Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 17, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-8036 | |
Entity Registrant Name | WEST PHARMACEUTICAL SERVICES, INC. | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 23-1210010 | |
Entity Address, Address Line One | 530 Herman O. West Drive, | |
Entity Address, City or Town | Exton, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19341-0645 | |
City Area Code | 610 | |
Local Phone Number | 594-2900 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of each class | Common Stock, par value $0.25 per share | |
Trading Symbol | WST | |
Security Exchange Name | NYSE | |
Entity Central Index Key | 0000105770 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 73,602,233 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 491.5 | $ 443.5 |
Cost of goods and services sold | 324.5 | 296.7 |
Gross profit | 167 | 146.8 |
Research and development | 10.7 | 9.8 |
Selling, general and administrative expenses | 71.8 | 68.6 |
Other income (Note 15) | (3.5) | (2.3) |
Operating profit | 88 | 70.7 |
Interest expense | 2 | 2.3 |
Interest income | (0.8) | (0.9) |
Other nonoperating expense (income) | 0.3 | (0.6) |
Income before income taxes | 86.5 | 69.9 |
Income tax expense | 15 | 16.1 |
Equity in net income of affiliated companies | (2.8) | (1.6) |
Net income | $ 74.3 | $ 55.4 |
Net income per share: | ||
Basic (in dollars per share) | $ 1.01 | $ 0.75 |
Diluted (in dollars per share) | $ 0.99 | $ 0.73 |
Weighted average shares outstanding: | ||
Basic (in shares) | 73.9 | 74.1 |
Diluted (in shares) | 75.5 | 75.3 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 74.3 | $ 55.4 |
Other comprehensive (loss) income, net of tax: | ||
Foreign currency translation adjustments | (47.3) | 4.4 |
Defined benefit pension and other postretirement plan adjustments, net of tax of $0.6 and $0 | 2 | (0.3) |
Net gain (loss) on derivatives, net of tax of $1.3 and $(1.6) | 2.6 | (3.3) |
Other comprehensive (loss) income, net of tax | (42.7) | 0.8 |
Comprehensive income | $ 31.6 | $ 56.2 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Defined benefit pension and other postretirement plan adjustments, tax | $ 0.6 | $ 0 |
Net gain (loss) on derivatives, tax | $ 1.3 | $ (1.6) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 335.3 | $ 439.1 |
Accounts receivable, net | 333 | 319.3 |
Inventories | 251 | 235.7 |
Other current assets | 58.2 | 64.6 |
Total current assets | 977.5 | 1,058.7 |
Property, plant and equipment | 1,816.9 | 1,820.1 |
Less: accumulated depreciation and amortization | 988.6 | 980.8 |
Property, plant and equipment, net | 828.3 | 839.3 |
Operating lease right-of-use assets | 68.5 | 70.1 |
Investments in affiliated companies | 197.7 | 192.7 |
Goodwill | 106.9 | 107.8 |
Intangible assets, net | 28.1 | 29.8 |
Deferred income taxes | 12.3 | 14 |
Pension and other postretirement benefits | 5.2 | 4.3 |
Other noncurrent assets | 22 | 24.7 |
Total Assets | 2,246.5 | 2,341.4 |
Current liabilities: | ||
Notes payable and other current debt | 2.3 | 2.3 |
Accounts payable | 157.9 | 156.8 |
Pension and other postretirement benefits | 2.2 | 2.2 |
Accrued salaries, wages and benefits | 61.2 | 73 |
Income taxes payable | 13.9 | 6.4 |
Operating lease liabilities, current | 9.4 | 9.6 |
Other current liabilities | 97.5 | 91.3 |
Total current liabilities | 344.4 | 341.6 |
Long-term debt | 254.4 | 255 |
Deferred income taxes | 5.6 | 15.5 |
Pension and other postretirement benefits | 50.7 | 52.5 |
Operating lease liabilities, noncurrent | 61.2 | 62.4 |
Other long-term liabilities | 40 | 41.2 |
Total Liabilities | 756.3 | 768.2 |
Commitments and contingencies (Note 15) | ||
Equity: | ||
Preferred stock, 3.0 million shares authorized; 0 shares issued and outstanding | 0 | 0 |
Common stock, par value $0.25 per share; 100.0 million shares authorized; shares issued: 75.3 million and 75.3 million; shares outstanding: 73.6 million and 74.1 million | 18.8 | 18.8 |
Capital in excess of par value | 267.6 | 272.7 |
Retained earnings | 1,611.8 | 1,549.4 |
Accumulated other comprehensive loss | (192.3) | (149.6) |
Treasury stock, at cost (1.7 million and 1.2 million shares) | (215.7) | (118.1) |
Total Equity | 1,490.2 | 1,573.2 |
Total Liabilities and Equity | $ 2,246.5 | $ 2,341.4 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares shares in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Preferred stock, shares authorized (in shares) | 3 | 3 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.25 | $ 0.25 |
Common stock, shares authorized (in shares) | 100 | 100 |
Common stock, shares issued (in shares) | 75.3 | 75.3 |
Common stock, shares outstanding (in shares) | 73.6 | 74.1 |
Treasury stock, at cost (in shares) | 1.7 | 1.2 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 74.3 | $ 55.4 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 24.9 | 24.9 |
Amortization | 1.1 | 0.6 |
Stock-based compensation | 5.4 | 6.2 |
Non-cash restructuring charges | 0 | 0.3 |
Pension settlement charge | 1.4 | 0 |
Contingent consideration payments in excess of acquisition-date liability | (0.1) | (0.2) |
Other non-cash items, net | (4.3) | (0.8) |
Changes in assets and liabilities | (45.6) | (38.8) |
Net cash provided by operating activities | 57.1 | 47.6 |
Cash flows from investing activities: | ||
Capital expenditures | (32.1) | (28.8) |
Other, net | 0.2 | 0.1 |
Net cash used in investing activities | (31.9) | (28.7) |
Cash flows from financing activities: | ||
Borrowings under revolving credit agreements | 0 | 28 |
Repayments under revolving credit agreements | 0 | (28) |
Repayments of Long-term Debt | (0.6) | 0 |
Issuance of long-term debt | 0 | (0.8) |
Dividend payments | (11.8) | (11.1) |
Proceeds from stock-based compensation awards | 6.3 | 3.3 |
Employee stock purchase plan contributions | 1.3 | 1.2 |
Shares purchased under share repurchase programs | (115.5) | (83.1) |
Net cash used in financing activities | (120.3) | (90.5) |
Effect of exchange rates on cash | (8.7) | (0.3) |
Net decrease in cash and cash equivalents | (103.8) | (71.9) |
Cash and cash equivalents at beginning of period | 439.1 | 337.4 |
Cash and cash equivalents at end of period | $ 335.3 | $ 265.5 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation : The condensed consolidated financial statements included in this report are unaudited and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting and U.S. Securities and Exchange Commission (“SEC”) regulations. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, these financial statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the financial position, results of operations, cash flows and the change in equity for the periods presented. The condensed consolidated financial statements for the three months ended March 31, 2020 should be read in conjunction with the consolidated financial statements and notes thereto of West Pharmaceutical Services, Inc. and its majority-owned subsidiaries (which may be referred to as “West”, the “Company”, “we”, “us” or “our”) appearing in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “ 2019 Annual Report ”). The results of operations for any interim period are not necessarily indicative of results for the full year. West has been actively monitoring the novel coronavirus (“COVID-19”) situation and its impact globally. The financial results for the three months ended March 31, 2020 were not significantly impacted by COVID-19 and our production facilities continued to operate during the quarter as they had prior to the COVID-19 pandemic with very little change, other than for enhanced safety measures intended to prevent the spread of the virus. The remote working arrangements and travel restrictions imposed by various governments had limited impact on our ability to maintain operations during the quarter, as our manufacturing operations have generally been exempted from stay-at-home orders. |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Standards | New Accounting Standards Recently Adopted Standards In April 2019, the Financial Accounting Standards Board (“FASB”) issued guidance which clarifies and improves areas related to the new credit losses, hedging, and recognition and measurement standards. This guidance is effective for the same fiscal years in which the original standards are effective or, if already implemented, annual periods beginning after the issuance of this guidance. We adopted this guidance as of January 1, 2020, on a prospective basis. The adoption did not have a material impact on our financial statements. In August 2018, the FASB issued guidance to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by this update. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. We adopted this guidance as of January 1, 2020, on a prospective basis. The adoption did not have a material impact on our financial statements. In August 2018, the FASB issued guidance which modifies the disclosure requirements on fair value measurements by removing, modifying, or adding certain disclosures. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. We adopted this guidance as of January 1, 2020. The adoption did not have a material impact on our financial statements. Please refer to Note 10, Fair Value Measurements , for additional details. In June 2016, the FASB issued guidance which provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments held by a reporting entity, including accounts receivable, at each reporting date. Under the previous guidance, an entity reflected credit losses on financial assets measured on an amortized cost basis only when it was probable that losses had incurred, generally considering only past events and current conditions when determining incurred loss. The new guidance requires the recognition of an allowance that reflects the current estimate of credit losses expected to be incurred over the life of the financial asset, based not only on historical experience and current conditions, but also on reasonable and supportable forecasts. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. We adopted this guidance as of January 1, 2020, on a modified retrospective basis, to the accounts receivable and contract asset balances as of January 1, 2020. Under the current expected credit loss model, we have adopted a provision matrix approach, utilizing historical loss rates based on the number of days past due, adjusted to reflect current economic conditions and forecasts of future economic conditions. The effect of the adoption on the financial statement line items of accounts receivable and contract assets was not material as of January 1, 2020. As a result of our adoption, we recorded a cumulative-effect adjustment of $0.1 million within retained earnings in our condensed consolidated balance sheet as of January 1, 2020, to reflect the incremental estimated lifetime expected credit losses on the accounts receivable balance as of January 1, 2020. We have not presented the amortized cost basis within each credit quality indicator by year of origination as all of our accounts receivable are due within one year or less. Standards Issued Not Yet Adopted In March 2020, the FASB issued guidance which provides optional expedients and exceptions to address the impact of reference rate reform where contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate need to be discontinued. This guidance was effective upon issuance and generally can be applied through December 31, 2022. We are currently evaluat i ng the impact to our financial statements, the transition, and disclosure requirements of this guidance . In December 2019, the FASB issued guidance which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification (“ASC”) Topic 740 and by clarifying and amending existing ASC Topic 740 guidance. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. Early adoption is permitted. We are currently evaluating our adoption timing and the impact that this guidance may have on our financial statements. In August 2018, the FASB issued guidance which modifies the disclosure requirements for defined benefit pension plans and other postretirement plans. The guidance removes disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. This guidance is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. We believe that the adoption of this guidance will not have a material impact on our financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue [Abstract] | |
Revenue from Contract with Customer [Text Block] | RevenueOur revenue results from the sale of goods or services and reflects the consideration to which we expect to be entitled in exchange for those goods or services. We record revenue based on a five-step model, in accordance with ASC Topic 606. Following the identification of a contract with a customer, we identify the performance obligations (goods or services) in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize the revenue when (or as) we satisfy the performance obligations by transferring the promised goods or services to our customers. A good or service is transferred when (or as) the customer obtains control of that good or service. The following table presents the approximate percentage of our net sales by market group: Three Months Ended 2020 2019 Biologics 28 % 26 % Generics 19 % 20 % Pharma 29 % 31 % Contract-Manufactured Products 24 % 23 % 100 % 100 % The following table presents the approximate percentage of our net sales by product category: Three Months Ended 2020 2019 High-Value Components 43 % 43 % Standard Packaging 28 % 30 % Delivery Devices 5 % 4 % Contract-Manufactured Products 24 % 23 % 100 % 100 % The following table presents the approximate percentage of our net sales by geographic location: Three Months Ended 2020 2019 Americas 48 % 46 % Europe, Middle East, Africa 44 % 47 % Asia Pacific 8 % 7 % 100 % 100 % Contract Assets and Liabilities The following table summarizes our contract assets and liabilities, excluding contract assets included in accounts receivable, net: ($ in millions) Contract assets, December 31, 2019 $ 9.8 Contract assets, March 31, 2020 16.4 Change in contract assets - increase (decrease) $ 6.6 Deferred income, December 31, 2019 $ (34.9) Deferred income, March 31, 2020 (41.8) Change in deferred income - decrease (increase) $ (6.9) During the three months ended March 31, 2020, $10.2 million of revenue was recognized that was included in deferred income at the beginning of the year. The majority of the performance obligations within our contracts are satisfied within one year or less. Performance obligations satisfied beyond one year include those relating to a nonrefundable customer payment of $20.0 million received in June 2013 in return for the exclusive use of the SmartDose ® technology platform within a specific therapeutic area. As of March 31, 2020, there was $5.4 million of unearned income related to this payment, of which $0.9 million was included in other current liabilities and $4.5 million was included in other long-term liabilities. The unearned income is being recognized as income on a straight-line basis over the remaining term of the agreement. The agreement does not include a future minimum purchase commitment from the customer. Supply Chain Financing We have entered into supply chain financing agreements with certain banks, pursuant to which we offer for sale certain accounts receivable to such banks from time to time, subject to the terms of the applicable agreements. These transactions result in a reduction in accounts receivable, as the agreements transfer effective control over, and credit risk related to, the receivables to the banks. These agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest in the underlying accounts receivable once sold. As of March 31, 2020 and 2019, we derecognized accounts receivable of $3.3 million and $1.8 million, respectively, under these agreements. Discount fees related to the sale of such accounts receivable on our condensed consolidated income statements for the three months ended March 31, 2020 and 2019 were not material. Voluntary Recall On January 24, 2019, we issued a voluntary recall of our Vial2Bag ® product line due to reports of potential unpredictable or variable dosing under certain conditions. Our fourth quarter 2018 results included an $11.3 million provision for product returns, recorded as a reduction of sales, partially offset by a reduction in cost of goods sold, reflecting our inventory balance for these devices at December 31, 2018. During three months ended March 31, 2019, we recorded a provision of $4.5 million for inventory returns from our customers and related in-house inventory, partially offset by a reduction in our provision for product returns. We continue to work to get the product back on the market. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The following table reconciles the shares used in the calculation of basic net income per share to those used for diluted net income per share: Three Months Ended (in millions) 2020 2019 Net income $ 74.3 $ 55.4 Weighted average common shares outstanding 73.9 74.1 Dilutive effect of equity awards, based on the treasury stock method 1.6 1.2 Weighted average shares assuming dilution 75.5 75.3 During the three months ended March 31, 2020 and 2019, there were 0.1 million and 0.6 million shares, respectively, from stock-based compensation plans not included in the computation of diluted net income per share because their impact was antidilutive. In December 2019, we announced a share repurchase program for calendar-year 2020 authorizing the repurchase of up to 848,000 shares of our common stock from time to time on the open market or in privately-negotiated transactions as permitted under the Securities Exchange Act of 1934 Rule 10b-18. The number of shares repurchased and the timing of such transactions will depend on a variety of factors, including market conditions. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are valued at the lower of cost (on a first-in, first-out basis) and net realizable value. Inventory balances were as follows: ($ in millions) March 31, December 31, Raw materials $ 104.6 $ 100.9 Work in process 43.1 37.4 Finished goods 103.3 97.4 $ 251.0 $ 235.7 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | Leases A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: 1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment); and 2) the customer has the right to control the use of the identified asset. Lease payments included in the measurement of the operating lease right-of-use assets and lease liabilities are comprised of fixed payments (including in-substance fixed payments), variable payments that depend on an index or rate, and the exercise price of a lessee option to purchase the underlying asset if the lessee is reasonably certain to exercise. The components of lease expense were as follows: Three Months Ended ($ in millions) 2020 2019 Operating lease cost $ 3.1 $ 3.2 Short-term lease cost 0.2 0.2 Variable lease cost 0.8 0.6 Total lease cost $ 4.1 $ 4.0 Supplemental cash flow information related to leases were as follows: Three Months Ended ($ in millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3.2 $ 3.1 Right-of-use assets obtained in exchange for new operating lease liabilities $ 2.5 $ 6.8 As of March 31, 2020 and December 31, 2019, the weighted average remaining lease term for operating leases was 11.4 years and 11.7 years, respectively. As of March 31, 2020 and December 31, 2019, the weighted average discount rate was 3.77% and 3.76%, respectively. Maturities of operating lease liabilities were as follows: ($ in millions) March 31, December 31, Year 2020 2019 2020 $ 9.0 $ 12.1 2021 10.9 10.4 2022 9.2 8.6 2023 8.2 7.8 2024 7.7 7.3 Thereafter 41.0 41.8 86.0 88.0 Less: imputed lease interest (15.4) (16.0) Total lease liabilities $ 70.6 $ 72.0 |
Affiliated Companies
Affiliated Companies | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Affiliated Companies | Affiliated Companies At March 31, 2020 and December 31, 2019, the aggregate carrying amount of our investment in affiliated companies that are accounted for under the equity method was $184.3 million and $179.3 million, respectively, and the aggregate carrying amount of our investment in affiliated companies that are not accounted for under the equity method was $13.4 million at both period-ends. We have elected to record these investments, for which fair value was not readily determinable, at cost, less impairment, adjusted for subsequent observable price changes. We test these investments for impairment whenever circumstances indicate that the carrying value of the investments may not be recoverable. On November 1, 2019, in connection with the amendment of certain commercial agreements with Daikyo Seiko, Ltd. (“Daikyo”), we increased our ownership interest from 25% to 49% in Daikyo in exchange for $85.1 million in cash and $4.9 million in shares of our treasury stock to certain stockholders of Daikyo. We believe that the increase in ownership interest will not have a material impact on our financial statements. Our purchases from, and royalty payments made to, affiliates totaled $32.5 million for the three months ended March 31, 2020, as compared to $24.6 million for the same period in 2019. As of March 31, 2020 and December 31, 2019, the payable balance due to affiliates was $22.3 million and $20.8 million, respectively. The majority of these transactions related to a distributorship agreement with Daikyo that allows us to purchase and re-sell Daikyo products. Sales to affiliates were $2.2 million for both the three months ended March 31, 2020 and 2019. As of March 31, 2020 and December 31, 2019, the receivable balance due from affiliates was $2.6 million and $1.9 million, respectively. Please refer to Note 7, Affiliated Companies , to the consolidated financial statements in our 201 9 Annual Report for additional details. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes our long-term debt obligations, net of unamortized debt issuance costs and current maturities. The interest rates shown in parentheses are as of March 31, 2020. ($ in millions) March 31, December 31, Term Loan, due December 31, 2024 (2.78%) $ 89.4 $ 90.0 Series A notes, due July 5, 2022 (3.67%) 42.0 42.0 Series B notes, due July 5, 2024 (3.82%) 53.0 53.0 Series C notes, due July 5, 2027 (4.02%) 73.0 73.0 257.4 258.0 Less: unamortized debt issuance costs 0.7 0.7 Total debt 256.7 257.3 Less: current portion of long-term debt 2.3 2.3 Long-term debt, net $ 254.4 $ 255.0 Please refer to Note 10, Debt , to the consolidated financial statements in our 2019 Annual Report for additional details regarding our debt agreements. Credit Agreement - Credit Facility At March 31, 2020, the borrowing capacity available under our $300.0 million multi-currency revolving credit facility (the “Credit Facility”), including outstanding letters of credit of $2.5 million, was $297.5 million. Credit Agreement Amendment - Term Loan At March 31, 2020, we had $89.4 million in borrowings under the Term Loan, of which $2.3 million was classified as current and $87.1 million was classified as long-term. Please refer to Note 9, Derivative Financial Instruments , for a discussion of the foreign currency hedge associated with the Term Loan. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Our ongoing business operations expose us to various risks, such as fluctuating interest rates, foreign currency exchange rates and increasing commodity prices. To manage these market risks, we periodically enter into derivative financial instruments, such as interest rate swaps, options and foreign exchange contracts for periods consistent with, and for notional amounts equal to or less than, the related underlying exposures. We do not purchase or hold any derivative financial instruments for investment or trading purposes. All derivatives are recorded in our condensed consolidated balance sheet at fair value. Foreign Exchange Rate Risk We have entered into forward exchange contracts, designated as fair value hedges, to manage our exposure to fluctuating foreign exchange rates on cross-currency intercompany loans. As of both March 31, 2020 and December 31, 2019, the total amount of these forward exchange contracts was Singapore Dollar (“SGD”) 601.5 million and $13.4 million. In addition, we have entered into several foreign currency contracts, designated as cash flow hedges, for periods of up to eighteen months, intended to hedge the currency risk associated with a portion of our forecasted transactions denominated in foreign currencies. As of March 31, 2020, we had outstanding foreign currency contracts to purchase and sell certain pairs of currencies, as follows: (in millions) Sell Currency Purchase USD Euro USD 52.7 — 47.0 Yen 9,175.8 45.2 36.2 SGD 59.8 35.2 6.7 In December 2019, we entered into the cross-currency swap for $90 million, which we designated as a hedge of our net investment in Daikyo. The notional amount of the cross-currency swap is ¥9.8 billion ($90 million) and the swap termination date is December 31, 2024. Under the cross-currency swap, we receive floating interest rate payments based on three-month U.S. Dollar (“USD”) LIBOR plus a margin, in return for paying floating interest rate payments based on three-month Japanese Yen (“Yen”) LIBOR plus a margin. Commodity Price Risk Many of our proprietary products are made from synthetic elastomers, which are derived from the petroleum refining process. We purchase the majority of our elastomers via long-term supply contracts, some of which contain clauses that provide for surcharges related to fluctuations in crude oil prices. The following economic hedges did not qualify for hedge accounting treatment since they did not meet the highly effective requirement at inception. From November 2017 through March 2020, we purchased several series of call options for a total of 374,380 barrels of crude oil to mitigate our exposure to such oil-based surcharges and protect operating cash flows with regards to a portion of our forecasted elastomer purchases. As of March 31, 2020, we had outstanding contracts to purchase 128,191 barrels of crude oil from April 2020 to September 2021, at a weighted-average strike price of $68.06 per barrel. Effects of Derivative Instruments on Financial Position and Results of Operations Please refer to Note 10, Fair Value Measurements , for the balance sheet location and fair values of our derivative instruments as of March 31, 2020 and December 31, 2019. The following table summarizes the effects of derivative instruments designated as fair value hedges on the condensed consolidated statements of income: Amount of Gain Three Months Ended Location on Statement of Income ($ in millions) 2020 2019 Fair Value Hedges: Foreign currency hedge contracts $ (2.0) $ (1.9) Other income Total $ (2.0) $ (1.9) We recognize in earnings the initial value of forward point components on a straight-line basis over the life of the fair value hedge. The amounts recognized in earnings, pre-tax, for forward point components for the three months ended March 31, 2020 and 2019 were $2.0 million and $1.9 million, respectively. The following tables summarize the effects of derivative instruments designated as fair value, cash flow, and net investment hedges on other comprehensive income (“OCI”) and earnings, net of tax: Amount of Gain (Loss) Recognized in OCI for the Amount of (Gain) Loss Reclassified from Accumulated OCI into Income for the Location of (Gain) Loss Reclassified from Accumulated OCI into Income Three Months Ended Three Months Ended ($ in millions) 2020 2019 2020 2019 Fair Value Hedges Foreign currency hedge contracts $ 3.6 $ (0.1) $ (1.3) $ (3.2) Other income Total $ 3.6 $ (0.1) $ (1.3) $ (3.2) Cash Flow Hedges: Foreign currency hedge contracts $ 0.1 $ 0.5 $ (0.2) $ (0.2) Net sales Foreign currency hedge contracts 0.4 (0.1) — (0.1) Cost of goods and services sold Total $ 0.5 $ 0.4 $ (0.2) $ (0.3) Net Investment Hedges: Foreign currency-denominated debt $ — $ 0.1 $ — $ — Other income Cross-currency swap (1.2) — — — Other income Total $ (1.2) $ 0.1 $ — $ — The following table summarizes the effects of derivative instruments designated as fair value, cash flow, and net investment hedges by line item in our condensed consolidated statements of income: Three Months Ended ($ in millions) 2020 2019 Net sales $ (0.2) $ (0.2) Cost of goods and services sold — (0.1) Other income (1.3) (3.2) The following table summarizes the effects of derivative instruments not designated as hedges on the condensed consolidated statements of income: Amount of Loss Recognized in Income for the Three Months Ended Location on Statement of Income ($ in millions) 2020 2019 Commodity call options $ 0.2 $ — Cost of goods and services sold Total $ 0.2 $ — For the three months ended March 31, 2020 and 2019, there was no material ineffectiveness related to our hedges. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The following fair value hierarchy classifies the inputs to valuation techniques used to measure fair value into one of three levels: • Level 1 : Unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 : Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3 : Unobservable inputs that reflect the reporting entity’s own assumptions. The following tables present the assets and liabilities recorded at fair value on a recurring basis: Balance at Basis of Fair Value Measurements ($ in millions) March 31, Level 1 Level 2 Level 3 Assets: Deferred compensation assets $ 9.3 $ 9.3 $ — $ — Foreign currency contracts 1.2 — 1.2 — Commodity call options 0.1 — 0.1 — $ 10.6 $ 9.3 $ 1.3 $ — Liabilities: Contingent consideration $ 3.2 $ — $ — $ 3.2 Deferred compensation liabilities 10.2 10.2 — — Cross-currency swap 2.9 — 2.9 — Foreign currency contracts 5.1 — 5.1 — $ 21.4 $ 10.2 $ 8.0 $ 3.2 Balance at Basis of Fair Value Measurements ($ in millions) December 31, Level 1 Level 2 Level 3 Assets: Deferred compensation assets $ 11.3 $ 11.3 $ — $ — Foreign currency contracts 7.7 — 7.7 — Commodity call options 0.1 0.1 $ 19.1 $ 11.3 $ 7.8 $ — Liabilities: Contingent consideration $ 3.3 $ — $ — $ 3.3 Deferred compensation liabilities 12.8 12.8 — — Cross-currency swap 1.4 — 1.4 — Foreign currency contracts 0.3 — 0.3 — $ 17.8 $ 12.8 $ 1.7 $ 3.3 Deferred compensation assets are included within other noncurrent assets and are valued using a market approach based on quoted market prices in an active market. The fair value of our foreign currency contracts, included within other current and other noncurrent assets, as well as other current and other long-term liabilities, is valued using an income approach based on quoted forward foreign exchange rates and spot rates at the reporting date. The fair value of our commodity call options, included within other current and other noncurrent assets, is valued using a market approach. The fair value of our contingent consideration, included within other current and other long-term liabilities, is discussed further in the section related to Level 3 fair value measurements. The fair value of deferred compensation liabilities is based on quoted prices of the underlying employees’ investment selections and is included within other long-term liabilities. The fair value of the cross-currency swap, included within other long-term liabilities, is valued using a market approach. Please refer to Note 9, Derivative Financial Instruments , for further discussion of our derivatives. Level 3 Fair Value Measurements The fair value of the contingent consideration liability related to the SmartDose technology platform (the “SmartDose contingent consideration”) was initially determined using a probability-weighted income approach, and is revalued at each reporting date or more frequently if circumstances dictate. Changes in the fair value of this obligation are recorded as income or expense within other expense (income) in our condensed consolidated statements of income. The significant unobservable inputs used in the fair value measurement of the SmartDose contingent consideration are the sales projections, the probability of success factors, and the discount rate. Significant increases or decreases in any of those inputs in isolation would result in a significantly lower or higher fair value measurement. Sales projections were derived using upside, base and downside forecasted cases for each partnership and applying probability-weighted scenarios of 10%, 50% and 40% to the three cases, respectively, to reflect the likelihood of West meeting the estimated sales projection targets. The probability of success factors included the probabilities of successful FDA approval for each partnership drug, which was estimated in a range of 13% to 100% based on the development phase of each respective drug, and the probability of the successful execution of supply agreements with each partnership, which was estimated in the range of 15% to 100% based on historical, current, and future supply agreements with the respective partnerships. The fair value of this liability utilized a risk-adjusted discount rate of 19% to present value the cash flows. The discount rate is calculated by determining the after-tax required returns on debt and equity and weighting each return by the respective percent of debt and equity to total capital. Key inputs for the discount rate include the risk-free rate on the 20-Year United States Treasury maturity, equity risk premium, company-specific risk premium, pre-tax cost of debt, and U.S. tax rate, among others. As development and commercialization of the SmartDose technology platform progresses, we may need to update the sales projections, the probability of success factors, and the discount rate used. This could result in a material increase or decrease to the SmartDose contingent consideration. The following table provides a summary of changes in our Level 3 fair value measurements: ($ in millions) Balance, December 31, 2018 $ 1.7 Increase in fair value recorded in earnings 2.1 Payments (0.5) Balance, December 31, 2019 3.3 Increase in fair value recorded in earnings — Payments (0.1) Balance, March 31, 2020 $ 3.2 Other Financial Instruments We believe that the carrying amounts of our cash and cash equivalents and accounts receivable approximate their fair values due to their near-term maturities. The estimated fair value of long-term debt is based on quoted market prices for debt issuances with similar terms and maturities and is classified as Level 2 within the fair value hierarchy. At March 31, 2020, the estimated fair |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table presents the changes in the components of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2020: ($ in millions) (Losses) gains on Unrealized gains Defined benefit Foreign Total Balance, December 31, 2019 $ (0.8) $ 0.4 $ (40.3) $ (108.9) $ (149.6) Other comprehensive income (loss) before reclassifications 4.1 — 1.0 (47.3) (42.2) Amounts reclassified out from accumulated other comprehensive income (loss) (1.5) — 1.0 — (0.5) Other comprehensive income (loss), net of tax 2.6 — 2.0 (47.3) (42.7) Balance, March 31, 2020 $ 1.8 $ 0.4 $ (38.3) $ (156.2) $ (192.3) A summary of the reclassifications out of accumulated other comprehensive loss is presented in the following table: ($ in millions) Three Months Ended Location on Statement of Income Detail of components 2020 2019 Gains (losses) on derivatives: Foreign currency contracts $ 0.3 $ 0.2 Net sales Foreign currency contracts 0.1 0.2 Cost of goods and services sold Foreign currency contracts 2.0 4.8 Other income Forward treasury locks (0.1) (0.1) Interest expense Total before tax 2.3 5.1 Tax benefit (expense) (0.8) (1.6) Net of tax $ 1.5 $ 3.5 Amortization of defined benefit pension and other postretirement plans: Prior service credit $ 0.2 $ 0.2 (a) Actuarial losses (0.1) — (a) Settlements (1.4) — (a) Total before tax (1.3) 0.2 Tax benefit (expense) 0.3 (0.1) Net of tax $ (1.0) $ 0.1 Total reclassifications for the period, net of tax $ 0.5 $ 3.6 (a) These components are included in the computation of net periodic benefit cost. Please refer to Note 14, Benefit Plans , for additional details. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Shareholders ’ Equity The following table presents the changes in shareholders’ equity for the three months ended March 31, 2020: Common Shares Issued Common Stock Capital in Excess of Par Value Number of Treasury Shares Treasury Stock Retained earnings Accumulated other comprehensive loss Total (in millions) Balance, December 31, 2019 75.3 $ 18.8 $ 272.7 1.2 $ (118.1) $ 1,549.4 $ (149.6) $ 1,573.2 Effect of modified retrospective application of a new accounting standard (see Note 2) — — — — — (0.1) — (0.1) Net income — — — — — 74.3 — 74.3 Activity related to stock-based compensation — — (5.1) (0.3) 17.9 — — 12.8 Shares purchased under share repurchase program — — — 0.8 (115.5) — — (115.5) Dividends declared ($0.16 per share) — — — — — (11.8) — (11.8) Other comprehensive loss, net of tax — — — — — — (42.7) (42.7) Balance, March 31, 2020 75.3 $ 18.8 $ 267.6 1.7 $ (215.7) $ 1,611.8 $ (192.3) $ 1,490.2 The following table presents the changes in shareholders’ equity for the three months ended March 31, 2019: Common Shares Issued Common Stock Capital in Excess of Par Value Number of Treasury Shares Treasury Stock Retained earnings Accumulated other comprehensive loss Total (in millions) Balance, December 31, 2018 75.3 $ 18.8 $ 282.0 1.2 $ (103.7) $ 1,353.4 $ (154.2) $ 1,396.3 Net income — — — — — 55.4 — 55.4 Activity related to stock-based compensation — — (3.5) (0.2) 14.2 — — 10.7 Shares purchased under share repurchase program — — — 0.8 (83.1) — — (83.1) Dividends declared ($0.15 per share) — — — — — (10.6) — (10.6) Other comprehensive income, net of tax — — — — — — 0.8 0.8 Balance, March 31, 2019 75.3 $ 18.8 $ 278.5 1.8 $ (172.6) $ 1,398.2 $ (153.4) $ 1,369.5 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The West Pharmaceutical Services, Inc. 2016 Omnibus Incentive Compensation Plan (the “2016 Plan”) provides for the granting of stock options, stock appreciation rights, restricted stock awards and performance awards to employees and non-employee directors. A committee of the Board of Directors determines the terms and conditions of awards to be granted. Vesting requirements vary by award. At March 31, 2020, there were 2,750,037 shares remaining in the 2016 Plan for future grants. During the three months ended March 31, 2020, we granted 222,564 stock options at a weighted average exercise price of $173.22 per share based on the grant-date fair value of our stock to employees under the 2016 Plan. The weighted average grant date fair value of options granted was $39.21 per share as determined by the Black-Scholes option valuation model using the following weighted average assumptions: a risk-free interest rate of 1.4%; expected life of 5.7 years based on prior experience; stock volatility of 22.3% based on historical data; and a dividend yield of 0.4%. Stock option expense is recognized over the vesting period, net of forfeitures. During the three months ended March 31, 2020, we granted 50,459 stock-settled performance share unit (“PSU”) awards at a weighted average grant-date fair value of $173.22 per share to eligible employees. These awards are earned based on the Company’s performance against pre-established targets, including annual growth rate of revenue and return on invested capital, over a specified performance period. Depending on the achievement of the targets, recipients of stock-settled PSU awards are entitled to receive a certain number of shares of common stock. Shares earned under PSU awards may vary from 0% to 200% of an employee’s targeted award. The fair value of stock-settled PSU awards is based on the market price of our stock at the grant date and is recognized as expense over the performance period, adjusted for estimated target outcomes and net of forfeitures. During the three months ended March 31, 2020, we granted 5,424 stock-settled restricted share unit (“RSU”) awards at a weighted average grant-date fair value of $173.22 per share to eligible employees. These awards are earned over a specified performance period. The fair value of stock-settled RSU awards is based on the market price of our stock at the grant date and is recognized as expense over the vesting period, net of forfeitures. |
Benefit Plans
Benefit Plans | 3 Months Ended |
Mar. 31, 2020 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Benefit Plans | Benefit Plans The components of net periodic benefit cost for the three months ended March 31 were as follows: Pension benefits Other retirement benefits Total ($ in millions) 2020 2019 2020 2019 2020 2019 Service cost $ 0.3 $ 0.4 $ — $ — $ 0.3 $ 0.4 Interest cost 1.9 2.4 0.1 0.1 2.0 2.5 Expected return on assets (3.0) (2.9) — — (3.0) (2.9) Amortization of prior service credit — — (0.2) (0.2) (0.2) (0.2) Recognized actuarial losses (gains) 0.5 0.5 (0.4) (0.5) 0.1 — Settlements 1.4 — — — 1.4 — Net periodic benefit cost $ 1.1 $ 0.4 $ (0.5) $ (0.6) $ 0.6 $ (0.2) Pension benefits Other retirement benefits Total ($ in millions) 2020 2019 2020 2019 2020 2019 U.S. plans $ 0.8 $ (0.1) $ (0.5) $ (0.6) $ 0.3 $ (0.7) International plans 0.3 0.5 — — 0.3 0.5 Net periodic benefit cost $ 1.1 $ 0.4 $ (0.5) $ (0.6) $ 0.6 $ (0.2) During the three months ended March 31, 2020, we recorded a $1.4 million pension settlement charge within other nonoperating expense (income), as we determined that normal-course lump-sum payments for our U.S. qualified defined benefit pension plan exceeded the threshold for settlement accounting under U.S. GAAP for the year. |
Other Expense
Other Expense | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Expense | Other Income Other expense (income) consists of: Three Months Ended ($ in millions) 2020 2019 Restructuring and related charges: Severance and post-employment benefits $ — $ 0.3 Other charges — 0.3 Total restructuring and related charges — 0.6 Development and licensing income (0.2) (0.2) Contingent consideration — 0.2 Foreign exchange transaction gains (3.5) (3.8) Other items 0.2 0.9 Total other income $ (3.5) $ (2.3) Restructuring and Related Charges In February 2018, our Board of Directors approved a restructuring plan designed to realign our manufacturing capacity with demand. These changes were expected to be implemented over a period of up to twenty-four months from the date of approval. The plan was expected to require restructuring and related charges of approximately $16.0 million. Since its approval, we have recorded $13.7 million in restructuring and related charges associated with this plan. The plan was considered complete as of December 31, 2019. During the three months ended March 31, 2019, we recorded $0.6 million in restructuring and related charges associated with this plan, consisting of $0.3 million for severance charges and $0.3 million for other non-cash charges. The following table presents activity related to our restructuring obligations related to our 2018 restructuring plan: ($ in millions) Severance Asset-related charges Other charges Total Balance, December 31, 2019 $ 1.4 $ — $ — $ 1.4 Cash payments (0.6) — — (0.6) Balance, March 31, 2020 $ 0.8 $ — $ — $ 0.8 On February 15, 2016, our Board of Directors approved a restructuring plan designed to repurpose several of our production facilities in support of growing high-value proprietary products and to realign operational and commercial activities to meet the needs of our new market-focused commercial organization. As of March 31, 2020, we completed our remaining restructuring obligations related to the 2016 restructuring plan. Other Items During both the three months ended March 31, 2020 and 2019, we recorded development income of $0.2 million related to a nonrefundable customer payment of $20.0 million received in June 2013 in return for the exclusive use of the SmartDose technology platform within a specific therapeutic area. Please refer to Note 3, Revenue , for additional information. Contingent consideration represents changes in the fair value of the SmartDose contingent consideration. Please refer to Note 10, Fair Value Measurements , for additional details. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 before taxes, adjusted for the impact of discrete quarterly items. The provision for income taxes was $15.0 million and $16.1 million for the three months ended March 31, 2020 and 2019, respectively, and the effective tax rate was 17.4% and 23.1%, respectively. The decrease in the effective tax rate is primarily due to an increase in stock-based compensation deductions for the three months ended March 31, 2020 as compared to the same period in 2019. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesFrom time to time, we are involved in product liability matters and other legal proceedings and claims generally incidental to our normal business activities. We accrue for loss contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. While the outcome of current proceedings cannot be accurately predicted, we believe their ultimate resolution should not have a material adverse effect on our business, financial condition, results of operations or liquidity. There have been no significant changes to the commitments and contingencies included in our 201 9 Annual Report . |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our business operations are organized into two reportable segments, Proprietary Products and Contract-Manufactured Products. Our Proprietary Products reportable segment offers proprietary packaging, containment and drug delivery products, along with analytical lab and other services, to biologic, generic and pharmaceutical drug customers. Our Contract-Manufactured Products reportable segment serves as a fully integrated business, focused on the design, manufacture, and automated assembly of complex devices, primarily for pharmaceutical, diagnostic, and medical device customers. The Chief Operating Decision Maker (“CODM”) evaluates the performance of our segments based upon, among other things, segment net sales and operating profit. Segment operating profit excludes general corporate costs, which include executive and director compensation, stock-based compensation, adjustments to annual incentive plan expense for over- or under-attainment of targets, certain pension and other retirement benefit costs, and other corporate facilities and administrative expenses not allocated to the segments. Also excluded are items that the CODM considers not representative of ongoing operations. Such items are referred to as other unallocated items and generally include restructuring and related charges, certain asset impairments and other specifically-identified income or expense items. The following table presents information about our reportable segments, reconciled to consolidated totals: Three Months Ended ($ in millions) 2020 2019 Net sales: Proprietary Products $ 373.5 $ 340.4 Contract-Manufactured Products 118.1 103.1 Intersegment sales elimination (0.1) — Consolidated net sales $ 491.5 $ 443.5 Operating profit (loss): Proprietary Products $ 93.2 $ 77.0 Contract-Manufactured Products 12.8 10.5 Corporate (18.0) (16.2) Other unallocated items — (0.6) Total operating profit $ 88.0 $ 70.7 Interest expense 2.0 2.3 Interest income (0.8) (0.9) Other nonoperating expense (income) 0.3 (0.6) Income before income taxes $ 86.5 $ 69.9 The intersegment sales elimination, which is required for the presentation of consolidated net sales, represents the elimination of components sold between our segments. Other unallocated items during the three months ended March 31, 2019 consisted of $0.6 million in restructuring and related charges. Please refer to Note 15, Other Income , for further discussion of these items. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation : The condensed consolidated financial statements included in this report are unaudited and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting and U.S. Securities and Exchange Commission (“SEC”) regulations. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, these financial statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the financial position, results of operations, cash flows and the change in equity for the periods presented. The condensed consolidated financial statements for the three months ended March 31, 2020 should be read in conjunction with the consolidated financial statements and notes thereto of West Pharmaceutical Services, Inc. and its majority-owned subsidiaries (which may be referred to as “West”, the “Company”, “we”, “us” or “our”) appearing in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “ 2019 Annual Report ”). The results of operations for any interim period are not necessarily indicative of results for the full year. West has been actively monitoring the novel coronavirus (“COVID-19”) situation and its impact globally. The financial results for the three months ended March 31, 2020 were not significantly impacted by COVID-19 and our production facilities continued to operate during the quarter as they had prior to the COVID-19 pandemic with very little change, other than for enhanced safety measures intended to prevent the spread of the virus. The remote working arrangements and travel restrictions imposed by various governments had limited impact on our ability to maintain operations during the quarter, as our manufacturing operations have generally been exempted from stay-at-home orders. |
New Accounting Standards | Recently Adopted Standards In April 2019, the Financial Accounting Standards Board (“FASB”) issued guidance which clarifies and improves areas related to the new credit losses, hedging, and recognition and measurement standards. This guidance is effective for the same fiscal years in which the original standards are effective or, if already implemented, annual periods beginning after the issuance of this guidance. We adopted this guidance as of January 1, 2020, on a prospective basis. The adoption did not have a material impact on our financial statements. In August 2018, the FASB issued guidance to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by this update. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. We adopted this guidance as of January 1, 2020, on a prospective basis. The adoption did not have a material impact on our financial statements. In August 2018, the FASB issued guidance which modifies the disclosure requirements on fair value measurements by removing, modifying, or adding certain disclosures. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. We adopted this guidance as of January 1, 2020. The adoption did not have a material impact on our financial statements. Please refer to Note 10, Fair Value Measurements , for additional details. In June 2016, the FASB issued guidance which provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments held by a reporting entity, including accounts receivable, at each reporting date. Under the previous guidance, an entity reflected credit losses on financial assets measured on an amortized cost basis only when it was probable that losses had incurred, generally considering only past events and current conditions when determining incurred loss. The new guidance requires the recognition of an allowance that reflects the current estimate of credit losses expected to be incurred over the life of the financial asset, based not only on historical experience and current conditions, but also on reasonable and supportable forecasts. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. We adopted this guidance as of January 1, 2020, on a modified retrospective basis, to the accounts receivable and contract asset balances as of January 1, 2020. Under the current expected credit loss model, we have adopted a provision matrix approach, utilizing historical loss rates based on the number of days past due, adjusted to reflect current economic conditions and forecasts of future economic conditions. The effect of the adoption on the financial statement line items of accounts receivable and contract assets was not material as of January 1, 2020. As a result of our adoption, we recorded a cumulative-effect adjustment of $0.1 million within retained earnings in our condensed consolidated balance sheet as of January 1, 2020, to reflect the incremental estimated lifetime expected credit losses on the accounts receivable balance as of January 1, 2020. We have not presented the amortized cost basis within each credit quality indicator by year of origination as all of our accounts receivable are due within one year or less. Standards Issued Not Yet Adopted In March 2020, the FASB issued guidance which provides optional expedients and exceptions to address the impact of reference rate reform where contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate need to be discontinued. This guidance was effective upon issuance and generally can be applied through December 31, 2022. We are currently evaluat i ng the impact to our financial statements, the transition, and disclosure requirements of this guidance . In December 2019, the FASB issued guidance which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification (“ASC”) Topic 740 and by clarifying and amending existing ASC Topic 740 guidance. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. Early adoption is permitted. We are currently evaluating our adoption timing and the impact that this guidance may have on our financial statements. In August 2018, the FASB issued guidance which modifies the disclosure requirements for defined benefit pension plans and other postretirement plans. The guidance removes disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. This guidance is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. We believe that the adoption of this guidance will not have a material impact on our financial statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents the approximate percentage of our net sales by market group: Three Months Ended 2020 2019 Biologics 28 % 26 % Generics 19 % 20 % Pharma 29 % 31 % Contract-Manufactured Products 24 % 23 % 100 % 100 % The following table presents the approximate percentage of our net sales by product category: Three Months Ended 2020 2019 High-Value Components 43 % 43 % Standard Packaging 28 % 30 % Delivery Devices 5 % 4 % Contract-Manufactured Products 24 % 23 % 100 % 100 % The following table presents the approximate percentage of our net sales by geographic location: Three Months Ended 2020 2019 Americas 48 % 46 % Europe, Middle East, Africa 44 % 47 % Asia Pacific 8 % 7 % 100 % 100 % |
Change in Contract with Customer, Asset and Liability [Abstract] | The following table summarizes our contract assets and liabilities, excluding contract assets included in accounts receivable, net: ($ in millions) Contract assets, December 31, 2019 $ 9.8 Contract assets, March 31, 2020 16.4 Change in contract assets - increase (decrease) $ 6.6 Deferred income, December 31, 2019 $ (34.9) Deferred income, March 31, 2020 (41.8) Change in deferred income - decrease (increase) $ (6.9) |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic to Diluted Net Income Per Share | The following table reconciles the shares used in the calculation of basic net income per share to those used for diluted net income per share: Three Months Ended (in millions) 2020 2019 Net income $ 74.3 $ 55.4 Weighted average common shares outstanding 73.9 74.1 Dilutive effect of equity awards, based on the treasury stock method 1.6 1.2 Weighted average shares assuming dilution 75.5 75.3 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories are valued at the lower of cost (on a first-in, first-out basis) and net realizable value. Inventory balances were as follows: ($ in millions) March 31, December 31, Raw materials $ 104.6 $ 100.9 Work in process 43.1 37.4 Finished goods 103.3 97.4 $ 251.0 $ 235.7 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | The components of lease expense were as follows: Three Months Ended ($ in millions) 2020 2019 Operating lease cost $ 3.1 $ 3.2 Short-term lease cost 0.2 0.2 Variable lease cost 0.8 0.6 Total lease cost $ 4.1 $ 4.0 |
Lessee, Lease Cash Flow and Supplemental Information [Table Text Block] | Supplemental cash flow information related to leases were as follows: Three Months Ended ($ in millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3.2 $ 3.1 Right-of-use assets obtained in exchange for new operating lease liabilities $ 2.5 $ 6.8 |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Maturities of operating lease liabilities were as follows: ($ in millions) March 31, December 31, Year 2020 2019 2020 $ 9.0 $ 12.1 2021 10.9 10.4 2022 9.2 8.6 2023 8.2 7.8 2024 7.7 7.3 Thereafter 41.0 41.8 86.0 88.0 Less: imputed lease interest (15.4) (16.0) Total lease liabilities $ 70.6 $ 72.0 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt Obligations, Net of Current Maturities | The following table summarizes our long-term debt obligations, net of unamortized debt issuance costs and current maturities. The interest rates shown in parentheses are as of March 31, 2020. ($ in millions) March 31, December 31, Term Loan, due December 31, 2024 (2.78%) $ 89.4 $ 90.0 Series A notes, due July 5, 2022 (3.67%) 42.0 42.0 Series B notes, due July 5, 2024 (3.82%) 53.0 53.0 Series C notes, due July 5, 2027 (4.02%) 73.0 73.0 257.4 258.0 Less: unamortized debt issuance costs 0.7 0.7 Total debt 256.7 257.3 Less: current portion of long-term debt 2.3 2.3 Long-term debt, net $ 254.4 $ 255.0 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Foreign Currency Contracts | As of March 31, 2020, we had outstanding foreign currency contracts to purchase and sell certain pairs of currencies, as follows: (in millions) Sell Currency Purchase USD Euro USD 52.7 — 47.0 Yen 9,175.8 45.2 36.2 SGD 59.8 35.2 6.7 |
Effects of Derivative Instruments on Other Comprehensive Income ('OCI') and Earnings | The following table summarizes the effects of derivative instruments designated as fair value hedges on the condensed consolidated statements of income: Amount of Gain Three Months Ended Location on Statement of Income ($ in millions) 2020 2019 Fair Value Hedges: Foreign currency hedge contracts $ (2.0) $ (1.9) Other income Total $ (2.0) $ (1.9) We recognize in earnings the initial value of forward point components on a straight-line basis over the life of the fair value hedge. The amounts recognized in earnings, pre-tax, for forward point components for the three months ended March 31, 2020 and 2019 were $2.0 million and $1.9 million, respectively. The following tables summarize the effects of derivative instruments designated as fair value, cash flow, and net investment hedges on other comprehensive income (“OCI”) and earnings, net of tax: Amount of Gain (Loss) Recognized in OCI for the Amount of (Gain) Loss Reclassified from Accumulated OCI into Income for the Location of (Gain) Loss Reclassified from Accumulated OCI into Income Three Months Ended Three Months Ended ($ in millions) 2020 2019 2020 2019 Fair Value Hedges Foreign currency hedge contracts $ 3.6 $ (0.1) $ (1.3) $ (3.2) Other income Total $ 3.6 $ (0.1) $ (1.3) $ (3.2) Cash Flow Hedges: Foreign currency hedge contracts $ 0.1 $ 0.5 $ (0.2) $ (0.2) Net sales Foreign currency hedge contracts 0.4 (0.1) — (0.1) Cost of goods and services sold Total $ 0.5 $ 0.4 $ (0.2) $ (0.3) Net Investment Hedges: Foreign currency-denominated debt $ — $ 0.1 $ — $ — Other income Cross-currency swap (1.2) — — — Other income Total $ (1.2) $ 0.1 $ — $ — The following table summarizes the effects of derivative instruments designated as fair value, cash flow, and net investment hedges by line item in our condensed consolidated statements of income: Three Months Ended ($ in millions) 2020 2019 Net sales $ (0.2) $ (0.2) Cost of goods and services sold — (0.1) Other income (1.3) (3.2) The following table summarizes the effects of derivative instruments not designated as hedges on the condensed consolidated statements of income: Amount of Loss Recognized in Income for the Three Months Ended Location on Statement of Income ($ in millions) 2020 2019 Commodity call options $ 0.2 $ — Cost of goods and services sold Total $ 0.2 $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following tables present the assets and liabilities recorded at fair value on a recurring basis: Balance at Basis of Fair Value Measurements ($ in millions) March 31, Level 1 Level 2 Level 3 Assets: Deferred compensation assets $ 9.3 $ 9.3 $ — $ — Foreign currency contracts 1.2 — 1.2 — Commodity call options 0.1 — 0.1 — $ 10.6 $ 9.3 $ 1.3 $ — Liabilities: Contingent consideration $ 3.2 $ — $ — $ 3.2 Deferred compensation liabilities 10.2 10.2 — — Cross-currency swap 2.9 — 2.9 — Foreign currency contracts 5.1 — 5.1 — $ 21.4 $ 10.2 $ 8.0 $ 3.2 Balance at Basis of Fair Value Measurements ($ in millions) December 31, Level 1 Level 2 Level 3 Assets: Deferred compensation assets $ 11.3 $ 11.3 $ — $ — Foreign currency contracts 7.7 — 7.7 — Commodity call options 0.1 0.1 $ 19.1 $ 11.3 $ 7.8 $ — Liabilities: Contingent consideration $ 3.3 $ — $ — $ 3.3 Deferred compensation liabilities 12.8 12.8 — — Cross-currency swap 1.4 — 1.4 — Foreign currency contracts 0.3 — 0.3 — $ 17.8 $ 12.8 $ 1.7 $ 3.3 |
Summary of Changes in Level 3 Fair Value Measurements | The following table provides a summary of changes in our Level 3 fair value measurements: ($ in millions) Balance, December 31, 2018 $ 1.7 Increase in fair value recorded in earnings 2.1 Payments (0.5) Balance, December 31, 2019 3.3 Increase in fair value recorded in earnings — Payments (0.1) Balance, March 31, 2020 $ 3.2 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The following table presents the changes in the components of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2020: ($ in millions) (Losses) gains on Unrealized gains Defined benefit Foreign Total Balance, December 31, 2019 $ (0.8) $ 0.4 $ (40.3) $ (108.9) $ (149.6) Other comprehensive income (loss) before reclassifications 4.1 — 1.0 (47.3) (42.2) Amounts reclassified out from accumulated other comprehensive income (loss) (1.5) — 1.0 — (0.5) Other comprehensive income (loss), net of tax 2.6 — 2.0 (47.3) (42.7) Balance, March 31, 2020 $ 1.8 $ 0.4 $ (38.3) $ (156.2) $ (192.3) |
Reclassification out of Accumulated Other Comprehensive Loss | A summary of the reclassifications out of accumulated other comprehensive loss is presented in the following table: ($ in millions) Three Months Ended Location on Statement of Income Detail of components 2020 2019 Gains (losses) on derivatives: Foreign currency contracts $ 0.3 $ 0.2 Net sales Foreign currency contracts 0.1 0.2 Cost of goods and services sold Foreign currency contracts 2.0 4.8 Other income Forward treasury locks (0.1) (0.1) Interest expense Total before tax 2.3 5.1 Tax benefit (expense) (0.8) (1.6) Net of tax $ 1.5 $ 3.5 Amortization of defined benefit pension and other postretirement plans: Prior service credit $ 0.2 $ 0.2 (a) Actuarial losses (0.1) — (a) Settlements (1.4) — (a) Total before tax (1.3) 0.2 Tax benefit (expense) 0.3 (0.1) Net of tax $ (1.0) $ 0.1 Total reclassifications for the period, net of tax $ 0.5 $ 3.6 (a) These components are included in the computation of net periodic benefit cost. Please refer to Note 14, Benefit Plans , for additional details. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Schedule of Stockholders Equity [Table Text Block] | The following table presents the changes in shareholders’ equity for the three months ended March 31, 2020: Common Shares Issued Common Stock Capital in Excess of Par Value Number of Treasury Shares Treasury Stock Retained earnings Accumulated other comprehensive loss Total (in millions) Balance, December 31, 2019 75.3 $ 18.8 $ 272.7 1.2 $ (118.1) $ 1,549.4 $ (149.6) $ 1,573.2 Effect of modified retrospective application of a new accounting standard (see Note 2) — — — — — (0.1) — (0.1) Net income — — — — — 74.3 — 74.3 Activity related to stock-based compensation — — (5.1) (0.3) 17.9 — — 12.8 Shares purchased under share repurchase program — — — 0.8 (115.5) — — (115.5) Dividends declared ($0.16 per share) — — — — — (11.8) — (11.8) Other comprehensive loss, net of tax — — — — — — (42.7) (42.7) Balance, March 31, 2020 75.3 $ 18.8 $ 267.6 1.7 $ (215.7) $ 1,611.8 $ (192.3) $ 1,490.2 | The following table presents the changes in shareholders’ equity for the three months ended March 31, 2019: Common Shares Issued Common Stock Capital in Excess of Par Value Number of Treasury Shares Treasury Stock Retained earnings Accumulated other comprehensive loss Total (in millions) Balance, December 31, 2018 75.3 $ 18.8 $ 282.0 1.2 $ (103.7) $ 1,353.4 $ (154.2) $ 1,396.3 Net income — — — — — 55.4 — 55.4 Activity related to stock-based compensation — — (3.5) (0.2) 14.2 — — 10.7 Shares purchased under share repurchase program — — — 0.8 (83.1) — — (83.1) Dividends declared ($0.15 per share) — — — — — (10.6) — (10.6) Other comprehensive income, net of tax — — — — — — 0.8 0.8 Balance, March 31, 2019 75.3 $ 18.8 $ 278.5 1.8 $ (172.6) $ 1,398.2 $ (153.4) $ 1,369.5 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Schedule of Components of Net Periodic Benefit Cost | The components of net periodic benefit cost for the three months ended March 31 were as follows: Pension benefits Other retirement benefits Total ($ in millions) 2020 2019 2020 2019 2020 2019 Service cost $ 0.3 $ 0.4 $ — $ — $ 0.3 $ 0.4 Interest cost 1.9 2.4 0.1 0.1 2.0 2.5 Expected return on assets (3.0) (2.9) — — (3.0) (2.9) Amortization of prior service credit — — (0.2) (0.2) (0.2) (0.2) Recognized actuarial losses (gains) 0.5 0.5 (0.4) (0.5) 0.1 — Settlements 1.4 — — — 1.4 — Net periodic benefit cost $ 1.1 $ 0.4 $ (0.5) $ (0.6) $ 0.6 $ (0.2) Pension benefits Other retirement benefits Total ($ in millions) 2020 2019 2020 2019 2020 2019 U.S. plans $ 0.8 $ (0.1) $ (0.5) $ (0.6) $ 0.3 $ (0.7) International plans 0.3 0.5 — — 0.3 0.5 Net periodic benefit cost $ 1.1 $ 0.4 $ (0.5) $ (0.6) $ 0.6 $ (0.2) During the three months ended March 31, 2020, we recorded a $1.4 million pension settlement charge within other nonoperating expense (income), as we determined that normal-course lump-sum payments for our U.S. qualified defined benefit pension plan exceeded the threshold for settlement accounting under U.S. GAAP for the year. |
Other Expense (Tables)
Other Expense (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Expense | Other expense (income) consists of: Three Months Ended ($ in millions) 2020 2019 Restructuring and related charges: Severance and post-employment benefits $ — $ 0.3 Other charges — 0.3 Total restructuring and related charges — 0.6 Development and licensing income (0.2) (0.2) Contingent consideration — 0.2 Foreign exchange transaction gains (3.5) (3.8) Other items 0.2 0.9 Total other income $ (3.5) $ (2.3) |
Schedule of Restructuring Reserve | The following table presents activity related to our restructuring obligations related to our 2018 restructuring plan: ($ in millions) Severance Asset-related charges Other charges Total Balance, December 31, 2019 $ 1.4 $ — $ — $ 1.4 Cash payments (0.6) — — (0.6) Balance, March 31, 2020 $ 0.8 $ — $ — $ 0.8 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | The following table presents information about our reportable segments, reconciled to consolidated totals: Three Months Ended ($ in millions) 2020 2019 Net sales: Proprietary Products $ 373.5 $ 340.4 Contract-Manufactured Products 118.1 103.1 Intersegment sales elimination (0.1) — Consolidated net sales $ 491.5 $ 443.5 Operating profit (loss): Proprietary Products $ 93.2 $ 77.0 Contract-Manufactured Products 12.8 10.5 Corporate (18.0) (16.2) Other unallocated items — (0.6) Total operating profit $ 88.0 $ 70.7 Interest expense 2.0 2.3 Interest income (0.8) (0.9) Other nonoperating expense (income) 0.3 (0.6) Income before income taxes $ 86.5 $ 69.9 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Business Combinations (Details) $ in Millions | Apr. 01, 2019USD ($) |
Business Combinations [Abstract] | |
Business acquisition, transaction costs | $ 18.9 |
Business combination, recognized inventory | 4.5 |
Business combination, recognized property, plant, and equipment | 0.6 |
Business combination, recognized goodwill | 2.6 |
Business combination, recognized intangible assets | $ 11.2 |
New Accounting Standards (Detai
New Accounting Standards (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained Earnings (Accumulated Deficit) | $ 1,611.8 | $ 1,549.4 | |
Accounting Standards Update 2016-13 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained Earnings (Accumulated Deficit) | $ 0.1 |
Revenue Recognition (Details)
Revenue Recognition (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 100.00% | 100.00% |
Revenue Benchmark [Member] | Product Concentration Risk [Member] | High-Value Components [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 43.00% | 43.00% |
Revenue Benchmark [Member] | Product Concentration Risk [Member] | Standard Packaging [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 28.00% | 30.00% |
Revenue Benchmark [Member] | Product Concentration Risk [Member] | Delivery Devices [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 5.00% | 4.00% |
Revenue Benchmark [Member] | Product Concentration Risk [Member] | Contract-Manufactured Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 24.00% | 23.00% |
Biologics [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 28.00% | 26.00% |
Generics [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 19.00% | 20.00% |
Pharma [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 29.00% | 31.00% |
Contract-Manufactured Products [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 24.00% | 23.00% |
Americas [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 48.00% | 46.00% |
Europe, Middle East, Africa [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 44.00% | 47.00% |
Asia Pacific [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of net sales | 8.00% | 7.00% |
Contracts and Liabilities (Deta
Contracts and Liabilities (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Contract assets, December 31, 2019 | $ 9.8 |
Contract assets, March 31, 2020 | 16.4 |
Change in contract assets - increase (decrease) | 6.6 |
Deferred income, December 31, 2019 | (34.9) |
Deferred income, March 31, 2020 | (41.8) |
Change in deferred income - decrease (increase) | (6.9) |
Revenue recognized that was included in the deferred income balance | 10.2 |
SmartDose [Member] | |
Deferred income, March 31, 2020 | (5.4) |
Deferred income, current | 0.9 |
Deferred income, noncurrent | $ 4.5 |
Revenue Supply Chain Financing
Revenue Supply Chain Financing (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Mar. 31, 2019 |
Supply Chain Financing [Abstract] | ||
Sales of certain accounts receivable | $ 3.3 | $ 1.8 |
Revenue Voluntary Recall (Detai
Revenue Voluntary Recall (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Voluntary Recall [Abstract] | ||
Provision for Product Returns | $ 4.5 | $ 11.3 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Net income | $ 74.3 | $ 55.4 | |
Weighted average common shares outstanding (in shares) | 73,900,000 | 74,100,000 | |
Dilutive effect of equity awards, based on the treasury stock method (in shares) | 1,600,000 | 1,200,000 | |
Weighted average shares assuming dilution (in shares) | 75,500,000 | 75,300,000 | |
Antidilutive options excluded from computation of diluted net income per share (in shares) | 100,000 | 600,000 | |
Stock repurchase program, shares authorized | 848,000 | ||
Stock repurchase program, shares purchased | 761,500 | ||
Stock purchase program, cost of shares purchased | $ 115.5 | $ 83.1 | |
Stock repurchase program, average price per share | $ 151.65 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 104.6 | $ 100.9 |
Work in process | 43.1 | 37.4 |
Finished goods | 103.3 | 97.4 |
Total inventories | $ 251 | $ 235.7 |
Lease Cost (Details)
Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease, Cost [Abstract] | ||
Operating lease cost | $ 3.1 | $ 3.2 |
Short-term lease cost | 0.2 | 0.2 |
Variable lease cost | 0.8 | 0.6 |
Total lease cost | $ 4.1 | $ 4 |
Lease Cash Flow and Supplementa
Lease Cash Flow and Supplemental Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease Cash Flow and Supplemental Information [Abstract] | ||
Operating lease payments | $ 3.2 | $ 3.1 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 2.5 | $ 6.8 |
Lease Weighted Average (Details
Lease Weighted Average (Details) | Mar. 31, 2020 | Dec. 31, 2019 |
Lease Cash Flow and Supplemental Information [Abstract] | ||
Weighted average remaining lease term | 11 years 4 months 24 days | 11 years 8 months 12 days |
Weighted average discount rate | 3.77% | 3.76% |
Maturities of Operating Lease L
Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 | $ 9 | $ 12.1 |
2021 | 10.9 | 10.4 |
2022 | 9.2 | 8.6 |
2023 | 8.2 | 7.8 |
2024 | 7.7 | 7.3 |
Thereafter | 41 | 41.8 |
Operating leases liabilities payments due | 86 | 88 |
Less: imputed lease interest | (15.4) | (16) |
Total lease liabilities | $ 70.6 | $ 72 |
Affiliated Companies (Details)
Affiliated Companies (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Nov. 01, 2019 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||||
Purchases and royalty payments made to affiliates | $ 32.5 | $ 24.6 | |||
Amount due and payable to affiliates | 22.3 | $ 20.8 | |||
Sales to affiliates | 2.2 | $ 2.2 | |||
Amount receivable from affiliates | 2.6 | 1.9 | |||
Purchase of investment in affiliated companies in cash | 85.1 | ||||
Purchase of investment in affiliated companies | 4.9 | ||||
Carrying amount, equity-method investments | 184.3 | 179.3 | |||
Carrying amount, cost-method investments | $ 13.4 | $ 13.4 | |||
Daikyo Seiko, Ltd. (Daikyo) [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 49.00% | 25.00% |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 257.4 | $ 258 |
Unamortized debt issuance costs | 0.7 | 0.7 |
Long-term debt | 256.7 | 257.3 |
Current portion of long-term debt | 2.3 | 2.3 |
Long-term debt, excluding current portion | $ 254.4 | $ 255 |
Term Loan Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 2.78% | 2.78% |
Long-term debt, gross | $ 89.4 | $ 90 |
Current portion of long-term debt | 2.3 | |
Long-term debt, excluding current portion | $ 87.1 | |
Series A Notes, Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 3.67% | 3.67% |
Long-term debt, gross | $ 42 | $ 42 |
Series B Notes, Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 3.82% | 3.82% |
Long-term debt, gross | $ 53 | $ 53 |
Series C Notes, Due 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 4.02% | 4.02% |
Long-term debt, gross | $ 73 | $ 73 |
Credit Agreement (Details)
Credit Agreement (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | $ 257.4 | $ 258 |
Current portion of long-term debt | 2.3 | 2.3 |
Long-term debt | 254.4 | 255 |
Revolving credit facility, Due 2024 [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, unused commitment level | 297.5 | |
Revolving credit facility, Due 2024 [Member] | Letter of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Line of Credit | 2.5 | |
Term Loan Due 2024 [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | 89.4 | $ 90 |
Current portion of long-term debt | 2.3 | |
Long-term debt | $ 87.1 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Textuals) (Details) € in Millions, ¥ in Millions, $ in Millions, $ in Millions | 28 Months Ended | ||||||
Mar. 31, 2020USD ($)bbl$ / bbl | Dec. 31, 2020JPY (¥) | Mar. 31, 2020SGD ($)bbl$ / bbl | Mar. 31, 2020JPY (¥)bbl$ / bbl | Mar. 31, 2020EUR (€)bbl$ / bbl | Dec. 31, 2019USD ($) | Dec. 31, 2019SGD ($) | |
Options Held [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Nonmonetary Notional Amount | bbl | 128,191 | 128,191 | 128,191 | 128,191 | |||
Derivative, Average Price Risk Option Strike Price | $ / bbl | 68.06 | 68.06 | 68.06 | 68.06 | |||
Derivative, Nonmonetary Notional Amount, Volume | bbl | 374,380 | ||||||
Singapore, Dollars | Forward Contracts [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | $ 601.5 | $ 601.5 | |||||
United States of America, Dollars | Forward Contracts [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | $ 13.4 | $ 13.4 | |||||
United States of America, Dollars | Cross Currency Interest Rate Contract [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | 90 | ||||||
United States of America, Dollars | Net Investment Hedges [Member] | Cross Currency Interest Rate Contract [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | $ 90 | ||||||
Japan, Yen | Cross Currency Interest Rate Contract [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | ¥ | ¥ 9,800 | ||||||
Long [Member] | Designated as Hedging Instrument [Member] | Singapore, Dollars | Foreign Exchange Forward [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | $ 59.8 | ||||||
Long [Member] | Designated as Hedging Instrument [Member] | United States of America, Dollars | Foreign Exchange Forward [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | 52.7 | ||||||
Long [Member] | Designated as Hedging Instrument [Member] | Japan, Yen | Foreign Exchange Forward [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | ¥ | ¥ 9,175.8 | ||||||
Short [Member] | Designated as Hedging Instrument [Member] | Singapore, Dollars | Foreign Exchange Forward [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | 35.2 | € 6.7 | |||||
Short [Member] | Designated as Hedging Instrument [Member] | United States of America, Dollars | Foreign Exchange Forward [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | 0 | 47 | |||||
Short [Member] | Designated as Hedging Instrument [Member] | Japan, Yen | Foreign Exchange Forward [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | $ 45.2 | € 36.2 |
Effects of Derivative Instrumen
Effects of Derivative Instruments on OCI and Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value Hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ 3.6 | $ (0.1) |
Derivative, (Gain) Loss on Derivative, Net | (2) | (1.9) |
Amount of (gain) loss reclassified from accumulated OCI into income | (1.3) | (3.2) |
Derivative, Forward Point Components, Gain (Loss), Recognized in Earnings | 2 | 1.9 |
Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 0.5 | 0.4 |
Amount of (gain) loss reclassified from accumulated OCI into income | (0.2) | (0.3) |
Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0.2 | 0 |
Net Investment Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | (1.2) | 0.1 |
Amount of (gain) loss reclassified from accumulated OCI into income | 0 | 0 |
Net sales [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) on Derivative Instruments, Net, Pretax | (0.2) | (0.2) |
Cost of goods and services sold [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) on Derivative Instruments, Net, Pretax | 0 | (0.1) |
Other expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) on Derivative Instruments, Net, Pretax | (1.3) | (3.2) |
Foreign Currency Hedge Contracts [Member] | Net sales [Member] | Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 0.1 | 0.5 |
Amount of (gain) loss reclassified from accumulated OCI into income | (0.2) | (0.2) |
Foreign Currency Hedge Contracts [Member] | Cost of goods and services sold [Member] | Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 0.4 | (0.1) |
Amount of (gain) loss reclassified from accumulated OCI into income | 0 | (0.1) |
Foreign Currency Hedge Contracts [Member] | Other expense [Member] | Fair Value Hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 3.6 | (0.1) |
Derivative, (Gain) Loss on Derivative, Net | (2) | (1.9) |
Amount of (gain) loss reclassified from accumulated OCI into income | (1.3) | (3.2) |
Foreign Currency Hedge Contracts [Member] | Cost of goods and services sold [Member] | Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0.2 | 0 |
Foreign Currency - Denominated Debt [Member] | Other expense [Member] | Net Investment Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 0 | 0.1 |
Amount of (gain) loss reclassified from accumulated OCI into income | 0 | 0 |
Currency Swap [Member] | Other expense [Member] | Net Investment Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ (1.2) | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Deferred compensation assets | $ 9.3 | $ 11.3 |
Foreign currency contracts | 1.2 | 7.7 |
Commodity call options | 0.1 | 0.1 |
Total assets at fair value | 10.6 | 19.1 |
Liabilities: | ||
Contingent consideration | 3.2 | 3.3 |
Deferred compensation liabilities | 10.2 | 12.8 |
Foreign currency contracts | 5.1 | 0.3 |
Total liabilities at fair value | 21.4 | 17.8 |
Currency Swap [Member] | ||
Liabilities: | ||
Foreign currency contracts | 2.9 | 1.4 |
Level 1 [Member] | ||
Assets: | ||
Deferred compensation assets | 9.3 | 11.3 |
Total assets at fair value | 9.3 | 11.3 |
Liabilities: | ||
Deferred compensation liabilities | 10.2 | 12.8 |
Total liabilities at fair value | 10.2 | 12.8 |
Level 2 [Member] | ||
Assets: | ||
Foreign currency contracts | 1.2 | 7.7 |
Commodity call options | 0.1 | 0.1 |
Total assets at fair value | 1.3 | 7.8 |
Liabilities: | ||
Foreign currency contracts | 5.1 | 0.3 |
Total liabilities at fair value | 8 | 1.7 |
Level 2 [Member] | Currency Swap [Member] | ||
Liabilities: | ||
Foreign currency contracts | 2.9 | 1.4 |
Level 3 [Member] | ||
Liabilities: | ||
Contingent consideration | 3.2 | 3.3 |
Total liabilities at fair value | $ 3.2 | $ 3.3 |
Fair Value Measurements Level 3
Fair Value Measurements Level 3 (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Level 3 Fair Value Measurements [Roll Forward] | ||
Balance, beginning of period | $ 3.3 | $ 1.7 |
Increase (decrease) in fair value recorded in earnings | 0 | 2.1 |
Payments | (0.1) | (0.5) |
Balance, end of period | $ 3.2 | $ 3.3 |
Measurement Input, Discount Rate [Member] | ||
Level 3 Fair Value Measurements [Roll Forward] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 19.00% | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 19.00% | |
Forecasted Upside Case [Member] | Sales Projections [Member] | ||
Level 3 Fair Value Measurements [Roll Forward] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 10.00% | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 10.00% | |
Minimum [Member] | Probabilities of Successful FDA Approval [Member] | ||
Level 3 Fair Value Measurements [Roll Forward] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 13.00% | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 13.00% | |
Minimum [Member] | Probabilities of Successful Execution of Agreement [Member] | ||
Level 3 Fair Value Measurements [Roll Forward] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 15.00% | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 15.00% | |
Maximum [Member] | Probabilities of Successful FDA Approval [Member] | ||
Level 3 Fair Value Measurements [Roll Forward] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 100.00% | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 100.00% | |
Maximum [Member] | Probabilities of Successful Execution of Agreement [Member] | ||
Level 3 Fair Value Measurements [Roll Forward] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 100.00% | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 100.00% | |
Forecasted Base Case [Member] | Sales Projections [Member] | ||
Level 3 Fair Value Measurements [Roll Forward] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 50.00% | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 50.00% | |
Forecasted Downside Case [Member] | Sales Projections [Member] | ||
Level 3 Fair Value Measurements [Roll Forward] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 40.00% | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 40.00% |
Fair Value Measurements Other F
Fair Value Measurements Other Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Other Financial Instruments [Abstract] | ||
Long-term debt, fair value | $ 260.8 | $ 263.3 |
Long-term debt | $ 254.4 | $ 255 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Changes in the Components of Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward] | ||
Balance, beginning | $ (149.6) | |
Other comprehensive income (loss) before reclassifications | (42.2) | |
Amounts reclassified out from accumulated other comprehensive income (loss) | (0.5) | |
Other comprehensive (loss) income, net of tax | (42.7) | $ 0.8 |
Balance, ending | (192.3) | |
Gains (Losses) on Derivatives [Member] | ||
Changes in the Components of Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward] | ||
Balance, beginning | (0.8) | |
Other comprehensive income (loss) before reclassifications | 4.1 | |
Amounts reclassified out from accumulated other comprehensive income (loss) | (1.5) | |
Other comprehensive (loss) income, net of tax | 2.6 | |
Balance, ending | 1.8 | |
Unrealized Gains on Investment Securities [Member] | ||
Changes in the Components of Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward] | ||
Balance, beginning | 0.4 | |
Other comprehensive income (loss) before reclassifications | 0 | |
Amounts reclassified out from accumulated other comprehensive income (loss) | 0 | |
Other comprehensive (loss) income, net of tax | 0 | |
Balance, ending | 0.4 | |
Defined Benefit Pension and Other Postretirement Plans [Member] | ||
Changes in the Components of Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward] | ||
Balance, beginning | (40.3) | |
Other comprehensive income (loss) before reclassifications | 1 | |
Amounts reclassified out from accumulated other comprehensive income (loss) | 1 | |
Other comprehensive (loss) income, net of tax | 2 | |
Balance, ending | (38.3) | |
Foreign Currency Translation [Member] | ||
Changes in the Components of Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward] | ||
Balance, beginning | (108.9) | |
Other comprehensive income (loss) before reclassifications | (47.3) | |
Amounts reclassified out from accumulated other comprehensive income (loss) | 0 | |
Other comprehensive (loss) income, net of tax | (47.3) | |
Balance, ending | $ (156.2) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Reclassification out of Accumulated Other Comprehensive Loss [Line Items] | |||
Net sales | $ 491.5 | $ 443.5 | |
Cost of goods and services sold | (324.5) | (296.7) | |
Interest expense | (2) | (2.3) | |
Prior service cost | 0.2 | 0.2 | |
Actuarial losses | (0.1) | 0 | |
Settlements | (1.4) | 0 | |
Income before income taxes | 86.5 | 69.9 | |
Tax expense (benefit) | (15) | (16.1) | |
Net income | 74.3 | 55.4 | |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | |||
Reclassification out of Accumulated Other Comprehensive Loss [Line Items] | |||
Net income | 0.5 | 3.6 | |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Gains (Losses) on Derivatives [Member] | |||
Reclassification out of Accumulated Other Comprehensive Loss [Line Items] | |||
Income before income taxes | 2.3 | 5.1 | |
Tax expense (benefit) | (0.8) | (1.6) | |
Net income | 1.5 | 3.5 | |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Amortization of Defined Benefit Pension and Other Postretirement Plans [Member] | |||
Reclassification out of Accumulated Other Comprehensive Loss [Line Items] | |||
Prior service cost | [1] | 0.2 | 0.2 |
Actuarial losses | [1] | (0.1) | 0 |
Settlements | (1.4) | 0 | |
Income before income taxes | (1.3) | 0.2 | |
Tax expense (benefit) | 0.3 | (0.1) | |
Net income | (1) | 0.1 | |
Foreign Currency Contract [Member] | Reclassification out of Accumulated Other Comprehensive Loss [Member] | Gains (Losses) on Derivatives [Member] | |||
Reclassification out of Accumulated Other Comprehensive Loss [Line Items] | |||
Net sales | 0.3 | 0.2 | |
Cost of goods and services sold | 0.1 | 0.2 | |
Interest Rate Swap Contracts [Member] | Reclassification out of Accumulated Other Comprehensive Loss [Member] | Gains (Losses) on Derivatives [Member] | |||
Reclassification out of Accumulated Other Comprehensive Loss [Line Items] | |||
Interest expense | 2 | 4.8 | |
Forward Treasury Locks [Member] | Reclassification out of Accumulated Other Comprehensive Loss [Member] | Gains (Losses) on Derivatives [Member] | |||
Reclassification out of Accumulated Other Comprehensive Loss [Line Items] | |||
Interest expense | $ (0.1) | $ (0.1) | |
[1] | These components are included in the computation of net periodic benefit cost. Please refer to Note 14, Benefit Plans , for additional details. |
Change in Shareholders' Equity
Change in Shareholders' Equity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | $ 1,573.2 | $ 1,396.3 |
Cumulative effect of new accounting principle in period of adoption | (0.1) | |
Net income | 74.3 | 55.4 |
Activity related to stock-based compensation | $ 12.8 | 10.7 |
Share purchased under share repurchase program (in shares) | 761,500 | |
Shares purchased under share repurchase program | $ (115.5) | (83.1) |
Dividends declared | (11.8) | (10.6) |
Other comprehensive income, net of tax | (42.7) | 0.8 |
Balance | 1,490.2 | 1,369.5 |
Common Stock [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | $ 18.8 | $ 18.8 |
Balance (in shares) | 75,300,000 | 75,300,000 |
Shares issued under stock plans (in shares) | 0 | 0 |
Activity related to stock-based compensation | $ 0 | $ 0 |
Balance | $ 18.8 | $ 18.8 |
Balance (in shares) | 75,300,000 | 75,300,000 |
Additional Paid-in Capital [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | $ 272.7 | $ 282 |
Activity related to stock-based compensation | (5.1) | (3.5) |
Balance | 267.6 | 278.5 |
Treasury Stock [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | $ (118.1) | $ (103.7) |
Balance (in shares) | 1,200,000 | 1,200,000 |
Shares issued under stock plans (in shares) | (300,000) | (200,000) |
Activity related to stock-based compensation | $ 17.9 | $ 14.2 |
Share purchased under share repurchase program (in shares) | 800,000 | 800,000 |
Shares purchased under share repurchase program | $ (115.5) | $ (83.1) |
Balance | $ (215.7) | $ (172.6) |
Balance (in shares) | 1,700,000 | 1,800,000 |
Retained Earnings [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | $ 1,549.4 | $ 1,353.4 |
Cumulative effect of new accounting principle in period of adoption | (0.1) | |
Net income | 74.3 | 55.4 |
Dividends declared | 11.8 | (10.6) |
Balance | 1,611.8 | 1,398.2 |
AOCI Attributable to Parent [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance | (149.6) | (154.2) |
Other comprehensive income, net of tax | (42.7) | 0.8 |
Balance | $ (192.3) | $ (153.4) |
Supplemental Equity Information
Supplemental Equity Information (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Dividends declared per share | $ 0.16 | $ 0.15 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance under the 2016 Plan (in shares) | 2,750,037 | |
Stock options, granted (in shares) | 222,564 | |
Stock options, weighted average exercise price (in dollars per share) | $ 173.22 | |
Stock options, weighted average grant date fair value (in dollars per share) | $ 39.21 | |
Risk-free interest rate (in hundredths) | 1.40% | |
Expected life (in years) | 5 years 8 months 12 days | |
Stock volatility (in hundredths) | 22.30% | |
Dividend yield (in hundredths) | 0.40% | |
Stock-based compensation expense | $ 5.4 | $ 6.2 |
Performance Share Unit (PSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 50,459 | |
Grant date fair value (in dollars per share) | $ 173.22 | |
PSU payout, minimum (in hundredths) | 0.00% | |
PSU payout, maximum (in hundredths) | 200.00% | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 5,424 | |
Grant date fair value (in dollars per share) | $ 173.22 |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||
Service cost | $ 0.3 | $ 0.4 |
Interest cost | 2 | 2.5 |
Expected return on assets | (3) | (2.9) |
Amortization of prior service credit | (0.2) | (0.2) |
Recognized actuarial losses (gains) | 0.1 | 0 |
Settlements | 1.4 | 0 |
Net periodic benefit cost | 0.6 | (0.2) |
UNITED STATES | ||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||
Net periodic benefit cost | 0.3 | (0.7) |
Foreign Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||
Net periodic benefit cost | 0.3 | 0.5 |
Pension Benefits [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||
Service cost | 0.3 | 0.4 |
Interest cost | 1.9 | 2.4 |
Expected return on assets | (3) | (2.9) |
Amortization of prior service credit | 0 | 0 |
Recognized actuarial losses (gains) | 0.5 | 0.5 |
Settlements | 1.4 | 0 |
Net periodic benefit cost | 1.1 | 0.4 |
Pension Benefits [Member] | UNITED STATES | ||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||
Net periodic benefit cost | 0.8 | (0.1) |
Pension Benefits [Member] | Foreign Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||
Net periodic benefit cost | 0.3 | 0.5 |
Other Retirement Benefits [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||
Interest cost | 0.1 | 0.1 |
Amortization of prior service credit | (0.2) | (0.2) |
Recognized actuarial losses (gains) | (0.4) | (0.5) |
Net periodic benefit cost | (0.5) | (0.6) |
Other Retirement Benefits [Member] | UNITED STATES | ||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||
Net periodic benefit cost | $ (0.5) | $ (0.6) |
Other Expense (Details)
Other Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Income and Expenses [Abstract] | ||
Development and licensing income | $ (0.2) | $ (0.2) |
Contingent consideration | 0 | 0.2 |
Foreign exchange transaction gains | (3.5) | (3.8) |
Other items | 0.2 | 0.9 |
Total other income | $ (3.5) | $ (2.3) |
Other Expense Restructuring and
Other Expense Restructuring and Related Charges (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related charges | $ 0.6 | ||
Restructuring Reserve [Roll Forward] | |||
Non-cash asset-write-downs | $ 0 | (0.3) | |
Severance and benefits [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Balance, December 31, 2019 | 1.4 | ||
Cash payments | (0.6) | ||
Balance, March 31, 2020 | 0.8 | ||
Asset-related charges [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Cash payments | 0 | ||
Other charges [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Cash payments | 0 | ||
2018 Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, expected cost | $ 16 | ||
Restructuring and related cost, cumulative cost incurred | $ 13.7 | ||
Severance charges | 0 | 0.3 | |
Other charges | 0 | 0.3 | |
Restructuring and related charges | 0 | ||
Restructuring Reserve [Roll Forward] | |||
Balance, December 31, 2019 | 1.4 | ||
Charges | $ 0.6 | ||
Cash payments | (0.6) | ||
Balance, March 31, 2020 | 0.8 | ||
2018 Restructuring Plan [Member] | Asset-related charges [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Balance, December 31, 2019 | 0 | ||
Balance, March 31, 2020 | 0 | ||
2018 Restructuring Plan [Member] | Other charges [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Balance, December 31, 2019 | 0 | ||
Balance, March 31, 2020 | $ 0 |
Other Expense Other (Income) De
Other Expense Other (Income) Development and Licensing Income (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2013 | |
Development and licensing income [Line Items] | ||||
Development and licensing income | $ 0.2 | $ 0.2 | ||
Deferred income | 41.8 | $ 34.9 | ||
SmartDose [Member] | ||||
Development and licensing income [Line Items] | ||||
Development and licensing income | $ 0.2 | $ 0.2 | ||
Deferred income | $ 20 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit (expense) | $ 15 | $ 16.1 |
Effective income tax rate | 17.40% | 23.10% |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Restructuring and related charges | $ 0.6 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net sales | $ 491.5 | 443.5 |
Total operating (loss) profit | 88 | 70.7 |
Interest expense | 2 | 2.3 |
Interest income | (0.8) | (0.9) |
Other nonoperating expense (income) | 0.3 | (0.6) |
Income before income taxes | 86.5 | 69.9 |
Proprietary Products [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net sales | 373.5 | 340.4 |
Total operating (loss) profit | 93.2 | 77 |
Contract-Manufactured Products [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net sales | 118.1 | 103.1 |
Total operating (loss) profit | 12.8 | 10.5 |
Intersegment sales elimination [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net sales | (0.1) | 0 |
Corporate [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total operating (loss) profit | (18) | (16.2) |
Other unallocated items [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total operating (loss) profit | $ 0 | $ (0.6) |