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Delaware
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20-8737688
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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14 Schoolhouse Road
Somerset, New Jersey
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08873
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.01 par value per share
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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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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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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Item 16.
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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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•
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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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•
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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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•
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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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•
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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.
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•
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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.
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•
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Our global operations are subject to economic, political and regulatory risks, including the risks of changing regulatory standards or changing interpretations of existing standards, that could affect the profitability of our operations or require costly changes to our procedures.
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•
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The referendum in the United Kingdom (the "U.K.") and resulting decision of the U.K. government to consider exiting from the European Union could have future adverse effects on our revenue and costs, and therefore our profitability.
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•
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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.
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•
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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.
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•
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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.
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•
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Changes in market access or healthcare reimbursement for our customers’ products in the United States or internationally, including the possible repeal or replacement of the Affordable Care Act in the United States, could adversely affect our results of operations and financial condition by affecting demand for our offerings.
|
•
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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.
|
•
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Tax legislation initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.
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•
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Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
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•
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Changes to the estimated future profitability of the business may require that we establish an additional valuation allowance against all or some portion of our net U.S. deferred tax assets.
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•
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We are dependent on key personnel.
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•
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We use advanced information and communication systems to run our operations, compile and analyze financial and operational data, and communicate among our employees, customers, and counter-parties, and the risks generally associated with such information and communications systems could adversely affect our results of operations.
|
•
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We engage, from time to time, 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.
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•
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Our offerings and our customers’ products may infringe on the intellectual property rights of third parties.
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•
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We are subject to environmental, health and safety laws and regulations, which could increase our costs and restrict our operations in the future.
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•
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We are subject to labor and employment laws and regulations, which could increase our costs and restrict our operations in the future.
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•
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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.
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•
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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.
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ITEM 1.
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BUSINESS
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Segment
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Offerings and Services
|
|
Fiscal 2017
Revenue*
|
||
Softgel Technologies
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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 plant-derived materials).
|
|
$
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855.3
|
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Drug Delivery Solutions
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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; biologics manufacturing; analytical and bioanalytical development; and testing services.
|
|
$
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910.1
|
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Clinical Supply Services
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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.
|
|
$
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348.8
|
|
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North America
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Europe
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South America
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Asia Pacific
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Total
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Approximate Number of Employees as of June 30, 2017
|
5,200
|
3,900
|
900
|
800
|
10,800
|
ITEM 1A.
|
RISK FACTORS
|
•
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properly anticipate and satisfy customer needs, including increasing demand for lower cost products;
|
•
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enhance, innovate, develop and manufacture new offerings in an economical and timely manner;
|
•
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differentiate our offerings from competitors’ offerings;
|
•
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achieve positive clinical outcomes for our customers’ new products;
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•
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meet safety requirements and other regulatory requirements of governmental agencies;
|
•
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obtain valid and enforceable intellectual property rights; and
|
•
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avoid infringing the proprietary rights of third parties.
|
•
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facilitate the manufacture and distribution of thousands of inventory items in, to and from our facilities;
|
•
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receive, process and ship orders on a timely basis;
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•
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manage the accurate billing and collections for roughly one thousand customers;
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•
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create, compile, and retain testing and other product-related data necessary for meeting our and our customer's regulatory obligations.
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•
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manage the accurate accounting and payment for thousands of vendors;
|
•
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schedule and operate our global network of development, manufacturing and packaging facilities;
|
•
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document various aspects of our activities, including the agreements we make with suppliers and customers;
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•
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compile financial and other operational data into reports necessary to manage our business and comply with various regulatory or contractual obligations, including obligations under our bank loans, the indenture governing the Notes, the federal securities laws and the Code and other applicable state, local and foreign tax laws; and
|
•
|
communicate among our
10,800
employees spread across
thirty-five
facilities over five continents.
|
•
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pay substantial damages (potentially including treble damages in the United States);
|
•
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cease the manufacture, use or sale of the infringing offerings or processes;
|
•
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discontinue the use of the infringing technology;
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•
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expend significant resources to develop non-infringing technology;
|
•
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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 and our Senior Euro-denominated Notes, are at variable rates of interest;
|
•
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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 (though our board has implemented shareholder proxy access, beginning with our 2018 annual meeting of shareholders);
|
•
|
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 (a level that our board will recommend be reduced to a simple majority, subject to shareholder approval at our 2017 annual meeting of shareholders); 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 (though our board will be reducing the threshold for amendment of our bylaws to a simple majority, subject to shareholder approval at our 2017 annual meeting of shareholders).
|
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
|
Windsor
|
|
Canada
|
|
North America
|
|
Softgel
|
|
125,892
|
|
|
Owned
|
7
|
Sorocaba
|
|
Brazil
|
|
South America
|
|
Softgel
|
|
124,685
|
|
|
Owned
|
8
|
Strathroy
|
|
Canada
|
|
North America
|
|
Softgel
|
|
118,009
|
|
|
Owned
|
9
|
Kakegawa
(1)
|
|
Japan
|
|
Asia Pacific
|
|
Softgel
|
|
104,500
|
|
|
Owned
|
10
|
Aprilia
|
|
Italy
|
|
Europe
|
|
Softgel
|
|
92,010
|
|
|
Owned
|
11
|
Beinheim
|
|
France
|
|
Europe
|
|
Softgel
|
|
78,100
|
|
|
Owned
|
12
|
Dee Why
|
|
Australia
|
|
Asia Pacific
|
|
Softgel
|
|
59,836
|
|
|
Leased
|
13
|
Indaiatuba
|
|
Brazil
|
|
South America
|
|
Softgel
|
|
53,800
|
|
|
Owned
|
14
|
Woodstock, IL
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
421,665
|
|
|
Owned
|
15
|
Kansas City, MO
(1)
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
329,394
|
|
|
Owned
|
16
|
Brussels
|
|
Belgium
|
|
Europe
|
|
Drug Delivery Solutions
|
|
265,287
|
|
|
Owned
|
17
|
Somerset, NJ
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions / Corporate HQ
|
|
265,000
|
|
|
Owned
|
18
|
Swindon
|
|
United Kingdom
|
|
Europe
|
|
Drug Delivery Solutions
|
|
253,314
|
|
|
Owned
|
19
|
Morrisville, NC
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
186,406
|
|
|
Leased
|
20
|
Winchester, KY
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
180,000
|
|
|
Owned
|
21
|
Limoges
|
|
France
|
|
Europe
|
|
Drug Delivery Solutions
|
|
179,000
|
|
|
Owned
|
22
|
Schorndorf
(1)
|
|
Germany
|
|
Europe
|
|
Drug Delivery Solutions
|
|
166,027
|
|
|
Owned
|
23
|
Madison, WI
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
102,723
|
|
|
Leased
|
24
|
Malvern, PA
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
84,000
|
|
|
Leased
|
25
|
San Diego, CA
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
66,244
|
|
|
Leased
|
26
|
Dartford
|
|
United Kingdom
|
|
Europe
|
|
Drug Delivery Solutions
|
|
20,250
|
|
|
Leased
|
27
|
Emeryville, CA
|
|
USA
|
|
North America
|
|
Drug Delivery Solutions
|
|
6,418
|
|
|
Leased
|
28
|
Philadelphia, PA
|
|
USA
|
|
North America
|
|
Clinical Supply Services
|
|
206,878
|
|
|
Leased/Owned
|
29
|
Bathgate
|
|
United Kingdom
|
|
Europe
|
|
Clinical Supply Services
|
|
191,000
|
|
|
Owned
|
30
|
Kansas City, MO
(1)
|
|
USA
|
|
North America
|
|
Clinical Supply Services
|
|
80,606
|
|
|
Owned
|
31
|
Bolton
|
|
United Kingdom
|
|
Europe
|
|
Clinical Supply Services
|
|
60,830
|
|
|
Owned
|
32
|
Schorndorf
(1)
|
|
Germany
|
|
Europe
|
|
Clinical Supply Services
|
|
54,693
|
|
|
Owned
|
33
|
Shanghai
|
|
China
|
|
Asia Pacific
|
|
Clinical Supply Services
|
|
31,000
|
|
|
Leased
|
34
|
Singapore
|
|
Singapore
|
|
Asia Pacific
|
|
Clinical Supply Services
|
|
13,379
|
|
|
Leased
|
35
|
Kakegawa
(1)
|
|
Japan
|
|
Asia Pacific
|
|
Clinical Supply Services
|
|
2,800
|
|
|
Owned
|
|
Total
|
|
|
|
|
|
|
|
5,270,429
|
|
|
|
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, 2017:
|
|
|
|
|
|
|
|
High
|
$38.73
|
|
$30.22
|
|
$27.43
|
|
$26.95
|
Low
|
$27.48
|
|
$25.51
|
|
$21.83
|
|
$22.52
|
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)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
2,075.4
|
|
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
|
$
|
1,827.7
|
|
|
$
|
1,800.3
|
|
Cost of sales
|
1,420.8
|
|
|
1,260.5
|
|
|
1,215.5
|
|
|
1,229.1
|
|
|
1,231.7
|
|
|||||
Gross margin
|
654.6
|
|
|
587.6
|
|
|
615.3
|
|
|
598.6
|
|
|
568.6
|
|
|||||
Selling, general and administrative expenses
|
402.6
|
|
|
358.1
|
|
|
337.3
|
|
|
334.8
|
|
|
340.6
|
|
|||||
Impairment charges and (gain)/loss on sale of assets
|
9.8
|
|
|
2.7
|
|
|
4.7
|
|
|
3.2
|
|
|
5.2
|
|
|||||
Restructuring and other
|
8.0
|
|
|
9.0
|
|
|
13.4
|
|
|
19.7
|
|
|
18.4
|
|
|||||
Operating earnings
|
234.2
|
|
|
217.8
|
|
|
259.9
|
|
|
240.9
|
|
|
204.4
|
|
|||||
Interest expense, net
|
90.1
|
|
|
88.5
|
|
|
105.0
|
|
|
163.1
|
|
|
203.2
|
|
|||||
Other (income)/expense, net
|
8.5
|
|
|
(15.6
|
)
|
|
42.4
|
|
|
10.4
|
|
|
25.1
|
|
|||||
Earnings/(loss) from continuing operations before income taxes
|
135.6
|
|
|
144.9
|
|
|
112.5
|
|
|
67.4
|
|
|
(23.9
|
)
|
|||||
Income tax expense/(benefit)
|
25.8
|
|
|
33.7
|
|
|
(97.7
|
)
|
|
49.5
|
|
|
27.0
|
|
|||||
Earnings/(loss) from continuing operations
|
109.8
|
|
|
111.2
|
|
|
210.2
|
|
|
17.9
|
|
|
(50.9
|
)
|
|||||
Earnings/(loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(2.7
|
)
|
|
1.2
|
|
|||||
Net earnings/(loss)
|
109.8
|
|
|
111.2
|
|
|
210.3
|
|
|
15.2
|
|
|
(49.7
|
)
|
|||||
Less: Net earnings/(loss) attributable to noncontrolling interest, net of tax
|
—
|
|
|
(0.3
|
)
|
|
(1.9
|
)
|
|
(1.0
|
)
|
|
(0.1
|
)
|
|||||
Net earnings/(loss) attributable to Catalent
|
$
|
109.8
|
|
|
$
|
111.5
|
|
|
$
|
212.2
|
|
|
$
|
16.2
|
|
|
$
|
(49.6
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share attributable to Catalent common shareholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings/(loss) from continuing operations
|
$
|
0.88
|
|
|
$
|
0.89
|
|
|
$
|
1.77
|
|
|
$
|
0.25
|
|
|
$
|
(0.68
|
)
|
Net earnings/(loss)
|
0.88
|
|
|
0.89
|
|
|
1.77
|
|
|
0.22
|
|
|
(0.66
|
)
|
|||||
Diluted earnings per share attributable to Catalent common shareholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings/(loss) from continuing operations
|
$
|
0.87
|
|
|
$
|
0.89
|
|
|
$
|
1.75
|
|
|
$
|
0.25
|
|
|
$
|
(0.68
|
)
|
Net earnings/(loss)
|
0.87
|
|
|
0.89
|
|
|
1.75
|
|
|
0.21
|
|
|
(0.66
|
)
|
|
Year Ended June 30,
|
||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
288.3
|
|
|
$
|
131.6
|
|
|
$
|
151.3
|
|
|
$
|
74.4
|
|
|
$
|
106.4
|
|
Goodwill
|
1,044.1
|
|
|
996.5
|
|
|
1,061.5
|
|
|
1,097.1
|
|
|
1,023.4
|
|
|||||
Total assets
|
3,454.3
|
|
|
3,091.1
|
|
|
3,138.3
|
|
|
3,073.4
|
|
|
2,931.3
|
|
|||||
Long term debt, including current portion and other short term borrowing
|
2,079.7
|
|
|
1,860.5
|
|
|
1,880.8
|
|
|
2,693.8
|
|
|
2,673.4
|
|
|||||
Total liabilities
|
2,730.8
|
|
|
2,455.2
|
|
|
2,498.5
|
|
|
3,440.7
|
|
|
3,341.6
|
|
|||||
Total shareholders’ equity/(deficit)
|
$
|
723.5
|
|
|
$
|
635.9
|
|
|
$
|
634.0
|
|
|
$
|
(371.8
|
)
|
|
$
|
(410.3
|
)
|
|
Year Ended June 30,
|
||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
$
|
139.8
|
|
|
$
|
139.6
|
|
|
$
|
141.0
|
|
|
$
|
122.4
|
|
|
$
|
122.5
|
|
Net cash provided by/(used in) continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
299.5
|
|
|
155.3
|
|
|
171.7
|
|
|
180.2
|
|
|
139.1
|
|
|||||
Investing activities
|
(309.0
|
)
|
|
(137.7
|
)
|
|
(271.8
|
)
|
|
(175.2
|
)
|
|
(122.1
|
)
|
|||||
Financing activities
|
161.3
|
|
|
(30.8
|
)
|
|
196.5
|
|
|
(42.1
|
)
|
|
(49.3
|
)
|
|||||
Net cash provided by/(used in) discontinued operations:
|
—
|
|
|
—
|
|
|
0.1
|
|
|
2.1
|
|
|
(1.4
|
)
|
|||||
Effect of foreign currency on cash
|
$
|
4.9
|
|
|
$
|
(6.5
|
)
|
|
$
|
(19.6
|
)
|
|
$
|
3.0
|
|
|
$
|
1.1
|
|
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
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Net revenue
|
$
|
2,075.4
|
|
|
$
|
1,848.1
|
|
|
$
|
(54.8
|
)
|
|
$
|
282.1
|
|
|
15
|
%
|
Cost of sales
|
1,420.8
|
|
|
1,260.5
|
|
|
(31.9
|
)
|
|
192.2
|
|
|
15
|
%
|
||||
Gross margin
|
654.6
|
|
|
587.6
|
|
|
(22.9
|
)
|
|
89.9
|
|
|
15
|
%
|
||||
Selling, general and administrative expenses
|
402.6
|
|
|
358.1
|
|
|
(5.8
|
)
|
|
50.3
|
|
|
14
|
%
|
||||
Impairment charges and (gain)/loss on sale of assets
|
9.8
|
|
|
2.7
|
|
|
—
|
|
|
7.1
|
|
|
*
|
|
||||
Restructuring and other
|
8.0
|
|
|
9.0
|
|
|
0.3
|
|
|
(1.3
|
)
|
|
(14
|
)%
|
||||
Operating earnings
|
234.2
|
|
|
217.8
|
|
|
(17.4
|
)
|
|
33.8
|
|
|
16
|
%
|
||||
Interest expense, net
|
90.1
|
|
|
88.5
|
|
|
(2.6
|
)
|
|
4.2
|
|
|
5
|
%
|
||||
Other (income)/expense, net
|
8.5
|
|
|
(15.6
|
)
|
|
(2.6
|
)
|
|
26.7
|
|
|
*
|
|
||||
Earnings from continuing operations, before income taxes
|
135.6
|
|
|
144.9
|
|
|
(12.2
|
)
|
|
2.9
|
|
|
2
|
%
|
||||
Income tax expense
|
25.8
|
|
|
33.7
|
|
|
(2.7
|
)
|
|
(5.2
|
)
|
|
(15
|
)%
|
||||
Earnings from continuing operations
|
109.8
|
|
|
111.2
|
|
|
(9.5
|
)
|
|
8.1
|
|
|
7
|
%
|
||||
Net earnings from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
*
|
|
||||
Net earnings
|
109.8
|
|
|
111.2
|
|
|
(9.5
|
)
|
|
8.1
|
|
|
7
|
%
|
||||
Less: Net earnings/(loss) attributable to noncontrolling
interest, net of tax
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
0.3
|
|
|
*
|
|
||||
Net earnings attributable to Catalent
|
$
|
109.8
|
|
|
$
|
111.5
|
|
|
$
|
(9.5
|
)
|
|
$
|
7.8
|
|
|
7
|
%
|
|
Fiscal Year Ended
June 30, |
|
FX impact
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Softgel Technologies
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
855.3
|
|
|
$
|
775.0
|
|
|
$
|
(11.3
|
)
|
|
$
|
91.6
|
|
|
12
|
%
|
Segment EBITDA
|
190.5
|
|
|
163.8
|
|
|
(6.3
|
)
|
|
33.0
|
|
|
20
|
%
|
||||
Drug Delivery Solutions
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
910.1
|
|
|
806.4
|
|
|
(22.8
|
)
|
|
126.5
|
|
|
16
|
%
|
||||
Segment EBITDA
|
242.4
|
|
|
215.2
|
|
|
(9.6
|
)
|
|
36.8
|
|
|
17
|
%
|
||||
Clinical Supply Services
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
348.8
|
|
|
307.5
|
|
|
(21.3
|
)
|
|
62.6
|
|
|
20
|
%
|
||||
Segment EBITDA
|
54.9
|
|
|
53.2
|
|
|
(5.6
|
)
|
|
7.3
|
|
|
14
|
%
|
||||
Inter-segment revenue elimination
|
(38.8
|
)
|
|
(40.8
|
)
|
|
0.6
|
|
|
1.4
|
|
|
(3
|
)%
|
||||
Unallocated Costs
(1)
|
(115.6
|
)
|
|
(57.9
|
)
|
|
2.0
|
|
|
(59.7
|
)
|
|
*
|
|
||||
Combined Total
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
2,075.4
|
|
|
$
|
1,848.1
|
|
|
$
|
(54.8
|
)
|
|
$
|
282.1
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA from continuing operations
|
$
|
372.2
|
|
|
$
|
374.3
|
|
|
$
|
(19.5
|
)
|
|
$
|
17.4
|
|
|
5
|
%
|
(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)
|
2017
|
|
2016
|
||||
Impairment charges and gain/(loss) on sale of assets
|
$
|
(9.8
|
)
|
|
$
|
(2.7
|
)
|
Equity compensation
|
(20.9
|
)
|
|
(10.8
|
)
|
||
Restructuring and other special items
(2)
|
(33.5
|
)
|
|
(27.2
|
)
|
||
Noncontrolling interest
|
—
|
|
|
0.3
|
|
||
Other income/(expense), net
|
(8.5
|
)
|
|
15.6
|
|
||
Non-allocated corporate costs, net
|
(42.9
|
)
|
|
(33.1
|
)
|
||
Total unallocated costs
|
$
|
(115.6
|
)
|
|
$
|
(57.9
|
)
|
(2)
|
Segment results do not include restructuring and certain acquisition-related costs.
|
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Earnings from continuing operations
|
$
|
109.8
|
|
|
$
|
111.2
|
|
Depreciation and amortization
|
146.5
|
|
|
140.6
|
|
||
Interest expense, net
|
90.1
|
|
|
88.5
|
|
||
Income tax expense
|
25.8
|
|
|
33.7
|
|
||
Noncontrolling interest
|
—
|
|
|
0.3
|
|
||
EBITDA from continuing operations
|
$
|
372.2
|
|
|
$
|
374.3
|
|
|
2017 vs. 2016
|
||||
Factors Contributing to Year-Over-Year Change
|
Fiscal Year Ended
June 30, |
||||
|
Net Revenue
|
|
Segment EBITDA
|
||
Revenue / Segment EBITDA without acquisitions
|
6
|
%
|
|
15
|
%
|
Impact of acquisitions
|
6
|
%
|
|
5
|
%
|
Constant currency change
|
12
|
%
|
|
20
|
%
|
Foreign exchange fluctuation
|
(2
|
)%
|
|
(4
|
)%
|
Total % Change
|
10
|
%
|
|
16
|
%
|
|
2017 vs. 2016
|
||||
Factors Contributing to Year-Over-Year Change
|
Fiscal Year Ended
June 30, |
||||
|
Net Revenue
|
|
Segment EBITDA
|
||
Revenue / Segment EBITDA without acquisitions
|
13
|
%
|
|
15
|
%
|
Impact of acquisitions
|
3
|
%
|
|
2
|
%
|
Constant currency change
|
16
|
%
|
|
17
|
%
|
Foreign exchange fluctuation
|
(3
|
)%
|
|
(4
|
)%
|
Total % Change
|
13
|
%
|
|
13
|
%
|
|
2017 vs. 2016
|
||||
Factors Contributing to Year-Over-Year Change
|
Fiscal Year Ended
June 30, |
||||
|
Net Revenue
|
|
Segment EBITDA
|
||
Revenue / Segment EBITDA without acquisitions
|
20
|
%
|
|
14
|
%
|
Impact of acquisitions
|
—
|
%
|
|
—
|
%
|
Constant currency change
|
20
|
%
|
|
14
|
%
|
Foreign exchange fluctuation
|
(6
|
)%
|
|
(11
|
)%
|
Total % Change
|
14
|
%
|
|
3
|
%
|
|
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
|
||
Revenue / Segment EBITDA without acquisitions
|
6
|
%
|
|
4
|
%
|
Impact of acquisitions
|
1
|
%
|
|
—
|
%
|
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
|
||
Revenue / Segment EBITDA without acquisitions
|
3
|
%
|
|
(5
|
)%
|
Impact of acquisitions
|
1
|
%
|
|
1
|
%
|
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
|
||
Revenue / Segment EBITDA
|
10
|
%
|
|
(2
|
)%
|
Impact of acquisitions
|
—
|
%
|
|
—
|
%
|
Constant currency change
|
10
|
%
|
|
(2
|
)%
|
Foreign exchange fluctuation
|
(3
|
)%
|
|
(4
|
)%
|
Total % Change
|
7
|
%
|
|
(6
|
)%
|
|
Fiscal Year Ended
June 30, |
|
|
||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
$ Change
|
||||||
Net cash provided by/(used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
299.5
|
|
|
$
|
155.3
|
|
|
$
|
144.2
|
|
Investing activities
|
$
|
(309.0
|
)
|
|
$
|
(137.7
|
)
|
|
$
|
(171.3
|
)
|
Financing activities
|
$
|
161.3
|
|
|
$
|
(30.8
|
)
|
|
$
|
192.1
|
|
|
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
|
)
|
•
|
a pledge of 100% of the capital stock of Operating Company and 100% of the equity interests directly held by Operating Company and each guarantor in any wholly owned material subsidiary of Operating Company 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 Operating Company 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,
2017 |
|
June 30,
2016 |
||||
Earnings from continuing operations
|
$
|
109.8
|
|
|
$
|
111.2
|
|
Interest expense, net
|
90.1
|
|
|
88.5
|
|
||
Income tax expense
(1)
|
25.8
|
|
|
33.7
|
|
||
Depreciation and amortization
|
146.5
|
|
|
140.6
|
|
||
Noncontrolling interest
|
—
|
|
|
0.3
|
|
||
EBITDA from continuing operations
|
372.2
|
|
|
374.3
|
|
||
Equity compensation
|
20.9
|
|
|
10.8
|
|
||
Impairment charges and (gain)/loss on sale of assets
|
9.8
|
|
|
2.7
|
|
||
Financing related expenses and other
|
4.3
|
|
|
—
|
|
||
U.S. GAAP Restructuring and other
|
8.0
|
|
|
9.0
|
|
||
Acquisition, integration and other special items
|
25.6
|
|
|
18.2
|
|
||
Foreign exchange loss/(gain) (included in other, net)
(2)
|
9.6
|
|
|
(10.5
|
)
|
||
Other adjustments
|
(0.4
|
)
|
|
(3.3
|
)
|
||
Adjusted EBITDA
|
$
|
450.0
|
|
|
$
|
401.2
|
|
FX impact (unfavorable)
|
$
|
(18.9
|
)
|
|
|
||
Adjusted EBITDA - Constant Currency
|
$
|
468.9
|
|
|
|
(1)
|
Represents the amount of income tax-related expense recorded within our net earnings/(loss) that may not result in cash payment or receipt.
|
(2)
|
Foreign exchange loss of
$9.6 million
for the twelve months ended
June 30, 2017
included
$7.8 million
of unrealized foreign currency exchange rate losses primarily driven by foreign currency exchange losses of $21.3 million due to the ineffective portion of the net investment hedge related to the Euro-denominated debt, partially offset by gains of $13.2 million related to inter-company loans denominated in a currency different from the functional currency of either the borrower or the lender. 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
$1.8 million
. Inter-company loans are between our entities and do not reflect the ongoing results of the Company’s trade operations.
|
(Dollars in millions)
|
Total
|
|
Fiscal 2018
|
|
Fiscal 2019 - Fiscal 2020
|
|
Fiscal 2021 - Fiscal 2022
|
|
Thereafter
|
|||||||||||
Long-term debt obligations
(1)
|
$
|
2,046.2
|
|
|
$
|
22.3
|
|
|
$
|
39.5
|
|
|
$
|
1,554.0
|
|
|
$
|
430.4
|
|
|
Interest on long-term obligations
(2)
|
453.9
|
|
|
91.2
|
|
|
190.3
|
|
|
114.6
|
|
|
57.8
|
|
||||||
Capital lease obligations
(3)
|
53.3
|
|
|
2.3
|
|
|
5.3
|
|
|
6.4
|
|
|
39.3
|
|
||||||
Operating lease obligations
(4)
|
52.2
|
|
|
11.0
|
|
|
13.8
|
|
|
10.5
|
|
|
16.9
|
|
||||||
Purchase obligations
(5)
|
57.0
|
|
|
51.0
|
|
|
3.8
|
|
|
2.2
|
|
|
—
|
|
||||||
Other long-term liabilities
(6)
|
60.5
|
|
|
3.5
|
|
|
7.5
|
|
|
7.8
|
|
|
41.7
|
|
||||||
Total
|
$
|
2,723.1
|
|
|
$
|
181.3
|
|
|
$
|
260.2
|
|
|
$
|
1,695.5
|
|
|
$
|
586.1
|
|
(1)
|
Represents gross maturities of our long-term debt obligations excluding capital lease obligations as of
June 30, 2017
.
|
(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, 2017
.
|
(3)
|
Represents maturities of our capital lease obligations included within long-term debt as of
June 30, 2017
.
|
(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,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenue
|
$
|
2,075.4
|
|
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
Cost of sales
|
1,420.8
|
|
|
1,260.5
|
|
|
1,215.5
|
|
|||
Gross margin
|
654.6
|
|
|
587.6
|
|
|
615.3
|
|
|||
Selling, general and administrative expenses
|
402.6
|
|
|
358.1
|
|
|
337.3
|
|
|||
Impairment charges and (gain)/loss on sale of assets
|
9.8
|
|
|
2.7
|
|
|
4.7
|
|
|||
Restructuring and other
|
8.0
|
|
|
9.0
|
|
|
13.4
|
|
|||
Operating earnings
|
234.2
|
|
|
217.8
|
|
|
259.9
|
|
|||
Interest expense, net
|
90.1
|
|
|
88.5
|
|
|
105.0
|
|
|||
Other (income)/expense, net
|
8.5
|
|
|
(15.6
|
)
|
|
42.4
|
|
|||
Earnings from continuing operations before income taxes
|
135.6
|
|
|
144.9
|
|
|
112.5
|
|
|||
Income tax expense/(benefit)
|
25.8
|
|
|
33.7
|
|
|
(97.7
|
)
|
|||
Earnings from continuing operations
|
109.8
|
|
|
111.2
|
|
|
210.2
|
|
|||
Net earnings/(loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Net earnings
|
109.8
|
|
|
111.2
|
|
|
210.3
|
|
|||
Less: Net (loss) attributable to noncontrolling interest, net of tax
|
—
|
|
|
(0.3
|
)
|
|
(1.9
|
)
|
|||
Net earnings attributable to Catalent
|
$
|
109.8
|
|
|
$
|
111.5
|
|
|
$
|
212.2
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|||||||
Earnings per share attributable to Catalent:
|
|
|
|
|
|
|
|||||
Basic
|
|
|
|
|
|
|
|||||
Net earnings
|
0.88
|
|
|
0.89
|
|
|
1.77
|
|
|||
Diluted
|
|
|
|
|
|
||||||
Net earnings
|
0.87
|
|
|
0.89
|
|
|
1.75
|
|
|
Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net earnings
|
$
|
109.8
|
|
|
$
|
111.2
|
|
|
$
|
210.3
|
|
Other comprehensive income/(loss), net of tax
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(31.9
|
)
|
|
(118.8
|
)
|
|
(144.0
|
)
|
|||
Defined benefit pension plan
|
13.0
|
|
|
(9.1
|
)
|
|
(6.4
|
)
|
|||
Available for sale investment adjustments
|
10.5
|
|
|
—
|
|
|
—
|
|
|||
Deferred compensation
|
—
|
|
|
(3.8
|
)
|
|
0.6
|
|
|||
Other comprehensive income/(loss), net of tax
|
(8.4
|
)
|
|
(131.7
|
)
|
|
(149.8
|
)
|
|||
Comprehensive income/(loss)
|
101.4
|
|
|
(20.5
|
)
|
|
60.5
|
|
|||
Comprehensive income/(loss) attributable to noncontrolling interest
|
—
|
|
|
(0.3
|
)
|
|
(1.9
|
)
|
|||
Comprehensive income/(loss) attributable to Catalent
|
$
|
101.4
|
|
|
$
|
(20.2
|
)
|
|
$
|
62.4
|
|
|
June 30,
2017 |
|
June 30,
2016 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
288.3
|
|
|
$
|
131.6
|
|
Trade receivables, net
|
488.8
|
|
|
414.8
|
|
||
Inventories
|
184.9
|
|
|
154.8
|
|
||
Prepaid expenses and other
|
97.8
|
|
|
89.0
|
|
||
Total current assets
|
1,059.8
|
|
|
790.2
|
|
||
Property, plant, and equipment, net
|
995.9
|
|
|
905.8
|
|
||
Other assets:
|
|
|
|
||||
Goodwill
|
1,044.1
|
|
|
996.5
|
|
||
Other intangibles, net
|
273.1
|
|
|
294.0
|
|
||
Deferred income taxes
|
53.9
|
|
|
37.5
|
|
||
Other
|
27.5
|
|
|
67.1
|
|
||
Total assets
|
$
|
3,454.3
|
|
|
$
|
3,091.1
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND SHAREHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term obligations and other short-term borrowings
|
$
|
24.6
|
|
|
$
|
27.7
|
|
Accounts payable
|
163.2
|
|
|
143.7
|
|
||
Other accrued liabilities
|
281.2
|
|
|
219.8
|
|
||
Total current liabilities
|
469.0
|
|
|
391.2
|
|
||
Long-term obligations, less current portion
|
2,055.1
|
|
|
1,832.8
|
|
||
Pension liability
|
129.5
|
|
|
151.0
|
|
||
Deferred income taxes
|
31.7
|
|
|
41.4
|
|
||
Other liabilities
|
45.5
|
|
|
38.8
|
|
||
Commitment and contingencies (see Note 14)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Shareholders’ equity/(deficit):
|
|
|
|
||||
Common stock $0.01 par value; 1.0 billion and 1.0 billion shares authorized in 2017 and 2016, respectively; 125,049,867 and 124,712,240 shares issued and outstanding in 2017 and 2016, respectively.
|
1.3
|
|
|
1.2
|
|
||
Preferred stock $0.01 par value; 100 million and 100 million authorized in 2017 and 2016, respectively, 0 issued and outstanding in 2017 and 2016.
|
—
|
|
|
—
|
|
||
Additional paid in capital
|
1,992.0
|
|
|
1,976.5
|
|
||
Accumulated deficit
|
(955.7
|
)
|
|
(1,036.1
|
)
|
||
Accumulated other comprehensive income/(loss)
|
(314.1
|
)
|
|
(305.7
|
)
|
||
Total shareholders’ equity
|
723.5
|
|
|
635.9
|
|
||
Total liabilities, redeemable noncontrolling interest and shareholders’ equity
|
$
|
3,454.3
|
|
|
$
|
3,091.1
|
|
|
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, 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
|
|
||||||
Cumulative effect of a change in accounting for income taxes (Note 1)
|
|
|
|
|
—
|
|
|
(29.4
|
)
|
|
|
|
|
|
(29.4
|
)
|
||||||||||
Stock option exercises
|
337.7
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
||||||||||
Equity compensation
|
|
|
|
|
20.9
|
|
|
|
|
|
|
|
|
20.9
|
|
|||||||||||
Cash paid, in lieu of equity, for tax withholding
|
|
|
|
|
(5.4
|
)
|
|
|
|
|
|
|
|
(5.4
|
)
|
|||||||||||
Net earnings
|
|
|
|
|
|
|
109.8
|
|
|
|
|
|
|
109.8
|
|
|||||||||||
Other comprehensive income /(loss), net of tax
|
|
|
|
|
|
|
|
|
(8.4
|
)
|
|
|
|
(8.4
|
)
|
|||||||||||
Balance at June 30, 2017
|
125,049.9
|
|
|
$
|
1.3
|
|
|
$
|
1,992.0
|
|
|
$
|
(955.7
|
)
|
|
$
|
(314.1
|
)
|
|
$
|
—
|
|
|
$
|
723.5
|
|
|
Year ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net earnings/(loss)
|
$
|
109.8
|
|
|
$
|
111.2
|
|
|
$
|
210.3
|
|
Net earnings/(loss) from discontinued operations
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Earnings from continuing operations
|
109.8
|
|
|
111.2
|
|
|
210.2
|
|
|||
Adjustments to reconcile (loss)/earnings from continued operations to net cash from operations:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
146.5
|
|
|
140.6
|
|
|
140.8
|
|
|||
Non-cash foreign currency transaction (gains)/losses, net
|
7.8
|
|
|
(10.9
|
)
|
|
(16.4
|
)
|
|||
Amortization and write off of debt financing costs
|
6.8
|
|
|
4.7
|
|
|
16.0
|
|
|||
Impairments charges and (gain)/loss on sale of assets
|
9.8
|
|
|
2.7
|
|
|
4.7
|
|
|||
Non-cash gain on acquisition
|
—
|
|
|
—
|
|
|
(8.9
|
)
|
|||
Call premium and financing fees paid
|
—
|
|
|
—
|
|
|
12.6
|
|
|||
Equity compensation
|
20.9
|
|
|
10.8
|
|
|
9.0
|
|
|||
Provision/(benefit) for deferred income taxes
|
(1.3
|
)
|
|
(15.3
|
)
|
|
(120.7
|
)
|
|||
Provision for bad debts and inventory
|
11.0
|
|
|
13.2
|
|
|
12.7
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
(Increase)/decrease in trade receivables
|
(54.9
|
)
|
|
(54.1
|
)
|
|
(7.5
|
)
|
|||
(Increase)/decrease in inventories
|
(13.5
|
)
|
|
(35.4
|
)
|
|
(19.2
|
)
|
|||
Increase/(decrease) in accounts payable
|
9.9
|
|
|
21.4
|
|
|
(11.7
|
)
|
|||
Other assets/accrued liabilities, net - current and non-current
|
46.7
|
|
|
(33.6
|
)
|
|
(49.9
|
)
|
|||
Net cash provided by/(used in) operating activities from continuing operations
|
299.5
|
|
|
155.3
|
|
|
171.7
|
|
|||
Net cash provided by/(used in) operating activities from discontinued operations
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Net cash provided by/(used in) operating activities
|
299.5
|
|
|
155.3
|
|
|
171.8
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Acquisition of property and equipment and other productive assets
|
(139.8
|
)
|
|
(139.6
|
)
|
|
(141.0
|
)
|
|||
Proceeds from sale of property and equipment
|
0.7
|
|
|
1.9
|
|
|
—
|
|
|||
Payment for acquisitions, net
|
(169.9
|
)
|
|
—
|
|
|
(130.8
|
)
|
|||
Net cash provided by/(used in) investing activities
|
(309.0
|
)
|
|
(137.7
|
)
|
|
(271.8
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Net change in other borrowings
|
(5.8
|
)
|
|
2.3
|
|
|
—
|
|
|||
Proceeds from borrowing, net
|
397.4
|
|
|
—
|
|
|
150.4
|
|
|||
Payments related to long-term obligations
|
(218.5
|
)
|
|
(18.6
|
)
|
|
(879.8
|
)
|
|||
Call premium and financing fees paid
|
(6.4
|
)
|
|
—
|
|
|
(12.6
|
)
|
|||
Purchase of redeemable noncontrolling interest shares
|
—
|
|
|
(5.8
|
)
|
|
—
|
|
|||
Equity contribution
|
—
|
|
|
—
|
|
|
948.8
|
|
|||
Cash paid, in lieu of equity, for tax withholding obligation
|
(5.4
|
)
|
|
(8.7
|
)
|
|
(10.3
|
)
|
|||
Net cash (used in)/provided by financing activities
|
161.3
|
|
|
(30.8
|
)
|
|
196.5
|
|
|||
Effect of foreign currency on cash
|
4.9
|
|
|
(6.5
|
)
|
|
(19.6
|
)
|
|||
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS
|
156.7
|
|
|
(19.7
|
)
|
|
76.9
|
|
|||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
|
131.6
|
|
|
151.3
|
|
|
74.4
|
|
|||
CASH AND EQUIVALENTS AT END OF PERIOD
|
$
|
288.3
|
|
|
$
|
131.6
|
|
|
$
|
151.3
|
|
SUPPLEMENTARY CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
80.8
|
|
|
$
|
82.4
|
|
|
$
|
107.1
|
|
Income taxes paid, net
|
$
|
39.8
|
|
|
$
|
40.6
|
|
|
$
|
34.0
|
|
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).
|
•
|
|
2
.
|
BUSINESS COMBINATIONS
|
3
.
|
GOODWILL
|
(Dollars in millions)
|
Softgel Technologies
|
|
Drug Delivery Solutions
|
|
Clinical Supply Services
|
|
Total
|
||||||||
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
|
|
||||
Additions/(impairments)
|
5.8
|
|
|
48.3
|
|
|
—
|
|
|
54.1
|
|
||||
Foreign currency translation adjustments
|
3.5
|
|
|
(6.2
|
)
|
|
(3.8
|
)
|
|
(6.5
|
)
|
||||
Balance at June 30, 2017
|
$
|
415.2
|
|
|
$
|
477.2
|
|
|
$
|
151.7
|
|
|
$
|
1,044.1
|
|
4
.
|
DEFINITE-LIVED LONG-LIVED ASSETS
|
(Dollars in millions)
|
Weighted Average Life
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
||||||
June 30, 2017
|
|
|
|
|
|
|
|
||||||
Amortized intangibles:
|
|
|
|
|
|
|
|
||||||
Core technology
|
18 years
|
|
$
|
170.3
|
|
|
$
|
(74.8
|
)
|
|
$
|
95.5
|
|
Customer relationships
|
14 years
|
|
253.0
|
|
|
(106.1
|
)
|
|
146.9
|
|
|||
Product relationships
|
12 years
|
|
206.9
|
|
|
(176.2
|
)
|
|
30.7
|
|
|||
Total intangible assets
|
|
|
$
|
630.2
|
|
|
$
|
(357.1
|
)
|
|
$
|
273.1
|
|
(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)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
||||||||||
Amortization expense
|
$
|
44.8
|
|
|
$
|
39.2
|
|
|
$
|
25.5
|
|
|
$
|
25.5
|
|
|
$
|
25.5
|
|
5
.
|
RESTRUCTURING AND OTHER COSTS
|
|
Year ended June 30,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Restructuring costs:
|
|
|
|
|
|
||||||
Employee-related reorganization
|
$
|
7.9
|
|
|
$
|
3.7
|
|
|
$
|
11.5
|
|
Asset impairments
|
—
|
|
|
0.4
|
|
|
—
|
|
|||
Facility exit and other costs
|
(1.7
|
)
|
|
4.9
|
|
|
1.9
|
|
|||
Total restructuring costs
|
$
|
6.2
|
|
|
$
|
9.0
|
|
|
$
|
13.4
|
|
Other - Temporary suspension customer claims
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total restructuring and other costs
|
$
|
8.0
|
|
|
$
|
9.0
|
|
|
$
|
13.4
|
|
6
.
|
LONG-TERM OBLIGATIONS AND OTHER SHORT-TERM BORROWINGS
|
(Dollars in millions)
|
Maturity
|
|
June 30,
2017 |
|
June 30,
2016 |
||||
Senior Secured Credit Facilities
|
|
|
|
|
|
||||
Term loan facility dollar-denominated
|
May 2021
|
|
$
|
1,244.2
|
|
|
$
|
1,454.2
|
|
Term loan facility euro-denominated
|
May 2021
|
|
352.0
|
|
|
345.2
|
|
||
Euro-denominated 4.75% Senior Notes due 2024
|
December 2024
|
|
424.3
|
|
|
—
|
|
||
Capital lease obligations
|
2020 to 2032
|
|
53.3
|
|
|
51.4
|
|
||
Other obligations
|
2017 to 2018
|
|
5.9
|
|
|
9.7
|
|
||
Total
|
|
|
2,079.7
|
|
|
1,860.5
|
|
||
Less: Current portion of long-term obligations and other short-term
borrowings
|
|
|
24.6
|
|
|
27.7
|
|
||
Long-term obligations, less current portion
|
|
|
$
|
2,055.1
|
|
|
$
|
1,832.8
|
|
(Dollars in millions)
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
Total
|
|||||||||
Maturities of long-term and other obligations
|
$
|
24.6
|
|
23.4
|
|
21.4
|
|
1,557.1
|
|
3.3
|
|
469.7
|
|
$
|
2,099.5
|
|
•
|
a pledge of
100%
of the capital stock of Operating Company and
100%
of the equity interests directly held by Operating Company 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 Operating Company and of each guarantor, subject to certain limited exceptions.
|
|
|
June 30, 2017
|
|
June 30, 2016
|
||||||||||||
(Dollars in millions)
|
Fair Value Measurement
|
Carrying
Value
|
|
Estimated Fair
Value
|
|
Carrying
Value
|
|
Estimated Fair
Value
|
||||||||
Euro-denominated 4.75% Senior Notes
|
Level 1
|
$
|
424.3
|
|
|
$
|
454.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Senior Secured Credit Facilities & Other
|
Level 2
|
1,655.4
|
|
|
1,653.1
|
|
|
1,860.5
|
|
|
1,868.8
|
|
||||
Total
|
|
$
|
2,079.7
|
|
|
$
|
2,107.1
|
|
|
$
|
1,860.5
|
|
|
$
|
1,868.8
|
|
7
.
|
EARNINGS PER SHARE
|
|
Year ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Earnings from continuing operations less net income / (loss) attributable to noncontrolling interest
|
$
|
109.8
|
|
|
$
|
111.5
|
|
|
$
|
212.1
|
|
Earnings / (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Net earnings attributable to Catalent
|
$
|
109.8
|
|
|
$
|
111.5
|
|
|
$
|
212.2
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
124,954,248
|
|
|
124,787,819
|
|
|
119,575,568
|
|
|||
Dilutive securities issuable-stock plans
|
1,783,537
|
|
|
1,082,275
|
|
|
1,773,068
|
|
|||
Total weighted average diluted shares outstanding
|
126,737,785
|
|
|
125,870,094
|
|
|
121,348,636
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share of common stock:
|
|
|
|
|
|
|
|
||||
Net earnings attributable to Catalent
|
$
|
0.88
|
|
|
$
|
0.89
|
|
|
$
|
1.77
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share of common stock-assuming dilution:
|
|
|
|
|
|
|
|
||||
Net earnings attributable to Catalent
|
$
|
0.87
|
|
|
$
|
0.89
|
|
|
$
|
1.75
|
|
8
.
|
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
|
(Dollars in millions)
|
June 30,
2017 |
|
June 30,
2016 |
||||
Unrealized foreign exchange gain/(loss) within other comprehensive income
|
$
|
(21.3
|
)
|
|
$
|
1.8
|
|
Unrealized foreign exchange gain/(loss) within statement of operations
|
$
|
(21.3
|
)
|
|
$
|
3.9
|
|
9
.
|
INCOME TAXES
|
|
Fiscal Year Ended
June 30, |
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
U.S. Operations
|
$
|
5.0
|
|
|
$
|
60.0
|
|
|
$
|
25.8
|
|
Non-U.S. Operations
|
$
|
130.6
|
|
|
$
|
84.9
|
|
|
$
|
86.7
|
|
|
$
|
135.6
|
|
|
$
|
144.9
|
|
|
$
|
112.5
|
|
|
Fiscal Year Ended
June 30, |
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
2.1
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
State and local
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(0.8
|
)
|
|||
Non-U.S.
|
22.7
|
|
|
26.3
|
|
|
31.9
|
|
|||
Total
|
$
|
24.4
|
|
|
$
|
25.5
|
|
|
$
|
31.1
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
1.9
|
|
|
$
|
19.6
|
|
|
$
|
(125.3
|
)
|
State and local
|
1.4
|
|
|
(4.8
|
)
|
|
(1.1
|
)
|
|||
Non-U.S.
|
(1.9
|
)
|
|
(6.6
|
)
|
|
(2.4
|
)
|
|||
Total
|
1.4
|
|
|
8.2
|
|
|
(128.8
|
)
|
|||
|
|
|
|
|
|
||||||
Total provision/(benefit)
|
$
|
25.8
|
|
|
$
|
33.7
|
|
|
$
|
(97.7
|
)
|
|
Fiscal Year Ended
June 30, |
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Provision at U.S. federal statutory tax rate
|
$
|
47.4
|
|
|
$
|
50.7
|
|
|
$
|
39.4
|
|
State and local income taxes
|
(1.5
|
)
|
|
(3.0
|
)
|
|
(2.4
|
)
|
|||
Foreign tax rate differential
|
(25.7
|
)
|
|
(21.7
|
)
|
|
(23.9
|
)
|
|||
Permanent items
|
2.9
|
|
|
(2.3
|
)
|
|
1.7
|
|
|||
Unrecognized tax positions
|
(0.3
|
)
|
|
5.6
|
|
|
14.7
|
|
|||
Tax valuation allowance
|
3.1
|
|
|
7.2
|
|
|
(133.2
|
)
|
|||
Withholding tax and other foreign taxes
|
(0.2
|
)
|
|
0.6
|
|
|
1.4
|
|
|||
Change in tax rate
|
2.0
|
|
|
(3.2
|
)
|
|
1.3
|
|
|||
Foreign currency impact on permanently reinvested loans
|
—
|
|
|
—
|
|
|
2.7
|
|
|||
R&D Tax Credit
|
(1.2
|
)
|
|
(1.4
|
)
|
|
(1.3
|
)
|
|||
Other
|
(0.7
|
)
|
|
1.2
|
|
|
1.9
|
|
|||
|
$
|
25.8
|
|
|
$
|
33.7
|
|
|
$
|
(97.7
|
)
|
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Deferred income tax assets:
|
|
|
|
|
|||
Accrued liabilities
|
$
|
27.4
|
|
|
$
|
21.6
|
|
Equity compensation
|
16.4
|
|
|
10.7
|
|
||
Loss and tax credit carryforwards
|
141.0
|
|
|
155.0
|
|
||
Foreign currency
|
11.5
|
|
|
18.8
|
|
||
Pension
|
39.4
|
|
|
45.9
|
|
||
Property-related
|
9.4
|
|
|
9.3
|
|
||
Intangibles
|
26.3
|
|
|
8.0
|
|
||
Other
|
25.7
|
|
|
17.1
|
|
||
Euro Denominated Debt
|
22.8
|
|
|
—
|
|
||
Total deferred income tax assets
|
319.9
|
|
|
286.4
|
|
||
Valuation allowance
|
(78.8
|
)
|
|
(69.9
|
)
|
||
Net deferred income tax assets
|
$
|
241.1
|
|
|
$
|
216.5
|
|
|
|
|
|
||||
|
|
|
|
||||
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Accrued liabilities
|
(0.8
|
)
|
|
(0.6
|
)
|
||
Foreign currency
|
(1.3
|
)
|
|
(0.9
|
)
|
||
Property-related
|
(57.6
|
)
|
|
(48.1
|
)
|
||
Goodwill and other intangibles
|
(151.1
|
)
|
|
(142.2
|
)
|
||
Other
|
(8.1
|
)
|
|
(1.0
|
)
|
||
Euro Denominated Debt
|
—
|
|
|
(27.6
|
)
|
||
Total deferred income tax liabilities
|
$
|
(218.9
|
)
|
|
(220.4
|
)
|
|
|
|
|
|
||||
Net deferred tax asset/(liability)
|
$
|
22.2
|
|
|
$
|
(3.9
|
)
|
|
Fiscal Year Ended
June 30, |
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Non-current deferred tax asset
|
53.9
|
|
|
37.5
|
|
||
Non-current deferred tax liability
|
31.7
|
|
|
41.4
|
|
||
Net deferred tax asset/(liability)
|
$
|
22.2
|
|
|
$
|
(3.9
|
)
|
•
|
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)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Accumulated Benefit Obligation
|
$
|
322.4
|
|
|
$
|
328.1
|
|
|
$
|
2.8
|
|
|
$
|
3.6
|
|
|
|
|
|
|
|
|
|
||||||||
Change in Benefit Obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
336.6
|
|
|
323.7
|
|
|
3.6
|
|
|
3.7
|
|
||||
Company service cost
|
3.2
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
6.6
|
|
|
10.4
|
|
|
0.1
|
|
|
0.1
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Plan amendments
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
||||
Curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Special termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
5.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(11.0
|
)
|
|
(11.6
|
)
|
|
(0.8
|
)
|
|
(0.2
|
)
|
||||
Actual expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Actuarial (gain)/loss
|
(6.4
|
)
|
|
40.5
|
|
|
(0.1
|
)
|
|
—
|
|
||||
Exchange rate gain/(loss)
|
(3.9
|
)
|
|
(28.5
|
)
|
|
—
|
|
|
—
|
|
||||
Benefit obligation at end of year
|
330.6
|
|
|
336.6
|
|
|
2.8
|
|
|
3.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Change in Plan Assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
227.6
|
|
|
222.0
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
18.4
|
|
|
33.8
|
|
|
—
|
|
|
—
|
|
||||
Company contributions
|
10.6
|
|
|
9.2
|
|
|
0.7
|
|
|
0.2
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Special company contributions to fund termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
4.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(11.0
|
)
|
|
(11.6
|
)
|
|
(0.7
|
)
|
|
(0.2
|
)
|
||||
Actual expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Exchange rate gain/(loss)
|
(5.5
|
)
|
|
(25.8
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
244.6
|
|
|
227.6
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Funded Status
|
|
|
|
|
|
|
|
||||||||
Funded status at end of year
|
(86.0
|
)
|
|
(109.0
|
)
|
|
(2.8
|
)
|
|
(3.6
|
)
|
||||
Employer contributions between measurement date and reporting date
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net pension asset (liability)
|
(86.0
|
)
|
|
(109.0
|
)
|
|
(2.8
|
)
|
|
(3.6
|
)
|
At June 30,
|
Retirement Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Amounts Recognized in Statement of Financial Position
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(0.8
|
)
|
|
(0.8
|
)
|
|
(0.3
|
)
|
|
—
|
|
||||
Noncurrent liabilities
|
(87.9
|
)
|
|
(108.2
|
)
|
|
(2.5
|
)
|
|
(3.6
|
)
|
||||
Total asset/(liability)
|
(86.0
|
)
|
|
(109.0
|
)
|
|
(2.8
|
)
|
|
(3.6
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized in Accumulated Other Comprehensive Income
|
|
|
|
|
|
|
|
||||||||
Transition (asset)/obligation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Prior service cost
|
(0.5
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
||||
Net (gain)/loss
|
58.2
|
|
|
76.9
|
|
|
(1.5
|
)
|
|
(1.5
|
)
|
||||
Total accumulated other comprehensive income at the end of the year
|
57.7
|
|
|
76.4
|
|
|
(1.5
|
)
|
|
(1.5
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Additional Information for Plan with ABO in Excess of Plan Assets
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
153.1
|
|
|
321.0
|
|
|
2.8
|
|
|
3.6
|
|
||||
Accumulated benefit obligation
|
147.5
|
|
|
315.7
|
|
|
2.8
|
|
|
3.6
|
|
||||
Fair value of plan assets
|
64.5
|
|
|
213.3
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Additional Information for Plan with PBO in Excess of Plan Assets
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
153.1
|
|
|
336.6
|
|
|
2.8
|
|
|
3.6
|
|
||||
Accumulated benefit obligation
|
147.5
|
|
|
328.1
|
|
|
2.8
|
|
|
3.6
|
|
||||
Fair value of plan assets
|
64.5
|
|
|
227.6
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
||||||||
Service Cost
|
3.2
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
||||
Interest Cost
|
6.6
|
|
|
10.4
|
|
|
0.1
|
|
|
0.1
|
|
||||
Expected return on plan assets
|
(11.0
|
)
|
|
(9.8
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of unrecognized:
|
|
|
|
|
|
|
|
||||||||
Transition (asset)/obligation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net (gain)/loss
|
4.4
|
|
|
2.9
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
||||
Net periodic benefit cost
|
3.2
|
|
|
6.3
|
|
|
(0.1
|
)
|
|
—
|
|
At June 30,
|
Retirement Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
|
|
|
|
|
|
|
|
||||||||
Net (gain)/loss arising during the year
|
$
|
(13.8
|
)
|
|
$
|
16.4
|
|
|
(0.1
|
)
|
|
—
|
|
||
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
|
(4.4
|
)
|
|
(2.8
|
)
|
|
0.1
|
|
|
0.1
|
|
||||
Exchange rate gain/(loss) recognized during the year
|
(0.5
|
)
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
Total recognized in other comprehensive income
|
$
|
(18.7
|
)
|
|
$
|
13.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income
|
|
|
|
|
|
|
|
||||||||
Total recognized in net periodic benefit cost and other comprehensive income
|
$
|
(15.5
|
)
|
|
$
|
19.3
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
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
|
2.3
|
|
|
4.5
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Financial Assumptions Used to Determine Benefit Obligations at the Balance Sheet Date
|
|
|
|
|
|
|
|
||||||||
Discount rate (%)
|
2.49
|
%
|
|
2.33
|
%
|
|
3.28
|
%
|
|
2.89
|
%
|
||||
Rate of compensation increases (%)
|
2.09
|
%
|
|
2.10
|
%
|
|
n/a
|
|
|
n/a
|
|
||||
Financial Assumptions Used to Determine Net Periodic Benefit Cost for Financial Year
|
|
|
|
|
|
|
|
||||||||
Discount rate (%)
|
2.33
|
%
|
|
3.38
|
%
|
|
2.89
|
%
|
|
3.69
|
%
|
||||
Rate of compensation increases (%)
|
2.09
|
%
|
|
2.10
|
%
|
|
n/a
|
|
|
n/a
|
|
||||
Expected long-term rate of return (%)
|
5.46
|
%
|
|
4.93
|
%
|
|
n/a
|
|
|
n/a
|
|
||||
Expected Future Contributions
|
|
|
|
|
|
|
|
||||||||
Financial Year
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
10.3
|
|
|
|
|
$
|
0.3
|
|
|
|
|
At June 30,
|
Retirement Benefits
|
|
Other Post-Retirement Benefits
|
||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Expected Future Benefit Payments
|
|
|
|
|
|
|
|
||||
Financial Year
|
|
|
|
|
|
|
|
||||
2017
|
10.8
|
|
|
9.0
|
|
|
0.3
|
|
|
0.8
|
|
2018
|
10.6
|
|
|
9.4
|
|
|
0.3
|
|
|
0.3
|
|
2019
|
12.3
|
|
|
10.8
|
|
|
0.3
|
|
|
0.3
|
|
2020
|
11.6
|
|
|
11.1
|
|
|
0.2
|
|
|
0.2
|
|
2021
|
12.1
|
|
|
12.0
|
|
|
0.2
|
|
|
0.2
|
|
2022-2026
|
73.7
|
|
|
67.4
|
|
|
0.9
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
||||
Actual Asset Allocation (%)
|
|
|
|
|
|
|
|
||||
Equities
|
22.9
|
%
|
|
23.6
|
%
|
|
—
|
%
|
|
—
|
%
|
Government Bonds
|
27.0
|
%
|
|
29.9
|
%
|
|
—
|
%
|
|
—
|
%
|
Corporate Bonds
|
12.5
|
%
|
|
12.3
|
%
|
|
—
|
%
|
|
—
|
%
|
Property
|
2.5
|
%
|
|
2.5
|
%
|
|
—
|
%
|
|
—
|
%
|
Insurance Contracts
|
9.2
|
%
|
|
9.0
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
25.9
|
%
|
|
22.7
|
%
|
|
—
|
%
|
|
—
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
||||
Actual Asset Allocation (Amount)
|
|
|
|
|
|
|
|
||||
Equities
|
56.0
|
|
|
53.7
|
|
|
—
|
|
|
—
|
|
Government Bonds
|
66.0
|
|
|
68.1
|
|
|
—
|
|
|
—
|
|
Corporate Bonds
|
30.5
|
|
|
28.0
|
|
|
—
|
|
|
—
|
|
Property
|
6.2
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
Insurance Contracts
|
22.5
|
|
|
20.4
|
|
|
—
|
|
|
—
|
|
Other
|
63.4
|
|
|
51.6
|
|
|
—
|
|
|
—
|
|
Total
|
244.6
|
|
|
227.6
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||
Target Asset Allocation (%)
|
|
|
|
|
|
|
|
||||
Equities
|
23.8
|
%
|
|
24.1
|
%
|
|
—
|
%
|
|
—
|
%
|
Government Bonds
|
29.6
|
%
|
|
29.8
|
%
|
|
—
|
%
|
|
—
|
%
|
Corporate Bonds
|
12.1
|
%
|
|
12.3
|
%
|
|
—
|
%
|
|
—
|
%
|
Property
|
2.7
|
%
|
|
2.7
|
%
|
|
—
|
%
|
|
—
|
%
|
Insurance Contracts
|
10
|
%
|
|
8.9
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
21.8
|
%
|
|
22.2
|
%
|
|
—
|
%
|
|
—
|
%
|
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, 2017
and June 30, 2016, including
$36.6 million
and $28.0 million of investments in hedge funds related to the Company's U.K. pension plan, are classified as Level 2.
|
(Dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Investments Measured at Net Asset Value (a)
|
|
Total Assets
|
|||||||||||
Equity Securities
|
$
|
—
|
|
|
$
|
56.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56.0
|
|
|
Debt Securities
|
—
|
|
|
96.5
|
|
|
—
|
|
|
—
|
|
|
96.5
|
|
||||||
Real Estate
|
—
|
|
|
4.5
|
|
|
—
|
|
|
1.7
|
|
|
6.2
|
|
||||||
Other
|
—
|
|
|
65.8
|
|
|
20.1
|
|
|
—
|
|
|
85.9
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
222.8
|
|
|
$
|
20.1
|
|
|
$
|
1.7
|
|
|
$
|
244.6
|
|
(Dollars in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Investments Measured at Net Asset Value (a)
|
|
Total Assets
|
|||||||||||
Equity Securities
|
$
|
—
|
|
|
$
|
53.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
53.7
|
|
||
Debt Securities
|
—
|
|
|
96.1
|
|
|
—
|
|
|
—
|
|
|
96.1
|
|
||||||
Real Estate
|
—
|
|
|
4.1
|
|
|
—
|
|
|
1.7
|
|
|
5.8
|
|
||||||
Other
|
—
|
|
|
52.4
|
|
|
19.6
|
|
|
—
|
|
|
72.0
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
206.3
|
|
|
$
|
19.6
|
|
|
$
|
1.7
|
|
|
$
|
227.6
|
|
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, 2016
|
$
|
19.6
|
|
|
$
|
3.2
|
|
|
$
|
16.4
|
|
Actual return on plan assets:
|
|
|
|
|
|
||||||
Relating to assets still held at the reporting date
|
1.3
|
|
|
0.1
|
|
|
1.2
|
|
|||
Relating to assets sold during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchases, sales, settlements, contributions and benefits paid
|
(0.8
|
)
|
|
(0.3
|
)
|
|
(0.5
|
)
|
|||
Transfers in and/or out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending Balance at June 30, 2017
|
$
|
20.1
|
|
|
$
|
3.0
|
|
|
$
|
17.1
|
|
|
Other Post-Retirement Benefits
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Assumed Healthcare Cost Trend Rates at the Balance Sheet Date
|
|
|
|
||||
Healthcare cost trend rate – initial (%)
|
|
|
|
||||
Pre-65
|
n/a
|
|
|
n/a
|
|
||
Post-65
|
8.02
|
%
|
|
10.35
|
%
|
||
Healthcare cost trend rate – ultimate (%)
|
|
|
|
||||
Pre-65
|
n/a
|
|
|
n/a
|
|
||
Post-65
|
4.81
|
%
|
|
4.84
|
%
|
||
Year in which ultimate rates are reached
|
|
|
|
||||
Pre-65
|
n/a
|
|
|
n/a
|
|
||
Post-65
|
2026
|
|
|
2022
|
|
||
Effect of 1% Change in Healthcare Cost Trend Rate
|
|
|
|
||||
Healthcare cost trend rate up 1%
|
|
|
|
||||
on APBO at balance sheet date
|
$
|
122,687
|
|
|
$
|
169,433
|
|
on total service and interest cost
|
2,884
|
|
|
5,721
|
|
||
Effect of 1% Change in Healthcare Cost Trend Rate
|
|
|
|
||||
Healthcare cost trend rate down 1%
|
|
|
|
||||
on APBO at balance sheet date
|
$
|
(109,956
|
)
|
|
$
|
(151,184
|
)
|
on total service and interest cost
|
(2,583
|
)
|
|
(5,106
|
)
|
||
|
|
|
|
||||
Expected Future Contributions
|
|
|
|
||||
Financial Year
|
|
|
|
||||
2018
|
$
|
277,080
|
|
|
|
11
.
|
EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
(Dollars in millions)
|
Foreign Currency Translation Adjustments
|
|
Available for Sale Investment Adjustments
|
|
Deferred Compensation
|
|
Pension Liability Adjustments
|
|
Other Comprehensive Income/(Loss)
|
||||||||||
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
|
)
|
|||||
Activity, net of tax
|
(31.9
|
)
|
|
10.5
|
|
|
—
|
|
|
13.0
|
|
|
(8.4
|
)
|
|||||
Balance at June 30, 2017
|
$
|
(280.7
|
)
|
|
$
|
10.5
|
|
|
$
|
—
|
|
|
$
|
(43.9
|
)
|
|
$
|
(314.1
|
)
|
|
Year Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Net investment hedge
|
$
|
(21.3
|
)
|
|
$
|
1.8
|
|
|
$
|
30.0
|
|
Long term inter-company loans
|
(14.3
|
)
|
|
(65.0
|
)
|
|
(9.0
|
)
|
|||
Translation adjustments
|
(3.8
|
)
|
|
(54.9
|
)
|
|
(152.7
|
)
|
|||
Total foreign currency translation adjustments, pretax
|
(39.4
|
)
|
|
(118.1
|
)
|
|
(131.7
|
)
|
|||
Tax expense / (benefit)
(1)
|
(7.5
|
)
|
|
0.7
|
|
|
12.3
|
|
|||
Total foreign currency translation adjustments, net of tax
|
$
|
(31.9
|
)
|
|
$
|
(118.8
|
)
|
|
$
|
(144.0
|
)
|
|
|
|
|
|
|
||||||
Net change in minimum pension liability
|
|
|
|
|
|
||||||
Net gain/(loss) arising during the year
|
$
|
13.9
|
|
|
$
|
(16.4
|
)
|
|
$
|
(12.3
|
)
|
Net (gain)/loss recognized during the year
|
4.3
|
|
|
3.4
|
|
|
3.1
|
|
|||
Foreign Exchange Translation and Other
|
0.5
|
|
|
(0.2
|
)
|
|
0.6
|
|
|||
Total minimum pension liability, pretax
|
18.7
|
|
|
(13.2
|
)
|
|
(8.6
|
)
|
|||
Tax expense / (benefit)
|
5.7
|
|
|
(4.1
|
)
|
|
(2.2
|
)
|
|||
Net change in minimum pension liability, net of tax
|
$
|
13.0
|
|
|
$
|
(9.1
|
)
|
|
$
|
(6.4
|
)
|
|
|
|
|
|
|
||||||
Net change in available for sale investment:
|
|
|
|
|
|
||||||
Net gain/(loss) arising during the year
|
$
|
16.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net (gain)/loss recognized during the year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign Exchange Translation and Other
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total available for sale investment, pretax
|
16.2
|
|
|
—
|
|
|
—
|
|
|||
Tax expense / (benefit)
|
5.7
|
|
|
—
|
|
|
—
|
|
|||
Net change in available for sale investment, net of tax
|
$
|
10.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Tax related to foreign currency translation adjustments relates to the net investment hedge activity.
|
12
.
|
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, 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
|
|
|||
Granted
|
$
|
24.42
|
|
515,671
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||
Exercised
|
$
|
13.56
|
|
(448,477
|
)
|
—
|
|
6,707,436
|
|
(135,766
|
)
|
—
|
|
1,884,507
|
|
(344,101
|
)
|
—
|
|
6,291,098
|
|
|||
Forfeited
|
$
|
16.46
|
|
(64,400
|
)
|
—
|
|
—
|
|
(37,030
|
)
|
—
|
|
—
|
|
(1,101,531
|
)
|
—
|
|
—
|
|
|||
Expired / Canceled
|
$
|
18.78
|
|
(6,033
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||
Outstanding as of June 30, 2017
|
$
|
20.15
|
|
1,821,616
|
|
7.13
|
23,380,986
|
|
623,722
|
|
5.72
|
10,587,364
|
|
340,068
|
|
3.21
|
7,661,773
|
|
||||||
Vest and expected to vest as of June 30, 2017
|
$
|
20.37
|
|
1,821,616
|
|
7.13
|
23,380,986
|
|
268,584
|
|
5.40
|
4,709,332
|
|
340,068
|
|
3.21
|
7,661,773
|
|
||||||
Vested and exercisable as of June 30, 2017
|
$
|
16.84
|
|
723,637
|
|
5.60
|
$
|
11,895,684
|
|
268,584
|
|
5.40
|
$
|
4,709,332
|
|
340,068
|
|
3.21
|
$
|
7,661,773
|
|
|
Time-Based Units
|
|
Weighted Average Grant-Date Fair Value
|
|||
Unvested as of June 30, 2016
|
504,096
|
|
|
$
|
25.96
|
|
Granted
|
549,271
|
|
|
25.08
|
|
|
Vested
|
35,878
|
|
|
30.57
|
|
|
Forfeited
|
102,578
|
|
|
25.18
|
|
|
Unvested as of June 30, 2017
|
914,911
|
|
|
$
|
25.34
|
|
|
EPS Units
|
|
Weighted Average Grant-Date Fair Value
|
|||
Unvested as of June 30, 2016
|
505,425
|
|
|
$
|
25.16
|
|
Granted
|
224,097
|
|
|
24.61
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
68,922
|
|
|
26.74
|
|
|
Unvested as of June 30, 2017
|
660,600
|
|
|
$
|
24.81
|
|
|
Year Ended June 30,
|
||
|
2017
|
|
2016
|
Expected volatility
|
32 % - 35%
|
|
25%
|
Expected life (in years)
|
2.4 - 2.9
|
|
2.84
|
Risk-free interest rates
|
0.85% - 1.36%
|
|
0.94%
|
Dividend yield
|
None
|
|
None
|
|
RTSR Units
|
|
Weighted Average Grant-Date Fair Value
|
|||
Unvested as of June 30, 2016
|
132,656
|
|
|
$
|
37.17
|
|
Granted
|
210,971
|
|
|
26.14
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
36,993
|
|
|
31.17
|
|
|
Unvested as of June 30, 2017
|
306,634
|
|
|
$
|
30.30
|
|
13
.
|
OTHER (INCOME) / EXPENSE, NET
|
|
Twelve Months Ended
June 30, |
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Other (Income) / Expense, net
|
|
|
|
|
|
||||||
Debt refinancing / extinguishment costs
|
$
|
4.3
|
|
|
$
|
—
|
|
|
$
|
21.8
|
|
Gain on acquisition, net
(1)
|
—
|
|
|
—
|
|
|
(8.9
|
)
|
|||
Sponsor advisory agreement termination fee
(2)
|
—
|
|
|
—
|
|
|
29.8
|
|
|||
Foreign currency (gains) and losses
|
4.2
|
|
|
(12.6
|
)
|
|
(2.4
|
)
|
|||
Other
(3)
|
—
|
|
|
(3.0
|
)
|
|
2.1
|
|
|||
Total Other (Income) / Expense
|
$
|
8.5
|
|
|
$
|
(15.6
|
)
|
|
$
|
42.4
|
|
(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 a 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.
|
14
.
|
COMMITMENTS AND CONTINGENCIES
|
(Dollars in millions)
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
Total
|
||||||||||||||
Minimum rental payments
|
$
|
11.0
|
|
$
|
7.3
|
|
$
|
6.5
|
|
$
|
5.7
|
|
$
|
4.8
|
|
$
|
16.9
|
|
$
|
52.2
|
|
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Softgel Technologies
|
|
|
|
|
|
||||||
Net revenue
|
$
|
855.3
|
|
|
$
|
775.0
|
|
|
$
|
787.5
|
|
Segment EBITDA
|
$
|
190.5
|
|
|
$
|
163.8
|
|
|
$
|
173.6
|
|
Drug Delivery Solutions
|
|
|
|
|
|
||||||
Net revenue
|
910.1
|
|
|
806.4
|
|
|
798.3
|
|
|||
Segment EBITDA
|
242.4
|
|
|
215.2
|
|
|
230.7
|
|
|||
Clinical Supply Services
|
|
|
|
|
|
||||||
Net revenue
|
348.8
|
|
|
307.5
|
|
|
288.4
|
|
|||
Segment EBITDA
|
54.9
|
|
|
53.2
|
|
|
56.7
|
|
|||
Inter-segment revenue elimination
|
(38.8
|
)
|
|
(40.8
|
)
|
|
(43.4
|
)
|
|||
Unallocated costs
(1)
|
(115.6
|
)
|
|
(57.9
|
)
|
|
(100.8
|
)
|
|||
Combined Total
|
|
|
|
|
|
||||||
Net revenue
|
$
|
2,075.4
|
|
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
|
|
|
|
|
|
||||||
EBITDA from continuing operations
|
$
|
372.2
|
|
|
$
|
374.3
|
|
|
$
|
360.2
|
|
(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, |
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Impairment charges and gain/(loss) on sale of assets
|
$
|
(9.8
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(4.7
|
)
|
Equity compensation
|
(20.9
|
)
|
|
(10.8
|
)
|
|
(9.0
|
)
|
|||
Restructuring and other items
(2)
|
(33.5
|
)
|
|
(27.2
|
)
|
|
(27.2
|
)
|
|||
Noncontrolling interest
|
—
|
|
|
0.3
|
|
|
1.9
|
|
|||
Other income/(expense), net
(3)
|
(8.5
|
)
|
|
15.6
|
|
|
(42.4
|
)
|
|||
Non-allocated corporate costs, net
|
(42.9
|
)
|
|
(33.1
|
)
|
|
(19.4
|
)
|
|||
Total unallocated costs
|
$
|
(115.6
|
)
|
|
$
|
(57.9
|
)
|
|
$
|
(100.8
|
)
|
(2)
|
Segment results do not include restructuring and certain acquisition-related costs.
|
(3)
|
Refer to Note
13
for details.
|
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Earnings/(loss) from continuing operations
|
$
|
109.8
|
|
|
$
|
111.2
|
|
|
$
|
210.2
|
|
Depreciation and amortization
|
146.5
|
|
|
140.6
|
|
|
140.8
|
|
|||
Interest expense, net
|
90.1
|
|
|
88.5
|
|
|
105.0
|
|
|||
Income tax (benefit)/expense
|
25.8
|
|
|
33.7
|
|
|
(97.7
|
)
|
|||
Noncontrolling interest
|
—
|
|
|
0.3
|
|
|
1.9
|
|
|||
EBITDA from continuing operations
|
$
|
372.2
|
|
|
$
|
374.3
|
|
|
$
|
360.2
|
|
(Dollars in millions)
|
June 30,
2017 |
|
June 30,
2016 |
||||
Assets
|
|
|
|
||||
Softgel Technologies
|
$
|
1,631.8
|
|
|
$
|
1,446.4
|
|
Drug Delivery Solutions
|
1,639.0
|
|
|
1,475.7
|
|
||
Clinical Supply Services
|
596.2
|
|
|
578.9
|
|
||
Corporate and eliminations
|
(412.7
|
)
|
|
(409.9
|
)
|
||
Total assets
|
$
|
3,454.3
|
|
|
$
|
3,091.1
|
|
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Softgel Technologies
|
$
|
38.4
|
|
|
$
|
36.7
|
|
|
$
|
42.8
|
|
Drug Delivery Solutions
|
75.3
|
|
|
72.9
|
|
|
66.9
|
|
|||
Clinical Supply Services
|
18.7
|
|
|
21.1
|
|
|
24.1
|
|
|||
Corporate
|
14.1
|
|
|
9.9
|
|
|
7.0
|
|
|||
Total depreciation and amortization expense
|
$
|
146.5
|
|
|
$
|
140.6
|
|
|
$
|
140.8
|
|
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Softgel Technologies
|
$
|
27.6
|
|
|
$
|
20.6
|
|
|
$
|
29.6
|
|
Drug Delivery Solutions
|
83.5
|
|
|
92.4
|
|
|
86.2
|
|
|||
Clinical Supply Services
|
7.2
|
|
|
5.1
|
|
|
6.4
|
|
|||
Corporate
|
21.5
|
|
|
21.5
|
|
|
18.8
|
|
|||
Total capital expenditure
|
$
|
139.8
|
|
|
$
|
139.6
|
|
|
$
|
141.0
|
|
|
Net Revenue
|
|
Long-Lived Assets
(1)
|
||||||||||||||||
(Dollars in millions)
|
Fiscal Year Ended
June 30, |
|
|
|
|
||||||||||||||
2017
|
|
2016
|
|
2015
|
|
June 30,
2017 |
|
June 30,
2016 |
|||||||||||
United States
|
$
|
996.4
|
|
|
$
|
858.6
|
|
|
$
|
799.3
|
|
|
$
|
588.0
|
|
|
$
|
538.9
|
|
Europe
|
797.4
|
|
|
733.2
|
|
|
795.4
|
|
|
281.6
|
|
|
280.2
|
|
|||||
International Other
|
345.0
|
|
|
313.5
|
|
|
268.6
|
|
|
126.3
|
|
|
86.7
|
|
|||||
Eliminations
|
(63.4
|
)
|
|
(57.2
|
)
|
|
(32.5
|
)
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
2,075.4
|
|
|
$
|
1,848.1
|
|
|
$
|
1,830.8
|
|
|
$
|
995.9
|
|
|
$
|
905.8
|
|
(1)
|
Long-lived assets include property and equipment, net of accumulated depreciation.
|
16
.
|
SUPPLEMENTAL BALANCE SHEET INFORMATION
|
(Dollars in millions)
|
June 30,
2017 |
|
June 30,
2016 |
||||
Raw materials and supplies
|
$
|
107.5
|
|
|
$
|
88.7
|
|
Work-in-process
|
42.8
|
|
|
30.7
|
|
||
Finished goods
|
56.7
|
|
|
55.2
|
|
||
Total inventory, gross
|
207.0
|
|
|
174.6
|
|
||
Inventory cost adjustment
|
(22.1
|
)
|
|
(19.8
|
)
|
||
Inventories
|
$
|
184.9
|
|
|
$
|
154.8
|
|
(Dollars in millions)
|
June 30,
2017 |
|
June 30,
2016 |
||||
Prepaid expenses
|
$
|
23.8
|
|
|
$
|
29.3
|
|
Spare parts supplies
|
11.8
|
|
|
10.8
|
|
||
Short term investments
|
—
|
|
|
7.0
|
|
||
Long term tax asset (current portion)
(1)
|
—
|
|
|
6.8
|
|
||
Available for sale investment
|
18.6
|
|
|
—
|
|
||
Other current assets
|
43.6
|
|
|
35.1
|
|
||
Prepaid expenses and other
|
$
|
97.8
|
|
|
$
|
89.0
|
|
(Dollars in millions)
|
June 30,
2017 |
|
June 30,
2016 |
||||
Land, buildings and improvements
|
$
|
735.2
|
|
|
$
|
649.6
|
|
Machinery, equipment and capitalized software
|
825.0
|
|
|
757.1
|
|
||
Furniture and fixtures
|
10.1
|
|
|
9.9
|
|
||
Construction in progress
|
137.4
|
|
|
134.1
|
|
||
Property and equipment, at cost
|
1,707.7
|
|
|
1,550.7
|
|
||
Accumulated depreciation
|
(711.8
|
)
|
|
(644.9
|
)
|
||
Property, plant, and equipment, net
|
$
|
995.9
|
|
|
$
|
905.8
|
|
(Dollars in millions)
|
June 30,
2017 |
|
June 30,
2016 |
||||
Long term tax asset
(1)
|
$
|
—
|
|
|
$
|
45.4
|
|
Deferred compensation investments
|
15.4
|
|
|
11.1
|
|
||
Deferred long-term debt financing costs
|
1.2
|
|
|
1.8
|
|
||
Other
|
10.9
|
|
|
8.8
|
|
||
Total other assets
|
$
|
27.5
|
|
|
$
|
67.1
|
|
(Dollars in millions)
|
June 30,
2017 |
|
June 30,
2016 |
||||
Accrued employee-related expenses
|
$
|
96.4
|
|
|
$
|
82.8
|
|
Restructuring accrual
|
5.9
|
|
|
6.1
|
|
||
Accrued interest
|
0.9
|
|
|
—
|
|
||
Deferred revenue and fees
|
84.9
|
|
|
46.2
|
|
||
Accrued income tax
|
24.7
|
|
|
38.8
|
|
||
Other accrued liabilities and expenses
|
68.4
|
|
|
45.9
|
|
||
Other accrued liabilities
|
$
|
281.2
|
|
|
$
|
219.8
|
|
(Dollars in millions)
|
June 30,
2017 |
|
June 30,
2016 |
|
June 30,
2015 |
||||||
Trade receivables allowance for doubtful accounts
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
3.9
|
|
|
$
|
6.6
|
|
|
$
|
5.4
|
|
Charged to cost and expenses (recoveries)
|
1.0
|
|
|
(0.5
|
)
|
|
2.7
|
|
|||
Deductions
|
(0.9
|
)
|
|
(1.8
|
)
|
|
(1.1
|
)
|
|||
Impact of foreign exchange
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||
Closing balance
|
$
|
4.0
|
|
|
$
|
3.9
|
|
|
$
|
6.6
|
|
17
.
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
(Dollars in millions, except per share data)
|
Fiscal Year 2017, By Quarters
|
||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|||||||||
Net revenue
|
$
|
442.2
|
|
|
$
|
483.7
|
|
|
$
|
532.6
|
|
|
$
|
616.9
|
|
Gross margin
|
124.1
|
|
|
147.9
|
|
|
167.4
|
|
|
215.2
|
|
||||
Net earnings attributable to Catalent
|
$
|
4.6
|
|
|
$
|
17.4
|
|
|
$
|
26.0
|
|
|
$
|
61.8
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Catalent:
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
0.04
|
|
|
$
|
0.14
|
|
|
$
|
0.21
|
|
|
$
|
0.49
|
|
Diluted
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
0.04
|
|
|
$
|
0.14
|
|
|
$
|
0.21
|
|
|
$
|
0.49
|
|
(Dollars in millions, except per share data)
|
Fiscal Year 2016, By Quarters
|
||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|||||||||
Net revenue
|
$
|
423.0
|
|
|
$
|
454.9
|
|
|
$
|
438.0
|
|
|
$
|
532.2
|
|
Gross margin
|
121.5
|
|
|
152.1
|
|
|
126.2
|
|
|
187.8
|
|
||||
Net earnings attributable to Catalent
|
$
|
11.9
|
|
|
$
|
30.8
|
|
|
$
|
10.7
|
|
|
$
|
58.1
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Catalent:
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
0.10
|
|
|
$
|
0.25
|
|
|
$
|
0.09
|
|
|
$
|
0.47
|
|
Diluted
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
0.09
|
|
|
$
|
0.24
|
|
|
$
|
0.09
|
|
|
$
|
0.46
|
|
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 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, 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
|
)
|
|
|
|
|
|
|
|
|
||||||||
Year ended June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Tax Valuation Allowance
|
$
|
(69.9
|
)
|
|
$
|
(9.4
|
)
|
|
$
|
0.5
|
|
|
$
|
(78.8
|
)
|
Exhibit No.
|
Description
|
|
|
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)
|
|
|
|
|
|
Bylaws of Catalent, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 28, 2017, File No. 001-36587)
|
|
|
|
|
|
Indenture dated December 9, 2016, by and among Catalent Pharma Solutions, Inc., the subsidiary guarantors named therein, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as principal paying agent, and Deutsche Bank Luxembourg S.A., as transfer agent and registrar (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on December 12, 2016, File No. 001-36587).
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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) †
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
†
|
|
|
|
|
|
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)
|
|
|
|
|
|
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) †
|
|
|
|
|
|
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)†
|
|
|
|
|
|
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)
|
|
|
|
|
|
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)
|
|
|
|
|
|
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)
|
|
|
|
|
|
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) †
|
|
|
|
|
|
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) †
|
|
|
|
|
|
Offer letter, dated October 6, 2014, between Steven Fasman and Catalent Pharma Solutions, Inc. (incorporated by reference to Exhibit 10.40 to the Company’s Annual Report on Form 10-K filed on August 29, 2016, File No. 001-36587)†
|
|
|
|
|
|
Offer letter, dated April 18, 2011, between Sharon Johnson and Catalent Pharma Solutions, Inc. (incorporated by reference to Exhibit 10.39 to the Company's Annual Report on Form 10-K filed on September 2, 2015, File No. 001-36587) †
|
|
|
|
|
|
Form of Performance Share Unit Agreement for U.S. Employees for the performance period July 1, 2015 through June 30, 2018 (incorporated by reference to Exhibit 10.41 to the Company’s Annual Report on Form 10-K filed on August 29, 2016, File No. 001-36587)†
|
|
|
|
|
|
Form of Performance Share Unit Agreement for Non-U.S. Employees for the performance period July 1, 2015 through June 30, 2018 (incorporated by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K filed on August 29, 2016, File No. 001-36587)†
|
|
|
|
|
|
Catalent Pharma Solutions, Inc. Deferred Compensation Plan as amended and restated effective January 1, 2017 * †
|
|
|
|
|
|
Form of Management Incentive Plan for the fiscal year ended June 30, 2017 * †
|
|
|
|
|
|
Offer letter, dated May 2, 2011, between Barry Littlejohns and Catalent Pharma Solutions, Inc.* †
|
|
|
|
|
|
Amendment No. 2 to Amended and Restated Credit Agreement, dated as of December 9, 2016, by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc. as administrative agent, collateral agent and swing line lender and the lenders party thereto, which amends that certain Amended and Restated Credit Agreement, dated as of May 20, 2014 (as amended), by and among Catalent Pharma Solutions, Inc. PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc. and JP Morgan Chase Bank, N.A. as L/C Issuers, the other lenders party thereto and the other agents party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 12, 2016, File No. 001-36587).
|
|
|
|
|
|
Form of Performance Share Unit Agreement for U.S. Employees for the performance period July 1, 2016 through June 30, 2019* †
|
|
|
|
|
|
Form of Performance Share Unit Agreement for Non-U.S. Employees for the performance period July 1, 2016 through June 30, 2019 * †
|
|
|
|
|
|
Amendment to Employment Agreement, dated August 23, 2017, by and between 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 August 28, 2017, File No. 001-36587) †
|
|
|
|
|
|
Settlement Agreement, dated May 16, 2017, by and between Catalent Pharma Solutions Limited and Sharon Johnson * †
|
|
|
|
|
|
Form of Restricted Stock Agreement for U.S. Employees (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 28, 2017, File No. 001-36587)
†
|
|
|
|
|
|
Form of Performance Restricted Stock Agreement for U.S. Employees (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 28, 2017, File No. 001-36587)
†
|
|
|
|
|
|
Subsidiaries of the Registrant *
|
|
|
|
|
|
Consent of Ernst & Young LLP *
|
|
|
|
|
|
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*
|
|
|
|
|
|
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*
|
|
|
|
|
|
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**
|
|
|
|
|
|
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**
|
|
|
|
|
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
|
|
|
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
CATALENT, INC.
|
||
|
|
|
|
|
Date:
|
August 28, 2017
|
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 28, 2017
|
John R. Chiminski
|
|
|
|
|
|
|
|
/s/ MADHAVAN BALACHANDRAN
|
|
Director
|
August 28, 2017
|
Madhavan Balachandran
|
|
|
|
|
|
|
|
/s/ J. MARTIN CARROLL
|
|
Director
|
August 28, 2017
|
J. Martin Carroll
|
|
|
|
|
|
|
|
/s/ ROLF CLASSON
|
|
Director
|
August 28, 2017
|
Rolf Classon
|
|
|
|
|
|
|
|
/s/ GREGORY T. LUCIER
|
|
Director
|
August 28, 2017
|
Gregory T. Lucier
|
|
|
|
|
|
|
|
/s/ DONALD E. MOREL, JR.
|
|
Director
|
August 28, 2017
|
Donald E. Morel, Jr.
|
|
|
|
|
|
|
|
/s/ JAMES QUELLA
|
|
Director
|
August 28, 2017
|
James Quella
|
|
|
|
|
|
|
|
/s/ UWE ROEHRHOFF
|
|
Director
|
August 28, 2017
|
Uwe Roehrhoff
|
|
|
|
|
|
|
|
/s/ JACK STAHL
|
|
Director
|
August 28, 2017
|
Jack Stahl
|
|
|
|
|
|
|
|
/s/ MATTHEW M. WALSH
|
|
Executive Vice President & Chief Financial Officer
|
August 28, 2017
|
Matthew M. Walsh
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
1.
|
The Table of Contents on the page immediately following the cover page of the Plan is deleted in its entirety.
|
2.
|
Section 2.16 of the Plan is amended by deleting the following:
|
3.
|
Section 2.34 of the Plan is amended in its entirety to read as follows:
|
4.
|
The following new definition is added to the Plan and subsequent provisions are renumbered accordingly:
|
5.
|
The following new definition is added to the Plan and subsequent provisions are renumbered accordingly:
|
6.
|
Section 2.39 of the Plan is amended in its entirety to read as follows:
|
“(a)
|
A Participant may elect to defer Compensation by submitting a Compensation Deferral Agreement during the enrollment periods established by the Committee as further described below in this paragraph (a), but in any event, in accordance with Section 4.2. A Compensation Deferral Agreement that is not timely filed during the enrollment periods established by the Committee 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 Participant may modify any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2.
|
(i)
|
Subject to Section 4.2, a Participant, other than a non-employee Director, may elect to defer up to 80% of base salary for services rendered in the next following Plan Year.
|
(ii)
|
Subject to Section 4.2, a Participant, other than a non-employee Director, may elect to defer up to 80% of his or her Management Incentive Plan (“MIP”) annual bonus for services rendered in the fiscal year commencing on July 1 of the current Plan Year and ending on June 30 of the next following Plan Year.
|
(iii)
|
Subject to Section 4.2, a Participant, other than a non-employee Director, may elect to defer up to 80% of quarterly sales commissions for sales occurring in the next following Plan Year.
|
(iv)
|
Subject to Section 4.2, a Participant, other than a non-employee Director, may elect to defer either 0% or 100% of the restricted stock units (“RSUs”) granted under the Catalent, Inc. 2014 Omnibus Incentive Plan (the “OIP”); provided, only RSUs granted under the OIP subject to a three-year vesting schedule are eligible for deferral under this Plan.
|
(v)
|
Subject to Section 4.2, a Participant, other than a non-employee Director, may elect to defer either 0% or 100% of performance share units (“PSUs”) awarded under the OIP (the “PSU Award”); provided, only PSU Awards granted under the OIP and subject to a three-year performance period are eligible for deferral under this Plan. A Participant’s election to defer PSUs under this paragraph shall have no impact on the value of his or her PSU Award, which is governed by Section 11 of the OIP, as in effect from time to time.
|
(vi)
|
Subject to Section 4.2, a Participant who is a non-employee Director may elect to defer up to 100% of meeting and retainer fees for services rendered in the next following Plan Year.
|
(vii)
|
Subject to Section 4.2, a Participant who is a non-employee Director may elect to defer either 0% or 100% of RSUs granted under the OIP; provided, only RSUs granted under the OIP subject to a one-year vesting schedule are eligible for deferral under this Plan.”
|
(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 2016 Account and Post- 2016 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 2016 and Post-2016 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 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. Payment of Pre-2016 Accounts will be on the first regular payment processing date after the termination of the Participant's employment or service, as applicable, unless a longer delay is required by applicable law, in which event the lump sum shall be paid as soon as is permitted by applicable law, with the amount 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.
|
(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.
|
(g)
|
Death (2016 Account and Post-2016 Account)
. With respect to a Participant’s 2016 Account and Post-2016 Account, upon the Participant’s death, his or her designated Beneficiary(ies) shall receive a distribution of all such 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’s death occurs, or (ii) ninety (90) days following the date of the Participant’s death.
|
(h)
|
Death (
Pre
-2016 Accounts).
|
|
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 Compensation 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 2017, 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.
|
Event
|
Event occurs
:
Prior to April 1, 2017
|
Event occurs
:
From April 1, 2017through date of MIP payment (scheduled to occur in Sept. 2017)
|
Voluntary termination (including resignation and job abandonment)
|
Not eligible for payout
|
Not eligible for payout
|
Involuntary termination for cause* or for other than reduction-in-force/restructure/divestiture
|
Not eligible for payout
|
Not eligible for payout
|
Involuntary termination due to reduction-in-force/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 2017, 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 2017, 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 2017 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.”
|
Catalent Pharma Solutions
14 Schoolhouse Road
Somerset, NJ 08873
T (732) 537-6401
F (732) 537-5932
|
|
John Chiminski
President & Chief Executive Officer
|
1.
|
Position
: Your position is President, Medical Delivery Systems reporting directly to myself. As the President, MDS you will also be a member of Catalent's Executive Leadership Team and located at our Somerset, NJ office.
|
2.
|
Pay
: Your base bi-weekly rate of pay will be $14,230.77 (annualized to $370,000). 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 2012 (July 1, 2011 - June 30, 2012) 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.
|
We will recommend to the Board of Directors of PTS Holdings Corp. (parent entity of Catalent) that you be awarded 2,500 stock options to acquire shares of common stock of PTS Holdings Corp. with an exercise price per share equal to the Fair Market Value on the date of grant (as such term is defined in the Equity Documents). The grant of your award will be subject to and conditioned upon your investment within 90 days of your hire date of not less than $200,000 in cash to purchase shares of common stock of PTS Holdings Corp. at a per share purchase price equal to the Fair Market Value. Your current holding of shares of PTS Holdings Corp. common stock shall be applied against your co investment. Provided that you utilize 100% of your after-tax proceeds of your Sign-on Bonus to make your co-investment within 90 days of your hire, the remaining portion of your co-investment may be completed following the payment of the MIP bonus (as applicable) for FY2012, but in no case later than December 2012 and in any case at the FMV in effect on the date of such co-investment.
|
5.
|
Sign-on Bonus
: You will receive a sign-on bonus of $115,000.00 payable within 30 days of your start date (the "Sign-on Bonus"). You may use any and all after-tax proceeds of your Sign-on Bonus to make your co-investment described in paragraph 4(d) above. Notwithstanding any terms herein to the contrary, the entire Sign-on Bonus shall be repaid to Catalent within 30 days following any termination of your employment (i) by you without Good Reason or (ii) by Catalent for Cause, in either case, prior to the first anniversary of your hire date. The terms "Good Reason" and "Cause" are defined in your severance agreement.
|
6.
|
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.
|
7.
|
Paid Time Off
: Upon joining Catalent you will receive seven (7) paid company holidays (New Years Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and the day following, and Christmas Day). You will also be eligible to receive up to 26 days of PTO each year. For 2011, this will be prorated based upon your start date. PTO includes vacation, sick and personal days, all of which need to be used during the 2011 calendar year as we do not permit carry over, unless lawfully required.
|
8.
|
Screening
: Consistent with our policies for all Catalent personnel and the special consideration of our industry, this offer is contingent upon the taking of a company-paid drug screening test, the results of which must be negative, as well as an acceptable background check. The drug screen must be completed within five days of receipt of this offer. The background check must be completed prior to your start of employment. Please sign and fax back at least one week prior to your start date the following documents authorizing us to move forward with the initiation of the required background check:
|
1.
|
Signed copy of this offer
|
2.
|
Background Check - Notice & Acknowledgement.
|
9.
|
Terms
: Notwithstanding anything to the contrary herein, employment with Catalent is not for any definite period of time and is terminable, with or without notice, at the will of either you or the company at any time for any reason. There shall be no contract, express or implied, of employment.
|
10.
|
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.
|
11.
|
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 a Business Unit President with global responsibilities.
|
12.
|
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 1-9 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.
|
13.
|
Start Date
: Your first day of employment will be July 1, 2011 subject to the release date from your current employer.
|
(e)
|
Plan
. The term “Plan” means the 2014 Omnibus Incentive Plan, as in effect from
|
6.
|
Treatment on Termination.
|
10.
|
Restrictive Covenants
.
|
(b)
|
Competitive Activity.
|
(1)
|
with whom the Participant had personal contact or dealings on behalf of the Company or any of its Subsidiaries or Affiliates 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 or Affiliates during the one-year period preceding the Termination Date; or
|
(3)
|
for whom the Participant had direct or indirect responsibility during the one-year period preceding the Termination Date.
|
(1)
|
engage in any business that competes with the business of the Company or any of its Subsidiaries or Affiliates, including, but not limited to, providing formulation/dose form technologies and/or contract services to pharmaceutical, biotechnology, over-the-counter and vitamins/minerals/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
|
(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, any business relationship (whether formed before, on or after the Date of Grant) between the Company or any of its Subsidiaries or Affiliates and any customer, client, supplier, or investor of the Company or any of its Subsidiaries or Affiliates.
|
(1)
|
solicit or encourage any employee of the Company or any of its Subsidiaries or Affiliates to leave such Employment; or
|
(2)
|
hire any such employee who was employed by the Company or any of its Subsidiaries or Affiliates as of the Termination Date or who left such Employment 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 or Affiliates for at least six (6) months.
|
(c)
|
Confidentiality
.
|
(d)
|
Equitable Relief.
|
3.
|
Earning Per Share Performance Goal
|
Performance Level
|
Cumulative EPS
|
Percent of Target Goal
|
EPS Performance Percentage
|
Below Threshold
|
Below $3.10
|
Below 75%
|
0%
|
Threshold
|
$3.10
|
75%
|
50%
|
|
Between $3.10 and $4.13
|
|
Linearly interpolate between 50% and 100%
|
Target
|
$4.13
|
100%
|
100%
|
|
Between $4.13 and $5.16
|
|
Linearly interpolate between 100% and 200%
|
Maximum
|
$5.16 (or higher)
|
125%
|
200%
|
4.
|
Relative Total Shareholder Return Performance Goal
|
RTSR Percentile Rank
Relative to RTSR of Peer Group
|
Performance Level
|
RTSR Performance Percentage
|
Below 25th Percentile
|
Below Threshold
|
0%
|
25th Percentile
|
Threshold
|
50%
|
Between 25
th
Percentile and Median
|
|
Linearly Interpolate Between 50% and 100%
|
Median
|
Target
|
100%
|
Between Median and 75
th
Percentile
|
|
Linearly Interpolate Between 100% and 150%
|
75th Percentile and Above
|
Maximum
|
150%
|
(e)
|
Plan
. The term “Plan” means the 2014 Omnibus Incentive Plan, as in effect from
|
6.
|
Treatment on Termination
.
|
10.
|
Restrictive Covenants
.
|
(b)
|
Competitive Activity
.
|
(1)
|
with whom the Participant had personal contact or dealings on behalf of the Company or any of its Subsidiaries or Affiliates 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 or Affiliates during the one-year period preceding the Termination Date; or
|
(3)
|
for whom the Participant had direct or indirect responsibility during the one-year period preceding the Termination Date.
|
(1)
|
engage in any business that competes with the business of the Company or any of its Subsidiaries or Affiliates, including, but not limited to, providing formulation/dose form technologies and/or contract services to
|
(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, any business relationship (whether formed before, on or after the Date of Grant) between the Company or any of its Subsidiaries or Affiliates and any customer, client, supplier, or investor of the Company or any of its Subsidiaries or Affiliates.
|
(1)
|
solicit or encourage any employee of the Company or any of its Subsidiaries or Affiliates to leave such Employment; or
|
(2)
|
hire any such employee who was employed by the Company or any of its Subsidiaries or Affiliates as of the Termination Date or who left such Employment 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 or Affiliates for at least six (6) months.
|
(c)
|
Confidentiality
.
|
(d)
|
Equitable Relief.
|
11.
|
Tax Withholding
.
|
(f)
|
the Participant is voluntarily participating in the Plan;
|
3.
|
Earning Per Share Performance Goal
|
Performance Level
|
Cumulative EPS
|
Percent Target Goal
|
of
|
EPSPerformance Percentage
|
Below Threshold
|
Below $3.10
|
Below 75%
|
0%
|
|
Threshold
|
$3.10
|
75%
|
50%
|
|
|
Between $3.10 and $4.13
|
|
Linearly interpolate between 50% and 100%
|
|
Target
|
$4.13
|
100%
|
100%
|
|
|
Between $4.13 and $5.16
|
|
Linearly interpolate between 100% and 200%
|
|
Maximum
|
$5.16 (or higher)
|
125%
|
200%
|
4.
|
Relative Total Shareholder Return Performance Goal
|
RTSR Percentile Rank
Relative to RTSR of Peer Group
|
Performance Level
|
RTSR Performance Percentage
|
Below 25th Percentile
|
Below Threshold
|
0%
|
25th Percentile
|
Threshold
|
50%
|
Between 25th Percentile and Median
|
|
Linearly Interpolate between 50% and 100%
|
Median
|
Target
|
100%
|
Between Median and 75th Percentile
|
|
Linearly Interpolate between 100% and 150%
|
75th Percentile and Above
|
Maximum
|
150%
|
Olswang LLP
|
T +44 (0) 20 7067 3000
|
|
90 High Holborn
|
F +44 (0) 20 7067 3999
|
Olswang LLP is authorised and regulated by the Solicitors Regulation
Authority.
|
London WC1V 6XX
|
DX 37972 Kingsway
|
www.olswang.com
|
1.
|
DEFINITIONS 1
|
2.
|
TERMINATION 3
|
4.
|
TAXATION 5
|
5.
|
COMPANY PROPERTY 6
|
6.
|
CONFIDENTIALITY 6
|
7.
|
RESTRICTIONS 7
|
8.
|
CLAIMS AGAINST THE COMPANY AND WARRANTIES 9
|
9.
|
REFERENCE AND OTHER MATTERS 11
|
10.
|
GENERAL 12
|
(1)
|
CATALENT PHARMA SOLUTIONS LIMITED
a company incorporated in England and Wales (registered number
03761135
) whose registered office is at Frankland Road, Blagrove, Swindon, Wiltshire SN5 8YG ("Company"); and
|
(2)
|
SHARON JOHNSON
of 8 Tithe Barn Close, Ickburgh, Norfolk IP26 5JY ("Employee").
|
1.
|
DEFINITIONS
|
1.1
|
In this Agreement (including the schedules) the following words and expressions shall have the following meanings unless the context otherwise requires:
|
2.
|
TERMINATION
|
2.1
|
Following the Employee's resignation on 1 April 2017, the Employee's employment with the Company will terminate on the Termination Date.
|
2.2
|
During the period up to the Termination Date, the Employee will remain an employee of the Company and will continue to comply with:
|
2.2.1
|
all of her express and implied duties and obligations under the Contract of Employment,
|
2.2.2
|
all other duties she may have as a Company employee, including, but not limited to, her duties to comply with all applicable policies of the Company, including, but not limited to, its Standards of Business Conduct and its Securities Trading Policy, and
|
2.2.3
|
all fiduciary (or similar) duties she owes as an officer of a Group Company pursuant to the law under which such Group Company is organized.
|
2.3
|
In addition to discharging the responsibilities set forth in clause 2.2 of this Agreement, during the period up to the Termination Date and for the Three Month Period, the Employee will participate cooperatively in transition activities as required by the Company or any Group Company and provide in a timely fashion such assistance and information as the Company or any Group Company may require in connection with any matter with which the Employee dealt in the course of her employment. During the Three Month Period, clause 16 of the Contract of Employment (Confidentiality) shall continue to apply to the Employee save that references to "employment" in that clause shall be read as references to employment and the Three Month Period. In respect of the Three Month Period:
|
2.3.1
|
the Employee will not receive any salary, benefits or other remuneration for providing such transition assistance, other than reimbursement of expenses properly incurred and submitted in accordance with the Company's expenses policy and clause 3.6 below; and
|
2.3.2
|
any travel undertaken by the Employee pursuant to such transition activities shall be with the Employee's consent.
|
2.4
|
The Employee agrees to resign any and all directorships, offices, trusteeships or other positions held by her in or on behalf of the Company or any Group Company with effect from the Termination Date by signing a resignation letter in the form attached at Schedule 3 and such other documentation as the Company shall require to be signed in order to give effect to such resignations.
|
3.
|
PAYMENTS
|
3.1
|
The Employee will receive her salary and contractual benefits as usual up to and including the Termination Date (less applicable tax and employee's National Insurance contributions), together with a payment in lieu of accrued but untaken holiday (if any) as at the Termination Date (less applicable tax and employee's National Insurance contributions).
|
3.2
|
The Employee will retain all rights to any benefits that vested on or before the Termination Date. In addition:
|
3.2.1
|
the Employee will remain eligible for a cash bonus under and in accordance with the terms of the MIP for fiscal year 2017; and
|
13.2.2
|
any Award (or part of an Award) which is held by the Employee will continue to be capable of vesting (and, if applicable, being exercised by the Employee) up to and including the Termination Date in accordance with, and subject to, the provisions of the Plan and any grant notice or agreement relating to the Award in the usual way.
|
3.3
|
Subject to:
|
3.3.1
|
receipt by the Company of a copy of this Agreement, signed by all the parties and the Adviser;
|
3.3.2
|
the Employee's compliance with the Terms; and
|
3.3.3
|
receipt by the Company of the resignation letter referred to in clause 2.4;
|
3.4
|
Notwithstanding the termination of the Employee's employment with the Company on the Termination Date:
|
3.4.1
|
a cash bonus equal to 75% of the Employee's current base annual salary (75% of the Employee’s current base annual salary being £219,256.50) that would otherwise have become due and payable to the Employee under the terms of the MIP for fiscal year 2018 will continue to be paid to the Employee in accordance with its terms at the same time as other eligible employees receive their MIP awards;
|
3.4.2
|
any Award (or any part of an Award) which is (a) held by the Employee pursuant to the Plan and (b) not vested as of the Termination Date but is due to vest on or before 30 September 2017 will continue to be capable of vesting (and, if applicable, being exercised by the Employee) in accordance with, and subject to, the provisions of the Plan and any grant notice or agreement relating to the Award; and
|
3.4.3
|
any option to purchase the Company’s common stock that vested prior to the Termination Date or will vest on or before 30 September 2017 in accordance with clause 3.4.2 may be exercised, in whole or in part from time to time, at any time up to the date that is three months from the later of the Termination Date or the date when such option vested, provided that any option not exercised by such date will be cancelled and forfeited,
|
3.5
|
In addition, the Company will pay the Employee, without admission of liability, and subject to the deductions provided for in this Agreement, an amount equal to the Employee's current base annual salary (being £292,342.00) as the Compensation Payment. The Compensation Payment will be paid in 12 monthly instalments on or around the last working day of each calendar month commencing within 28 days of the Termination Date. The Company's liability to pay any outstanding instalments will cease immediately at the time the Employee breaches any Term, including (without limitation) if the Employee commences any proceedings in an employment tribunal or other court, whether in the United Kingdom, the United States or any other country, against the Company, any Group Company or any Relevant Personnel.
|
3.6
|
The Employee must submit any expenses claims on or before the Termination Date in the case of expenses incurred on or before the Termination Date and on or before the end of the Three Month Period in the case of expenses incurred during the Three Month Period and the Company will reimburse the Employee for any expenses properly incurred in the usual way, subject to compliance with the requirements of the Company's expenses policy. Any expenditure on the Company's credit card that was not properly incurred on the Company's business or for which the Employee cannot produce appropriate receipts may be deducted from the payment referred to in clause 3.4.1 above.
|
3.7
|
For the avoidance of doubt, the Employee’s entitlement to all salary and other benefits will end on the Termination Date.
|
4.
|
TAXATION
|
4.1
|
The payments referred to in clauses 3.2, 3.4.1 and 3.4.2 will be made less applicable tax and employee's National Insurance contributions.
|
4.2
|
The first £30,000 of the Compensation Payment will be paid to the Employee without deduction of income tax or employee’s National Insurance contributions. The balance of the Compensation Payment will be paid to the Employee less income tax and any applicable employee's National Insurance contributions.
|
4.3
|
Except in respect of income tax or employee's National Insurance contributions deducted by the Company under clauses 4.1 and 4.2 the Employee is, and undertakes to be, responsible for any Tax Liability, including for the avoidance of doubt any Tax Liability on the first £30,000 of the Compensation Payment, and the Employee indemnifies and will keep indemnified the Company and each Group Company against any claim or demand which is made against the Company or any Group Company in respect of any such Tax Liability but excluding any interest, costs or penalties imposed in respect of the Tax Liability arising from the Company's or any Group Company’s failure to inform the Employee within a reasonable period of any demand received in respect of any Tax Liability. The Employee undertakes immediately to pay to the Company on demand any such Tax Liability other than any part of the Tax Liability already paid by the Employee to HM Revenue & Customs.
|
4.4
|
The Company will reimburse the Employee for the reasonable costs incurred by the Employee in obtaining tax planning or preparation services, up to a limit of £15,000 (including VAT, if applicable), provided such services are procured by the Employee by 30 April 2018 and the Employee’s claim for reimbursement is submitted reasonably promptly thereafter in accordance with the Company’s normal expense reimbursement policies.
|
4.5
|
The Company will in addition pay such amounts to the Employee as are sufficient to equalise the tax burden on the Employee as a result of share option exercises, in a manner consistent with the manner in which such payments have been made available to the Employee and certain other U.K.-based executives previously.
|
5.
|
COMPANY PROPERTY
|
5.1
|
The Employee warrants and confirms that the Employee will return to the Company on or before the Termination Date, without modification, all property belonging to the Company or any Group Company which is in the Employee's possession, custody or control including, but not limited to, computer disks, computer and other electronic equipment, correspondence, credit or charge cards, documents, files, keys, laptop computers, mobile telephones, records, security passes and other equipment and information (whether originals, copies or extracts) and that the Employee will not retain any copies or extracts of any documents or other property belonging to the Company or any Group Company (whether in physical or electronic form). The Employee undertakes to return immediately to the Company any such property that may, after the Termination Date, come into the Employee's possession, custody or control.
|
5.2
|
The Employee confirms that any information which belongs or may belong to the Company or any Group Company and which is stored on any storage platform, personal computer or other electronic equipment belonging to the Employee or to which the Employee has access (other than that which is stored on any Company personal computer or other Company electronic equipment) will be returned to the Company pursuant to clause 5.1 and will be permanently deleted from such equipment or platform on or before the Termination Date.
|
6.
|
CONFIDENTIALITY
|
7.
|
RESTRICTIONS
|
7.1
|
Notwithstanding the termination of the Employee's employment, the Employee acknowledges and affirms that the Employee remains bound by those provisions of the Contract of Employment that are expressed to continue after termination of the Employee's employment including, without limitation, clause 16 (Confidentiality) and clause 17 (Intellectual Property Rights) save for the restrictions at clause 18 (Restraint) of the Contract of Employment which the parties agree will be replaced by, and the Employee will bound by, the restrictions at clause 7.2 of this Agreement.
|
7.2
|
In consideration of the payments and benefits set forth in clauses 3.4 and 4.4 of this Agreement, which the Employee acknowledges she would otherwise not be entitled to, the Employee agrees with the Company that she will not directly or indirectly for a period of six months immediately following the Termination Date:
|
7.2.1
|
carry on or be involved or interested in a Competing Business, save that she may be interested: (1) in securities in a company whose shares or other securities are listed, traded and/or dealt in on any securities exchange or market provided that she does not hold (and is not interested, directly or indirectly) in shares or securities conferring more than three per cent of the votes that could be cast at a general meeting of that body corporate; or (2) in any class of securities not so listed, traded or dealt provided that she does not hold (and is not interested, directly or indirectly) in shares or securities conferring more than 5 per cent of the votes that could be cast at a general meeting of that body corporate;
|
7.2.2
|
in any capacity perform in a Competing Business a similar role to that which she performed for the Company;
|
7.2.3
|
either on her own account or on behalf of any Competing Business supply or facilitate the supply of Restricted Goods or Services to any Client;
|
7.2.4
|
on behalf of any Competing Business deal with a Client;
|
7.2.5
|
either on her own account or on behalf of any Competing Business deal with a Supplier;
|
7.2.6
|
either on her own account or for any person, firm or company or other undertaking employ or otherwise engage or facilitate the employment or engagement of the services of any Key Employee whether or not any such Key Employee would in entering into the employment or engagement commit a breach of contract;
|
7.2.7
|
either on her own account or for any company, firm, person or other undertaking induce, solicit or entice or endeavour to induce, solicit or entice (or assist any company, firm, person or other undertaking to induce, solicit or entice or endeavour to induce, solicit or entice) any Key Employee to cease working for or providing their services to the Company or any Group Company whether or
|
7.2.8
|
either on her own account or on behalf of any Competing Business induce, solicit or entice or endeavour to induce, solicit or entice (or assist any Competing Business to induce, solicit or entice or endeavour to induce, solicit or entice) any Client to cease conducting any business with the Company or any Group Company or to reduce the amount of business conducted with the Company or any Group Company or adversely to vary the terms upon which any business is conducted with the Company or any Group Company or to exclude the Company or any Group Company from new business opportunities in relation to any Restricted Goods or Services;
|
7.2.9
|
on behalf of any Competing Business induce, solicit or entice or endeavour to induce, solicit or entice (or assist any Competing Business to induce, solicit or entice or endeavour to induce, solicit or entice) any Supplier to cease conducting business with the Company or any Group Company or to reduce the amount of business conducted with the Company or any Group Company or adversely to vary the terms upon which any business is conducted with the Company or any Group Company.
|
7.3
|
The Employee agrees that each of the restrictions set out in clauses 7.2.1 to 7.2.9 constitute entirely separate, severable and independent restrictions on her. The Employee acknowledges that she has received independent legal advice on the terms and effect of the provisions of this Agreement, including the restrictions above.
|
7.4
|
The Employee will not at any time after the Termination Date present herself or allow herself to be held out or presented as being in any way connected with or interested in the business of the Company or any Group Company (other than for the purposes of carrying out transition activities during the Three Month Period in accordance with clause 2.3 above, as a shareholder (if that is the case) or if the Employee is re-hired by the Company or any Group Company).
|
7.5
|
The Employee undertakes, affirms and agrees that:
|
7.5.1
|
the Employee will not directly or indirectly make, publish or otherwise communicate any statement whatsoever whether in writing or otherwise which may have the effect of damaging or lowering the business interests or the reputation of the Company or any Group Company or any Relevant Personnel or which may be disparaging or derogatory to any of the Company or any Group Company or any Relevant Personnel; and
|
7.5.2
|
following the Termination Date, the Employee will not represent herself or allow herself to be held out or represented as being in any way connected with or interested in the business of the Company or any Group Company.
|
8.
|
CLAIMS AGAINST THE COMPANY AND WARRANTIES
|
8.1
|
The Employee accepts that the Terms are offered by the Company without any admission of liability and are in full and final settlement of all and any claims as set out in Schedule 1 ("Claims").
|
8.2
|
The provisions of clause 8.1 will not prevent the Employee bringing proceedings:
|
8.2.1
|
to enforce this Agreement; or
|
8.2.2
|
in respect of Pension Rights; or
|
8.2.3
|
in a County Court or the High Court, in respect of any personal injury of which the Employee is not aware and could not reasonably have been aware at the time of signing this Agreement.
|
8.3
|
The Employee undertakes and warrants that, to the best of her knowledge, information and belief, after due and careful enquiry, she is not aware of any circumstances that might give rise to a personal injury claim (nor to a claim in respect of Pension Rights) against the Company or any Group Company.
|
8.4
|
The Employee represents, warrants and undertakes that:
|
8.4.1
|
the Employee has received advice from the Adviser as to the Terms and effect of this Agreement and in particular its effect on the Employee's ability to pursue the Employee's rights or complaint before an employment tribunal;
|
8.4.2
|
the Adviser has confirmed to the Employee that they are a solicitor of the Senior Courts of England and Wales, holding a current practising certificate and that there was in force, at the time the Employee received the advice referred to above, a contract of insurance, or an indemnity provided for members of a profession or professional body, covering the risk of a claim by the Employee in respect of loss arising in consequence of or from that advice;
|
8.4.3
|
the Employee has not presented or brought and will not present or bring any complaint, proceedings, action or claim before any court, employment tribunal or other judicial body in England, Scotland or any other jurisdiction in connection with, relating to or arising out of the Employee's employment or its termination and nor has nor will anyone acting on the Employee's behalf;
|
8.4.4
|
the Employee has disclosed to the Adviser all facts or circumstances that may give rise to a claim against the Company or any Group Company or Relevant Personnel and the Adviser has advised the Employee as to whether the Employee has any claim of any kind arising out of or in connection with the Employee's employment by the Company or any Group Company or the termination of any such employment and, to the extent that the Employee has or may have any such claims, these have been asserted or intimated to the Company by the Employee or the Adviser on the Employee's behalf prior to the date of this Agreement and this Agreement and the waiver and release in clause 8.1 above expressly relate to each and every one of those claims;
|
8.4.5
|
except for those claims asserted or intimated as indicated in clause 8.4.4 above, the Employee has no other complaints or claims of any nature against the Company or any Group Company or any of its Relevant Personnel;
|
8.4.6
|
the Employee has not withheld or failed to disclose any material fact concerning any material failure by the Employee in the performance of the Employee's duties for the Company and any Group Company;
|
8.4.7
|
the Employee is not aware: (1) of any grounds on which she can make, or (2) (to the best of the Employee's knowledge) that any other employee or worker of the Company or any Group Company is intending to make a protected disclosure under section 43A of the Employment Rights Act 1996 in relation to the Company or any Group Company;
|
8.4.8
|
the Employee has not committed any breach of any duty (including fiduciary duty) owed by the Employee to the Company or any Group Company nor a breach of the Contract of Employment that would entitle the Company to terminate the Employee's employment without notice; and
|
8.4.9
|
as at the date of this Agreement, the Employee has not agreed to accept, accepted or received nor has it been indicated that the Employee might receive an offer of alternative employment, engagement or consultancy.
|
8.5
|
Nothing in this Agreement shall prevent the Employee from making a protected disclosure under section 43A of the Employment Rights Act 1996.
|
8.6
|
The Employee accepts that the Company (on behalf of itself, and its Group Companies) is entering into this Agreement in reliance upon the representations, warranties and undertakings provided by the Employee in this clause 8 and clauses 5, 6 and 7 above.
|
8.7
|
The Company confirms that, as at the date of this Agreement, it is not aware of any claims which it or any Group Company has or may have against the Employee.
|
8.8
|
The Employee agrees that the conditions regulating compromise agreements and settlement agreements contained in the Sex Discrimination Act 1975, the Race Relations Act 1976, the Trade Union and Labour Relations (Consolidation) Act 1992, the Disability Discrimination Act 1995, the Employment Rights Act 1996, the National Minimum Wage Act 1998, the Working Time Regulations 1998, the Transnational Information and Consultation of Employees Regulations 1999, the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, the Employment Equality (Religion or Belief) Regulations 2003, the Employment Equality (Sexual Orientation) Regulations 2003, the Information and Consultation of Employees Regulations 2004, the Employment Equality (Age) Regulations 2006, the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006, the Pensions Act 2008 and the Agency Workers Regulations 2010 are intended to be and have been satisfied. The Employee agrees that this is a qualifying settlement agreement under the Equality Act 2010 and that Section 147(3)(c) and (d) Equality Act 2010 are met.
|
8.9
|
If the Employee breaches any material provision of this Agreement the Employee agrees to indemnify the Company or any Group Company for any losses suffered as a result thereof including all reasonable professional fees incurred.
|
8.10
|
If the Company breaches any material provision of this Agreement the Company agrees to indemnify the Employee for any losses suffered as a result thereof including all reasonable professional fees incurred.
|
8.11
|
If the Employee, or anyone acting on the Employee's behalf institutes any action, claim or proceedings in the employment tribunal or any other court against the Company, any Group Company or any Relevant Personnel in respect of any matters that are the subject of clause 8.1 or if the Employee or anyone acting on the Employee's behalf asserts that this Agreement is not a valid compromise agreement, settlement agreement or qualifying settlement agreement or if it is so adjudged by any court or tribunal, the Employee undertakes to repay the payment set out at clause 3.4.1 (less any tax paid on it) together with any sums paid to the Employee or on the Employee's behalf under this Agreement in respect of legal costs to the Company in full immediately on demand and the Company and each Group Company and all Relevant Personnel will be released from any continuing obligations under this Agreement. Such repayment shall be recoverable by the Company as a debt.
|
9.
|
REFERENCE AND OTHER MATTERS
|
9.1
|
It is a condition of this Agreement that the Employee obtains legal advice as to the terms and effect of this Agreement from the Adviser and that the Adviser signs the acknowledgement at Schedule 2.
|
9.2
|
The Company agrees to pay, directly to the Adviser's firm, the Adviser's firm's reasonable legal fees incurred by the Employee exclusively for advice given to the Employee in relation to the termination of the Employee's employment and the terms of this Agreement up to a maximum of £750 (plus VAT) after receipt by the Company of an appropriate invoice from the Adviser's firm addressed to the Employee and expressed to be payable by the Company and sent (marked strictly private and confidential) to Steven Fasman.
|
9.3
|
Upon receipt of a written request from a prospective employer addressed to the Company’s Senior Vice President, Human Resources the Company will provide a written reference substantially in the form set out in Schedule 4, subject always to any legal or regulatory obligations which the Company may have that may require it to amend or add to the reference or make any oral comment in respect of it.
|
9.4
|
Any internal or external comment or statement by the Employee concerning her separation from the Company will be consistent with the substance and tenor of the agreed form internal announcement set out in Schedule 5.
|
10.
|
GENERAL
|
10.1
|
The parties consider that this Agreement satisfies the conditions regarding compromise agreements and settlement agreements and is a qualifying settlement agreement under the Equality Act 2010.
|
10.2
|
This Agreement sets out the entire agreement and understanding between the Employee and the Company and supersedes any prior agreement between the parties relating to the subject matter of this Agreement. The Employee acknowledges and agrees that in entering into this Agreement no reliance is placed upon, and no remedy shall be available in respect of, any statement, representation, warranty, understanding, promise or assurance (whether negligently or innocently made) of any person (whether party to this Agreement or not) other than as expressly set out in this Agreement. Nothing in this clause operates to limit or exclude any liability for fraud.
|
10.3
|
The failure to exercise or any delay in exercising a right or remedy provided by this Agreement or by law does not constitute a waiver of the right or remedy or a waiver of other rights or remedies. A waiver of a breach of any of the terms of this Agreement or a default under this Agreement does not constitute a waiver of any other breach or default and will not affect the other terms of this Agreement and will not prevent a party from subsequently requiring compliance with the waived obligation.
|
10.4
|
The validity, construction and performance of the terms set out in this Agreement shall be governed by and construed in accordance with the law of England and Wales. Each of the parties irrevocably submits to the exclusive jurisdiction of the courts of England and Wales.
|
10.5
|
This Agreement, although marked "without prejudice/subject to contract", will upon signature by the parties and upon the Adviser signing the acknowledgement in Schedule 2 be treated (subject to clause 6) as an open document evidencing an agreement binding on the parties.
|
10.6
|
This Agreement may be executed in any number of counterparts and by the parties to it on separate counterparts, each of which shall be an original but all of which together shall constitute one and the same
|
1.
|
In this Agreement, "Claims" means all and any claims, costs, expenses or rights of action of any kind, whether contractual, statutory or otherwise, whether or not they are or could be in the contemplation of the parties at the date of this Agreement, and whether having already occurred or arising in the future in the United Kingdom or in any other country in the world, including, but not limited to, the United States of America, which the Employee has or may have against the Company or any Group Company or any Relevant Personnel from time to time, which arise out of or in connection with the Employee's employment by the Company or any Group Company or its termination including (but not limited to) any claim:
|
1.1
|
in relation to notice or pay in lieu of notice;
|
1.2
|
for equal treatment or equality of terms under the Equal Pay Act 1970 or the Equality Act 2010;
|
1.3
|
for direct or indirect discrimination on the grounds of sex, pregnancy or maternity, gender re-assignment, marital or civil partnership status, discrimination by way of victimisation, harassment and any other claim under the Sex Discrimination Act 1975 or the Equality Act 2010;
|
1.4
|
for direct or indirect discrimination, discrimination by way of victimisation, harassment on grounds of colour, race, nationality or ethnic or national origin and any other claim under the Race Relations Act 1976 or the Equality Act 2010;
|
1.5
|
for refusal of employment, action short of dismissal, dismissal or other detriment on grounds related to trade union membership, for failure to comply with collective consultation obligations or to pay a protective award or any other claim under the Trade Union and Labour Relations (Consolidation) Act 1992;
|
1.6
|
for discrimination, harassment, or victimisation related to disability, failure to make adjustments and any other claim under the Disability Discrimination Act 1995 or the Equality Act 2010;
|
1.7
|
for employment particulars and itemised pay statements, unauthorised deductions from wages, for detriment in employment (on any ground), for detriment or dismissal or selection for redundancy on grounds related to having made a protected disclosure, for paid time off for ante-natal care, for the right to time off for dependants for the right to request time off for study or training, for the right to a written statement of reasons for dismissal, for unfair dismissal, for automatically unfair dismissal (on any ground), for a redundancy payment, for automatically unfair selection for redundancy on any ground and any other claim under the Employment Rights Act 1996;
|
1.8
|
under the Protection from Harassment Act 1997;
|
1.9
|
for the national minimum wage or additional remuneration, failure to allow access to records and detriment in employment on grounds related to the national minimum wage under the National Minimum Wage Act 1998;
|
1.10
|
for the right to be accompanied and for detriment or dismissal on the grounds relating to the right to be accompanied under the Employment Relations Act 1999;
|
1.11
|
under the Employment Act 2002;
|
1.12
|
for dismissal for reasons related to a relevant transfer, for failure to inform or consult, or any other claim under the Transfer of Undertakings (Protection of Employment) Regulations 1981 or 2006;
|
1.13
|
for compensation for entitlement to annual leave, payment in respect of annual leave refusal to give paid annual leave, daily or weekly or compensatory rest or rest breaks and any other claim under the Working Time Regulations 1998;
|
1.14
|
relating to any rights to or during any period of parental leave, relating to the right to return after parental leave, detriment relating to parental leave rights, automatic unfair dismissal on grounds of parental leave, contractual rights to or during parental leave under the Maternity and Parental Leave, etc Regulations 1999;
|
1.15
|
relating to any rights to or during any period of shared parental leave, relating to the right to return after shared parental leave, detriment relating to shared parental leave rights, automatic unfair dismissal on grounds of shared parental leave;
|
1.16
|
under the Transnational Information and Consultation of Employees Regulations 1999;
|
1.17
|
for less favourable treatment, for the right to receive a written statement of reasons for less favourable treatment, automatic unfair dismissal or detriment in employment under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000;
|
1.18
|
for less favourable treatment, for the right to receive a written statement of reasons for less favourable treatment, automatic unfair dismissal or detriment in employment under the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002;
|
1.19
|
for detriment or dismissal relating to the right to request contract variation (flexible working) under the Employment Rights Act 1996;
|
1.20
|
for direct or indirect discrimination, victimisation or harassment on grounds of religion or belief under the Employment Equality (Religion or Belief) Regulations 2003 or the Equality Act 2010;
|
1.21
|
for direct or indirect discrimination, victimisation or harassment on grounds of sexual orientation under the Employment Equality (Sexual Orientation) Regulations 2003 or the Equality Act 2010;
|
1.22
|
under the Information and Consultation of Employees Regulations 2004;
|
1.23
|
for direct or indirect discrimination, victimisation or harassment on grounds of age under the Employment Equality (Age) Regulations 2006 or the Equality Act 2010;
|
1.24
|
in relation to any breach of the Contract of Employment including (but not limited to) unpaid wages, unpaid holiday pay or unpaid sick pay, permanent health insurance, private medical insurance, bonus or commission or any other contractual or discretionary benefit and any other contractual or tortious claim;
|
1.25
|
in relation to any office or directorship(s) of the Company or any Group Company the Employee may hold;
|
1.26
|
for personal injury or negligence save, for the avoidance of doubt, those claims specifically excluded under clause 8.2.3 of this Agreement;
|
1.27
|
in relation to any share option scheme, bonus scheme, long-term incentive scheme or other profit-sharing scheme or arrangement between the Employee and the Company or any Group Company;
|
1.28
|
for detriment or dismissal relating to rights under the Pensions Act 2008;
|
1.29
|
in relation to the conduct of the Company or any Group Company in relation to any retirement benefits scheme which provides Relevant Benefits of which the Employee is or claims to be a member including, without limitation, the payment of contributions to, the accrual of benefits under, or the exercise of any powers or discretion in relation to such a scheme;
|
1.30
|
in respect of which a Conciliation Officer is authorised to act;
|
1.31
|
under European Union law;
|
1.32
|
under any similar law to the foregoing in any other jurisdiction that may be applicable to the employment relationship between the Employee and the Company or any Group Company or the separation from such employment, including without limitation any similar law of the United States or any of its political subdivisions; or
|
1.33
|
any other statutory claim or claim for breach of statutory duty.
|
2.
|
“Claim" includes (without limitation):
|
2.1
|
any claim of which, at the date of this Agreement, neither the Company or the Employee is aware; and
|
2.2
|
any claim of which, at the date of this Agreement, the Employee is aware but neither the Company nor any Group Company nor any Relevant Personnel is aware.
|
EXECUTED
as a deed by
CATALENT PHARMA SOLUTIONS LIMITED
acting by its director in the presence of:
|
Signature
/s/ Lance Miyamoto
Print name
Lance Miyamoto
Date
12 May 2017
|
|
Witness's
Signature /s/ Anna Murray Name Anna Murray Address 14 Schoolhouse Road Somerset, NJ 08873 Occupation Executive Assistant |
|
|
|
Exhibit 21.1
|
||||
|
|
|
|
|
|
|
|
CATALENT, INC. SUBSIDIARIES
|
|||||||
As of June 30, 2017
|
|||||||
NAME (STATE OF ORGANIZATION)
|
|
||||||
WHOLLY OWNED SUBSIDIARIES OF CATALENT, INC.
|
1
|
Accucaps Industries Limited (CANADA)
|
2
|
Catalent Argentina S.A.I.C. (ARGENTINA)
|
3
|
Catalent Australia Holding Pty Ltd (AUSTRALIA)
|
4
|
Catalent Australia Pty Ltd (AUSTRALIA)
|
5
|
Catalent Belgium Holding S.A. (BELGIUM)
|
6
|
Catalent Belgium S.A. (BELGIUM)
|
7
|
Catalent Brasil Ltda (BAZIL)
|
8
|
Catalent China Holdings Limited (CAYMAN ISLANDS)
|
9
|
Catalent Cosmetics AG (SWITZERLAND)
|
10
|
Catalent CTS (Edinburgh) Limited (UNITED KINGDOM)
|
11
|
Catalent CTS (Kansas City), LLC (DELAWARE)
|
12
|
Catalent CTS (Singapore) Pvt Ltd (SINGAPORE)
|
13
|
Catalent CTS Informatics, Inc. (DELAWARE)
|
14
|
Catalent CTS UK Holding Limited (UNITED KINGDOM)
|
15
|
Catalent CTS, LLC (DELAWARE)
|
16
|
Catalent France Beinheim S.A. (FRANCE)
|
17
|
Catalent France Limoges Holding S.A.S. (FRANCE)
|
18
|
Catalent France Limoges S.A.S. (FRANCE)
|
19
|
Catalent Germany Eberbach GmbH (GERMANY)
|
20
|
Catalent Germany Holding II GmbH (GERMANY)
|
21
|
Catalent Germany Holding III GmbH (GERMANY)
|
22
|
Catalent Germany Schorndorf GmbH (GERMANY)
|
23
|
Catalent Italy Holding Srl (ITALY)
|
24
|
Catalent Italy S.p.A. (ITALY)
|
25
|
Catalent Japan K.K. (JAPAN)
|
26
|
Catalent Netherlands Holding B.V. (NETHERLANDS)
|
27
|
Catalent Pharma Solutions GmbH (SWITZERLAND)
|
28
|
Catalent Pharma Solutions Limited (UNITED KINGDOM)
|
29
|
Catalent Pharma Solutions, Inc. (DELAWARE)
|
30
|
Catalent Pharma Solutions, LLC (DELAWARE)
|
31
|
Catalent Pharmaceutical Consulting (Shanghai) Co., Ltd. (CHINA)
|
32
|
Catalent San Diego Inc. (CALIFORNIA)
|
33
|
Catalent (Shanghai) Clinical Trial Supplies Co Ltd. (CHINA)
|
34
|
Catalent Singapore Holdings Pte. Ltd. (SINGAPORE)
|
35
|
Catalent U.K. Packaging Limited (UNITED KINGDOM)
|
36
|
Catalent U.K. Swindon Zydis Limited (UNITED KINGDOM)
|
37
|
Catalent Uruguay S.A. (URUGUAY)
|
38
|
Catalent US Holding I, LLC (DELAWARE)
|
39
|
Catalent US Holding II, LLC (DELAWARE)
|
40
|
Catalent USA Packaging, LLC (DELAWARE)
|
41
|
Catalent USA Woodstock, Inc. (ILLINOIS)
|
42
|
Micron Technologies, Inc. (PENNSYLVANIA)
|
43
|
Micron Technologies Limited (UNITED KINGDOM)
|
44
|
MTI Pharma Solutions Limited (UNITED KINGDOM)
|
45
|
MTI Pharma Solutions, Inc. (DELAWARE)
|
46
|
Pharmapak Technologies Pty. Ltd. (AUSTRALIA)
|
47
|
PTS Intermediate Holdings LLC (DELAWARE)
|
48
|
R.P. Scherer Technologies, LLC (NEVADA)
|
49
|
Redwood Bioscience Inc. (DELAWARE)
|
50
|
Zhejiang Catalent Jiang Yuan Tang Biotechnology Co., Ltd. (CHINA)
|
51
|
R.P. Scherer DDV B.V. (NETHERLANDS)
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
June 30, 2017
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, 2017
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
|