Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 27, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | APTARGROUP INC | |
Entity Central Index Key | 896,622 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 62,795,667 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
Net Sales | $ 594,275 | $ 670,631 | $ 1,184,086 | $ 1,346,682 |
Operating Expenses: | ||||
Cost of sales (exclusive of depreciation and amortization shown below) | 375,278 | 451,051 | 761,257 | 904,462 |
Selling, research & development and administrative | 89,312 | 96,486 | 185,499 | 203,160 |
Depreciation and amortization | 34,165 | 38,466 | 68,225 | 75,713 |
Total Operating Expenses | 498,755 | 586,003 | 1,014,981 | 1,183,335 |
Operating Income | 95,520 | 84,628 | 169,105 | 163,347 |
Other (Expense) Income: | ||||
Interest expense | (9,195) | (5,246) | (16,498) | (10,127) |
Interest income | 1,105 | 1,047 | 2,836 | 2,063 |
Equity results of affiliates | (407) | (198) | (526) | (1,744) |
Miscellaneous, net | (1,268) | (525) | (1,467) | (153) |
Total Other Income (Expense) | (9,765) | (4,922) | (15,655) | (9,961) |
Income before Income Taxes | 85,755 | 79,706 | 153,450 | 153,386 |
Provision for Income Taxes | 28,214 | 26,622 | 50,810 | 51,894 |
Net Income | 57,541 | 53,084 | 102,640 | 101,492 |
Net (Income) Loss Attributable to Noncontrolling Interests | (2) | (8) | 70 | (27) |
Net Income Attributable to AptarGroup, Inc. | $ 57,539 | $ 53,076 | $ 102,710 | $ 101,465 |
Net Income Attributable to AptarGroup, Inc. Per Common Share: | ||||
Basic (in dollars per share) | $ 0.92 | $ 0.81 | $ 1.64 | $ 1.55 |
Diluted (in dollars per share) | $ 0.90 | $ 0.79 | $ 1.59 | $ 1.49 |
Average Number of Shares Outstanding: | ||||
Basic (in shares) | 62,697 | 65,328 | 62,496 | 65,397 |
Diluted (in shares) | 64,276 | 67,438 | 64,603 | 68,042 |
Dividends per Common Share (in dollars per share) | $ 0.28 | $ 0.28 | $ 0.56 | $ 0.53 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net Income | $ 57,541 | $ 53,084 | $ 102,640 | $ 101,492 |
Other Comprehensive Income (Loss): | ||||
Foreign currency translation adjustments | 45,099 | (5,164) | (94,147) | (4,601) |
Changes in treasury locks, net of tax | 7 | 6 | 13 | 12 |
Defined benefit pension plan, net of tax | ||||
Amortization of prior service cost included in net income, net of tax | 42 | 53 | 85 | 106 |
Amortization of net loss included in net income, net of tax | 1,131 | 664 | 2,257 | 1,329 |
Total defined benefit pension plan, net of tax | 1,173 | 717 | 2,342 | 1,435 |
Total other comprehensive income (loss) | 46,279 | (4,441) | (91,792) | (3,154) |
Comprehensive Income | 103,820 | 48,643 | 10,848 | 98,338 |
Comprehensive (Income) Loss Attributable to Noncontrolling Interests | (2) | (9) | 70 | (18) |
Comprehensive Income Attributable to AptarGroup, Inc. | $ 103,818 | $ 48,634 | $ 10,918 | $ 98,320 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and equivalents | $ 391,810 | $ 399,762 |
Short-term Investments | 66,897 | |
Cash Equivalents and Short-term Investments Total | 458,707 | 399,762 |
Accounts and notes receivable, less allowance for doubtful accounts of $4,192 in 2015 and $4,251 in 2014 | 435,448 | 406,976 |
Inventories | 315,178 | 311,072 |
Prepaid and other | 102,258 | 96,128 |
Total Current Assets | 1,311,591 | 1,213,938 |
Property, Plant and Equipment: | ||
Buildings and improvements | 342,879 | 353,683 |
Machinery and equipment | 1,874,243 | 1,919,507 |
Property, Plant and Equipment, Gross | 2,217,122 | 2,273,190 |
Less: Accumulated depreciation | (1,462,264) | (1,484,546) |
Property, Plant and Equipment, Net | 754,858 | 788,644 |
Land | 21,778 | 23,011 |
Total Property, Plant and Equipment | 776,636 | 811,655 |
Other Assets: | ||
Investments in affiliates | 4,965 | 5,760 |
Goodwill | 316,480 | 329,741 |
Intangible assets, net | 36,090 | 40,045 |
Miscellaneous | 32,044 | 36,051 |
Total Other Assets | 389,579 | 411,597 |
Total Assets | 2,477,806 | 2,437,190 |
Current Liabilities: | ||
Notes payable | 5,766 | 233,284 |
Current maturities of long-term obligations | 18,122 | 18,692 |
Accounts payable and accrued liabilities | 377,569 | 352,762 |
Total Current Liabilities | 401,457 | 604,738 |
Long-term obligations | 813,007 | 588,892 |
Deferred Liabilities and Other: | ||
Deferred income taxes | 21,297 | 25,521 |
Retirement and deferred compensation plans | 110,631 | 109,517 |
Deferred and other non-current liabilities | $ 3,724 | $ 4,606 |
Commitments and contingencies (Note 10) | ||
Total Deferred Liabilities and Other | $ 135,652 | $ 139,644 |
AptarGroup, Inc. stockholders' equity | ||
Common stock, $.01 par value, 199 million shares authorized; 87.0 and 86.3 million shares issued as of June 30, 2015 and December 31, 2014, respectively | 869 | 862 |
Capital in excess of par value | 555,307 | 507,313 |
Retained earnings | 1,807,786 | 1,740,005 |
Accumulated other comprehensive (loss) | (201,837) | (110,045) |
Less treasury stock at cost, 24.2 and 24.3 million shares as of June 30, 2015 and December 31, 2014, respectively | (1,034,726) | (1,034,728) |
Total AptarGroup, Inc. Stockholders' Equity | 1,127,399 | 1,103,407 |
Noncontrolling interests in subsidiaries | 291 | 509 |
Total Stockholders' Equity | 1,127,690 | 1,103,916 |
Total Liabilities and Stockholders' Equity | $ 2,477,806 | $ 2,437,190 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands, shares in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts and notes receivable, allowance for doubtful accounts (in dollars) | $ 4,192 | $ 4,251 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 199 | 199 |
Common stock, shares issued | 87 | 86.3 |
Treasury stock, shares | 24.2 | 24.3 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Common Stock Par Value | Treasury Stock | Capital in Excess of Par Value | Non-Controlling Interest | Total |
Balance at Dec. 31, 2013 | $ 1,619,419 | $ 109,751 | $ 853 | $ (744,213) | $ 493,947 | $ 551 | $ 1,480,308 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income | 101,465 | 27 | 101,492 | ||||
Foreign currency translation adjustments | (4,592) | (9) | (4,601) | ||||
Changes in unrecognized pension losses and related amortization, net of tax | 1,435 | 1,435 | |||||
Changes in treasury locks, net of tax | 12 | 12 | |||||
Stock option exercises & restricted stock vestings | 5 | 1 | 35,737 | 35,743 | |||
Cash dividends declared on common stock | (34,693) | (34,693) | |||||
Treasury stock purchased | (52,884) | (52,884) | |||||
Balance at Jun. 30, 2014 | 1,686,191 | 106,606 | 858 | (797,096) | 529,684 | 569 | 1,526,812 |
Balance at Dec. 31, 2014 | 1,740,005 | (110,045) | 862 | (1,034,728) | 507,313 | 509 | 1,103,916 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income | 102,710 | (70) | 102,640 | ||||
Foreign currency translation adjustments | (94,147) | (94,147) | |||||
Changes in unrecognized pension losses and related amortization, net of tax | 2,342 | 2,342 | |||||
Changes in treasury locks, net of tax | 13 | 13 | |||||
Stock option exercises & restricted stock vestings | 7 | 2 | 48,470 | 48,479 | |||
Cash dividends declared on common stock | (34,929) | (34,929) | |||||
Non Controlling Interest Repurchased | (476) | (148) | (624) | ||||
Balance at Jun. 30, 2015 | $ 1,807,786 | $ (201,837) | $ 869 | $ (1,034,726) | $ 555,307 | $ 291 | $ 1,127,690 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows from Operating Activities: | ||
Net income | $ 102,640 | $ 101,492 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation | 66,059 | 72,946 |
Amortization | 2,166 | 2,767 |
Stock based compensation | 13,983 | 13,130 |
Provision for (recovery of) doubtful accounts | 362 | (69) |
Deferred income taxes | (2,465) | (3,808) |
Defined benefit plan expense | 10,294 | 8,452 |
Equity in results of affiliates in excess of cash distributions received | 526 | 1,744 |
Changes in balance sheet items, excluding effects from foreign currency adjustments: | ||
Accounts receivable | (50,289) | (71,208) |
Inventories | (23,058) | (19,565) |
Prepaid and other current assets | (16,381) | (5,868) |
Accounts payable and accrued liabilities | 38,885 | 17,898 |
Income taxes payable | (3,222) | (21,572) |
Retirement and deferred compensation plans | (3,832) | (6,559) |
Other changes, net | 4,509 | 20,920 |
Net Cash Provided by Operations | 140,177 | 110,700 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (60,306) | (87,068) |
Proceeds from sale of property and equipment | 83 | 2,287 |
Insurance proceeds | 1,900 | |
Purchase of short-term investments | (66,897) | |
Notes receivable, net | (701) | (163) |
Net Cash Used by Investing Activities | (125,921) | (84,944) |
Cash Flows from Financing Activities: | ||
(Repayments of) Proceeds from notes payable | (227,512) | 77,019 |
Proceeds from long-term obligations | 225,887 | |
Repayments of long-term obligations | (1,539) | (308) |
Dividends paid | (34,929) | (34,693) |
Credit facility costs | (1,216) | (299) |
Proceeds from stock option exercises | 28,810 | 18,319 |
Purchase of treasury stock | (52,884) | |
Excess tax benefit from exercise of stock options | 4,575 | 3,802 |
Net Cash (Used) Provided Provided by Financing Activities | (5,924) | 10,956 |
Effect of Exchange Rate Changes on Cash | (16,284) | (5,285) |
Net (Decrease) Increase in Cash and Equivalents | (7,952) | 31,427 |
Cash and Equivalents at Beginning of Period | 399,762 | 309,861 |
Cash and Equivalents at End of Period | $ 391,810 | $ 341,288 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of AptarGroup, Inc. and our subsidiaries. The terms “AptarGroup” or “Company” as used herein refer to AptarGroup, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain previously reported amounts have been reclassified to conform to the current period presentation. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of consolidated financial position, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. Also, certain financial position data included herein was derived from the Audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 but does not include all disclosures required by GAAP. Accordingly, these Unaudited Condensed Consolidated Financial Statements and related notes should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The results of operations of any interim period are not necessarily indicative of the results that may be expected for the year. CHANGE IN ACCOUNTING PRINCIPLE During the quarter, the Company changed its inventory valuation method for certain operating entities in its North American business to the first-in first-out (FIFO) method from the last-in first-out (LIFO) method. Prior to the change, the Company utilized two methods of inventory costing: LIFO for inventories in these operating entities and FIFO for inventories in other operating entities. The Company believes that the FIFO method is preferable as it better reflects the current value of inventory on the Company’s Condensed Consolidated Balance Sheet, provides better matching of revenues and expenses, results in uniformity across the Company’s global operations with respect to the method of inventory accounting and improves comparability with the Company’s peers. The cumulative pre-tax effect of this change is $7.4 million. We have determined that this change is not material to the Company’s previously issued financial statements and that the cumulative effect of the change is not material to current operations or to the trend of reported results of operations. Therefore, we conclude it was appropriate to recognize the cumulative effect of the change as an operating item in the current period’s Condensed Consolidated Statement of Income and not to adopt the change by retrospective application. ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates to the FASB’s Accounting Standards Codification. During the first six months of 2015, there have been no developments to the recently adopted accounting pronouncements from those disclosed in the Company’s 2014 Annual Report on Form 10-K that are considered to have a material impact on our Unaudited Condensed Consolidated Financial Statements. Other accounting standards that have been issued by the FASB or other standards-setting bodies but are not yet effective are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations. SHORT TERM INVESTMENTS Short term investments reflect funds invested in a time deposit instrument with a two-year maturity. However, during the life of the investment the funds can be redeemed at any time with a 35-90 day notice. There are no penalties for early redemption. We do not consider this investment a marketable security as there is no active market for this type of product. INCOME TAXES The Company computes taxes on income in accordance with the tax rules and regulations of the many taxing authorities where income is earned. The income tax rates imposed by these taxing authorities may vary substantially. Taxable income may differ from pre-tax income for financial accounting purposes. To the extent that these differences create differences between the tax basis of an asset or liability and our reported amount in the financial statements, an appropriate provision for deferred income taxes is made. In our determination of which foreign earnings are permanently reinvested in foreign operations, the Company considers numerous factors, including the financial requirements of the U.S. parent company and those of our foreign subsidiaries, the U.S. funding needs for dividend payments and stock repurchases, and the tax consequences of remitting earnings to the U.S. From this analysis, current year repatriation decisions are made in an attempt to provide a proper mix of debt and shareholder capital both within the U.S. and for non-U.S. operations. The Company’s policy is to permanently reinvest our accumulated foreign earnings and the Company will only make a distribution out of current year earnings to meet the cash needs at the parent company. As such, the Company does not provide for taxes on earnings that are deemed to be permanently reinvested. Since no distribution to the U.S. of foreign earnings is expected in 2015, the effective tax rate for 2015 includes no tax cost of repatriation. The Company provides a liability for the amount of tax benefits realized from uncertain tax positions. This liability is provided whenever the Company determines that a tax benefit will not meet a more-likely-than-not threshold for recognition. See Note 4 of the Unaudited Notes to the Condensed Consolidated Financial Statements for more information. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2015 | |
INVENTORIES | |
INVENTORIES | NOTE 2 - INVENTORIES At December 31, 2014, approximately 19% of the total inventories were accounted for by the LIFO method. Inventories, by component, consisted of: June 30, December 31, Raw materials $ $ Work in process Finished goods Total Less LIFO reserve -- ) Total $ $ As discussed in Note 1 above, the Company changed its inventory valuation method for certain operating entities in its North American business to the first-in first-out (FIFO) method from the last-in first-out (LIFO) method during the current quarter. Had this change not been implemented, the Company would have reported a LIFO reserve for the current quarter ended June 30, 2015 of $6,879 as compared to $7,427 for the quarter ended March 31, 2015 and $7,769 for the fiscal year ended December 31, 2014. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2015 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 3 – GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill since December 31, 2014 are as follows by reporting segment: Beauty + Food + Corporate Home Pharma Beverage & Other Total Balance as of December 31, 2014 Goodwill $ $ $ $ $ Accumulated impairment losses -- -- -- ) ) $ $ $ $ -- $ Foreign currency exchange effects ) ) ) -- ) Balance as of June 30, 2015 Goodwill $ $ $ $ $ Accumulated impairment losses -- -- -- ) ) $ $ $ $ -- $ The table below shows a summary of intangible assets as of June 30, 2015 and December 31, 2014. June 30, 2015 December 31, 2014 Weighted Average Gross Gross Amortization Carrying Accumulated Net Carrying Accumulated Net Period (Years) Amount Amortization Value Amount Amortization Value Amortized intangible assets: Patents $ $ ) $ $ $ ) $ Acquired Technology ) ) License agreements and other ) ) Total intangible assets $ $ ) $ $ $ ) $ Aggregate amortization expense for the intangible assets above for the quarters ended June 30, 2015 and 2014 was $1,085 and $1,369, respectively. Aggregate amortization expense for the intangible assets above for the six months ended June 30, 2015 and 2014 was $2,166 and $2,767, respectively. Future estimated amortization expense for the years ending December 31 is as follows: 2015 $ (remaining estimated amortization for 2015) 2016 2017 2018 2019 and thereafter Future amortization expense may fluctuate depending on changes in foreign currency rates. The estimates for amortization expense noted above are based upon foreign exchange rates as of June 30, 2015. |
INCOME TAX UNCERTAINTIES
INCOME TAX UNCERTAINTIES | 6 Months Ended |
Jun. 30, 2015 | |
INCOME TAX UNCERTAINTIES | |
INCOME TAX UNCERTAINTIES | NOTE 4 – INCOME TAX UNCERTAINTIES The Company had approximately $5.7 and $6.4 million recorded for income tax uncertainties as of June 30, 2015 and December 31, 2014, respectively. The $0.7 million decrease in income tax uncertainties was primarily due to the settlement of a tax audit in Italy as well as changes in foreign currency rates. The amount, if recognized, that would impact the effective tax rate is $5.5 and $6.3 million, respectively. The Company estimates that it is reasonably possible that the liability for uncertain tax positions will decrease by no more than $5.1 million in the next twelve months from the resolution of various uncertain positions as a result of the completion of tax audits, litigation and the expiration of the statute of limitations in various jurisdictions. |
LONG-TERM OBLIGATIONS
LONG-TERM OBLIGATIONS | 6 Months Ended |
Jun. 30, 2015 | |
LONG-TERM OBLIGATIONS | |
LONG TERM OBLIGATIONS | NOTE 5 – LONG –TERM OBLIGATIONS In December 2014, we executed a $475 million private placement to take advantage of low long-term interest rates. At that time, we closed on $250 million of the private placement to fund our ASR program (see Note 11). This closing consisted of two maturity tranches, with $125 million of 9 year notes at an interest rate of 3.49% and $125 million of 11 year notes at an interest rate of 3.61%. We closed on the remaining $225 million of the private placement in February, 2015, consisting of $100 million of 9 year notes at an interest rate of 3.49% and $125 million of 11 year notes at an interest rate of 3.61%. The proceeds from this closing were used to pay down the existing revolving line of credit. The Company’s long-term obligations consisted of the following: June 30, December 31, Notes payable 0.61% - 27.26%, due in monthly and annual installments through 2027 $ $ Senior unsecured notes 2.3%, due in 2015 Senior unsecured notes 6.0%, due in 2016 Senior unsecured notes 6.0%, due in 2018 Senior unsecured notes 3.8%, due in 2020 Senior unsecured notes 3.2%, due in 2022 Senior unsecured notes 3.5%, due in 2023 Senior unsecured notes 3.4%, due in 2024 Senior unsecured notes 3.5%, due in 2024 -- Senior unsecured notes 3.6%, due in 2025 Senior unsecured notes 3.6%, due in 2026 -- Capital lease obligations Current maturities of long-term obligations ) ) Total long-term obligations $ $ Aggregate long-term maturities, excluding capital lease obligations, due annually for the five years beginning in 2015 are $17,769, $50,391, $392, $75,342, $189 and $685,161 thereafter. |
RETIREMENT AND DEFERRED COMPENS
RETIREMENT AND DEFERRED COMPENSATION PLANS | 6 Months Ended |
Jun. 30, 2015 | |
RETIREMENT AND DEFERRED COMPENSATION PLANS | |
RETIREMENT AND DEFERRED COMPENSATION PLANS | NOTE 6 – RETIREMENT AND DEFERRED COMPENSATION PLANS Components of Net Periodic Benefit Cost: Domestic Plans Foreign Plans Three months ended June 30, Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of net loss Amortization of prior service cost -- -- Net periodic benefit cost $ $ $ $ Domestic Plans Foreign Plans Six months ended June 30, Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of net loss Amortization of prior service cost -- -- Net periodic benefit cost $ $ $ $ EMPLOYER CONTRIBUTIONS Although the Company has no minimum funding requirement, we plan to contribute approximately $10 million to our domestic defined benefit plans in 2015. No 2015 contributions were made as of June 30, 2015. The Company also expects to contribute approximately $12.6 million to our foreign defined benefit plans in 2015, and as of June 30, 2015, we have contributed approximately $1.0 million. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 6 Months Ended |
Jun. 30, 2015 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME Changes in Accumulated Other Comprehensive Income by Component: Foreign Currency Defined Benefit Pension Plans Other Total Balance – December 31, 2013 $ $ ) $ ) $ Other comprehensive loss before reclassifications ) -- -- ) Amounts reclassified from accumulated other comprehensive income ) Net current-period other comprehensive (loss) income ) ) Balance - June 30, 2014 $ $ ) $ ) $ Balance – December 31, 2014 $ ) $ ) $ ) $ ) Other comprehensive loss before reclassifications ) -- -- ) Amounts reclassified from accumulated other comprehensive income -- Net current-period other comprehensive (loss) income ) ) Balance - June 30, 2015 $ ) $ ) $ ) $ ) Reclassifications Out of Accumulated Other Comprehensive Income: Details about Accumulated Other Amount Reclassified from Accumulated Affected Line in the Statement Comprehensive Income Components Other Comprehensive Income Where Net Income is Presented Three months ended June 30, Defined Benefit Pension Plans Amortization of net loss $ $ (a) Amortization of prior service cost (a) Total before tax ) ) Tax benefit $ $ Net of tax Other Changes in treasury locks Interest Expense Total before tax ) ) Tax benefit $ $ Net of tax Total reclassifications for the period $ $ (a) These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax (see Note 6 – Retirement and Deferred Compensation Plans for additional details). Details about Accumulated Other Amount Reclassified from Accumulated Affected Line in the Statement Comprehensive Income Components Other Comprehensive Income Where Net Income is Presented Six months ended June 30, Defined Benefit Pension Plans Amortization of net loss $ $ (b) Amortization of prior service cost (b) Total before tax ) ) Tax benefit $ $ Net of tax Foreign Currency Foreign Currency Gain -- ) Miscellaneous, net -- ) Total before tax -- -- Tax benefit $ -- $ ) Net of tax Other Changes in treasury locks Interest Expense Total before tax ) ) Tax benefit $ $ Net of tax Total reclassifications for the period $ $ (b) These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax (see Note 6 – Retirement and Deferred Compensation Plans for additional details). |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Jun. 30, 2015 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 8 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company maintains a foreign exchange risk management policy designed to establish a framework to protect the value of the Company’s non-functional denominated transactions from adverse changes in exchange rates. Sales of the Company’s products can be denominated in a currency different from the currency in which the related costs to produce the product are denominated. Changes in exchange rates on such inter-country sales or intercompany loans can impact the Company’s results of operations. The Company’s policy is not to engage in speculative foreign currency hedging activities, but to minimize our net foreign currency transaction exposure, defined as firm commitments and transactions recorded and denominated in currencies other than the functional currency. The Company may use foreign currency forward exchange contracts, options and cross currency swaps to economically hedge these risks. For derivative instruments designated as hedges, the Company formally documents the nature and relationships between the hedging instruments and the hedged items, as well as the risk management objectives, strategies for undertaking the various hedge transactions, and the method of assessing hedge effectiveness. Additionally, in order to designate any derivative instrument as a hedge of an anticipated transaction, the significant characteristics and expected terms of any anticipated transaction must be specifically identified, and it must be probable that the anticipated transaction will occur. HEDGE OF NET INVESTMENTS IN FOREIGN OPERATIONS A significant number of the Company’s operations are located outside of the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of the Company’s foreign subsidiaries. A strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on the Company’s financial condition and results of operations. Conversely, a weakening U.S. dollar has an additive effect. The Company in some cases maintains debt in these subsidiaries to offset the net asset exposure. The Company does not otherwise actively manage this risk using derivative financial instruments. In the event the Company plans on a full or partial liquidation of any of our foreign subsidiaries where the Company’s net investment is likely to be monetized, the Company will consider hedging the currency exposure associated with such a transaction. OTHER As of June 30, 2015, the Company has recorded the fair value of foreign currency forward exchange contracts of $1.4 million in prepaid and other, $1.7 million in accounts payable and accrued liabilities, and $0.1 million in deferred and other non-current liabilities in the balance sheet. All forward exchange contracts outstanding as of June 30, 2015 had an aggregate contract amount of $138.1 million. Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 Derivative Contracts Not Designated as Hedging Instruments Balance Sheet Location June 30, 2015 December 31, 2014 Derivative Assets Foreign Exchange Contracts Prepaid and other $ $ Foreign Exchange Contracts Miscellaneous Other Assets -- $ $ Derivative Liabilities Foreign Exchange Contracts Accounts payable and accrued liabilities $ $ Foreign Exchange Contracts Deferred and other non-current liabilities $ $ The Effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the Quarters Ended June 30, 2015 and June 30, 2014 Derivatives Not Designated as Hedging Instruments Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivative 2015 2014 Foreign Exchange Contracts Other Income (Expense) Miscellaneous, net $ ) $ ) $ ) $ ) The Effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the Six Months Ended June 30, 2015 and June 30, 2014 Derivatives Not Designated as Hedging Instruments Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivative 2015 2014 Foreign Exchange Contracts Other Income (Expense) Miscellaneous, net $ ) $ ) $ ) $ ) Net Amounts Gross Amounts not Offset in the Gross Amounts Presented in Statement of Financial Position Gross Offset in the the Statement of Financial Cash Collateral Net Amount Financial Position Financial Position Instruments Received Amount Description June 30, 2015 Derivative Assets $ -- $ -- -- $ Total Assets $ -- $ -- -- $ Derivative Liabilities $ -- $ -- -- $ Total Liabilities $ -- $ -- -- $ December 31, 2014 Derivative Assets $ -- $ -- -- $ Total Assets $ -- $ -- -- $ Derivative Liabilities $ -- $ -- -- $ Total Liabilities $ -- $ -- -- $ |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2015 | |
FAIR VALUE | |
FAIR VALUE | NOTE 9 – FAIR VALUE Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: · Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. · Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. · Le vel 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. As of June 30, 2015, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Forward exchange contracts (a) $ $ -- $ $ -- Total assets at fair value $ $ -- $ $ -- Liabilities Forward exchange contracts (a) $ $ -- $ $ -- Total liabilities at fair value $ $ -- $ $ -- As of December 31, 2014, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Forward exchange contracts (a) $ $ -- $ $ -- Total assets at fair value $ $ -- $ $ -- Liabilities Forward exchange contracts (a) $ $ -- $ $ -- Total liabilities at fair value $ $ -- $ $ -- (a) Market approach valuation technique based on observable market transactions of spot and forward rates. The carrying amounts of the Company’s other current financial instruments such as cash and equivalents, notes payable and current maturities of long-term obligations approximate fair value due to the short-term maturity of the instrument. The Company considers our long-term obligations a Level 2 liability and utilizes the market approach valuation technique based on interest rates that are currently available to the Company for issuance of debt with similar terms and maturities. The estimated fair value of the Company’s long-term obligations was $827 million as of June 30, 2015 and $606 million as of December 31, 2014. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES The Company, in the normal course of business, is subject to a number of lawsuits and claims both actual and potential in nature. While management believes the resolution of these claims and lawsuits will not have a material adverse effect on the Company’s financial position or results of operations or cash flows, claims and legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur that could include amounts in excess of any accruals which management has established. Were such unfavorable final outcomes to occur, it is possible that they could have a material adverse effect on our financial position, results of operations and cash flows. Under our Certificate of Incorporation, the Company has agreed to indemnify our officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a directors and officers liability insurance policy that covers a portion of our exposure. As a result of our insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. The Company has no liabilities recorded for these agreements as of June 30, 2015. |
STOCK REPURCHASE PROGRAM
STOCK REPURCHASE PROGRAM | 6 Months Ended |
Jun. 30, 2015 | |
STOCK REPURCHASE PROGRAM | |
STOCK REPURCHASE PROGRAM | NOTE 11 – STOCK REPURCHASE PROGRAM On October 30, 2014, the Company announced a new share repurchase authorization of up to $350 million of common stock. This new authorization replaces previous authorizations and has no expiration date. AptarGroup may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions. On December 16, 2014, the Company entered into an agreement to repurchase approximately $250 million of its common stock under an accelerated share repurchase program (the “ASR program”). The ASR program is part of the Company’s $350 million share repurchase authorization. On December 17, 2014, the Company paid $250 million to Wells Fargo Bank N.A. (“Wells Fargo”) in exchange for approximately 3.1 million shares, estimated to represent approximately 80% of the total number of shares expected to be purchased in the ASR program based on then current market prices. The ultimate number of shares to be repurchased under the ASR program will be based on the volume-weighted average price of the Company’s common stock during the term of the ASR program, less a discount. Final settlement of the ASR program is expected to be completed by the end of September 2015, although the settlement may be accelerated at Wells Fargo’s option. During the three and six months ended June 30, 2015, the Company did not repurchase any shares. During the three and six months ended June 30, 2014, the Company repurchased approximately 600 thousand and 800 thousand shares for approximately $39.9 million and $52.9 million, respectively. Shares repurchased were returned to Treasury Stock. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2015 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 12 – STOCK-BASED COMPENSATION The Company issues stock options and restricted stock units to employees under Stock Awards Plans approved by shareholders. Stock options and restricted stock units are issued to non-employee directors under Director Stock Option Plans and the Director Restricted Stock Unit Plan approved by shareholders. Options are awarded with the exercise price equal to the market price on the date of grant and generally become exercisable over three years and expire 10 years after grant. Restricted stock units generally vest over three years. Compensation expense recorded attributable to stock options for the first six months of 2015 was approximately $12.0 million ($7.8 million after tax). The income tax benefit related to this compensation expense was approximately $4.2 million. Approximately $10.7 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. Compensation expense recorded attributable to stock options for the first six months of 2014 was approximately $12.0 million ($7.8 million after tax). The income tax benefit related to this compensation expense was approximately $4.2 million. Approximately $10.8 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. The Company uses historical data to estimate expected life and volatility. The weighted-average fair value of stock options granted under the Stock Awards Plans was $12.83 and $14.84 per share in 2015 and 2014, respectively. These values were estimated on the respective dates of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: Stock Awards Plans: Six months ended June 30, Dividend Yield % % Expected Stock Price Volatility % % Risk-free Interest Rate % % Expected Life of Option (years) There were no grants under the Director Stock Option Plan during the second quarter of 2015 as this plan was cancelled and replaced by the Director Restricted Stock Unit Plan. The fair value of stock options granted under the Director Stock Option Plan during the second quarter of 2014 was $14.07. These values were estimated on the respective date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: Director Stock Option Plans: Six months ended June 30, Dividend Yield % Expected Stock Price Volatility % Risk-free Interest Rate % Expected Life of Option (years) A summary of option activity under the Company’s stock plans during the first half of 2015 is presented below: Stock Awards Plans Director Stock Option Plans Weighted Average Weighted Average Shares Exercise Price Shares Exercise Price Outstanding, January 1, 2015 $ $ Granted -- -- Exercised ) ) Forfeited or expired ) -- -- Outstanding at June 30, 2015 $ $ Exercisable at June 30, 2015 $ $ Weighted-Average Remaining Contractual Term (Years): Outstanding at June 30, 2015 Exercisable at June 30, 2015 Aggregate Intrinsic Value ($000): Outstanding at June 30, 2015 $ $ Exercisable at June 30, 2015 $ $ Intrinsic Value of Options Exercised ($000) During the Six Months Ended: June 30, 2015 $ $ June 30, 2014 $ $ The fair value of shares vested during the six months ended June 30, 2015 and 2014 was $15.8 million and $13.9 million, respectively. Cash received from option exercises was approximately $28.8 million and the actual tax benefit realized for the tax deduction from option exercises was approximately $7.0 million in the six months ended June 30, 2015. As of June 30, 2015, the remaining valuation of stock option awards to be expensed in future periods was $18.7 million and the related weighted-average period over which it is expected to be recognized is 1.5 years. The fair value of restricted stock unit grants is the market price of the underlying shares on the grant date. A summary of restricted stock unit activity as of June 30, 2015, and changes during the period then ended is presented below: Director Restricted Stock Awards Plans Stock Unit Plan Weighted Average Weighted Average Shares Grant-Date Fair Value Shares Grant-Date Fair Value Nonvested at January 1, 2015 $ -- $ -- Granted Vested ) -- -- Nonvested at June 30, 2015 $ $ Compensation expense recorded attributable to restricted stock unit grants for the first half of 2015 and 2014 was approximately $2.0 million and $1.1 million, respectively. The fair value of units vested during the six months ended June 30, 2015 and 2014 was $633 thousand and $491 thousand, respectively. The intrinsic value of units vested during the six months ended June 30, 2015 and 2014 was $732 thousand and $613 thousand, respectively. As of June 30, 2015 there was $1.9 million of total unrecognized compensation cost relating to restricted stock unit awards which is expected to be recognized over a weighted-average period of 1.4 years. The Company has a long-term incentive program for certain employees. The program is based on the cumulative total shareholder return of our common stock during a three year performance period. Total expense related to this program is expected to be approximately $2.3 million over the performance period, of which $483 thousand and $320 thousand was recognized in the first half of 2015 and 2014, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2015 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 13 – EARNINGS PER SHARE AptarGroup’s authorized common stock consists of 199 million shares, having a par value of $.01 each. Information related to the calculation of earnings per share is as follows: Three months ended June 30, 2015 June 30, 2014 Diluted Basic Diluted Basic Consolidated operations Income available to common shareholders $ $ $ $ Average equivalent shares Shares of common stock Effect of dilutive stock based compensation Stock options -- -- Restricted stock -- -- Total average equivalent shares Net income per share $ $ $ $ Six months ended June 30, 2015 June 30, 2014 Diluted Basic Diluted Basic Consolidated operations Income available to common shareholders $ $ $ $ Average equivalent shares Shares of common stock Effect of dilutive stock based compensation Stock options -- -- Restricted stock -- -- Total average equivalent shares Net income per share $ $ $ $ |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2015 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 14 – SEGMENT INFORMATION The Company operates in the packaging components industry, which includes the development, manufacture and sale of consumer product dispensing solutions. The Company is organized into three reporting segments. Operations that sell dispensing systems primarily to the personal care, beauty and home care markets form the Beauty + Home segment. Operations that sell dispensing systems primarily to the prescription drug, consumer health care and injectables markets form the Pharma segment. Operations that sell dispensing systems primarily to the food and beverage markets form the Food + Beverage segment. The accounting policies of the segments are the same as those described in Note 1, Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Financial information regarding the Company’s reportable segments is shown below: Three Months Ended June 30 , Six Months Ended June 30, Total Revenue: Beauty + Home $ $ $ $ Pharma Food + Beverage Total Revenue Less: Intersegment Sales: Beauty + Home $ $ $ $ Pharma -- -- -- -- Food + Beverage Total Intersegment Sales $ $ $ $ Net Sales: Beauty + Home $ $ $ $ Pharma Food + Beverage Net Sales $ $ $ $ Segment Income (1): Beauty + Home $ $ $ $ Pharma Food + Beverage Corporate & Other ) ) ) ) Income before interest and taxes $ $ $ $ Interest expense, net ) ) ) ) Income before income taxes $ $ $ $ (1) The Company evaluates performance of our business units and allocates resources based upon segment income. Segment income is defined as earnings before net interest expense, certain corporate expenses and income taxes. |
INSURANCE SETTLEMENT RECEIVABLE
INSURANCE SETTLEMENT RECEIVABLE | 6 Months Ended |
Jun. 30, 2015 | |
INSURANCE SETTLEMENT RECEIVABLE | |
INSURANCE SETTLEMENT RECEIVABLE | NOTE 15 – INSURANCE SETTLEMENT RECEIVABLE A fire caused damage to the roof and production area of a facility owned by an AptarGroup subsidiary in Brazil on September 1, 2014. There were no injuries. The facility is primarily an internal supplier to AptarGroup of anodized aluminum components for certain dispensing systems sold to the regional beauty and personal care markets. Repairs of the facility continue to progress as planned. AptarGroup is insured for the damages caused by the fire, including business interruption insurance. While the Company is still in the process of reviewing claims with our insurance carriers, we have currently recognized a $4.3 million receivable related to costs incurred but not yet reimbursed, which is included in Prepaid and Other in the Condensed Consolidated Balance Sheet. This incident did not have a material impact on our financial results during the first half of 2015 and we expect to reach a final insurance settlement during the second half of 2015. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of AptarGroup, Inc. and our subsidiaries. The terms “AptarGroup” or “Company” as used herein refer to AptarGroup, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain previously reported amounts have been reclassified to conform to the current period presentation. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of consolidated financial position, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. Also, certain financial position data included herein was derived from the Audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 but does not include all disclosures required by GAAP. Accordingly, these Unaudited Condensed Consolidated Financial Statements and related notes should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The results of operations of any interim period are not necessarily indicative of the results that may be expected for the year. |
CHANGE IN ACCOUNTING POLICY | CHANGE IN ACCOUNTING PRINCIPLE During the quarter, the Company changed its inventory valuation method for certain operating entities in its North American business to the first-in first-out (FIFO) method from the last-in first-out (LIFO) method. Prior to the change, the Company utilized two methods of inventory costing: LIFO for inventories in these operating entities and FIFO for inventories in other operating entities. The Company believes that the FIFO method is preferable as it better reflects the current value of inventory on the Company’s Condensed Consolidated Balance Sheet, provides better matching of revenues and expenses, results in uniformity across the Company’s global operations with respect to the method of inventory accounting and improves comparability with the Company’s peers. The cumulative pre-tax effect of this change is $7.4 million. We have determined that this change is not material to the Company’s previously issued financial statements and that the cumulative effect of the change is not material to current operations or to the trend of reported results of operations. Therefore, we conclude it was appropriate to recognize the cumulative effect of the change as an operating item in the current period’s Condensed Consolidated Statement of Income and not to adopt the change by retrospective application. |
ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates to the FASB’s Accounting Standards Codification. During the first six months of 2015, there have been no developments to the recently adopted accounting pronouncements from those disclosed in the Company’s 2014 Annual Report on Form 10-K that are considered to have a material impact on our Unaudited Condensed Consolidated Financial Statements. Other accounting standards that have been issued by the FASB or other standards-setting bodies but are not yet effective are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
SHORT TERM INVESTMENTS | SHORT TERM INVESTMENTS Short term investments reflect funds invested in a time deposit instrument with a two-year maturity. However, during the life of the investment the funds can be redeemed at any time with a 35-90 day notice. There are no penalties for early redemption. We do not consider this investment a marketable security as there is no active market for this type of product. |
INCOME TAXES | INCOME TAXES The Company computes taxes on income in accordance with the tax rules and regulations of the many taxing authorities where income is earned. The income tax rates imposed by these taxing authorities may vary substantially. Taxable income may differ from pre-tax income for financial accounting purposes. To the extent that these differences create differences between the tax basis of an asset or liability and our reported amount in the financial statements, an appropriate provision for deferred income taxes is made. In our determination of which foreign earnings are permanently reinvested in foreign operations, the Company considers numerous factors, including the financial requirements of the U.S. parent company and those of our foreign subsidiaries, the U.S. funding needs for dividend payments and stock repurchases, and the tax consequences of remitting earnings to the U.S. From this analysis, current year repatriation decisions are made in an attempt to provide a proper mix of debt and shareholder capital both within the U.S. and for non-U.S. operations. The Company’s policy is to permanently reinvest our accumulated foreign earnings and the Company will only make a distribution out of current year earnings to meet the cash needs at the parent company. As such, the Company does not provide for taxes on earnings that are deemed to be permanently reinvested. Since no distribution to the U.S. of foreign earnings is expected in 2015, the effective tax rate for 2015 includes no tax cost of repatriation. The Company provides a liability for the amount of tax benefits realized from uncertain tax positions. This liability is provided whenever the Company determines that a tax benefit will not meet a more-likely-than-not threshold for recognition. See Note 4 of the Unaudited Notes to the Condensed Consolidated Financial Statements for more information. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
INVENTORIES | |
Schedule of inventories, by component | June 30, December 31, Raw materials $ $ Work in process Finished goods Total Less LIFO reserve -- ) Total $ $ |
GOODWILL AND OTHER INTANGIBLE25
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of changes in the carrying amount of goodwill | Beauty + Food + Corporate Home Pharma Beverage & Other Total Balance as of December 31, 2014 Goodwill $ $ $ $ $ Accumulated impairment losses -- -- -- ) ) $ $ $ $ -- $ Foreign currency exchange effects ) ) ) -- ) Balance as of June 30, 2015 Goodwill $ $ $ $ $ Accumulated impairment losses -- -- -- ) ) $ $ $ $ -- $ |
Summary of amortized intangible assets | June 30, 2015 December 31, 2014 Weighted Average Gross Gross Amortization Carrying Accumulated Net Carrying Accumulated Net Period (Years) Amount Amortization Value Amount Amortization Value Amortized intangible assets: Patents $ $ ) $ $ $ ) $ Acquired Technology ) ) License agreements and other ) ) Total intangible assets $ $ ) $ $ $ ) $ |
Schedule of future estimated amortization expense | Future estimated amortization expense for the years ending December 31 is as follows: 2015 $ (remaining estimated amortization for 2015) 2016 2017 2018 2019 and thereafter |
LONG-TERM OBLIGATIONS (Tables)
LONG-TERM OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
LONG-TERM OBLIGATIONS | |
Schedule of long-term obligations | June 30, December 31, Notes payable 0.61% - 27.26%, due in monthly and annual installments through 2027 $ $ Senior unsecured notes 2.3%, due in 2015 Senior unsecured notes 6.0%, due in 2016 Senior unsecured notes 6.0%, due in 2018 Senior unsecured notes 3.8%, due in 2020 Senior unsecured notes 3.2%, due in 2022 Senior unsecured notes 3.5%, due in 2023 Senior unsecured notes 3.4%, due in 2024 Senior unsecured notes 3.5%, due in 2024 -- Senior unsecured notes 3.6%, due in 2025 Senior unsecured notes 3.6%, due in 2026 -- Capital lease obligations Current maturities of long-term obligations ) ) Total long-term obligations $ $ |
RETIREMENT AND DEFERRED COMPE27
RETIREMENT AND DEFERRED COMPENSATION PLANS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
RETIREMENT AND DEFERRED COMPENSATION PLANS | |
Components of net periodic benefit cost | Domestic Plans Foreign Plans Three months ended June 30, Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of net loss Amortization of prior service cost -- -- Net periodic benefit cost $ $ $ $ Domestic Plans Foreign Plans Six months ended June 30, Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of net loss Amortization of prior service cost -- -- Net periodic benefit cost $ $ $ $ |
ACCUMULATED OTHER COMPREHENSI28
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
Changes in Accumulated Other Comprehensive Income by Component | Foreign Currency Defined Benefit Pension Plans Other Total Balance – December 31, 2013 $ $ ) $ ) $ Other comprehensive loss before reclassifications ) -- -- ) Amounts reclassified from accumulated other comprehensive income ) Net current-period other comprehensive (loss) income ) ) Balance - June 30, 2014 $ $ ) $ ) $ Balance – December 31, 2014 $ ) $ ) $ ) $ ) Other comprehensive loss before reclassifications ) -- -- ) Amounts reclassified from accumulated other comprehensive income -- Net current-period other comprehensive (loss) income ) ) Balance - June 30, 2015 $ ) $ ) $ ) $ ) |
Reclassifications Out of Accumulated Other Comprehensive Income | Details about Accumulated Other Amount Reclassified from Accumulated Affected Line in the Statement Comprehensive Income Components Other Comprehensive Income Where Net Income is Presented Three months ended June 30, Defined Benefit Pension Plans Amortization of net loss $ $ (a) Amortization of prior service cost (a) Total before tax ) ) Tax benefit $ $ Net of tax Other Changes in treasury locks Interest Expense Total before tax ) ) Tax benefit $ $ Net of tax Total reclassifications for the period $ $ (a) These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax (see Note 6 – Retirement and Deferred Compensation Plans for additional details). Details about Accumulated Other Amount Reclassified from Accumulated Affected Line in the Statement Comprehensive Income Components Other Comprehensive Income Where Net Income is Presented Six months ended June 30, Defined Benefit Pension Plans Amortization of net loss $ $ (b) Amortization of prior service cost (b) Total before tax ) ) Tax benefit $ $ Net of tax Foreign Currency Foreign Currency Gain -- ) Miscellaneous, net -- ) Total before tax -- -- Tax benefit $ -- $ ) Net of tax Other Changes in treasury locks Interest Expense Total before tax ) ) Tax benefit $ $ Net of tax Total reclassifications for the period $ $ (b) These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax (see Note 6 – Retirement and Deferred Compensation Plans for additional details). |
DERIVATIVE INSTRUMENTS AND HE29
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Schedule of Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets | Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 Derivative Contracts Not Designated as Hedging Instruments Balance Sheet Location June 30, 2015 December 31, 2014 Derivative Assets Foreign Exchange Contracts Prepaid and other $ $ Foreign Exchange Contracts Miscellaneous Other Assets -- $ $ Derivative Liabilities Foreign Exchange Contracts Accounts payable and accrued liabilities $ $ Foreign Exchange Contracts Deferred and other non-current liabilities $ $ |
Schedule of Effect of Derivative Instruments on the Condensed Consolidated Statements of Income | The Effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the Quarters Ended June 30, 2015 and June 30, 2014 Derivatives Not Designated as Hedging Instruments Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivative 2015 2014 Foreign Exchange Contracts Other Income (Expense) Miscellaneous, net $ ) $ ) $ ) $ ) The Effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the Six Months Ended June 30, 2015 and June 30, 2014 Derivatives Not Designated as Hedging Instruments Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivative 2015 2014 Foreign Exchange Contracts Other Income (Expense) Miscellaneous, net $ ) $ ) $ ) $ ) |
Schedule of offsetting derivative assets and liabilities | Net Amounts Gross Amounts not Offset in the Gross Amounts Presented in Statement of Financial Position Gross Offset in the the Statement of Financial Cash Collateral Net Amount Financial Position Financial Position Instruments Received Amount Description June 30, 2015 Derivative Assets $ -- $ -- -- $ Total Assets $ -- $ -- -- $ Derivative Liabilities $ -- $ -- -- $ Total Liabilities $ -- $ -- -- $ December 31, 2014 Derivative Assets $ -- $ -- -- $ Total Assets $ -- $ -- -- $ Derivative Liabilities $ -- $ -- -- $ Total Liabilities $ -- $ -- -- $ |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
FAIR VALUE | |
Schedule of fair values of financial assets and liabilities | As of June 30, 2015, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Forward exchange contracts (a) $ $ -- $ $ -- Total assets at fair value $ $ -- $ $ -- Liabilities Forward exchange contracts (a) $ $ -- $ $ -- Total liabilities at fair value $ $ -- $ $ -- As of December 31, 2014, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Forward exchange contracts (a) $ $ -- $ $ -- Total assets at fair value $ $ -- $ $ -- Liabilities Forward exchange contracts (a) $ $ -- $ $ -- Total liabilities at fair value $ $ -- $ $ -- (a) Market approach valuation technique based on observable market transactions of spot and forward rates. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
STOCK-BASED COMPENSATION | |
Weighted-average assumptions used to estimate fair value of stock options granted | Stock Awards Plans: Six months ended June 30, Dividend Yield % % Expected Stock Price Volatility % % Risk-free Interest Rate % % Expected Life of Option (years) Director Stock Option Plans: Six months ended June 30, Dividend Yield % Expected Stock Price Volatility % Risk-free Interest Rate % Expected Life of Option (years) |
Summary of option activity | Stock Awards Plans Director Stock Option Plans Weighted Average Weighted Average Shares Exercise Price Shares Exercise Price Outstanding, January 1, 2015 $ $ Granted -- -- Exercised ) ) Forfeited or expired ) -- -- Outstanding at June 30, 2015 $ $ Exercisable at June 30, 2015 $ $ Weighted-Average Remaining Contractual Term (Years): Outstanding at June 30, 2015 Exercisable at June 30, 2015 Aggregate Intrinsic Value ($000): Outstanding at June 30, 2015 $ $ Exercisable at June 30, 2015 $ $ Intrinsic Value of Options Exercised ($000) During the Six Months Ended: June 30, 2015 $ $ June 30, 2014 $ $ |
Summary of restricted stock unit activity | Director Restricted Stock Awards Plans Stock Unit Plan Weighted Average Weighted Average Shares Grant-Date Fair Value Shares Grant-Date Fair Value Nonvested at January 1, 2015 $ -- $ -- Granted Vested ) -- -- Nonvested at June 30, 2015 $ $ |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
EARNINGS PER SHARE | |
Information related to the calculation of earnings per share | Three months ended June 30, 2015 June 30, 2014 Diluted Basic Diluted Basic Consolidated operations Income available to common shareholders $ $ $ $ Average equivalent shares Shares of common stock Effect of dilutive stock based compensation Stock options -- -- Restricted stock -- -- Total average equivalent shares Net income per share $ $ $ $ Six months ended June 30, 2015 June 30, 2014 Diluted Basic Diluted Basic Consolidated operations Income available to common shareholders $ $ $ $ Average equivalent shares Shares of common stock Effect of dilutive stock based compensation Stock options -- -- Restricted stock -- -- Total average equivalent shares Net income per share $ $ $ $ |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
SEGMENT INFORMATION | |
Financial information regarding the Company's reportable segments | Three Months Ended June 30 , Six Months Ended June 30, Total Revenue: Beauty + Home $ $ $ $ Pharma Food + Beverage Total Revenue Less: Intersegment Sales: Beauty + Home $ $ $ $ Pharma -- -- -- -- Food + Beverage Total Intersegment Sales $ $ $ $ Net Sales: Beauty + Home $ $ $ $ Pharma Food + Beverage Net Sales $ $ $ $ Segment Income (1): Beauty + Home $ $ $ $ Pharma Food + Beverage Corporate & Other ) ) ) ) Income before interest and taxes $ $ $ $ Interest expense, net ) ) ) ) Income before income taxes $ $ $ $ (1) The Company evaluates performance of our business units and allocates resources based upon segment income. Segment income is defined as earnings before net interest expense, certain corporate expenses and income taxes. |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total |
INCOME TAXES | |
Expected distribution of foreign earnings | $ 0 |
Tax cost of repatriation included in effective tax rate | $ 0 |
Short Term Investments | |
Maturity of the deposit | 2 years |
Penalty for early redemption | $ 0 |
Minimum | |
Short Term Investments | |
Redemption period | 35 days |
Maximum | |
Short Term Investments | |
Redemption period | 90 days |
Accounting principle change | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Cumulative pre-tax effect | $ 7,400 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Inventories accounted for by using the LIFO method (as a percent) | 19.00% | ||
Inventories, by component | |||
Raw materials | $ 100,872 | $ 108,618 | |
Work in process | 97,426 | 94,414 | |
Finished goods | 116,880 | 115,809 | |
Total | 315,178 | 318,841 | |
Less LIFO Reserve | $ (7,427) | (7,769) | |
Total | 315,178 | $ 311,072 | |
Pro Forma | |||
Inventories, by component | |||
Less LIFO Reserve | $ (6,879) |
GOODWILL AND OTHER INTANGIBLE36
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Changes in the carrying amount of goodwill | |||
Goodwill | $ 318,095 | $ 331,356 | |
Accumulated impairment losses | (1,615) | (1,615) | |
Goodwill, Total | $ 329,741 | 316,480 | 329,741 |
Goodwill, balance at the beginning of the period | 329,741 | ||
Foreign currency exchange effects | (13,261) | ||
Goodwill, balance at the end of the period | 316,480 | ||
Operating segment | Beauty + Home | |||
Changes in the carrying amount of goodwill | |||
Goodwill | 167,202 | 171,149 | |
Goodwill, Total | 171,149 | 167,202 | 171,149 |
Goodwill, balance at the beginning of the period | 171,149 | ||
Foreign currency exchange effects | (3,947) | ||
Goodwill, balance at the end of the period | 167,202 | ||
Operating segment | Pharma | |||
Changes in the carrying amount of goodwill | |||
Goodwill | 132,793 | 141,592 | |
Goodwill, Total | 141,592 | 132,793 | 141,592 |
Goodwill, balance at the beginning of the period | 141,592 | ||
Foreign currency exchange effects | (8,799) | ||
Goodwill, balance at the end of the period | 132,793 | ||
Operating segment | Food + Beverage | |||
Changes in the carrying amount of goodwill | |||
Goodwill | 16,485 | 17,000 | |
Goodwill, Total | 17,000 | 16,485 | 17,000 |
Goodwill, balance at the beginning of the period | 17,000 | ||
Foreign currency exchange effects | (515) | ||
Goodwill, balance at the end of the period | $ 16,485 | ||
Corporate Non-Segment | |||
Changes in the carrying amount of goodwill | |||
Goodwill | 1,615 | 1,615 | |
Accumulated impairment losses | $ (1,615) | $ (1,615) |
GOODWILL AND OTHER INTANGIBLE37
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Amortized intangible assets: | |||||
Gross Carrying Amount | $ 79,690 | $ 79,690 | $ 85,506 | ||
Accumulated Amortization | (43,600) | (43,600) | (45,461) | ||
Net Value | 36,090 | 36,090 | 40,045 | ||
Aggregate amortization expense | 1,085 | $ 1,369 | 2,166 | $ 2,767 | |
Future estimated amortization expense | |||||
2,015 | 2,055 | 2,055 | |||
2,016 | 3,743 | 3,743 | |||
2,017 | 3,317 | 3,317 | |||
2,018 | 3,317 | 3,317 | |||
2019 and thereafter | 23,658 | $ 23,658 | |||
Weighted Average | |||||
Amortized intangible assets: | |||||
Amortization Period | 9 years | ||||
Patents | |||||
Amortized intangible assets: | |||||
Gross Carrying Amount | 15,743 | $ 15,743 | 17,001 | ||
Accumulated Amortization | (15,711) | (15,711) | (16,852) | ||
Net Value | 32 | $ 32 | 149 | ||
Patents | Weighted Average | |||||
Amortized intangible assets: | |||||
Amortization Period | 7 years | ||||
Acquired technology | |||||
Amortized intangible assets: | |||||
Gross Carrying Amount | 32,891 | $ 32,891 | 35,701 | ||
Accumulated Amortization | (7,675) | (7,675) | (5,950) | ||
Net Value | 25,216 | $ 25,216 | 29,751 | ||
Acquired technology | Weighted Average | |||||
Amortized intangible assets: | |||||
Amortization Period | 15 years | ||||
License agreements and other | |||||
Amortized intangible assets: | |||||
Gross Carrying Amount | 31,056 | $ 31,056 | 32,804 | ||
Accumulated Amortization | (20,214) | (20,214) | (22,659) | ||
Net Value | $ 10,842 | $ 10,842 | $ 10,145 | ||
License agreements and other | Weighted Average | |||||
Amortized intangible assets: | |||||
Amortization Period | 5 years |
INCOME TAXES UNCERTAINTIES (Det
INCOME TAXES UNCERTAINTIES (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
INCOME TAX UNCERTAINTIES | ||
Income tax uncertainties | $ 5.7 | $ 6.4 |
Change in income tax uncertainties | 0.7 | |
Amount of income tax uncertainties that, if recognized, would impact the effective tax rate | 5.5 | $ 6.3 |
Decrease in liability for uncertain tax positions, high end of range | $ 5.1 | |
Number of months, in which liability for uncertain tax positions will decrease | 12 months |
LONG-TERM OBLIGATIONS (Details)
LONG-TERM OBLIGATIONS (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Feb. 28, 2015USD ($) | Dec. 31, 2014USD ($)item | Jun. 30, 2015USD ($) | |
Debt | |||
Proceeds from private placement | $ 475,000 | ||
Long-term obligations including current maturities | 607,584 | $ 831,129 | |
Current maturities of long-term obligations | (18,692) | (18,122) | |
Long-term obligations | 588,892 | 813,007 | |
Aggregate long-term maturities, excluding capital lease obligations | |||
2,015 | 17,769 | ||
2,016 | 50,391 | ||
2,017 | 392 | ||
2,018 | 75,342 | ||
2,019 | 189 | ||
Thereafter | 685,161 | ||
Notes payable | |||
Debt | |||
Proceeds from debt | $ 225,000 | $ 250,000 | |
Number of maturity tranches in funding of private placement | item | 2 | ||
Notes payable 0.61% - 27.26%, due in monthly and annual installments through 2027 | |||
Debt | |||
Long-term obligations including current maturities | $ 5,160 | $ 4,244 | |
Interest rate on notes payable, low end of range (as a percent) | 0.61% | ||
Interest rate on notes payable, high end of range (as a percent) | 27.26% | ||
Senior unsecured notes 2.3%, due in 2015 | |||
Debt | |||
Long-term obligations including current maturities | 16,000 | $ 16,000 | |
Interest rate on senior unsecured notes (as a percent) | 2.30% | ||
Senior unsecured notes 6.0%, due in 2016 | |||
Debt | |||
Long-term obligations including current maturities | 50,000 | $ 50,000 | |
Interest rate on senior unsecured notes (as a percent) | 6.00% | ||
Senior unsecured notes 6.0%, due in 2018 | |||
Debt | |||
Long-term obligations including current maturities | 75,000 | $ 75,000 | |
Interest rate on senior unsecured notes (as a percent) | 6.00% | ||
Senior unsecured notes 3.8%, due in 2020 | |||
Debt | |||
Long-term obligations including current maturities | 84,000 | $ 84,000 | |
Interest rate on senior unsecured notes (as a percent) | 3.80% | ||
Senior unsecured notes 3.2%, due in 2022 | |||
Debt | |||
Long-term obligations including current maturities | 75,000 | $ 75,000 | |
Interest rate on senior unsecured notes (as a percent) | 3.20% | ||
Senior unsecured notes 3.5%, due in 2023 | |||
Debt | |||
Term of debt | 9 years | ||
Long-term obligations including current maturities | 125,000 | $ 125,000 | |
Interest rate on senior unsecured notes (as a percent) | 3.49% | ||
Senior unsecured notes 3.4%, due in 2024 | |||
Debt | |||
Long-term obligations including current maturities | 50,000 | $ 50,000 | |
Interest rate on senior unsecured notes (as a percent) | 3.40% | ||
Senior unsecured notes 3.5%, due in 2024 | |||
Debt | |||
Term of debt | 9 years | ||
Long-term obligations including current maturities | $ 100,000 | ||
Interest rate on senior unsecured notes (as a percent) | 3.49% | ||
Senior unsecured notes 3.6%, due in 2025 | |||
Debt | |||
Term of debt | 11 years | ||
Long-term obligations including current maturities | 125,000 | $ 125,000 | |
Interest rate on senior unsecured notes (as a percent) | 3.61% | ||
Senior unsecured notes 3.6%, due in 2026 | |||
Debt | |||
Term of debt | 11 years | ||
Long-term obligations including current maturities | $ 125,000 | ||
Interest rate on senior unsecured notes (as a percent) | 3.61% | ||
Capital lease obligations | |||
Debt | |||
Long-term obligations including current maturities | $ 2,424 | $ 1,885 |
RETIREMENT AND DEFERRED COMPE40
RETIREMENT AND DEFERRED COMPENSATION PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Domestic Plans | ||||
Components of net periodic benefit cost: | ||||
Service cost | $ 2,504 | $ 2,010 | $ 5,008 | $ 4,021 |
Interest cost | 1,589 | 1,482 | 3,178 | 2,964 |
Expected return on plan assets | (1,897) | (1,646) | (3,795) | (3,292) |
Amortization of net loss | 1,351 | 717 | 2,702 | 1,434 |
Net periodic benefit cost | 3,547 | 2,563 | 7,093 | 5,127 |
Minimum funding requirement | 0 | |||
Expected contribution in current fiscal year | 10,000 | |||
Employer contributions | 0 | |||
Foreign Plans | ||||
Components of net periodic benefit cost: | ||||
Service cost | 1,139 | 1,081 | 2,299 | 2,160 |
Interest cost | 412 | 699 | 832 | 1,398 |
Expected return on plan assets | (447) | (510) | (902) | (1,020) |
Amortization of net loss | 418 | 313 | 843 | 626 |
Amortization of prior service cost | 64 | 80 | 129 | 161 |
Net periodic benefit cost | $ 1,586 | $ 1,663 | 3,201 | $ 3,325 |
Expected contribution in current fiscal year | 12,600 | |||
Employer contributions | $ 1,000 |
ACCUMULATED OTHER COMPREHENSI41
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated other comprehensive income activity | ||
Balance at the beginning of the period | $ (110,045) | $ 109,751 |
Other comprehensive loss before reclassifications | (94,147) | (4,252) |
Amounts reclassified from accumulated other comprehensive income | 2,355 | 1,107 |
Net current-period other comprehensive (loss) income | (91,792) | (3,145) |
Balance at the end of the period | (201,837) | 106,606 |
Foreign Currency | ||
Accumulated other comprehensive income activity | ||
Balance at the beginning of the period | (42,851) | 149,965 |
Other comprehensive loss before reclassifications | (94,147) | (4,252) |
Amounts reclassified from accumulated other comprehensive income | (340) | |
Net current-period other comprehensive (loss) income | (94,147) | (4,592) |
Balance at the end of the period | (136,998) | 145,373 |
Defined Benefit Pension Plans | ||
Accumulated other comprehensive income activity | ||
Balance at the beginning of the period | (67,097) | (40,093) |
Amounts reclassified from accumulated other comprehensive income | 2,342 | 1,435 |
Net current-period other comprehensive (loss) income | 2,342 | 1,435 |
Balance at the end of the period | (64,755) | (38,658) |
Other | ||
Accumulated other comprehensive income activity | ||
Balance at the beginning of the period | (97) | (121) |
Amounts reclassified from accumulated other comprehensive income | 13 | 12 |
Net current-period other comprehensive (loss) income | 13 | 12 |
Balance at the end of the period | $ (84) | $ (109) |
ACCUMULATED OTHER COMPREHENSI42
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Interest expense | $ 9,195 | $ 5,246 | $ 16,498 | $ 10,127 |
Miscellaneous, net | 1,268 | 525 | 1,467 | 153 |
Total before tax | (85,755) | (79,706) | (153,450) | (153,386) |
Tax benefit | 28,214 | 26,622 | 50,810 | 51,894 |
Total reclassifications for the period | (57,539) | (53,076) | (102,710) | (101,465) |
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Total reclassifications for the period | 1,180 | 723 | 2,355 | 1,107 |
Defined Benefit Pension Plans | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Amortization of net loss | 1,769 | 1,030 | 3,545 | 2,060 |
Amortization of prior service cost | 64 | 80 | 129 | 161 |
Total before tax | 1,833 | 1,110 | 3,674 | 2,221 |
Tax benefit | (660) | (393) | (1,332) | (786) |
Total reclassifications for the period | 1,173 | 717 | 2,342 | 1,435 |
Foreign Currency | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Miscellaneous, net | (340) | |||
Total before tax | (340) | |||
Total reclassifications for the period | (340) | |||
Other | Treasury locks | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Interest expense | 9 | 10 | 19 | 19 |
Total before tax | 9 | 10 | 19 | 19 |
Tax benefit | (2) | (4) | (6) | (7) |
Total reclassifications for the period | $ 7 | $ 6 | $ 13 | $ 12 |
DERIVATIVE INSTRUMENTS AND HE43
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Aggregate amount of forward exchange contracts outstanding | $ 138,100 | |
Fair Value of Derivative Instruments | ||
Derivative Assets | 1,379 | $ 1,044 |
Derivative Liabilities | 1,826 | 2,493 |
Derivative Contracts Not Designated as Hedging Instruments | ||
Fair Value of Derivative Instruments | ||
Derivative Assets | 1,379 | 1,044 |
Derivative Liabilities | 1,826 | 2,493 |
Derivative Contracts Not Designated as Hedging Instruments | Foreign Exchange Contracts | Prepaid and other | ||
Fair Value of Derivative Instruments | ||
Derivative Assets | 1,379 | 1,037 |
Derivative Contracts Not Designated as Hedging Instruments | Foreign Exchange Contracts | Miscellaneous Other Assets | ||
Fair Value of Derivative Instruments | ||
Derivative Assets | 7 | |
Derivative Contracts Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts payable and accrued liabilities | ||
Fair Value of Derivative Instruments | ||
Derivative Liabilities | 1,736 | 2,378 |
Derivative Contracts Not Designated as Hedging Instruments | Foreign Exchange Contracts | Deferred and other non-current liabilities | ||
Fair Value of Derivative Instruments | ||
Derivative Liabilities | $ 90 | $ 115 |
DERIVATIVE INSTRUMENTS AND HE44
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative instruments, gain or (loss) | ||||
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | $ (3,301) | $ (1,335) | $ (48) | $ (1,494) |
Foreign Exchange Contracts | ||||
Derivative instruments, gain or (loss) | ||||
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | $ (3,301) | $ (1,335) | $ (48) | $ (1,494) |
DERIVATIVE INSTRUMENTS AND HE45
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 3) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Derivative Assets | ||
Gross Amount | $ 1,379 | $ 1,044 |
Net Amounts Presented in the Statement of Financial Position | 1,379 | 1,044 |
Net Amount | 1,379 | 1,044 |
Derivative Liabilities | ||
Gross Amount | 1,826 | 2,493 |
Net Amounts Presented in the Statement of Financial Position | 1,826 | 2,493 |
Net Amount | $ 1,826 | $ 2,493 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Liabilities | ||
Fair value of long-term obligations | $ 827,000 | $ 606,000 |
Assets and liabilities measured at fair value on recurring basis | Total | ||
Assets | ||
Forward exchange contracts, assets | 1,379 | 1,044 |
Total assets at fair value | 1,379 | 1,044 |
Liabilities | ||
Forward exchange contracts, liabilities | 1,826 | 2,493 |
Total liabilities at fair value | 1,826 | 2,493 |
Assets and liabilities measured at fair value on recurring basis | Level 2 | ||
Assets | ||
Forward exchange contracts, assets | 1,379 | 1,044 |
Total assets at fair value | 1,379 | 1,044 |
Liabilities | ||
Forward exchange contracts, liabilities | 1,826 | 2,493 |
Total liabilities at fair value | $ 1,826 | $ 2,493 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2015USD ($) |
Indemnification agreements | |
Commitments and contingencies | |
Liabilities recorded under indemnification agreements | $ 0 |
STOCK REPURCHASE PROGRAM (Detai
STOCK REPURCHASE PROGRAM (Details) - USD ($) shares in Thousands, $ in Thousands | Dec. 17, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 16, 2014 | Oct. 30, 2014 |
Stock repurchase program | |||||
Share repurchases authorized amount | $ 350,000 | ||||
Aggregate amount of share repurchases (in dollars) | $ 39,900 | $ 52,884 | |||
Number of shares repurchased | 600 | 800 | |||
ASR Program | |||||
Stock repurchase program | |||||
Share repurchases authorized amount | $ 250,000 | ||||
Aggregate amount of share repurchases (in dollars) | $ 250,000 | ||||
Number of shares repurchased | 3,100 | ||||
Percentage of the total number of shares expected to be purchased in the ASR | 80.00% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
STOCK-BASED COMPENSATION | |||
Proceeds from stock option exercises | $ 28,810 | $ 18,319 | |
Stock options | |||
STOCK-BASED COMPENSATION | |||
Award vesting period | 3 years | ||
Expiration period | 10 years | ||
Compensation expense | $ 12,000 | 12,000 | |
Compensation expense, net of tax | 7,800 | 7,800 | |
Income tax benefit related to compensation expense | 4,200 | 4,200 | |
Fair value of shares vested | 15,800 | 13,900 | |
Proceeds from stock option exercises | 28,800 | ||
Actual tax benefit realized for the tax deduction from option exercises | 7,000 | ||
Unrecognized compensation cost expected to be recognized in future periods | $ 18,700 | ||
Weighted-average period over which compensation cost is expected to be recognized | 1 year 6 months | ||
Stock options | Selling, research & development and administrative expenses | |||
STOCK-BASED COMPENSATION | |||
Compensation expense | $ 10,700 | $ 10,800 | |
Stock Option Plans | Stock options | |||
STOCK-BASED COMPENSATION | |||
Weighted-average fair value of stock options granted (in dollars per share) | $ 12.83 | $ 14.84 | |
Assumptions used to estimate fair value of stock options granted | |||
Dividend Yield (as a percent) | 1.70% | 1.70% | |
Expected Stock Price Volatility (as a percent) | 21.90% | 22.20% | |
Risk-free Interest Rate (as a percent) | 1.60% | 2.30% | |
Expected Life of Option (years) | 6 years 10 months 24 days | 6 years 10 months 24 days | |
Stock options activity | |||
Outstanding at the beginning of the period (in shares) | 8,107,806 | ||
Granted (in shares) | 1,391,355 | ||
Exercised (in shares) | (788,268) | ||
Forfeited or expired (in shares) | (20,653) | ||
Outstanding at the end of the period (in shares) | 8,690,240 | ||
Exercisable at the end of the period (in shares) | 5,925,974 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 46.74 | ||
Granted (in dollars per share) | 64.60 | ||
Exercised (in dollars per share) | 34.60 | ||
Forfeited or expired (in dollars per share) | 60.34 | ||
Outstanding at the end of the period (in dollars per share) | 50.67 | ||
Exercisable at the end of the period (in dollars per share) | $ 44.64 | ||
Weighted-Average Remaining Contractual Term (Years): | |||
Outstanding at the end of the period | 6 years 4 months 24 days | ||
Exercisable at the end of the period | 5 years 2 months 12 days | ||
Aggregate Intrinsic Value: | |||
Outstanding at the end of the period | $ 120,651 | ||
Exercisable at the end of the period | 115,264 | ||
Intrinsic Value of Options Exercised | $ 23,592 | $ 18,050 | |
Stock Option Plans | Restricted stock units | |||
STOCK-BASED COMPENSATION | |||
Award vesting period | 3 years | ||
Compensation expense | $ 2,000 | 1,100 | |
Unrecognized compensation cost expected to be recognized in future periods | $ 1,900 | ||
Weighted-average period over which compensation cost is expected to be recognized | 1 year 4 months 24 days | ||
Restricted stock unit activity | |||
Balance at the beginning of the period (in shares) | 61,750 | ||
Granted (in shares) | 11,448 | ||
Vested (in shares) | (11,083) | ||
Balance at the end of the period (in shares) | 62,115 | ||
Weighted-Average Grant-Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 64.09 | ||
Granted (in dollars per share) | 65.87 | ||
Vested (in dollars per share) | 57.13 | ||
Nonvested at the end of the period (in dollars per share) | $ 65.65 | ||
Fair value of units vested | $ 633 | 491 | |
Intrinsic value of units vested | $ 732 | $ 613 | |
Stock Option Plans | Director restricted stock unit plan | |||
Restricted stock unit activity | |||
Granted (in shares) | 18,857 | ||
Balance at the end of the period (in shares) | 18,857 | ||
Weighted-Average Grant-Date Fair Value | |||
Granted (in dollars per share) | $ 63.10 | ||
Nonvested at the end of the period (in dollars per share) | 63.10 | ||
Director Stock Option Plans | Stock options | |||
STOCK-BASED COMPENSATION | |||
Weighted-average fair value of stock options granted (in dollars per share) | $ 14.07 | $ 0 | |
Assumptions used to estimate fair value of stock options granted | |||
Dividend Yield (as a percent) | 1.80% | ||
Expected Stock Price Volatility (as a percent) | 22.20% | ||
Risk-free Interest Rate (as a percent) | 2.20% | ||
Expected Life of Option (years) | 6 years 10 months 24 days | ||
Stock options activity | |||
Outstanding at the beginning of the period (in shares) | 368,668 | ||
Exercised (in shares) | (62,001) | ||
Outstanding at the end of the period (in shares) | 306,667 | ||
Exercisable at the end of the period (in shares) | 224,325 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 53.52 | ||
Exercised (in dollars per share) | 40.67 | ||
Outstanding at the end of the period (in dollars per share) | 56.11 | ||
Exercisable at the end of the period (in dollars per share) | $ 53.41 | ||
Weighted-Average Remaining Contractual Term (Years): | |||
Outstanding at the end of the period | 7 years 4 months 24 days | ||
Exercisable at the end of the period | 6 years 10 months 24 days | ||
Aggregate Intrinsic Value: | |||
Outstanding at the end of the period | $ 2,616 | ||
Exercisable at the end of the period | 2,432 | ||
Intrinsic Value of Options Exercised | 1,449 | $ 741 | |
New long-term incentive program | |||
STOCK-BASED COMPENSATION | |||
Compensation expense | $ 483 | $ 320 | |
Performance period used to measure cumulative total shareholder return of common stock | 3 years | ||
Expected total expense related to program over the performance period | $ 2,300 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
EARNINGS PER SHARE | |||||
Authorized common stock (in shares) | 199,000 | 199,000 | 199,000 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||
Diluted | |||||
Income available to common stockholders (in dollars) | $ 57,539 | $ 53,076 | $ 102,710 | $ 101,465 | |
Shares of common stock | 62,697 | 65,328 | 62,496 | 65,397 | |
Total average equivalent shares | 64,276 | 67,438 | 64,603 | 68,042 | |
Net income per share, diluted (in dollars per share) | $ 0.90 | $ 0.79 | $ 1.59 | $ 1.49 | |
Basic | |||||
Income available to common stockholders (in dollars) | $ 57,539 | $ 53,076 | $ 102,710 | $ 101,465 | |
Shares of common stock | 62,697 | 65,328 | 62,496 | 65,397 | |
Net income per share, basic (in dollars per share) | $ 0.92 | $ 0.81 | $ 1.64 | $ 1.55 | |
Stock options | |||||
Diluted | |||||
Effect of dilutive stock based compensation (in shares) | 1,550 | 2,103 | 2,075 | 2,616 | |
Restricted stock units | |||||
Diluted | |||||
Effect of dilutive stock based compensation (in shares) | 29 | 7 | 32 | 29 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | |
SEGMENT INFORMATION | ||||
Number of reportable segments | segment | 3 | |||
Financial information regarding the Company's reportable segments | ||||
Net Sales | $ 594,275 | $ 670,631 | $ 1,184,086 | $ 1,346,682 |
Income before interest and taxes | 93,845 | 83,905 | 167,112 | 161,450 |
Interest expense, net | (8,090) | (4,199) | (13,662) | (8,064) |
Income before Income Taxes | 85,755 | 79,706 | 153,450 | 153,386 |
Beauty + Home | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | 319,124 | 385,226 | 648,539 | 776,462 |
Income before interest and taxes | 27,193 | 27,198 | 50,569 | 54,979 |
Pharma | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | 183,300 | 195,690 | 361,969 | 390,039 |
Income before interest and taxes | 55,462 | 52,793 | 107,463 | 105,275 |
Food + Beverage | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | 91,851 | 89,715 | 173,578 | 180,181 |
Income before interest and taxes | 14,991 | 12,416 | 24,041 | 21,496 |
Corporate & Other | ||||
Financial information regarding the Company's reportable segments | ||||
Income before interest and taxes | (3,801) | (8,502) | (14,961) | (20,300) |
Operating segment | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | 600,164 | 677,097 | 1,195,547 | 1,360,612 |
Operating segment | Beauty + Home | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | 324,742 | 391,215 | 659,536 | 789,755 |
Operating segment | Pharma | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | 183,300 | 195,690 | 361,969 | 390,039 |
Operating segment | Food + Beverage | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | 92,122 | 90,192 | 174,042 | 180,818 |
Intersegment | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | (5,889) | (6,466) | (11,461) | (13,930) |
Intersegment | Beauty + Home | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | (5,617) | (5,989) | (10,997) | (13,293) |
Intersegment | Food + Beverage | ||||
Financial information regarding the Company's reportable segments | ||||
Net Sales | $ (272) | $ (477) | $ (464) | $ (637) |
INSURANCE SETTLEMENT RECEIVAB52
INSURANCE SETTLEMENT RECEIVABLE (Details) $ in Millions | Jun. 30, 2015USD ($) |
INSURANCE SETTLEMENT RECEIVABLE | |
Insurance receivable | $ 4.3 |