West Pharmaceutical Services (WST) 10-K risk factor changes: FY2018 vs FY2017

[removed: looking] [added: We also provide forward-looking] statements in other materials we release to the public as well as oral forward-looking statements.

Examples of the effects of these global economic challenges include: our [removed: suppliers'] [added: suppliers’] and our [removed: customers'] [added: customers’] inability to access the credit markets at commercially reasonable rates; reduction in sales due to customers decreasing their inventories in the near-term or long-term or due to liquidity difficulties; reduction in sales due to shortages of materials we purchase from our suppliers; reduction in research and development efforts and expenditures by our customers; our inability to hedge our currency and raw material risks sufficiently or at commercially reasonable prices; insolvency of suppliers or customers; inflationary pressures on our supplies or our products; and increased expenses due to growing global taxation of corporate profits or [removed: revenues, including the impact of the Tax Cuts and Jobs Act (the “2017 Tax Act”).][added: revenues.]

Sales outside of the U.S. accounted for [removed: 54.1%] [added: 55.4%] of our consolidated net sales in [removed: 2017] [added: 2018] and we anticipate that sales from international operations will continue to [removed: represent a significant portion of our total sales in the future.]

[added: We are] also exposed to currencies in emerging market countries, such as the Chinese Yuan, the Indian Rupee, and various South American currencies.

The design, development, manufacturing, marketing and labeling of certain of our products and our [removed: customers'] [added: customers’] products that incorporate our products are subject to regulation by governmental authorities in the U.S., Europe and other countries, including the U.S. Food and Drug Administration [removed: (“FDA”) and] [added: (“FDA”),] the European Medicines [removed: Agency.][added: Agency, and the National Medical Products Administration (China).]

[removed: Failure to comply with applicable regulatory requirements or failure to obtain regulatory approval for] a new product could result in expenses and actions that could adversely affect our business and financial performance.

Products [removed: incorporating] [added: that incorporate] our technologies [added: and medical devices that we produce] are subject to regulations and extensive approval or clearance processes, which make the timing and success of new-product commercialization difficult to predict.

The process of obtaining [added: and maintaining] FDA and other required regulatory approvals is expensive and time-consuming.

Historically, most medical devices [removed: incorporating] [added: that incorporate] our technologies [added: and medical devices that we produce] have been subject to the [removed: FDA's] [added: FDA’s] 510(k) marketing [added: approval process, which typically lasts from six to nine months.]

Pharmaceutical products [removed: incorporating] [added: that incorporate] our technologies [added: and medical devices that we produce] are subject to the [removed: FDA's] [added: FDA’s] New Drug Application process, which typically takes a number of years to complete.

Additionally, biotechnology products [removed: incorporating] [added: that incorporate] our technologies [added: and medical devices that we produce] are subject to the [removed: FDA's] [added: FDA’s] Biologics License Application process, which also typically takes a number of years to complete.

An effect of the governmental regulation of our [removed: customers'] [added: medical devices and our customers’] drug products, devices, and manufacturing processes is that compliance with regulations makes it difficult to change components and devices produced by one supplier with those from another supplier, due to the large amount of data and information that customers must generate to demonstrate that the components and devices are equivalent and pose no additional risk to the patient.

The regulation of our [removed: customers'] [added: medical devices and our customers’] products that incorporate our components and devices has increased over time.

We rely on patent, trademark, copyright, trade secret, and other intellectual property laws, as well as nondisclosure and confidentiality agreements and other methods, to protect our proprietary [added: products,] information, technologies and processes.

We also have obligations with respect to the non-use and non-disclosure of [removed: third party] [added: third-party] intellectual property.

In addition, effective patent, copyright, trademark and trade secret protection may be unavailable or limited for some of our [removed: intellectual property] [added: proprietary products] in some countries.

Failure to protect our intellectual property [added: or successfully invalidate or defend against intellectual property protections of third parties] could harm our business and results of operations.

[added: We face this competition from a wide] range of companies, including large medical device companies, some of which have greater financial and marketing resources than we do.

Changes in U.S. social, political, regulatory, and economic conditions, [removed: including the impact of the 2017 Tax Act,] or in laws and policies governing foreign trade, manufacturing, development, immigration, and [removed: investment] [added: investment,] could have an adverse effect on our financial condition, results of operations and cash flows.

[added: The] prices of many of these raw materials and utilities are cyclical and volatile.

[removed: Delays, interruptions or failures in developing and commercializing new-product] innovations or proprietary multi-component systems could adversely affect future revenues and operating income.

We may not succeed in finding and completing acquisition or other strategic transactions, [removed: if any,] which could have an adverse effect on our business and results of operations.

Strategic transactions involve risks, including those associated with integrating the operations or maintaining the operations as separate (as applicable), financial reporting, disparate technologies and personnel of acquired companies, joint ventures or related companies; managing geographically dispersed operations or other strategic investments; the diversion of [removed: management's] [added: management’s] attention from other business concerns; the inherent risks in entering markets or lines of business in which we have either limited or no direct experience; [removed: unknown risks; and] the potential loss of key employees, customers and strategic partners of acquired companies, joint ventures or companies in which we may make strategic [removed: investments.][added: investments; and potentially other unknown risks.]

Strategic transactions may not be accretive to our earnings and may negatively impact our results of operations as a result of, among other things, the incurrence of debt, one-time write-offs of [removed: goodwill] [added: goodwill, additional carrying costs of patent or trademark portfolios,] and amortization expenses of other intangible assets.

Our future success depends, in large part, on our ability to retain [removed: these officers and other] key employees, including [removed: people] [added: our executive officers, individuals] in technical, marketing, sales and research positions.

We maintain an extensive network of technical security controls, policy enforcement mechanisms and monitoring [removed: systems] [added: systems,] in order to address these threats.

If we cannot [added: comply with regulations or] prevent the unauthorized access, release and/or corruption of our or our customers' confidential, classified or personally identifiable information, our reputation could be damaged, and/or we could face financial losses.

represent a significant portion of our total sales in the future.

Failure to comply with applicable regulatory requirements or failure to obtain regulatory approval for

Changes in regulation on a global scale must be monitored and actions taken to ensure ongoing compliance.

There is no certainty that any regulatory approval may be obtained or maintained indefinitely, and our ability to launch products on to the market and maintain market presence is not guaranteed.

Our systems and networks, as well as those of our customers, suppliers, service providers, and banks, have and may in the future become the target of cyberattacks or information security breaches which, in turn, could result in the unauthorized release and misuse of confidential or proprietary information about our company, our employees, or our customers, as well as disrupt our operations or damage our facilities or those of third parties.

Additionally, our systems are subject to regulation to preserve the privacy of certain data held on those systems.

We may also be required to incur additional costs to modify or enhance our systems, or to try to prevent or remediate any such attacks.

Modifying or enhancing our systems may result in unanticipated or prolonged disruption events, which could have a material adverse effect on our business and/or results of operations.

Delays, interruptions or failures in developing and commercializing new-product

We also provide forward-

We are

approval process, which typically lasts from six to nine months.

We face this competition from a wide

The

Our executive officers are critical to the management and direction of our businesses.

We may face certain security threats, including threats to the confidentiality, availability and integrity of our data and systems.

[removed: The re-measured results excluding effects from currency translation and excluding the effects of] unallocated items are not in conformity with U.S. GAAP and should not be used as a substitute for the comparable U.S. GAAP financial measures.

[removed: 2017] [added: 2018] Financial Performance Summary

Consolidated net sales increased by [removed: $90.0] [added: $118.3] million, or [removed: 6.0%,] [added: 7.4%,] in [removed: 2017,] [added: 2018,] including a favorable foreign currency translation impact of [removed: $12.2] [added: $28.6] million.

Excluding foreign currency translation effects, consolidated net sales increased by [removed: $77.8] [added: $89.7] million, or [removed: 5.2%.][added: 5.6%.]

Consolidated operating profit increased by [removed: $32.1] [added: $30.6] million, or [removed: 16.3%,] [added: 15.7%,] in 2017, including a favorable foreign currency translation impact of $1.6 million.

Net income in [removed: 2017] [added: 2018] was [removed: $150.7] [added: $206.9] million, or [removed: $1.99] [added: $2.74] per diluted share, compared to [removed: $143.6] [added: $150.7] million, or [removed: $1.91] [added: $1.99] per diluted share, in [removed: 2016.][added: 2017.]

[removed: Our] [added: Net income in] 2017 [removed: results] included the impact of a discrete tax charge of $48.8 million, or $0.64 per diluted share, related to the 2017 Tax Act and the impact of changes in enacted international tax rates on previously-recorded deferred tax asset and liability balances, a tax benefit of $33.1 million, or $0.44 per diluted share, associated with our adoption of the guidance issued by the FASB regarding share-based payment transactions, and a charge of $11.1 million, or $0.15 per diluted share, related to the deconsolidation of our Venezuelan subsidiary.

At December 31, [removed: 2017,] [added: 2018,] our cash and cash equivalents balance totaled [removed: $235.9] [added: $337.4] million and our available borrowing capacity under our $300.0 million multi-currency revolving credit facility (the “Credit Facility”) was [removed: $267.5] [added: $268.9] million.

| ($ in millions) | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2017/2016] [added: 2018/2017] | | | [removed: 2016/2015] [added: 2017/2016] | |

| Proprietary Products | $ | [removed: 1,236.9] [added: 1,308.6] | | | $ | [removed: 1,189.9] [added: 1,236.9] | | | $ | [removed: 1,098.3] [added: 1,189.9] | | | [removed: 3.9] [added: 5.8] | % | | [removed: 8.3] [added: 3.9] | % |

| Contract-Manufactured Products | [removed: 362.5] [added: 409.1] | | | | [removed: 320.2] [added: 362.5] | | | | [removed: 302.4] [added: 320.2] | | | | [removed: 13.2] [added: 12.9] | % | | [removed: 5.9] [added: 13.2] | % |

| Intersegment sales elimination | (0.3 | | ) | | [removed: (1.0] [added: (0.3] | | ) | | [removed: (0.9] [added: (1.0] | | ) | | — | [added: %] | | — | [added: %] |

| Consolidated net sales | $ | [removed: 1,599.1] [added: 1,717.4] | | | $ | [removed: 1,509.1] [added: 1,599.1] | | | $ | [removed: 1,399.8] [added: 1,509.1] | | | [removed: 6.0] [added: 7.4] | % | | [removed: 7.8] [added: 6.0] | % |

[removed: Proprietary Products sales growth in 2017 has been slower than in 2016,] as customers continued to work down inventory purchased in 2016 mostly to address long production lead-times for [removed: high-value products.]

Additional production capacity and staffing improved our lead-times, and we began to see [removed: positive growth for customers in the Biologics and Generics market units.]

[removed: Higher sales volume contributed 2.2] percentage points of the increase, and sales price increases contributed 1.0 percentage points of the increase.

[removed: Excluding foreign] currency translation effects, net sales increased by $38.5 million, or 12.0%, primarily due to the initial commercial [removed: ramp-up of projects that commenced in the latter half of 2016.]

[removed: Higher sales volume contributed 10.8 percentage] points of the increase, and sales price increases contributed 1.2 percentage points of the increase.

[removed: 2016] [added: 2017] compared to [removed: 2015][added: 2016]

[removed: Consolidated] [added: Proprietary Products – Proprietary Products] net sales increased by [removed: $109.3] [added: $71.7] million, or [removed: 7.8%,] [added: 5.8%,] in [removed: 2016,] [added: 2018,] including [removed: an unfavorable] [added: a favorable] foreign currency translation impact of [removed: $17.5] [added: $23.8] million.

Excluding foreign currency translation effects, consolidated net sales increased by [removed: $126.8] [added: $89.7] million, or [removed: 9.1%.][added: 5.6%.]

[removed: Proprietary] [added: Contract-Manufactured] Products – [removed: Proprietary] [added: Contract-Manufactured] Products net sales increased by [removed: $91.6] [added: $46.6] million, or [removed: 8.3%,] [added: 12.9%,] in [removed: 2016,] [added: 2018,] including [removed: an unfavorable] [added: a favorable] foreign currency translation impact of [removed: $17.5] [added: $4.8] million.

Excluding foreign currency translation effects, net sales increased by [removed: $109.1] [added: $47.9] million, or [removed: 9.9%, due to] [added: 3.9%, as] growth in our high-value product offerings, including [removed: products sold under] our [removed: distributorship agreement with Daikyo and our] Westar® and FluroTec-coated [removed: stoppers] [added: components, our ready-to-use seals, stoppers,] and [removed: plungers.][added: plungers, and our NovaPure® products, as well as sales price increases, partially offset the impact of the voluntary recall of Vial2Bag products and the deconsolidation of our Venezuelan subsidiary as of April 1, 2017.]

[removed: An improvement in product mix and higher] [added: Higher] sales [removed: volumes] [added: volume, particularly in Ireland,] contributed [removed: 9.1] [added: 10.4] percentage points of the increase, and sales price increases contributed [removed: the remainder] [added: 1.2 percentage points] of the increase.

| Gross profit margin | [removed: 36.3] [added: 37.1] | | % | | [removed: 37.7] [added: 36.3] | | % | | [removed: 36.8] [added: 37.7] | | % | | | | | | |

| Gross profit | $ | [removed: 63.6] [added: 60.0] | | | $ | [removed: 53.1] [added: 63.6] | | | $ | [removed: 51.3] [added: 53.1] | | | [removed: 19.8] [added: (5.7] | [removed: %] [added: )%] | | [removed: 3.5] [added: 19.8] | % |

| Gross profit margin | [removed: 17.5] [added: 14.7] | | % | | [removed: 16.6] [added: 17.5] | | % | | [removed: 17.0] [added: 16.5] | | % | | | | | | |

| Consolidated gross profit margin | [removed: 32.1] [added: 31.8] | | % | | [removed: 33.2] [added: 32.1] | | % | | [removed: 32.6] [added: 33.2] | | % | | | | | | |

Contract-Manufactured Products gross profit margin increased by [removed: 0.9] [added: 1.0] margin points in 2017, as sales price increases, a favorable mix of products sold, higher sales volume, and production efficiencies were partially offset by increased labor, overhead, and depreciation costs.

Consolidated gross profit increased by [removed: $45.3] [added: $32.5] million, or [removed: 9.9%,] [added: 6.3%,] in [removed: 2016,] [added: 2018,] including [removed: an unfavorable] [added: a favorable] foreign currency translation impact of [removed: $5.6] [added: $9.3] million.

Consolidated gross profit margin [removed: increased] [added: decreased] by [removed: 0.6] [added: 0.3] margin points in [removed: 2016.][added: 2018.]

Proprietary Products – Proprietary Products gross profit increased by [removed: $43.5] [added: $36.1] million, or [removed: 10.8%,] [added: 8.0%,] in [removed: 2016,] [added: 2018,] including [removed: an unfavorable] [added: a favorable] foreign currency translation impact of [removed: $5.6] [added: $8.5] million.

Proprietary Products gross profit margin increased by [removed: 0.9] [added: 0.8] margin points in [removed: 2016,] [added: 2018,] as [removed: product mix improvements,] production efficiencies, [added: a favorable mix of products sold,] and sales price increases were partially offset by [added: the impact of under-absorbed overhead costs from our new facility in Waterford, Ireland and the deconsolidation of our Venezuelan subsidiary as of April 1, 2017, as well as] increased labor and [removed: overhead] [added: depreciation costs and higher raw material] costs.

Contract-Manufactured Products – Contract-Manufactured Products [removed: gross profit] [added: SG&A costs] increased by [removed: $1.8] [added: $0.2] million, or [removed: 3.5%, in 2016.]

| Proprietary Products | $ | [removed: 39.1] [added: 40.3] | | | $ | [removed: 36.8] [added: 39.1] | | | $ | [removed: 34.1] [added: 36.8] | | | [removed: 6.3] [added: 3.1] | % | | [removed: 7.9] [added: 6.3] | % |

| Consolidated R&D costs | $ | [removed: 39.1] [added: 40.3] | | | $ | [removed: 36.8] [added: 39.1] | | | $ | [removed: 34.1] [added: 36.8] | | | [removed: 6.3] [added: 3.1] | % | | [removed: 7.9] [added: 6.3] | % |

All of the R&D costs incurred during [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] related to Proprietary Products.

| Contract-Manufactured Products | [removed: 15.4] [added: 16.5] | | | | [removed: 15.2] [added: 15.4] | | | | [removed: 15.8] [added: 15.2] | | | | [removed: 1.3] [added: 7.1] | % | | [removed: (3.8] [added: 1.3] | [removed: )%] [added: %] |

| SG&A as a % of net sales | [removed: 15.2] [added: 15.3] | | % | | [removed: 15.9] [added: 15.4] | | % | | [removed: 16.6] [added: 15.9] | | % | | | | | | |

Consolidated SG&A costs increased by [removed: $2.8] [added: $16.9] million, or [removed: 1.2%,] [added: 6.9%,] in [removed: 2017,] [added: 2018,] including the impact of foreign currency translation, which increased SG&A costs by [removed: $1.2] [added: $2.4] million.

The re-measured results excluding effects from currency translation and excluding the effects of

Consolidated net sales increased by $118.3 million, or 7.4%, in 2018.

Net income in 2018 included the impact of restructuring and related charges of $7.2 million (net of $1.9 million in tax), or $0.09 per diluted share, a gain on the sale of fixed assets as a result of our restructuring plans of $0.9 million (net of $0.2 million in tax), or $0.01 per diluted share, a charge of $1.1 million, or $0.02 per diluted share, related to the classification of Argentina’s economy as highly inflationary under U.S. GAAP as of July 1, 2018, a net tax benefit of $2.5 million, or $0.03 per diluted share, for the impact of tax law changes, including the 2017 Tax Act, and a tax benefit of $14.3 million, or $0.19 per diluted share, associated with our adoption in 2017 of guidance issued by the FASB regarding share-based payment transactions.

On January 24, 2019, we issued a voluntary recall of our Vial2Bag® product line due to reports of potential unpredictable or variable dosing under certain conditions.

Our 2018 results included an $11.3 million provision for product returns, recorded as a reduction of sales.

Our inventory balance for these devices was $6.5 million at December 31, 2018, which included estimated in-transit inventory being returned by our customers.

We are working to develop the support required to get the products back on the market, and we currently believe the returned inventory will be saleable in 2019.

2018 compared to 2017

Excluding foreign currency translation effects, net sales increased by $41.8 million, or 11.6%, despite the impact of the loss of a consumer-product customer in early 2018.

Proprietary Products sales growth in 2017 was slower than in 2016,

high-value products.

positive growth for customers in the Biologics and Generics market units.

Higher sales volume contributed 2.2

Excluding foreign

ramp-up of projects that commenced in the latter half of 2016.

Higher sales volume contributed 10.8 percentage

| Gross profit | $ | 485.4 | | | $ | 449.3 | | | $ | 448.3 | | | 8.0 | % | | 0.2 | % |

| Consolidated gross profit | $ | 545.4 | | | $ | 512.9 | | | $ | 501.4 | | | 6.3 | % | | 2.3 | % |

2018 compared to 2017

Contract-Manufactured Products – Contract-Manufactured Products gross profit decreased by $3.6 million, or 5.7%, in 2018, including a favorable foreign currency translation impact of $0.8 million.

Contract-Manufactured Products gross profit margin decreased by 2.8 margin points in 2018, due to unabsorbed overhead from plant consolidation activities, start-up costs associated with the launch of new programs, an unfavorable mix of product sales, and lower profitability on development and tooling agreements, and higher raw material costs, partially offset by sales price increases and production efficiencies.

2018 compared to 2017

Consolidated R&D costs increased by $1.2 million, or 3.1%, in 2018.

Efforts remain focused on the continued investment in self-injection systems development, elastomeric packaging components, and formulation development.

| ($ in millions) | 2018 | | | | 2017 | | | | 2016 | | | | 2018/2017 | | | 2017/2016 | |

| Proprietary Products | $ | 185.0 | | | $ | 175.3 | | | $ | 167.4 | | | 5.5 | % | | 4.7 | % |

| Corporate | 61.4 | | | | 55.3 | | | | 57.0 | | | | 11.0 | % | | (3.0 | )% |

| Consolidated SG&A costs | $ | 262.9 | | | $ | 246.0 | | | $ | 239.6 | | | 6.9 | % | | 2.7 | % |

2018 compared to 2017

Proprietary Products – Proprietary Products SG&A costs increased by $9.7 million, or 5.5%, in 2018, due to higher commercial sales compensation costs and legal costs.

Corporate – Corporate SG&A costs increased by $6.1 million, or 11.0%, in 2018, primarily due to the impact of higher achievement levels on incentive compensation costs and increased personnel costs.

translation, which increased SG&A costs by $1.2 million.

Proprietary Products – Proprietary Products SG&A costs increased by $7.9 million, or 4.7%, in 2017, due to

Foreign currency translation

increased Proprietary Products SG&A costs by $1.2 million.

Corporate – Corporate SG&A costs decreased by $1.7 million, or 3.0%, in 2017, due to decreases in U.S.

| ($ in millions) | 2018 | | | | 2017 | | | | 2016 | | |

2018 compared to 2017

Proprietary Products – Proprietary Products other income decreased by $2.6 million in 2018, primarily as we recorded income of $9.1 million attributable to the reimbursement of certain costs related to a technology that we subsequently licensed to a third party in 2017, partially offset by foreign exchange transaction gains in Europe in 2018.

Please refer to Note 15, Other Expense, for further discussion of the $9.1 million attributable to the reimbursement of certain costs.

Our 2016 results included the impact of restructuring and related charges of $17.4 million, or $0.23 per diluted share, a charge related to the devaluation of the Venezuelan Bolivar of $2.7 million, or $0.04 per diluted share, and a discrete tax charge of $1.0 million, or $0.01 per diluted share.

Our 2016 results also included a pension curtailment gain of $1.3 million, or $0.01 per diluted share.

Consolidated net sales originating in the U.S. in 2016 were $738.3 million, an increase of 10.6% from 2015.

Consolidated net sales generated outside of the U.S. (mainly in Europe) in 2016 were $770.8 million, an increase of 5.2% from 2015.

Excluding foreign currency translation effects, consolidated net sales generated outside of the U.S. in 2016 increased by 7.6%.

Contract-Manufactured Products – Contract-Manufactured Products net sales increased by $17.8 million, or 5.9%, in 2016, primarily due to higher drug delivery and diagnostic product sales.

The intersegment sales elimination, which is required for the presentation of consolidated net sales, represents the elimination of components sold between our segments.

| Gross profit | $ | 449.0 | | | $ | 448.0 | | | $ | 404.5 | | | 0.2 | % | | 10.8 | % |

| Consolidated gross profit | $ | 512.6 | | | $ | 501.1 | | | $ | 455.8 | | | 2.3 | % | | 9.9 | % |

Contract-Manufactured Products gross profit margin decreased by 0.4 margin points in 2016, as increased labor and overhead costs were partially offset by a favorable mix of product sales and lower raw material costs.

Consolidated R&D costs increased by $2.7 million, or 7.9%, in 2016, due to continued investment in advanced delivery and container systems, process technology, and formulation development.

| Proprietary Products | $ | 176.6 | | | $ | 168.3 | | | $ | 159.4 | | | 4.9 | % | | 5.6 | % |

| Corporate | 50.6 | | | | 56.3 | | | | 57.8 | | | | (10.1 | )% | | (2.6 | )% |

| Consolidated SG&A costs | $ | 242.6 | | | $ | 239.8 | | | $ | 233.0 | | | 1.2 | % | | 2.9 | % |

Proprietary Products – Proprietary Products SG&A costs increased by $8.9 million, or 5.6%, in 2016, due to increases in compensation costs primarily related to merit increases and information system maintenance costs.

Foreign currency translation decreased Proprietary Products SG&A costs by $1.7 million.

Corporate – Corporate’s SG&A costs decreased by $1.5 million, or 2.6%, in 2016, as a decrease in incentive compensation costs was partially offset by an increase in U.S. pension costs and stock-based compensation expense.

Proprietary Products – Proprietary Products other expense increased by $2.2 million in 2016, primarily due to increased contingent consideration and foreign exchange transaction losses.

In addition, during 2016, we recorded a pension curtailment gain of $2.1 million in connection with our decision to freeze both our U.S. qualified and non-qualified defined benefit pension plans as of January 1, 2019, and recorded a charge of $2.7 million related to the devaluation of the Venezuelan Bolivar from the previously-prevailing official exchange rate of 6.3 Bolivars to USD to 10.0 Bolivars to USD.

| Proprietary Products | $ | 242.2 | | | $ | 241.9 | | | $ | 212.2 | | | 0.1 | % | | 14.0 | % |

| Corporate | (50.5 | | ) | | (56.3 | | ) | | (57.8 | | ) | | (10.3 | )% | | (2.6 | )% |

| Adjusted consolidated operating profit | $ | 240.0 | | | $ | 223.8 | | | $ | 189.9 | | | 7.2 | % | | 17.9 | % |

| Consolidated operating profit | $ | 228.9 | | | $ | 196.8 | | | $ | 128.6 | | | 16.3 | % | | 53.0 | % |

During 2015, we recorded a tax benefit of $18.4 million in connection with the pension settlement charge of $50.4 million, a tax benefit of $4.0 million in connection with the $10.9 million charge for executive retirement and related costs of $10.9 million, and a discrete tax charge of $0.8 million resulting from the impact of a change in the enacted tax rate in the United Kingdom on our previously-recorded deferred tax asset balances.

Equity in net income of affiliated companies increased by $2.4 million, or 41.4%, in 2016, due to favorable operating results at Daikyo.

Our 2015 results included the impact of a pension settlement charge of $32.0 million (net of $18.4 million in tax), a charge for executive retirement and related costs of $6.9 million (net of $4.0 million in tax) and a discrete tax charge of $0.8 million.

Net cash used in investing activities increased by $46.3 million in 2016, due to an increase in capital spending, to $170.2 million, and our $8.4 million cost-method investment in an intradermal drug delivery company.

The capital spending for 2016 consisted of spending for new products, expansion activity, and emerging markets, including the construction of our new facility in Waterford, Ireland.

Net cash used in financing activities increased by $72.4 million in 2016, due to net debt repayments of $69.8 million, which included the maturity of our Euro note B, and $52.2 million in treasury share purchases under the repurchase program announced in December 2015, partially offset by increases in proceeds and excess tax benefits from employee stock plans.

The cash and cash equivalents balance at December 31, 2017 included $100.5 million of cash held by subsidiaries within the U.S., and $135.4 million of cash held by subsidiaries outside of the U.S. During 2017, we repatriated $63.0

million of cash held by non-U.S. subsidiaries.

We do not expect any additional tax costs associated with the repatriation.

Please refer to Note 15, Income Taxes, for discussion of the undistributed earnings of our China and Mexico entities at December 31, 2017.

The increase in current liabilities was due to an increase in accounts payable and other current liabilities, partially offset by the payment of our $33.1 million five-year term loan due January 2018.

Debt and credit facilities - The $31.6 million decrease in total debt at December 31, 2017, as compared to December 31, 2016, resulted from net debt repayments of $34.9 million, which included the payment of our $33.1 million five-year term loan due January 2018, partially offset by foreign currency rate fluctuations of $3.1 million and a reduction of $0.2 million in unamortized debt issuance costs.

| Purchase obligations (1) | $ | 75.6 | | $ | 5.3 | | $ | 18.3 | | $ | 19.5 | | $ | 32.5 | |

| Operating lease obligations | 79.1 | | | 13.2 | | | 19.9 | | | 12.9 | | | 33.1 | | |

| Other long-term liabilities (3) | 11.5 | | | 0.8 | | | 1.9 | | | 2.8 | | | 6.0 | | |

| Total contractual obligations (4) | $ | 412.8 | | $ | 26.1 | | $ | 83.3 | | $ | 89.5 | | $ | 213.9 | |

Revenue Recognition: Revenue is recognized when persuasive evidence of a sales arrangement exists, title and risk of loss have transferred, the selling price is fixed or determinable, and collectability is reasonably assured.

[removed: We are exposed] [added: Our ongoing business operations expose us] to various [removed: market risk factors] [added: risks,] such as fluctuating interest rates, foreign currency exchange rates and increasing commodity prices.

To manage these [added: market] risks, we periodically enter into derivative financial [removed: instruments] [added: instruments,] such as interest rate swaps, [removed: call] options and [removed: forward] [added: foreign] exchange contracts for periods consistent [removed: with] [added: with,] and for notional amounts equal to or less [removed: than] [added: than,] the underlying exposures.

[removed: In accordance with Company policy,] [added: We do not purchase or hold any] derivative financial instruments [removed: are not used] for investment or trading purposes.

Sales outside of the U.S. accounted for [removed: 54.1%] [added: 55.4%] of [added: our] consolidated net sales in [removed: 2017.][added: 2018.]

[added: As a result, our results of operations and] financial position are exposed to changing currency exchange rates.

We periodically use forward [added: exchange] contracts to hedge certain transactions or to manage month-end balance sheet exposures on cross-currency intercompany loans.

We also have ¥500.0 million in Yen-denominated borrowings under our Credit [removed: Facility] [added: Facility,] which has been designated as a hedge of our net investment in Daikyo.

At December 31, [removed: 2017,] [added: 2018,] a cumulative foreign currency translation loss on these hedges of [removed: $1.4] [added: $0.4] million (net of tax of $0.2 million) was recorded within accumulated other comprehensive loss.

The following table summarizes our interest rate risk-sensitive [removed: instruments:][added: instruments (excluding unamortized debt issuance cost):]

| ($ in millions) | [removed: 2018 |] 2019 | | | 2020 | | 2021 | 2022 | | [added: 2023 |] Thereafter | | Carrying Value | | | Fair Value | | |

| U.S. dollar denominated | [removed: |] $ | 0.1 | | | | | | | | | [added: |] $ | 0.1 | | $ | 0.1 | |

| U.S. dollar denominated | | | | | | | [removed: |] 42.0 | | [added: |] 126.0 | | 168.0 | | | [removed: 171.8] [added: 164.6] | | |

| Average interest rate - fixed | | | | | | | [removed: |] 3.7 | % | [added: |] 3.9 | % | | | | | | |

| Euro denominated | | | | [added: 24.0] | [removed: 25.2] | | | | | | | [removed: 25.2] [added: 24.0] | | | [removed: 25.2] [added: 24.0] | | |

| Average interest rate - variable | | | | [removed: |] 1.0 | % | | | | | | | | | | | | [added: |]

| Yen denominated | | | | [added: 4.6] | [removed: 4.4] | | | | | | | [removed: 4.4] [added: 4.6] | | | [removed: 4.4] [added: 4.6] | | |

In recent years, raw material costs have [removed: fluctuated due to crude oil price fluctuations.]

We will continue to pursue pricing and hedging strategies, and ongoing cost control [removed: initiatives] [added: initiatives,] to offset the effects on gross profit.

[removed: With these contracts in 2016,] [added: During 2018,] the gain recorded in cost of goods and services sold related to these options was [removed: less than] $0.1 million.

During 2017, the loss recorded in cost of goods and services sold related to these options was [removed: $0.2] [added: $0.3] million.

As of December 31, [removed: 2017,] [added: 2018,] we had outstanding contracts to purchase [removed: 115,701] [added: 47,445] barrels of crude [removed: oil,] [added: oil from January 2019 to August 2019] at a [added: weighted-average] strike price of [removed: $70] [added: $76.45] per barrel.

| Current Debt: | | | | | | | | | | | | | | | | | |

| Average interest rate - variable | | | | 1.0 | % | | | | | | | | | | | | |

fluctuated due to crude oil price fluctuations.

In April 2018, we purchased a series of call options for a total of 30,612 barrels of crude oil from December 2018 through August 2019.

As a result, our results of operations and

During 2017, the loss recorded in cost of goods and services sold related to these options was less than $0.1 million.

This focus on quality includes excellence in manufacturing, scientific and technical expertise and management, [removed: so we can] [added: and enables us to] partner with our customers to deliver safe, effective drug products to patients quickly and efficiently.

Offering the combination of primary packaging components, containment solutions, and drug delivery devices, as well as [removed: analytical lab] [added: a broad range of integrated] services, helps to position us as the leader in the integrated containment and delivery of injectable medicines.

[removed: See] [added: Please refer to] Item 2, Properties, for additional information on our manufacturing and other sites.

[removed: See] [added: Please refer to] Note [removed: 17,] [added: 18,] Segment Information, for net sales, operating profit and asset information for Proprietary Products.

[removed: See] [added: Please refer to] Note [removed: 17,] [added: 18,] Segment Information, for net sales, operating profit and asset information for Contract-Manufactured Products.

Sales outside of the U.S. accounted for [removed: 54.1%] [added: 55.4%] of [added: our] consolidated net sales in [removed: 2017.][added: 2018.]

For a geographic breakdown of sales, [removed: see] [added: please refer to] Note [removed: 17,] [added: 18,] Segment Information.

These risks include currency fluctuations relative to the U.S. Dollar (“USD”), multiple tax jurisdictions and, particularly in South [removed: America] [added: America, Israel] and [removed: Israel,] [added: the Middle East,] political and social issues that could destabilize local markets and affect the demand for our products.

See further discussion of our international operations, the risks associated with our international operations, and our attempt to minimize some of these risks in Part I, Item 1A, Risk Factors; Part II, Item 7, [removed: Management's] [added: Management’s] Discussion and Analysis of Financial Condition and Results of Operations under the caption Financial Condition, Liquidity and Capital Resources; Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk; Note 1 under the captions Financial Instruments and Foreign Currency Translation; and Note [removed: 9,] [added: 10,] Derivative Financial Instruments.

Our [removed: Contract-Manufactured Products] business is not inherently seasonal.

Our products and services are [added: sold and] distributed primarily through our own sales force and distribution network, with limited use of contract sales agents and regional distributors.

Our ten largest customers accounted for [removed: 37.5%] [added: 37.1%] of our consolidated net sales in [removed: 2017,] [added: 2018,] but none of these customers individually accounted for more than 10% of [added: consolidated] net sales.

We also have contractual arrangements with a number of our [removed: customers.]

[added: Order] backlog may be positively or negatively impacted by several factors, including customer ordering patterns and the necessary lead-time to deliver customer orders.

At December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] the order backlog for Proprietary Products was [removed: $377.4] [added: $407.3] million and [removed: $373.3] [added: $377.4] million, respectively.

The majority of the order backlog for Proprietary Products at December 31, [removed: 2017] [added: 2018] is expected to be filled during [removed: 2018.][added: 2019.]

The majority of Contract-Manufactured Products manufacturing activity is governed by contractual volume expectations, [removed: with terms between one and three years,] subject to periodic revisions based on customer requirements.

[removed: We] [added: With our range of proprietary technologies, we] compete with several companies across our Proprietary Products product lines.

In addition, there are a number of competitors supplying medical devices and medical device [removed: components.][added: components, including a number of pharmaceutical manufacturers who are also potential customers of our medical devices.]

We [removed: aim to] differentiate ourselves from our competition by [removed: being] [added: serving as] an integrated drug containment and delivery systems global supplier that can provide pre-approval primary packaging support and engineering development, analytical services, regulatory expertise and after-sale technical support.

Given the cost pressures they face, many of our customers look [removed: off-shore] to reduce [removed: cost.][added: costs by sourcing from low-cost locations.]

We [removed: aim to] differentiate ourselves by leveraging our global capabilities and by employing new technologies such as high-speed automated assembly, insert-molding, multi-shot [added: precision] molding and expertise with multiple-piece closure systems.

We [added: also] continue to seek new innovative opportunities for acquisition, licensing, partnering or development of products, services and technologies that serve the injectable drug containment and delivery market.

[removed: Research] [added: We expect that research] and development spending will continue to increase as we pursue innovative strategic platforms in prefillable syringes, injectable containers, advanced injection and safety and administration systems.

New products that we develop may require separate approval as medical devices, and products that are intended to be used in the packaging and delivery of pharmaceutical products are subject to both [added: customer acceptance of our products and regulatory approval of the customer’s products following our development period.]

We spent [removed: $39.1] [added: $40.3] million in [removed: 2017, $36.8] [added: 2018, $39.1] million in [removed: 2016,] [added: 2017,] and [removed: $34.1] [added: $36.8] million in [removed: 2015] [added: 2016] on research and development, all of which related to Proprietary Products.

There were no [added: required] material capital expenditures for environmental [removed: control] [added: controls in our] facilities in [removed: 2017] [added: 2018] and there are [added: currently] no [added: needed or planned] material expenditures [removed: planned] for [removed: such purposes in 2018.][added: 2019.]

As of December 31, [removed: 2017,] [added: 2018,] we employed approximately [removed: 7,500] [added: 7,700] people in our operations throughout the world, including approximately [removed: 7,300] [added: 7,600] full-time employees.

Throughout this Form 10-K, we incorporate by reference certain information from parts of other documents filed with the SEC and from our Proxy Statement for the [removed: 2018] [added: 2019] Annual Meeting of Shareholders [removed: (“2018] [added: (“2019] Proxy Statement”), which will be filed with the SEC within 120 days following the end of our [removed: 2017] [added: 2018] fiscal year.

Our [removed: 2018] [added: 2019] Proxy Statement will be available on our website on or about March 31, [removed: 2018,] [added: 2019,] under the caption Investors - Annual Reports & Proxy.

In addition to our Proprietary Products product portfolio, we provide our customers with a range of integrated services, including analytical lab services, pre-approval primary packaging support and engineering development, regulatory expertise, and after-sales technical support.

Please refer to Item 2, Properties, for additional information on our manufacturing and other sites.

Please refer to Item 2, Properties, for additional information on our manufacturing and other sites.

In 2018, more than 120 patents were issued to West across the globe.

Please refer to Note 3, Revenue, and Note 18, Segment Information, for additional information on our consolidated net sales.

customers.

Analytical lab services completes the product offerings in the Proprietary Products reportable segment.

This group provides specialized testing for drug packaging, devices and administration systems.

Although our Proprietary Products business is not inherently seasonal, sales and operating profit in the second half of the year are typically lower than the first half primarily due to scheduled plant shutdowns in conjunction with our customers' production schedules and the year-end impact of holidays on production.

This can vary from year-to-year, depending upon customer inventory management programs and customer product launches and other factors.

Levels of inventory are also influenced by the seasonal patterns addressed above.

See Note 17, Segment Information, for information on sales by significant product group.

Order

The increase in backlog reflects the impact of foreign currency, partially offset by the impact of shorter lead-time requirements for customer orders.

customer acceptance of our products and regulatory approval of the customer's products following our development period.

For the fiscal year ended December 31, [removed: 2017][added: 2018]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of [removed: registrant's] [added: registrant’s] knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [added: o]

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, [removed: 2017] [added: 2018] was approximately [removed: $6,994,711,952] [added: $7,301,615,623] based on the closing price as reported on the New York Stock Exchange.

As of January 31, [removed: 2018,] [added: 2019,] there were [removed: 73,986,496] [added: 74,186,169] shares of the [removed: registrant's] [added: registrant’s] common stock outstanding.

| Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 1, 2018] [added: 7, 2019] | Part III |

| [PART [removed: I](#s81F1A1CA0B7DD0E19E2C6293792C4879)] [added: I](#sADDB20E1418F75E3BFDFFBDFC1325C81)] | | Page |

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| [ITEM [removed: 2.](#s41905444A01C8275D1C7629379CC2983)] [added: 2.](#s31769B66A1BFF747B95FFBDFC1D29B96)] | PROPERTIES | [removed: [15](#s41905444A01C8275D1C7629379CC2983)] [added: [16](#s31769B66A1BFF747B95FFBDFC1D29B96)] |

| [ITEM [removed: 3.](#sC13EAE8381E9EF25F924629379F48F06)] [added: 3.](#s10728941BA0C6785ABAEFBDFC1FAA397)] | LEGAL PROCEEDINGS | [removed: [16](#sC13EAE8381E9EF25F924629379F48F06)] [added: [17](#s10728941BA0C6785ABAEFBDFC1FAA397)] |

| [ITEM [removed: 4.](#sD1D2874E3FB1011BB3FF62937A261F94)] [added: 4.](#s028FEBEAD2D91C306B75FBDFC22CE161)] | MINE SAFETY DISCLOSURES | [removed: [16](#sD1D2874E3FB1011BB3FF62937A261F94)] [added: [17](#s028FEBEAD2D91C306B75FBDFC22CE161)] |

| [EXECUTIVE OFFICERS OF THE [removed: COMPANY](#s7572CC28DAAD81D6F02E62937A44C091)] [added: COMPANY](#s9BC12FA2549EAA8385BFFBDFC24A9413)] | | [removed: [16](#s7572CC28DAAD81D6F02E62937A44C091)] [added: [17](#s9BC12FA2549EAA8385BFFBDFC24A9413)] |

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| [ITEM [removed: 6.](#s955235C1832EF2A5997262936AA41744)] [added: 6.](#s32E5CDEFA62F8D47E4EBFBDFA0EBB8D6)] | SELECTED FINANCIAL DATA | [removed: [20](#s955235C1832EF2A5997262936AA41744)] [added: [21](#s32E5CDEFA62F8D47E4EBFBDFA0EBB8D6)] |

| [ITEM [removed: 7.](#sCE182ED63D4D0910DB3B62937B168E0F)] [added: 7.](#s9F46193B0D85E3BF0275FBDFC2FE76DF)] | [removed: MANAGEMENT'S] [added: MANAGEMENT’S] DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | [removed: [21](#sCE182ED63D4D0910DB3B62937B168E0F)] [added: [22](#s9F46193B0D85E3BF0275FBDFC2FE76DF)] |

| [ITEM [removed: 7A.](#s1F6C4BD4CA6EC2DAC55E62936C66395D)] [added: 7A.](#s47E09342D912DC399805FBDFA1B357DA)] | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | [removed: [34](#s1F6C4BD4CA6EC2DAC55E62936C66395D)] [added: [37](#s47E09342D912DC399805FBDFA1B357DA)] |

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| [PART [removed: III](#sDBED8BBE050623E2AD7C629381744365)] [added: III](#s5C909307F6BB520E509AFBDFCFBA7C04)] | | |

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| [ITEM [removed: 16.](#saf9c5a0b9e8d4f8a9a06fff2adc017a9)] [added: 16.](#s1A14746977EEE0FCF13AFBDFD122BA40)] | FORM 10-K SUMMARY | [removed: [80](#saf9c5a0b9e8d4f8a9a06fff2adc017a9)] [added: [86](#s1A14746977EEE0FCF13AFBDFD122BA40)] |

| [EXHIBIT [removed: INDEX](#sBC0C1CBAF969C9696CD1629382F024E6)] [added: INDEX](#s9F6244B070763669DF5FFBDFD154011D)] | | [removed: [F-1](#sBC0C1CBAF969C9696CD1629382F024E6)] [added: [F-1](#s9F6244B070763669DF5FFBDFD154011D)] |

All trademarks and registered trademarks used in this report are our property, either directly or indirectly through our [removed: subsidiaries] [added: subsidiaries,] unless noted otherwise.

Information in this Form 10-K is current as of February [removed: 26, 2018,] [added: 27, 2019,] unless otherwise specified.

10-K 1 wst10k12312018.htm 10-K

| [PART II](#s321C50DEBFCAA6962209FBDFC27C4F43) | | |

| [PART IV](#s9264D366522BE4C21271FBDFD0A0FCE6) | | |

| [SIGNATURES](#s9FED734CED3401B3738FFBDFA0CD7514) | | [87](#s9FED734CED3401B3738FFBDFA0CD7514) |

10-K 1 wst10k12312017.htm 10-K

| [PART II](#sD8F866A9DB14569C177062937A762071) | | |

| [PART IV](#s0B10CF3B456A65BC5F83629382640499) | | |

| [SIGNATURES](#s0BD822A89E88CAFB15AD62936F401D16) | | [81](#s0BD822A89E88CAFB15AD62936F401D16) |

| [removed: Brazil] | | Serbia | | |

| Sao Paulo | | [removed: Kovin] [added: Waterford] | | |

| Grand Rapids, MI | | [added: Dublin (2)] | | |

| Brazil | | Ireland | | |

| | | Kovin | | |

| | | | | |

This building also houses our North American sales and marketing, administrative support and customer service functions, as well as laboratories.

| Frankfort, IN (2) | | Dublin (2) | | |

In October 2014, we announced plans to expand our global manufacturing operations to include a new facility in Waterford, Ireland, which will produce packaging components for insulin injector cartridges and other high-value packaging components.

The Waterford facility will continue to undergo validation procedures during 2018, with commercial production expected to begin in the second half of 2018.

| Annette F. Favorite | [removed: 53] [added: 54] | Senior Vice President and Chief Human Resources Officer since October 2015. Prior to joining West, she spent more than 25 years at IBM Corporation, an information technology services company, in a number of strategic and global human resources roles. Most recently, she served as Vice President, Global Talent Management. |

| Karen A. Flynn | [removed: 55] [added: 56] | Senior Vice President and Chief Commercial Officer since January 2016. She was President, Pharmaceutical Packaging Systems from October 2014 to January 2016, President, Pharmaceutical Packaging Systems Americas Region from June 2012 to October 2014, and Vice President, Sales from May 2008 to June 2012. From 2000 to 2008, she worked in Sales Management, most recently as Vice President, Global Accounts, for Catalent (formerly a business segment of Cardinal Health). Prior thereto, she held various positions at West, including [added: roles in] Quality, Research and Development, and Sales. |

| Eric M. Green | [removed: 48] [added: 49] | Chief Executive Officer since April 2015 and President since December 2015. Prior to joining West, he was Executive Vice President and President of the Research Markets business unit at Sigma-Aldrich [removed: Corporation, a leading life science and technology company,] [added: Corporation] from 2013 to 2015. From 2009 to 2013, he served as Vice President and Managing Director, International, where he was responsible for Asia Pacific and Latin America, and prior thereto, held various commercial and operational roles. |

| Quintin J. Lai | [removed: 51] [added: 52] | Vice President, Corporate Development, Strategy and Investor Relations since January 2016. Prior to joining West, he was Vice President of Investor Relations and Corporate Strategy at Sigma-Aldrich Corporation from 2012 to 2015. From 2002 to 2012, he [removed: served as] [added: was at Robert W. Baird & Company, where he held various roles, including] Managing Director and Senior Equity Research Analyst of the Life Science Tools and Diagnostic sector [removed: at Robert W. Baird & Company.] [added: and Associate Director of Equity Research.] |

| Daniel Malone | [removed: 56] [added: 57] | Vice President and Corporate Controller since August 2011. He was Vice President of Finance, Pharmaceutical Packaging Systems Americas [removed: Region] [added: Region,] from September 2008 to August [removed: 2011] [added: 2011,] and Director of Financial and Management Reporting from October 1999 to September 2008. |

| George L. Miller | [removed: 63] [added: 64] | Senior Vice President, General Counsel and Corporate Secretary since joining West in November 2015. Previously, he served as Senior Vice President, General Counsel and Corporate Secretary for Sigma-Aldrich Corporation from 2009 to 2015. Prior to working at Sigma-Aldrich, he held senior legal positions with Novartis AG, a global healthcare company. |

| David A. Montecalvo | [removed: 52] [added: 53] | Senior Vice President, Global Operations and Supply Chain since September 2016. Prior to joining West, he served in a number of senior leadership roles at Medtronic plc, including Vice President, Contract Manufacturing Operations, for the [removed: company's] [added: company’s] Restorative Therapies Group, and Vice President, Business Operations Integration, where he was responsible for directing and leading the global operations integration of Covidien plc into Medtronic. Prior thereto, he held senior operations and product development roles at Urologix, Inc. and LecTec Corporation. |

| Eric Resnick | [removed: 54] [added: 55] | Vice President and Chief Technology Officer since March 2016. Previously, he served as Vice President and General Manager of Integrated Packaging and Delivery within [removed: West's] [added: West’s] Innovation and Technology Team and President Proprietary Products - Pharmaceutical Delivery Systems from March 2015 until March 2016. He served as Vice President Research and Development and Self-Injection Systems from March 2014 until March 2015, and Vice President and General Manager of [removed: West's] [added: West’s] Contract Manufacturing Delivery Devices division from 2008 until March 2014. Prior thereto, he held various positions of increasing responsibility since joining The Tech Group in 2001. Prior to joining West, he held engineering and operating roles with Eastman Kodak Company and Ortho Clinical Diagnostics. |

| Silji Abraham | 47 | Senior Vice President, Chief Digital and Transformation Officer since February 2018. Prior to joining West, he most recently served as Executive Vice President and Chief Information Officer of MilliporeSigma, a subsidiary of Merck KGaA, Darmstadt, Germany. Prior to this role, he served as Chief Information Officer at Sigma-Aldrich Corporation, a leading life science and technology company, and worked in various leadership roles at Invensys Operations Management, ArvinMeritor and Chrysler Group. |

| Bernard J. Birkett | 50 | Senior Vice President, Chief Financial Officer and Treasurer since June 2018. Prior to joining West, he spent more than 20 years at Merit Medical Systems, Inc., a leading manufacturer of disposable medical devices, where he served in a number of senior global leadership roles, including Chief Financial Officer and Treasurer, Controller for Europe, Middle East and Africa (EMEA) and Vice President of International Finance. |

| | | |

| William J. Federici | 58 | Senior Vice President and Chief Financial Officer since joining West in August 2003. Acting Treasurer since January 2017. He was National Industry Director for Pharmaceuticals of KPMG LLP (accounting firm) from June 2002 until August 2003 and, prior thereto, an audit partner with Arthur Andersen, LLP. |

As of January 31, [removed: 2018,] [added: 2019,] we had [removed: 880] [added: 805] shareholders of record, which excludes shareholders whose shares were held by brokerage firms, depositaries and other institutional firms in “street names” for their customers.

Our common stock paid a quarterly dividend of [removed: $0.12] [added: $0.13] per share in each of the first three quarters of [removed: 2016; $0.13] [added: 2017; $0.14] per share in the fourth quarter of [removed: 2016] [added: 2017] and each of the first three quarters of [removed: 2017;] [added: 2018;] and [removed: $0.14] [added: $0.15] per share in the fourth quarter of [removed: 2017.][added: 2018.]

The following table shows information with respect to purchases of our common stock made during the three months ended December 31, [removed: 2017] [added: 2018] by us or any of our “affiliated purchasers” as defined in Rule 10b-18(a)(3) under the Exchange Act:

| (1) | Includes [removed: 120] [added: 140] shares purchased on behalf of employees enrolled in the Non-Qualified Deferred Compensation Plan for Designated Employees (Amended and Restated Effective [removed: January] [added: December] 1, [removed: 2008).] [added: 2018).] Under the plan, Company match contributions are delivered to the plan’s investment administrator, who then purchases shares in the open market and credits the shares to individual plan accounts. |

| (2) | In [removed: December 2016,] [added: February 2018,] we announced a share repurchase program [added: for calendar-year 2018] authorizing the repurchase of up to 800,000 shares of our common stock from time to time on the open market or in privately-negotiated transactions as permitted under the Securities Exchange Act of 1934 Rule 10b-18. [removed: During the fourth quarter] [added: The number] of [removed: 2017, we purchased 475,000] shares [added: repurchased and the timing] of [removed: our common stock under this program at] [added: such transactions depended on] a [removed: cost of $47.5 million, or an average price] [added: variety] of [removed: $99.88 per share.] [added: factors, including market conditions. There were no shares purchased during the three months ended December 31, 2018.] During the year ended December 31, [removed: 2017,] [added: 2018,] we purchased 800,000 shares of our common stock under [removed: this] [added: the] program at a cost of [removed: $74.4] [added: $70.8] million, or an average price of [removed: $92.96] [added: $88.51] per share. [removed: This share repurchase program expired on December 31, 2017.] |

| (3) | In February [removed: 2018,] [added: 2019,] we announced a share repurchase program for calendar-year [removed: 2018] [added: 2019] authorizing the repurchase of up to 800,000 shares of our common stock from time to time on the open market or in privately-negotiated transactions as permitted under the Securities Exchange Act of 1934 Rule 10b-18. The number of shares to be repurchased and the timing of such transactions will depend on a variety of factors, including market conditions. This share repurchase program is expected to be completed by December 31, [removed: 2018.] [added: 2019.] |

The following performance graph compares the cumulative total return to holders of our common stock with the cumulative total return of the following Standard & [removed: Poor's] [added: Poor’s] (“S&P”) indices, for the five years ended December 31, [removed: 2017:] [added: 2018:] 500, MidCap 400 Index and 400 Health Care Equipment & Supplies Industry.

The [removed: Company's] [added: Company’s] cumulative shareholder return is based on an investment of $100 on December 31, [removed: 2012] [added: 2013] and is compared to the cumulative total return of the S&P indices mentioned above over the period with a like amount invested.

[removed: ][added: ]

| 2018 | $102.80 | $84.73 | $102.14 | $82.74 | $124.51 | $96.97 | $125.09 | $91.75 | $125.09 | $82.74 |

| October 1 – 31, 2018 | | — | | | $ | — | | | — | | | — | |

| November 1 – 30, 2018 | | 140 | | | 108.80 | | | | — | | | — | |

| December 1 – 31, 2018 | | — | | | — | | | | — | | | — | |

| Total | | 140 | | | $ | 108.80 | | | — | | | — | |

| 2016 | $69.59 | $53.88 | $77.71 | $68.42 | $84.33 | $71.23 | $86.50 | $70.17 | $86.50 | $53.88 |

| October 1 – 31, 2017 | | — | | | $ | — | | | — | | | 475,000 | |

| November 1 – 30, 2017 | | 319,590 | | | 100.00 | | | | 319,500 | | | 155,500 | |

| December 1 – 31, 2017 | | 155,530 | | | 99.65 | | | | 155,500 | | | — | |

| Total | | 475,120 | | | $ | 99.88 | | | 475,000 | | | — | |

| (in millions, except per share data) | [added: 2018 | | |] 2017 | | | 2016 | | | 2015 | | | 2014 | | | [removed: 2013 | | |]

| Net sales | $ | [removed: 1,599.1] [added: 1,717.4] | | $ | [removed: 1,509.1] [added: 1,599.1] | | $ | [removed: 1,399.8] [added: 1,509.1] | | $ | [removed: 1,421.4] [added: 1,399.8] | | $ | [removed: 1,368.4] [added: 1,421.4] | |

| Net income | [added: 206.9 | | |] 150.7 | | | 143.6 | | | 95.6 | | | 127.1 | | | [removed: 112.3 | | |]

| Basic (1) | $ | [removed: 2.04] [added: 2.80] | | $ | [removed: 1.96] [added: 2.04] | | $ | [removed: 1.33] [added: 1.96] | | $ | [removed: 1.79] [added: 1.33] | | $ | [removed: 1.61] [added: 1.79] | |

| Diluted (2) | [added: 2.74 | | |] 1.99 | | | 1.91 | | | 1.30 | | | 1.75 | | | [removed: 1.57 | | |]

| Weighted average common shares outstanding | 73.9 | | | [removed: 73.3] [added: 73.9] | | | [removed: 72.0] [added: 73.3] | | | [removed: 70.9] [added: 72.0] | | | [removed: 69.6] [added: 70.9] | | |

| Weighted average shares assuming dilution | [added: 75.4 | | |] 75.8 | | | 75.0 | | | 73.8 | | | 72.8 | | | [removed: 71.4 | | |]

| Dividends declared per common share | $ | [removed: 0.54] [added: 0.58] | | $ | [removed: 0.50] [added: 0.54] | | $ | [removed: 0.46] [added: 0.50] | | $ | [removed: 0.41] [added: 0.46] | | $ | [removed: 0.39] [added: 0.41] | |

| Cash and cash equivalents | $ | [removed: 235.9] [added: 337.4] | | $ | [removed: 203.0] [added: 235.9] | | $ | [removed: 274.6] [added: 203.0] | | $ | [removed: 255.3] [added: 274.6] | | $ | [removed: 230.0] [added: 255.3] | |

| Working capital | [added: 610.7 | | |] 464.0 | | | 400.9 | | | 359.4 | | | 406.6 | | | [removed: 413.6 | | |]

| Total assets | [added: 1,978.9 | | |] 1,862.8 | | | 1,716.7 | | | 1,695.1 | | | 1,669.7 | | | [removed: 1,670.2 | | |]

| Total debt | [added: 196.1 | | |] 197.0 | | | 228.6 | | | 298.2 | | | 335.5 | | | [removed: 372.1 | | |]

| Total equity | [added: 1,396.3 | | |] 1,279.9 | | | 1,117.5 | | | 1,023.9 | | | 956.9 | | | [removed: 906.4 | | |]

| Total invested capital | $ | [removed: 1,476.9] [added: 1,592.4] | | $ | [removed: 1,346.1] [added: 1,476.9] | | $ | [removed: 1,322.1] [added: 1,346.1] | | $ | [removed: 1,292.4] [added: 1,322.1] | | $ | [removed: 1,278.5] [added: 1,292.4] | |

| Gross margin (a) | [removed: 32.1] [added: 31.8] | | % | [removed: 33.2] [added: 32.1] | | % | [removed: 32.6] [added: 33.2] | | % | [removed: 31.5] [added: 32.6] | | % | [removed: 31.8] [added: 31.5] | | % |

| Effective tax rate (4) | [removed: 36.4] [added: 17.2] | | % | [removed: 28.7] [added: 36.4] | | % | [removed: 22.6] [added: 28.7] | | % | [removed: 28.0] [added: 22.6] | | % | [removed: 27.4] [added: 28.0] | | % |

| Return on invested capital (c) [added: †] | [removed: 10.3] [added: 13.0] | | % | [removed: 10.5] [added: 10.2] | | % | [removed: 7.6] [added: 10.4] | | % | [removed: 10.2] [added: 10.5] | | % | [removed: 9.8] [added: 10.2] | | % |

| Net debt-to-total invested capital (d) | N/A | | | [removed: 2.2] [added: N/A] | | [removed: %] | [removed: 2.3] [added: 2.2] | | % | [removed: 7.7] [added: 2.3] | | % | [removed: 13.6] [added: 7.7] | | % |

| Research and development expenses | $ | [removed: 39.1] [added: 40.3] | | $ | [removed: 36.8] [added: 39.1] | | $ | [removed: 34.1] [added: 36.8] | | $ | [removed: 37.3] [added: 34.1] | | $ | [removed: 37.9] [added: 37.3] | |

| Operating cash flow | [added: 288.6 | | |] 263.3 | | | 219.4 | | | 212.4 | | | 182.9 | | | [removed: 220.5 | | |]

| Stock price range | [added: $125.09-82.74 | | |] $103.36-77.97 | | | $86.50-53.88 | | | $64.59-48.66 | | | $55.29-39.11 | | | [removed: $50.60-27.31 | | |]

(4) As a result of the [removed: 2017] Tax [removed: Act,] [added: Cuts and Jobs Act (the “2017 Tax Act”),] the federal statutory rate [removed: will be] [added: was] reduced from 35.0% to 21.0% effective for tax years beginning after December 31, 2017.

Please refer to Note [removed: 15,] [added: 16,] Income Taxes, for further discussion of the 2017 Tax Act.

| ▪ | Net income in 2017 included the impact of a discrete tax charge of $48.8 million related to the 2017 Tax Act and the impact of changes in enacted international tax rates on previously-recorded deferred tax asset and liability balances, as well as a tax benefit of $33.1 million associated with our adoption of the guidance issued by the [removed: Financial Accounting Standards Board (“FASB”)] [added: FASB] regarding share-based payment transactions and a charge of $11.1 million related to the deconsolidation of our Venezuelan subsidiary. |

| Operating profit † | 240.3 | | | 225.8 | | | 195.2 | | | 177.0 | | | 182.0 | | |

| Operating profitability (b) † | 14.0 | | % | 14.1 | | % | 12.9 | | % | 12.6 | | % | 12.8 | | % |

† Reflects our adoption of the guidance issued by the Financial Accounting Standards Board (“FASB”) regarding the presentation of net periodic pension and postretirement benefit cost (net benefit cost).

| ▪ | Net income in 2018 included the impact of restructuring and related charges of $7.2 million (net of $1.9 million in tax), a gain on the sale of fixed assets as a result of our restructuring plans of $0.9 million (net of $0.2 million in tax), a charge of $1.1 million related to the classification of Argentina’s economy as highly inflationary under U.S. GAAP as of July 1, 2018, a net tax benefit of $2.5 million for the impact of tax law changes, including the 2017 Tax Act, and a tax benefit of $14.3 million associated with our adoption in 2017 of guidance issued by the FASB regarding share-based payment transactions. |

| Operating profit | 228.9 | | | 196.8 | | | 128.6 | | | 182.0 | | | 162.4 | | |

| Operating profitability (b) | 14.3 | | % | 13.0 | | % | 9.2 | | % | 12.8 | | % | 11.9 | | % |

| ▪ | Net income in 2013 included the impact of a loss on extinguishment of debt of $0.2 million and net discrete tax charges of $3.6 million. |

West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015][added: 2016]

| | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Net sales | | $ | [removed: 1,599.1] [added: 1,717.4] | | | $ | [removed: 1,509.1] [added: 1,599.1] | | | $ | [removed: 1,399.8] [added: 1,509.1] | |

| Cost of goods and services sold | [removed: | 1,086.5] [added: 1,172.0] | | | | [removed: 1,008.0] [added: 1,172.0] | | | | [removed: 944.0] [added: —] | | |

| Research and development | | [removed: 39.1] [added: 40.3] | | | | [removed: 36.8] [added: 39.1] | | | | [removed: 34.1] [added: 36.8] | | |

| Selling, general and administrative expenses | | [removed: 242.6] [added: 262.9] | | | | [removed: 239.8] [added: 246.0] | | | | [removed: 233.0] [added: 239.6] | | |

| Other expense (Note [removed: 14)] [added: 15)] | | [removed: 2.0] [added: 1.9] | | | | [removed: 27.7] [added: 2.0] | | | | [removed: 60.1] [added: 29.8] | | |

| Interest expense | | [removed: 7.8] [added: 8.4] | | | | [removed: 8.1] [added: 7.8] | | | | [removed: 14.1] [added: 8.1] | | |

| Interest income | | [removed: 1.3] [added: (2.1] | | [added: )] | | [removed: 1.1] [added: (1.3] | | [added: )] | | [removed: 1.6] [added: (1.1] | | [added: )] |

| Income before income taxes | | [removed: 222.4] [added: 240.7] | | | | [removed: 189.8] [added: 222.4] | | | | [removed: 116.1] [added: 189.8] | | |

| Income tax expense | | [removed: 80.9] [added: 41.4] | | | | [removed: 54.4] [added: 80.9] | | | | [removed: 26.3] [added: 54.4] | | |

| Equity in net income of affiliated companies | | [removed: 9.2] [added: (7.6] | | [added: )] | | [removed: 8.2] [added: (9.2] | | [added: )] | | [removed: 5.8] [added: (8.2] | | [added: )] |

| Net income | | $ | [removed: 150.7] [added: 206.9] | | | $ | [removed: 143.6] [added: 150.7] | | | $ | [removed: 95.6] [added: 143.6] | |

| Basic | | $ | [removed: 2.04] [added: 2.80] | | | $ | [removed: 1.96] [added: 2.04] | | | $ | [removed: 1.33] [added: 1.96] | |

| Diluted | | $ | [removed: 1.99] [added: 2.74] | | | $ | [removed: 1.91] [added: 1.99] | | | $ | [removed: 1.30] [added: 1.91] | |

| Basic | | 73.9 | | | | [removed: 73.3] [added: 73.9] | | | | [removed: 72.0] [added: 73.3] | | |

| Diluted | | [removed: 75.8] [added: 75.4] | | | | [removed: 75.0] [added: 75.8] | | | | [removed: 73.8] [added: 75.0] | | |

| Dividends declared per share | | $ | [removed: 0.54] [added: 0.58] | | | $ | [removed: 0.50] [added: 0.54] | | | $ | [removed: 0.46] [added: 0.50] | |

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Net income | $ | [removed: 150.7] [added: 206.9] | | | $ | [removed: 143.6] [added: 150.7] | | | $ | [removed: 95.6] [added: 143.6] | |

| Other comprehensive [removed: income (loss),] [added: (loss) income,] net of tax: | | | | | | | | | | | |

| Foreign currency translation adjustments | [removed: 68.8] [added: (39.2] | | [added: )] | | [removed: (18.1] [added: 68.8] | | [removed: )] | | [removed: (70.3] [added: (18.1] | | ) |

| Prior service [added: (cost)] credit arising during period, net of tax of [removed: $1.1] [added: $0, $0] and [removed: $0.3] [added: $1.1] | [removed: —] [added: (0.3] | | [added: )] | | [removed: 1.9] [added: —] | | | | [removed: 0.4] [added: 1.9] | | |

| Net actuarial [removed: gain] (loss) [added: gain] arising during period, net of tax of [removed: $1.3, $(4.8)] [added: $(0.2), $1.3] and [removed: $(6.0)] [added: $(4.8)] | [removed: 6.3] [added: (0.7] | | [added: )] | | [removed: (11.1] [added: 6.3] | | [removed: )] | | [removed: (9.3] [added: (11.1] | | ) |

| Settlement effects arising during period, net of tax of $1.1 [removed: and $18.7] | — | | | | [removed: 2.0] [added: —] | | | | [removed: 31.7] [added: 2.0] | | |

| Less: amortization of actuarial loss, net of tax of [removed: $0.5, $1.2] [added: $0.3, $0.5] and [removed: $1.6] [added: $1.2] | [removed: 3.6] [added: 1.1] | | | | [removed: 2.2] [added: 3.6] | | | | [removed: 2.9] [added: 2.2] | | |

| Less: amortization of prior service credit, net of tax of $(0.5), $(0.5) and $(0.5) | [removed: (3.5] [added: (1.5] | | ) | | [removed: (0.9] [added: (3.5] | | ) | | [removed: (0.8] [added: (0.9] | | ) |

| Less: amortization of transition obligation | — | | | | [removed: 0.1] [added: —] | | | | 0.1 | | |

| Net [removed: (loss) gain] [added: loss] on investment securities, net of tax of [removed: $(2.5), $(0.1)] [added: $(0.1), $(2.5)] and [removed: $0.4] [added: $(0.1)] | [removed: (4.7] [added: (0.1] | | ) | | [removed: (0.2] [added: (4.7] | | ) | | [removed: 0.7] [added: (0.2] | | [added: )] |

| Net [removed: (loss)] gain [added: (loss)] on derivatives, net of tax of [removed: $(0.1), $0.1] [added: $1.5, $(0.1)] and [removed: $0.8] [added: $0.1] | [removed: (1.0] [added: 3.8] | | [removed: )] | | [removed: (0.1] [added: (1.0] | | ) | | [removed: 1.2] [added: (0.1] | | [added: )] |

| Other comprehensive [removed: income (loss),] [added: (loss) income,] net of tax | [removed: 69.5] [added: (36.9] | | [added: )] | | [removed: (24.2] [added: 69.5] | | [removed: )] | | [removed: (43.4] [added: (24.2] | | ) |

| Comprehensive income | $ | [removed: 220.2] [added: 170.0] | | | $ | [removed: 119.4] [added: 220.2] | | | $ | [removed: 52.2] [added: 119.4] | |

West Pharmaceutical Services, Inc. and Subsidiaries at December 31, [removed: 2017] [added: 2018] and [removed: 2016][added: 2017]

| | [added: 2018 | | | |] 2017 | | | | 2016 | | |

| Cash and cash equivalents | $ | [removed: 235.9] [added: 337.4] | | | $ | [removed: 203.0] [added: 235.9] | |

| Accounts receivable, net | [removed: 253.2] [added: 288.2] | | | | [removed: 200.5] [added: 253.2] | | |

| Inventories | [removed: 215.2] [added: 214.5] | | | | [removed: 199.3] [added: 215.2] | | |

| Other current assets | [removed: 39.2] [added: 54.3] | | | | [removed: 39.1] [added: 39.2] | | |

| Total current assets | [removed: 743.5] [added: 894.4] | | | | [removed: 641.9] [added: 743.5] | | |

| Property, plant and equipment | [removed: 1,745.8] [added: 1,752.7] | | | | [removed: 1,554.7] [added: 1,745.8] | | |

| Cost of goods and services sold | | 1,172.0 | | | | 1,086.2 | | | | 1,007.7 | | |

| Gross profit | | 545.4 | | | | 512.9 | | | | 501.4 | | |

| Operating profit | | 240.3 | | | | 225.8 | | | | 195.2 | | |

| Other nonoperating income | | (6.7 | | ) | | (3.1 | | ) | | (1.6 | | ) |

West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, 2018, 2017 and 2016

| | 2018 | | | | 2017 | | |

West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, 2018, 2017 and 2016

| Effect of modified retrospective application of a new accounting standard | — | | | — | | | | — | | | | — | | | — | | | | (4.1 | | ) | | — | | | | (4.1 | | ) |

| Stock-based compensation | — | | | — | | | | 7.3 | | | | — | | | 9.2 | | | | — | | | | — | | | | 16.5 | | |

| Shares issued under stock plans | 0.1 | | | — | | | | (34.8 | | ) | | (0.9 | ) | | 71.6 | | | | — | | | | — | | | | 36.8 | | |

| Shares purchased under share repurchase program | — | | | — | | | | — | | | | 0.8 | | | (70.8 | | ) | | — | | | | — | | | | (70.8 | | ) |

| Balance, December 31, 2018 | 75.3 | | | $ | 18.8 | | | $ | 282.0 | | | 1.2 | | | $ | (103.7 | ) | | $ | 1,353.4 | | | $ | (154.2 | ) | | $ | 1,396.3 | |

West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, 2018, 2017 and 2016

| Net income | $ | 206.9 | | | $ | 150.7 | | | $ | 143.6 | |

| Contingent consideration payments in excess of acquisition-date liability | (0.6 | | ) | | — | | | | — | | |

| Purchase of investment in affiliated companies | — | | | | — | | | | (8.4 | | ) |

| ($ in millions) | 2018 | | | | 2017 | | |

| | $ | 214.5 | | | $ | 215.2 | |

During 2018, as part of our 2018 restructuring plan, we recorded within other expense a $2.2 million non-cash asset write-down associated with the discontinued use of certain equipment.

whenever circumstances indicate that the carrying value of these assets may not be recoverable.

For our funded plans, we consider the current and expected asset allocations of our plan assets, as well as historical and expected rates of return, in estimating the long-term rate of return on plan assets.

Revenue Recognition: Our revenue results from the sale of goods or services and reflects the consideration to which we expect to be entitled in exchange for those goods or services.

Revenue is recognized based on a five-step model, in accordance with ASC 606.

Following the identification of a contract with a customer, we identify the performance obligations (goods or services) in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize the revenue when (or as) we satisfy the performance obligations by transferring the promised goods or services to our customers.

A good or service is transferred when (or as) the customer obtains control of that good or service.

Please refer to Note 3, Revenue, for additional information.

As of January 1, 2018, we reasserted indefinite reinvestment related to all post-2017 unremitted earnings in all of our foreign subsidiaries.

Please refer to Note 16, Income Taxes, for additional information.

In March 2018, the FASB issued guidance which updates the income tax accounting in U.S. GAAP to reflect the SEC’s interpretive guidance released on December 22, 2017, when the 2017 Tax Act was signed into law.

This guidance was effective immediately upon issuance.

Please refer to Note 16, Income Taxes, for additional information.

Early adoption was permitted.

This guidance was effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.

Early adoption was permitted.

We adopted this guidance as of January 1, 2018, on a retrospective basis.

This guidance was effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.

Early adoption was permitted.

We adopted this guidance as of January 1, 2018, on a retrospective basis.

This guidance was effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.

We adopted ASC 606 as of January 1, 2018, on a modified retrospective basis.

| Gross profit | | 512.6 | | | | 501.1 | | | | 455.8 | | |

| Operating profit | | 228.9 | | | | 196.8 | | | | 128.6 | | |

| Balance, December 31, 2014 | 71.4 | | | $ | 17.8 | | | $ | 160.2 | | | 0.1 | | | $ | (4.1 | ) | | $ | 902.2 | | | $ | (119.2 | ) | | $ | 956.9 | |

| Stock-based compensation | — | | | 0.1 | | | | 26.4 | | | | — | | | 0.2 | | | | — | | | | — | | | | 26.7 | | |

| Shares issued under stock plans | 1.1 | | | 0.2 | | | | 17.6 | | | | — | | | — | | | | — | | | | — | | | | 17.8 | | |

| Purchase of cost-method investments | — | | | | (8.4 | | ) | | (1.5 | | ) |

| Borrowings under revolving credit agreements | — | | | | — | | | | 71.4 | | |

| Repayments under revolving credit agreements | — | | | | — | | | | (71.4 | | ) |

| Debt issuance costs | — | | | | — | | | | (1.0 | | ) |

| Excess tax benefits from employee stock plans | — | | | | 18.2 | | | | 9.1 | | |

| | $ | 215.2 | | | $ | 199.3 | |

A goodwill impairment charge will now be the amount by which a reporting unit's carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

reporting units was less than its carrying amount and determined that it was not necessary to perform the quantitative goodwill impairment test in 2017.

Revenue Recognition: Revenue is recognized when persuasive evidence of a sales arrangement exists, title and risk of loss have transferred, the selling price is fixed or determinable, and collectability is reasonably assured.

Generally, sales are recognized upon shipment or upon delivery to our customers' site, based upon shipping terms or legal requirements.

We record

Please refer to Note 15, Income Taxes, for discussion of the undistributed earnings of our China and Mexico entities at December 31, 2017.

In January 2017, the FASB issued guidance which removes the second step of the goodwill impairment test.

We

In January 2017, the FASB issued guidance which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

In October 2016, the FASB issued guidance which requires companies to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs.

As a result of the adoption, a cumulative-effect adjustment of $4.1 million was recorded within retained earnings in our consolidated balance sheet as of January 1, 2017, for unamortized tax expense previously deferred and previously unrecognized deferred tax assets.

In March 2016, the FASB issued guidance that simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.

We adopted this guidance as of January 1, 2017, on a prospective basis as it relates to the timing or recognition and classification of share-based compensation award-related income tax effects.

For the year ended December 31, 2017, we recorded a tax benefit of $33.1 million within income tax expense in our consolidated statement of income.

These tax benefits were recorded within capital in excess of par value in our consolidated balance sheet in the prior-year period.

Also per the amended guidance, we classified the $33.1 million of excess tax benefits within net cash provided by operating activities in our consolidated statement of cash flows for the year ended December 31, 2017, rather than net cash used in financing activities, which included the excess tax benefits for the year ended December 31, 2016.

The amended guidance allows entities to account for award forfeitures as they occur, however, we have elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period.

The adoption of the amended guidance may result in increased volatility in our effective tax rate.

In March 2016, the FASB issued guidance that simplifies the transition to the equity method of accounting.

This guidance eliminates the requirement to retroactively adopt the equity method of accounting when there is an increase in the level of ownership interest or degree of influence.

In July 2015, the FASB issued guidance regarding the subsequent measurement of inventory.

This guidance requires inventory measured using any method other than last-in, first-out or the retail inventory method to be measured at the lower of cost and net realizable value.

Net realizable value represents estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

modification accounting if its fair value, vesting conditions and classification of the awards are the same immediately before and after the modification.

Early adoption is permitted as of one year prior to the current effective date.

Entities can choose to apply the guidance using either a full retrospective approach or a modified retrospective approach.

Based on the results of the procedures performed through December 31, 2017, which included a review of a representative sample of our contracts across our reportable segments and revenue streams, we believe that the adoption of this guidance will not have a material impact on our financial statements, particularly as the majority of our net sales relates to the sale of packaging components.

We continue to review the impact

We will apply the guidance using the modified retrospective approach.

Based on this evaluation, our CEO and CFO have concluded that, as of December 31, [removed: 2017,] [added: 2018,] our disclosure controls and procedures are effective.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2017] [added: 2018] based on the framework established in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this assessment, management has determined that our internal control over financial reporting was effective as of December 31, [removed: 2017.][added: 2018.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2017] [added: 2018] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included herein.

During the fourth quarter ended December 31, [removed: 2017,] [added: 2018,] there have been no changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On January 1, 2018, we adopted ASC 606.

Although our adoption of ASC 606 resulted in no change to our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, we did implement changes to our internal controls relating to revenue.

These changes included the development of new policies based on a five-step model provided in ASC 606, enhanced contract review requirements, and other ongoing monitoring activities.

These controls were designed to provide assurance at a reasonable level of the fair presentation of our consolidated financial statements and related disclosures.

Information about our directors is incorporated by reference from the discussion under the heading [removed: Items to Be Voted on -] [added: Board of Directors Nominee Information \-] Proposal 1 - Election of Directors in our [removed: 2018] [added: 2019] Proxy Statement.

Information about our Code of Business Conduct is incorporated by reference from the discussion under the heading Corporate Governance [removed: and Board Matters] [added: Documents] - Code of Business Conduct in our [removed: 2018] [added: 2019] Proxy Statement.

Information regarding the procedures by which our shareholders may recommend nominees to our Board of Directors is incorporated by reference from the discussion under the heading [added: Voting and] Other Information - [removed: 2019] [added: 2020] Shareholder Proposals or Nominations included in our [removed: 2018] [added: 2019] Proxy Statement.

Information about our Audit Committee, including the members of the committee, and our Audit Committee financial experts, is incorporated by reference from the discussion under the heading [removed: Corporate Governance and] Board [removed: Matters] [added: and Director Information and Policies] - Committees - Audit Committee in our [removed: 2018] [added: 2019] Proxy Statement.

Information about director and executive compensation is incorporated by reference from the discussion under the headings Director Compensation and Executive Compensation in our [removed: 2018] [added: 2019] Proxy Statement.

Information required by this Item is incorporated by reference from the discussion under the heading [removed: Other Information] [added: Stock Ownership] - [added: Current] Stock Ownership [added: by Officers and Directors] in our [removed: 2018] [added: 2019] Proxy Statement.

The following table sets forth information about the grants of stock options, restricted stock or other rights under all of the [removed: Company's] [added: Company’s] equity compensation plans as of the close of business on December 31, [removed: 2017.][added: 2018.]

The table does not include information about tax-qualified plans such as the West 401(k) Plan or the [removed: Tech Group Puerto Rico] [added: West Contract Manufacturing] Savings and Retirement Plan.

| (1) | Includes [removed: 511,373] [added: 935,878] outstanding stock options, [removed: 95,554] [added: 185,253] restricted performance share units, [removed: 1,393] [added: 17,904] restricted retention share units, [removed: 44,946] [added: 67,797] deferred stock-equivalents units and [removed: 528] [added: 584] restricted stock-equivalents units granted to directors under the 2016 Plan. Includes [removed: 2,498,076] [added: 1,864,237] outstanding stock options, [removed: 21,980] [added: 14,160] outstanding stock-settled stock appreciation rights, [removed: 240,867] [added: 94,746] restricted performance share units, [removed: 41,458] [added: 24,062] restricted retention share units and 171,422 deferred stock-equivalents units under the 2011 Plan (which was terminated in 2016). Includes [removed: 456,185] [added: 193,722] outstanding stock options and 72,523 deferred stock-equivalents units granted to directors under the Non-Qualified Deferred Compensation Plan for Non-Employee Directors under the 2007 Omnibus Incentive Compensation Plan (which was terminated in 2011). The average term of remaining options and stock-settled stock appreciation rights granted is 6.4 years. No future grants or awards may be made under the terminated plans. The total includes restricted performance share units at 100% of grant. The restricted performance share unit payouts were at [removed: 89.81%, 110.6%,] [added: 96.6%, 89.8%,] and [removed: 167.8%] [added: 110.6%] in [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015,] [added: 2016,] respectively. The total does not include stock-equivalent units granted or credited to directors under the Non-Qualified Deferred Compensation Plan for Non-Employee Directors to be settled only in cash. |

| (3) | Represents [removed: 4,039,545] [added: 3,881,103] shares reserved under the [removed: Company's] [added: Company’s] Employee Stock Purchase Plan and [removed: 4,597,102] [added: 3,710,483] shares remaining available for issuance under the 2016 Plan. The estimated number of shares that could be issued for [removed: 2017] [added: 2018] from the Employee Stock Purchase Plan is [removed: 340,285.] [added: 300,852.] This number of shares is calculated by multiplying the [removed: 269] [added: 244] shares per offering period per participant limit by [removed: 1,265,] [added: 1,233,] the number of current participants in the plan. |

| Equity compensation plans approved by security holders | 3,642,288 | | (1) | $ | 58.74 | | (2) | 7,591,586 | | (3) |

| Total | 3,642,288 | | | $ | 58.74 | | | 7,591,586 | | |

| Equity compensation plans approved by security holders | 4,156,305 | | (1) | $ | 48.61 | | (2) | 8,636,647 | | (3) |

| Total | 4,156,305 | | | $ | 48.61 | | | 8,636,647 | | |

Information called for by this Item is incorporated by reference from the discussion under the heading Corporate Governance [removed: and Board Matters] [added: Documents] - Related Person Transactions and Procedures in our [removed: 2018] [added: 2019] Proxy Statement.

Information about director independence is incorporated by reference from the discussion under the heading Corporate Governance [removed: and Board Matters] [added: Documents] - Director Independence in our [removed: 2018] [added: 2019] Proxy Statement.

Information about the fees for professional services rendered by our independent auditors in [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] is incorporated by reference from the discussion under the heading Independent Auditors and Fees - Fees Paid to [removed: PricewaterhouseCoopers LLP in our 2018 Proxy Statement.]

Our Audit [removed: Committee's] [added: Committee’s] policy on pre-approval of audit and permissible non-audit services of our independent auditors is incorporated by reference from the section captioned Independent Auditors and Fees - Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services in our [removed: 2018] [added: 2019] Proxy Statement.

PricewaterhouseCoopers LLP in our 2019 Proxy Statement.

Consolidated Statements of Income for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015][added: 2016]

Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015][added: 2016]

Consolidated Balance Sheets at December 31, [removed: 2017] [added: 2018] and [removed: 2016][added: 2017]

Consolidated Statement of Equity for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015][added: 2016]

Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015][added: 2016]

| For the year ended December 31, [removed: 2015] [added: 2018] | | | | | | | | | | | | |

| Deferred tax asset valuation allowance | $ | 20.9 | | $ | (3.0 | ) | $ | (1.9 | ) | $ | 16.0 | |

| Allowance for doubtful accounts | 0.5 | | | 0.7 | | | 0.8 | | | 2.0 | | |

| Total allowances deducted from assets | $ | 21.4 | | $ | (2.3 | ) | $ | (1.1 | ) | $ | 18.0 | |

| Deferred tax asset valuation allowance | $ | 22.1 | | $ | (0.3 | ) | $ | (1.7 | ) | $ | 20.1 | |

| Allowance for doubtful accounts | 0.9 | | | 0.1 | | | (0.4 | | ) | 0.6 | | |

| Total allowances deducted from assets | $ | 23.0 | | $ | (0.2 | ) | $ | (2.1 | ) | $ | 20.7 | |

Senior Vice [removed: President and] [added: President,] Chief Financial Officer [added: and Treasurer]

| /s/ Eric M. Green | Director, President and Chief Executive Officer | February [removed: 26, 2018] [added: 27, 2019] |

| /s/ Daniel Malone | Vice President and Controller | February [removed: 26, 2018] [added: 27, 2019] |

| /s/ [removed: William] [added: Bernard] J. [removed: Federici] [added: Birkett] | Senior Vice [removed: President and] [added: President,] Chief Financial Officer [added: and Treasurer] | February [removed: 26, 2018] [added: 27, 2019] |

| [removed: William] [added: Bernard] J. [removed: Federici] [added: Birkett] | (Principal Financial Officer) | |

| /s/ Mark A. Buthman | Director | February [removed: 13, 2018] [added: 19, 2019] |

| /s/ William F. Feehery, Ph.D. | Director | February [removed: 13, 2018] [added: 19, 2019] |

| /s/ Thomas W. Hofmann | Director | February [removed: 13, 2018] [added: 19, 2019] |

| /s/ Paula A. Johnson, M.D., MPH | Director | February [removed: 13, 2018] [added: 19, 2019] |

| /s/ Deborah L.V. Keller | Director | February [removed: 13, 2018] [added: 19, 2019] |

| /s/ Myla P. Lai-Goldman, M.D. | Director | February [removed: 13, 2018] [added: 19, 2019] |

| /s/ Douglas A. Michels | Director | February [removed: 13, 2018] [added: 19, 2019] |

| /s/ Paolo Pucci | Director | February [removed: 13, 2018] [added: 19, 2019] |

| /s/ John H. Weiland | Director | February [removed: 13, 2018] [added: 19, 2019] |

| /s/ Patrick J. Zenner | Director and Chairman of the Board | February [removed: 13, 2018] [added: 19, 2019] |

| 10.1 | [removed: [First Amendment to Credit] [added: [Credit] Agreement, dated as of [removed: September 4,] [added: October 15,] 2015, [removed: by and among] [added: between] West, certain of its subsidiaries, the [removed: several banks and other financial institutions] [added: lenders] party [removed: thereto, and] [added: thereto from time to time,] PNC Bank, National Association, as [removed: administrative agent for the Lenders] [added: Administrative Agent and PNC Capital Markets, LLC, as Sole Lead Arranger and Sole Bookrunner, is] incorporated by reference from our Form [removed: 10-Q report for the quarter ended September 30, 2015.](http://www.sec.gov/Archives/edgar/data/105770/000010577015000047/ex101amendment.htm)] [added: 8-K dated October 15, 2015.](http://www.sec.gov/Archives/edgar/data/105770/000010577015000042/exh101creditagreement.htm)] |

| [removed: 10.3] [added: 10.2] | [Note Purchase Agreement, dated July 5, 2012, among the Company and the Purchasers named therein is incorporated by reference from our Form 8-K filed on July 10, 2012.](http://www.sec.gov/Archives/edgar/data/105770/000010577012000048/exh10_1.htm) |