UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-K
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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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WEST PHARMACEUTICAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
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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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530 Herman O. West Drive, Exton, 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 2, 2017
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Part III
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Page
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BUSINESS
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RISK FACTORS
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UNRESOLVED STAFF COMMENTS
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PROPERTIES
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LEGAL PROCEEDINGS
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MINE SAFETY DISCLOSURES
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MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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SELECTED FINANCIAL DATA
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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CONTROLS AND PROCEDURES
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OTHER INFORMATION
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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EXECUTIVE COMPENSATION
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
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PRINCIPAL ACCOUNTING FEES AND SERVICES
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EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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Proprietary Products
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Manufacturing:
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North American Operations
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European Operations
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Asia Pacific Operations
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United States
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Denmark
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China
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Clearwater, FL
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Horsens
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Qingpu
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Jersey Shore, PA
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England
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India
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Kearney, NE
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St. Austell
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Sri City
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Kinston, NC
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France
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Singapore
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Lititz, PA
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Le Nouvion
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Jurong
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Scottsdale, AZ (2)
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Le Vaudreuil
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St. Petersburg, FL (1)
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Germany
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Eschweiler (1)
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South American Operations
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Stolberg
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Brazil
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Serbia
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Sao Paulo
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Kovin
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Mold-and-Die Tool Shop:
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Contract Analytical Laboratory:
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North American Operations
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European Operations
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North American Operations
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United States
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England
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United States
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Upper Darby, PA
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Bodmin (2)
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Exton, PA
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Contract-Manufactured Products
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Manufacturing:
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North American Operations
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European Operations
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United States
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Ireland
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Frankfort, IN (2)
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Dublin (2)
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Grand Rapids, MI
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Phoenix, AZ (2)
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Tempe, AZ (2)
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Williamsport, PA
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Puerto Rico
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Cayey
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(1)
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This manufacturing facility is also used for research and development activities.
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(2)
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This facility is leased in whole or in part.
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Name
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Age
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Position
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Michael A. Anderson
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61
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Vice President and Treasurer since June 2001. He was Finance Director, Drug Delivery Systems Division from October 1999 to June 2001, Vice President, Business Development from April 1997 to October 1999 and Director of Taxes from July 1992 to April 1997. He retired from West as of December 31, 2016.
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Annette F. Favorite
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52
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Senior Vice President and Chief Human Resources Officer since October 2015. Prior to joining West, she spent more than 25 years at IBM Corporation, an information technology services company, in a number of strategic and global human resources roles. Most recently, she served as Vice President, Global Talent Management
.
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William J. Federici
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57
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Senior Vice President and Chief Financial Officer since joining West in August 2003. Acting Treasurer since January 2017. He was National Industry Director for Pharmaceuticals of KPMG LLP (accounting firm) from June 2002 until August 2003 and, prior thereto, an audit partner with Arthur Andersen, LLP.
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Karen A. Flynn
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54
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Senior Vice President and Chief Commercial Officer since January 2016. She was President, Pharmaceutical Packaging Systems from October 2014 to January 2016, President, Pharmaceutical Packaging Systems Americas Region from June 2012 to October 2014, and Vice President, Sales from May 2008 to June 2012. From 2000 to 2008, she worked in Sales Management, most recently as Vice President, Global Accounts, for Catalent (formerly a business segment of Cardinal Health). Prior thereto, she held various positions at West, including Quality, Research and Development, and Sales.
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Eric M. Green
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47
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Chief Executive Officer since April 2015 and President since December 2015. Prior to joining West, he was Executive Vice President and President of the Research Markets business unit at Sigma-Aldrich Corporation, a leading life science and technology company, from 2013 to 2015. From 2009 to 2013, he served as Vice President and Managing Director, International, where he was responsible for Asia Pacific and Latin America, and prior thereto, held various commercial and operational roles.
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Daniel Malone
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55
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Vice President and Corporate Controller since August 2011. He was Vice President of Finance, Pharmaceutical Packaging Systems Americas Region from September 2008 to August 2011 and Director of Financial and Management Reporting from October 1999 to September 2008.
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George L. Miller
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62
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Senior Vice President, General Counsel and Corporate Secretary since joining West in November 2015. Previously, he served as Senior Vice President, General Counsel and Corporate Secretary for Sigma-Aldrich Corporation from 2009 to 2015. Prior to working at Sigma-Aldrich, he held senior legal positions with Novartis AG, a global healthcare company.
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David A. Montecalvo
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51
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Senior Vice President, Global Operations and Supply Chain since September 2016. Prior to joining West, he served in a number of senior leadership roles at Medtronic plc, including Vice President, Contract Manufacturing Operations, for the company's Restorative Therapies Group, and Vice President, Business Operations Integration, where he was responsible for directing and leading the global operations integration of Covidien plc into Medtronic. Prior thereto, he held senior operations and product development roles at Urologix, Inc. and LecTec Corporation.
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Eric Resnick
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53
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Vice President and Chief Technology Officer since March 2016. Previously, he served as Vice President and General Manager of Integrated Packaging and Delivery within West's Innovation and Technology Team and President Proprietary Products - Pharmaceutical Delivery Systems from March 2015 until March 2016. He served as Vice President Research and Development and Self-Injection Systems from March 2014 until March 2015, and Vice President and General Manager of West's Contract Manufacturing Delivery Devices division from 2008 until March 2014. Prior thereto, he held various positions of increasing responsibility since joining The Tech Group in 2001. Prior to joining West, he held engineering and operating roles with Eastman Kodak Company and Ortho Clinical Diagnostics.
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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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2016
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69.59
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53.88
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77.71
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68.42
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84.33
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71.23
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86.50
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70.17
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86.50
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53.88
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2015
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60.30
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48.66
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60.00
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52.73
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61.73
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53.10
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64.59
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52.79
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64.59
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48.66
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Period
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Total number of shares purchased
(1)(2)
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Average price paid per share
(1)(2)
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Total number of shares purchased as
part of publicly
announced plans or
programs
(2)(3)
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Maximum number (or approximate dollar value)
of shares that may
yet be purchased
under the plans or
programs
(2)(3)
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October 1 – 31, 2016
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70
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$
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72.23
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—
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329,190
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November 1 – 30, 2016
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329,390
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77.24
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329,190
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—
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December 1 – 31, 2016
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70
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82.86
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—
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—
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Total
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329,530
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$
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77.24
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329,190
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—
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(1)
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Includes 340 shares purchased on behalf of employees enrolled in the Non-Qualified Deferred Compensation Plan for Designated Employees (Amended and Restated Effective January 1, 2008). Under the plan, Company match contributions are delivered to the plan’s investment administrator, who then purchases shares in the open market and credits the shares to individual plan accounts.
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(2)
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In December 2015, we announced a share repurchase program authorizing the repurchase of up to 700,000 shares of our common stock from time to time on the open market or in privately-negotiated transactions as permitted under the Securities Exchange Act of 1934 Rule 10b-18. During the fourth quarter of 2016, we purchased 329,190 shares of our common stock under this program at a cost of $25.4 million, or an average price of $77.25 per share. During the year ended December 31, 2016, we purchased 700,000 shares of our common stock under this program at a cost of $52.2 million, or an average price of $74.54 per share. This share repurchase program expired on December 31, 2016.
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(3)
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In December 2016, we announced a share repurchase program authorizing the repurchase of up to 800,000 shares of our common stock from time to time on the open market or in privately-negotiated transactions as permitted under the Securities Exchange Act of 1934 Rule 10b-18. The number of shares to be repurchased and the timing of such transactions will depend on a variety of factors, including market conditions. This share repurchase program commenced on January 1, 2017 and is expected to be completed by December 31, 2017.
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(in millions, except per share data)
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2016
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2015
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2014
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2013
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2012
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SUMMARY OF OPERATIONS
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Net sales
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$
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1,509.1
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$
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1,399.8
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$
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1,421.4
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$
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1,368.4
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$
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1,266.4
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Operating profit
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196.8
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128.6
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182.0
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162.4
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135.1
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Net income
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143.6
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95.6
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127.1
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112.3
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80.7
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|||||
Net income per share:
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||||||||||
Basic (1)
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$
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1.96
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$
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1.33
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$
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1.79
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$
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1.61
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$
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1.19
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Diluted (2)
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1.91
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1.30
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1.75
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1.57
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1.15
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|||||
Weighted average common shares outstanding
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73.3
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72.0
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70.9
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69.6
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68.1
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|||||
Weighted average shares assuming dilution
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75.0
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73.8
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72.8
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71.4
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71.8
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|||||
Dividends declared per common share
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$
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0.50
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$
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0.46
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$
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0.41
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$
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0.39
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$
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0.37
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YEAR-END FINANCIAL POSITION
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||||||||||
Cash and cash equivalents
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$
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203.0
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$
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274.6
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$
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255.3
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$
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230.0
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$
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161.9
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Working capital
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400.9
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359.4
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406.6
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413.6
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295.4
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|||||
Total assets
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1,716.7
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1,695.1
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1,669.7
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1,670.2
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1,562.5
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|||||
Total invested capital:
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||||||||||
Total debt
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228.6
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298.2
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335.5
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372.1
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410.0
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|||||
Total equity
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1,117.5
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1,023.9
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956.9
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906.4
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728.9
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|||||
Total invested capital
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$
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1,346.1
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$
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1,322.1
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$
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1,292.4
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$
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1,278.5
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$
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1,138.9
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||||||||||
PERFORMANCE MEASUREMENTS (3)
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||||||||||
Gross margin (a)
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33.2
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%
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32.6
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%
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31.5
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%
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31.8
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%
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30.6
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%
|
|||||
Operating profitability (b)
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13.0
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%
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9.2
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%
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12.8
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%
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11.9
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%
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10.7
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%
|
|||||
Effective tax rate
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28.7
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%
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22.6
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%
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28.0
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%
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27.4
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%
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30.2
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%
|
|||||
Return on invested capital (c)
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10.5
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%
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7.6
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%
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10.2
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%
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9.8
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%
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8.8
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%
|
|||||
Net debt-to-total invested capital (d)
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2.2
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%
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2.3
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%
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7.7
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%
|
13.6
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%
|
25.4
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%
|
|||||
Research and development expenses
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$
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36.8
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|
$
|
34.1
|
|
$
|
37.3
|
|
$
|
37.9
|
|
$
|
33.2
|
|
Operating cash flow
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219.4
|
|
212.4
|
|
182.9
|
|
220.5
|
|
187.4
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|||||
Stock price range
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$86.50-53.88
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$64.59-48.66
|
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$55.29-39.11
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$50.60-27.31
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$28.01-18.68
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▪
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Net income in 2016 included the impact of restructuring and related charges of $17.4 million (net of $9.0 million in tax), a charge related to the devaluation of the Venezuelan Bolivar of $2.7 million, a pension curtailment gain of $1.3 million (net of $0.8 million in tax), and a discrete tax charge of $1.0 million.
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▪
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Net income in 2015 included the impact of a pension settlement charge of $32.0 million (net of $18.4 million in tax), a charge for executive retirement and related costs of $6.9 million (net of $4.0 million in tax) and a discrete tax charge of $0.8 million.
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▪
|
Net income in 2014 included the impact of a charge for license costs associated with acquired in-process research of $0.8 million (net of $0.4 million in tax) and discrete tax charges of $1.8 million.
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▪
|
Net income in 2013 included the impact of a loss on extinguishment of debt of $0.2 million and net discrete tax charges of $3.6 million.
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▪
|
Net income in 2012 included the impact of restructuring and related charges of $1.4 million (net of $0.7 million in tax), an impairment charge of $2.1 million (net of $1.3 million in tax), an increase in acquisition-related contingencies of $1.0 million (net of $0.2 million in tax), a loss on extinguishment of debt of $9.8 million (net of $1.8 million in tax) and discrete tax charges of $2.1 million.
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
||||||||
Proprietary Products
|
$
|
1,189.9
|
|
|
$
|
1,098.3
|
|
|
$
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1,126.3
|
|
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8.3
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%
|
|
(2.5
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)%
|
Contract-Manufactured Products
|
320.2
|
|
|
302.4
|
|
|
295.7
|
|
|
5.9
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%
|
|
2.3
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%
|
|||
Intersegment sales elimination
|
(1.0
|
)
|
|
(0.9
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
—
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|
|||
Consolidated net sales
|
$
|
1,509.1
|
|
|
$
|
1,399.8
|
|
|
$
|
1,421.4
|
|
|
7.8
|
%
|
|
(1.5
|
)%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
||||||||
Proprietary Products:
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Profit
|
$
|
448.0
|
|
|
$
|
404.5
|
|
|
$
|
396.6
|
|
|
10.8
|
%
|
|
2.0
|
%
|
Gross Profit Margin
|
37.7
|
%
|
|
36.8
|
%
|
|
35.2
|
%
|
|
|
|
|
|||||
Contract-Manufactured Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross Profit
|
$
|
53.1
|
|
|
$
|
51.3
|
|
|
$
|
51.2
|
|
|
3.5
|
%
|
|
0.2
|
%
|
Gross Profit Margin
|
16.6
|
%
|
|
17.0
|
%
|
|
17.3
|
%
|
|
|
|
|
|||||
Consolidated Gross Profit
|
$
|
501.1
|
|
|
$
|
455.8
|
|
|
$
|
447.8
|
|
|
9.9
|
%
|
|
1.8
|
%
|
Consolidated Gross Profit Margin
|
33.2
|
%
|
|
32.6
|
%
|
|
31.5
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
||||||||
Proprietary Products
|
$
|
36.8
|
|
|
$
|
34.1
|
|
|
$
|
37.3
|
|
|
7.9
|
%
|
|
(8.6
|
)%
|
Contract-Manufactured Products
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Consolidated R&D costs
|
$
|
36.8
|
|
|
$
|
34.1
|
|
|
$
|
37.3
|
|
|
7.9
|
%
|
|
(8.6
|
)%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
||||||||
Proprietary Products
|
$
|
168.3
|
|
|
$
|
159.4
|
|
|
$
|
160.7
|
|
|
5.6
|
%
|
|
(0.8
|
)%
|
Contract-Manufactured Products
|
15.2
|
|
|
15.8
|
|
|
14.8
|
|
|
(3.8
|
)%
|
|
6.8
|
%
|
|||
Corporate
|
56.3
|
|
|
57.8
|
|
|
53.2
|
|
|
(2.6
|
)%
|
|
8.6
|
%
|
|||
Consolidated SG&A costs
|
$
|
239.8
|
|
|
$
|
233.0
|
|
|
$
|
228.7
|
|
|
2.9
|
%
|
|
1.9
|
%
|
SG&A as a % of net sales
|
15.9
|
%
|
|
16.6
|
%
|
|
16.1
|
%
|
|
|
|
|
Expense (income)
|
Year Ended December 31,
|
||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Proprietary Products
|
$
|
1.0
|
|
|
$
|
(1.2
|
)
|
|
$
|
(1.0
|
)
|
Contract-Manufactured Products
|
(0.3
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||
Corporate
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Unallocated items
|
27.0
|
|
|
61.3
|
|
|
1.2
|
|
|||
Consolidated other expense (income)
|
$
|
27.7
|
|
|
$
|
60.1
|
|
|
$
|
(0.2
|
)
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
||||||||
Proprietary Products
|
$
|
241.9
|
|
|
$
|
212.2
|
|
|
$
|
199.6
|
|
|
14.0
|
%
|
|
6.3
|
%
|
Contract-Manufactured Products
|
38.2
|
|
|
35.5
|
|
|
36.9
|
|
|
7.6
|
%
|
|
(3.8
|
)%
|
|||
Corporate
|
(56.3
|
)
|
|
(57.8
|
)
|
|
(53.3
|
)
|
|
(2.6
|
)%
|
|
8.4
|
%
|
|||
Adjusted consolidated operating profit
|
$
|
223.8
|
|
|
$
|
189.9
|
|
|
$
|
183.2
|
|
|
17.9
|
%
|
|
3.7
|
%
|
Adjusted consolidated operating profit margin
|
14.8
|
%
|
|
13.6
|
%
|
|
12.9
|
%
|
|
|
|
|
|||||
Unallocated items
|
(27.0
|
)
|
|
(61.3
|
)
|
|
(1.2
|
)
|
|
|
|
|
|||||
Consolidated operating profit
|
$
|
196.8
|
|
|
$
|
128.6
|
|
|
$
|
182.0
|
|
|
53.0
|
%
|
|
(29.3
|
)%
|
Consolidated operating profit margin
|
13.0
|
%
|
|
9.2
|
%
|
|
12.8
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
||||||||
Interest expense
|
$
|
11.7
|
|
|
$
|
15.6
|
|
|
$
|
18.1
|
|
|
(25.0
|
)%
|
|
(13.8
|
)%
|
Capitalized interest
|
(3.6
|
)
|
|
(1.5
|
)
|
|
(1.6
|
)
|
|
140.0
|
%
|
|
(6.3
|
)%
|
|||
Interest income
|
(1.1
|
)
|
|
(1.6
|
)
|
|
(3.5
|
)
|
|
(31.3
|
)%
|
|
(54.3
|
)%
|
|||
Interest expense, net
|
$
|
7.0
|
|
|
$
|
12.5
|
|
|
$
|
13.0
|
|
|
(44.0
|
)%
|
|
(3.8
|
)%
|
($ in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by operating activities
|
$
|
219.4
|
|
|
$
|
212.4
|
|
|
$
|
182.9
|
|
Net cash used in investing activities
|
$
|
(175.8
|
)
|
|
$
|
(129.5
|
)
|
|
$
|
(104.0
|
)
|
Net cash used in financing activities
|
$
|
(113.9
|
)
|
|
$
|
(41.5
|
)
|
|
$
|
(30.8
|
)
|
($ in millions)
|
December 31, 2016
|
|
December 31, 2015
|
||||
Cash and cash equivalents
|
$
|
203.0
|
|
|
$
|
274.6
|
|
Working capital
|
$
|
400.9
|
|
|
$
|
359.4
|
|
Total debt
|
$
|
228.6
|
|
|
$
|
298.2
|
|
Total equity
|
$
|
1,117.5
|
|
|
$
|
1,023.9
|
|
Net debt-to-total invested capital
|
2.2
|
%
|
|
2.3
|
%
|
|
|
Payments Due By Period
|
|||||||||||||
($ in millions)
|
Total
|
Less than 1 year
|
1 - 3 years
|
3 - 5 years
|
More than 5 years
|
||||||||||
Purchase obligations
(1)
|
$
|
75.7
|
|
$
|
4.2
|
|
$
|
7.5
|
|
$
|
18.3
|
|
$
|
45.7
|
|
Debt (including unamortized debt issuance costs)
|
229.5
|
|
2.4
|
|
32.7
|
|
26.4
|
|
168.0
|
|
|||||
Interest on debt and interest rate swaps
(2)
|
58.7
|
|
9.0
|
|
14.2
|
|
13.5
|
|
22.0
|
|
|||||
Operating lease obligations
|
68.4
|
|
12.3
|
|
19.4
|
|
10.2
|
|
26.5
|
|
|||||
Other long-term liabilities
(3)
|
19.4
|
|
0.5
|
|
3.1
|
|
5.3
|
|
10.5
|
|
|||||
Total contractual obligations
(4)
|
$
|
451.7
|
|
$
|
28.4
|
|
$
|
76.9
|
|
$
|
73.7
|
|
$
|
272.7
|
|
(1)
|
Our business creates a need to enter into various commitments with suppliers. In accordance with U.S. GAAP, these purchase obligations are not reflected in the accompanying consolidated balance sheets. These purchase commitments do not exceed our projected requirements and are in the normal course of business.
|
(2)
|
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.
|
(3)
|
Represents acquisition-related contingencies. In connection with certain business acquisitions, we agreed to make payments to the sellers if and when certain operating milestones are achieved, such as sales and operating income targets.
|
(4)
|
This table does not include obligations pertaining to pension and postretirement benefits because the actual amount and timing of future contributions may vary significantly depending upon plan asset performance, benefit payments, and other factors. Contributions to our plans are expected to be $23.7 million in 2017. See Note 13,
Benefit Plans
, for estimated benefit payments over the next ten years.
|
($ in millions)
|
2017
|
2018
|
2019
|
2020
|
2021
|
Thereafter
|
Carrying Value
|
Fair Value
|
||||||||||
Current Debt and Capital Leases:
|
|
|
|
|
|
|
|
|
||||||||||
U.S. dollar denominated
(1)
|
$
|
2.4
|
|
|
|
|
|
|
$
|
2.4
|
|
$
|
2.4
|
|
||||
Average interest rate - variable
|
2.3
|
%
|
|
|
|
|
|
|
|
|||||||||
Long-Term Debt:
|
|
|
|
|
|
|
|
|
||||||||||
U.S. dollar denominated
(1)
|
|
|
32.6
|
|
0.1
|
|
|
|
|
|
32.7
|
|
32.7
|
|
||||
Average interest rate - variable
|
|
|
2.3
|
%
|
|
|
|
|
|
|
|
|
||||||
U.S. dollar denominated
|
|
|
|
|
|
168.0
|
|
168.0
|
|
169.2
|
|
|||||||
Average interest rate - fixed
|
|
|
|
|
|
3.9
|
%
|
|
|
|||||||||
Euro denominated
|
|
|
|
22.1
|
|
|
|
22.1
|
|
22.1
|
|
|||||||
Average interest rate - variable
|
|
|
|
1.0
|
%
|
|
|
|
|
|||||||||
Yen denominated
|
|
|
|
4.3
|
|
|
|
4.3
|
|
4.3
|
|
|||||||
Average interest rate - variable
|
|
|
|
1.0
|
%
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
|
$
|
1,509.1
|
|
|
$
|
1,399.8
|
|
|
$
|
1,421.4
|
|
Cost of goods and services sold
|
|
1,008.0
|
|
|
944.0
|
|
|
973.6
|
|
|||
Gross profit
|
|
501.1
|
|
|
455.8
|
|
|
447.8
|
|
|||
Research and development
|
|
36.8
|
|
|
34.1
|
|
|
37.3
|
|
|||
Selling, general and administrative expenses
|
|
239.8
|
|
|
233.0
|
|
|
228.7
|
|
|||
Other expense (income) (Note 14)
|
|
27.7
|
|
|
60.1
|
|
|
(0.2
|
)
|
|||
Operating profit
|
|
196.8
|
|
|
128.6
|
|
|
182.0
|
|
|||
Interest expense
|
|
8.1
|
|
|
14.1
|
|
|
16.5
|
|
|||
Interest income
|
|
1.1
|
|
|
1.6
|
|
|
3.5
|
|
|||
Income before income taxes
|
|
189.8
|
|
|
116.1
|
|
|
169.0
|
|
|||
Income tax expense
|
|
54.4
|
|
|
26.3
|
|
|
47.2
|
|
|||
Equity in net income of affiliated companies
|
|
8.2
|
|
|
5.8
|
|
|
5.3
|
|
|||
Net income
|
|
$
|
143.6
|
|
|
$
|
95.6
|
|
|
$
|
127.1
|
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
1.96
|
|
|
$
|
1.33
|
|
|
$
|
1.79
|
|
Diluted
|
|
$
|
1.91
|
|
|
$
|
1.30
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
73.3
|
|
|
72.0
|
|
|
70.9
|
|
|||
Diluted
|
|
75.0
|
|
|
73.8
|
|
|
72.8
|
|
|||
|
|
|
|
|
|
|
||||||
Dividends declared per share
|
|
$
|
0.50
|
|
|
$
|
0.46
|
|
|
$
|
0.41
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
143.6
|
|
|
$
|
95.6
|
|
|
$
|
127.1
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
(18.1
|
)
|
|
(70.3
|
)
|
|
(71.3
|
)
|
|||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Prior service credit arising during period, net of tax of $1.1 and $0.3
|
1.9
|
|
|
0.4
|
|
|
—
|
|
|||
Net actuarial loss arising during period, net of tax of $(4.8), $(6.0) and $(10.6)
|
(11.1
|
)
|
|
(9.3
|
)
|
|
(18.9
|
)
|
|||
Settlement effects arising during period, net of tax of $1.1 and $18.7
|
2.0
|
|
|
31.7
|
|
|
—
|
|
|||
Less: amortization of actuarial loss, net of tax of $1.2, $1.6 and $1.1
|
2.2
|
|
|
2.9
|
|
|
2.0
|
|
|||
Less: amortization of prior service credit, net of tax of $(0.5), $(0.5) and $(0.5)
|
(0.9
|
)
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|||
Less: amortization of transition obligation
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||
Net (losses) gains on investment securities, net of tax of $(0.1), $0.4 and $0.2
|
(0.2
|
)
|
|
0.7
|
|
|
0.4
|
|
|||
Net (losses) gains on derivatives, net of tax of $0.1, $0.8 and $0.9
|
(0.1
|
)
|
|
1.2
|
|
|
1.7
|
|
|||
Other comprehensive loss, net of tax
|
(24.2
|
)
|
|
(43.4
|
)
|
|
(86.8
|
)
|
|||
Comprehensive income
|
$
|
119.4
|
|
|
$
|
52.2
|
|
|
$
|
40.3
|
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
203.0
|
|
|
$
|
274.6
|
|
Accounts receivable, net
|
200.5
|
|
|
181.4
|
|
||
Inventories
|
199.3
|
|
|
181.1
|
|
||
Other current assets
|
39.1
|
|
|
36.6
|
|
||
Total current assets
|
641.9
|
|
|
673.7
|
|
||
Property, plant and equipment
|
1,554.7
|
|
|
1,440.3
|
|
||
Less: accumulated depreciation and amortization
|
776.4
|
|
|
719.3
|
|
||
Property, plant and equipment, net
|
778.3
|
|
|
721.0
|
|
||
Investments in affiliated companies
|
82.7
|
|
|
61.3
|
|
||
Goodwill
|
103.0
|
|
|
104.6
|
|
||
Deferred income taxes
|
66.2
|
|
|
70.5
|
|
||
Intangible assets, net
|
23.3
|
|
|
37.6
|
|
||
Other noncurrent assets
|
21.3
|
|
|
26.4
|
|
||
Total Assets
|
$
|
1,716.7
|
|
|
$
|
1,695.1
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Notes payable and other current debt
|
$
|
2.4
|
|
|
$
|
69.3
|
|
Accounts payable
|
122.0
|
|
|
119.8
|
|
||
Pension and other postretirement benefits
|
2.2
|
|
|
5.6
|
|
||
Accrued salaries, wages and benefits
|
51.6
|
|
|
53.0
|
|
||
Income taxes payable
|
4.5
|
|
|
12.8
|
|
||
Other current liabilities
|
58.3
|
|
|
53.8
|
|
||
Total current liabilities
|
241.0
|
|
|
314.3
|
|
||
Long-term debt
|
226.2
|
|
|
228.9
|
|
||
Deferred income taxes
|
9.2
|
|
|
12.4
|
|
||
Pension and other postretirement benefits
|
75.6
|
|
|
62.0
|
|
||
Other long-term liabilities
|
47.2
|
|
|
53.6
|
|
||
Total Liabilities
|
599.2
|
|
|
671.2
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
||||
Preferred stock, 3.0 million shares authorized; 0 shares issued and 0 shares outstanding in 2016 and 2015
|
—
|
|
|
—
|
|
||
Common stock, par value $.25 per share; 100.0 million shares authorized; shares issued: 73.7 million and 72.4 million; shares outstanding: 73.1 million and 72.3 million
|
18.4
|
|
|
18.1
|
|
||
Capital in excess of par value
|
260.4
|
|
|
207.8
|
|
||
Retained earnings
|
1,071.6
|
|
|
964.6
|
|
||
Accumulated other comprehensive loss
|
(186.8
|
)
|
|
(162.6
|
)
|
||
Treasury stock, at cost (0.6 million and 0.1 million shares in 2016 and 2015)
|
(46.1
|
)
|
|
(4.0
|
)
|
||
Total Equity
|
1,117.5
|
|
|
1,023.9
|
|
||
Total Liabilities and Equity
|
$
|
1,716.7
|
|
|
$
|
1,695.1
|
|
|
Common Shares Issued
|
|
Common Stock
|
|
Capital in Excess of Par Value
|
|
Number of Treasury Shares
|
|
Treasury Stock
|
|
Retained earnings
|
|
Accumulated other comprehensive loss
|
|
Total
|
||||||||||||||
Balance, December 31, 2013
|
70.4
|
|
|
$
|
17.6
|
|
|
$
|
120.0
|
|
|
0.2
|
|
|
$
|
(3.8
|
)
|
|
$
|
805.0
|
|
|
$
|
(32.4
|
)
|
|
$
|
906.4
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127.1
|
|
|
—
|
|
|
127.1
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
15.5
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
15.2
|
|
||||||
Shares issued under stock plans
|
1.1
|
|
|
0.2
|
|
|
20.9
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.1
|
|
||||||
Shares repurchased for employee tax withholdings
|
(0.1
|
)
|
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
||||||
Excess tax benefits from employee stock plans
|
—
|
|
|
—
|
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.9
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.9
|
)
|
|
—
|
|
|
(29.9
|
)
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(86.8
|
)
|
|
(86.8
|
)
|
||||||
Balance, December 31, 2014
|
71.4
|
|
|
17.8
|
|
|
160.2
|
|
|
0.1
|
|
|
(4.1
|
)
|
|
902.2
|
|
|
(119.2
|
)
|
|
956.9
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95.6
|
|
|
—
|
|
|
95.6
|
|
||||||
Stock-based compensation
|
—
|
|
|
0.1
|
|
|
26.4
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
26.7
|
|
||||||
Shares issued under stock plans
|
1.1
|
|
|
0.2
|
|
|
17.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.8
|
|
||||||
Shares repurchased for employee tax withholdings
|
(0.1
|
)
|
|
—
|
|
|
(5.5
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(5.6
|
)
|
||||||
Excess tax benefits from employee stock plans
|
—
|
|
|
—
|
|
|
9.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.1
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.2
|
)
|
|
—
|
|
|
(33.2
|
)
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43.4
|
)
|
|
(43.4
|
)
|
||||||
Balance, December 31, 2015
|
72.4
|
|
|
18.1
|
|
|
207.8
|
|
|
0.1
|
|
|
(4.0
|
)
|
|
964.6
|
|
|
(162.6
|
)
|
|
1,023.9
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143.6
|
|
|
—
|
|
|
143.6
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
17.1
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
17.3
|
|
||||||
Shares issued under stock plans
|
1.4
|
|
|
0.3
|
|
|
21.0
|
|
|
—
|
|
|
9.9
|
|
|
—
|
|
|
—
|
|
|
31.2
|
|
||||||
Shares purchased under share repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
(52.2
|
)
|
|
—
|
|
|
—
|
|
|
(52.2
|
)
|
||||||
Shares repurchased for employee tax withholdings
|
(0.1
|
)
|
|
—
|
|
|
(3.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.7
|
)
|
||||||
Excess tax benefits from employee stock plans
|
—
|
|
|
—
|
|
|
18.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18.2
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36.6
|
)
|
|
—
|
|
|
(36.6
|
)
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.2
|
)
|
|
(24.2
|
)
|
||||||
Balance, December 31, 2016
|
73.7
|
|
|
$
|
18.4
|
|
|
$
|
260.4
|
|
|
0.6
|
|
|
$
|
(46.1
|
)
|
|
$
|
1,071.6
|
|
|
$
|
(186.8
|
)
|
|
$
|
1,117.5
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
143.6
|
|
|
$
|
95.6
|
|
|
$
|
127.1
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
88.1
|
|
|
86.1
|
|
|
84.8
|
|
|||
Amortization
|
2.6
|
|
|
3.8
|
|
|
5.2
|
|
|||
Stock-based compensation
|
19.5
|
|
|
29.6
|
|
|
18.6
|
|
|||
Non-cash restructuring charges
|
17.5
|
|
|
—
|
|
|
—
|
|
|||
Pension (curtailment gain) settlement charge
|
(2.1
|
)
|
|
50.4
|
|
|
—
|
|
|||
Loss on sales of equipment
|
0.7
|
|
|
0.4
|
|
|
0.3
|
|
|||
Deferred income taxes
|
21.5
|
|
|
(8.9
|
)
|
|
7.0
|
|
|||
Pension and other retirement plans, net
|
(6.5
|
)
|
|
(28.8
|
)
|
|
(25.0
|
)
|
|||
Equity in undistributed earnings of affiliates, net of dividends
|
(6.8
|
)
|
|
(5.0
|
)
|
|
(4.5
|
)
|
|||
Changes in assets/liabilities:
|
|
|
|
|
|
||||||
Increase in accounts receivable
|
(23.3
|
)
|
|
(14.1
|
)
|
|
(6.3
|
)
|
|||
Increase in inventories
|
(21.2
|
)
|
|
(11.4
|
)
|
|
(16.2
|
)
|
|||
Increase in other current assets
|
(2.4
|
)
|
|
(2.6
|
)
|
|
(11.7
|
)
|
|||
Increase (decrease) in accounts payable
|
6.1
|
|
|
17.2
|
|
|
(3.5
|
)
|
|||
Changes in other assets and liabilities
|
(17.9
|
)
|
|
0.1
|
|
|
7.1
|
|
|||
Net cash provided by operating activities
|
219.4
|
|
|
212.4
|
|
|
182.9
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
(170.2
|
)
|
|
(131.6
|
)
|
|
(111.9
|
)
|
|||
Acquisition of patents and other long-term assets
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||
Sales and maturities of short-term investments
|
—
|
|
|
—
|
|
|
16.8
|
|
|||
Purchases of short-term investments
|
—
|
|
|
—
|
|
|
(9.3
|
)
|
|||
Purchase of cost-method investments
|
(8.4
|
)
|
|
(1.5
|
)
|
|
(0.5
|
)
|
|||
Other, net
|
2.8
|
|
|
3.6
|
|
|
1.1
|
|
|||
Net cash used in investing activities
|
(175.8
|
)
|
|
(129.5
|
)
|
|
(104.0
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Borrowings under revolving credit agreements
|
—
|
|
|
71.4
|
|
|
263.4
|
|
|||
Repayments under revolving credit agreements
|
—
|
|
|
(71.4
|
)
|
|
(283.4
|
)
|
|||
Debt issuance costs
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|||
Repayments of long-term debt
|
(69.8
|
)
|
|
(27.4
|
)
|
|
(2.3
|
)
|
|||
Dividend payments
|
(35.8
|
)
|
|
(32.4
|
)
|
|
(29.1
|
)
|
|||
Contingent consideration payments
|
(0.3
|
)
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|||
Proceeds from exercise of stock options and stock appreciation rights
|
25.9
|
|
|
12.7
|
|
|
14.3
|
|
|||
Employee stock purchase plan contributions
|
3.8
|
|
|
3.2
|
|
|
2.8
|
|
|||
Excess tax benefits from employee stock plans
|
18.2
|
|
|
9.1
|
|
|
7.9
|
|
|||
Shares purchased under share repurchase program
|
(52.2
|
)
|
|
—
|
|
|
—
|
|
|||
Shares repurchased for employee tax withholdings
|
(3.7
|
)
|
|
(5.6
|
)
|
|
(4.1
|
)
|
|||
Net cash used in financing activities
|
(113.9
|
)
|
|
(41.5
|
)
|
|
(30.8
|
)
|
|||
Effect of exchange rates on cash
|
(1.3
|
)
|
|
(22.1
|
)
|
|
(22.8
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(71.6
|
)
|
|
19.3
|
|
|
25.3
|
|
|||
Cash, including cash equivalents at beginning of period
|
274.6
|
|
|
255.3
|
|
|
230.0
|
|
|||
Cash, including cash equivalents at end of period
|
$
|
203.0
|
|
|
$
|
274.6
|
|
|
$
|
255.3
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Interest paid, net of amounts capitalized
|
$
|
8.6
|
|
|
$
|
14.7
|
|
|
$
|
16.7
|
|
Income taxes paid, net
|
$
|
48.1
|
|
|
$
|
33.1
|
|
|
$
|
37.4
|
|
Accrued capital expenditures
|
$
|
22.7
|
|
|
$
|
25.0
|
|
|
$
|
21.0
|
|
Dividends declared, not paid
|
$
|
9.5
|
|
|
$
|
8.6
|
|
|
$
|
7.8
|
|
($ in millions)
|
2016
|
2015
|
||||
Raw materials
|
$
|
78.0
|
|
$
|
74.4
|
|
Work in process
|
28.9
|
|
30.1
|
|
||
Finished goods
|
92.4
|
|
76.6
|
|
||
|
$
|
199.3
|
|
$
|
181.1
|
|
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
143.6
|
|
|
$
|
95.6
|
|
|
$
|
127.1
|
|
Weighted average common shares outstanding
|
73.3
|
|
|
72.0
|
|
|
70.9
|
|
|||
Dilutive effect of stock options, stock appreciation rights and performance share awards, based on the treasury stock method
|
1.7
|
|
|
1.8
|
|
|
1.9
|
|
|||
Weighted average shares assuming dilution
|
75.0
|
|
|
73.8
|
|
|
72.8
|
|
($ in millions)
|
Expected useful lives (years)
|
2016
|
2015
|
||||
Land
|
|
$
|
18.6
|
|
$
|
17.6
|
|
Buildings and improvements
|
5-50
|
443.3
|
|
412.8
|
|
||
Machinery and equipment
|
10-15
|
698.5
|
|
674.8
|
|
||
Molds and dies
|
4-7
|
98.3
|
|
94.4
|
|
||
Computer hardware and software
|
3-10
|
121.9
|
|
118.3
|
|
||
Construction in progress
|
|
174.1
|
|
122.4
|
|
||
|
|
$
|
1,554.7
|
|
$
|
1,440.3
|
|
|
Location
|
Ownership interest
|
The West Company 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%
|
Pharma Rubber S.A. de C.V.
|
Mexico
|
49%
|
Daikyo
|
Japan
|
25%
|
($ in millions)
|
Proprietary Products
|
Contract-Manufactured Products
|
Total
|
||||||
Balance, December 31, 2014
|
$
|
78.9
|
|
$
|
29.7
|
|
$
|
108.6
|
|
Foreign currency translation
|
(3.8
|
)
|
(0.2
|
)
|
(4.0
|
)
|
|||
Balance, December 31, 2015
|
75.1
|
|
29.5
|
|
104.6
|
|
|||
Foreign currency translation
|
(1.4
|
)
|
(0.2
|
)
|
(1.6
|
)
|
|||
Balance, December 31, 2016
|
$
|
73.7
|
|
$
|
29.3
|
|
$
|
103.0
|
|
|
2016
|
2015
|
||||||||||||||||
($ in millions)
|
Cost
|
Accumulated Amortization
|
Net
|
Cost
|
Accumulated Amortization
|
Net
|
||||||||||||
Patents and licensing
|
$
|
17.8
|
|
$
|
(13.4
|
)
|
$
|
4.4
|
|
$
|
19.7
|
|
$
|
(12.8
|
)
|
$
|
6.9
|
|
Technology
|
3.3
|
|
(0.7
|
)
|
2.6
|
|
3.4
|
|
(0.6
|
)
|
2.8
|
|
||||||
Trademarks
|
2.0
|
|
(1.6
|
)
|
0.4
|
|
12.0
|
|
(1.4
|
)
|
10.6
|
|
||||||
Customer relationships
|
29.3
|
|
(18.3
|
)
|
11.0
|
|
29.5
|
|
(17.7
|
)
|
11.8
|
|
||||||
Customer contracts
|
10.7
|
|
(5.8
|
)
|
4.9
|
|
10.8
|
|
(5.3
|
)
|
5.5
|
|
||||||
|
$
|
63.1
|
|
$
|
(39.8
|
)
|
$
|
23.3
|
|
$
|
75.4
|
|
$
|
(37.8
|
)
|
$
|
37.6
|
|
($ in millions)
|
2016
|
2015
|
||||
Deferred income
|
$
|
13.2
|
|
$
|
14.4
|
|
Other accrued expenses
|
20.3
|
|
23.1
|
|
||
Dividends payable
|
9.5
|
|
8.6
|
|
||
Restructuring obligations
|
5.9
|
|
—
|
|
||
Other
|
9.4
|
|
7.7
|
|
||
Total other current liabilities
|
$
|
58.3
|
|
$
|
53.8
|
|
($ in millions)
|
2016
|
|
2015
|
||||
Euro note B, due February 27, 2016
|
$
|
—
|
|
|
$
|
66.8
|
|
Term loan, due January 1, 2018 (2.27%)
|
34.9
|
|
|
37.1
|
|
||
Note payable, due December 31, 2019
|
0.2
|
|
|
0.2
|
|
||
Credit Facility, due October 15, 2020 (1.00%)
|
26.4
|
|
|
27.1
|
|
||
Series A notes, due July 5, 2022 (3.67%)
|
42.0
|
|
|
42.0
|
|
||
Series B notes, due July 5, 2024 (3.82%)
|
53.0
|
|
|
53.0
|
|
||
Series C notes, due July 5, 2027 (4.02%)
|
73.0
|
|
|
73.0
|
|
||
|
229.5
|
|
|
299.2
|
|
||
Less: unamortized debt issuance costs
|
0.9
|
|
|
1.0
|
|
||
Total debt
|
228.6
|
|
|
298.2
|
|
||
Less: current portion of long-term debt
|
2.4
|
|
|
69.3
|
|
||
Long-term debt
|
$
|
226.2
|
|
|
$
|
228.9
|
|
(in millions)
|
|
|
Sell
|
||||
Currency
|
Purchase
|
|
USD
|
Euro
|
|||
USD
|
49.0
|
|
|
—
|
|
46.1
|
|
Yen
|
6,475.0
|
|
|
31.6
|
|
23.5
|
|
Singapore Dollar
|
37.0
|
|
|
18.2
|
|
7.3
|
|
|
Amount of (Loss)Gain Recognized in OCI
|
|
Amount of (Gain) Loss Reclassified from Accumulated OCI into Income
|
|
Location of (Gain) Loss Reclassified from Accumulated OCI into
Income
|
||||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
||||||||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency hedge contracts
|
$
|
(0.5
|
)
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
(1.6
|
)
|
|
Net sales
|
Foreign currency hedge contracts
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Cost of goods and services sold
|
||||
Interest rate swap contracts
|
(0.1
|
)
|
|
(0.3
|
)
|
|
0.8
|
|
|
1.3
|
|
|
Interest expense
|
||||
Forward treasury locks
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
Interest expense
|
||||
Total
|
$
|
(1.2
|
)
|
|
$
|
1.3
|
|
|
$
|
1.1
|
|
|
$
|
(0.1
|
)
|
|
|
Net Investment Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency-denominated debt
|
$
|
—
|
|
|
$
|
6.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Foreign exchange and other
|
Total
|
$
|
—
|
|
|
$
|
6.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
•
|
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.
|
|
Balance at
|
|
Basis of Fair Value Measurements
|
||||||||||||
($ in millions)
|
December 31,
2016 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation assets
|
$
|
7.4
|
|
|
$
|
7.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
|
$
|
7.6
|
|
|
$
|
7.4
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration
|
$
|
8.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.0
|
|
Deferred compensation liabilities
|
8.4
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap contract
|
1.0
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||||
Foreign currency contracts
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
||||
|
$
|
19.0
|
|
|
$
|
8.4
|
|
|
$
|
2.6
|
|
|
$
|
8.0
|
|
|
Balance at
|
|
Basis of Fair Value Measurements
|
||||||||||||
($ in millions)
|
December 31,
2015 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation assets
|
$
|
6.8
|
|
|
$
|
6.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
|
$
|
7.0
|
|
|
$
|
6.8
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration
|
$
|
6.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.0
|
|
Deferred compensation liabilities
|
8.8
|
|
|
8.8
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap contracts
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
||||
Foreign currency contracts
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
|
$
|
17.0
|
|
|
$
|
8.8
|
|
|
$
|
2.2
|
|
|
$
|
6.0
|
|
($ in millions)
|
Losses on
cash flow
hedges
|
Unrealized gains
on investment
securities
|
Defined benefit
pension and other
postretirement plans
|
Foreign
currency
translation
|
Total
|
||||||||||
Balance, December 31, 2014
|
$
|
(4.3
|
)
|
$
|
4.7
|
|
$
|
(64.6
|
)
|
$
|
(55.0
|
)
|
$
|
(119.2
|
)
|
Other comprehensive income (loss) before reclassifications
|
1.3
|
|
0.7
|
|
(8.9
|
)
|
(70.3
|
)
|
(77.2
|
)
|
|||||
Amounts reclassified out
|
(0.1
|
)
|
—
|
|
33.9
|
|
—
|
|
33.8
|
|
|||||
Other comprehensive income (loss), net of tax
|
1.2
|
|
0.7
|
|
25.0
|
|
(70.3
|
)
|
(43.4
|
)
|
|||||
Balance, December 31, 2015
|
(3.1
|
)
|
5.4
|
|
(39.6
|
)
|
(125.3
|
)
|
(162.6
|
)
|
|||||
Other comprehensive loss before reclassifications
|
(1.2
|
)
|
(0.2
|
)
|
(9.2
|
)
|
(18.1
|
)
|
(28.7
|
)
|
|||||
Amounts reclassified out
|
1.1
|
|
—
|
|
3.4
|
|
—
|
|
4.5
|
|
|||||
Other comprehensive loss, net of tax
|
(0.1
|
)
|
(0.2
|
)
|
(5.8
|
)
|
(18.1
|
)
|
(24.2
|
)
|
|||||
Balance, December 31, 2016
|
$
|
(3.2
|
)
|
$
|
5.2
|
|
$
|
(45.4
|
)
|
$
|
(143.4
|
)
|
$
|
(186.8
|
)
|
Detail of components
|
2016
|
2015
|
Location on Statement of Income
|
||||
Losses on cash flow hedges:
|
|
|
|
||||
Foreign currency contracts
|
$
|
—
|
|
$
|
1.8
|
|
Net sales
|
Interest rate swap contracts
|
(1.3
|
)
|
(2.1
|
)
|
Interest expense
|
||
Forward treasury locks
|
(0.4
|
)
|
(0.3
|
)
|
Interest expense
|
||
Total before tax
|
(1.7
|
)
|
(0.6
|
)
|
|
||
Tax expense
|
0.6
|
|
0.7
|
|
|
||
Net of tax
|
$
|
(1.1
|
)
|
$
|
0.1
|
|
|
Amortization of defined benefit pension and other postretirement plans:
|
|
|
|
||||
Transition obligation
|
$
|
(0.1
|
)
|
$
|
(0.1
|
)
|
(a)
|
Prior service credit
|
1.4
|
|
1.3
|
|
(a)
|
||
Actuarial losses
|
(3.4
|
)
|
(4.5
|
)
|
(a)
|
||
Curtailment
|
(3.1
|
)
|
—
|
|
(a)
|
||
Settlements
|
—
|
|
(50.4
|
)
|
(a)
|
||
Total before tax
|
(5.2
|
)
|
(53.7
|
)
|
|
||
Tax expense
|
1.8
|
|
19.8
|
|
|
||
Net of tax
|
$
|
(3.4
|
)
|
$
|
(33.9
|
)
|
|
Total reclassifications for the period, net of tax
|
$
|
(4.5
|
)
|
$
|
(33.8
|
)
|
|
($ in millions)
|
2016
|
2015
|
2014
|
||||||
Stock option and appreciation rights
|
$
|
8.6
|
|
$
|
9.2
|
|
$
|
7.6
|
|
Performance-vesting shares
|
6.7
|
|
6.0
|
|
6.5
|
|
|||
Performance-vesting units
|
0.1
|
|
0.7
|
|
1.9
|
|
|||
Performance-vesting shares/units dividend equivalents
|
0.2
|
|
0.2
|
|
0.4
|
|
|||
Employee stock purchase plan
|
0.7
|
|
0.6
|
|
0.5
|
|
|||
Deferred compensation plans
|
3.2
|
|
2.5
|
|
1.7
|
|
|||
Total stock-based compensation expense
|
$
|
19.5
|
|
$
|
19.2
|
|
$
|
18.6
|
|
(in millions, except per share data)
|
2016
|
|
2015
|
|
2014
|
|
Options outstanding, January 1
|
5.0
|
|
4.6
|
|
4.8
|
|
Granted
|
0.7
|
|
0.9
|
|
0.7
|
|
Exercised
|
(1.1
|
)
|
(0.5
|
)
|
(0.7
|
)
|
Forfeited
|
(0.1
|
)
|
—
|
|
(0.2
|
)
|
Options outstanding, December 31
|
4.5
|
|
5.0
|
|
4.6
|
|
Options exercisable, December 31
|
2.7
|
|
2.9
|
|
2.6
|
|
Weighted Average Exercise Price
|
2016
|
|
2015
|
|
2014
|
|
|||
Options outstanding, January 1
|
$
|
31.77
|
|
$
|
25.49
|
|
$
|
21.99
|
|
Granted
|
61.98
|
|
56.06
|
|
47.59
|
|
|||
Exercised
|
22.50
|
|
21.85
|
|
20.17
|
|
|||
Forfeited
|
45.91
|
|
—
|
|
31.42
|
|
|||
Options outstanding, December 31
|
$
|
38.11
|
|
$
|
31.77
|
|
$
|
25.49
|
|
Options exercisable, December 31
|
$
|
27.17
|
|
$
|
22.75
|
|
$
|
20.67
|
|
|
2016
|
|
2015
|
|
2014
|
|
SARs outstanding, January 1
|
232,930
|
|
297,714
|
|
375,104
|
|
Granted
|
3,368
|
|
12,356
|
|
7,733
|
|
Exercised
|
(114,976
|
)
|
(77,140
|
)
|
(85,123
|
)
|
Forfeited
|
(5,235
|
)
|
—
|
|
—
|
|
SARs outstanding, December 31
|
116,087
|
|
232,930
|
|
297,714
|
|
SARs exercisable, December 31
|
71,701
|
|
112,295
|
|
88,751
|
|
Weighted Average Exercise Price
|
2016
|
|
2015
|
|
2014
|
|
|||
SARs outstanding, January 1
|
$
|
27.79
|
|
$
|
25.20
|
|
$
|
24.03
|
|
Granted
|
68.40
|
|
57.25
|
|
47.74
|
|
|||
Exercised
|
24.95
|
|
22.52
|
|
22.09
|
|
|||
Forfeited
|
42.28
|
|
—
|
|
—
|
|
|||
SARs outstanding, December 31
|
$
|
31.13
|
|
$
|
27.79
|
|
$
|
25.20
|
|
SARs exercisable, December 31
|
$
|
26.65
|
|
$
|
24.60
|
|
$
|
23.15
|
|
|
2016
|
|
2015
|
|
2014
|
|
|||
Non-vested PVS awards, January 1
|
422,726
|
|
470,719
|
|
578,358
|
|
|||
Granted at target level
|
115,035
|
|
147,908
|
|
133,823
|
|
|||
Adjustments above/(below) target
|
19,339
|
|
132,444
|
|
53,438
|
|
|||
Vested and converted
|
(173,364
|
)
|
(318,337
|
)
|
(250,205
|
)
|
|||
Forfeited
|
(5,674
|
)
|
(10,008
|
)
|
(44,695
|
)
|
|||
Non-vested PVS awards, December 31
|
378,062
|
|
422,726
|
|
470,719
|
|
|||
|
|
|
|
||||||
Weighted Average Grant Date Fair Value
|
2016
|
|
2015
|
|
2014
|
|
|||
Non-vested PVS awards, January 1
|
$
|
45.60
|
|
$
|
30.93
|
|
$
|
23.79
|
|
Granted at target level
|
60.47
|
|
55.49
|
|
47.21
|
|
|||
Adjustments above/(below) target
|
38.71
|
|
22.97
|
|
22.86
|
|
|||
Vested and converted
|
59.64
|
|
51.53
|
|
48.69
|
|
|||
Forfeited
|
49.86
|
|
41.84
|
|
30.76
|
|
|||
Non-vested PVS awards, December 31
|
$
|
54.47
|
|
$
|
45.60
|
|
$
|
30.93
|
|
|
2016
|
|
2015
|
|
2014
|
|
Non-vested PVU awards, January 1
|
29,196
|
|
55,509
|
|
79,456
|
|
Granted at target level
|
419
|
|
1,386
|
|
1,584
|
|
Adjustments above/(below) target
|
2,858
|
|
19,315
|
|
6,907
|
|
Vested and converted
|
(29,032
|
)
|
(47,014
|
)
|
(32,438
|
)
|
Forfeited
|
(990
|
)
|
—
|
|
—
|
|
Non-vested PVU awards, December 31
|
2,451
|
|
29,196
|
|
55,509
|
|
Weighted Average Grant Date Fair Value
|
2016
|
|
2015
|
|
2014
|
|
|||
Non-vested PVU awards, January 1
|
$
|
32.07
|
|
$
|
26.15
|
|
$
|
23.86
|
|
Granted at target level
|
59.64
|
|
54.14
|
|
47.34
|
|
|||
Adjustments above/(below) target
|
30.80
|
|
22.07
|
|
22.72
|
|
|||
Vested and converted
|
59.64
|
|
51.53
|
|
47.34
|
|
|||
Forfeited
|
50.55
|
|
—
|
|
—
|
|
|||
Non-vested PVU awards, December 31
|
$
|
25.28
|
|
$
|
32.07
|
|
$
|
26.15
|
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2014
|
|
|
2016
|
|
2015
|
|
2014
|
|
||||||
Net periodic benefit cost:
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
10.2
|
|
$
|
10.6
|
|
$
|
9.8
|
|
|
$
|
0.5
|
|
$
|
0.5
|
|
$
|
0.4
|
|
Interest cost
|
10.5
|
|
13.8
|
|
17.1
|
|
|
0.5
|
|
0.4
|
|
0.4
|
|
||||||
Expected return on assets
|
(12.6
|
)
|
(19.5
|
)
|
(19.3
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
(1.4
|
)
|
(1.3
|
)
|
(1.3
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of transition obligation
|
0.1
|
|
0.1
|
|
0.1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of actuarial loss (gain)
|
4.8
|
|
5.9
|
|
4.7
|
|
|
(1.4
|
)
|
(1.4
|
)
|
(1.6
|
)
|
||||||
Curtailment
|
(2.1
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Settlement effects
|
—
|
|
50.4
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
9.5
|
|
$
|
60.0
|
|
$
|
11.1
|
|
|
$
|
(0.4
|
)
|
$
|
(0.5
|
)
|
$
|
(0.8
|
)
|
Other changes in plan assets and benefit obligations recognized in OCI, pre-tax:
|
|
|
|
|
|
|
|
||||||||||||
Net loss (gain) arising during period
|
$
|
19.2
|
|
$
|
17.7
|
|
$
|
31.5
|
|
|
$
|
(0.1
|
)
|
$
|
(0.8
|
)
|
$
|
0.1
|
|
Prior service credit arising during period
|
—
|
|
(0.7
|
)
|
—
|
|
|
(3.0
|
)
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
1.4
|
|
1.3
|
|
1.3
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of transition obligation
|
(0.1
|
)
|
(0.1
|
)
|
(0.1
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of actuarial (loss) gain
|
(4.8
|
)
|
(5.9
|
)
|
(4.7
|
)
|
|
1.4
|
|
1.4
|
|
1.6
|
|
||||||
Curtailment
|
(3.1
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Settlement effects
|
—
|
|
(50.4
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Foreign currency translation
|
(3.2
|
)
|
(1.6
|
)
|
(2.1
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Total recognized in OCI
|
$
|
9.4
|
|
$
|
(39.7
|
)
|
$
|
25.9
|
|
|
$
|
(1.7
|
)
|
$
|
0.6
|
|
$
|
1.7
|
|
Total recognized in net periodic benefit cost and OCI
|
$
|
18.9
|
|
$
|
20.3
|
|
$
|
37.0
|
|
|
$
|
(2.1
|
)
|
$
|
0.1
|
|
$
|
0.9
|
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
|
2016
|
|
2015
|
|
2014
|
|
||||||
U.S. plans
|
$
|
7.1
|
|
$
|
57.4
|
|
$
|
8.1
|
|
|
$
|
(0.4
|
)
|
$
|
(0.5
|
)
|
$
|
(0.8
|
)
|
International plans
|
2.4
|
|
2.6
|
|
3.0
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
9.5
|
|
$
|
60.0
|
|
$
|
11.1
|
|
|
$
|
(0.4
|
)
|
$
|
(0.5
|
)
|
$
|
(0.8
|
)
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||||
($ in millions)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||
Change in benefit obligation:
|
|
|
|
|
|
||||||||
Benefit obligation, January 1
|
$
|
(246.3
|
)
|
$
|
(398.5
|
)
|
|
$
|
(10.2
|
)
|
$
|
(10.1
|
)
|
Service cost
|
(10.2
|
)
|
(10.6
|
)
|
|
(0.5
|
)
|
(0.5
|
)
|
||||
Interest cost
|
(10.5
|
)
|
(13.8
|
)
|
|
(0.5
|
)
|
(0.4
|
)
|
||||
Participants' contributions
|
(0.6
|
)
|
(0.6
|
)
|
|
(0.5
|
)
|
(0.6
|
)
|
||||
Actuarial (loss) gain
|
(23.4
|
)
|
7.8
|
|
|
0.1
|
|
0.8
|
|
||||
Amendments/transfers in
|
—
|
|
0.8
|
|
|
3.0
|
|
—
|
|
||||
Benefits/expenses paid
|
16.2
|
|
14.6
|
|
|
0.6
|
|
0.6
|
|
||||
Curtailment
|
5.2
|
|
—
|
|
|
—
|
|
—
|
|
||||
Settlement
|
—
|
|
149.7
|
|
|
—
|
|
—
|
|
||||
Foreign currency translation
|
7.4
|
|
4.3
|
|
|
—
|
|
—
|
|
||||
Benefit obligation, December 31
|
$
|
(262.2
|
)
|
$
|
(246.3
|
)
|
|
$
|
(8.0
|
)
|
$
|
(10.2
|
)
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
||||||||
Fair value of assets, January 1
|
$
|
188.9
|
|
$
|
322.3
|
|
|
$
|
—
|
|
$
|
—
|
|
Actual return on assets
|
16.8
|
|
(6.0
|
)
|
|
—
|
|
—
|
|
||||
Employer contribution
|
6.8
|
|
38.0
|
|
|
0.1
|
|
—
|
|
||||
Participants' contributions
|
0.6
|
|
0.6
|
|
|
0.5
|
|
0.6
|
|
||||
Benefits/expenses paid
|
(16.2
|
)
|
(14.6
|
)
|
|
(0.6
|
)
|
(0.6
|
)
|
||||
Settlement
|
—
|
|
(149.7
|
)
|
|
—
|
|
—
|
|
||||
Foreign currency translation
|
(4.5
|
)
|
(1.7
|
)
|
|
—
|
|
—
|
|
||||
Fair value of assets, December 31
|
$
|
192.4
|
|
$
|
188.9
|
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||||
Funded status at end of year
|
$
|
(69.8
|
)
|
$
|
(57.4
|
)
|
|
$
|
(8.0
|
)
|
$
|
(10.2
|
)
|
|
Pension benefits
|
Other retirement benefits
|
||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||
Current liabilities
|
$
|
(1.5
|
)
|
$
|
(5.0
|
)
|
$
|
(0.7
|
)
|
$
|
(0.6
|
)
|
Noncurrent liabilities
|
(68.3
|
)
|
(52.4
|
)
|
(7.3
|
)
|
(9.6
|
)
|
||||
|
$
|
(69.8
|
)
|
$
|
(57.4
|
)
|
$
|
(8.0
|
)
|
$
|
(10.2
|
)
|
|
Pension benefits
|
Other retirement benefits
|
||||||||||
($ in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||
Net actuarial loss (gain)
|
$
|
86.0
|
|
$
|
79.9
|
|
$
|
(11.9
|
)
|
$
|
(13.2
|
)
|
Transition obligation
|
—
|
|
0.1
|
|
—
|
|
—
|
|
||||
Prior service credit
|
(2.3
|
)
|
(5.7
|
)
|
(3.0
|
)
|
—
|
|
||||
Total
|
$
|
83.7
|
|
$
|
74.3
|
|
$
|
(14.9
|
)
|
$
|
(13.2
|
)
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
|
|
2016
|
|
2015
|
|
2014
|
|
Discount rate
|
3.99
|
%
|
4.08
|
%
|
4.50
|
%
|
|
4.30
|
%
|
3.90
|
%
|
4.55
|
%
|
Rate of compensation increase
|
4.04
|
%
|
4.07
|
%
|
4.29
|
%
|
|
—
|
|
—
|
|
—
|
|
Long-term rate of return on assets
|
6.95
|
%
|
6.84
|
%
|
7.01
|
%
|
|
—
|
|
—
|
|
—
|
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
Discount rate
|
3.68
|
%
|
4.22
|
%
|
|
3.90
|
%
|
4.30
|
%
|
Rate of compensation increase
|
4.04
|
%
|
4.07
|
%
|
|
—
|
|
—
|
|
|
2016
|
|
2015
|
|
Equity securities
|
60
|
%
|
62
|
%
|
Debt securities
|
30
|
%
|
35
|
%
|
Other
|
10
|
%
|
3
|
%
|
|
100
|
%
|
100
|
%
|
|
Balance at
|
|
||||||||||
|
December 31,
|
Basis of Fair Value Measurements
|
||||||||||
($ in millions)
|
2016
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Cash
|
$
|
10.0
|
|
$
|
10.0
|
|
$
|
—
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
||||||||
Indexed mutual funds
|
8.9
|
|
8.9
|
|
—
|
|
—
|
|
||||
International mutual funds
|
3.0
|
|
3.0
|
|
—
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
||||||||
Mutual funds
|
9.2
|
|
9.2
|
|
—
|
|
—
|
|
||||
Insurance contract
|
0.5
|
|
—
|
|
0.5
|
|
—
|
|
||||
Balanced mutual fund
|
6.3
|
|
6.3
|
|
—
|
|
—
|
|
||||
Pension plan assets in the fair value hierarchy
|
$
|
37.9
|
|
$
|
37.4
|
|
$
|
0.5
|
|
$
|
—
|
|
Pension plan assets measured at NAV
|
154.5
|
|
|
|
|
|||||||
Pension plan assets at fair value
|
$
|
192.4
|
|
|
|
|
|
|
|
|
Balance at
|
|
||||||||||
|
December 31,
|
Basis of Fair Value Measurements
|
||||||||||
($ in millions)
|
2015
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Cash
|
$
|
0.6
|
|
$
|
0.6
|
|
$
|
—
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
||||||||
Indexed mutual funds
|
79.2
|
|
79.2
|
|
—
|
|
—
|
|
||||
International mutual funds
|
37.7
|
|
37.7
|
|
—
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
||||||||
Mutual funds
|
63.0
|
|
63.0
|
|
—
|
|
—
|
|
||||
Insurance contract
|
0.6
|
|
—
|
|
0.6
|
|
—
|
|
||||
Balanced mutual fund
|
7.8
|
|
7.8
|
|
—
|
|
—
|
|
||||
Pension plan assets at fair value
|
$
|
188.9
|
|
$
|
188.3
|
|
$
|
0.6
|
|
$
|
—
|
|
($ in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Restructuring and related charges:
|
|
|
|
|
|
||||||
Severance and post-employment benefits
|
$
|
8.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Asset-related charges
|
17.3
|
|
|
—
|
|
|
—
|
|
|||
Other charges
|
0.2
|
|
|
—
|
|
|
—
|
|
|||
Total restructuring and related charges
|
$
|
26.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pension settlement charge
|
—
|
|
|
50.4
|
|
|
—
|
|
|||
Pension curtailment gain
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|||
Executive retirement and related costs
|
—
|
|
|
10.9
|
|
|
—
|
|
|||
Venezuela currency devaluation
|
2.7
|
|
|
—
|
|
|
—
|
|
|||
License costs
|
—
|
|
|
—
|
|
|
1.2
|
|
|||
Development income
|
(1.5
|
)
|
|
(1.5
|
)
|
|
(1.6
|
)
|
|||
Contingent consideration costs
|
2.3
|
|
|
1.1
|
|
|
1.0
|
|
|||
Other items
|
(0.1
|
)
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|||
Total other expense (income)
|
$
|
27.7
|
|
|
$
|
60.1
|
|
|
$
|
(0.2
|
)
|
($ in millions)
|
Severance and benefits
|
|
Asset-related charges
|
|
Other charges
|
|
Total
|
||||||||
Balance, December 31, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
8.9
|
|
|
17.3
|
|
|
0.2
|
|
|
26.4
|
|
||||
Cash payments
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
||||
Non-cash asset write-downs
|
—
|
|
|
(17.3
|
)
|
|
(0.2
|
)
|
|
(17.5
|
)
|
||||
Balance, December 31, 2016
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
($ in millions)
|
2016
|
|
2015
|
|
||
Balance at January 1
|
$
|
5.9
|
|
$
|
6.9
|
|
Increase due to current year position
|
1.0
|
|
0.8
|
|
||
Increase due to prior year position
|
1.2
|
|
0.9
|
|
||
Reduction for expiration of statute of limitations
|
(0.9
|
)
|
(1.2
|
)
|
||
Settlements
|
(1.0
|
)
|
(1.5
|
)
|
||
Balance at December 31
|
$
|
6.2
|
|
$
|
5.9
|
|
($ in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
U.S. operations
|
$
|
84.5
|
|
$
|
(4.0
|
)
|
$
|
57.5
|
|
International operations
|
105.3
|
|
120.1
|
|
111.5
|
|
|||
Total income before income taxes
|
$
|
189.8
|
|
$
|
116.1
|
|
$
|
169.0
|
|
($ in millions)
|
2016
|
|
2015
|
|
2014
|
|
|||
Current:
|
|
|
|
||||||
Federal
|
$
|
2.5
|
|
$
|
1.0
|
|
$
|
5.2
|
|
State
|
1.0
|
|
0.9
|
|
0.5
|
|
|||
International
|
29.4
|
|
33.3
|
|
34.5
|
|
|||
Current income tax provision
|
32.9
|
|
35.2
|
|
40.2
|
|
|||
Deferred:
|
|
|
|
||||||
Federal and state
|
21.8
|
|
(13.2
|
)
|
7.7
|
|
|||
International
|
(0.3
|
)
|
4.3
|
|
(0.7
|
)
|
|||
Deferred income tax provision
|
21.5
|
|
(8.9
|
)
|
7.0
|
|
|||
Income tax expense
|
$
|
54.4
|
|
$
|
26.3
|
|
$
|
47.2
|
|
($ in millions)
|
2016
|
|
2015
|
|
||
Deferred tax assets
|
|
|
||||
Net operating loss carryforwards
|
$
|
15.4
|
|
$
|
16.5
|
|
Tax credit carryforwards
|
27.9
|
|
40.8
|
|
||
Restructuring and impairment charges
|
2.9
|
|
—
|
|
||
Pension and deferred compensation
|
46.4
|
|
42.0
|
|
||
Other
|
19.5
|
|
19.3
|
|
||
Valuation allowance
|
(18.7
|
)
|
(20.1
|
)
|
||
Total deferred tax assets
|
93.4
|
|
98.5
|
|
||
Deferred tax liabilities:
|
|
|
||||
Accelerated depreciation
|
30.3
|
|
35.0
|
|
||
Other
|
6.1
|
|
5.4
|
|
||
Total deferred tax liabilities
|
36.4
|
|
40.4
|
|
||
Net deferred tax asset
|
$
|
57.0
|
|
$
|
58.1
|
|
|
2016
|
|
2015
|
|
2014
|
|
U.S. federal corporate tax rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
Tax on international operations less than U.S. tax rate
|
(2.9
|
)
|
(5.1
|
)
|
(6.8
|
)
|
Reversal of prior valuation allowance
|
(0.3
|
)
|
—
|
|
(0.5
|
)
|
Reversal of reserves for unrecognized tax benefits
|
(0.6
|
)
|
(1.6
|
)
|
(0.5
|
)
|
U.S. tax on international earnings, net of foreign tax credits
|
(1.3
|
)
|
(4.6
|
)
|
(0.1
|
)
|
State income taxes, net of federal tax effect
|
0.8
|
|
0.3
|
|
1.5
|
|
U.S. research and development credits
|
(0.8
|
)
|
(1.3
|
)
|
(0.9
|
)
|
Other business credits and Section 199 Deduction
|
(1.1
|
)
|
(1.3
|
)
|
(0.7
|
)
|
Other
|
(0.1
|
)
|
1.2
|
|
1.0
|
|
Effective tax rate
|
28.7
|
%
|
22.6
|
%
|
28.0
|
%
|
Year
|
($ in millions)
|
|
|
2017
|
$
|
12.3
|
|
2018
|
10.9
|
|
|
2019
|
8.5
|
|
|
2020
|
5.4
|
|
|
2021
|
4.8
|
|
|
Thereafter
|
26.5
|
|
|
Total
|
$
|
68.4
|
|
($ in millions)
|
2016
|
2015
|
2014
|
||||||
Net sales:
|
|
|
|
|
|
|
|||
Proprietary Products
|
$
|
1,189.9
|
|
$
|
1,098.3
|
|
$
|
1,126.3
|
|
Contract-Manufactured Products
|
320.2
|
|
302.4
|
|
295.7
|
|
|||
Intersegment sales elimination
|
(1.0
|
)
|
(0.9
|
)
|
(0.6
|
)
|
|||
Consolidated net sales
|
$
|
1,509.1
|
|
$
|
1,399.8
|
|
$
|
1,421.4
|
|
|
Net Sales
|
|
Property, Plant and Equipment, Net
|
||||||||||||||||
($ in millions)
|
2016
|
2015
|
2014
|
|
2016
|
2015
|
2014
|
||||||||||||
United States
|
$
|
738.3
|
|
$
|
667.4
|
|
$
|
630.7
|
|
|
$
|
329.3
|
|
$
|
332.3
|
|
$
|
327.5
|
|
Germany
|
200.6
|
|
194.0
|
|
219.4
|
|
|
96.8
|
|
102.9
|
|
110.9
|
|
||||||
France
|
116.3
|
|
107.6
|
|
118.2
|
|
|
37.1
|
|
38.6
|
|
40.4
|
|
||||||
Other European countries
|
268.3
|
|
252.0
|
|
285.0
|
|
|
192.3
|
|
117.6
|
|
91.5
|
|
||||||
Other
|
185.6
|
|
178.8
|
|
168.1
|
|
|
122.8
|
|
129.6
|
|
135.5
|
|
||||||
|
$
|
1,509.1
|
|
$
|
1,399.8
|
|
$
|
1,421.4
|
|
|
$
|
778.3
|
|
$
|
721.0
|
|
$
|
705.8
|
|
($ in millions)
|
Proprietary Products
|
Contract-Manufactured Products
|
Corporate and Elimination
|
Consolidated
|
||||||||
2016
|
|
|
|
|
||||||||
Net sales
|
$
|
1,189.9
|
|
$
|
320.2
|
|
$
|
(1.0
|
)
|
$
|
1,509.1
|
|
Operating profit
|
$
|
241.9
|
|
$
|
38.2
|
|
$
|
(83.3
|
)
|
$
|
196.8
|
|
Interest expense, net
|
—
|
|
—
|
|
(7.0
|
)
|
(7.0
|
)
|
||||
Income before income taxes
|
$
|
241.9
|
|
$
|
38.2
|
|
$
|
(90.3
|
)
|
$
|
189.8
|
|
Segment assets
|
$
|
1,173.9
|
|
$
|
261.1
|
|
$
|
281.7
|
|
$
|
1,716.7
|
|
Capital expenditures
|
133.2
|
|
34.0
|
|
3.0
|
|
170.2
|
|
||||
Depreciation and amortization expense
|
71.7
|
|
14.9
|
|
4.1
|
|
90.7
|
|
||||
|
|
|
|
|
||||||||
2015
|
|
|
|
|
||||||||
Net sales
|
$
|
1,098.3
|
|
$
|
302.4
|
|
$
|
(0.9
|
)
|
$
|
1,399.8
|
|
Operating profit
|
$
|
212.2
|
|
$
|
35.5
|
|
$
|
(119.1
|
)
|
$
|
128.6
|
|
Interest expense, net
|
—
|
|
—
|
|
(12.5
|
)
|
(12.5
|
)
|
||||
Income before income taxes
|
$
|
212.2
|
|
$
|
35.5
|
|
$
|
(131.6
|
)
|
$
|
116.1
|
|
Segment assets
|
$
|
1,083.7
|
|
$
|
248.5
|
|
$
|
362.9
|
|
$
|
1,695.1
|
|
Capital expenditures
|
113.2
|
|
22.1
|
|
(3.7
|
)
|
131.6
|
|
||||
Depreciation and amortization expense
|
69.9
|
|
14.2
|
|
5.8
|
|
89.9
|
|
||||
|
|
|
|
|
||||||||
2014
|
|
|
|
|
||||||||
Net sales
|
$
|
1,126.3
|
|
$
|
295.7
|
|
$
|
(0.6
|
)
|
$
|
1,421.4
|
|
Operating profit
|
$
|
199.6
|
|
$
|
36.9
|
|
$
|
(54.5
|
)
|
$
|
182.0
|
|
Interest expense, net
|
—
|
|
—
|
|
(13.0
|
)
|
(13.0
|
)
|
||||
Income before income taxes
|
$
|
199.6
|
|
$
|
36.9
|
|
$
|
(67.5
|
)
|
$
|
169.0
|
|
Segment assets
|
$
|
1,185.5
|
|
$
|
234.0
|
|
$
|
250.2
|
|
$
|
1,669.7
|
|
Capital expenditures
|
88.4
|
|
26.9
|
|
(3.4
|
)
|
111.9
|
|
||||
Depreciation and amortization expense
|
71.6
|
|
12.7
|
|
5.7
|
|
90.0
|
|
($ in millions, except per share data)
|
First
Quarter
(1)
|
Second
Quarter
(2)
|
Third
Quarter
(3)
|
Fourth
Quarter
(4)
|
Full Year
|
||||||||||
2016
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
362.1
|
|
$
|
388.0
|
|
$
|
376.7
|
|
$
|
382.3
|
|
$
|
1,509.1
|
|
Gross profit
|
123.3
|
|
133.3
|
|
121.1
|
|
123.4
|
|
501.1
|
|
|||||
Net income
|
22.1
|
|
44.7
|
|
37.6
|
|
39.1
|
|
143.6
|
|
|||||
Net income per share:
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.31
|
|
$
|
0.61
|
|
$
|
0.51
|
|
$
|
0.53
|
|
$
|
1.96
|
|
Diluted
|
$
|
0.30
|
|
$
|
0.60
|
|
$
|
0.50
|
|
$
|
0.52
|
|
$
|
1.91
|
|
|
|
|
|
|
|
||||||||||
2015
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
335.9
|
|
$
|
359.7
|
|
$
|
344.5
|
|
$
|
359.7
|
|
$
|
1,399.8
|
|
Gross profit
|
109.7
|
|
118.2
|
|
108.3
|
|
119.6
|
|
455.8
|
|
|||||
Net income
|
32.9
|
|
27.8
|
|
1.5
|
|
33.4
|
|
95.6
|
|
|||||
Net income per share:
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.46
|
|
$
|
0.39
|
|
$
|
0.02
|
|
$
|
0.46
|
|
$
|
1.33
|
|
Diluted
|
$
|
0.45
|
|
$
|
0.38
|
|
$
|
0.02
|
|
$
|
0.45
|
|
$
|
1.30
|
|
(1)
|
Net income for the first quarter of 2016 included restructuring and related charges of $15.0 million ($0.20 per diluted share) and a charge of $2.5 million related to the devaluation of the Venezuelan Bolivar ($0.03 per diluted share).
|
(2)
|
Second quarter 2016 net income included $1.0 million in reversals of previously-recorded restructuring and related charges ($0.01 per diluted share). Second quarter 2015 net income included a $6.9 million ($0.09 per diluted share) charge for executive retirement and related costs.
|
(3)
|
Net income for the third quarter of 2016 included restructuring and related charges of $1.6 million ($0.02 per diluted share) and a discrete tax charge of $0.3 million ($0.01 per diluted share). Net income for the third quarter of 2015 included a pension settlement charge of $31.1 million ($0.42 per diluted share) in connection with our purchase of a group annuity contract from MetLife and lump-sum payouts made to terminated vested participants of our U.S. qualified pension plan.
|
(4)
|
Fourth quarter 2016 net income included restructuring and related charges of $1.8 million ($0.02 per diluted share), a pension curtailment gain of $1.3 million ($0.01 per diluted share) and a discrete tax charge of $0.7 million ($0.01 per diluted share). Fourth quarter 2015 net income included a $0.9 million ($0.01 per diluted share) pension settlement charge related to lump-sum payouts made to terminated vested participants of our U.S. qualified pension plan and a discrete tax charge of $0.8 million ($0.01 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
|
5,272,515
|
|
(1)
|
$
|
37.97
|
|
(2)
|
9,374,016
|
|
(3)
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
5,272,515
|
|
|
$
|
37.97
|
|
|
9,374,016
|
|
|
(1)
|
Includes 78,184 outstanding stock options, 103,680 restricted performance share units, 1,393 restricted retention share units, 24,244 deferred stock-equivalents units and 704 restricted stock-equivalents units granted to directors under the 2016 Plan. Includes 3,358,823 outstanding stock options, 54,952 outstanding stock-settled stock appreciation rights, 255,603 restricted performance share units, 41,458 restricted retention share units, 171,422 deferred stock-equivalents units under the 2011 Plan (which was terminated in 2016). Includes 1,100,092 outstanding stock options and 72,523 deferred stock-equivalents units granted to directors under the Non-Qualified Deferred Compensation Plan for Non-Employee Directors under the 2007 Omnibus Incentive Compensation Plan (which was terminated in 2011). Includes 9,437 outstanding stock options under the 2004 Stock-Based Compensation Plan (which was terminated in 2007). The average term of remaining options and stock-settled stock appreciation rights granted is 6.3 years. No future grants or awards may be made under the terminated plans. The total includes restricted performance share units at 100% of grant. The restricted performance share unit payouts were at 110.6%, 167.8% and 124.4% in 2016, 2015 and 2014, respectively. The total does not include stock-equivalent units granted or credited to directors under the Non-Qualified Deferred Compensation Plan for Non-Employee Directors to be settled only in cash.
|
(2)
|
Restricted performance share and deferred stock-equivalent units are excluded when determining the weighted-average exercise price of outstanding options.
|
(3)
|
Represents 4,039,545 shares reserved under the Company's Employee Stock Purchase Plan and 5,334,471 shares remaining available for issuance under the 2016 Plan. The estimated number of shares that could be issued for 2016 from the Employee Stock Purchase Plan is 454,936. This number of shares is calculated by multiplying the 328 share per offering period per participant limit by 1,387, 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, 2016
|
|
|
|
|
||||||||
Allowances deducted from assets:
|
|
|
|
|
||||||||
Deferred tax asset valuation allowance
|
$
|
20.1
|
|
$
|
(1.3
|
)
|
$
|
(0.1
|
)
|
$
|
18.7
|
|
Allowance for doubtful accounts
|
0.6
|
|
—
|
|
(0.2
|
)
|
0.4
|
|
||||
Total allowances deducted from assets
|
$
|
20.7
|
|
$
|
(1.3
|
)
|
$
|
(0.3
|
)
|
$
|
19.1
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2015
|
|
|
|
|
||||||||
Allowances deducted from assets:
|
|
|
|
|
||||||||
Deferred tax asset valuation allowance
|
$
|
22.1
|
|
$
|
(0.3
|
)
|
$
|
(1.7
|
)
|
$
|
20.1
|
|
Allowance for doubtful accounts
|
0.9
|
|
0.1
|
|
(0.4
|
)
|
0.6
|
|
||||
Total allowances deducted from assets
|
$
|
23.0
|
|
$
|
(0.2
|
)
|
$
|
(2.1
|
)
|
$
|
20.7
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2014
|
|
|
|
|
||||||||
Allowances deducted from assets:
|
|
|
|
|
||||||||
Deferred tax asset valuation allowance
|
$
|
23.5
|
|
$
|
(0.9
|
)
|
$
|
(0.5
|
)
|
$
|
22.1
|
|
Allowance for doubtful accounts
|
0.8
|
|
0.4
|
|
(0.3
|
)
|
0.9
|
|
||||
Total allowances deducted from assets
|
$
|
24.3
|
|
$
|
(0.5
|
)
|
$
|
(0.8
|
)
|
$
|
23.0
|
|
|
|
|
|
|
(1)
|
Includes accounts receivable written off, the write-off or write-down of valuation allowances, and translation adjustments.
|
(a) 3.
|
Exhibits - An index of the exhibits included in this Form 10-K is contained on pages F-1 through F-4 and is incorporated herein by reference.
|
(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/ Eric M. Green
|
Director, President and Chief Executive Officer
|
February 28, 2017
|
Eric M. Green
|
(Principal Executive Officer)
|
|
|
|
|
/s/ Daniel Malone
|
Vice President and Controller
|
February 28, 2017
|
Daniel Malone
|
(Principal Accounting Officer)
|
|
|
|
|
/s/ William J. Federici
|
Senior Vice President and Chief Financial Officer
|
February 28, 2017
|
William J. Federici
|
(Principal Financial Officer)
|
|
|
|
|
/s/ Mark A. Buthman
|
Director
|
February 14, 2017
|
Mark A. Buthman
|
|
|
|
|
|
/s/ William F. Feehery
|
Director
|
February 14, 2017
|
William F. Feehery
|
|
|
|
|
|
/s/ Thomas W. Hofmann
|
Director
|
February 14, 2017
|
Thomas W. Hofmann
|
|
|
|
|
|
/s/ Paula A. Johnson
|
Director
|
February 14, 2017
|
Paula A. Johnson
|
|
|
|
|
|
/s/ Myla Lai-Goldman, M.D.
|
Director
|
February 14, 2017
|
Myla Lai-Goldman, M.D.
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/s/ Douglas A. Michels
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Director
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February 14, 2017
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Douglas A. Michels
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/s/ Paolo Pucci
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Director
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February 14, 2017
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Paolo Pucci
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/s/ John H. Weiland
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Director
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February 14, 2017
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John H. Weiland
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/s/ Patrick J. Zenner
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Director and Chairman of the Board
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February 14, 2017
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Patrick J. Zenner
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Exhibit Number
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Description
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3.1
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Our Amended and Restated Articles of Incorporation are incorporated by reference from our Form 10-Q report for the quarter ended March 31, 2015.
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3.2
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Our Bylaws, as amended through May 5, 2015, are incorporated by reference from our Form 10-Q report for the quarter ended March 31, 2015.
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4.1
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Form of stock certificate for common stock is incorporated by reference from our annual report on Form 10-K dated May 6, 1999.
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4.2
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Article 5, 6, 8(c) and 9 of our Amended and Restated Articles of Incorporation are incorporated by reference from our Form 10-Q report for the quarter ended March 31, 2015.
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4.3
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Article I and V of our Bylaws, as amended through May 5, 2015, are incorporated by reference from our Form 10-Q report for the quarter ended March 31, 2015.
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4.4
(1)
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Instruments defining the rights of holders of long-term debt securities of West and its subsidiaries have been omitted.
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10.1
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First Amendment to Credit Agreement, dated as of September 4, 2015, by and among West, certain of its subsidiaries, the several banks and other financial institutions party thereto, and PNC Bank, National Association, as administrative agent for the Lenders incorporated by reference from our Form 10-Q report for the quarter ended September 30, 2015.
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10.2
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Credit Agreement, dated as of October 15, 2015, between West, certain of its subsidiaries, the lenders party thereto from time to time, PNC Bank, National Association, as Administrative Agent and PNC Capital Markets, LLC, as Sole Lead Arranger and Sole Bookrunner, is incorporated by reference from our Form 8-K dated October 15, 2015.
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10.3
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Note Purchase Agreement, dated July 5, 2012, among the Company and the Purchasers named therein is incorporated by reference from our Form 8-K filed on July 10, 2012.
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10.4
(2)
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Retirement Separation Agreement, dated as of June 30, 2015, between us and Donald E. Morel, Jr., Ph.D., is incorporated by reference from our Form 8-K dated July 1, 2015.
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10.5
(2)
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2015 Long-Term Incentive Plan Award, dated as of June 30, 2015, between us and Donald E. Morel, Jr., is incorporated by reference from our Form 10-Q report for the quarter ended June 30, 2015.
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10.6
(2)
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2015 Long-Term Incentive Plan Award, dated as of June 30, 2015, between us and Patrick Zenner, is incorporated by reference from our Form 10-Q report for the quarter ended June 30, 2015.
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10.7
(2)
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Employment Agreement, dated as of April 13, 2015, between us and Eric M. Green, is incorporated by reference from our Form 8-K dated April 15, 2015.
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10.8
(2)
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Indemnification Agreement, dated as of April 24, 2015, between us and Eric M. Green, is incorporated by reference from our Form 8-K dated April 30, 2015.
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10.9
(2)
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Sign-On Retention Award Notice, dated as of April 24, 2015, from us to Eric M. Green, is incorporated by reference from our Form 8-K dated April 30, 2015.
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10.10
(2)
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Form of Second Amended and Restated Change-in-Control Agreement between us and certain of our executive officers dated as of March 25, 2000 is incorporated by reference from our 10-Q report for the quarter ended March 31, 2000.
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10.11
(2)
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Form of Amendment No. 1 to Second Amended and Restated Change-in-Control Agreement dated as of May 1, 2001 between us and certain of our executive officers is incorporated by reference from our 2001 10-K report.
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10.12
(2)
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Form of Amendment No. 2 to Second Amended and Restated Change-in-Control Agreement between us and certain of our executive officers, dated as of various dates in December 2008, is incorporated by reference from our 2008 10-K report.
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10.13
(2)
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Schedule of agreements with executive officers is incorporated by reference from our 2008 10-K report.
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10.14
(2)
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Change-in-Control Agreement, dated as of August 16, 2012, between us and Daniel Malone, is incorporated by reference from our 2013 10-K report.
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10.15
(2)
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Change-in-Control Agreement, dated as of August 15, 2012, between us and Karen Flynn, is incorporated by reference from our 2013 10-K report.
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Exhibit Number
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Description
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10.16
(2)
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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.
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10.17
(2)
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Amendment #1 to the Employment Agreement between us and Donald E. Morel, Jr., dated as of December 19, 2008, is incorporated by reference from our 2008 10-K report.
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10.18
(2)
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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.
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10.19
(2)
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Indemnification Agreement, dated as of January 5, 2009 between us and Donald E. Morel, Jr. is incorporated by reference from our Form 8-K dated January 6, 2009.
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10.20
(2)
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Supplemental Employees' Retirement Plan, as amended and restated effective January 1, 2008, is incorporated by reference from our 2008 10-K report.
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10.21
(2)
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Non-Qualified Deferred Compensation Plan for Designated Employees, as amended and restated effective January 1, 2008, is incorporated by reference from our 2008 10-K report.
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10.22
(2)
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Deferred Compensation Plan for Outside Directors, as amended and restated effective June 30, 2013, is incorporated by reference from our 2013 10-K report.
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10.23
(2)
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West Pharmaceutical Services, Inc. 2011 Omnibus Incentive Compensation Plan is incorporated by reference from our Form 8-K filed on May 6, 2011.
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10.24
(2)
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2007 Omnibus Incentive Compensation Plan effective as of May 1, 2007, is incorporated by reference to Exhibit 99.1 of the Company's Form 8-K dated May 4, 2007.
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10.25
(2)
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2004 Stock-Based Compensation Plan (now terminated) is incorporated by reference from our Proxy Statement for the 2004 Annual Meeting of Shareholders.
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10.26
(2)
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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.
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10.27
(2)
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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.
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10.28
(2)
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Form of Director 2006 Stock Unit Award Notice is incorporated by reference from our 10-Q report for the quarter ended June 30, 2006.
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10.29
(2)
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Form of 2007 Non-Qualified Stock Option and Performance-Vesting Share Unit Award, issued pursuant to the 2004 Stock-Based Compensation Plan, is incorporated by reference from our 10-Q report for the quarter ended March 31, 2007.
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10.30
(2)
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Form of Director 2007 Deferred Stock Award, issued pursuant to the 2007 Omnibus Incentive Compensation Plan, is incorporated by reference from our 10-Q report for the quarter ended June 30, 2007.
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10.31
(2)
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Form of 2008 Non-Qualified Stock Option and Performance-Vesting Share Unit Award, issued pursuant to the 2007 Omnibus Incentive Compensation Plan, is incorporated by reference from our 10-Q report for the quarter ended March 31, 2008.
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10.32
(2)
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Form of Director 2008 Deferred Stock Award, issued pursuant to the 2007 Omnibus Incentive Compensation Plan, is incorporated by reference from our 2008 10-K report.
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10.33
(2)
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Form of 2009 Supplemental Long-Term Incentive Award, is incorporated by reference from our 10-Q report for the quarter ended September 30, 2009.
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10.34
(2)
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Letter Agreement dated as of March 30, 2006 between us and Donald E. Morel, Jr. is incorporated by reference from our 10-Q report for the quarter ended June 30, 2006.
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10.35
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Credit Agreement, dated June 3, 2011, by and among us, certain of our subsidiaries, several banks and other financial institutions from time to time parties thereto (the “Lenders”) and PNC Bank, National Association, as administrative agent for the Lenders.
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10.36
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Security Agreement, dated June 3, 2011, by and among us, the subsidiaries of the Company listed on the signature pages thereto and PNC Bank, National Association, as administrative agent, for the holders of the Obligations.
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10.37
(3)
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Agreement, effective as of January 1, 2005, between us and The Goodyear Tire & Rubber Company is incorporated by reference from our 10-Q report for the quarter ended June 30, 2005.
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Exhibit Number
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Description
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10.38
(3)
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First Agreement to Amend to Agreement, effective as of July 1, 2008, between us and The Goodyear Tire & Rubber Company is incorporated by reference from our 10-Q report for the quarter ended March 31, 2009.
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10.39
(3)
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Distributorship Agreement, dated and effective January 18, 2017, between Daikyo Seiko, Ltd. and us.
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10.40
(4)
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Amended and Restated Technology Exchange and Cross License Agreement, dated and effective January 18, 2017, between Daikyo Seiko, Ltd. and us.
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10.41
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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.
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10.42
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Indemnification agreements between us and each of our directors in the form of Exhibit 10.1 to our Form 8-K report dated January 6, 2009, which is incorporated by reference.
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10.43
(3)
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Global Supply Agreement by and between ExxonMobil Chemical Company and us, entered into on August 11, 2014, and effective January 1, 2014 through December 31, 2018 is incorporated by reference from our Form 8-K report filed on August 15, 2014.
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10.44
(2)
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Form of 2014 Long-Term Incentive Plan Award is incorporated by reference from our Form 10-Q report for the quarter ended March 31, 2014.
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10.45
(2)
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Form of 2014 Stock-Settled Restricted Stock Unit Award is incorporated by reference from our Form 10-Q report for the quarter ended June 30, 2014.
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10.46
(3)
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Amendment by and between ExxonMobil Chemical Company and us, incorporated by reference from our Form 10-Q report for the quarter ended June 30, 2016.
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10.47
(2)
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Employment Agreement, dated August 28, 2016, between David Montecalvo and us, incorporated by reference from our Form 10-Q report for the quarter ended September 30, 2016.
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10.48
(3)
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Agreement, dated August 16, 2016, to amend Agreement by and between the Goodyear Tire & Rubber Company and us, incorporated by reference from our Form 10-Q report for the quarter ended September 30, 2016.
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21.
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Subsidiaries of the Company.
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23.
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Consent of Independent Registered Public Accounting Firm.
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31.1
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Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1*
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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.
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32.2*
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Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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(1)
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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.
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(2)
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Management compensatory plan.
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(3)
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Certain portions of this exhibit have been omitted and filed separately with the SEC pursuant to a confidential treatment order of the SEC.
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(4)
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Certain portions of this exhibit have been omitted pursuant to a confidential treatment request submitted to the SEC.
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*
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Furnished, not filed.
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Material, Formula, or Process Rank
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Pieces
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[**]
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[**]
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[**]
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S
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[**]
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[**]
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[**]
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A
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[**]
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[**]
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[**]
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B
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[**]
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[**]
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[**]
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C
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[**]
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[**]
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[**]
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D
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[**]
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[**]
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[**]
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Material, Formula, or Process Rank
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[**]
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[**]
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[**]
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[**]
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[**]
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S
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[**]
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[**]
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[**]
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[**]
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A
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[**]
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[**]
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[**]
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[**]
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B
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[**]
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[**]
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[**]
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[**]
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C
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[**]
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[**]
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[**]
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[**]
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D
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[**]
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[**]
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[**]
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[**]
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(i)
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the design and manufacture of [**] suitable for use in the [**] (the “[**]”);
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(ii)
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the design, filling, packaging and manufacturing of [**] and related products as provided or directed by West (“[**]”); and
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(iii)
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medical devices incorporating Daikyo’s [**] products (“[**]”), and West has agreed to provide certain assistance and support to Daikyo relating thereto.
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a.
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Assistance in classification of the device and product code determination.
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b.
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Assistance in researching predicate devices for substantial equivalence determination in the premarket notification (510(k)).
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c.
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Supplying a premarket notification template (510(k) template) which meets the requirements of 21CFR 807.
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d.
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Review of the premarket notification submission.
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e.
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Preparing the new required ecopy of the premarket notification 510(k) submission per Section 745A(a) of the FD&C Act.
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f.
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Assistance in preparation of the response to inquiries from the FDA in relation to the aforementioned premarket notification application.
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g.
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Assistance in set and preparation of the automated establishment registration process and medical device listing in accordance with 21 CFR 807.
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h.
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Initial training - current Good Manufacturing Practices (cGMP) for medical devices.
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a.
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Training on required elements and required objective evidence of Daikyo’s quality management system per applicable compliance regulations, e.g. 21CFR820.
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b.
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Training on the content of a 510(k) submission.
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i.
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Facilitate assisting completing the customer requirements for the product design input.
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j.
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Provide a compliant format and facilitate completion of Design and Development Plan, Risk Management Plan, and Device Inputs document per 21CFR 820.30. Facilitate the design reviews and creation of the design history file associated with the device.
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k.
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Assistance in preparing compliant procedures for:
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a.
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Medical Device Reporting (MDR) (Adverse event reporting) – 21 CFR 803.
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b.
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Product Recalls, Including Removals and Corrections – 21 CFR 7.
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State/County of
Incorporation
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Stock
Ownership
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West Pharmaceutical Services, Inc.
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Pennsylvania
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Parent Co.
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Citation Plastics Co.
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New Jersey
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100.0
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%
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Medimop Medical Projects Ltd.
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Israel
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100.0
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Tech Group Europe Limited
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Ireland
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100.0
|
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Tech Group Grand Rapids, Inc.
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Delaware
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100.0
|
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Tech Group North America, Inc.
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Arizona
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100.0
|
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West Contract Manufacturing, LLC
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Delaware
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100.0
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TGPR Holdings Limited
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Ireland
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100.0
|
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W.P.S. F. Limited
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England
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100.0
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West Analytical Services, LLC
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Delaware
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100.0
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West Pharmaceutical Packaging (China) Company Ltd.
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China
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100.0
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West Pharmaceutical Packaging India Private Limited
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India
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100.0
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West Pharmaceutical Services Argentina S.A.
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Argentina
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100.0
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West Pharmaceutical Services Australia Pty. Ltd.
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Australia
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100.0
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West Pharmaceutical Services Beograd d.o.o
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Serbia
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100.0
|
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West Pharmaceutical Services Brasil Ltda.
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Brasil
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100.0
|
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West Pharmaceutical Services Colombia S.A.S
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Colombia
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98.2
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(a)
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West Pharmaceutical Services Cornwall Limited
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England
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100.0
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West Pharmaceutical Services Danmark A/S
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Denmark
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100.0
|
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West Pharmaceutical Services Delaware Acquisition, Inc.
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Delaware
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100.0
|
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West Pharmaceutical Services Deutschland GmbH Co KG
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Germany
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100.0
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West Pharmaceutical Services France S.A.
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France
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99.9
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(b)
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West Pharmaceutical Services Group Limited
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England
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100.0
|
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West Pharmaceutical Services Hispania S.A.
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Spain
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100.0
|
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West Pharmaceutical Services Holding Danmark ApS
|
Denmark
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100.0
|
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West Pharmaceutical Services Holding France SAS
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France
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100.0
|
|
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West Pharmaceutical Services Holding GmbH
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Germany
|
100.0
|
|
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West Pharmaceutical Services Holdings Ltd
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Israel
|
100.0
|
|
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West Pharmaceutical Services Italia S.r.L.
|
Italy
|
100.0
|
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West Pharmaceutical Services Ireland, Ltd.
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Ireland
|
100.0
|
|
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West Pharmaceutical Products Holding Ireland North, Ltd.
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Ireland
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100.0
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West Pharmaceutical Products Holding Ireland South, Ltd.
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Ireland
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100.0
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West Pharmaceutical Services Lakewood, Inc.
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Delaware
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100.0
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West Pharmaceutical Services Normandie SAS
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France
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100.0
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West Pharmaceutical Services of Delaware, Inc.
|
Delaware
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100.0
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West Pharmaceutical Services of Florida, Inc.
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Florida
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100.0
|
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West Pharmaceutical Services Shanghai Medical Rubber Products Co., Ltd.
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China
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100.0
|
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West Pharmaceutical Services Singapore (Holding) Pte. Limited
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Singapore
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100.0
|
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West Pharmaceutical Services Singapore Pte. Ltd.
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Singapore
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100.0
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West Pharmaceutical Services Vega Alta, Inc.
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Delaware
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100.0
|
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West Pharmaceutical Services Venezuela C.A.
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Venezuela
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100.0
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West Pharmaceutical Services Verwaltungs GmbH
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Germany
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100.0
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|||
(a) 1.55% is held in treasury by West Pharmaceutical Services Colombia S.A.S
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|
|||
(b) In addition, .01% is owned directly by 8 individual shareholders who are officers of the Company.
|
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1.
|
I have reviewed this Annual Report on Form 10-K of West Pharmaceutical Services, Inc.;
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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;
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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;
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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.
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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.
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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
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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.
|