.2(c), all determinations required under this Section 8.2, including
whether a Gross-Up Payment is required, the amount of the Payments
constituting excess parachute payments, and the amount of the Gross-Up
Payment, shall be made by the accounting firm that was the Company's
independent auditors immediately prior to the Change in Control (or, in
default thereof, an accounting firm mutually agreed upon by the Company
and Employee) (the ‘
Accounting
Firm’
), which shall provide detailed supporting calculations both
to Employee and the Company within fifteen days of the Change in Control,
the Termination Date or any other date reasonably requested by Employee or
the Company on which a determination under this Section 8.2 is necessary
or advisable. If the Accounting Firm determines that no Excise
Tax is payable by Employee, the Company shall cause the Accounting Firm to
provide Employee with an opinion that the Accounting Firm has substantial
authority under the Code and Regulations not to report an Excise Tax on
Employee's federal income tax return. Any determination by the
Accounting Firm shall be binding upon Employee and the
Company. If the initial Gross-Up Payment is insufficient to
cover the amount of the Excise Tax that is ultimately determined to be
owing by Employee with respect to any Payment (hereinafter an ‘
Underpayment
’),
the Company, after exhausting its remedies under Section 8.2(c) below,
shall pay to Employee an additional Gross-Up Payment in respect of the
Underpayment.
|
(c)
|
Timing of
Payment.
The Company shall pay to Employee the initial
Gross-Up Payment or any required Underpayment (i) if the Employee is a
‘specified employee’ within the meaning of Section 409A of the Code, on
the later of (A) the date that is at least six months after the date of
the Employee’s termination of employment or (B) the fifth business day
following the receipt by Employee and the Company of the Accounting Firm's
determination, or (ii) if the Employee is not a “specified employee”
within the meaning of Section 409A the fifth business day following the
receipt by Employee and the Company of the Accounting Firm’s
determination. Notwithstanding anything herein to the contrary,
any Gross-Up Payment or Underpayment must be paid on or before the end of
the Employee’s taxable year following the taxable year in which the
applicable Excise Tax is payable.
|
(d)
|
Procedures
. Employee
shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of a
Gross-Up Payment. Such notice shall be given as soon as
practicable after Employee knows of such claim and shall apprise the
Company of the nature of the claim and the date on which the claim is
requested to be paid. Employee agrees not to pay the claim
until the expiration of the thirty-day period following the date on which
Employee notifies the Company, or such shorter period ending on the date
the Taxes with respect to such claim are due (the ‘
Notice
Period
’). If the Company notifies Employee in writing
prior to the expiration of the Notice Period that it desires to contest
the claim, Employee shall: (i) give the Company any information
reasonably requested by the Company relating to the claim; (ii) take such
action in connection with the claim as the Company may reasonably request,
including accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company and reasonably acceptable to
Employee; (iii) cooperate with the Company in good faith in contesting the
claim; and (iv) permit the Company to participate in any proceedings
relating to the claim. Employee shall permit the Company to
control all proceedings related to the claim and, at its option, permit
the Company to pursue or forgo any and all administrative appeals,
proceedings, hearings, and conferences with the taxing authority in
respect of such claim. If requested by the Company, Employee
agrees either to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner and to prosecute such contest to a
determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts as the Company
shall determine;
provided
,
however
, that, if the
Company directs Employee to pay such claim and pursue a refund, the
Company shall advance the amount of such payment to Employee on an
after-tax and interest-free basis (the "Advance"). The
Company's control of the contest related to the claim shall be limited to
the issues related to the Gross-Up Payment and Employee shall be entitled
to settle or contest, as the case may be, any other issues raised by the
Internal Revenue Service or other taxing authority. If the
Company does not notify Employee in writing prior to the end of the Notice
Period of its desire to contest the claim, the Company shall pay to
Employee an additional Gross-Up Payment in respect of the excess parachute
payments that are the subject of the claim, and Employee agrees to pay the
amount of the Excise Tax that is the subject of the claim to the
applicable taxing authority in accordance with applicable
law. The Advance, any additional Gross-Up Payments and the
reimbursement of any related costs, expenses or taxes payable under this
Section 8.2(d) and/or Section 8.2(f) shall be made on or before the end of
the Employee’s taxable year following the taxable year in which any
additional taxes are payable by the Employee or if no additional taxes are
payable the Employee’s taxable year following the taxable year in which
the audit or litigation is closed.
|
(e)
|
Repayments
. If,
after receipt by Employee of an Advance, Employee becomes entitled to a
refund with respect to the claim to which such Advance relates, Employee
shall pay the Company the amount of the refund (together with any interest
paid or credited thereon after Taxes applicable thereto). If,
after receipt by Employee of an Advance, a determination is made that
Employee shall not be entitled to any refund with respect to the claim and
the Company does not promptly notify Employee of its intent to contest the
denial of refund, then the amount of the Advance shall not be required to
be repaid by Employee and the amount thereof shall offset the amount of
the additional Gross-Up Payment then owing to
Employee.
|
(f)
|
Further
Assurances
. The Company shall indemnify Employee and
hold Employee harmless, on an after-tax basis, from any costs, expenses,
penalties, fines, interest or other liabilities ("Losses") incurred by
Employee with respect to the exercise by the Company of any of its rights
under this Section 8.2, including any Losses related to the Company's
decision to contest a claim or any imputed income to Employee resulting
from any Advance or action taken on Employee's behalf by the Company
hereunder. Subject to the last sentence of Section 8.2(d), the
Company shall pay all legal fees and expenses incurred under this Section
8.2 and shall promptly reimburse Employee, or cause the Trust to reimburse
Employee, for the reasonable expenses incurred by Employee in connection
with any actions taken by the Company or required to be taken by Employee
hereunder. The Company shall also pay all of the fees and
expenses of the Accounting Firm, including the fees and expenses related
to the opinion referred to in Section
8.2(b).”
|
1.
|
Eligible
Directors
. Duly elected members of the Board of
Directors of the Company (“Directors”) eligible to participate in this
Plan shall be those Directors who are not officers or employees of the
Company or any of its subsidiaries as defined in section 425 (f) of the
Internal Revenue Code of 1986, as
amended.
|
2.
|
Deferrable
Compensation
. An Eligible Director may elect to defer
all or any part or none of the compensation payable to such Eligible
Director by the Company for services rendered as a director (“Directors’
Fees”).
|
3.
|
Crediting of Stock
Equivalents
. An Eligible Director shall also be credited
with any Stock Equivalents awarded or credited to the Director under the
Stock-Equivalents Plan and Stock Units credited under the 2004 Stock Plan,
in accordance with the terms and conditions contained
therein.
|
4.
|
Crediting of Deferred
Stock
. An Eligible Director shall also be credited with
any Deferred Stock awarded to the Director under the 2007 Omnibus Plan, or
any successor plan thereto, in accordance with the terms and conditions
contained therein.
|
5.
|
Election to
Defer
.
|
a)
|
An
Eligible Director who desires to defer payment of his or her Directors’
Fees in any calendar year shall notify the Company’s Secretary in writing
on or before December 31 of the prior year, stating how much of his or her
Directors’ Fees shall be deferred. Except as provided in
Sections 5(b) or 5(c), an election so made shall be irrevocable and shall
apply to payments made in each calendar year thereafter until the Director
shall, on or before December 31, notify the Company’s Secretary in writing
that a different election shall apply to the following calendar
years. Any such election shall likewise continue in effect
until similarly changed.
|
b)
|
By
notifying the Company in writing, an Eligible Director may cancel (but not
postpone) his or her deferral election, if either the Eligible Director
experiences an “unforeseeable emergency” within the meaning of Section
409A of the Code. Future elections to defer are subject to
Section 5(a).
|
c)
|
An
Eligible Director may cancel (but not postpone) his or her deferral
election, if he or she experiences a Disability, provided that the
Eligible Director notifies the Company in writing by the later of the date
that is 2½ months following the date such Director incurred a Disability
or the end of the calendar year containing the year in which the Director
incurred a Disability. For purposes of this Section 5(c), a
“Disability” is any medically determinable physical or mental impairment
resulting in the service provider’s inability to perform the duties of his
or her position or any substantially similar position, where such
impairment can be expected to result in death or can be expected to last
for a continuous period of not less than six
months.
|
6.
|
Non-Deferred
Compensation
. Any Directors’ Fees that are not deferred
under this Plan shall be paid in line with normal Company
policy.
|
7.
|
Deferred Compensation
Accounts
.
|
a)
|
Credits
. At the
time that a Director makes an election to defer under Paragraph 5 above,
the Director shall also indicate whether the amount he or she chooses to
defer shall be credited to an “A” Account or to a “B” Account, as
described below. The Company shall then establish such an
Account for that Director. The Company shall also establish a
“C” Account for purposes of crediting Stock Equivalents awarded or
credited under the Stock-Equivalents Plan and Stock Units awarded under
the 2004 Stock Plan and a “D” Account for purposes of crediting Deferred
Stock awarded.
|
i)
|
“A”
Account
. If a Director elects an “A” Account, his or her
account shall be credited on the last business day of each calendar
quarter with the amount of his or her Directors’ Fees earned during that
quarter but deferred pursuant to Paragraph
5.
|
ii)
|
“B” Account
. If
a Director elects a “B” Account, his or her account shall be credited on
the last business day of each calendar quarter with a number of Stock
Equivalents equal to that number (including fractions) obtained by
dividing the amount of his or her Directors’ Fees earned during that
quarter but deferred under Paragraph 5, by the Fair Market Value of the
Company’s common stock (the “Common Stock”) on the last business day of
such calendar quarter.
|
iii)
|
“C” Account
. A
Director’s “C” Account shall be credited, from time to time, with the
Stock Equivalents, if any, that are awarded to the Director under the
Stock-Equivalents Plan and Stock Units, if any, that are awarded to the
Director under the 2004 Stock Plan.
|
iv)
|
“D”
Account
. A Director’s “D” Account shall be credited,
from time to time, with Deferred Stock, if any, that are awarded under the
2007 Omnibus Plan.
|
v)
|
“
Fair Market
Value
” (for all purposes of this Plan) shall mean the reported
closing asked price of the Common Stock on the date in question on the
principal national securities exchange on which it is then listed or
admitted to trading. If no reported sale of Common Stock takes
place on the date in question on the principal exchange, then the reported
closing asked price of the Common Stock on such date on the principal
exchange shall be determinative of “Fair Market
Value.”
|
vi)
|
Grandfathering of
Pre-2005 Amounts
. Each “A,” “B,” and “C” Account shall
be divided into separate book accounts to reflect (I) amounts earned and
vested on or before December 31, 2004 and the earnings credited thereon
(“Grandfathered Amounts”), and (II) amounts earned and vested on or after
January 1, 2005 and the earnings credited thereon (“Grandfathered
Amounts”)
|
b)
|
Earnings
. In
addition, the Company shall credit the indicated Account as
follows:
|
i)
|
“A”
Account
. As of January 1, April 1, July 1 and October 1
of each year, the Company shall credit, as earnings to each “A” Account
established on behalf of a Director, an amount equal to a percentage of
the balance in each such “A” Account at the end of the preceding calendar
quarter, determined without regard to any additions made to such “A”
Account as of the last business day of that calendar
quarter. Such percentage shall be equal to one-fourth of the
prime rate of interest at the Company’s principal commercial bank in
effect on the last day of such
quarter.
|
ii)
|
“B” Account
. As
of January 1, April 1, July 1 and October 1 of each year, the Company
shall credit as earnings to each “B” Account, an additional number of
Stock Equivalents. Effective January 1, 2009, the number of
additional Stock Equivalents to be credited shall be determined by
dividing the dividends paid during the preceding calendar quarter with
respect to the number of shares of Common Stock equal to the Stock
Equivalents in the “B” Account on the relevant dividend record dates, by
the Fair Market Value of the on the such dividend record
date.
|
iii)
|
“C” Account
. As
of January 1, April 1, July 1 and October 1 of each year, the Company
shall credit as earnings to each “C” Account an additional number of Stock
Equivalents. Effective January 1, 2009, the number of
additional Stock Equivalents to be credited shall be determined by
dividing the dividends paid during the preceding calendar quarter with
respect to the number of shares of Common Stock equal to the Stock
Equivalents in the “C” Account on the relevant dividend record dates, by
the Fair Market Value of the Common Stock on such dividend record
date.
|
iv)
|
“D” Account
. As
of January 1, April 1, July 1 and October 1 of each year, the Company
shall credit as earnings to each “D” Account an additional number of
shares of Deferred Stock. Effective January 1, 2009, the number
of additional shares of Deferred Stock to be credited shall be determined
by dividing the dividends paid during the preceding calendar quarter with
respect to the number of shares of Common Stock equal to the Stock
Equivalents in the “D” Account on the relevant dividend record dates, by
the Fair Market Value of the Common Stock on the such dividend record
date.
|
8.
|
Adjustments
. In
the event of any change in the Common Stock, the value and attributes of
each Stock Equivalent shall be appropriately adjusted consistent with such
change to the same extent as if such Stock Equivalents were instead,
issued and outstanding shares of Common Stock. A change
referred to in this Paragraph includes, without limitation, a stock
dividend, recapitalization, reorganization, merger, consolidation,
split-up, combination or exchange of shares, or rights offering to
purchase Common Stock at a price substantially below fair market value, or
any similar change affecting the Common
Stock
|
9.
|
Payment of Deferred
Compensation
. The balance in a Director’s Account shall
be determined on the first day of the calendar quarter following the
calendar quarter in which he or she ceases to be a Director of the
Company, whether by reason of death, resignation, removal, failure of
re-election, or otherwise (“Termination
Date”).
|
a)
|
Balances
of each Account shall be determined as
follows:
|
i)
|
The
balance in a Director’s “A” Account shall be the dollar amount credited to
such Account as of the Termination
Date.
|
ii)
|
The
balance in a Director’s “B” and “C” Accounts shall be the dollar amount
that would be derived if shares of Common Stock equal in number to the
Stock Equivalents credited to such Account as of the Termination Date were
sold at Fair Market Value on the Termination
Date.
|
iii)
|
The
balance in a Director’s “D” Account shall be the number of shares of
Deferred Stock credited to such Account as of the Termination Date
(inclusive of additional shares credited due to dividends payable under
Section 7).
|
b)
|
Subject
to a Director’s election to receive his or her distribution in an
alternate form and method as permitted pursuant to Section 9(c), a
Director shall receive the balance in each of his or her Accounts in ten
equal installments. The first installment shall be paid on the
January 15 immediately following the Termination Date, and the others
shall be paid on January 15 of the second through tenth years following
the Termination Date. With respect to amounts credited to a
Director’s “B” and “C” Account as of such Director’s Termination Date, the
second through tenth installments shall be increased by earnings that
would have been credited to the remaining balance if it had been held in
an “A” Account during the year. The shares credited to the
Director’s “D” Account upon his Termination shall only be increased to
reflect dividends paid on the underlying Deferred Stock under Section
5(b).
|
c)
|
A
Director may make an election to receive a distribution of his or her
Accounts in lump sum or other annual installment form to the extent
permitted by this Section 9(c),
|
i)
|
With
respect to Grandfathered Amounts, a Director may make an election to
receive a single, lump sum payment of the balance in a Director’s
Accounts. Such lump sum election is revocable, but must be made
no later than December 31 of the year before the year of a Director’s
Termination Date.
|
ii)
|
With
respect to Non-Grandfathered Amounts, a Director may make an irrevocable
election to receive either (I) a single, lump sum payment of the balance
in a Director’s Accounts or (II) annual installments for a period between
two and nine years, which shall be payable in the same amount and in the
same time and manner described in Section 9(b). Such election
must be made on or before the later of (a) December 31, 2008, or (b) the
date a Director submits his initial deferral and form of payment election
for participation in the Plan, which date shall be no later than 30 days
following the Director’s initial eligibility to participate in the
Plan.
|
iii)
|
If
the Director makes a lump sum election pursuant to Section 9(c)(i) for
Grandfathered Amounts or 9(c)(ii) for Non-Grandfathered Amounts, (I) the
balance in a Director’s “A” Account, “B” Account and “C” Account, as
determined above, shall be paid to him or her in cash in a lump sum
payable during the month following the Termination Date (or January 15,
2009, if later), and (II) the balance in a Director’s “D” Account, as
determined above, shall be paid to him or her by the issuance of shares of
Common Stock plus cash equal to the fair market value of any partial
shares of Deferred Stock credited to such Director’s “D” Account during
the month following the Termination Date (or January 15, 2009, if
later).
|
10.
|
Designation of
Beneficiary
. If a Director dies before receiving the
entire balance of his or her Accounts, any balance remaining in the
Accounts shall be paid in a lump sum to the Director’s designated
beneficiary. If the Director has not designated a beneficiary
in writing to the Company’s Secretary, then the balance shall be paid to
the Director’s estate. Any designation of beneficiary may be
revoked or modified at any time by the
Director.
|
11.
|
Unsecured Obligation
of Company
. The Company’s obligations to establish and maintain
Accounts for each electing Eligible Director and to make payments of
deferred compensation to such Eligible Director under this Plan shall be
the general unsecured obligations of the Company. The Company
shall have no obligation to establish any separate fund, purchase any
annuity contract or in any other way make special provision or specially
earmark any funds for the payment of any amounts called for under this
Plan. Neither this Plan nor any actions taken under or pursuant
to this Plan shall be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Eligible Director, his
or her designated beneficiary, executors or administrators, or any other
person or entity. If the Company chooses to establish such a
fund or purchase such an annuity contract or make any other arrangement to
provide for the payment of any amounts called for under this Plan, such
fund, contract or arrangement shall remain part of the general assets of
the Company. No person claiming benefits under this Plan shall
have any right, title, or interest in or to any such fund, contract or
arrangement.
|
12.
|
Withholding of
Taxes
. The rights of a Director to payments under this Plan shall
be subject to the Company’s obligations, if any, to withhold from such
payments all applicable federal, state, local or foreign withholding
taxes.
|
13.
|
Non-Assignability
.
Except as described in Paragraph 10, no portion of a Director’s Account
may be assigned or transferred in any manner, and no Account shall be
subject to anticipation or to voluntary or involuntary
alienation.
|
14.
|
Amendments and
Termination
.
|
a)
|
The
Plan may be amended at any time by the entire Board of Directors or by a
Committee of the Board of Directors consisting only of Directors not
eligible to defer compensation under the Plan. The Board may
amend or terminate the Plan at any time; provided that no amendment may be
made without:
|
i)
|
the
appropriate approval of the Company’s shareholders if such approval is
necessary to comply with any tax or other regulatory requirement,
including any shareholder approval required as a condition to the
exemptive relief under Section 16(b) of the Securities Exchange Act of
1934, as amended from time to time, and the regulations promulgated
thereunder (the “Exchange Act”); or
|
ii)
|
the
Director’s consent, if such amendment would adversely impair or affect any
rights or obligations of the Director under the
Plan.
|
b)
|
Prior Shareholder and
Eligible Director Approval
. Anything herein to the contrary
notwithstanding, the Board may amend the Plan without the consent of
Eligible Directors or shareholders to comply with the requirements of Rule
16b-3 issued under the Exchange Act, or any successor rules promulgated by
the Securities and Exchange
Commission.
|
15.
|
Restatement Effective
Date
. The Plan as amended and restated herein shall be effective
with respect to Director’s Fees, Stock Equivalents, Stock Units and
Deferred Stock payable on or after January 1, 2008, except to the extent
required to have an earlier effective date pursuant to Section 409A of the
Internal Revenue Code.
|
1.
|
Crediting of Deferred
Stock.
All Deferred Stock will be credited to your
account under the Company’s Non-Qualified Deferred Compensation Plan for
Outside Directors, as amended (the “Deferred Compensation Plan”) and will
be considered “Deferred Stock” for all purposes under the Deferred
Compensation Plan.
|
2.
|
Crediting of Dividend
Equivalents
. Each calendar quarter, the Company will
credit to your account an additional number of shares of Deferred
Stock. The number of shares to be credited is determined by
dividing the dividends paid in respect of the number of shares Deferred
Stock held in your account on the relevant dividend record date by the
fair market value of the Company’s common stock on the last business day
of the previous calendar quarter.
|
3.
|
Adjustments
.
The value and attributes of each share of Deferred Stock held in your
account will be appropriately adjusted consistent with any change in the
Company’s common stock, including a change resulting from a stock
dividend, recapitalization, reorganization, merger, consolidation,
split-up, or combination or exchange of
shares.
|
4.
|
Payment Upon
Termination
. Distribution of your Deferred Stock will
occur only upon your termination of service as a director. In
the event of a termination of service, your Deferred Stock will be
distributed as shares of stock (plus cash for any partial shares credited
to your account) in accordance with the terms of the Deferred Compensation
Plan. The number of shares of Deferred Stock that you are
entitled to receive will be determined on your termination
date.
|
5.
|
Incorporation of
Plans
. This Award is subject to the applicable terms and
conditions of the West Pharmaceutical Services, Inc. 2007 Omnibus
Incentive Compensation Plan and the Deferred Compensation Plan, each of
which is incorporated herein by reference, and in the event of any
contradiction, distinction or differences between this summary and the
terms of the plan documents, the plan documents will
control.
|
EXHIBIT
12.1
|
||||||||||||||||||||
West Pharmacetical
Services, Inc. and Subsidiaries
|
||||||||||||||||||||
Computation of Ratio of
Earnings to Fixed Charges
|
||||||||||||||||||||
(in
millions, except ratio amounts)
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
EARNINGS:
|
||||||||||||||||||||
Income
before income taxes and minority interests
|
109.5 | $ | 86.4 | $ | 84.5 | $ | 61.4 | $ | 42.4 | |||||||||||
Add:
|
||||||||||||||||||||
Fixed
charges
|
22.3 | 19.9 | 17.2 | 17.9 | 12.1 | |||||||||||||||
Less:
|
||||||||||||||||||||
Capitalized
interest
|
(2.6 | ) | (1.9 | ) | (0.7 | ) | (0.6 | ) | (1.3 | ) | ||||||||||
Adjusted
earnings
|
$ | 129.2 | $ | 104.4 | $ | 101.0 | $ | 78.7 | $ | 53.2 | ||||||||||
FIXED
CHARGES:
|
||||||||||||||||||||
Interest
expense
|
18.6 | $ | 16.4 | $ | 13.4 | $ | 14.7 | $ | 9.8 | |||||||||||
One-third
of rent expense
|
3.7 | 3.5 | 3.8 | 3.2 | 2.3 | |||||||||||||||
Total
fixed charges
|
$ | 22.3 | $ | 19.9 | $ | 17.2 | $ | 17.9 | $ | 12.1 | ||||||||||
Ratio
of earnings to fixed charges
|
5.79 | 5.25 | 5.88 | 4.39 | 4.39 | |||||||||||||||
State/County
of
Incorporation
|
Stock
Ownership
|
|||||
West
Pharmaceutical Services, Inc
|
Pennsylvania
|
Parent
Co.
|
||||
Tech
Group North America, Inc.
|
Arizona
|
100.0 |
%
|
|||
West
Pharmaceutical Services Lakewood, Inc.
|
Delaware
|
100.0 | ||||
West
Pharmaceutical Services Canovanas, Inc.
|
Delaware
|
100.0 | ||||
West
Pharmaceutical Services Vega Alta, Inc.
|
Delaware
|
100.0 | ||||
West
Pharmaceutical Services of Delaware, Inc.
|
Delaware
|
100.0 | ||||
West
Pharmaceutical Services Delaware Acquisition, Inc.
|
Delaware
|
100.0 | ||||
West
Analytical Laboratories LLC
|
Delaware
|
100.0 | ||||
West
Pharmaceutical Services of Florida, Inc.
|
Florida
|
100.0 | ||||
Tech
Group Grand Rapids, Inc.
|
Michigan
|
100.0 | ||||
Citation
Plastics Co.
|
New
Jersey
|
100.0 | ||||
Medimop
USA, LLC
|
Ohio
|
100.0 | ||||
West
Pharmaceutical Services Argentina S.A.
|
Argentina
|
100.0 | ||||
West
Pharmaceutical Services Australia Pty. Ltd.
|
Australia
|
100.0 | ||||
West
Pharmaceutical Services Brasil LTDA.
|
Brasil
|
100.0 | ||||
West
Pharmaceutical Packaging (China) Company Ltd.
|
China
|
50.0 | ||||
West
Pharmaceutical Services Shanghai Medical Rubber Products Co.,
Ltd.
|
China
|
100.0 | ||||
West
Pharmaceutical Services Colombia S.A.
|
Colombia
|
98.2 |
(a)
|
|||
West
Pharmaceutical Services Holding Danmark ApS
|
Denmark
|
100.0 | ||||
West
Pharmaceutical Services Danmark A/S
|
Denmark
|
100.0 | ||||
West
Pharmaceutical Services Finance Danmark ApS
|
Denmark
|
100.0 | ||||
West
Pharmaceutical Services Limited Danmark A/S
|
Denmark
|
100.0 | ||||
West
Pharmaceutical Services Group Limited
|
England
|
100.0 | ||||
West
Pharmaceutical Services Cornwall Limited.
|
England
|
100.0 | ||||
Plasmec
Public Limited Company
|
England
|
100.0 | ||||
West
Pharmaceutical Services Lewes Limited.
|
England
|
100.0 | ||||
West
Pharmaceutical Services Dublin, Limited.
|
England
|
100.0 | ||||
West
Pharmaceutical Services France S.A.
|
France
|
99.9 |
(b)
|
|||
West
Pharmaceutical Services Holding France SAS
|
France
|
100.0 | ||||
West
Pharmaceutical Services Holding GmbH
|
Germany
|
100.0 | ||||
West
Pharmaceutical Services Verwaltungs GmbH
|
Germany
|
100.0 | ||||
West
Pharmaceutical Services Deutschland GmbH Co KG
|
Germany
|
100.0 | ||||
Tech
Group Europe Limited
|
Ireland
|
100.0 | ||||
Medimop
Medical Projects (North), Ltd.
|
Israel
|
100.0 | ||||
Medimop
Medical Projects Ltd.
|
Israel
|
100.0 | ||||
West
Pharmaceutical Services Italia S.r.L.
|
Italy
|
100.0 | ||||
Tech
Group de Mexico SRL de CV
|
Mexico
|
100.0 | ||||
(mfg)
Tech Group Puerto Rico, Inc.
|
Puerto
Rico
|
100.0 | ||||
West
Pharmaceutical Services Beograd
|
Serbia
|
100.0 | ||||
West
Pharmaceutical Services Singapore Pte. Ltd
|
Singapore
|
100.0 | ||||
West
Pharmaceutical Services Hispania S.A.
|
Spain
|
100.0 | ||||
West
Pharmaceutical Services Venezuela C.A.
|
Venezuela
|
100.0 | ||||
W.P.S.F.
Limited
|
England
|
100.0 | ||||
West
Pharmaceutical Packaging India Private Limited
|
India
|
100.0 | ||||
West
Pharmaceutical Services Singapore (Holding) Pte. Limited
|
Singapore
|
100.0 | ||||
(a) 1.55%
is held in treasury by West Pharmaceutical Services
Colombia S.A.
|
||||||
(b) In
addition, .01% is owned directly by 8 individual shareholders who are
officers of the Company
|
|
1.
|
I
have reviewed this annual report on Form 10-K of West Pharmaceutical
Services, Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
|
1.
|
I
have reviewed this annual report on Form 10-K of West Pharmaceutical
Services, Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|