UNITED STATES | ||
SECURITIES AND EXCHANGE COMMISSION | ||
Washington, D.C. 20549 |
FORM 10-K
|
☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
WEST PHARMACEUTICAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
|
Pennsylvania | 23-1210010 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||
530 Herman O. West Drive, Exton, PA
|
19341-0645 | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Common Stock, par value $.25 per share | WST | New York Stock Exchange |
Large accelerated filer | ☑ | Accelerated filer | ☐ | |||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
Emerging growth company | ☐ |
Document | Parts Into Which Incorporated | ||||
Proxy Statement for the Annual Meeting of Shareholders to be held May 4, 2021. | Part III |
Page | ||||||||
North America | 44% | ||||
Europe | 41% | ||||
Asia Pacific | 12% | ||||
South America | 3% | ||||
Total | 100% |
Global Operations | 83% | ||||
Sales and Marketing | 5% | ||||
Corporate | 5% | ||||
Digital & Technology (D&T) | 4% | ||||
Research & Development | 3% | ||||
Total | 100% |
Men | Women | |||||||
West Global Employees | 63% | 37% |
Type of Facility/ Country | Location | Segment | ||||||||||||
Manufacturing: | ||||||||||||||
North America | ||||||||||||||
United States of America | Phoenix, AZ (2) | Contract Manufactured Products | ||||||||||||
Scottsdale, AZ (1) (2) | Proprietary Products | |||||||||||||
Tempe, AZ (2) | Contract Manufactured Products | |||||||||||||
St. Petersburg, FL (1) | Proprietary Products | |||||||||||||
Grand Rapids, MI | Contract Manufactured Products | |||||||||||||
Kinston, NC | Proprietary Products | |||||||||||||
Kearney, NE | Proprietary Products | |||||||||||||
Jersey Shore, PA | Proprietary Products | |||||||||||||
Williamsport, PA | Contract Manufactured Products | |||||||||||||
Puerto Rico | Cayey | Proprietary Products and Contract Manufactured Products | ||||||||||||
South America | ||||||||||||||
Brazil | Sao Paulo | Proprietary Products | ||||||||||||
Europe | ||||||||||||||
Denmark | Horsens | Proprietary Products | ||||||||||||
England | St. Austell | Proprietary Products | ||||||||||||
France | Le Nouvion | Proprietary Products | ||||||||||||
Le Vaudreuil | Proprietary Products | |||||||||||||
Germany | Eschweiler (1) (2) | Proprietary Products | ||||||||||||
Stolberg | Proprietary Products | |||||||||||||
Ireland | Waterford | Proprietary Products | ||||||||||||
Dublin (2) | Contract Manufactured Products | |||||||||||||
Serbia | Kovin | Proprietary Products | ||||||||||||
Asia Pacific | ||||||||||||||
China | Qingpu | Proprietary Products | ||||||||||||
India | Sri City | Proprietary Products | ||||||||||||
Singapore | Jurong (2) | Proprietary Products | ||||||||||||
Mold-and-Die Tool Shop: | ||||||||||||||
North America | ||||||||||||||
United States of America | Upper Darby, PA | Proprietary Products | ||||||||||||
Type of Facility/ Country | Location | Segment | ||||||||||||
Europe | ||||||||||||||
England | Bodmin (2) | Proprietary Products | ||||||||||||
Contract Analytical Laboratory: | ||||||||||||||
North America | ||||||||||||||
United States of America | Exton, PA | Proprietary Products | ||||||||||||
Technology Center: | ||||||||||||||
Asia Pacific | ||||||||||||||
India | Bangalore (2) | Proprietary Products, Contract Manufactured Products |
Name | Age | Position | ||||||
Silji Abraham | 49 | Senior Vice President, Chief Technology Officer since December 2020. Senior Vice President, Chief Digital and Transformation Officer from February 2018 to December 2020. 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. | ||||||
Bernard J. Birkett | 52 | Senior Vice President and Chief Financial Officer since June 2018. In addition, Treasurer from June 2018 to December 2019 and Principal Accounting Officer from October 2019 to April 2020. 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. | ||||||
Annette F. Favorite | 56 | 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, including Vice President, Global Talent Management, Vice President of Human Resources for Worldwide Software Sales, and Human Resources Leader for the company’s Southwest European Region, based out of Spain. | ||||||
Eric M. Green
|
51 | 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. | ||||||
Quintin J. Lai | 54 | 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. | ||||||
Kimberly Banks MacKay | 55 |
Senior Vice President, General Counsel and Corporate Secretary since December 2020. Prior to joining West, from April 2019 to November 2020, she served as Senior Vice President, General Counsel and Corporate Secretary at the Segal Group in New York, a privately held firm specializing in employee benefits and investment consulting. Prior to Segal, she served for over 15 years in a variety of Legal leadership roles for Novartis, a global healthcare company, including Head of U.S. Legal for Novartis Business Service.
|
||||||
David A. Montecalvo | 55 | Senior Vice President and Chief Operations and Supply Chain Officer since February 2019. Senior Vice President, Global Operations and Supply Chain from September 2016 until February 2019. Prior to joining West, he served in a number of senior leadership roles at Medtronic plc, a medical device company, including Vice President, Contract Manufacturing Operations, for the company’s Restorative Therapies Group, Vice President, Business Operations Integration, where he was responsible for directing and leading the global operations integration of Covidien plc into Medtronic, and Vice President, Product Development and Operations for Medtronic Cardiovascular. Prior thereto, he held senior operations and product development roles at Urologix, Inc. and LecTec Corporation. | ||||||
Chad R. Winters | 42 | Vice President, Chief Accounting Officer and Corporate Controller since May 2020. Vice President and Corporate Controller since October 2019. Prior to joining West, he served as Senior Vice President of Finance & Accounting and Controller of Amneal Pharmaceuticals, Inc., a specialty pharmaceutical company. Prior to Amneal, he held roles of increasing responsibility at the Chemours Company, UGI Corporation, and PricewaterhouseCoopers LLP. | ||||||
(in millions, except per share data) | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||
SUMMARY OF OPERATIONS | |||||||||||||||||
Net sales (1) | $ | 2,146.9 | $ | 1,839.9 | $ | 1,717.4 | $ | 1,599.1 | $ | 1,509.1 | |||||||
Operating profit † | 406.9 | 296.6 | 240.3 | 225.8 | 195.2 | ||||||||||||
Net income | 346.2 | 241.7 | 206.9 | 150.7 | 143.6 | ||||||||||||
Net income per share: | |||||||||||||||||
Basic (2) | $ | 4.68 | $ | 3.27 | $ | 2.80 | $ | 2.04 | $ | 1.96 | |||||||
Diluted (3) | 4.57 | 3.21 | 2.74 | 1.99 | 1.91 | ||||||||||||
Weighted average common shares outstanding | 73.9 | 74.0 | 73.9 | 73.9 | 73.3 | ||||||||||||
Weighted average shares assuming dilution | 75.8 | 75.4 | 75.4 | 75.8 | 75.0 | ||||||||||||
Dividends declared per common share | $ | 0.66 | $ | 0.62 | $ | 0.58 | $ | 0.54 | $ | 0.50 | |||||||
YEAR-END FINANCIAL POSITION | |||||||||||||||||
Cash and cash equivalents | $ | 615.5 | $ | 439.1 | $ | 337.4 | $ | 235.9 | $ | 203.0 | |||||||
Working capital | 870.3 | 717.1 | 610.7 | 464.0 | 400.9 | ||||||||||||
Total assets | 2,793.8 | 2,341.4 | 1,978.9 | 1,862.8 | 1,716.7 | ||||||||||||
Total invested capital: | |||||||||||||||||
Total debt | 255.2 | 257.3 | 196.1 | 197.0 | 228.6 | ||||||||||||
Total equity | 1,854.5 | 1,573.2 | 1,396.3 | 1,279.9 | 1,117.5 | ||||||||||||
Total invested capital | $ | 2,109.7 | $ | 1,830.5 | $ | 1,592.4 | $ | 1,476.9 | $ | 1,346.1 | |||||||
PERFORMANCE MEASUREMENTS (4) | |||||||||||||||||
Gross margin (a) | 35.8 | % | 32.9 | % | 31.8 | % | 32.1 | % | 33.2 | % | |||||||
Operating profitability (b) † | 19.0 | % | 16.1 | % | 14.0 | % | 14.1 | % | 12.9 | % | |||||||
Effective tax rate (5) | 18.1 | % | 20.2 | % | 17.2 | % | 36.4 | % | 28.7 | % | |||||||
Return on invested capital (c) † | 16.9 | % | 13.8 | % | 13.0 | % | 10.2 | % | 10.4 | % | |||||||
Net debt-to-total invested capital (d) | N/A | N/A | N/A | N/A | 2.2 | % | |||||||||||
Research and development expenses | $ | 46.9 | $ | 38.9 | $ | 40.3 | $ | 39.1 | $ | 36.8 | |||||||
Operating cash flow | 472.5 | 367.2 | 288.6 | 263.3 | 219.4 | ||||||||||||
Stock price range | $305-124.53 | $152.12-93.08 | $125.09-82.74 | $103.36-77.97 | $86.50-53.88 |
($ in millions)
|
Operating Profit | Income tax expense | Net income | Diluted EPS | |||||||||||||||||||
Year ended December 31, 2020 GAAP | $ | 406.9 | $ | 72.5 | $ | 346.2 | $ | 4.57 | |||||||||||||||
Unallocated items: | |||||||||||||||||||||||
Restructuring and severance related charges | 7.0 | 1.7 | 5.3 | 0.07 | |||||||||||||||||||
Pension settlement (1)
|
— | 0.9 | 2.9 | 0.04 | |||||||||||||||||||
Amortization of acquisition-related
intangible assets (2)
|
0.6 | 0.1 | 3.6 | 0.05 | |||||||||||||||||||
Cost investment impairment | 2.5 | — | 2.5 | 0.03 | |||||||||||||||||||
Year ended December 31, 2020 adjusted amounts (non-U.S. GAAP) | $ | 417.0 | $ | 75.2 | $ | 360.5 | $ | 4.76 | |||||||||||||||
($ in millions)
|
Operating Profit | Income tax expense | Net income | Diluted EPS | |||||||||||||||||||
Year ended December 31, 2019 GAAP | $ | 296.6 | $ | 59.0 | $ | 241.7 | $ | 3.21 | |||||||||||||||
Unallocated items: | |||||||||||||||||||||||
Restructuring and related charges | 4.9 | 1.2 | 3.7 | 0.04 | |||||||||||||||||||
Gain on restructuring-related sale of assets | (1.7) | (0.4) | (1.3) | (0.02) | |||||||||||||||||||
Pension settlement (1)
|
— | 0.8 | 2.7 | 0.04 | |||||||||||||||||||
Argentina currency devaluation | 1.0 | — | 1.0 | 0.01 | |||||||||||||||||||
Tax Recovery (3)
|
(4.4) | (1.5) | (2.9) | (0.04) | |||||||||||||||||||
Tax law Changes (4)
|
— | 0.3 | (0.3) | — | |||||||||||||||||||
Year ended December 31, 2019 adjusted amounts (non-U.S. GAAP) | $ | 296.4 | $ | 59.4 | $ | 244.6 | $ | 3.24 |
($ in millions)
|
Operating Profit | Income tax expense | Net income | Diluted EPS | |||||||||||||||||||
Year ended December 31, 2018 GAAP | $ | 240.3 | $ | 41.4 | $ | 206.9 | $ | 2.74 | |||||||||||||||
Restructuring and related charges | 9.1 | 1.9 | 7.2 | 0.09 | |||||||||||||||||||
Gain on restructuring-related sale of assets | (1.1) | (0.2) | (0.9) | (0.01) | |||||||||||||||||||
Argentina currency devaluation | 1.1 | — | 1.1 | 0.02 | |||||||||||||||||||
Tax law Changes (4)
|
— | 2.5 | (2.5) | (0.03) | |||||||||||||||||||
Year ended December 31, 2018 adjusted amounts (non-U.S. GAAP) | $ | 249.4 | $ | 45.6 | $ | 211.8 | $ | 2.81 |
Year Ended December 31, | % Change | ||||||||||||||||||||||||||||
($ in millions) |
2020
|
2019
|
2018
|
2020/2019
|
2019/2018
|
||||||||||||||||||||||||
Proprietary Products | $ | 1,648.6 | $ | 1,398.6 | $ | 1,308.6 | 17.9 | % | 6.9 | % | |||||||||||||||||||
Contract-Manufactured Products | 498.6 | 441.5 | 409.1 | 12.9 | % | 7.9 | % | ||||||||||||||||||||||
Intersegment sales elimination | (0.3) | (0.2) | (0.3) | 50.0 | % | (33.3) | % | ||||||||||||||||||||||
Consolidated net sales | $ | 2,146.9 | $ | 1,839.9 | $ | 1,717.4 | 16.7 | % | 7.1 | % |
Year Ended December 31, | % Change | ||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2018 | 2020/2019 | 2019/2018 | ||||||||||||||||||||||||
Proprietary Products: | |||||||||||||||||||||||||||||
Gross profit | $ | 682.2 | $ | 540.4 | $ | 485.4 | 26.2 | % | 11.3 | % | |||||||||||||||||||
Gross profit margin | 41.4 | % | 38.6 | % | 37.1 | % | |||||||||||||||||||||||
Contract-Manufactured Products: | |||||||||||||||||||||||||||||
Gross profit | $ | 85.6 | $ | 65.5 | $ | 60.0 | 30.7 | % | 9.2 | % | |||||||||||||||||||
Gross profit margin | 17.2 | % | 14.8 | % | 14.7 | % | |||||||||||||||||||||||
Unallocated items | $ | — | $ | (0.2) | $ | — | |||||||||||||||||||||||
Consolidated gross profit | $ | 767.8 | $ | 605.7 | $ | 545.4 | 26.8 | % | 11.1 | % | |||||||||||||||||||
Consolidated gross profit margin | 35.8 | % | 32.9 | % | 31.8 | % |
Year Ended December 31, | % Change | ||||||||||||||||||||||||||||
($ in millions) |
2020
|
2019
|
2018
|
2020/2019 | 2019/2018 | ||||||||||||||||||||||||
Consolidated R&D costs | $ | 46.9 | $ | 38.9 | $ | 40.3 | 20.6 | % | (3.5) | % |
Year Ended December 31, | % Change | ||||||||||||||||||||||||||||
($ in millions) |
2020
|
2019
|
2018
|
2020/2019 | 2019/2018 | ||||||||||||||||||||||||
Proprietary Products | $ | 197.5 | $ | 189.9 | $ | 185.0 | 4.0 | % | 2.6 | % | |||||||||||||||||||
Contract-Manufactured Products | 15.5 | 16.2 | 16.5 | (4.3) | % | (1.8) | % | ||||||||||||||||||||||
Corporate and unallocated items | 89.0 | 66.6 | 61.4 | 33.6 | % | 8.5 | % | ||||||||||||||||||||||
Consolidated SG&A costs | $ | 302.0 | $ | 272.7 | $ | 262.9 | 10.7 | % | 3.7 | % | |||||||||||||||||||
SG&A as a % of net sales | 14.1 | % | 14.8 | % | 15.3 | % |
Expense (Income) | Year Ended December 31, | ||||||||||||||||
($ in millions) |
2020
|
2019
|
2018
|
||||||||||||||
Proprietary Products | $ | 3.3 | $ | (2.0) | $ | (6.3) | |||||||||||
Contract-Manufactured Products | 1.5 | 0.2 | (0.8) | ||||||||||||||
Corporate and unallocated items | 7.2 | (0.7) | 9.0 | ||||||||||||||
Consolidated other expense (income) | $ | 12.0 | $ | (2.5) | $ | 1.9 |
Year Ended December 31, | % Change | ||||||||||||||||||||||||||||
($ in millions) |
2020
|
2019
|
2018
|
2020/2019 | 2019/2018 | ||||||||||||||||||||||||
Proprietary Products | $ | 434.5 | $ | 313.6 | $ | 266.4 | 38.6 | % | 17.7 | % | |||||||||||||||||||
Contract-Manufactured Products | 68.6 | 49.1 | 44.3 | 39.7 | % | 10.8 | % | ||||||||||||||||||||||
Corporate | (86.1) | (66.3) | (61.3) | 29.9 | % | 8.2 | % | ||||||||||||||||||||||
Adjusted consolidated operating profit | $ | 417.0 | $ | 296.4 | $ | 249.4 | 40.7 | % | 18.8 | % | |||||||||||||||||||
Adjusted consolidated operating profit margin | 19.4 | % | 16.1 | % | 14.5 | % | |||||||||||||||||||||||
Unallocated items | (10.1) | 0.2 | (9.1) | ||||||||||||||||||||||||||
Consolidated operating profit | $ | 406.9 | $ | 296.6 | $ | 240.3 | 37.2 | % | 23.4 | % | |||||||||||||||||||
Consolidated operating profit margin | 19.0 | % | 16.1 | % | 14.0 | % |
Year Ended December 31, | % Change | ||||||||||||||||||||||||||||
($ in millions) |
2020
|
2019 |
2018
|
2020/2019 | 2019/2018 | ||||||||||||||||||||||||
Interest expense | $ | 9.6 | $ | 9.4 | $ | 9.3 | 2.1 | % | 1.1 | % | |||||||||||||||||||
Capitalized interest | (1.4) | (0.9) | (0.9) | 55.6 | % | — | % | ||||||||||||||||||||||
Interest income | (1.4) | (3.8) | (2.1) | (63.2) | % | 81.0 | % | ||||||||||||||||||||||
Interest expense, net | $ | 6.8 | $ | 4.7 | $ | 6.3 | 44.7 | % | (25.4) | % |
($ in millions) | 2020 | 2019 | 2018 | ||||||||||||||
Net cash provided by operating activities | $ | 472.5 | $ | 367.2 | $ | 288.6 | |||||||||||
Net cash used in investing activities | $ | (179.5) | $ | (228.0) | $ | (100.8) | |||||||||||
Net cash used in financing activities | $ | (137.1) | $ | (36.8) | $ | (80.7) |
($ in millions) | December 31, 2020 | December 31, 2019 | |||||||||
Cash and cash equivalents | $ | 615.5 | $ | 439.1 | |||||||
Accounts receivable, net | $ | 385.3 | $ | 319.3 | |||||||
Inventories | $ | 321.3 | $ | 235.7 | |||||||
Accounts payable | $ | 213.1 | $ | 156.8 | |||||||
Debt | $ | 255.2 | $ | 257.3 | |||||||
Equity | $ | 1,854.5 | $ | 1,573.2 | |||||||
Working Capital | $ | 870.3 | $ | 717.1 |
Payments Due By Period | |||||||||||||||||
($ in millions) | Total | Less than 1 year |
1 - 3 years
(through 2023) |
3 - 5 years
(through 2025) |
More than 5 years | ||||||||||||
Purchase obligations (1)
|
$ | 118.4 | $ | 41.4 | $ | 76.6 | $ | 0.4 | $ | — | |||||||
Debt (excluding unamortized debt issuance costs) | 255.8 | 2.3 | 46.5 | 134.0 | 73.0 | ||||||||||||
Interest on debt and cross-currency swap (2)
|
30.3 | 7.0 | 11.6 | 7.3 | 4.4 | ||||||||||||
Operating lease obligations | 85.2 | 12.4 | 19.7 | 15.6 | 37.5 | ||||||||||||
Other long-term liabilities (3)
|
7.4 | 0.7 | 1.2 | 2.4 | 3.1 | ||||||||||||
Total contractual obligations (4)
|
$ | 497.1 | $ | 63.8 | $ | 155.6 | $ | 159.7 | $ | 118.0 |
(in millions) | Sell | |||||||||||||
Currency | Purchase | USD | Euro | |||||||||||
USD | 57.0 | — | 49.2 | |||||||||||
Yen | 7,194.1 | 42.7 | 22.0 | |||||||||||
SGD | 42.9 | 25.0 | 5.0 |
($ in millions) | 2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | Carrying Value | Fair Value | ||||||||||||||||||
Current Debt: | ||||||||||||||||||||||||||
U.S. dollar denominated | $2.3 | $2.3 | $2.3 | |||||||||||||||||||||||
Average interest rate - variable | 1.13% | |||||||||||||||||||||||||
Long-Term Debt: | ||||||||||||||||||||||||||
U.S. dollar denominated | $42.0 | $53.0 | $73.0 | $168.0 | $180.7 | |||||||||||||||||||||
Average interest rate - fixed | 3.67% | 3.82% | 4.02% | |||||||||||||||||||||||
U.S. dollar denominated | $2.3 | $2.2 | $81.0 | $85.5 | $85.5 | |||||||||||||||||||||
Average interest rate - variable | 1.13% | 1.13% | 1.13% | |||||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||
Net sales | $ | 2,146.9 | $ | 1,839.9 | $ | 1,717.4 | ||||||||||||||
Cost of goods and services sold | 1,379.1 | 1,234.2 | 1,172.0 | |||||||||||||||||
Gross profit | 767.8 | 605.7 | 545.4 | |||||||||||||||||
Research and development | 46.9 | 38.9 | 40.3 | |||||||||||||||||
Selling, general and administrative expenses | 302.0 | 272.7 | 262.9 | |||||||||||||||||
Other expense (income) (Note 16) | 12.0 | (2.5) | 1.9 | |||||||||||||||||
Operating profit | 406.9 | 296.6 | 240.3 | |||||||||||||||||
Interest expense | 8.2 | 8.5 | 8.4 | |||||||||||||||||
Interest income | (1.4) | (3.8) | (2.1) | |||||||||||||||||
Other nonoperating (income) expense | (1.2) | 0.1 | (6.7) | |||||||||||||||||
Income before income taxes | 401.3 | 291.8 | 240.7 | |||||||||||||||||
Income tax expense | 72.5 | 59.0 | 41.4 | |||||||||||||||||
Equity in net income of affiliated companies | (17.4) | (8.9) | (7.6) | |||||||||||||||||
Net income | $ | 346.2 | $ | 241.7 | $ | 206.9 | ||||||||||||||
Net income per share: | ||||||||||||||||||||
Basic | $ | 4.68 | $ | 3.27 | $ | 2.80 | ||||||||||||||
Diluted | $ | 4.57 | $ | 3.21 | $ | 2.74 | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 73.9 | 74.0 | 73.9 | |||||||||||||||||
Diluted | 75.8 | 75.4 | 75.4 | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Net income | $ | 346.2 | $ | 241.7 | $ | 206.9 | |||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||
Foreign currency translation adjustments | 40.1 | 4.9 | (39.2) | ||||||||||||||
Defined benefit pension and other postretirement plans: | |||||||||||||||||
Prior service cost arising during period, net of tax of $0
|
— | — | (0.3) | ||||||||||||||
Net actuarial loss arising during period, net of tax of $(0.7), $(0.3), and $(0.2)
|
(2.5) | (1.9) | (0.7) | ||||||||||||||
Settlement effects arising during period, net of tax of $0.9, $0.8, and $0
|
2.9 | 2.7 | — | ||||||||||||||
Less: amortization of actuarial (gain) loss, net of tax of $0, $0, and $0.3
|
(0.1) | (0.2) | 1.1 | ||||||||||||||
Less: amortization of prior service credit, net of tax of $(0.1), $(0.1) and $(0.5).
|
(0.5) | (0.5) | (1.5) | ||||||||||||||
Net gain (loss) on equity affiliate accumulated other comprehensive income, net of tax of $0, $0, and $(0.1)
|
0.2 | — | (0.1) | ||||||||||||||
Net (loss) gain on derivatives, net of tax of $(0.6), $(0.2), and $1.5
|
(1.1) | (0.4) | 3.8 | ||||||||||||||
Other comprehensive income (loss), net of tax | 39.0 | 4.6 | (36.9) | ||||||||||||||
Comprehensive income | $ | 385.2 | $ | 246.3 | $ | 170.0 |
(in millions, except per share data) | 2020 | 2019 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 615.5 | $ | 439.1 | |||||||
Accounts receivable, net | 385.3 | 319.3 | |||||||||
Inventories | 321.3 | 235.7 | |||||||||
Other current assets | 51.6 | 64.6 | |||||||||
Total current assets | 1,373.7 | 1,058.7 | |||||||||
Property, plant and equipment | 2,035.5 | 1,820.1 | |||||||||
Less: accumulated depreciation and amortization | 1,092.3 | 980.8 | |||||||||
Property, plant and equipment, net | 943.2 | 839.3 | |||||||||
Operating lease right-of-use assets | 68.3 | 70.1 | |||||||||
Investments in affiliated companies | 214.7 | 192.7 | |||||||||
Goodwill | 111.1 | 107.8 | |||||||||
Intangible assets, net | 30.5 | 29.8 | |||||||||
Deferred income taxes | 16.0 | 14.0 | |||||||||
Pension and other postretirement benefits | 12.9 | 4.3 | |||||||||
Other noncurrent assets | 23.4 | 24.7 | |||||||||
Total Assets | $ | 2,793.8 | $ | 2,341.4 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Notes payable and other current debt | $ | 2.3 | $ | 2.3 | |||||||
Accounts payable | 213.1 | 156.8 | |||||||||
Pension and other postretirement benefits | 2.3 | 2.2 | |||||||||
Accrued salaries, wages and benefits | 106.0 | 73.0 | |||||||||
Income taxes payable | 26.0 | 6.4 | |||||||||
Operating lease liabilities | 10.1 | 9.6 | |||||||||
Other current liabilities | 143.6 | 91.3 | |||||||||
Total current liabilities | 503.4 | 341.6 | |||||||||
Long-term debt | 252.9 | 255.0 | |||||||||
Deferred income taxes | 10.4 | 15.5 | |||||||||
Pension and other postretirement benefits | 57.5 | 52.5 | |||||||||
Operating lease liabilities | 60.4 | 62.4 | |||||||||
Deferred compensation benefits | 22.9 | 17.8 | |||||||||
Other long-term liabilities | 31.8 | 23.4 | |||||||||
Total Liabilities | 939.3 | 768.2 | |||||||||
Commitments and contingencies (Note 18) | |||||||||||
Equity: | |||||||||||
Preferred stock, 3.0 million shares authorized; 0 shares issued and outstanding in 2020 and 2019
|
— | — | |||||||||
Common stock, par value $0.25 per share; 200 million shares authorized; shares issued: 75.3 million in 2020 and 2019; shares outstanding: 74.0 million and 74.1 million in 2020 and 2019
|
18.8 | 18.8 | |||||||||
Capital in excess of par value | 267.3 | 272.7 | |||||||||
Retained earnings | 1,846.7 | 1,549.4 | |||||||||
Accumulated other comprehensive loss | (110.6) | (149.6) | |||||||||
Treasury stock, at cost (1.3 million and 1.2 million shares in 2020 and 2019)
|
(167.7) | (118.1) | |||||||||
Total Equity | 1,854.5 | 1,573.2 | |||||||||
Total Liabilities and Equity | $ | 2,793.8 | $ | 2,341.4 |
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, 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 | — | — | — | — | — | 11.4 | — | 11.4 | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 206.9 | — | 206.9 | |||||||||||||||||||||||||||||||||||||||
Activity related to stock-based compensation | 0.1 | — | (27.3) | (0.9) | 76.2 | — | — | 48.9 | |||||||||||||||||||||||||||||||||||||||
Shares purchased under share repurchase program | — | — | — | 0.8 | (70.8) | — | — | (70.8) | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.58 per share)
|
— | — | — | — | — | (43.1) | — | (43.1) | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income, 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 | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 241.7 | — | 241.7 | |||||||||||||||||||||||||||||||||||||||
Activity related to stock-based compensation | — | — | (11.1) | (0.8) | 65.6 | — | — | 54.5 | |||||||||||||||||||||||||||||||||||||||
Shares purchased under share repurchase program | — | — | — | 0.8 | (83.1) | — | — | (83.1) | |||||||||||||||||||||||||||||||||||||||
Purchase of investment in affiliated companies | — | — | 1.8 | — | 3.1 | — | — | 4.9 | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.62 per share)
|
— | — | — | — | — | (45.7) | — | (45.7) | |||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | 4.6 | 4.6 | |||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | 75.3 | 18.8 | 272.7 | 1.2 | (118.1) | 1,549.4 | (149.6) | 1,573.2 | |||||||||||||||||||||||||||||||||||||||
Effect of modified retrospective application of a new accounting standard (see Note 2) | — | — | — | — | — | (0.1) | — | (0.1) | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 346.2 | — | 346.2 | |||||||||||||||||||||||||||||||||||||||
Activity related to stock-based compensation | — | — | (5.4) | (0.7) | 65.9 | — | — | 60.5 | |||||||||||||||||||||||||||||||||||||||
Shares purchased under share repurchase program | — | — | — | 0.8 | (115.5) | — | — | (115.5) | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.66 per share)
|
— | — | — | — | — | (48.8) | — | (48.8) | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | 39.0 | 39.0 | |||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | 75.3 | $ | 18.8 | $ | 267.3 | 1.3 | $ | (167.7) | $ | 1,846.7 | $ | (110.6) | $ | 1,854.5 |
2020 | 2019 | 2018 | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income | $ | 346.2 | $ | 241.7 | $ | 206.9 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||||||||||||
Depreciation | 104.7 | 100.0 | 101.7 | ||||||||||||||
Amortization | 4.4 | 3.4 | 2.7 | ||||||||||||||
Stock-based compensation | 34.0 | 24.4 | 15.1 | ||||||||||||||
Non-cash restructuring charges | — | 2.3 | 2.2 | ||||||||||||||
Pension settlement charge | 3.7 | 3.5 | — | ||||||||||||||
Contingent consideration payments in excess of acquisition-date liability | (0.9) | (0.5) | (0.6) | ||||||||||||||
Fixed asset impairments and sale of equipment, net | 7.7 | 0.8 | 1.8 | ||||||||||||||
Deferred income taxes | (5.8) | 15.3 | 0.9 | ||||||||||||||
Pension and other retirement plans, net | 4.6 | (2.6) | (7.9) | ||||||||||||||
Equity in undistributed earnings of affiliates, net of dividends | (15.8) | (6.7) | (5.9) | ||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||
Increase in accounts receivable | (46.6) | (33.3) | (43.8) | ||||||||||||||
Increase in inventories | (73.7) | (18.6) | (7.0) | ||||||||||||||
Decrease (increase) in other current assets | 5.5 | 2.6 | (6.2) | ||||||||||||||
Increase in accounts payable | 36.6 | 25.3 | 0.4 | ||||||||||||||
Changes in other assets and liabilities | 67.9 | 9.6 | 28.3 | ||||||||||||||
Net cash provided by operating activities | 472.5 | 367.2 | 288.6 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Capital expenditures | (174.4) | (126.4) | (104.7) | ||||||||||||||
Purchase of investment in affiliated companies | — | (85.1) | — | ||||||||||||||
Acquisition of business | — | (18.9) | — | ||||||||||||||
Other, net | (5.1) | 2.4 | 3.9 | ||||||||||||||
Net cash used in investing activities | (179.5) | (228.0) | (100.8) | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Borrowings under revolving credit agreements | — | 108.5 | — | ||||||||||||||
Repayments under revolving credit agreements | — | (136.3) | — | ||||||||||||||
Issuance of long-term debt | — | 90.0 | — | ||||||||||||||
Debt issuance cost | — | (1.2) | — | ||||||||||||||
Repayments of long-term debt | (2.3) | (0.1) | (0.1) | ||||||||||||||
Dividend payments | (48.1) | (45.1) | (42.1) | ||||||||||||||
Proceeds from stock-based compensation awards | 22.4 | 25.1 | 27.4 | ||||||||||||||
Employee stock purchase plan contributions | 6.4 | 5.4 | 4.9 | ||||||||||||||
Shares purchased under share repurchase programs | (115.5) | (83.1) | (70.8) | ||||||||||||||
Net cash used in financing activities | (137.1) | (36.8) | (80.7) | ||||||||||||||
Effect of exchange rates on cash | 20.5 | (0.7) | (5.6) | ||||||||||||||
Net increase in cash and cash equivalents | 176.4 | 101.7 | 101.5 | ||||||||||||||
Cash, including cash equivalents at beginning of period | 439.1 | 337.4 | 235.9 | ||||||||||||||
Cash, including cash equivalents at end of period | $ | 615.5 | $ | 439.1 | $ | 337.4 | |||||||||||
Supplemental cash flow information: | |||||||||||||||||
Interest paid, net of amounts capitalized | $ | 8.1 | $ | 8.6 | $ | 8.4 | |||||||||||
Income taxes paid, net | $ | 48.4 | $ | 47.5 | $ | 42.0 | |||||||||||
Accrued capital expenditures | $ | 31.3 | $ | 17.0 | $ | 15.0 | |||||||||||
Dividends declared, not paid | $ | 12.6 | $ | 11.8 | $ | 11.3 | |||||||||||
Purchase of investment in affiliated companies, treasury stock | $ | — | $ | 4.9 | $ | — |
($ in millions) | 2020 | 2019 | |||||||||
Raw materials | $ | 133.5 | $ | 100.9 | |||||||
Work in process | 54.9 | 37.4 | |||||||||
Finished goods | 132.9 | 97.4 | |||||||||
$ | 321.3 | $ | 235.7 |
2020 | 2019 | 2018 | |||||||||||||||||||||||||||
Biologics | 31 | % | 25 | % | 21 | % | |||||||||||||||||||||||
Generics | 20 | % | 20 | % | 21 | % | |||||||||||||||||||||||
Pharma | 26 | % | 31 | % | 34 | % | |||||||||||||||||||||||
Contract-Manufactured Products | 23 | % | 24 | % | 24 | % | |||||||||||||||||||||||
100 | % | 100 | % | 100 | % |
2020 | 2019 | 2018 | |||||||||||||||||||||||||||
High-Value Product Components | 46 | % | 42 | % | 41 | % | |||||||||||||||||||||||
High-Value Product Delivery Devices | 5 | % | 5 | % | 3 | % | |||||||||||||||||||||||
Standard Packaging | 26 | % | 29 | % | 32 | % | |||||||||||||||||||||||
Contract-Manufactured Products | 23 | % | 24 | % | 24 | % | |||||||||||||||||||||||
100 | % | 100 | % | 100 | % |
2020 | 2019 | 2018 | |||||||||||||||||||||||||||
Americas | 48 | % | 48 | % | 48 | % | |||||||||||||||||||||||
Europe, Middle East, Africa | 43 | % | 44 | % | 44 | % | |||||||||||||||||||||||
Asia Pacific | 9 | % | 8 | % | 8 | % | |||||||||||||||||||||||
100 | % | 100 | % | 100 | % |
($ in millions) | |||||
Contract assets, December 31, 2019
|
$ | 9.8 | |||
Contract assets, December 31, 2020
|
10.9 | ||||
Change in contract assets - increase (decrease) | $ | 1.1 | |||
Deferred income, December 31, 2019
|
$ | (34.9) | |||
Deferred income, December 31, 2020
|
(57.1) | ||||
Change in deferred income - (increase) decrease | $ | (22.2) |
(in millions) | 2020 | 2019 | 2018 | ||||||||||||||
Net income | $ | 346.2 | $ | 241.7 | $ | 206.9 | |||||||||||
Weighted average common shares outstanding | 73.9 | 74.0 | 73.9 | ||||||||||||||
Dilutive effect of equity awards, based on the treasury stock method
|
1.9 | 1.4 | 1.5 | ||||||||||||||
Weighted average shares assuming dilution | 75.8 | 75.4 | 75.4 |
($ in millions) | Expected useful lives (years) | 2020 | 2019 | ||||||||||||||
Land | $ | 24.8 | $ | 22.1 | |||||||||||||
Buildings and improvements |
15-35
|
618.1 | 572.9 | ||||||||||||||
Machinery and equipment |
5-12
|
911.8 | 817.0 | ||||||||||||||
Molds and dies |
4-7
|
131.2 | 123.8 | ||||||||||||||
Computer hardware and software |
3-10
|
157.5 | 155.6 | ||||||||||||||
Construction in progress | 192.1 | 128.7 | |||||||||||||||
$ | 2,035.5 | $ | 1,820.1 |
($ in millions) | 2020 | 2019 | |||||||||
Operating lease cost | $ | 12.8 | $ | 12.9 | |||||||
Short-term lease cost | 0.8 | 0.8 | |||||||||
Variable lease cost | 3.8 | 3.3 | |||||||||
Total lease cost | $ | 17.4 | $ | 17.0 |
($ in millions) | 2020 | 2019 | |||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | 12.6 | $ | 12.5 | |||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | 6.1 | 9.1 |
($ in millions) | Operating | ||||
Year | Leases | ||||
2021 | $ | 12.4 | |||
2022 | 10.4 | ||||
2023 | 9.3 | ||||
2024 | 8.7 | ||||
2025 | 6.9 | ||||
Thereafter | 37.5 | ||||
85.2 | |||||
Less: imputed lease interest | (14.7) | ||||
Total lease liabilities | $ | 70.5 |
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% | ||||||
I&W Pharma Group LLC | United States | 49% | ||||||
Daikyo | Japan | 49% |
($ in millions) | Proprietary Products | Contract-Manufactured Products | Total | ||||||||||||||
Balance, December 31, 2018 | $ | 76.0 | $ | 29.8 | $ | 105.8 | |||||||||||
Goodwill recorded due to acquisition | 2.6 | — | 2.6 | ||||||||||||||
Foreign currency translation | (0.5) | (0.1) | (0.6) | ||||||||||||||
Balance, December 31, 2019 | 78.1 | 29.7 | 107.8 | ||||||||||||||
Foreign currency translation | 2.8 | 0.5 | 3.3 | ||||||||||||||
Balance, December 31, 2020 | $ | 80.9 | $ | 30.2 | $ | 111.1 |
2020 | 2019 | ||||||||||||||||||||||||||||||||||
($ in millions) | Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | |||||||||||||||||||||||||||||
Patents and licensing | $ | 25.9 | $ | (17.9) | $ | 8.0 | $ | 21.5 | $ | (16.0) | $ | 5.5 | |||||||||||||||||||||||
Technology | 3.3 | (1.7) | 1.6 | 3.3 | (1.5) | 1.8 | |||||||||||||||||||||||||||||
Trademarks | 2.0 | (1.8) | 0.2 | 2.0 | (1.8) | 0.2 | |||||||||||||||||||||||||||||
Customer relationships | 40.9 | (23.4) | 17.5 | 40.3 | (21.6) | 18.7 | |||||||||||||||||||||||||||||
Customer contracts | 11.1 | (7.9) | 3.2 | 11.0 | (7.4) | 3.6 | |||||||||||||||||||||||||||||
$ | 83.2 | $ | (52.7) | $ | 30.5 | $ | 78.1 | $ | (48.3) | $ | 29.8 |
($ in millions) | 2020 | 2019 | |||||||||
Deferred income | $ | 51.0 | $ | 27.5 | |||||||
Dividends payable | 12.6 | 11.8 | |||||||||
Accrued commissions, rebates and royalties | 10.0 | 9.7 | |||||||||
Accrued retirement plans (excluding pension) | 8.4 | 7.9 | |||||||||
Accrued taxes other than income | 15.4 | 6.5 | |||||||||
Accrued professional services | 3.7 | 5.9 | |||||||||
Accrued interest | 3.3 | 3.3 | |||||||||
Restructuring and severance related charges | 7.8 | 2.6 | |||||||||
Short term derivative instruments | 9.5 | 0.2 | |||||||||
Other | 21.9 | 15.9 | |||||||||
Total other current liabilities | $ | 143.6 | $ | 91.3 |
($ in millions) | 2020 | 2019 | |||||||||
Term Loan, due December 31, 2024 (1.13%)
|
$ | 87.7 | $ | 90.0 | |||||||
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 | |||||||||
255.7 | 258.0 | ||||||||||
Less: unamortized debt issuance costs | 0.5 | 0.7 | |||||||||
Total debt | 255.2 | 257.3 | |||||||||
Less: current portion of long-term debt | 2.3 | 2.3 | |||||||||
Long-term debt, net | $ | 252.9 | $ | 255.0 |
(in millions) | Sell | |||||||||||||
Currency | Purchase | USD | Euro | |||||||||||
USD | 57.0 | — | 49.2 | |||||||||||
Yen | 7,194.1 | 42.7 | 22.0 | |||||||||||
SGD | 42.9 | 25.0 | 5.0 |
Amount of Gain Recognized in Income | Location on Statement of Income | ||||||||||||||||
($ in millions) | 2020 | 2019 | |||||||||||||||
Fair Value Hedges: | |||||||||||||||||
Hedged item (intercompany loan) | $ | 28.5 | $ | (15.3) | Other expense (income) | ||||||||||||
Derivative designated as hedging instrument | (28.5) | 15.3 | Other expense (income) | ||||||||||||||
Amount excluded from effectiveness testing | (6.1) | (6.9) | Other expense (income) | ||||||||||||||
Total | $ | (6.1) | $ | (6.9) |
Amount of Gain (Loss) Recognized in OCI | Amount of (Gain) Loss Reclassified from Accumulated OCI into Income | Location of (Gain) Loss Reclassified from Accumulated OCI into Income | |||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Fair Value Hedges: | |||||||||||||||||||||||||||||
Foreign currency hedge contracts | $ | 4.0 | $ | 4.8 | $ | (4.3) | $ | (4.6) | Other expense (income) | ||||||||||||||||||||
Total | $ | 4.0 | $ | 4.8 | $ | (4.3) | $ | (4.6) | |||||||||||||||||||||
Cash Flow Hedges: | |||||||||||||||||||||||||||||
Foreign currency hedge contracts | $ | (0.6) | $ | 0.8 | $ | 0.2 | $ | (0.9) | Net sales | ||||||||||||||||||||
Foreign currency hedge contracts | (0.6) | (0.2) | (0.1) | (0.6) | Cost of goods and services sold | ||||||||||||||||||||||||
Forward treasury locks | — | — | 0.3 | 0.3 | Interest expense | ||||||||||||||||||||||||
Total | $ | (1.2) | $ | 0.6 | $ | 0.4 | $ | (1.2) | |||||||||||||||||||||
Net Investment Hedges: | |||||||||||||||||||||||||||||
Foreign currency-denominated debt | $ | — | $ | 0.6 | $ | — | $ | — | Other expense (income) | ||||||||||||||||||||
Cross-currency swap | (3.2) | (1.1) | — | — | Other expense (income) | ||||||||||||||||||||||||
Total | $ | (3.2) | $ | (0.5) | $ | — | $ | — |
($ in millions) | 2020 | 2019 | |||||||||
Net sales | $ | 0.2 | $ | (0.9) | |||||||
Cost of goods and services sold | (0.1) | (0.6) | |||||||||
Other expense (income) | (4.3) | (4.6) | |||||||||
Interest expense | 0.3 | 0.3 |
Amount of Loss (Gain) Recognized in Income | Location on Statement of Income | ||||||||||||||||
($ in millions) | 2020 | 2019 | |||||||||||||||
Commodity call options | $ | 0.2 | $ | 0.4 | Cost of goods and services sold | ||||||||||||
Total | $ | 0.2 | $ | 0.4 |
Balance at | Basis of Fair Value Measurements | ||||||||||||||||||||||
($ in millions) |
December 31,
2020 |
Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Deferred compensation assets | $ | 12.8 | $ | 12.8 | $ | — | $ | — | |||||||||||||||
Foreign currency contracts | 3.0 | — | 3.0 | — | |||||||||||||||||||
Commodity call options | 0.3 | — | 0.3 | — | |||||||||||||||||||
$ | 16.1 | $ | 12.8 | $ | 3.3 | $ | — | ||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Contingent consideration | $ | 3.6 | $ | — | $ | — | $ | 3.6 | |||||||||||||||
Deferred compensation liabilities | 14.5 | 14.5 | — | — | |||||||||||||||||||
Cross-currency swap | 5.6 | — | 5.6 | — | |||||||||||||||||||
Foreign currency contracts | 9.7 | — | 9.7 | — | |||||||||||||||||||
$ | 33.4 | $ | 14.5 | $ | 15.3 | $ | 3.6 |
Balance at | Basis of Fair Value Measurements | ||||||||||||||||||||||
($ in millions) |
December 31,
2019 |
Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Deferred compensation assets | $ | 11.3 | $ | 11.3 | $ | — | $ | — | |||||||||||||||
Foreign currency contracts | 7.7 | — | 7.7 | — | |||||||||||||||||||
Commodity call options | 0.1 | — | 0.1 | — | |||||||||||||||||||
$ | 19.1 | $ | 11.3 | $ | 7.8 | $ | — | ||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Contingent consideration | $ | 3.3 | $ | — | $ | — | $ | 3.3 | |||||||||||||||
Deferred compensation liabilities | 12.8 | 12.8 | — | — | |||||||||||||||||||
Cross-currency swap | 1.4 | — | 1.4 | — | |||||||||||||||||||
Foreign currency contracts | 0.3 | — | 0.3 | — | |||||||||||||||||||
$ | 17.8 | $ | 12.8 | $ | 1.7 | $ | 3.3 |
($ in millions) | (Losses) gains on derivatives | Change in equity affiliate investment AOCI | Defined benefit pension and other postretirement plans | Foreign currency translation | Total | ||||||||||||||||||||||||
Balance, December 31, 2018 | $ | (0.4) | $ | 0.4 | $ | (40.4) | $ | (113.8) | $ | (154.2) | |||||||||||||||||||
Other comprehensive income (loss) before reclassifications | 5.4 | — | (1.9) | 4.9 | 8.4 | ||||||||||||||||||||||||
Amounts reclassified out | (5.8) | — | 2.0 | — | (3.8) | ||||||||||||||||||||||||
Other comprehensive (loss) income, net of tax | (0.4) | — | 0.1 | 4.9 | 4.6 | ||||||||||||||||||||||||
Balance, December 31, 2019 | (0.8) | 0.4 | (40.3) | (108.9) | (149.6) | ||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | 2.8 | 0.2 | (2.5) | 40.1 | 40.6 | ||||||||||||||||||||||||
Amounts reclassified out | (3.9) | — | 2.3 | — | (1.6) | ||||||||||||||||||||||||
Other comprehensive (loss) income, net of tax | (1.1) | 0.2 | (0.2) | 40.1 | 39.0 | ||||||||||||||||||||||||
Balance, December 31, 2020 | $ | (1.9) | $ | 0.6 | $ | (40.5) | $ | (68.8) | $ | (110.6) |
Detail of components | 2020 | 2019 | Location on Statement of Income | |||||||||||||||||
Gains (losses) on derivatives: | ||||||||||||||||||||
Foreign currency contracts | $ | (0.2) | $ | 1.0 | Net sales | |||||||||||||||
Foreign currency contracts | 0.1 | 1.0 | Cost of goods and services sold | |||||||||||||||||
Foreign currency contracts | 5.9 | 6.9 | Other expense (income) | |||||||||||||||||
Forward treasury locks | (0.4) | (0.5) | Interest expense | |||||||||||||||||
Total before tax | 5.4 | 8.4 | ||||||||||||||||||
Tax (expense) benefit | (1.5) | (2.6) | ||||||||||||||||||
Net of tax | $ | 3.9 | $ | 5.8 | ||||||||||||||||
Amortization of defined benefit pension and other postretirement plans: | ||||||||||||||||||||
Prior service credit | 0.6 | 0.6 | (a) | |||||||||||||||||
Actuarial gains (losses) | (0.1) | 0.2 | (a) | |||||||||||||||||
Settlements | (3.7) | (3.5) | (a) | |||||||||||||||||
Total before tax | (3.2) | (2.7) | ||||||||||||||||||
Tax benefit (expense) | 0.9 | 0.7 | ||||||||||||||||||
Net of tax | $ | (2.3) | $ | (2.0) | ||||||||||||||||
Total reclassifications for the period, net of tax | $ | 1.6 | $ | 3.8 |
($ in millions) | 2020 | 2019 | 2018 | ||||||||||||||
Stock option and appreciation rights | $ | 10.2 | $ | 9.1 | $ | 8.6 | |||||||||||
Performance share units, stock-settled | 16.6 | 9.5 | 2.5 | ||||||||||||||
Performance share units, cash-settled | 0.4 | 0.1 | — | ||||||||||||||
Performance share units, dividend equivalents | 0.6 | 0.2 | 0.1 | ||||||||||||||
Employee stock purchase plan | 1.1 | 0.9 | 0.9 | ||||||||||||||
Deferred compensation plans and restricted share awards | 5.1 | 4.6 | 3.0 | ||||||||||||||
Total stock-based compensation expense | $ | 34.0 | $ | 24.4 | $ | 15.1 |
(in millions, except per share data) | 2020 | 2019 | 2018 | ||||||||||||||
Options outstanding, January 1 | 2.7 | 3.0 | 3.5 | ||||||||||||||
Granted | 0.2 | 0.3 | 0.5 | ||||||||||||||
Exercised | (0.5) | (0.6) | (1.0) | ||||||||||||||
Forfeited | — | — | — | ||||||||||||||
Options outstanding, December 31 | 2.4 | 2.7 | 3.0 | ||||||||||||||
Options exercisable, December 31 | 1.6 | 1.6 | 1.7 |
Weighted Average Exercise Price | 2020 | 2019 | 2018 | ||||||||||||||
Options outstanding, January 1 | $ | 67.02 | $ | 58.93 | $ | 48.76 | |||||||||||
Granted | 178.11 | 103.40 | 90.36 | ||||||||||||||
Exercised | 49.99 | 46.42 | 35.95 | ||||||||||||||
Forfeited | 103.51 | 92.71 | 75.32 | ||||||||||||||
Options outstanding, December 31 | $ | 81.37 | $ | 67.02 | $ | 58.93 | |||||||||||
Options exercisable, December 31 | $ | 62.42 | $ | 53.12 | $ | 45.32 |
2020 | 2019 | 2018 | |||||||||||||||
SARs outstanding, January 1 | 35,993 | 39,819 | 51,368 | ||||||||||||||
Granted | 3,272 | 3,364 | 3,480 | ||||||||||||||
Exercised | (11,261) | (6,790) | (14,629) | ||||||||||||||
Forfeited | (325) | (400) | (400) | ||||||||||||||
SARs outstanding, December 31 | 27,679 | 35,993 | 39,819 | ||||||||||||||
SARs exercisable, December 31 | 27,182 | 27,781 | 30,285 |
Weighted Average Exercise Price | 2020 | 2019 | 2018 | ||||||||||||||
SARs outstanding, January 1 | $ | 52.36 | $ | 46.48 | $ | 38.55 | |||||||||||
Granted | 190.97 | 102.51 | 89.64 | ||||||||||||||
Exercised | 35.37 | 42.08 | 28.45 | ||||||||||||||
Forfeited | 71.43 | 63.43 | 63.43 | ||||||||||||||
SARs outstanding, December 31 | $ | 75.43 | $ | 52.36 | $ | 46.48 | |||||||||||
SARs exercisable, December 31 | $ | 40.23 | $ | 40.73 | $ | 36.91 |
2020 | 2019 | 2018 | |||||||||||||||
Non-vested stock-settled PSU awards, January 1 | 264,622 | 296,037 | 341,944 | ||||||||||||||
Granted at target level | 53,659 | 84,309 | 102,307 | ||||||||||||||
Adjustments above/(below) target | (14,004) | (50,556) | (2,284) | ||||||||||||||
Vested and converted | (70,074) | (48,964) | (121,984) | ||||||||||||||
Forfeited | (11,404) | (16,204) | (23,946) | ||||||||||||||
Non-vested stock-settled PSU awards, December 31 | 222,799 | 264,622 | 296,037 | ||||||||||||||
Weighted Average Grant Date Fair Value | 2020 | 2019 | 2018 | ||||||||||||||
Non-vested stock-settled PSU awards, January 1 | $ | 92.80 | $ | 76.84 | $ | 64.38 | |||||||||||
Granted at target level | 177.31 | 103.40 | 90.45 | ||||||||||||||
Adjustments above/(below) target | 77.02 | 83.89 | 33.86 | ||||||||||||||
Vested and converted | 173.22 | 102.51 | 93.00 | ||||||||||||||
Forfeited | 104.43 | 69.09 | 68.65 | ||||||||||||||
Non-vested stock-settled PSU awards, December 31 | $ | 116.37 | $ | 92.80 | $ | 76.84 |
2020 | 2019 | 2018 | |||||||||||||||
Non-vested cash-settled PSU awards, January 1 | 1,981 | 1,592 | 1,972 | ||||||||||||||
Granted at target level | 732 | 806 | 560 | ||||||||||||||
Adjustments above/(below) target | (99) | (206) | (30) | ||||||||||||||
Vested and converted | (502) | (211) | (910) | ||||||||||||||
Forfeited | — | — | — | ||||||||||||||
Non-vested cash-settled PSU awards, December 31 | 2,112 | 1,981 | 1,592 |
Weighted Average Grant Date Fair Value | 2020 | 2019 | 2018 | ||||||||||||||
Non-vested cash-settled PSU awards, January 1 | $ | 93.28 | $ | 79.48 | $ | 92.25 | |||||||||||
Granted at target level | 190.71 | 102.51 | 89.64 | ||||||||||||||
Adjustments above/(below) target | 74.43 | 56.95 | 41.53 | ||||||||||||||
Vested and converted | 173.22 | 102.51 | 93.00 | ||||||||||||||
Forfeited | — | — | — | ||||||||||||||
Non-vested cash-settled PSU awards, December 31 | $ | 130.13 | $ | 93.28 | $ | 79.48 |
Pension benefits | Other retirement benefits | ||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||
Net periodic benefit cost: | |||||||||||||||||||||||||||||||||||
Service cost | $ | 1.5 | $ | 1.4 | $ | 10.8 | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Interest cost | 7.1 | 9.2 | 9.4 | 0.2 | 0.2 | 0.2 | |||||||||||||||||||||||||||||
Expected return on plan assets | (11.7) | (12.0) | (15.7) | — | — | — | |||||||||||||||||||||||||||||
Amortization of prior service credit | 0.1 | 0.1 | (1.3) | (0.7) | (0.7) | (0.7) | |||||||||||||||||||||||||||||
Amortization of actuarial loss (gain) | 2.0 | 2.1 | 3.8 | (1.9) | (2.3) | (2.4) | |||||||||||||||||||||||||||||
Settlement loss | 3.7 | 3.5 | — | — | — | — | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 2.7 | $ | 4.3 | $ | 7.0 | $ | (2.4) | $ | (2.8) | $ | (2.9) | |||||||||||||||||||||||
Other changes in plan assets and benefit obligations recognized in OCI, pre-tax: | |||||||||||||||||||||||||||||||||||
Net loss (gain) arising during period | $ | 1.8 | $ | 1.5 | $ | 3.5 | $ | (0.4) | $ | 0.1 | $ | (1.4) | |||||||||||||||||||||||
Prior service credit arising during period | — | — | 0.3 | — | — | — | |||||||||||||||||||||||||||||
Amortization of prior service credit | (0.1) | (0.1) | 1.3 | 0.7 | 0.7 | 0.7 | |||||||||||||||||||||||||||||
Amortization of actuarial (loss) gain | (2.0) | (2.1) | (3.8) | 1.9 | 2.3 | 2.4 | |||||||||||||||||||||||||||||
Settlement loss | (3.7) | (3.5) | — | — | — | — | |||||||||||||||||||||||||||||
Foreign currency translation | 1.8 | 0.6 | (1.2) | — | — | — | |||||||||||||||||||||||||||||
Total recognized in OCI | $ | (2.2) | $ | (3.6) | $ | 0.1 | $ | 2.2 | $ | 3.1 | $ | 1.7 | |||||||||||||||||||||||
Total recognized in net periodic benefit cost and OCI | $ | 0.5 | $ | 0.7 | $ | 7.1 | $ | (0.2) | $ | 0.3 | $ | (1.2) |
Pension benefits | Other retirement benefits | ||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||
U.S. plans | $ | 1.2 | $ | 2.4 | $ | 4.8 | $ | (2.4) | $ | (2.8) | $ | (2.9) | |||||||||||||||||||||||
International plans | 1.5 | 1.9 | 2.2 | — | — | — | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 2.7 | $ | 4.3 | $ | 7.0 | $ | (2.4) | $ | (2.8) | $ | (2.9) |
Pension benefits | Other retirement benefits | ||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation, January 1 | $ | (287.9) | $ | (267.0) | $ | (6.6) | $ | (6.0) | |||||||||||||||
Service cost | (1.5) | (1.4) | — | — | |||||||||||||||||||
Interest cost | (7.1) | (9.2) | (0.2) | (0.2) | |||||||||||||||||||
Participants’ contributions | (0.3) | (0.3) | (0.1) | (0.7) | |||||||||||||||||||
Actuarial (loss) gain | (22.1) | (30.8) | 0.5 | (0.2) | |||||||||||||||||||
Benefits paid | 6.2 | 6.8 | 0.3 | 0.5 | |||||||||||||||||||
Curtailment gain | 0.1 | — | — | — | |||||||||||||||||||
Settlement loss | 18.6 | 15.0 | — | — | |||||||||||||||||||
Foreign currency translation | (4.9) | (1.0) | — | — | |||||||||||||||||||
Benefit obligation, December 31 | $ | (298.9) | $ | (287.9) | $ | (6.1) | $ | (6.6) | |||||||||||||||
Change in plan assets: | |||||||||||||||||||||||
Fair value of assets, January 1 | $ | 244.1 | $ | 214.5 | $ | — | $ | — | |||||||||||||||
Actual return on plan assets | 31.8 | 41.3 | — | — | |||||||||||||||||||
Employer contribution | 4.8 | 8.0 | 0.2 | (0.2) | |||||||||||||||||||
Participants’ contributions | 0.3 | 0.3 | 0.1 | 0.7 | |||||||||||||||||||
Benefits paid | (6.0) | (6.3) | (0.3) | (0.5) | |||||||||||||||||||
Settlement loss | (18.6) | (15.0) | — | — | |||||||||||||||||||
Foreign currency translation | 1.7 | 1.3 | — | — | |||||||||||||||||||
Fair value of assets, December 31 | $ | 258.1 | $ | 244.1 | $ | — | $ | — | |||||||||||||||
Funded status at end of year | $ | (40.8) | $ | (43.8) | $ | (6.1) | $ | (6.6) |
Pension benefits | Other retirement benefits | ||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Noncurrent assets | $ | 12.9 | $ | 4.3 | $ | — | $ | — | |||||||||||||||
Current liabilities | (1.6) | (1.5) | (0.7) | (0.7) | |||||||||||||||||||
Noncurrent liabilities | (52.1) | (46.6) | (5.4) | (5.9) | |||||||||||||||||||
$ | (40.8) | $ | (43.8) | $ | (6.1) | $ | (6.6) |
Pension benefits | Other retirement benefits | ||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Net actuarial loss (gain) | $ | 67.3 | $ | 69.4 | $ | (5.4) | $ | (7.0) | |||||||||||||||
Prior service cost (credit) | 0.8 | 0.8 | (0.4) | (1.0) | |||||||||||||||||||
Total | $ | 68.1 | $ | 70.2 | $ | (5.8) | $ | (8.0) |
($ in millions) | Domestic | International | Total | ||||||||||||||
2021 | $ | 21.9 | $ | 2.4 | $ | 24.3 | |||||||||||
2022 | 14.8 | 3.0 | 17.8 | ||||||||||||||
2023 | 14.4 | 2.5 | 16.9 | ||||||||||||||
2024 | 14.0 | 3.2 | 17.2 | ||||||||||||||
2025 | 13.2 | 3.9 | 17.1 | ||||||||||||||
2026 to 2030 | 54.5 | 20.2 | 74.7 | ||||||||||||||
$ | 132.8 | $ | 35.2 | $ | 168.0 |
Pension benefits | Other retirement benefits | ||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Discount rate | 2.61 | % | 2.70 | % | 2.91 | % | 3.20 | % | 4.20 | % | 3.45 | % | |||||||||||||||||||||||
Rate of compensation increase | 2.33 | % | 2.41 | % | 4.00 | % | — | — | — | ||||||||||||||||||||||||||
Expected long-term rate of return on assets | 5.10 | % | 5.54 | % | 6.71 | % | — | — | — |
Pension benefits | Other retirement benefits | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Discount rate | 2.10 | % | 2.79 | % | 2.30 | % | 4.20 | % | |||||||||||||||
Rate of compensation increase | 2.58 | % | 2.49 | % | — | — |
2020 | 2019 | 2018 | |||||||||||||||
U.S. plans | 3.30 | % | 3.30 | % | 3.30 | % | |||||||||||
International plans | 0.52 | % | 0.85 | % | 0.41 | % |
2020 | 2019 | ||||||||||
Equity securities | 34 | % | 33 | % | |||||||
Debt securities | 64 | % | 65 | % | |||||||
Other | 2 | % | 2 | % | |||||||
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) | 2020 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Cash | $ | 1.5 | $ | 1.5 | $ | — | $ | — | |||||||||||||||
Equity securities: | |||||||||||||||||||||||
International mutual funds | 20.6 | — | 20.6 | — | |||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
Mutual funds | 18.7 | — | 18.7 | — | |||||||||||||||||||
Other mutual funds | 2.9 | — | 2.9 | — | |||||||||||||||||||
Pension plan assets in the fair value hierarchy | $ | 43.7 | $ | 1.5 | $ | 42.2 | $ | — | |||||||||||||||
Pension plan assets measured at NAV | 214.4 | ||||||||||||||||||||||
Pension plan assets at fair value | $ | 258.1 |
Balance at | |||||||||||||||||||||||
December 31, | Basis of Fair Value Measurements | ||||||||||||||||||||||
($ in millions) | 2019 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Cash | $ | 2.2 | $ | 2.2 | $ | — | $ | — | |||||||||||||||
Equity securities: | |||||||||||||||||||||||
International mutual funds | 15.5 | 1.3 | 14.2 | — | |||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
Mutual funds | 21.7 | 3.8 | 17.9 | — | |||||||||||||||||||
Pension plan assets in the fair value hierarchy | $ | 39.4 | $ | 7.3 | $ | 32.1 | $ | — | |||||||||||||||
Pension plan assets measured at NAV | 204.7 | ||||||||||||||||||||||
Pension plan assets at fair value | $ | 244.1 |
($ in millions) | 2020 | 2019 | 2018 | ||||||||||||||
Restructuring and related charges: | |||||||||||||||||
Severance and post-employment benefits | $ | 4.6 | $ | 2.6 | $ | 3.1 | |||||||||||
Asset-related charges | — | 0.3 | 2.2 | ||||||||||||||
Other charges | — | 2.0 | 3.8 | ||||||||||||||
Total restructuring and related charges | $ | 4.6 | $ | 4.9 | $ | 9.1 | |||||||||||
Fixed asset impairments and sale of equipment, net | 7.7 | 0.8 | 1.8 | ||||||||||||||
Argentina currency devaluation | — | 1.0 | 1.1 | ||||||||||||||
Brazil tax recovery | — | (4.7) | — | ||||||||||||||
Development and licensing income | (0.9) | (0.9) | (0.9) | ||||||||||||||
Contingent consideration | 1.2 | 2.1 | (2.6) | ||||||||||||||
Foreign exchange transaction gains | (1.5) | (4.6) | (5.5) | ||||||||||||||
Other items | 0.9 | (1.1) | (1.1) | ||||||||||||||
Total other expense (income) | $ | 12.0 | $ | (2.5) | $ | 1.9 |
($ in millions) | Severance and benefits | Asset-related charges | Other charges | Total | |||||||||||||||||||
Balance, December 31, 2019 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Charges | 4.6 | — | — | 4.6 | |||||||||||||||||||
Cash payments | — | — | — | — | |||||||||||||||||||
Balance, December 31, 2020 | $ | 4.6 | $ | — | $ | — | $ | 4.6 |
($ in millions) | Severance and benefits | Asset-related charges | Other charges | Total | |||||||||||||||||||
Balance, December 31, 2018 | $ | 2.3 | $ | — | $ | — | $ | 2.3 | |||||||||||||||
Charges | 2.6 | 0.3 | 2.0 | 4.9 | |||||||||||||||||||
Cash payments | (3.5) | — | — | (3.5) | |||||||||||||||||||
Non-cash asset write-downs | — | (0.3) | (2.0) | (2.3) | |||||||||||||||||||
Balance, December 31, 2019 | $ | 1.4 | $ | — | $ | — | $ | 1.4 | |||||||||||||||
Cash payments | (1.3) | — | — | (1.3) | |||||||||||||||||||
Balance, December 31, 2020 | $ | 0.1 | $ | — | $ | — | $ | 0.1 |
($ in millions) | 2020 | 2019 | |||||||||
Balance at January 1 | $ | 5.0 | $ | 3.9 | |||||||
Increase due to current year position | 4.9 | 1.6 | |||||||||
Increase due to prior year position | 0.6 | — | |||||||||
Reduction for expiration of statute of limitations/audits | (0.1) | (0.5) | |||||||||
Balance at December 31 | $ | 10.4 | $ | 5.0 |
($ in millions) | 2020 | 2019 | 2018 | ||||||||||||||
U.S. operations | $ | 227.0 | $ | 161.2 | $ | 132.9 | |||||||||||
International operations | 174.3 | 130.6 | 107.8 | ||||||||||||||
Total income before income taxes | $ | 401.3 | $ | 291.8 | $ | 240.7 |
($ in millions) | 2020 | 2019 | 2018 | ||||||||||||||
Current: | |||||||||||||||||
Federal | $ | 28.9 | $ | 10.8 | $ | 2.1 | |||||||||||
State | 3.4 | 2.4 | 3.3 | ||||||||||||||
International | 46.0 | 30.5 | 35.1 | ||||||||||||||
Current income tax provision | 78.3 | 43.7 | 40.5 | ||||||||||||||
Deferred: | |||||||||||||||||
Federal and state | 0.2 | 10.3 | 1.4 | ||||||||||||||
International | (6.0) | 5.0 | (0.5) | ||||||||||||||
Deferred income tax provision | (5.8) | 15.3 | 0.9 | ||||||||||||||
Income tax expense | $ | 72.5 | $ | 59.0 | $ | 41.4 |
($ in millions) | 2020 | 2019 | |||||||||
Deferred tax assets | |||||||||||
Net operating loss carryforwards | $ | 21.4 | $ | 21.9 | |||||||
Tax credit carryforwards | 2.0 | 2.8 | |||||||||
Restructuring and impairment charges | 0.4 | — | |||||||||
Pension and deferred compensation | 35.3 | 25.6 | |||||||||
Other | 10.6 | 9.2 | |||||||||
Valuation allowance | (15.1) | (15.9) | |||||||||
Total deferred tax assets | 54.6 | 43.6 | |||||||||
Deferred tax liabilities: | |||||||||||
Property, plant, and equipment | 42.1 | 37.9 | |||||||||
Tax on undistributed earnings of subsidiaries | 6.5 | 6.3 | |||||||||
Other | 0.4 | 0.9 | |||||||||
Total deferred tax liabilities | 49.0 | 45.1 | |||||||||
Net deferred tax (liability) asset | $ | 5.6 | $ | (1.5) |
2020 | 2019 | 2018 | |||||||||||||||
U.S. federal corporate tax rate | 21.0 | % | 21.0 | % | 21.0 | % | |||||||||||
Tax on international operations other than U.S. tax rate | 1.2 | 2.7 | 4.8 | ||||||||||||||
Adjustments to reserves for unrecognized tax benefits | 1.4 | 0.4 | 0.2 | ||||||||||||||
U.S. tax on international earnings, net of foreign tax credits | 0.4 | 0.4 | (0.2) | ||||||||||||||
Foreign-Derived Intangible Income Deductions (FDII) | (1.1) | (0.6) | (0.4) | ||||||||||||||
State income taxes, net of federal tax effect | 1.2 | 1.4 | 2.3 | ||||||||||||||
U.S. research and development credits | (0.7) | (1.0) | (0.9) | ||||||||||||||
Excess tax benefits on share-based payments | (5.2) | (3.5) | (6.0) | ||||||||||||||
Impact of 2017 Tax Act | — | — | (2.9) | ||||||||||||||
Tax on undistributed earnings of subsidiaries | 0.1 | (0.2) | (1.3) | ||||||||||||||
Other | (0.2) | (0.4) | 0.6 | ||||||||||||||
Effective tax rate | 18.1 | % | 20.2 | % | 17.2 | % |
($ in millions) | 2020 | 2019 | 2018 | ||||||||||||||
Net sales: | |||||||||||||||||
Proprietary Products | $ | 1,648.6 | $ | 1,398.6 | $ | 1,308.6 | |||||||||||
Contract-Manufactured Products | 498.6 | 441.5 | 409.1 | ||||||||||||||
Intersegment sales elimination | (0.3) | (0.2) | (0.3) | ||||||||||||||
Consolidated net sales | $ | 2,146.9 | $ | 1,839.9 | $ | 1,717.4 |
Net Sales | Long-Lived Assets | ||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2018 | 2020 | 2019 | ||||||||||||||||||||||||
United States | $ | 975.6 | $ | 814.7 | $ | 766.1 | $ | 407.8 | $ | 364.7 | |||||||||||||||||||
Germany | 282.1 | 236.3 | 235.9 | 112.0 | 105.5 | ||||||||||||||||||||||||
Ireland | 226.0 | 173.8 | 138.1 | 197.6 | 176.6 | ||||||||||||||||||||||||
France | 172.7 | 150.6 | 145.0 | 76.0 | 53.8 | ||||||||||||||||||||||||
Other European countries | 236.8 | 251.1 | 230.5 | 66.8 | 59.7 | ||||||||||||||||||||||||
Other | 253.7 | 213.4 | 201.8 | 151.3 | 149.1 | ||||||||||||||||||||||||
$ | 2,146.9 | $ | 1,839.9 | $ | 1,717.4 | $ | 1,011.5 | $ | 909.4 |
($ in millions) | |||||||||||
Assets | 2020 | 2019 | |||||||||
Proprietary Products | $ | 1,798.3 | $ | 1,480.6 | |||||||
Contract-Manufactured Products | 411.6 | 386.0 | |||||||||
Corporate and Unallocated | 583.9 | 474.8 | |||||||||
Total consolidated | $ | 2,793.8 | $ | 2,341.4 |
($ in millions) | |||||||||||||||||
Depreciation and Amortization | 2020 | 2019 | 2018 | ||||||||||||||
Proprietary Products | $ | 84.6 | $ | 82.2 | $ | 83.9 | |||||||||||
Contract-Manufactured Products | 20.4 | 17.9 | 17.2 | ||||||||||||||
Corporate and Unallocated | 4.1 | 3.3 | 3.3 | ||||||||||||||
Total consolidated | $ | 109.1 | $ | 103.4 | $ | 104.4 | |||||||||||
($ in millions) | |||||||||||||||||
Capital Expenditures | 2020 | 2019 | 2018 | ||||||||||||||
Proprietary Products | $ | 139.5 | $ | 88.7 | $ | 79.1 | |||||||||||
Contract-Manufactured Products | 25.0 | 36.1 | 24.3 | ||||||||||||||
Corporate and Unallocated | 9.9 | 1.6 | 1.3 | ||||||||||||||
Total consolidated | $ | 174.4 | $ | 126.4 | $ | 104.7 |
($ in millions, except per share data) |
First
Quarter
(1)
|
Second
Quarter
(2)
|
Third
Quarter
(3)
|
Fourth
Quarter
(4)
|
Full Year | ||||||||||||||||||||||||
2020 | |||||||||||||||||||||||||||||
Net sales | $ | 491.5 | $ | 527.2 | $ | 548.0 | $ | 580.2 | $ | 2,146.9 | |||||||||||||||||||
Gross profit | 167.0 | 195.1 | 194.6 | 211.1 | 767.8 | ||||||||||||||||||||||||
Net income | 74.3 | 91.2 | 82.3 | 98.4 | 346.2 | ||||||||||||||||||||||||
Net income per share: | |||||||||||||||||||||||||||||
Basic | $ | 1.01 | $ | 1.24 | $ | 1.11 | $ | 1.32 | $ | 4.68 | |||||||||||||||||||
Diluted | $ | 0.99 | $ | 1.21 | $ | 1.09 | $ | 1.29 | $ | 4.57 | |||||||||||||||||||
2019 | |||||||||||||||||||||||||||||
Net sales | $ | 443.5 | $ | 469.7 | $ | 456.1 | $ | 470.6 | $ | 1,839.9 | |||||||||||||||||||
Gross profit | 146.8 | 157.9 | 147.8 | 153.2 | 605.7 | ||||||||||||||||||||||||
Net income | 55.4 | 66.1 | 56.3 | 63.9 | 241.7 | ||||||||||||||||||||||||
Net income per share: | |||||||||||||||||||||||||||||
Basic | $ | 0.75 | $ | 0.90 | $ | 0.76 | $ | 0.86 | $ | 3.27 | |||||||||||||||||||
Diluted | $ | 0.73 | $ | 0.88 | $ | 0.75 | $ | 0.84 | $ | 3.21 |
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 | 2,889,524 |
(1)
|
$ | 81.3 |
(2)
|
6,555,129 |
(3)
|
|||||||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||||||||||
Total | 2,889,524 | 81.3 | 6,555,129 |
($ in millions) |
Balance at
beginning of
period
|
Charged to costs and expenses (1)
|
Deductions (2) |
Balance at
end of
period
|
||||||||||
For the year ended December 31, 2020 | ||||||||||||||
Allowances deducted from assets: | ||||||||||||||
Deferred tax asset valuation allowance | $ | 15.9 | $ | — | $ | (0.8) | $ | 15.1 | ||||||
Allowance for doubtful accounts | 0.5 | 0.7 | (0.1) | 1.1 | ||||||||||
Total allowances deducted from assets | $ | 16.4 | $ | 0.7 | $ | (0.9) | $ | 16.2 | ||||||
For the year ended December 31, 2019 | ||||||||||||||
Allowances deducted from assets: | ||||||||||||||
Deferred tax asset valuation allowance | $ | 16.0 | $ | — | $ | (0.1) | $ | 15.9 | ||||||
Allowance for doubtful accounts | 2.0 | 0.1 | (1.6) | 0.5 | ||||||||||
Total allowances deducted from assets | $ | 18.0 | $ | 0.1 | $ | (1.7) | $ | 16.4 | ||||||
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 | ||||||
Signature | Title | Date | ||||||
/s/ Eric M. Green | Director, President and Chief Executive Officer | February 23, 2021 | ||||||
Eric M. Green | (Principal Executive Officer) | |||||||
/s/ Bernard J. Birkett | Senior Vice President and Chief Financial Officer | February 23, 2021 | ||||||
Bernard J. Birkett | (Principal Financial Officer) | |||||||
/s/ Chad R. Winters | Vice President, Chief Accounting Officer and Corporate Controller | February 23, 2021 | ||||||
Chad R. Winters | (Principal Accounting Officer) | |||||||
/s/ Mark A. Buthman | Director | February 23, 2021 | ||||||
Mark A. Buthman | ||||||||
/s/ William F. Feehery, Ph.D. | Director | February 23, 2021 | ||||||
William F. Feehery, Ph.D. | ||||||||
/s/ Robert F. Friel | Director | February 23, 2021 | ||||||
Robert F. Friel | ||||||||
/s/ Thomas W. Hofmann | Director | February 23, 2021 | ||||||
Thomas W. Hofmann | ||||||||
/s/ Paula A. Johnson, M.D., MPH | Director | February 23, 2021 | ||||||
Paula A. Johnson, M.D., MPH | ||||||||
/s/ Deborah L.V. Keller | Director | February 23, 2021 | ||||||
Deborah L.V. Keller | ||||||||
/s/ Myla P. Lai-Goldman, M.D. | Director | February 23, 2021 | ||||||
Myla P. Lai-Goldman, M.D. | ||||||||
/s/ Douglas A. Michels | Director | February 23, 2021 | ||||||
Douglas A. Michels | ||||||||
/s/ Paolo Pucci | Director | February 23, 2021 | ||||||
Paolo Pucci | ||||||||
/s/ Patrick J. Zenner | Director and Chairman of the Board | February 23, 2021 | ||||||
Patrick J. Zenner |
Exhibit Number | Description | ||||
3.1 | |||||
3.2 | |||||
4.1 | |||||
4.2 | |||||
4.3 | |||||
4.4 | |||||
4.5 (1)
|
Instruments defining the rights of holders of long-term debt securities of West and its subsidiaries constituting less than 10% of West's total assets have been omitted. | ||||
10.1 | |||||
10.2 | |||||
10.3 | |||||
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)
|
Exhibit Number | Description | ||||
10.13 (2)
|
|||||
10.14 (2)
|
|||||
10.15 (2)
|
|||||
10.16 (2)
|
|||||
10.17 (2)
|
|||||
10.18 (2)
|
|||||
10.19 (2)
|
|||||
10.20 (2)
|
|||||
10.21 (2)
|
|||||
10.22 (2)
|
|||||
10.23 (2)
|
|||||
10.24 (2)
|
|||||
10.25 (2)
|
|||||
10.26 | |||||
10.27 (2)
|
|||||
10.28 (3)
|
|||||
10.29 (3)
|
|||||
10.30 (3)
|
|||||
10.31 (3)
|
Exhibit Number | Description | ||||
10.32 (3)
|
|||||
10.33 (3)
|
|||||
10.34 (4)
|
|||||
10.35 (4)
|
|||||
21 | |||||
23 | |||||
31.1 | |||||
31.2 | |||||
32.1* | |||||
32.2* | |||||
101.INS | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
104* | Inline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline XBRL Document Set. |
State/ Country of Incorporation
|
Stock Ownership
|
||||||||||
West Pharmaceutical Services, Inc. | Pennsylvania | Parent Co. | |||||||||
Tech Group Europe Limited (dba West) | Ireland | 100.0 | |||||||||
Tech Group Grand Rapids, Inc. (dba West) | Delaware | 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 Ireland, Ltd. | Ireland | 100.0 | |||||||||
West Pharmaceutical Services Argentina S.A. | Argentina | 100.0 | |||||||||
West Pharmaceutical Services Asia, Ltd. | Taiwan | 100.0 | |||||||||
West Pharmaceutical Services Australia Pty. Ltd. | Australia | 100.0 | |||||||||
West Pharmaceutical Services AZ, Inc. | Arizona | 100.0 | |||||||||
West Pharmaceutical Services Beograd d.o.o. | Serbia | 100.0 | |||||||||
West Pharmaceutical Services Brasil Ltda. | Brazil | 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.S. | France | 99.9 | |||||||||
West Pharmaceutical Services Group Limited | England | 100.0 | |||||||||
West Pharmaceutical Services Hispania S.A. | Spain | 100.0 | |||||||||
West Pharmaceutical Services Holding II GmbH | Germany | 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 Ireland North, Ltd. | Ireland | 100.0 | |||||||||
West Pharmaceutical Services Holding Ireland South, Ltd. | Ireland | 100.0 | |||||||||
West Pharmaceutical Services Holding Japan, GK | Japan | 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 Switzerland GmbH | Switzerland | 100.0 | |||||||||
West Pharmaceutical Services Venezuela C.A. | Venezuela | 100.0 | |||||||||
West Pharmaceutical Services Verwaltungs GmbH | Germany | 100.0 |