West Pharmaceutical Services (WST) 10-K risk factor changes: FY2019 vs FY2018

[removed: Our] [added: *Our] disclosure and analysis in this Form 10-K contains some forward-looking statements that are based on management’s beliefs and assumptions, current expectations, estimates and forecasts.

We have attempted, wherever possible, to identify forward-looking statements by using words such as “estimate,” “expect,” “intend,” “believe,” “plan,” “anticipate” and other words and [removed: terms] [added: phrases] of similar meaning.

[removed: In particular, these include statements relating to future actions, business plans and prospects, new products, future performance] [added: *performance] or results of current or anticipated products, sales efforts, expenses, interest rates, foreign-exchange rates, economic effects, the outcome of contingencies, such as legal proceedings, and financial [removed: results.][added: results.*]

[removed: Many] [added: *Many] of the factors that will determine our future results are beyond our ability to control or predict.

You should bear this in mind as you consider forward-looking [removed: statements.][added: statements.*]

[removed: Unless] [added: *Unless] required by applicable securities law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.

We also refer you to further disclosures we make on related subjects in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K to the [removed: SEC.][added: SEC.*]

[removed: Our] [added: Our] operating results may be adversely affected by unfavorable economic and market [removed: conditions.][added: conditions.]

Examples of the effects of these global economic challenges include: our suppliers’ and our 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.][added: revenues or changes in, or expirations of, a country’s tax laws or regulations.]

[removed: Our] [added: Our] sales and profitability are largely dependent on the sale of drug products delivered by injection and the packaging of drug products.

If the [added: drug] products developed by our customers in the future use another delivery [removed: system,] [added: system or are reconfigured to require less frequent dosing,] our sales and profitability could [removed: suffer.][added: suffer.]

If [added: (i)] our customers fail to continue to sell, develop and deploy injectable [added: products; (ii) our customers reconfigure their drug product or develop new drug] products [added: requiring less frequent dosing;] or [added: (iii)] we are unable to develop new products that assist in the delivery of drugs by alternative methods, our sales and profitability may suffer.

[removed: Changes] [added: Changes] in foreign currency exchange rates could have a material adverse effect on our business and/or results of [removed: operations.][added: operations.]

Sales outside of the U.S. accounted for [removed: 55.4%] [added: 55.7%] of our consolidated net sales in [removed: 2018] [added: 2019] and we anticipate that sales from international operations will continue to [added: represent a significant portion of our total sales in the future.]

In addition, we are exposed to Japanese Yen (“Yen”), as we maintain a [removed: 25%] [added: 49%] ownership interest in, and we purchase finished goods and other materials from, Daikyo.

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

Our consolidated financial statements are presented in USD, and, therefore, we must translate the reported values of our foreign assets, liabilities, [removed: revenues] [added: revenues,] and expenses into USD, which can result in significant fluctuations in the amount of those assets, liabilities, [removed: revenues] [added: revenues,] or expenses.

[removed: The] exchange rates between these foreign currencies and USD in recent years have fluctuated significantly and may continue to do so in the future.

[removed: If] [added: If] we are unable to provide comparative value advantages, timely fulfill customer orders, or resist pricing pressure, we will have to reduce our prices, which may reduce our profit [removed: margins.][added: margins.]

If we are unable to resist or [removed: to] offset the effects of continued pricing pressure through our value-added services, improved operating efficiencies and reduced expenditures, or if we have to reduce our prices, our sales and profitability may suffer.

[removed: Consolidation] [added: Consolidation] in the pharmaceutical and healthcare industries could adversely affect our future revenues and operating [removed: income.][added: income.]

[removed: We] [added: We] are subject to regulation by governments around the world, and if these regulations are not complied with, existing and future operations may be curtailed, and we could be subject to [removed: liability.][added: liability.]

The design, development, manufacturing, marketing and labeling of certain of our products and our 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 (“FDA”), the European Medicines [removed: Agency,] [added: Agency] and the National Medical Products Administration (China).

[added: 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.

[removed: Products] [added: Products] that incorporate our technologies 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 [removed: predict.][added: predict.]

Supplemental or full pre-market approval reviews require a significantly longer period, delaying [removed: commercialization.]

[removed: Changes] [added: Changes] in the regulation of drug products and devices may increase competitive pressure and adversely affect our [removed: business.][added: business.]

[removed: If] [added: If] we are not successful in protecting our intellectual property rights, our ability to compete may be [removed: affected.][added: affected.]

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

[removed: Disruption] [added: Disruption] in our manufacturing facilities could have a material adverse effect on our ability to make and sell products and have a negative impact on our reputation, performance or financial [removed: condition.][added: condition.]

[removed: The] [added: The] medical technology industry is very competitive and customer demands and/or new products in the marketplace could cause a reduction in [removed: demand.][added: demand.]

[removed: Significant] [added: Significant] developments in U.S. policies could have a material adverse effect on our business and/or results of [removed: operations.][added: operations.]

[removed: Our] [added: Our] international sales and operations are subject to risks and uncertainties that vary by country and which could have a material adverse effect on our business and/or results of [removed: operations.][added: operations.]

[removed: Disruptions] [added: Disruptions] in the supply of key raw materials could adversely impact our [removed: operations.][added: operations.]

Due to the stringent regulations and requirements of the FDA and other regulatory authorities regarding the manufacture of our [removed: products,] [added: products and the availability of such raw materials,] we may not be able to quickly establish additional or replacement sources for these components or [added: raw] materials or do so without excessive cost.

[removed: Unauthorized] [added: Unauthorized] access to our or our [removed: customers’ information] [added: customers’ information] and systems could negatively impact our [removed: business.][added: business.]

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 [removed: employees,] [added: employees] or our customers, as well as disrupt our operations or damage our facilities or those of third parties.

[removed: Raw] [added: Raw] material and energy prices have a significant impact on our profitability.

If raw material and/or energy prices increase, and we cannot pass those price increases on to our customers, our profitability and financial condition may [removed: suffer.][added: suffer.]

[removed: If] [added: If] we are not timely or successful in new-product innovation or the development and commercialization of proprietary multi-component systems, our future revenues and operating income could be adversely [removed: affected.][added: affected.]

In particular, these include statements relating to future actions, business plans and prospects, new products, future*

The

commercialization.

We may be unable to identify suitable

Please refer to Note 3, *Revenue*, for the discussion of the voluntary recall of our Vial2Bag® product line.

dependent on an educated and highly skilled engineering staff and workforce.

Climate change and potential climate change legislation may present risks to our operations, including business interruption, significantly increased costs and/or other adverse consequences to our business.

Some of the potential impacts of climate change to our business include physical risks to our facilities, water and energy supply limitations or interruptions, disruptions to our supply chain and impairment of other resources.

LIBOR reform may adversely affect our financial condition, results of operations and cash flows.

Our variable-rate debt, which includes our new senior unsecured, multi-currency revolving credit facility agreement (the “Credit Agreement”) and our new term loan (the “Term Loan”), currently use the London Interbank Offered Rate ("LIBOR") as a benchmark for establishing the interest rate.

LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform.

These proposals for reform and other pressures may cause LIBOR to disappear entirely or to perform differently than in the past.

If the method for calculation of LIBOR changes, if LIBOR is no longer available or if lenders have increased costs due to changes in LIBOR, we may suffer from potential increases in interest rates on our variable-rate debt, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Further, we may need to amend our Credit Agreement and Term Loan as a factor in determining the interest rate to replace LIBOR with the new standard that is established.

We will continue to monitor the proposals for reform relating to LIBOR.

The actual declaration and payment of future dividends, the amount of any such dividends, and the

Please refer to Note 7, *Affiliated Companies,* for information relating to the increase in our ownership interest in Daikyo in 2019.

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

innovations or proprietary multi-component systems could adversely affect future revenues and operating income.

[removed: OVERVIEW][added: OVERVIEW]

[removed: Non-U.S.] [added: Non-U.S.] GAAP Financial [removed: Measures][added: Measures]

[removed: The constant-currency amounts are] calculated by translating the current year’s functional currency results at the prior-year period’s exchange rate.

[added: 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.

The non-U.S. GAAP financial measures are [removed: incorporated into] [added: included in] our discussion and analysis as management uses them in evaluating our results of [removed: operations,] [added: operations] and believes that this information provides users [added: with] a valuable insight into our [removed: results.][added: overall performance and financial position.]

[removed: Our Operations][added: Our Operations]

Our products include a variety of primary packaging, containment solutions, reconstitution and transfer systems, and drug delivery systems, as well as contract [removed: manufacturing and] [added: manufacturing,] analytical lab [removed: services.][added: services and integrated solutions.]

Our customers include the leading biologic, generic, pharmaceutical, diagnostic, and [added: additional] medical device companies in the world.

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

Our Proprietary Products reportable segment offers proprietary packaging, containment and drug delivery products, along with analytical lab [removed: services,] [added: services and integrated solutions, primarily] to biologic, generic and pharmaceutical drug customers.

We also maintain [removed: partnerships] [added: collaborations] to share technologies and market products with affiliates in Japan and Mexico.

[removed: 2018] [added: 2019] Financial Performance [removed: Summary][added: Summary]

Consolidated net sales increased by [removed: $118.3] [added: $122.5] million, or [removed: 7.4%,] [added: 7.1%,] in [removed: 2018.][added: 2019.]

Excluding foreign currency translation effects, [added: as well as incremental sales of $3.3 million from our recent acquisition,] consolidated net sales increased by [removed: $89.7] [added: $171.4] million, or [removed: 5.6%.][added: 10.0%.]

Net income in [removed: 2018] [added: 2019] was [removed: $206.9] [added: $241.7] million, or [removed: $2.74] [added: $3.21] per diluted share, compared to [removed: $150.7] [added: $206.9] million, or [removed: $1.99] [added: $2.74] per diluted share, in [removed: 2017.][added: 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 [added: estimated] impact of [removed: tax law changes, including] the 2017 Tax Act, and a tax benefit of $14.3 million, or $0.19 per diluted share, associated with [removed: our adoption in 2017 of guidance issued by the FASB regarding share-based payment transactions.][added: stock-based compensation.]

[removed: Net income in 2017 included the impact of] [added: During 2017, we recorded] a discrete tax charge of $48.8 [removed: million, or $0.64 per diluted share,] [added: 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, [added: as well as] a tax benefit of $33.1 [removed: million, or $0.44 per diluted share,] [added: million] associated with [removed: 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.][added: stock-based compensation.]

At December 31, [removed: 2018,] [added: 2019,] our cash and cash equivalents balance totaled [removed: $337.4 million] [added: $439.1] and our available borrowing capacity under our $300.0 million multi-currency revolving credit facility (the “Credit Facility”) was [removed: $268.9] [added: $297.5] million.

[removed: RESULTS] [added: RESULTS] OF [removed: OPERATIONS][added: OPERATIONS]

Percentages in the following tables and throughout this [removed: Results] [added: *Results] of [removed: Operations] [added: Operations*] section may reflect rounding adjustments.

[removed: Net Sales][added: Net Sales]

| | [added: | |] Year Ended December 31, | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |] % Change | | | | | [added: | | | | | | | | | |]

| ($ in millions) | [added: | | 2019 | | | | | |] 2018 | | | | [added: | |] 2017 | | | | [removed: 2016] | | [added: 2019/2018] | | [added: | | | |] 2018/2017 | | | [removed: 2017/2016] | | [added: | | | | | | | | | | | | | | | |]

| Proprietary Products | [added: | |] $ | [added: 1,398.6 | | | | | $ |] 1,308.6 | | | [added: | |] $ | 1,236.9 | | | [removed: $] | [removed: 1,189.9] | [added: 6.9] | | [added: % | | | |] 5.8 | [added: |] % | | [removed: 3.9] | [removed: %] | [added: | | | | | | | | | | | | | | |]

| Contract-Manufactured Products | [added: | | 441.5 | | | | | |] 409.1 | | | | [added: | |] 362.5 | | | | [removed: 320.2] | | [added: 7.9] | | [added: % | | | |] 12.9 | [added: |] % | | [removed: 13.2] | [removed: %] | [added: | | | | | | | | | | | | | | |]

| Intersegment sales elimination | [removed: (0.3] | | [removed: )] [added: (0.2)] | | [removed: (0.3] | | [removed: )] | | [removed: (1.0] [added: (0.3)] | | [removed: )] | | [removed: —] | [added: | (0.3) | | | | | | (33.3) | |] % | | [added: | |] — | [added: |] % | [added: | | | | | | | | | | | | | | | | | |]

| Consolidated net sales | [added: | |] $ | [added: 1,839.9 | | | | | $ |] 1,717.4 | | | [added: | |] $ | 1,599.1 | | | [removed: $] | [removed: 1,509.1] | [added: 7.1] | | [added: % | | | |] 7.4 | [added: |] % | | [removed: 6.0] | [removed: %] | [added: | | | | | | | | | | | | | | |]

[removed: 2018] [added: 2018] compared to [removed: 2017][added: 2017]

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

[removed: Excluding foreign currency translation effects, net sales increased by $47.9 million, or 3.9%, as growth in our high-value product offerings, including our Westar® and] FluroTec-coated components, our ready-to-use seals, stoppers, and plungers, and our [removed: NovaPure®] [added: 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: Contract-Manufactured Products] [added: Contract-Manufactured Products] – Contract-Manufactured Products net sales increased by $46.6 million, or 12.9%, in 2018, including a favorable foreign currency translation impact of $4.8 million.

[removed: 2017] [added: 2018] compared to [removed: 2016][added: 2017]

Consolidated net sales increased by [removed: $90.0] [added: $122.5] million, or [removed: 6.0%,] [added: 7.1%,] in [removed: 2017,] [added: 2019,] including [removed: a favorable] [added: an unfavorable] foreign currency translation impact of [removed: $12.2] [added: $52.2] million.

Excluding foreign currency translation [removed: effects,] [added: effects of $52.2 million, as well as incremental sales of $3.3 million from our recent acquisition,] consolidated net sales increased by [removed: $77.8 million,] [added: $171.4,] or [removed: 5.2%.][added: 10.0%.]

[removed: Proprietary] [added: Proprietary] Products [removed: –] [added: –] Proprietary Products net sales increased by [removed: $47.0] [added: $90.0] million, or [removed: 3.9%,] [added: 6.9%,] in [removed: 2017,] [added: 2019,] including [removed: a favorable] [added: an unfavorable] foreign currency translation impact of [removed: $8.4] [added: $43.1] million.

Excluding foreign currency translation effects, net sales increased by [removed: $38.6] [added: $47.9] million, or [removed: 3.2%.][added: 3.9%, as growth in our high-value product offerings, including our Westar® and]

[removed: Contract-Manufactured] [added: Contract-Manufactured] Products [removed: –] [added: –] Contract-Manufactured Products net sales increased by [removed: $42.3] [added: $32.4] million, or [removed: 13.2%,] [added: 7.9%,] in [removed: 2017,] [added: 2019,] including [removed: a favorable] [added: an unfavorable] foreign currency translation impact of [removed: $3.8] [added: $9.1] million.

[removed: Gross Profit][added: Gross Profit]

| | [added: | |] Year Ended December 31, | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |] % Change | | | | | [added: | | | | | | | | | |]

| ($ in millions) | [added: | | 2019 | | | | | |] 2018 | | | | [added: | |] 2017 | | | | [removed: 2016] | | [added: 2019/2018] | | [added: | | | |] 2018/2017 | | | [removed: 2017/2016] | | [added: | | | | | | | | | | | | | | | |]

The constant-currency amounts are

Net income in 2019 included the impact of restructuring and related charges of $3.7 million (net of $1.2 million in tax), or $0.04 per diluted share, a gain on the sale of fixed assets as a result of our restructuring plan of $1.3 million (net of $0.4 million in tax), or $0.02 per diluted share, a pension settlement charge of $2.7 million (net of $0.8 million in tax), or $0.04 per diluted share, a charge of $1.0 million related to the continued devaluation of Argentina’s currency, or $0.01 per diluted share, a tax recovery related to previously-paid international excise taxes of $2.9 million (net of $1.5 million in tax), or $0.04 per diluted share, a net tax benefit of $0.3 million related to the impact of federal law changes enacted during the year, and a tax benefit of $10.3 million, or $0.14 per diluted share, associated with stock-based compensation.

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Excluding foreign currency translation effects, as well as incremental sales of $3.3 million from our recent acquisition, net sales increased by $129.8 million, or 9.9%, primarily due to growth in our high-value product offerings, including our Daikyo components, our ready-to-use seals, stoppers, and plungers, our NovaPure® components and Crystal Zenith products, and our self-injection systems and FluroTec-coated components.

Excluding foreign currency translation effects, net sales increased by $41.5 million, or 10.1%, due to an increase in the sale of healthcare-related injection and diagnostic devices.

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

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| Unallocated items | | | $ | (0.2) | | | | | $ | — | | | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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Consolidated R&D costs decreased by $1.4 million, or 3.5%, in 2019, primarily due to an increase in customer-funded R&D projects via customer development agreements.

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| Corporate and unallocated items | | | 66.6 | | | | | | 61.4 | | | | | | 55.3 | | | | | | 8.5 | | % | | | | 11.0 | | % | | | | | | | | | | | | | | | | | | |

Proprietary Products – Proprietary Products SG&A costs increased by $4.9 million, or 2.6%, in 2019, primarily due to an increase in compensation costs and incremental costs associated with our voluntary recall and the acquisition of our distributor in South Korea, partially offset by ongoing cost control measures.

Foreign currency translation decreased Proprietary Products SG&A costs by $0.3 million.

Contract-Manufactured Products – Contract-Manufactured Products SG&A costs decreased by $0.3 million, or 1.8%, in 2019, due to ongoing cost control measures.

Corporate and unallocated items – Corporate SG&A costs increased by $5.2 million, or 8.5%, in 2019, primarily due to increases in stock-based compensation costs and incentive compensation costs, partially offset by a decrease in U.S. pension costs due to the cessation of our U.S. qualified and non-qualified defined benefit pension plans as of January 1, 2019 (except for interest crediting) and ongoing cost control measures.

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| Corporate and unallocated items | | | (0.7) | | | | | | 9.0 | | | | | | 11.0 | | | | | | | | | | | | | | |

Consolidated other (income) expense changed by $4.4 million in 2019.

Proprietary Products – Proprietary Products other income decreased by $4.3 million in 2019, primarily due to increased contingent consideration costs.

Please refer to Note 12, *Fair Value Measurements*, for further discussion of this item.

Contract-Manufactured Products – Contract-Manufactured Products other expense (income) changed by $1.0 million in 2019, primarily due to a decrease in gains on the sale of fixed assets during 2019.

Corporate and unallocated items – Corporate and unallocated items changed by $9.7 million in 2019.

During 2019, we recorded $4.9 million in restructuring and related charges, a $1.9 million gain on the sale of fixed assets as a result of our restructuring plan, and a charge of $1.0 million as a result of the continued devaluation of Argentina’s currency.

savings of approximately $14.0 million.

In addition, during 2019, we recognized a tax recovery of $4.7 million related to previously-paid international excise taxes, following a favorable court ruling.

Corporate and unallocated items – Corporate and unallocated items changed by $2.0 million in 2018.

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2019 compared to 2018

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2019 compared to 2018

Interest expense, net, decreased by $1.6 million, or 25.4%, in 2019, due to an increase in interest income in 2019 resulting from higher interest rates on our deposit accounts and higher average cash and cash equivalents balances.

2019 compared to 2018

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

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.

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

as customers continued to work down inventory purchased in 2016 mostly to address long production lead-times for

high-value products.

Additional production capacity and staffing improved our lead-times, and we began to see

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

Higher sales volume contributed 2.2

percentage points of the increase, and sales price increases contributed 1.0 percentage points of the increase.

Excluding foreign

currency translation effects, net sales increased by $38.5 million, or 12.0%, primarily due to the initial commercial

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

Higher sales volume contributed 10.8 percentage

points of the increase, and sales price increases contributed 1.2 percentage points of the increase.

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Consolidated R&D costs increased by $2.3 million, or 6.3%, in 2017, due to continued investment in self-injection systems development and formulation development.

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

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

increases in compensation costs, primarily related to headcount and merit increases.

Foreign currency translation

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

Contract-Manufactured Products – Contract-Manufactured Products SG&A costs increased by $0.2 million, or

1.3%, in 2017, due to an increase in incentive compensation and travel costs.

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

pension costs and stock-based compensation expense, partially offset by increases in headcount and outside services.

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

We do not purchase or hold any derivative financial [removed: instruments for investment or trading purposes.]

[removed: Foreign] [added: Foreign] Currency Exchange [removed: Risk][added: Risk]

Sales outside of the U.S. accounted for [removed: 55.4%] [added: 55.7%] of our consolidated net sales in [removed: 2018.][added: 2019.]

[removed: Interest] [added: Interest] Rate [removed: Risk][added: Risk]

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

| ($ in millions) | [removed: 2019] | | [removed: |] 2020 | | [added: |] 2021 | [added: | |] 2022 | | [added: |] 2023 | [added: | | 2024 | | |] Thereafter | | [added: |] Carrying Value | | | Fair Value | | |

| [removed: Current Debt:] [added: Current Debt:] | | | | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| U.S. dollar denominated | [added: | |] $ | [removed: 0.1] [added: 2.3] | | | | | | | | | | [added: | | | | | | |] $ | [removed: 0.1] [added: 2.3] | | $ | [removed: 0.1] [added: 2.3] | |

| Average interest rate - variable | | | [added: 2.8] | | [added: %] | | | | | | | | | | | | | [added: | | | | | | | | |]

| [removed: Long-Term Debt:] [added: Long-Term Debt:] | | | | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| U.S. dollar denominated | | | | | | | [added: | |] 42.0 | | | [removed: 126.0] | | [added: | 53.0 | | | 73.0 | | |] 168.0 | | | [removed: 164.6] [added: 176.3] | | |

| Average interest rate - fixed | | | | | | | [added: | |] 3.7 | [added: |] % | | [removed: 3.9] | [added: | 3.8 | |] % | [added: 4.0] | | [added: %] | | | | [added: | | |]

| Average interest rate - variable | | | | [removed: 1.0] | [added: | 2.8 | |] % | [added: 2.8] | | [added: %] | [added: 2.8] | | [added: %] | [added: 2.8] | | [added: %] | | | | [added: | | | | | |]

[removed: Commodity] [added: Commodity] Price [removed: Risk][added: Risk]

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

[removed: In] [added: From] November [removed: 2016,] [added: 2017 through October 2019,] we purchased [removed: a] [added: several] series of call options for a total of [removed: 96,525] [added: 352,682] barrels of crude oil to mitigate our exposure to such oil-based surcharges and protect operating cash flows with regards to a portion of our forecasted elastomer [removed: purchases through November 2017.][added: purchases.]

During [removed: 2017,] [added: 2019,] the loss recorded in cost of goods and services sold related to these options was [removed: $0.3] [added: $0.4] million.

As of December 31, [removed: 2018,] [added: 2019,] we had outstanding contracts to purchase [removed: 47,445] [added: 135,967] barrels of crude oil from January [removed: 2019] [added: 2020] to [removed: August 2019] [added: June 2021,] at a weighted-average strike price of [removed: $76.45] [added: $70.71] per barrel.

instruments for investment or trading purposes.

All derivatives are recorded in our consolidated balance sheet at fair value.

We have entered into forward exchange contracts, designated as fair value hedges, to manage our exposure to fluctuating foreign exchange rates on cross-currency intercompany loans.

As of December 31, 2019, the total amount of these forward exchange contracts was SGD 601.5 million and $13.4 million.

As of December 31, 2018, the total amount of these forward exchange contracts was €10.0 million, SGD 601.5 million and $13.4 million.

In addition, we have entered into several foreign currency contracts, designated as cash flow hedges, for periods of up to eighteen months, intended to hedge the currency risk associated with a portion of our forecasted transactions denominated in foreign currencies.

As of December 31, 2019, we had outstanding foreign currency contracts to purchase and sell certain pairs of currencies, as follows:

| (in millions) | | | | | | | | | Sell | | | | | | | | |

| Currency | | | Purchase | | | | | | USD | | | Euro | | | | | |

| USD | | | 38.4 | | | | | | — | | | 33.6 | | | | | |

| Yen | | | 6,550.4 | | | | | | 37.8 | | | 20.6 | | | | | |

| SGD | | | 29.4 | | | | | | 16.5 | | | 4.6 | | | | | |

In November and December 2019, in conjunction with the repayment of the outstanding long-term borrowings under our Credit Facility denominated in Euro and Yen, we de-designated these borrowings as hedges of our net investments in certain European subsidiaries and Daikyo.

The amounts recorded as a cumulative translation adjustment in accumulated other comprehensive loss related to these borrowings (prior to de-designation) will remain in accumulated other comprehensive loss indefinitely, unless certain future events occur, such as the disposition of the operations for which the net investment hedges relate.

In December 2019, in conjunction with the repayment of the outstanding long-term borrowings under our Credit Facility denominated in Yen, we entered into a forward exchange contract, designated as a cash flow hedge, to manage our exposure to fluctuating foreign exchange rates.

This forward exchange contract matured on December 30, 2019.

In December 2019, we entered into a five-year floating-to-floating forward-starting cross-currency swap (the “cross-currency swap”) for $90 million, which we designated as a hedge of our net investment in Daikyo.

The notional amount of the cross-currency swap is ¥9.8 billion ($90 million) and the swap termination date is December 31, 2024.

Under the cross-currency swap, we receive floating interest rate payments based on three-month USD LIBOR plus a margin, in return for paying floating interest rate payments based on three-month Yen LIBOR plus a margin.

Long-term debt consists of our Term Loan and Series A, B and C notes.

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| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| U.S. dollar denominated | | | | | | 2.3 | | | 2.3 | | | 2.3 | | | 80.8 | | | | | | 87.7 | | | 87.7 | | |

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| | | | | | | | | | | | | | | | | | | | | | | | | | | |

We have designated our €21.0 million Euro-denominated borrowings under our Credit Facility as a hedge of our net investment in certain European subsidiaries.

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

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

Long-term debt consists of senior notes and revolving credit facilities.

Our exposures to fluctuations in interest rates are managed to the extent considered necessary by entering into interest rate swap agreements.

| | | | | | | | | | | | | | | | | | |

| Euro denominated | | | | 24.0 | | | | | | | | 24.0 | | | 24.0 | | |

| Yen denominated | | | | 4.6 | | | | | | | | 4.6 | | | 4.6 | | |

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

fluctuated due to crude oil price fluctuations.

In November 2017, we purchased a series of call options for a total of 125,166 barrels of crude oil through May 2019.

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.

[removed: General][added: General]

Our products include a variety of primary packaging, containment solutions, reconstitution and transfer systems, and drug delivery systems, as well as contract [removed: manufacturing and] [added: manufacturing,] analytical lab [removed: services.][added: services and integrated solutions.]

Our customers include the leading biologic, generic, pharmaceutical, diagnostic, and [added: additional] medical device companies in the world.

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

[removed: Business Segments][added: Business Segments]

[removed: Proprietary] [added: Proprietary] Products [removed: Segment][added: Segment]

Our Proprietary Products reportable segment offers proprietary packaging, containment and drug delivery products, along with analytical lab [removed: services,] [added: services and integrated solutions, primarily] to biologic, generic and pharmaceutical drug customers.

This segment’s product portfolio also includes drug containment solutions, including [removed: CZ,] [added: Crystal Zenith,] a cyclic olefin polymer, in the form of vials, syringes and cartridges.

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

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

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

Please refer to Note [removed: 18, Segment Information, for net sales, operating profit] [added: 3, *Revenue*,] and [removed: asset information] [added: Note 19, *Segment Information*,] for [removed: Proprietary Products.][added: additional information on our consolidated net sales.]

[removed: Contract-Manufactured] [added: Contract-Manufactured] Products [removed: Segment][added: Segment]

These products include a variety of custom contract-manufacturing and assembly solutions, which use such technologies as multi-component molding, in-mold labeling, ultrasonic [removed: welding and] [added: welding,] clean room molding and device assembly.

We have vast expertise in product design and development, including in-house mold design, [removed: an engineering center for developmental and prototype tooling,] process design and validation and high-speed automated assemblies.

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

[removed: International][added: International]

Sales outside of the U.S. accounted for [removed: 55.4%] [added: 55.7%] of our consolidated net sales in [removed: 2018.][added: 2019.]

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

These risks include currency fluctuations relative to the U.S. Dollar (“USD”), multiple tax jurisdictions and, particularly in South America, Israel and the Middle East, [added: uncertain or changing regulatory regimes, or] political and social [removed: issues] [added: 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, [removed: Risk Factors;] [added: *Risk Factors;*] Part II, Item 7, [removed: Management’s] [added: *Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations] [added: Operations*] under the caption [removed: Financial] [added: *Financial] Condition, Liquidity and Capital [removed: Resources;] [added: Resources;*] Part II, Item 7A, [removed: Quantitative] [added: *Quantitative] and Qualitative Disclosures About Market [removed: Risk;] [added: Risk;*] Note 1 under the captions [removed: Financial Instruments] [added: *Financial Instruments*] and [removed: Foreign] [added: *Foreign] Currency [removed: Translation;] [added: Translation;*] and Note [removed: 10, Derivative] [added: 11, *Derivative] Financial [removed: Instruments.][added: Instruments*.]

[removed: Raw Materials][added: Raw Materials]

Due to regulatory control over our production [removed: processes] [added: processes, sole source availability,] and the cost and time involved in qualifying suppliers, we rely on single-source suppliers for many critical raw materials.

We [added: generally] purchase certain raw materials in the open market.

This strategy increases the risk that our supply chain may be interrupted in the event of a supplier production or [removed: distribution problem.]

These risks are managed, [added: when and] where possible, by selecting suppliers with multiple manufacturing sites, rigorous quality control systems, surplus inventory levels and other methods of maintaining supply in case of an interruption in production or distribution.

[removed: Intellectual Property][added: Intellectual Property]

Intellectual property, including patents, [added: trademarks, copyrights,] trade [removed: secrets] [added: secrets,] and know-how, is important to our business.

In [removed: 2018,] [added: 2019,] more than [removed: 120] [added: 150] patents were issued to West across the globe.

[removed: Seasonality][added: Seasonality]

[removed: Working Capital][added: Working Capital]

For a more detailed discussion of working capital, please refer to the discussion in Part II, Item 7, [removed: Management’s] [added: *Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations] [added: Operations*] under the caption [removed: Financial] [added: *Financial] Condition, Liquidity and Capital [removed: Resources.][added: Resource*s.]

[removed: Marketing][added: Marketing]

Our Proprietary Products customers [added: primarily] include [removed: most] [added: many] of the major biologic, generic, and pharmaceutical drug companies in the world, which incorporate our components and other offerings into their [added: injectable] products for distribution to the point of care and ultimate end-user - the patient.

Our ten largest customers accounted for [removed: 37.1%] [added: 44.3%] of our consolidated net sales in [removed: 2018,] [added: 2019,] but none of these customers individually accounted for more than 10% of consolidated net sales.

[removed: Order Backlog][added: Order Backlog]

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

At December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the order backlog for Proprietary Products was [removed: $407.3] [added: $587.9] million and [removed: $377.4] [added: $407.3] million, respectively.

The majority of the order backlog for Proprietary Products at December 31, [removed: 2018] [added: 2019] is expected to be filled during [removed: 2019.][added: 2020.]

[removed: Competition][added: Competition]

distribution problem.

The increase in backlog primarily reflects increases in demand for our products due to several successful customer launches in 2019 and expansion of current customer programs due to the success of their drug

products.

Information on our website does not constitute part of this document.

Please refer to Note 18, Segment Information, for net sales, operating profit and asset information for Contract-Manufactured Products.

For a geographic breakdown of sales, please refer to Note 18, Segment Information.

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

customers.

We spent $40.3 million in 2018, $39.1 million in 2017, and $36.8 million in 2016 on research and development, all of which related to Proprietary Products.

You may also read and copy any document we file at the SEC’s Public Reference Room at 100 F.

Street, N.E., Washington, D.C. 20549.

Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room.

| [removed: UNITED STATES] [added: UNITED STATES] | [added: | |]

| [removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION] [added: COMMISSION] | [added: | |]

| [removed: Washington,] [added: Washington,] D.C. [removed: 20549] [added: 20549] | [added: | |]

| [removed: FORM 10-K] [added: FORM 10-K] | [added: | |]

[removed: (Mark One)][added: (Mark One)]

| [removed: þ] [added: ☑] | [removed: ANNUAL] [added: | | ANNUAL] REPORT PURSUANT TO SECTION 13 OR [removed: 15 (d)] [added: 15(d)] OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] | [added: | |]

[removed: For] [added: For] the fiscal year ended December 31, [removed: 2018][added: 2019]

| [removed: ¨] [added: ☐] | [removed: TRANSITION] [added: | | TRANSITION] REPORT PURSUANT TO SECTION 13 OR [removed: 15 (d)] [added: 15(d)] OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] | [added: | |]

[removed: For] [added: For] the transition period from [removed: to][added: to]

[removed: Commission] [added: Commission] File Number [removed: 1-8036][added: 1-8036]

| [removed: WEST] [added: WEST] PHARMACEUTICAL SERVICES, [removed: INC. (Exact] [added: INC. (Exact] name of registrant as specified in its [removed: charter)] [added: charter)] | [added: | |]

| [removed: Pennsylvania] [added: Pennsylvania] | [removed: 23-1210010] | [added: | 23-1210010 | | |]

| (State or other jurisdiction of incorporation or organization) | [added: | |] (I.R.S. Employer Identification Number) | [added: | |]

| [removed: 530] [added: 530] Herman O. West Drive, Exton, [removed: PA] [added: PA] | [removed: 19341-0645] | [added: | 19341-0645 | | |]

| (Address of principal executive offices) | [added: | |] (Zip Code) | [added: | |]

Registrant’s telephone number, including area code: [removed: 610-594-2900][added: 610-594-2900]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | [removed: Name] [added: | | Trading Symbol | | | Name] of each exchange on which [removed: registered] [added: registered] | [added: | |]

| Common Stock, par value $.25 per share | [added: | | WST | | |] New York Stock Exchange | [added: | |]

[removed: Securities] [added: Securities] registered pursuant to Section [removed: 12 (g)] [added: 12(g)] of the [removed: Act:] [added: Act:] None

Yes [removed: þ] [added: ☑] No [removed: o][added: ☐]

Yes [removed: o] [added: ☐] No [removed: þ][added: ☑]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or [removed: 15 (d)] [added: 15(d)] of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T [added: (§ 232.405 of this chapter)] during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

| Large accelerated filer | [removed: þ] | | [added: ☑ | | | | | |] Accelerated filer | [removed: o] | [added: | ☐ | | |]

| Non-accelerated filer | [removed: o] | [removed: (Do not check if a smaller reporting company)] | [added: ☐ | | | | | |] Smaller reporting company | [removed: o] | [added: | ☐ | | |]

| | | | [added: | | | | | |] Emerging growth company | [removed: o] | [added: | ☐ | | |]

Yes [removed: o] [added: ☐] No [removed: þ][added: ☑]

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, [removed: 2018] [added: 2019] was approximately [removed: $7,301,615,623] [added: $9,218,126,218] based on the closing price as reported on the New York Stock Exchange.

As of January 31, [removed: 2019,] [added: 2020,] there were [removed: 74,186,169] [added: 73,837,449] shares of the registrant’s common stock outstanding.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

| [removed: Document] [added: Document] | [removed: Parts] [added: | | Parts] Into Which [removed: Incorporated] [added: Incorporated] | [added: | |]

| Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 7, 2019] [added: 5, 2020] | [added: | |] Part III | [added: | |]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| [removed: [PART I](#sADDB20E1418F75E3BFDFFBDFC1325C81)] [added: [PART I](#i_0_10)] | | [removed: Page] | [added: | | | Page | | | | | |]

| [removed: [ITEM 1.](#sE6E0BDF65F98E5A34D93FBDFC1506F96)] [added: [ITEM 1.](#i_0_13)] | [removed: BUSINESS] | [removed: [3](#sE6E0BDF65F98E5A34D93FBDFC1506F96)] | [added: BUSINESS | | | [3](#i_0_13) | | | | | |]

| [removed: [ITEM 1A.](#s00B292434B1523617EC6FBDFC1827E1C)] [added: [ITEM 1A.](#i_0_16)] | [removed: RISK FACTORS] | [removed: [8](#s00B292434B1523617EC6FBDFC1827E1C)] | [added: RISK FACTORS | | | [7](#i_0_16) | | | | | |]

| [removed: [ITEM 1B.](#sC659A02B3A418401431EFBDFC1A0C567)] [added: [ITEM 1B.](#i_0_19)] | [removed: UNRESOLVED] [added: | | UNRESOLVED] STAFF [removed: COMMENTS] [added: COMMENTS] | [removed: [15](#sC659A02B3A418401431EFBDFC1A0C567)] | [added: | [15](#i_0_19) | | | | | |]

| [removed: [ITEM 2.](#s31769B66A1BFF747B95FFBDFC1D29B96)] [added: [ITEM 2.](#i_0_22)] | [removed: PROPERTIES] | [removed: [16](#s31769B66A1BFF747B95FFBDFC1D29B96)] | [added: PROPERTIES | | | [15](#i_0_22) | | | | | |]

| [removed: [ITEM 3.](#s10728941BA0C6785ABAEFBDFC1FAA397)] [added: [ITEM 3.](#i_0_25)] | [removed: LEGAL PROCEEDINGS] | [removed: [17](#s10728941BA0C6785ABAEFBDFC1FAA397)] | [added: LEGAL PROCEEDINGS | | | [16](#i_0_25) | | | | | |]

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| [INFORMATION ABOUT OUR EXECUTIVE OFFICERS](#i_0_31) | | | | | | | | | [16](#i_0_31) | | |

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| [SIGNATURES](#i_0_202) | | | | | | | | | [90](#i_0_202) | | |

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10-K 1 wst10k12312018.htm 10-K

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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 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. o

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| [EXECUTIVE OFFICERS OF THE COMPANY](#s9BC12FA2549EAA8385BFFBDFC24A9413) | | [17](#s9BC12FA2549EAA8385BFFBDFC24A9413) |

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

| [removed: Proprietary Products] [added: Proprietary Products] | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| [removed: Manufacturing:] [added: Manufacturing:] | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| [removed: North] [added: North] American [removed: Operations] [added: Operations] | | [removed: European Operations] | | [removed: Asia] [added: | | European Operations | | | | | | Asia] Pacific [removed: Operations] [added: Operations] | [added: | | | | | | | | | | | | | |]

| United States | | [added: | | | |] Denmark | | [added: | | | |] China | [added: | | | | | | | | | | | | | |]

| [removed: Clearwater, FL] [added: Jersey Shore, PA] | | [added: | | | |] Horsens | | [added: | | | |] Qingpu | [added: | | | | | | | | | | | | | |]

| [removed: Jersey Shore, PA] [added: Kearney, NE] | | [added: | | | |] England | | [added: | | | |] India | [added: | | | | | | | | | | | | | |]

| [removed: Kearney, NE] [added: Kinston, NC] | | [added: | | | |] St. Austell | | [added: | | | |] Sri City | [added: | | | | | | | | | | | | | |]

| [removed: Kinston, NC] [added: Scottsdale, AZ (2)] | | [added: | | | |] France | | [added: | | | |] Singapore | [added: | | | | | | | | | | | | | |]

| [removed: Lititz, PA] [added: St. Petersburg, FL (1)] | | [added: | | | |] Le Nouvion | | [added: | | | |] Jurong | [added: | | | | | | | | | | | | | |]

| [removed: Scottsdale, AZ (2)] | | [added: | | | |] Le Vaudreuil | | | [added: | | | | | | | | | | | | | | | | | |]

| [added: Brazil] | | [added: | | | |] Eschweiler (1) (2) | | | [added: | | | | | | | | | | | | | | | | | |]

| [removed: South] [added: South] American [removed: Operations] [added: Operations] | | [removed: Stolberg] | | | [added: | Germany | | | | | | | | | | | | | | | | | | | | |]

| [removed: Brazil] | | [added: | | | |] Ireland | | | [added: | | | | | | | | | | | | | | | | | |]

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

| | | [added: | | | |] Serbia | | | [added: | | | | | | | | | | | | | | | | | |]

| | | [added: | | | |] Kovin | | | [added: | | | | | | | | | | | | | | | | | |]

| [removed: Mold-and-Die] [added: Mold-and-Die] Tool [removed: Shop:] [added: Shop:] | | | | [removed: Contract] [added: | | | | | | | | Contract] Analytical [removed: Laboratory:] [added: Laboratory:] | [added: | | | | | | | | | | | | | |]

| [removed: North] [added: North] American [removed: Operations] [added: Operations] | | [removed: European Operations] | | [removed: North] [added: | | European Operations | | | | | | North] American [removed: Operations] [added: Operations] | [added: | | | | | | | | | | | | | |]

| United States | | [added: | | | |] England | | [added: | | | |] United States | [added: | | | | | | | | | | | | | |]

| Upper Darby, PA | | [added: | | | |] Bodmin (2) | | [added: | | | |] Exton, PA | [added: | | | | | | | | | | | | | |]

| [removed: Contract-Manufactured Products] [added: Contract-Manufactured Products] | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| [removed: Manufacturing:] [added: Manufacturing:] | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| [removed: North] [added: North] American [removed: Operations] [added: Operations] | | [removed: European Operations] | | | [added: | European Operations | | | | | | | | | | | | | | | | | | | | |]

| United States | | [added: | | | |] Ireland | | | [added: | | | | | | | | | | | | | | | | | |]

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

| Phoenix, AZ (2) | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| Tempe, AZ (2) | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| Williamsport, PA | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| Puerto Rico | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| Cayey | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

[removed: | (1) | This] [added: (1)This] manufacturing facility is also used for research and development activities. [removed: |]

[removed: | (2) | This] [added: (2)This] facility is leased in whole or in part. [removed: |]

Our Proprietary Products reportable segment leases facilities located in [removed: Germany, Israel] [added: Germany] and [removed: New Jersey] [added: Israel] for research and development, as well as other activities.

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| | | | | | | Waterford | | | | | | | | | | | | | | | | | | | | |

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| St. Petersburg, FL (1) | | Germany | | |

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| [removed: Name] [added: Name] | [removed: Age] | [removed: Position] | [added: Age | | | Position | | |]

| Silji Abraham | [removed: 47] | [added: | 48 | | |] 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. | [added: | |]

| Bernard J. Birkett | [removed: 50] | [added: | 51 | | |] Senior Vice [removed: President,] [added: President and] Chief Financial Officer [removed: and Treasurer] since June 2018. [added: In addition, Treasurer from June 2018 to December 2019. Principal Accounting Officer since October 2019.] 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. | [added: | |]

| Annette F. Favorite | [removed: 54] | [added: | 55 | | |] 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 [removed: roles. Most recently, she served as] [added: roles, including] Vice President, Global Talent [removed: Management.] [added: Management, Vice President of Human Resources for Worldwide Software Sales, and Human Resources Leader for the company’s Southwest European Region, based out of Spain.] | [added: | |]

| Eric M. Green | [removed: 49] | [added: | 50 | | |] 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 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. | [added: | |]

| Quintin J. Lai | [removed: 52] | [added: | 53 | | |] 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 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 and Associate Director of Equity Research. | [added: | |]

| George L. Miller | [removed: 64] | [added: | 65 | | |] 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. | [added: | |]

| David A. Montecalvo | [removed: 53] | [added: | 54 | | |] Senior Vice [added: President and Chief Operations and Supply Chain Officer since February 2019. Senior Vice] President, Global Operations and Supply Chain [removed: since] [added: from] September [removed: 2016.] [added: 2016 until February 2019.] Prior to joining West, he served in a number of senior leadership roles at Medtronic plc, including Vice President, Contract Manufacturing Operations, for the company’s Restorative Therapies Group, [removed: and] Vice President, Business Operations Integration, where he was responsible for directing and leading the global operations integration of Covidien plc into [removed: Medtronic.] [added: Medtronic, and Vice President, Product Development and Operations for Medtronic Cardiovascular.] Prior thereto, he held senior operations and product development roles at Urologix, Inc. and LecTec Corporation. | [added: | |]

| Eric Resnick | [removed: 55] | [added: | 56 | | |] Vice President and Chief Technology Officer since March 2016. Previously, he served as Vice President and General Manager of Integrated Packaging and Delivery within 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 West’s Contract Manufacturing Delivery Devices division from 2008 until March 2014. Prior thereto, he held various positions [removed: of increasing responsibility] since joining The Tech Group in [removed: 2001. Prior to joining West, he] [added: 2001, and] held engineering and operating roles with Eastman Kodak Company and Ortho Clinical Diagnostics. | [added: | |]

[removed: PART II][added: PART II]

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

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EXECUTIVE OFFICERS OF THE COMPANY

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| Karen A. Flynn | 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 roles in Quality, Research and Development, and Sales. |

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

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Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “WST.” [removed: The following table shows the high and low prices for our common stock as reported by the NYSE, for the periods indicated.]

As of January 31, [removed: 2019,] [added: 2020,] we had [removed: 805] [added: 756] shareholders of record, which excludes shareholders whose shares were held by brokerage firms, depositaries and other institutional firms in “street names” for their customers.

[removed: Dividends][added: Dividends]

Our common stock paid a quarterly dividend of [removed: $0.13] [added: $0.14] per share in each of the first three quarters of [removed: 2017; $0.14] [added: 2018; $0.15] per share in the fourth quarter of [removed: 2017] [added: 2018] and each of the first three quarters of [removed: 2018;] [added: 2019;] and [removed: $0.15] [added: $0.16] per share in the fourth quarter of [removed: 2018.][added: 2019.]

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

[removed: The following table shows information with respect to purchases of our common stock made during] [added: During] the three months ended December 31, [removed: 2018] [added: 2019, there were no purchases of our common stock made] by us or any of our “affiliated purchasers” as defined in Rule 10b-18(a)(3) under the Exchange [removed: Act:][added: Act.]

[removed: | (2) |] 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 [removed: the Securities] Exchange Act [removed: of 1934] Rule 10b-18. [removed: The number of shares repurchased and the timing of such transactions depended on a variety of factors, including market conditions. There were no shares purchased during the three months ended December 31, 2018. During the year ended December 31, 2018, we purchased 800,000 shares of our common stock under the program at a cost of $70.8 million, or an average price of $88.51 per share. |]

[removed: | (3) |] In [removed: February] [added: December] 2019, we announced a share repurchase program for calendar-year [removed: 2019] [added: 2020] authorizing the repurchase of up to [removed: 800,000] [added: 848,000] shares of our common stock from time to time on the open market or in privately-negotiated transactions as permitted under [removed: the Securities] Exchange Act [removed: of 1934] Rule 10b-18. [removed: 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, 2019. |]

[removed: Performance Graph][added: Performance Graph]

The following performance graph compares the cumulative total return to holders of our common stock with the cumulative total return of the following Standard & Poor’s (“S&P”) indices, for the five years ended December 31, [removed: 2018: 500, MidCap 400 Index] [added: 2019: 500] and [added: MidCap] 400 [removed: Health Care Equipment & Supplies Industry.][added: Index.]

The Company’s cumulative shareholder return is based on an investment of $100 on December 31, [removed: 2013] [added: 2014] 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: ]

On November 1, 2019, in connection with the amendment of certain commercial agreements with Daikyo, we increased our ownership interest from 25% to 49% in Daikyo in exchange for $85.1 million in cash and $4.9 million in shares of our treasury stock to certain stockholders of Daikyo (the “Stock Consideration”).

Please refer to Note 7, *Affiliated Companies,* for additional information on our ownership interest in Daikyo.

The issuance of the Stock Consideration is exempt from registration under the Securities Act of 1933 (the “Securities Act”) pursuant to Section 4(a)(2) under the Securities Act.

Our reliance upon Section 4(a)(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there were only a limited number of recipients; (c) the negotiations for the issuance of the securities took place directly between the recipients and the Company; and (d) the recipients of the securities were sophisticated, accredited investors.

The number of shares repurchased and the timing of such transactions depended on a variety of factors, including market conditions.

There were no shares purchased during the three months ended December 31, 2019.

During the year ended December 31, 2019, we purchased 800,000 shares of our common stock under the now-completed program at a cost of $83.1 million, or an average price of $103.89 per share.

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, 2020.

The performance graph does not necessarily reflect management's opinion that such indices are an appropriate measure of the relative performance of the stock involved, and is not intended to forecast or be indicative of possible future performance of the Company’s common stock.

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| | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | | Year | |

| | High | Low | High | Low | High | Low | High | Low | High | Low |

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

| 2017 | $88.30 | $79.06 | $99.91 | $77.97 | $96.81 | $80.02 | $103.36 | $89.77 | $103.36 | $77.97 |

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| Period | | Total number of shares purchased (1)(2) | | | Average price paid per share (1)(2) | | | | Total number of shares purchased as part of publicly announced plans or programs (2) | | | Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (2) (3) | |

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

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

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

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

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| (1) | Includes 140 shares purchased on behalf of employees enrolled in the Non-Qualified Deferred Compensation Plan for Designated Employees (Amended and Restated Effective December 1, 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. |

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| (in millions, except per share data) | [added: | | 2019 | | |] 2018 | | | 2017 | | | 2016 | | | 2015 | | | [removed: 2014 | | |]

| SUMMARY OF OPERATIONS | | | | | | | | | | | | | | | | [added: | |]

| Net sales | [added: | |] $ | [removed: 1,717.4] [added: 1,839.9] | | $ | [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] | |

| Operating profit † | [added: | | 296.6 | | |] 240.3 | | | 225.8 | | | 195.2 | | | 177.0 | | | [removed: 182.0 | | |]

| Net income | [added: | | 241.7 | | |] 206.9 | | | 150.7 | | | 143.6 | | | 95.6 | | | [removed: 127.1 | | |]

| Net income per share: | | | | | | | | | | | | | | | | [added: | |]

| Basic (1) | [added: | |] $ | [removed: 2.80] [added: 3.27] | | $ | [removed: 2.04] [added: 2.80] | | $ | [removed: 1.96] [added: 2.04] | | $ | [removed: 1.33] [added: 1.96] | | $ | [removed: 1.79] [added: 1.33] | |

| Diluted (2) | [added: | | 3.21 | | |] 2.74 | | | 1.99 | | | 1.91 | | | 1.30 | | | [removed: 1.75 | | |]

| Weighted average common shares outstanding | [removed: 73.9] | | [added: 74.0] | [added: | |] 73.9 | | | [removed: 73.3] [added: 73.9] | | | [removed: 72.0] [added: 73.3] | | | [removed: 70.9] [added: 72.0] | | |

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

| Dividends declared per common share | [added: | |] $ | [removed: 0.58] [added: 0.62] | | $ | [removed: 0.54] [added: 0.58] | | $ | [removed: 0.50] [added: 0.54] | | $ | [removed: 0.46] [added: 0.50] | | $ | [removed: 0.41] [added: 0.46] | |

| YEAR-END FINANCIAL POSITION | | | | | | | | | | | | | | | | [added: | |]

| Cash and cash equivalents | [added: | |] $ | [removed: 337.4] [added: 439.1] | | $ | [removed: 235.9] [added: 337.4] | | $ | [removed: 203.0] [added: 235.9] | | $ | [removed: 274.6] [added: 203.0] | | $ | [removed: 255.3] [added: 274.6] | |

| Working capital | [added: | | 717.1 | | |] 610.7 | | | 464.0 | | | 400.9 | | | 359.4 | | | [removed: 406.6 | | |]

| Total assets | [added: | | 2,341.4 | | |] 1,978.9 | | | 1,862.8 | | | 1,716.7 | | | 1,695.1 | | | [removed: 1,669.7 | | |]

| Total invested capital: | | | | | | | | | | | | | | | | [added: | |]

| Total debt | [added: | | 257.3 | | |] 196.1 | | | 197.0 | | | 228.6 | | | 298.2 | | | [removed: 335.5 | | |]

| Total equity | [added: | | 1,573.2 | | |] 1,396.3 | | | 1,279.9 | | | 1,117.5 | | | 1,023.9 | | | [removed: 956.9 | | |]

| Total invested capital | [added: | |] $ | [removed: 1,592.4] [added: 1,830.5] | | $ | [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] | |

| PERFORMANCE MEASUREMENTS (3) | | | | | | | | | | | | | | | | [added: | |]

| Gross margin (a) | [removed: 31.8] | | [added: 32.9 | |] % | [removed: 32.1] [added: 31.8] | | % | [removed: 33.2] [added: 32.1] | | % | [removed: 32.6] [added: 33.2] | | % | [removed: 31.5] [added: 32.6] | | % |

| Operating profitability (b) † | [removed: 14.0] | | [added: 16.1 | |] % | [removed: 14.1] [added: 14.0] | | % | [removed: 12.9] [added: 14.1] | | % | [removed: 12.6] [added: 12.9] | | % | [removed: 12.8] [added: 12.6] | | % |

| Effective tax rate (4) | [removed: 17.2] | | [added: 20.2 | |] % | [removed: 36.4] [added: 17.2] | | % | [removed: 28.7] [added: 36.4] | | % | [removed: 22.6] [added: 28.7] | | % | [removed: 28.0] [added: 22.6] | | % |

| Return on invested capital (c) † | [removed: 13.0] | | [added: 13.8 | |] % | [removed: 10.2] [added: 13.0] | | % | [removed: 10.4] [added: 10.2] | | % | [removed: 10.5] [added: 10.4] | | % | [removed: 10.2] [added: 10.5] | | % |

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

| Research and development expenses | [added: | |] $ | [removed: 40.3] [added: 38.9] | | $ | [removed: 39.1] [added: 40.3] | | $ | [removed: 36.8] [added: 39.1] | | $ | [removed: 34.1] [added: 36.8] | | $ | [removed: 37.3] [added: 34.1] | |

| Operating cash flow | [added: | | 367.2 | | |] 288.6 | | | 263.3 | | | 219.4 | | | 212.4 | | | [removed: 182.9 | | |]

| Stock price range | [added: | | $152.12-93.08 | | |] $125.09-82.74 | | | $103.36-77.97 | | | $86.50-53.88 | | | $64.59-48.66 | | | [removed: $55.29-39.11 | | |]

The non-U.S. GAAP financial measures are included as management uses them in evaluating our results of [removed: operations,] [added: operations] and believes that this information provides users with a valuable insight into our overall performance and financial position.

Please refer to Note [removed: 16, Income Taxes,] [added: 17, *Income Taxes*,] for further discussion of the 2017 Tax Act.

[removed: | ▪ | Net] [added: ▪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 [added: estimated] impact of [removed: tax law changes, including] the 2017 Tax Act, and a tax benefit of $14.3 million associated with [removed: our adoption in 2017 of guidance issued by the FASB regarding share-based payment transactions. |][added: stock-based compensation.]

[removed: | ▪ | Net] [added: ▪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 [removed: our adoption of the guidance issued by the FASB regarding share-based payment transactions] [added: stock-based compensation] and a charge of $11.1 million related to the deconsolidation of our Venezuelan subsidiary. [removed: |]

[removed: | ▪ | Net] [added: ▪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. [removed: |]

[removed: | ▪ | Net] [added: ▪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. [removed: |]

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▪Net income in 2019 included the impact of restructuring and related charges of $3.7 million (net of $1.2 million in tax), a gain on the sale of fixed assets as a result of our restructuring plan of $1.3 million (net of $0.4 million in tax), a pension settlement charge of $2.7 million (net of $0.8 million in tax), a charge of $1.0 million related to the continued devaluation of Argentina’s currency, a tax recovery of $2.9 million (net of $1.5 million in tax) related to previously-paid international excise taxes, a net tax benefit of $0.3 million related to the impact of federal law changes enacted during the year, and a tax benefit of $10.3 million associated with stock-based compensation.

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| ▪ | 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. |

[removed: CONSOLIDATED] [added: CONSOLIDATED] STATEMENTS OF [removed: INCOME][added: INCOME]

West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016][added: 2017]

| | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | | [removed: 2016] | | [added: 2018] | [added: | | | | | 2017 | | |]

| Net sales | | [added: | | | |] $ | [removed: 1,717.4] [added: 1,839.9] | | | [added: | |] $ | [removed: 1,599.1] [added: 1,717.4] | | | [added: | |] $ | [removed: 1,509.1] [added: 1,599.1] | |

| Cost of goods and services sold | | [removed: 1,172.0] | | | | [removed: 1,086.2] [added: 1,234.2] | | | | [removed: 1,007.7] | | [added: 1,172.0] | [added: | | | | | 1,086.2 | | |]

| Gross profit | | [removed: 545.4] | | | | [removed: 512.9] [added: 605.7] | | | | [removed: 501.4] | | [added: 545.4] | [added: | | | | | 512.9 | | |]

| Research and development | | [removed: 40.3] | | | | [removed: 39.1] [added: 38.9] | | | | [removed: 36.8] | | [added: 40.3] | [added: | | | | | 39.1 | | |]

| Selling, general and administrative expenses | | [removed: 262.9] | | | | [removed: 246.0] [added: 272.7] | | | | [removed: 239.6] | | [added: 262.9] | [added: | | | | | 246.0 | | |]

| Other [added: (income)] expense (Note [removed: 15)] [added: 16)] | | [removed: 1.9] | | | | [removed: 2.0] [added: (2.5)] | | | | [removed: 29.8] | | [added: 1.9] | [added: | | | | | 2.0 | | |]

| Operating profit | | [removed: 240.3] | | | | [removed: 225.8] [added: 296.6] | | | | [removed: 195.2] | | [added: 240.3] | [added: | | | | | 225.8 | | |]

| Interest expense | | [removed: 8.4] | | | | [removed: 7.8] [added: 8.5] | | | | [removed: 8.1] | | [added: 8.4] | [added: | | | | | 7.8 | | |]

| Interest income | | [removed: (2.1] | | [removed: )] | | [removed: (1.3] [added: (3.8)] | | [removed: )] | | [removed: (1.1] | | [removed: )] [added: (2.1)] | [added: | | | | | (1.3) | | |]

| Other nonoperating income | | [removed: (6.7] | [added: —] | [removed: )] | | [removed: (3.1] | | [removed: )] | [added: —] | [removed: (1.6] | | [removed: )] | [added: | | (6.7) | | | | | | (6.7) | | | | | |]

| Income before income taxes | | [removed: 240.7] | | | | [removed: 222.4] [added: 291.8] | | | | [removed: 189.8] | | [added: 240.7] | [added: | | | | | 222.4 | | |]

| Income tax expense | | [removed: 41.4] | | | | [removed: 80.9] [added: 59.0] | | | | [removed: 54.4] | | [added: 41.4] | [added: | | | | | 80.9 | | |]