UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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Special Note Regarding Forward-Looking Statements

These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments, and other factors they believe to be appropriate. Any forward-looking statement is subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements.

We caution you that the risks, uncertainties, and other factors referenced above may not contain all of the risks, uncertainties, and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct, or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.

Overview

We believe our customers value us because our depth of development solutions and advanced delivery technologies, intellectual property, consistent and reliable supply, geographic reach, and substantial expertise enable us to create a broad range of business and product solutions that can be customized to fit their individual needs. Today we employ approximately 1,6002,400 scientists and technicians and hold approximately 1,100more than 1,300 patents and patent applications in advanced delivery, drug and biologics formulation, and manufacturing. The aim of our offerings is to allow our customers to bring more products to market faster, and to develop and market differentiated new products that improve patient outcomes. We believe our leading market position significant global scale, and diversity of customers, offerings, regulatory categories, products, and geographies reduce our exposure to potential strategic and product shifts within the industry.

History

Our Competitive Strengths

We have longstanding, extensive relationships with leading pharmaceutical and biotechnology customers. In fiscal 2017,2019, we did business with 8583 of the top 100 branded drug marketers, 2321 of the top 25 generics marketers, 23 of the top 25 biologics marketers, and 2221 of the top 25 consumer health marketers globally, as well as with more than 1,000 other customers, including emerging and specialty companies, which are often more reliant on outside partners as a result of their more virtual business models. Regardless of size, our customers seek innovative product development, superior quality, advanced manufacturing, and skilled technical services to support their development and marketed product needs.

We have made significant investments over time to establish a global manufacturing network, capable of serving customers and patients worldwide and today employ 5.36.4 million square feet of manufacturing and laboratory space across five continents. We have investeddeployed approximately $665$815.0 million in the last five fiscal years in gross capital expenditures. Growth-related investments in facilities, capacity, and capabilities across our businesses have positioned us for future growth in areas aligned with anticipated future demand. Through our focus on operational, quality, and regulatory excellence, we drive ongoing and continuous improvements in safety, productivity, and reliable supply to customer expectations, which we believe further differentiate us. Our manufacturing network and capabilities allow us the flexibility to reliably supply the changing needs of our customers while consistently meeting their quality, delivery, and regulatory compliance expectations.

Our Strategy

We are pursuing the following key growth initiatives:

We intend to use our advanced delivery technologies and development solutions across the entire lifecycle of our customers’ products to drive future growth. Our development solutions span the drug development process, starting with our platforms for early pre-clinical development of small molecules, biologics, and antibody-drug conjugates, to formulation and analytical services, through clinical development and manufacturing of clinical trial supplies, to regulatory consulting. Once a molecule is ready for therapeutic trials and subsequent commercialization, we provide our customers with a range of advanced delivery technologies and manufacturing expertise that allow them to deliver their molecules to the end-users in appropriate dosage forms. The relationship between a molecule and our advanced delivery technologies typically starts with developing and manufacturing the innovator product, then extends throughout the molecule’s commercial life, including with additional customers through potential generic launches or over-the-counter conversion. For prescription products, we are typically the sole and/or exclusive provider, and are reflected in customers’ new drug applications. Our revenues from our advanced delivery technologies are primarily driven by volumes and, as a result, the loss of an innovator drug'sdrug’s market exclusivity may be mitigated if we supply both branded and generic customers.

An example of this can be found in a leading over-the-counter respiratory brand, which today uses both our Zydis fast dissolve and our Liqui-Gels softgel technologies. We originally began development of the prescription format of this product for our multinational pharmaceutical company partner in 1992 to address specific patient sub-segment needs. After four years of development, we then commercially supplied the prescription Zydis product for six years, and we have continued to provide the Zydis form since the switch to over-the-counter status in the United States and other markets in the early 2000s. More recently,Subsequently, we proactively brought a softgel product concept for the brand to the customer, which the customer elected to develop and launch as well. By following this molecule, we have built a strong, 25-year long27-year-long relationship across multiple formats and markets.

We intend to grow by supplementing our existing diverse base of commercialized advanced delivery technology products with new development programs. As of June 30, 2017,2019, our product development teams were working on nearly 800approximately 1,100 new customer programs. Our base of active development programs has expanded in recent years from growing market demand, as well as from our expanded capabilities and technologies. Although there are many complex factors that affect the development and commercialization of pharmaceutical, biological, and customerconsumer and animal health products, we expect that a portion of these programs will reach full development and market approval in the future and thereby add to our long-duration commercial revenues under long-term contracts and grow our existing product base. In the year ended June 30, 2017,fiscal 2019, we introduced 183193 new products consistent with the prior year level.

Catalent continues to be the global leader in providing chemistry, manufacturing, and controls-based product development services to the global pharmaceutical, biotechnology, and consumer health industry, driven by thousands of projects annually. In the year ended June 30, 2017,fiscal 2019, we recognized approximately $409$653.0 million of revenue related to the development of products on behalf of customers, included in our Softgel Technologies, Biologics and Specialty Drug Delivery, Solutionsand Oral Drug Delivery reporting segments, up 24%27% from the prior year. In addition, substantially all of the revenues associated with the Clinical Supply Services segment relate to our support of customer products in development.

investments, the fiscal 2019 acquisition of Paragon for an aggregate nominal purchase price of $1.2 billion, and the fiscal 2018 acquisition of Catalent Indiana for an aggregate nominal purchase price of $950.0 million. And we have commenced a $200.0 million capital investment at our sites in Bloomington and Madison to expand drug substance manufacturing capacity and drug product fill/finish capacity due to projected growth among our existing and future customers. Today, Catalent iswe are a recognized leader in biologics, including AAV vectors for gene therapies; advanced cell-line development, formulation, and formulation,fill-finish into pre-filled syringes, vials, and cartridges; and increasingly in specialized manufacturing of biologic drug substance for use in clinical trials and bioanalytical analysis. During fiscal 2017, the secondThe third production suite in our Madison, Wisconsin facility came on-line and we broke ground for the third suite, which will takein fiscal 2018 taking us to commercial scale supply.supply for biologics drug substance. We have partnered with customers from around the world to develop advanced cell expression for more than 600 products,nearly 700 cell lines, many using our advanced GPEx technology. WeAnd we have invested in a second-generation antibody-drug conjugate technology, SMARTag, and in fiscal 2017, we licensed rights to a development stage ADC product we created and sawsee continued progress in our customers’ SMARTag product developmentproduct-development activities. We expect to continue to expand our biologics presence through both organic and potential inorganic investments.

We have broad and diverse technology platformplatforms that are supported by extensive know-how and approximately 1,100more than 1,300 patents and patent applications in approximately 100125 families across advanced delivery technologies, drug and biologics formulation, and manufacturing. For example, we have significant softgel fill and formulation know-how, databases of formulated products, and substantial softgel regulatory approval expertise, and, as a result, nearlyapproximately 90% of NCE softgel approvals by the FDA over the last 25 years have been developed and supplied by us.

In addition to resolving productdelivery challenges for our customers’ molecules,products, for more than two decades we have applied our technology platforms and development expertise to proactively develop proof-of-concept products, whether improved versions of existing drugs, new generic formulations or innovative consumer health products. In the consumer health area, we file product dossiers with regulators in relevant jurisdictions for self-created products, which help contribute sustainable growth to our consumer health business. We expect to continue to seek proactive development opportunities and other non-traditional relationships to increase demand for and value realized from our technology platforms. These activities have provided us with opportunities to capture an increased share of end-market value through out-licensing, profit-sharing and other arrangements.

We operate in highly fragmented markets in both our advanced delivery technologies and development solutions businesses. Within those markets, the five top players represent nearlyapproximately 35% and 10% of the total market share, respectively, by revenue. Our broad platform, global infrastructure and diversified customer base provide us with a strong foundation from which to consolidate within these markets and to generate operating leverage through such acquisitions. Since fiscal 2012,2013, we have executed eleventen transactions, investing approximately $900 million,$2.7 billion, and have demonstrated an ability to efficiently and effectively integrate these acquisitions.

While we are rigorously focused on driving Catalent'sCatalent’s organic growth, we intend to continue to opportunistically source and execute bolt-on strategic acquisitions within our existing business areas, as well as to undertake transactions that provide us with expansion opportunities within new geographic markets or adjacent market segments. We have a dedicated corporate

development team in place to identify these opportunities and have a rigorous and financially disciplined process for evaluating, executing, and integrating such acquisitions.

Our Reportable Segments

Our Softgel Technologies segment represents 40%34%, 41%36%, and 42%40% of the segments'our aggregate revenue before inter-segment eliminations for fiscal 2017, 20162019, 2018, and 2015,2017, respectively.

Our range of injectable manufacturing offerings includes filling drugssmall molecules or biologics into pre-filled syringes, cartridges, and glass-free ADVASEPT vials, with flexibility to accommodate other formats within our existing network, increasingly focused on complex pharmaceuticals and biologics. With our range of technologies, we are able to meet a wide range of specifications, timelines, and budgets. We believe that the complexity of the manufacturing process, the importance of experience and know-how, regulatory compliance, and high start-up capital requirements provide us with a substantial competitive advantage in the market. For example, blow-fill-seal is an advanced aseptic processing technology, which uses a continuous process to form, fill with drug or biologic, and seal a plastic container in a sterile environment. Blow-fill-seal units are currently used for a variety of pharmaceuticals in liquid form, such as respiratory, ophthalmic, and otic products. We are a leader in the outsourced blow-fill-seal market, and operate one of the largest capacity commercial manufacturing blow-fill-seal facilities in the world. Our sterile blow-fill-seal manufacturing has significant capacity and flexibility with regard toin manufacturing configurations. This business provides flexible and scalable solutions for unit-dose delivery of complex formulations such as suspensions and emulsions. Further, the business provides engineering and manufacturing solutions related to complex containers. Our regulatory expertise can lead to decreased time to commercialization, and our dedicated development production lines support feasibility, stability, and clinical runs. We plan to continue to expand our product line in existing and new markets, and in higher margin specialty products with additional respiratory, ophthalmic, injectable, and nasal applications.

scientific expertise and depth and breadth of services offered, as well as by the reliablereliability of our supply, thereof, including quality, execution, and performance.

Our Oral Drug Delivery Solutions segment represents 43%24%, 43%23%, and 43%27% of the segments'our aggregate revenue before inter-segment eliminations for fiscal 2019, 2018, and 2017, 2016 and 2015, respectively.

Our Clinical Supply Services segment provides manufacturing, packaging, storage, distribution, and inventory management for drugs and biologics in clinical trials. We offer customers flexible solutions for clinical supplies production and provide distribution and inventory management support for both simple and complex clinical trials. This includes over-encapsulation where needed; supplying placebos, comparator drug procurement, and clinical packages and kits for physicians and patients; inventory management; investigator kit ordering and fulfillment; and return supply reconciliation and reporting. We support trials in all regions of the world through our facilities and distribution network. In fiscal 2018, we completed the second phase of our expansion program in our Kansas City, Missouri facility. Further, in fiscal 2016 and again in fiscal 2018, we commenced an expansion ofexpanded our Singapore facility by building newadditional flexible cGMP space, and we introduced clinical supply services at our existing 100,000 square foot facility in Japan, expanding our Asia Pacific capabilities. Additionally, in fiscal 2013, we established our first clinical supply services facility in China as a joint venture, and assumed full ownership in fiscal 2015.2015, and opened a second facility in China in fiscal 2019. We are the leading provider of integrated development solutions and one of the leading providers of clinical trial supplies. Representative customers of Clinical Supply Services include Merck KGaA, Quintiles,IQVIA, Eli Lilly, Abbvie,AbbVie, and Incyte Corporation and Pfizer.Corporation.

Our Clinical Supply Services segment represents 16%13%, 17%, and 16% and 15% of the segments'our aggregate revenue before inter-segment eliminations for fiscal 2017, 20162019, 2018, and 2015,2017, respectively.

Integrated Development and Product Supply Chain Solutions

In addition to our proprietary offerings, we are also differentiated in the market by our ability to bring together our development solutions and advanced delivery technologies to offer innovative development and product supply solutions whichthat can be combined or tailored in many ways to enable our customers to take their drugs, biologics, and consumer and animal health products from laboratory to market. Once a product is on the market, we can provide comprehensive integrated product supply, from the sourcing of the bulk active ingredient to comprehensive manufacturing and packaging to the testing required for release to distribution. CustomerThe customer- and product-specific solutions we develop are flexible, scalable and creative, so that they meet the unique needs of both large and emerging companies and are appropriate for products of all sizes. We believe that our development and product supply solutions such as OptiForm Solutions Suite and OneBioSuite will continue to contribute to our future growth.

Sales and Marketing

Our target customers include large pharmaceutical and biotechnology companies, mid-size, emerging and specialty pharmaceutical and biotechnology companies, and consumer health companies, along with companies in other selected healthcare market segments such as animal health and medical devices and companies in adjacent industries, such as cosmetics. We have longstanding, extensive relationships with leading pharmaceutical and biotechnology customers. In fiscal 2017,2019, we did business with 8583 of the top 100 branded drug marketers, 2321 of the top 25 generics marketers, 23 of the top 25 biologics marketers, and 2221 of the top 25 consumer health marketers globally, as well as with more than 1,000 other customers. Faced with access, pricing, and reimbursement pressures as well as other market challenges, large pharmaceutical and biotechnology companies have increasingly sought partners to enhance the clinical competitiveness of their drugs and biologics and improve the productivity of their research and development activities, while reducing their fixed cost base. Many mid-size, emerging, and specialty pharmaceutical and biotechnology companies, while facing the same pricing and market pressures, have chosen not to build a full infrastructure, but rather to partner with other companies through licensing agreements or outsourcing to access the critical skills, technologies, and services required to bring their products to market. Consumer health companies require rapidly developed, innovative dose forms and formulations to keep up inwith the fast-paced over-the-counter medication, vitamins, and vitaminspersonal care markets. These market segments are all critically important to our growth, but require distinct solutions, marketing and sales approaches, and market strategy.

We manage selected accounts globally due to their substantial current business and growth potential. We recorded approximately 26%20% of our total revenue in fiscal 20172019 from these global accounts. Each global account is assigned a lead business development professional with substantial industry experience. These account leaders, along with other members of the sales and executive leadership teams, are responsible for managing and extending the overall account relationship. Account leaders work closely with the rest of the sales organization to ensure alignment around critical priorities for the accounts.

Emerging, specialty, and virtual pharmaceutical and biotechnology companies are expected to be critical drivers of industry growth globally. Historically, many of these companies have chosen not to build a full infrastructure, but rather partner with other companies to produce their products. We expect them to continue to do so in the future, providing a critical source for future integrated solutions demand. We expect to continue to increase our penetration of geographic clusters of emerging companies in North America, Europe, South America, and Asia. We regularly use active pipeline and product screening and customer targeting to identify the optimal candidates for partnering based on product profiles, funding status, and relationships, to ensure that our technical sales specialists and field sales representatives develop custom solutions designed to address the specific needs of customersthese customers.

Our annual financial reporting periods end on June 30. Our revenue and net earnings are generally higher in the market.third and fourth quarters of each fiscal year, with our first fiscal quarter typically generating our lowest revenue of any quarter, and our last fiscal quarter typically generating our highest revenue. These fluctuations are primarily the result of the timing of our, and our customers’, annual operational maintenance periods at locations in continental Europe and the U.K., the seasonality associated with pharmaceutical and biotechnology budgetary spending decisions, clinical trial and research and development schedules, the timing of new product launches and length of time needed to obtain full market penetration, and, to a lesser extent, the time of the year some of our customers’ products are in higher demand.

Contractual Arrangements

We generally enter into a broad range of contractual arrangements with our customers, including agreements with respect to feasibility, development, supply, licenses, and quality. The terms of these contracts vary significantly depending on the

offering and customer requirements. Some of our agreements may include a variety of revenue arrangements such as fee-for-service, minimum volume commitments, royalties, profit-sharing and fixed fees. We employ a range of capacity access approaches, from standard to completely dedicated capacity models, based on customer and product needs. We generally secure pricing and other contract mechanisms in our supply agreements thatto allow for periodic resetting of pricing terms, and, in some cases, these agreements provide for our abilitypermit us to renegotiate pricing in the event of certain price increases for the raw materials utilized in the products we make.use to make products. Our typical supply agreements include indemnification from our customers for product liability and intellectual property matters and caps on our contractual liabilities, subject in each case to negotiated exclusions. In addition,The terms of our manufacturing supply agreement termsagreements range from three to tenseven years with regular renewals of one to three years, although some of our agreements are terminable upon much shorter notice periods, such as 30 or 90 days. For our development solutions offerings, we may enter into master service agreements, which provide for standardized terms and conditions and make it easier and faster for customers with multiple development needs to access our offerings.

Backlog

While we generally have long-term supply agreements that provide for a revenue stream over a period of years, our backlog represents, as of a point in time, future service revenues from work not yet completed. For our Softgel Technologies, Biologics and Specialty Drug Delivery, Solutionsand Oral Drug Delivery segments, backlog represents firm orders for manufacturing services and includes minimum volumes, where applicable. For our Clinical Supply Services segment, backlog represents estimated future service revenues from work not yet completed under signed contracts. Using these methods of reporting backlog, as of June 30, 2017,2019, our backlog was approximately $1,052.2$1,349.8 million as compared to approximately $827.5$1,112.3 million as of June 30, 2016,2018, including approximately $338.3$366.3 million and $292.1$273.2 million, respectively, related to our Clinical Supply Services segment. We expect to recognize approximately 83%85% of revenue from the backlog in existence as of June 30, 20172019 by the completion of the fiscal year ending June 30, 2018.2020.

To the extent projects are delayed, the timing of our revenue could be affected. If a customer cancels an order, we may be reimbursed for the costs we have incurred. For orders that are placed inside a contractual firm period, we generally have a contractual right to payment in the event of cancellation. Fluctuations in our reported backlog levels also result from the timing and order pattern of our customers who often seek to manage their level of inventory on hand. Because of customer ordering patterns, our backlog reported for certain periods may fluctuate and may not be indicative of future results.

Manufacturing Capabilities

We operate our plants in accordance with cGMP or other applicable requirements. More than halfAll of our facilities are registered with the FDA with the remaining facilities being registered withor other applicable regulatory agencies, such as the EMA. In some cases, our facilities are registered with multiple regulatory agencies.

We have invested approximately $420.4$534.4 million of cash outflows in our manufacturing facilities since fiscal 20152017 through improvements and expansions in our facilities, including approximately $139.8$218.1 million on capital expenditures in fiscal 2017.2019. We believe that our facilities and equipment are in good condition, are well maintained, and are able to operate at or above present levels for the foreseeable future, in all material respects.

Our manufacturing operations are focused on employee health and safety, regulatory compliance, operational excellence, continuous improvement, and process standardization across the organization. In fiscal 2017,2019, we achieved approximately 98%97% on-time shipment delivery versus customer request date across our network as a result of this focus. Our manufacturing operations are structured around an enterprise management philosophy and methodology that utilizes principles and tools common to a number of quality management programs, including Lean Six Sigma and Lean Manufacturing.

Raw Materials

We use a broad and diverse range of raw materials in the design, development, and manufacture of our products. This includes, but is not limited to, key materials such as gelatin, starch, and iota carrageenan for our Softgel Technologies segment; packaging films for our Clinical Supply Services segment,segment; and glass vials and syringes for injectable fill-finish along with resin for our blow-fill-seal business in our Biologics and Specialty Drug Delivery Solutions segment. The raw materials that we use are sourced

Competition

We compete on several fronts both domesticallywith multiple companies as to each of our offerings and internationally,in every region of the globe in which we operate, including with other companies that offer conventional and advanced delivery technologies, clinical trials support, outsourced dose form or biologics manufacturing, or development services to pharmaceutical, biotechnology, and consumer health companies based in North America, South America, Europe, and the Asia-Pacific region. We also may compete in some cases with the internal operations of those pharmaceutical, biotechnology, and consumer health manufacturerscustomers that also have manufacturing capabilities and choose to source these services internally, where possible.

Competition is driven by proprietary technologies and know-how (where relevant), capabilities, consistency of operational performance, quality, price, value, responsiveness, and speed. While we do have competitors that compete with us in our individual offerings, and a few competitors that compete across many of our offerings, we do not believe we have competition from any directly comparable companies.

Research and Development Costs

Our research activities are primarily directed toward the development of new offerings and manufacturing process improvements. Costs incurred in connection with the development of new offerings and manufacturing process improvements are recorded within selling, general, and administrative expenses. Such research and development costs included in selling, general, and administrative expenses amounted to $3.3 million, $6.3 million, and $7.0 million $7.6 millionfor fiscal 2019, 2018, and $12.2 million for the fiscal years ended June 30, 2017, June 30, 2016 and June 30, 2015, respectively. Costs incurred in connection with research and development services we provide to customers and services performed in support of the commercial manufacturing process for customers are recorded within cost of sales. Such research and development costs included in cost of sales amounted to $51.2 million, $46.2 million, and $45.8 million $47.4 million and $41.3 million for the fiscal years ended June 30,2019, 2018, and 2017, June 30, 2016 and June 30, 2015, respectively.

Employees

As of June 30, 2017,2019, we had approximately 10,800nearly 12,300 employees in thirty-fivethirty-nine facilities on five continents: twelvefifteen facilities are in the United States, with certain employees at one facility being represented by a labor organization with their terms and conditions of employment being subject to a collective bargaining agreement. National works councils and/or labor organizations are active at all eleventhirteen of our European facilities consistent with labor environments/laws in European countries. Similar relationships with labor organizations or national works councils exist at our plants in Canada, Argentina, Australia, Brazil, and Australia.Canada. Our management believes that our employee relations are satisfactory.

We ask employees are supporting Catalent’s corporate responsibility commitmentat every level of our organization to uphold these values and helping millions of people aroundto apply the world live better, healthier lives by developing, delivering and supplying reliable, high-quality treatments; connecting to and bettering our communities; promoting a healthy environment and investinghighest ethical standards in their work. Investing in our people, managing our environmental footprint, and giving back to help themour communities are part of our long-term growth and sustainability strategy and guide our business grow.

To manage our CR performance, we maintain a CR Council (the "CR Council") is made up of executive and senior leadership and guidesto guide the implementation of our corporate responsibilityCR strategy and commitments.commitments and report to our board of directors or a designated committee on CR matters. Three sub-committees - committees reporting to the CR Council—the Environmental Committee, the Grant-making Committee, and the Community Engagement Ambassador Network - of the CR Council are responsible for drivingNetwork—help drive progress in three keycritical areas of our overall CR commitment and embed CR deeper into our business.

Beyond being the business and align the corporate responsibility agenda withright thing to do, our focus on CR strengthens our business goals.by reducing risks, meeting customer and investor expectations, and attracting top talent to join and stay with us. CR performance is an important contributor to our business success. It informs our risk management process, protects our reputation, and alerts us to regulatory, environmental, and societal threats to our business. Our CR activities also support our customers, some of which have robust CR programs and prefer suppliers with a similar commitment.

In fiscal 2019, we continued to introduce an expanded set of site-based CR performance metrics to measure the impact of our strategic grant-makingCR activities across our network. As part of this exercise, we conducted our most comprehensive environmental baseline assessment to date. Our environmental data, and other relevant CR metrics and targets, will be shared as part of our first CR report, which is expected in 2020. Catalent has also achieved global accreditation with respect to the international management standards for environment (ISO14001:2015) and occupational safety (OHSAS18001:2007).

In April 2019, our second annual Earth Month campaign, Catalent Unplugged, emphasized our focus on partnerships,reducing CO₂ emissions linked to energy use. Our employees and sites responded enthusiastically, organizing volunteering, recycling, awareness-raising, and waste elimination initiatives and programsacross the network.

Our Catalent Month of Service grew to include almost every site in the Catalent network. We expanded our community grant making program, focused on giving back through our diverse network of facilities worldwide. Our grants promote local organizations that demonstrably promote researchsupport patients and development into or delivery or use of a treatment or encourage STEM (Science, Technology, Engineering(science, technology, engineering, and Mathematics) educationmathematics) educational and training initiatives. We intend to introduce matching-gift and volunteer grant programs forCatalent’s disaster response program is valued by our employees while coordinating even more volunteer projectsfor helping people affected by natural disasters in the communities around the world in which we operate.U.S. and beyond.

Intellectual Property

We rely on a combination of know-how, trade secrets, patents, copyrights, and trademarks, and other intellectual property laws, nondisclosure and other contractual provisions, and technical measures to protect a number of our offerings, services, and intangible assets. These proprietary rights are important to our ongoing operations. Certain of our operations and products are under intellectual property licenses from third parties, and in certain instances we license our technology to third parties. We also have a long track record of innovation across our lines of business, and, to further encourage active innovation, we have developed incentive compensation systems linked to patent filings and other recognition and reward programs for scientists and non-scientists alike.

We hold patents and license rights relating to certain aspects of our formulations, nutritional and pharmaceutical dosage forms, mammalian cell engineering, and sterile manufacturing services. We also hold patents relating to certain processes and products. We have a number of pending patent applications in the United States and certain foreignother countries and intend to pursue additional patents as appropriate. We have enforced and will continue to enforce our intellectual property rights in the United States and worldwide.

We do not consider any particular patent, trademark, license, franchise, or concession to be material to our overall business.

Regulatory Matters

In addition, certain of our subsidiaries are subject to other healthcare laws, including the United StatesU.S. Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, the Controlled Substances Act, and comparable state and foreign laws and regulations in certain of their activities.

We are also subject to various federal, state, local, foreign and transnational laws, regulations, and recommendations,requirements, both in the United States and abroad, relating to safe working conditions, laboratory and distribution practices, and the use, transportation, and disposal of hazardous or potentially hazardous substances. In addition, U.S. and international import and export laws and regulations require us to abide by certain standards relating to the cross-border transit of finished goods, raw materials, and supplies and the handling of information. We are also subject to various other laws and regulations concerning the conduct of our foreign operations, including the U.S. Foreign Corrupt Practices Act, the U.K. Anti-Bribery Act, and other anti-bribery laws and laws pertaining to the accuracy of our internal books and records.

In fiscal 2017,2019, we were subject to 5375 regulatory audits, and, over the last five fiscal years, we successfully completed more than 250approximately 300 regulatory audits, with approximately 50% resulting in no reported observations.audits.

Quality Assurance

We are committed to ensuring and maintaining the highest standard of regulatory compliance while providing high quality products to our customers. To meet these commitments, we have developed and implemented a Catalent-wide quality management system throughout the organization.system. We have nearly 1,400more than 1,900 employees around the globe focusing on quality and regulatory compliance. Our senior management team is actively involved in setting quality policies, standards, and internal position papers as well as managing internal and external quality performance. Our quality assurance department provides quality leadership and supervises our quality systems programs. An internal audit program monitors compliance with applicable regulations, standards, and internal policies. In addition, our facilities are subject to periodic inspection by the FDA, the DEA, and other equivalent local, state, and foreign regulatory authorities andas well as our customers. All FDA, DEA, and other regulatory inspectional observations have been resolved or are on track to be completed at the prescribed timeframe provided in commitments to the applicable agency in all material respects. We believe that our operations are in compliance in all material respects with the regulations under which our facilities are governed.

Environmental Matters

Risks Relating to Our Business and Industry

We operate in a market that is highly competitive. We compete on several fronts, both domesticallywith multiple companies as to each of our offerings and internationally,in every region of the globe in which we operate, including competing with other companies that provide similar offeringsoffer advanced delivery technologies, outsourced dose form or biologics manufacturing, clinical trials support services, or development services to pharmaceutical, biotechnology, and consumer and animal health companies based in North America, LatinSouth America, Europe, and the Asia-Pacific region. We also may compete in some cases with the internal operations of those pharmaceutical, biotechnology, and consumer and animal health manufacturerscustomers that also have manufacturing capabilities and choose to source these offeringsservices internally.

We face materialsubstantial competition in each of our markets. Competition is driven by proprietary technologies and know-how, capabilities, consistency of operational performance, quality, price, value, responsiveness, and speed. Some competitors may have greater financial, research and development, operational, and marketing resources than we do. Competition may also increase as additional companies enter our markets or use their existing resources to compete directly with ours. Expanded competition from companies in low-cost jurisdictions, such as India and China, may in the future adversely affect our results of operations or limit our growth. Greater financial, research and development, operational, and marketing resources may allow our competitors to respond more quickly with new, alternative, or emerging technologies. Changes in the nature or extent of our customercustomers’ requirements may render our offerings obsolete or non-competitive and could adversely affect our results of operations and financial condition.

Our customers are engaged in research, development, production, and marketing of pharmaceutical, biotechnology, and consumer and animal health products. The amount of customer spending on research, development, production, and marketing, as well as the outcomes of such research, development, and marketing activities, have a large impact on our sales and profitability, particularly the amount our customers choose to spend on our offerings. Our customers determine the amounts that they will spend based upon, among other things, available resources and their need to develop new products, which, in turn, is dependent upon a number of factors, including their competitors’ research, development, and production initiatives, and the anticipated market uptake, clinical, and reimbursement scenarios for specific products and therapeutic areas. In addition, consolidation in the industries in which our customers operate may have an impact on such spending as customers integrate acquired operations, including research and development departments and their budgets. Our customers finance their research and development spending from private and public sources. A reduction in spending by our customers could have a material adverse effect on our business, financial condition, and results of operations. If our customers are not successful in attaining or retaining product sales due to market conditions, reimbursement issues, or other factors, our results of operations may be materially adversely affected.

We are subject to potentially significant product liability and other liability risks that are inherent in the design, development, manufacture, and marketing of our offerings. We may be named as a defendant in product liability lawsuits, which may allege that our offerings have resulted or could result in an unsafe condition or injury to consumers. Such lawsuits could be costly to defend and could result in reduced sales, significant liabilities, and diversion of management’s time, attention, and resources. Even claims without merit could subject us to adverse publicity and require us to incur significant legal fees.

Furthermore, product liability claims and lawsuits, regardless of their ultimate outcome, could have a material adverse effect on our business operations, financial condition, and reputation and on our ability to attract and retain customers. We have historically sought to manage this risk through the combination of product liability insurance and contractual indemnities and liability limitations in our agreements with customers and vendors. The availability of product liability insurance for companies in the pharmaceutical industry is generally more limited than insurance available to companies in other industries. Insurance carriers providing product liability insurance to those in the pharmaceutical and biotechnology industries generally limit the amount of available policy limits, require larger self-insured retentions, and exclude coverage for certain products and claims.

We maintain product liability insurance with annual aggregate limits in excess of $25$25.0 million. There can be no assurance that a successful product liability claim or other liability claim would be adequately covered by our applicable insurance policies or by any applicable contractual indemnity or liability limitations.

The healthcare industry is highly regulated. We, and our customers, are subject to various local, state, federal, foreignnational, and transnational laws and regulations, which include the operating, quality, and security standards of the FDA, the DEA, various state boards of pharmacy, state health departments, the DHHS, similar bodies of the EUE.U. and its member states, and other comparable agencies around the world, and, in the future, any changeschange to such laws and regulations could adversely affect us. Among other rules affecting us, we are subject to laws and regulations concerning cGMP and drug safety. Our subsidiaries may be required to register for permits and/or licenses, with, and may be required to comply, with the laws and regulations of the FDA, the DEA, the DHHS, foreignex-U.S. agencies including the EMA, and other various state boards of pharmacy, state health departments, and/or comparable state and foreign agencies in various jurisdictions around the world, as well as certain accrediting bodies, depending upon the type of operations and locations of distribution and sale of the products manufactured or services provided by those subsidiaries.

The manufacture, distribution, and marketing of our offerings are subject to extensive ongoing regulation by the FDA, the DEA, the EMA, and other equivalent local, state, federal, foreignnational, and transnational regulatory authorities. Failure by us or by our customers to comply with the requirements of these regulatory authorities could result in warning letters, product recalls or seizures, monetary sanctions, injunctions to halt manufacture or distribution, restrictions on our operations, civil or criminal sanctions, or withdrawal of existing or denial of pending approvals, permits or registrations, including those relating to products or facilities. In addition, any such failure relating to the products or services we provide could expose us to contractual or product liability claims as well as contractual claims from our customers, including claims for reimbursement for lost or damaged active pharmaceutical ingredients, which cost could be significant. Customers may also claim loss of profits due to lost or delayed sales, although our contracts generally place substantial limits on such claims. There can be no assurance that any such contractual limitation will be applicable, or sufficient, or fully enforced in any given situation.

In addition, any new offering or product classified as a pharmaceutical productor medical device must undergo lengthy and rigorous clinical testing and other extensive, costly and time-consuming procedures mandated by the FDA, the EMA and other equivalent local, state, federal, national and foreigntransnational regulatory authorities.authorities in the jurisdictions that regulate our offerings and products. We or our customers may elect to delay or cancel anticipated regulatory submissions for current or proposed new offerings or products for any number of reasons.

Although we believe that we comply in all material respects with applicable laws and regulations, there can be no assurance that a regulatory agency or tribunal would not reach a different conclusion concerning the compliance of our operations with applicable laws and regulations. In addition, there can be no assurance that we will be able to maintain or renew existing permits, licenses, or other regulatory approvals or obtain, without significant delay, future permits, licenses, or other approvals needed for the operation of our businesses. Any noncompliance by us or our customers with applicable laws and regulationslaw or regulation or the failure to maintain, renew, or obtain necessary permits and licenses could have an adverse effect on our results of operations and financial condition. Furthermore, loss of a permit, license, or other approval in any one portion of our business may have indirect consequences in another portion of our business if regulators or customers adjust their reviews of such other portion as a result or customers cease business with such other portion due to fears that such loss is a sign of broader concerns about our ability to deliver products or services of sufficient quality.

Our results depend on our ability to execute and improve when necessary our quality management strategy and systems, and effectively train and maintain our employee base with respect to quality management. Quality management plays an essential role in determining and meeting customer requirements, preventing defects, and improving our offerings. While we have a network of quality systems throughout our business units and facilities that relate to the design, formulation, development, manufacturing, packaging, sterilization, handling, distribution, and labeling of the products we supply, quality and safety issues may occur with respect to any of our offerings. A quality or safety issue could have an adverse effect on our business, financial condition, and results of operations and may subject us to regulatory actions, including product recalls, product seizures, injunctions to halt manufacture or distribution, or restrictions on our operations,operations; monetary fines; or other civil sanctions, including monetary sanctions andor criminal actions.sanctions. In addition, such an issue could subject us to costly litigation, including claims from our customers for reimbursement for the cost of lost or damaged active pharmaceutical ingredients or other related losses, the cost of which could be significant.

The offerings we provide are highly exacting and complex, particularly in our Softgel Technologies, Biologics and Specialty Drug Delivery, Solutionsand Oral Drug Delivery segments, due in part to strict regulatory requirements. From time to time, problems may arise in connection with facility operations or during preparation or provision of an offering, in both cases for a variety of reasons including, but not limited to, equipment malfunction, sterility variances or failures, failure to follow specific protocols and procedures, problems with raw materials, environmental factors, and damage to, or loss of, manufacturing operations due to fire, flood, or similar causes. Such problems could affect production of a particular batch or series of batches, require the destruction of or otherwise result in the loss of product or materials used in the production of product, or could halt facility production altogether. This could, among other things, lead to increased costs, lost revenue, damage to customer relations, reimbursement to customers for lost active pharmaceutical ingredients or other related losses, time and expense spent investigating the cause, lost production time, and, depending on the cause, similar losses with respect to other batches or products. Production problems in our drug and biologic manufacturing operations could be particularly significant because the cost of raw materials is often higher than in our other businesses. If problems are not discovered before the product is released to the market, recall and product liability costs may also be incurred. In addition, such risks may be greater at facilities that are new or going through significant expansion or renovation.

We conduct our operations in various regions of the world, including North America, South America, Europe, and the Asia-Pacific region. Global and regional economic and regulatory developments affect businesses such as ours in many ways. Our operations are subject to the effects of global and regional competition, including potential competition from manufacturers in low-cost jurisdictions such as India and China. Local jurisdiction risks include regulatory risks arising from local laws. Our global operations are also affected by local economic environments, including inflation and recession. Political changes, some of which may be disruptive, and related hostilities can interfere with our supply chain, andour customers, and some or all of our activities in a particular location. While some of these risks can be hedged using derivatives or other financial instruments and some are insurable, such attempts to mitigate these risks aremitigating measures may be unavailable, costly, and not always successful.or unsuccessful.

In June 2016, the U.K. held a referendum in which a majority of voters approved the U.K.’s exit from the EU,E.U., and the U.K. government has publicly announced that it intendsinvoked its right to honor that vote and seek an exit.withdraw, effective in March 2019. This deadline for withdrawal has since been extended by agreement to October 2019. There is no immediate change in either the U.K. or the EUE.U. as a result of this referendum, andeither action, but the U.K. government mustis now decide, through legislative actionengaged in both internal and through negotiationsexternal discussions with the EU and other affected parties whatand considering additional legislation regarding the changes that will result from the decision to exit. FourFive of our thirty-five facilities, employing hundreds of workers, are located in the U.K., and these facilities, as well as others in our network, source goods, manufacture goods, and provide services from or intended for the U.K. These facilities operate within an existing framework of trade and human capital integration with the EUE.U. and, by extension, the other parts of the world, with which the EUE.U. has trade and immigration agreements. Furthermore, some of our facilities located in other E.U. member states ship materials to and from or otherwise engage in various business interactions with the U.K., including our U.K. facilities. Due to future changes in the U.K. resulting from an eventual exit, such asincluding potentially increased trade barriers, increased tariff rates, or custom duties, or in anticipation of such changes, our suppliers, customers, or employees may change their interactions with us, including changes in imports to or exports from the U.K., changes in the requested utilization of our facilities, both within and without the U.K., and changes in our relationships with our workforce in the U.K. To the extent that our facilities operate as part of a cross-border supply and distribution chain, their operations may also be negatively affected by a decrease in the cross-border mobility of goods and services. We cannot anticipate the nature of these changes, as they largely depend on factors outside our control, but the changes may result in adverse changes in our future operations, revenues, and costs, and therefore our future profitability.

The healthcare industry is characterized by rapid technological change. Demand for our offerings may change in ways we may not anticipate because of evolving industry standards as well as a result of evolving customer needs that are increasingly sophisticated and varied and the introduction by others of new offerings and technologies that provide alternatives to our offerings. Several of our higher margin offerings are based on proprietary technologies. To the extent that our proprietary rightssuch technologies are based on

protected by patents, patents are inherently of limited longevity and therefore will ultimately expire, and suchtheir related offerings may

Even if we succeed in creating enhanced or new offerings from these innovations, they may still fail to result in commercially successful offerings or may not produce revenue in excess of the costs of development, and they may be rendered obsolete by changing customer preferences or the introduction by our competitors of offerings embodying new technologies or features. Finally, innovations may not be accepted quickly in the marketplace because of, among other things, entrenched patterns of clinical practice, the need for regulatory clearance, and uncertainty over market access or government or third-party reimbursement.

We rely on a combination of know-how, trade secrets, patents, copyrights, and trademarks, and other intellectual property laws, nondisclosure and other contractual provisions, and technical measures to protect a numbermany of our offerings and intangible assets. These proprietary rights are important to our ongoing operations. There can be no assurance that these protections will proveprovide uniqueness or meaningful against competitive differentiation in our offerings or otherwise be commercially valuable or that we will be successful in obtaining additional intellectual property or enforcing our intellectual property rights against unauthorized users. Our exclusive rights under certain of our offerings are protected by patents, some of which will expire in the near term. When patents covering an offering expire, loss of exclusivity may occur, and thiswhich may force us to compete with third parties, thereby negatively affecting our revenue and profitability. We do not currently expect any material loss of revenue to occur as a result of the expiration of any patent currently protecting our business.

Our proprietary rights may be invalidated, circumvented, or challenged. We may in the future be subject to proceedings seeking to oppose or limit the scope of our patent applications or issued patents. In addition, in the future, we may need to take legal actions to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity or scope of the proprietary rights of others. Legal proceedings are inherently uncertain, and the outcome of any such legal actionproceedings may be unfavorable to us.

Any legal action regardless of outcome might result in substantial costs and diversion of resources and management attention. Although we use reasonable efforts to protect our proprietary and confidential information, there can be no assurance that our confidentiality and non-disclosure agreements will not be breached, our trade secrets will not otherwise become known by competitors, or that we will have adequate remedies in the event of unauthorized use or disclosure of proprietary information. Even if the validity and enforceability of our intellectual property is upheld, an adjudicator might construe our intellectual property not to cover the alleged infringement. In addition, intellectual property enforcement may be unavailable or practically ineffective in some foreign countries. There can be no assurance that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology or that third parties will not design around our intellectual property claims to produce competitive offerings. The use of our technology or similar technology by others could reduce or eliminate any competitive advantage we have developed, cause us to lose sales, or otherwise harm our business.

We have applied in the United States and certain foreignother countries for registration of a number of trademarks, service marks, and patents, some of which have been registered or issued, and also claim common law rights in various trademarks and

service marks. In the past, third parties have occasionally opposed our applications to register intellectual property, and there

Our use of certain intellectual property rights is also subject to licenseLicense agreements with third parties forcontrol our rights to use certain patents, software, and information technology systems and proprietary technologies. Iftechnologies owned by third parties, some of which are important to our business. Termination of these license agreements were terminated for any reason it could result in the loss of our rights to this intellectual property, causing an adverse change in our operations may be materially adversely affected and we may be unableor the inability to commercialize certain offerings.

In addition, many of our branded pharmaceutical customers rely on patents to protect their products from generic competition. Because incentives exist in some countries, including the United States, for generic pharmaceutical companies to challenge these patents, pharmaceutical and biotechnology companies are under the ongoing threat of challenges to their patents. If the patents on which our customers’ patentscustomers rely were successfully challenged and, as a result, subjectedthe affected products become subject to generic competition, the market for our customers’ products could be significantly adversely affected, which could have an adverse effect on our results of operations and financial condition. We attempt to mitigate these risks by making our offerings available to generic as well as branded manufacturers and distributors, but there can be no assurance that we will be successful in marketing these offerings.

We depend on various active pharmaceutical ingredients, components, compounds, raw materials, and energy supplied primarily by others for our offerings. This includes, but is not limited to, gelatin, starch, iota carrageenan, petroleum-based products and resin. Also, our customers frequently provide to us their active pharmaceutical or biologic ingredient for formulation or incorporation in the finished product. It is possible that any of our or our customers'customers’ supplier relationships could be interrupted due to changing regulatory requirements, import or export restrictions, natural disasters, international supply disruptions caused by pandemics, geopolitical issues, operational or quality issues at the suppliers’ facilities, and other events, or could be terminated in the future.

For example, gelatin is a critical component in most of the products produced in our Softgel Technologies segment. Gelatin is available from only a limited number of sources. In addition, much of the gelatin we use is bovine-derived. Past concerns of contamination from bovine spongiform encephalopathy, or BSE, have narrowed the number of possible sources of particular types of gelatin. If there were a future disruption in the supply of gelatin from any one or more key suppliers, we may not be able to obtain an adequate alternative supply from our other suppliers. If future restrictions were to emerge on the use of bovine-derived gelatin due to concerns of contamination from BSE or otherwise, any such restriction could hinder our ability to timely supply our customers with products and the use of alternative non-bovine-derived gelatin could be subject to lengthy formulation, testing, and regulatory approval.

Any sustained interruption in our receipt of adequate supplies could have an adverse effect on us. In addition, while we have processes intended to reduce volatility in component and material pricing, we may not be able to successfully manage price fluctuations, and future price fluctuations or shortages may have an adverse effect on our results of operations.

The healthcare industry has changed significantly over time, and we expect the industry to continue to evolve. Some of these changes, such as ongoing healthcare reform, adverse changes in governmental or private funding of healthcare products and services, legislation or regulations governing patient access to care and privacy, or the delivery, pricing, or reimbursement approval of pharmaceuticals and healthcare services or mandated benefits, may cause healthcare industry participants to change the amount of our offerings that they purchase or the price they are willing to pay for ourthese offerings. In particular, there is significant uncertainty about the futurelikelihood of changes to the ACA and healthcare laws in general in the United States.States, including future legislation that may affect or put a cap on future pricing of pharmaceutical and biotechnology products. While we are unable to predict the likelihood of changes to the ACA, any repealsubstantial revision of this or full or partial replacementother healthcare legislation could have a material adverse effect on the demand for our customer’scustomers’ products, which in turn could have a negative impact on our results of operations, financial condition, or business. Changes in the healthcare industry’s pricing, selling, inventory, distribution, or supply policies or practices, or in public or government sentiment for the industry as a whole, could also significantly reduce our revenue and results of operations. In particular, volatility in individual product demand may result from changes in public or private payer reimbursement or coverage.

As a company with significant operations outside of the United States, certain revenues, costs, assets, and liabilities, including our euro-denominated 4.75% Senior Notes due 2024 (the "Notes") and a portion of our senior secured credit facilities, are denominated in currencies other than the U.S. dollar.dollar, which is the currency that we use to report our financial results. As a result, changes in the exchange rates of these currencies or any other applicable currencycurrencies to the U.S. dollar will affect our revenues, earnings and cash flows. There has been, and may continue to be, volatility in currency exchange rates affecting the various currencies in which we do business, including as a result of the U.K.'s’s referendum in which voters approved the U.K.'sto exit from the EU.E.U. Such volatility and other changes in exchange rates could result in unrealized and realized exchange losses, despite any effort we may undertake to manage or mitigate our exposure to foreign currency fluctuations.fluctuations in the values of various currencies.

We are a large multinational corporation with operations in the United States and several international jurisdictions, including North America,Canada, South America, Europe, and the Asia-Pacific region. As such, we are subject to the tax laws and regulations

We have deferred tax assets for net operating loss carryforwards and other temporary differences. We currently do not maintain a valuation allowance for a portion of our U.S. net deferred tax assets. We may experience, in the future, a decline in U.S. federal taxable income, resulting from a decline in profitability of our U.S. operations, an increased level of debt in the U.S., or other factors. In assessing our ability to realize our U.S. deferred tax assets, we may conclude that it is more likely than not that some portion or all of our U.S. deferred tax assets will not be realized. As a result, we may be required to record an additional valuation allowance against our U.S. deferred tax assets, which could adversely affect our effective income tax rate and therefore our financial results.

We depend on our executive officers and other key personnel, including our technical personnel, to operate and grow our business and to develop new enhancements,and enhanced offerings and technologies. The loss of any of these officers or other key personnel combined withor a failure to attract and retain suitably skilled technical personnel could adversely affect our operations.

With respect to our technical talent, we have approximately 1,600more than 2,400 scientists and technicians whose areas of expertise and specialization cover subjects such as advanced delivery, drug and biologics formulation and manufacturing. Many of our sites and laboratories are located in competitive labor markets like those in which our Morrisville, North Carolina; Brussels, Belgium; Woodstock, Illinois; Madison, Wisconsin; Emeryville,Emeryville; California, Bloomington, Indiana; Nottingham, U.K.; and Schorndorf, Germany facilities are located. Global and regional competitors and, in some cases, customers and suppliers compete for the same skills and talent as we do.

We rely on information systems in our business to obtain, rapidly process, analyze and manage data to:

We deploy defenses against cyber-attack and work to secure the integrity of our data systems using techniques, hardware, and software typical of companies of our size and scope. Despite our security measures, however, our information technology and infrastructure may be vulnerable to attacks by increasingly sophisticated intruders or others who try to cause harm to or interfere with our normal use of our systems. They are also susceptible to breach due to employee error, malfeasance, or other disruptions. Our results of operations could be adversely affected if these systems are interrupted or damaged by unforeseen events or fail for any extended period of time.period.

Our future success may depend in part on opportunities to buy or otherwise acquire rights to other businesses or technologies, or enter into joint ventures or otherwise enter into strategic arrangements with business partners that could complement, enhance, or expand our current business or offerings and services or that might otherwise offer us growth opportunities.opportunities, or divest assets or an ongoing business. We may face competition from other companies in pursuing acquisitions and similar transactions in the pharmaceutical and biotechnology industry. Our ability to complete such transactions may also be limited by applicable antitrust and trade regulation laws and regulations in the United StatesU.S. and foreignother jurisdictions in which we or the operations or assets we seek to acquire carry on business. To the extent that we are successful in making acquisitions, we may have to expend substantial amounts of cash, incur debt, or assume loss-making divisions as consideration. We or the purchaser of a divested asset or business may not be able to complete such transactionsa desired transaction for any number of reasons, including but not limited to, a failure to secure financing.

Any transactionacquisition that we are able to identify and complete may involve a number of risks, including, but not limited to, the diversion of management’s attention to integrate the acquired businesses or joint ventures, the possible adverse effects on our operating results during the integration process, the potential loss of customers or employees in connection with the acquisition, delays or reduction in realizing expected synergies, unexpected liabilities and our potential inability to achieve our intended objectives for the transaction. In addition, we may be unable to maintain uniform standards, controls, procedures and policies, and thiswhich may lead to operational inefficiencies.

To the extent that we are not successful in completing desired divestitures, as such may be determined by future strategic plans and business performance, we may have to expend substantial amounts of cash, incur debt, andor continue to absorb the costs of loss-making or under-performing divisions. Any divestiture, whether we are able to complete it or not, may involve a number of risks, including diversion of management’s attention, a negative impact on our customer relationships, costs associated with

Gene therapy remains a relatively new means for treating disease and resultsother medical conditions, with only a few gene therapies approved to date in the U.S., the E.U., or elsewhere. Public perception may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of operations.the public or the medical community. In addition, ethical, social, legal, and cost-benefit concerns about gene therapy, genetic testing, and genetic research could result in additional regulations or limitations or even outright prohibitions on certain gene therapies or gene-therapy-related products. Various regulatory and legislative bodies have expressed an interest in, or have taken steps towards, further regulation of various biotechnologies, including gene therapies. More restrictive regulations or claims that certain gene therapies are unsafe or pose a hazard could reduce our customers’ use of our services. We can provide no assurance whether legislative changes will be enacted, regulations, policies, or guidance changed, or interpretations of existing strictures by agencies or courts changed, or what the impact of such changes, if any, may be.

Our operations are subject to a variety of environmental, health, and safety laws and regulations, including those of the EPA and the U.S. Occupational Safety & Health Administration and equivalent local, state, national, and foreigntransnational regulatory agencies in each of the jurisdictions in which we operate. These laws and regulations govern, among other things, air emissions, wastewater discharges, the use, handling, and disposal of hazardous substances and wastes, soil and groundwater contamination, and employee health and safety. Any failure by us to comply with environmental, health, and safety requirements could result in the limitation or suspension of production or subject us to monetary fines, or civil or criminal sanctions, or other future liabilities in excess of our reserves. We are also subject to laws and regulations governing the destruction and disposal of raw materials and non-compliant products, the handling of regulated material that are included in our offerings, and the disposal of our products or their components at the end of their useful lives. In addition, compliance with environmental, health, and safety requirements could restrict our ability to expand our facilities or require us to acquire costly environmental or safety control equipment, incur other significant expenses, or modify our manufacturing processes. Our manufacturing facilities may use, in varying degrees, hazardous substances in their processes. These substances include, among others, chlorinated solvents, and in the past chlorinated solvents were used at one or more of our facilities, including a number we no longer own or operate. As at our current facilities, contamination at such formerly owned or operated properties can result and has resulted in liability to us. In the event of the discovery of new or previously unknown contamination either at our facilities or at third-party locations, including facilities we formerly owned or operated, the issuance of additional requirements with respect to existing contamination, or the imposition of other cleanup obligations for which we are responsible, we may be required to take

We employ approximately 10,800 employeesnearly 12,300 individuals worldwide, including approximately 5,2006,800 employees in North America, 3,900 in Europe, 900 in South America, and 800700 in the Asia/PacificAsia-Pacific region. Certain employees at one of our North American facilities are represented by a labor organization, and national works councils and/or labor organizations are active at all of our European facilities and certain of our other facilities consistent with local labor environments/environments and laws. Our management believes that our employee relations are satisfactory. However, further organizing activities, collective bargaining, or changes in the regulatory framework for employment may increase our employment-related costs or may result in work stoppages or other labor disruptions. Moreover, as employers are subject to various employment-related claims, such as individual and class actions relating to alleged employment discrimination and wage-hour and labor standards issues, such actions, if brought against us and successful in whole or in part, may affect our ability to compete or have a material adverse effect on our business, financial condition, and results of operations.

Certain of our current and former employees in the U.S., the U.K., Germany, France, Japan, Belgium, and Switzerland, and Australia are participants in defined benefit pension plans that we sponsor. As of June 30, 2017,2019, the underfunded amount of our pension plans on a worldwide basis was approximately $86.0$77.4 million, primarily related to our pension plans in the U.K. and Germany. In addition, we have an estimated obligation of approximately $39.1$38.8 million, as of June 30, 2017,2019, related to our withdrawal from a multiemployer pension plan in which we formerly participated. In general, the amount of future contributions to the underfunded plans will depend upon asset returns, applicable actuarial assumptions, prevailing and expected interest rates, and other factors, and, as a result, the amount we may be required to contribute in the future to fund the obligations associated with such plans may vary.

Such cash contributions to the plans will reduce the cash available for our business, including the funds available to pursue strategic growth initiatives or the payment of interest expense on our indebtedness.

We are highly leveraged. As of June 30, 2017,2019, we had $1,596.2$2,959.3 million (dollar(U.S. dollar equivalent) of total indebtedness outstanding, consisting of $1,283 million (U.S. dollar equivalent) of secured indebtedness under our senior indebtedness and $424.3secured credit facilities; $1,365 million of Notes; an additional $188senior unsecured indebtedness, including $500.0 million aggregate principal amount of Senior Notes due 2027 (the “USD 2027 Notes”), $450.0 million aggregate principal amount of Senior Notes due 2026 (the “USD 2026 Notes” and, together with the USD 2027 Notes, the “USD Notes”), €380.0 million aggregate principal amount of Senior Notes due 2024 (the “Euro Notes” and, together with the USD Notes, the “Senior Notes”); $143.9 million representing the fair value of the remaining deferred purchase consideration related to the acquisition of Catalent Indiana, and $167.3 million of un-utilizedcapital lease and other obligations. In addition, we had $543.4 million of unutilized capacity and $12.0$6.6 million of outstanding letters of credit under our $550.0 million secured revolving credit facility.facility, which is part of our senior secured credit facilities (the “Revolving Credit Facility”).

Our high degree of leverage could have important consequences for us, including:

Our total interest expense, net was $90.1$110.9 million, $88.5$111.4 million, and $105.0$90.1 million for fiscal years 2017, 20162019, 2018, and 2015,2017, respectively. After taking into consideration our ratio of fixed-to-floating ratefixed-to-floating-rate debt, an increaseand assuming that our revolving credit facility is undrawn and LIBOR is above any applicable minimum floor, each change of 100 basis points in floatinginterest rates would increase ourresult in a change of approximately $9.5 million in annual interest expense by approximately $12.6 million.on the indebtedness under our senior secured credit facilities.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although the agreements governing our indebtedness contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and, under certain circumstances, the amount of indebtedness that we may incur while remaining in compliance with these restrictions could be substantial. As of June 30, 2019, we would have had approximately $543.4 million available to us for borrowing, subject to certain conditions, under our Revolving Credit Facility. If new debt is added to our subsidiaries’ existing debt levels, the risks associated with debt we currently face would increase.

A breach of any of these covenants could result in a default under one or more of these agreements, including as a result of cross-default provisions, and, in the case of our revolving credit facility,Revolving Credit Facility, permit the lenders to cease making loans to us.

We may enter into interest-rate swap agreements, currency swap agreements, or other hedging transactions in an attempt to limit our exposure to adverse changes in variable interest rates and currency exchange rates. Such instruments may result in economic losses if, for example, prevailing interest rates decline to a point lower than any applicable fixed-rate commitment. Any such swap will expose us to credit-related risks that, if realized, could adversely affect our results of operations or financial condition.

Risks RelatedRelating to Our Series A Preferred Stock.

Risks Relating to Ownership of Our Common Stock

Broad market and industry fluctuations may adversely affect the market price of our common stock,Common Stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float or trading volume of our common stockCommon Stock is low, and the amount of public float on any given day can vary depending on whetherthe individual actions of our stockholders choose to hold for the long term.stockholders.

Following periods of market volatility, stockholders have been known to institute securities class action litigation in order to recover their resulting losses. If we become involved in securities litigation, it could have a substantial cost and divert resources and the attention of senior management from our business regardless of the outcome of such litigation.

The trading market for our common stockCommon Stock has been affected in part by the research and reports that industry and financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more of the analysts who cover us downgrade our stock or our industry, change their views regarding the stock of any of our competitors or other healthcare sector companies, or publish inaccurate or unfavorable research about our business, the market price of our stockCommon Stock could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

The sale of shares of our common stockCommon Stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock.Common Stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

In addition, 1,581,761as of August 22, 2019, 2,537,207 shares of common stockour Common Stock may become eligible for sale upon exercise of vested options. A total of 6,700,00015,600,000 shares of common stockour Common Stock were reserved for issuance under our 2018 Omnibus Incentive Plan, subject to adjustment for retired and post-June 30, 2018 awards under the prior 2014 Omnibus Incentive Plan,Plan. As of which 2,398,417August 22, 2019, 11,159,256 shares of common stockour Common Stock remain available for future issuance at August 25, 2017.under the 2018 Omnibus Incentive Plan. These shares can be sold in the public market upon issuance, subject to restrictions under the securities laws applicable to resales by affiliates.

Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

Certain provisions of our amended and restatedcurrent certificate of incorporation and bylaws may have an anti-takeover effect and may delay, defer, or prevent a merger, acquisition, tender offer, takeover attempt, or other change of control transaction that may otherwise be in the best interests of our stockholders, including transactions that might otherwise result in the payment of a premium over the market price for the shares held by our stockholders.

These provisions provide for, among other things:

Provisions such as those just described, to the threshold for amendment of our bylaws to a simple majority, subject to shareholder approval at our 2017 annual meeting of shareholders).

From time to time, the Companywe may be involved in legal proceedings arising in the ordinary course of business, including, without limitation, inquiries and claims concerning environmental contamination as well as litigation and allegations in connection with acquisitions, product liability, manufacturing or packaging defects, and claims for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of any of which could be significant. The Company intendsWe intend to vigorously defend itselfourselves against any such litigation and doesdo not currently believe that the outcome of any such litigation will have a material adverse effect on the Company’sour financial statements. In addition, the healthcare industry is highly regulated and government agencies continue to scrutinize certain practices affecting government programs and otherwise.

From time to time, the Company receiveswe receive subpoenas or requests for information relating to the business practices and activities of customers or suppliers from various governmental agencies or private parties, including from state attorneys general, the U.S. Department of Justice, and private parties engaged in patent infringement, antitrust, tort, and other litigation. The CompanyWe generally respondsrespond to such subpoenas and requests in a timely and thorough manner, whichand responses sometimes require considerable time and effort and can result in considerable costs being incurred. The Company expectsWe expect to incur costs in future periods in connection with future requests.

Not Applicable.

Recent Sales of Unregistered Equity Securities

Purchases of Equity Securities

OnIn October 29, 2015, our Board of Directors authorized a share repurchase program to use up to $100.0 million to repurchase outstanding shares of our common stock.Common Stock. We may repurchase shares under the program through open market purchases, privately negotiated transactions, or otherwise as permitted by applicable federal securities laws. There was no purchase by us, on our behalf, or on behalf of any affiliate of our registered equity securities during the period covered by this Annual Report on Form 10-K.Report.

Performance Graph

Set forth below is a line graph comparing the cumulative total shareholder return on the Company’s common stockour Common Stock since July 31, 2014 (the date our common stockCommon Stock commenced trading on the NYSE) through June 30, 2017,2019, based on the market price of the Company’s common stockour Common Stock and assuming reinvestment of dividends, with the cumulative total shareholder return of companies on the S&P Composite 1500 Index and S&P Composite 1500 Healthcare Index. The graph assumes that $100 was invested in the Company’s common stockour Common Stock and in each index at the market close on July 31, 2014. The stock price performance of the following graph is not necessarily indicative of future stock performance.

The following table sets forth our selected historical financial and operating data for, or as of the end of, each of the five years ended June 30, 2017.2019. The selected financial data as of June 30, 20172019 and 2016,2018, and for the fiscal years ended June 30, 2019, 2018, and 2017, 2016 and 2015 hashave been derived from our audited consolidated financial statements included in "Financial Statements and Supplementary Data."Consolidated Financial Statements. The financial data as of June 30, 2015, 20142017, 2016, and 20132015 and for the fiscal years ended June 30, 20142016 and 20132015 have been derived from our audited consolidated financial statements not included in this Annual Report on Form 10-K.Report. This table should be read in conjunction with the Consolidated Financial Statements and the notes thereto.