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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Emerging growth 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 7, 2019
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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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FORM 10-K SUMMARY
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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) (2)
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South American Operations
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Stolberg
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Brazil
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Ireland
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Sao Paulo
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Waterford
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Serbia
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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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Grand Rapids, MI
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Dublin (2)
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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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Silji Abraham
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47
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Senior Vice President, Chief Digital and Transformation Officer since February 2018. Prior to joining West, he most recently served as Executive Vice President and Chief Information Officer of MilliporeSigma, a subsidiary of Merck KGaA, Darmstadt, Germany. Prior to this role, he served as Chief Information Officer at Sigma-Aldrich Corporation, a leading life science and technology company, and worked in various leadership roles at Invensys Operations Management, ArvinMeritor and Chrysler Group.
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Bernard J. Birkett
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50
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Senior Vice President, Chief Financial Officer and Treasurer since June 2018. Prior to joining West, he spent more than 20 years at Merit Medical Systems, Inc., a leading manufacturer of disposable medical devices, where he served in a number of senior global leadership roles, including Chief Financial Officer and Treasurer, Controller for Europe, Middle East and Africa (EMEA) and Vice President of International Finance.
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Annette F. Favorite
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54
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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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Karen A. Flynn
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56
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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 roles in Quality, Research and Development, and Sales.
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Eric M. Green
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49
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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 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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Quintin J. Lai
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52
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Vice President, Corporate Development, Strategy and Investor Relations since January 2016. Prior to joining West, he was Vice President of Investor Relations and Corporate Strategy at Sigma-Aldrich Corporation from 2012 to 2015. From 2002 to 2012, he was at Robert W. Baird & Company, where he held various roles, including Managing Director and Senior Equity Research Analyst of the Life Science Tools and Diagnostic sector and Associate Director of Equity Research.
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Daniel Malone
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57
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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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64
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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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53
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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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55
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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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2018
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$102.80
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$84.73
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$102.14
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$82.74
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$124.51
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$96.97
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$125.09
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$91.75
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$125.09
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$82.74
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2017
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$88.30
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$79.06
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$99.91
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$77.97
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$96.81
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$80.02
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$103.36
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$89.77
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$103.36
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$77.97
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Period
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Total number of shares purchased
(1)(2)
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Average price paid per share
(1)(2)
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Total number of shares purchased as
part of publicly
announced plans or
programs
(2)
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Maximum number (or approximate dollar value)
of shares that may
yet be purchased
under the plans or
programs
(2) (3)
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|||||
October 1 – 31, 2018
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—
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$
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—
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—
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—
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November 1 – 30, 2018
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140
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108.80
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—
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—
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December 1 – 31, 2018
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—
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—
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—
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—
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Total
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140
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$
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108.80
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—
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—
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(1)
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Includes 140 shares purchased on behalf of employees enrolled in the Non-Qualified Deferred Compensation Plan for Designated Employees (Amended and Restated Effective December 1, 2018). 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 February 2018, we announced a share repurchase program for calendar-year 2018 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 repurchased and the timing of such transactions depended on a variety of factors, including market conditions. There were no shares purchased during the three months ended December 31, 2018. During the year ended December 31, 2018, we purchased 800,000 shares of our common stock under the program at a cost of $70.8 million, or an average price of $88.51 per share.
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(3)
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In February 2019, we announced a share repurchase program for calendar-year 2019 authorizing the repurchase of up to 800,000 shares of our common stock from time to time on the open market or in privately-negotiated transactions as permitted under the Securities Exchange Act of 1934 Rule 10b-18. The number of shares to be repurchased and the timing of such transactions will depend on a variety of factors, including market conditions. This share repurchase program is expected to be completed by December 31, 2019.
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(in millions, except per share data)
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2018
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2017
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2016
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2015
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2014
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||||||||||
SUMMARY OF OPERATIONS
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Net sales
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$
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1,717.4
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$
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1,599.1
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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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Operating profit †
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240.3
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225.8
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195.2
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177.0
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182.0
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|||||
Net income
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206.9
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150.7
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143.6
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95.6
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127.1
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|||||
Net income per share:
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||||||||||
Basic (1)
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$
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2.80
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$
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2.04
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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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Diluted (2)
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2.74
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1.99
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1.91
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1.30
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1.75
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Weighted average common shares outstanding
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73.9
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73.9
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73.3
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72.0
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70.9
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Weighted average shares assuming dilution
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75.4
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75.8
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75.0
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73.8
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72.8
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Dividends declared per common share
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$
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0.58
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$
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0.54
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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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YEAR-END FINANCIAL POSITION
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Cash and cash equivalents
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$
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337.4
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$
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235.9
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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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Working capital
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610.7
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464.0
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400.9
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359.4
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406.6
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|||||
Total assets
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1,978.9
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1,862.8
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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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|||||
Total invested capital:
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||||||||||
Total debt
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196.1
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197.0
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228.6
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298.2
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335.5
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|||||
Total equity
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1,396.3
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1,279.9
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1,117.5
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1,023.9
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956.9
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|||||
Total invested capital
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$
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1,592.4
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$
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1,476.9
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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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||||||||||
PERFORMANCE MEASUREMENTS (3)
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||||||||||
Gross margin (a)
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31.8
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%
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32.1
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%
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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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%
|
|||||
Operating profitability (b) †
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14.0
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%
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14.1
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%
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12.9
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%
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12.6
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%
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12.8
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%
|
|||||
Effective tax rate (4)
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17.2
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%
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36.4
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%
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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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%
|
|||||
Return on invested capital (c) †
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13.0
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%
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10.2
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%
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10.4
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%
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10.5
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%
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10.2
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%
|
|||||
Net debt-to-total invested capital (d)
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N/A
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N/A
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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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%
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|||||
Research and development expenses
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$
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40.3
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$
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39.1
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|
$
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36.8
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|
$
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34.1
|
|
$
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37.3
|
|
Operating cash flow
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288.6
|
|
263.3
|
|
219.4
|
|
212.4
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182.9
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|||||
Stock price range
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$125.09-82.74
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$103.36-77.97
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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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▪
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Net income in 2018 included the impact of restructuring and related charges of $7.2 million (net of $1.9 million in tax), a gain on the sale of fixed assets as a result of our restructuring plans of $0.9 million (net of $0.2 million in tax), a charge of $1.1 million related to the classification of Argentina’s economy as highly inflationary under U.S. GAAP as of July 1, 2018, a net tax benefit of $2.5 million for the impact of tax law changes, including the 2017 Tax Act, and a tax benefit of $14.3 million associated with our adoption in 2017 of guidance issued by the FASB regarding share-based payment transactions.
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▪
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Net income in 2017 included the impact of a discrete tax charge of $48.8 million related to the 2017 Tax Act and the impact of changes in enacted international tax rates on previously-recorded deferred tax asset and liability balances, as well as a tax benefit of $33.1 million associated with our adoption of the guidance issued by the FASB regarding share-based payment transactions and a charge of $11.1 million related to the deconsolidation of our Venezuelan subsidiary.
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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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▪
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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 $1.8 million.
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018/2017
|
|
2017/2016
|
||||||||
Proprietary Products
|
$
|
1,308.6
|
|
|
$
|
1,236.9
|
|
|
$
|
1,189.9
|
|
|
5.8
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%
|
|
3.9
|
%
|
Contract-Manufactured Products
|
409.1
|
|
|
362.5
|
|
|
320.2
|
|
|
12.9
|
%
|
|
13.2
|
%
|
|||
Intersegment sales elimination
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(1.0
|
)
|
|
—
|
%
|
|
—
|
%
|
|||
Consolidated net sales
|
$
|
1,717.4
|
|
|
$
|
1,599.1
|
|
|
$
|
1,509.1
|
|
|
7.4
|
%
|
|
6.0
|
%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018/2017
|
|
2017/2016
|
||||||||
Proprietary Products:
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
$
|
485.4
|
|
|
$
|
449.3
|
|
|
$
|
448.3
|
|
|
8.0
|
%
|
|
0.2
|
%
|
Gross profit margin
|
37.1
|
%
|
|
36.3
|
%
|
|
37.7
|
%
|
|
|
|
|
|||||
Contract-Manufactured Products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross profit
|
$
|
60.0
|
|
|
$
|
63.6
|
|
|
$
|
53.1
|
|
|
(5.7
|
)%
|
|
19.8
|
%
|
Gross profit margin
|
14.7
|
%
|
|
17.5
|
%
|
|
16.5
|
%
|
|
|
|
|
|||||
Consolidated gross profit
|
$
|
545.4
|
|
|
$
|
512.9
|
|
|
$
|
501.4
|
|
|
6.3
|
%
|
|
2.3
|
%
|
Consolidated gross profit margin
|
31.8
|
%
|
|
32.1
|
%
|
|
33.2
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018/2017
|
|
2017/2016
|
||||||||
Proprietary Products
|
$
|
40.3
|
|
|
$
|
39.1
|
|
|
$
|
36.8
|
|
|
3.1
|
%
|
|
6.3
|
%
|
Contract-Manufactured Products
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Consolidated R&D costs
|
$
|
40.3
|
|
|
$
|
39.1
|
|
|
$
|
36.8
|
|
|
3.1
|
%
|
|
6.3
|
%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018/2017
|
|
2017/2016
|
||||||||
Proprietary Products
|
$
|
185.0
|
|
|
$
|
175.3
|
|
|
$
|
167.4
|
|
|
5.5
|
%
|
|
4.7
|
%
|
Contract-Manufactured Products
|
16.5
|
|
|
15.4
|
|
|
15.2
|
|
|
7.1
|
%
|
|
1.3
|
%
|
|||
Corporate
|
61.4
|
|
|
55.3
|
|
|
57.0
|
|
|
11.0
|
%
|
|
(3.0
|
)%
|
|||
Consolidated SG&A costs
|
$
|
262.9
|
|
|
$
|
246.0
|
|
|
$
|
239.6
|
|
|
6.9
|
%
|
|
2.7
|
%
|
SG&A as a % of net sales
|
15.3
|
%
|
|
15.4
|
%
|
|
15.9
|
%
|
|
|
|
|
Expense (income)
|
Year Ended December 31,
|
||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Proprietary Products
|
$
|
(6.3
|
)
|
|
$
|
(8.9
|
)
|
|
$
|
1.0
|
|
Contract-Manufactured Products
|
(0.8
|
)
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|||
Corporate
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Unallocated items
|
9.1
|
|
|
11.1
|
|
|
29.1
|
|
|||
Consolidated other expense
|
$
|
1.9
|
|
|
$
|
2.0
|
|
|
$
|
29.8
|
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018/2017
|
|
2017/2016
|
||||||||
Proprietary Products
|
$
|
266.4
|
|
|
$
|
243.8
|
|
|
$
|
243.1
|
|
|
9.3
|
%
|
|
0.3
|
%
|
Contract-Manufactured Products
|
44.3
|
|
|
48.3
|
|
|
38.2
|
|
|
(8.3
|
)%
|
|
26.4
|
%
|
|||
Corporate
|
(61.3
|
)
|
|
(55.2
|
)
|
|
(57.0
|
)
|
|
11.1
|
%
|
|
(3.2
|
)%
|
|||
Adjusted consolidated operating profit
|
$
|
249.4
|
|
|
$
|
236.9
|
|
|
$
|
224.3
|
|
|
5.3
|
%
|
|
5.6
|
%
|
Adjusted consolidated operating profit margin
|
14.5
|
%
|
|
14.8
|
%
|
|
14.9
|
%
|
|
|
|
|
|||||
Unallocated items
|
(9.1
|
)
|
|
(11.1
|
)
|
|
(29.1
|
)
|
|
|
|
|
|||||
Consolidated operating profit
|
$
|
240.3
|
|
|
$
|
225.8
|
|
|
$
|
195.2
|
|
|
6.4
|
%
|
|
15.7
|
%
|
Consolidated operating profit margin
|
14.0
|
%
|
|
14.1
|
%
|
|
12.9
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018/2017
|
|
2017/2016
|
||||||||
Interest expense
|
$
|
9.3
|
|
|
$
|
10.5
|
|
|
$
|
11.7
|
|
|
(11.4
|
)%
|
|
(10.3
|
)%
|
Capitalized interest
|
(0.9
|
)
|
|
(2.7
|
)
|
|
(3.6
|
)
|
|
(66.7
|
)%
|
|
(25.0
|
)%
|
|||
Interest income
|
(2.1
|
)
|
|
(1.3
|
)
|
|
(1.1
|
)
|
|
61.5
|
%
|
|
18.2
|
%
|
|||
Interest expense, net
|
$
|
6.3
|
|
|
$
|
6.5
|
|
|
$
|
7.0
|
|
|
(3.1
|
)%
|
|
(7.1
|
)%
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by operating activities
|
$
|
288.6
|
|
|
$
|
263.3
|
|
|
$
|
219.4
|
|
Net cash used in investing activities
|
$
|
(100.8
|
)
|
|
$
|
(133.6
|
)
|
|
$
|
(175.8
|
)
|
Net cash used in financing activities
|
$
|
(80.7
|
)
|
|
$
|
(109.0
|
)
|
|
$
|
(113.9
|
)
|
($ in millions)
|
December 31, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
337.4
|
|
|
$
|
235.9
|
|
Working capital
|
$
|
610.7
|
|
|
$
|
464.0
|
|
Total debt
|
$
|
196.1
|
|
|
$
|
197.0
|
|
Total equity
|
$
|
1,396.3
|
|
|
$
|
1,279.9
|
|
Net debt-to-total invested capital
|
N/A
|
|
|
N/A
|
|
|
|
Payments Due By Period
|
|||||||||||||
($ in millions)
|
Total
|
Less than 1 year
|
1 - 3 years
|
3 - 5 years
|
More than 5 years
|
||||||||||
Purchase obligations
(1)
|
$
|
72.7
|
|
$
|
14.0
|
|
$
|
18.7
|
|
$
|
18.5
|
|
$
|
21.5
|
|
Debt (excluding unamortized debt issuance costs)
|
196.7
|
|
0.1
|
|
28.6
|
|
42.0
|
|
126.0
|
|
|||||
Interest on debt and interest rate swaps
(2)
|
42.0
|
|
6.8
|
|
13.2
|
|
10.7
|
|
11.3
|
|
|||||
Operating lease obligations
|
81.5
|
|
13.0
|
|
18.3
|
|
12.4
|
|
37.8
|
|
|||||
Other long-term liabilities
(3)
|
3.3
|
|
0.4
|
|
0.8
|
|
0.9
|
|
1.2
|
|
|||||
Total contractual obligations
(4)
|
$
|
396.2
|
|
$
|
34.3
|
|
$
|
79.6
|
|
$
|
84.5
|
|
$
|
197.8
|
|
(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 $3.9 million in 2019. Please refer to Note 14,
Benefit Plans
, for estimated benefit payments over the next ten years.
|
($ in millions)
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
Carrying Value
|
Fair Value
|
|||||||||
Current Debt:
|
|
|
|
|
|
|
|
|
|||||||||
U.S. dollar denominated
|
$
|
0.1
|
|
|
|
|
|
|
$
|
0.1
|
|
$
|
0.1
|
|
|||
Average interest rate - variable
|
|
|
|
|
|
|
|
|
|||||||||
Long-Term Debt:
|
|
|
|
|
|
|
|
|
|||||||||
U.S. dollar denominated
|
|
|
|
42.0
|
|
|
126.0
|
|
168.0
|
|
164.6
|
|
|||||
Average interest rate - fixed
|
|
|
|
3.7
|
%
|
|
3.9
|
%
|
|
|
|||||||
Euro denominated
|
|
24.0
|
|
|
|
|
|
24.0
|
|
24.0
|
|
||||||
Average interest rate - variable
|
|
1.0
|
%
|
|
|
|
|
|
|
||||||||
Yen denominated
|
|
4.6
|
|
|
|
|
|
4.6
|
|
4.6
|
|
||||||
Average interest rate - variable
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
|
$
|
1,717.4
|
|
|
$
|
1,599.1
|
|
|
$
|
1,509.1
|
|
Cost of goods and services sold
|
|
1,172.0
|
|
|
1,086.2
|
|
|
1,007.7
|
|
|||
Gross profit
|
|
545.4
|
|
|
512.9
|
|
|
501.4
|
|
|||
Research and development
|
|
40.3
|
|
|
39.1
|
|
|
36.8
|
|
|||
Selling, general and administrative expenses
|
|
262.9
|
|
|
246.0
|
|
|
239.6
|
|
|||
Other expense (Note 15)
|
|
1.9
|
|
|
2.0
|
|
|
29.8
|
|
|||
Operating profit
|
|
240.3
|
|
|
225.8
|
|
|
195.2
|
|
|||
Interest expense
|
|
8.4
|
|
|
7.8
|
|
|
8.1
|
|
|||
Interest income
|
|
(2.1
|
)
|
|
(1.3
|
)
|
|
(1.1
|
)
|
|||
Other nonoperating income
|
|
(6.7
|
)
|
|
(3.1
|
)
|
|
(1.6
|
)
|
|||
Income before income taxes
|
|
240.7
|
|
|
222.4
|
|
|
189.8
|
|
|||
Income tax expense
|
|
41.4
|
|
|
80.9
|
|
|
54.4
|
|
|||
Equity in net income of affiliated companies
|
|
(7.6
|
)
|
|
(9.2
|
)
|
|
(8.2
|
)
|
|||
Net income
|
|
$
|
206.9
|
|
|
$
|
150.7
|
|
|
$
|
143.6
|
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
2.80
|
|
|
$
|
2.04
|
|
|
$
|
1.96
|
|
Diluted
|
|
$
|
2.74
|
|
|
$
|
1.99
|
|
|
$
|
1.91
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
73.9
|
|
|
73.9
|
|
|
73.3
|
|
|||
Diluted
|
|
75.4
|
|
|
75.8
|
|
|
75.0
|
|
|||
|
|
|
|
|
|
|
||||||
Dividends declared per share
|
|
$
|
0.58
|
|
|
$
|
0.54
|
|
|
$
|
0.50
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
206.9
|
|
|
$
|
150.7
|
|
|
$
|
143.6
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
(39.2
|
)
|
|
68.8
|
|
|
(18.1
|
)
|
|||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Prior service (cost) credit arising during period, net of tax of $0, $0 and $1.1
|
(0.3
|
)
|
|
—
|
|
|
1.9
|
|
|||
Net actuarial (loss) gain arising during period, net of tax of $(0.2), $1.3 and $(4.8)
|
(0.7
|
)
|
|
6.3
|
|
|
(11.1
|
)
|
|||
Settlement effects arising during period, net of tax of $1.1
|
—
|
|
|
—
|
|
|
2.0
|
|
|||
Less: amortization of actuarial loss, net of tax of $0.3, $0.5 and $1.2
|
1.1
|
|
|
3.6
|
|
|
2.2
|
|
|||
Less: amortization of prior service credit, net of tax of $(0.5), $(0.5) and $(0.5)
|
(1.5
|
)
|
|
(3.5
|
)
|
|
(0.9
|
)
|
|||
Less: amortization of transition obligation
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Net loss on investment securities, net of tax of $(0.1), $(2.5) and $(0.1)
|
(0.1
|
)
|
|
(4.7
|
)
|
|
(0.2
|
)
|
|||
Net gain (loss) on derivatives, net of tax of $1.5, $(0.1) and $0.1
|
3.8
|
|
|
(1.0
|
)
|
|
(0.1
|
)
|
|||
Other comprehensive (loss) income, net of tax
|
(36.9
|
)
|
|
69.5
|
|
|
(24.2
|
)
|
|||
Comprehensive income
|
$
|
170.0
|
|
|
$
|
220.2
|
|
|
$
|
119.4
|
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
337.4
|
|
|
$
|
235.9
|
|
Accounts receivable, net
|
288.2
|
|
|
253.2
|
|
||
Inventories
|
214.5
|
|
|
215.2
|
|
||
Other current assets
|
54.3
|
|
|
39.2
|
|
||
Total current assets
|
894.4
|
|
|
743.5
|
|
||
Property, plant and equipment
|
1,752.7
|
|
|
1,745.8
|
|
||
Less: accumulated depreciation and amortization
|
930.7
|
|
|
890.8
|
|
||
Property, plant and equipment, net
|
822.0
|
|
|
855.0
|
|
||
Investments in affiliated companies
|
91.2
|
|
|
85.8
|
|
||
Goodwill
|
105.8
|
|
|
107.7
|
|
||
Deferred income taxes
|
24.7
|
|
|
25.7
|
|
||
Intangible assets, net
|
20.3
|
|
|
21.7
|
|
||
Other noncurrent assets
|
20.5
|
|
|
23.4
|
|
||
Total Assets
|
$
|
1,978.9
|
|
|
$
|
1,862.8
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Notes payable and other current debt
|
$
|
0.1
|
|
|
$
|
—
|
|
Accounts payable
|
130.4
|
|
|
138.1
|
|
||
Pension and other postretirement benefits
|
2.3
|
|
|
2.2
|
|
||
Accrued salaries, wages and benefits
|
64.5
|
|
|
56.2
|
|
||
Income taxes payable
|
9.8
|
|
|
6.0
|
|
||
Other current liabilities
|
76.6
|
|
|
77.0
|
|
||
Total current liabilities
|
283.7
|
|
|
279.5
|
|
||
Long-term debt
|
196.0
|
|
|
197.0
|
|
||
Deferred income taxes
|
13.1
|
|
|
10.4
|
|
||
Pension and other postretirement benefits
|
56.2
|
|
|
53.4
|
|
||
Other long-term liabilities
|
33.6
|
|
|
42.6
|
|
||
Total Liabilities
|
582.6
|
|
|
582.9
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 17)
|
|
|
|
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
||||
Preferred stock, 3.0 million shares authorized; 0 shares issued and outstanding in 2018 and 2017
|
—
|
|
|
—
|
|
||
Common stock, par value $.25 per share; 100.0 million shares authorized; shares issued: 75.3 million and 75.2 million in 2018 and 2017; shares outstanding: 74.1 million and 73.9 million in 2018 and 2017
|
18.8
|
|
|
18.8
|
|
||
Capital in excess of par value
|
282.0
|
|
|
309.3
|
|
||
Retained earnings
|
1,353.4
|
|
|
1,178.2
|
|
||
Accumulated other comprehensive loss
|
(154.2
|
)
|
|
(117.3
|
)
|
||
Treasury stock, at cost (1.2 million and 1.3 million shares in 2018 and 2017)
|
(103.7
|
)
|
|
(109.1
|
)
|
||
Total Equity
|
1,396.3
|
|
|
1,279.9
|
|
||
Total Liabilities and Equity
|
$
|
1,978.9
|
|
|
$
|
1,862.8
|
|
|
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, 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
|
|
||||||
Share 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
|
|
||||||
Effect of modified retrospective application of a new accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
(4.1
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150.7
|
|
|
—
|
|
|
150.7
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
6.5
|
|
|
—
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
14.0
|
|
||||||
Shares issued under stock plans
|
1.5
|
|
|
0.4
|
|
|
38.0
|
|
|
(0.1
|
)
|
|
7.3
|
|
|
—
|
|
|
—
|
|
|
45.7
|
|
||||||
Share purchased under share repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
(74.4
|
)
|
|
—
|
|
|
—
|
|
|
(74.4
|
)
|
||||||
Shares repurchased for employee tax withholdings
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
|
(3.8
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40.0
|
)
|
|
—
|
|
|
(40.0
|
)
|
||||||
Other adjustments to capital in excess of par value
|
—
|
|
|
—
|
|
|
4.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69.5
|
|
|
69.5
|
|
||||||
Balance, December 31, 2017
|
75.2
|
|
|
18.8
|
|
|
309.3
|
|
|
1.3
|
|
|
(109.1
|
)
|
|
1,178.2
|
|
|
(117.3
|
)
|
|
1,279.9
|
|
||||||
Effect of modified retrospective application of a new accounting standard (see Note 3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.4
|
|
|
—
|
|
|
11.4
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
206.9
|
|
|
—
|
|
|
206.9
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
7.3
|
|
|
—
|
|
|
9.2
|
|
|
—
|
|
|
—
|
|
|
16.5
|
|
||||||
Shares issued under stock plans
|
0.1
|
|
|
—
|
|
|
(34.8
|
)
|
|
(0.9
|
)
|
|
71.6
|
|
|
—
|
|
|
—
|
|
|
36.8
|
|
||||||
Shares purchased under share repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
(70.8
|
)
|
|
—
|
|
|
—
|
|
|
(70.8
|
)
|
||||||
Shares repurchased for employee tax withholdings
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(4.6
|
)
|
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43.1
|
)
|
|
—
|
|
|
(43.1
|
)
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36.9
|
)
|
|
(36.9
|
)
|
||||||
Balance, December 31, 2018
|
75.3
|
|
|
$
|
18.8
|
|
|
$
|
282.0
|
|
|
1.2
|
|
|
$
|
(103.7
|
)
|
|
$
|
1,353.4
|
|
|
$
|
(154.2
|
)
|
|
$
|
1,396.3
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
206.9
|
|
|
$
|
150.7
|
|
|
$
|
143.6
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
101.7
|
|
|
94.3
|
|
|
88.1
|
|
|||
Amortization
|
2.7
|
|
|
2.4
|
|
|
2.6
|
|
|||
Stock-based compensation
|
15.1
|
|
|
16.1
|
|
|
19.5
|
|
|||
Non-cash restructuring charges
|
2.2
|
|
|
0.7
|
|
|
17.5
|
|
|||
Pension curtailment gain
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|||
Venezuela deconsolidation
|
—
|
|
|
11.1
|
|
|
—
|
|
|||
Contingent consideration payments in excess of acquisition-date liability
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on sales of equipment
|
1.8
|
|
|
1.6
|
|
|
0.7
|
|
|||
Deferred income taxes
|
0.9
|
|
|
41.7
|
|
|
21.5
|
|
|||
Pension and other retirement plans, net
|
(7.9
|
)
|
|
(6.9
|
)
|
|
(6.5
|
)
|
|||
Equity in undistributed earnings of affiliates, net of dividends
|
(5.9
|
)
|
|
(7.0
|
)
|
|
(6.8
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Increase in accounts receivable
|
(43.8
|
)
|
|
(39.7
|
)
|
|
(23.3
|
)
|
|||
Increase in inventories
|
(7.0
|
)
|
|
(3.6
|
)
|
|
(21.2
|
)
|
|||
(Increase) decrease in other current assets
|
(6.2
|
)
|
|
0.3
|
|
|
(2.4
|
)
|
|||
Increase in accounts payable
|
0.4
|
|
|
12.6
|
|
|
6.1
|
|
|||
Changes in other assets and liabilities
|
28.3
|
|
|
(11.0
|
)
|
|
(17.9
|
)
|
|||
Net cash provided by operating activities
|
288.6
|
|
|
263.3
|
|
|
219.4
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
(104.7
|
)
|
|
(130.8
|
)
|
|
(170.2
|
)
|
|||
Purchase of investment in affiliated companies
|
—
|
|
|
—
|
|
|
(8.4
|
)
|
|||
Cash related to deconsolidated Venezuelan subsidiary
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|||
Other, net
|
3.9
|
|
|
3.2
|
|
|
2.8
|
|
|||
Net cash used in investing activities
|
(100.8
|
)
|
|
(133.6
|
)
|
|
(175.8
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Repayments of long-term debt
|
(0.1
|
)
|
|
(34.9
|
)
|
|
(69.8
|
)
|
|||
Dividend payments
|
(42.1
|
)
|
|
(39.1
|
)
|
|
(35.8
|
)
|
|||
Contingent consideration payments up to amount of acquisition-date liability
|
—
|
|
|
(0.7
|
)
|
|
(0.3
|
)
|
|||
Proceeds from exercise of stock options and stock appreciation rights
|
31.8
|
|
|
39.5
|
|
|
25.9
|
|
|||
Employee stock purchase plan contributions
|
4.9
|
|
|
4.4
|
|
|
3.8
|
|
|||
Excess tax benefits from employee stock plans
|
—
|
|
|
—
|
|
|
18.2
|
|
|||
Shares purchased under share repurchase programs
|
(70.8
|
)
|
|
(74.4
|
)
|
|
(52.2
|
)
|
|||
Shares repurchased for employee tax withholdings
|
(4.4
|
)
|
|
(3.8
|
)
|
|
(3.7
|
)
|
|||
Net cash used in financing activities
|
(80.7
|
)
|
|
(109.0
|
)
|
|
(113.9
|
)
|
|||
Effect of exchange rates on cash
|
(5.6
|
)
|
|
12.2
|
|
|
(1.3
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
101.5
|
|
|
32.9
|
|
|
(71.6
|
)
|
|||
Cash, including cash equivalents at beginning of period
|
235.9
|
|
|
203.0
|
|
|
274.6
|
|
|||
Cash, including cash equivalents at end of period
|
$
|
337.4
|
|
|
$
|
235.9
|
|
|
$
|
203.0
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Interest paid, net of amounts capitalized
|
$
|
8.4
|
|
|
$
|
8.0
|
|
|
$
|
8.6
|
|
Income taxes paid, net
|
$
|
42.0
|
|
|
$
|
31.0
|
|
|
$
|
48.1
|
|
Accrued capital expenditures
|
$
|
15.0
|
|
|
$
|
20.1
|
|
|
$
|
22.7
|
|
Dividends declared, not paid
|
$
|
11.3
|
|
|
$
|
10.4
|
|
|
$
|
9.5
|
|
($ in millions)
|
2018
|
|
2017
|
||||
Raw materials
|
$
|
90.4
|
|
|
$
|
88.6
|
|
Work in process
|
42.2
|
|
|
31.8
|
|
||
Finished goods
|
81.9
|
|
|
94.8
|
|
||
|
$
|
214.5
|
|
|
$
|
215.2
|
|
($ in millions)
|
Balance at December 31, 2017
|
|
Adjustments Due to ASC 606
|
|
Balance at January 1, 2018
|
||||||
Assets:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
$
|
253.2
|
|
|
$
|
25.0
|
|
|
$
|
278.2
|
|
Inventories
|
215.2
|
|
|
(20.8
|
)
|
|
194.4
|
|
|||
Other current assets
|
39.2
|
|
|
(8.4
|
)
|
|
30.8
|
|
|||
|
|
|
|
|
|
||||||
Liabilities and Equity:
|
|
|
|
|
|
||||||
Other current liabilities
|
$
|
77.0
|
|
|
$
|
(13.7
|
)
|
|
$
|
63.3
|
|
Deferred income taxes
|
10.4
|
|
|
3.0
|
|
|
13.4
|
|
|||
Other long-term liabilities
|
42.6
|
|
|
(4.9
|
)
|
|
37.7
|
|
|||
Retained earnings
|
1,178.2
|
|
|
11.4
|
|
|
1,189.6
|
|
($ in millions)
|
As Reported
|
|
Balances without Adoption of ASC 606
|
|
Effects of Change (Lower)/Higher
|
||||||
Net sales
|
$
|
1,717.4
|
|
|
$
|
1,720.9
|
|
|
$
|
(3.5
|
)
|
Cost of goods and services sold
|
1,172.0
|
|
|
1,172.0
|
|
|
—
|
|
|||
Other expense
|
1.9
|
|
|
1.2
|
|
|
0.7
|
|
|||
Income tax expense
|
41.4
|
|
|
42.6
|
|
|
(1.2
|
)
|
|||
Net income
|
$
|
206.9
|
|
|
$
|
209.9
|
|
|
$
|
(3.0
|
)
|
($ in millions)
|
As Reported
|
|
Balances without Adoption of ASC 606
|
|
Effects of Change Higher/(Lower)
|
||||||
Assets:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
$
|
288.2
|
|
|
$
|
264.3
|
|
|
$
|
23.9
|
|
Inventories
|
214.5
|
|
|
234.4
|
|
|
(19.9
|
)
|
|||
Other current assets
|
54.3
|
|
|
63.4
|
|
|
(9.1
|
)
|
|||
|
|
|
|
|
|
||||||
Liabilities and Equity:
|
|
|
|
|
|
||||||
Other current liabilities
|
$
|
76.6
|
|
|
$
|
87.7
|
|
|
$
|
(11.1
|
)
|
Deferred income taxes
|
13.1
|
|
|
11.3
|
|
|
1.8
|
|
|||
Other long-term liabilities
|
33.6
|
|
|
37.8
|
|
|
(4.2
|
)
|
|||
Retained earnings
|
1,353.4
|
|
|
1,345.0
|
|
|
8.4
|
|
|
2018
|
|
2017
(1)
|
||
Biologics
|
21
|
%
|
|
23
|
%
|
Generics
|
21
|
%
|
|
20
|
%
|
Pharma
|
34
|
%
|
|
34
|
%
|
Contract-Manufactured Products
|
24
|
%
|
|
23
|
%
|
|
100
|
%
|
|
100
|
%
|
(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method.
|
|
2018
|
|
2017
(1)
|
||
High-Value Components
|
41
|
%
|
|
41
|
%
|
Standard Packaging
|
32
|
%
|
|
32
|
%
|
Delivery Devices
|
3
|
%
|
|
4
|
%
|
Contract-Manufactured Products
|
24
|
%
|
|
23
|
%
|
|
100
|
%
|
|
100
|
%
|
(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method.
|
|
2018
|
|
2017
(1)
|
||
Americas
|
48
|
%
|
|
51
|
%
|
Europe, Middle East, Africa
|
44
|
%
|
|
42
|
%
|
Asia Pacific
|
8
|
%
|
|
7
|
%
|
|
100
|
%
|
|
100
|
%
|
(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method.
|
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
206.9
|
|
|
$
|
150.7
|
|
|
$
|
143.6
|
|
Weighted average common shares outstanding
|
73.9
|
|
|
73.9
|
|
|
73.3
|
|
|||
Dilutive effect of equity awards, based on the treasury stock method
|
1.5
|
|
|
1.9
|
|
|
1.7
|
|
|||
Weighted average shares assuming dilution
|
75.4
|
|
|
75.8
|
|
|
75.0
|
|
($ in millions)
|
Expected useful lives (years)
|
|
2018
|
|
2017
|
||||
Land
|
|
|
$
|
20.9
|
|
|
$
|
21.4
|
|
Buildings and improvements
|
5-50
|
|
569.1
|
|
|
539.2
|
|
||
Machinery and equipment
|
10-15
|
|
806.7
|
|
|
793.4
|
|
||
Molds and dies
|
4-7
|
|
115.8
|
|
|
114.5
|
|
||
Computer hardware and software
|
3-10
|
|
151.1
|
|
|
144.6
|
|
||
Construction in progress
|
|
|
89.1
|
|
|
132.7
|
|
||
|
|
|
$
|
1,752.7
|
|
|
$
|
1,745.8
|
|
|
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, 2016
|
$
|
73.7
|
|
|
$
|
29.3
|
|
|
$
|
103.0
|
|
Foreign currency translation
|
3.9
|
|
|
0.8
|
|
|
4.7
|
|
|||
Balance, December 31, 2017
|
77.6
|
|
|
30.1
|
|
|
107.7
|
|
|||
Foreign currency translation
|
(1.6
|
)
|
|
(0.3
|
)
|
|
(1.9
|
)
|
|||
Balance, December 31, 2018
|
$
|
76.0
|
|
|
$
|
29.8
|
|
|
$
|
105.8
|
|
|
2018
|
|
2017
|
||||||||||||||||||||
($ in millions)
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Patents and licensing
|
$
|
19.6
|
|
|
$
|
(15.1
|
)
|
|
$
|
4.5
|
|
|
$
|
18.2
|
|
|
$
|
(14.1
|
)
|
|
$
|
4.1
|
|
Technology
|
3.3
|
|
|
(1.2
|
)
|
|
2.1
|
|
|
3.3
|
|
|
(1.0
|
)
|
|
2.3
|
|
||||||
Trademarks
|
2.0
|
|
|
(1.8
|
)
|
|
0.2
|
|
|
2.0
|
|
|
(1.7
|
)
|
|
0.3
|
|
||||||
Customer relationships
|
29.3
|
|
|
(20.0
|
)
|
|
9.3
|
|
|
29.3
|
|
|
(19.1
|
)
|
|
10.2
|
|
||||||
Customer contracts
|
11.0
|
|
|
(6.8
|
)
|
|
4.2
|
|
|
11.1
|
|
|
(6.3
|
)
|
|
4.8
|
|
||||||
|
$
|
65.2
|
|
|
$
|
(44.9
|
)
|
|
$
|
20.3
|
|
|
$
|
63.9
|
|
|
$
|
(42.2
|
)
|
|
$
|
21.7
|
|
($ in millions)
|
2018
|
|
2017
|
||||
Deferred income
|
$
|
25.5
|
|
|
$
|
18.4
|
|
Other accrued expenses
|
26.2
|
|
|
27.7
|
|
||
Dividends payable
|
11.3
|
|
|
10.4
|
|
||
Restructuring obligations
|
3.3
|
|
|
2.1
|
|
||
Other
|
10.3
|
|
|
18.4
|
|
||
Total other current liabilities
|
$
|
76.6
|
|
|
$
|
77.0
|
|
($ in millions)
|
2018
|
|
2017
|
||||
Note payable, due December 31, 2019
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Credit Facility, due October 15, 2020 (1.00%)
|
28.6
|
|
|
29.6
|
|
||
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
|
|
||
|
196.7
|
|
|
197.7
|
|
||
Less: unamortized debt issuance costs
|
0.6
|
|
|
0.7
|
|
||
Total debt
|
196.1
|
|
|
197.0
|
|
||
Less: current portion of long-term debt
|
0.1
|
|
|
—
|
|
||
Long-term debt, net
|
$
|
196.0
|
|
|
$
|
197.0
|
|
(in millions)
|
|
|
Sell
|
||||
Currency
|
Purchase
|
|
USD
|
Euro
|
|||
USD
|
32.9
|
|
|
—
|
|
27.8
|
|
Yen
|
5,602.7
|
|
|
27.3
|
|
20.4
|
|
SGD
|
42.4
|
|
|
20.0
|
|
9.5
|
|
|
Amount of Gain (Loss) Recognized in OCI
|
|
Amount of Loss (Gain) Reclassified from Accumulated OCI into Income
|
|
Location of Loss (Gain) Reclassified from Accumulated OCI into
Income
|
||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
||||||||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency hedge contracts
|
$
|
0.4
|
|
|
$
|
(1.7
|
)
|
|
$
|
0.6
|
|
|
$
|
1.1
|
|
|
Net sales
|
Foreign currency hedge contracts
|
2.2
|
|
|
(2.0
|
)
|
|
0.3
|
|
|
0.8
|
|
|
Cost of goods and services sold
|
||||
Interest rate swap contracts
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.5
|
|
|
Interest expense
|
||||
Forward treasury locks
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
Interest expense
|
||||
Total
|
$
|
2.6
|
|
|
$
|
(3.6
|
)
|
|
$
|
1.2
|
|
|
$
|
2.6
|
|
|
|
Net Investment Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency-denominated debt
|
$
|
0.8
|
|
|
$
|
(2.4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Other expense
|
Total
|
$
|
0.8
|
|
|
$
|
(2.4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
•
|
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,
2018 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation assets
|
$
|
8.7
|
|
|
$
|
8.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts
|
6.5
|
|
|
—
|
|
|
6.5
|
|
|
—
|
|
||||
|
$
|
15.2
|
|
|
$
|
8.7
|
|
|
$
|
6.5
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
Deferred compensation liabilities
|
9.8
|
|
|
9.8
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency contracts
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
|
$
|
11.7
|
|
|
$
|
9.8
|
|
|
$
|
0.2
|
|
|
$
|
1.7
|
|
|
Balance at
|
|
Basis of Fair Value Measurements
|
||||||||||||
($ in millions)
|
December 31,
2017 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation assets
|
$
|
8.9
|
|
|
$
|
8.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
||||
|
$
|
9.4
|
|
|
$
|
8.9
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration
|
$
|
4.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.9
|
|
Deferred compensation liabilities
|
9.9
|
|
|
9.9
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency contracts
|
5.1
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
||||
|
$
|
19.9
|
|
|
$
|
9.9
|
|
|
$
|
5.1
|
|
|
$
|
4.9
|
|
($ 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, 2016
|
$
|
(3.2
|
)
|
|
$
|
5.2
|
|
|
$
|
(45.4
|
)
|
|
$
|
(143.4
|
)
|
|
$
|
(186.8
|
)
|
Other comprehensive (loss) income before reclassifications
|
(3.6
|
)
|
|
(4.7
|
)
|
|
6.3
|
|
|
68.8
|
|
|
66.8
|
|
|||||
Amounts reclassified out
|
2.6
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
2.7
|
|
|||||
Other comprehensive (loss) income, net of tax
|
(1.0
|
)
|
|
(4.7
|
)
|
|
6.4
|
|
|
68.8
|
|
|
69.5
|
|
|||||
Balance, December 31, 2017
|
(4.2
|
)
|
|
0.5
|
|
|
(39.0
|
)
|
|
(74.6
|
)
|
|
(117.3
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
2.6
|
|
|
(0.1
|
)
|
|
(1.0
|
)
|
|
(39.2
|
)
|
|
(37.7
|
)
|
|||||
Amounts reclassified out
|
1.2
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
0.8
|
|
|||||
Other comprehensive income (loss), net of tax
|
3.8
|
|
|
(0.1
|
)
|
|
(1.4
|
)
|
|
(39.2
|
)
|
|
(36.9
|
)
|
|||||
Balance, December 31, 2018
|
$
|
(0.4
|
)
|
|
$
|
0.4
|
|
|
$
|
(40.4
|
)
|
|
$
|
(113.8
|
)
|
|
$
|
(154.2
|
)
|
Detail of components
|
|
2018
|
|
2017
|
|
Location on Statement of Income
|
||||
Losses on cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
$
|
(0.7
|
)
|
|
$
|
(1.3
|
)
|
|
Net sales
|
Foreign currency contracts
|
|
(0.5
|
)
|
|
(1.2
|
)
|
|
Cost of goods and services sold
|
||
Interest rate swap contracts
|
|
—
|
|
|
(0.7
|
)
|
|
Interest expense
|
||
Forward treasury locks
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
Interest expense
|
||
Total before tax
|
|
(1.6
|
)
|
|
(3.6
|
)
|
|
|
||
Tax expense
|
|
0.4
|
|
|
1.0
|
|
|
|
||
Net of tax
|
|
$
|
(1.2
|
)
|
|
$
|
(2.6
|
)
|
|
|
Amortization of defined benefit pension and other postretirement plans:
|
|
|
|
|
|
|
||||
Prior service credit
|
|
2.0
|
|
|
2.1
|
|
|
(a)
|
||
Actuarial losses
|
|
(1.4
|
)
|
|
(2.3
|
)
|
|
(a)
|
||
Total before tax
|
|
0.6
|
|
|
(0.2
|
)
|
|
|
||
Tax expense
|
|
(0.2
|
)
|
|
0.1
|
|
|
|
||
Net of tax
|
|
$
|
0.4
|
|
|
$
|
(0.1
|
)
|
|
|
Total reclassifications for the period, net of tax
|
|
$
|
(0.8
|
)
|
|
$
|
(2.7
|
)
|
|
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Stock option and appreciation rights
|
$
|
8.6
|
|
|
$
|
7.8
|
|
|
$
|
8.6
|
|
Performance share units, stock-settled
|
2.5
|
|
|
4.1
|
|
|
6.7
|
|
|||
Performance share units, cash-settled
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Performance share units, dividend equivalents
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|||
Employee stock purchase plan
|
0.9
|
|
|
0.8
|
|
|
0.7
|
|
|||
Deferred compensation plans
|
3.0
|
|
|
3.2
|
|
|
3.2
|
|
|||
Total stock-based compensation expense
|
$
|
15.1
|
|
|
$
|
16.1
|
|
|
$
|
19.5
|
|
(in millions, except per share data)
|
2018
|
|
2017
|
|
2016
|
|||
Options outstanding, January 1
|
3.5
|
|
|
4.5
|
|
|
5.0
|
|
Granted
|
0.5
|
|
|
0.5
|
|
|
0.7
|
|
Exercised
|
(1.0
|
)
|
|
(1.5
|
)
|
|
(1.1
|
)
|
Forfeited
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
Options outstanding, December 31
|
3.0
|
|
|
3.5
|
|
|
4.5
|
|
Options exercisable, December 31
|
1.7
|
|
|
1.9
|
|
|
2.7
|
|
Weighted Average Exercise Price
|
2018
|
|
2017
|
|
2016
|
||||||
Options outstanding, January 1
|
$
|
48.76
|
|
|
$
|
38.11
|
|
|
$
|
31.77
|
|
Granted
|
90.36
|
|
|
84.09
|
|
|
61.98
|
|
|||
Exercised
|
35.95
|
|
|
26.15
|
|
|
22.50
|
|
|||
Forfeited
|
75.32
|
|
|
60.92
|
|
|
45.91
|
|
|||
Options outstanding, December 31
|
$
|
58.93
|
|
|
$
|
48.76
|
|
|
$
|
38.11
|
|
Options exercisable, December 31
|
$
|
45.32
|
|
|
$
|
35.44
|
|
|
$
|
27.17
|
|
|
2018
|
|
2017
|
|
2016
|
|||
SARs outstanding, January 1
|
51,368
|
|
|
116,087
|
|
|
232,930
|
|
Granted
|
3,480
|
|
|
2,792
|
|
|
3,368
|
|
Exercised
|
(14,629
|
)
|
|
(67,511
|
)
|
|
(114,976
|
)
|
Forfeited
|
(400
|
)
|
|
—
|
|
|
(5,235
|
)
|
SARs outstanding, December 31
|
39,819
|
|
|
51,368
|
|
|
116,087
|
|
SARs exercisable, December 31
|
30,285
|
|
|
39,769
|
|
|
71,701
|
|
Weighted Average Exercise Price
|
2018
|
|
2017
|
|
2016
|
||||||
SARs outstanding, January 1
|
$
|
38.55
|
|
|
$
|
31.13
|
|
|
$
|
27.79
|
|
Granted
|
89.64
|
|
|
83.47
|
|
|
68.40
|
|
|||
Exercised
|
28.45
|
|
|
27.65
|
|
|
24.95
|
|
|||
Forfeited
|
63.43
|
|
|
—
|
|
|
42.28
|
|
|||
SARs outstanding, December 31
|
$
|
46.48
|
|
|
$
|
38.55
|
|
|
$
|
31.13
|
|
SARs exercisable, December 31
|
$
|
36.91
|
|
|
$
|
30.77
|
|
|
$
|
26.65
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Non-vested stock-settled PSU awards, January 1
|
341,944
|
|
|
378,062
|
|
|
422,726
|
|
|||
Granted at target level
|
102,307
|
|
|
92,045
|
|
|
115,035
|
|
|||
Adjustments above/(below) target
|
(2,284
|
)
|
|
(11,369
|
)
|
|
19,339
|
|
|||
Vested and converted
|
(121,984
|
)
|
|
(116,684
|
)
|
|
(173,364
|
)
|
|||
Forfeited
|
(23,946
|
)
|
|
(110
|
)
|
|
(5,674
|
)
|
|||
Non-vested stock-settled PSU awards, December 31
|
296,037
|
|
|
341,944
|
|
|
378,062
|
|
|||
|
|
|
|
|
|
||||||
Weighted Average Grant Date Fair Value
|
2018
|
|
2017
|
|
2016
|
||||||
Non-vested stock-settled PSU awards, January 1
|
$
|
64.38
|
|
|
$
|
54.47
|
|
|
$
|
45.60
|
|
Granted at target level
|
90.45
|
|
|
84.01
|
|
|
60.47
|
|
|||
Adjustments above/(below) target
|
33.86
|
|
|
42.85
|
|
|
38.71
|
|
|||
Vested and converted
|
93.00
|
|
|
50.06
|
|
|
59.64
|
|
|||
Forfeited
|
68.65
|
|
|
73.64
|
|
|
49.86
|
|
|||
Non-vested stock-settled PSU awards, December 31
|
$
|
76.84
|
|
|
$
|
64.38
|
|
|
$
|
54.47
|
|
Weighted Average Grant Date Fair Value
|
2018
|
|
2017
|
|
2016
|
||||||
Non-vested cash-settled PSU awards, January 1
|
$
|
92.25
|
|
|
$
|
25.28
|
|
|
$
|
32.07
|
|
Granted at target level
|
89.64
|
|
|
83.47
|
|
|
59.64
|
|
|||
Adjustments above/(below) target
|
41.53
|
|
|
66.61
|
|
|
30.80
|
|
|||
Vested and converted
|
93.00
|
|
|
86.93
|
|
|
59.64
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
50.55
|
|
|||
Non-vested cash-settled PSU awards, December 31
|
$
|
79.48
|
|
|
$
|
92.25
|
|
|
$
|
25.28
|
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
10.8
|
|
|
$
|
10.4
|
|
|
$
|
10.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
Interest cost
|
9.4
|
|
|
9.8
|
|
|
10.5
|
|
|
0.2
|
|
|
0.3
|
|
|
0.5
|
|
||||||
Expected return on assets
|
(15.7
|
)
|
|
(13.5
|
)
|
|
(12.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
(1.3
|
)
|
|
(1.3
|
)
|
|
(1.4
|
)
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|
—
|
|
||||||
Amortization of transition obligation
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of actuarial loss (gain)
|
3.8
|
|
|
4.9
|
|
|
4.8
|
|
|
(2.4
|
)
|
|
(2.6
|
)
|
|
(1.4
|
)
|
||||||
Curtailment
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
7.0
|
|
|
$
|
10.3
|
|
|
$
|
9.5
|
|
|
$
|
(2.9
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(0.4
|
)
|
Other changes in plan assets and benefit obligations recognized in OCI, pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss (gain) arising during period
|
$
|
3.5
|
|
|
$
|
(9.0
|
)
|
|
$
|
19.2
|
|
|
$
|
(1.4
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
(0.1
|
)
|
Prior service credit arising during period
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
||||||
Amortization of prior service credit
|
1.3
|
|
|
1.3
|
|
|
1.4
|
|
|
0.7
|
|
|
0.7
|
|
|
—
|
|
||||||
Amortization of transition obligation
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of actuarial (loss) gain
|
(3.8
|
)
|
|
(4.9
|
)
|
|
(4.8
|
)
|
|
2.4
|
|
|
2.6
|
|
|
1.4
|
|
||||||
Curtailment
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency translation
|
(1.2
|
)
|
|
2.6
|
|
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total recognized in OCI
|
$
|
0.1
|
|
|
$
|
(10.0
|
)
|
|
$
|
9.4
|
|
|
$
|
1.7
|
|
|
$
|
2.2
|
|
|
$
|
(1.7
|
)
|
Total recognized in net periodic benefit cost and OCI
|
$
|
7.1
|
|
|
$
|
0.3
|
|
|
$
|
18.9
|
|
|
$
|
(1.2
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(2.1
|
)
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
U.S. plans
|
$
|
4.8
|
|
|
$
|
7.3
|
|
|
$
|
7.1
|
|
|
$
|
(2.9
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(0.4
|
)
|
International plans
|
2.2
|
|
|
3.0
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
7.0
|
|
|
$
|
10.3
|
|
|
$
|
9.5
|
|
|
$
|
(2.9
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(0.4
|
)
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation, January 1
|
$
|
(288.0
|
)
|
|
$
|
(262.2
|
)
|
|
$
|
(7.1
|
)
|
|
$
|
(8.0
|
)
|
Service cost
|
(10.8
|
)
|
|
(10.4
|
)
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
(9.4
|
)
|
|
(9.8
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
||||
Participants’ contributions
|
(0.6
|
)
|
|
(0.7
|
)
|
|
(0.6
|
)
|
|
(0.5
|
)
|
||||
Actuarial (loss) gain
|
20.4
|
|
|
(11.8
|
)
|
|
1.4
|
|
|
1.2
|
|
||||
Amendments/transfers in
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits/expenses paid
|
18.0
|
|
|
14.2
|
|
|
0.5
|
|
|
0.5
|
|
||||
Foreign currency translation
|
3.7
|
|
|
(7.3
|
)
|
|
—
|
|
|
—
|
|
||||
Benefit obligation, December 31
|
$
|
(267.0
|
)
|
|
$
|
(288.0
|
)
|
|
$
|
(6.0
|
)
|
|
$
|
(7.1
|
)
|
|
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of assets, January 1
|
$
|
239.5
|
|
|
$
|
192.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on assets
|
(8.3
|
)
|
|
34.4
|
|
|
—
|
|
|
—
|
|
||||
Employer contribution
|
2.7
|
|
|
23.2
|
|
|
(0.1
|
)
|
|
—
|
|
||||
Participants’ contributions
|
0.6
|
|
|
0.7
|
|
|
0.6
|
|
|
0.5
|
|
||||
Benefits/expenses paid
|
(18.0
|
)
|
|
(14.2
|
)
|
|
(0.5
|
)
|
|
(0.5
|
)
|
||||
Foreign currency translation
|
(2.0
|
)
|
|
3.0
|
|
|
—
|
|
|
—
|
|
||||
Fair value of assets, December 31
|
$
|
214.5
|
|
|
$
|
239.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Funded status at end of year
|
$
|
(52.5
|
)
|
|
$
|
(48.5
|
)
|
|
$
|
(6.0
|
)
|
|
$
|
(7.1
|
)
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Current liabilities
|
$
|
(1.6
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(0.7
|
)
|
Noncurrent liabilities
|
(50.9
|
)
|
|
(47.0
|
)
|
|
(5.3
|
)
|
|
(6.4
|
)
|
||||
|
$
|
(52.5
|
)
|
|
$
|
(48.5
|
)
|
|
$
|
(6.0
|
)
|
|
$
|
(7.1
|
)
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net actuarial loss (gain)
|
$
|
73.0
|
|
|
$
|
74.5
|
|
|
$
|
(9.4
|
)
|
|
$
|
(10.4
|
)
|
Prior service cost (credit)
|
0.9
|
|
|
(0.8
|
)
|
|
(1.7
|
)
|
|
(2.4
|
)
|
||||
Total
|
$
|
73.9
|
|
|
$
|
73.7
|
|
|
$
|
(11.1
|
)
|
|
$
|
(12.8
|
)
|
($ in millions)
|
Domestic
|
|
International
|
|
Total
|
||||||
2019
|
$
|
13.6
|
|
|
$
|
2.1
|
|
|
$
|
15.7
|
|
2020
|
14.6
|
|
|
2.7
|
|
|
17.3
|
|
|||
2021
|
14.1
|
|
|
2.2
|
|
|
16.3
|
|
|||
2022
|
14.7
|
|
|
2.9
|
|
|
17.6
|
|
|||
2023
|
14.9
|
|
|
2.3
|
|
|
17.2
|
|
|||
2024 to 2028
|
69.3
|
|
|
16.9
|
|
|
86.2
|
|
|||
|
$
|
141.2
|
|
|
$
|
29.1
|
|
|
$
|
170.3
|
|
|
Pension benefits
|
|
Other retirement benefits
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Discount rate
|
3.76
|
%
|
|
3.14
|
%
|
|
4.20
|
%
|
|
3.45
|
%
|
Rate of compensation increase
|
4.01
|
%
|
|
3.80
|
%
|
|
—
|
|
|
—
|
|
|
2018
|
|
2017
|
||
Equity securities
|
23
|
%
|
|
63
|
%
|
Debt securities
|
74
|
%
|
|
37
|
%
|
Other
|
3
|
%
|
|
—
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Target allocation
|
|
Allocation range
|
Equity securities
|
30%
|
|
27% - 33%
|
Debt securities
|
70%
|
|
67% - 73%
|
Other
|
—%
|
|
0% - 3%
|
|
Balance at
|
|
|
||||||||||||
|
December 31,
|
|
Basis of Fair Value Measurements
|
||||||||||||
($ in millions)
|
2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash
|
$
|
1.7
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
International mutual funds
|
17.7
|
|
|
17.7
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
Mutual funds
|
13.9
|
|
|
13.9
|
|
|
—
|
|
|
—
|
|
||||
Pension plan assets in the fair value hierarchy
|
$
|
33.3
|
|
|
$
|
33.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pension plan assets measured at NAV
|
181.2
|
|
|
|
|
|
|
|
|||||||
Pension plan assets at fair value
|
$
|
214.5
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
|
|
|
||||||||||||
|
December 31,
|
|
Basis of Fair Value Measurements
|
||||||||||||
($ in millions)
|
2017
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
International mutual funds
|
15.5
|
|
|
15.5
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
Mutual funds
|
17.5
|
|
|
17.5
|
|
|
—
|
|
|
—
|
|
||||
Pension plan assets in the fair value hierarchy
|
$
|
34.6
|
|
|
$
|
34.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pension plan assets measured at NAV
|
204.9
|
|
|
|
|
|
|
|
|||||||
Pension plan assets at fair value
|
$
|
239.5
|
|
|
|
|
|
|
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Restructuring and related charges:
|
|
|
|
|
|
||||||
Severance and post-employment benefits
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
8.9
|
|
Asset-related charges
|
2.2
|
|
|
—
|
|
|
17.3
|
|
|||
Other charges
|
3.8
|
|
|
—
|
|
|
0.2
|
|
|||
Total restructuring and related charges
|
$
|
9.1
|
|
|
$
|
—
|
|
|
$
|
26.4
|
|
Argentina currency devaluation
|
1.1
|
|
|
—
|
|
|
—
|
|
|||
Venezuela deconsolidation
|
—
|
|
|
11.1
|
|
|
—
|
|
|||
Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
2.7
|
|
|||
Development and licensing income
|
(0.9
|
)
|
|
(10.6
|
)
|
|
(1.5
|
)
|
|||
Contingent consideration
|
(2.6
|
)
|
|
(2.4
|
)
|
|
2.3
|
|
|||
Other items
|
(4.8
|
)
|
|
3.9
|
|
|
(0.1
|
)
|
|||
Total other expense
|
$
|
1.9
|
|
|
$
|
2.0
|
|
|
$
|
29.8
|
|
($ in millions)
|
Severance and benefits
|
|
Asset-related charges
|
|
Other charges
|
|
Total
|
||||||||
Balance, December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
3.1
|
|
|
2.2
|
|
|
3.5
|
|
|
8.8
|
|
||||
Cash payments
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
||||
Non-cash asset write-downs
|
—
|
|
|
(2.2
|
)
|
|
(3.5
|
)
|
|
(5.7
|
)
|
||||
Balance, December 31, 2018
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
($ in millions)
|
2018
|
|
2017
|
||||
Balance at January 1
|
$
|
3.2
|
|
|
$
|
6.2
|
|
Increase due to current year position
|
0.8
|
|
|
0.4
|
|
||
Increase due to prior year position
|
0.4
|
|
|
0.1
|
|
||
Reduction for expiration of statute of limitations/audits
|
(0.5
|
)
|
|
(3.5
|
)
|
||
Balance at December 31
|
$
|
3.9
|
|
|
$
|
3.2
|
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
U.S. operations
|
$
|
132.9
|
|
|
$
|
96.5
|
|
|
$
|
84.5
|
|
International operations
|
107.8
|
|
|
125.9
|
|
|
105.3
|
|
|||
Total income before income taxes
|
$
|
240.7
|
|
|
$
|
222.4
|
|
|
$
|
189.8
|
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
2.1
|
|
|
$
|
2.1
|
|
|
$
|
2.5
|
|
State
|
3.3
|
|
|
0.1
|
|
|
1.0
|
|
|||
International
|
35.1
|
|
|
37.0
|
|
|
29.4
|
|
|||
Current income tax provision
|
40.5
|
|
|
39.2
|
|
|
32.9
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal and state
|
1.4
|
|
|
41.8
|
|
|
21.8
|
|
|||
International
|
(0.5
|
)
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|||
Deferred income tax provision
|
0.9
|
|
|
41.7
|
|
|
21.5
|
|
|||
Income tax expense
|
$
|
41.4
|
|
|
$
|
80.9
|
|
|
$
|
54.4
|
|
($ in millions)
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
18.4
|
|
|
$
|
19.7
|
|
Tax credit carryforwards
|
10.5
|
|
|
13.7
|
|
||
Restructuring and impairment charges
|
—
|
|
|
0.1
|
|
||
Pension and deferred compensation
|
27.2
|
|
|
28.3
|
|
||
Other
|
11.4
|
|
|
14.3
|
|
||
Valuation allowance
|
(16.0
|
)
|
|
(20.9
|
)
|
||
Total deferred tax assets
|
51.5
|
|
|
55.2
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Accelerated depreciation
|
31.3
|
|
|
26.3
|
|
||
Tax on undistributed earnings of subsidiaries
|
6.6
|
|
|
9.8
|
|
||
Other
|
2.0
|
|
|
3.8
|
|
||
Total deferred tax liabilities
|
39.9
|
|
|
39.9
|
|
||
Net deferred tax asset
|
$
|
11.6
|
|
|
$
|
15.3
|
|
|
2018
|
|
2017
|
|
2016
|
|||
U.S. federal corporate tax rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Tax on international operations other than U.S. tax rate
|
4.8
|
|
|
(4.5
|
)
|
|
(2.9
|
)
|
Reversal of prior valuation allowance
|
—
|
|
|
(0.5
|
)
|
|
(0.3
|
)
|
Adjustments to reserves for unrecognized tax benefits
|
0.2
|
|
|
(0.2
|
)
|
|
(0.6
|
)
|
U.S. tax on international earnings, net of foreign tax credits
|
(0.2
|
)
|
|
0.1
|
|
|
(1.3
|
)
|
State income taxes, net of federal tax effect
|
2.3
|
|
|
0.2
|
|
|
0.8
|
|
U.S. research and development credits
|
(0.9
|
)
|
|
(0.8
|
)
|
|
(0.8
|
)
|
Excess tax benefits on share-based payments
|
(6.0
|
)
|
|
(14.1
|
)
|
|
—
|
|
Impact of 2017 Tax Act
|
(2.9
|
)
|
|
15.9
|
|
|
—
|
|
Tax on undistributed earnings of subsidiaries
|
(1.3
|
)
|
|
4.4
|
|
|
—
|
|
Venezuela deconsolidation
|
—
|
|
|
1.7
|
|
|
—
|
|
Other business credits and Section 199 Deduction
|
—
|
|
|
(0.6
|
)
|
|
(1.1
|
)
|
Other
|
0.2
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
Effective tax rate
|
17.2
|
%
|
|
36.4
|
%
|
|
28.7
|
%
|
Year
|
($ in millions)
|
|
|
2019
|
$
|
13.0
|
|
2020
|
10.5
|
|
|
2021
|
7.8
|
|
|
2022
|
6.9
|
|
|
2023
|
5.5
|
|
|
Thereafter
|
37.8
|
|
|
Total
|
$
|
81.5
|
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales:
|
|
|
|
|
|
||||||
Proprietary Products
|
$
|
1,308.6
|
|
|
$
|
1,236.9
|
|
|
$
|
1,189.9
|
|
Contract-Manufactured Products
|
409.1
|
|
|
362.5
|
|
|
320.2
|
|
|||
Intersegment sales elimination
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(1.0
|
)
|
|||
Consolidated net sales
|
$
|
1,717.4
|
|
|
$
|
1,599.1
|
|
|
$
|
1,509.1
|
|
|
Net Sales
|
|
Property, Plant and Equipment, Net
|
||||||||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
United States
|
$
|
766.1
|
|
|
$
|
734.6
|
|
|
$
|
738.3
|
|
|
$
|
315.3
|
|
|
$
|
323.8
|
|
|
$
|
329.3
|
|
Germany
|
235.9
|
|
|
226.4
|
|
|
200.6
|
|
|
99.3
|
|
|
108.8
|
|
|
96.8
|
|
||||||
France
|
127.5
|
|
|
125.6
|
|
|
116.3
|
|
|
42.5
|
|
|
43.1
|
|
|
37.1
|
|
||||||
Other European countries
|
386.1
|
|
|
318.5
|
|
|
268.3
|
|
|
232.5
|
|
|
244.9
|
|
|
192.3
|
|
||||||
Other
|
201.8
|
|
|
194.0
|
|
|
185.6
|
|
|
132.4
|
|
|
134.4
|
|
|
122.8
|
|
||||||
|
$
|
1,717.4
|
|
|
$
|
1,599.1
|
|
|
$
|
1,509.1
|
|
|
$
|
822.0
|
|
|
$
|
855.0
|
|
|
$
|
778.3
|
|
($ in millions)
|
Proprietary Products
|
|
Contract-Manufactured Products
|
|
Corporate and Elimination
|
|
Consolidated
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,308.6
|
|
|
$
|
409.1
|
|
|
$
|
(0.3
|
)
|
|
$
|
1,717.4
|
|
Operating profit
|
$
|
266.4
|
|
|
$
|
44.3
|
|
|
$
|
(70.4
|
)
|
|
$
|
240.3
|
|
Interest expense
|
—
|
|
|
—
|
|
|
8.4
|
|
|
8.4
|
|
||||
Interest income
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
(2.1
|
)
|
||||
Other nonoperating income
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
|
(6.7
|
)
|
||||
Income before income taxes
|
$
|
266.4
|
|
|
$
|
44.3
|
|
|
$
|
(70.0
|
)
|
|
$
|
240.7
|
|
Segment assets
|
$
|
1,342.3
|
|
|
$
|
301.4
|
|
|
$
|
335.2
|
|
|
$
|
1,978.9
|
|
Capital expenditures
|
77.0
|
|
|
20.7
|
|
|
7.0
|
|
|
104.7
|
|
||||
Depreciation and amortization expense
|
83.9
|
|
|
17.2
|
|
|
3.3
|
|
|
104.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,236.9
|
|
|
$
|
362.5
|
|
|
$
|
(0.3
|
)
|
|
$
|
1,599.1
|
|
Operating profit
|
$
|
243.8
|
|
|
$
|
48.3
|
|
|
$
|
(66.3
|
)
|
|
$
|
225.8
|
|
Interest expense
|
—
|
|
|
—
|
|
|
7.8
|
|
|
7.8
|
|
||||
Interest income
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
(1.3
|
)
|
||||
Other nonoperating income
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
(3.1
|
)
|
||||
Income before income taxes
|
$
|
243.8
|
|
|
$
|
48.3
|
|
|
$
|
(69.7
|
)
|
|
$
|
222.4
|
|
Segment assets
|
$
|
1,321.3
|
|
|
$
|
286.4
|
|
|
$
|
255.1
|
|
|
$
|
1,862.8
|
|
Capital expenditures
|
107.2
|
|
|
18.6
|
|
|
5.0
|
|
|
130.8
|
|
||||
Depreciation and amortization expense
|
77.1
|
|
|
16.4
|
|
|
3.2
|
|
|
96.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,189.9
|
|
|
$
|
320.2
|
|
|
$
|
(1.0
|
)
|
|
$
|
1,509.1
|
|
Operating profit
|
$
|
243.1
|
|
|
$
|
38.2
|
|
|
$
|
(86.1
|
)
|
|
$
|
195.2
|
|
Interest expense
|
—
|
|
|
—
|
|
|
8.1
|
|
|
8.1
|
|
||||
Interest income
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
||||
Other nonoperating income
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
(1.6
|
)
|
||||
Income before income taxes
|
$
|
243.1
|
|
|
$
|
38.2
|
|
|
$
|
(91.5
|
)
|
|
$
|
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
|
|
($ in millions, except per share data)
|
First
Quarter
(1)
|
|
Second
Quarter
(2)
|
|
Third
Quarter
(3)
|
|
Fourth
Quarter
(4)
|
|
Full Year
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
415.7
|
|
|
$
|
447.5
|
|
|
$
|
431.7
|
|
|
$
|
422.5
|
|
|
$
|
1,717.4
|
|
Gross profit
|
134.4
|
|
|
142.2
|
|
|
135.6
|
|
|
133.2
|
|
|
545.4
|
|
|||||
Net income
|
43.6
|
|
|
56.1
|
|
|
55.2
|
|
|
52.0
|
|
|
206.9
|
|
|||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.59
|
|
|
$
|
0.76
|
|
|
$
|
0.75
|
|
|
$
|
0.70
|
|
|
$
|
2.80
|
|
Diluted
|
$
|
0.58
|
|
|
$
|
0.75
|
|
|
$
|
0.73
|
|
|
$
|
0.69
|
|
|
$
|
2.74
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
387.7
|
|
|
$
|
397.6
|
|
|
$
|
398.2
|
|
|
$
|
415.6
|
|
|
$
|
1,599.1
|
|
Gross profit
|
134.2
|
|
|
125.0
|
|
|
125.1
|
|
|
128.6
|
|
|
512.9
|
|
|||||
Net income
|
60.9
|
|
|
38.8
|
|
|
51.0
|
|
|
—
|
|
|
150.7
|
|
|||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.83
|
|
|
$
|
0.53
|
|
|
$
|
0.69
|
|
|
$
|
—
|
|
|
$
|
2.04
|
|
Diluted
|
$
|
0.81
|
|
|
$
|
0.51
|
|
|
$
|
0.67
|
|
|
$
|
—
|
|
|
$
|
1.99
|
|
(1)
|
Net income for the first quarter of 2018 included the impact of restructuring and related charges of $2.7 million ($0.03 per diluted share), a net tax charge of $0.3 million ($0.01 per diluted share) for the estimated impact of the 2017 Tax Act, and a tax benefit of $2.1 million ($0.03 per diluted share) associated with our adoption of the guidance issued by the FASB regarding share-based payment transactions. Net income for the first quarter of 2017 included the impact of a tax benefit of $15.9 million ($0.21 per diluted share) associated with our adoption of the guidance issued by the FASB regarding share-based payment transactions.
|
(2)
|
Second quarter 2018 net income included the impact of restructuring and related charges of $1.6 million ($0.01 per diluted share), a net tax benefit of $4.8 million ($0.06 per diluted share) for the estimated impact of the 2017 Tax Act, and a tax benefit of $3.4 million ($0.04 per diluted share) associated with our adoption of the guidance issued by the FASB regarding share-based payment transactions. Second quarter 2017 net income included the impact of a tax benefit of $9.6 million ($0.13 per diluted share) associated with our adoption of the guidance issued by the FASB regarding share-based payment transactions and a charge of $11.1 million ($0.15 per diluted share) related to the deconsolidation of our Venezuelan subsidiary.
|
(3)
|
Net income for the third quarter of 2018 included the impact of restructuring and related charges of $0.9 million ($0.01 per diluted share), a net tax charge of $0.4 million for the estimated impact of the 2017 Tax Act, a tax benefit of $7.7 million ($0.10 per diluted share) associated with our adoption of the guidance issued by the FASB regarding share-based payment transactions, and a charge of $1.1 million ($0.02 per diluted share) related to the classification of Argentina’s economy as highly inflationary under U.S. GAAP as of July 1, 2018. Net income for the third quarter of 2017 included the impact of a tax benefit of $4.8 million ($0.06 per diluted share) associated with our adoption of the guidance issued by the FASB regarding share-based payment transactions.
|
(4)
|
Fourth quarter 2018 net income included the impact of restructuring and related charges of $2.1 million ($0.02 per diluted share), a gain on the sale of fixed assets as a result of our restructuring plans of $0.9 million ($0.01 per diluted share), a net tax charge of $1.6 million ($0.03 per diluted share) for the impact of tax law changes,
|
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 Columns (a)) (c)
|
|
||||
Equity compensation plans approved by security holders
|
3,642,288
|
|
(1)
|
$
|
58.74
|
|
(2)
|
7,591,586
|
|
(3)
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
3,642,288
|
|
|
$
|
58.74
|
|
|
7,591,586
|
|
|
(1)
|
Includes 935,878 outstanding stock options, 185,253 restricted performance share units, 17,904 restricted retention share units, 67,797 deferred stock-equivalents units and 584 restricted stock-equivalents units granted to directors under the 2016 Plan. Includes 1,864,237 outstanding stock options, 14,160 outstanding stock-settled stock appreciation rights, 94,746 restricted performance share units, 24,062 restricted retention share units and 171,422 deferred stock-equivalents units under the 2011 Plan (which was terminated in 2016). Includes 193,722 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). The average term of remaining options and stock-settled stock appreciation rights granted is 6.4 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 96.6%, 89.8%, and 110.6% in
2018
,
2017
and
2016
, 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 3,881,103 shares reserved under the Company’s Employee Stock Purchase Plan and 3,710,483 shares remaining available for issuance under the 2016 Plan. The estimated number of shares that could be issued for
2018
from the Employee Stock Purchase Plan is 300,852. This number of shares is calculated by multiplying the 244 shares per offering period per participant limit by 1,233, 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, 2018
|
|
|
|
|
||||||||
Allowances deducted from assets:
|
|
|
|
|
||||||||
Deferred tax asset valuation allowance
|
$
|
20.9
|
|
$
|
(3.0
|
)
|
$
|
(1.9
|
)
|
$
|
16.0
|
|
Allowance for doubtful accounts
|
0.5
|
|
0.7
|
|
0.8
|
|
2.0
|
|
||||
Total allowances deducted from assets
|
$
|
21.4
|
|
$
|
(2.3
|
)
|
$
|
(1.1
|
)
|
$
|
18.0
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2017
|
|
|
|
|
||||||||
Allowances deducted from assets:
|
|
|
|
|
||||||||
Deferred tax asset valuation allowance
|
$
|
18.7
|
|
$
|
2.5
|
|
$
|
(0.3
|
)
|
$
|
20.9
|
|
Allowance for doubtful accounts
|
0.4
|
|
(0.2
|
)
|
0.3
|
|
0.5
|
|
||||
Total allowances deducted from assets
|
$
|
19.1
|
|
$
|
2.3
|
|
$
|
—
|
|
$
|
21.4
|
|
|
|
|
|
|
||||||||
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
|
|
|
|
|
|
|
(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-3 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 27, 2019
|
Eric M. Green
|
(Principal Executive Officer)
|
|
|
|
|
/s/ Bernard J. Birkett
|
Senior Vice President, Chief Financial Officer and Treasurer
|
February 27, 2019
|
Bernard J. Birkett
|
(Principal Financial Officer)
|
|
|
|
|
/s/ Daniel Malone
|
Vice President and Controller
|
February 27, 2019
|
Daniel Malone
|
(Principal Accounting Officer)
|
|
|
|
|
/s/ Mark A. Buthman
|
Director
|
February 19, 2019
|
Mark A. Buthman
|
|
|
|
|
|
/s/ William F. Feehery, Ph.D.
|
Director
|
February 19, 2019
|
William F. Feehery, Ph.D.
|
|
|
|
|
|
/s/ Thomas W. Hofmann
|
Director
|
February 19, 2019
|
Thomas W. Hofmann
|
|
|
|
|
|
/s/ Paula A. Johnson, M.D., MPH
|
Director
|
February 19, 2019
|
Paula A. Johnson, M.D., MPH
|
|
|
|
|
|
/s/ Deborah L.V. Keller
|
Director
|
February 19, 2019
|
Deborah L.V. Keller
|
|
|
|
|
|
/s/ Myla P. Lai-Goldman, M.D.
|
Director
|
February 19, 2019
|
Myla P. Lai-Goldman, M.D.
|
|
|
|
|
|
/s/ Douglas A. Michels
|
Director
|
February 19, 2019
|
Douglas A. Michels
|
|
|
|
|
|
/s/ Paolo Pucci
|
Director
|
February 19, 2019
|
Paolo Pucci
|
|
|
|
|
|
/s/ John H. Weiland
|
Director
|
February 19, 2019
|
John H. Weiland
|
|
|
|
|
|
/s/ Patrick J. Zenner
|
Director and Chairman of the Board
|
February 19, 2019
|
Patrick J. Zenner
|
|
|
Exhibit Number
|
Description
|
3.1
|
|
3.2
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
(1)
|
Instruments defining the rights of holders of long-term debt securities of West and its subsidiaries have been omitted.
|
10.1
|
|
10.2
|
|
10.3
(2)
|
|
10.4
(2)
|
|
10.5
(2)
|
|
10.6
(2)
|
|
10.7
(2)
|
|
10.8
(2)
|
|
10.9
(2)
|
|
10.10
(2)
|
|
10.11
(2)
|
|
10.12
(2)
|
|
10.13
(2)
|
|
10.14
(2)
|
|
10.15
(2)
|
|
10.16
(2)
|
|
10.17
(2)
|
Exhibit Number
|
Description
|
10.18
(2)
|
|
10.19
(2)
|
|
10.20
(2)
|
|
10.21
(2)
|
|
10.22
(2)
|
|
10.23
(2)
|
|
10.24
|
|
10.25
(2)
|
|
10.26
(3)
|
|
10.27
(3)
|
|
10.28
(3)
|
|
10.29
(3)
|
|
10.30
(3)
|
|
10.31
(3)
|
|
10.32
(3)
|
|
10.33
(3)
|
|
21.
|
|
23.
|
|
31.1
|
|
31.2
|
|
32.1*
|
|
32.2*
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
Exhibit Number
|
Description
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
(1)
|
We agree to furnish to the SEC, upon request, a copy of each instrument with respect to issuances of long-term debt of the Company and its subsidiaries.
|
(2)
|
Management compensatory plan.
|
(3)
|
Certain portions of this exhibit have been omitted and filed separately with the SEC pursuant to a confidential treatment order of the SEC.
|
*
|
Furnished, not filed.
|
|
Jurisdiction of
Incorporation
|
Stock
Ownership
|
|
|
West Pharmaceutical Services, Inc.
|
Pennsylvania
|
Parent Co.
|
|
|
Citation Plastics Co.
|
New Jersey
|
100.0
|
|
%
|
Tech Group Europe Limited (dba West)
|
Ireland
|
100.0
|
|
|
Tech Group Grand Rapids, Inc. (dba West)
|
Delaware
|
100.0
|
|
|
Tech Group North America, Inc. (dba West)
|
Arizona
|
100.0
|
|
|
TGPR Holdings Limited
|
Ireland
|
100.0
|
|
|
W.P.S.F. Limited
|
England
|
100.0
|
|
|
WD SG Pte. Ltd.
|
Singapore
|
100.0
|
|
|
West Analytical Services, LLC
|
Delaware
|
100.0
|
|
|
West Contract Manufacturing, LLC
|
Delaware
|
100.0
|
|
|
West Pharma. Services IL, Ltd.
|
Israel
|
100.0
|
|
|
West Pharmaceutical Packaging (China) Company Ltd.
|
China
|
100.0
|
|
|
West Pharmaceutical Packaging India Private Limited
|
India
|
100.0
|
|
|
West Pharmaceutical Products Holding Ireland North, Ltd.
|
Ireland
|
100.0
|
|
|
West Pharmaceutical Products Holding Ireland South, Ltd.
|
Ireland
|
100.0
|
|
|
West Pharmaceutical Products Ireland, Ltd.
|
Ireland
|
100.0
|
|
|
West Pharmaceutical Services Argentina S.A.
|
Argentina
|
100.0
|
|
|
West Pharmaceutical Services Australia Pty. Ltd.
|
Australia
|
100.0
|
|
|
West Pharmaceutical Services Beograd d.o.o.
|
Serbia
|
100.0
|
|
|
West Pharmaceutical Services Brasil Ltda.
|
Brasil
|
100.0
|
|
|
West Pharmaceutical Services Colombia S.A.S.
|
Colombia
|
100.0
|
|
|
West Pharmaceutical Services Cornwall Limited
|
England
|
100.0
|
|
|
West Pharmaceutical Services Danmark A/S
|
Denmark
|
100.0
|
|
|
West Pharmaceutical Services Delaware Acquisition, Inc.
|
Delaware
|
100.0
|
|
|
West Pharmaceutical Services Deutschland GmbH Co KG
|
Germany
|
100.0
|
|
|
West Pharmaceutical Services France S.A.
|
France
|
99.9
|
|
|
West Pharmaceutical Services Group Limited
|
England
|
100.0
|
|
|
West Pharmaceutical Services Hispania S.A.
|
Spain
|
100.0
|
|
|
West Pharmaceutical Services Holding Danmark ApS
|
Denmark
|
100.0
|
|
|
West Pharmaceutical Services Holding France SAS
|
France
|
100.0
|
|
|
West Pharmaceutical Services Holding GmbH
|
Germany
|
100.0
|
|
|
West Pharmaceutical Services Holding II GmbH
|
Germany
|
100.0
|
|
|
West Pharmaceutical Services Holdings Ltd
|
Israel
|
100.0
|
|
|
West Pharmaceutical Services Italia S.r.L.
|
Italy
|
100.0
|
|
|
West Pharmaceutical Services Korea Ltd.
|
South Korea
|
100.0
|
|
|
West Pharmaceutical Services Lakewood, Inc.
|
Delaware
|
100.0
|
|
|
West Pharmaceutical Services Normandie SAS
|
France
|
100.0
|
|
|
West Pharmaceutical Services of Delaware, Inc.
|
Delaware
|
100.0
|
|
|
West Pharmaceutical Services of Florida, Inc.
|
Florida
|
100.0
|
|
|
West Pharmaceutical Services Shanghai Medical Rubber Products Co., Ltd.
|
China
|
100.0
|
|
|
West Pharmaceutical Services Singapore (Holding) Pte. Limited
|
Singapore
|
100.0
|
|
|
West Pharmaceutical Services Singapore Pte. Ltd.
|
Singapore
|
100.0
|
|
|
West Pharmaceutical Services Vega Alta, Inc.
|
Delaware
|
100.0
|
|
|
West Pharmaceutical Services Venezuela C.A.
|
Venezuela
|
100.0
|
|
|
West Pharmaceutical Services Verwaltungs GmbH
|
Germany
|
100.0
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of West Pharmaceutical Services, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this Annual Report on Form 10-K of West Pharmaceutical Services, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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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;
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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;
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c.
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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
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d.
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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.
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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):
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a.
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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
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b.
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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.
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