--12-312020Q30000896622false00008966222020-01-012020-09-30xbrli:shares00008966222020-10-23iso4217:USD00008966222020-07-012020-09-3000008966222019-07-012019-09-3000008966222019-01-012019-09-30iso4217:USDxbrli:shares00008966222020-09-3000008966222019-12-310000896622us-gaap:RetainedEarningsMember2019-06-300000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300000896622us-gaap:CommonStockMember2019-06-300000896622us-gaap:TreasuryStockMember2019-06-300000896622us-gaap:AdditionalPaidInCapitalMember2019-06-300000896622us-gaap:NoncontrollingInterestMember2019-06-3000008966222019-06-300000896622us-gaap:RetainedEarningsMember2019-07-012019-09-300000896622us-gaap:NoncontrollingInterestMember2019-07-012019-09-300000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300000896622us-gaap:CommonStockMember2019-07-012019-09-300000896622us-gaap:TreasuryStockMember2019-07-012019-09-300000896622us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300000896622us-gaap:RetainedEarningsMember2019-09-300000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-300000896622us-gaap:CommonStockMember2019-09-300000896622us-gaap:TreasuryStockMember2019-09-300000896622us-gaap:AdditionalPaidInCapitalMember2019-09-300000896622us-gaap:NoncontrollingInterestMember2019-09-3000008966222019-09-300000896622us-gaap:RetainedEarningsMember2020-06-300000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300000896622us-gaap:CommonStockMember2020-06-300000896622us-gaap:TreasuryStockMember2020-06-300000896622us-gaap:AdditionalPaidInCapitalMember2020-06-300000896622us-gaap:NoncontrollingInterestMember2020-06-3000008966222020-06-300000896622us-gaap:RetainedEarningsMember2020-07-012020-09-300000896622us-gaap:NoncontrollingInterestMember2020-07-012020-09-300000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000896622us-gaap:CommonStockMember2020-07-012020-09-300000896622us-gaap:TreasuryStockMember2020-07-012020-09-300000896622us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300000896622us-gaap:RetainedEarningsMember2020-09-300000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300000896622us-gaap:CommonStockMember2020-09-300000896622us-gaap:TreasuryStockMember2020-09-300000896622us-gaap:AdditionalPaidInCapitalMember2020-09-300000896622us-gaap:NoncontrollingInterestMember2020-09-300000896622us-gaap:RetainedEarningsMember2018-12-310000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310000896622us-gaap:CommonStockMember2018-12-310000896622us-gaap:TreasuryStockMember2018-12-310000896622us-gaap:AdditionalPaidInCapitalMember2018-12-310000896622us-gaap:NoncontrollingInterestMember2018-12-3100008966222018-12-310000896622us-gaap:RetainedEarningsMember2019-01-012019-09-300000896622us-gaap:NoncontrollingInterestMember2019-01-012019-09-300000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300000896622us-gaap:CommonStockMember2019-01-012019-09-300000896622us-gaap:TreasuryStockMember2019-01-012019-09-300000896622us-gaap:AdditionalPaidInCapitalMember2019-01-012019-09-300000896622us-gaap:RetainedEarningsMember2019-12-310000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310000896622us-gaap:CommonStockMember2019-12-310000896622us-gaap:TreasuryStockMember2019-12-310000896622us-gaap:AdditionalPaidInCapitalMember2019-12-310000896622us-gaap:NoncontrollingInterestMember2019-12-310000896622us-gaap:RetainedEarningsMember2020-01-012020-09-300000896622us-gaap:NoncontrollingInterestMember2020-01-012020-09-300000896622us-gaap:RetainedEarningsMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310000896622us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310000896622us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000896622us-gaap:CommonStockMember2020-01-012020-09-300000896622us-gaap:TreasuryStockMember2020-01-012020-09-300000896622us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300000896622country:AR2020-04-012020-06-30xbrli:pure0000896622srt:MaximumMemberus-gaap:SalesRevenueNetMembercountry:ARus-gaap:GeographicConcentrationRiskMember2020-01-012020-09-300000896622srt:RestatementAdjustmentMemberus-gaap:AccountingStandardsUpdate201613Member2020-01-010000896622atr:BeautyAndHomeMembersrt:EuropeMember2020-07-012020-09-300000896622atr:BeautyAndHomeMembersrt:NorthAmericaMember2020-07-012020-09-300000896622srt:LatinAmericaMemberatr:BeautyAndHomeMember2020-07-012020-09-300000896622atr:BeautyAndHomeMembersrt:AsiaMember2020-07-012020-09-300000896622atr:BeautyAndHomeMember2020-07-012020-09-300000896622atr:PharmaMembersrt:EuropeMember2020-07-012020-09-300000896622atr:PharmaMembersrt:NorthAmericaMember2020-07-012020-09-300000896622atr:PharmaMembersrt:LatinAmericaMember2020-07-012020-09-300000896622atr:PharmaMembersrt:AsiaMember2020-07-012020-09-300000896622atr:PharmaMember2020-07-012020-09-300000896622us-gaap:FoodAndBeverageMembersrt:EuropeMember2020-07-012020-09-300000896622us-gaap:FoodAndBeverageMembersrt:NorthAmericaMember2020-07-012020-09-300000896622srt:LatinAmericaMemberus-gaap:FoodAndBeverageMember2020-07-012020-09-300000896622us-gaap:FoodAndBeverageMembersrt:AsiaMember2020-07-012020-09-300000896622us-gaap:FoodAndBeverageMember2020-07-012020-09-300000896622srt:EuropeMember2020-07-012020-09-300000896622srt:NorthAmericaMember2020-07-012020-09-300000896622srt:LatinAmericaMember2020-07-012020-09-300000896622srt:AsiaMember2020-07-012020-09-300000896622atr:BeautyAndHomeMembersrt:EuropeMember2019-07-012019-09-300000896622atr:BeautyAndHomeMembersrt:NorthAmericaMember2019-07-012019-09-300000896622srt:LatinAmericaMemberatr:BeautyAndHomeMember2019-07-012019-09-300000896622atr:BeautyAndHomeMembersrt:AsiaMember2019-07-012019-09-300000896622atr:BeautyAndHomeMember2019-07-012019-09-300000896622atr:PharmaMembersrt:EuropeMember2019-07-012019-09-300000896622atr:PharmaMembersrt:NorthAmericaMember2019-07-012019-09-300000896622atr:PharmaMembersrt:LatinAmericaMember2019-07-012019-09-300000896622atr:PharmaMembersrt:AsiaMember2019-07-012019-09-300000896622atr:PharmaMember2019-07-012019-09-300000896622us-gaap:FoodAndBeverageMembersrt:EuropeMember2019-07-012019-09-300000896622us-gaap:FoodAndBeverageMembersrt:NorthAmericaMember2019-07-012019-09-300000896622srt:LatinAmericaMemberus-gaap:FoodAndBeverageMember2019-07-012019-09-300000896622us-gaap:FoodAndBeverageMembersrt:AsiaMember2019-07-012019-09-300000896622us-gaap:FoodAndBeverageMember2019-07-012019-09-300000896622srt:EuropeMember2019-07-012019-09-300000896622srt:NorthAmericaMember2019-07-012019-09-300000896622srt:LatinAmericaMember2019-07-012019-09-300000896622srt:AsiaMember2019-07-012019-09-300000896622atr:BeautyAndHomeMembersrt:EuropeMember2020-01-012020-09-300000896622atr:BeautyAndHomeMembersrt:NorthAmericaMember2020-01-012020-09-300000896622srt:LatinAmericaMemberatr:BeautyAndHomeMember2020-01-012020-09-300000896622atr:BeautyAndHomeMembersrt:AsiaMember2020-01-012020-09-300000896622atr:BeautyAndHomeMember2020-01-012020-09-300000896622atr:PharmaMembersrt:EuropeMember2020-01-012020-09-300000896622atr:PharmaMembersrt:NorthAmericaMember2020-01-012020-09-300000896622atr:PharmaMembersrt:LatinAmericaMember2020-01-012020-09-300000896622atr:PharmaMembersrt:AsiaMember2020-01-012020-09-300000896622atr:PharmaMember2020-01-012020-09-300000896622us-gaap:FoodAndBeverageMembersrt:EuropeMember2020-01-012020-09-300000896622us-gaap:FoodAndBeverageMembersrt:NorthAmericaMember2020-01-012020-09-300000896622srt:LatinAmericaMemberus-gaap:FoodAndBeverageMember2020-01-012020-09-300000896622us-gaap:FoodAndBeverageMembersrt:AsiaMember2020-01-012020-09-300000896622us-gaap:FoodAndBeverageMember2020-01-012020-09-300000896622srt:EuropeMember2020-01-012020-09-300000896622srt:NorthAmericaMember2020-01-012020-09-300000896622srt:LatinAmericaMember2020-01-012020-09-300000896622srt:AsiaMember2020-01-012020-09-300000896622atr:BeautyAndHomeMembersrt:EuropeMember2019-01-012019-09-300000896622atr:BeautyAndHomeMembersrt:NorthAmericaMember2019-01-012019-09-300000896622srt:LatinAmericaMemberatr:BeautyAndHomeMember2019-01-012019-09-300000896622atr:BeautyAndHomeMembersrt:AsiaMember2019-01-012019-09-300000896622atr:BeautyAndHomeMember2019-01-012019-09-300000896622atr:PharmaMembersrt:EuropeMember2019-01-012019-09-300000896622atr:PharmaMembersrt:NorthAmericaMember2019-01-012019-09-300000896622atr:PharmaMembersrt:LatinAmericaMember2019-01-012019-09-300000896622atr:PharmaMembersrt:AsiaMember2019-01-012019-09-300000896622atr:PharmaMember2019-01-012019-09-300000896622us-gaap:FoodAndBeverageMembersrt:EuropeMember2019-01-012019-09-300000896622us-gaap:FoodAndBeverageMembersrt:NorthAmericaMember2019-01-012019-09-300000896622srt:LatinAmericaMemberus-gaap:FoodAndBeverageMember2019-01-012019-09-300000896622us-gaap:FoodAndBeverageMembersrt:AsiaMember2019-01-012019-09-300000896622us-gaap:FoodAndBeverageMember2019-01-012019-09-300000896622srt:EuropeMember2019-01-012019-09-300000896622srt:NorthAmericaMember2019-01-012019-09-300000896622srt:LatinAmericaMember2019-01-012019-09-300000896622srt:AsiaMember2019-01-012019-09-300000896622atr:BeautyAndHomeMemberus-gaap:OperatingSegmentsMember2019-12-310000896622atr:PharmaMemberus-gaap:OperatingSegmentsMember2019-12-310000896622us-gaap:FoodAndBeverageMemberus-gaap:OperatingSegmentsMember2019-12-310000896622us-gaap:CorporateNonSegmentMember2019-12-310000896622atr:BeautyAndHomeMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000896622atr:PharmaMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000896622us-gaap:FoodAndBeverageMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000896622us-gaap:CorporateNonSegmentMember2020-01-012020-09-300000896622atr:BeautyAndHomeMemberus-gaap:OperatingSegmentsMember2020-09-300000896622atr:PharmaMemberus-gaap:OperatingSegmentsMember2020-09-300000896622us-gaap:FoodAndBeverageMemberus-gaap:OperatingSegmentsMember2020-09-300000896622us-gaap:CorporateNonSegmentMember2020-09-300000896622us-gaap:PatentsMembersrt:WeightedAverageMember2020-01-012020-09-300000896622us-gaap:PatentsMember2020-09-300000896622us-gaap:PatentsMember2019-12-310000896622us-gaap:PatentedTechnologyMembersrt:WeightedAverageMember2020-01-012020-09-300000896622us-gaap:PatentedTechnologyMember2020-09-300000896622us-gaap:PatentedTechnologyMember2019-12-310000896622us-gaap:CustomerRelationshipsMembersrt:WeightedAverageMember2020-01-012020-09-300000896622us-gaap:CustomerRelationshipsMember2020-09-300000896622us-gaap:CustomerRelationshipsMember2019-12-310000896622us-gaap:TrademarksAndTradeNamesMembersrt:WeightedAverageMember2020-01-012020-09-300000896622us-gaap:TrademarksAndTradeNamesMember2020-09-300000896622us-gaap:TrademarksAndTradeNamesMember2019-12-310000896622srt:WeightedAverageMemberatr:LicensingAgreementsAndOtherProductMember2020-01-012020-09-300000896622atr:LicensingAgreementsAndOtherProductMember2020-09-300000896622atr:LicensingAgreementsAndOtherProductMember2019-12-310000896622srt:WeightedAverageMember2020-01-012020-09-300000896622us-gaap:NotesPayableToBanksMember2020-01-012020-09-300000896622us-gaap:NotesPayableToBanksMember2020-09-300000896622us-gaap:NotesPayableToBanksMember2019-12-310000896622us-gaap:LineOfCreditMember2020-01-012020-09-300000896622us-gaap:LineOfCreditMember2020-09-300000896622us-gaap:LineOfCreditMember2019-12-310000896622srt:MinimumMemberus-gaap:BankOverdraftsMember2020-01-012020-09-300000896622srt:MaximumMemberus-gaap:BankOverdraftsMember2020-01-012020-09-300000896622us-gaap:BankOverdraftsMember2020-09-300000896622us-gaap:BankOverdraftsMember2019-12-31atr:tranche0000896622atr:FiveYearRevolvingCreditFacilityMaturingInJuly2022Member2020-01-012020-09-300000896622atr:FiveYearRevolvingCreditFacilityMaturingInJuly2022Member2020-09-30iso4217:EUR0000896622atr:FiveYearRevolvingCreditFacilityMaturingInJuly2022Member2019-12-310000896622us-gaap:NotesPayableOtherPayablesMembersrt:MinimumMember2020-09-300000896622us-gaap:NotesPayableOtherPayablesMembersrt:MaximumMember2020-09-300000896622us-gaap:NotesPayableOtherPayablesMember2020-09-300000896622atr:SeniorUnsecuredNotes3.2PercentDue2022Member2020-09-300000896622us-gaap:NotesPayableToBanksMember2020-09-300000896622atr:SeniorUnsecuredNotes3.5PercentDue2023Member2020-09-300000896622atr:SeniorUnsecuredNotes0.98DueIn2023Member2020-09-300000896622atr:SeniorUnsecuredNotes3.4PercentDue2024Member2020-09-300000896622atr:SeniorUnsecuredNotes3.5PercentDue2024Member2020-09-300000896622atr:SeniorUnsecuredNotes1.17DueIn2024Member2020-09-300000896622atr:SeniorUnsecuredNotes3.6PercentDue2025Member2020-09-300000896622atr:SeniorUnsecuredNotes3.6PercentDue2026Member2020-09-300000896622us-gaap:NotesPayableOtherPayablesMembersrt:MinimumMember2019-12-310000896622us-gaap:NotesPayableOtherPayablesMembersrt:MaximumMember2019-12-310000896622us-gaap:NotesPayableOtherPayablesMember2019-12-310000896622atr:SeniorUnsecuredNotes3.2PercentDue2022Member2019-12-310000896622us-gaap:NotesPayableToBanksMember2019-12-310000896622atr:SeniorUnsecuredNotes3.5PercentDue2023Member2019-12-310000896622atr:SeniorUnsecuredNotes0.98DueIn2023Member2019-12-310000896622atr:SeniorUnsecuredNotes3.4PercentDue2024Member2019-12-310000896622atr:SeniorUnsecuredNotes3.5PercentDue2024Member2019-12-310000896622atr:SeniorUnsecuredNotes1.17DueIn2024Member2019-12-310000896622atr:SeniorUnsecuredNotes3.6PercentDue2025Member2019-12-310000896622atr:SeniorUnsecuredNotes3.6PercentDue2026Member2019-12-310000896622srt:MaximumMember2020-09-300000896622srt:MinimumMember2020-09-300000896622country:US2020-07-012020-09-300000896622country:US2019-07-012019-09-300000896622us-gaap:ForeignPlanMember2020-07-012020-09-300000896622us-gaap:ForeignPlanMember2019-07-012019-09-300000896622country:US2020-01-012020-09-300000896622country:US2019-01-012019-09-300000896622us-gaap:ForeignPlanMember2020-01-012020-09-300000896622us-gaap:ForeignPlanMember2019-01-012019-09-300000896622us-gaap:AccumulatedTranslationAdjustmentMember2018-12-310000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2018-12-310000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2018-12-310000896622us-gaap:AccumulatedTranslationAdjustmentMember2019-01-012019-09-300000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-01-012019-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-01-012019-09-300000896622us-gaap:AccumulatedTranslationAdjustmentMember2019-09-300000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-09-300000896622us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-310000896622us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-09-300000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-01-012020-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-01-012020-09-300000896622us-gaap:AccumulatedTranslationAdjustmentMember2020-09-300000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-09-300000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:InterestRateSwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:InterestRateSwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:CurrencySwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:CurrencySwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300000896622us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000896622us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000896622us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:InterestRateSwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:InterestRateSwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:CurrencySwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:CurrencySwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000896622us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300000896622us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000896622us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300000896622us-gaap:NotesPayableToBanksMember2017-01-012017-12-310000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:CashFlowHedgingMember2017-12-310000896622us-gaap:NotesPayableToBanksMember2017-12-310000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:CashFlowHedgingMember2020-01-012020-09-300000896622us-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2020-09-300000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:CashFlowHedgingMember2020-09-300000896622us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-09-300000896622us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-09-300000896622us-gaap:ForeignExchangeContractMember2020-09-300000896622us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-300000896622us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310000896622us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-300000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-09-300000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000896622us-gaap:DesignatedAsHedgingInstrumentMember2020-09-300000896622us-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-09-300000896622us-gaap:DesignatedAsHedgingInstrumentMember2019-12-310000896622us-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000896622us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-300000896622us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310000896622us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-300000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-09-300000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310000896622us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000896622us-gaap:InterestExpenseMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2020-07-012020-09-300000896622us-gaap:InterestExpenseMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2019-07-012019-09-300000896622us-gaap:CurrencySwapMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherNonoperatingIncomeExpenseMember2020-07-012020-09-300000896622us-gaap:CurrencySwapMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherNonoperatingIncomeExpenseMember2019-07-012019-09-300000896622us-gaap:CashFlowHedgingMember2020-07-012020-09-300000896622us-gaap:CashFlowHedgingMember2019-07-012019-09-300000896622us-gaap:InterestExpenseMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2020-01-012020-09-300000896622us-gaap:InterestExpenseMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2019-01-012019-09-300000896622us-gaap:CurrencySwapMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherNonoperatingIncomeExpenseMember2020-01-012020-09-300000896622us-gaap:CurrencySwapMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherNonoperatingIncomeExpenseMember2019-01-012019-09-300000896622us-gaap:CashFlowHedgingMember2020-01-012020-09-300000896622us-gaap:CashFlowHedgingMember2019-01-012019-09-300000896622us-gaap:ForeignExchangeContractMember2020-07-012020-09-300000896622us-gaap:ForeignExchangeContractMember2019-07-012019-09-300000896622us-gaap:ForeignExchangeContractMember2020-01-012020-09-300000896622us-gaap:ForeignExchangeContractMember2019-01-012019-09-300000896622us-gaap:FairValueMeasurementsRecurringMember2020-09-300000896622us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-09-300000896622us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-09-300000896622us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-09-300000896622us-gaap:FairValueMeasurementsRecurringMember2019-12-310000896622us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2019-12-310000896622us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2019-12-310000896622us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2019-12-310000896622atr:FusionPackagingMember2020-09-300000896622atr:NobleMember2020-09-300000896622atr:GatewayAnalyticalMember2020-07-012020-09-300000896622atr:NobleMember2019-12-310000896622atr:GatewayAnalyticalMember2019-12-310000896622us-gaap:IndemnificationGuaranteeMember2019-12-310000896622us-gaap:IndemnificationGuaranteeMember2020-09-300000896622us-gaap:FireMembercountry:FR2020-09-300000896622country:BR2017-03-310000896622country:BR2019-01-012019-12-310000896622country:BR2020-01-012020-09-300000896622country:BR2020-09-300000896622country:BRus-gaap:ReductionInTaxesMember2019-03-310000896622us-gaap:CostOfSalesMembercountry:BRus-gaap:ReductionInTaxesMember2019-03-310000896622us-gaap:InterestIncomeMembercountry:BRus-gaap:ReductionInTaxesMember2019-03-310000896622country:BRus-gaap:ReductionInTaxesMember2020-06-300000896622us-gaap:CostOfSalesMembercountry:BRus-gaap:ReductionInTaxesMember2020-06-300000896622srt:MinimumMembercountry:BRus-gaap:ReductionInTaxesMember2020-09-300000896622srt:MaximumMembercountry:BRus-gaap:ReductionInTaxesMember2020-09-300000896622atr:TaxAssessmentMembercountry:BR2019-12-310000896622atr:TaxAssessmentInterestMembercountry:BR2019-12-310000896622atr:TaxAssessmentPenalitesMembercountry:BR2019-12-310000896622atr:TaxAssessmentMembercountry:BR2020-09-300000896622atr:StockRepurchaseProgramApril182019Member2019-04-180000896622atr:RestrictedStockUnitsTimeBasedMember2020-01-012020-09-300000896622atr:RestrictedStockUnitsPerformanceBasedMember2020-01-012020-09-300000896622atr:DirectorStockOptionPlansMemberus-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300000896622atr:RestrictedStockUnitsPerformanceBasedMember2019-01-012019-09-300000896622atr:RestrictedStockUnitsTimeBasedMember2019-12-310000896622atr:RestrictedStockUnitsPerformanceBasedMember2019-12-310000896622atr:RestrictedStockUnitsTimeBasedMember2020-09-300000896622atr:RestrictedStockUnitsPerformanceBasedMember2020-09-300000896622atr:DirectorStockOptionPlansMemberatr:RestrictedStockUnitsTimeBasedMember2020-01-012020-09-300000896622us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300000896622us-gaap:RestrictedStockUnitsRSUMember2019-01-012019-09-300000896622us-gaap:RestrictedStockUnitsRSUMember2020-09-300000896622us-gaap:EmployeeStockOptionMember2020-01-012020-09-300000896622us-gaap:EmployeeStockOptionMemberatr:SellingResearchAndDevelopmentAndAdministrativeExpensesMember2020-01-012020-09-300000896622us-gaap:EmployeeStockOptionMember2019-01-012019-09-300000896622us-gaap:EmployeeStockOptionMemberatr:SellingResearchAndDevelopmentAndAdministrativeExpensesMember2019-01-012019-09-300000896622atr:StockAwardPlansMemberus-gaap:EmployeeStockOptionMember2019-12-310000896622atr:DirectorStockOptionPlansMemberus-gaap:EmployeeStockOptionMember2019-12-310000896622atr:StockAwardPlansMemberus-gaap:EmployeeStockOptionMember2020-01-012020-09-300000896622atr:DirectorStockOptionPlansMemberus-gaap:EmployeeStockOptionMember2020-01-012020-09-300000896622atr:StockAwardPlansMemberus-gaap:EmployeeStockOptionMember2020-09-300000896622atr:DirectorStockOptionPlansMemberus-gaap:EmployeeStockOptionMember2020-09-300000896622atr:StockAwardPlansMemberus-gaap:EmployeeStockOptionMember2019-01-012019-09-300000896622atr:DirectorStockOptionPlansMemberus-gaap:EmployeeStockOptionMember2019-01-012019-09-300000896622us-gaap:EmployeeStockOptionMember2020-09-300000896622us-gaap:EmployeeStockOptionMember2020-07-012020-09-300000896622us-gaap:EmployeeStockOptionMember2019-07-012019-09-300000896622us-gaap:RestrictedStockUnitsRSUMember2020-07-012020-09-300000896622us-gaap:RestrictedStockUnitsRSUMember2019-07-012019-09-30atr:segment0000896622atr:BeautyAndHomeMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000896622atr:BeautyAndHomeMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000896622atr:BeautyAndHomeMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000896622atr:PharmaMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000896622atr:PharmaMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000896622atr:PharmaMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000896622us-gaap:FoodAndBeverageMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000896622us-gaap:FoodAndBeverageMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000896622us-gaap:FoodAndBeverageMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000896622us-gaap:OperatingSegmentsMember2020-07-012020-09-300000896622us-gaap:OperatingSegmentsMember2019-07-012019-09-300000896622us-gaap:OperatingSegmentsMember2020-01-012020-09-300000896622us-gaap:OperatingSegmentsMember2019-01-012019-09-300000896622atr:BeautyAndHomeMemberus-gaap:IntersegmentEliminationMember2020-07-012020-09-300000896622atr:BeautyAndHomeMemberus-gaap:IntersegmentEliminationMember2019-07-012019-09-300000896622atr:BeautyAndHomeMemberus-gaap:IntersegmentEliminationMember2020-01-012020-09-300000896622atr:BeautyAndHomeMemberus-gaap:IntersegmentEliminationMember2019-01-012019-09-300000896622atr:PharmaMemberus-gaap:IntersegmentEliminationMember2020-07-012020-09-300000896622atr:PharmaMemberus-gaap:IntersegmentEliminationMember2019-07-012019-09-300000896622atr:PharmaMemberus-gaap:IntersegmentEliminationMember2020-01-012020-09-300000896622atr:PharmaMemberus-gaap:IntersegmentEliminationMember2019-01-012019-09-300000896622us-gaap:FoodAndBeverageMemberus-gaap:IntersegmentEliminationMember2020-07-012020-09-300000896622us-gaap:FoodAndBeverageMemberus-gaap:IntersegmentEliminationMember2019-07-012019-09-300000896622us-gaap:FoodAndBeverageMemberus-gaap:IntersegmentEliminationMember2020-01-012020-09-300000896622us-gaap:FoodAndBeverageMemberus-gaap:IntersegmentEliminationMember2019-01-012019-09-300000896622us-gaap:IntersegmentEliminationMember2020-07-012020-09-300000896622us-gaap:IntersegmentEliminationMember2019-07-012019-09-300000896622us-gaap:IntersegmentEliminationMember2020-01-012020-09-300000896622us-gaap:IntersegmentEliminationMember2019-01-012019-09-300000896622us-gaap:CorporateAndOtherMember2020-07-012020-09-300000896622us-gaap:CorporateAndOtherMember2019-07-012019-09-300000896622us-gaap:CorporateAndOtherMember2020-01-012020-09-300000896622us-gaap:CorporateAndOtherMember2019-01-012019-09-300000896622atr:FusionPackagingMember2020-04-010000896622atr:FusionPackagingMember2020-04-012020-04-010000896622atr:FusionPackagingMember2020-07-012020-09-300000896622atr:FusionPackagingMember2020-01-012020-09-300000896622atr:NobleMember2019-10-310000896622atr:NobleMember2019-10-312019-10-310000896622atr:NobleMember2020-01-012020-03-310000896622atr:NanopharmMember2019-06-052019-06-050000896622atr:NanopharmMember2019-06-050000896622atr:GatewayAnalyticalMember2019-05-312019-05-310000896622atr:GatewayAnalyticalMember2019-05-310000896622atr:GatewayAnalyticalMember2020-04-012020-06-300000896622atr:Acquisitions2019Member2019-12-310000896622atr:FusionPackagingMember2019-12-310000896622atr:Acquisitions2019Member2020-09-300000896622us-gaap:PatentedTechnologyMemberatr:FusionPackagingMember2020-01-012020-09-300000896622us-gaap:PatentedTechnologyMemberatr:FusionPackagingMember2020-09-300000896622us-gaap:PatentedTechnologyMemberatr:Acquisitions2019Member2019-01-012019-12-310000896622us-gaap:PatentedTechnologyMemberatr:Acquisitions2019Member2019-12-310000896622us-gaap:CustomerRelationshipsMemberatr:FusionPackagingMember2020-01-012020-09-300000896622us-gaap:CustomerRelationshipsMemberatr:FusionPackagingMember2020-09-300000896622us-gaap:CustomerRelationshipsMemberatr:Acquisitions2019Member2019-01-012019-12-310000896622us-gaap:CustomerRelationshipsMemberatr:Acquisitions2019Member2019-12-310000896622us-gaap:TrademarksAndTradeNamesMemberatr:FusionPackagingMember2020-01-012020-09-300000896622us-gaap:TrademarksAndTradeNamesMemberatr:FusionPackagingMember2020-09-300000896622us-gaap:TrademarksAndTradeNamesMemberatr:Acquisitions2019Member2019-01-012019-12-310000896622us-gaap:TrademarksAndTradeNamesMemberatr:Acquisitions2019Member2019-12-310000896622atr:FusionPackagingMemberatr:LicensingAgreementsAndOtherProductMember2020-01-012020-09-300000896622atr:FusionPackagingMemberatr:LicensingAgreementsAndOtherProductMember2020-09-300000896622atr:Acquisitions2019Memberatr:LicensingAgreementsAndOtherProductMember2019-01-012019-12-310000896622atr:Acquisitions2019Memberatr:LicensingAgreementsAndOtherProductMember2019-12-310000896622atr:FusionPackagingMember2019-07-012019-09-300000896622atr:FusionPackagingMember2019-01-012019-09-300000896622atr:BapcoClosuresHoldingLimitedMember2019-08-020000896622atr:BapcoClosuresHoldingLimitedMember2019-08-022019-08-020000896622atr:BapcoClosuresHoldingLimitedMemberatr:BapcoClosuresHoldingLimitedMember2018-12-310000896622atr:BtyMember2020-09-300000896622atr:BtyMember2019-12-310000896622atr:SonmolMember2020-09-300000896622atr:SonmolMember2019-12-310000896622atr:KaliCareMember2020-09-300000896622atr:KaliCareMember2019-12-310000896622atr:DesotecGmbhMember2020-09-300000896622atr:DesotecGmbhMember2019-12-310000896622atr:SonmolMember2020-04-012020-04-010000896622atr:SonmolMember2020-04-010000896622atr:BtyMember2020-01-010000896622atr:BtyMemberus-gaap:CallOptionMembersrt:MinimumMember2020-01-010000896622srt:MaximumMemberatr:BtyMemberus-gaap:CallOptionMember2020-01-010000896622atr:BtyMember2020-01-012020-01-010000896622atr:KaliCareMember2017-01-012017-12-310000896622atr:KaliCareMember2017-12-310000896622atr:DesotecGmbhMember2009-01-012009-12-310000896622atr:DesotecGmbhMember2009-12-310000896622atr:LoopAndPurecycleMemberus-gaap:PreferredStockMember2019-08-012019-08-31atr:investment0000896622atr:LoopAndPurecycleMemberus-gaap:PreferredStockMember2019-08-310000896622atr:LoopAndPurecycleMemberus-gaap:PreferredStockMember2020-07-012020-09-300000896622atr:BusinessTransformationPlanMember2020-07-012020-09-300000896622atr:BusinessTransformationPlanMember2020-01-012020-09-300000896622atr:BusinessTransformationPlanMember2019-07-012019-09-300000896622atr:BusinessTransformationPlanMember2019-01-012019-09-300000896622atr:BusinessTransformationPlanMember2020-09-300000896622atr:BusinessTransformationPlanMember2018-01-012020-09-300000896622us-gaap:EmployeeSeveranceMember2019-12-310000896622us-gaap:EmployeeSeveranceMember2020-01-012020-09-300000896622us-gaap:EmployeeSeveranceMember2020-09-300000896622atr:OtherRestructuringCostsMember2019-12-310000896622atr:OtherRestructuringCostsMember2020-01-012020-09-300000896622atr:OtherRestructuringCostsMember2020-09-30
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
​
FORM 10-Q
​
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
​
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020
​
OR
​
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
​
FOR THE TRANSITION PERIOD FROM     TO      
COMMISSION FILE NUMBER 1-11846
ATR-20200930_G1.JPG
AptarGroup, Inc.​
Delaware ​ 36-3853103
(State of Incorporation) ​ (I.R.S. Employer Identification No.)
​
265 EXCHANGE DRIVE, SUITE 100, CRYSTAL LAKE, IL 60014
​
815-477-0424
​
Securities registered pursuant to Section 12(b) of the Act:​
Title of each class Trading symbol(s) Name of each exchange on which registered
Common Stock, $.01 par value ATR New York Stock Exchange
​
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ◻
​
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ◻
​
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
​
Large accelerated filer ☑
Accelerated filer

☐ Non-accelerated
filer 		☐ Smaller reporting
company 		☐ Emerging growth company ☐
​
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
​
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
​
The number of shares outstanding of common stock, as of October 23, 2020, was 64,722,498 shares.
​​
​

Table of Contents
​
AptarGroup, Inc.
​
Form 10-Q
​
Quarter Ended September 30, 2020
​
INDEX​
​
​
​ ​ ​
​
​ ​ ​
​
1
​ ​ ​
​
2
​ ​ ​
​
3
​ ​ ​
​
5
​ ​ ​
​
7
​ ​ ​
​
9
​ ​ ​
32
​ ​ ​
49
​ ​ ​
49
​ ​ ​
​
​ ​ ​
50
​ ​ ​
50
​ ​ ​
51
​ ​ ​
​
52
i
Table of Contents
PART I – FINANCIAL INFORMATION
​
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
​
AptarGroup, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
​
In thousands, except per share amounts
​ ​ ​ ​ ​
​ Three Months Ended
September 30, 		Nine Months Ended
September 30,
​ 2020 2019 2020 2019
​ ​ ​ ​ ​
Net Sales $ 759,153  $ 701,278  $ 2,180,011  $ 2,188,399 
Operating Expenses: ​ ​ ​ ​
Cost of sales (exclusive of depreciation and amortization shown below) 479,672  444,237  1,372,630  1,382,810 
Selling, research & development and administrative 121,850  111,559  371,407  346,526 
Depreciation and amortization 55,179  49,218  162,414  144,574 
Restructuring initiatives 3,415  6,019  15,585  17,286 
​ 660,116  611,033  1,922,036  1,891,196 
Operating Income 99,037  90,245  257,975  297,203 
​ ​ ​ ​ ​
Other (Expense) Income: ​ ​ ​ ​
Interest expense (8,851) (8,898) (25,973) (26,868)
Interest income 249  957  599  3,738 
Equity in results of affiliates (256) 238  (1,383) 152 
Miscellaneous, net (1,040) (269) (3,375) 148 
​ (9,898) (7,972) (30,132) (22,830)
​ ​ ​ ​ ​
Income before Income Taxes 89,139  82,273  227,843  274,373 
​ ​ ​ ​ ​
Provision for Income Taxes 25,404  25,504  66,998  80,684 
​ ​ ​ ​ ​
Net Income $ 63,735  $ 56,769  $ 160,845  $ 193,689 
​ ​ ​ ​ ​
Net Income Attributable to Noncontrolling Interests $ (19) $ (19) $ (37) $ (20)
​ ​ ​ ​ ​
Net Income Attributable to AptarGroup, Inc. $ 63,716  $ 56,750  $ 160,808  $ 193,669 
​ ​ ​ ​ ​
Net Income Attributable to AptarGroup, Inc. per Common Share: ​ ​ ​ ​
Basic $ 0.99  $ 0.89  $ 2.50  $ 3.05 
Diluted $ 0.95  $ 0.85  $ 2.42  $ 2.93 
​ ​ ​ ​ ​
Average Number of Shares Outstanding: ​ ​ ​ ​
Basic 64,562  64,010  64,278  63,485 
Diluted 66,922  66,702  66,483  66,163 
​ ​ ​ ​ ​
Dividends per Common Share $ 0.36  $ 0.36  $ 1.08  $ 1.06 

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.​
1
Table of Contents
​AptarGroup, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
​
In thousands ​ ​ ​ ​
​ ​ ​ ​ ​
​ Three Months Ended
September 30, 		Nine Months Ended
September 30,
​ 2020 2019 2020 2019
​ ​ ​ ​ ​
Net Income $ 63,735  $ 56,769  $ 160,845  $ 193,689 
Other Comprehensive Income (Loss): ​ ​ ​ ​
Foreign currency translation adjustments 42,425  (42,540) 19,292  (42,737)
Changes in derivative (losses) gains, net of tax (147) 279  603  (593)
Defined benefit pension plan, net of tax ​ ​ ​ ​
Amortization of prior service cost included in net income, net of tax 73  82  216  249 
Amortization of net loss included in net income, net of tax 1,490  631  4,423  1,901 
Total defined benefit pension plan, net of tax 1,563  713  4,639  2,150 
Total other comprehensive income (loss) 43,841  (41,548) 24,534  (41,180)
Comprehensive Income 107,576  15,221  185,379  152,509 
Comprehensive Income Attributable to Noncontrolling Interests (28) (7) (47) (8)
Comprehensive Income Attributable to AptarGroup, Inc. $ 107,548  $ 15,214  $ 185,332  $ 152,501 
​
See accompanying unaudited Notes to Condensed Consolidated Financial Statements.​
2
Table of Contents
AptarGroup, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
​
In thousands ​ ​
​ ​ ​
​ September 30, 2020 December 31, 2019
Assets ​ ​
Current Assets: ​ ​
Cash and equivalents $ 226,546  $ 241,970 
Accounts and notes receivable, less current expected credit loss ("CECL") of $7,440 in 2020 and $3,626 in 2019
593,418  558,428 
Inventories 375,177  375,795 
Prepaid and other 132,055  115,048 
​ 1,327,196  1,291,241 
Property, Plant and Equipment: ​ ​
Buildings and improvements 551,164  504,328 
Machinery and equipment 2,679,171  2,521,737 
​ 3,230,335  3,026,065 
Less: Accumulated depreciation (2,117,684) (1,963,520)
​ 1,112,651  1,062,545 
Land 27,248  25,133 
​ 1,139,899  1,087,678 
Other Assets: ​ ​
Investments in equity securities 46,995  8,396 
Goodwill 878,015  763,461 
Intangible assets, net 347,695  291,084 
Operating lease right-of-use assets 72,269  72,377 
Miscellaneous 49,680  47,882 
​ 1,394,654  1,183,200 
Total Assets $ 3,861,749  $ 3,562,119 
​
See accompanying unaudited Notes to Condensed Consolidated Financial Statements.
3
Table of Contents
AptarGroup, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
​
In thousands, except share and per share amounts ​ ​
​ ​ ​
​ September 30, 2020 December 31, 2019
Liabilities and Stockholders’ Equity ​ ​
Current Liabilities: ​ ​
Notes payable, revolving credit facility and overdrafts $ 95,200  $ 44,259 
Current maturities of long-term obligations, net of unamortized debt issuance costs 66,056  65,988 
Accounts payable, accrued and other liabilities 625,865  573,028 
​ 787,121  683,275 
Long-Term Obligations, net of unamortized debt issuance costs 1,039,935  1,085,453 
Deferred Liabilities and Other: ​ ​
Deferred income taxes 40,120  41,388 
Retirement and deferred compensation plans 116,886  101,225 
Operating lease liabilities 54,899  55,276 
Deferred and other non-current liabilities 62,833  23,250 
Commitments and contingencies —  — 
​ 274,738  221,139 
Stockholders’ Equity: ​ ​
AptarGroup, Inc. stockholders’ equity ​ ​
Common stock, $.01 par value, 199 million shares authorized, 69.3 and 68.6 million shares issued as of September 30, 2020 and December 31, 2019, respectively
693  686 
Capital in excess of par value 827,273  770,596 
Retained earnings 1,613,891  1,523,820 
Accumulated other comprehensive loss (317,424) (341,948)
Less: Treasury stock at cost, 4.6 and 4.8 million shares as of September 30, 2020 and December 31, 2019, respectively
(364,861) (381,238)
Total AptarGroup, Inc. Stockholders’ Equity 1,759,572  1,571,916 
Noncontrolling interests in subsidiaries 383  336 
Total Stockholders’ Equity 1,759,955  1,572,252 
Total Liabilities and Stockholders’ Equity $ 3,861,749  $ 3,562,119 
​
See accompanying unaudited Notes to Condensed Consolidated Financial Statements.
​
​
4
Table of Contents
AptarGroup, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
​
In thousands ​ ​ ​ ​ ​ ​ ​
Three Months Ended AptarGroup, Inc. Stockholders’ Equity ​ ​
September 30, 2020 and 2019 Retained Earnings Accumulated
Other
Comprehensive (Loss) Income 		Common
Stock
Par Value 		Treasury
Stock 		Capital in
Excess of
Par Value 		Non-
Controlling
Interest 		Total
Equity
​
Balance - June 30, 2019 $ 1,464,607  $ (310,136) $ 683  $ (317,380) $ 743,332  $ 316  $ 1,581,422 
Net income 56,750  —  —  —  —  19  56,769 
Foreign currency translation adjustments —  (42,528) —  —  —  (12) (42,540)
Changes in unrecognized pension gains (losses) and related amortization, net of tax —  713  —  —  —  —  713 
Changes in derivative gains (losses), net of tax —  279  —  —  —  —  279 
Stock awards and option exercises —  —  2  2,512  13,656  —  16,170 
Cash dividends declared on common stock (23,057) —  —  —  —  —  (23,057)
Treasury stock purchased —  —  —  (35,777) —  —  (35,777)
Balance - September 30, 2019 $ 1,498,300  $ (351,672) $ 685  $ (350,645) $ 756,988  $ 323  $ 1,553,979 
​ ​ ​ ​ ​ ​ ​ ​
Balance - June 30, 2020 $ 1,573,392  $ (361,256) $ 690  $ (370,706) $ 803,511  $ 355  $ 1,645,986 
Net income 63,716  —  —  —  —  19  63,735 
Foreign currency translation adjustments —  42,416  —  —  —  9  42,425 
Changes in unrecognized pension gains (losses) and related amortization, net of tax —  1,563  —  —  —  —  1,563 
Changes in derivative gains (losses), net of tax —  (147) —  —  —  —  (147)
Stock awards and option exercises —  —  3  5,845  23,762  —  29,610 
Cash dividends declared on common stock (23,217) —  —  —  —  —  (23,217)
Balance - September 30, 2020 $ 1,613,891  $ (317,424) $ 693  $ (364,861) $ 827,273  $ 383  $ 1,759,955 
5
Table of Contents
In thousands ​ ​ ​ ​ ​ ​ ​
Nine Months Ended AptarGroup, Inc. Stockholders’ Equity ​ ​
September 30, 2020 and 2019 Retained
Earnings 		Accumulated
Other
Comprehensive
(Loss) Income 		Common
Stock
Par Value 		Treasury
Stock 		Capital in
Excess of
Par Value 		Non-
Controlling
Interest 		Total
Equity
​
Balance - December 31, 2018
$ 1,371,826  $ (310,504) $ 673  $ (318,208) $ 678,769  $ 315  $ 1,422,871 
Net income 193,669  — — — — 20  193,689 
Foreign currency translation adjustments — (42,725) — — — (12) (42,737)
Changes in unrecognized pension gains (losses) and related amortization, net of tax — 2,150  — — — — 2,150 
Changes in derivative gains (losses), net of tax — (593) — — — — (593)
Stock awards and option exercises — — 12  22,436  78,219  — 100,667 
Cash dividends declared on common stock (67,195) — — — — — (67,195)
Treasury stock purchased — — — (54,873) — — (54,873)
Balance - September 30, 2019 $ 1,498,300  $ (351,672) $ 685  $ (350,645) $ 756,988  $ 323  $ 1,553,979 
​ ​ ​ ​ ​ ​ ​ ​
Balance - December 31, 2019
$ 1,523,820  $ (341,948) $ 686  $ (381,238) $ 770,596  $ 336  $ 1,572,252 
Net income 160,808  — — — — 37  160,845 
Adoption of CECL standard (1,377) — — — — — (1,377)
Foreign currency translation adjustments — 19,282  — — — 10  19,292 
Changes in unrecognized pension gains (losses) and related amortization, net of tax — 4,639  — — — — 4,639 
Changes in derivative gains (losses), net of tax — 603  — — — — 603 
Stock awards and option exercises — — 7  16,377  56,677  — 73,061 
Cash dividends declared on common stock (69,360) — — — — — (69,360)
Balance - September 30, 2020 $ 1,613,891  $ (317,424) $ 693  $ (364,861) $ 827,273  $ 383  $ 1,759,955 
​
See accompanying unaudited Notes to Condensed Consolidated Financial Statements.
​
6
Table of Contents

AptarGroup, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
​
In thousands, brackets denote cash outflows ​ ​ ​
​ ​ ​ ​
Nine Months Ended September 30, 2020 ​ 2019
​ ​ ​ ​
Cash Flows from Operating Activities: ​ ​ ​
Net income $ 160,845  $ 193,689 
Adjustments to reconcile net income to net cash provided by operations: ​ ​ ​
Depreciation 132,394  124,787 
Amortization 30,020  19,787 
Stock-based compensation 26,191  18,075 
Provision for CECL 2,345  930 
Loss on disposition of fixed assets 475  303 
Deferred income taxes (2,591) 5,948 
Defined benefit plan expense 17,442  11,517 
Equity in results of affiliates 1,383  (152)
Change in fair value of contingent consideration 4,270  — 
Changes in balance sheet items, excluding effects from foreign currency adjustments: ​ ​ ​
Accounts and other receivables (31,871) 724 
Inventories 3,937  (16,025)
Prepaid and other current assets (15,932) (1,721)
Accounts payable, accrued and other liabilities 64,113  15,047 
Income taxes payable (4,865) 6,729 
Retirement and deferred compensation plan liabilities (1,569) (935)
Other changes, net (5,160) 1,678 
Net Cash Provided by Operations 381,427  380,381 
Cash Flows from Investing Activities: ​ ​ ​
Capital expenditures (173,365) (186,841)
Proceeds from sale of property, plant and equipment 2,845  3,658 
Acquisition of business, net of cash acquired and release of escrow (164,181) ​ (49,062)
Acquisition of intangible assets, net (3,690) (4,621)
Investment in equity securities (38,455) (3,530)
Proceeds from sale of investment in equity securities —  ​ 16,487 
Notes receivable, net (1,046) (89)
Net Cash Used by Investing Activities (377,892) (223,998)
Cash Flows from Financing Activities: ​ ​ ​
Proceeds from notes payable and overdrafts 19,191  ​ 36,893 
Repayments of notes payable and overdrafts (33,162) ​ (41,145)
Proceeds and repayments of short term revolving credit facility, net 70,000  ​ (47,253)
Proceeds from long-term obligations 1,316  10,524 
Repayments of long-term obligations (63,052) (64,924)
Payment of contingent consideration obligation (2,765) ​ —
Dividends paid (69,360) (67,195)
Proceeds from stock option exercises 51,098  81,815 
Purchase of treasury stock — (54,873)
Net Cash Used by Financing Activities (26,734) (146,158)
Effect of Exchange Rate Changes on Cash 7,605  (6,471)
Net (Decrease) Increase in Cash and Equivalents and Restricted Cash (15,594) 3,754 
Cash and Equivalents and Restricted Cash at Beginning of Period 246,973  266,823 
Cash and Equivalents and Restricted Cash at End of Period $ 231,379  $ 270,577 
​
7
Table of Contents
Restricted cash included in the line item prepaid and other on the Condensed Consolidated Balance Sheets as shown below represents amounts held in escrow related to the Noble and Fusion Acquisitions (as defined herein).
Nine Months Ended September 30, 2020 2019
​ ​ ​
Cash and equivalents $ 226,546  $ 270,577 
Restricted cash included in prepaid and other 4,833  —
Total Cash and Equivalents and Restricted Cash shown in the Statement of Cash Flows $ 231,379  $ 270,577 
​
​
See accompanying unaudited Notes to Condensed Consolidated Financial Statements.
8
Table of Contents
​
​
AptarGroup, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollars in Thousands, Except per Share Amounts, or as Otherwise Indicated)
(Unaudited)
​
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
​
BASIS OF PRESENTATION
​
The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of AptarGroup, Inc. and our subsidiaries. The terms “AptarGroup”, “Aptar”, “Company”, “we”, “us” or “our” as used herein refer to AptarGroup, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain previously reported amounts have been reclassified to conform to the current period presentation.
In the opinion of management, the unaudited Condensed Consolidated Financial Statements (the “Condensed Consolidated Financial Statements”) include all normal recurring adjustments necessary for a fair statement of consolidated financial position, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. The accompanying Condensed Consolidated Financial Statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. Also, certain financial position data included herein was derived from the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 but does not include all disclosures required by U.S. GAAP. Accordingly, these Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations of any interim period are not necessarily indicative of the results that may be expected for the year.
Beginning July 1, 2018, we have applied highly inflationary accounting for our Argentinian subsidiaries pursuant to U.S. GAAP. We have changed the functional currency from the Argentinian peso to the U.S. dollar. We remeasure our peso denominated assets and liabilities using the official rate. In September 2019, the President of Argentina reinstituted exchange controls restricting foreign currency purchases in an attempt to stabilize Argentina’s financial markets. As a result of these currency controls, a legal mechanism known as the Blue Chip Swap emerged in Argentina for reporting entities to transfer U.S. dollars. The Blue Chip Swap rate has diverged significantly from Argentina’s “official rate” due to the economic environment. During the second quarter of 2020, we transferred U.S. dollars into Argentina through the Blue Chip Swap method and we recognized a gain of $1.0 million. This gain helped to offset foreign currency losses due to our Argentinian peso exposure and devaluation against the U.S. dollar. For the nine months ended September 30, 2020, our Argentinian operations contributed less than 2.0% of consolidated net assets and revenues.
There are many uncertainties regarding the current COVID-19 pandemic, including the scope of scientific and health issues, the anticipated duration of the pandemic and the extent of local and worldwide social, political and economic disruption it may cause. The pandemic has impacted certain markets within our business, operations and financial results during the nine months ended September 30, 2020 including an overall reduction to net sales within those markets. No impairments were recorded as of September 30, 2020. While the disruption is currently expected to be temporary, there is uncertainty around the duration. Due to significant uncertainty surrounding the situation, future results could change and therefore our results could be materially impacted.
​
ADOPTION OF RECENT ACCOUNTING STANDARDS
​
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification.
Effective January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued by the FASB in June 2016, as well as the clarifying amendments subsequently issued. We applied the guidance using a modified retrospective approach and accordingly recognized an amount of $1.4 million as the cumulative adjustment to opening retained earnings in the first quarter of 2020. This is based on management's best estimates of specific losses on individual exposures particularly on current trade receivables, as well as the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. On an ongoing basis, we will contemplate forward-looking economic conditions in recording lifetime expected credit losses for our financial assets measured at cost, such as our trade receivables and certain other assets.
In January 2017, the FASB issued ASU 2017-04, which provides guidance to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. As a result, impairment charges are required for the amount by which a reporting unit’s carrying amount exceeds its fair value up to the amount of its allocated goodwill. We adopted the standard on January 1, 2020 and did not record any impairment charges.
9
In August 2018, the FASB issued ASU 2018-15 to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. We adopted the standard on January 1, 2020 and no material impacts were noted.
In August 2018, the FASB issued ASU 2018-13, which amends disclosure requirements for fair value measurements. The new standard modifies disclosure requirements including removing requirements to disclose the valuation process for Level 3 measurements and adding requirements to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. We adopted the standard on January 1, 2020 and no material impacts were noted.
Other accounting standards that have been issued by the FASB or other standards-setting bodies did not have a material impact on our Condensed Consolidated Financial Statements.
INCOME TAXES
​
We compute taxes on income in accordance with the tax rules and regulations of the many taxing authorities where the income is earned. The income tax rates imposed by these taxing authorities may vary substantially. Taxable income may differ from pre-tax income for financial accounting purposes. To the extent that these differences create temporary differences between the tax basis of an asset or liability and our reported amount in the financial statements, an appropriate provision for deferred income taxes is made.
We maintain our assertion that the cash and distributable reserves at our non-U.S. affiliates are indefinitely reinvested.  Under current U.S. tax laws, all of our non-U.S. earnings are subject to U.S. taxation. We will provide for the necessary withholding and local income taxes when management decides that an affiliate should make a distribution. These decisions are made taking into consideration the financial requirements of the non-U.S. affiliates and the global cash management goals of the Company.
We provide a liability for the amount of unrecognized tax benefits from uncertain tax positions. This liability is provided whenever we determine that a tax benefit will not meet a more-likely-than-not threshold for recognition.
The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and many state and foreign jurisdictions. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner inconsistent with its expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. The resolution of each of these audits is not expected to be material to our Condensed Consolidated Financial Statements.
 ​
​
​
​
​
​
NOTE 2 – REVENUE
At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. For a contract that has more than one performance obligation, we allocate the total contract consideration to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when (or as) the performance obligations are satisfied (i.e., when the customer obtains control of the good or service). The majority of our revenues are derived from product and tooling sales; however, we also receive revenues from service, license, exclusivity and royalty arrangements, which collectively are not material to the quarterly and year-to-date results. Revenue by segment and geography for the three and nine months ended September 30, 2020 and 2019 is as follows:
For the Three Months Ended September 30, 2020
Segment Europe Domestic Latin
America 		Asia Total
Beauty + Home 165,701  109,175  37,921  24,434  337,231 
Pharma 206,376  92,932  4,846  11,604  315,758 
Food + Beverage 29,688  60,439  6,668  9,369  106,164 
Total 401,765  262,546  49,435  45,407  759,153 
​
10
For the Three Months Ended September 30, 2019
Segment Europe Domestic Latin
America 		Asia Total
Beauty + Home $ 188,542  $ 75,931  $ 40,261  $ 23,448  $ 328,182 
Pharma 174,252  78,259  6,366  10,374  269,251 
Food + Beverage 28,718  57,307  8,058  9,762  103,845 
Total $ 391,512  $ 211,497  $ 54,685  $ 43,584  $ 701,278 
​
​ For the Nine Months Ended September 30, 2020
Segment Europe Domestic Latin
America 		Asia Total
Beauty + Home $ 505,063  $ 285,369  $ 103,995  $ 67,150  $ 961,577 
Pharma 598,319  264,995  18,412  32,487  914,213 
Food + Beverage 86,298  172,507  21,191  24,225  304,221 
Total $ 1,189,680  $ 722,871  $ 143,598  $ 123,862  $ 2,180,011 
​
​
​ For the Nine Months Ended September 30, 2019
Segment Europe Domestic Latin
America 		Asia Total
Beauty + Home $ 607,316  $ 236,883  $ 124,352  $ 69,370  $ 1,037,921 
Pharma 549,080  226,073  21,100  27,638  823,891 
Food + Beverage 92,015  177,587  25,153  31,832  326,587 
Total $ 1,248,411  $ 640,543  $ 170,605  $ 128,840  $ 2,188,399 
​
We perform our obligations under a contract with a customer by transferring goods and/or services in exchange for consideration from the customer. The timing of performance will sometimes differ from the timing of the receipt of the associated consideration from the customer, thus resulting in the recognition of a contract asset or a contract liability. We recognize a contract asset when we transfer control of goods or services to a customer prior to invoicing for the related performance obligation. The contract asset is transferred to accounts receivable when the product is shipped or services are performed and invoiced to the customer. We recognize a contract liability if the customer's payment of consideration precedes the entity's performance.
The opening and closing balances of our contract asset and contract liabilities are as follows:
​ Balance as of December 31, 2019 Balance as of September 30, 2020 Increase/
(Decrease)
Contract asset (current) $ 16,245  $ 15,914  $ (331)
Contract asset (long-term) $ —  $ —  $ — 
Contract liability (current) $ 79,305  $ 66,782  $ (12,523)
Contract liability (long-term) $ 9,779  $ 22,035  $ 12,256 
​
The differences in the opening and closing balances of our contract asset and contract liabilities are primarily the result of timing differences between our performance and the customer’s payment. The total amount of revenue recognized during the current year against contract liabilities is $59.6 million, including $39.1 million relating to contract liabilities at the beginning of the year.
Determining the Transaction Price
In most cases, the transaction price for each performance obligation is stated in the contract. In determining the variable amounts of consideration within the transaction price (such as volume-based customer rebates), we include an estimate of the expected amount of consideration as revenue. We apply the expected value method based on all of the information (historical, current, and forecast) that is reasonably available and identify reasonable estimates based on this information. We apply the method consistently throughout the contract when estimating the effect of an uncertainty on the amount of variable consideration to which we will be entitled.
11
Product Sales
We primarily manufacture and sell drug delivery, dispensing, sealing and active packaging solutions. The amount of consideration is typically fixed for such customers. At the time of delivery, the customer is invoiced the agreed-upon price. Revenue from product sales is typically recognized upon manufacture or shipment, when control of the goods transfers to the customer.
To determine when the control transfers, we typically assess, among other things, the shipping terms of the contract, shipping being one of the indicators of transfer of control. A majority of product sales are sold free on board (“FOB”) shipping point. For FOB shipping point shipments, control of the goods transfers to the customer at the time of shipment of the goods. Therefore, our performance obligation is satisfied at the time of shipment. We have elected to account for shipping and handling costs that occur after the customer has obtained control of a good as fulfillment costs rather than as a promised service. We do not have any material significant payment terms as payment is typically received shortly after the point of sale.
There also exist instances where we manufacture highly customized products that have no alternative use to us and for which we have an enforceable right to payment for performance completed to date. For these products, we transfer control and recognize revenue over time by measuring progress towards completion using the Output Method based on the number of products produced. As we normally make our products to a customer’s order, the time between production and shipment of our products is typically within a few weeks.
As a part of our customary business practice, we offer a standard warranty that the products will materially comply with the technical specifications and will be free from material defects. Because such warranties are not sold separately, do not provide for any service beyond a guarantee of a product’s initial specifications, and are not required by law, there is no revenue deferral for these types of warranties.
Tooling Sales
We also build, or contract to build molds and other tools (collectively defined as “tooling”) necessary to produce our products. As with product sales, we recognize revenue when control of the tool transfers to the customer. If the tooling is highly customized with no alternative use to us and we have an enforceable right to payment for performance completed to date, we transfer control and recognize revenue over time by measuring progress towards completion using the Input Method based on costs incurred relative to total estimated costs to completion. Otherwise, revenue for the tooling is recognized at the point in time when the customer approves the tool. We do not have any material significant payment terms as payment is typically either received during the mold-build process or shortly after completion.
In certain instances, we offer extended warranties on tools sold to our customers above and beyond the normal standard warranties. We normally receive payment at the inception of the contract and recognize revenue over the term of the contract. At December 31, 2019, $515 thousand of unearned revenue associated with outstanding contracts was reported in Accounts Payable, Accrued and Other Liabilities. At September 30, 2020, the unearned amount was $487 thousand. We expect to recognize approximately $55 thousand of the unearned amount during the remainder of 2020, $131 thousand in 2021, and $301 thousand thereafter.
Credit Risk
We are exposed to credit losses primarily through our product sales, tooling sales and services to our customers. We assess each customer’s ability to pay for the products we sell by conducting a credit review. The credit review considers our expected billing exposure and timing for payment and the customer’s established credit rating or our assessment of the customer’s creditworthiness based on our analysis of their financial statements when a credit rating is not available. We also consider contract terms and conditions, country and political risks, and business strategy in our evaluation. A credit limit is established for each customer based on the outcome of this review.
We monitor our ongoing credit exposure through active review of customer balances against contract terms and due dates. Our activities include timely account reconciliation, dispute resolution and payment confirmation. We may employ collection agencies and legal counsel to pursue recovery of defaulted receivables.
At September 30, 2020, we reported $593 million of accounts receivable, net of CECL of $7.4 million. Changes in the allowance were not material for the nine months ended September 30, 2020. Current uncertainty in credit and market conditions due to the COVID-19 pandemic may slow our collection efforts if customers experience significant difficulty accessing credit and paying their obligations, which may lead to higher than normal accounts receivable and increased CECL charges.
12
NOTE 3 - INVENTORIES
Inventories, by component, consisted of:​
​ September 30,
2020 		December 31,
2019
Raw materials $ 112,296  $ 111,653 
Work in process 119,397  123,750 
Finished goods 143,484  140,392 
Total $ 375,177  $ 375,795 

​
NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS
The changes in the carrying amount of goodwill by reporting segment since December 31, 2019 are as follows:​
​ Beauty +
Home 		Pharma Food +
Beverage 		Corporate
& Other 		Total
Goodwill $ 221,658  $ 413,650  $ 128,153  $ 1,615  $ 765,076 
Accumulated impairment losses —  —  —  (1,615) (1,615)
Balance as of December 31, 2019 $ 221,658  $ 413,650  $ 128,153  $ —  $ 763,461 
Acquisition 99,350  463  —  —  99,813 
Foreign currency exchange effects 3,972  10,502  267  —  14,741 
Goodwill $ 324,980  $ 424,615  $ 128,420  $ 1,615  $ 879,630 
Accumulated impairment losses —  —  —  (1,615) (1,615)
Balance as of September 30, 2020 $ 324,980  $ 424,615  $ 128,420  $ —  $ 878,015 
​
The table below shows a summary of intangible assets as of September 30, 2020 and December 31, 2019.
​​
​ ​ September 30, 2020 December 31, 2019
Weighted Average Amortization Period (Years) Gross
Carrying
Amount 		Accumulated
Amortization 		Net
Value 		Gross
Carrying
Amount 		Accumulated
Amortization 		Net
Value
Amortized intangible assets: ​ ​ ​ ​ ​ ​ ​
Patents 7.4 $ 2,795  (1,393) $ 1,402  $ 2,804  $ (1,318) $ 1,486 
Acquired technology 12.9 107,529  (33,322) 74,207  100,511  (25,430) 75,081 
Customer relationships 13.3 283,091  (50,048) 233,043  217,934  (33,924) 184,010 
Trademarks and trade names 6.3 45,285  (15,470) 29,815  35,015  (11,003) 24,012 
License agreements and other 19.1 18,693  (9,465) 9,228  16,153  (9,658) 6,495 
Total intangible assets 12.6 $ 457,393  $ (109,698) $ 347,695  $ 372,417  $ (81,333) $ 291,084 
​
Aggregate amortization expense for the intangible assets above for the quarters ended September 30, 2020 and 2019 was $9,686 and $7,399, respectively. Aggregate amortization expense for the intangible assets above for the nine months ended September 30, 2020 and 2019 was $30,020 and $19,787, respectively.
13
Future estimated amortization expense for the years ending December 31 is as follows:
2020 $ 9,819 
(remaining estimated amortization for 2020)
2021 38,300  ​
2022 38,020  ​
2023 37,938  ​
2024 and thereafter 223,618  ​
​
Future amortization expense may fluctuate depending on changes in foreign currency rates. The estimates for amortization expense noted above are based upon foreign exchange rates as of September 30, 2020.​

NOTE 5 – INCOME TAXES
The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings and related estimated full year-taxes, adjusted for the impact of discrete quarterly items.
The effective tax rate for the three months ended September 30, 2020 and 2019, respectively, was 28.5% and 31.0%. The reported effective tax rate for the three months ended September 30, 2020 was favorably impacted by additional excess tax benefits from employee stock-based compensation of $1.4 million and benefits reflecting changes in the U.S. global intangible low taxed income ("U.S. GILTI") tax for the current year of $1.5 million.
The effective tax rate for the nine months ended September 30, 2020 and 2019 was 29.4%. The nine month effective tax rates reflect a favorable impact from the excess tax benefits from employee stock-based compensation of $8.7 million and $13.6 million, respectively, offset by the unfavorable impact from losses in jurisdictions where the tax benefit is not recognized and other discrete items of $5.1 million and $10.9 million, respectively.
​
NOTE 6 – DEBT
Notes Payable, Revolving Credit Facility and Overdrafts
At September 30, 2020 and December 31, 2019, our notes payable, revolving credit facility and overdrafts, consisted of the following:
​ September 30,
2020 		December 31,
2019
Notes payable 8%
$ 200  $ 1,436 
Revolving credit facility 1.46%
95,000  25,000 
Overdrafts 5.68% - 7.82%
—  17,823 
​ $ 95,200  $ 44,259 
​
We maintain a multi-currency revolving credit facility with two tranches that matures in July 2022 which provides for unsecured financing of up to $300 million that is available in the U.S. and up to €150 million that is available to our wholly-owned UK subsidiary. $95.0 million was utilized under our U.S. facility and no balance was utilized under our euro-based revolving credit facility as of September 30, 2020. $25.0 million was utilized under our U.S. facility and no balance was utilized on our euro-based revolving credit facility as of December 31, 2019.
There are no compensating balance requirements associated with our revolving credit facility. Each borrowing under the credit facility will bear interest at rates based on LIBOR, prime rates or other similar rates, in each case plus an applicable margin. A facility fee on the total amount of the facility is also payable quarterly, regardless of usage. The applicable margins for borrowings under the credit facility and the facility fee percentage may change from time to time depending on changes in our consolidated leverage ratio.
14
Long-Term Obligations
At September 30, 2020, our long-term obligations consisted of the following:
​ Principal Unamortized Debt Issuance Costs Net
Notes payable 0.00% – 10.90%, due in monthly and annual installments through 2028
$ 13,993  $ —  $ 13,993 
Senior unsecured notes 3.2%, due in 2022
75,000  44  74,956 
Senior unsecured debts 1.8% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022
112,000  277  111,723 
Senior unsecured notes 3.5%, due in 2023
125,000  116  124,884 
Senior unsecured notes 1.0%, due in 2023
117,230  312  116,918 
Senior unsecured notes 3.4%, due in 2024
50,000  53  49,947 
Senior unsecured notes 3.5%, due in 2024
100,000  116  99,884 
Senior unsecured notes 1.2%, due in 2024
234,460  621  233,839 
Senior unsecured notes 3.6%, due in 2025
125,000  134  124,866 
Senior unsecured notes 3.6%, due in 2026
125,000  134  124,866 
Finance Lease Liabilities 30,115  —  30,115 
​ $ 1,107,798  $ 1,807  $ 1,105,991 
Current maturities of long-term obligations (66,056) —  (66,056)
Total long-term obligations $ 1,041,742  $ 1,807  $ 1,039,935 
​
At December 31, 2019, our long-term obligations consisted of the following:
​
Principal Unamortized Debt Issuance Costs Net
Notes payable 0.00% – 10.90%, due in monthly and annual installments through 2028
$ 19,220  $ —  $ 19,220 
Senior unsecured notes 3.2%, due in 2022
75,000  64  74,936 
Senior unsecured debts 3.2% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022
168,000  390  167,610 
Senior unsecured notes 3.5%, due in 2023
125,000  144  124,856 
Senior unsecured notes 1.0%, due in 2023
112,170  356  111,814 
Senior unsecured notes 3.4%, due in 2024
50,000  63  49,937 
Senior unsecured notes 3.5%, due in 2024
100,000  144  99,856 
Senior unsecured notes 1.2%, due in 2024
224,340  742  223,598 
Senior unsecured notes 3.6%, due in 2025
125,000  169  124,831 
Senior unsecured notes 3.6%, due in 2026
125,000  169  124,831 
Finance Lease Liabilities 29,952  —  29,952 
​ $ 1,153,682  $ 2,241  $ 1,151,441 
Current maturities of long-term obligations (65,988) —  (65,988)
Total long-term obligations $ 1,087,694  $ 2,241  $ 1,085,453 
​
The aggregate long-term maturities, excluding finance lease liabilities, which are disclosed in Note 7, due annually from the current balance sheet date for the next five years are $62,023, $134,772, $119,655, $510,581, $229 and $250,423 thereafter.
15
Covenants
Our revolving credit facility and corporate long-term obligations require us to satisfy certain financial and other covenants including:
​      Requirement      Level at September 30, 2020
Consolidated Leverage Ratio (1)  
Maximum of 3.50 to 1.00
 
1.81 to 1.00
Consolidated Interest Coverage Ratio (1)  
Minimum of 3.00 to 1.00
 
15.92 to 1.00
________________________________________
(1)Definitions of ratios are included as part of the revolving credit facility agreement and the note purchase agreements.  
​
​
NOTE 7 – LEASES
We lease certain warehouse, plant and office facilities as well as certain equipment under noncancelable operating and finance leases expiring at various dates through the year 2034. Most of the operating leases contain renewal options and certain leases include options to purchase the related asset during or at the end of the lease term.
Amortization expense related to finance leases is included in depreciation expense while rent expense related to operating leases is included within cost of sales and selling research & development and administrative expenses (“SG&A”).
The components of lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows:​
​ Three Months Ended September 30, Nine Months Ended September 30,
​ 2020 2019 2020 2019
Operating lease cost $ 6,076  $ 6,001  $ 17,171  $ 17,442 
​ ​ ​ ​ ​
Finance lease cost: ​ ​ ​ ​
Amortization of right-of-use assets $ 905  $ 1,165  $ 3,010  $ 3,041 
Interest on lease liabilities $ 356  $ 344  $ 1,073  $ 984 
Total finance lease cost $ 1,261  $ 1,509  $ 4,083  $ 4,025 
​ ​ ​ ​ ​
Short-term lease and variable lease costs $ 2,466  $ 1,757  $ 7,344  $ 6,027 
​
Supplemental cash flow information related to leases was as follows:
Nine Months Ended September 30, 2020 2019
Cash paid for amounts included in the measurement of lease liabilities: ​ ​
Operating cash flows from operating leases $ 17,060  $ 15,874 
Operating cash flows from finance leases 1,089  877 
Financing cash flows from finance leases 3,678  3,365 
​
Right-of-use assets obtained in exchange for lease obligations:
Operating leases $ 19,255  $ 11,673 
Finance leases 3,356  12,401 
​
16
NOTE 8 – RETIREMENT AND DEFERRED COMPENSATION PLANS
Components of Net Periodic Benefit Cost:
​ Domestic Plans Foreign Plans
Three Months Ended September 30, 2020 2019 2020 2019
Service cost $ 3,570  $ 2,772  $ 1,867  $ 1,429 
Interest cost 1,761  1,845  360  491 
Expected return on plan assets (3,062) (3,095) (671) (581)
Amortization of net loss 1,422  490  544  356 
Amortization of prior service cost —  —  101  111 
Net periodic benefit cost $ 3,691  $ 2,012  $ 2,201  $ 1,806 
​
​ Domestic Plans Foreign Plans
Nine Months Ended September 30, 2020 2019 2020 2019
Service cost $ 10,709  $ 8,320  $ 5,402  $ 4,334 
Interest cost 5,284  5,536  1,040  1,487 
Expected return on plan assets (9,186) (9,284) (1,936) (1,759)
Amortization of net loss 4,264  1,468  1,572  1,078 
Amortization of prior service cost —  —  293  337 
Net periodic benefit cost $ 11,071  $ 6,040  $ 6,371  $ 5,477 
​
The components of net periodic benefit cost, other than the service cost component, are included in the line “Miscellaneous, net” in the income statement.

EMPLOYER CONTRIBUTIONS
Although we currently have no minimum funding requirements for our domestic and foreign plans, we contributed $204 thousand to our ongoing domestic supplemental employee retirement plan (SERP) annuity contracts during the nine months ended September 30, 2020 and do not expect additional significant contributions during 2020. We have contributed approximately $1.6 million to our foreign defined benefit plans during the nine months ended September 30, 2020 and do not expect additional significant contributions during 2020.
​
NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME
Changes in Accumulated Other Comprehensive (Loss) Income by Component:
​ Foreign Currency Defined Benefit Pension Plans Derivatives Total
Balance - December 31, 2018 $ (248,401) $ (60,463) $ (1,640) $ (310,504)
Other comprehensive (loss) income before reclassifications (42,725) —  11,806  (30,919)
Amounts reclassified from accumulated other comprehensive income (loss) —  2,150  (12,399) (10,249)
Net current-period other comprehensive (loss) income (42,725) 2,150  (593) (41,168)
Balance - September 30, 2019 $ (291,126) $ (58,313) $ (2,233) $ (351,672)
​
Balance - December 31, 2019 $ (257,124) $ (83,147) $ (1,677) $ (341,948)
Other comprehensive income (loss) before reclassifications 19,282  —  (4,342) 14,940 
Amounts reclassified from accumulated other comprehensive income —  4,639  4,945  9,584 
Net current-period other comprehensive income 19,282  4,639  603  24,524 
Balance - September 30, 2020 $ (237,842) $ (78,508) $ (1,074) $ (317,424)
17
​
Reclassifications Out of Accumulated Other Comprehensive (Loss) Income:
Details about Accumulated Other
Comprehensive Income Components 		Amount Reclassified from Accumulated Other Comprehensive Income Affected Line in the Statement
Where Net Income is Presented
Three Months Ended September 30, 2020 2019     
​ ​ ​ ​
Defined Benefit Pension Plans ​ ​ ​
Amortization of net loss $ 1,966  $ 846  (1)
Amortization of prior service cost 101  111  (1)
​ 2,067  957  Total before tax
​ (504) (244) Tax impact
​ $ 1,563  $ 713  Net of tax
Derivatives ​ ​ ​
Changes in cross currency swap: interest component $ (146) $ (1,309) Interest Expense
Changes in cross currency swap: foreign exchange component 6,099  (6,491) Miscellaneous, net
​ $ 5,953  $ (7,800) Net of tax
Total reclassifications for the period $ 7,516  $ (7,087) ​
Details about Accumulated Other
Comprehensive Income Components 		Amount Reclassified from Accumulated Other Comprehensive Income Affected Line in the Statement
Where Net Income is Presented
Nine Months Ended September 30, 2020 2019     
​ ​ ​ ​
Defined Benefit Pension Plans ​ ​ ​
Amortization of net loss $ 5,836  $ 2,546  (1)
Amortization of prior service cost 293  337  (1)
​ 6,129  2,883  Total before tax
​ (1,490) (733) Tax impact
​ $ 4,639  $ 2,150  Net of tax
Derivatives ​ ​ ​
Changes in cross currency swap: interest component $ (1,434) $ (4,315) Interest Expense
Changes in cross currency swap: foreign exchange component 6,379  (8,084) Miscellaneous, net
​ $ 4,945  $ (12,399) Net of tax
Total reclassifications for the period $ 9,584  $ (10,249) ​
______________________________________________
(1)These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax. See Note 8 – Retirement and Deferred Compensation Plans for additional details.
​
​
​
NOTE 10 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
We maintain a foreign exchange risk management policy designed to establish a framework to protect the value of our non-functional denominated transactions from adverse changes in exchange rates. Sales of our products can be denominated in a currency different from the currency in which the related costs to produce the product are denominated. Changes in exchange rates on such inter-country sales or intercompany loans can impact our results of operations. Our policy is not to engage in speculative foreign currency hedging activities, but to minimize our net foreign currency transaction exposure, defined as firm commitments and transactions recorded and denominated in currencies other than the functional currency. We may use foreign currency forward exchange contracts, options and cross currency swaps to economically hedge these risks.
18
For derivative instruments designated as hedges, we formally document the nature and relationships between the hedging instruments and the hedged items, as well as the risk management objectives, strategies for undertaking the various hedge transactions, and the method of assessing hedge effectiveness at inception. Quarterly thereafter, we formally assess whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. Additionally, in order to designate any derivative instrument as a hedge of an anticipated transaction, the significant characteristics and expected terms of any anticipated transaction must be specifically identified, and it must be probable that the anticipated transaction will occur. All derivative financial instruments used as hedges are recorded at fair value in the Condensed Consolidated Balance Sheets. See Note 11 - Fair Value for additional details.
Cash Flow Hedge
For derivative instruments that are designated and qualify as cash flow hedges, the changes in fair values are recorded in accumulated other comprehensive loss and included in changes in derivative gain/loss. The changes in the fair values of derivatives designated as cash flow hedges are reclassified from accumulated other comprehensive loss to net income when the underlying hedged item is recognized in earnings. Cash flows from the settlement of derivative contracts designated as cash flow hedges offset cash flows from the underlying hedged items and are included in operating activities in the Condensed Consolidated Statements of Cash Flows.
During 2017, our wholly-owned UK subsidiary borrowed $280 million in term loan borrowings under a new credit facility. In order to mitigate the currency risk of U.S. dollar debt on a euro functional currency entity and to mitigate the risk of variability in interest rates, we entered into a cross currency swap in the notional amount of $280 million to effectively hedge the foreign exchange and interest rate exposure on the $280 million term loan. This EUR/USD swap agreement fixed our U.S. dollar floating-rate debt to 1.36% euro fixed-rate debt. Related to this hedge, approximately $1.1 million of loss is included in accumulated other comprehensive loss at September 30, 2020. The amount expected to be recognized into earnings during the next 12 months related to the interest component of our cross currency swap based on prevailing foreign exchange and interest rates at September 30, 2020 is a gain of $0.1 million. The amount expected to be recognized into earnings during the next 12 months related to the foreign exchange component of our cross currency swap is dependent on fluctuations in currency exchange rates. As of September 30, 2020, the fair values of the cross currency swap were a $3.2 million liability. The swap contract expires on July 20, 2022.
Hedge of Net Investments in Foreign Operations
A significant number of our operations are located outside of the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of our foreign subsidiaries. A strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on our financial condition and results of operations. Conversely, a weakening U.S. dollar has an additive effect. In some cases, we maintain debt in these subsidiaries to offset the net asset exposure. We do not otherwise actively manage this risk using derivative financial instruments. In the event we plan on a full or partial liquidation of any of our foreign subsidiaries where our net investment is likely to be monetized, we will consider hedging the currency exposure associated with such a transaction.
Other
As of September 30, 2020, we have recorded the fair value of foreign currency forward exchange contracts of $0.1 million in prepaid and other and $0.4 million in accounts payable, accrued and other liabilities on the balance sheet. All forward exchange contracts outstanding as of September 30, 2020 had an aggregate notional contract amount of $43.2 million.
19
​
Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019
​ ​ September 30, 2020 December 31, 2019
​
Balance Sheet
Location
Derivatives Designated as Hedging Instruments Derivatives not Designated as Hedging Instruments Derivatives Designated as Hedging Instruments Derivatives not Designated as Hedging Instruments
Derivative Assets ​ ​ ​ ​ ​
Foreign Exchange Contracts Prepaid and other $ —  $ 73  — $ 206 
Cross Currency Swap Contract (1) Prepaid and other —  —  2,552  — 
​ ​ $ —  $ 73  $ 2,552  $ 206 
​ ​ ​ ​ ​ ​
Derivative Liabilities ​ ​ ​ ​ ​
Foreign Exchange Contracts Accounts payable, accrued and other liabilities $ —  $ 426  $ —  $ 401 
Cross Currency Swap Contract (1) Accounts payable, accrued and other liabilities 3,227  —  —  — 
​ ​ $ 3,227  $ 426  $ —  $ 401 
__________________________
(1)This cross currency swap contract is composed of both an interest component and a foreign exchange component.
​
​
The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Three Months Ended September 30, 2020 and 2019
​
Derivatives in Cash Flow Hedging
Relationships 		Amount of Gain (Loss)
Recognized in
Other Comprehensive
Income on Derivative 		Location of (Loss)
Gain Recognized
in Income on
Derivatives 		Amount of Gain (Loss)
Reclassified from
Accumulated
Other Comprehensive
Income on Derivative 		Total Amount of Affected Income Statement Line Item
​ 2020 2019 ​ 2020 2019
Cross currency swap contract: ​ ​ ​ ​ ​ ​
Interest component $ (1) $ 1,586  Interest expense $ 146  $ 1,309  $ (8,851)
Foreign exchange component (6,099) 6,491  Miscellaneous, net (6,099) 6,491  (1,040)
​ $ (6,100) $ 8,077  ​ $ (5,953) $ 7,800  ​

​
The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Nine Months Ended September 30, 2020 and 2019
Derivatives in Cash Flow Hedging
Relationships 		Amount of Gain (Loss)
Recognized in
Other Comprehensive
Income on Derivative 		Location of (Loss)
Gain Recognized
in Income on
Derivatives 		Amount of Gain (Loss)
Reclassified from
Accumulated
Other Comprehensive
Income on Derivative 		Total Amount of Affected Income Statement Line Item
​ 2020 2019 ​ 2020 2019
Cross currency swap contract: ​ ​ ​ ​ ​ ​
Interest component $ 2,037  $ 4,058  Interest expense $ 1,434  $ 4,315  $ (25,973)
Foreign exchange component (6,379) 8,084  Miscellaneous, net (6,379) 8,084  (3,375)
​ $ (4,342) $ 12,142  ​ $ (4,945) $ 12,399  ​
20
​
​
The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the Three Months Ended September 30, 2020 and 2019
Derivatives Not Designated
as Hedging Instruments 		Location of (Loss) Gain Recognized
in Income on Derivatives 		Amount of (Loss) Gain
Recognized in Income
on Derivatives
​ ​ 2020 2019
Foreign Exchange Contracts Other (Expense) Income:
Miscellaneous, net 		$ (994) $ (15)
​ ​ $ (994) $ (15)
​
​
The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the Nine Months Ended September 30, 2020 and 2019
​
Derivatives Not Designated
as Hedging Instruments 		Location of (Loss) Gain Recognized
in Income on Derivatives 		Amount of (Loss) Gain
Recognized in Income
on Derivatives
​ ​ 2020 2019
Foreign Exchange Contracts Other (Expense) Income:
Miscellaneous, net 		$ (187) $ (529)
​ ​ $ (187) $ (529)
​
​
​ ​ Gross Amounts not Offset in the Statement of Financial Position ​
​ Gross Amount Gross Amounts Offset in the Statement of Financial Position Net Amounts Presented in the Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount
Description ​ ​ ​ ​ ​ ​
September 30, 2020
Derivative Assets $ 73  —  $ 73  —  —  $ 73 
Total Assets $ 73  —  $ 73  —  —  $ 73 
​ ​ ​ ​ ​ ​ ​
Derivative Liabilities $ 3,653  —  $ 3,653  —  —  $ 3,653 
Total Liabilities $ 3,653  —  $ 3,653  —  —  $ 3,653 
​ ​ ​ ​ ​ ​ ​
December 31, 2019
Derivative Assets $ 2,758  —  $ 2,758  —  —  $ 2,758 
Total Assets $ 2,758  —  $ 2,758  —  —  $ 2,758 
​ ​ ​ ​ ​ ​ ​
Derivative Liabilities $ 401  —  $ 401  —  —  $ 401 
Total Liabilities $ 401  —  $ 401  —  —  $ 401 

​
21
NOTE 11 – FAIR VALUE
Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
•Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
•Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
•Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

As of September 30, 2020, the fair values of our financial assets and liabilities were categorized as follows:
​ Total Level 1 Level 2 Level 3
Assets ​ ​ ​ ​
Foreign exchange contracts (1)
$ 73  $ —  $ 73  $ — 
Total assets at fair value $ 73  $ —  $ 73  $ — 
Liabilities ​ ​ ​ ​
Foreign exchange contracts (1)
$ 426  $ —  $ 426  $ — 
Cross currency swap contract (1)
3,227  —  3,227  — 
Contingent consideration obligation 26,280  —  —  26,280 
Total liabilities at fair value $ 29,933  $ —  $ 3,653  $ 26,280 
​
As of December 31, 2019, the fair values of our financial assets and liabilities were categorized as follows:
​ Total Level 1 Level 2 Level 3
Assets ​ ​ ​ ​
Foreign exchange contracts (1)
$ 206  $ —  $ 206  $ — 
Cross currency swap contract (1)
2,552  —  2,552  — 
Total assets at fair value $ 2,758  $ —  $ 2,758  $ — 
Liabilities ​ ​ ​ ​
Foreign exchange contracts (1)
$ 401  $ —  $ 401  $ — 
Contingent consideration obligation 5,930  —  —  5,930 
Total liabilities at fair value $ 6,331  $ —  $ 401  $ 5,930 
________________________________________________
(1)Market approach valuation technique based on observable market transactions of spot and forward rates.
​

The carrying amounts of our other current financial instruments such as cash and equivalents, accounts and notes receivable, notes payable and current maturities of long-term obligations approximate fair value due to the short-term maturity of the instruments. We consider our long-term obligations a Level 2 liability and utilize the market approach valuation technique based on interest rates that are currently available to us for issuance of debt with similar terms and maturities. The estimated fair value of our long-term obligations was $1.1 billion as of September 30, 2020 and $1.1 billion as of December 31, 2019.
As discussed in Note 17 - Acquisitions, we have a contingent consideration obligation to the selling equity holders of Fusion in connection with the Fusion Acquisition (as defined herein) based on 2022 cumulative performance targets, a contingent consideration obligation to the selling equity holders of Noble in connection with the Noble Acquisition (as defined herein) based on 2024 cumulative performance targets and a contingent consideration obligation to the selling equity holder of Gateway in connection with the Gateway Acquisition (as defined herein) based on 2020 and 2022 performance targets. We consider these obligations Level 3 liabilities and have estimated the aggregate fair value for these contingent consideration arrangements to be $22.1 million and $4.2 million for the Fusion Acquisition and the Noble Acquisition, respectively, as of September 30, 2020. During the quarter ended September 30, 2020, $1.3 million of the Gateway contingent consideration accrual was paid out in full satisfaction of the remaining earn out consideration and no related liability is outstanding as all required payments have been made for both performance targets. As of December 31, 2019 the aggregate fair value for these contingent consideration arrangements was $2.9 million and $3.0 million for the Noble Acquisition and the Gateway Acquisition, respectively.
​
22
NOTE 12 - COMMITMENTS AND CONTINGENCIES
The Company, in the normal course of business, is subject to a number of lawsuits and claims both actual and potential in nature. While management believes the resolution of these claims and lawsuits will not have a material adverse effect on our financial position, results of operations or cash flows, claims and legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur and could include amounts in excess of any accruals which management has established. Were such unfavorable final outcomes to occur, it is possible that they could have a material adverse effect on our financial position, results of operations and cash flows.
Under our Certificate of Incorporation, we have agreed to indemnify our officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have a directors and officers liability insurance policy that covers a portion of our exposure. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal. We have no liabilities recorded for these agreements as of September 30, 2020 and December 31, 2019.
A fire caused damage to our facility in Annecy, France in June 2016. We are insured for the damages caused by the fire, including business interruption insurance.  For the nine months ended September 30, 2020, we did not receive any insurance proceeds, and have no insurance receivable as of September 30, 2020. During the nine months ended September 30, 2020 and 2019, profitability was not impacted. The final settlement continues to be negotiated. In many cases, our insurance coverage exceeds the amount of our recognized losses. However, no gain contingencies were recognized during the nine months ended September 30, 2020 as our ability to realize those gains remains uncertain.
An environmental investigation, undertaken to assess areas of possible contamination, was completed at our facility in Jundiaí, São Paulo, Brazil. The facility is primarily an internal supplier of anodized aluminum components for certain of our dispensing systems. The testing indicated that soil and groundwater in certain areas of the facility were impacted above acceptable levels established by local regulations. In March 2017, we reported the findings to the relevant environmental authority, the Environmental Company of the State of São Paulo – CETESB. Based upon our best estimate, we recorded a reserve of $1.5 million (operating expense) in the first quarter of 2017 related to this contingency. During 2019, we paid approximately $0.6 million. For the nine months ended September 30, 2020, we paid approximately $0.1 million.  As of September 30, 2020, our outstanding reserve is $0.4 million. The ultimate loss associated with this environmental contingency is subject to the investigation and ongoing review of the CETESB. We will continue to evaluate the range of likely costs as the investigation proceeds and we have further clarity on the nature and extent of remediation that will be required. We note that the contamination, or any failure to complete any required remediation in a timely manner, could potentially result in fines or penalties.
In March 2017, the Supreme Court of Brazil issued a decision that a certain state value added tax should not be included in the calculation of federal gross receipts taxes. The decision reduces our gross receipts tax in Brazil prospectively and, potentially, retrospectively. During the first quarter of 2019, we received a favorable court decision of $2.7 million for the retrospective right to recover part of our claim. This amount is recorded in cost of sales as a favorable impact of $1.7 million and $1.0 million was recognized as interest income. In June 2020, we received a favorable court decision of $0.7 million for the retrospective right to recover part of our claim. This amount is recorded in cost of sales as a favorable impact of $0.7 million. If the Supreme Court grants full retrospective recovery, we estimate remaining potential recoveries of approximately $1.5 million to $7.5 million, including interest, depending on the future decisions of the Supreme Court of Brazil. Due to uncertainties around our remaining court recovery claims, we have not recorded any further amounts relating to the retrospective nature of this matter.
In December 2019, tax authorities in Brazil notified us of a tax assessment of approximately $6.1 million, including interest and penalties of $2.3 million and $0.8 million, respectively, relating to differences in tax classification codes used for import duties for the period from January 2015 to August 2018. We are vigorously contesting the assessment, including interest and penalties, and have filed an administrative defense appeal in December 2019. In June 2020, an unfavorable decision was issued on the first administrative defense appeal. We filed a second administrative defense appeal in August 2020. We still believe we have a strong defense. Due to uncertainty in the amount of assessment and the timing of our appeal, no liability is recorded as of September 30, 2020.
​
NOTE 13 – STOCK REPURCHASE PROGRAM
On April 18, 2019, we announced a share repurchase authorization of up to $350 million of common stock. This authorization replaces previous authorizations and has no expiration date. We may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions.
During the three and nine months ended September 30, 2020, we did not repurchase any shares. During the three and nine months ended September 30, 2019, we repurchased approximately 300 thousand shares and 493 thousand shares for approximately $35.8 million and $54.9 million, respectively. As of September 30, 2020, there was $278.5 million of authorized share repurchases available to us.
​
23
NOTE 14 – STOCK-BASED COMPENSATION
We issue restricted stock units (“RSUs”), which consist of time-based and performance-based awards, to employees under stock awards plans approved by stockholders. In addition, RSUs are issued to non-employee directors under a Restricted Stock Unit Award Agreement for Directors pursuant to the Company’s 2018 Equity Incentive Plan. RSUs granted to employees vest according to a specified performance period and/or vesting period. Time-based RSUs generally vest over three years. Performance-based RSUs vest at the end of the specified performance period, generally three years, assuming required performance or market vesting conditions are met. Performance-based RSUs have one of two vesting conditions: (1) based on our internal financial performance metrics and (2) based on our total shareholder return (“TSR”) relative to total shareholder returns of an industrial peer group. At the time of vesting, the vested shares of common stock are issued in the employee’s name. In addition, RSU awards are generally net settled (shares are withheld to cover the employee tax obligation). RSUs granted to directors are only time-based and generally vest over one year.
The fair value of both time-based RSUs and performance-based RSUs pertaining to internal performance metrics is determined using the closing price of our common stock on the grant date. The fair value of performance-based RSUs pertaining to TSR is estimated using a Monte Carlo simulation. Inputs and assumptions used to calculate the fair value are shown in the table below. The fair value of these RSUs is expensed over the vesting period using the straight-line method or using the graded vesting method when an employee becomes eligible to retain the award at retirement.
​
Nine Months Ended September 30, 2020 2019
Fair value per stock award $ 94.98  $ 134.97 
Grant date stock price $ 83.93  $ 104.51 
Assumptions: ​ ​
Aptar's stock price expected volatility 23.80  % 16.50  %
Expected average volatility of peer companies 48.50  % 31.90  %
Correlation assumption 63.50  % 37.40  %
Risk-free interest rate 0.31  % 2.19  %
Dividend yield assumption 1.72  % 1.30  %
​
A summary of RSU activity as of September 30, 2020 and changes during the nine month period then ended is presented below:
​ Time-Based RSUs Performance-Based RSUs
​ Units Weighted Average
Grant-Date Fair Value 		Units Weighted Average
Grant-Date Fair Value
Nonvested at January 1, 2020 480,729  $ 95.45  181,680  $ 117.26 
Granted 232,802  86.05  417,313  93.08 
Vested (130,654) 85.62  —  — 
Forfeited (5,692) 99.08  (6,714) 108.10 
Nonvested at September 30, 2020 577,185  $ 92.33  592,279  $ 100.29 
​
Included in the September 30, 2020 time-based RSUs are 12,379 units granted to non-employee directors and 11,490 units vested related to non-employee directors.
Compensation expense recorded attributable to RSUs for the first nine months of 2020 and 2019 was approximately $24.5 million and $13.7 million, respectively. The actual tax benefit realized for the tax deduction from RSUs was approximately $4.5 million in the nine months ended September 30, 2020. The fair value of units vested during the nine months ended September 30, 2020 and 2019 was $11.2 million and $4.1 million, respectively. The intrinsic value of units vested during the nine months ended September 30, 2020 and 2019 was $13.5 million and $4.9 million, respectively. As of September 30, 2020, there was $51.1 million of total unrecognized compensation cost relating to RSU awards which is expected to be recognized over a weighted-average period of 2.0 years.
Historically we issued stock options to our employees and non-employee directors. Beginning in 2019, we no longer issue stock options. Stock options were awarded with the exercise price equal to the market price on the date of grant and generally vest over three years and expire 10 years after grant. Compensation expense attributable to employee stock options for the first nine months of 2020 was approximately $1.7 million ($1.3 million after tax). Approximately $1.4 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. Compensation expense attributable to stock options for the first nine months of 2019 was approximately $4.4 million ($3.6 million after tax). Approximately $3.7 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. The reduction in stock option expense is due to our move to RSUs as discussed above. For stock option grants, we used historical data to estimate expected life and volatility.
24
 A summary of option activity under our stock plans during the nine months ended September 30, 2020 is presented below:​
​ Stock Awards Plans Director Stock Option Plans
​ Options Weighted Average
Exercise Price 		Options Weighted Average
Exercise Price
Outstanding, January 1, 2020 5,044,180  $ 68.32  135,251  $ 58.45 
Granted —  —  —  — 
Exercised (785,478) 59.98  (34,151) 51.75 
Forfeited or expired (14,200) 76.07  —  — 
Outstanding at September 30, 2020 4,244,502  $ 69.91  101,100  $ 60.71 
Exercisable at September 30, 2020 4,089,846  $ 69.11  101,100  $ 60.71 
Weighted-Average Remaining Contractual Term (Years): ​ ​ ​ ​
Outstanding at September 30, 2020 4.9 ​ 2.9 ​
Exercisable at September 30, 2020 4.8 ​ 2.9 ​
Aggregate Intrinsic Value: ​ ​ ​ ​
Outstanding at September 30, 2020 $ 183,753  ​ $ 5,306  ​
Exercisable at September 30, 2020 $ 179,771  ​ $ 5,306  ​
Intrinsic Value of Options Exercised During the Nine Months Ended:
​ ​ ​ ​
September 30, 2020 $ 44,086  ​ $ 2,183  ​
September 30, 2019 $ 76,797  ​ $ 722  ​
​
The grant date fair value of options vested during the nine months ended September 30, 2020 and 2019 was $7.6 million and $12.2 million, respectively. Cash received from option exercises was approximately $51.1 million and the actual tax benefit realized for the tax deduction from option exercises was approximately $10.8 million in the nine months ended September 30, 2020. As of September 30, 2020, the remaining valuation of stock option awards to be expensed in future periods was $0.6 million and the related weighted-average period over which it is expected to be recognized is 0.4 years.
​
​
NOTE 15 – EARNINGS PER SHARE
Basic net income per share is calculated by dividing net income attributable to Aptar by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing the net income attributable to Aptar by the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to stock-based compensation awards. Stock-based compensation awards for which total employee proceeds exceed the average market price over the applicable period would have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share. The reconciliation of basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019 is as follows:
​
​
25
​ Three Months Ended
​ September 30, 2020 September 30, 2019
​ Diluted Basic Diluted Basic
Consolidated operations ​ ​ ​ ​
Income available to common stockholders $ 63,716  $ 63,716  $ 56,750  $ 56,750 
​ ​ ​ ​ ​
Average equivalent shares ​ ​ ​ ​
Shares of common stock 64,562  64,562  64,010  64,010 
Effect of dilutive stock-based compensation ​ ​ ​ ​
Stock options 1,809  —  2,367  — 
Restricted stock 551  —  325  — 
Total average equivalent shares 66,922  64,562  66,702  64,010 
Net income per share $ 0.95  $ 0.99  $ 0.85  $ 0.89 
​
​ Nine Months Ended
​ September 30, 2020 September 30, 2019
​ Diluted Basic Diluted Basic
Consolidated operations ​ ​ ​ ​
Income available to common stockholders $ 160,808  $ 160,808  $ 193,669  $ 193,669 
​ ​ ​ ​ ​
Average equivalent shares ​ ​ ​ ​
Shares of common stock 64,278  64,278  63,485  63,485 
Effect of dilutive stock-based compensation ​ ​ ​ ​
Stock options 1,770  — 2,425  —
Restricted stock 435  — 253  —
Total average equivalent shares 66,483  64,278  66,163  63,485 
Net income per share $ 2.42  $ 2.50  $ 2.93  $ 3.05 
​
​
​
NOTE 16 – SEGMENT INFORMATION
We are organized into three reporting segments. Our Beauty + Home segment sells to the personal care, beauty and home care markets. Our Pharma segment serves customers in the prescription drug, consumer health care, injectables and active packaging markets. Our Food + Beverage segment sells to the food and beverage markets.
The accounting policies of the segments are the same as those described in Part II, Item 8, Note 1 - Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2019. We evaluate performance of our business units and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives and acquisition-related costs. All internal segment reporting and discussions of results with our Chief Operating Decision Maker (CODM) are based on segment Adjusted EBITDA.
26
Financial information regarding our reporting segments is shown below:
​ Three Months Ended
September 30, 2020 		Nine Months Ended
September 30, 2020
​ 2020 2019 2020 2019
Total Sales: ​ ​ ​ ​
Beauty + Home $ 342,710  $ 333,870  $ 979,645  $ 1,056,626 
Pharma 317,610  271,608  921,085  830,679 
Food + Beverage 106,667  104,458  305,991  328,280 
Total Sales 766,987  709,936  $ 2,206,721  $ 2,215,585 
Less: Intersegment Sales: ​ ​ ​ ​
Beauty + Home $ 5,479  $ 5,688  $ 18,068  $ 18,705 
Pharma 1,852  2,357  6,872  6,788 
Food + Beverage 503  613  1,770  1,693 
Total Intersegment Sales $ 7,834  $ 8,658  $ 26,710  $ 27,186 
Net Sales: ​ ​ ​ ​
Beauty + Home $ 337,231  $ 328,182  $ 961,577  $ 1,037,921 
Pharma 315,758  269,251  914,213  823,891 
Food + Beverage 106,164  103,845  304,221  326,587 
Net Sales $ 759,153  $ 701,278  $ 2,180,011  $ 2,188,399 
Adjusted EBITDA (1): ​ ​ ​ ​
Beauty + Home $ 34,733  $ 41,475  $ 92,954  $ 143,411 
Pharma 112,436  95,899  324,877  294,684 
Food + Beverage 20,351  18,728  53,543  56,363 
Corporate & Other, unallocated (10,964) (9,943) (34,071) (33,328)
Acquisition-related costs (2) (221) (708) (6,087) (1,767)
Restructuring Initiatives (3) (3,415) (6,019) (15,585) (17,286)
Depreciation and amortization (55,179) (49,218) (162,414) (144,574)
Interest Expense (8,851) (8,898) (25,973) (26,868)
Interest Income 249  957  599  3,738 
Income before Income Taxes $ 89,139  $ 82,273  $ 227,843  $ 274,373 
________________________________________________
(1)We evaluate performance of our reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives and acquisition-related costs.
(2)Acquisition-related costs include transaction costs and purchase accounting adjustments related to acquisitions and investments (see Note 17 – Acquisitions and Note 18 – Investment in Equity Securities for further details).
(3)Restructuring Initiatives includes expense items for the three and nine months ended September 30, 2020 and 2019 as follows (see Note 19 – Restructuring Initiatives for further details):
​
​ Three Months Ended
September 30, 2020 		Nine Months Ended
September 30, 2020
​ 2020 2019 2020 2019
Restructuring Initiatives by Segment ​ ​ ​ ​
Beauty + Home $ 3,144  $ 5,341  $ 15,375  $ 14,869 
Pharma 300  168  158  381 
Food + Beverage (31) 204  147  826 
Corporate & Other 2  306  (95) 1,210 
Total Restructuring Initiatives $ 3,415  $ 6,019  $ 15,585  $ 17,286 
​
​
​
​
27
NOTE 17 – ACQUISITIONS
Business Combinations
On April 1, 2020, we completed our acquisition (the “Fusion Acquisition”) of 100% of the equity interests of Fusion Packaging, Inc. (“Fusion”) for a purchase price of approximately $163.8 million (net of $1.0 million of cash acquired), which was funded by a draw on our revolving credit facility and cash on hand. Fusion, based in Dallas, TX, is a global leader in the design, engineering and distribution of luxury packaging for the beauty industry. As part of the Fusion Acquisition, we are also obligated to pay to the selling equity holders of Fusion certain contingent consideration based on 2022 cumulative financial performance metrics as defined in the purchase agreement. Based on a projection as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $19.1 million utilizing a Black-Scholes valuation model. As of September 30, 2020, we have estimated the aggregate fair value for this contingent consideration arrangement to be $22.1 million.
As of the acquisition date, $2.8 million was held in restricted cash pending the finalization of a working capital adjustment and indemnity escrow. During the third quarter of 2020, $2.0 million related to the working capital escrow was released from restriction, resulting in a refund from seller of $294 thousand and a corresponding decrease to our purchase price and associated goodwill balance. Fusion contributed net sales of $37.9 million and pretax loss of $1.5 million since acquisition for the period ended September 30, 2020 which have been included in the Condensed Consolidated Financial Statements within our Beauty + Home segment. Included in pretax loss is $5.7 million of fair value adjustment amortization for inventory sold during 2020 and contingent consideration liability adjustments.
On October 31, 2019, we completed our acquisition (the “Noble Acquisition”) of 100% of the equity interests of Noble International Holdings, Inc., Genia Medical, Inc. and JBCB Holdings, LLC (collectively referred to as “Noble”). Noble, based in Orlando, FL, is a leading provider in developing patient-centric advanced drug delivery system training devices including autoinjector, prefilled syringe, onbody and respiratory devices for the world’s leading biopharmaceutical companies and original equipment manufacturers. The purchase price was approximately $62.3 million (net of $1.6 million of cash acquired) and was funded by cash on hand. As part of the Noble Acquisition, we are also obligated to pay to the selling equity holders of Noble certain contingent consideration based on 2024 cumulative financial performance metrics defined in the purchase agreement. Based on projection as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $2.9 million utilizing the Black-Scholes valuation model. As of September 30, 2020, we have estimated the aggregate fair value for this contingent consideration arrangement to be $4.2 million.
As of December 31, 2019, $5 million was held in restricted cash pending the finalization of a working capital adjustment and indemnity escrow. During the first quarter of 2020, $1.0 million related to the working capital escrow was released from restriction, resulting in an additional $463 thousand payment due to the seller and a corresponding increase to our purchase price and associated goodwill balance. The results of Noble’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition.
On June 5, 2019, we completed our acquisition (the “Nanopharm Acquisition”) of all of the outstanding capital stock of Nanopharm Ltd. (“Nanopharm”). Nanopharm, located in Newport, UK, is a science-driven, leading provider of orally inhaled and nasal drug product design and development services. The purchase price was approximately $38.1 million (net of $1.8 million of cash acquired) and was funded by cash on hand. The results of Nanopharm’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition.
On May 31, 2019, we completed our acquisition (the “Gateway Acquisition”) of all of the outstanding equity interests of Gateway Analytical LLC (“Gateway”). Gateway, located in Gibsonia, PA, provides industry-leading particulate detection and predictive analytical services to customers developing injectable medicines. The purchase price was approximately $7.0 million and was funded by cash on hand. As part of the Gateway Acquisition, we are also obligated to pay to the selling equity holder of Gateway certain contingent consideration based on 2020 and 2022 performance targets defined in the purchase agreement. Based on projections as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $3.0 million. During the second quarter 2020, $1.5 million of the contingent consideration accrual was paid as a result of the business meeting their first performance target. During the third quarter 2020, an additional $1.3 million was paid out in full satisfaction of the remaining earn out consideration and a gain of $235 thousand was realized. The results of Gateway’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition.
28
The following table summarizes the assets acquired and liabilities assumed as of the acquisition date at estimated fair value.
​ 2020 2019
Assets ​ ​
Cash and equivalents $ 1,010  $ 3,427 
Accounts receivable 4,380  3,504 
Inventories 386  — 
Prepaid and other 1,090  2,478 
Property, plant and equipment 2,885  4,267 
Goodwill 99,644  59,143 
Intangible assets 79,900  52,980 
Operating lease right-of-use assets 4,744  — 
Other miscellaneous assets 65  430 
Liabilities ​ ​
Accounts payable, accrued and other liabilities 5,641  5,388 
Deferred income taxes —  2,592 
Operating lease liabilities 4,207  — 
Deferred and other non-current liabilities 322  1,598 
Net assets acquired $ 183,934  $ 116,651 
​
The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date:
​ 2020 2019
​ Weighted-Average Useful Life (in Years) Estimated Fair Value of Assets Weighted-Average Useful Life (in Years) Estimated Fair Value of Assets
Acquired technology 4 $ 4,600  8 $ 9,160 
Customer relationships 13 62,300  11 39,379 
Trademarks and trade names 4 10,300  4 2,457 
License agreements and other 0.25 2,700  1 1,984 
Total ​ $ 79,900  ​ $ 52,980 
​
Goodwill in the amount of $99.6 million was recorded related to the Fusion Acquisition which is included in the Beauty + Home segment and $59.1 million was recorded related to the 2019 acquisitions, all of which are included in the Pharma segment. Goodwill is calculated as the excess of the consideration transferred over the net assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill largely consists of unique relationships, brand equity and proprietary technology that has been established creating niches such as turnkey solutions for the beauty market related to the Fusion Acquisition, analytical services for drug developers related to the Nanopharm Acquisition and Gateway Acquisition and patient onboarding related to the Noble Acquisition, as well as the abilities of the acquired companies to maintain their competitive advantage from a technical viewpoint. Goodwill will not be amortized, but will be tested for impairment at least annually. For the Fusion Acquisition, goodwill of $82.3 million will be deductible for tax purposes. For the 2019 acquisitions, goodwill of $31.1 million will be deductible for tax purposes.
The unaudited pro forma results presented below include the effects of the Fusion Acquisition as if it had occurred as of January 1, 2019. The unaudited pro forma results reflect certain adjustments related to the acquisition, such as intangible asset amortization, fair value adjustments for inventory and financing costs related to the change in our debt structure. The pro forma results do not include any synergies or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been completed on the date indicated.
​
29
​ Three Months Ended September 30, 2020 Nine Months Ended
September 30, 2020
​ 2020 2019 2020 2019
Net Sales $ 759,153  $ 719,008  $ 2,187,974  $ 2,244,834 
Net Income Attributable to AptarGroup Inc. 63,724  57,191  160,077  196,195 
Net Income per common share — basic 0.99  0.89  2.49  3.09 
Net Income per common share — diluted 0.95  0.86  2.41  2.97 
​
Asset Acquisition
On August 2, 2019, we completed our asset acquisition (the “Bapco Acquisition”) of the remaining 80% ownership interest in the capital stock of Bapco Closures Holdings Limited (“Bapco”), for $3.8 million (net of $2.9 million of cash acquired). The 20% ownership investment previously held in Bapco is now included within the intangible assets acquired. Bapco, located in Leeds, UK, provides innovative closures sealing technology that provides package integrity and tamper evidence. The results of Bapco’s operations have been included in the Condensed Consolidated Financial Statements within our Food + Beverage segment since the date of acquisition.
NOTE 18 – INVESTMENT IN EQUITY SECURITIES
Our investment in equity securities consisted of the following:​
​ September 30,
2020 		December 31,
2019
Equity Method Investments: ​ ​
BTY $ 31,921  $ 119 
Sonmol 5,195  — 
Kali Care 3,611  3,881 
Desotec GmbH 904  858 
​
Other Investments 5,365  3,538 
​ $ 46,995  $ 8,396 
​
Equity method investments
Sonmol
On April 1, 2020, we invested $5 million to acquire 30% of the equity interests in Healthcare, Inc., Shanghai Sonmol Internet Technology Co., Ltd. and its subsidiary, Shanghai Sonmol Medical Equipment Co., Ltd. (collectively referred to as “Sonmol”), a pharmaceutical and leading Chinese digital respiratory therapeutics company that provides connected devices for asthma control and develops digital therapies and services platforms targeting chronic respiratory illnesses and other diseases.
BTY
On January 1, 2020, we acquired 49% of the equity interests in 3 related companies: Suzhou Hsing Kwang, Suqian Hsing Kwang and Suzhou BTY (collectively referred to as “BTY”) for an approximate purchase price of $32 million. We have a call option to acquire an additional 26% to 31% of BTY’s equity interests following the initial lock-up period of 5 years based on a predetermined formula. Subsequent to the second lock-up period, which ends 3 years subsequent to the initial lock-up period, we have a call option to acquire the remaining equity interests of BTY based on a predetermined formula. Additionally, the selling shareholders of BTY have a put option for the remaining equity interest to be acquired by Aptar based on a predetermined formula. The BTY entities are leading Chinese manufacturers of high quality, decorative metal components, metal-plastic sub-assemblies, and complete color cosmetics packaging solutions for the beauty industry.
Kali Care
During 2017, we invested $5 million to acquire 20% of the equity interests in Kali Care, a technology company that provides digital monitoring systems for medical devices.


30
Desotec GmbH
During 2009, we invested €574 thousand to acquire 23% of the equity interests in Desotec GmbH, a leading manufacturer of special assembly machines for bulk processing for the pharmaceutical, beauty and home and food and beverages markets.
Other investments
During August 2019, we invested an aggregate amount of $3.5 million in two preferred equity investments in sustainability companies Loop and Purecycle Technologies (“Purecycle”) that are accounted for at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. In July and September 2020, we invested an additional $1.3 million in these two equity investments and also received $333 thousand of equity in Purecycle in exchange for our resource dedication for technological partnership and support.
There were no indications of impairment nor were there any changes from observable price changes noted in the nine months ended September 30, 2020 related to these investments.
​
NOTE 19 – RESTRUCTURING INITIATIVES
In late 2017, we began a business transformation to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness. The primary focus of the plan is the Beauty + Home segment; however, certain global general and administrative functions are also being addressed. For the three and nine months ended September 30, 2020, we recognized $3.4 million and $15.6 million of restructuring costs related to this plan, respectively. For the three and nine months ended September 30, 2019, we recognized $6.0 million and $17.3 million of restructuring costs related to this plan, respectively. Using current exchange rates, we estimate total implementation costs of approximately $125 million for these initiatives, including costs that have been recognized to date. The cumulative expense incurred as of September 30, 2020 was $102.1 million. We also anticipate making capital investments related to the transformation plan of approximately $50 million, of which $47 million has been incurred to date.
As of September 30, 2020 we have recorded the following activity associated with the business transformation:
​ Beginning
Reserve at
12/31/2019
Net Charges for the Nine Months Ended 9/30/2020
Cash Paid Interest and
FX Impact 		Ending Reserve at 9/30/2020
Employee severance $ 7,090  $ 10,210  $ (6,157) $ 161  $ 11,304 
Professional fees and other costs 3,609  5,375  (5,359) 4  3,629 
Totals $ 10,699  $ 15,585  $ (11,516) $ 165  $ 14,933 

​
​

31
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, OR AS OTHERWISE INDICATED)
​
RESULTS OF OPERATIONS
​
​ Three Months Ended September 30, Nine Months Ended September 30,
​ 2020 2019 2020 2019
​ ​ ​ ​ ​
Net sales 100.0  % 100.0  % 100.0  % 100.0  %
Cost of sales (exclusive of depreciation and amortization shown below) 63.2  63.3  63.0  63.2 
Selling, research & development and administrative 16.1  15.9  17.0  15.8 
Depreciation and amortization 7.3  7.0  7.5  6.6 
Restructuring initiatives 0.4  0.9  0.7  0.8 
Operating income 13.0  12.9  11.8  13.6 
Other expense (1.3) (1.2) (1.3) (1.1)
Income before income taxes 11.7  11.7  10.5  12.5 
Net Income 8.4  8.1  7.4  8.9 
Effective tax rate 28.5  % 31.0  % 29.4  % 29.4  %
Adjusted EBITDA margin (1) 20.6  % 20.8  % 20.1  % 21.1  %
________________________________________________
(1)Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under "Non-U.S. GAAP Measures".
​
SIGNIFICANT DEVELOPMENTS
During the third quarter of 2020, financial results and operations continued to be adversely impacted by the novel coronavirus (“COVID-19”) pandemic. The significance of the impacts to our segments during the third quarter and first nine months of 2020 are discussed herein and include, but are not limited to, the adverse impact on sales of our beauty products sold via duty free travel and retail stores and a reduction of our products used for on-the-go beverage applications. The extent to which the COVID-19 pandemic impacts our financial results and operations for fiscal year 2020 and going forward for all three of our business segments will depend on future developments which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the outbreak and the international actions being taken to contain and treat it. No impairments were recorded as of September 30, 2020. While the disruption is currently expected to be temporary, there is uncertainty around the duration and the extent of further resurgences. Due to significant uncertainty surrounding the situation, future results could change and therefore our results could be materially impacted.
As each of our segments produce dispensing systems that have been determined to be essential products by various government agencies around the world, our facilities remained operational during the third quarter of 2020. We have taken a variety of measures to ensure the availability and functioning of our critical infrastructure, to promote the safety and security of our employees and to support the communities in which we operate. These measures include requiring remote working arrangements for employees where practicable. We are following public and private sector policies and initiatives to reduce the transmission of COVID-19, such as the imposition of travel restrictions, the promotion of social distancing and the adoption of work-from-home arrangements, and all of these policies and initiatives have impacted our operations. Due to the dynamic nature of the situation, we are not able at this time to estimate the impact of COVID-19 on our future financial results and operations, but the impact could be material for the remainder of fiscal year 2020 and could be material during any future periods affected either directly or indirectly by this pandemic. See Part II, Item 1A, “Risk Factors,” included in this report for information on material risks associated with COVID-19.
32
Table of Contents
NET SALES
We reported net sales of $759.2 million for the quarter ended September 30, 2020, which represents an 8% increase compared to $701.3 million reported during the third quarter of 2019. Reported sales were positively impacted by acquisitions and changes in currency exchange rates. The acquisitions of Noble and Fusion positively impacted sales by 4%. The average U.S. dollar exchange rate weakened compared to the euro while it appreciated against most Latin America and Asian currencies, resulting in a positive currency translation impact of 2%. Therefore, core sales, which exclude acquisitions and changes in foreign currency rates, increased by 2% in the third quarter of 2020 compared to the same period in 2019. During the third quarter of 2020, our Pharma segment experienced strong, broad-based demand with particularly strong growth in our injectables division and strong custom tooling and product sales in our active packaging division. While sales to our beauty markets continue to be negatively impacted by the effects of COVID-19, our Beauty + Home segment benefited from strong sales to the personal care market related to hand sanitizers and liquid soaps and the home care market related to cleaners and disinfectants. Our Food + Beverage segment reported positive sales growth with strong sales to the food market due to the demand for pantry staples with consumers continuing to cook at home during the pandemic. Sales to the beverage market continued to be impacted by lower demand for on-the-go beverages related to the pandemic.
Third Quarter 2020
Net Sales Change over Prior Year 		Beauty
+ Home 		Pharma Food +
Beverage 		Total
Core Sales Growth (5) % 11  % 2  % 2  %
Acquisitions 7  % 2  % —  % 4  %
Currency Effects (1) 1  % 4  % —  % 2  %
Total Reported Net Sales Growth 3  % 17  % 2  % 8  %
​
For the first nine months of 2020, reported net sales of $2.18 billion, were in line with the first nine months of 2019 reported net sales of $2.19 billion. Sales were negatively impacted by changes in currency exchange rates, passing-through lower resin costs to customers and COVID-19 related effects on certain markets we serve. While the average U.S. dollar exchange rate did not change compared to the euro, it strengthened compared to most of the other major currencies we operate in, resulting in a negative currency translation impact of 1%. The acquisitions of Gateway, Nanopharm, Noble and Fusion positively impacted sales by 3%.  Therefore, core sales, which exclude acquisitions and changes in foreign currency rates, decreased by 2% in the first nine months of 2020 compared to the same period in 2019.  As discussed above, both our Beauty + Home and Food + Beverage segments have been significantly impacted by the COVID-19 pandemic, along with a negative impact of passing through lower resin costs to our customers.
Nine Months Ended September 30, 2020
Net Sales Change over Prior Year 		Beauty
+ Home 		Pharma Food +
Beverage 		Total
Core Sales Growth (9) % 8  % (5) % (2) %
Acquisitions 4  % 3  % —  % 3  %
Currency Effects (1) (2) % —  % (2) % (1) %
Total Reported Net Sales Growth (7) % 11  % (7) % —  %
________________________________________________
(1)Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

The following table sets forth, for the periods indicated, net sales by geographic location:
​
​ Three Months Ended September 30, Nine Months Ended September 30,
​ 2020 % of Total 2019 % of Total 2020 % of Total 2019 % of Total
Domestic $ 262,546  35  % $ 211,497  30  % $ 722,871  33  % $ 640,543  29  %
Europe 401,765  53  % 391,512  56  % 1,189,680  55  % 1,248,411  57  %
Latin America 49,435  6  % 54,685  8  % 143,598  6  % 170,605  8  %
Asia 45,407  6  % 43,584  6  % 123,862  6  % 128,840  6  %
​
For further discussion on net sales by reporting segment, please refer to the analysis of segment net sales and segment Adjusted EBITDA on the following pages.
33
Table of Contents
COST OF SALES (EXCLUSIVE OF DEPRECIATION AND AMORTIZATION SHOWN BELOW)
Cost of sales (“COS”) as a percent of net sales remained consistent at 63.2% in the third quarter of 2020 compared to 63.3% in the third quarter of 2019. Our COS percentage was positively impacted by our cost containment efforts and the mix of business as we reported sales growth in our higher margin Pharma segment. We also benefited from lower resin costs during the quarter as resin prices have declined compared to the prior year. However, we did experience some additional costs and under-absorbed overhead primarily in our dedicated beauty facilities during the third quarter of 2020 related to the COVID-19 pandemic.
Cost of sales as a percent of net sales decreased slightly to 63.0% in the first nine months of 2020 compared to 63.2% in the same period a year ago. As mentioned above, our COS was favorably impacted by the increased mix in our higher margin Pharma business, lower resin costs and cost containment efforts. However, we also reported additional costs and temporary inefficiencies in our manufacturing process related to the COVID-19 pandemic as discussed above. For example, we declared special bonus payments to certain employees who worked to maintain supply to our customers and keep our facilities running, which increased our COS percentage during the first nine months of 2020.
SELLING, RESEARCH & DEVELOPMENT AND ADMINISTRATIVE
Selling, research & development and administrative expenses (“SG&A”) increased by approximately $10.3 million to $121.9 million in the third quarter of 2020 compared to $111.6 million during the same period in 2019. Excluding changes in foreign currency rates, SG&A increased by approximately $8.6 million in the quarter. The increase is mainly due to $6.9 million of new operational costs for our acquisitions completed subsequent to September 30, 2019, as well as fair value adjustments related to contingent consideration arrangements. We also recognized higher personnel costs, including $3.5 million of stock-based compensation mainly for our acquired entities which was offset by lower travel costs due to the COVID-19 pandemic. SG&A as a percentage of net sales increased to 16.1% compared to 15.9% in the same period of the prior year due to the cost increases mentioned above.
SG&A increased by $24.9 million to $371.4 million in the first nine months of 2020 compared to $346.5 million during the same period a year ago. Excluding changes in foreign currency rates, SG&A increased by approximately $28.7 million in the first nine months of 2020 compared to the first nine months of 2019. As discussed above, the increase is related to $15.7 million of new SG&A costs from our acquisitions completed subsequent to September 30, 2019 as well as fair value adjustments related to contingent consideration arrangements, along with higher personnel costs. SG&A as a percentage of net sales increased to 17.0% compared to 15.8% in the same period of the prior year due to the cost increases mentioned above.
DEPRECIATION AND AMORTIZATION
Reported depreciation and amortization expenses increased by approximately $6.0 million to $55.2 million in the third quarter of 2020 compared to $49.2 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately $5.1 million in the quarter compared to the same period in 2019. The majority of this increase is due to $3.3 million of incremental depreciation and amortization costs related to our acquired companies. Depreciation and amortization as a percentage of net sales increased to 7.3% in the third quarter of 2020 compared to 7.0% in the same period of the prior year.
Reported depreciation and amortization expenses increased by approximately $17.8 million to $162.4 million in the first nine months of 2020 compared to $144.6 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately $19.3 million in the first nine months of 2020 compared to the same period a year ago. The majority of this increase is due to $11.7 million of incremental depreciation and amortization costs related to our acquired companies. Depreciation and amortization as a percentage of net sales increased to 7.5% in the first nine months of 2020 compared to 6.6% in the same period of the prior year.
34
Table of Contents
RESTRUCTURING INITIATIVES
In late 2017, we began a business transformation to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness. The primary focus of the plan is the Beauty + Home segment; however, certain global general and administrative functions are also being addressed. Restructuring costs related to this plan for the three and nine months ended September 30, 2020 and 2019 are as follows:
​ Three Months Ended September 30, Nine Months Ended September 30,
​ 2020 2019 2020 2019
Restructuring Initiatives by Segment ​ ​ ​ ​
Beauty + Home $ 3,144  $ 5,341  $ 15,375  $ 14,869 
Pharma 300  168  158  381 
Food + Beverage (31) 204  147  826 
Corporate & Other 2  306  (95) 1,210 
Total Restructuring Initiatives $ 3,415  $ 6,019  $ 15,585  $ 17,286 
​
We estimate total implementation costs of approximately $125 million, including $102.1 million of costs that have been recognized to date. We also anticipate making capital investments related to the business transformation of approximately $50 million, of which $47 million has been incurred to date. Based on our ongoing restructuring initiatives, we are progressing towards our initial target of $80 million annualized incremental EBITDA by the end of 2020, principally within the Beauty + Home segment. However, in addition to the impacts of COVID-19, ongoing changes in customer and vendor negotiations, material indices, macro-economic trends and other factors represent continuing headwinds to the Beauty + Home segment, and have offset the consolidated net benefits from these initiatives.  
OPERATING INCOME
Operating income increased approximately $8.8 million to $99.0 million in the third quarter of 2020 compared to $90.2 million in the same period a year ago. Excluding changes in foreign currency rates, operating income increased by approximately $5.0 million in the quarter compared to the same period a year ago. This increase is due to higher sales volumes while maintaining a consistent gross margin. We also benefited from lower restructuring costs during the third quarter of 2020 compared to the prior year period. Operating income as a percentage of net sales increased slightly to 13.0% in the third quarter of 2020 compared to 12.9% in the prior year period.
For the first nine months of 2020, operating income decreased approximately $39.2 million to $258.0 million compared to $297.2 million in the same period of the prior year. Excluding changes in foreign currency rates, operating income decreased by approximately $38.8 million in the first nine months of 2020 compared to the same period a year ago. The majority of this decrease occurred during the second quarter of 2020 due to the impact of lower sales and operational inefficiencies related to the COVID-19 pandemic. Operating income as a percentage of net sales decreased to 11.8% in the first nine months of 2020 compared to 13.6% for the same period in the prior year.
NET OTHER EXPENSE
Net other expense in the third quarter of 2020 increased $1.9 million to $9.9 million from $8.0 million in the same period of the prior year. Interest income decreased by approximately $0.7 million due to less cash on hand after our acquisition of Fusion at the beginning of the second quarter 2020.  Miscellaneous expenses increased by approximately $0.8 million as a result of higher pension costs due to the decline in discount rates in 2020 compared to 2019 and higher costs to hedge certain Latin American currencies.
Net other expense for the nine months ended September 30, 2020 increased $7.3 million to $30.1 million from $22.8 million in the same period of the prior year. As discussed above, this increase is mainly due to $3.1 million of lower interest income in 2020 as a result of the Fusion Acquisition. Miscellaneous expenses increased by approximately $3.5 million mainly due to the higher pension costs and higher costs to hedge certain Latin American currencies as mentioned above.
EFFECTIVE TAX RATE
The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings and related estimated full year-taxes, adjusted for the impact of discrete quarterly items.
The effective tax rate for the three months ended September 30, 2020 and 2019, respectively, was 28.5% and 31.0%.  The reported effective tax rate for the three months ended September 30, 2020 was favorably impacted by additional excess tax benefits from employee stock-based compensation of $1.4 million and benefits reflecting changes in the U.S. GILTI tax for the current year of $1.5 million. 
35
Table of Contents
The effective tax rate for the nine months ended September 30, 2020 and 2019 was 29.4%. The nine month effective tax rates reflect a favorable impact from the excess tax benefits from employee stock-based compensation of $8.7 million and $13.6 million, respectively, offset by the unfavorable impact from losses in jurisdictions where the tax benefit is not recognized and other discrete items of $5.1 million and $10.9 million, respectively.
​
NET INCOME ATTRIBUTABLE TO APTARGROUP, INC.
We reported net income attributable to AptarGroup of $63.7 million and $160.8 million in the three and nine months ended September 30, 2020, compared to $56.8 million and $193.7 million for the same periods in the prior year.
BEAUTY + HOME SEGMENT
Operations that sell dispensing systems and sealing solutions to the personal care, beauty and home care markets form the Beauty + Home segment.
​
​ Three Months Ended September 30, Nine Months Ended September 30,
​ 2020 2019 2020 2019
Net Sales $ 337,231  $ 328,182  $ 961,577  $ 1,037,921 
Adjusted EBITDA (1) 34,733  41,475  92,954  143,411 
Adjusted EBITDA margin (1) 10.3  % 12.6  % 9.7  % 13.8  %
________________________________________________
(1)Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives and acquisition-related costs. Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under "Non-U.S. GAAP Measures".

Reported net sales for the quarter ended September 30, 2020 increased 3% to $337.2 million compared to $328.2 million in the third quarter of the prior year. Changes in currency rates positively impacted net sales by 1% while our acquisition of Fusion contributed an additional 7% to the top line growth in the third quarter of 2020. Therefore, core sales decreased 5% in the third quarter of 2020 compared to the same quarter of the prior year. The COVID-19 pandemic continued to negatively impact core sales to the beauty market during the third quarter of 2020 due to significant reduction in domestic and international travel leading to a reduction in duty free sales. Core sales of our products to the beauty market decreased 21% as we continued to experience a significant reduction in orders from customers providing both fragrance and skin care products, mainly in the travel retail and standard retail settings. Personal care core sales increased 12% on increased sales of our products to our personal cleansing customers, mainly for hand sanitizers and liquid soaps which more than compensated for continued softness in our deodorant, hair care and sun care applications as consumers continued to shelter in place. Core sales to the home care markets increased 6% on strong demand for our household cleaner and disinfectant products.
Third Quarter 2020
Net Sales Change over Prior Year 		Personal
Care 		Beauty Home
Care 		Total
Core Sales Growth 12  % (21) % 6  % (5) %
Acquisitions —  % 14  % —  % 7  %
Currency Effects (1) —  % 1  % 1  % 1  %
Total Reported Net Sales Growth 12  % (6) % 7  % 3  %
​
For the first nine months of 2020, net sales decreased 7% to $0.96 billion compared to $1.04 billion in the first nine months of the prior year. Changes in currency rates negatively impacted net sales by 2% while our acquisition of Fusion positively impacted sales by 4% in the first nine months of 2020. Therefore, core sales decreased by 9% in the first nine months of 2020 compared to the same period in the prior year. The COVID-19 pandemic also impacted the first nine months of 2020 as we began to see the effects in our first quarter results. Core sales of our products to the beauty market decreased 22% across all applications, but mainly on lower sales of prestige fragrance products to our customers.  Compared to the same period in the prior year, personal care core sales increased 6%, driven by increases in hand sanitation product sales, while home care core sales decreased 2% mainly on lower sales to our laundry care customers.
36
Table of Contents
Nine Months Ended September 30, 2020
Net Sales Change over Prior Year 		Personal
Care 		Beauty Home
Care 		Total
Core Sales Growth 6  % (22) % (2) % (9) %
Acquisitions —  % 7  % —  % 4  %
Currency Effects (1) (2) % (2) % (1) % (2) %
Total Reported Net Sales Growth 4  % (17) % (3) % (7) %
________________________________________________
(1)Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

Adjusted EBITDA in the third quarter of 2020 decreased 16% to $34.7 million compared to $41.5 million in the same period in the prior year. As discussed above, the COVID-19 pandemic affected our profitability due to overall lower sales volumes. Our profitability was further impacted by lower overhead absorption due to fluctuations in demand primarily in our facilities that manufacture beauty products. We also incurred $1.8 million of fair value adjustments related to our contingent consideration arrangement for the Fusion Acquisition.
Adjusted EBITDA in the first nine months of 2020 decreased 35% to $93.0 million compared to $143.4 million reported in the same period in the prior year. As discussed above, our profitability during the first nine months of 2020 was significantly impacted by the COVID-19 pandemic, mainly in our beauty applications. Our profitability was further impacted by special employee bonus payments to certain employees who worked to maintain supply to our customers and keep our facilities running as well as lower overhead absorption as we continue to manage demand fluctuations in our facilities. We also incurred $3.0 million of fair value adjustments related to our contingent consideration arrangement for the Fusion Acquisition.
PHARMA SEGMENT
Operations that sell drug delivery, sealing and active packaging solutions primarily to the prescription drug, consumer health care, injectables and active packaging markets form the Pharma segment.
​
​ Three Months Ended September 30, Nine Months Ended September 30,
​ 2020 2019 2020 2019
Net Sales $ 315,758  $ 269,251  $ 914,213  $ 823,891 
Adjusted EBITDA (1) 112,436  95,899  324,877  294,684 
Adjusted EBITDA margin (1) 35.6  % 35.6  % 35.5  % 35.8  %
________________________________________________
(1)Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives and acquisition-related costs. Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under "Non-U.S. GAAP Measures".

Net sales for the Pharma segment increased 17% in the third quarter of 2020 to $315.8 million compared to $269.3 million in the third quarter of 2019. Changes in currencies positively affected net sales by 4% while our acquisition of Noble positively impacted sales by 2% in the third quarter of 2020. Therefore, core sales increased by 11% in the third quarter of 2020 compared to the third quarter of 2019. Core sales increased in each end market with the exception of the prescription drug market where higher sales of drug delivery devices were offset by lower custom tooling sales. Core sales to the consumer health care market increased 6% on strong demand for our products used on nasal saline and nasal decongestant treatments. Injectables core sales increased 27% on higher demand for primary components used with injected medicines such as existing seasonal flu vaccines and other treatments, as well as some initial orders in anticipation of coming COVID-19 vaccines. Active packaging core sales increased 56% mainly due to two large tooling projects during the quarter. We also reported strong sales growth in our ActivVial and ActivFilm used with probiotic and oral solid dose products.
Third Quarter 2020
Net Sales Change over Prior Year 		Prescription
Drug 		Consumer
Health Care
Injectables Active
Packaging
Total
Core Sales Growth —  % 6  % 27  % 56  % 11  %
Acquisitions —  % —  % 14  % —  % 2  %
Currency Effects (1) 3  % 5  % 6  % 3  % 4  %
Total Reported Net Sales Growth 3  % 11  % 47  % 59  % 17  %
​
37
Table of Contents
Net sales for the first nine months of 2020 increased by 11% to $914.2 million compared to $823.9 million in the first nine months of 2019. While there was no impact from changes in currencies, our acquisitions of Noble, Nanopharm and Gateway positively impacted sales by 3% in the first nine months of 2020. Therefore, core sales increased by 8% in the first nine months of 2020 compared to the same period in the prior year. The core sales decrease of 1% in the prescription drug market was driven by difficult prior year comparisons on tooling and central nervous system application sales. During 2019, we also benefited from the realization of $1.8 million of revenue for achieving a development milestone related to a customer project. Core sales to the consumer health care market increased 6% on strong demand for our products used on nasal decongestant, cough and cold and dermal drug delivery treatments. Core sales of our products to the injectables and active packaging markets increased 25% and 34% respectively due to strong sales across all applications and tooling as discussed above.
​
Nine Months Ended September 30, 2020
Net Sales Change over Prior Year 		Prescription
Drug 		Consumer
Health Care
Injectables Active
Packaging
Total
Core Sales Growth (1) % 6  % 25  % 34  % 8  %
Acquisitions —  % —  % 16  % —  % 3  %
Currency Effects (1) —  % 1  % —  % —  % —  %
Total Reported Net Sales Growth (1) % 7  % 41  % 34  % 11  %
_______________________________________
(1)Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.
Adjusted EBITDA in the third quarter of 2020 increased 17% to $112.4 million compared to $95.9 million reported in the same period of the prior year. As discussed above, we reported strong product growth across most markets and benefited from higher tooling sales within our active packaging market. These core sales improvements, along with strong performance resulting from the Noble Acquisition led to the increase in reported results for the third quarter of 2020 compared to the third quarter of 2019. These improvements were slightly offset by $0.9 million higher stock-based compensation expense and $1.3 million of fair value adjustments related to our contingent consideration arrangement for the Noble Acquisition.
Adjusted EBITDA in the first nine months of 2020 increased 10% to $324.9 million compared to $294.7 million reported in the same period of the prior year. Increased sales in three of our divisions, along with incremental profit related to our acquisitions was able to compensate for $2.6 million of additional stock-based compensation expense and $1.3 million of fair value adjustments related to our contingent consideration arrangement for the Noble Acquisition. While the Pharma segment did not experience a significant sales impact from COVID-19, our margins were negatively impacted by lower sales of our high-margin prescription applications compared to our other product offerings. We also made special bonus payments to certain employees who worked to maintain supply to our customers and keep our facilities running.
​
FOOD + BEVERAGE SEGMENT
Operations that sell dispensing systems and sealing solutions to the food and beverage markets form the Food + Beverage segment.
​
​ Three Months Ended September 30, Nine Months Ended September 30,
​ 2020 2019 2020 2019
Net Sales $ 106,164  $ 103,845  $ 304,221  $ 326,587 
Adjusted EBITDA (1) 20,351  18,728  53,543  56,363 
Adjusted EBITDA margin (1) 19.2  % 18.0  % 17.6  % 17.3  %
________________________________________________
(1)Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives and acquisition-related costs. Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under "Non-U.S. GAAP Measures".
Core sales for the quarter ended September 30, 2020 increased approximately 2% to $106.2 million compared to $103.8 million in the third quarter of the prior year. There were no acquisitions or changes in foreign currency rates during the third quarter of 2020 compared to the third quarter of 2019. Core sales growth was negatively impacted by $3.5 million from passing through lower resin costs to our customers. The changes in core sales by market show distinctly different results, but both are being impacted by the COVID-19 pandemic. Core sales to the food market increased 15% due to the increased demand across several applications for pantry staples as consumers continued to cook at home during the pandemic. However, core sales to the beverage market decreased 22% as sales of our single-serve bottled water and on-the-go functional drink products continue to be negatively impacted as consumers demand less on-the-go beverages during the COVID-19 pandemic.
38
Table of Contents
Third Quarter 2020
Net Sales Change over Prior Year 		Food Beverage Total
Core Sales Growth 15  % (22) % 2  %
Acquisitions —  % —  % —  %
Currency Effects (1) —  % (1) % —  %
Total Reported Net Sales Growth 15  % (23) % 2  %
​
Net sales for the first nine months of 2020 decreased by 7% to $304.2 million compared to $326.6 million in the first nine months of 2019. Changes in currency rates negatively impacted net sales by 2%. Therefore, core sales decreased by 5% in the first nine months of 2020 compared to the same period in the prior year. The pass-through of lower resin costs and lower tooling sales negatively impacted the first nine months of 2020 by $12.2 million and $6.4 million, respectively. Core sales to the food market increased 4% while core sales to the beverage market decreased 25% in the first nine months of 2020 compared to the same period of the prior year. Sales to the food market increased due to strong sales of our products to our spreads, cooking oils and granular/powder customers. These increases were offset by lower tooling sales versus the prior year period. As discussed above, core sales to the beverage market decreased as sales of our single-serve bottled water and on-the-go functional drink products as well as tooling sales were all significantly affected by the COVID-19 pandemic.
Nine Months Ended September 30, 2020
Net Sales Change over Prior Year 		Food Beverage Total
Core Sales Growth 4  % (25) % (5) %
Acquisitions —  % —  % —  %
Currency Effects (1) (1) % (2) % (2) %
Total Reported Net Sales Growth 3  % (27) % (7) %
______________________________________________________________
(1)Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.
Adjusted EBITDA in the third quarter of 2020 increased 9% to $20.4 million compared to $18.7 million reported in the same period of the prior year. Higher product sales to the food markets discussed above, along with the benefits we received from our cost containment activities and other operational improvements realized during the third quarter of 2020 more than compensated for lower tooling sales and other negative COVID-19 impacts, mainly on our beverage market applications.
Adjusted EBITDA in the first nine months of 2020 decreased 5% to $53.5 million compared to $56.4 million reported in the same period of the prior year. The COVID-19 impact on product sales discussed above, along with lower tooling and special bonus payments to certain employees who worked to maintain supply to our customers and keep our facilities running, more than offset the benefits we received from cost containment activities and other operational improvements realized during the first nine months of 2020.
​
CORPORATE & OTHER
In addition to our three reporting segments, we assign certain costs to “Corporate & Other,” which is presented separately in Note 16 – Segment Information to the Notes to the Condensed Consolidated Financial Statements. For Corporate & Other, Adjusted EBITDA (which excludes net interest, taxes, depreciation, amortization, restructuring initiatives and acquisition-related costs) primarily includes certain professional fees, compensation and information system costs which are not allocated directly to our reporting segments. For the quarter ended September 30, 2020, Corporate & Other expenses increased to $11.0 million from $9.9 million in the third quarter of 2019. Of the $1.1 million increase, $0.4 million is due to changes in foreign currencies. The remaining increase is due to slightly higher variable compensation costs which are tied to company performance and other personnel costs as we continue to implement our growth strategy partially offset by lower travel and entertainment costs due to travel restrictions in place during 2020 .
Corporate & Other expenses in the first nine months of 2020 increased to $34.1 million compared to $33.3 million reported in the same period of the prior year. Of the $0.8 million increase, $0.3 million is due to changes in foreign currencies. As discussed above, the remaining increase is due to higher variable compensation and other personnel costs partially offset by lower travel and entertainment costs.
39
Table of Contents
NON-U.S. GAAP MEASURES
In addition to the information presented herein that conforms to U.S. GAAP, we also present financial information that does not conform to U.S. GAAP, which are referred to as non-U.S. GAAP financial measures. Management may assess our financial results both on a U.S. GAAP basis and on a non-U.S. GAAP basis. We believe it is useful to present these non-U.S. GAAP financial measures because they allow for a better period over period comparison of operating results by removing the impact of items that, in management’s view, do not reflect our core operating performance. These non-U.S. GAAP financial measures should not be considered in isolation or as a substitute for U.S. GAAP financial results, but should be read in conjunction with the unaudited Condensed Consolidated Statements of Income and other information presented herein. Investors are cautioned against placing undue reliance on these non-U.S. GAAP measures. Further, investors are urged to review and consider carefully the adjustments made by management to the most directly comparable U.S. GAAP financial measure to arrive at these non-U.S. GAAP financial measures.
In our Management’s Discussion and Analysis, we exclude the impact of foreign currency translation when presenting net sales information, which we define as “constant currency.” Changes in net sales excluding the impact of foreign currency translation is a non-U.S. GAAP financial measure. As a worldwide business, it is important that we take into account the effects of foreign currency translation when we view our results and plan our strategies. Consequently, when our management looks at our financial results to measure the core performance of our business, we may exclude the impact of foreign currency translation by translating our prior period results at current period foreign currency exchange rates. As a result, our management believes that these presentations are useful internally and may be useful to investors. We also exclude the impact of material acquisitions when comparing results to prior periods. Changes in operating results excluding the impact of acquisitions are non-U.S. GAAP financial measures. We believe it is important to exclude the impact of acquisitions on period over period results in order to evaluate performance on a more comparable basis.
We present adjusted earnings before net interest and taxes (“Adjusted EBIT”) and consolidated adjusted earnings before net interest, taxes, depreciation and amortization (“Adjusted EBITDA”), both of which exclude the business transformation charges (restructuring initiatives), acquisition-related costs and purchase accounting adjustments related to acquisitions and investments. Our “Outlook” discussion below is also provided on a non-U.S. GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled, such as exchange rates, or reliably predicted because they are not part of our routine activities, such as restructuring initiatives and acquisition-related costs.
We provide a reconciliation of Net Debt to Net Capital as a non-U.S. GAAP measure. “Net Debt” is calculated as interest bearing debt less cash and equivalents and short-term investments while “Net Capital” is calculated as stockholders’ equity plus Net Debt. Net Debt to Net Capital measures a company’s financial leverage, which gives users an idea of a company's financial structure, or how it is financing its operations, along with insight into its financial strength. We believe that it is meaningful to take into consideration the balance of our cash and equivalents, and short-term investments when evaluating our leverage. If needed, such assets could be used to reduce our gross debt position.
Finally, we provide a reconciliation of free cash flow as a non-U.S. GAAP measure. Free cash flow is calculated as cash provided by operations less capital expenditures. We use free cash flow to measure cash flow generated by operations that is available for dividends, share repurchases, acquisitions and debt repayment. We believe that it is meaningful to investors in evaluating our financial performance and measuring our ability to generate cash internally to fund our initiatives.
40
Table of Contents
​ Three Months Ended
​ September 30, 2020
​ ​
​ Consolidated Beauty + Home Pharma Food + Beverage Corporate & Other Net Interest
Net Sales $ 759,153  $ 337,231  $ 315,758  $ 106,164  $ —  $ — 
​
Reported net income $ 63,735 
Reported income taxes 25,404 
Reported income before income taxes 89,139  7,944  92,202  10,884  (13,289) (8,602)
Adjustments:
Restructuring initiatives 3,415  3,144  300  (31) 2 
Transaction costs related to acquisitions 221  11  210 
Adjusted earnings before income taxes 92,775  11,099  92,712  10,853  (13,287) (8,602)
Interest expense 8,851  8,851 
Interest income (249) (249)
Adjusted earnings before net interest and taxes (Adjusted EBIT) 101,377  11,099  92,712  10,853  (13,287) — 
Depreciation and amortization 55,179  23,634  19,724  9,498  2,323 
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 156,556  $ 34,733  $ 112,436  $ 20,351  $ (10,964) $ — 
​ ​ ​ ​ ​ ​ ​
Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 20.6  % 10.3  % 35.6  % 19.2  % ​ ​
41
Table of Contents
​ Three Months Ended
​ September 30, 2019
​ ​
​ Consolidated Beauty + Home Pharma Food + Beverage Corporate & Other Net Interest
Net Sales $ 701,278  $ 328,182  $ 269,251  $ 103,845  $ —  $ — 
​ ​ ​ ​ ​ ​ ​
Reported net income $ 56,769  ​ ​ ​ ​ ​
Reported income taxes 25,504  ​ ​ ​ ​ ​
Reported income before income taxes 82,273  15,413  78,418  9,323  (12,940) (7,941)
Adjustments: ​ ​ ​ ​ ​ ​
Restructuring initiatives 6,019  5,341  168  204  306  ​
Transaction costs related to acquisitions 708  34  520  154  ​ ​
Purchase accounting adjustments related to acquisitions and investments 647  ​ 647  ​ ​ ​
Adjusted earnings before income taxes 89,647  20,788  79,753  9,681  (12,634) (7,941)
Interest expense 8,898  ​ ​ ​ ​ 8,898 
Interest income (957) ​ ​ ​ ​ (957)
Adjusted earnings before net interest and taxes (Adjusted EBIT) 97,588  20,788  79,753  9,681  (12,634) — 
Depreciation and amortization 49,218  20,687  16,793  9,047  2,691  ​
Purchase accounting adjustments included in Depreciation and amortization above (647) ​ (647) ​ ​ — 
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 146,159  $ 41,475  $ 95,899  $ 18,728  $ (9,943) $ — 
​ ​ ​ ​ ​ ​ ​
Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 20.8  % 12.6  % 35.6  % 18.0  % ​ ​
​
42
Table of Contents
​ Nine Months Ended
​ September 30, 2020
​ ​
​ Consolidated Beauty + Home Pharma Food + Beverage Corporate & Other Net Interest
Net Sales $ 2,180,011  $ 961,577  $ 914,213  $ 304,221  $ —  $ — 
​
Reported net income $ 160,845 
Reported income taxes 66,998 
Reported income before income taxes 227,843  2,297  267,523  25,365  (41,968) (25,374)
Adjustments:
Restructuring initiatives 15,585  15,375  158  147  (95)
Transaction costs related to acquisitions 4,812  4,602  210 
Purchase accounting adjustments related to acquisitions and investments 4,642  3,221  1,421 
Adjusted earnings before income taxes 252,882  25,495  269,312  25,512  (42,063) (25,374)
Interest expense 25,973  25,973 
Interest income (599) (599)
Adjusted earnings before net interest and taxes (Adjusted EBIT) 278,256  25,495  269,312  25,512  (42,063) — 
Depreciation and amortization 162,414  70,159  56,232  28,031  7,992 
Purchase accounting adjustments included in Depreciation and amortization above (3,367) (2,700) (667)
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 437,303  $ 92,954  $ 324,877  $ 53,543  $ (34,071) $ — 
​ ​ ​ ​ ​ ​ ​
Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 20.1  % 9.7  % 35.5  % 17.6  % ​ ​
43
Table of Contents
​ Nine Months Ended
​ September 30, 2019
​ ​
​ Consolidated Beauty + Home Pharma Food + Beverage Corporate & Other Net Interest
Net Sales $ 2,188,399  $ 1,037,921  $ 823,891  $ 326,587  $ —  $ — 
​
Reported net income $ 193,689 
Reported income taxes 80,684 
Reported income before income taxes 274,373  66,407  244,101  29,234  (42,239) (23,130)
Adjustments:
Restructuring initiatives 17,286  14,869  381  826  1,210 
Transaction costs related to acquisitions 1,767  34  1,579  154 
Purchase accounting adjustments related to acquisitions and investments 869  869 
Adjusted earnings before income taxes 294,295  81,310  246,930  30,214  (41,029) (23,130)
Interest expense 26,868  26,868 
Interest income (3,738) (3,738)
Adjusted earnings before net interest and taxes (Adjusted EBIT) 317,425  81,310  246,930  30,214  (41,029) — 
Depreciation and amortization 144,574  62,101  48,623  26,149  7,701 
Purchase accounting adjustments included in Depreciation and amortization above (869) (869)
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 461,130  $ 143,411  $ 294,684  $ 56,363  $ (33,328) $ — 
​ ​ ​ ​ ​ ​ ​
Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 21.1  % 13.8  % 35.8  % 17.3  % ​ ​
​
Net Debt to Net Capital Reconciliation September 30, December 31,
​ 2020 2019
​ ​ ​
Notes payable, revolving credit facility and overdrafts $ 95,200  $ 44,259 
Current maturities of long-term obligations, net of unamortized debt issuance costs 66,056  65,988 
Long-Term Obligations, net of unamortized debt issuance costs 1,039,935  1,085,453 
Total Debt 1,201,191  1,195,700 
Less: ​ ​
Cash and equivalents 226,546  241,970 
Net Debt $ 974,645  $ 953,730 
​ ​ ​
Total Stockholders' Equity $ 1,759,955  $ 1,572,252 
Net Debt 974,645  953,730 
Net Capital $ 2,734,600  $ 2,525,982 
​ ​ ​
Net Debt to Net Capital 35.6  % 37.8  %
44
Table of Contents
​
Free Cash Flow Reconciliation September 30, September 30,
​ 2020 2019
​ ​ ​
Net Cash Provided by Operations $ 381,427  $ 380,381 
​ ​ ​
Less: ​ ​
Capital Expenditures 173,365  186,841 
Free Cash Flow $ 208,062  $ 193,540 
​
FOREIGN CURRENCY
Because of our international presence, movements in exchange rates may have a significant impact on the translation of the financial statements of our foreign subsidiaries. Our primary foreign exchange exposure is to the euro, but we also have foreign exchange exposure to the Chinese yuan, Brazilian real, Mexican peso, Swiss franc and other Asian, European and South American currencies. A strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on our financial statements. Conversely, a weakening U.S. dollar has an additive effect. In some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. We manage our exposures to foreign exchange principally with forward exchange contracts to economically hedge recorded transactions and firm purchase and sales commitments denominated in foreign currencies. Changes in exchange rates on such inter-country sales could materially impact our results of operations. During the third quarter of 2020, the U.S. dollar weakened compared to the major European currencies while it appreciated against most Latin America and Asian currencies. This resulted in an additive impact on our translated results during the third quarter of 2020 when compared to the third quarter of 2019.
Beginning July 1, 2018, we have applied highly inflationary accounting for our Argentinian subsidiaries pursuant to U.S. GAAP. We have changed the functional currency from the Argentinian peso to the U.S. dollar. We remeasure our peso denominated assets and liabilities using the official rate. In September 2019, the President of Argentina reinstituted exchange controls restricting foreign currency purchases in an attempt to stabilize Argentina’s financial markets. As a result of these currency controls, a legal mechanism known as the Blue Chip Swap emerged in Argentina for reporting entities to transfer U.S. dollars. The Blue Chip Swap rate has diverged significantly from Argentina’s “official rate” due to the economic environment. During the second quarter of 2020, we transferred U.S. dollars into Argentina through the Blue Chip Swap method and we recognized a gain of $1.0 million. This gain helped to offset foreign currency losses due to our Argentinian peso exposure and devaluation against the U.S. dollar. For the nine months ended September 30, 2020, our Argentinian operations contributed less than 2.0% of consolidated net assets and revenues.
QUARTERLY TRENDS
Our results of operations in the last quarter of the year typically are negatively impacted by customer plant shutdowns in December. In addition to the significant impact of COVID-19 on our business, our results of operations in a quarterly period could be impacted by factors such as the seasonality of certain products within our segments, changes in foreign currency rates, changes in product mix, changes in material costs, changes in growth rates in the markets to which our products are sold and changes in general economic conditions in any of the countries in which we do business.
LIQUIDITY AND CAPITAL RESOURCES
Given the diversification of our segments, we believe we are in a strong financial position and have the financial resources to meet our business requirements in the foreseeable future. Our primary uses of liquidity are to invest in equipment and facilities that are necessary to support our growth and to make acquisitions that will contribute to the achievement of our strategic objectives. Amid the COVID-19 pandemic, we are focused on preserving our liquidity and therefore we have temporarily suspended repurchasing shares of our common stock and discretionary contributions to our defined benefit plans. However, we intend to continue to pay quarterly dividends to our stockholders, invest in our business and make acquisitions as we consider necessary to achieve our strategic objectives. In the event that customer demand decreases significantly for a prolonged period of time due to the COVID-19 pandemic and adversely impacts our cash flows from operations, we would have the ability to restrict and significantly reduce capital expenditure levels as well as evaluate our acquisition strategy. A prolonged and significant reduction in capital expenditure levels could increase future repairs and maintenance costs as well as have a negative impact on operating margins if we were unable to invest in new innovative products.
Cash and equivalents and restricted cash decreased to $231.4 million at September 30, 2020 from $247.0 million at December 31, 2019. Total short and long-term interest bearing debt of $1.2 billion at September 30, 2020 was unchanged from $1.2 billion at December 31, 2019. The ratio of our Net Debt (interest bearing debt less cash and equivalents) to Net Capital (stockholders’ equity plus Net Debt) decreased to 35.6% at September 30, 2020 compared to 37.8% at December 31, 2019. See the reconciliation under "Non-U.S. GAAP Measures".
45
Table of Contents
In the first nine months of 2020, our operations provided approximately $381.4 million in net cash flow compared to $380.4 million for the same period a year ago. In both periods, cash flow from operations was primarily derived from earnings before depreciation and amortization. The increase in cash provided by operations during the first nine months of 2020 is primarily attributable to better working capital management which offset lower net income.
We used $377.9 million in cash for investing activities during the first nine months of 2020 compared to $224.0 million during the same period a year ago. During the first nine months of 2020, $162.7 million of cash was utilized to fund the Fusion Acquisition. We invested $32.0 million in our 49% equity interest of BTY and $5.0 million in our 30% equity interest of Sonmol, which are accounted for as equity method investments. Additionally, we released $1.0 million relating to the working capital escrow settlement and paid an additional $463 thousand as a working capital payment related to our acquisition of Noble. Our investment in capital projects decreased $13.5 million during the first nine months of 2020 compared to the first nine months of 2019 due to timing of our capital expenditures. Our 2020 estimated cash outlays for capital expenditures are expected to be in the range of approximately $240 to $250 million but could vary due to changes in exchange rates as well as the timing of capital projects.
Financing activities used $26.7 million in cash during the first nine months of 2020 compared to $146.2 million in cash used by financing activities during the same period a year ago. During the first nine months of 2020, we received net proceeds from our U.S. group credit facility of $70.0 million and stock option exercises of $51.1 million. We used cash on hand to pay $69.4 million of dividends, net repayments of $14.0 million related to our notes payable and overdrafts and $61.7 million related to our outstanding long-term debt obligations.
We hold U.S. dollar and euro-denominated debt to align our capital structure with our earnings base. We also maintain a multi-currency revolving credit facility with two tranches, providing for unsecured financing of up to $300 million that is available in the U.S. and up to €150 million that is available to our wholly-owned UK subsidiary. Each borrowing under the credit facility will bear interest at rates based on LIBOR, prime rates or other similar rates, in each case plus an applicable margin. A facility fee on the total amount of the facility is also payable quarterly, regardless of usage. The applicable margins for borrowings under the credit facility and the facility fee percentage may change from time to time depending on changes in our consolidated leverage ratio. $95.0 million was utilized under our U.S. facility and no balance was utilized under our euro-based revolving credit facility as of September 30, 2020. The $25.0 million balance at December 31, 2019 under our U.S. credit facility was repaid during the first quarter of 2020. Credit facility balances are included in notes payable, including revolving credit facilities on the Condensed Consolidated Balance Sheets.
​
Our revolving credit facility and corporate long-term obligations require us to satisfy certain financial and other covenants including:
​ Requirement Level at September 30, 2020
Consolidated Leverage Ratio (1) Maximum of 3.50 to 1.00 1.81 to 1.00
Consolidated Interest Coverage Ratio (1) Minimum of 3.00 to 1.00 15.92 to 1.00
__________________________________________________________
(1)Definitions of ratios are included as part of the revolving credit facility agreement and the note purchase agreements.
​
Based upon the above consolidated leverage ratio covenant, we have the ability to borrow approximately an additional $938.1 million before the 3.50 to 1.00 maximum ratio requirement is exceeded.
Our foreign operations have historically met cash requirements with the use of internally generated cash or uncommitted short-term borrowings. We also have committed financing arrangements in both the U.S. and UK as detailed above. We manage our global cash requirements considering (i) available funds among the many subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances.
On October 15, 2020, the Board of Directors declared a quarterly cash dividend of $0.36 per share payable on November 18, 2020 to stockholders of record as of October 28, 2020.
CONTINGENCIES
The Company, in the normal course of business, is subject to a number of lawsuits and claims both actual and potential in nature. Please refer to Note 12 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for a discussion of contingencies affecting our business.
46
Table of Contents
OFF-BALANCE SHEET ARRANGEMENTS
We lease certain warehouse, plant and office facilities as well as certain equipment under noncancelable operating leases. Most of the operating leases contain renewal options and certain equipment leases include options to purchase during or at the end of the lease term. As a result of the adoption of ASU 2016-02 and subsequent amendments, which requires organizations to recognize leases on the balance sheet, we do not have significant off-balance sheet arrangements. Please refer to Note 7 – Leases of the Notes to Condensed Consolidated Financial Statements.
RECENTLY ISSUED ACCOUNTING STANDARDS
We have reviewed the recently issued accounting standards updates to the FASB’s Accounting Standards Codification that have future effective dates. Standards that have been adopted during 2020 are discussed in Note 1 – Summary of Significant Accounting Policies of the Notes to Condensed Consolidated Financial Statements.
In March 2020, the FASB issued ASU 2020-04, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments to this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The new standard is effective upon issuance and can be adopted any time prior to December 31, 2022. We do not anticipate that this new guidance will have a significant impact on our consolidated financial statements.
In August 2018, the FASB issued ASU 2018-14, which amends disclosure requirements for defined benefit pension and other postretirement plans. The amendments in this update remove disclosures that are no longer considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The new standard is effective for fiscal years ending after December 15, 2020. As this update only modifies disclosure requirements, we do not expect that this guidance will have a significant impact on our consolidated financial statements.
Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.
OUTLOOK
We expect the company to continue to achieve core growth. Rising demand in many end markets is expected to more than offset COVID-19 related declines in some of our end markets. We are proud of the way our employees have responded to the difficult year and we are performing well. We expect our Pharma business to continue to do well with existing business and increased opportunities directly and indirectly related to the pandemic.
We expect earnings per share for the fourth quarter of 2020, excluding any restructuring expenses and acquisition-related costs, to be in the range of $0.84 to $0.92 and this guidance is based on an effective tax rate range of 27% to 29%.
FORWARD-LOOKING STATEMENTS
Certain statements in Management’s Discussion and Analysis and other sections of this Form 10-Q are forward-looking and involve a number of risks and uncertainties, including certain statements set forth in the Significant Developments, Restructuring Initiatives, Quarterly Trends, Liquidity and Capital Resources, Contingencies and Outlook sections of this Form 10-Q. Words such as “expects,” “anticipates,” “believes,” “estimates,” “future,” “potential” and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and are based on our beliefs as well as assumptions made by and information currently available to us. Accordingly, our actual results may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist in our operations and business environment including, but not limited to:
•outbreaks of pandemics, including the impact of COVID-19 on our global supply chain and our global customers and operations, which has elevated and may or will continue to elevate many of the risks and uncertainties discussed below;
•economic conditions worldwide, including potential deflationary or inflationary conditions in regions we rely on for growth;
•political conditions worldwide, including the impact of the UK leaving the European Union (Brexit) on our UK operations;
•significant fluctuations in foreign currency exchange rates or our effective tax rate;
•the impact of tax reform legislation, changes in tax rates and other tax-related events or transactions that could impact our effective tax rate;
•financial conditions of customers and suppliers;
•consolidations within our customer or supplier bases;
•changes in customer and/or consumer spending levels;
•loss of one or more key accounts;
•the availability of raw materials and components (particularly from sole sourced suppliers) as well as the financial viability of these suppliers;
47
Table of Contents
•fluctuations in the cost of materials, components and other input costs (particularly resin, metal, anodization costs and transportation and energy costs);
•our ability to successfully implement facility expansions and new facility projects;
•our ability to offset inflationary impacts with cost containment, productivity initiatives or price increases;
•changes in capital availability or cost, including interest rate fluctuations;
•volatility of global credit markets;
•our ability to identify potential new acquisitions and to successfully acquire and integrate such operations and products, including the successful integration of the businesses we have acquired, including contingent consideration valuation;
•direct or indirect consequences of acts of war, terrorism or social unrest;
•cybersecurity threats that could impact our networks and reporting systems;
•the impact of natural disasters and other weather-related occurrences;
•fiscal and monetary policies and other regulations;
•changes or difficulties in complying with government regulation;
•changing regulations or market conditions regarding environmental sustainability;
•work stoppages due to labor disputes;
•competition, including technological advances;
•our ability to protect and defend our intellectual property rights, as well as litigation involving intellectual property rights;
•the outcome of any legal proceeding that has been or may be instituted against us and others;
•our ability to meet future cash flow estimates to support our goodwill impairment testing;
•the demand for existing and new products;
•the success of our customers’ products, particularly in the pharmaceutical industry;
•our ability to manage worldwide customer launches of complex technical products, particularly in developing markets;
•difficulties in product development and uncertainties related to the timing or outcome of product development;
•significant product liability claims;
•the execution of our business transformation plan; and
•other risks associated with our operations.
​
Although we believe that our forward-looking statements are based on reasonable assumptions, there can be no assurance that actual results, performance or achievements will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Please refer to Item 1A (Risk Factors) of Part I included in our Annual Report on Form 10-K for the year ended December 31, 2019 and to Item 1A (Risk Factors) of Part II of this report for additional risk factors affecting the Company.

48
Table of Contents
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A significant number of our operations are located outside of the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of our entities. Our primary foreign exchange exposure is to the euro, but we also have foreign exchange exposure to the Chinese yuan, Brazilian real, Mexican peso and Swiss franc, among other Asian, European, and South American currencies. A strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on our financial condition and results of operations. Conversely, a weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial condition and results of operations.
Additionally, in some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Any changes in exchange rates on such inter-country sales may impact our results of operations.
We manage our exposures to foreign exchange principally with forward exchange contracts to hedge certain firm purchase and sales commitments and intercompany cash transactions denominated in foreign currencies.
The table below provides information as of September 30, 2020 about our forward currency exchange contracts. The majority of the contracts expire before the end of the fourth quarter of 2020.
Buy/Sell Contract Amount
(in thousands) 		Average
Contractual
Exchange Rate 		Min / Max
Notional
Volumes
​ ​ ​ ​
EUR / USD $ 13,585  1.1671  13,114-24,247
EUR / BRL 9,300  6.3817  9,300-10,173
CZK / EUR 4,998  0.0377  3,408-5,029
EUR / INR 3,864  88.6650  3,806-3,898
EUR/THB 3,478  37.0688  1,276-3,478
MXN / USD 2,400  0.0432  2,400-2,610
CHF / EUR 2,374  0.6405  2,374-2,874
EUR/CNY 1,174  8.2267  0-3,569
EUR / MXN 1,062  26.5924  1,062-2,165
GBP / EUR 733  1.1022  733-889
USD / EUR 146  0.8494  146-8,297
EUR/CZK 69  26.6496  0-69
Total $ 43,183  ​ ​
​
As of September 30, 2020, we have recorded the fair value of foreign currency forward exchange contracts of $0.1 million in prepaid and other and $0.4 million in accounts payable, accrued and other liabilities on the balance sheet. We also entered into a EUR/USD floating-to-fixed cross currency swap on July 20, 2017 to effectively hedge the foreign exchange and interest rate exposure on the $280 million bank term loan drawn by our wholly-owned UK subsidiary. The fair value of this cash flow hedge is $3.2 million reported in accounts payable, accrued and other liabilities on the balance sheet.

ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
Management has evaluated, with the participation of the chief executive officer and chief financial officer of the Company, the effectiveness of our disclosure controls and procedures (as that term is defined in Rule 13a-15(e) under the Exchange Act) as of September 30, 2020. Based on that evaluation, the chief executive officer and chief financial officer have concluded that these controls and procedures were effective as of such date.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During the fiscal quarter ended September 30, 2020, we implemented enterprise resource planning (“ERP”) systems at one operating facility. Consequently, the control environments have been modified at this location to incorporate the controls contained within the new ERP systems. Except for the foregoing, no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) occurred during our fiscal quarter ended September 30, 2020 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Amid the COVID-19 pandemic, we have implemented remote work arrangements and restricted non-essential business travel. These arrangements have not materially affected our ability to maintain our business operations, including the operation of financial reporting systems, internal control over financial reporting and disclosure controls and procedures.
49
Table of Contents
PART II - OTHER INFORMATION

ITEM 1A. RISK FACTORS
The following risk factor is in addition to the risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 under Item 1A, “Risk Factors” filed with the SEC pursuant to the Exchange Act. The effects of the events and circumstances described in the following risk factors have elevated and may or will continue to elevate many of the risks contained in the Company’s Form 10-K, including the risks relating to a deterioration in economic conditions in a particular region or market, our fixed costs structure, reliance on single sourced materials and manufacturing sites and potential asset impairments.
The COVID-19 pandemic continues to adversely affect our business. Additional factors could exacerbate such negative consequences and/or create materially adverse effects. The COVID-19 pandemic adversely affected our sales of products to our travel and retail beauty business and on-the-go beverage customers in the nine months ended September 30, 2020 and that adverse impact may continue into the fourth quarter. Beginning in the first quarter of 2020, economic and health conditions in the United States and across most of the globe have changed rapidly. Customer demand across all segments, particularly our Beauty + Home and Food + Beverage segments, may decrease further from historical levels depending on the duration and severity of the COVID-19 pandemic and the extent of further resurgences, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties. Such events may result in business and manufacturing disruption, inventory shortages due to disruptions to our supply chain and distribution channels, delivery delays, increased risk associated with customer payments and reduced sales and operations, any of which could materially affect our stock price, business prospects, financial condition, results of operations and liquidity.
The ability of our employees to work may be significantly impacted by COVID-19. The majority of our office and management personnel are working remotely and the majority of our facilities remained operational during the first nine months of 2020 as each of our segments produce dispensing systems that have been determined to be essential products by various government agencies around the world. The health and safety of our workforce is of primary concern and we may need to enact further precautionary measures to help minimize the risk of our employees being exposed to the virus. Further, our management team is focused on mitigating the adverse effects of the COVID-19 pandemic, which has required and will continue to require a large investment of time and resources across the entire company, thereby diverting their attention from other priorities that existed prior to the outbreak of the pandemic. If these conditions worsen, or last for an extended period of time, our ability to manage our business may be impaired, and operational risks, cybersecurity risks and other risks facing us even prior to the pandemic may be elevated.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
​
RECENT SALES OF UNREGISTERED SECURITIES
Certain French employees are eligible to participate in the FCP Aptar Savings Plan (the “Plan”). An independent agent purchases shares of common stock available under the Plan for cash on the open market and we do not issue shares. We do not receive any proceeds from the purchase of common stock under the Plan. The agent under the Plan is Banque Nationale de Paris Paribas Fund Services. No underwriters are used under the Plan. All shares are sold in reliance upon the exemption from registration under the Securities Act of 1933 provided by Regulation S promulgated under that Act. During the quarter ended September 30, 2020, the Plan purchased 316 shares of our common stock on behalf of the participants at an average price of $118.66, for an aggregate amount of $37 thousand. The Plan sold 6,123 shares of our common stock on behalf of the participants at an average price of $118.01, for an aggregate amount of $723 thousand during the same period. At September 30, 2020, the Plan owned 90,976 shares of our common stock.
ISSUER PURCHASES OF EQUITY SECURITIES
On April 18, 2019, we announced a share purchase authorization of up to $350 million of common stock. This authorization replaces previous authorizations and has no expiration date. We may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions.
During the three and nine months ended September 30, 2020, we did not repurchase any shares. As of September 30, 2020, there was $278.5 million of authorized share repurchases available to us. Amid the COVID-19 pandemic, we are focused on preserving our liquidity and therefore we have temporarily suspended repurchasing shares of our common stock.

50
Table of Contents
ITEM 6. EXHIBITS
​
Exhibit 10.1
Exhibit 31.1 ​
​ ​ ​
Exhibit 31.2 ​
​ ​ ​
Exhibit 32.1 ​
​ ​ ​
Exhibit 32.2 ​
​ ​ ​
Exhibit 101 ​
The following information from our Quarterly Report on Form 10-Q for the third quarter of fiscal 2020, filed with the SEC on October 30, 2020, formatted in Inline Extensible Business Reporting Language (XBRL): (i) the Cover Page, (ii) the Condensed Consolidated Statements of Income – Three and Nine Months Ended September 30, 2020 and 2019, (iii) the Condensed Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2020 and 2019, (iv) the Condensed Consolidated Balance Sheets – September 30, 2020 and December 31, 2019, (v) the Condensed Consolidated Statements of Changes in Equity – Three and Nine Months Ended September 30, 2020 and 2019, (vi) the Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2020 and 2019 and (vii) the Notes to Condensed Consolidated Financial Statements.
​
Exhibit 104 ​ Cover Page Interactive Data File (embedded within the Inline XBRL document).
​
​
​

51
Table of Contents
SIGNATURE
​
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
​
​ ​ AptarGroup, Inc.
​ ​ (Registrant)
​ ​ ​
​ By /s/ ROBERT W. KUHN
​ ​ Robert W. Kuhn
​ ​ Executive Vice President,
​ ​ Chief Financial Officer and Secretary
​ ​ (Duly Authorized Officer and
​ ​ Principal Accounting and Financial Officer)
​ ​ ​
​ ​ ​
​ ​ Date: October 30, 2020

52
AG_LOGOXRGBXKXCG10X55451.JPG

Exhibit 10.1
TRANSLATION OF A LETTER WRITTEN IN FRENCH;
In this translation an attempt has been made to be as literal as possible without jeopardizing the overall continuity. Inevitably, differences may occur in translation, and if so the French text will by law govern.

Monsieur Gaël Touya
[Address]
France


Louveciennes, July 31, 2020

Strictly personal and confidential

Dear Gaël,
    
In view of your responsibilities as President of the Pharma Segment and as a member of the Executive Committee of the Aptar Group, and in order to align your situation with that of the other members of the Group Executive Committee while taking into account the specificity of French law, we are pleased to grant you additional guarantees intended to compensate you for the prejudice that would result for you from the loss of your employment, in particular in the event of a change in control of the Aptar Group.

It is understood that the allowances referred to in A and B above are not cumulative.

A - Dismissal following a change in control

The definition of "Change in Control", as usually defined by the Aptar Group as a result of the listing of its ultimate shareholder Aptargroup, Inc. on the New York Stock Exchange, is set out in the Appendix.

In the event that, within two years following a change of control as defined in the appendix below, you are dismissed by the Company for any reason whatsoever, except in cases of serious or gross misconduct and dismissal for unfitness, Aptargroup UK Holdings Ltd-French Branch (the “Company”) undertakes to pay you compensation (called “Change in Control Compensation”) to offset the loss resulting for you from this termination. This Change in Control Indemnity will be in addition to the indemnities to which you may be entitled, as the case may be, in respect of such termination (legal or contractual termination indemnity). Its gross amount will be equal to:

–Six (6) months of the average gross salary that you will have received during the 12 calendar months preceding the notification of your dismissal, it being specified that the average salary will include, on the one hand, your fixed gross salary actually received during the 12 months preceding the notification of your dismissal and, on the other hand, your average gross annual bonus ("short term incentive") received during the last three years preceding your dismissal.

Aptargroup UK Holdings Ltd. Aptargroup UK Holdings Ltd. – Succursale française
5 Bruntcliffe Avenue TEL + 44 113 220 3206 36-38 rue de la Princesse, CS 42430 Téléphone +33 (0)1 3087 1980
Leeds 27 Industrial Estate FAX + 44 113 220 3217 78431 Louveciennes Cedex, France Télécopie +33 (0)1 3081 0909
Leeds, Yorkshire LS27 0LL, United Kingdom SIRET 807 468 921 00026 RCS Versailles
APE 7010Z – TVA FR 70 807 468 921

aptar.com

    

In addition to this Change in Control Indemnity, you will receive the financial compensation for your non-competition clause and your notice period as provided for in your employment contract.

B - Dismissal not resulting from a change in control

In the event that you are dismissed by the Company for any reason whatsoever, except in cases of serious or gross misconduct and dismissal for unfitness, the Company undertakes to pay you compensation (called “Additional Dismissal Compensation”) to offset the loss resulting for you from this termination. This additional termination indemnity will be in addition to the indemnities to which you may be entitled, as the case may be, in respect of such termination (legal or contractual termination indemnity). Its gross amount will be equal to:

–Six (6) months of the average gross salary that you will have received during the 12 calendar months prior to the notification of your dismissal, the average salary including, on the one hand, the gross fixed salary that you will have actually received during the 12 months prior to the notification of your dismissal and, on the other hand, the average gross annual bonus ("short term incentive") received during the last three years prior to your dismissal.

In addition to this additional severance pay, you will receive the financial compensation for your non-competition clause and your notice period as provided for in your employment contract.


The Change in Control Indemnity or the Additional Dismissal Compensation that will eventually be due to you as the case might be at the time of your dismissal will be paid in the form of a settlement indemnity in return for the signature of a settlement agreement confirming your waiver of all proceedings and actions against the Company and all the companies of the Aptar Group concerning the conclusion, performance and termination of your employment contract.

This undertaking supplements the provisions of your current employment contract and has neither the object nor the effect of modifying its terms.

Best regards.




Anne Vergnaud
Gaël Touya
Legal representative
(“Read and approved, good for agreement”)



CC: Stephan Tanda and Shiela Vinczeller
Appendix: definition of Change in Control
Aptargroup UK Holdings Ltd. Aptargroup UK Holdings Ltd. – Succursale française
5 Bruntcliffe Avenue TEL + 44 113 220 3206 36-38 rue de la Princesse, CS 42430 Téléphone +33 (0)1 3087 1980
Leeds 27 Industrial Estate FAX + 44 113 220 3217 78431 Louveciennes Cedex, France Télécopie +33 (0)1 3081 0909
Leeds, Yorkshire LS27 0LL, United Kingdom SIRET 807 468 921 00026 RCS Versailles
APE 7010Z – TVA FR 70 807 468 921

aptar.com

    

Annex: Definition of Change in Control

Change in Control For purposes of this side letter, “Change in Control” shall mean
1.the acquisition by any individual, entity or group (a “Person”), including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of more than 50% of either (i) the then outstanding shares of common stock of Aptargroup, Inc. (the “Outstanding Aptar Common Stock”) or (ii) the combined voting power of the then outstanding securities of Aptargroup, Inc. entitled to vote generally in the election of directors (the “Outstanding Aptar Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from Aptargroup, Inc. (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from Aptargroup, Inc.), (B) any acquisition by Aptargroup, Inc., (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Aptargroup, Inc. or any corporation controlled by Aptargroup, Inc. or (D) any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving Aptargroup, Inc., if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (i), (ii) and (iii) of Article 3 shall be satisfied; and provided further that, for purposes of clause (B), if any Person (other than Aptargroup, Inc. or any employee benefit plan (or related trust) sponsored or maintained by Aptargroup, Inc. or any corporation controlled by Aptargroup, Inc.) shall become the beneficial owner of more than 50% of the Outstanding Aptar Common Stock or more than 50% of the Outstanding Aptar Voting Securities by reason of an acquisition by Aptargroup, Inc. and such Person shall, after such acquisition by Aptargroup, Inc., become the beneficial owner of any additional shares of the Outstanding Aptar Common Stock or any additional Outstanding Aptar Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control;
2.individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided, however, that any individual who becomes a director of Aptargroup, Inc. subsequent to the date hereof whose election, or nomination for election by Aptargroup, Inc.’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed to have been a member of the Incumbent Board; and provided further, that no individual who was initially elected as a director of Aptargroup, Inc. as a result of an actual or threatened solicitation by a Person other than the Board for the purpose of opposing a solicitation by any other Person with respect to the election or removal of directors or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall be deemed to have been a member of the Incumbent Board;
Aptargroup UK Holdings Ltd. Aptargroup UK Holdings Ltd. – Succursale française
5 Bruntcliffe Avenue TEL + 44 113 220 3206 36-38 rue de la Princesse, CS 42430 Téléphone +33 (0)1 3087 1980
Leeds 27 Industrial Estate FAX + 44 113 220 3217 78431 Louveciennes Cedex, France Télécopie +33 (0)1 3081 0909
Leeds, Yorkshire LS27 0LL, United Kingdom SIRET 807 468 921 00026 RCS Versailles
APE 7010Z – TVA FR 70 807 468 921

aptar.com

    

3.consummation of a reorganization, merger or consolidation unless, in any such case, immediately after such reorganization, merger or consolidation, (i) 50% or more of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and 50% or more of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals or entities who were the beneficial owners, respectively, of the Outstanding Aptar Common Stock and the Outstanding Aptar Voting Securities immediately prior to such reorganization, merger or consolidation and in substantially the same proportions relative to each other as their ownership, immediately prior to such reorganization, merger or consolidation, of the Outstanding Aptar Common Stock and the Outstanding Aptar Voting Securities, as the case may be, (ii) no Person (other than Aptargroup, Inc., any employee benefit plan (or related trust) sponsored or maintained by Aptargroup, Inc. or the corporation resulting from such reorganization, merger or consolidation (or any corporation controlled by Aptargroup, Inc.) and any Person which beneficially owned, immediately prior to such reorganization, merger or consolidation, directly or indirectly, more than 50% of the Outstanding Aptar Common Stock or the Outstanding Aptar Voting Securities, as the case may be) beneficially owns, directly or indirectly, more than 50% of the then outstanding shares of common stock of such corporation or more than 50% of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such reorganization, merger or consolidation; or
4.consummation of (i) a plan of complete liquidation or dissolution of Aptargroup, Inc. or (ii) the sale or other disposition of all or substantially all of the assets of Aptargroup, Inc. other than to a corporation with respect to which, immediately after such sale or other disposition, (A) 50% or more of the then outstanding shares of common stock thereof and 50% or more of the combined voting power of the then outstanding securities thereof entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Aptar Common Stock and the Outstanding Aptar Voting Securities immediately prior to such sale or other disposition and in substantially the same proportions relative to each other as their ownership, immediately prior to such sale or other disposition, of the Outstanding Aptar Common Stock and the Outstanding Aptar Voting Securities, as the case may be, (B) no Person (other than Aptargroup, Inc., any employee benefit plan (or related trust) sponsored or maintained by Aptargroup, Inc. or such corporation (or any corporation controlled by Aptargroup, Inc.) and any Person which beneficially owned, immediately prior to such sale or other disposition, directly or indirectly, more than 50% of the Outstanding Aptar Common Stock or the Outstanding Aptar Voting Securities, as the case may be) beneficially owns, directly or indirectly, more than 50% of the then outstanding shares of common stock thereof or more than 50% of the combined voting power of the then outstanding securities thereof entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition.
Aptargroup UK Holdings Ltd. Aptargroup UK Holdings Ltd. – Succursale française
5 Bruntcliffe Avenue TEL + 44 113 220 3206 36-38 rue de la Princesse, CS 42430 Téléphone +33 (0)1 3087 1980
Leeds 27 Industrial Estate FAX + 44 113 220 3217 78431 Louveciennes Cedex, France Télécopie +33 (0)1 3081 0909
Leeds, Yorkshire LS27 0LL, United Kingdom SIRET 807 468 921 00026 RCS Versailles
APE 7010Z – TVA FR 70 807 468 921

aptar.com

    

Exhibit 31.1
​
CERTIFICATION
​
I, Stephan B. Tanda, certify that:
​
1.I have reviewed this quarterly report on Form 10-Q of AptarGroup, 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 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 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.
​
​ Date: October 30, 2020
​ ​ ​
​ ​ ​
​ By: /s/ STEPHAN B. TANDA
​ ​ Stephan B. Tanda
​ ​ President and Chief Executive Officer
​


Exhibit 31.2
​
CERTIFICATION
​
I, Robert W. Kuhn, certify that:
​
1.I have reviewed this quarterly report on Form 10-Q of AptarGroup, 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 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 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.
​
​ Date: October 30, 2020
​ ​ ​
​ ​ ​
​ By:
/s/ ROBERT W. KUHN
​ ​ Robert W. Kuhn
​ ​ Executive Vice President,
​ ​ Chief Financial Officer and Secretary
​


Exhibit 32.1
​
Certificate Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
​
I, Stephan B. Tanda, president and chief executive officer of AptarGroup, Inc., certify that (i) the Quarterly Report on Form 10-Q of AptarGroup, Inc. for the quarter ended September 30, 2020 (the “Form 10-Q”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of AptarGroup, Inc.
​
​
​ By: /s/ STEPHAN B. TANDA
​ ​ Stephan B. Tanda
​ ​ President and Chief Executive Officer
​ ​ ​
​ ​ October 30, 2020
​



Exhibit 32.2
​
Certificate Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
​
I, Robert W. Kuhn, executive vice president and chief financial officer and secretary of AptarGroup, Inc., certify that (i) the Quarterly Report on Form 10-Q of AptarGroup, Inc. for the quarter ended September 30, 2020 (the “Form 10-Q”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of AptarGroup, Inc.
​
​
​ By: /s/ ROBERT W. KUHN
​ ​ Robert W. Kuhn
​ ​ Executive Vice President,
​ ​ Chief Financial Officer and Secretary
​ ​ ​
​ ​ October 30, 2020
​