Table of Contents

In thousands

Three Months Ended

AptarGroup, Inc. Stockholders’ Equity

June 30, 2020 and 2019



Accumulated










Other

Common

Capital in

Non-

Retained

Comprehensive

Stock

Treasury

Excess of

Controlling

Total

Earnings

(Loss) Income

Par Value

Stock

Par Value

Interest

Equity

Balance - March 31, 2019

$
1,413,453

$
(319,795)

$
676

$
(327,871)

$
700,933

$
318

$
1,467,714

Net income

73,915

—

—

—

—

6

73,921

Foreign currency translation adjustments

—

9,422

—

—

—

(8)

9,414

Changes in unrecognized pension gains (losses) and related amortization, net of tax

—

716

—

—

—

—

716

Changes in derivative gains (losses), net of tax

—

(479)

—

—

—

—

(479)

Stock awards and option exercises

—

—

7

14,587

42,399

—

56,993

Cash dividends declared on common stock

(22,761)

—

—

—

—

—

(22,761)

Treasury stock purchased

—

—

—

(4,096)

—

—

(4,096)

Balance - June 30, 2019

$
1,464,607

$
(310,136)

$
683

$
(317,380)

$
743,332

$
316

$
1,581,422

Balance - March 31, 2020

$
1,554,665

$
(381,058)

$
689

$
(372,573)

$
785,567

$
333

$
1,587,623

Net income

41,839

—

—

—

—

21

41,860

Foreign currency translation adjustments

—

19,095

—

—

—

1

19,096

Changes in unrecognized pension gains (losses) and related amortization, net of tax

—

1,440

—

—

—

—

1,440

Changes in derivative gains (losses), net of tax

—

(733)

—

—

—

—

(733)

Stock awards and option exercises

—

—

1

1,867

17,944

—

19,812

Cash dividends declared on common stock

(23,112)

—

—

—

—

—

(23,112)

Balance - June 30, 2020

$
1,573,392

$
(361,256)

$
690

$
(370,706)

$
803,511

$
355

$
1,645,986

In thousands

Six Months Ended

AptarGroup, Inc. Stockholders’ Equity

June 30, 2020 and 2019



Accumulated










Other

Common

Capital in

Non-

Retained

Comprehensive

Stock

Treasury

Excess of

Controlling

Total

Earnings

(Loss) Income

Par Value

Stock

Par Value

Interest

Equity

Balance - December 31, 2018

$
1,371,826

$
(310,504)

$
673

$
(318,208)

$
678,769

$
315

$
1,422,871

Net income

136,919

—

—

—

—

1

136,920

Foreign currency translation adjustments

—

(197)

—

—

—

—

(197)

Changes in unrecognized pension gains (losses) and related amortization, net of tax

—

1,437

—

—

—

—

1,437

Changes in derivative gains (losses), net of tax

—

(872)

—

—

—

—

(872)

Stock awards and option exercises

—

—

10

19,924

64,563

—

84,497

Cash dividends declared on common stock

(44,138)

—

—

—

—

—

(44,138)

Treasury stock purchased

—

—

—

(19,096)

—

—

(19,096)

Balance - June 30, 2019

$
1,464,607

$
(310,136)

$
683

$
(317,380)

$
743,332

$
316

$
1,581,422

Balance - December 31, 2019

$
1,523,820

$
(341,948)

$
686

$
(381,238)

$
770,596

$
336

$
1,572,252

Net income

97,092

—

—

—

—

18

97,110

Adoption of CECL standard

(1,377)

—

—

—

—

—

(1,377)

Foreign currency translation adjustments

—

(23,134)

—

—

—

1

(23,133)

Changes in unrecognized pension gains (losses) and related amortization, net of tax

—

3,076

—

—

—

—

3,076

Changes in derivative gains (losses), net of tax

—

750

—

—

—

—

750

Stock awards and option exercises

—

—

4

10,532

32,915

—

43,451

Cash dividends declared on common stock

(46,143)

—

—

—

—

—

(46,143)

Balance - June 30, 2020

$
1,573,392

$
(361,256)

$
690

$
(370,706)

$
803,511

$
355

$
1,645,986


In thousands

Six Months Ended	AptarGroup, Inc. Stockholders’ Equity
June 30, 2021 and 2020	Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Common Stock Par Value		Treasury Stock		Capital in Excess of Par Value		Non- Controlling Interest		Total Equity

Balance - December 31, 2019	$	1,523,820	$	(341,948)	$	686	$	(381,238)	$	770,596	$	336	$	1,572,252
Net income	97,092		—		—		—		—		18		97,110
Adoption of CECL standard	(1,377)		—		—		—		—		—		(1,377)
Foreign currency translation adjustments	—		(23,134)		—		—		—		1		(23,133)
Changes in unrecognized pension gains (losses) and related amortization, net of tax	—		3,076		—		—		—		—		3,076
Changes in derivative gains (losses), net of tax	—		750		—		—		—		—		750
Stock awards and option exercises	—		—		4		10,532		32,915		—		43,451
Cash dividends declared on common stock	(46,143)		—		—		—		—		—		(46,143)

Balance - June 30, 2020	$	1,573,392	$	(361,256)	$	690	$	(370,706)	$	803,511	$	355	$	1,645,986

Balance - December 31, 2020	$	1,643,825	$	(281,709)	$	695	$	(361,583)	$	849,161	$	396	$	1,850,785
Net income (loss)	139,228		—		—		—		—		(15)		139,213

Foreign currency translation adjustments	—		(27,373)		—		—		—		—		(27,373)
Changes in unrecognized pension gains (losses) and related amortization, net of tax	—		5,215		—		—		—		—		5,215
Changes in derivative gains (losses), net of tax			809		—		—		—		—		809
Stock awards and option exercises	—		—		7		17,201		49,221		—		66,429
Cash dividends declared on common stock	(48,415)		—		—		—		—		—		(48,415)
Balance - June 30, 2021	$	1,734,638	$	(303,058)	$	702	$	(344,382)	$	898,382	$	381	$	1,986,663


In thousands, brackets denote cash outflows

Six Months Ended June 30,	2021		2020

Cash Flows from Operating Activities:
Net income	$	139,213	$	97,110
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	95,606		86,901
Amortization	19,622		20,334
Stock-based compensation	21,805		17,603
Provision for CECL	(240)		1,089
Loss (gain) on disposition of fixed assets	5		(46)
Gain on remeasurement of equity securities	(15,198)		0
Deferred income taxes	(6,865)		9
Defined benefit plan expense	14,650		11,550
Equity in results of affiliates	434		1,127
Change in fair value of contingent consideration	1,950		0
Changes in balance sheet items, excluding effects from foreign currency adjustments:
Accounts and other receivables	(76,735)		(25,625)
Inventories	(55,873)		(13,241)
Prepaid and other current assets	(19,793)		(16,936)
Accounts payable, accrued and other liabilities	69,139		64,620
Income taxes payable	(5,261)		(8,446)
Retirement and deferred compensation plan liabilities	(9,657)		(5,916)
Other changes, net	2,779		(2,447)
Net Cash Provided by Operations	175,581		227,686
Cash Flows from Investing Activities:
Capital expenditures	(137,039)		(122,986)
Proceeds from sale of property, plant and equipment	4,571		4,130
Maturity of short-term investment	243		0
Acquisition of business, net of cash acquired and release of escrow	(4,834)		(159,570)
Acquisition of intangible assets, net	0		(3,612)
Investment in equity securities	0		(34,044)

Notes receivable, net	(29)		(1,045)
Net Cash Used by Investing Activities	(137,088)		(317,127)
Cash Flows from Financing Activities:
Proceeds from notes payable and overdrafts	7,410		14,464
Repayments of notes payable and overdrafts	(4,615)		(27,788)
Repayments and proceeds of short term revolving credit facility, net	(52,000)		125,000
Proceeds from long-term obligations	7,888		1,316
Repayments of long-term obligations	(7,001)		(4,067)
Credit facility costs	(1,718)		0
Payment of contingent consideration obligation	0		(1,500)
Dividends paid	(48,415)		(46,143)
Proceeds from stock option exercises	53,038		30,058

Net Cash (Used) Provided by Financing Activities	(45,413)		91,340
Effect of Exchange Rate Changes on Cash	(6,555)		8,522
Net (Decrease) Increase in Cash and Equivalents and Restricted Cash	(13,475)		10,421
Cash and Equivalents and Restricted Cash at Beginning of Period	304,970		246,973
Cash and Equivalents and Restricted Cash at End of Period	$	291,495	$	257,394


Six Months Ended June 30,	2021		2020

Cash and equivalents	$	291,495	$	247,656
Restricted cash included in prepaid and other	0		9,738
Total Cash and Equivalents and Restricted Cash shown in the Statement of Cash Flows	$	291,495	$	257,394

~~Table of Contents~~


	For the Three Months Ended June 30, 2020
Segment	Europe		Domestic		Latin America		Asia		Total
Pharma	$	201,813	$	81,098	$	6,987	$	11,361	$	301,259
Beauty + Home	152,412		94,349		29,893		23,132		299,786
Food + Beverage	27,841		54,478		6,489		9,452		98,260
Total	$	382,066	$	229,925	$	43,369	$	43,945	$	699,305

For the Three Months Ended June 30, 2020

Latin

Segment

Europe

Domestic

America

Asia

Total

Beauty + Home

$
152,412

$
94,349

$
29,893

$
23,132

$
299,786

Pharma

201,813

81,098

6,987

11,361

301,259

Food + Beverage

27,841

54,478

6,489

9,452

98,260

Total

$
382,066

$
229,925

$
43,369

$
43,945

$
699,305

For the Three Months Ended June 30, 2019

Latin

Segment

Europe

Domestic

America

Asia

Total

Beauty + Home

$
202,541

$
73,973

$
41,449

$
24,117

$
342,080

Pharma

190,654

76,042

7,078

8,165

281,939

Food + Beverage

32,336

65,160

9,211

11,935

118,642

Total

$
425,531

$
215,175

$
57,738

$
44,217

$
742,661

For the Six Months Ended June 30, 2020

Latin

Segment

Europe

Domestic

America

Asia

Total

Beauty + Home

$
339,362

$
176,194

$
66,074

$
42,716

$
624,346

Pharma

391,943

172,063

13,566

20,883

598,455

Food + Beverage

56,610

112,068

14,523

14,856

198,057

Total

$
787,915

$
460,325

$
94,163

$
78,455

$
1,420,858

��

For the Six Months Ended June 30, 2019

Latin

Segment

Europe

Domestic

America

Asia

Total

Beauty + Home

$
418,774

$
160,952

$
84,091

$
45,922

$
709,739

Pharma

374,828

147,814

14,734

17,264

554,640

Food + Beverage

63,297

120,280

17,095

22,070

222,742

Total

$
856,899

$
429,046

$
115,920

$
85,256

$
1,487,121


	For the Six Months Ended June 30, 2021
Segment	Europe		Domestic		Latin America		Asia		Total
Pharma	$	420,167	$	182,822	$	10,664	$	25,522	$	639,175
Beauty + Home	381,611		202,486		73,224		49,871		707,192
Food + Beverage	60,904		139,037		21,138		20,340		241,419
Total	$	862,682	$	524,345	$	105,026	$	95,733	$	1,587,786


	For the Six Months Ended June 30, 2020
Segment	Europe		Domestic		Latin America		Asia		Total
Pharma	$	391,943	$	172,063	$	13,566	$	20,883	$	598,455
Beauty + Home	339,362		176,194		66,074		42,716		624,346
Food + Beverage	56,610		112,068		14,523		14,856		198,057
Total	$	787,915	$	460,325	$	94,163	$	78,455	$	1,420,858

We perform our obligations under a contract with a customer by transferring goods and/or services in exchange for consideration from the customer. The timing of performance will sometimes differ from the timing of the receipt of the associated consideration from the customer, thus resulting in the recognition of a contract asset or a contract liability. We recognize a contract asset when we transfer control of goods or services to a customer prior to invoicing for the related performance obligation. The contract asset is transferred to accounts receivable when the product is shipped and invoiced to the customer. We recognize a contract liability if the customer's payment of consideration precedes the entity's performance.

The opening and closing balances of our contract asset and contract liabilities are as follows:


	Balance as of December 31, 2020		Balance as of June 30, 2021		Increase/ (Decrease)
Contract asset (current)	$	16,109	$	20,864	$	4,755

Contract liability (current)	87,188		101,299		14,111
Contract liability (long-term)	21,584		23,129		1,545

Table of Contents

Balance as of

Balance as of

Increase/


December 31, 2019

June 30, 2020

(Decrease)

Contract asset (current)

$
16,245

$
15,113

$
(1,132)

Contract asset (long-term)

$
—

$
—

$
—

Contract liability (current)

$
79,305

$
70,708

$
(8,597)

Contract liability (long-term)

$
9,779

$
20,662

$
10,883

The differences in the opening and closing balances of our contract asset and contract liabilities are primarily the result of timing differences between our performance and the customer’s payment. The total amount of revenue recognized during the current year against contract liabilities is ~~$27.3~~$49.9 million, including ~~$21.6~~$29.8 million relating to contract liabilities at the beginning of the year.

Current contract assets and long-term contract assets are included within the Prepaid and Other and Miscellaneous assets, respectively, while current contract liabilities and long-term contract liabilities are included within Accounts Payable, Accrued and Other Liabilities and Deferred and Other Non-current Liabilities, respectively, within our Condensed Consolidated Balance Sheets.

Determining the Transaction Price

In most cases, the transaction price for each performance obligation is stated in the contract. In determining the variable amounts of consideration within the transaction price (such as volume-based customer rebates), we include an estimate of the expected amount of consideration as revenue. We apply the expected value method based on all of the information (historical, current, and forecast) that is reasonably available and identify reasonable estimates based on this information. We apply the method consistently throughout the contract when estimating the effect of an uncertainty on the amount of variable consideration to which we will be entitled.

~~Table of Contents~~


Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Location of (Loss) Gain Recognized in Income on Derivatives	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income on Derivative				Total Amount of Affected Income Statement Line Item
	2021		2020			2021		2020
Cross currency swap contract:
Interest component	$	295	$	(208)	Interest expense	$	6	$	525	$	(7,175)
Foreign exchange component	(1,290)		(3,060)		Miscellaneous, net	(1,290)		(3,060)		(2,028)
	$	(995)	$	(3,268)		$	(1,284)	$	(2,535)

The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, ~~2020~~2021 and ~~2019~~

Amount of Gain (Loss)

Total Amount

Amount of Gain (Loss)

Location of (Loss)

Reclassified from

of Affected

Derivatives in Cash

Recognized in

Gain Recognized

Accumulated

Income

Flow Hedging

Other Comprehensive

in Income on

Other Comprehensive

Statement

Relationships

Income on Derivative

Derivatives

Income on Derivative

Line Item


2020

2019



2020

2019


Cross currency swap contract:

Interest component

$
2,038

$
2,472

Interest expense

$
1,288

$
3,006

$
(17,122)

Foreign exchange component

(280)

1,593

Miscellaneous, net

(280)

1,593

(2,335)

$
1,758

$
4,065

$
1,008

$
4,599

2020


Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Location of (Loss) Gain Recognized in Income on Derivatives	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income on Derivative				Total Amount of Affected Income Statement Line Item
	2021		2020			2021		2020
Cross currency swap contract:
Interest component	$	827	$	2,038	Interest expense	$	18	$	1,288	$	(14,590)
Foreign exchange component	3,239		(280)		Miscellaneous, net	3,239		(280)		(2,991)
	$	4,066	$	1,758		$	3,257	$	1,008

Table of Contents

The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the Three Months Ended June 30, ~~2020~~2021 and ~~2019~~

Amount of (Loss) Gain

Derivatives Not Designated

Location of (Loss) Gain Recognized

Recognized in Income

as Hedging Instruments

in Income on Derivatives

on Derivatives




2020

2019

Foreign Exchange Contracts

Other (Expense) Income:
Miscellaneous, net

$
(940)

$
(251)

$
(940)

$
(251)

2020

Derivatives Not Designated
as Hedging Instruments Location of (Loss) Gain Recognized
in Income on Derivatives Amount of (Loss) Gain
Recognized in Income
on Derivatives
2021 2020
Foreign Exchange Contracts Other (Expense) Income:
Miscellaneous, net $ (1,176) $ (940)
$ (1,176) $ (940)

The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the Six Months Ended June 30, ~~2020~~2021 and ~~2019~~

Amount of (Loss) Gain

Derivatives Not Designated

Location of (Loss) Gain Recognized

Recognized in Income

as Hedging Instruments

in Income on Derivatives

on Derivatives

2020

2019

Foreign Exchange Contracts

Other (Expense) Income:
Miscellaneous, net

$
807

$
(514)

$
807

$
(514)

Gross Amounts not Offset

Gross Amounts

Net Amounts

in the Statement of

Offset in the

Presented in

Financial Position

Gross

Statement of

the Statement of

Financial

Cash Collateral

Net

Amount

Financial Position

Financial Position

Instruments

Received

Amount

Description

June 30, 2020

Derivative Assets

$
3,799

—

$
3,799

—

—

$
3,799

Total Assets

$
3,799

—

$
3,799

—

—

$
3,799

Derivative Liabilities

$
137

—

$
137

—

—

$
137

Total Liabilities

$
137

—

$
137

—

—

$
137

December 31, 2019

Derivative Assets

$
2,758

—

$
2,758

—

—

$
2,758

Total Assets

$
2,758

—

$
2,758

—

—

$
2,758

Derivative Liabilities

$
401

—

$
401

—

—

$
401

Total Liabilities

$
401

—

$
401

—

—

$
401

2020

~~Table of Contents~~


Derivatives Not Designated as Hedging Instruments	Location of (Loss) Gain Recognized in Income on Derivatives	Amount of (Loss) Gain Recognized in Income on Derivatives
		2021		2020
Foreign Exchange Contracts	Other (Expense) Income: Miscellaneous, net	$	(1,689)	$	807
		$	(1,689)	$	807



			Gross Amounts Offset in the Statement of Financial Position	Net Amounts Presented in the Statement of Financial Position		Gross Amounts not Offset in the Statement of Financial Position
	Gross Amount					Financial Instruments	Cash Collateral Received	Net Amount
Description
June 30, 2021
Derivative Assets	$	30	—	$	30	—	—	$	30
Total Assets	$	30	—	$	30	—	—	$	30

Derivative Liabilities	$	5,582	—	$	5,582	—	—	$	5,582
Total Liabilities	$	5,582	—	$	5,582	—	—	$	5,582

December 31, 2020
Derivative Assets	$	322	—	$	322	—	—	$	322
Total Assets	$	322	—	$	322	—	—	$	322

Derivative Liabilities	$	8,455	—	$	8,455	—	—	$	8,455
Total Liabilities	$	8,455	—	$	8,455	—	—	$	8,455

NOTE 11 – FAIR VALUE

Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

●

~~Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.~~

●

Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

●

~~Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.~~

•Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

•Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

•Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Table of Contents

As of June 30, 2021, the fair values of our financial assets and liabilities were categorized as follows:


	Total		Level 1		Level 2		Level 3
Assets
Investment in equity securities (1)	$	20,595	$	20,595	$	0	$	0
Foreign exchange contracts (2)	30		0		30		0

Total assets at fair value	$	20,625	$	20,595	$	30	$	0
Liabilities
Foreign exchange contracts (2)	$	1,526	$	0	$	1,526	$	0
Cross currency swap contract (2)	4,056		0		4,056		0
Contingent consideration obligation	33,090		0		0		33,090
Total liabilities at fair value	$	38,672	$	0	$	5,582	$	33,090

As of December 31, 2020, the fair values of our financial assets and liabilities were categorized as follows:


	Total		Level 1		Level 2		Level 3
Assets
Foreign exchange contracts (2)	$	322	$	0	$	322	$	0

Total assets at fair value	$	322	$	0	$	322	$	0
Liabilities
Foreign exchange contracts (2)	$	146	$	0	$	146	$	0
Cross currency swap contract (2)	8,309		0		8,309		0
Contingent consideration obligation	31,140		0		0		31,140
Total liabilities at fair value	$	39,595	$	0	$	8,455	$	31,140

Total

Level 1

Level 2

Level 3

Assets

Foreign exchange contracts ⁽¹⁾

$
747

$
—

$
747

$
—

Cross currency swap contract ⁽¹⁾

3,052

—

3,052

—

Total assets at fair value

$
3,799

$
—

$
3,799

$
—

Liabilities

Foreign exchange contracts ⁽¹⁾

$
137

$
—

$
137

$
—

Contingent consideration obligation

24,710

—

—

24,710

Total liabilities at fair value

$
24,847

$
—

$
137

$
24,710

(1)

AsInvestment in PureCycle Technologies (PCT). See Note 18 - Investment in Equity Securities for discussion of ~~December 31, 2019, the fair values~~this investment.

(2)Market approach valuation technique based on observable market transactions of ~~our financial assets~~spot and ~~liabilities were categorized as follows:~~

Total

Level 1

Level 2

Level 3

Assets

Foreign exchange contracts ⁽¹⁾

$
206

$
—

$
206

$
—

Cross currency swap contract ⁽¹⁾

2,552

—

2,552

—

Total assets at fair value

$
2,758

$
—

$
2,758

$
—

Liabilities

Foreign exchange contracts ⁽¹⁾

$
401

$
—

$
401

$
—

Contingent consideration obligation

5,930

—

—

5,930

Total liabilities at fair value

$
6,331

$
—

$
401

$
5,930

forward rates.

~~(1)~~

~~Market approach valuation technique based on observable market transactions of spot and forward rates.~~

The carrying amounts of our other current financial instruments such as cash and equivalents, accounts and notes receivable, notes payable and current maturities of long-term obligations approximate fair value due to the short-term maturity of the instruments. We consider our long-term obligations a Level 2 liability and utilize the market approach valuation technique based on interest rates that are currently available to us for issuance of debt with similar terms and maturities. The estimated fair value of our long-term obligations was $1.1 billion as of June 30, ~~2020~~2021 and $1.1 billion as of December 31, ~~2019.~~

2020.

As discussed in Note 1719 - Acquisitions of our Annual Report on Form 10-K for the year ended December 31, 2020, we have a contingent consideration obligation to the selling equity holders of of:

–Fusion Packaging, Inc. ("Fusion") in connection with the acquisition of 100% of the equity interests of Fusion ~~Acquisition (as defined herein)~~(the "Fusion Acquisition") based on 2022 cumulative performance targets, ~~a contingent consideration obligation~~and

–Noble International Holdings, Inc., Genia Medical, Inc. and JBCB Holdings, LLC (collectively referred to ~~the selling equity holders of Noble~~as "Noble") in connection with the acquisition of 100% of the equity interests of Noble ~~Acquisition (as defined herein)~~(the "Noble Acquisition") based on 2024 cumulative performance ~~targets and a contingent consideration obligation to the selling equity holder of Gateway in connection with the Gateway Acquisition (as defined herein) based on 2020 and 2022 performance~~ targets.

We consider these obligations Level 3 liabilities and have estimated the aggregate fair value for these contingent consideration arrangements ~~to be $20.3 million, $2.9 million and $1.5 million, respectively,~~ as follows:


	June 30, 2021		December 31, 2020
Fusion Acquisition	$	28,010	$	26,910
Noble Acquisition	5,080		4,230

	$	33,090	$	31,140

Table of ~~June 30, 2020. During~~Contents

Changes in the quarter ended June 30, 2020, $1.5 million of the Gateway contingent consideration accrual was paid as a result of the business meeting their first performance target. As of December 31, 2019 the aggregate fair value ~~for~~of these ~~contingent consideration arrangements was $2.9 million~~obligations are recorded within selling, research & development and ~~$3.0 million for~~administrative expenses in our Condensed Consolidated Statements of Income. Significant changes to the ~~Noble Acquisition and the Gateway Acquisition, respectively.~~

inputs, as noted above, can result in a significantly higher or lower fair value measurement. The following table provides a summary of changes in our Level 3 fair value measurements:


Balance, December 31, 2020	$	31,140

Increase in fair value recorded in earnings	1,950

Balance, June 30, 2021	$	33,090

NOTE 12 - COMMITMENTS AND CONTINGENCIES

~~The Company, in~~

In the normal course of business, iswe are subject to a number of lawsuits and claims both actual and potential in nature. While management believes the resolution of these claims and lawsuits will not have a material adverse effect on our financial position, our results of operations or cash flows, claims and legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur and could include amounts in excess of any accruals which management has established. Were such unfavorable final outcomes to occur, it is possible that they could have a material adverse effect on our financial position, results of operations and cash flows.

~~Table of Contents~~

Under our Certificate of Incorporation, we have agreed to indemnify our officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have a directors and officers liability insurance policy that covers a portion of our exposure. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal. We have 0 liabilities recorded for these agreements as of June 30, ~~2020~~2021 and December 31, ~~2019.~~

A fire caused damage to our facility in Annecy, France in June 2016. We are insured for the damages caused by the fire, including business interruption insurance. For the six months ended June 30, 2020, we did not receive any insurance proceeds, and have 0 insurance receivable as of June 30, 2020. During the six months ended June 30, 2020 and 2019, profitability was not impacted. The final settlement continues to be negotiated. In many cases, our insurance coverage exceeds the amount of our recognized losses. However, 0 gain contingencies were recognized during the six months ended June 30, 2020 as our ability to realize those gains remains uncertain.

An environmental investigation, undertaken to assess areas of possible contamination, was completed at our facility in Jundiaí, São Paulo, Brazil. The facility is primarily an internal supplier of anodized aluminum components for certain of our dispensing systems. The testing indicated that soil and groundwater in certain areas of the facility were impacted above acceptable levels established by local regulations. In March 2017, we reported the findings to the relevant environmental authority, the Environmental Company of the State of São Paulo – CETESB. Based upon our best estimate, we recorded a reserve of $1.5 million (operating expense) in the first quarter of 2017 related to this contingency. During 2019, we paid approximately $0.6 million. For the six months ended June 30, 2020, we paid approximately $0.1 million and made adjustments to the accrual based on our future anticipated expenditures. As of June 30, 2020, our outstanding reserve is $0.4 million. The ultimate loss associated with this environmental contingency is subject to the investigation and ongoing review of the CETESB. We will continue to evaluate the range of likely costs as the investigation proceeds and we have further clarity on the nature and extent of remediation that will be required. We note that the contamination, or any failure to complete any required remediation in a timely manner, could potentially result in fines or penalties.

In March 2017, the Supreme Court of Brazil issued a decision that a certain state value added tax should not be included in the calculation of federal gross receipts taxes. The decision reduces our gross receipts tax in Brazil prospectively and ~~potentially,~~ retrospectively. ~~During~~In May 2021, the ~~first quarter~~Supreme Court of ~~2019,~~Brazil issued a judgment establishing rules for the refund of amounts paid in excess based on the calculation methodology to be applied. In June 2021 and June 2020, we received a favorable court ~~decision~~decisions of ~~$2.7~~$1.6 million and $0.7 million, respectively, for the retrospective right to recover part of our claim. ~~This amount is~~These amounts were recorded in cost of sales as a favorable impact of $1.7 million and $1.0 million was recognized as interest income. In June 2020, we received a favorable court decision of $0.7 million for the retrospective right to recover part of our claim. This amount is recorded in cost of sales as a favorable impact of $0.7 million.sales. If the ~~Judicial~~Supreme Court of Brazil grants full retrospective recovery, we estimate remaining potential recoveries of approximately ~~$1.5~~$3 million to ~~$7.5~~$6 million, including ~~interest, depending on the future decisions of the Supreme Court of Brazil.~~interest. Due to uncertainties around our remaining court recovery claims, we have not recorded any further amounts relating to the retrospective nature of this matter.

In December 2019, tax authorities in Brazil notified us of a tax assessment of approximately $6.1 million, including interest and penalties of $2.3 million and $0.8 million, respectively, relating to differences in tax classification codes used for import duties for the period from January 2015 to August 2018. We are vigorously contesting the assessment, including interest and penalties, and have filed an administrative defense appeal in December 2019. OnIn June 4, 2020, an unfavorable decision was issued on the first administrative defense appeal. We ~~are awaiting the formal notification~~filed a second administrative defense appeal in ~~order to review its content and file our second appeal.~~August 2020. We still believe we have a strong defense. Due to uncertainty in the amount of assessment and the timing of our appeal, 0 liability is recorded as of June 30, ~~2020.~~

2021.

NOTE 13 – STOCK REPURCHASE PROGRAM

On April 18, 2019, we announced a share repurchase authorization of up to $350 million of common stock. This authorization replaces previous authorizations and has no expiration date. We may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions.

During the three and six months ended June 30, 2021 and 2020, we did not repurchase any shares. ~~During the three and six months ended June 30, 2019, we repurchased approximately 34 thousand shares and 193 thousand shares for approximately $4.1 million and $19.1 million, respectively.~~ As of June 30, ~~2020,~~2021, there was $278.5 million of authorized share repurchases available to us.

~~Table of Contents~~

NOTE 14 – STOCK-BASED COMPENSATION

We issue restricted stock units (“RSUs”), which consist of time-based and performance-based awards, to employees under stock awards plans approved by stockholders. In addition, RSUs are issued to non-employee directors under a Restricted Stock Unit Award Agreement for Directors pursuant to the Company’s 2018 Equity Incentive Plan. RSUs granted to employees vest according to a specified performance period and/or vesting period. Time-based RSUs generally vest over three years. Performance-based RSUs vest at the end of the specified performance period, generally three years, assuming required performance or market vesting conditions are met. Performance-based RSUs have one of two vesting conditions: (1) based on our internal financial performance metrics and (2) based on our total shareholder return (“TSR”) relative to total shareholder returns of an industrial peer group. At the time of vesting, the vested shares of common stock are issued in the employee’s name. In addition, RSU awards are generally net settled (shares are withheld to cover the employee tax obligation). RSUs granted to directors are only time-based and generally vest over one year.

Table of Contents

The fair value of both time-based RSUs and performance-based RSUs pertaining to internal performance metrics is determined using the closing price of our common stock on the grant date. The fair value of performance-based RSUs pertaining to TSR is estimated using a Monte Carlo simulation. Inputs and assumptions used to calculate the fair value are shown in the table below. The fair value of these RSUs is expensed over the vesting period using the straight-line method or using the graded vesting method when an employee becomes eligible to retain the award at retirement.

Six Months Ended June 30,

2020

2019

Fair value per stock award

$
94.98

$
134.97

Grant date stock price

$
83.93

$
104.51

Assumptions:

Aptar's stock price expected volatility

23.80
%

16.50
%

Expected average volatility of peer companies

48.50
%

31.90
%

Correlation assumption

63.50
%

37.40
%

Risk-free interest rate

0.31
%

2.19
%

Dividend yield assumption

1.72
%

1.30
%


Six Months Ended June 30,	2021			2020
Fair value per stock award	$	171.63		$	94.98
Grant date stock price	$	141.59		$	83.93
Assumptions:
Aptar's stock price expected volatility	21.40		%	23.80		%
Expected average volatility of peer companies	50.00		%	48.50		%
Correlation assumption	58.10		%	63.50		%
Risk-free interest rate	0.32		%	0.31		%
Dividend yield assumption	1.02		%	1.72		%

A summary of RSU activity as of June 30, ~~2020~~2021 and changes during the six month period then ended is presented below:

Time-Based RSUs

Performance-Based RSUs



Weighted Average



Weighted Average

Units

Grant-Date Fair Value

Units

Grant-Date Fair Value

Nonvested at January 1, 2020

480,729

$
95.45

181,680

$
117.26

Granted

229,033

85.57

417,313

93.08

Vested

(125,020)

85.55

—

—

Forfeited

(5,692)

99.08

(6,714)

108.10

Nonvested at June 30, 2020

579,050

$
92.14

592,279

$
100.29



	Time-Based RSUs			Performance-Based RSUs
	Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2021	576,198	$	92.47	590,064	$	100.27
Granted	140,316	139.25		169,974	152.51
Vested	(134,808)	91.39		(71,994)	128.70
Forfeited	(3,244)	99.42		(31,872)	91.67
Nonvested at June 30, 2021	578,462	$	107.45	656,172	$	111.10

Included in the activity for the six months ended June 30, ~~2020~~2021 time-based RSUs are ~~12,379~~10,007 units granted to non-employee directors and ~~11,490~~12,379 units vested related to non-employee directors.

~~Compensation expense recorded attributable to RSUs for the first six months of 2020 and 2019 was approximately $16.3 million and $9.8 million, respectively.~~


Six Months Ended June 30,	2021		2020
Compensation expense	$	21,579	$	16,353
Fair value of units vested	20,778		10,696
Intrinsic value of units vested	28,259		12,821

The actual tax benefit realized for the tax deduction from RSUs was approximately ~~$3.0~~$4.0 million in the six months ended June 30, 2020. The fair value of units vested during the six months ended June 30, 2020 and 2019 was $10.7 million and $4.1 million, respectively. The intrinsic value of units vested during the six months ended June 30, 2020 and 2019 was $12.8 million and $4.8 million, respectively.2021. As of June 30, ~~2020,~~2021, there was ~~$58.8~~$61.3 million of total unrecognized compensation cost relating to RSU awards which is expected to be recognized over a weighted-average period of ~~2.2~~2 years.

Historically we issued stock options to our employees and non-employee directors. Beginning in 2019, we no longer issue stock options. Stock options were awarded with the exercise price equal to the market price on the date of grant and generally vest over three years and expire 10 years after grant. ~~Compensation expense attributable~~For stock option grants, we used historical data to ~~employee~~estimate expected life and volatility.

Table of Contents

A summary of option activity under our stock ~~options for~~plans during the ~~first~~ six months of 2020 was approximately $1.3 million ($1.0 million after tax). Approximately $1.1 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. Compensation expense attributable to stock options for the first six months of 2019 was approximately $3.2 million ($2.7 million after tax). Approximately $2.7 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. ended June 30, 2021 is presented below:



	Stock Awards Plans				Director Stock Option Plans
	Options		Weighted Average Exercise Price		Options		Weighted Average Exercise Price
Outstanding, January 1, 2021	3,998,047		$	70.28	99,200		$	60.80
Granted	0		0		0		0
Exercised	(816,058)		64.74		(47,500)		57.40
Forfeited or expired	(10,153)		75.46		0		0
Outstanding at June 30, 2021	3,171,836		$	71.69	51,700		$	63.91
Exercisable at June 30, 2021	3,171,836		$	71.69	51,700		$	63.91
Weighted-Average Remaining Contractual Term (Years):
Outstanding at June 30, 2021	4.5				2.6
Exercisable at June 30, 2021	4.5				2.6
Aggregate Intrinsic Value:
Outstanding at June 30, 2021	$	221,908			$	4,019
Exercisable at June 30, 2021	$	221,908			$	4,019
Intrinsic Value of Options Exercised During the Six Months Ended:
June 30, 2021	$	63,407			$	4,248
June 30, 2020	$	26,027			$	1,973


Six Months Ended June 30,	2021		2020
Compensation expense (included in SG&A)	$	185	$	1,051
Compensation expense (included in Cost of sales)	42		200
Compensation expense, Total	$	227	$	1,251
Compensation expense, net of tax	174		951
Grant date fair value of options vested	2,421		7,565

The reduction in stock option expense is due to our move to RSUs as discussed above. ~~For stock~~Cash received from option ~~grants, we used historical data to estimate expected life and volatility.~~

~~Table of Contents~~

~~A summary of option activity under our stock plans~~exercises was approximately $53.0 million during the six months ended June 30, ~~2020 is presented below:~~

Stock Awards Plans

Director Stock Option Plans




Weighted Average



Weighted Average

Options

Exercise Price

Options

Exercise Price

Outstanding, January 1, 2020

5,044,180

$
68.32

135,251

$
58.45

Granted

—

—

—

—

Exercised

(460,243)

58.21

(30,751)

51.22

Forfeited or expired

(14,200)

76.07

—

—

Outstanding at June 30, 2020

4,569,737

$
69.38

104,500

$
60.58

Exercisable at June 30, 2020

4,416,415

$
68.62

104,500

$
60.58

Weighted-Average Remaining Contractual Term (Years):

Outstanding at June 30, 2020

5.0

3.1

Exercisable at June 30, 2020

4.9

3.1

Aggregate Intrinsic Value:

Outstanding at June 30, 2020

$
194,684

$
4,902

Exercisable at June 30, 2020

$
190,936

$
4,902

Intrinsic Value of Options Exercised During the Six Months Ended:

June 30, 2020

$
26,027

$
1,973

June 30, 2019

$
65,944

$
722

2021. The ~~grant date fair value of options vested during the six months ended June 30, 2020 and 2019 was $7.6 million and $12.2 million, respectively. Cash received from option exercises was approximately$30.1 million and the~~ actual tax benefit realized for the tax deduction from option exercises was approximately $15.0 million and $6.4 million in the six months ended June 30, ~~2020.~~2021 and 2020, respectively. As of June 30, ~~2020, the~~2021, there is no remaining valuation of stock option awards to be expensed in future ~~periods was $1.0 million and the related weighted-average period over which it is expected to be recognized is 0.7 years.~~

periods.

NOTE 15 – EARNINGS PER SHARE

Basic net income per share is calculated by dividing net income attributable to Aptar by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing the net income attributable to Aptar by the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to stock-based compensation awards. Stock-based compensation awards for which total employee proceeds exceed the average market price over the applicable period would have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share. The reconciliation of basic and diluted earnings per share for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020 is as follows:

Three Months Ended


June 30, 2020

June 30, 2019

Diluted

Basic

Diluted

Basic

Consolidated operations

Income available to common stockholders

$
41,839

$
41,839

$
73,915

$
73,915

Average equivalent shares

Shares of common stock

64,262

64,262

63,471

63,471

Effect of dilutive stock-based compensation

Stock options

1,661

—

2,533

—

Restricted stock

461

—

228

—

Total average equivalent shares

66,384

64,262

66,232

63,471

Net income per share

$
0.63

$
0.65

$
1.12

$
1.16

Table of Contents

Six Months Ended

June 30, 2020

June 30, 2019

Diluted

Basic

Diluted

Basic

Consolidated operations

Income available to common stockholders

$
97,092

$
97,092

$
136,919

$
136,919

Average equivalent shares

Shares of common stock

64,135

64,135

63,219

63,219

Effect of dilutive stock-based compensation

Stock options

1,734

—

2,411

—

Restricted stock

377

—

212

—

Total average equivalent shares

66,246

64,135

65,842

63,219

Net income per share

$
1.47

$
1.51

$
2.08

$
2.17



	Three Months Ended
	June 30, 2021				June 30, 2020
	Diluted		Basic		Diluted		Basic
Consolidated operations
Income available to common stockholders	$	55,276	$	55,276	$	41,839	$	41,839

Average equivalent shares
Shares of common stock	65,818		65,818		64,262		64,262
Effect of dilutive stock-based compensation
Stock options	1,727		—		1,661		—
Restricted stock	541		—		461		—
Total average equivalent shares	68,086		65,818		66,384		64,262
Net income per share	$	0.81	$	0.84	$	0.63	$	0.65


	Six Months Ended
	June 30, 2021				June 30, 2020
	Diluted		Basic		Diluted		Basic
Consolidated operations
Income available to common stockholders	$	139,228	$	139,228	$	97,092	$	97,092

Average equivalent shares
Shares of common stock	65,525		65,525		64,135		64,135
Effect of dilutive stock-based compensation
Stock options	1,804		—		1,734		—
Restricted stock	540		—		377		—
Total average equivalent shares	67,869		65,525		66,246		64,135
Net income per share	$	2.05	$	2.12	$	1.47	$	1.51

NOTE 16 – SEGMENT INFORMATION

We are organized into 3 reporting segments. ~~Our Beauty + Home segment sells~~Operations that sell dispensing systems, drug delivery systems, sealing solutions and services to ~~the personal care, beauty and home care markets. Our Pharma segment serves customers in~~ the prescription drug, consumer health care, injectables, and active ~~packaging markets. Our Food~~material science solutions markets form the Pharma segment. Operations that sell dispensing systems and sealing solutions primarily to the beauty, personal care and home care markets form the Beauty + ~~Beverage segment sells~~Home segment. Operations that sell dispensing systems and sealing solutions to the food and beverage ~~markets.~~

markets form the Food + Beverage segment.

The accounting policies of the segments are the same as those described in Part II, Item 8, Note 1 - Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. We evaluate performance of our ~~business units~~reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives, acquisition-related costs, net investment gains and ~~acquisition-related costs. All internal segment reporting~~losses related to observable market price changes on equity securities and ~~discussions~~other special items.

Table of ~~results with our Chief Operating Decision Maker (CODM) are based on segment Adjusted EBITDA.~~

Contents

Financial information regarding our reporting segments is shown below:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Total Sales:
Pharma	$	328,549	$	303,885	$	644,360	$	603,475
Beauty + Home	366,641		306,469		720,018		636,935
Food + Beverage	125,918		99,023		242,621		199,324
Total Sales	$	821,108	$	709,377	$	1,606,999	$	1,439,734
Less: Intersegment Sales:
Pharma	$	3,206	$	2,626	$	5,185	$	5,020
Beauty + Home	6,395		6,683		12,826		12,589
Food + Beverage	475		763		1,202		1,267
Total Intersegment Sales	$	10,076	$	10,072	$	19,213	$	18,876
Net Sales:
Pharma	$	325,343	$	301,259	$	639,175	$	598,455
Beauty + Home	360,246		299,786		707,192		624,346
Food + Beverage	125,443		98,260		241,419		198,057
Net Sales	$	811,032	$	699,305	$	1,587,786	$	1,420,858
Adjusted EBITDA (1):
Pharma	$	105,979	$	104,099	$	214,463	$	212,441
Beauty + Home	37,910		23,974		73,266		58,221
Food + Beverage	19,626		17,785		39,616		33,192
Corporate & Other, unallocated	(15,959)		(9,279)		(27,566)		(23,107)
Acquisition-related costs (2)	(2,434)		(3,592)		(2,434)		(5,866)
Restructuring Initiatives (3)	(4,876)		(7,331)		(8,548)		(12,170)
Net investment (loss) gain (4)	(1,611)		0		15,198		0
Depreciation and amortization	(57,790)		(56,429)		(115,228)		(107,235)
Interest Expense	(7,175)		(8,734)		(14,590)		(17,122)
Interest Income	624		175		1,005		350
Income before Income Taxes	$	74,294	$	60,668	$	175,182	$	138,704

(1)

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

Total Sales:

Beauty + Home

$
306,469

$
349,253

$
636,935

$
722,756

Pharma

303,885

284,577

603,475

559,071

Food + Beverage

99,023

119,095

199,324

223,822

Total Sales

709,377

752,925

$
1,439,734

$
1,505,649

Less: Intersegment Sales:

Beauty + Home

$
6,683

$
7,173

$
12,589

$
13,017

Pharma

2,626

2,638

5,020

4,431

Food + Beverage

763

453

1,267

1,080

Total Intersegment Sales

$
10,072

$
10,264

$
18,876

$
18,528

Net Sales:

Beauty + Home

$
299,786

$
342,080

$
624,346

$
709,739

Pharma

301,259

281,939

598,455

554,640

Food + Beverage

98,260

118,642

198,057

222,742

Net Sales

$
699,305

$
742,661

$
1,420,858

$
1,487,121

Adjusted EBITDA (1):

Beauty + Home

$
23,974

$
48,745

$
58,221

$
101,936

Pharma

104,099

101,428

212,441

198,785

Food + Beverage

17,785

20,944

33,192

37,635

Corporate & Other, unallocated

(9,279)

(10,630)

(23,107)

(23,385)

Acquisition-related costs (2)

(3,592)

(1,059)

(5,866)

(1,059)

Restructuring Initiatives (3)

(7,331)

(1,737)

(12,170)

(11,267)

Depreciation and amortization

(56,429)

(47,867)

(107,235)

(95,356)

Interest Expense

(8,734)

(8,756)

(17,122)

(17,970)

Interest Income

175

1,033

350

2,781

Income before Income Taxes

$
60,668

$
102,101

$
138,704

$
192,100

We evaluate performance of our reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives, acquisition-related costs, net investment gains and losses related to observable market price changes on equity securities and other special items.

(2)Acquisition-related costs include transaction costs and purchase accounting adjustments related to acquisitions and investments (see Note 17 – Acquisitions and Note 18 – Investment in Equity Securities for further details).

(3)Restructuring Initiatives includes expense items for the three and six months ended June 30, 2021 and 2020 as follows (see Note 19 – Restructuring Initiatives for further details):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Restructuring Initiatives by Segment
Pharma	$	38	$	(111)	$	73	$	(142)
Beauty + Home	1,457		7,324		2,553		12,231
Food + Beverage	117		75		38		178
Corporate & Other	3,264		43		5,884		(97)
Total Restructuring Initiatives	$	4,876	$	7,331	$	8,548	$	12,170

~~(1)~~

We evaluate performance of our reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring and acquisition-related costs.

(4)Net investment (loss) gain represents the change in fair value of our investment in PCT (see Note 18 – Investment in Equity Securities for further details).

Table of Contents

~~Table of Contents~~

~~(2)~~

Acquisition-related costs include transaction costs and purchase accounting adjustments related to acquisitions and investments (see Note 17 – Acquisitions and Note 18 – Investment in Equity Securities for further details).

~~(3)~~

~~Restructuring Initiatives includes expense items for the three and six months ended June 30, 2020 and 2019 as follows (see Note 19 – Restructuring Initiatives for further details):~~

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

Restructuring Initiatives by Segment

Beauty + Home

$
7,324

$
1,259

$
12,231

$
9,528

Pharma

(111)

(113)

(142)

213

Food + Beverage

75

112

178

622

Corporate & Other

43

479

(97)

904

Total Restructuring Initiatives

$
7,331

$
1,737

$
12,170

$
11,267

NOTE 17 – ACQUISITIONS

Business Combinations

In June 2021, we entered into exclusive negotiations to acquire 100% of the outstanding shares (the “Voluntis Acquisition”) of Voluntis. Voluntis, based in Boston, MA and Paris, France, is a pioneer in digital therapeutics. Under the terms of the contemplated transaction, Aptar would acquire from certain members of the management and certain shareholders the entirety of their shares representing approximately 64.6% of the share capital of Voluntis (on a non-diluted basis) at a price of €8.70 per share for approximately €50.8 million (approximately $61.5 million assuming a euro/USD exchange rate of 1.21). This values the full company equity (on a fully diluted basis) at approximately €78.8 million (approximately $95.3 million). Upon completion of this acquisition, Aptar will launch a mandatory cash simplified tender offer to acquire Voluntis's remaining shares for the same price of €8.70 per share (the "tender offer"). If the regulatory conditions are met upon completion of the tender offer, Aptar intends to implement a mandatory squeeze-out on the remaining outstanding shares of Voluntis on the same financial terms as those of the tender offer. The acquisition, which is subject to customary regulatory approvals and other closing conditions, the tender offer, which is subject to regulatory clearance from the French Markets Authority, and the squeeze-out are expected to be completed before the end of the fourth quarter of 2021. The purchase will be funded with available cash on hand. Subsequent to the end of the second quarter, on July 22, 2021, we signed a share purchase agreement for the Voluntis Acquisition with terms consistent with the description above.

On May 25, 2021, we entered into a strategic definitive agreement to acquire 80% of the equity interests (the "Hengyu Acquisition") in Weihai Hengyu Medical Products Co., Ltd. ("Hengyu"). Hengyu, a leading Chinese manufacturer of elastomeric and plastic components used in injectable drug delivery, is based in Weihai, China and has an enterprise value of $77 million. The closing of the transaction, expected during the third quarter of 2021, is subject to customary regulatory approvals and other closing conditions. Under the terms of the deal, we have the option to acquire the remaining 20% of Hengyu after a 5-year lock up period. The purchase will be funded with available cash on hand.

On April 1, 2020, we completed ~~our acquisition (the “Fusion Acquisition”) of 100% of~~ the ~~equity interests of~~ Fusion ~~Packaging, Inc. (“Fusion”)~~Acquisition for a purchase price of approximately $163.8 million (net of $1.0 million of cash acquired), which was funded by a draw on our ~~revolving~~prior credit facility and cash on hand. Fusion, based in Dallas, TX, is a global leader in the design, engineering and distribution of luxury packaging for the beauty industry. As part of the Fusion Acquisition, we are also obligated to pay to the selling equity holders of Fusion certain contingent consideration based on 2022 cumulative financial performance metrics as defined in the purchase agreement. Based on a projection as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $19.1 million utilizing a Black-Scholes valuation model. During the fourth quarter of 2020, a $3.6 million fair value true-up was recorded as an adjustment to the opening balance of goodwill and contingent liability. As of June 30, 2020, $5.7 million was held in restricted cash pending the finalization of a working capital adjustment and indemnity escrow. Subsequent to the end of the quarter, $2.0 million of working capital escrow was released from restriction. Fusion contributed net sales of $13.8 million and pretax loss of $3.3 million for the quarter ended June 30, 2020 which2021, we have been included in the Condensed Consolidated Financial Statements within our Beauty + Home segment. Included in pretax loss is $2.7 million of fair value adjustment amortization for inventory sold during 2020. We are in the process of finalizing our purchase accounting.

On October 31, 2019, we completed our acquisition (the “Noble Acquisition”) of 100% of the equity interests of Noble International Holdings, Inc., Genia Medical, Inc. and JBCB Holdings, LLC (collectively referred to as “Noble”). Noble, based in Orlando, FL, is a leading provider in developing patient-centric advanced drug delivery system training devices including autoinjector, prefilled syringe, onbody and respiratory devices for the world’s leading biopharmaceutical companies and original equipment manufacturers. The purchase price was approximately $62.3 million (net of $1.6 million of cash acquired) and was funded by cash on hand. As part of the Noble Acquisition, we are also obligated to pay to the selling equity holders of Noble certain contingent consideration based on 2024 cumulative financial performance metrics defined in the purchase agreement. Based on projection as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be ~~$2.9 million utilizing the Black-Scholes valuation model.~~ $28.0 million.

As of ~~December 31, 2019, $5~~the acquisition date, $5.7 million was held in restricted cash pending the finalization of a working capital adjustment and indemnity escrow. During the ~~first~~third quarter of 2020, ~~$1.0~~$2.0 million related to the working capital escrow was released from restriction, resulting in ~~an additional $463~~a refund from seller of $294 thousand ~~payment due to the seller~~ and a corresponding ~~increase~~decrease to our purchase price and associated goodwill balance. During the second quarter of 2021, the remaining restricted cash was released. The results of ~~Noble’s~~Fusion's operations have been included in the Condensed Consolidated Financial Statements within our ~~Pharma~~Beauty + Home segment since the date of acquisition.

On June 5, 2019, we completed our acquisition (the “Nanopharm Acquisition”) of all of the outstanding capital stock of Nanopharm Ltd. (“Nanopharm”). Nanopharm, located in Newport, UK, is a science-driven, leading provider of orally inhaled and nasal drug product design and development services. The purchase price was approximately $38.1 million (net of $1.8 million of cash acquired) and was funded by cash on hand. The results of Nanopharm’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition.

On May 31, 2019, we completed our acquisition (the “Gateway Acquisition”) of all of the outstanding equity interests of Gateway Analytical LLC (“Gateway”). Gateway, located in Gibsonia, PA, provides industry-leading particulate detection and predictive analytical services to customers developing injectable medicines. The purchase price was approximately $7.0 million and was funded by cash on hand. As part of the Gateway Acquisition, we are also obligated to pay to the selling equity holder of Gateway certain contingent consideration based on 2020 and 2022 performance targets defined in the purchase agreement. Based on projections as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $3.0 million. During the quarter ended June 30, 2020, $1.5 million of the contingent consideration accrual was paid as a result of the business meeting their first performance target. Additionally, the remaining $1.5 million accrual was reclassified from long-term to short-term liabilities as the payment is expected to be made within a year. The results of Gateway’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition.

Table of Contents

The following table summarizes the assets acquired and liabilities assumed in the Fusion Acquisition as of the acquisition date at estimated fair value.

2020

2019

Assets

Cash and equivalents

$
1,010

$
3,427

Accounts receivable

4,380

3,504

Inventories

386

—

Prepaid and other

1,090

2,478

Property, plant and equipment

2,885

4,267

Goodwill

99,644

59,143

Intangible assets

79,900

52,980

Operating lease right-of-use assets

4,744

—

Other miscellaneous assets

65

430

Liabilities

Accounts payable, accrued and other liabilities

5,641

5,388

Deferred income taxes

—

2,592

Operating lease liabilities

4,207

—

Deferred and other non-current liabilities

322

1,598

Net assets acquired

$
183,934

$
116,651



	2020
Assets
Cash and equivalents	$	1,010
Accounts receivable	4,380
Inventories	386
Prepaid and other	1,090
Property, plant and equipment	2,885
Goodwill	103,130
Intangible assets	79,900
Operating lease right-of-use assets	4,744
Other miscellaneous assets	65
Liabilities
Accounts payable, accrued and other liabilities	5,641
Deferred income taxes	0
Operating lease liabilities	4,207
Deferred and other non-current liabilities	322
Net assets acquired	$	187,420

The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date:

2020

2019


Weighted-Average

Estimated

Weighted-Average

Estimated

Useful Life

Fair Value

Useful Life

Fair Value

(in years)

of Asset

(in years)

of Asset

Acquired technology

4

$
4,600

8

$
9,160

Customer relationships

13

62,300

11

39,379

Trademarks and trade names

4

10,300

4

2,457

License agreements and other

0.25

2,700

1

1,984

Total

$
79,900

$
52,980



	2020
		Weighted-Average Useful Life (in Years)	Estimated Fair Value of Assets
Acquired technology		4	$	4,600
Customer relationships		13	62,300
Trademarks and trade names		4	10,300
License agreements and other		0.25	2,700
Total			$	79,900

Goodwill in the amount of ~~$99.6~~$103.1 million was recorded related to the Fusion Acquisition which is included in the Beauty + Home ~~segment and $59.1 million was recorded related to the 2019 acquisitions, all of which are included in the Pharma~~ segment. Goodwill is calculated as the excess of the consideration transferred over the net assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill largely consists of unique relationships, brand equity and proprietary technology that has been established creating niches such as turnkey solutions for the beauty market related to the Fusion Acquisition ~~analytical services for drug developers related to the Nanopharm Acquisition and Gateway Acquisition and patient onboarding related to the Noble Acquisition,~~ as well as the abilities of ~~the~~ acquired companies to maintain their competitive advantage from a technical viewpoint. Goodwill will not be amortized, but will be tested for impairment at least annually. For ~~the Fusion Acquisition,~~2020 acquisitions, goodwill of ~~$82.3~~$80.6 million ~~will be~~is deductible for tax purposes. ~~For the 2019 acquisitions, goodwill of $31.1 million will be deductible for tax purposes.~~

The unaudited pro forma results presented below include the effects of the Fusion Acquisition as if it had occurred as of January 1, 2019. The unaudited pro forma results reflect certain adjustments related to the acquisition, such as intangible asset amortization, fair value adjustments for inventory and financing costs related to the change in our debt structure. The pro forma results do not include any synergies or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been completed on the date indicated.

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

Net Sales

$
699,305

$
762,148

$
1,428,821

$
1,525,826

Net Income Attributable to AptarGroup Inc.

45,989

75,811

96,350

139,003

Net Income per common share — basic

0.72

1.19

1.50

2.20

Net Income per common share — diluted

0.69

1.14

1.45

2.11

~~Table of Contents~~

Asset Acquisition

On ~~August 2, 2019,~~October 16, 2020, we completed our ~~asset~~ acquisition ~~(the “Bapco Acquisition”)~~ of the ~~remaining 80% ownership interest in~~assets of Cohero Health, Inc. ("Cohero Health") for $2.4 million. The net assets acquired and the capital stock of Bapco Closures Holdings Limited (“Bapco”), for $3.8 million (net of $2.9 million of cash acquired). The 20% ownership investment previously held in Bapco is now included within the intangible assets acquired. Bapco, located in Leeds, UK, provides innovative closures sealing technology that provides package integrity and tamper evidence. The results of ~~Bapco’s~~Cohero Health's operations have been included in the Condensed Consolidated Financial Statements within our ~~Food + Beverage~~Pharma segment since the date of acquisition.

Based in New York, Cohero Health develops innovative digital tools and technologies to improve respiratory care, reduce avoidable costs and optimize medication utilization.

Table of Contents

NOTE 18 ~~–INVESTMENT~~– INVESTMENT IN EQUITY SECURITIES

Our investment in equity securities consisted of the following:

June 30,

December 31,

2020

2019

Equity Method Investments:

BTY

$
30,894

$
119

Sonmol

4,969

—

Kali Care

3,691

3,881

Desotec GmbH

845

858

Other Investments

3,794

3,538

$
44,193

$
8,396


	June 30, 2021		December 31, 2020
Equity Method Investments:
BTY	$	33,005	$	33,020
Sonmol	5,710		5,598
Kali Care	422		535
Desotec GmbH	943		964

Other Investments:
PureCycle	20,595		5,397
Loop	2,894		2,894
Others	1,631		1,679
	$	65,200	$	50,087

Equity method investments

~~Sonmol~~

BTY

On ~~April~~January 1, 2020, we invested $5 million to acquire 30% of the equity interests in Healthcare, Inc., Shanghai Sonmol Internet Technology Co., Ltd. and its subsidiary, Shanghai Sonmol Medical Equipment Co., Ltd. (collectively referred to as “Sonmol”), a pharmaceutical company that provides connected devices for asthma control.

~~BTY~~

~~On October 1, 2019, we entered into a strategic definitive agreement to acquire~~acquired 49% of the equity interests in 3 related companies: Suzhou Hsing Kwang, Suqian Hsing Kwang and Suzhou BTY (collectively referred to as “BTY”)~~, contingent on the settlement date~~ for an approximate purchase price of ~~the transaction.~~$32 million. We have a call option to acquire an additional 26% to 31% of BTY’s equity interests following the initial lock-up period of 5 years based on a predetermined formula. Subsequent to the second lock-up period, which ends 3 years ~~subsequent to~~after the initial lock-up period, we have a call option to acquire the remaining equity interests of BTY based on a predetermined formula. Additionally, the selling shareholders of BTY have a put option for the remaining equity interest to be acquired by Aptar based on a predetermined formula. The BTY entities are leading Chinese manufacturers of high quality, decorative metal components, metal-plastic sub-assemblies, and complete color cosmetics packaging solutions for the beauty industry.

Sonmol

On ~~January~~April 1, 2020, we invested $5 million to acquire 30% of the ~~transaction closed~~equity interests in Healthcare, Inc., Shanghai Sonmol Internet Technology Co., Ltd. and its subsidiary, Shanghai Sonmol Medical Equipment Co., Ltd. (collectively referred to as “Sonmol”), a pharmaceutical and leading Chinese digital respiratory therapeutics company that provides consumer electric devices and connected devices for an approximate purchase price of $32 million for our 49% share. As of June 30, 2020, we paid approximately $28.8 million, with the remaining amount of $3.2 million included in Accounts payable, accruedasthma control, and develops digital therapies and services platforms targeting chronic respiratory illnesses and other ~~liabilities. The amount is payable after certain conditions under the definitive agreement are fulfilled and is expected to be paid during the third quarter of 2020.~~

diseases.

Kali Care

During 2017, we invested $5 million to acquire 20% of the equity interests in Kali Care, a technology company that provides digital monitoring systems for medical devices.

During the fourth quarter of 2020, we recognized an other than temporary impairment of $3.0 million ($2.3 million after-tax) on our underlying assets in this investment as a result of a reassessment of the future value of the business and continued reduction in operating cash flows.

Desotec GmbH

During 2009, we invested €574 thousand to acquire 23% of the equity interests in Desotec GmbH, a leading manufacturer of special assembly machines for bulk processing for the pharmaceutical, beauty and home and food and beverages markets.

Other investments

During August 2019, we invested an aggregate amount of $3.5 million in 2 preferred equity investments in sustainability companies Loop and ~~Purecycle~~PureCycle Technologies (“~~Purecycle”~~PureCycle”) that ~~are~~were accounted for at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

During 2020, we invested an additional $1.4 million in these 2 equity investments and also received $333 thousand of equity in PureCycle in exchange for our resource dedication for technological partnership and support. In November 2020, we increased the value of the PureCycle investment by $3.1 million based on observable price changes.

Table of Contents

In March 2021, PureCycle was purchased by a special purpose acquisition company and was subsequently listed on Nasdaq under the ticker PCT. At that time, our investment in PureCycle was converted into shares of PCT resulting in less than a 1% ownership interest. This investment is now recorded at fair value based on observable market prices for identical assets and the change in fair value is recorded as a net investment gain or loss in the Condensed Consolidated Statements of Income. For the three and six months ended June 30, 2021, we recorded a net unrealized loss on our investment in PureCycle of $1.6 million and a net unrealized gain of $15.2 million, respectively.

Subsequent to the quarter end, on July 7, 2021, we invested approximately $5.9 million to acquire 10% of the equity interests in YAT, a multi-functional, science-driven online skincare solutions company.

There were 0 indications of impairment ~~nor were there any changes from observable price changes~~ noted in the six months ended June 30, ~~2020~~2021 related to these investments.

NOTE 19 – RESTRUCTURING INITIATIVES

In late 2017, we began a business transformation to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness. The primary focus of the plan is the Beauty + Home segment; however, certain global general and administrative functions are also being addressed. For the three and six months ended June 30, ~~2020,~~2021, we recognized ~~$7.3~~$4.9 million and ~~$12.2~~$8.5 million of restructuring costs related to this plan, respectively. For the three and six months ended June 30, ~~2019,~~2020, we recognized ~~$1.7~~$7.3 million and ~~$11.3~~$12.2 million of restructuring costs related to this plan, respectively. Using current exchange rates, we estimate total implementation costs of approximately $125 million for these initiatives, including costs that have been recognized to date. The cumulative expense incurred as of June 30, ~~2020~~2021 was ~~$98.7~~$121.5 million. We have also ~~anticipate making~~made total capital investments related to ~~the transformation~~this plan of approximately $50 million, ~~of which $43 million has been incurred to date.~~

with no further significant capital investments expected.

As of June 30, ~~2020~~2021 we have recorded the following activity associated with the business transformation:


	Beginning Reserve at 12/31/2020		Net Charges for the Six Months Ended 6/30/2021		Cash Paid		Interest and FX Impact		Ending Reserve at 6/30/2021
Employee severance	$	7,956	$	144	$	(3,616)	$	(130)	$	4,354
Professional fees and other costs	2,533		8,404		(9,431)		(26)		1,480
Totals	$	10,489	$	8,548	$	(13,047)	$	(156)	$	5,834

Beginning

Net Charges for

Ending

Reserve at

the Six Months

Interest and

Reserve at

12/31/2019

Ended 6/30/2020

Cash Paid

FX Impact

6/30/2020

Employee severance

$
7,090

$
8,190

$
(2,324)

$
192

$
13,148

Professional fees and other costs

3,609

3,980

(4,595)

(17)

2,977

Totals

$
10,699

$
12,170

$
(6,919)

$
175

$
16,125

NOTE 20 – SUBSEQUENT EVENTS

On July 22, 2021, we signed a share purchase agreement for the acquisition of a majority stake in Voluntis, representing 64.6% of the share capital of Voluntis (on a non-diluted basis), at a price of €8.70 per share. Refer to Note 17 - Acquisitions for further details on the acquisition.

On July 7, 2021, we investe

d approximately

$5.9 million to acquire 10% of the equity interests in YAT, a multi-functional, science-driven online skincare solutions company.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, OR AS OTHERWISE INDICATED)

RESULTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

Net sales

100.0
%

100.0
%

100.0
%

100.0
%

Cost of sales (exclusive of depreciation and amortization shown below)

63.2

63.2

62.8

63.1

Selling, research & development and administrative

17.6

15.3

17.6

15.8

Depreciation and amortization

8.1

6.5

7.5

6.4

Restructuring initiatives

1.0

0.2

0.9

0.8

Operating income

10.1

14.8

11.2

13.9

Other expense

(1.4)

(1.1)

(1.4)

(1.0)

Income before income taxes

8.7

13.7

9.8

12.9

Net Income

6.0

10.0

6.8

9.2

Effective tax rate

31.0
%

27.6
%

30.0
%

28.7
%

Adjusted EBITDA margin (1)

19.5
%

21.6
%

19.8
%

21.2
%


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales (exclusive of depreciation and amortization shown below)	64.5		63.2		63.7		62.8
Selling, research & development and administrative	17.4		17.6		17.3		17.6
Depreciation and amortization	7.1		8.1		7.3		7.5
Restructuring initiatives	0.6		1.0		0.6		0.9
Operating income	10.4		10.1		11.1		11.2
Other income (expense)	(1.2)		(1.4)		(0.1)		(1.4)
Income before income taxes	9.2		8.7		11.0		9.8
Net Income	6.8		6.0		8.8		6.8
Effective tax rate	25.6	%	31.0	%	20.5	%	30.0	%
Adjusted EBITDA margin (1)	18.2	%	19.5	%	18.9	%	19.8	%

~~(1)~~

~~Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation of non-U.S. GAAP measures starting on page 35.~~

(1)

Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under "Non-U.S. GAAP Measures".

SIGNIFICANT DEVELOPMENTS

~~During the second quarter of 2020, financial results and operations continued~~

There continues to be ~~adversely impacted by~~many uncertainties regarding the ~~novel coronavirus (“COVID-19”) pandemic. The significance~~current COVID-19 pandemic, including the availability and adoption of approved vaccines within certain areas of the ~~impacts~~world and the potential for additional governmental actions that may be taken and/or extended in response to ~~our segments during~~any further resurgence of the ~~second quarter and first six months of 2020 are discussed herein and include, but are not limited~~virus. However, in contrast to the ~~adverse~~preceding year, we are currently seeing a limited impact on ~~sales of~~ our ~~beauty products sold via duty free travel and retail stores and a reduction of our products used for on-the-go beverage applications. The extent~~business related directly to ~~which~~ the COVID-19 pandemic ~~impacts our financial results~~as economic activity and ~~operations for fiscal year 2020~~customer and ~~going forward for all three of our business segments will depend on future developments which~~product mix are ~~highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the outbreak and the international actions being taken to contain and treat it.~~approaching pre-pandemic levels. No impairments were recorded as of June 30, ~~2020. While~~2021 related to the ~~disruption is currently expected to be temporary, there is uncertainty around the duration.~~COVID-19 pandemic. Due to ~~significant~~ uncertainty surrounding the situation, ~~our judgment regarding~~ future results could ~~change~~be negatively affected by the pandemic and therefore our results could be materially impacted.

As each of our segments produce dispensing systems that have been determined to be essential products by various government agencies around the world, the majority of our facilities remained operational during the second quarter of 2020. We have taken a variety of measures to ensure the availability and functioning of our critical infrastructure, to promote the safety and security of our employees and to support the communities in which we operate. These measures include requiring remote working arrangements for employees where practicable. We are following public and private sector policies and initiatives to reduce the transmission of COVID-19, such as the imposition of travel restrictions, the promotion of social distancing and the adoption of work-from-home arrangements, and all of these policies and initiatives have impacted our operations. Due to the speed with which the situation continues to evolve, we are not able at this time to estimate the impact of COVID-19 on our future financial results and operations, but the impact could be material for the remainder of fiscal year 2020 and could be material during any future periods affected either directly or indirectly by this pandemic. See Part II, Item 1A, “Risk Factors,” included in this report for information on material risks associated with COVID-19.

~~Table of Contents~~

NET SALES

We reported net sales of ~~$699.3~~$811.0 million for the quarter ended June 30, ~~2020,~~2021, which represents a ~~6% decrease~~16% increase compared to ~~$742.7~~$699.3 million reported during the second quarter of ~~2019. Sales were negatively impacted by changes in currency exchange rates, passing through lower resin costs to customers and COVID-19 related effects on certain markets we serve.~~2020. The average U.S. dollar exchange rate ~~strengthened~~weakened compared to ~~most~~the euro and other major currencies, ~~we operate in,~~ resulting in a ~~negative~~positive currency translation impact of 3%6%. There was no impact from acquisitions during the second quarter of 2021. Therefore, core sales, which exclude acquisitions and changes in foreign currency rates, increased by 10% in the second quarter of 2021 compared to the same period in 2020. Our Beauty + Home and Food + Beverage segments both reported strong core sales growth as the majority of their applications recovered from depressed sales during the height of the COVID-19 pandemic in the second quarter of 2020. Price adjustments related to the passing through of higher resin and other input costs, and increased tooling sales, also contributed to our sales growth in the quarter.


Second Quarter 2021 Net Sales Change over Prior Year	Pharma		Beauty + Home		Food + Beverage		Total
Core Sales Growth	2	%	13	%	23	%	10	%

Currency Effects (1)	6	%	7	%	5	%	6	%
Total Reported Net Sales Growth	8	%	20	%	28	%	16	%

Reported net sales for the first six months of 2021 increased 12% to $1.59 billion compared to $1.42 billion for the first six months of 2020. The average U.S. dollar exchange rate weakened compared to the euro and other major currencies in which we operate, resulting in a positive currency translation impact of 6%. The ~~acquisitions~~acquisition of ~~Gateway, Nanopharm, Noble and~~ Fusion Packaging, Inc. ("Fusion") positively impacted sales by 3%1%. Therefore, core sales, which exclude acquisitions and changes in foreign currency rates, ~~decreased~~increased by 6%5% in the ~~second quarter~~first six months of ~~2020~~2021 compared to the same period in ~~2019. During~~2020. Operationally, the ~~second quarter of 2020, our consolidated core~~ sales ~~were negatively impacted by the COVID-19 pandemic, especially~~recovery within our ~~Beauty + Home~~beauty, food and ~~Food + Beverage segments. For Beauty + Home, beauty~~beverage markets, along with the continued strong sales ~~were significantly impacted by~~to our injectables and active material science solutions customers, more than offset the ~~loss of travel and retail sales during the second quarter of 2020. Our Food + Beverage segment also realized lower core sales due to the negative~~ impact of ~~COVID-19, especially on~~inventory drawdowns in our ~~single-serving beverage product sales. Food + Beverage sales were~~prescription and consumer healthcare markets. As mentioned above, we also ~~impacted by lower~~benefited from the pass through of higher resin and other input costs and higher tooling sales ~~the effects of passing through lower resin costs to our customers~~ during the quarter. Conversely, our Pharma segment was less impacted by the COVID-19 pandemic and realized strong core sales growth during the second quarter of 2020 with three of the four divisions reporting increased sales compared to the same prior year period.

Second Quarter 2020

Beauty

Food +

Net Sales Change over Prior Year

+ Home

Pharma

Beverage

Total

Core Sales Growth

(13)
%
6
%
(15)
%
(6)
%
Acquisitions

4
%
2
%
—
%
3
%
Currency Effects (1)

(3)
%
(1)
%
(2)
%
(3)
%
Total Reported Net Sales Growth

(12)
%
7
%
(17)
%
(6)
%

~~For~~ the first six months of ~~2020, we reported net sales~~2021.

Table of ~~$1.42 billion, 4% below the first six months of 2019 reported net sales of $1.49 billion. Sales were negatively impacted~~Contents


Six Months Ended June 30, 2021 Net Sales Change over Prior Year	Pharma		Beauty + Home		Food + Beverage		Total
Core Sales Growth	1	%	5	%	18	%	5	%
Acquisitions	—	%	3	%	—	%	1	%
Currency Effects (1)	6	%	5	%	4	%	6	%
Total Reported Net Sales Growth	7	%	13	%	22	%	12	%

(1)Currency effects are calculated by ~~changes in currency~~translating last year’s amounts at this year’s foreign exchange rates, passing-through lower resin costs to customers and COVID-19 related effects on certain markets we serve. The average U.S. dollar exchange rate strengthened compared to most major currencies we operate in, resulting in a negative currency translation impact of 2%. The acquisitions of Gateway, Nanopharm, Noble and Fusion positively impacted sales by 2%. Therefore, core sales, which exclude acquisitions and changes in foreign currency rates, decreased by 4% in the first six months of 2020 compared to the same period in 2019. As discussed above, the Beauty + Home and Food + Beverage segments have both been significantly impacted by the COVID-19 pandemic, and passing through lower resin costs.

Six Months Ended June 30, 2020

Beauty

Food +

Net Sales Change over Prior Year

+ Home

Pharma

Beverage

Total

Core Sales Growth

(11)
%
6
%
(9)
%
(4)
%
Acquisitions

2
%
3
%
—
%
2
%
Currency Effects (1)

(3)
%
(1)
%
(2)
%
(2)
%
Total Reported Net Sales Growth

(12)
%
8
%
(11)
%
(4)
%
rates.

~~(1)~~

~~Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.~~

The following table sets forth, for the periods indicated, net sales sourced by geographic location:

Three Months Ended June 30,

Six Months Ended June 30,

2020

% of Total

2019

% of Total

2020

% of Total

2019

% of Total

Domestic

$
229,925

33%

$
215,175

29%

$
460,325

32%

$
429,046

29%

Europe

382,066

55%

425,531

57%

787,915

55%

856,899

57%

Latin America

43,369

6%

57,738

8%

94,163

7%

115,920

8%

Asia

43,945

6%

44,217

6%

78,455

6%

85,256

6%


	Three Months Ended June 30,								Six Months Ended June 30,
	2021		% of Total		2020		% of Total		2021		% of Total		2020		% of Total

Domestic	$	269,180	33	%	$	229,925	33	%	$	524,345	33	%	$	460,325	32	%
Europe	436,993		54	%	382,066		55	%	862,682		54	%	787,915		55	%
Latin America	56,061		7	%	43,369		6	%	105,026		7	%	94,163		7	%
Asia	48,798		6	%	43,945		6	%	95,733		6	%	78,455		6	%

For further discussion on net sales by reporting segment, please refer to the analysis of segment net sales and segment Adjusted EBITDA on the following pages.

~~Table of Contents~~

COST OF SALES (EXCLUSIVE OF DEPRECIATION AND AMORTIZATION SHOWN BELOW)

Cost of sales (“COS”) as a percent of net sales ~~remained consistent at~~increased to 64.5% in the second quarter of 2021 compared to 63.2% in the second quarter of ~~2020 compared to~~2020. Our COS percentage was negatively impacted by both changes in our mix of sales and inflation. During the second quarter of ~~2019. Our COS percentage was positively impacted by our cost containment efforts and the mix of business as~~2021, we reported a lower percentage of our higher-margin Pharma product sales ~~growth~~compared to the same period in 2020. We also reported an increase in our ~~higher margin Pharma segment compared to~~tooling sales ~~declines in the Beauty + Home and Food + Beverage segments. However, we did experience some additional costs, under-absorbed overhead and temporary disruptions to our manufacturing capacities~~ during the second quarter of ~~2020 related to the COVID-19 pandemic. For example, we declared a special bonus payment to certain employees who worked to maintain supply to~~2021, which typically carries lower margins than our ~~customers and keep our facilities running, which increased~~product sales. Both of these sales mix changes negatively impact our COS as a percentage ~~during the second quarter~~ of ~~2020.~~

~~Cost~~sales. During 2021, we also incurred inflationary cost increases. As discussed above, we experienced increases in several input costs including resin and labor. While we maintain our normal pass-through of ~~sales~~resin prices and have implemented general price increases to offset other cost increases, there is no margin on resin pass-through costs which increases our COS as a percentage of sales.

COS as a percent of net sales ~~decreased slightly~~increased to ~~62.8%~~63.7% in the first six months of ~~2020~~2021 compared to ~~63.1%~~62.8% in the same period a year ago. As ~~mentioned~~discussed above, this increase in COS is mainly due to a shift in sales mix from our ~~COS was favorably impacted by the increased mix in our higher margin Pharma business.~~ higher-margin prescription and consumer healthcare markets along with inflationary material and labor cost increases. We also ~~realized approximately $5.4 million in~~recognized increased tooling sales during 2021, which typically carry lower ~~resin costs during the first half of 2020 as prices have declined compared to the prior year.~~ ~~However, we also reported additional costs and temporary inefficiencies in~~margins than our ~~manufacturing process~~ ~~related to the COVID-19 pandemic as discussed above~~.

product sales.

SELLING, RESEARCH & DEVELOPMENT AND ADMINISTRATIVE

Selling, research & development and administrative expenses (“SG&A”) increased by approximately ~~$9.6~~$17.5 million to ~~$123.4~~$140.9 million in the second quarter of ~~2020~~2021 compared to ~~$113.8~~$123.4 million during the same period in ~~2019.~~2020. Excluding changes in foreign currency rates, SG&A increased by approximately ~~$12.6~~$11.0 million in the quarter. The increase is ~~partly~~mainly due to ~~$8.0 million of new operational and~~higher incentive compensation costs as our 2021 operating results are significantly better than 2020. We also realized higher professional fees, especially transaction costs ~~for~~related to our ~~acquisitions completed subsequent to June 30, 2019. We also recognized higher personnel costs, including $2.2 million in stock-based compensation, in accordance with our growth strategy.~~announced acquisitions. However, SG&A as a percentage of net sales ~~increased~~decreased to ~~17.6%~~17.4% compared to ~~15.3%~~17.6% in the same period of the prior year due to higher sales in the ~~cost increases mentioned above.~~

second quarter of 2021 compared to the prior year period.

SG&A increased by ~~$14.6~~$25.7 million to ~~$249.6~~$275.3 million in the first six months of ~~2020~~2021 compared to ~~$235.0~~$249.6 million during the same period a year ago. Excluding changes in foreign currency rates, SG&A increased by approximately ~~$20.2~~$13.8 million in the first six months of ~~2020~~2021 compared to the first six months of ~~2019. As discussed above, the~~2020. Part of this increase is ~~related~~due to ~~$12.3~~$3.4 million of ~~new~~incremental SG&A costs from our ~~acquisitions~~acquisition of Fusion completed subsequent to ~~June 30, 2019, along with~~March 31, 2020. As mentioned above, the remaining increase is mainly due to higher ~~personnel~~incentive compensation costs and professional fees, which more than offset lower travel and entertainment costs. SG&A as a percentage of net sales ~~increased~~decreased to 17.3% compared to 17.6%.

Table of Contents

DEPRECIATION AND AMORTIZATION

Reported depreciation and amortization expenses increased by approximately $1.4 million to $57.8 million in the second quarter of 2021 compared to ~~15.8%~~$56.4 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization decreased by approximately $1.6 million in the quarter compared to the same period in 2020. The majority of this decrease is due to the full amortization of short lived intangible assets related to our Fusion acquisition. Depreciation and amortization as a percentage of net sales decreased to 7.1% in the second quarter of 2021 compared to 8.1% in the same period of the prior year.

~~DEPRECIATION AND AMORTIZATION~~

Reported depreciation and amortization expenses increased by approximately ~~$8.5~~$8.0 million to ~~$56.4~~$115.2 million in the ~~second quarter~~first six months of ~~2020~~2021 compared to ~~$47.9~~$107.2 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately ~~$9.8~~$2.7 million in the ~~quarter~~first six months of 2021 compared to the same period ~~in 2019.~~a year ago. The majority of this increase is due to ~~$6.8 million of~~ incremental first quarter depreciation costs and amortization costs related to our ~~acquired companies.~~Fusion acquisition. We have also increased our capital spending during the current and prior year to support our growth strategy. Depreciation and amortization as a percentage of net sales ~~increased~~decreased to ~~8.1%~~7.3% in the ~~second quarter~~first six months of ~~2020~~2021 compared to ~~6.5%~~7.5% in the same period of the prior ~~year primarily due to a combination of lower sales in the current year and the increase in expenses noted above.~~

Reported depreciation and amortization expenses increased by approximately $11.9 million to $107.2 million in the first six months of 2020 compared to $95.3 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately $14.2 million in the first six months of 2020 compared to the same period a year ago. As discussed above, this increase is mainly due to incremental depreciation and amortization costs associated with our acquisitions Depreciation and amortization as a percentage of net sales increased to 7.5% in the first six months of 2020 compared to 6.4% in the same period of the prior year ~~due to lower sales in the current year and an increase in expenses~~.

year.

RESTRUCTURING INITIATIVES

In late 2017, we began a business transformation plan to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness. The primary focus of the plan is the Beauty + Home segment; however, certain global general and administrative functions are also being addressed. Restructuring costs related to this plan for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020 are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Restructuring Initiatives by Segment
Pharma	$	38	$	(111)	$	73	$	(142)
Beauty + Home	1,457		7,324		2,553		12,231
Food + Beverage	117		75		38		178
Corporate & Other	3,264		43		5,884		(97)
Total Restructuring Initiatives	$	4,876	$	7,331	$	8,548	$	12,170

~~Table~~We have successfully implemented the vast majority of ~~Contents~~

our planned initiatives related to our transformation plan, including successfully implementing new commercial strategies, reducing costs and adding capabilities in Asia and in fast growing application fields that we believe will position the segment for future growth and profitability. However, the COVID-19 global pandemic has caused several initiatives that were expected to be completed in 2020 to be delayed and resulted in a significant decline in our beauty business. While our Beauty + Home segment continues to be profitable, the disruption caused by the pandemic, including higher operating costs, have more than offset any expected growth in earnings from our transformation. Though we believe the beauty market remains a long-term attractive growth market and we remain committed to completing our remaining transformation initiatives, we expect the return to growth to be gradual and non-linear as this market is highly correlated to the return to post-pandemic normal consumer behavior, including travel, which has proven to be sporadic and uncertain. We estimate total implementation costs of approximately $125 million ~~including costs that~~for these initiatives.The cumulative expense incurred to date is $121.5 million. We have ~~been recognized to date. We~~ also ~~anticipate making~~made capital investments ~~related to the business transformation~~ of approximately $50 million ~~of which $43 million has been incurred~~related to date. Based on our ongoing restructuring initiatives, we are progressing towards our initial target of $80 million annualized incremental EBITDA by the end of 2020, principally within the Beauty + Home segment. However, in addition to the impacts of COVID-19, ongoing changes in customer and vendor negotiations, material indices, macro-economic trends and other factors represent continuing headwinds to the Beauty + Home segment, and have offset the consolidated net benefits from these initiatives.

this plan, with no further significant capital investments expected.

OPERATING INCOME

Operating income ~~decreased~~increased approximately ~~$39.4~~$13.9 million to ~~$70.5~~$84.4 million in the second quarter of ~~2020~~2021 compared to ~~$109.9~~$70.5 million in the same period a year ago. Excluding changes in foreign currency rates, operating income ~~decreased~~increased by approximately ~~$37.5~~$8.1 million in the quarter compared to the same period a year ago. This increase is due to higher sales volumes compared to the second quarter of 2020 which was significantly impacted by the COVID-19 pandemic. This increase was partially offset by higher input costs due to inflation. We also benefited from lower restructuring costs during the second quarter of 2021 compared to the prior year period. Operating income as a percentage of net sales ~~declined~~increased to ~~10.1%~~10.4% in the second quarter of ~~2020~~2021 compared to ~~14.8%~~10.1% in the prior year ~~period mainly due to some short-term under-absorption of fixed costs resulting from lower sales related to the COVID-19 pandemic.~~

period.

For the first six months of ~~2020,~~2021, operating income ~~decreased~~increased approximately ~~$48.0~~$18.1 million to ~~$158.9~~$177.0 million compared to ~~$207.0~~$158.9 million in the same period of the prior year. Excluding changes in foreign currency rates, operating income ~~decreased~~increased by approximately ~~$43.8~~$5.3 million in the first six months of ~~2020~~2021 compared to the same period a year ago. As ~~discussed~~mentioned above, ~~the majority of this decrease occurred during the second quarter of 2020 due to the short-term impact of lower sales related to the COVID-19 pandemic.~~higher operating income more than compensated for inflationary input cost increases. Operating income as a percentage of net sales decreased slightly to ~~11.2%~~11.1% in the first six months of ~~2020~~2021 compared to ~~13.9%~~11.2% for the same period in the prior year.

Table of Contents

NET OTHER ~~EXPENSE~~

INCOME (EXPENSE)

Net other expense in the second quarter of ~~2020~~2021 increased ~~$2.0~~$0.3 million to ~~$9.8~~$10.1 million from ~~$7.8~~$9.8 million in the same period of the prior year. ~~Interest income decreased by approximately $0.9~~We realized a $1.6 million ~~due to less cash~~loss on ~~hand after~~ our ~~acquisition of Fusion at the beginning of~~investment in PureCycle Technologies (“PureCycle”) during the second quarter ~~2020. Miscellaneous expenses increased by approximately $0.9 million~~of 2021. As discussed in Note 18 - Investment in Equity Securities of the Condensed Consolidated Financial Statements, our investment in PureCycle was converted into shares of PCT, a publicly traded entity, during the first quarter of 2021. This investment is now recorded at fair value based on observable market prices for identical assets and the change in fair value is recorded as a ~~result~~net investment gain or loss in the Condensed Consolidated Statements of Income. We believe that cost investment gains and losses, whether realized from sales or unrealized from changes in market prices, are not considered relevant to understanding our reported consolidated earnings or evaluating our periodic economic performance. Lower net interest expenses were partially offset by an increase in miscellaneous expenses due to higher costs to hedge certain Latin American currencies along with higher pension costs ~~due~~related to the decline in discount ~~rates in 2020 compared~~rates.

Net other expense improved $18.4 million to ~~2019.~~

~~Net other~~$1.8 million of expense for the six months ended June 30, ~~2020 increased $5.3 million to~~2021 from $20.2 million ~~from $14.9 million~~of expense in the same period of the prior year. As$15.2 million of this improvement is the gain on our PureCycle investment as discussed ~~above, this~~above. We also realized lower net interest expense during the first half of 2021 as we continue to reduce outstanding debt with our strong free cash flow generation over the past year. These improvements more than offset our increase ~~is mainly~~in pension costs due to ~~$2.4 million of~~ lower ~~interest income in 2020 as a result of the Fusion acquisition.~~ ~~Miscellaneous expenses increased by approximately $2.8 million in part due to the high costs to hedge certain Latin American and Asian currencies and the higher pension costs mentioned above.~~

~~EFFECTIVE TAX RATE~~

discount rates.

PROVISION FOR INCOME TAXES

The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings and related estimated full year-taxes, adjusted for the impact of discrete quarterly items. The effective tax rate for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, was ~~31.0%~~25.6% and ~~27.6%~~31.0%. The lower reported effective tax rate for the three months ended June 30, ~~2019 was favorably impacted by net tax benefits of $2.9 million from discrete events. This consisted of a $9.1 million benefit from the excess~~2021 reflects additional tax benefits from employee ~~share-based~~stock-based compensation ~~offset by, among other items,~~and a ~~$6.3 million charge to record a valuation allowance to properly reflect the realization~~more favorable mix of ~~recorded deferred tax assets.~~

earnings.

The effective tax rate for the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, was ~~30.0%~~20.5% and ~~28.7%~~30.0%. ~~The~~ As discussed above, this lower reported effective tax rate for the six months ended June 30, ~~2020~~2021 also reflects ~~a favorable impact of net tax benefits of $4.6 million, primarily from the excess~~additional tax benefits from employee ~~share-based compensation. This is offset by the unfavorable impact from the~~stock-based compensation and a more favorable mix of earnings, particularly losses in jurisdictions where we cannot record the tax benefit. The effective tax rate for the six months ended June 30, 2019 was favorably impacted by net tax benefits of $4.1 million from discrete events. This consisted of a favorable impact of $11.6 million from the excess tax benefits from employee share-based compensation, offset by, among other items, a $7.0 million charge recognized to record a valuation allowance to properly reflect the realization of recorded deferred tax assets.

earnings.

NET INCOME ATTRIBUTABLE TO APTARGROUP, INC.

We reported net income attributable to AptarGroup of ~~$41.8~~$55.3 million and ~~$97.1~~$139.2 million in the three and six months ended June 30, ~~2020,~~2021, compared to ~~$73.9~~$41.8 million and ~~$136.9~~$97.1 million for the same periods in the prior year.

PHARMA SEGMENT

Operations that sell dispensing systems, drug delivery systems, sealing solutions and services to the prescription drug, consumer health care, injectables and active material science solutions markets form the Pharma segment.


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020

Net Sales	$	325,343		$	301,259		$	639,175		$	598,455
Adjusted EBITDA (1)	105,979			104,099			214,463			212,441
Adjusted EBITDA margin (1)	32.6		%	34.6		%	33.6		%	35.5		%


Six Months Ended June 30, 2021 Net Sales Change over Prior Year	Prescription Drug		Consumer Health Care		Injectables		Active Material Science Solutions		Total
Core Sales Growth	(8)	%	(1)	%	14	%	12	%	1	%

Currency Effects (1)	6	%	7	%	7	%	4	%	6	%
Total Reported Net Sales Growth	(2)	%	6	%	21	%	16	%	7	%


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020

Net Sales	$	360,246		$	299,786		$	707,192		$	624,346
Adjusted EBITDA (1)	37,910			23,974			73,266			58,221
Adjusted EBITDA margin (1)	10.5		%	8.0		%	10.4		%	9.3		%

~~Table of Contents~~

We present earnings before net interest and taxes (“EBIT”) and earnings before net interest, taxes, depreciation and amortization (“EBITDA”). We also present our adjusted earnings before net interest and taxes (“Adjusted EBIT”) and ~~consolidated~~ adjusted earnings before net interest, taxes, depreciation and amortization (“Adjusted EBITDA”), both of which exclude the business transformation charges (restructuring initiatives), acquisition-related costs, ~~and~~ purchase accounting adjustments related to acquisitions and ~~investments.~~investments and net investment gains and losses related to observable market price changes on equity securities. Our ~~“Outlook” discussion below~~Outlook is also provided on a non-U.S. GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled, such as tax and exchange rates, or reliably predicted because they are not part of our routine activities, such as restructuring initiatives and acquisition-related costs.

We provide a reconciliation of Net Debt to Net Capital as a non-U.S. GAAP measure. “Net Debt” is calculated as interest bearing debt less cash and equivalents and short-term investments while “Net Capital” is calculated as stockholders’ equity plus Net Debt. Net Debt to Net Capital measures a company’s financial leverage, which gives users an idea of a company's financial structure, or how it is financing its operations, along with insight into its financial strength. We believe that it is meaningful to take into consideration the balance of our cash, ~~and~~cash equivalents and short-term investments when evaluating our leverage. If needed, such assets could be used to reduce our gross debt position.

Finally, we provide a reconciliation of free cash flow as a non-U.S. GAAP measure. Free cash flow is calculated as cash provided by ~~operations~~operating activities less capital expenditures. We use free cash flow to measure cash flow generated by operations that is available for dividends, share repurchases, acquisitions and debt repayment. We believe that it is meaningful to investors in evaluating our financial performance and measuring our ability to generate cash internally to fund our initiatives.

Three Months Ended

June 30, 2020


Consolidated

Beauty + Home

Pharma

Food + Beverage

Corporate & Other

Net Interest
Net Sales

$
699,305

$
299,786

$
301,259

$
98,260

$
-

$
-

Reported net income

$
41,860

Reported income taxes

18,808

Reported income before income taxes

60,668

(12,755)

85,467

8,519

(12,004)

(8,559)
Adjustments:

Restructuring initiatives

7,331

7,324

(111)

75

43

Transaction costs related to acquisitions

3,207

3,207

Purchase accounting adjustments related to acquisitions and investments

3,252

2,959

293

Adjusted earnings before income taxes

74,458

735

85,649

8,594

(11,961)

(8,559)
Interest expense

8,734

8,734
Interest income

(175)

(175)
Adjusted earnings before net interest and taxes (Adjusted EBIT)

83,017

735

85,649

8,594

(11,961)

-
Depreciation and amortization

56,429

25,939

18,617

9,191

2,682

-
Purchase accounting adjustments included in Depreciation and amortization above

(2,867)

(2,700)

(167)

Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)

$
136,579

$
23,974

$
104,099

$
17,785

$
(9,279)

$
-

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)

19.5%

8.0%

34.6%

18.1%

Table of Contents


	Three Months Ended
	June 30, 2021

	Consolidated			Pharma			Beauty + Home			Food + Beverage			Corporate & Other		Net Interest
Net Sales	$	811,032		$	325,343		$	360,246		$	125,443		$	—	$	—

Reported net income	$	55,274
Reported income taxes	19,020
Reported income before income taxes	74,294			81,806			12,122			9,691			(22,774)		(6,551)
Adjustments:
Restructuring initiatives	4,876			38			1,457			117			3,264
Net investment loss	1,611												1,611
Transaction costs related to acquisitions	2,434			2,434			—			—			—

Adjusted earnings before income taxes	83,215			84,278			13,579			9,808			(17,899)		(6,551)
Interest expense	7,175														7,175
Interest income	(624)														(624)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	89,766			84,278			13,579			9,808			(17,899)		—
Depreciation and amortization	57,790			21,701			24,331			9,818			1,940

Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	147,556		$	105,979		$	37,910		$	19,626		$	(15,959)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	18.2		%	32.6		%	10.5		%	15.6		%

Table of Contents


	Three Months Ended
	June 30, 2020

	Consolidated			Pharma			Beauty + Home			Food + Beverage			Corporate & Other		Net Interest
Net Sales	$	699,305		$	301,259		$	299,786		$	98,260		$	—	$	—

Reported net income	$	41,860
Reported income taxes	18,808
Reported income before income taxes	60,668			85,467			(12,755)			8,519			(12,004)		(8,559)
Adjustments:
Restructuring initiatives	7,331			(111)			7,324			75			43

Transaction costs related to acquisitions	3,207			—			3,207			—			—
Purchase accounting adjustments related to acquisitions and investments	3,252			293			2,959			—			—
Adjusted earnings before income taxes	74,458			85,649			735			8,594			(11,961)		(8,559)
Interest expense	8,734														8,734
Interest income	(175)														(175)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	83,017			85,649			735			8,594			(11,961)		—
Depreciation and amortization	56,429			18,617			25,939			9,191			2,682
Purchase accounting adjustments included in Depreciation and amortization above	(2,867)			(167)			(2,700)			—			—
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	136,579		$	104,099		$	23,974		$	17,785		$	(9,279)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	19.5		%	34.6		%	8.0		%	18.1		%

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	Six Months Ended
	June 30, 2021

	Consolidated			Pharma			Beauty + Home			Food + Beverage			Corporate & Other		Net Interest
Net Sales	$	1,587,786		$	639,175		$	707,192		$	241,419		$	—	$	—

Reported net income	$	139,213
Reported income taxes	35,969
Reported income before income taxes	175,182			169,476			21,810			19,701			(22,220)		(13,585)
Adjustments:
Restructuring initiatives	8,548			73			2,553			38			5,884
Net investment gain	(15,198)												(15,198)
Transaction costs related to acquisitions	2,434			2,434			—			—			—

Adjusted earnings before income taxes	170,966			171,983			24,363			19,739			(31,534)		(13,585)
Interest expense	14,590														14,590
Interest income	(1,005)														(1,005)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	184,551			171,983			24,363			19,739			(31,534)		—
Depreciation and amortization	115,228			42,480			48,903			19,877			3,968

Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	299,779		$	214,463		$	73,266		$	39,616		$	(27,566)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	18.9		%	33.6		%	10.4		%	16.4		%

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	Six Months Ended
	June 30, 2020

	Consolidated			Pharma			Beauty + Home			Food + Beverage			Corporate & Other		Net Interest
Net Sales	$	1,420,858		$	598,455		$	624,346		$	198,057		$	—	$	—

Reported net income	$	97,110
Reported income taxes	41,594
Reported income before income taxes	138,704			175,321			(5,647)			14,481			(28,679)		(16,772)
Adjustments:
Restructuring initiatives	12,170			(142)			12,231			178			(97)

Transaction costs related to acquisitions	4,591			—			4,591			—			—
Purchase accounting adjustments related to acquisitions and investments	4,642			1,421			3,221			—			—
Adjusted earnings before income taxes	160,107			176,600			14,396			14,659			(28,776)		(16,772)
Interest expense	17,122														17,122
Interest income	(350)														(350)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	176,879			176,600			14,396			14,659			(28,776)		—
Depreciation and amortization	107,235			36,508			46,525			18,533			5,669
Purchase accounting adjustments included in Depreciation and amortization above	(3,367)			(667)			(2,700)			—			—
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	280,747		$	212,441		$	58,221		$	33,192		$	(23,107)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	19.8		%	35.5		%	9.3		%	16.8		%

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Three Months Ended

June 30, 2019


Consolidated

Beauty + Home

Pharma

Food + Beverage

Corporate & Other

Net Interest
Net Sales

$
742,661

$
342,080

$
281,939

$
118,642

$
-

$
-

Reported net income

$
73,921

Reported income taxes

28,180

Reported income before income taxes

102,101

26,813

84,425

12,195

(13,609)

(7,723)
Adjustments:

Restructuring initiatives

1,737

1,259

(113)

112

479

Transaction costs related to acquisitions

1,059

1,059

Purchase accounting adjustments related to acquisitions and investments

222

222

Adjusted earnings before income taxes

105,119

28,072

85,593

12,307

(13,130)

(7,723)
Interest expense

8,756

8,756
Interest income

(1,033)

(1,033)
Adjusted earnings before net interest and taxes (Adjusted EBIT)

112,842

28,072

85,593

12,307

(13,130)

-
Depreciation and amortization

47,867

20,673

16,057

8,637

2,500

Purchase accounting adjustments included in Depreciation and amortization above

(222)

(222)

-
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)

$
160,487

$
48,745

$
101,428

$
20,944

$
(10,630)

$
-

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)

21.6%

14.2%

36.0%

17.7%

Six Months Ended

June 30, 2020


Consolidated

Beauty + Home

Pharma

Food + Beverage

Corporate & Other

Net Interest
Net Sales

$
1,420,858

$
624,346

$
598,455

$
198,057

$
-

$
-

Reported net income

$
97,110

Reported income taxes

41,594

Reported income before income taxes

138,704

(5,647)

175,321

14,481

(28,679)

(16,772)
Adjustments:

Restructuring initiatives

12,170

12,231

(142)

178

(97)

Transaction costs related to acquisitions

4,591

4,591

Purchase accounting adjustments related to acquisitions and investments

4,642

3,221

1,421

Adjusted earnings before income taxes

160,107

14,396

176,600

14,659

(28,776)

(16,772)
Interest expense

17,122

17,122
Interest income

(350)

(350)
Adjusted earnings before net interest and taxes (Adjusted EBIT)

176,879

14,396

176,600

14,659

(28,776)

-
Depreciation and amortization

107,235

46,525

36,508

18,533

5,669

-
Purchase accounting adjustments included in Depreciation and amortization above

(3,367)

(2,700)

(667)

Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)

$
280,747

$
58,221

$
212,441

$
33,192

$
(23,107)

$
-

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)

19.8%

9.3%

35.5%

16.8%


Net Debt to Net Capital Reconciliation	June 30,			December 31,
	2021			2020

Notes payable, revolving credit facility and overdrafts	$	2,965		$	52,200
Current maturities of long-term obligations, net of unamortized debt issuance costs	67,243			65,666
Long-Term Obligations, net of unamortized debt issuance costs	1,048,928			1,054,998
Total Debt	1,119,136			1,172,864
Less:
Cash and equivalents	291,495			300,137
Short-term investments	—			243
Net Debt	$	827,641		$	872,484

Total Stockholders' Equity	$	1,986,663		$	1,850,785
Net Debt	827,641			872,484
Net Capital	$	2,814,304		$	2,723,269

Net Debt to Net Capital	29.4		%	32.0		%

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RECENTLY ISSUED ACCOUNTING STANDARDS

We have reviewed the recently issued accounting standards updates to the FASB’s Accounting Standards Codification that have future effective dates. Standards that ~~are effective for 2020~~have been adopted during 2021 are discussed in Note 1 – Summary of Significant Accounting Policies of the Notes to Condensed Consolidated Financial Statements.

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In March 2020, the FASB issued ASU 2020-04, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments to this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ~~The new standard is~~ASU 2020-04 was further amended in January 2021 by ASU 2021-01 which clarified the applicability of certain provisions. Both standards are effective upon issuance and can be adopted any time prior to December 31, 2022. ~~We do~~The guidance in ASU 2020-04 and ASU 2021-01 is optional and may be elected over time as reference rate reform activities occur. As of June 30, 2021, we have not ~~anticipate that~~yet modified any contracts as a result of reference rate reform and are evaluating the impact this ~~new guidance will~~standard may have ~~a significant impact~~ on our ~~consolidated financial statements.~~

In August 2018, the FASB issued ASU 2018-14, which amends disclosure requirements for defined benefit pension and other postretirement plans. The amendments in this update remove disclosures that are no longer considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The new standard is effective for fiscal years ending after December 15, 2020. As this update adds disclosure requirements, we do not expect that this guidance will have a significant impact on our consolidated financial statements.

Condensed Consolidated Financial Statements.

Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our ~~consolidated financial statements~~Condensed Consolidated Financial Statements upon adoption.

OUTLOOK

~~Factors that could impact~~

Current macro-economic factors impacting our ~~third quarter results include among other things, economic uncertainty in some of our markets, driven in part by the recent spike in COVID-19 cases in many regions of the world. We expect~~business are not expected to ~~see gradual improvement~~change dramatically from what we experienced in the second ~~half~~quarter. We expect several of our businesses, primarily beauty and beverage, to benefit from the ~~year although this will be heavily dependent on the pace~~gradual and ~~breadth of the resumption of travel activity, the~~continued reopening of ~~retail stores~~economies, while the customer destocking cycle in the prescription market is expected to continue through the third quarter. In these and ~~general consumer spending confidence.~~

other markets, we expect to have more favorable comparisons to the prior year second half which was severely impacted by pandemic lockdowns. Rising input costs, including raw materials and transportation, have been and are expected to remain a headwind and we will continue to look to pass on these costs, as necessary. Our focus remains on continuing to generate yields across all our businesses with consolidated margins expected to improve.

We expect earnings per share for the third quarter of ~~2020,~~2021, excluding any restructuring expenses, ~~and~~ acquisition-related costs and changes in the fair value of equity investments, to be in the range of ~~$0.80~~$0.90 to ~~$0.88~~$0.98 and this guidance is based on an effective tax rate range of 28% to 30%.

FORWARD-LOOKING STATEMENTS

Certain statements in Management’s Discussion and Analysis and other sections of this Form 10-Q are forward-looking and involve a number of risks and uncertainties, including certain statements set forth in the Significant Developments, Restructuring Initiatives, Quarterly Trends, Liquidity and Capital Resources, Contingencies and Outlook sections of this Form 10-Q. Words such as “expects,” “anticipates,” “believes,” “estimates,” “future,” “potential”, "are optimistic" and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 ~~(the “Exchange Act”)~~ and are based on our beliefs as well as assumptions made by and information currently available to us. Accordingly, our actual results may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist in our operations and business environment including, but not limited to:

●

•~~outbreaks of~~ pandemics, including the impact of COVID-19 on our global supply chain and our global customers and operations, which has elevated and may or will continue to elevate many of the risks and uncertainties discussed below;

•our ability to preserve organizational culture and maintain employee productivity in the work-from-home environment caused by the current pandemic;

•the availability of raw materials and components (particularly from sole sourced suppliers) as well as the financial viability of these suppliers;

•economic conditions worldwide, including potential deflationary or inflationary conditions in regions we rely on for growth;

•political conditions worldwide;

•significant fluctuations in foreign currency exchange rates or our effective tax rate;

•the impact of tax reform legislation, changes in tax rates and other tax-related events or transactions that could impact our effective tax rate;

•financial conditions of customers and suppliers;

•consolidations within our customer or supplier bases;

•changes in customer and/or consumer spending levels;

•loss of one or more key accounts;

•the availability of direct labor workers and the increase in direct labor costs;

•fluctuations in the cost of materials, components, transportation cost as a result of on-going container shortages, and other input costs (particularly resin, metal, anodization costs, and energy costs);

•our ability to successfully implement facility expansions and new facility projects;

•our ability to offset inflationary impacts with cost containment, productivity initiatives or price increases;

•changes in capital availability or cost, including interest rate fluctuations;

•volatility of global credit markets;

•our ability to identify potential new acquisitions and to successfully acquire and integrate such operations and products, including the successful integration of the businesses we have acquired, including contingent consideration valuation;

•direct or indirect consequences of acts of war, terrorism or social unrest;

●	~~economic conditions worldwide, including potential deflationary or inflationary conditions in regions we rely on for growth;~~

●	~~political conditions worldwide, including the impact of the UK leaving the European Union (Brexit) on our UK operations;~~

●	~~significant fluctuations in foreign currency exchange rates or our effective tax rate;~~

●	~~the impact of tax reform legislation, changes in tax rates and other tax-related events or transactions that could impact our effective tax rate;~~

●	~~financial conditions of customers and suppliers;~~

●	~~consolidations within our customer or supplier bases;~~

●	~~changes in customer and/or consumer spending levels;~~

●	~~loss of one or more key accounts;~~

●	~~the availability of raw materials and components (particularly from sole sourced suppliers) as well as the financial viability of these suppliers;~~

●	~~fluctuations in the cost of materials, components and other input costs (particularly resin, metal, anodization costs and transportation and energy costs);~~

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•cybersecurity threats that could impact our networks and reporting systems;

•the impact of natural disasters and other weather-related occurrences;

•fiscal and monetary policies and other regulations;

•changes or difficulties in complying with government regulation;

•changing regulations or market conditions regarding environmental sustainability;

•work stoppages due to labor disputes;

•competition, including technological advances;

•our ability to protect and defend our intellectual property rights, as well as litigation involving intellectual property rights;

•the outcome of any legal proceeding that has been or may be instituted against us and others;

•our ability to meet future cash flow estimates to support our goodwill impairment testing;

•the demand for existing and new products;

•the success of our customers’ products, particularly in the pharmaceutical industry;

•our ability to manage worldwide customer launches of complex technical products, particularly in developing markets;

•difficulties in product development and uncertainties related to the timing or outcome of product development;

•significant product liability claims;

•the execution of our business transformation plan; and

•other risks associated with our operations.

~~Table of Contents~~

●	~~our ability to successfully implement facility expansions and new facility projects;~~

●	~~our ability to offset inflationary impacts with cost containment, productivity initiatives or price increases;~~

●	~~changes in capital availability or cost, including interest rate fluctuations;~~

●	~~volatility of global credit markets;~~

●	our ability to identify potential new acquisitions and to successfully acquire and integrate such operations and products, including the successful integration of the businesses we have acquired, including contingent consideration valuation;

●	~~direct or indirect consequences of acts of war, terrorism or social unrest;~~

●	~~cybersecurity threats that could impact our networks and reporting systems;~~

●	~~the impact of natural disasters and other weather-related occurrences;~~

●	~~fiscal and monetary policies and other regulations;~~

●	~~changes or difficulties in complying with government regulation;~~

●	~~changing regulations or market conditions regarding environmental sustainability;~~

●	~~work stoppages due to labor disputes;~~

●	~~competition, including technological advances;~~

●	~~our ability to protect and defend our intellectual property rights, as well as litigation involving intellectual property rights;~~

●	~~the outcome of any legal proceeding that has been or may be instituted against us and others;~~

●	~~our ability to meet future cash flow estimates to support our goodwill impairment testing;~~

●	~~the demand for existing and new products;~~

●	~~the success of our customers’ products, particularly in the pharmaceutical industry;~~

●	~~our ability to manage worldwide customer launches of complex technical products, particularly in developing markets;~~

●	~~difficulties in product development and uncertainties related to the timing or outcome of product development;~~

●	~~significant product liability claims;~~

●	~~the execution of our business transformation plan; and~~

●	~~other risks associated with our operations.~~

Although we believe that our forward-looking statements are based on reasonable assumptions, there can be no assurance that actual results, performance or achievements will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Please refer to Item 1A (Risk Factors) of Part I included in our Annual Report on Form 10-K for the year ended December 31, ~~2019 and to Item 1A (Risk Factors) of Part II of this report for additional risk factors affecting the Company.~~

2020.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A significant number of our operations are located outside of the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of our ~~entities.~~subsidiaries. Our primary foreign exchange exposure is to the euro, but we also have foreign exchange exposure to the Chinese yuan, Brazilian real, Mexican peso, ~~and~~ Swiss franc ~~among~~and other Asian, European, and South American currencies. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial condition and results of operations. Conversely, a strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on our financial condition and results of operations.

Additionally, in some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Any changes in exchange rates on such inter-country sales may impact our results of operations.

We manage our exposures to foreign exchange principally with forward exchange contracts to hedge certain firm purchase and sales commitments and intercompany cash transactions denominated in foreign currencies.

The table below provides information as of June 30, ~~2020~~2021 about our forward currency exchange contracts. The majority of the contracts expire before the end of the third quarter of ~~2020.~~

Average

Min / Max



Contract Amount

Contractual

Notional

Buy/Sell

(in thousands)

Exchange Rate

Volumes

EUR / USD

$
15,273

1.1043

13,329-17,460

EUR / BRL

9,672

5.5705

9,072-9,744

CHF / EUR

7,368

0.9455

205-7,368

EUR / INR

3,774

83.5400

3,767-3,777

CZK / EUR

3,631

0.0373

2,245-3,631

MXN / USD

2,669

0.0426

2,669-3,059

EUR / MXN

2,259

25.5878

2,259-2,863

USD / EUR

2,182

0.9092

1,488-2,593

EUR/THB

1,295

35.3761

1,235-1,295

GBP / EUR

759

1.1334

759-2,824

EUR/GBP

337

0.8901

122-337

CHF / USD

179

1.0317

175-354

CAD/EUR

22

0.6532

20-43

Total

$
49,420

2021.


Buy/Sell	Contract Amount (in thousands)		Average Contractual Exchange Rate	Min / Max Notional Volumes

EUR / USD	$	18,926	1.2055	18,602 - 18,926
EUR / BRL	10,823		6.5847	9,836 - 10,823
CZK / EUR	4,303		0.0389	4,303 - 5,084
EUR / THB	4,163		38.0078	3,520 - 4,163
EUR / INR	3,836		91.3400	3,836 - 3,935
CHF / EUR	3,186		0.9137	3,186 - 6,834
EUR / MXN	1,618		24.2431	1,152 - 1,618
MXN / USD	1,400		0.0490	1,100 - 1,400
USD / EUR	881		0.8296	442 - 2,818
GBP / EUR	711		1.1553	616 - 1,239
EUR / CHF	95		1.0924	0 - 259
Total	$	49,942

As of June 30, ~~2020,~~2021, we have recorded the fair value of foreign currency forward exchange contracts of ~~$0.7 million~~$30 thousand in prepaid and other and ~~$0.1~~$1.5 million in accounts payable, accrued and ~~accrued~~other liabilities on the ~~balance sheet.~~Condensed Consolidated Balance Sheets. We also entered into a EUR/USD floating-to-fixed cross currency interest rate swap on July 20, 2017 to effectively hedge the foreign exchange and interest rate exposure on the $280 million bank term loan drawn by our wholly-owned UK subsidiary. The fair value of this cash flow hedge is ~~$3.1~~$4.1 million reported in ~~prepaid~~accounts payable, accrued and other liabilities on the ~~balance sheet.~~

Condensed Consolidated Balance Sheets.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Management has evaluated, with the participation of the chief executive officer and chief financial officer of the Company, the effectiveness of our disclosure controls and procedures (as that term is defined in Rule 13a-15(e) under the Securities Exchange ~~Act)~~Act of 1934) as of June 30, ~~2020.~~2021. Based on that evaluation, the chief executive officer and chief financial officer have concluded that these controls and procedures were effective as of such date.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the fiscal quarter ended June 30, 2020, we implemented enterprise resource planning (“ERP”) systems at two operating facilities. Consequently, the control environments have been modified at these locations to incorporate the controls contained within the new ERP systems.~~Except for the foregoing, no~~

No changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange ~~Act)~~Act of 1934) occurred during our fiscal quarter ended June 30, ~~2020~~2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Amid the COVID-19 pandemic, we have implemented remote work arrangements and restricted non-essential business travel. These arrangements have not materially affected our ability to maintain our business operations, including the operation of financial reporting systems, internal control over financial reporting and disclosure controls and procedures.

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PART II - OTHER INFORMATION

~~ITEM 1A. RISK FACTORS~~

The following risk factor is in addition to the risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 under Item 1A, “Risk Factors” filed with the SEC pursuant to the Exchange Act. The effects of the events and circumstances described in the following risk factors have elevated and may or will continue to elevate many of the risks contained in the Company’s Form 10-K, including the risks relating to a deterioration in economic conditions in a particular region or market, our fixed costs structure, reliance on single sourced materials and manufacturing sites and potential asset impairments.

~~The COVID-19 pandemic is currently adversely affecting our business. Additional factors could exacerbate such negative consequences and/or cause other materially adverse effects.~~ The COVID-19 pandemic adversely affected our sales of products to our travel and retail beauty business and on-the-go beverage customers in the six months ended June 30, 2020 and that adverse impact may continue into the third quarter. Beginning in the first quarter of 2020, economic and health conditions in the United States and across most of the globe have changed rapidly. Customer demand across all segments, particularly our Beauty + Home and Food + Beverage segments, may decrease further from historical levels depending on the duration and severity of the COVID-19 pandemic, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties. Such events may result in business and manufacturing disruption, inventory shortages due to disruptions to our supply chain and distribution channels, delivery delays, increased risk associated with customer payments and reduced sales and operations, any of which could materially affect our stock price, business prospects, financial condition, results of operations and liquidity.

~~The ability of our employees to work may be significantly impacted by COVID-19.~~The majority of our office and management personnel are working remotely and the majority of our facilities remained operational during the first half of 2020 as each of our segments produce dispensing systems that have been determined to be essential products by various government agencies around the world. The health and safety of our workforce is of primary concern and we may need to enact further precautionary measures to help minimize the risk of our employees being exposed to the virus. Further, our management team is focused on mitigating the adverse effects of the COVID-19 pandemic, which has required and will continue to require a large investment of time and resources across the entire company, thereby diverting their attention from other priorities that existed prior to the outbreak of the pandemic. If these conditions worsen, or last for an extended period of time, our ability to manage our business may be impaired, and operational risks, cybersecurity risks and other risks facing us even prior to the pandemic may be elevated.

ITEM 2. UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS

RECENT SALES OF UNREGISTERED SECURITIES

Certain French employees are eligible to participate in the FCP Aptar Savings Plan (the “Plan”). An independent agent purchases shares of common stock available under the Plan for cash on the open market and we do not issue shares. We do not receive any proceeds from the purchase of common stock under the Plan. The agent under the Plan is ~~Banque Nationale de Paris~~BNP Paribas Fund Services. No underwriters are used under the Plan. All shares are sold in reliance upon the exemption from registration under the Securities Act of 1933 provided by Regulation S promulgated under that Act. During the quarter ended June 30, ~~2020,~~2021, the Plan purchased ~~19,876~~7,490 shares of our common stock on behalf of the participants at an average price of ~~$104.89,~~$147.26, for an aggregate amount of ~~$2.1 million. The Plan~~$1.1 million, and sold ~~11,571~~no shares of our common stock on behalf of the ~~participants at an average price of $105.62, for an aggregate amount of $1.2 million during the same period.~~participants. At June 30, ~~2020,~~2021, the Plan owned ~~96,783~~103,242 shares of our common stock.

ISSUER PURCHASES OF EQUITY SECURITIES

On April 18, 2019, we announced a share purchase authorization of up to $350 million of common stock. This authorization ~~replaces~~replaced previous authorizations and has no expiration date. We may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions.

During the three and six months ended June 30, ~~2020,~~2021, we did not repurchase any shares. As of June 30, ~~2020,~~2021, there was $278.5 million of authorized share repurchases available to us. Amid the COVID-19 pandemic, we ~~are~~have been focused on preserving our liquidity and therefore ~~we have~~ temporarily suspended ~~repurchasing shares~~our share repurchase plan in 2020. While we continue to assess the impact the pandemic is having on our business throughout 2021, we removed the aforementioned suspension during the first quarter of 2021 in order to preserve our ~~common stock.~~

flexibility to make repurchases from time to time depending on market conditions.

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~~ITEM 5. OTHER INFORMATION~~

On July 30, 2020, the Company’s Board of Directors (the “Board”) amended and restated the Company's by-laws to clarify certain corporate procedures and make certain other enhancements and technical changes. The changes effected by the amendment and restatement of the Company’s by-laws (the “Amended and Restated By-Laws”) include, without limitation, the following:

●

~~updating the advance notice provisions for director nominations and stockholder proposals at stockholder meetings;~~

●

~~designating the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of litigation;~~

●

~~clarifying that the Board may postpone, reschedule or cancel a stockholder meeting;~~

●

~~clarifying when the plurality voting carve-out to the majority vote standard for the election of directors applies;~~

●

~~clarifying the powers of the chairman of a stockholder meeting to regulate conduct at such meeting;~~

●

~~allowing emergency special Board meetings to be held with less than 24 hours’ notice; and~~

●

~~outlining the process for Board action in the event of an emergency.~~

The Amended and Restated By-Laws are effective July 30, 2020. The preceding summary does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated By-Laws, which are filed as Exhibit 3.1 to this Form 10-Q and incorporated herein by reference.

Contents

ITEM 6. EXHIBITS


Exhibit 10.1

~~Exhibit 3.1~~	Amended and Restated ~~By-Laws~~Credit Agreement, dated as of ~~AptarGroup, Inc.~~

~~Exhibit 10.1~~	~~AptarGroup, Inc. 2018 Equity Incentive Plan (as amended~~June 30, 2021, among the Company, the financial institutions party thereto as Lenders and ~~restated effective May 6, 2020),~~Wells Fargo Bank, National Association, as administrative agent and swingline lender, filed as Exhibit 10.1 to the ~~Company’s~~Company's current report on Form 8-K filed ~~May 7, 2020,~~July 2, 2021, is incorporated herein by reference.

Exhibit 31.1		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101		The following information from our Quarterly Report on Form 10-Q for the second quarter of fiscal ~~2020,~~2021, filed with the SEC on July ~~31, 2020,~~30, 2021, formatted in Inline Extensible Business Reporting Language (XBRL): (i) the Cover Page, (ii) the Condensed Consolidated Statements of Income – Three and Six Months Ended June 30, ~~2020~~2021 and ~~2019,~~2020, (iii) the Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30, ~~2020~~2021 and ~~2019,~~2020, (iv) the Condensed Consolidated Balance Sheets – June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, (v) the Condensed Consolidated Statements of Changes in Equity – Three and Six Months Ended June 30, ~~2020~~2021 and ~~2019,~~2020, (vi) the Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, ~~2020~~2021 and ~~2019~~2020 and (vii) the Notes to Condensed Consolidated Financial Statements.
Exhibit 104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~AptarGroup, Inc.~~
		~~(Registrant)~~ AptarGroup, Inc.
		(Registrant)
	By
	By	/s/ ROBERT W. KUHN
		Robert W. Kuhn
		Executive Vice President
and Chief Financial Officer ~~and Secretary~~
		(Duly Authorized Officer and
		Principal Accounting and Financial Officer)


		Date: July ~~31, 2020~~ 30, 2021


~~DELAWARE~~ Delaware						36-3853103
(State of Incorporation)						(I.R.S. Employer Identification No.)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	ATR	New York Stock Exchange


Part I.			FINANCIAL INFORMATION

Item 1.
~~Part I.~~	~~FINANCIAL INFORMATION~~

~~Item 1.~~	Financial Statements (Unaudited)

			Condensed Consolidated Statements of Income – Three and Six Months Ended June ~~30, 2020~~ 3 0 , 2021 and ~~2019~~2020		1

			Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30 , 2021 and 2020 ~~and 2019~~		2

			Condensed Consolidated Balance Sheets – June 30 ~~2020~~, 2021 and December 31, ~~2019~~2020		3

			Condensed Consolidated Statements of Changes in Equity – Three and Six Months Ended June 30 , 2021 and 2020 ~~and 2019~~		5

			Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30 , 2021 and 2020 ~~and 2019~~		6 7

			Notes to Condensed Consolidated Financial Statements		7 9

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations		28 32

Item 3.			Quantitative and Qualitative Disclosures about Market Risk		43 49

Item 4.			Controls and Procedures		43 49

Part II.			OTHER INFORMATION

~~Item 1A.~~			~~Risk Factors~~	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			44 50

Item 5.6.			~~Other Information~~Exhibits		45 51

~~Item 6.~~			~~Exhibits~~Signature		45
52
	~~Signature~~	46


In thousands

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019

Net Income	$	41,860	$	73,921	$	97,110	$	136,920
Other Comprehensive Income (Loss):
Foreign currency translation adjustments		19,096		9,414		(23,133)		(197)
Changes in derivative (losses) gains, net of tax		(733)		(479)		750		(872)
Defined benefit pension plan, net of tax
Amortization of prior service cost included in net income, net of tax		72		83		143		167
Amortization of net loss included in net income, net of tax		1,368		633		2,933		1,270
Total defined benefit pension plan, net of tax		1,440		716		3,076		1,437
Total other comprehensive income (loss)		19,803		9,651		(19,307)		368
Comprehensive Income		61,663		83,572		77,803		137,288
Comprehensive (Income) Loss Attributable to Noncontrolling Interests		(22)		2		(19)		(1)
Comprehensive Income Attributable to AptarGroup, Inc.	$	61,641	$	83,574	$	77,784	$	137,287


In thousands

		June 30,		December 31,
		2020		2019
Assets
Current Assets:
Cash and equivalents	$	247,656	$	241,970
Accounts and notes receivable, less current expected credit loss ("CECL") of $6,080 in 2020 and $3,626 in 2019		575,655		558,428
Inventories		381,939		375,795
Prepaid and other		138,321		115,048
		1,343,571		1,291,241
Property, Plant and Equipment:
Buildings and improvements		521,312		504,328
Machinery and equipment		2,578,354		2,521,737
		3,099,666		3,026,065
Less: Accumulated depreciation		(2,028,101)		(1,963,520)
		1,071,565		1,062,545
Land		26,355		25,133
		1,097,920		1,087,678
Other Assets:
Investments in equity securities		44,193		8,396
Goodwill		861,928		763,461
Intangible assets, net		352,740		291,084
Operating lease right-of-use assets		68,665		72,377
Miscellaneous		44,999		47,882
		1,372,525		1,183,200
Total Assets	$	3,814,016	$	3,562,119


In thousands, except per share amounts

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020

Net Sales	$	811,032	$	699,305	$	1,587,786	$	1,420,858
Operating Expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	523,050		441,702		1,011,755		892,958
Selling, research & development and administrative	140,913		123,365		275,261		249,557
Depreciation and amortization	57,790		56,429		115,228		107,235
Restructuring initiatives	4,876		7,331		8,548		12,170
Total Operating Expenses	726,629		628,827		1,410,792		1,261,920
Operating Income	84,403		70,478		176,994		158,938

Other Income (Expense):
Interest expense	(7,175)		(8,734)		(14,590)		(17,122)
Interest income	624		175		1,005		350
Net investment (loss) gain	(1,611)		0		15,198		0
Equity in results of affiliates	81		(328)		(434)		(1,127)
Miscellaneous, net	(2,028)		(923)		(2,991)		(2,335)
Total Other Expense	(10,109)		(9,810)		(1,812)		(20,234)

Income before Income Taxes	74,294		60,668		175,182		138,704

Provision for Income Taxes	19,020		18,808		35,969		41,594

Net Income	$	55,274	$	41,860	$	139,213	$	97,110

Net Loss (Income) Attributable to Noncontrolling Interests	$	2	$	(21)	$	15	$	(18)

Net Income Attributable to AptarGroup, Inc.	$	55,276	$	41,839	$	139,228	$	97,092

Net Income Attributable to AptarGroup, Inc. per Common Share:
Basic	$	0.84	$	0.65	$	2.12	$	1.51
Diluted	$	0.81	$	0.63	$	2.05	$	1.47

Average Number of Shares Outstanding:
Basic	65,818		64,262		65,525		64,135
Diluted	68,086		66,384		67,869		66,246

Dividends per Common Share	$	0.38	$	0.36	$	0.74	$	0.72


In thousands, except per share amounts

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019

Net Sales	$	699,305	$	742,661	$	1,420,858	$	1,487,121
Operating Expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		441,702		469,441		892,958		938,573
Selling, research & development and administrative		123,365		113,752		249,557		234,967
Depreciation and amortization		56,429		47,867		107,235		95,356
Restructuring initiatives		7,331		1,737		12,170		11,267
		628,827		632,797		1,261,920		1,280,163
Operating Income		70,478		109,864		158,938		206,958

Other (Expense) Income:
Interest expense		(8,734)		(8,756)		(17,122)		(17,970)
Interest income		175		1,033		350		2,781
Equity in results of affiliates		(328)		9		(1,127)		(86)
Miscellaneous, net		(923)		(49)		(2,335)		417
		(9,810)		(7,763)		(20,234)		(14,858)

Income before Income Taxes		60,668		102,101		138,704		192,100

Provision for Income Taxes		18,808		28,180		41,594		55,180

Net Income	$	41,860	$	73,921	$	97,110	$	136,920

Net Income Attributable to Noncontrolling Interests	$	(21)	$	(6)	$	(18)	$	(1)

Net Income Attributable to AptarGroup, Inc.	$	41,839	$	73,915	$	97,092	$	136,919

Net Income Attributable to AptarGroup, Inc. per Common Share:
Basic	$	0.65	$	1.16	$	1.51	$	2.17
Diluted	$	0.63	$	1.12	$	1.47	$	2.08

Average Number of Shares Outstanding:
Basic		64,262		63,471		64,135		63,219
Diluted		66,384		66,232		66,246		65,842

Dividends per Common Share	$	0.36	$	0.36	$	0.72	$	0.70


In thousands, except share and per share amounts

		June 30,		December 31,
		2020		2019
Liabilities and Stockholders’ Equity
Current Liabilities:
Notes payable, revolving credit facility and overdrafts	$	150,831	$	44,259
Current maturities of long-term obligations, net of unamortized debt issuance costs		66,248		65,988
Accounts payable, accrued and other liabilities		612,688		573,028
		829,767		683,275
Long-Term Obligations, net of unamortized debt issuance costs		1,082,742		1,085,453
Deferred Liabilities and Other:
Deferred income taxes		39,414		41,388
Retirement and deferred compensation plans		108,896		101,225
Operating lease liabilities		52,036		55,276
Deferred and other non-current liabilities		55,175		23,250
Commitments and contingencies		—		—
		255,521		221,139
Stockholders’ Equity:
AptarGroup, Inc. stockholders’ equity
Common stock, $.01 par value, 199 million shares authorized, 69.0 and 68.6 million shares issued as of June 30, 2020 and December 31, 2019, respectively		690		686
Capital in excess of par value		803,511		770,596
Retained earnings		1,573,392		1,523,820
Accumulated other comprehensive loss		(361,256)		(341,948)
Less: Treasury stock at cost, 4.7 and 4.8 million shares as of June 30, 2020 and December 31, 2019, respectively		(370,706)		(381,238)
Total AptarGroup, Inc. Stockholders’ Equity		1,645,631		1,571,916
Noncontrolling interests in subsidiaries		355		336
Total Stockholders’ Equity		1,645,986		1,572,252
Total Liabilities and Stockholders’ Equity	$	3,814,016	$	3,562,119


In thousands, except share and per share amounts

	June 30, 2021		December 31, 2020
Liabilities and Stockholders’ Equity
Current Liabilities:
Notes payable, revolving credit facility and overdrafts	$	2,965	$	52,200
Current maturities of long-term obligations, net of unamortized debt issuance costs	67,243		65,666
Accounts payable, accrued and other liabilities	712,358		662,463
Total Current Liabilities	782,566		780,329
Long-Term Obligations, net of unamortized debt issuance costs	1,048,928		1,054,998
Deferred income taxes	26,183		37,242
Retirement and deferred compensation plans	151,260		145,959
Operating lease liabilities	45,769		52,212
Deferred and other non-current liabilities	68,733		68,528
Commitments and contingencies	0		0
Total Deferred Liabilities and Other	291,945		303,941
AptarGroup, Inc. stockholders’ equity
Common stock, $.01 par value, 199 million shares authorized, 70.2 and 69.5 million shares issued as of June 30, 2021 and December 31, 2020, respectively	702		695
Capital in excess of par value	898,382		849,161
Retained earnings	1,734,638		1,643,825
Accumulated other comprehensive loss	(303,058)		(281,709)
Less: Treasury stock at cost, 4.3 and 4.5 million shares as of June 30, 2021 and December 31, 2020, respectively	(344,382)		(361,583)
Total AptarGroup, Inc. Stockholders’ Equity	1,986,282		1,850,389
Noncontrolling interests in subsidiaries	381		396
Total Stockholders’ Equity	1,986,663		1,850,785
Total Liabilities and Stockholders’ Equity	$	4,110,102	$	3,990,053


In thousands

Three Months Ended	AptarGroup, Inc. Stockholders’ Equity
June 30, 2020 and 2019			Accumulated
			Other		Common				Capital in		Non-
	Retained		Comprehensive		Stock		Treasury		Excess of		Controlling		Total
	Earnings		(Loss) Income		Par Value		Stock		Par Value		Interest		Equity
Balance - March 31, 2019	$	1,413,453	$	(319,795)	$	676	$	(327,871)	$	700,933	$	318	$	1,467,714
Net income		73,915		—		—		—		—		6		73,921
Foreign currency translation adjustments		—		9,422		—		—		—		(8)		9,414
Changes in unrecognized pension gains (losses) and related amortization, net of tax		—		716		—		—		—		—		716
Changes in derivative gains (losses), net of tax		—		(479)		—		—		—		—		(479)
Stock awards and option exercises		—		—		7		14,587		42,399		—		56,993
Cash dividends declared on common stock		(22,761)		—		—		—		—		—		(22,761)
Treasury stock purchased		—		—		—		(4,096)		—		—		(4,096)
Balance - June 30, 2019	$	1,464,607	$	(310,136)	$	683	$	(317,380)	$	743,332	$	316	$	1,581,422

Balance - March 31, 2020	$	1,554,665	$	(381,058)	$	689	$	(372,573)	$	785,567	$	333	$	1,587,623
Net income		41,839		—		—		—		—		21		41,860
Foreign currency translation adjustments		—		19,095		—		—		—		1		19,096
Changes in unrecognized pension gains (losses) and related amortization, net of tax		—		1,440		—		—		—		—		1,440
Changes in derivative gains (losses), net of tax		—		(733)		—		—		—		—		(733)
Stock awards and option exercises		—		—		1		1,867		17,944		—		19,812
Cash dividends declared on common stock		(23,112)		—		—		—		—		—		(23,112)
Balance - June 30, 2020	$	1,573,392	$	(361,256)	$	690	$	(370,706)	$	803,511	$	355	$	1,645,986


In thousands

Six Months Ended	AptarGroup, Inc. Stockholders’ Equity
June 30, 2020 and 2019			Accumulated
			Other		Common				Capital in		Non-
	Retained		Comprehensive		Stock		Treasury		Excess of		Controlling		Total
	Earnings		(Loss) Income		Par Value		Stock		Par Value		Interest		Equity
Balance - December 31, 2018	$	1,371,826	$	(310,504)	$	673	$	(318,208)	$	678,769	$	315	$	1,422,871
Net income		136,919		—		—		—		—		1		136,920
Foreign currency translation adjustments		—		(197)		—		—		—		—		(197)
Changes in unrecognized pension gains (losses) and related amortization, net of tax		—		1,437		—		—		—		—		1,437
Changes in derivative gains (losses), net of tax		—		(872)		—		—		—		—		(872)
Stock awards and option exercises		—		—		10		19,924		64,563		—		84,497
Cash dividends declared on common stock		(44,138)		—		—		—		—		—		(44,138)
Treasury stock purchased		—		—		—		(19,096)		—		—		(19,096)
Balance - June 30, 2019	$	1,464,607	$	(310,136)	$	683	$	(317,380)	$	743,332	$	316	$	1,581,422

Balance - December 31, 2019	$	1,523,820	$	(341,948)	$	686	$	(381,238)	$	770,596	$	336	$	1,572,252
Net income		97,092		—		—		—		—		18		97,110
Adoption of CECL standard		(1,377)		—		—		—		—		—		(1,377)
Foreign currency translation adjustments		—		(23,134)		—		—		—		1		(23,133)
Changes in unrecognized pension gains (losses) and related amortization, net of tax		—		3,076		—		—		—		—		3,076
Changes in derivative gains (losses), net of tax		—		750		—		—		—		—		750
Stock awards and option exercises		—		—		4		10,532		32,915		—		43,451
Cash dividends declared on common stock		(46,143)		—		—		—		—		—		(46,143)
Balance - June 30, 2020	$	1,573,392	$	(361,256)	$	690	$	(370,706)	$	803,511	$	355	$	1,645,986


In thousands, brackets denote cash outflows

Six Months Ended June 30,		2020		2019

Cash Flows from Operating Activities:
Net income	$	97,110	$	136,920
Adjustments to reconcile net income to net cash provided by operations:
Depreciation		86,901		82,968
Amortization		20,334		12,388
Stock-based compensation		17,603		12,978
Provision for CECL		1,089		312
(Gain) loss on disposition of fixed assets		(46)		368
Deferred income taxes		9		679
Defined benefit plan expense		11,550		7,699
Equity in results of affiliates		1,127		86
Changes in balance sheet items, excluding effects from foreign currency adjustments:
Accounts and other receivables		(25,625)		(28,772)
Inventories		(13,241)		(18,503)
Prepaid and other current assets		(16,936)		546
Accounts payable, accrued and other liabilities		63,256		14,590
Income taxes payable		(8,446)		1,840
Retirement and deferred compensation plan liabilities		(5,916)		(4,652)
Other changes, net		(1,083)		1,693
Net Cash Provided by Operations		227,686		221,140
Cash Flows from Investing Activities:
Capital expenditures		(122,986)		(124,774)
Proceeds from sale of property, plant and equipment		4,130		1,082
Acquisition of business, net of cash acquired and release of escrow		(159,570)		(49,131)
Acquisition of intangible assets, net		(3,612)		(602)
Investment in equity securities		(34,044)		—
Proceeds from sale of investment in equity securities		—		16,487
Notes receivable, net		(1,045)		(220)
Net Cash Used by Investing Activities		(317,127)		(157,158)
Cash Flows from Financing Activities:
Proceeds from notes payable and overdrafts		14,464		31,022
Repayments of notes payable and overdrafts		(27,788)		(35,490)
Proceeds and repayments of short term revolving credit facility, net		125,000		(38,685)
Proceeds from long-term obligations		1,316		10,446
Repayments of long-term obligations		(4,067)		(6,546)
Payment of contingent consideration obligation		(1,500)		—
Dividends paid		(46,143)		(44,138)
Proceeds from stock option exercises		30,058		70,712
Purchase of treasury stock		—		(19,096)
Net Cash Provided (Used) by Financing Activities		91,340		(31,775)
Effect of Exchange Rate Changes on Cash		8,522		3,920
Net Increase in Cash and Equivalents and Restricted Cash		10,421		36,127
Cash and Equivalents and Restricted Cash at Beginning of Period		246,973		266,823
Cash and Equivalents and Restricted Cash at End of Period	$	257,394	$	302,950


	For the Three Months Ended June 30, 2021
Segment	Europe		Domestic		Latin America		Asia		Total
Pharma	$	212,220	$	93,527	$	5,294	$	14,302	$	325,343
Beauty + Home	192,371		103,679		38,882		25,314		360,246
Food + Beverage	32,402		71,974		11,885		9,182		125,443
Total	$	436,993	$	269,180	$	56,061	$	48,798	$	811,032


	For the Three Months Ended June 30, 2020
					Latin
Segment	Europe		Domestic		America		Asia		Total
Beauty + Home	$	152,412	$	94,349	$	29,893	$	23,132	$	299,786
Pharma		201,813		81,098		6,987		11,361		301,259
Food + Beverage		27,841		54,478		6,489		9,452		98,260
Total	$	382,066	$	229,925	$	43,369	$	43,945	$	699,305

									��
	For the Six Months Ended June 30, 2019
					Latin
Segment	Europe		Domestic		America		Asia			Total
Beauty + Home	$	418,774	$	160,952	$	84,091	$	45,922		$	709,739
Pharma		374,828		147,814		14,734		17,264			554,640
Food + Beverage		63,297		120,280		17,095		22,070			222,742
Total	$	856,899	$	429,046	$	115,920	$	85,256		$	1,487,121



	June 30, 2021		December 31, 2020
Raw materials	$	134,582	$	116,029
Work in process	135,695		115,870
Finished goods	159,163		147,480
Total	$	429,440	$	379,379


		June 30, 2020							December 31, 2019
Weighted Average		Gross						Gross
Amortization Period		Carrying		Accumulated		Net		Carrying		Accumulated		Net
	(Years)	Amount		Amortization		Value		Amount		Amortization		Value
Amortized intangible assets:
Patents	7.1	$	2,703		(1,334)	$	1,369	$	2,804	$	(1,318)	$	1,486
Acquired technology	12.6		105,020		(29,907)		75,113		100,511		(25,430)		75,081
Customer relationships	13.5		279,709		(43,561)		236,148		217,934		(33,924)		184,010
Trademarks and trade names	6.0		44,508		(13,568)		30,940		35,015		(11,003)		24,012
License agreements and other	15.5		22,480		(13,310)		9,170		16,153		(9,658)		6,495
Total intangible assets	12.6	$	454,420	$	(101,680)	$	352,740	$	372,417	$	(81,333)	$	291,084



		June 30, 2021						December 31, 2020
Weighted Average Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization		Net Value		Gross Carrying Amount		Accumulated Amortization		Net Value
Amortized intangible assets:
Patents	13.8	$	2,822	$	(1,465)	$	1,357	$	2,861	$	(1,477)	$	1,384
Acquired technology	12.2	110,171		(41,264)		68,907		111,854		(36,943)		74,911
Customer relationships	13.5	284,613		(67,039)		217,574		286,644		(56,714)		229,930
Trademarks and trade names	6.8	45,653		(20,286)		25,367		46,174		(17,437)		28,737
License agreements and other	38.3	15,220		(6,410)		8,810		19,208		(9,861)		9,347
Total intangible assets	13.4	$	458,479	$	(136,464)	$	322,015	$	466,741	$	(122,432)	$	344,309


	Balance as of		Balance as of		Increase/
	December 31, 2019		June 30, 2020		(Decrease)
Contract asset (current)	$	16,245	$	15,113	$	(1,132)
Contract asset (long-term)	$	—	$	—	$	—
Contract liability (current)	$	79,305	$	70,708	$	(8,597)
Contract liability (long-term)	$	9,779	$	20,662	$	10,883



	Pharma		Beauty + Home		Food + Beverage		Corporate & Other		Total
Goodwill	$	436,731	$	333,111	$	128,679	$	1,615	$	900,136
Accumulated impairment losses	0		0		0		(1,615)		(1,615)
Balance as of December 31, 2020	$	436,731	$	333,111	$	128,679	$	0	$	898,521

Foreign currency exchange effects	(7,427)		(3,167)		(186)		0		(10,780)
Goodwill	$	429,304	$	329,944	$	128,493	$	1,615	$	889,356
Accumulated impairment losses	0		0		0		(1,615)		(1,615)
Balance as of June 30, 2021	$	429,304	$	329,944	$	128,493	$	0	$	887,741


	Beauty +				Food +		Corporate
	Home		Pharma		Beverage		& Other		Total
Goodwill	$	221,658	$	413,650	$	128,153	$	1,615	$	765,076
Accumulated impairment losses		—		—		—		(1,615)		(1,615)
Balance as of December 31, 2019	$	221,658	$	413,650	$	128,153	$	—	$	763,461
Acquisition		99,644		463		—		—		100,107
Foreign currency exchange effects		(473)		(1,175)		8		—		(1,640)
Goodwill	$	320,829	$	412,938	$	128,161	$	1,615	$	863,543
Accumulated impairment losses		—		—		—		(1,615)		(1,615)
Balance as of June 30, 2020	$	320,829	$	412,938	$	128,161	$	—	$	861,928


2020	$	19,192	(remaining estimated amortization for 2020)
2021		37,723
2022		37,443
2023		37,362
2024 and thereafter		221,020


2021	$	19,989	(remaining estimated amortization for 2021)
2022	38,319
2023	38,236
2024	35,097
2025 and thereafter	190,374


	June 30, 2021		December 31, 2020
Notes payable 0.0%	$	0	$	200
Revolving credit facility 1.45%	0		52,000
Overdrafts 4.15% to 6.70%	2,965		0
	$	2,965	$	52,200


			Unamortized
			Debt Issuance
	Principal		Costs		Net
Notes payable 0.00% – 10.90%, due in monthly and annual installments through 2028	$	15,358	$	—	$	15,358
Senior unsecured notes 3.2%, due in 2022		75,000		52		74,948
Senior unsecured debts 2.4% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022		168,000		315		167,685
Senior unsecured notes 3.5%, due in 2023		125,000		126		124,874
Senior unsecured notes 1.0%, due in 2023		112,340		326		112,014
Senior unsecured notes 3.4%, due in 2024		50,000		56		49,944
Senior unsecured notes 3.5%, due in 2024		100,000		126		99,874
Senior unsecured notes 1.2%, due in 2024		224,680		661		224,019
Senior unsecured notes 3.6%, due in 2025		125,000		145		124,855
Senior unsecured notes 3.6%, due in 2026		125,000		145		124,855
Finance Lease Liabilities		30,564		—		30,564
	$	1,150,942	$	1,952	$	1,148,990
Current maturities of long-term obligations		(66,248)		—		(66,248)
Total long-term obligations	$	1,084,694	$	1,952	$	1,082,742


	June 30, 2021		December 31, 2020
Notes payable 0.00% – 10.91%, due in monthly and annual installments through 2028	$	17,754	$	14,002
Senior unsecured notes 3.2%, due in 2022	75,000		75,000
Senior unsecured debts 1.4% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022	112,000		112,000
Senior unsecured notes 3.5%, due in 2023	125,000		125,000
Senior unsecured notes 1.0%, due in 2023	118,590		122,100
Senior unsecured notes 3.4%, due in 2024	50,000		50,000
Senior unsecured notes 3.5%, due in 2024	100,000		100,000
Senior unsecured notes 1.2%, due in 2024	237,180		244,200
Senior unsecured notes 3.6%, due in 2025	125,000		125,000
Senior unsecured notes 3.6%, due in 2026	125,000		125,000
Finance Lease Liabilities	32,021		30,025
Unamortized debt issuance costs	(1,374)		(1,663)
	$	1,116,171	$	1,120,664
Current maturities of long-term obligations	(67,243)		(65,666)
Total long-term obligations	$	1,048,928	$	1,054,998


Year One	$	63,069
Year Two	136,740
Year Three	347,690
Year Four	287,609
Year Five	250,262
Thereafter	154


	Domestic Plans				Foreign Plans
Three Months Ended June 30,	2020		2019		2020		2019
Service cost	$	3,562	$	2,775	$	1,767	$	1,445
Interest cost		1,536		1,846		340		495
Expected return on plan assets		(2,702)		(3,095)		(631)		(586)
Amortization of net loss		1,294		489		514		359
Amortization of prior service cost		—		—		95		113
Net periodic benefit cost	$	3,690	$	2,015	$	2,085	$	1,826


	Domestic Plans				Foreign Plans
Three Months Ended June 30,	2021		2020		2021		2020
Service cost	$	3,941	$	3,562	$	2,071	$	1,767
Interest cost	1,604		1,536		208		340
Expected return on plan assets	(3,064)		(2,702)		(721)		(631)
Amortization of net loss	2,501		1,294		591		514
Amortization of prior service cost	0		0		44		95
Net periodic benefit cost	$	4,982	$	3,690	$	2,193	$	2,085


	Foreign Currency		Defined Benefit Pension Plans		Derivatives		Total
Balance - December 31, 2019	$	(257,124)	$	(83,147)	$	(1,677)	$	(341,948)
Other comprehensive (loss) income before reclassifications	(23,134)		0		1,758		(21,376)
Amounts reclassified from accumulated other comprehensive income (loss)	0		3,076		(1,008)		2,068
Net current-period other comprehensive (loss) income	(23,134)		3,076		750		(19,308)
Balance - June 30, 2020	$	(280,258)	$	(80,071)	$	(927)	$	(361,256)

Balance - December 31, 2020	$	(178,025)	$	(102,322)	$	(1,362)	$	(281,709)
Other comprehensive (loss) income before reclassifications	(27,373)		442		4,066		(22,865)
Amounts reclassified from accumulated other comprehensive income (loss)	0		4,773		(3,257)		1,516
Net current-period other comprehensive (loss) income	(27,373)		5,215		809		(21,349)
Balance - June 30, 2021	$	(205,398)	$	(97,107)	$	(553)	$	(303,058)


	Foreign		Defined Benefit
	Currency		Pension Plans		Derivatives		Total
Balance - December 31, 2018	$	(248,401)	$	(60,463)	$	(1,640)	$	(310,504)
Other comprehensive (loss) income before reclassifications		(197)		—		3,727		3,530
Amounts reclassified from accumulated other comprehensive income (loss)		—		1,437		(4,599)		(3,162)
Net current-period other comprehensive (loss) income		(197)		1,437		(872)		368
Balance - June 30, 2019	$	(248,598)	$	(59,026)	$	(2,512)	$	(310,136)

Balance - December 31, 2019	$	(257,124)	$	(83,147)	$	(1,677)	$	(341,948)
Other comprehensive (loss) income before reclassifications		(23,134)		—		1,758		(21,376)
Amounts reclassified from accumulated other comprehensive income (loss)		—		3,076		(1,008)		2,068
Net current-period other comprehensive (loss) income		(23,134)		3,076		750		(19,308)
Balance - June 30, 2020	$	(280,258)	$	(80,071)	$	(927)	$	(361,256)


	Amount Reclassified from
Details about Accumulated Other	Accumulated Other				Affected Line in the Statement
Comprehensive Income Components	Comprehensive Income				Where Net Income is Presented
Three Months Ended June 30,	2020		2019

Defined Benefit Pension Plans
Amortization of net loss	$	1,808	$	848	(1)
Amortization of prior service cost		95		113	(1)
		1,903		961	Total before tax
		(463)		(245)	Tax benefit
	$	1,440	$	716	Net of tax
Derivatives
Changes in cross currency swap: interest component	$	(525)	$	(1,552)	Interest Expense
Changes in cross currency swap: foreign exchange component		3,060		3,084	Miscellaneous, net
	$	2,535	$	1,532	Net of tax
Total reclassifications for the period	$	3,975	$	2,248


Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income				Affected Line in the Statement Where Net Income is Presented
Three Months Ended June 30,	2021		2020

Defined Benefit Pension Plans
Amortization of net loss	$	3,092	$	1,808	(1)
Amortization of prior service cost	44		95		(1)
	3,136		1,903		Total before tax
	(750)		(463)		Tax impact
	$	2,386	$	1,440	Net of tax
Derivatives
Changes in cross currency swap: interest component	$	(6)	$	(525)	Interest Expense
Changes in cross currency swap: foreign exchange component	1,290		3,060		Miscellaneous, net
	$	1,284	$	2,535	Net of tax
Total reclassifications for the period	$	3,670	$	3,975


		June 30, 2021				December 31, 2020
	Balance Sheet Location	Derivatives Designated as Hedging Instruments		Derivatives not Designated as Hedging Instruments		Derivatives Designated as Hedging Instruments		Derivatives not Designated as Hedging Instruments
Derivative Assets
Foreign Exchange Contracts	Prepaid and other	$	0	$	30	$	0	$	322

		$	0	$	30	$	0	$	322

Derivative Liabilities
Foreign Exchange Contracts	Accounts payable, accrued and other liabilities	$	0	$	1,526	$	0	$	146
Cross Currency Swap Contract (1)	Accounts payable, accrued and other liabilities	4,056		0		8,309		0
		$	4,056	$	1,526	$	8,309	$	146

~~(1)~~	~~This cross currency swap contract is composed of both an interest component and a foreign exchange component.~~


		Amount of (Loss) Gain
Derivatives Not Designated	Location of (Loss) Gain Recognized	Recognized in Income
as Hedging Instruments	in Income on Derivatives	on Derivatives
		2020		2019
Foreign Exchange Contracts	Other (Expense) Income: Miscellaneous, net	$	(940)	$	(251)
		$	(940)	$	(251)


						Gross Amounts not Offset
			Gross Amounts	Net Amounts		in the Statement of
			Offset in the	Presented in		Financial Position
	Gross		Statement of	the Statement of		Financial	Cash Collateral	Net
	Amount		Financial Position	Financial Position		Instruments	Received	Amount
Description
June 30, 2020
Derivative Assets	$	3,799	—	$	3,799	—	—	$	3,799
Total Assets	$	3,799	—	$	3,799	—	—	$	3,799

Derivative Liabilities	$	137	—	$	137	—	—	$	137
Total Liabilities	$	137	—	$	137	—	—	$	137

December 31, 2019
Derivative Assets	$	2,758	—	$	2,758	—	—	$	2,758
Total Assets	$	2,758	—	$	2,758	—	—	$	2,758

Derivative Liabilities	$	401	—	$	401	—	—	$	401
Total Liabilities	$	401	—	$	401	—	—	$	401


	Total		Level 1		Level 2		Level 3
Assets
Foreign exchange contracts ⁽¹⁾	$	747	$	—	$	747	$	—
Cross currency swap contract ⁽¹⁾		3,052		—		3,052		—
Total assets at fair value	$	3,799	$	—	$	3,799	$	—
Liabilities
Foreign exchange contracts ⁽¹⁾	$	137	$	—	$	137	$	—
Contingent consideration obligation		24,710		—		—		24,710
Total liabilities at fair value	$	24,847	$	—	$	137	$	24,710