filings.toolsItem 6. SELECTED FINANCIAL DATA
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Item 6. SELECTED FINANCIAL DATA
FIVE-YEAR SUMMARY
West Pharmaceutical Services, Inc. and Subsidiaries
| (in millions, except per share data) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
| SUMMARY OF OPERATIONS | |||||||||||||||
| Net sales | $ | 1,717.4 | $ | 1,599.1 | $ | 1,509.1 | $ | 1,399.8 | $ | 1,421.4 | |||||
| Operating profit † | 240.3 | 225.8 | 195.2 | 177.0 | 182.0 | ||||||||||
| Net income | 206.9 | 150.7 | 143.6 | 95.6 | 127.1 | ||||||||||
| Net income per share: | |||||||||||||||
| Basic (1) | $ | 2.80 | $ | 2.04 | $ | 1.96 | $ | 1.33 | $ | 1.79 | |||||
| Diluted (2) | 2.74 | 1.99 | 1.91 | 1.30 | 1.75 | ||||||||||
| Weighted average common shares outstanding | 73.9 | 73.9 | 73.3 | 72.0 | 70.9 | ||||||||||
| Weighted average shares assuming dilution | 75.4 | 75.8 | 75.0 | 73.8 | 72.8 | ||||||||||
| Dividends declared per common share | $ | 0.58 | $ | 0.54 | $ | 0.50 | $ | 0.46 | $ | 0.41 | |||||
| YEAR-END FINANCIAL POSITION | |||||||||||||||
| Cash and cash equivalents | $ | 337.4 | $ | 235.9 | $ | 203.0 | $ | 274.6 | $ | 255.3 | |||||
| Working capital | 610.7 | 464.0 | 400.9 | 359.4 | 406.6 | ||||||||||
| Total assets | 1,978.9 | 1,862.8 | 1,716.7 | 1,695.1 | 1,669.7 | ||||||||||
| Total invested capital: | |||||||||||||||
| Total debt | 196.1 | 197.0 | 228.6 | 298.2 | 335.5 | ||||||||||
| Total equity | 1,396.3 | 1,279.9 | 1,117.5 | 1,023.9 | 956.9 | ||||||||||
| Total invested capital | $ | 1,592.4 | $ | 1,476.9 | $ | 1,346.1 | $ | 1,322.1 | $ | 1,292.4 | |||||
| PERFORMANCE MEASUREMENTS (3) | |||||||||||||||
| Gross margin (a) | 31.8 | % | 32.1 | % | 33.2 | % | 32.6 | % | 31.5 | % | |||||
| Operating profitability (b) † | 14.0 | % | 14.1 | % | 12.9 | % | 12.6 | % | 12.8 | % | |||||
| Effective tax rate (4) | 17.2 | % | 36.4 | % | 28.7 | % | 22.6 | % | 28.0 | % | |||||
| Return on invested capital (c) † | 13.0 | % | 10.2 | % | 10.4 | % | 10.5 | % | 10.2 | % | |||||
| Net debt-to-total invested capital (d) | N/A | N/A | 2.2 | % | 2.3 | % | 7.7 | % | |||||||
| Research and development expenses | $ | 40.3 | $ | 39.1 | $ | 36.8 | $ | 34.1 | $ | 37.3 | |||||
| Operating cash flow | 288.6 | 263.3 | 219.4 | 212.4 | 182.9 | ||||||||||
| Stock price range | $125.09-82.74 | $103.36-77.97 | $86.50-53.88 | $64.59-48.66 | $55.29-39.11 |
(1) Based on weighted average common shares outstanding.
(2) Based on weighted average shares, assuming dilution.
(3) Performance measurements represent indicators commonly used in the financial community. The following performance measures are not in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and should not be used as a substitute for the comparable U.S. GAAP financial measures. The non-U.S. GAAP financial measures are included as management uses them in evaluating our results of operations, and believes that this information provides users with a valuable insight into our overall performance and financial position.
(a) Net sales minus cost of goods and services sold, including applicable depreciation and amortization, divided by net sales.
(b) Operating profit divided by net sales.
(c) Operating profit multiplied by one minus the effective tax rate divided by average total invested capital.
(d) Net debt (total debt less cash and cash equivalents) divided by total invested capital less cash and cash equivalents.
(4) As a result of the Tax Cuts and Jobs Act (the “2017 Tax Act”), the federal statutory rate was reduced from 35.0% to 21.0% effective for tax years beginning after December 31, 2017. Please refer to Note 16, Income Taxes, for further discussion of the 2017 Tax Act.
† 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).
Factors affecting the comparability of the information reflected in the selected financial data:
| ▪ | 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. |
| ▪ | 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 FASB regarding share-based payment transactions and a charge of $11.1 million related to the deconsolidation of our Venezuelan subsidiary. |
| ▪ | Net income in 2016 included the impact of restructuring and related charges of $17.4 million (net of $9.0 million in tax), a charge related to the devaluation of the Venezuelan Bolivar of $2.7 million, a pension curtailment gain of $1.3 million (net of $0.8 million in tax), and a discrete tax charge of $1.0 million. |
| ▪ | Net income in 2015 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 income in 2014 included the impact of a charge for license costs associated with acquired in-process research of $0.8 million (net of $0.4 million in tax) and discrete tax charges of $1.8 million. |
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