|
Delaware
|
20-8737688
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
|
14 Schoolhouse Road
Somerset, New Jersey
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08873
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Name of each exchange on which registered
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Common Stock, $0.01 par value per share
|
New York Stock Exchange
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Large accelerated filer
|
x
|
|
Accelerated filer
|
o
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Non-accelerated filer
|
o
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(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
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Item
|
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Page
|
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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||
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|
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•
|
We participate in a highly competitive market, and increased competition may adversely affect our business.
|
•
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The demand for our offerings depends in part on our customers’ research and development and the clinical and market success of their products. Our business, financial condition and results of operations may be harmed if our customers spend less on, or are less successful, in these activities.
|
•
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We are subject to product and other liability risks that could adversely affect our results of operations, financial condition, liquidity, and cash flows.
|
•
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Failure to comply with existing and future regulatory requirements could adversely affect our results of operations and financial condition.
|
•
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Failure to provide quality offerings to our customers could have an adverse effect on our business and subject us to regulatory actions and costly litigation.
|
•
|
The services and offerings we provide are highly exacting and complex, and if we encounter problems providing the services or support required, our business could suffer.
|
•
|
Our global operations are subject to economic, political and regulatory risks.
|
•
|
If we do not enhance our existing or introduce new technology or service offerings in a timely manner, our offerings may become obsolete over time, customers may not buy our offerings and our revenue and profitability may decline.
|
•
|
We and our customers depend on patents, copyrights, trademarks, trade secrets and other forms of intellectual property protections, but these protections may not be adequate.
|
•
|
Our future results of operations are subject to fluctuations in the costs, availability, and suitability of the components of the products we manufacture, including active pharmaceutical ingredients, excipients, purchased components, and raw materials.
|
•
|
Changes in market access or healthcare reimbursement for our customers’ products in the United States or internationally could adversely affect our results of operations and financial condition by affecting demand for our offerings.
|
•
|
As a global enterprise, fluctuations in the exchange rate of the U.S. dollar against foreign currencies could have a material adverse effect on our financial performance and results of operations.
|
•
|
Tax legislation initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.
|
•
|
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
|
•
|
We are dependent on key personnel.
|
•
|
Risks generally associated with information and communications systems could adversely affect our results of operations.
|
•
|
We have in the past engaged and may in the future engage in acquisitions and other transactions that may complement or expand our business or divest of non-strategic businesses or assets. We may not be able to complete such transactions, and such transactions, if executed, pose significant risks and could have a negative effect on our operations.
|
•
|
Our offerings and our customers’ products may infringe on the intellectual property rights of third parties.
|
•
|
We are subject to environmental, health and safety laws and regulations, which could increase our costs and restrict our operations in the future.
|
•
|
We are subject to labor and employment laws and regulations, which could increase our costs and restrict our operations in the future.
|
•
|
Certain of our pension plans are underfunded, and additional cash contributions we may make will reduce the cash available for our business, such as the payment of our interest expense.
|
•
|
Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or in our industry, expose us to interest-rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under our indebtedness.
|
•
|
Affiliates of The Blackstone Group L.P. (
“
Blackstone
”
) have substantial influence over us and their interests may conflict with ours or yours in the future.
|
ITEM 1.
|
BUSINESS
|
Segment
|
Offerings and Services
|
Fiscal 2016
Revenue*
|
||
Softgel Technologies
|
Formulation, development and manufacturing of prescription and consumer health soft capsules, or "softgels" including traditional softgel capsules (in which the shell is made from animal-derived materials) and Vegicaps and OptiShell capsules (in which the shell is made from vegetable-derived materials).
|
$
|
775.0
|
|
Drug Delivery Solutions
|
Formulation, development and manufacturing of prescription and consumer and animal health products using our proprietary OptiMelt, OptiPact, OptiForm and Zydis technologies, other proprietary and conventional drug delivery technologies such as prefilled syringes; blow-fill seal unit dose manufacturing including our ADVASEPT technology; biologic cell line development including our GPEx and SMARTag technologies; and analytical and bioanalytical development; and testing services.
|
$
|
806.4
|
|
Clinical Supply Services
|
Manufacturing, packaging, labeling, storage, distribution and inventory management for global clinical trials of drugs and biologics for customer required patient kits; FastChain demand-led clinical supply service; clinical e-solutions and informatics; and global comparator sourcing services.
|
$
|
307.5
|
|
|
North America
|
Europe
|
South America
|
Asia Pacific
|
Total
|
Approximate Number of Employees
|
3,900
|
3,600
|
900
|
800
|
9,200
|
ITEM 1A.
|
RISK FACTORS
|
•
|
properly anticipate and satisfy customer needs, including increasing demand for lower cost products;
|
•
|
enhance, innovate, develop and manufacture new offerings in an economical and timely manner;
|
•
|
differentiate our offerings from competitors’ offerings;
|
•
|
achieve positive clinical outcomes for our customers’ new products;
|
•
|
meet safety requirements and other regulatory requirements of governmental agencies;
|
•
|
obtain valid and enforceable intellectual property rights; and
|
•
|
avoid infringing the proprietary rights of third parties.
|
•
|
facilitate the manufacture and distribution of thousands of inventory items in, to and from our facilities;
|
•
|
receive, process and ship orders on a timely basis;
|
•
|
manage the accurate billing and collections for roughly one thousand customers;
|
•
|
manage the accurate accounting and payment for thousands of vendors;
|
•
|
schedule and operate our global network of development, manufacturing and packaging facilities; and
|
•
|
communicate among our
9,200
employees spread across
thirty-three
facilities over five continents.
|
•
|
pay substantial damages (potentially including treble damages in the United States);
|
•
|
cease the manufacture, use or sale of the infringing offerings or processes;
|
•
|
discontinue the use of the infringing technology;
|
•
|
expend significant resources to develop non-infringing technology;
|
•
|
license technology from the third party claiming infringement, which license may not be available on commercially reasonable terms, or may not be available at all; and
|
•
|
lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of our intellectual property against others.
|
•
|
increasing our vulnerability to adverse economic, industry or competitive developments;
|
•
|
exposing us to the risk of increased interest rates because certain of our borrowings, including borrowings under our senior secured credit facilities, are at variable rates of interest;
|
•
|
exposing us to the risk of fluctuations in exchange rates because certain of our borrowings, including certain of our senior secured term loan facilities, are denominated in euros;
|
•
|
making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing such indebtedness;
|
•
|
restricting us from making strategic acquisitions or capital investments or causing us to make non-strategic divestitures;
|
•
|
limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes; and
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
|
•
|
incur additional indebtedness and issue certain preferred stock;
|
•
|
pay certain dividends on, repurchase or make distributions in respect of capital stock or make other restricted payments;
|
•
|
pay distributions from restricted subsidiaries;
|
•
|
issue or sell capital stock of restricted subsidiaries;
|
•
|
guarantee certain indebtedness;
|
•
|
make certain investments;
|
•
|
sell or exchange assets;
|
•
|
enter into transactions with affiliates;
|
•
|
create certain liens; and
|
•
|
consolidate, merge or transfer all or substantially all of their assets and the assets of their subsidiaries, when considered on a consolidated basis.
|
•
|
results of operations that vary from the expectations of securities analysts or investors;
|
•
|
results of operations that vary from those of our competitors;
|
•
|
changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts or investors;
|
•
|
declines in the market prices of stocks generally, or those of pharmaceutical or other healthcare companies;
|
•
|
strategic actions by us or our competitors;
|
•
|
announcements by us or our competitors of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;
|
•
|
changes in general economic or market conditions or trends in our industry or markets;
|
•
|
changes in business or regulatory conditions or regulatory actions taken with respect to our business or the business of any of our competitors or customers;
|
•
|
future sales of our common stock or other securities;
|
•
|
investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;
|
•
|
the public response to press releases or other public announcements by us or third parties, including our filings with or documents furnished to the SEC;
|
•
|
announcements relating to litigation;
|
•
|
guidance, if any, that we provide to the public, any change in this guidance or any failure to meet this guidance;
|
•
|
the development and sustainability of an active trading market for our stock;
|
•
|
changes in accounting principles or our application of these principles to our business; and
|
•
|
other events or factors, including those resulting from natural disasters, hostilities, acts of terrorism, geopolitical activity or responses to these events.
|
•
|
advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;
|
•
|
certain limitations on convening special stockholder meetings;
|
•
|
the removal of directors only for cause and only upon the affirmative vote of holders of at least 66-2/3% of the shares of common stock entitled to vote generally in the election of directors; and
|
•
|
any amendment of certain provisions only by the affirmative vote of at least 66-2/3% of the shares of common stock entitled to vote generally in the election of directors.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
|
Facility Sites
|
|
Country
|
|
Region
|
|
Segment
|
|
Total Square Footage
|
|
Leased/Owned
|
|
1
|
Eberbach
|
|
Germany
|
|
Europe
|
|
Softgel
|
|
370,580
|
|
|
Leased
|
2
|
St. Petersburg, FL
|
|
USA
|
|
North America
|
|
Softgel
|
|
328,073
|
|
|
Owned
|
3
|
Buenos Aires
|
|
Argentina
|
|
South America
|
|
Softgel
|
|
265,000
|
|
|
Owned
|
4
|
Haining
|
|
China
|
|
Asia Pacific
|
|
Softgel
|
|
219,930
|
|
|
Owned
|
5
|
Braeside
|
|
Australia
|
|
Asia Pacific
|
|
Softgel
|
|
163,100
|
|
|
Owned
|
6
|
Sorocaba
|
|
Brazil
|
|
South America
|
|
Softgel
|
|
124,685
|
|
|
Owned
|
7
|
Kakegawa
(2)
|
|
Japan
|
|
Asia Pacific
|
|
Softgel
|
|
104,500
|
|
|
Owned
|
8
|
Aprilia
|
|
Italy
|
|
Europe
|
|
Softgel
|
|
92,010
|
|
|
Owned
|
9
|
Beinheim
|
|
France
|
|
Europe
|
|
Softgel
|
|
78,100
|
|
|
Owned
|
10
|
Dee Why
|
|
Australia
|
|
Asia Pacific
|
|
Softgel
|
|
59,836
|
|
|
Leased
|
11
|
Indaiatuba
|
|
Brazil
|
|
South America
|
|
Softgel
|
|
53,800
|
|
|
Owned
|
12
|
Woodstock, IL
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
421,665
|
|
|
Owned
|
13
|
Kansas City, MO
(2)
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
329,394
|
|
|
Owned
|
14
|
Brussels
|
|
Belgium
|
|
Europe
|
|
Drug Delivery Solutions
|
|
265,287
|
|
|
Owned
|
15
|
Somerset, NJ
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions / Corporate HQ
|
|
265,000
|
|
|
Owned
|
16
|
Swindon
|
|
United Kingdom
|
|
Europe
|
|
Drug Delivery Solutions
|
|
253,314
|
|
|
Owned
|
17
|
Morrisville, NC
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
186,406
|
|
|
Leased
|
18
|
Winchester, KY
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
180,000
|
|
|
Owned
|
19
|
Limoges
|
|
France
|
|
Europe
|
|
Drug Delivery Solutions
|
|
179,000
|
|
|
Owned
|
20
|
Schorndorf
(2)
|
|
Germany
|
|
Europe
|
|
Drug Delivery Solutions
|
|
166,027
|
|
|
Owned
|
21
|
Madison, WI
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
102,723
|
|
|
Leased
|
22
|
Malvern, PA
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
84,000
|
|
|
Leased
|
23
|
Dartford
|
|
United Kingdom
|
|
Europe
|
|
Drug Delivery Solutions
|
|
20,250
|
|
|
Leased
|
24
|
Emeryville, CA
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
6,418
|
|
|
Leased
|
25
|
Philadelphia, PA
|
|
USA
|
|
North America
|
|
Clinical Supply Services
|
|
206,878
|
|
|
Leased/Owned
|
26
|
Bathgate
|
|
United Kingdom
|
|
Europe
|
|
Clinical Supply Services
|
|
191,000
|
|
|
Owned
|
27
|
Deeside
(1)
|
|
United Kingdom
|
|
Europe
|
|
Clinical Supply Services
|
|
127,533
|
|
|
Leased
|
28
|
Kansas City, MO
(2)
|
|
USA
|
|
North America
|
|
Clinical Supply Services
|
|
80,606
|
|
|
Owned
|
29
|
Bolton
|
|
United Kingdom
|
|
Europe
|
|
Clinical Supply Services
|
|
60,830
|
|
|
Owned
|
30
|
Schorndorf
(2)
|
|
Germany
|
|
Europe
|
|
Clinical Supply Services
|
|
54,693
|
|
|
Owned
|
31
|
Shanghai
|
|
China
|
|
Asia Pacific
|
|
Clinical Supply Services
|
|
31,000
|
|
|
Leased
|
32
|
Singapore
|
|
Singapore
|
|
Asia Pacific
|
|
Clinical Supply Services
|
|
13,379
|
|
|
Leased
|
33
|
Kakegawa
(2)
|
|
Japan
|
|
Asia Pacific
|
|
Clinical Supply Services
|
|
2,800
|
|
|
Owned
|
|
Total
|
|
|
|
|
|
|
|
5,087,817
|
|
|
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Common Stock Market Prices
|
4th Quarter
|
|
3rd Quarter
|
|
2nd Quarter
|
|
1st Quarter
|
Fiscal year ended June 30, 2016
|
|
|
|
|
|
|
|
High
|
$32.24
|
|
$27.60
|
|
$28.75
|
|
$34.42
|
Low
|
$20.94
|
|
$18.92
|
|
$23.63
|
|
$24.05
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended June 30,
|
||||||||||||||||||
(Dollars in millions, except as noted)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
|
$
|
1,827.7
|
|
|
$
|
1,800.3
|
|
|
$
|
1,694.8
|
|
Cost of sales
|
1,260.5
|
|
|
1,215.5
|
|
|
1,229.1
|
|
|
1,231.7
|
|
|
1,136.2
|
|
|||||
Gross margin
|
587.6
|
|
|
615.3
|
|
|
598.6
|
|
|
568.6
|
|
|
558.6
|
|
|||||
Selling, general and administrative expenses
|
358.1
|
|
|
337.3
|
|
|
334.8
|
|
|
340.6
|
|
|
348.1
|
|
|||||
Impairment charges and (gain)/loss on sale of assets
|
2.7
|
|
|
4.7
|
|
|
3.2
|
|
|
5.2
|
|
|
1.8
|
|
|||||
Restructuring and other
|
9.0
|
|
|
13.4
|
|
|
19.7
|
|
|
18.4
|
|
|
19.5
|
|
|||||
Property and casualty (gain)/loss, net
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.8
|
)
|
|||||
Operating earnings/(loss)
|
217.8
|
|
|
259.9
|
|
|
240.9
|
|
|
204.4
|
|
|
198.0
|
|
|||||
Interest expense, net
|
88.5
|
|
|
105.0
|
|
|
163.1
|
|
|
203.2
|
|
|
183.2
|
|
|||||
Other (income)/expense, net
|
(15.6
|
)
|
|
42.4
|
|
|
10.4
|
|
|
25.1
|
|
|
(3.8
|
)
|
|||||
Earnings/(loss) from continuing operations before income taxes
|
144.9
|
|
|
112.5
|
|
|
67.4
|
|
|
(23.9
|
)
|
|
18.6
|
|
|||||
Income tax expense/(benefit)
|
33.7
|
|
|
(97.7
|
)
|
|
49.5
|
|
|
27.0
|
|
|
0.5
|
|
|||||
Earnings/(loss) from continuing operations
|
111.2
|
|
|
210.2
|
|
|
17.9
|
|
|
(50.9
|
)
|
|
18.1
|
|
|||||
Earnings/(loss) from discontinued operations, net of tax
|
—
|
|
|
0.1
|
|
|
(2.7
|
)
|
|
1.2
|
|
|
(41.3
|
)
|
|||||
Net earnings/(loss)
|
111.2
|
|
|
210.3
|
|
|
15.2
|
|
|
(49.7
|
)
|
|
(23.2
|
)
|
|||||
Less: Net earnings/(loss) attributable to noncontrolling interest, net of tax
|
(0.3
|
)
|
|
(1.9
|
)
|
|
(1.0
|
)
|
|
(0.1
|
)
|
|
1.2
|
|
|||||
Net earnings/(loss) attributable to Catalent
|
$
|
111.5
|
|
|
$
|
212.2
|
|
|
$
|
16.2
|
|
|
$
|
(49.6
|
)
|
|
$
|
(24.4
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share attributable to Catalent common shareholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings/(loss) from continuing operations
|
$
|
0.89
|
|
|
$
|
1.77
|
|
|
$
|
0.25
|
|
|
$
|
(0.68
|
)
|
|
$
|
0.23
|
|
Net earnings/(loss)
|
0.89
|
|
|
1.77
|
|
|
0.22
|
|
|
(0.66
|
)
|
|
(0.33
|
)
|
|||||
Diluted earnings per share attributable to Catalent common shareholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings/(loss) from continuing operations
|
$
|
0.89
|
|
|
$
|
1.75
|
|
|
$
|
0.25
|
|
|
$
|
(0.68
|
)
|
|
$
|
0.22
|
|
Net earnings/(loss)
|
0.89
|
|
|
1.75
|
|
|
0.21
|
|
|
(0.66
|
)
|
|
(0.32
|
)
|
(1)
|
In March 2011, a U.K. based packaging facility was damaged by fire. The 2012 amounts reported are net of insurance recovery.
|
|
Year Ended June 30,
|
||||||||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
131.6
|
|
|
$
|
151.3
|
|
|
$
|
74.4
|
|
|
$
|
106.4
|
|
|
$
|
139.0
|
|
Goodwill
|
996.5
|
|
|
1,061.5
|
|
|
1,097.1
|
|
|
1,023.4
|
|
|
1,029.9
|
|
|||||
Total assets
(2)
|
3,091.1
|
|
|
3,138.3
|
|
|
3,073.4
|
|
|
2,931.3
|
|
|
3,009.4
|
|
|||||
Long term debt, including current portion and other short term borrowing
(2)
|
1,860.5
|
|
|
1,880.8
|
|
|
2,693.8
|
|
|
2,673.4
|
|
|
2,660.8
|
|
|||||
Total liabilities
(2)
|
2,455.2
|
|
|
2,498.5
|
|
|
3,440.7
|
|
|
3,341.6
|
|
|
3,360.1
|
|
|||||
Total shareholders’ equity/(deficit)
|
$
|
635.9
|
|
|
$
|
634.0
|
|
|
$
|
(371.8
|
)
|
|
$
|
(410.3
|
)
|
|
$
|
(350.7
|
)
|
|
Year Ended June 30,
|
||||||||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
$
|
139.6
|
|
|
$
|
141.0
|
|
|
$
|
122.4
|
|
|
$
|
122.5
|
|
|
$
|
104.2
|
|
Ratio of Earnings to Fixed Charges
(3)
|
2.5x
|
|
|
2.0x
|
|
|
1.4x
|
|
|
—
|
|
|
1.1x
|
|
|||||
Net cash provided by/(used in) continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
155.3
|
|
|
171.7
|
|
|
180.2
|
|
|
139.1
|
|
|
87.7
|
|
|||||
Investing activities
|
(137.7
|
)
|
|
(271.8
|
)
|
|
(175.2
|
)
|
|
(122.1
|
)
|
|
(538.2
|
)
|
|||||
Financing activities
|
(30.8
|
)
|
|
196.5
|
|
|
(42.1
|
)
|
|
(49.3
|
)
|
|
352.9
|
|
|||||
Net cash provided by/(used in) discontinued operations:
|
—
|
|
|
0.1
|
|
|
2.1
|
|
|
(1.4
|
)
|
|
43.9
|
|
|||||
Effect of foreign currency on cash
|
$
|
(6.5
|
)
|
|
$
|
(19.6
|
)
|
|
$
|
3.0
|
|
|
$
|
1.1
|
|
|
$
|
(12.4
|
)
|
(2)
|
In connection with the Company's adoption of ASU 2015-03,
Simplifying the Presentation of Debt Issuance Costs
, as of January 1, 2016, prior year debt balances have been retrospectively adjusted to include a direct deduction of unamortized debt issuance costs, resulting in a reclassification of $7.1 million, $16.8 million, $18.2 million and $22.7 million of debt issuance costs as of June 30, 2015, 2014, 2013, and 2012, respectively, to long-term debt, including current portion and other short term borrowing for the respective periods. Prior to the adoption of ASU 2015-03, the unamortized debt issuance costs were included in other assets on the Company's consolidated balance sheets. The unamortized debt issuance costs associated with the Company's revolving credit facility continues to be included within other assets.
|
(3)
|
The ratio of earnings to fixed charges is calculated by dividing the sum of earnings from continuing operations before income taxes, equity in earnings (loss) from non-consolidated investments and fixed charges, by fixed charges. Fixed charges consist of interest expenses, capitalized interest and imputed interest on our leased obligations. For fiscal year 2013, earnings were insufficient to cover fixed charges by $25.9 million.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Changes in the level or timing of research and development activities and sales activities by our customers;
|
•
|
Fluctuations in overall economic activity within the geographic markets in which we operate;
|
•
|
Change in the level of competition we face from our competitors;
|
•
|
New intellectual property we develop and expiration of our patents;
|
•
|
Changes in prices of our products and services, which are generally relatively stable due to our long-term contracts; and
|
•
|
Fluctuations in exchange rates between foreign currencies, in which a substantial portion of our revenues and expenses are denominated, and the U.S. dollar.
|
•
|
Impairment charges and (gain)/loss on sale of assets;
|
•
|
Equity compensation;
|
•
|
Restructuring expenses and other special items;
|
•
|
Sponsor advisory fee and the related termination fee incurred in connection with our initial public offering;
|
•
|
Noncontrolling interest; and
|
•
|
Other income/(expense), net.
|
•
|
The utilization rate of our facilities: as our utilization rate increases, we achieve greater economies of scale as fixed manufacturing costs are spread over a larger number of units produced;
|
•
|
Production volumes: as volumes change, the level of resources employed also fluctuate, including raw materials, component costs, employment costs and other related expenses, and our utilization rate may also be affected;
|
•
|
The mix of different products or services that we sell;
|
•
|
The cost of raw materials, components and general expense;
|
•
|
Implementation of cost control measures and our ability to effect cost savings through our Operational Excellence, Lean Manufacturing and Lean Six Sigma programs; and
|
•
|
Fluctuations in exchange rates between foreign currencies, in which a substantial portion of our revenues and expenses are denominated, and the U.S. dollar.
|
•
|
Significant under-performance relative to historical or projected future operating results;
|
•
|
Significant changes in the manner of use of the acquired assets or the strategy of the overall business;
|
•
|
Significant negative industry or economic trends; and
|
•
|
Recognition of goodwill impairment charges.
|
•
|
Future reversals of existing taxable temporary differences;
|
•
|
Tax planning strategies; and
|
•
|
Future taxable income exclusive of reversing temporary differences and carryforwards.
|
|
Fiscal Year Ended
June 30, |
|
FX impact (unfavorable) / favorable
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Net revenue
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
|
$
|
(95.4
|
)
|
|
$
|
112.7
|
|
|
6
|
%
|
Cost of sales
|
1,260.5
|
|
|
1,215.5
|
|
|
(69.1
|
)
|
|
114.1
|
|
|
9
|
%
|
||||
Gross margin
|
587.6
|
|
|
615.3
|
|
|
(26.3
|
)
|
|
(1.4
|
)
|
|
*
|
|
||||
Selling, general and administrative expenses
|
358.1
|
|
|
337.3
|
|
|
(9.5
|
)
|
|
30.3
|
|
|
9
|
%
|
||||
Impairment charges and (gain)/loss on sale of assets
|
2.7
|
|
|
4.7
|
|
|
0.2
|
|
|
(2.2
|
)
|
|
(47
|
)%
|
||||
Restructuring and other
|
9.0
|
|
|
13.4
|
|
|
(0.6
|
)
|
|
(3.8
|
)
|
|
(28
|
)%
|
||||
Operating earnings
|
217.8
|
|
|
259.9
|
|
|
(16.4
|
)
|
|
(25.7
|
)
|
|
(10
|
)%
|
||||
Interest expense, net
|
88.5
|
|
|
105.0
|
|
|
(1.5
|
)
|
|
(15.0
|
)
|
|
(14
|
)%
|
||||
Other (income)/expense, net
|
(15.6
|
)
|
|
42.4
|
|
|
(2.6
|
)
|
|
(55.4
|
)
|
|
*
|
|
||||
Earnings from continuing operations before income taxes
|
144.9
|
|
|
112.5
|
|
|
(12.3
|
)
|
|
44.7
|
|
|
40
|
%
|
||||
Income tax expense/(benefit)
|
33.7
|
|
|
(97.7
|
)
|
|
(4.0
|
)
|
|
135.4
|
|
|
*
|
|
||||
Earnings from continuing operations
|
111.2
|
|
|
210.2
|
|
|
(8.3
|
)
|
|
(90.7
|
)
|
|
(43
|
)%
|
||||
Net earnings from discontinued operations, net of tax
|
—
|
|
|
0.1
|
|
|
—
|
|
|
(0.1
|
)
|
|
*
|
|
||||
Net earnings
|
111.2
|
|
|
210.3
|
|
|
(8.3
|
)
|
|
(90.8
|
)
|
|
(43
|
)%
|
||||
Less: Net earnings/(loss) attributable to noncontrolling interest, net of tax
|
(0.3
|
)
|
|
(1.9
|
)
|
|
—
|
|
|
1.6
|
|
|
(84
|
)%
|
||||
Net earnings attributable to Catalent
|
$
|
111.5
|
|
|
$
|
212.2
|
|
|
$
|
(8.3
|
)
|
|
$
|
(92.4
|
)
|
|
(44
|
)%
|
|
Fiscal Year Ended
June 30, |
|
FX impact (unfavorable) / favorable
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Softgel Technologies
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
775.0
|
|
|
$
|
787.5
|
|
|
$
|
(68.2
|
)
|
|
$
|
55.7
|
|
|
7
|
%
|
Segment EBITDA
|
163.8
|
|
|
173.6
|
|
|
(15.9
|
)
|
|
6.1
|
|
|
4
|
%
|
||||
Drug Delivery Solutions
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
806.4
|
|
|
798.3
|
|
|
(20.4
|
)
|
|
28.5
|
|
|
4
|
%
|
||||
Segment EBITDA
|
215.2
|
|
|
230.7
|
|
|
(5.2
|
)
|
|
(10.3
|
)
|
|
(4
|
)%
|
||||
Clinical Supply Services
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
307.5
|
|
|
288.4
|
|
|
(9.4
|
)
|
|
28.5
|
|
|
10
|
%
|
||||
Segment EBITDA
|
53.2
|
|
|
56.7
|
|
|
(2.4
|
)
|
|
(1.1
|
)
|
|
(2
|
)%
|
||||
Inter-segment revenue elimination
|
(40.8
|
)
|
|
(43.4
|
)
|
|
2.6
|
|
|
—
|
|
|
*
|
|
||||
Unallocated Costs
(1)
|
(57.9
|
)
|
|
(100.8
|
)
|
|
3.3
|
|
|
39.6
|
|
|
(39
|
)%
|
||||
Combined Total
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
|
$
|
(95.4
|
)
|
|
$
|
112.7
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA from continuing operations
|
$
|
374.3
|
|
|
$
|
360.2
|
|
|
$
|
(20.2
|
)
|
|
$
|
34.3
|
|
|
10
|
%
|
(1)
|
Unallocated costs includes equity-based compensation, certain acquisition-related costs, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:
|
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2016
|
|
2015
|
||||
Impairment charges and gain/(loss) on sale of assets
|
$
|
(2.7
|
)
|
|
$
|
(4.7
|
)
|
Equity compensation
|
(10.8
|
)
|
|
(9.0
|
)
|
||
Restructuring and other special items
(2)
|
(27.2
|
)
|
|
(27.2
|
)
|
||
Noncontrolling interest
|
0.3
|
|
|
1.9
|
|
||
Other income/(expense), net
(3)
|
15.6
|
|
|
(42.4
|
)
|
||
Non-allocated corporate costs, net
|
(33.1
|
)
|
|
(19.4
|
)
|
||
Total unallocated costs
|
$
|
(57.9
|
)
|
|
$
|
(100.8
|
)
|
(2)
|
Segment results do not include restructuring and certain acquisition-related costs.
|
(3)
|
Amounts for fiscal 2015 primarily relate to the expense associated with the termination of the sponsor advisory fee agreement of $29.8 million resulting from the IPO, expenses related to financing transactions of $21.8 million and non-recurring non-cash purchase accounting gains of approximately
$8.9 million
related to acquisitions completed.
|
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2016
|
|
2015
|
||||
Earnings from continuing operations
|
$
|
111.2
|
|
|
$
|
210.2
|
|
Depreciation and amortization
|
140.6
|
|
|
140.8
|
|
||
Interest expense, net
|
88.5
|
|
|
105.0
|
|
||
Income tax (benefit)/expense
|
33.7
|
|
|
(97.7
|
)
|
||
Noncontrolling interest
|
0.3
|
|
|
1.9
|
|
||
EBITDA from continuing operations
|
$
|
374.3
|
|
|
$
|
360.2
|
|
|
2016 vs. 2015
|
||||
Factors Contributing to Year-Over-Year Change
|
Fiscal Year Ended
June 30, |
||||
|
Net Revenue
|
|
Segment EBITDA
|
||
Organic revenue / Segment EBITDA
|
6
|
%
|
|
4
|
%
|
Impact of acquisitions
|
1
|
%
|
|
—
|
%
|
Impact of divestitures / business restructuring
|
—
|
%
|
|
—
|
%
|
Constant currency change
|
7
|
%
|
|
4
|
%
|
Foreign exchange fluctuation
|
(8
|
)%
|
|
(9
|
)%
|
Total % Change
|
(1
|
)%
|
|
(5
|
)%
|
|
2016 vs. 2015
|
||||
Factors Contributing to Year-Over-Year Change
|
Fiscal Year Ended
June 30, |
||||
|
Net Revenue
|
|
Segment EBITDA
|
||
Organic revenue / Segment EBITDA
|
3
|
%
|
|
(5
|
)%
|
Impact of acquisitions
|
1
|
%
|
|
1
|
%
|
Impact of divestitures / business restructuring
|
—
|
%
|
|
—
|
%
|
Constant currency change
|
4
|
%
|
|
(4
|
)%
|
Foreign exchange fluctuation
|
(3
|
)%
|
|
(3
|
)%
|
Total % Change
|
1
|
%
|
|
(7
|
)%
|
|
2016 vs. 2015
|
||||
Factors Contributing to Year-Over-Year Change
|
Fiscal Year Ended
June 30, |
||||
|
Net Revenue
|
|
Segment EBITDA
|
||
Organic revenue / Segment EBITDA
|
10
|
%
|
|
(2
|
)%
|
Impact of acquisitions
|
—
|
%
|
|
—
|
%
|
Impact of divestitures / business restructuring
|
—
|
%
|
|
—
|
%
|
Constant currency change
|
10
|
%
|
|
(2
|
)%
|
Foreign exchange fluctuation
|
(3
|
)%
|
|
(4
|
)%
|
Total % Change
|
7
|
%
|
|
(6
|
)%
|
|
Fiscal Year Ended
June 30, |
|
FX impact (unfavorable) / favorable
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Net revenue
|
$
|
1,830.8
|
|
|
$
|
1,827.7
|
|
|
$
|
(117.9
|
)
|
|
$
|
121.0
|
|
|
7
|
%
|
Cost of products sold
|
1,215.5
|
|
|
1,229.1
|
|
|
(82.2
|
)
|
|
68.6
|
|
|
6
|
%
|
||||
Gross margin
|
615.3
|
|
|
598.6
|
|
|
(35.7
|
)
|
|
52.4
|
|
|
9
|
%
|
||||
Selling, general and administrative expenses
|
337.3
|
|
|
334.8
|
|
|
(11.0
|
)
|
|
13.5
|
|
|
4
|
%
|
||||
Impairment charges and (gain)/loss on sale of assets
|
4.7
|
|
|
3.2
|
|
|
(0.1
|
)
|
|
1.6
|
|
|
50
|
%
|
||||
Restructuring and other
|
13.4
|
|
|
19.7
|
|
|
(2.0
|
)
|
|
(4.3
|
)
|
|
(22
|
)%
|
||||
Operating earnings
|
259.9
|
|
|
240.9
|
|
|
(22.6
|
)
|
|
41.6
|
|
|
17
|
%
|
||||
Interest expense, net
|
105.0
|
|
|
163.1
|
|
|
(1.2
|
)
|
|
(56.9
|
)
|
|
(35
|
)%
|
||||
Other (income)/expense, net
|
42.4
|
|
|
10.4
|
|
|
(5.2
|
)
|
|
37.2
|
|
|
*
|
|
||||
Earnings from continuing operations before income taxes
|
112.5
|
|
|
67.4
|
|
|
(16.2
|
)
|
|
61.3
|
|
|
91
|
%
|
||||
Income tax expense/(benefit)
|
(97.7
|
)
|
|
49.5
|
|
|
(4.3
|
)
|
|
(142.9
|
)
|
|
*
|
|
||||
Earnings from continuing operations
|
210.2
|
|
|
17.9
|
|
|
(11.9
|
)
|
|
204.2
|
|
|
*
|
|
||||
Net earnings/(loss) from discontinued operations, net of tax
|
0.1
|
|
|
(2.7
|
)
|
|
—
|
|
|
2.8
|
|
|
*
|
|
||||
Net earnings
|
210.3
|
|
|
15.2
|
|
|
(11.9
|
)
|
|
207.0
|
|
|
*
|
|
||||
Less: Net earnings/(loss) attributable to noncontrolling interest, net of tax
|
(1.9
|
)
|
|
(1.0
|
)
|
|
0.1
|
|
|
(1.0
|
)
|
|
*
|
|
||||
Net earnings attributable to Catalent
|
$
|
212.2
|
|
|
$
|
16.2
|
|
|
$
|
(12.0
|
)
|
|
$
|
208.0
|
|
|
*
|
|
|
Fiscal Year Ended
June 30, |
|
FX impact (unfavorable) / favorable
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Softgel Technologies
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
787.5
|
|
|
$
|
857.5
|
|
|
$
|
(83.6
|
)
|
|
$
|
13.6
|
|
|
2
|
%
|
Segment EBITDA
|
173.6
|
|
|
214.8
|
|
|
(22.6
|
)
|
|
(18.6
|
)
|
|
(9
|
)%
|
||||
Drug Delivery Solutions
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
798.3
|
|
|
719.2
|
|
|
(33.1
|
)
|
|
112.2
|
|
|
16
|
%
|
||||
Segment EBITDA
|
230.7
|
|
|
182.2
|
|
|
(7.9
|
)
|
|
56.4
|
|
|
31
|
%
|
||||
Clinical Supply Services
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
288.4
|
|
|
291.7
|
|
|
(6.4
|
)
|
|
3.1
|
|
|
1
|
%
|
||||
Segment EBITDA
|
56.7
|
|
|
59.5
|
|
|
(2.0
|
)
|
|
(0.8
|
)
|
|
(1
|
)%
|
||||
Inter-segment revenue elimination
|
(43.4
|
)
|
|
(40.7
|
)
|
|
5.2
|
|
|
(7.9
|
)
|
|
19
|
%
|
||||
Unallocated Costs
(1)
|
(100.8
|
)
|
|
(82.1
|
)
|
|
7.6
|
|
|
(26.3
|
)
|
|
32
|
%
|
||||
Combined Total
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
1,830.8
|
|
|
$
|
1,827.7
|
|
|
$
|
(117.9
|
)
|
|
$
|
121.0
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA from continuing operations
|
$
|
360.2
|
|
|
$
|
374.4
|
|
|
$
|
(24.9
|
)
|
|
$
|
10.7
|
|
|
3
|
%
|
(1)
|
Unallocated costs includes equity-based compensation, certain acquisition-related costs, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:
|
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Impairment charges and gain/(loss) on sale of assets
|
$
|
(4.7
|
)
|
|
$
|
(3.2
|
)
|
Equity compensation
|
(9.0
|
)
|
|
(4.5
|
)
|
||
Restructuring and other special items
(2)
|
(27.2
|
)
|
|
(29.4
|
)
|
||
Sponsor advisory fee
|
—
|
|
|
(12.9
|
)
|
||
Noncontrolling interest
|
1.9
|
|
|
1.0
|
|
||
Other income/(expense), net
(3)
|
(42.4
|
)
|
|
(10.4
|
)
|
||
Non-allocated corporate costs, net
|
(19.4
|
)
|
|
(22.7
|
)
|
||
Total unallocated costs
|
$
|
(100.8
|
)
|
|
$
|
(82.1
|
)
|
(2)
|
Segment results do not include restructuring and certain acquisition-related costs
|
(3)
|
Amounts for fiscal 2015 primarily relate to the expense associated with the termination of the sponsor advisory fee agreement of $29.8 million resulting from the IPO, expenses related to financing transactions of $21.8 million, non-recurring non-cash purchase accounting gains of approximately
$8.9 million
related to acquisitions completed.
|
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Earnings from continuing operations
|
$
|
210.2
|
|
|
$
|
17.9
|
|
Depreciation and amortization
|
140.8
|
|
|
142.9
|
|
||
Interest expense, net
|
105.0
|
|
|
163.1
|
|
||
Income tax (benefit)/expense
|
(97.7
|
)
|
|
49.5
|
|
||
Noncontrolling interest
|
1.9
|
|
|
1.0
|
|
||
EBITDA from continuing operations
|
$
|
360.2
|
|
|
$
|
374.4
|
|
|
2015 vs. 2014
|
||||
Factors Contributing to Year-Over-Year Change
|
Fiscal Year Ended
June 30, |
||||
|
Net Revenue
|
|
Segment EBITDA
|
||
Organic Growth / Segment EBITDA
|
1
|
%
|
|
(9
|
)%
|
Impact of acquisitions
|
1
|
%
|
|
—
|
%
|
Impact of divestitures / business restructuring
|
—
|
%
|
|
—
|
%
|
Constant currency change
|
2
|
%
|
|
(9
|
)%
|
Foreign exchange fluctuation
|
(10
|
)%
|
|
(10
|
)%
|
Total % Change
|
(8
|
)%
|
|
(19
|
)%
|
|
2015 vs. 2014
|
||||
Factors Contributing to Year-Over-Year Change
|
Fiscal Year Ended
June 30, |
||||
|
Net Revenue
|
|
Segment EBITDA
|
||
Organic Growth / Segment EBITDA
|
14
|
%
|
|
30
|
%
|
Impact of acquisitions
|
2
|
%
|
|
1
|
%
|
Impact of divestitures / business restructuring
|
—
|
%
|
|
—
|
%
|
Constant currency change
|
16
|
%
|
|
31
|
%
|
Foreign exchange fluctuation
|
(5
|
)%
|
|
(4
|
)%
|
Total % Change
|
11
|
%
|
|
27
|
%
|
|
2015 vs. 2014
|
||||
Factors Contributing to Year-Over-Year Change
|
Fiscal Year Ended
June 30, |
||||
|
Net Revenue
|
|
Segment EBITDA
|
||
Organic Growth / Segment EBITDA
|
1
|
%
|
|
(1
|
)%
|
Impact of acquisitions
|
—
|
%
|
|
—
|
%
|
Impact of divestitures / business restructuring
|
—
|
%
|
|
—
|
%
|
Constant currency change
|
1
|
%
|
|
(1
|
)%
|
Foreign exchange fluctuation
|
(2
|
)%
|
|
(4
|
)%
|
Total % Change
|
(1
|
)%
|
|
(5
|
)%
|
|
Fiscal Year Ended
June 30, |
|
|
||||||||
(in millions)
|
2016
|
|
2015
|
|
$ Change
|
||||||
Net cash provided by/(used in):
|
|
|
|
|
|
||||||
Operating activities from continuing operations
|
$
|
155.3
|
|
|
$
|
171.7
|
|
|
$
|
(16.4
|
)
|
Investing activities from continuing operations
|
$
|
(137.7
|
)
|
|
$
|
(271.8
|
)
|
|
$
|
134.1
|
|
Financing activities from continuing operations
|
$
|
(30.8
|
)
|
|
$
|
196.5
|
|
|
$
|
(227.3
|
)
|
|
Fiscal Year Ended
June 30, |
|
|
||||||||
(in millions)
|
2015
|
|
2014
|
|
$ Change
|
||||||
Net cash provided by/(used in):
|
|
|
|
|
|
||||||
Operating activities from continuing operations
|
$
|
171.7
|
|
|
$
|
180.2
|
|
|
$
|
(8.5
|
)
|
Investing activities from continuing operations
|
$
|
(271.8
|
)
|
|
$
|
(175.2
|
)
|
|
$
|
(96.6
|
)
|
Financing activities from continuing operations
|
$
|
196.5
|
|
|
$
|
(42.1
|
)
|
|
$
|
238.6
|
|
•
|
a pledge of 100% of the capital stock of the borrower and 100% of the equity interests directly held by the borrower and each guarantor in any wholly owned material subsidiary of the borrower or any guarantor (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, will not include more than 65% of the voting stock of such non-U.S. subsidiary); and
|
•
|
a security interest in, and mortgages on, substantially all tangible and intangible assets of the borrower and of each guarantor, subject to certain limited exceptions.
|
•
|
does not include non-cash stock-based employee compensation expense and certain other non-cash charges;
|
•
|
does not include cash and non-cash restructuring, severance and relocation costs incurred to realize future cost savings and enhance our operations;
|
•
|
adds back noncontrolling interest expense, which represents minority investors’ ownership of certain of our consolidated subsidiaries and is, therefore, not available to us; and
|
•
|
includes estimated cost savings that have not yet been fully reflected in our results.
|
|
Twelve Months Ended
|
||||||
|
June 30,
2016 |
|
June 30,
2015 |
||||
Earnings from continuing operations
|
$
|
111.2
|
|
|
$
|
210.2
|
|
Interest expense, net
|
88.5
|
|
|
105.0
|
|
||
Income tax expense/(benefit)
(1)
|
33.7
|
|
|
(97.7
|
)
|
||
Depreciation and amortization
|
140.6
|
|
|
140.8
|
|
||
Noncontrolling interest
|
0.3
|
|
|
1.9
|
|
||
EBITDA from continuing operations
|
374.3
|
|
|
360.2
|
|
||
Equity compensation
|
10.8
|
|
|
9.0
|
|
||
Impairment charges and (gain)/loss on sale of assets
|
2.7
|
|
|
4.7
|
|
||
Financing related expenses and other
(2)
|
—
|
|
|
21.8
|
|
||
U.S. GAAP Restructuring
|
9.0
|
|
|
13.4
|
|
||
Acquisition, integration and other special items
|
18.2
|
|
|
13.8
|
|
||
Foreign exchange loss/(gain) (included in other, net)
(3)
|
(10.5
|
)
|
|
(2.7
|
)
|
||
Other adjustments
(4)
|
(3.3
|
)
|
|
22.9
|
|
||
Subtotal
|
401.2
|
|
|
443.1
|
|
||
Estimated cost savings
|
—
|
|
|
—
|
|
||
Adjusted EBITDA
|
$
|
401.2
|
|
|
$
|
443.1
|
|
FX impact (unfavorable)
|
$
|
(20.8
|
)
|
|
|
||
Adjusted EBITDA - Constant Currency
|
$
|
422.0
|
|
|
|
(1)
|
Represents the amount of income tax-related expense/(benefit) recorded within our net earnings/(loss) that may not result in cash payment or receipt.
|
(2)
|
Financing-related expenses for the three months ended September 30, 2014 include $20.6 million of early debt termination expenses incurred in connection with the repayment of debt with the net proceeds of the IPO. See footnote 4 below for an additional $29.8 million of IPO-related costs, totaling $50.4 million.
|
(3)
|
Foreign exchange gain of
$10.5 million
for the twelve months ended
June 30, 2016
included
$16.3 million
of unrealized foreign currency exchange rate
gains
primarily driven by
gains
of
$9.0 million
related to inter-company loans denominated in a currency different from the functional currency of either the borrower or the lender, partially offset by foreign currency exchange
gains
of
$3.8 million
driven by the ineffective portion of the net investment hedge related to the Euro-denominated debt. The foreign exchange adjustment was also affected by the exclusion of realized foreign currency exchange rate
losses
from the non-cash and cash settlement of inter-company loans of
$5.8 million
. Inter-company loans are between our entities and do not reflect the ongoing results of the Company’s trade operations.
|
(4)
|
Other Adjustments for the twelve months ended June 30, 2015 includes $29.8 million for a sponsor advisory agreement termination fee paid in connection with the IPO. See footnote 2 above for an additional $20.6 million of IPO-related costs, totaling $50.4 million.
|
(Dollars in millions)
|
Total
|
|
Fiscal 2017
|
|
Fiscal 2018 - Fiscal 2019
|
|
Fiscal 2020 - Fiscal 2021
|
|
Thereafter
|
|||||||||||
Long-term debt obligations
(1)
|
$
|
1,828.7
|
|
|
$
|
25.9
|
|
|
$
|
39.5
|
|
|
$
|
1,763.3
|
|
|
$
|
—
|
|
|
Interest on long-term obligations
(2)
|
431.8
|
|
|
83.8
|
|
|
163.9
|
|
|
151.8
|
|
|
32.3
|
|
||||||
Capital lease obligations
(3)
|
51.4
|
|
|
2.0
|
|
|
4.6
|
|
|
5.5
|
|
|
39.3
|
|
||||||
Operating lease obligations
(4)
|
34.1
|
|
|
9.2
|
|
|
12.5
|
|
|
8.0
|
|
|
4.4
|
|
||||||
Purchase obligations
(5)
|
51.4
|
|
|
44.8
|
|
|
4.1
|
|
|
2.5
|
|
|
—
|
|
||||||
Other long-term liabilities
(6)
|
61.3
|
|
|
4.6
|
|
|
7.1
|
|
|
7.2
|
|
|
42.4
|
|
||||||
Total
|
$
|
2,458.7
|
|
|
$
|
170.3
|
|
|
$
|
231.7
|
|
|
$
|
1,938.3
|
|
|
$
|
118.4
|
|
(1)
|
Represents gross maturities of our long-term debt obligations excluding capital lease obligations as of
June 30, 2016
.
|
(2)
|
Represents estimated interest payments relating to our long-term obligations including capital lease obligations. Estimated future interest payments on our variable-rate debt obligations were calculated using the interest and exchange rates as of
June 30, 2016
.
|
(3)
|
Represents maturities of our capital lease obligations included within long-term debt as of
June 30, 2016
.
|
(4)
|
Represents minimum rental payments for operating leases having initial or remaining non-cancelable lease terms.
|
(5)
|
Purchase obligations includes agreements to purchase goods or services that are enforceable, specify all significant terms, including the following: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and approximate timing of the transaction. Purchase obligations disclosed above may include estimates of the time period in which cash outflows will occur. Purchase orders entered into in the normal course of business and authorizations to purchase that involve no firm commitment from either party are excluded from the above table. In addition, contracts that can be unilaterally canceled with no termination fee or with proper notice are excluded from our total purchase obligations except for the amount of the termination fee or the minimum amount of goods that must be purchased during the requisite notice period.
|
(6)
|
Primarily relates to certain long-term employee-related liabilities for operations under programs that we have discontinued.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
Year ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net revenue
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
|
$
|
1,827.7
|
|
Cost of sales
|
1,260.5
|
|
|
1,215.5
|
|
|
1,229.1
|
|
|||
Gross margin
|
587.6
|
|
|
615.3
|
|
|
598.6
|
|
|||
Selling, general and administrative expenses
|
358.1
|
|
|
337.3
|
|
|
334.8
|
|
|||
Impairment charges and (gain)/loss on sale of assets
|
2.7
|
|
|
4.7
|
|
|
3.2
|
|
|||
Restructuring and other
|
9.0
|
|
|
13.4
|
|
|
19.7
|
|
|||
Operating earnings/(loss)
|
217.8
|
|
|
259.9
|
|
|
240.9
|
|
|||
Interest expense, net
|
88.5
|
|
|
105.0
|
|
|
163.1
|
|
|||
Other (income)/expense, net
|
(15.6
|
)
|
|
42.4
|
|
|
10.4
|
|
|||
Earnings from continuing operations before income taxes
|
144.9
|
|
|
112.5
|
|
|
67.4
|
|
|||
Income tax expense/(benefit)
|
33.7
|
|
|
(97.7
|
)
|
|
49.5
|
|
|||
Earnings from continuing operations
|
111.2
|
|
|
210.2
|
|
|
17.9
|
|
|||
Net earnings/(loss) from discontinued operations, net of tax
|
—
|
|
|
0.1
|
|
|
(2.7
|
)
|
|||
Net earnings
|
111.2
|
|
|
210.3
|
|
|
15.2
|
|
|||
Less: Net (loss) attributable to noncontrolling interest, net of tax
|
(0.3
|
)
|
|
(1.9
|
)
|
|
(1.0
|
)
|
|||
Net earnings attributable to Catalent
|
$
|
111.5
|
|
|
$
|
212.2
|
|
|
$
|
16.2
|
|
|
|
|
|
|
|
||||||
Amounts attributable to Catalent:
|
|
|
|
|
|
|
|
||||
Earnings from continuing operations less net income (loss) attributable to noncontrolling interest
|
111.5
|
|
|
212.1
|
|
|
18.9
|
|
|||
Net earnings attributable to Catalent
|
111.5
|
|
|
212.2
|
|
|
16.2
|
|
|||
|
|
|
|
|
|||||||
Earnings per share attributable to Catalent:
|
|
|
|
|
|
|
|||||
Basic
|
|
|
|
|
|
|
|||||
Earnings continuing operations
|
0.89
|
|
|
1.77
|
|
|
0.25
|
|
|||
Net earnings
|
0.89
|
|
|
1.77
|
|
|
0.22
|
|
|||
Diluted
|
|
|
|
|
|
||||||
Earnings continuing operations
|
0.89
|
|
|
1.75
|
|
|
0.25
|
|
|||
Net earnings
|
0.89
|
|
|
1.75
|
|
|
0.21
|
|
|
Year Ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net earnings
|
$
|
111.2
|
|
|
$
|
210.3
|
|
|
$
|
15.2
|
|
Other comprehensive income/(loss), net of tax
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(118.8
|
)
|
|
(144.0
|
)
|
|
32.4
|
|
|||
Defined benefit pension plan
|
(9.1
|
)
|
|
(6.4
|
)
|
|
(15.5
|
)
|
|||
Deferred compensation
|
(3.8
|
)
|
|
0.6
|
|
|
1.7
|
|
|||
Other comprehensive income/(loss), net of tax
|
(131.7
|
)
|
|
(149.8
|
)
|
|
18.6
|
|
|||
Comprehensive income/(loss)
|
(20.5
|
)
|
|
60.5
|
|
|
33.8
|
|
|||
Comprehensive income/(loss) attributable to noncontrolling interest
|
(0.3
|
)
|
|
(1.9
|
)
|
|
(0.6
|
)
|
|||
Comprehensive income/(loss) attributable to Catalent
|
$
|
(20.2
|
)
|
|
$
|
62.4
|
|
|
$
|
34.4
|
|
|
June 30,
2016 |
|
June 30,
2015 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
131.6
|
|
|
$
|
151.3
|
|
Trade receivables, net
|
414.8
|
|
|
372.4
|
|
||
Inventories
|
154.8
|
|
|
132.9
|
|
||
Prepaid expenses and other
|
89.0
|
|
|
80.9
|
|
||
Total current assets
|
790.2
|
|
|
737.5
|
|
||
Property, plant, and equipment, net
|
905.8
|
|
|
885.2
|
|
||
Other assets:
|
|
|
|
||||
Goodwill
|
996.5
|
|
|
1,061.5
|
|
||
Other intangibles, net
|
294.0
|
|
|
368.7
|
|
||
Deferred income taxes
|
37.5
|
|
|
64.1
|
|
||
Other
|
67.1
|
|
|
21.3
|
|
||
Total assets
|
$
|
3,091.1
|
|
|
$
|
3,138.3
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND SHAREHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term obligations and other short-term borrowings
|
$
|
27.7
|
|
|
$
|
23.8
|
|
Accounts payable
|
143.7
|
|
|
128.2
|
|
||
Other accrued liabilities
|
219.8
|
|
|
247.0
|
|
||
Total current liabilities
|
391.2
|
|
|
399.0
|
|
||
Long-term obligations, less current portion
|
1,832.8
|
|
|
1,857.0
|
|
||
Pension liability
|
151.0
|
|
|
143.7
|
|
||
Deferred income taxes
|
41.4
|
|
|
56.3
|
|
||
Other liabilities
|
38.8
|
|
|
42.5
|
|
||
Commitment and contingencies (see Note 16)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interest
|
—
|
|
|
5.8
|
|
||
|
|
|
|
||||
Shareholders’ equity/(deficit):
|
|
|
|
||||
Common stock $0.01 par value; 1.0 billion and 1.0 billion shares authorized in 2016 and 2015, respectively; 124,712,240 and 124,319,279 shares issued and outstanding in 2016 and 2015, respectively.
|
1.2
|
|
|
1.2
|
|
||
Preferred stock $0.01 par value; 100 million and 100 million authorized in 2016 and 2015, respectively, 0 issued and outstanding in 2016 and 2015.
|
—
|
|
|
—
|
|
||
Additional paid in capital
|
1,976.5
|
|
|
1,973.7
|
|
||
Accumulated deficit
|
(1,036.1
|
)
|
|
(1,166.9
|
)
|
||
Accumulated other comprehensive income/(loss)
|
(305.7
|
)
|
|
(174.0
|
)
|
||
Total Catalent shareholders’ equity
|
635.9
|
|
|
634.0
|
|
||
Noncontrolling interest
|
—
|
|
|
—
|
|
||
Total shareholders’ equity
|
635.9
|
|
|
634.0
|
|
||
Total liabilities, redeemable noncontrolling interest and shareholders’ equity
|
$
|
3,091.1
|
|
|
$
|
3,138.3
|
|
|
Shares of Common Stock
|
|
Common Stock
|
|
Additional Paid in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive (Loss)/Income
|
|
Noncontrolling Interest
|
|
Total Shareholders’ Equity/(Deficit)
|
|||||||||||||
Balance at June 30, 2013
|
74,796.1
|
|
|
$
|
0.7
|
|
|
$
|
1,026.7
|
|
|
$
|
(1,395.3
|
)
|
|
$
|
(42.8
|
)
|
|
$
|
0.4
|
|
|
$
|
(410.3
|
)
|
Equity contribution
|
25.2
|
|
|
|
|
0.2
|
|
|
|
|
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|||||||||
Equity compensation
|
|
|
|
|
4.5
|
|
|
|
|
|
|
|
|
4.5
|
|
|||||||||||
Net earnings
|
|
|
|
|
|
|
16.2
|
|
|
|
|
(0.6
|
)
|
|
15.6
|
|
||||||||||
Other comprehensive income /(loss), net of tax
|
|
|
|
|
|
|
|
|
18.6
|
|
|
|
|
18.6
|
|
|||||||||||
Balance at June 30, 2014
|
74,821.3
|
|
|
0.7
|
|
|
1,031.4
|
|
|
(1,379.1
|
)
|
|
(24.2
|
)
|
|
(0.6
|
)
|
|
(371.8
|
)
|
||||||
Equity contribution
|
48,875.0
|
|
|
0.5
|
|
|
946.1
|
|
|
|
|
|
|
|
|
946.6
|
|
|||||||||
Stock option exercises
|
623.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity compensation
|
|
|
|
|
9.0
|
|
|
|
|
|
|
|
|
9.0
|
|
|||||||||||
Cash paid, in lieu of equity, for tax withholding
|
|
|
|
|
(10.3
|
)
|
|
|
|
|
|
|
|
(10.3
|
)
|
|||||||||||
Noncontrolling interest ownership changes
|
|
|
|
|
(2.5
|
)
|
|
|
|
|
|
1.0
|
|
|
(1.5
|
)
|
||||||||||
Net earnings
|
|
|
|
|
|
|
212.2
|
|
|
|
|
(0.4
|
)
|
|
211.8
|
|
||||||||||
Other comprehensive income /(loss), net of tax
|
|
|
|
|
|
|
|
|
(149.8
|
)
|
|
|
|
(149.8
|
)
|
|||||||||||
Balance at June 30, 2015
|
124,319.3
|
|
|
1.2
|
|
|
1,973.7
|
|
|
(1,166.9
|
)
|
|
(174.0
|
)
|
|
—
|
|
|
634.0
|
|
||||||
Cumulative effect of stock compensation standard adoption
|
|
|
|
|
1.0
|
|
|
19.3
|
|
|
|
|
|
|
20.3
|
|
||||||||||
Stock option exercises
|
392.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity compensation
|
|
|
|
|
10.8
|
|
|
|
|
|
|
|
|
10.8
|
|
|||||||||||
Cash paid, in lieu of equity, for tax withholding
|
|
|
|
|
(8.7
|
)
|
|
|
|
|
|
|
|
(8.7
|
)
|
|||||||||||
Noncontrolling interest ownership changes
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
|
—
|
|
|
(0.3
|
)
|
||||||||||
Net earnings
|
|
|
|
|
|
|
111.5
|
|
|
|
|
—
|
|
|
111.5
|
|
||||||||||
Other comprehensive income /(loss), net of tax
|
|
|
|
|
|
|
|
|
(131.7
|
)
|
|
|
|
(131.7
|
)
|
|||||||||||
Balance at June 30, 2016
|
124,712.2
|
|
|
$
|
1.2
|
|
|
$
|
1,976.5
|
|
|
$
|
(1,036.1
|
)
|
|
$
|
(305.7
|
)
|
|
$
|
—
|
|
|
$
|
635.9
|
|
|
Year ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net earnings/(loss)
|
$
|
111.2
|
|
|
$
|
210.3
|
|
|
$
|
15.2
|
|
Net earnings/(loss) from discontinued operations
|
—
|
|
|
0.1
|
|
|
(2.7
|
)
|
|||
Earnings from continuing operations
|
111.2
|
|
|
210.2
|
|
|
17.9
|
|
|||
Adjustments to reconcile (loss)/earnings from continued operations to net cash from operations:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
140.6
|
|
|
140.8
|
|
|
142.9
|
|
|||
Non-cash foreign currency transaction (gains)/losses, net
|
(10.9
|
)
|
|
(16.4
|
)
|
|
(17.1
|
)
|
|||
Amortization and write off of debt financing costs
|
4.7
|
|
|
16.0
|
|
|
14.0
|
|
|||
Asset impairments and (gain)/loss on sale of assets
|
2.7
|
|
|
4.7
|
|
|
3.2
|
|
|||
Non-cash gain on acquisition
|
—
|
|
|
(8.9
|
)
|
|
—
|
|
|||
Call premium and financing fees paid
|
—
|
|
|
12.6
|
|
|
7.2
|
|
|||
Equity compensation
|
10.8
|
|
|
9.0
|
|
|
4.5
|
|
|||
Provision/(benefit) for deferred income taxes
|
(15.3
|
)
|
|
(120.7
|
)
|
|
(15.1
|
)
|
|||
Provision for bad debts and inventory
|
13.2
|
|
|
12.7
|
|
|
9.8
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
(Increase)/decrease in trade receivables
|
(54.1
|
)
|
|
(7.5
|
)
|
|
(38.0
|
)
|
|||
(Increase)/decrease in inventories
|
(35.4
|
)
|
|
(19.2
|
)
|
|
(8.5
|
)
|
|||
Increase/(decrease) in accounts payable
|
21.4
|
|
|
(11.7
|
)
|
|
(7.6
|
)
|
|||
Other assets/accrued liabilities, net - current and non-current
|
(33.6
|
)
|
|
(49.9
|
)
|
|
67.0
|
|
|||
Net cash provided by/(used in) operating activities from continuing operations
|
155.3
|
|
|
171.7
|
|
|
180.2
|
|
|||
Net cash provided by/(used in) operating activities from discontinued operations
|
—
|
|
|
0.1
|
|
|
(1.9
|
)
|
|||
Net cash provided by/(used in) operating activities
|
155.3
|
|
|
171.8
|
|
|
178.3
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Acquisition of property and equipment and other productive assets
|
(139.6
|
)
|
|
(141.0
|
)
|
|
(122.4
|
)
|
|||
Proceeds from sale of property and equipment
|
1.9
|
|
|
—
|
|
|
0.9
|
|
|||
Payment for acquisitions, net
|
—
|
|
|
(130.8
|
)
|
|
(53.7
|
)
|
|||
Net cash provided by/(used in) investing activities from continuing operations
|
(137.7
|
)
|
|
(271.8
|
)
|
|
(175.2
|
)
|
|||
Net cash provided by/(used in) investing activities from discontinued operations
|
—
|
|
|
—
|
|
|
4.0
|
|
|||
Net cash provided by/(used in) investing activities
|
(137.7
|
)
|
|
(271.8
|
)
|
|
(171.2
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Net change in other borrowings
|
2.3
|
|
|
—
|
|
|
(17.5
|
)
|
|||
Proceeds from borrowing, net
|
—
|
|
|
150.4
|
|
|
1,723.7
|
|
|||
Payments related to long-term obligations
|
(18.6
|
)
|
|
(879.8
|
)
|
|
(1,741.3
|
)
|
|||
Call premium and financing fees paid
|
—
|
|
|
(12.6
|
)
|
|
(7.2
|
)
|
|||
Purchase of redeemable noncontrolling interest shares
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|||
Equity contribution
|
—
|
|
|
948.8
|
|
|
0.2
|
|
|||
Cash paid, in lieu of equity, for tax withholding obligation
|
(8.7
|
)
|
|
(10.3
|
)
|
|
—
|
|
|||
Net cash (used in)/provided by financing activities from continuing operations
|
(30.8
|
)
|
|
196.5
|
|
|
(42.1
|
)
|
|||
Net cash (used in)/provided by financing activities from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net cash (used in)/provided by financing activities
|
(30.8
|
)
|
|
196.5
|
|
|
(42.1
|
)
|
|||
Effect of foreign currency on cash
|
(6.5
|
)
|
|
(19.6
|
)
|
|
3.0
|
|
|||
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS
|
(19.7
|
)
|
|
76.9
|
|
|
(32.0
|
)
|
|||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
|
151.3
|
|
|
74.4
|
|
|
106.4
|
|
|||
CASH AND EQUIVALENTS AT END OF PERIOD
|
$
|
131.6
|
|
|
$
|
151.3
|
|
|
$
|
74.4
|
|
SUPPLEMENTARY CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
82.4
|
|
|
$
|
107.1
|
|
|
$
|
153.8
|
|
Income taxes paid, net
|
$
|
40.6
|
|
|
$
|
34.0
|
|
|
$
|
21.0
|
|
1
.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.
|
•
|
Cost approach, which is based on the cost to acquire or construct comparable assets less an allowance for functional and/or economic obsolescence.
|
•
|
Income approach, which is based on the present value of the future stream of net cash flows.
|
•
|
Quoted prices for identical assets or liabilities in active markets (called Level 1 inputs).
|
•
|
Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are directly or indirectly observable (called Level 2 inputs).
|
•
|
Unobservable inputs that reflect estimates and assumptions (called Level 3 inputs).
|
•
|
|
|
June 30, 2015
|
||||||
(Dollars in millions)
|
As Reported
|
|
As Adjusted
|
||||
Other assets:
|
|
|
|
||||
Other
|
$
|
28.4
|
|
|
$
|
21.3
|
|
Total assets
|
$
|
3,145.4
|
|
|
$
|
3,138.3
|
|
|
|
|
|
||||
Long-term obligations, less current portion
|
$
|
1,864.1
|
|
|
$
|
1,857.0
|
|
Total liabilities, redeemable noncontrolling interest and shareholders' equity
|
$
|
3,145.4
|
|
|
$
|
3,138.3
|
|
2
.
|
BUSINESS COMBINATIONS
|
3
.
|
GOODWILL
|
(Dollars in millions)
|
Softgel Technologies
|
|
Drug Delivery Solutions
|
|
Clinical Supply Services
|
|
Total
|
||||||||
Balance at June 30, 2014
|
$
|
472.9
|
|
|
$
|
430.6
|
|
|
$
|
193.6
|
|
|
$
|
1,097.1
|
|
Additions/(impairments)
|
2.3
|
|
|
58.7
|
|
|
—
|
|
|
61.0
|
|
||||
Foreign currency translation adjustments
|
(64.0
|
)
|
|
(17.8
|
)
|
|
(14.8
|
)
|
|
(96.6
|
)
|
||||
Balance at June 30, 2015
|
411.2
|
|
|
471.5
|
|
|
178.8
|
|
|
1,061.5
|
|
||||
Additions/(impairments)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency translation adjustments
|
(5.3
|
)
|
|
(36.4
|
)
|
|
(23.3
|
)
|
|
(65.0
|
)
|
||||
Balance at June 30, 2016
|
$
|
405.9
|
|
|
$
|
435.1
|
|
|
$
|
155.5
|
|
|
$
|
996.5
|
|
4
.
|
DEFINITE-LIVED LONG-LIVED ASSETS
|
(Dollars in millions)
|
Weighted Average Life
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
||||||
June 30, 2016
|
|
|
|
|
|
|
|
||||||
Amortized intangibles:
|
|
|
|
|
|
|
|
||||||
Core technology
|
18 years
|
|
$
|
170.6
|
|
|
$
|
(64.9
|
)
|
|
$
|
105.7
|
|
Customer relationships
|
14 years
|
|
230.3
|
|
|
(90.9
|
)
|
|
139.4
|
|
|||
Product relationships
|
12 years
|
|
208.6
|
|
|
(159.7
|
)
|
|
48.9
|
|
|||
Total intangible assets
|
|
|
$
|
609.5
|
|
|
$
|
(315.5
|
)
|
|
$
|
294.0
|
|
(Dollars in millions)
|
Weighted Average Life
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
||||||
June 30, 2015
|
|
|
|
|
|
|
|
||||||
Amortized intangibles:
|
|
|
|
|
|
|
|
||||||
Core technology
|
18 years
|
|
$
|
177.6
|
|
|
$
|
(57.6
|
)
|
|
$
|
120.0
|
|
Customer relationships
|
14 years
|
|
259.2
|
|
|
(81.8
|
)
|
|
177.4
|
|
|||
Product relationships
|
12 years
|
|
222.9
|
|
|
(151.6
|
)
|
|
71.3
|
|
|||
Total intangible assets
|
|
|
$
|
659.7
|
|
|
$
|
(291.0
|
)
|
|
$
|
368.7
|
|
(Dollars in millions)
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
||||||||||
Amortization expense
|
$
|
45.0
|
|
|
$
|
44.9
|
|
|
$
|
39.1
|
|
|
$
|
24.8
|
|
|
$
|
24.8
|
|
5
.
|
RESTRUCTURING AND OTHER COSTS
|
|
Year ended June 30,
|
||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Restructuring costs:
|
|
|
|
|
|
||||||
Employee-related reorganization
(1)
|
$
|
3.7
|
|
|
$
|
11.5
|
|
|
$
|
16.5
|
|
Asset impairments
|
0.4
|
|
|
—
|
|
|
—
|
|
|||
Facility exit and other costs
(2)
|
4.9
|
|
|
1.9
|
|
|
3.2
|
|
|||
Total restructuring costs
|
$
|
9.0
|
|
|
$
|
13.4
|
|
|
$
|
19.7
|
|
(1)
|
Employee-related costs consist primarily of severance costs and also include outplacement services provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.
|
(2)
|
Facility exit and other costs consist of accelerated depreciation, equipment relocation costs and costs associated with planned facility expansions and closures to streamline Company operations.
|
6
.
|
LONG-TERM OBLIGATIONS AND OTHER SHORT-TERM BORROWINGS
|
(Dollars in millions)
|
Maturity
|
|
June 30,
2016 |
|
June 30,
2015 (1) |
||||
Senior Secured Credit Facilities
|
|
|
|
|
|
||||
Term loan facility dollar-denominated
|
May 2021
|
|
$
|
1,454.2
|
|
|
$
|
1,465.9
|
|
Term loan facility euro-denominated
|
May 2021
|
|
345.2
|
|
|
353.8
|
|
||
Capital lease obligations
|
2020 to 2032
|
|
51.4
|
|
|
55.5
|
|
||
Other obligations
|
2016 to 2018
|
|
9.7
|
|
|
5.6
|
|
||
Total
|
|
|
1,860.5
|
|
|
1,880.8
|
|
||
Less: Current portion of long-term obligations and other short-term borrowings
|
|
|
27.7
|
|
|
23.8
|
|
||
Long-term obligations, less current portion
|
|
|
$
|
1,832.8
|
|
|
$
|
1,857.0
|
|
(1)
|
In connection with the Company's adoption of ASU 2015-03, prior year debt balances have been retrospectively adjusted to include a direct deduction of unamortized debt issuance costs, resulting in a reclassification of $7.1 million of debt issuance costs to long-term debt obligation, less current portion. Prior to the adoption of ASU 2015-03, the unamortized debt issuance costs were included in other assets on the Company's consolidated balance sheets. The unamortized debt issuance costs associated with the Company's revolving credit facility continues to be included within other assets.
|
(Dollars in millions)
|
2017
|
2018
|
2019
|
2020
|
2021
|
Thereafter
|
Total
|
|||||||||
Maturities of long-term and other obligations
|
$
|
27.9
|
|
23.2
|
|
21.0
|
|
21.2
|
|
1,747.5
|
|
39.3
|
|
$
|
1,880.1
|
|
•
|
a pledge of
100%
of the capital stock of the borrower and
100%
of the equity interests directly held by the borrower and each guarantor in any wholly owned material subsidiary of the borrower or any guarantor (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, will not include more than
65%
of the voting stock of such non-U.S. subsidiary); and
|
•
|
a security interest in, and mortgages on, substantially all tangible and intangible assets of the borrower and of each guarantor, subject to certain limited exceptions.
|
|
June 30, 2016
|
|
June 30, 2015
|
||||||||||||
(Dollars in millions)
|
Carrying
Value
|
|
Estimated Fair
Value
|
|
Carrying
Value
(1)
|
|
Estimated Fair
Value
|
||||||||
Long-term debt and other
|
$
|
1,860.5
|
|
|
$
|
1,868.8
|
|
|
$
|
1,880.8
|
|
|
$
|
1,854.7
|
|
7
.
|
EARNINGS PER SHARE
|
|
Year ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Earnings from continuing operations less net income / (loss) attributable to noncontrolling interest
|
$
|
111.5
|
|
|
$
|
212.1
|
|
|
$
|
18.9
|
|
Earnings / (loss) from discontinued operations
|
—
|
|
|
0.1
|
|
|
(2.7
|
)
|
|||
Net earnings attributable to Catalent
|
$
|
111.5
|
|
|
$
|
212.2
|
|
|
$
|
16.2
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
124,787,819
|
|
|
119,575,568
|
|
|
75,045,147
|
|
|||
Dilutive securities issuable-stock plans
|
1,082,275
|
|
|
1,773,068
|
|
|
1,078,710
|
|
|||
Total weighted average diluted shares outstanding
|
125,870,094
|
|
|
121,348,636
|
|
|
76,123,857
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share of common stock:
|
|
|
|
|
|
|
|
||||
Earnings from continuing operations
|
$
|
0.89
|
|
|
$
|
1.77
|
|
|
$
|
0.25
|
|
Earnings / (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
(0.03
|
)
|
|||
Net earnings attributable to Catalent
|
$
|
0.89
|
|
|
$
|
1.77
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share of common stock-assuming dilution:
|
|
|
|
|
|
|
|
||||
Earnings from continuing operations
|
$
|
0.89
|
|
|
$
|
1.75
|
|
|
$
|
0.25
|
|
Earnings / (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
(0.04
|
)
|
|||
Net earnings attributable to Catalent
|
$
|
0.89
|
|
|
$
|
1.75
|
|
|
$
|
0.21
|
|
8
.
|
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
|
(Dollars in millions)
|
June 30,
2016 |
|
June 30,
2015 |
||||
Unrealized foreign exchange gain/(loss) within other comprehensive income
|
$
|
1.8
|
|
|
$
|
30.0
|
|
Unrealized foreign exchange gain/(loss) within statement of operations
|
$
|
3.9
|
|
|
$
|
47.7
|
|
9
.
|
INCOME TAXES
|
|
Fiscal Year Ended
June 30, |
||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
U.S. Operations
|
$
|
60.0
|
|
|
$
|
25.8
|
|
|
$
|
(75.6
|
)
|
Non-U.S. Operation
|
$
|
84.9
|
|
|
$
|
86.7
|
|
|
$
|
143.0
|
|
|
$
|
144.9
|
|
|
$
|
112.5
|
|
|
$
|
67.4
|
|
|
Fiscal Year Ended
June 30, |
||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
State and local
|
(0.2
|
)
|
|
(0.8
|
)
|
|
(1.2
|
)
|
|||
Non-U.S.
|
26.3
|
|
|
31.9
|
|
|
55.7
|
|
|||
Total
|
$
|
25.5
|
|
|
$
|
31.1
|
|
|
$
|
54.5
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
19.6
|
|
|
$
|
(125.3
|
)
|
|
$
|
5.3
|
|
State and local
|
(4.8
|
)
|
|
(1.1
|
)
|
|
0.4
|
|
|||
Non-U.S.
|
(6.6
|
)
|
|
(2.4
|
)
|
|
(10.7
|
)
|
|||
Total
|
8.2
|
|
|
(128.8
|
)
|
|
(5.0
|
)
|
|||
|
|
|
|
|
|
||||||
Total provision/(benefit)
|
$
|
33.7
|
|
|
$
|
(97.7
|
)
|
|
$
|
49.5
|
|
|
Fiscal Year Ended
June 30, |
||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Provision at U.S. federal statutory tax rate
|
$
|
50.7
|
|
|
$
|
39.4
|
|
|
$
|
23.6
|
|
State and local income taxes
|
(3.0
|
)
|
|
(2.4
|
)
|
|
0.6
|
|
|||
Foreign tax rate differential
|
(21.7
|
)
|
|
(23.9
|
)
|
|
(25.5
|
)
|
|||
Permanent items
|
(2.3
|
)
|
|
1.7
|
|
|
24.6
|
|
|||
Unrecognized tax positions
|
5.6
|
|
|
14.7
|
|
|
34.2
|
|
|||
Tax valuation allowance
|
7.2
|
|
|
(133.2
|
)
|
|
(9.5
|
)
|
|||
Withholding tax and other foreign taxes
|
0.6
|
|
|
1.4
|
|
|
6.2
|
|
|||
Change in tax rate
|
(3.2
|
)
|
|
1.3
|
|
|
(5.0
|
)
|
|||
Foreign currency impact on permanently reinvested loans
|
—
|
|
|
2.7
|
|
|
—
|
|
|||
R&D Tax Credit
|
(1.4
|
)
|
|
(1.3
|
)
|
|
(0.8
|
)
|
|||
Other
|
1.2
|
|
|
1.9
|
|
|
1.1
|
|
|||
|
$
|
33.7
|
|
|
$
|
(97.7
|
)
|
|
$
|
49.5
|
|
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2016
|
|
2015
|
||||
Deferred income tax assets:
|
|
|
|
|
|||
Accrued liabilities
|
$
|
21.6
|
|
|
$
|
24.0
|
|
Equity compensation
|
10.7
|
|
|
8.4
|
|
||
Loss and tax credit carryforwards
|
155.0
|
|
|
204.0
|
|
||
Foreign currency
|
18.8
|
|
|
16.2
|
|
||
Pension
|
45.9
|
|
|
42.9
|
|
||
Property-related
|
9.3
|
|
|
9.7
|
|
||
Intangibles
|
8.0
|
|
|
10.5
|
|
||
Other
|
22.9
|
|
|
17.1
|
|
||
Total deferred income tax assets
|
292.2
|
|
|
332.8
|
|
||
Valuation allowance
|
(69.9
|
)
|
|
(82.4
|
)
|
||
Net deferred income tax assets
|
$
|
222.3
|
|
|
$
|
250.4
|
|
|
|
|
|
||||
|
|
|
|
||||
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2016
|
|
2015
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Accrued liabilities
|
(0.6
|
)
|
|
(0.6
|
)
|
||
Equity compensation
|
—
|
|
|
—
|
|
||
Foreign currency
|
(0.9
|
)
|
|
(0.4
|
)
|
||
Property-related
|
(53.9
|
)
|
|
(44.5
|
)
|
||
Goodwill and other intangibles
|
(142.2
|
)
|
|
(156.1
|
)
|
||
Other
|
(1.0
|
)
|
|
(1.8
|
)
|
||
Euro Denominated Debt
|
(27.6
|
)
|
|
(21.0
|
)
|
||
Total deferred income tax liabilities
|
$
|
(226.2
|
)
|
|
(224.4
|
)
|
|
|
|
|
|
||||
Net deferred tax asset/(liability)
|
$
|
(3.9
|
)
|
|
$
|
26.0
|
|
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2016
|
|
2015
|
||||
Current deferred tax asset
|
$
|
—
|
|
|
$
|
19.7
|
|
Non-current deferred tax asset
|
37.5
|
|
|
64.1
|
|
||
Current deferred tax liability
|
—
|
|
|
1.5
|
|
||
Non-current deferred tax liability
|
41.4
|
|
|
56.3
|
|
||
Net deferred tax asset/(liability)
|
$
|
(3.9
|
)
|
|
$
|
26.0
|
|
•
|
Future reversals of existing taxable temporary differences;
|
•
|
Tax planning strategies; and
|
•
|
Future taxable income exclusive of reversing temporary differences and carryforwards.
|
10
.
|
EMPLOYEE RETIREMENT BENEFIT PLANS
|
At June 30,
|
Retirement Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Accumulated Benefit Obligation
|
$
|
328.1
|
|
|
$
|
316.0
|
|
|
$
|
3.6
|
|
|
$
|
3.7
|
|
|
|
|
|
|
|
|
|
||||||||
Change in Benefit Obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
323.7
|
|
|
333.8
|
|
|
3.7
|
|
|
4.4
|
|
||||
Company service cost
|
2.8
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
10.4
|
|
|
11.4
|
|
|
0.1
|
|
|
0.2
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Plan amendments
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Curtailments
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Special termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Business combinations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(11.6
|
)
|
|
(9.6
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
Actual expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Actuarial (gain)/loss
|
40.5
|
|
|
20.8
|
|
|
—
|
|
|
(0.7
|
)
|
||||
Exchange rate gain/(loss)
|
(28.5
|
)
|
|
(33.8
|
)
|
|
—
|
|
|
—
|
|
||||
Benefit obligation at end of year
|
336.6
|
|
|
323.7
|
|
|
3.6
|
|
|
3.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Change in Plan Assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
222.0
|
|
|
222.2
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
33.8
|
|
|
18.4
|
|
|
—
|
|
|
—
|
|
||||
Company contributions
|
9.2
|
|
|
9.0
|
|
|
0.2
|
|
|
0.2
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Special company contributions to fund termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Business combinations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(11.6
|
)
|
|
(9.6
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
Actual expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Exchange rate gain/(loss)
|
(25.8
|
)
|
|
(18.0
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
227.6
|
|
|
222.0
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Funded Status
|
|
|
|
|
|
|
|
||||||||
Funded status at end of year
|
(109.0
|
)
|
|
(101.7
|
)
|
|
(3.6
|
)
|
|
(3.7
|
)
|
||||
Employer contributions between measurement date and reporting date
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net pension asset (liability)
|
(109.0
|
)
|
|
(101.7
|
)
|
|
(3.6
|
)
|
|
(3.7
|
)
|
At June 30,
|
Retirement Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Amounts Recognized in Statement of Financial Position
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(0.8
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(0.8
|
)
|
||||
Noncurrent liabilities
|
(108.2
|
)
|
|
(101.4
|
)
|
|
(3.6
|
)
|
|
(2.9
|
)
|
||||
Total asset/(liability)
|
(109.0
|
)
|
|
(101.7
|
)
|
|
(3.6
|
)
|
|
(3.7
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized in Accumulated Other Comprehensive Income
|
|
|
|
|
|
|
|
||||||||
Transition (asset)/obligation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Prior service cost
|
(0.5
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Net (gain)/loss
|
76.9
|
|
|
63.2
|
|
|
(1.5
|
)
|
|
(1.6
|
)
|
||||
Total accumulated other comprehensive income at the end of the year
|
76.4
|
|
|
63.3
|
|
|
(1.5
|
)
|
|
(1.6
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Additional Information for Plan with ABO in Excess of Plan Assets
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
321.0
|
|
|
309.6
|
|
|
3.6
|
|
|
3.7
|
|
||||
Accumulated benefit obligation
|
315.7
|
|
|
304.1
|
|
|
3.6
|
|
|
3.7
|
|
||||
Fair value of plan assets
|
213.3
|
|
|
207.3
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Additional Information for Plan with PBO in Excess of Plan Assets
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
336.6
|
|
|
309.6
|
|
|
3.6
|
|
|
3.7
|
|
||||
Accumulated benefit obligation
|
328.1
|
|
|
304.1
|
|
|
3.6
|
|
|
3.7
|
|
||||
Fair value of plan assets
|
227.6
|
|
|
207.3
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
||||||||
Service Cost
|
2.8
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
||||
Interest Cost
|
10.4
|
|
|
11.4
|
|
|
0.1
|
|
|
0.2
|
|
||||
Expected return on plan assets
|
(9.8
|
)
|
|
(10.5
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of unrecognized:
|
|
|
|
|
|
|
|
||||||||
Transition (asset)/obligation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net (gain)/loss
|
2.9
|
|
|
1.8
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Ongoing periodic cost
|
6.3
|
|
|
5.4
|
|
|
—
|
|
|
0.1
|
|
||||
Settlement/curtailment expense/(income)
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
6.3
|
|
|
5.2
|
|
|
—
|
|
|
0.1
|
|
At June 30,
|
Retirement Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
|
|
|
|
|
|
|
|
||||||||
Net (gain)/loss arising during the year
|
$
|
16.4
|
|
|
$
|
13.0
|
|
|
—
|
|
|
(0.7
|
)
|
||
Prior service cost (credit) during the year
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Transition asset/(obligation) recognized during the year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Prior service cost recognized during the year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net gain/(loss) recognized during the year
|
(2.8
|
)
|
|
(3.2
|
)
|
|
0.1
|
|
|
0.1
|
|
||||
Exchange rate gain/(loss) recognized during the year
|
0.2
|
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
||||
Total recognized in other comprehensive income
|
$
|
13.1
|
|
|
$
|
9.2
|
|
|
$
|
0.1
|
|
|
$
|
(0.6
|
)
|
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income
|
|
|
|
|
|
|
|
||||||||
Total recognized in net periodic benefit cost and other comprehensive income
|
$
|
19.3
|
|
|
$
|
14.4
|
|
|
$
|
0.1
|
|
|
$
|
(0.5
|
)
|
Estimated Amounts to be Amortized from Accumulated Other Comprehensive Income into Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
||||||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Transition (asset)/obligation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Prior service cost/(credit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net (gain)/loss
|
4.5
|
|
|
2.9
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Financial Assumptions Used to Determine Benefit Obligations at the Balance Sheet Date
|
|
|
|
|
|
|
|
||||||||
Discount rate (%)
|
2.33
|
%
|
|
3.38
|
%
|
|
2.89
|
%
|
|
3.69
|
%
|
||||
Rate of compensation increases (%)
|
2.10
|
%
|
|
2.06
|
%
|
|
n/a
|
|
|
n/a
|
|
||||
Financial Assumptions Used to Determine Net Periodic Benefit Cost for Financial Year
|
|
|
|
|
|
|
|
||||||||
Discount rate (%)
|
3.38
|
%
|
|
3.73
|
%
|
|
3.69
|
%
|
|
3.67
|
%
|
||||
Rate of compensation increases (%)
|
2.10
|
%
|
|
2.10
|
%
|
|
n/a
|
|
|
n/a
|
|
||||
Expected long-term rate of return (%)
|
4.93
|
%
|
|
5.11
|
%
|
|
n/a
|
|
|
n/a
|
|
||||
Expected Future Contributions
|
|
|
|
|
|
|
|
||||||||
Financial Year
|
|
|
|
|
|
|
|
||||||||
2017
|
$
|
8.4
|
|
|
|
|
$
|
0.3
|
|
|
|
|
At June 30,
|
Retirement Benefits
|
|
Other Post-Retirement Benefits
|
||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Expected Future Benefit Payments
|
|
|
|
|
|
|
|
||||
Financial Year
|
|
|
|
|
|
|
|
||||
2017
|
9.0
|
|
|
10.5
|
|
|
0.8
|
|
|
0.8
|
|
2018
|
9.4
|
|
|
9.5
|
|
|
0.3
|
|
|
0.3
|
|
2019
|
10.8
|
|
|
11.1
|
|
|
0.3
|
|
|
0.3
|
|
2020
|
11.1
|
|
|
11.2
|
|
|
0.2
|
|
|
0.3
|
|
2021
|
12.0
|
|
|
13.9
|
|
|
0.2
|
|
|
0.3
|
|
2022-2026
|
67.4
|
|
|
72.0
|
|
|
1.0
|
|
|
1.1
|
|
|
|
|
|
|
|
|
|
||||
Actual Asset Allocation (%)
|
|
|
|
|
|
|
|
||||
Equities
|
23.6
|
%
|
|
34.2
|
%
|
|
—
|
%
|
|
—
|
%
|
Government Bonds
|
29.9
|
%
|
|
28.2
|
%
|
|
—
|
%
|
|
—
|
%
|
Corporate Bonds
|
12.3
|
%
|
|
17.3
|
%
|
|
—
|
%
|
|
—
|
%
|
Property
|
2.5
|
%
|
|
3.1
|
%
|
|
—
|
%
|
|
—
|
%
|
Insurance Contracts
|
9.0
|
%
|
|
8.5
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
22.7
|
%
|
|
8.7
|
%
|
|
—
|
%
|
|
—
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
||||
Actual Asset Allocation (Amount)
|
|
|
|
|
|
|
|
||||
Equities
|
53.7
|
|
|
75.7
|
|
|
—
|
|
|
—
|
|
Government Bonds
|
68.1
|
|
|
62.7
|
|
|
—
|
|
|
—
|
|
Corporate Bonds
|
28.0
|
|
|
38.5
|
|
|
—
|
|
|
—
|
|
Property
|
5.8
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
Insurance Contracts
|
20.4
|
|
|
18.9
|
|
|
—
|
|
|
—
|
|
Other
|
51.6
|
|
|
19.3
|
|
|
—
|
|
|
—
|
|
Total
|
227.6
|
|
|
222.0
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||
Target Asset Allocation (%)
|
|
|
|
|
|
|
|
||||
Equities
|
24.1
|
%
|
|
34.5
|
%
|
|
—
|
%
|
|
—
|
%
|
Government Bonds
|
29.8
|
%
|
|
24.8
|
%
|
|
—
|
%
|
|
—
|
%
|
Corporate Bonds
|
12.3
|
%
|
|
22.1
|
%
|
|
—
|
%
|
|
—
|
%
|
Property
|
2.7
|
%
|
|
3.5
|
%
|
|
—
|
%
|
|
—
|
%
|
Insurance Contracts
|
8.9
|
%
|
|
6.3
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
22.2
|
%
|
|
8.8
|
%
|
|
—
|
%
|
|
—
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
—
|
%
|
|
—
|
%
|
•
|
Short-term investments, equity securities, fixed-income securities, and real estate are valued using quoted market prices or other valuation methods, and thus are classified within Level 1 or Level 2.
|
•
|
Insurance contracts and other types of investments include investments with some observable and unobservable prices that are adjusted by cash contributions and distributions, and thus are classified within Level 2 or Level 3.
|
•
|
Other assets as of
June 30, 2016
include
$28.0 million
of investments in hedge funds related to our U.K. pension plan and are classified as Level 2.
|
(Dollars in millions)
|
Total Assets
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
Equity Securities
|
$
|
53.7
|
|
|
$
|
—
|
|
|
$
|
53.7
|
|
|
—
|
|
||
Debt Securities
|
96.1
|
|
|
—
|
|
|
96.1
|
|
|
—
|
|
|||||
Real Estate
|
5.8
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|||||
Other
|
72.0
|
|
|
—
|
|
|
52.4
|
|
|
19.6
|
|
|||||
Total
|
$
|
227.6
|
|
|
$
|
—
|
|
|
$
|
208.0
|
|
|
$
|
19.6
|
|
(Dollars in millions)
|
Total Assets
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
Equity Securities
|
$
|
75.7
|
|
|
$
|
—
|
|
|
$
|
75.7
|
|
|
—
|
|
||
Debt Securities
|
101.2
|
|
|
—
|
|
|
101.2
|
|
|
—
|
|
|||||
Real Estate
|
6.9
|
|
|
—
|
|
|
0.3
|
|
|
6.6
|
|
|||||
Other
|
38.2
|
|
|
—
|
|
|
17.3
|
|
|
20.9
|
|
|||||
Total
|
$
|
222.0
|
|
|
$
|
—
|
|
|
$
|
194.5
|
|
|
$
|
27.5
|
|
Total (Level 3)
|
Fair Value Measurement
|
|
Fair Value Measurement
|
|
Fair Value Measurement
|
||||||
(Dollars in millions)
|
Using Significant
|
|
Using Significant
|
|
Using Significant
|
||||||
|
Unobservable Inputs
|
|
Unobservable Inputs
|
|
Unobservable Inputs
|
||||||
|
Total (Level 3)
|
|
Insurance Contracts
|
|
Other
|
||||||
Beginning Balance at June 30, 2015
|
$
|
27.5
|
|
|
$
|
4.7
|
|
|
$
|
22.8
|
|
Actual return on plan assets:
|
|
|
|
|
|
||||||
Relating to assets still held at the reporting date
|
(0.9
|
)
|
|
(1.3
|
)
|
|
0.4
|
|
|||
Relating to assets sold during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchases, sales, settlements, contributions and benefits paid
|
(7.0
|
)
|
|
(0.2
|
)
|
|
(6.8
|
)
|
|||
Transfers in and/or out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending Balance at June 30, 2016
|
$
|
19.6
|
|
|
$
|
3.2
|
|
|
$
|
16.4
|
|
At June 30,
|
Other Post-Retirement Benefits
|
||||||
(Actual dollar amounts)
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Assumed Healthcare Cost Trend Rates at the Balance Sheet Date
|
|
|
|
||||
Healthcare cost trend rate – initial (%)
|
|
|
|
||||
Pre-65
|
n/a
|
|
|
n/a
|
|
||
Post-65
|
10.35
|
%
|
|
11.35
|
%
|
||
Healthcare cost trend rate – ultimate (%)
|
|
|
|
||||
Pre-65
|
n/a
|
|
|
n/a
|
|
||
Post-65
|
4.84
|
%
|
|
4.64
|
%
|
||
Year in which ultimate rates are reached
|
|
|
|
||||
Pre-65
|
n/a
|
|
|
n/a
|
|
||
Post-65
|
2022
|
|
|
2022
|
|
||
Effect of 1% Change in Healthcare Cost Trend Rate
|
|
|
|
||||
Healthcare cost trend rate up 1%
|
|
|
|
||||
on APBO at balance sheet date
|
$
|
169,433
|
|
|
$
|
171,309
|
|
on total service and interest cost
|
5,721
|
|
|
8,181
|
|
||
Effect of 1% Change in Healthcare Cost Trend Rate
|
|
|
|
||||
Healthcare cost trend rate down 1%
|
|
|
|
||||
on APBO at balance sheet date
|
$
|
(151,184
|
)
|
|
$
|
(152,189
|
)
|
on total service and interest cost
|
(5,106
|
)
|
|
(7,282
|
)
|
||
Expected Future Contributions
|
|
|
|
||||
Financial Year
|
|
|
|
||||
2017
|
$
|
259,942
|
|
|
|
11
.
|
RELATED PARTY TRANSACTIONS
|
12
.
|
EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
(Dollars in millions)
|
Foreign Currency Translation Adjustments
|
|
Deferred Compensation
|
|
Pension Liability Adjustments
|
|
Other Comprehensive Income/(Loss)
|
||||||||
Balance at June 30, 2013
|
$
|
(18.4
|
)
|
|
$
|
1.5
|
|
|
$
|
(25.9
|
)
|
|
$
|
(42.8
|
)
|
Activity, net of tax
|
32.4
|
|
|
1.7
|
|
|
(15.5
|
)
|
|
18.6
|
|
||||
Balance at June 30, 2014
|
14.0
|
|
|
3.2
|
|
|
(41.4
|
)
|
|
(24.2
|
)
|
||||
Activity, net of tax
|
(144.0
|
)
|
|
0.6
|
|
|
(6.4
|
)
|
|
(149.8
|
)
|
||||
Balance at June 30, 2015
|
(130.0
|
)
|
|
3.8
|
|
|
(47.8
|
)
|
|
(174.0
|
)
|
||||
Activity, net of tax
|
(118.8
|
)
|
|
(3.8
|
)
|
|
(9.1
|
)
|
|
(131.7
|
)
|
||||
Balance at June 30, 2016
|
$
|
(248.8
|
)
|
|
$
|
—
|
|
|
$
|
(56.9
|
)
|
|
$
|
(305.7
|
)
|
|
Year Ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net investment hedge
|
$
|
1.8
|
|
|
$
|
30.0
|
|
|
$
|
(13.6
|
)
|
Long term inter-company loans
|
(65.0
|
)
|
|
(9.0
|
)
|
|
28.3
|
|
|||
Translation adjustments
|
(54.9
|
)
|
|
(152.7
|
)
|
|
17.7
|
|
|||
Total foreign currency translation adjustments, pretax
|
(118.1
|
)
|
|
(131.7
|
)
|
|
32.4
|
|
|||
Tax
(1)
|
(0.7
|
)
|
|
(12.3
|
)
|
|
—
|
|
|||
Total foreign currency translation adjustments, net of tax
|
$
|
(118.8
|
)
|
|
$
|
(144.0
|
)
|
|
$
|
32.4
|
|
|
|
|
|
|
|
||||||
Net change in minimum pension liability
|
|
|
|
|
|
||||||
Net gain/(loss) arising during the year
|
$
|
(16.4
|
)
|
|
$
|
(12.3
|
)
|
|
$
|
(20.4
|
)
|
Net (gain)/loss recognized during the year
|
3.4
|
|
|
3.1
|
|
|
1.5
|
|
|||
Foreign Exchange Translation and Other
|
(0.2
|
)
|
|
0.6
|
|
|
(0.5
|
)
|
|||
Total Pension, pretax
|
(13.2
|
)
|
|
(8.6
|
)
|
|
(19.4
|
)
|
|||
Tax
|
4.1
|
|
|
2.2
|
|
|
3.9
|
|
|||
Net change in minimum pension liability, net of tax
|
$
|
(9.1
|
)
|
|
$
|
(6.4
|
)
|
|
$
|
(15.5
|
)
|
(1)
|
Tax related to foreign currency translation adjustments primarily relates to the Net investment hedge activity.
|
13
.
|
EQUITY-BASED COMPENSATION
|
|
|
Time
|
Performance
|
Market
|
||||||||||||||||||||
|
Weighted
|
|
Weighted
|
|
|
Weighted
|
|
|
Weighted
|
|
||||||||||||||
|
Average
|
Number
|
Average
|
Aggregate
|
Number
|
Average
|
Aggregate
|
Number
|
Average
|
Aggregate
|
||||||||||||||
|
Exercise
|
of
|
Contractual
|
Intrinsic
|
of
|
Contractual
|
Intrinsic
|
of
|
Contractual
|
Intrinsic
|
||||||||||||||
|
Price
|
shares
|
Term
|
Value
|
shares
|
Term
|
Value
|
shares
|
Term
|
Value
|
||||||||||||||
Outstanding as of June 30, 2015
|
$
|
15.62
|
|
2,007,699
|
|
6.83
|
$
|
25,979,873
|
|
1,097,250
|
|
6.87
|
$
|
14,296,090
|
|
2,073,610
|
|
5.81
|
$
|
30,739,825
|
|
|||
Granted
|
$
|
31.80
|
|
368,995
|
|
9.17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Exercised
|
$
|
12.64
|
|
(416,183
|
)
|
—
|
|
7,700,424
|
|
(261,042
|
)
|
—
|
|
4,450,531
|
|
—
|
|
—
|
|
—
|
|
|||
Forfeited
|
$
|
17.26
|
|
(135,656
|
)
|
—
|
|
—
|
|
(39,690
|
)
|
—
|
|
—
|
|
(287,910
|
)
|
—
|
|
—
|
|
|||
Expired / Canceled
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Outstanding as of June 30, 2016
|
$
|
17.26
|
|
1,824,855
|
|
6.75
|
8,841,470
|
|
796,518
|
|
6.46
|
4,323,349
|
|
1,785,700
|
|
5.07
|
15,130,345
|
|
||||||
Vest and expected to vest as of June 30, 2016
|
$
|
17.57
|
|
1,824,855
|
|
6.75
|
8,841,470
|
|
382,706
|
|
5.95
|
2,528,446
|
|
693,440
|
|
4.08
|
7,387,124
|
|
||||||
Vested and exercisable as of June 30, 2016
|
$
|
15.23
|
|
851,749
|
|
5.04
|
$
|
7,056,933
|
|
382,706
|
|
5.95
|
$
|
2,528,446
|
|
—
|
|
—
|
|
—
|
|
|
Time-Based Units
|
|
Weighted Average Grant-Date Fair Value
|
|||
Non-vested as of June 30, 2015
|
354,153
|
|
|
$
|
20.75
|
|
Granted
|
283,976
|
|
|
31.12
|
|
|
Vested
|
57,543
|
|
|
21.20
|
|
|
Forfeited
|
76,490
|
|
|
24.57
|
|
|
Non-vested as of June 30, 2016
|
504,096
|
|
|
$
|
25.96
|
|
|
EPS Units
|
|
Weighted Average Grant-Date Fair Value
|
|||
Non-vested as of June 30, 2015
|
419,147
|
|
|
$
|
22.16
|
|
Granted
|
174,031
|
|
|
31.8
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
87,753
|
|
|
23.99
|
|
|
Non-vested as of June 30, 2016
|
505,425
|
|
|
$
|
25.16
|
|
Expected volatility
|
25%
|
Expected life (in years)
|
2.84
|
Risk-free interest rates
|
0.94%
|
Dividend yield
|
None
|
|
RTSR Units
|
|
Weighted Average Grant-Date Fair Value
|
|||
Non-vested as of June 30, 2015
|
—
|
|
|
$
|
—
|
|
Granted
|
148,982
|
|
|
37.21
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
16,326
|
|
|
37.61
|
|
|
Non-vested as of June 30, 2016
|
132,656
|
|
|
$
|
37.17
|
|
14
.
|
OTHER (INCOME) / EXPENSE, NET
|
|
Twelve Months Ended
June 30, |
||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Other (Income) / Expense, net
|
|
|
|
|
|
||||||
Debt extinguishment costs
|
$
|
—
|
|
|
$
|
21.8
|
|
|
$
|
11.1
|
|
Gain on acquisition, net
(1)
|
—
|
|
|
(8.9
|
)
|
|
—
|
|
|||
Sponsor advisory agreement termination fee
(2)
|
—
|
|
|
29.8
|
|
|
—
|
|
|||
Foreign currency (gains) and losses
|
(12.6
|
)
|
|
(2.4
|
)
|
|
(2.5
|
)
|
|||
Other
(3)
|
(3.0
|
)
|
|
2.1
|
|
|
1.8
|
|
|||
Total Other (Income) / Expense
|
$
|
(15.6
|
)
|
|
$
|
42.4
|
|
|
$
|
10.4
|
|
(1)
|
Included within Other (income) / expense, net are gains associated with acquisitions completed during the respective periods. Such income events are non-standard in nature and not reflective of the Company’s core operating results. During the
twelve months ended
June 30,
2015
, the Company recorded a gain of
$3.2 million
on the re-measurement of a cost investment in an entity that became a wholly owned subsidiary as of October 2014, a
$7.0 million
bargain purchase gain for an acquisition completed in July
2014
, and a
$1.3 million
loss on the redeemable noncontrolling interest in June
2015
.
|
(2)
|
The Company paid a sponsor advisory agreement termination fee of
$29.8 million
in connection with its IPO.
|
(3)
|
Included within Other (income) / expense, net are realized gains associated with the sale of available for sale investments of approximately
$3.8 million
during the fiscal year ended
June 30, 2016
.
|
15
.
|
REDEEMABLE NONCONTROLLING INTEREST
|
16
.
|
COMMITMENTS AND CONTINGENCIES
|
(Dollars in millions)
|
2017
|
2018
|
2019
|
2020
|
2021
|
Thereafter
|
Total
|
||||||||||||||
Minimum rental payments
|
$
|
9.2
|
|
$
|
6.6
|
|
$
|
6.0
|
|
$
|
4.2
|
|
$
|
3.7
|
|
$
|
4.4
|
|
$
|
34.1
|
|
17
.
|
SEGMENT INFORMATION
|
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
Softgel Technologies
|
|
|
|
|
|
||||||
Net revenue
|
$
|
775.0
|
|
|
$
|
787.5
|
|
|
$
|
857.5
|
|
Segment EBITDA
|
$
|
163.8
|
|
|
$
|
173.6
|
|
|
$
|
214.8
|
|
Drug Delivery Solutions
|
|
|
|
|
|
||||||
Net revenue
|
806.4
|
|
|
798.3
|
|
|
719.2
|
|
|||
Segment EBITDA
|
215.2
|
|
|
230.7
|
|
|
182.2
|
|
|||
Clinical Supply Services
|
|
|
|
|
|
||||||
Net revenue
|
307.5
|
|
|
288.4
|
|
|
291.7
|
|
|||
Segment EBITDA
|
53.2
|
|
|
56.7
|
|
|
59.5
|
|
|||
Inter-segment revenue elimination
|
(40.8
|
)
|
|
(43.4
|
)
|
|
(40.7
|
)
|
|||
Unallocated costs
(1)
|
(57.9
|
)
|
|
(100.8
|
)
|
|
(82.1
|
)
|
|||
Combined Total
|
|
|
|
|
|
||||||
Net revenue
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
|
$
|
1,827.7
|
|
|
|
|
|
|
|
||||||
EBITDA from continuing operations
|
$
|
374.3
|
|
|
$
|
360.2
|
|
|
$
|
374.4
|
|
(1)
|
Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:
|
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
Impairment charges and gain/(loss) on sale of assets
|
$
|
(2.7
|
)
|
|
$
|
(4.7
|
)
|
|
$
|
(3.2
|
)
|
Equity compensation
|
(10.8
|
)
|
|
(9.0
|
)
|
|
(4.5
|
)
|
|||
Restructuring and other items
(2)
|
(27.2
|
)
|
|
(27.2
|
)
|
|
(29.4
|
)
|
|||
Sponsor advisory fee
|
—
|
|
|
—
|
|
|
(12.9
|
)
|
|||
Noncontrolling interest
|
0.3
|
|
|
1.9
|
|
|
1.0
|
|
|||
Other income/(expense), net
(3)
|
15.6
|
|
|
(42.4
|
)
|
|
(10.4
|
)
|
|||
Non-allocated corporate costs, net
|
(33.1
|
)
|
|
(19.4
|
)
|
|
(22.7
|
)
|
|||
Total unallocated costs
|
$
|
(57.9
|
)
|
|
$
|
(100.8
|
)
|
|
$
|
(82.1
|
)
|
(2)
|
Segment results do not include restructuring and certain acquisition-related costs.
|
(3)
|
Refer to Note
14
for details.
|
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
Earnings/(loss) from continuing operations
|
$
|
111.2
|
|
|
$
|
210.2
|
|
|
$
|
17.9
|
|
Depreciation and amortization
|
140.6
|
|
|
140.8
|
|
|
142.9
|
|
|||
Interest expense, net
|
88.5
|
|
|
105.0
|
|
|
163.1
|
|
|||
Income tax (benefit)/expense
|
33.7
|
|
|
(97.7
|
)
|
|
49.5
|
|
|||
Noncontrolling interest
|
0.3
|
|
|
1.9
|
|
|
1.0
|
|
|||
EBITDA from continuing operations
|
$
|
374.3
|
|
|
$
|
360.2
|
|
|
$
|
374.4
|
|
(Dollars in millions)
|
June 30,
2016 |
|
June 30,
2015 |
||||
Assets
|
|
|
|
||||
Softgel Technologies
|
$
|
1,446.4
|
|
|
$
|
1,438.8
|
|
Drug Delivery Solutions
|
1,475.7
|
|
|
1,254.0
|
|
||
Clinical Supply Services
|
578.9
|
|
|
575.7
|
|
||
Corporate and eliminations
|
(409.9
|
)
|
|
(130.2
|
)
|
||
Total assets
|
$
|
3,091.1
|
|
|
$
|
3,138.3
|
|
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
Softgel Technologies
|
$
|
36.7
|
|
|
$
|
42.8
|
|
|
$
|
48.3
|
|
Drug Delivery Solutions
|
72.9
|
|
|
66.9
|
|
|
63.7
|
|
|||
Clinical Supply Services
|
21.1
|
|
|
24.1
|
|
|
22.3
|
|
|||
Corporate
|
9.9
|
|
|
7.0
|
|
|
8.6
|
|
|||
Total depreciation and amortization expense
|
$
|
140.6
|
|
|
$
|
140.8
|
|
|
$
|
142.9
|
|
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
Softgel Technologies
|
$
|
20.6
|
|
|
$
|
29.6
|
|
|
$
|
24.9
|
|
Drug Delivery Solutions
|
92.4
|
|
|
86.2
|
|
|
68.7
|
|
|||
Clinical Supply Services
|
5.1
|
|
|
6.4
|
|
|
15.7
|
|
|||
Corporate
|
21.5
|
|
|
18.8
|
|
|
13.1
|
|
|||
Total capital expenditure
|
$
|
139.6
|
|
|
$
|
141.0
|
|
|
$
|
122.4
|
|
|
Net Revenue
|
|
Long-Lived Assets
(1)
|
||||||||||||||||
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
|
|
|
|
||||||||||||||
2016
|
|
2015
|
|
2014
|
|
June 30,
2016 |
|
June 30,
2015 |
|||||||||||
United States
|
$
|
858.6
|
|
|
$
|
799.3
|
|
|
$
|
682.3
|
|
|
$
|
538.9
|
|
|
$
|
479.0
|
|
Europe
|
733.2
|
|
|
795.4
|
|
|
888.8
|
|
|
280.2
|
|
|
314.6
|
|
|||||
International Other
|
313.5
|
|
|
268.6
|
|
|
278.8
|
|
|
86.7
|
|
|
91.6
|
|
|||||
Eliminations
|
(57.2
|
)
|
|
(32.5
|
)
|
|
(22.2
|
)
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
|
$
|
1,827.7
|
|
|
$
|
905.8
|
|
|
$
|
885.2
|
|
(1)
|
Long-lived assets include property and equipment, net of accumulated depreciation.
|
18
.
|
SUPPLEMENTAL BALANCE SHEET INFORMATION
|
(Dollars in millions)
|
June 30,
2016 |
|
June 30,
2015 |
||||
Raw materials and supplies
|
$
|
88.7
|
|
|
$
|
76.9
|
|
Work-in-process
|
30.7
|
|
|
26.3
|
|
||
Finished goods
|
55.2
|
|
|
43.8
|
|
||
Total inventory, gross
|
174.6
|
|
|
147.0
|
|
||
Inventory reserve
|
(19.8
|
)
|
|
(14.1
|
)
|
||
Inventories
|
$
|
154.8
|
|
|
$
|
132.9
|
|
(Dollars in millions)
|
June 30,
2016 |
|
June 30,
2015 |
||||
Prepaid expenses
|
$
|
29.3
|
|
|
$
|
22.0
|
|
Spare parts supplies
|
10.8
|
|
|
11.5
|
|
||
Deferred income taxes
(1)
|
—
|
|
|
19.7
|
|
||
Long term tax asset (current portion)
(2)
|
6.8
|
|
|
—
|
|
||
Other current assets
|
42.1
|
|
|
27.7
|
|
||
Prepaid expenses and other
|
$
|
89.0
|
|
|
$
|
80.9
|
|
(Dollars in millions)
|
June 30,
2016 |
|
June 30,
2015 |
||||
Land, buildings and improvements
|
$
|
649.6
|
|
|
$
|
637.6
|
|
Machinery, equipment and capitalized software
|
757.1
|
|
|
727.9
|
|
||
Furniture and fixtures
|
9.9
|
|
|
10.1
|
|
||
Construction in progress
|
134.1
|
|
|
97.6
|
|
||
Property and equipment, at cost
|
1,550.7
|
|
|
1,473.2
|
|
||
Accumulated depreciation
|
(644.9
|
)
|
|
(588.0
|
)
|
||
Property, plant, and equipment, net
|
$
|
905.8
|
|
|
$
|
885.2
|
|
(Dollars in millions)
|
June 30,
2016 |
|
June 30,
2015 |
||||
Long term tax asset
(1)
|
$
|
45.4
|
|
|
$
|
—
|
|
Deferred compensation investments
|
11.1
|
|
|
10.1
|
|
||
Deferred long-term debt financing costs
|
1.8
|
|
|
2.4
|
|
||
Other
|
8.8
|
|
|
8.8
|
|
||
Total other assets
|
$
|
67.1
|
|
|
$
|
21.3
|
|
(Dollars in millions)
|
June 30,
2016 |
|
June 30,
2015 |
||||
Accrued employee-related expenses
|
$
|
82.8
|
|
|
$
|
87.8
|
|
Restructuring accrual
|
6.1
|
|
|
7.3
|
|
||
Deferred income taxes
(1)
|
—
|
|
|
1.5
|
|
||
Accrued interest
|
0.1
|
|
|
0.2
|
|
||
Deferred revenue and fees
|
46.2
|
|
|
39.0
|
|
||
Accrued income tax
|
38.8
|
|
|
55.8
|
|
||
Other accrued liabilities and expenses
|
45.8
|
|
|
55.4
|
|
||
Other accrued liabilities
|
$
|
219.8
|
|
|
$
|
247.0
|
|
(Dollars in millions)
|
June 30,
2016 |
|
June 30,
2015 |
|
June 30,
2014 |
||||||
Trade receivables allowance for doubtful accounts
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
6.6
|
|
|
$
|
5.4
|
|
|
$
|
5.7
|
|
Charged to cost and expenses (recoveries)
|
(0.5
|
)
|
|
2.7
|
|
|
0.5
|
|
|||
Deductions
|
(1.8
|
)
|
|
(1.1
|
)
|
|
(1.0
|
)
|
|||
Impact of foreign exchange
|
(0.4
|
)
|
|
(0.4
|
)
|
|
0.2
|
|
|||
Closing balance
|
$
|
3.9
|
|
|
$
|
6.6
|
|
|
$
|
5.4
|
|
(Dollars in millions)
|
June 30,
2016 |
|
June 30,
2015 |
|
June 30,
2014 |
||||||
Inventory reserve
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
14.1
|
|
|
$
|
12.9
|
|
|
$
|
11.8
|
|
Charged to cost and expenses
|
13.6
|
|
|
9.5
|
|
|
10.2
|
|
|||
Write offs
|
(7.2
|
)
|
|
(6.5
|
)
|
|
(9.5
|
)
|
|||
Impact of foreign exchange
|
(0.7
|
)
|
|
(1.8
|
)
|
|
0.4
|
|
|||
Closing balance
|
$
|
19.8
|
|
|
$
|
14.1
|
|
|
$
|
12.9
|
|
19
.
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
(Dollars in millions, except per share data)
|
Fiscal Year 2016, By Quarters (as adjusted)
(1)
|
||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|||||||||
Net revenue
|
$
|
423.0
|
|
|
$
|
454.9
|
|
|
$
|
438.0
|
|
|
$
|
532.2
|
|
Gross margin
|
121.5
|
|
|
152.1
|
|
|
126.2
|
|
|
187.8
|
|
||||
Earnings from continuing operations less net income (loss) attributable to noncontrolling interest
|
11.9
|
|
|
30.8
|
|
|
10.7
|
|
|
58.1
|
|
||||
Net earnings from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net earnings attributable to Catalent
|
$
|
11.9
|
|
|
$
|
30.8
|
|
|
$
|
10.7
|
|
|
$
|
58.1
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Catalent:
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
0.10
|
|
|
$
|
0.25
|
|
|
$
|
0.09
|
|
|
$
|
0.47
|
|
Net earnings
|
$
|
0.10
|
|
|
$
|
0.25
|
|
|
$
|
0.09
|
|
|
$
|
0.47
|
|
Diluted
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
0.09
|
|
|
$
|
0.24
|
|
|
$
|
0.09
|
|
|
$
|
0.46
|
|
Net earnings
|
$
|
0.09
|
|
|
$
|
0.24
|
|
|
$
|
0.09
|
|
|
$
|
0.46
|
|
(Dollars in millions, except per share data)
|
Fiscal Year 2015, By Quarters
|
||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|||||||||
Net revenue
|
$
|
418.3
|
|
|
$
|
455.8
|
|
|
$
|
446.6
|
|
|
$
|
510.1
|
|
Gross margin
|
125.3
|
|
|
156.1
|
|
|
152.2
|
|
|
181.7
|
|
||||
Earnings/(loss) from continuing operations less net income (loss) attributable to noncontrolling interest
|
(19.9
|
)
|
|
46.7
|
|
|
31.5
|
|
|
153.8
|
|
||||
Net earnings/(loss) from discontinued operations, net of tax
|
0.4
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||
Net earnings/(loss) attributable to Catalent
|
$
|
(19.5
|
)
|
|
$
|
46.5
|
|
|
$
|
31.5
|
|
|
$
|
153.7
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Catalent:
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Earnings/(loss) from continuing operations
|
$
|
(0.19
|
)
|
|
$
|
0.38
|
|
|
$
|
0.25
|
|
|
$
|
1.23
|
|
Net earnings/(loss)
|
$
|
(0.18
|
)
|
|
$
|
0.37
|
|
|
$
|
0.25
|
|
|
$
|
1.23
|
|
Diluted
|
|
|
|
|
|
|
|
||||||||
Earnings/(loss) from continuing operations
|
$
|
(0.19
|
)
|
|
$
|
0.37
|
|
|
$
|
0.25
|
|
|
$
|
1.22
|
|
Net earnings/(loss)
|
$
|
(0.18
|
)
|
|
$
|
0.37
|
|
|
$
|
0.25
|
|
|
$
|
1.22
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(Dollars in millions)
|
Beginning Balance
|
|
Current Period (Charge) / Benefit
|
|
Deductions and Other
|
|
Ending Balance
|
||||||||
Year ended June 30, 2014
|
|
|
|
|
|
|
|
||||||||
Tax Valuation Allowance
|
$
|
(208.4
|
)
|
|
$
|
(16.1
|
)
|
|
$
|
6.3
|
|
|
$
|
(218.2
|
)
|
|
|
|
|
|
|
|
|
||||||||
Year ended June 30, 2015
|
|
|
|
|
|
|
|
||||||||
Tax Valuation Allowance
|
$
|
(218.2
|
)
|
|
$
|
107.7
|
|
|
$
|
28.1
|
|
|
$
|
(82.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Year ended June 30, 2016
|
|
|
|
|
|
|
|
||||||||
Tax Valuation Allowance
|
$
|
(82.4
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
14.6
|
|
|
$
|
(69.9
|
)
|
Exhibit No.
|
Description
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Catalent, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Catalent, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
|
|
|
|
10.1
|
|
Stockholders Agreement, dated as of August 5, 2014, between Catalent, Inc. and Blackstone Healthcare Partners L.L.C. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
|
|
|
|
10.2
|
|
Registration Rights Agreement, dated as of August 5, 2014, by and among Catalent, Inc. and certain of its stockholders (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
|
|
|
|
10.3
|
|
Form of Severance Agreement between named executive officers and Catalent Pharma Solutions, Inc. (incorporated by reference to Exhibit 10.3 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 17, 2010, File No. 333-147871)
†
|
|
|
|
10.4
|
|
Offer Letter, dated August 25, 2009, between William Downie and Catalent Pharma Solutions, Inc. (incorporated by reference to Exhibit 10.4 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 4, 2012, File No. 333-147871)
†
|
|
|
|
10.5
|
|
Letter Agreement, dated November 18, 2010, between Catalent Pharma Solutions, Inc. and William Downie (incorporated by reference to Exhibit 10.6 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 4, 2012, File No. 333-147871)
†
|
|
|
|
10.6
|
|
Employment Agreement, dated as of October 11, 2011, and effective as of September 26, 2011, by and between Catalent Pharma Solutions, Inc. and Matthew Walsh (including Form of Restricted Stock Unit Agreement and Form of Nonqualified Stock Option Agreement) (incorporated by reference to Exhibit 10.42 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 4, 2012, File No. 333-147871)
†
|
|
|
|
10.7
|
|
Management Equity Subscription Agreement dated September 8, 2010 by and between Catalent, Inc. (formerly known as PTS Holdings Corp.) and Melvin D. Booth (incorporated by reference to Exhibit 10.7 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 17, 2010, File No. 333-147871)
†
|
|
|
|
10.8
|
|
Amended and Restated Management Equity Subscription Agreement dated as of October 11, 2011 by and between Catalent, Inc. (formerly known as PTS Holdings Corp.) and Matthew Walsh (incorporated by reference to Exhibit 10.43 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 4, 2012, File No. 333-147871)
†
|
|
|
|
10.9
|
|
Form of Unit Subscription Agreement (incorporated by reference to Exhibit 10.12 to Catalent Pharma Solutions, Inc.’s Amendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008, File No. 333-147871)
†
|
|
|
|
10.10
|
|
Form of Management Equity Subscription Agreement (incorporated by reference to Exhibit 10.13 to Catalent Pharma Solutions, Inc.’s Amendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008, File No. 333-147871)
†
|
|
|
|
10.11
|
|
Form of Nonqualified Stock Option Agreement (executives) (incorporated by reference to Exhibit 10.14 to Catalent Pharma Solutions, Inc.’s Amendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008, File No. 333-147871)
†
|
|
|
|
10.12
|
|
Form of Nonqualified Stock Option Agreement (non-employee directors) (incorporated by reference to Exhibit 10.15 to Catalent Pharma Solutions, Inc.’s Amendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008, File No. 333-147871)
†
|
|
|
|
10.13
|
|
2007 PTS Holdings Corp. Stock Incentive Plan (incorporated by reference to Exhibit 10.16 to Catalent Pharma Solutions, Inc.’s Registration Statement on Form S-4 filed on December 6, 2007, File No. 333-147871)
†
|
|
|
|
10.14
|
|
Amendment No. 1 to the 2007 PTS Holdings Corp. Stock Incentive Plan, dated September 8, 2010 (incorporated by reference to Exhibit 10.16 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 17, 2010, File No. 333-147871)
†
|
|
|
|
10.15
|
|
Amendment No. 2 to the 2007 PTS Holdings Corp. Stock Incentive Plan, dated June 25, 2013 (incorporated by reference to Exhibit 10.45 to Catalent, Inc.’s Amendment No. 1 to the Registration Statement on Form S-1/A as filed on September 28, 2014, File No. 333-193542)
†
|
|
|
|
10.16
|
|
Form of Nonqualified Stock Option Agreement (executives) approved October 23, 2009 (incorporated by reference to Exhibit 10.1 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 12, 2010, File No. 333-147871)
†
|
|
|
|
10.17
|
|
Form of Nonqualified Stock Option Agreement Amendment (executives) approved October 23, 2009 (incorporated by reference to Exhibit 10.3 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 12, 2010), File No. 333-147871)
†
|
|
|
|
10.18
|
|
Form of Nonqualified Stock Option Agreement (executives) approved June 25, 2013 (incorporated by reference to Exhibit 10.45 of Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 10, 2013, File No. 333-147871) †
|
|
|
|
10.19
|
|
Form of Nonqualified Stock Option Agreement (Chief Executive Officer) approved June 25, 2013 (incorporated by reference to Exhibit 10.46 of Catalent Pharma Solutions Inc.’s Annual Report on Form 10-K filed on September 10, 2013, File No. 333-147871)
†
|
|
|
|
10.20
|
|
Form of Nonqualified Stock Option Agreement (John R. Chiminski) approved October 23, 2009 (incorporated by reference to Exhibit 10.4 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 12, 2010, File No. 333-147871)
†
|
|
|
|
10.21
|
|
Form of Restricted Stock Unit Agreement (John R. Chiminski) approved October 23, 2009 (incorporated by reference to Exhibit 10.5 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 12, 2010, File No. 333-147871)
†
|
|
|
10.22
|
|
Catalent Pharma Solutions, LLC Deferred Compensation Plan (incorporated by reference to Exhibit 10.19 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 28, 2009, File No. 333-147871)
†
|
|
|
|
10.23
|
|
First Amendment to the Catalent Pharma Solutions, LLC Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 17, 2009, File No. 333-147871)
†
|
|
|
|
10.24
|
|
Second Amendment to the Catalent Pharma Solutions, LLC Deferred Compensation Plan (incorporated by reference to Exhibit 10.21 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 28, 2009, File No. 333-147871)
†
|
|
|
|
10.25
|
|
Catalent, Inc. 2014 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
†
|
|
|
|
10.26
|
|
Form of Stock Option Agreement for U.S. Employees (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
†
|
|
|
|
10.27
|
|
Form of Restricted Stock Unit Agreement for U.S. Employees (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
†
|
|
|
|
10.28
|
|
Form of Restricted Stock Unit Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
†
|
|
|
|
10.29
|
|
Form of Stock Option Agreement for Non-U.S. Employees (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
†
|
|
|
|
10.30
|
|
Form of Restricted Stock Unit Agreement for Non-U.S. Employees (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587)
†
|
|
|
|
10.31
|
|
Amended and Restated Credit Agreement, dated as of May 20, 2014, relating to the Credit Agreement, dated as of April 10, 2007, as amended, among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc., as the administrative agent, collateral agent and swing line lender and other lenders as parties thereto (incorporated by reference to Exhibit 10.1 to Catalent Pharma Solutions, Inc.’s Current Report on Form 8-K filed on May 27, 2014, File No. 333-147871)
|
|
|
|
10.32
|
|
Form of Performance Share Unit for U.S. Employees (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2014, File No. 001-36587) †
|
|
|
|
10.33
|
|
Form of Performance Share Unit for Non-U.S. Employees (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2014, File No. 001-36587)†
|
|
|
|
10.34
|
|
Intellectual Property Security Agreement, dated as of April 10, 2007, among PTS Acquisition Corp., Cardinal Health 409, Inc., PTS Intermediate Holdings LLC, Certain Subsidiaries of Holdings Identified Therein and Morgan Stanley Senior Funding, Inc. (incorporated by reference to Exhibit 10.21 to Catalent Pharma Solutions, Inc.’s Registration Statement on Form S-4 filed on December 6, 2007, File No. 333-147871)
|
|
|
|
10.35
|
|
Intellectual Property Security Agreement Supplement, dated as of July 1, 2008, to the Intellectual Property Security Agreement, dated as of April 10, 2007, among PTS Acquisition Corp., Cardinal Health 409, Inc., PTS Intermediate Holdings LLC, Certain Subsidiaries of Holdings Identified Therein and Morgan Stanley Senior Funding, Inc. (incorporated by reference to Exhibit 10.28 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 29, 2008, File No. 333-147871)
|
|
|
|
10.36
|
|
Amendment No. 1, dated December 1, 2014 to Amended and Restated Credit Agreement, dated as of May 20, 2014 among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc., as the administrative agent, collateral agent and swing line lender and other lenders as parties thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 2, 2014, File No. 001-36587)
|
|
|
|
10.37
|
|
Employment Agreement, dated October 22, 2014 by and among Catalent, Inc. and John R. Chiminski (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 24, 2014, File No. 001-36587) †
|
|
|
|
10.38
|
|
Relocation agreement, dated November 18, 2010, between William Downie and Catalent Pharma Solutions, Inc. (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K filed on September 2, 2015, File No. 001-36587) †
|
|
|
|
10.39
|
|
Offer letter, dated May 4, 2009, between Stephen Leonard and Catalent Pharma Solutions, Inc. (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K filed on September 2, 2015, File No. 001-36587) †
|
|
|
|
10.40
|
|
Offer letter, dated October 6, 2014, between Steven Fasman and Catalent Pharma Solutions, Inc. † *
|
|
|
|
10.41
|
|
Form of Performance Share Unit Agreement for U.S. Employees for the performance period July 1, 2015 through June 30, 2018 † *
|
|
|
|
10.42
|
|
Form of Performance Share Unit Agreement for Non-U.S. Employees for the performance period July 1, 2015 through June 30, 2018 † *
|
|
|
|
10.43
|
|
Form of Management Incentive Plan for the fiscal year ended June 30, 2016 † *
|
|
|
|
10.44
|
|
Catalent Pharma Solutions, Inc. Deferred Compensation Plan (formerly the Catalent Pharma Solutions, LLC Deferred Compensation Plan, as amended and restated effective January 1, 2016) † *
|
|
|
|
12.1
|
|
Statement Regarding Computation of Ratio of Earnings to Fixed Charges*
|
|
|
|
21.1
|
|
Subsidiaries of the Registrant *
|
|
|
|
23.1
|
|
Consent of Ernst & Young LLP *
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended*
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended*
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
|
|
|
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
|
|
|
|
99.1
|
|
Section 13(r) Disclosure*
|
|
|
|
101.1
|
|
The following materials are formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statement of Changes in Shareholders’ Equity (Deficit), (v) the Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements
|
|
|
|
|
|
CATALENT, INC.
|
||
|
|
|
|
|
Date:
|
August 29, 2016
|
By:
|
|
/s/ STEVEN L. FASMAN
|
|
|
|
|
Steven L. Fasman
|
|
|
|
|
Senior Vice President & General Counsel
and Secretary
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ JOHN R. CHIMINSKI
|
|
President & Chief Executive Officer (Principal Executive Officer) and Director
|
August 29, 2016
|
John R. Chiminski
|
|
|
|
|
|
|
|
/s/ CHINH E. CHU
|
|
Chairman of the Board and Director
|
August 29, 2016
|
Chinh E. Chu
|
|
|
|
|
|
|
|
/s/ MELVIN D. BOOTH
|
|
Director
|
August 29, 2016
|
Melvin D. Booth
|
|
|
|
|
|
|
|
/s/ J. MARTIN CARROLL
|
|
Director
|
August 29, 2016
|
J. Martin Carroll
|
|
|
|
|
|
|
|
/s/ ROLF CLASSON
|
|
Director
|
August 29, 2016
|
Rolf Classon
|
|
|
|
|
|
|
|
/s/ GREGORY T. LUCIER
|
|
Director
|
August 29, 2016
|
Gregory T. Lucier
|
|
|
|
|
|
|
|
/s/ BRUCE MCEVOY
|
|
Director
|
August 29, 2016
|
Bruce McEvoy
|
|
|
|
|
|
|
|
/s/ DONALD E. MOREL
|
|
Director
|
August 29, 2016
|
Donald E. Morel
|
|
|
|
|
|
|
|
/s/ JAMES QUELLA
|
|
Director
|
August 29, 2016
|
James Quella
|
|
|
|
|
|
|
|
/s/ JACK STAHL
|
|
Director
|
August 29, 2016
|
Jack Stahl
|
|
|
|
|
|
|
|
/s/ MATTHEW M. WALSH
|
|
Executive Vice President & Chief Financial Officer
|
August 29, 2016
|
Matthew M. Walsh
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
1.
|
Position:
Your position is Senior Vice President and General Counsel reporting directly to me. As the Senior Vice President and General Counsel, you will also be a member of Catalent’s Executive Leadership Team and will be located at our Somerset, NJ office.
|
2.
|
Pay:
Your base bi-weekly rate of pay will be $19,230.77 (annualized to $500,000.00). The official Catalent workweek starts on Monday and runs through Sunday. Catalent employees are paid every other Friday, one week in arrears according to the payroll schedule included in your packet.
|
3.
|
Performance:
Your performance and merit reviews will follow the standard annual review calendar for Catalent.
|
4.
|
Rewards:
Catalent is pleased to offer a comprehensive, competitive compensation program that rewards talented employees for their performance.
|
a.
|
You will be eligible for participation in our short-term incentive plan, which we call our Management Incentive Plan (MIP). Your target incentive for fiscal year 2015 (July 1, 2014 - June 30, 2015) will be
75%
of your annual base salary. Annual bonus payments are determined based upon the achievement of specific financial and management objectives. This will be explained to you in more detail when you come on board, but I am glad to answer any questions you may have in the interim.
|
b.
|
You will be eligible for our health, life, disability and 401(k) retirement savings plans on your first day of employment. You will receive more information on these benefits during your new hire orientation.
|
c.
|
You will be eligible to participate in Catalent’s Deferred Compensation Plan that enables you to save over the IRS limits in the qualified 401(k) plan. Complete details on the features of this plan and how to enroll will be mailed to your home.
|
d.
|
In recognition of your leadership position, you will be recommended to receive an annual Long-Term Incentive Plan (LTIP) Grant equal to 100% of your base salary. Since LTIP grants have equity components, your grant
|
e.
|
The Total Direct Compensation which includes your base salary, annual Management Incentive Plan bonus at Target and annual Long Term Incentive grant at Target is $1.375m.
|
5.
|
Severance:
A separate severance agreement letter will be provided to you to reflect a severance benefit equal to your annual base salary and MIP target bonus subject to the terms of the agreement.
|
9.
|
Confidentiality:
Catalent does not hire people for the purpose of acquiring their current or former employer’s trade secrets, intellectual property, or other confidential or proprietary information, and Catalent does not want access to any materials containing such information. Consequently, any documents, computer discs, etc. containing any such information should be returned to your current or former employer, and in no case may such information be brought to, or used, at Catalent.
|
10.
|
Ethics:
As a company founded on a core set of values, you will be provided with Catalent’s Standards of Business Conduct and be prepared to sign a letter of compliance. You also represent that there is nothing that will prevent you from performing the role and duties commensurate of Senior Vice President and General Counsel with global responsibilities.
|
11.
|
Orientation:
Orientation for new hires is conducted monthly at the Somerset facility. We will work out a mutually agreeable day and time for your orientation to receive information about the benefits program, as well as technology training. The Immigration Reform and Control Act of 1986 require employers to verify the employment eligibility and identity of all new employees. In accordance with this Act, please bring the appropriate identifying documents with you on your first day of employment. A sample copy of the I-9 form including a list of accepted documentation of proof of work authorization is attached in this offer packet for your review. You do not need to complete this form now, but will be asked to complete it on your first day of employment. Typical identification items include your driver’s license and social security card.
|
12.
|
Start Date:
Your first day of employment will be October 14, 2014.
|
(1)
|
with whom the Participant had personal contact or dealings on behalf of the Company or any of its Subsidiaries during the one year period preceding the Termination Date;
|
(2)
|
with whom employees reporting to the Participant have had personal contact or dealings on behalf of the Company or any of its Subsidiaries during the one year immediately preceding the Termination Date; or
|
(3)
|
for whom the Participant had direct or indirect responsibility during the one year immediately preceding the Termination Date.
|
(1)
|
engage in any business that competes with the business of the Company or any of its Subsidiaries, including, but not limited to, providing formulation/dose form technologies and/or contract services to pharmaceutical, biotechnology, over-the-counter and vitamin/mineral supplements companies related to pre-clinical and clinical development, formulation, analysis,
manufacturing and/or packaging and any other technology, product or service of the type developed, manufactured or sold by the Company or any of its Subsidiaries (including, without limitation, any other business which the Company or any of its Subsidiaries have plans to engage in as of the Termination Date) in any geographical area where the Company or any of its Subsidiaries conduct business
(a “
Competitive Business
”);
|
(2)
|
enter the employ of, or render any services to, any Person (or any division or controlled or controlling Affiliate of any Person) who or which engages in a Competitive Business;
|
(3)
|
acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual,
|
(4)
|
interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the Date of Grant) between the Company or any of its Subsidiaries and customers, clients, suppliers, or investors of the Company or any of its Subsidiaries.
|
(1)
|
solicit or encourage any employee of the Company or any of its Subsidiaries to leave the employment of the Company or any of its Subsidiaries; or
|
(2)
|
hire any such employee who was employed by the Company or any of its Subsidiaries as of the Termination Date or who left the employment of the Company or any of its Subsidiaries coincident with, or within six (6) months prior to or after, the Termination Date; provided, however, that this restriction shall cease to apply to any employee who has not been employed by the Company or any of its Subsidiaries for at least six (6) months.
|
Performance Level
|
Earnings
Per Share
|
Percent of
Target Goal
|
EPS Performance
Percentage
|
Below Threshold
|
Below $3.92
|
Below 75%
|
0%
|
Threshold
|
$3.92
|
75%
|
50%
|
Target
|
$5.23
|
100%
|
100%
|
Maximum
|
$6.54 (or higher)
|
125%
|
200%
|
Total Shareholder Return
=
|
(
Ending Stock Price
-
Beginning
Stock Price
+
Assumed
Dividend Reinvestment
) /
Beginning Stock Price
|
TSR Percentile Rank
Relative to Peer Group
|
Performance Level
|
RTSR Performance Percentage
|
Below 25th Percentile
|
Below Threshold
|
0%
|
25th Percentile
|
Threshold
|
50%
|
Median
|
Target
|
100%
|
75th Percentile and Above
|
Maximum
|
150%
|
(1)
|
with whom the Participant had personal contact or dealings on behalf of the Company or any of its Subsidiaries during the one year period preceding the Termination Date;
|
(2)
|
with whom employees reporting to the Participant have had personal contact or dealings on behalf of the Company or any of its Subsidiaries during the one year immediately preceding the Termination Date; or
|
(3)
|
for whom the Participant had direct or indirect responsibility during the one year immediately preceding the Termination Date.
|
(1)
|
engage in any business that competes with the business of the Company or any of its Subsidiaries, including, but not limited to, providing formulation/dose form technologies and/or contract services to pharmaceutical, biotechnology, over-the-counter and vitamin/mineral supplements companies related to pre-clinical and clinical development, formulation, analysis,
manufacturing and/or packaging and any other technology, product or service of the type developed, manufactured or sold by the Company or any of its Subsidiaries (including, without limitation, any other business which the Company or any of its Subsidiaries have plans to engage in as of the Termination Date) in any geographical area where the Company or any of its Subsidiaries conduct business (a “
Competitive Business
”);
|
(2)
|
enter the employ of, or render any services to, any Person (or any division or controlled or controlling Affiliate of any Person) who or which engages in a Competitive Business;
|
(3)
|
acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or
|
(4)
|
interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the Date of Grant) between the Company or any of its Subsidiaries and customers, clients, suppliers, or investors of the Company or any of its Subsidiaries.
|
(1)
|
solicit or encourage any employee of the Company or any of its Subsidiaries to leave the employment of the Company or any of its Subsidiaries; or
|
(2)
|
hire any such employee who was employed by the Company or any of its Subsidiaries as of the Termination Date or who left the employment of the Company or any of its Subsidiaries coincident with, or within six (6) months prior to or after, the Termination Date; provided, however, that this restriction shall cease to apply to any employee who has not been employed by the Company or any of its Subsidiaries for at least six (6) months.
|
Performance Level
|
Earnings
Per Share
|
Percent of
Target Goal
|
EPS Performance
Percentage
|
Below Threshold
|
Below $3.92
|
Below 75%
|
0%
|
Threshold
|
$3.92
|
75%
|
50%
|
Target
|
$5.23
|
100%
|
100%
|
Maximum
|
$6.54 (or higher)
|
125%
|
200%
|
Total Shareholder Return
=
|
(
Ending Stock Price
-
Beginning
Stock Price
+
Assumed
Dividend Reinvestment
) /
Beginning Stock Price
|
TSR Percentile Rank
Relative to Peer Group
|
Performance Level
|
RTSR Performance Percentage
|
Below 25th Percentile
|
Below Threshold
|
0%
|
25th Percentile
|
Threshold
|
50%
|
Median
|
Target
|
100%
|
75th Percentile and Above
|
Maximum
|
150%
|
|
Business Performance Factors Weighting
|
||
Position Category
(1)
|
Overall
Catalent
|
Business
Unit
|
Site/
Region
(3)
|
ELT and Corporate
|
100%
|
|
|
BU Functional Leaders
(2)
|
50%
|
50%
|
|
Site/Region-Based Leaders
|
30%
|
30%
|
40%
|
Site-Based Participants
|
0%
|
40%
|
60%
|
Notes
:
|
(1)
As noted above, there may in rare cases be other weightings used for individual participants.
|
% of Target Achieved
|
Achievement Factor Assigned
|
Comment
|
< 90%
|
Zero
|
Any payout at Comp Committee discretion
|
90%
|
50.0%
|
Threshold performance @ 50%
|
91%
|
55.0%
|
|
92%
|
60.0%
|
|
93%
|
65.0%
|
|
94%
|
70.0%
|
|
95%
|
75.0%
|
|
96%
|
80.0%
|
|
97%
|
85.0%
|
|
98%
|
90.0%
|
|
99%
|
95.0%
|
|
100%
|
100.0%
|
Target
|
101%
|
105.0%
|
|
102%
|
110.0%
|
|
103%
|
115.0%
|
|
104%
|
120.0%
|
|
105%
|
125.0%
|
|
106%
|
132.5%
|
|
107%
|
140.0%
|
|
108%
|
147.5%
|
|
109%
|
155.0%
|
|
110%
|
162.5%
|
|
111%
|
167.5%
|
|
112%
|
172.5%
|
|
113%
|
177.5%
|
|
114%
|
182.5%
|
|
115%
|
187.5%
|
Maximum performance @ 187.5%
|
>115%
|
187.5%
|
|
|
|
Revenue Goal Achievement
|
||||||
|
|
<90%
(1)
|
90%
|
95%
|
100%
|
105%
|
110%
|
115%
|
EBITDA Goal
Achievement
|
<90%
(1)
|
0.0%
|
12.5%
|
18.8%
|
25.0%
|
31.3%
|
40.6%
|
46.9%
|
90%
|
37.5%
|
50.0%
|
56.3%
|
62.5%
|
68.8%
|
78.1%
|
84.4%
|
|
95%
|
56.3%
|
68.8%
|
75.0%
|
81.3%
|
87.5%
|
96.9%
|
103.1%
|
|
100%
|
75.0%
|
87.5%
|
93.8%
|
100.0%
|
106.3%
|
115.6%
|
121.9%
|
|
105%
|
93.8%
|
106.3%
|
112.5%
|
118.8%
|
125.0%
|
134.4%
|
140.6%
|
|
110%
|
121.9%
|
134.4%
|
140.6%
|
146.9%
|
153.1%
|
162.5%
|
168.8%
|
|
115%
|
140.6%
|
153.1%
|
159.4%
|
165.6%
|
171.9%
|
181.3%
|
187.5%
|
Note
: (1)
|
For fiscal 2016, the Compensation Committee has set the revenue and EBITDA performance thresholds at
90%
of target. Funding for the MIP is dependent on achievement of at least the threshold level for both performance metrics. If both hurdles are not met, MIP funding can only occur at the discretion of management, with approval of the Compensation Committee.
|
Bonus Eligible Compensation
|
X
|
Bonus Target %
|
|
70% X BF
|
|
|
||
|
|
|
|
|
|
US$10,500
|
|
Final Award
|
|
|
|
|
|
|
|
=
|
US$15,000
|
US$100,000
|
X
|
15%
|
|
30% X IPF
|
|
|
||
|
|
US$15,000
|
|
US$4,500
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Earned Salary in the fiscal year is prorated based on hire date or salary change effective date
|
|
MIP target % assigned to the plan participant; may be a blended % due to promotions, changes in role during the FY
|
|
70% + 30%
|
|
The MIP bonus amount for the fiscal year
|
Event
|
Event occurs
:
Prior to April 1, 2016
|
Event occurs
:
From April 1, 2016 through date of MIP payment (scheduled to occur in Sept. 2016)
|
Voluntary termination (including resignation and job abandonment)
|
Not eligible for payout
|
Not eligible for payout
|
Involuntary termination for cause* or for other than RIF/restructure/divestiture
|
Not eligible for payout
|
Not eligible for payout
|
Involuntary termination due to RIF/restructure/divestiture
|
Not eligible for payout
|
Employees with continuous MIP-eligible service through the date of termination, where at least 90 days of that service occurred in fiscal 2016, will be eligible for payout at the normal payout date based on actual company/BU/site results (pro-rated for the portion of the year in service) and IPF as determined by the employees’ manager (similarly pro-rated)
|
Death
|
Employees with continuous MIP-eligible service through the date of death, where at least 90 days of that service occurred in fiscal 2016, will be eligible for payout at the normal payout date based on actual company/BU/site results (pro-rated for the portion of the year in service) and IPF as determined by the employees’ manager (similarly pro-rated)
|
|
Retirement
|
Not eligible for payout
|
Employees with at least 90 days of MIP-eligible service in fiscal 2016 will be eligible for payout at the normal payout date based on actual company/BU/site results (pro-rated for the portion of the year in service) and IPF as determined by the employees’ manager (similarly pro-rated)
|
Certain leaves of absence (LOA) may affect eligibility. Applicable LOA policies should be consulted on a regional basis.
|
*
|
Management reserves the right to determine in its sole discretion whether an individual termination of a MIP participant is for “cause.”
|
Article I
|
|
||
|
Establishment and Purpose
|
1
|
|
|
|
|
|
Article II
|
|
||
|
Definitions
|
1
|
|
|
|
|
|
Article III
|
|
||
|
Eligibility and Participation
|
8
|
|
|
|
|
|
Article IV
|
|
||
|
Deferrals
|
9
|
|
|
|
|
|
Article V
|
|
||
|
Company Contributions
|
12
|
|
|
|
|
|
Article VI
|
|
||
|
Benefits
|
13
|
|
|
|
|
|
Article VII
|
|
||
|
Modifications to Payment Schedules
|
17
|
|
|
|
|
|
Article VIII
|
|
||
|
Valuation of Account Balances; Investments
|
17
|
|
|
|
|
|
Article IX
|
|
||
|
Administration
|
19
|
|
|
|
|
|
Article X
|
|
||
|
Amendment and Termination
|
20
|
|
|
|
|
|
Article XI
|
|
||
|
Informal Funding
|
21
|
|
|
|
|
|
Article XII
|
|
||
|
Claims
|
21
|
|
|
|
|
|
Article XIII
|
|
||
|
General Provisions
|
25
|
|
2.1
|
Account.
Account means a bookkeeping account maintained by the Committee to record the payment obligation of a Participating Employer to a Participant as determined under the terms of the Plan. The Committee may maintain an Account to record the total obligation to a Participant and component Accounts to reflect amounts payable at different times and in different forms. Reference to an Account means any such Account established by the Committee, as the context requires. Accounts are intended to constitute unfunded obligations within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
|
2.2
|
Account Balance.
Account Balance means, with respect to any Account, the total payment obligation owed to a Participant from such Account as of the most recent Valuation Date.
|
2.3
|
Adopting Employer.
Adopting Employer means an Affiliate who, with the consent of the Company, has adopted the Plan for the benefit of its eligible employees. As a condition of adopting the Plan, the Adopting Employer agrees that it will be deemed to have appointed the Company as its agent to exercise on its behalf all of the powers and authority conferred upon the Company by the terms of the Plan including, but not limited to, the power to amend and terminate the Plan.
|
2.4
|
Affiliate.
Affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or (c).
|
2.5
|
Beneficiary.
Beneficiary means a natural person, estate, or trust designated by a Participant to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan. The Participant’s estate shall be the Beneficiary if: (i) the Participant has failed to properly designate a Beneficiary, or (ii) all designated Beneficiaries have predeceased the Participant.
|
2.6
|
Business Day
. Business Day means each day on which the New York Stock Exchange is open for business.
|
2.7
|
Change of Control
. Change of Control means (i) the sale or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act or (ii) any “person” or “group” becomes the “beneficial owner” (as defined in Rules 13d-2 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company, including by way of merger, consolidation or otherwise.
|
2.8
|
Claimant.
Claimant means a Participant or Beneficiary filing a claim under Article XII of this Plan.
|
2.9
|
Code.
Code means the Internal Revenue Code of 1986, as amended from time to time.
|
2.10
|
Code Section 409A.
Code Section 409A means section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder.
|
2.11
|
Committee.
Committee means, as applicable: (i) the Compensation Committee of the Board of Directors of the Company, or, if none exists, the Compensation Committee of the Board of Directors of a public parent company of the Company; (ii) such other committee to which the Board of Directors of the Company or of a public parent company of the Company, as applicable, has delegated power to oversee the administration of the Plan; or (iii) if no such committee has been created, the Board of Directors of the Company.
|
2.12
|
Company.
Company means Catalent Pharma Solutions, Inc.
|
2.13
|
Company Contribution.
Company Contribution means a credit by a Participating Employer to a Participant’s Account(s) in accordance with the provisions of Section 5.1. Unless the context clearly indicates otherwise, a reference to Company Contribution shall include Earnings attributable to such contribution.
|
2.14
|
Company Stock.
Company Stock means phantom shares of common stock issued by a public parent company of the Company, as applicable.
|
2.15
|
Compensation.
Compensation means a Participant’s base salary, bonus, commissions, Director fees (including fees paid for service as a member of the Board of Directors of a Participating Employer, and fees for attendance at any such Board or committee meetings), restricted stock units and/or performance share units designated as eligible for deferral by the Committee, and such other cash or equity-based compensation (if any) approved by the Committee as Compensation that may be deferred under this Plan. Compensation shall not include any compensation that has been previously deferred under this Plan or any other arrangement subject to Code Section 409A. Notwithstanding the foregoing, the following amounts are excluded from Compensation: (i) other cash or non-cash compensation that has not been approved by the Committee as Compensation that may be deferred, expense reimbursements, other benefits or contributions by the Company, its Affiliate, or any public parent company of the Company, as applicable, to any other employee benefit plan, other than pre-tax salary deferrals into the Qualified Plan or any Code Section 125 plan sponsored by the Company, its Affiliates, or any public parent company of the Company, as applicable, and (ii) amounts realized (A) from the exercise of a stock option, (B) when restricted stock (or property) held by a Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture, or (C) from the sale, exchange or other disposition of stock acquired under a qualified stock option.
|
2.16
|
Compensation Deferral Agreement.
Compensation Deferral Agreement means an agreement between a Participant and a Participating Employer that specifies: (i) the amount of each component of Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV, and (ii) the Payment Schedule
|
2.17
|
Deferral.
Deferral means a credit to a Participant’s Account(s) that records that portion of the Participant’s Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV. Unless the context of the Plan clearly indicates otherwise, a reference to Deferrals includes Earnings attributable to such Deferrals.
|
2.18
|
Director.
Director means a member of the Board of Directors of a Participating Employer.
|
2.19
|
Disabled.
Disabled means that a Participant is, by reason of any medically-determinable physical or mental impairment, which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months: (i) unable to engage in any substantial gainful activity, or (ii) receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer. The Committee shall determine whether a Participant is Disabled in accordance with Code Section 409A
|
2.20
|
Earnings.
Earnings means a positive or negative adjustment to the value of an Account in accordance with Article VIII.
|
2.21
|
Effective Date.
Effective Date of this amended and restated Plan means January 1, 2016.
|
2.22
|
Eligible Employee.
Eligible Employee means a member of a “select group of management or highly compensated employees” of a Participating Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as determined by the Committee from time to time in its sole discretion.
|
2.23
|
Employee.
Employee means a common-law employee of an Employer.
|
2.24
|
Employer.
Employer means, with respect to Employees it employs, the Company, each Affiliate, and any public parent company of the Company, as applicable.
|
2.25
|
ERISA.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
|
2.27
|
Participant.
Participant means an Eligible Employee or a Director who has received notification of his or her eligibility to defer Compensation under the Plan under Section 3.1 and any other person with an Account Balance greater than zero, regardless of whether such individual continues to be an Eligible Employee or a Director. A Participant’s continued participation in the Plan shall be governed by Section 3.2 of the Plan.
|
2.28
|
Participating Employer.
Participating Employer means the Company, each Adopting Employer, and any public parent company of the Company.
|
2.29
|
Payment Schedule.
Payment Schedule means the date as of which payment of an Account under the Plan will commence and the form in which payment of such Account will be made.
|
2.30
|
Performance-Based Compensation.
Performance-Based Compensation means Compensation where the amount of, or entitlement to, the Compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months. Organizational or individual performance criteria are considered pre-established if established in writing by not later than 90 days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. The determination of whether Compensation qualifies as “Performance-Based Compensation” will be made in accordance with Treas. Reg. Section 1.409A-1(e) and subsequent guidance.
|
2.31
|
PSU Account.
PSU Account means the Account established by the Committee to record a Participant’s Deferrals of performance share units (if any) for a Plan Year and the Payment Schedule applicable to such Deferrals.
|
2.32
|
Plan.
Generally, the term Plan means the “Catalent Pharma Solutions, Inc. Deferred Compensation Plan” as documented herein and as may be amended from time to time hereafter. However, to the extent permitted or required under Code Section 409A, the term Plan may in the appropriate context also mean a portion of the Plan that is treated as a single plan under Treas. Reg. Section 1.409A-1(c), or the Plan or portion of the Plan and any other nonqualified deferred compensation plan or portion thereof that is treated as a single plan under such section.
|
2.33
|
Plan Year.
Plan Year means January 1 through December 31.
|
2.34
|
Post-2015 Account
. Post-2015 Account means all amounts credited to the Plan on behalf of a Participant that were deferred under Compensation Deferral Agreements that first took effect on or after January 1, 2016 or that were attributable to periods that began on or after January 1, 2016.
|
2.35
|
Pre-2016 Account.
Pre-2016 Account means all amounts credited to the Plan on behalf of a Participant that were deferred under Compensation Deferral Agreements that first took effect prior to January 1, 2016 or that were attributable to periods that began prior to January 1, 2016, including Prior Plan Credits.
|
2.36
|
Prior Plan.
Prior Plan means the Cardinal Health Deferred Compensation Plan, as amended and restated effective January 1, 2005.
|
2.37
|
Prior Plan Credits.
Prior Plan Credits means credits made by the Company to a Participant’s Account(s) of amounts accrued by the Participant, if any, under the Prior Plan. A schedule of the Prior Plan Credits of Participants shall be maintained by the Committee. A Participant is 100% vested in any Prior Plan Credits credited to his or her Account.
|
2.38
|
Qualified Plan.
Qualified Plan means the Catalent Pharma Solutions, LLC 401(k) Plan, as amended from time to time.
|
2.39
|
Retirement.
In connection with a Participant’s Post-2015 Account, Retirement means (i) with respect to a Participant who is an Employee, Separation from Service after attainment of an age which, when combined with the Participant’s completed Years of Service, total 65 or more and (ii) with respect to a Participant who is a Director, Separation from Service. In connection with a Participant’s Pre-2016 Account, Retirement means (i) with respect to a Participant who is an Employee, Separation from Service after attainment of age 65 and (ii) with respect to a Participant who is a Director, Separation from Service.
|
2.40
|
Retirement/Termination Account.
Retirement/Termination Account means an Account established by the Committee to record amounts payable to a Participant upon Separation from Service, other than amounts allocated to a PSU Account or RSU Account. The Committee shall establish a Primary Retirement/Termination Account for each Participant effective January 1, 2016 or, if later, effective with his or her initial participation in the Plan. A Participant may establish one additional Retirement/Termination Account. All Deferrals and other amounts credited to the Plan on behalf of a Participant shall be allocated to the Participant’s Primary Retirement/ Termination Account unless allocated to a different Account by the Participant.
|
2.41
|
RSU Account.
RSU Account means the Account established by the Committee to record a Participant’s Deferrals of restricted stock units (if any) for a Plan Year and the Payment Schedule applicable to such Deferrals.
|
2.42
|
Separation from Service.
Separation from Service means an Employee’s termination of employment with the Employer. A Director incurs a Separation from Service upon the date he or she ceases to serve on the Board of Directors of a Participating Employer. Whether a Separation from Service has occurred shall be determined by the Committee in accordance with Code Section 409A.
|
2.43
|
Specified Date Account.
Specified Date Account means an Account established by the Committee to record the amounts payable at a future date as specified in the Participant’s Compensation Deferral Agreement, other than amounts allocated to a PSU Account or RSU Account. Unless otherwise determined by the Committee, a Participant may
|
2.44
|
Substantial Risk of Forfeiture.
Substantial Risk of Forfeiture means the description specified in Treas. Reg. Section 1.409A-1(d).
|
2.45
|
Unforeseeable Emergency.
Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s dependent (as defined in Code section 152, without regard to section 152(b)(1), (b)(2), and (d)(1)(B)), or a Beneficiary; loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The types of events which may qualify as an Unforeseeable Emergency may be limited by the Committee.
|
2.46
|
Valuation Date.
Valuation Date means each Business Day.
|
2.47
|
Year of Service
. Year of Service means a period of twelve (12) consecutive calendar months during which a Participant is employed by the Company, an Affiliate, or a public parent company of the Company, as applicable; and, prior to April 10, 2007, by Cardinal Health, Inc. or one of its affiliates.
|
3.1
|
Eligibility and Participation.
An Eligible Employee or a Director becomes a Participant upon the earlier to occur of: (i) a credit of Company Contributions under Article V, or (ii) receipt of notification of eligibility to participate.
|
3.2
|
Duration.
A Participant shall be eligible to defer Compensation and receive allocations of Company Contributions, subject to the terms of the Plan, for as long as such Participant remains an Eligible Employee or a Director. A Participant who is no longer an Eligible Employee or a Director but has not Separated from Service may not defer Compensation under the Plan beyond the Plan Year in which he or she became ineligible but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero (0), and during such time may continue to make allocation elections as provided in Section 8.4. An individual shall cease being a Participant in the Plan when all benefits under the Plan to which he or she is entitled have been paid.
|
(a)
|
A Participant may elect to defer Compensation by submitting a Compensation Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 4.2. A Compensation Deferral Agreement that is not timely filed with respect to a service period or component of Compensation shall be considered void and shall have no effect with respect to such service period or Compensation. The Committee may modify any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2.
|
(b)
|
The Participant shall specify on his or her Compensation Deferral Agreement the amount of Deferrals and whether to allocate Deferrals (excluding Deferrals of performance share units or restricted stock units) to a Retirement/Termination Account or to a Specified Date Account. If no designation is made, Deferrals shall be allocated to the Primary Retirement/Termination Account. Deferrals of performance share units and restricted stock units shall be allocated to a PSU Account or RSU Account, as applicable. A Participant may also specify in his or her Compensation Deferral Agreement the Payment Schedule applicable to his or her Plan Accounts. If the Payment Schedule is not specified in a Compensation Deferral Agreement, the Payment Schedule shall be the Payment Schedule specified in Article VI.
|
(a)
|
First Year of Eligibility.
In the case of the first year in which an Eligible Employee or a Director becomes eligible to participate in the Plan, he or she has up to 30 days following notification of his or her initial eligibility to submit a Compensation Deferral Agreement with respect to Compensation to be earned during such year. The Compensation Deferral Agreement described in this paragraph becomes irrevocable upon the end of such 30-day period, and shall become effective on the first day of the calendar quarter coincident with or next following the end of such 30-day period. The determination of whether an Eligible Employee or a Director may file a Compensation Deferral Agreement under this paragraph shall be determined in accordance with the rules of Code Section 409A, including the provisions of Treas. Reg. Section 1.409A-2(a)(7).
|
(b)
|
Prior Year Election.
Except as otherwise provided in this Section 4.2, Participants may defer Compensation by filing a Compensation Deferral Agreement no later than December 31 of the year prior to the year in which the Compensation to be deferred is earned. A Compensation Deferral Agreement described in this paragraph shall become irrevocable with respect to such Compensation as of January 1 of the year in which such Compensation is earned.
|
(c)
|
Performance-Based Compensation.
Participants may file a Compensation Deferral Agreement with respect to Performance-Based Compensation no later than the date that is six months before the end of the performance period, provided that:
|
(i)
|
the Participant performs services continuously from the later of the beginning of the performance period or the date the criteria are established through the date the Compensation Deferral Agreement is submitted; and
|
(ii)
|
the Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement is filed.
|
(d)
|
Sales Commissions.
Sales commissions (as defined in Treas. Reg. Section 1.409A-2(a)(12)(i)) are considered to be earned by the Participant in the taxable year of the Participant in which they are earned for income tax purposes. The Compensation Deferral Agreement must be filed before the last day of the year preceding the year in which the sales commissions are earned, and becomes irrevocable after that date.
|
(e)
|
Short-Term Deferrals.
Compensation that meets the definition of a “short-term deferral” described in Treas. Reg. Section 1.409A-1(b)(4) may be deferred in accordance with the rules of Article VII, applied as if the date the Substantial Risk of Forfeiture lapses is the date payments were originally scheduled to commence, provided, however, that the provisions of Section 7.3 shall not apply to payments attributable to a change in control event (as defined in Treas. Reg. Section 1.409A-3(i)(5)).
|
(f)
|
Certain Forfeitable Rights.
With respect to a legally binding right to a payment in a subsequent year that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least 12 months from the date the Participant obtains the legally binding right, an election to defer such
|
(g)
|
Company Awards.
Participating Employers may unilaterally provide for deferrals of Company awards prior to the date of such awards. Deferrals of Company awards (such as sign-on, retention, or severance pay) may be negotiated with a Participant prior to the date the Participant has a legally binding right to such Compensation.
|
(h)
|
“Evergreen” Deferral Elections.
The Committee, in its discretion, may provide in the Compensation Deferral Agreement that such Compensation Deferral Agreement will continue in effect for each subsequent year or performance period. Such “evergreen” Compensation Deferral Agreements will become effective with respect to an item of Compensation on the date such election becomes irrevocable under this Section 4.2. An evergreen Compensation Deferral Agreement may be terminated or modified prospectively with respect to Compensation for which such election remains revocable under this Section 4.2. A Participant whose Compensation Deferral Agreement is cancelled in accordance with Section 4.6 will be required to file a new Compensation Deferral Agreement under this Article IV in order to recommence Deferrals under the Plan.
|
4.3
|
Allocation of Deferrals.
A Compensation Deferral Agreement may allocate Deferrals (other than Deferrals of performance share units or restricted stock units) to one or more Specified Date Accounts and/or to up to two Retirement/Termination Accounts. The Committee may, in its discretion, establish a minimum deferral period for the establishment of a Specified Date Account (for example, the third Plan Year following the year Compensation is allocated to such accounts or, for restricted stock units, the third Plan Year following the year of deferral). Deferrals of performance share units or restricted stock units shall be allocated to a PSU Account or RSU Account, as applicable.
|
4.4
|
Deductions from Pay.
The Committee has the authority to determine the payroll practices under which any component of Compensation subject to a Compensation Deferral Agreement will be deducted from a Participant’s Compensation.
|
4.5
|
Vesting.
Participant Deferrals of cash Compensation shall be 100% vested at all times. Deferrals of equity-based Compensation shall be vested in accordance with the underlying equity award.
|
4.6
|
Cancellation of Deferrals.
The Committee may cancel a Participant’s Deferrals: (i) for the balance of the Plan Year in which an Unforeseeable Emergency occurs, (ii) if the Participant receives a hardship distribution under the Employer’s qualified 401(k) plan, through the end of the Plan Year in which the six month anniversary of the hardship distribution falls, and (iii) during periods in which the Participant is unable to perform the duties of his or her position or any substantially similar position due to a mental or physical impairment that can be expected to result in death or last for a continuous period of at least six months, provided cancellation occurs by the later of the end of the taxable year of the Participant or the 15
th
day of the third month following the date the Participant incurs the disability (as defined in this paragraph (iii)).
|
5.1
|
Discretionary Company Contributions.
The Committee, in its discretion for any year, shall credit Company Contributions with respect to the Deferrals made by Participants who are Employees. Such Company Contributions shall be equal to fifty percent of the amount of Deferrals for the year on Compensation up to six percent of the Participant’s Compensation.
|
5.2
|
Vesting.
Company Contributions described in Section 5.1 above, and the Earnings thereon, shall vest in accordance with the following schedule:
|
Years of Service
|
Vested Percentage
|
Less than 1
|
0%
|
At least 1 but less than 2
|
25%
|
At least 2 but less than 3
|
50%
|
At least 3 but less than 4
|
75%
|
4 or more
|
100%
|
6.1
|
Distributions of Post-2015 Accounts.
A Participant shall be entitled to payments from the Plan upon the first to occur of the following events, at the time and in the manner specified below:
|
(a)
|
Retirement.
Upon the Participant’s Separation from Service due to Retirement, he or she shall receive a distribution from each Retirement/Termination Account, based on the value of that Account(s) as of the end of the month preceding the month of payment or such later date as the Committee, in its sole discretion, shall determine. In addition, the Participant shall receive a distribution of the balance of any PSU Account or RSU Account that the Participant did not elect to have distributed upon a specified date or that is distributable upon Separation from Service under paragraph (c) below because payments from the Account had not commenced as of the date of Separation from Service. Payment will be made or begin on the 15
th
day of the month following the month in which the six-month anniversary of the Participant’s Separation from Service due to Retirement occurs, in a single lump sum payment, unless the Participant elects to have the Account distributed in substantially equal annual installments over a period of up to fifteen years.
|
(b)
|
Termination.
Upon the Participant’s Separation from Service for reasons other than death or Retirement, he or she shall receive a distribution of the vested portion of each Retirement/Termination Account, based on the value of that Account(s) as of the end of the month preceding the month of payment or such later date as the Committee, in its sole discretion, shall determine. In addition, the Participant shall receive a distribution of the balance of any PSU Account or RSU Account that the Participant did not elect to have distributed upon a specified date or that is distributable upon Separation from Service under paragraph (c) below because payments from the Account had not commenced as of the date of Separation from Service. Payment will be made or begin on the 15
th
day of the month following the month in which the six-month anniversary of the Participant’s Separation from Service occurs, in a single lump sum payment, unless the Participant elects to have the Account distributed in substantially equal annual installments over a period of up to five years.
|
(c)
|
Specified Date.
Upon the occurrence of a specified date designated by a Participant who is not a Director, he or she shall receive a distribution of the vested portion of the applicable Specified Date Account, based on the value of that Account as of the end of the month preceding the month of payment or such later date as the Committee, in its sole discretion, shall determine. In addition, the Participant shall receive a distribution of the balance of any PSU Account or RSU Account that the Participant elected to have distributed upon a specified date. Payment will be made or begin on the 15
th
day of the month following the month in which the specified date occurs, in a single lump sum payment, unless the
|
6.2
|
Distribution of Pre-2016 Accounts
. The balance of a Participant’s Pre-2016 Account shall be distributed upon the first to occur of the following events, at the time and in the manner specified in this Section 6.2. Participants shall continue to have the right to modify distribution elections applicable to a Pre-2016 Account in accordance with terms of the Plan in effect prior to January 1, 2016.
|
(a)
|
Separation from Service.
Upon the Participant’s Separation from Service due to Retirement or Termination, he or she shall receive a distribution of his entire Pre-2016 Account, based on the value of that Account as of the end of the month preceding the month of payment or such later date as the Committee, in its sole discretion, shall determine. Payment will be made or begin on the 15
th
day of the month following the month in which the six-month anniversary of the Participant’s Separation from Service due to Retirement or Termination occurs, in a single lump sum payment or, if elected by the Participant during his or her initial enrollment in the Plan, during the period ending on December 31, 2015 pursuant to the terms of Plan then in effect, or in accordance with Article VII, in substantially equal annual installments over a period of five or ten years, as elected by the Participant.
|
(b)
|
Death After the Commencement of Benefits.
Upon the Participant’s death after the commencement of the distribution of the Participant’s Pre-2016 Account, his or her designated Beneficiary(ies) shall receive the remaining distributions of the Pre-2016 Account due under the Plan in accordance with the distribution method in effect at the time of the Participant’s death.
|
(c)
|
Death Prior to the Commencement of Benefits.
Upon the Participant’s death prior to the commencement of the distribution of the Participant’s Pre-2016 Account, his or her designated Beneficiary(ies) shall receive a distribution of all of his or her Pre-2016 Account, based on the value of such Account as of the end of the month preceding the month of payment or such later date as the Committee, in its sole discretion, shall determine, in a single lump sum. Notwithstanding the forgoing, the Participant’s designated Beneficiaries shall receive distributions of the Participant’s Pre-2016 Account in annual installments as elected by the Participant during his or her initial enrollment in the Plan or not later than twelve months prior to the Participant’s death. Payment of the Pre-2016 Account in a lump sum or annual installments will be made or begin no later than the later of
|
6.3
|
Distribution Rules Applicable to Both Pre-2016 Accounts and Post-2015 Accounts
. Notwithstanding anything to the contrary in this Article, distribution of a Participant’s Pre-2016 Account and Post-2015 Account shall be distributed in accordance with the following:
|
(a)
|
Disability.
Upon the Participant’s becoming Disabled the Participant shall receive a distribution of all of his or her Accounts, based on the value of such Accounts as of the end of the month preceding the month of payment or such later date as the Committee, in its sole discretion, shall determine, in a single lump sum. Payment will be made or begin no later than the later of (i) December 31 of the year in which the Participant is determined to be Disabled, or (ii) ninety (90) days following the date of the Participant’s disability.
|
(b)
|
Unforeseeable Emergency.
Upon the occurrence of an Unforeseeable Emergency, a Participant may submit a written request to the Committee to receive payment of all or any portion of his or her vested Accounts. Whether a Participant or Beneficiary is faced with an Unforeseeable Emergency permitting an emergency payment shall be determined by the Committee based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of Unforeseeable Emergency may not be made to the extent that such emergency is or may be reimbursed through insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of Deferrals under this Plan. If an emergency payment is approved by the Committee, the amount of the payment shall not exceed the amount reasonably necessary to satisfy the need, taking into account the additional compensation that is available to the Participant as the result of cancellation of deferrals to the Plan, including amounts necessary to pay any taxes or penalties that the Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be subtracted first from the Participant’s Pre-2016 Account until depleted, and then from the Participant’s Post-2015 Account on a pro rata basis from the vested portion of each of the Participant's Retirement/Termination Accounts until depleted and then pro rata from the vested portion of each of the Participant’s Specified Date Accounts. Emergency payments shall be paid in a single lump sum as soon as administratively practicable following the date the payment is approved by the Committee.
|
(c)
|
Change of Control.
Notwithstanding anything to the contrary in this Section 6.1, the remaining balance of all of a Participant’s Accounts will be distributed in a single lump sum payment if the Participant Separates from Service within 24 months following a Change of Control. Payment of Post-2015 Accounts will be made on the 15
th
day of the month following the month in which the six-month anniversary of the Participant’s Separation from Service occurs, based on the
|
(d)
|
Small Account Balances.
Notwithstanding anything to the contrary in this Article VI, the Committee shall pay the value of the Participant’s Accounts upon a Separation from Service in a single lump sum if the balance of such Accounts is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), provided the payment represents the complete liquidation of the Participant’s interest in the Plan. Further, the Committee may, in its discretion, direct a single lump sum payment of all of a Participant’s Account at any time, if the balance of such Accounts is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), provided the payment represents the complete liquidation of the Participant’s interest in the Plan and all plans and arrangements which are required to be aggregated with the Plan under Treas. Reg. § 1.409A-1(c)(2).
|
(e)
|
Rules Applicable to Installment Payments.
If a Payment Schedule specifies installment payments, annual payments will be made beginning as of the payment commencement date for such installments and shall continue on each anniversary thereof until the number of installment payments specified in the Payment Schedule has been paid. Earnings shall continue to be credited to a Participant’s Accounts during the installment period. The amount of each installment payment shall be determined by dividing (a) by (b), where (a) equals the Account Balance as of the Valuation Date disregarding any portion thereof consisting of units of Company Stock and (b) equals the remaining number of installment payments. For purposes of Article VII, each installment payment will be treated as a separate payment.
|
(f)
|
Acceleration of or Delay in Payments.
The Committee, in its sole and absolute discretion, may elect to accelerate the time or form of payment of a benefit owed to the Participant hereunder, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time for payment of a benefit owed to the Participant hereunder, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7). If the Plan receives a domestic relations order (within the meaning of Code Section 414(p)(1)(B)) directing that all or a portion of a Participant’s Accounts be paid to an “alternate payee,” any amounts to be paid to the alternate payee(s) shall be paid in a single lump sum.
|
7.1
|
Participant’s Right to Modify.
A Participant may modify any or all of the alternative Payment Schedules with respect to an Account, consistent with the permissible Payment Schedules available under the Plan for the applicable Account, provided such modification complies with the requirements of this Article VII. For purposes of clarity, the Payment Schedule applicable to a Pre-2016 Account may be modified only to elect a different Payment Schedule available for a Pre-2016 Account. The permissible Payment Schedule for pre-retirement death benefit elections is the Payment Schedule available for Post-2015 Retirement/Termination Accounts.
|
7.2
|
Time of Election.
The date on which a modification election is submitted to the Committee must be at least 12 months prior to the date on which payment is scheduled to commence under the Payment Schedule in effect prior to the modification.
|
7.3
|
Date of Payment under Modified Payment Schedule.
Except with respect to modifications that relate to the payment of a Death Benefit, the date payments are to commence under the modified Payment Schedule must be no earlier than five years after the date payment would have commenced under the original Payment Schedule. Under no circumstances may a modification election result in an acceleration of payments in violation of Code Section 409A.
|
7.4
|
Effective Date.
A modification election submitted in accordance with this Article VII is irrevocable upon receipt by the Committee and becomes effective 12 months after such date.
|
7.5
|
Effect on Accounts.
An election to modify a Payment Schedule is specific to the Account or payment event to which it applies, and shall not be construed to affect the Payment Schedules of any other Accounts.
|
8.1
|
Valuation.
Deferrals shall be credited to appropriate Accounts on the date such Compensation would have been paid to the Participant absent the Compensation Deferral Agreement. Company Contributions shall be credited to the Primary Retirement/Termination Account at the times determined by the Committee. Valuation of Accounts shall be performed under procedures approved by the Committee.
|
8.2
|
Earnings Credit.
Each Account will be credited with Earnings on each Business Day, based upon the Participant’s investment allocation among a menu of investment options selected in advance by the Committee, in accordance with the provisions of this Article VIII (“investment allocation”).
|
8.3
|
Investment Options
. Investment options will be determined by the Committee. The Committee, in its sole discretion, shall be permitted to add or remove investment options from the Plan menu from time to time, provided that any such additions or removals of investment options shall not be effective with respect to any period prior to the effective date of such change.
|
8.4
|
Investment Allocations.
A Participant’s investment allocation constitutes a deemed, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership in any investment option included in the investment menu, nor shall the Participating Employer or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participant’s investment allocation. A Participant’s investment allocation shall be used solely for purposes of adjusting the value of a Participant’s Account Balances.
|
8.5
|
Unallocated Deferrals and Accounts.
If the Participant fails to make an investment allocation with respect to an Account, such Account shall be invested in an investment option, the primary objective of which is the preservation of capital, as determined by the Committee.
|
8.6
|
Company Stock.
The Committee may include Company Stock as one of the investment options described in Section 8.3. The Committee may, in its sole discretion, limit the investment allocation of Company Contributions to Company Stock. The Committee may also require Deferrals consisting of equity-based Compensation, such as deferrals of restricted stock units or performance share units, to be allocated to Company Stock.
|
8.7
|
Diversification.
A Participant may not re-allocate an investment in Company Stock into another investment option. The portion of an Account that is invested in Company Stock will be paid under Article VI in the form of whole shares of Company Stock.
|
8.8
|
Effect on Installment Payments.
If an Account is to be paid in installments, the portion of the Account that is invested in Company Stock will be paid under Article VI in a single lump sum payment at the time the initial installment is distributed, and only the cash value of the Account shall be considered in determining the amount of each installment payment.
|
8.9
|
Dividend Equivalents.
Dividend equivalents with respect to company stock, if any, will be credited to Participant Accounts, in the discretion of the Committee, and distributed to Participants in accordance with Section 6 of this Plan.
|
9.1
|
Plan Administration
. This Plan shall be administered by the Committee which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article XII.
|
9.2
|
Administration Upon Change of Control.
Upon a Change of Control, the Committee, as constituted immediately prior to such Change of Control, shall continue to act as the Committee. The individual who was the Chief Executive Officer of the Company (or if such person is unable or unwilling to act, the next highest ranking officer) prior to the Change of Control shall have the authority (but shall not be obligated) to appoint an independent third party to act as the Committee.
|
9.3
|
Withholding.
Any payments due under the Plan or any amounts credited to the Plan shall be subject to withholding of any taxes required by law to be withheld in respect of such payment (or credit). Withholdings with respect to amounts credited to the Plan shall be deducted from Compensation that has not been deferred to the Plan.
|
9.4
|
Indemnification.
All Participating Employers shall indemnify and hold harmless each employee, officer, director, or agent, to whom or to which are delegated duties, responsibilities, and authority under the Plan or otherwise with respect to administration of the Plan, including, without limitation, the Committee and its agents (but excluding any third-party administrator, record-keeper, or trustee except as provided under a separate agreement with such party), against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including but not limited to reasonable attorney fees) which arise as a result of his or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased by any Participating Employer. Notwithstanding the foregoing, no Participating Employer shall indemnify any person if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Participating Employer consents in writing to such settlement or compromise.
|
9.5
|
Delegation of Authority.
In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who shall be legal counsel to the Company or public parent company of the Company, as applicable.
|
9.6
|
Binding Decisions or Actions.
The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
|
10.1
|
Amendment and Termination.
The Company may at any time and from time to time amend the Plan or may terminate the Plan as provided in this Article X. Each Participating Employer may also terminate its participation in the Plan.
|
10.2
|
Amendments.
The Company may amend the Plan at any time and for any reason, provided that any such amendment shall not adversely affect the rights to which a Participant is entitled as of the date of any such amendment or restatement.
|
10.3
|
Termination.
The Company may terminate the Plan and pay Participants and Beneficiaries their Account Balances in a single lump sum at any time, to the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix). If a Participating Employer terminates its participation in the Plan, the benefits of affected Employees shall be paid at the time provided in Article VI.
|
10.4
|
Accounts Taxable Under Code Section 409A.
The Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under
|
11.1
|
General Assets.
Obligations established under the terms of the Plan may be satisfied from the general funds of the Participating Employers or a trust described in this Article XI. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in assets of the Company, an Affiliate, or a public parent company of the Company. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company, an Affiliate, or a public parent company of the Company and any Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments hereunder, such rights are no greater than the right of an unsecured general creditor of the Company, its Affiliates, or any public parent company of the Company, as applicable.
|
11.2
|
Rabbi Trust.
The Company or a public parent company of the Company, as applicable, may, in its sole discretion, establish a grantor trust, commonly known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan. Payments under the Plan may be paid from the general assets of the Participating Employer or from the assets of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the Participant or Beneficiary under the Plan.
|
12.1
|
Filing a Claim.
Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee, which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the “Claimant”).
|
(a)
|
In General.
Notice of a denial of benefits will be provided within 90 days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 90-day period. The extension will not be more than 90 days from the end of the initial 90-day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision.
|
(b)
|
Disability Benefits.
Notice of denial of disability benefits will be provided within forty-five (45) days of the Committee’s receipt of the Claimant’s claim for Disability benefits. If the Committee determines that it needs additional time to review the Disability claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 45-day period. If the Committee determines that a decision cannot be made within the first extension period due to matters beyond the control of the Committee, the time period for making a determination may be further extended for an additional 30 days. If such an additional extension is necessary, the Committee shall notify the Claimant prior to the expiration of the initial 30-day extension. Any notice of extension shall indicate the circumstances necessitating the extension of time, the date by which the Committee expects to furnish a notice of decision, the specific standards on which such entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim and any additional information needed to resolve those issues. A Claimant will be provided a minimum of 45 days to submit any necessary additional information to the Committee. In the event that a 30-day extension is necessary due to a Claimant’s failure to submit information necessary to decide a claim, the period for furnishing a notice of decision shall be tolled from the date on which the notice of the extension is sent to the Claimant until the earlier of the date the Claimant responds to the request for additional information or the response deadline.
|
(c)
|
Contents of Notice.
If a claim for benefits is completely or partially denied, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language. The notice shall: (i) cite the pertinent provisions of the Plan document, and (ii) explain, where appropriate, how the Claimant can perfect the claim, including a description of any additional material or information necessary to complete the claim and why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse decision on review. In the case of a complete or partial denial of a disability benefit claim, the notice shall provide a statement that the Committee will provide to the Claimant, upon request and free of charge, a copy of any internal rule, guideline, protocol, or other similar criterion that was relied upon in making the decision.
|
12.2
|
Appeal of Denied Claims.
A Claimant whose claim has been completely or partially denied shall be entitled to appeal the claim denial by filing a written appeal with a committee designated to hear such appeals (the “Appeals Committee”). A Claimant who timely requests a review of the denied claim (or his or her authorized representative) may review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relevant to the claim to the Appeals Committee. All written comments, documents, records, and other information shall be considered “relevant” if
|
(a)
|
In General.
Appeal of a denied benefits claim (other than a disability benefits claim) must be filed in writing with the Appeals Committee no later than 60 days after receipt of the written notification of such claim denial. The Appeals Committee shall make its decision regarding the merits of the denied claim within 60 days following receipt of the appeal (or within 120 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination.
|
(b)
|
Disability Benefits.
Appeal of a denied disability benefits claim must be filed in writing with the Appeals Committee no later than 180 days after receipt of the written notification of such claim denial. The review shall be conducted by the Appeals Committee (exclusive of the person who made the initial adverse decision or such person’s subordinate). In reviewing the appeal, the Appeals Committee shall: (i) not afford deference to the initial denial of the claim, (ii) consult a medical professional who has appropriate training and experience in the field of medicine relating to the Claimant’s disability and who was neither consulted as part of the initial denial nor is the subordinate of such individual, and (iii) identify the medical or vocational experts whose advice was obtained with respect to the initial benefit denial, without regard to whether the advice was relied upon in making the decision. The Appeals Committee shall make its decision regarding the merits of the denied claim within 45 days following receipt of the appeal (or within 90 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. Following its review of any additional information submitted by the Claimant, the Appeals Committee shall render a decision on its review of the denied claim.
|
(c)
|
Contents of Notice.
If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language.
|
(d)
|
For the denial of a disability benefit, the notice will also include a statement that the Appeals Committee will provide, upon request and free of charge: (i) any internal rule, guideline, protocol or other similar criterion relied upon in making the decision, (ii) any medical opinion relied upon to make the decision, and (iii) the required statement under Section 2560.503-1(j)(5)(iii) of the Department of Labor regulations.
|
12.3
|
Claims Appeals Upon Change of Control.
Upon a Change of Control, the Appeals Committee, as constituted immediately prior to such Change of Control, shall continue to act as the Appeals Committee. Upon such Change of Control, the Company may not remove any member of the Appeals Committee, but may replace resigning members if 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the replacement.
|
12.4
|
Legal Action.
A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his or her administrative remedies under such claims procedures.
|
12.5
|
Discretion of Appeals Committee.
All interpretations, determinations and decisions of the Appeals Committee with respect to any claim shall be made in its sole discretion, and shall be final and conclusive.
|
13.1
|
Assignment.
No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)).
|
13.2
|
No Legal or Equitable Rights or Interest.
No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Company, an Affiliate, or any public parent company of the Company. The right and power of the Company, its Affiliates, or any public parent company of the Company to dismiss or discharge an Employee is expressly reserved. The Company, its Affiliates, and any public parent company of the Company make no representations or warranties as to the tax consequences to a Participant or a Participant’s beneficiaries resulting from a deferral of income pursuant to the Plan.
|
13.3
|
No Employment Contract.
Nothing contained herein shall be construed to constitute a contract of employment between an Employee and the Company, an Affiliate, or any public parent company of the Company.
|
13.4
|
Notice.
Any notice or filing required or permitted to be delivered to the Committee under this Plan shall be delivered in writing, in person, or through such electronic means as is established by the Committee. Notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Written transmission shall be sent by certified mail to:
|
13.5
|
Headings.
The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control.
|
13.6
|
Invalid or Unenforceable Provisions.
If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Committee may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included.
|
13.7
|
Lost Participants or Beneficiaries.
Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his or her current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments until contact with the payee is restored.
|
13.8
|
Facility of Payment to a Minor.
If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Committee may, in its discretion, make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence, or (ii) to the conservator or committee or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Committee, the Company, any Affiliate, any public parent company of the Company, and the Plan from further liability on account thereof.
|
13.9
|
Governing Law.
To the extent not preempted by ERISA, the laws of the State of Delaware shall govern the construction and administration of the Plan.
|
|
Year Ended June 30,
|
|||||||||||||
(Dollars in millions, except for ratios)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||
Earnings/(loss) from continuing operations before income taxes and noncontrolling interest
|
139.7
|
|
|
112.5
|
|
|
67.4
|
|
|
(23.9
|
)
|
|
18.6
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Plus Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
88.5
|
|
|
105.0
|
|
|
163.1
|
|
|
204.6
|
|
|
185.1
|
|
Capital interest
|
3.1
|
|
|
1.6
|
|
|
2.5
|
|
|
2.3
|
|
|
0.6
|
|
Estimated interest within rental expense
|
4.1
|
|
|
4.2
|
|
|
3.4
|
|
|
3.3
|
|
|
4.7
|
|
Total Fixed Charges
|
95.7
|
|
|
110.8
|
|
|
169.0
|
|
|
210.2
|
|
|
190.4
|
|
Plus: amortization of capitalized interest
|
0.4
|
|
|
0.3
|
|
|
0.6
|
|
|
0.3
|
|
|
1.0
|
|
Less: Interest expense capitalized
|
3.1
|
|
|
1.6
|
|
|
2.5
|
|
|
2.3
|
|
|
0.6
|
|
Earnings
|
232.7
|
|
|
222.0
|
|
|
234.5
|
|
|
184.3
|
|
|
209.4
|
|
Ratio of earnings to fixed charges
(1)
|
2.4
|
|
|
2.0
|
|
|
1.4
|
|
|
*
|
|
|
1.1
|
|
Shortfall
|
|
|
|
|
|
|
(25.9
|
)
|
|
|
|
*
|
Ratios not meaningful
|
(1)
|
The ratio of earnings to fixed charges is calculated by dividing the sum of earnings from continuing operations before income taxes, equity in earnings (loss) from non-consolidated investments and fixed charges, by fixed charges. Fixed charges consist of interest expenses, capitalized interest and imputed interest on our leased obligations. For fiscal year 2013, earnings were insufficient to cover fixed charges by $25.9 million, respectively. For fiscal year 2012, 2014, and 2015 the ratio of earnings to fixed charges was 1.1, 1.4, and 2.0, respectively.
|
|
|
|
Exhibits 21.1
|
||||
|
|
|
|
|
|
|
|
CATALENT, INC. SUBSIDIARIES
|
|||||||
As of June 30, 2016
|
|||||||
NAME (STATE OF ORGANIZATION)
|
|
||||||
WHOLLY OWNED SUBSIDIARIES OF CATALENT, INC.
|
1
|
Catalent Argentina S.A.I.C. (ARGENTINA)
|
2
|
Catalent Australia Holding Pty Ltd (AUSTRALIA)
|
3
|
Catalent Australia Pty Ltd (AUSTRALIA)
|
4
|
Catalent Belgium Holding S.A. (BELGIUM)
|
5
|
Catalent Belgium S.A. (BELGIUM)
|
6
|
Catalent Brasil Ltda (BAZIL)
|
7
|
Catalent China Holdings Limited (CAYMAN ISLANDS)
|
8
|
Catalent Cosmetics AG (SWITZERLAND)
|
9
|
Catalent CTS (Edinburgh) Limited (UNITED KINGDOM)
|
10
|
Catalent CTS (Kansas City), LLC (DELAWARE)
|
11
|
Catalent CTS (Singapore) Pvt Ltd (SINGAPORE)
|
12
|
Catalent CTS Informatics, Inc. (DELAWARE)
|
13
|
Catalent CTS UK Holding Limited (UNITED KINGDOM)
|
14
|
Catalent CTS, LLC (DELAWARE)
|
15
|
Catalent France Beinheim S.A. (FRANCE)
|
16
|
Catalent France Limoges Holding S.A.S. (FRANCE)
|
17
|
Catalent France Limoges S.A.S. (FRANCE)
|
18
|
Catalent Germany Eberbach GmbH (GERMANY)
|
19
|
Catalent Germany Holding II GmbH (GERMANY)
|
20
|
Catalent Germany Holding III GmbH (GERMANY)
|
21
|
Catalent Germany Schorndorf GmbH (GERMANY)
|
22
|
Catalent Italy Holding Srl (ITALY)
|
23
|
Catalent Italy S.p.A. (ITALY)
|
24
|
Catalent Japan K.K. (JAPAN)
|
25
|
Catalent Netherlands Holding B.V. (NETHERLANDS)
|
26
|
Catalent Pharma Solutions GmbH (SWITZERLAND)
|
27
|
Catalent Pharma Solutions Limited (UNITED KINGDOM)
|
28
|
Catalent Pharma Solutions, Inc. (DELAWARE)
|
29
|
Catalent Pharma Solutions, LLC (DELAWARE)
|
30
|
Catalent Pharmaceutical Consulting (Shanghai) Co., Ltd. (CHINA)
|
31
|
Catalent (Shanghai) Clinical Trial Supplies Co Ltd. (CHINA)
|
32
|
Catalent Singapore Holdings Pte. Ltd. (SINGAPORE)
|
33
|
Catalent U.K. Packaging Limited (UNITED KINGDOM)
|
34
|
Catalent U.K. Swindon Zydis Limited (UNITED KINGDOM)
|
35
|
Catalent Uruguay S.A. (URUGUAY)
|
36
|
Catalent US Holding I, LLC (DELAWARE)
|
37
|
Catalent US Holding II, LLC (DELAWARE)
|
38
|
Catalent USA Packaging, LLC (DELAWARE)
|
39
|
Catalent USA Woodstock, Inc. (ILLINOIS)
|
40
|
Micron Holding Company, Inc. (DELAWARE)
|
41
|
Micron Technologies, Inc. (PENNSYLVANIA)
|
42
|
Micron Technologies Limited (UNITED KINGDOM)
|
43
|
MTI Pharma Solutions Limited (UNITED KINGDOM)
|
44
|
MTI Pharma Solutions, Inc. (DELAWARE)
|
45
|
Pharmapak Technologies Pty. Ltd. (AUSTRALIA)
|
46
|
PTS Intermediate Holdings LLC (DELAWARE)
|
47
|
R.P. Scherer Technologies, LLC (NEVADA)
|
48
|
Redwood Bioscience Inc. (DELAWARE)
|
49
|
Zhejiang Catalent Jiang Yuan Tang Biotechnology Co., Ltd. (CHINA)
|
50
|
R.P. Scherer DDV B.V. (NETHERLANDS)
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
June 30, 2016
of Catalent, 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.
|
/s/ JOHN R. CHIMINSKI
|
John R. Chiminski
|
President and Chief Executive Officer
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
June 30, 2016
of Catalent, 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.
|
/s/ MATTHEW M. WALSH
|
Matthew M. Walsh
|
Executive Vice President and
|
Chief Financial Officer
|
(Principal Financial Officer)
|
/s/ JOHN R. CHIMINSKI
|
John R. Chiminski
|
President and
|
Chief Executive Officer
|
/s/ MATTHEW M. WALSH
|
Matthew M. Walsh
|
Executive Vice President and
|
Chief Financial Officer
|