West Pharmaceutical Services (WST) 10-K risk factor changes: FY2020 vs FY2019

The statements in this section describe [removed: major] [added: material] risks to our business and should be considered carefully.

[removed: *performance] [added: In particular, these include statements relating to future actions, business plans and prospects, new products, future 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 results.*

Sales outside of the U.S. accounted for [removed: 55.7%] [added: 54.6%] of our consolidated net sales in [removed: 2019] [added: 2020] and we anticipate that sales from international operations will continue to represent a significant portion of our total sales in the future.

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

The pharmaceutical and healthcare industries [removed: have experienced] [added: continue to experience] a significant amount of consolidation.

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 [removed: U.S. Food and Drug Administration (“FDA”),] [added: FDA,] the European Medicines Agency and the National Medical Products Administration (China).

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

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

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

The functioning of our manufacturing and distribution assets and systems could be disrupted for reasons either within or beyond our control, including, without limitation: extreme weather or longer-term climatic changes; natural disasters; pandemic; war; accidental damage; disruption to the supply of material or services; product quality and safety issues; systems failure; workforce actions; or environmental [removed: contamination.][added: matters.]

Our international operations and our ability to implement our overall business strategy (including our plan to continue expanding into emerging and/or faster-growing markets outside of the U.S.) are subject to risks and uncertainties that can vary by country, and include: transportation delays and interruptions; political and economic instability and disruptions, including the United Kingdom’s [removed: referendum on] withdrawal from the European Union; imposition of duties and tariffs; import and export controls; the risks of divergent business expectations or cultural incompatibility inherent in establishing and maintaining operations in foreign countries; difficulties in staffing and managing multi-national operations; labor strikes and/or disputes; and potentially adverse tax consequences.

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

We have historically engaged in acquisition [removed: activity] [added: activity,] and we may in the future engage in acquisitions or other strategic transactions, such as joint ventures or investments in other entities.

[added: We may be unable to identify suitable] targets, opportunistic or otherwise, for acquisitions or other strategic transactions in the future.

Please refer to Note 3, [removed: *Revenue*,] [added: *[Revenue](#ic7db5523d9d74649b8592a121b55d512_94)*,] for the discussion of the voluntary recall of our Vial2Bag® product line.

In addition, because of the complex nature of many of our products and programs, we are generally [added: dependent on an educated and highly skilled engineering staff and workforce.]

Changes in the U.S. or international healthcare [removed: systems, including the Patient Protection and Affordable Care Act (the “PPACA”),] [added: systems] could result in reduced demand for our products, as our sales depend, in part, on the extent to which pharmaceutical companies and healthcare providers and facilities are reimbursed by government authorities, private insurers and other third-party payers for the costs of our products.

Legislative or administrative reforms to reimbursement systems in the U.S. [removed: (including the possible termination of the PPACA and potential replacement thereafter with a different system)] or abroad (for example, those under consideration in France, Germany, Italy and the United Kingdom) could significantly reduce reimbursement for our customers’ products, which could in turn reduce the demand for our products.

We will continue to evaluate [removed: the PPACA, as amended, the implementation of regulations or guidance related to various provisions of the PPACA by federal agencies, the potential repeal and replacement of the PPACA,] [added: healthcare reform,] as well as trends and changes that may be encouraged by [removed: the legislation and other] healthcare legislation globally and that may potentially impact our business over time.

Our variable-rate debt, which includes our [removed: new] senior unsecured, multi-currency revolving credit facility agreement [added: dated as of March 28, 2019] (the “Credit [removed: Agreement”)] [added: Agreement”),] and [removed: our new term loan] [added: its accompanying Incremental Facility Amendment dated as of December 30, 2019] (the “Term Loan”), currently use the London Interbank Offered Rate ("LIBOR") as a benchmark for establishing the interest rate.

Further, we may need to amend our Credit Agreement and Term Loan [removed: as a factor] in [removed: determining] [added: connection with] the [removed: interest rate to replace] [added: replacement of] LIBOR with the new standard that is established.

[added: The actual declaration and payment of future dividends, the amount of any such dividends, and the] establishment of record and payment dates, if any, are subject to determination by our Board of Directors each quarter after its review of our then-current strategy, applicable debt covenants and financial performance and position, among other things.

This guidance is comprised of forward-looking statements subject to risks and uncertainties, including the risks and uncertainties described in this Form 10-K and in our other public filings and public statements, and is based [removed: necessarily] on assumptions we make at the time we provide such guidance.

If we fail to comply with our obligations under our distributorship or license agreements with [removed: Daikyo,] [added: Daikyo or] the agreements are terminated early or [removed: we are unable to renew these agreements on the same or substantially similar terms,] [added: not renewed,] we could lose license rights [added: and access to certain product and technology] that are important to our business.

However, if the agreements are terminated [removed: early,] [added: early or not renewed,] our business could be adversely impacted.

Please refer to Note 7, [removed: *Affiliated Companies,*] [added: *[Affiliated Companies](#ic7db5523d9d74649b8592a121b55d512_109),*] for information relating to the increase in our ownership interest in Daikyo in 2019.

Global and Economic Risks

Our results of operations and financial condition may be adversely affected by the COVID-19 pandemic and other public health epidemics.

Our results of operations and financial condition may be adversely affected if the progression of the COVID-19 pandemic interferes with our ability, or that of our employees, contractors, suppliers, customers and other business partners, to carry out and deliver on business obligations.

COVID-19 may have an adverse effect on our operations, supply chains and distribution systems.

Known potential impacts are illness in our workforce as well as a reduction in access to raw materials for production and access to transportation of product.

There could be other unknown and unforeseeable impacts.

These impacts have increased and may continue to increase our expenses, including costs associated with preventive and precautionary measures that we, companies with which we conduct business and governments are taking.

Government measures include actions that restrict or prohibit travel, which in turn may impact our operations by limiting our employees’ ability to come to work, or the employees of companies upon which our supply chain depends.

The impacts of the pandemic and the aforesaid measures taken by other companies and governments may cause us to experience significant and unpredictable reductions or increases in demand for certain of our products.

This is especially possible in the event customers re-prioritize their needs due to the changing environment.

Despite our efforts to manage these COVID-19 related risks, their ultimate impact on the Company will be determined by factors beyond our knowledge or control, including the duration of COVID-19 and further actions taken to control its spread and mitigate its public health effects.

In July 2017, the U.K. Financial Conduct Authority (the "FCA"), which regulates LIBOR, announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021.

Such announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021.

Industry Risks

Business and Operational Risks

Legal and Regulatory Risks

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

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

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

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

We may also refer to [added: adjusted] consolidated operating profit and [added: adjusted] consolidated operating profit [removed: margin excluding] [added: margin, which exclude] the effects of unallocated items.

The re-measured results excluding effects from currency [removed: translation] [added: translation, the impact from acquisitions and/or divestitures,] 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: included] [added: incorporated] in our discussion and analysis 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.

This focus on quality includes a commitment to excellence in manufacturing, scientific and technical expertise and management, [removed: and] [added: which] enables us to partner with our customers 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 services and [added: other] integrated [added: services and] solutions, primarily to biologic, generic and pharmaceutical drug customers.

[removed: 2019] [added: 2020] Financial Performance Summary

Excluding foreign currency translation [removed: effects of $52.2 million,] [added: effects,] as well as incremental sales of $3.3 million from [added: the acquisition of] our [removed: recent acquisition,] [added: distributor in South Korea in 2019,] consolidated net sales increased by [removed: $171.4,] [added: $171.4 million] or 10.0%.

At December 31, [removed: 2019, our cash and cash equivalents balance totaled $439.1 and our available] [added: 2020, the] borrowing capacity [added: available] under [removed: our $300.0 million multi-currency revolving] [added: the Credit Facility, including outstanding letters of] credit [removed: facility (the “Credit Facility”)] [added: of $2.5 million,] was $297.5 million.

Segment operating profit excludes general corporate costs, which include executive and director compensation, stock-based compensation, [removed: adjustments to annual incentive plan expense for over- or under-attainment of targets,] certain pension and other retirement benefit costs, and other corporate facilities and administrative expenses not allocated to the segments.

[removed: Such items are referred to as other] [added: The] unallocated items [added: are not representative of ongoing operations,] and generally include restructuring and related charges, certain asset [removed: impairments] [added: impairments,] and other specifically-identified income or expense items.

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

| ($ in millions) | | | [removed: 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2019/2018] [added: 2020] | | | | | | [removed: 2018/2017] [added: 2019] | | | | | | [added: 2018] | | | | | | [added: 2020/2019] | | | | | | [added: 2019/2018] | | |

| Proprietary Products | | | $ | [removed: 1,398.6] [added: 1,648.6] | | | | | $ | [removed: 1,308.6] [added: 1,398.6] | | | | | $ | [removed: 1,236.9] [added: 1,308.6] | | | | | [removed: 6.9] [added: 17.9] | | % | | | | [removed: 5.8] [added: 6.9] | | % | [removed: | | | | | | | | | | | | | | | | | |]

| Contract-Manufactured Products | | | [removed: 441.5 | | | | | | 409.1] [added: 498.6] | | | | | | [removed: 362.5] [added: 441.5] | | | | | | [removed: 7.9] [added: 409.1] | | [removed: %] | | | | 12.9 | | % | | | | [removed: | | | | | | | | | | | |] [added: 7.9] | | [added: %] |

| Intersegment sales elimination | | | [removed: (0.2)] [added: (0.3)] | | | | | | [removed: (0.3)] [added: (0.2)] | | | | | | (0.3) | | | | | | [removed: (33.3)] [added: 50.0] | | % | | | | [removed: —] [added: (33.3)] | | % | [removed: | | | | | | | | | | | | | | | | | |]

| Consolidated net sales | | | $ | [removed: 1,839.9] [added: 2,146.9] | | | | | $ | [removed: 1,717.4] [added: 1,839.9] | | | | | $ | [removed: 1,599.1] [added: 1,717.4] | | | | | [removed: 7.1] [added: 16.7] | | % | | | | [removed: 7.4] [added: 7.1] | | % | [removed: | | | | | | | | | | | | | | | | | |]

Excluding foreign currency translation effects, as well as incremental sales of [removed: $3.3] [added: $1.2] million from [added: the acquisition of] our [removed: recent acquisition,] [added: distributor in South Korea in 2019,] consolidated net sales increased by [removed: $171.4] [added: $300.1] million, or [removed: 10.0%.][added: 16.3%.]

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

Excluding foreign currency translation effects, as well as incremental sales of $3.3 million from [added: the acquisition of] our [removed: recent acquisition,] [added: distributor in South Korea in 2019,] 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.

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

Consolidated net sales increased by [removed: $118.3] [added: $307.0] million, or [removed: 7.4%,] [added: 16.7%,] in [removed: 2018,] [added: 2020,] including a favorable foreign currency translation impact of [removed: $28.6] [added: $5.7] million.

Proprietary [removed: Products –] [added: Products –] Proprietary Products net sales increased by [removed: $71.7] [added: $250.0] million, or [removed: 5.8%,] [added: 17.9%,] in [removed: 2018,] [added: 2020,] including a favorable foreign currency translation impact of [removed: $23.8] [added: $2.2] million.

Contract-Manufactured [removed: Products –] [added: Products –] Contract-Manufactured Products net sales increased by [removed: $46.6] [added: $57.1] million, or 12.9%, in [removed: 2018,] [added: 2020,] including a favorable foreign currency translation impact of [removed: $4.8] [added: $3.5] million.

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

| Gross profit | | | $ | [removed: 540.4] [added: 682.2] | | | | | $ | [removed: 485.4] [added: 540.4] | | | | | $ | [removed: 449.3] [added: 485.4] | | | | | [removed: 11.3] [added: 26.2] | | % | | | | [removed: 8.0] [added: 11.3] | | % | [removed: | | | | | | | | | | | | | | | | | |]

| Gross profit margin | | | [removed: 38.6] [added: 41.4] | | % | | | | [removed: 37.1] [added: 38.6] | | % | | | | [removed: 36.3] [added: 37.1] | | % | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

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

| Gross profit | | | $ | [removed: 65.5] [added: 85.6] | | | | | $ | [removed: 60.0] [added: 65.5] | | | | | $ | [removed: 63.6] [added: 60.0] | | | | | [removed: 9.2] [added: 30.7] | | % | | | | [removed: (5.7)] [added: 9.2] | | % | [removed: | | | | | | | | | | | | | | | | | |]

| Gross profit margin | | | [removed: 14.8] [added: 17.2] | | % | | | | [removed: 14.7] [added: 14.8] | | % | | | | [removed: 17.5] [added: 14.7] | | % | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| Unallocated items | | | $ | [removed: (0.2)] [added: —] | | | | | $ | [removed: —] [added: (0.2)] | | | | | $ | — | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| Consolidated gross profit | | | $ | [removed: 605.7] [added: 767.8] | | | | | $ | [removed: 545.4] [added: 605.7] | | | | | $ | [removed: 512.9] [added: 545.4] | | | | | [removed: 11.1] [added: 26.8] | | % | | | | [removed: 6.3] [added: 11.1] | | % | [removed: | | | | | | | | | | | | | | | | | |]

| Consolidated gross profit margin | | | [removed: 32.9] [added: 35.8] | | % | | | | [removed: 31.8] [added: 32.9] | | % | | | | [removed: 32.1] [added: 31.8] | | % | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

Proprietary [removed: Products –] [added: Products –] Proprietary Products gross profit increased by $55.0 million, or 11.3%, in 2019, including an unfavorable foreign currency translation impact of $14.3 million.

Contract-Manufactured [removed: Products –] [added: Products –] Contract-Manufactured Products gross profit increased by $5.5 million, or 9.2%, in 2019, including an unfavorable foreign currency translation impact of $1.4 million.

Contract-Manufactured Products gross profit margin increased by 0.1 margin points in 2019, due to production efficiencies and lower [removed: raw] material costs, partially offset by increased overhead costs and an unfavorable mix of products sold.

Consolidated gross profit increased by [removed: $32.5] [added: $162.1] million, or [removed: 6.3%,] [added: 26.8%,] in [removed: 2018,] [added: 2020,] including a favorable foreign currency translation impact of [removed: $9.3] [added: $1.0] million.

Consolidated gross profit margin [removed: decreased] [added: increased] by [removed: 0.3] [added: 2.9] margin points in [removed: 2018.][added: 2020.]

Proprietary [removed: Products –] [added: Products –] Proprietary Products gross profit increased by [removed: $36.1] [added: $141.8] million, or [removed: 8.0%,] [added: 26.2%,] in [removed: 2018,] [added: 2020,] including a favorable foreign currency translation impact of [removed: $8.5] [added: $0.3] million.

Contract-Manufactured [removed: Products –] [added: Products –] Contract-Manufactured Products gross profit [removed: decreased] [added: increased] by [removed: $3.6] [added: $20.1] million, or [removed: 5.7%,] [added: 30.7%,] in [removed: 2018,] [added: 2020,] including a favorable foreign currency translation impact of [removed: $0.8] [added: $0.7] million.

The following table presents [removed: R&D] [added: SG&A] costs, consolidated and by reportable [removed: segment:][added: segment and corporate and unallocated items:]

Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than USD at the applicable foreign exchange rates in effect during the comparable prior-year period.

The following tables present a reconciliation from U.S. GAAP to non-U.S. GAAP financial measures:

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ($ in millions) | | | Operating Profit | | | | | | Income tax expense | | | | | | Net income | | | | | | Diluted EPS | | |

| Year ended December 31, 2020 GAAP | | | $ | 406.9 | | | | | $ | 72.5 | | | | | $ | 346.2 | | | | | $ | 4.57 | |

| Unallocated items: | | | | | | | | | | | | | | | | | | | | | | | |

| Restructuring and severance related charges | | | 7.0 | | | | | | 1.7 | | | | | | 5.3 | | | | | | 0.07 | | |

| Pension settlement (1) | | | — | | | | | | 0.9 | | | | | | 2.9 | | | | | | 0.04 | | |

| Amortization of acquisition-related intangible assets (2) | | | 0.6 | | | | | | 0.1 | | | | | | 3.6 | | | | | | 0.05 | | |

| Cost investment impairment | | | 2.5 | | | | | | — | | | | | | 2.5 | | | | | | 0.03 | | |

| Year ended December 31, 2020 adjusted amounts (non-U.S. GAAP) | | | $ | 417.0 | | | | | $ | 75.2 | | | | | $ | 360.5 | | | | | $ | 4.76 | |

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

During 2020, we recorded a tax benefit of $20.8 million associated with stock-based compensation.

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ($ in millions) | | | Operating Profit | | | | | | Income tax expense | | | | | | Net income | | | | | | Diluted EPS | | |

| Year ended December 31, 2019 GAAP | | | $ | 296.6 | | | | | $ | 59.0 | | | | | $ | 241.7 | | | | | $ | 3.21 | |

| Unallocated items: | | | | | | | | | | | | | | | | | | | | | | | |

| Restructuring and related charges | | | 4.9 | | | | | | 1.2 | | | | | | 3.7 | | | | | | 0.04 | | |

| Gain on restructuring-related sale of assets | | | (1.7) | | | | | | (0.4) | | | | | | (1.3) | | | | | | (0.02) | | |

| Pension settlement (1) | | | — | | | | | | 0.8 | | | | | | 2.7 | | | | | | 0.04 | | |

| Argentina currency devaluation | | | 1.0 | | | | | | — | | | | | | 1.0 | | | | | | 0.01 | | |

| Tax Recovery (3) | | | (4.4) | | | | | | (1.5) | | | | | | (2.9) | | | | | | (0.04) | | |

| Tax law Changes (4) | | | — | | | | | | 0.3 | | | | | | (0.3) | | | | | | — | | |

| Year ended December 31, 2019 adjusted amounts (non-U.S. GAAP) | | | $ | 296.4 | | | | | $ | 59.4 | | | | | $ | 244.6 | | | | | $ | 3.24 | |

During 2019, we recorded a tax benefit of $10.3 million associated with stock-based compensation.

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ($ in millions) | | | Operating Profit | | | | | | Income tax expense | | | | | | Net income | | | | | | Diluted EPS | | |

| Year ended December 31, 2018 GAAP | | | $ | 240.3 | | | | | $ | 41.4 | | | | | $ | 206.9 | | | | | $ | 2.74 | |

| Restructuring and related charges | | | 9.1 | | | | | | 1.9 | | | | | | 7.2 | | | | | | 0.09 | | |

| Gain on restructuring-related sale of assets | | | (1.1) | | | | | | (0.2) | | | | | | (0.9) | | | | | | (0.01) | | |

| Argentina currency devaluation | | | 1.1 | | | | | | — | | | | | | 1.1 | | | | | | 0.02 | | |

| Tax law Changes (4) | | | — | | | | | | 2.5 | | | | | | (2.5) | | | | | | (0.03) | | |

| Year ended December 31, 2018 adjusted amounts (non-U.S. GAAP) | | | $ | 249.4 | | | | | $ | 45.6 | | | | | $ | 211.8 | | | | | $ | 2.81 | |

During 2018, we recorded a tax benefit of $14.3 million associated with stock-based compensation.

(1) The Company recorded a pension settlement charge within other nonoperating (income) expense, as it determined that normal-course lump-sum payments for each of our U.S. qualified and non-qualified defined benefit pension plan exceeded the threshold for settlement accounting.

(2) The Company recorded $0.6 million of amortization expense within operating profit associated with an acquisition of an intangible asset during the second quarter of 2020.

Additionally, the company recorded $3.1 million of amortization expense in association with an acquisition of increased ownership interest in Daikyo.

The constant-currency amounts are

calculated by translating the current year’s functional currency results at the prior-year period’s exchange rate.

The Company was incorporated under the laws of the Commonwealth of Pennsylvania on July 27, 1923.

Consolidated net sales increased by $122.5 million, or 7.1%, in 2019.

Net income in 2019 was $241.7 million, or $3.21 per diluted share, compared to $206.9 million, or $2.74 per diluted share, in 2018.

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.

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 estimated impact of the 2017 Tax Act, and a tax benefit of $14.3 million, or $0.19 per diluted share, associated with stock-based compensation.

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

2018 compared to 2017

Excluding foreign currency translation effects, consolidated net sales increased by $89.7 million, or 5.6%.

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 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.

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.

Higher sales volume, particularly in Ireland, contributed 10.4 percentage points of the increase, and sales price increases contributed 1.2 percentage points of the increase.

Proprietary Products gross profit margin increased by 0.8 margin points in 2018, as production efficiencies, a favorable mix of products sold, and sales price increases were partially offset by 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 depreciation costs and higher raw material costs.

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.

| Proprietary Products | | | $ | 38.9 | | | | | $ | 40.3 | | | | | $ | 39.1 | | | | | (3.5) | | % | | | | 3.1 | | % | | | | | | | | | | | | | | | | | | |

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

Consolidated SG&A costs increased by $16.9 million, or 6.9%, in 2018, including the impact of foreign currency translation, which increased SG&A costs by $2.4 million.

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.

Foreign currency translation increased Proprietary Products SG&A costs by $2.3 million.

Contract-Manufactured Products – Contract-Manufactured Products SG&A costs increased by $1.1 million, or 7.1%, in 2018, due to increases in compensation and miscellaneous costs.

| Contract-Manufactured Products | | | 0.2 | | | | | | (0.8) | | | | | | (0.1) | | | | | | | | | | | | | | |

We expect that our 2018 restructuring plan, which is now considered complete, will provide annualized

savings of approximately $14.0 million.

Consolidated other expense decreased by $0.1 million in 2018.

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 16, *Other (Income) Expense*, for further discussion of the $9.1 million attributable to the reimbursement of certain costs.

Contract-Manufactured Products – Contract-Manufactured Products other income increased by $0.7 million in 2018, due to gains on the sale of fixed assets.

During 2018, we recorded $9.1 million in restructuring and related charges, a $1.1 million gain on the sale of fixed assets as a result of our restructuring plans, and 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.

Corporate – Corporate costs increased by $6.1 million, or 11.1%, in 2018, due to the factors described above.

Interest expense, net, decreased by $0.2 million, or 3.1%, in 2018, due to lower interest expense resulting from less average debt outstanding during 2018, as compared to 2017, and an increase in interest income, partially offset by a decrease in capitalized interest due to the completion of several major projects in 2017, including certain components of our new facility in Waterford, Ireland.

The Waterford facility began commercial production during the second half of 2018.

Other nonoperating income increased by $3.6 million in 2018, due to an increase in the expected return on pension plan assets and a decrease in recognized actuarial losses for 2018.

During 2017, we recorded 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 stock-based compensation.

Equity in net income of affiliated companies decreased by $1.6 million, or 17.4%, in 2018, primarily due to the impact of gains on the sale of investment securities by Daikyo in 2017.

Net Income

Our 2019 results 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.

Net income in 2018 was $206.9 million, or $2.74 per diluted share, compared to $150.7 million, or $1.99 per diluted share, in 2017.

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

Sales outside of the U.S. accounted for [removed: 55.7%] [added: 54.6%] of our consolidated net sales in [removed: 2019.][added: 2020.]

As of December 31, [added: 2020 and December 31,] 2019, the total amount of these forward exchange contracts [removed: was] [added: were] SGD 601.5 million and $13.4 million.

As of December 31, [removed: 2019,] [added: 2020,] we had outstanding foreign currency contracts to purchase and sell certain pairs of currencies, as follows:

| (in millions) | | | | | | | | | Sell | | | | | | [removed: | | |]

| Currency | | | Purchase | | | | | | USD | | | Euro | | | [removed: | | |]

The notional amount of the cross-currency swap is [removed: ¥9.8] [added: ¥9.6] billion [removed: ($90] [added: ($87.8] million) [removed: and the swap termination date is] [added: as of] December 31, [removed: 2024.][added: 2020.]

| ($ in millions) | | | [removed: 2020 | | |] 2021 | | | 2022 | | | 2023 | | | 2024 | | | [added: 2025 | | |] Thereafter | | | Carrying Value | | | Fair Value | | |

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

| Average interest rate - variable | | | [removed: 2.8] [added: 1.13%] | | [removed: %] | | | | | | | | | | | | | | | | | | | | | |

| Average interest rate - fixed | | | | | | [added: 3.67%] | | | [removed: 3.7] | | [removed: %] | [added: 3.82%] | | | [removed: 3.8] | | [removed: %] | [removed: 4.0] [added: 4.02%] | | [removed: %] | | | | | | |

| Average interest rate - variable | | | | | | [removed: 2.8] [added: 1.13%] | | [removed: %] | [removed: 2.8] [added: 1.13%] | | [removed: %] | [removed: 2.8] [added: 1.13%] | | [removed: %] | [removed: 2.8] | | [removed: %] | | | | | | | | | |

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

From November 2017 through [removed: October 2019,] [added: December 2020,] we purchased several series of call options for a total of [removed: 352,682] [added: 472,477] barrels of crude oil to mitigate our exposure to such oil-based surcharges and protect operating cash flows with regards to a portion of our forecasted elastomer purchases.

During [removed: 2018,] [added: 2020,] the [removed: gain] [added: loss] recorded in cost of goods and services sold related to these options was [removed: $0.1] [added: $0.2] million.

As of December 31, [removed: 2019,] [added: 2020,] we had outstanding contracts to purchase [removed: 135,967] [added: 141,734] barrels of crude oil from January [removed: 2020] [added: 2021] to June [removed: 2021,] [added: 2022,] at a weighted-average strike price of [removed: $70.71] [added: $59.14] per barrel.

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| USD | | | 57.0 | | | | | | — | | | 49.2 | | |

| Yen | | | 7,194.1 | | | | | | 42.7 | | | 22.0 | | |

| SGD | | | 42.9 | | | | | | 25.0 | | | 5.0 | | |

| U.S. dollar denominated | | | | | | $42.0 | | | | | | $53.0 | | | | | | $73.0 | | | $168.0 | | | $180.7 | | |

| U.S. dollar denominated | | | | | | $2.3 | | | $2.2 | | | $81.0 | | | | | | | | | $85.5 | | | $85.5 | | |

instruments for investment or trading purposes.

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.

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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

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

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

| U.S. dollar denominated | | | | | | | | | 42.0 | | | | | | 53.0 | | | 73.0 | | | 168.0 | | | 176.3 | | |

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

We expect this volatility to continue.

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

This focus on quality includes a commitment to excellence in manufacturing, scientific and technical expertise and management, [removed: and] [added: which] enables us to partner with our customers 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 services and [added: other] integrated [added: services and] solutions, primarily to biologic, generic and pharmaceutical drug customers.

We also provide films, coatings, [removed: washing] [added: washing, vision inspection] and sterilization processes and services to enhance the quality of packaging components and mitigate the risk of contamination and compatibility issues.

Please refer to Item 2, [removed: *Properties*,] [added: *[Properties](#ic7db5523d9d74649b8592a121b55d512_22)*,] for additional information on our manufacturing and other sites.

Sales outside of the U.S. accounted for [removed: 55.7%] [added: 54.6%] of our consolidated net sales in [removed: 2019.][added: 2020.]

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](#ic7db5523d9d74649b8592a121b55d512_16);*] Part II, Item 7, [removed: *Management’s] [added: *[Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations*] [added: Operations](#ic7db5523d9d74649b8592a121b55d512_43)*] under the caption *Financial Condition, Liquidity and Capital Resources;* Part II, Item 7A, [removed: *Quantitative] [added: *[Quantitative] and Qualitative Disclosures About Market [removed: Risk;*] [added: Risk](#ic7db5523d9d74649b8592a121b55d512_52);*] Note 1 under the captions *Financial Instruments* and *Foreign Currency Translation;* and Note 11, [removed: *Derivative] [added: *[Derivative] Financial [removed: Instruments*.][added: Instruments](#ic7db5523d9d74649b8592a121b55d512_127)*.]

Elastomers include both [removed: natural and] synthetic [added: and natural] materials.

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

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

We own or license intellectual property rights, including [added: know-how and] issued patents and pending patent applications in the U.S. and in other countries, that relate to various aspects of our products.

In [removed: 2019,] [added: 2020,] more than [removed: 150] [added: 290] patents were issued to West across the globe.

Some key value-added and proprietary products and processes are [added: exclusively] licensed from Daikyo.

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](#ic7db5523d9d74649b8592a121b55d512_43)*] under the caption *Financial Condition, Liquidity and Capital Resource*s.

Our ten largest customers accounted for [removed: 44.3%] [added: 42.0%] of our consolidated net sales in [removed: 2019,] [added: 2020,] but none of these customers individually accounted for more than 10% of consolidated net sales.

Please refer to Note 3, [removed: *Revenue*,] [added: *[Revenue](#ic7db5523d9d74649b8592a121b55d512_94)*,] and Note 19, [removed: *Segment Information*,] [added: *[Segment Information](#ic7db5523d9d74649b8592a121b55d512_163)*,] for additional information on our consolidated net sales.

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

We maintain our own research-scale production facilities and laboratories for developing new [removed: products,] [added: products] and offer contract engineering design and development services to assist customers with new product development.

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

[removed: Environmental Regulations][added: Environmental Regulations]

There were no required material capital expenditures for environmental controls in our facilities in [removed: 2019] [added: 2020] and there are currently no needed or planned material expenditures for [removed: 2020.][added: 2021.]

As of December 31, [removed: 2019,] [added: 2020,] we employed approximately [removed: 8,200 people] [added: 9,200 people, excluding contractors and temporary workers,] in our operations throughout the world.

These filings are also available to the public over the Internet at the SEC’s [removed: website at] [added: website,] *www.sec.gov*.

[removed: Throughout] [added: In Part II of] 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: 2020] [added: 2021] Annual Meeting of Shareholders [removed: (“2020] [added: (“2021] Proxy Statement”), which will be filed with the SEC within 120 days following the end of our [removed: 2019] [added: 2020] fiscal year.

Our [removed: 2020] [added: 2021] Proxy Statement will be available on our website on or about March [removed: 31, 2020,] [added: 25, 2021,] under the caption *Investors - Annual Reports & Proxy*.

We intend to make any required disclosures regarding any amendments of our Code of Business Conduct or waivers granted to any of our directors or executive officers under the caption [removed: *Code] [added: *Investors - Code] of Business Conduct* on our website.

Please refer to Item 2, *[Properties](#ic7db5523d9d74649b8592a121b55d512_22)*, for additional information on our manufacturing and other sites.

Please refer to Item 2, *[Properties](#ic7db5523d9d74649b8592a121b55d512_22)*, for additional information on our manufacturing and other sites.

Our intellectual property rights help protect our products and are critical to the growth of our business.

Government Regulation

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 Agency and the National Medical Products Administration (China).

Regulatory authorities, including regulatory review and oversight, can impact the time and cost associated with the development and continued availability of our products, and they have the authority to take various administrative and legal actions against West, such as product recalls.

There were no required material capital expenditures for adherence to our government-led regulatory standards in our facilities in 2020 outside the normal course of business and there are currently no needed or planned material expenditures for 2021.

West is also subject to various federal and state laws, and laws outside the United States, concerning fraud and abuse, global anti-corruption, and export control.

With the recent increased regulations, we remain committed as a company to comply with all laws and regulations applicable to our business.

Competition for these components is based primarily on product design and performance, quality, regulatory, and scientific expertise, along with total cost.

Human Capital Management

Our People

During 2020, West hired approximately 1,900 new team members and experienced an attrition rate of 15.1%.

The following table presents the approximate percentage of our employees by region:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| North America | | | 44% | | |

| Europe | | | 41% | | |

| Asia Pacific | | | 12% | | |

| South America | | | 3% | | |

| Total | | | 100% | | |

As of December 31, 2020, the following table presents the approximate percentage of our employees by business unit:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Global Operations | | | 83% | | |

| Sales and Marketing | | | 5% | | |

| Corporate | | | 5% | | |

| Digital & Technology (D&T) | | | 4% | | |

| Research & Development | | | 3% | | |

| Total | | | 100% | | |

As of December 31, 2020, we had the following global gender demographics:

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Men | | | Women | | |

| West Global Employees | | | 63% | | | 37% | | |

Diversity and Inclusion

We actively foster an inclusive and collaborative culture for our team members where different views and perspectives are welcomed and valued.

We are convinced that this approach brings forth innovation, learning and growth for our team members on a global basis.

The Chief Executive Officer ("CEO") and the executive team members review diversity and inclusion objectives throughout the year to ensure continuous focus and improvement.

As of December 31, 2020, three out of the ten members of West's Leadership Team are women, with five out of the ten members being women and/or people of color.

The Company was incorporated under the laws of the Commonwealth of Pennsylvania on July 27, 1923.

distribution problem.

Our intellectual property rights have been useful in establishing our market position and in the growth of our business, and are expected to continue to be of value in the future.

Seasonality

Our business is not inherently seasonal.

Order Backlog

Order backlog includes firm orders placed by customers for manufacture over a period of time according to their schedule or upon confirmation by the customer.

We also have contractual arrangements with a number of our customers.

Products covered by these contracts are included in our backlog only as orders are received.

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

Order backlog is one of many measures we use to understand future demand, and should not be considered in isolation to predict future sales growth.

At December 31, 2019 and 2018, the order backlog for Proprietary Products was $587.9 million and $407.3 million, respectively.

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.

The majority of the order backlog for Proprietary Products at December 31, 2019 is expected to be filled during 2020.

The majority of Contract-Manufactured Products manufacturing activity is governed by contractual volume expectations, subject to periodic revisions based on customer requirements.

Due to the special nature of our pharmaceutical packaging components and our long-standing participation in the market, competition for these components is based primarily on product design and performance, although total cost is becoming increasingly important as pharmaceutical companies continue with aggressive cost-control programs across their operations.

Employees

For the fiscal year ended December 31, [removed: 2019][added: 2020]

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

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, [removed: 2019] [added: 2020] was approximately [removed: $9,218,126,218] [added: $16,742,194,934] based on the closing price as reported on the New York Stock Exchange.

As of January [removed: 31, 2020,] [added: 27, 2021,] there were [removed: 73,837,449] [added: 74,103,026] shares of the registrant’s common stock outstanding.

| Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 5, 2020] [added: 4, 2021.] | | | Part III | | |

| [PART [removed: I](#i_0_10)] [added: I](#ic7db5523d9d74649b8592a121b55d512_10)] | | | | | | Page | | | [removed: | | |]

| [ITEM [removed: 1.](#i_0_13) | | | BUSINESS] [added: 1.](#ic7db5523d9d74649b8592a121b55d512_13)] | | | [removed: [3](#i_0_13)] [added: [BUSINESS](#ic7db5523d9d74649b8592a121b55d512_13)] | | | [added: [3](#ic7db5523d9d74649b8592a121b55d512_13)] | | |

| [ITEM [removed: 1A.](#i_0_16) | | | RISK FACTORS] [added: 1A.](#ic7db5523d9d74649b8592a121b55d512_16)] | | | [removed: [7](#i_0_16)] [added: [RISK FACTORS](#ic7db5523d9d74649b8592a121b55d512_16)] | | | [added: [9](#ic7db5523d9d74649b8592a121b55d512_16)] | | |

| [ITEM [removed: 1B.](#i_0_19)] [added: 1B.](#ic7db5523d9d74649b8592a121b55d512_19)] | | | [removed: UNRESOLVED] [added: [UNRESOLVED] STAFF [removed: COMMENTS | | | [15](#i_0_19)] [added: COMMENTS](#ic7db5523d9d74649b8592a121b55d512_19)] | | | [added: [18](#ic7db5523d9d74649b8592a121b55d512_19)] | | |

| [ITEM [removed: 2.](#i_0_22) | | | PROPERTIES] [added: 2.](#ic7db5523d9d74649b8592a121b55d512_22)] | | | [removed: [15](#i_0_22)] [added: [PROPERTIES](#ic7db5523d9d74649b8592a121b55d512_22)] | | | [added: [16](#ic7db5523d9d74649b8592a121b55d512_22)] | | |

| [ITEM [removed: 3.](#i_0_25) | | | LEGAL PROCEEDINGS] [added: 3.](#ic7db5523d9d74649b8592a121b55d512_25)] | | | [removed: [16](#i_0_25)] [added: [LEGAL PROCEEDINGS](#ic7db5523d9d74649b8592a121b55d512_25)] | | | [added: [20](#ic7db5523d9d74649b8592a121b55d512_25)] | | |

| [ITEM [removed: 4.](#i_0_28)] [added: 4.](#ic7db5523d9d74649b8592a121b55d512_28)] | | | [removed: MINE] [added: [MINE] SAFETY [removed: DISCLOSURES | | | [16](#i_0_28)] [added: DISCLOSURES](#ic7db5523d9d74649b8592a121b55d512_28)] | | | [added: [20](#ic7db5523d9d74649b8592a121b55d512_28)] | | |

| [INFORMATION ABOUT OUR EXECUTIVE [removed: OFFICERS](#i_0_31) | | |] [added: OFFICERS](#ic7db5523d9d74649b8592a121b55d512_31)] | | | | | | [removed: [16](#i_0_31)] [added: [20](#ic7db5523d9d74649b8592a121b55d512_31)] | | |

| [PART [removed: II](#i_0_34) | | |] [added: II](#ic7db5523d9d74649b8592a121b55d512_34)] | | | | | | | | |

| [ITEM [removed: 5.](#i_0_37)] [added: 5.](#ic7db5523d9d74649b8592a121b55d512_37)] | | | [removed: MARKET] [added: [MARKET] FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES | | | [18](#i_0_37)] [added: SECURITIES](#ic7db5523d9d74649b8592a121b55d512_37)] | | | [added: [22](#ic7db5523d9d74649b8592a121b55d512_37)] | | |

| [ITEM [removed: 6.](#i_0_40)] [added: 6.](#ic7db5523d9d74649b8592a121b55d512_40)] | | | [removed: SELECTED] [added: [SELECTED] FINANCIAL [removed: DATA | | | [20](#i_0_40)] [added: DATA](#ic7db5523d9d74649b8592a121b55d512_40)] | | | [added: [24](#ic7db5523d9d74649b8592a121b55d512_40)] | | |

| [ITEM [removed: 7.](#i_0_43)] [added: 7.](#ic7db5523d9d74649b8592a121b55d512_43)] | | | [removed: MANAGEMENT’S] [added: [MANAGEMENT’S] DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS | | | [21](#i_0_43)] [added: OPERATIONS](#ic7db5523d9d74649b8592a121b55d512_43)] | | | [added: [25](#ic7db5523d9d74649b8592a121b55d512_43)] | | |

| [ITEM [removed: 7A.](#i_0_52)] [added: 7A.](#ic7db5523d9d74649b8592a121b55d512_52)] | | | [removed: QUANTITATIVE] [added: [QUANTITATIVE] AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK | | | [35](#i_0_52)] [added: RISK](#ic7db5523d9d74649b8592a121b55d512_52)] | | | [added: [40](#ic7db5523d9d74649b8592a121b55d512_52)] | | |

| [ITEM [removed: 8.](#i_0_55)] [added: 8.](#ic7db5523d9d74649b8592a121b55d512_55)] | | | [removed: FINANCIAL] [added: [FINANCIAL] STATEMENTS AND SUPPLEMENTARY [removed: DATA | | | [38](#i_0_55)] [added: DATA](#ic7db5523d9d74649b8592a121b55d512_55)] | | | [added: [43](#ic7db5523d9d74649b8592a121b55d512_55)] | | |

| [ITEM [removed: 9.](#i_0_166)] [added: 9.](#ic7db5523d9d74649b8592a121b55d512_172)] | | | [removed: CHANGES] [added: [CHANGES] IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL [removed: DISCLOSURE | | | [85](#i_0_166)] [added: DISCLOSURE](#ic7db5523d9d74649b8592a121b55d512_172)] | | | [added: [87](#ic7db5523d9d74649b8592a121b55d512_172)] | | |

| [ITEM [removed: 9A.](#i_0_169)] [added: 9A.](#ic7db5523d9d74649b8592a121b55d512_175)] | | | [removed: CONTROLS] [added: [CONTROLS] AND [removed: PROCEDURES | | | [85](#i_0_169)] [added: PROCEDURES](#ic7db5523d9d74649b8592a121b55d512_175)] | | | [added: [87](#ic7db5523d9d74649b8592a121b55d512_175)] | | |

| [ITEM [removed: 9B.](#i_0_172) | | | OTHER INFORMATION] [added: 9B.](#ic7db5523d9d74649b8592a121b55d512_178)] | | | [removed: [86](#i_0_172)] [added: [OTHER INFORMATION](#ic7db5523d9d74649b8592a121b55d512_178)] | | | [added: [88](#ic7db5523d9d74649b8592a121b55d512_178)] | | |

| [PART [removed: III](#i_0_175) | | |] [added: III](#ic7db5523d9d74649b8592a121b55d512_181)] | | | | | | | | |

| [ITEM [removed: 10.](#i_0_178)] [added: 10.](#ic7db5523d9d74649b8592a121b55d512_184)] | | | [removed: DIRECTORS,] [added: [DIRECTORS,] EXECUTIVE OFFICERS AND CORPORATE [removed: GOVERNANCE | | | [86](#i_0_178)] [added: GOVERNANCE](#ic7db5523d9d74649b8592a121b55d512_184)] | | | [added: [88](#ic7db5523d9d74649b8592a121b55d512_184)] | | |

| [ITEM [removed: 11.](#i_0_181) | | | EXECUTIVE COMPENSATION] [added: 11.](#ic7db5523d9d74649b8592a121b55d512_187)] | | | [removed: [86](#i_0_181)] [added: [EXECUTIVE COMPENSATION](#ic7db5523d9d74649b8592a121b55d512_187)] | | | [added: [88](#ic7db5523d9d74649b8592a121b55d512_187)] | | |

| [ITEM [removed: 12.](#i_0_184)] [added: 12.](#ic7db5523d9d74649b8592a121b55d512_190)] | | | [removed: SECURITY] [added: [SECURITY] OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER [removed: MATTERS | | | [86](#i_0_184)] [added: MATTERS](#ic7db5523d9d74649b8592a121b55d512_190)] | | | [added: [89](#ic7db5523d9d74649b8592a121b55d512_190)] | | |

| [ITEM [removed: 13.](#i_0_187)] [added: 13.](#ic7db5523d9d74649b8592a121b55d512_193)] | | | [removed: CERTAIN] [added: [CERTAIN] RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR [removed: INDEPENDENCE | | | [87](#i_0_187)] [added: INDEPENDENCE](#ic7db5523d9d74649b8592a121b55d512_193)] | | | [added: [90](#ic7db5523d9d74649b8592a121b55d512_193)] | | |

| [ITEM [removed: 14.](#i_0_190)] [added: 14.](#ic7db5523d9d74649b8592a121b55d512_196)] | | | [removed: PRINCIPAL ACCOUNTING FEES] [added: [PRINCIPAL ACCOUNT](#ic7db5523d9d74649b8592a121b55d512_196)[ANT](#ic7db5523d9d74649b8592a121b55d512_196) [FEES] AND [removed: SERVICES | | | [88](#i_0_190)] [added: SERVICES](#ic7db5523d9d74649b8592a121b55d512_196)] | | | [added: [90](#ic7db5523d9d74649b8592a121b55d512_196)] | | |

| [ITEM [removed: 15.](#i_0_196)] [added: 15.](#ic7db5523d9d74649b8592a121b55d512_202)] | | | [removed: EXHIBITS,] [added: [EXHIBITS AND] FINANCIAL STATEMENT [removed: SCHEDULES | | | [88](#i_0_196)] [added: SCHEDULES](#ic7db5523d9d74649b8592a121b55d512_202)] | | | [added: [90](#ic7db5523d9d74649b8592a121b55d512_202)] | | |

| [ITEM [removed: 16.](#i_0_199)] [added: 16.](#ic7db5523d9d74649b8592a121b55d512_205)] | | | [removed: FORM] [added: [FORM] 10-K [removed: SUMMARY | | | [89](#i_0_199)] [added: SUMMARY](#ic7db5523d9d74649b8592a121b55d512_205)] | | | [added: [91](#ic7db5523d9d74649b8592a121b55d512_205)] | | |

| [EXHIBIT [removed: INDEX](#i_0_205) | | |] [added: INDEX](#ic7db5523d9d74649b8592a121b55d512_211)] | | | | | | [removed: [F-](#i_0_205)[1](#i_0_205)] [added: [F-](#ic7db5523d9d74649b8592a121b55d512_211)[1](#ic7db5523d9d74649b8592a121b55d512_211)] | | |

Information in this Form 10-K is current as of February [removed: 21, 2020,] [added: 23, 2021,] unless otherwise specified.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| [PART IV](#ic7db5523d9d74649b8592a121b55d512_199) | | | | | | | | |

| | | | | | | | | |

| [SIGNATURES](#ic7db5523d9d74649b8592a121b55d512_208) | | | | | | [92](#ic7db5523d9d74649b8592a121b55d512_208) | | |

| | | | | | | | | |

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| [PART IV](#i_0_193) | | | | | | | | | | | |

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

The following table summarizes [removed: production] [added: our] facilities by segment and geographic region.

| [removed: Proprietary Products] | | | | | | [removed: | | | | | | | | | | | |] [added: Scottsdale, AZ (1) (2)] | | | | | | [added: Proprietary Products] | | |

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

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

| [removed: Contract-Manufactured Products] | | | | | | [removed: | | | | | | | | | | | |] [added: Tempe, AZ (2)] | | | | | | [added: Contract Manufactured Products] | | |

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

Sales offices in various locations are leased under [removed: short-term] [added: contractual] arrangements.

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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

| Type of Facility/ Country | | | | | | Location | | | | | | Segment | | |

| *North America* | | | | | | | | | | | | | | |

| United States of America | | | | | | Phoenix, AZ (2) | | | | | | Contract Manufactured Products | | |

| | | | | | | St. Petersburg, FL (1) | | | | | | Proprietary Products | | |

| | | | | | | Grand Rapids, MI | | | | | | Contract Manufactured Products | | |

| | | | | | | Kinston, NC | | | | | | Proprietary Products | | |

| | | | | | | Kearney, NE | | | | | | Proprietary Products | | |

| | | | | | | Jersey Shore, PA | | | | | | Proprietary Products | | |

| | | | | | | Williamsport, PA | | | | | | Contract Manufactured Products | | |

| Puerto Rico | | | | | | Cayey | | | | | | Proprietary Products and Contract Manufactured Products | | |

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

| *South America* | | | | | | | | | | | | | | |

| Brazil | | | | | | Sao Paulo | | | | | | Proprietary Products | | |

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

| *Europe* | | | | | | | | | | | | | | |

| Denmark | | | | | | Horsens | | | | | | Proprietary Products | | |

| England | | | | | | St. Austell | | | | | | Proprietary Products | | |

| France | | | | | | Le Nouvion | | | | | | Proprietary Products | | |

| | | | | | | Le Vaudreuil | | | | | | Proprietary Products | | |

| Germany | | | | | | Eschweiler (1) (2) | | | | | | Proprietary Products | | |

| | | | | | | Stolberg | | | | | | Proprietary Products | | |

| Ireland | | | | | | Waterford | | | | | | Proprietary Products | | |

| | | | | | | Dublin (2) | | | | | | Contract Manufactured Products | | |

| Serbia | | | | | | Kovin | | | | | | Proprietary Products | | |

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

| *Asia Pacific* | | | | | | | | | | | | | | |

| China | | | | | | Qingpu | | | | | | Proprietary Products | | |

| India | | | | | | Sri City | | | | | | Proprietary Products | | |

| Singapore | | | | | | Jurong (2) | | | | | | Proprietary Products | | |

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

| *North America* | | | | | | | | | | | | | | |

| United States of America | | | | | | Upper Darby, PA | | | | | | Proprietary Products | | |

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

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Type of Facility/ Country | | | | | | Location | | | | | | Segment | | |

| *Europe* | | | | | | | | | | | | | | |

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

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| North American Operations | | | | | | European Operations | | | | | | Asia Pacific Operations | | | | | | | | | | | | | | |

| United States | | | | | | Denmark | | | | | | China | | | | | | | | | | | | | | |

| Jersey Shore, PA | | | | | | Horsens | | | | | | Qingpu | | | | | | | | | | | | | | |

| Kearney, NE | | | | | | England | | | | | | India | | | | | | | | | | | | | | |

| Kinston, NC | | | | | | St. Austell | | | | | | Sri City | | | | | | | | | | | | | | |

| Scottsdale, AZ (2) | | | | | | France | | | | | | Singapore | | | | | | | | | | | | | | |

| St. Petersburg, FL (1) | | | | | | Le Nouvion | | | | | | Jurong | | | | | | | | | | | | | | |

| | | | | | | Le Vaudreuil | | | | | | | | | | | | | | | | | | | | |

| South American Operations | | | | | | Germany | | | | | | | | | | | | | | | | | | | | |

| Brazil | | | | | | Eschweiler (1) (2) | | | | | | | | | | | | | | | | | | | | |

| Sao Paulo | | | | | | Stolberg | | | | | | | | | | | | | | | | | | | | |

| | | | | | | Ireland | | | | | | | | | | | | | | | | | | | | |

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

| | | | | | | Serbia | | | | | | | | | | | | | | | | | | | | |

| | | | | | | Kovin | | | | | | | | | | | | | | | | | | | | |

| North American Operations | | | | | | European Operations | | | | | | North American Operations | | | | | | | | | | | | | | |

| United States | | | | | | England | | | | | | United States | | | | | | | | | | | | | | |

| Upper Darby, PA | | | | | | Bodmin (2) | | | | | | Exton, PA | | | | | | | | | | | | | | |

| North American Operations | | | | | | European Operations | | | | | | | | | | | | | | | | | | | | |

| United States | | | | | | Ireland | | | | | | | | | | | | | | | | | | | | |

| Grand Rapids, MI | | | | | | Dublin (2) | | | | | | | | | | | | | | | | | | | | |

| Phoenix, AZ (2) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Tempe, AZ (2) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Williamsport, PA | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Puerto Rico | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cayey | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Silji Abraham | | | [removed: 48] [added: 49] | | | Senior Vice President, Chief [added: Technology Officer since December 2020. Senior Vice President, Chief] Digital and Transformation Officer [removed: since] [added: from] February [removed: 2018.] [added: 2018 to December 2020.] 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 | | | [removed: 51] [added: 52] | | | Senior Vice President and Chief Financial Officer since June 2018. In addition, Treasurer from June 2018 to December [removed: 2019.] [added: 2019 and] Principal Accounting Officer [removed: since] [added: from] October [removed: 2019.] [added: 2019 to April 2020.] 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. | | |

| Annette F. Favorite | | | [removed: 55] [added: 56] | | | 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, including Vice President, Global Talent 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. | | |

| Eric M. Green | | | [removed: 50] [added: 51] | | | 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. | | |

| Quintin J. Lai | | | [removed: 53] [added: 54] | | | 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. | | |

| David A. Montecalvo | | | [removed: 54] [added: 55] | | | Senior Vice President and Chief Operations and Supply Chain Officer since February 2019. Senior Vice President, Global Operations and Supply Chain from September 2016 until February 2019. Prior to joining West, he served in a number of senior leadership roles at Medtronic plc, [added: a medical device company,] including Vice President, Contract Manufacturing Operations, for the company’s Restorative Therapies Group, Vice President, Business Operations Integration, where he was responsible for directing and leading the global operations integration of Covidien plc into 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. | | |

| Kimberly Banks MacKay | | | 55 | | | Senior Vice President, General Counsel and Corporate Secretary since December 2020. Prior to joining West, from April 2019 to November 2020, she served as Senior Vice President, General Counsel and Corporate Secretary at the Segal Group in New York, a privately held firm specializing in employee benefits and investment consulting. Prior to Segal, she served for over 15 years in a variety of Legal leadership roles for Novartis, a global healthcare company, including Head of U.S. Legal for Novartis Business Service. | | |

| Chad R. Winters | | | 42 | | | Vice President, Chief Accounting Officer and Corporate Controller since May 2020. Vice President and Corporate Controller since October 2019. Prior to joining West, he served as Senior Vice President of Finance & Accounting and Controller of Amneal Pharmaceuticals, Inc., a specialty pharmaceutical company. Prior to Amneal, he held roles of increasing responsibility at the Chemours Company, UGI Corporation, and PricewaterhouseCoopers LLP. | | |

| | | | | | | | | |

| George L. Miller | | | 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. | | |

| Eric Resnick | | | 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 since joining The Tech Group in 2001, and held engineering and operating roles with Eastman Kodak Company and Ortho Clinical Diagnostics. | | |

As of January [removed: 31, 2020,] [added: 27, 2021,] we had [removed: 756] [added: 718] shareholders of record, which excludes [removed: shareholders] [added: beneficial owners] 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: $0.14] [added: $0.15] per share in each of the first three quarters of [removed: 2018; $0.15] [added: 2019; $0.16] per share in the fourth quarter of [removed: 2018] [added: 2019] and each of the first three quarters of [removed: 2019;] [added: 2020;] and [removed: $0.16] [added: $0.17] per share in the fourth quarter of [removed: 2019.][added: 2020.]

During the three months ended December 31, [removed: 2019,] [added: 2020,] 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 Act.

In [removed: February 2019,] [added: December 2020,] we announced a share repurchase program for calendar-year [removed: 2019] [added: 2021] authorizing the repurchase of up to [removed: 800,000] [added: 631,000] shares of our common stock from time to time on the open market or in privately-negotiated transactions as permitted under Exchange Act Rule 10b-18.

The number of shares [added: to be] repurchased and the timing of such transactions [removed: depended] [added: will depend] on a variety of factors, including market conditions.

During the year ended December 31, [removed: 2019,] [added: 2020,] we purchased [removed: 800,000] [added: 761,500] shares of our common stock under the [removed: now-completed] [added: now completed] program at a cost of [removed: $83.1] [added: $115.5] million, or an average price of [removed: $103.89] [added: $151.65] per share.

This share repurchase program is expected to be completed by December 31, [removed: 2020.][added: 2021.]

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: 2019:] [added: 2020: 500,] 500 [added: Health Care Index,] and MidCap 400 Index.

The Company’s cumulative shareholder return is based on an investment of $100 on December 31, [removed: 2014] [added: 2015] 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: ]

Due to the increase in our market capitalization, we have decided to replace the S&P MidCap 400 Index with the S&P 500 Health Care Index for comparison purposes, which will be used going forward.

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.

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

The number of shares to be repurchased and the timing

of such transactions will depend on a variety of factors, including market conditions.

| (in millions, except per share data) | | | [added: 2020 | | |] 2019 | | | 2018 | | | 2017 | | | 2016 | | | [removed: 2015 | | |]

| Net sales [added: (1)] | | | $ | [removed: 1,839.9] [added: 2,146.9] | | $ | [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] | |

| Operating profit † | | | [added: 406.9 | | |] 296.6 | | | 240.3 | | | 225.8 | | | 195.2 | | | [removed: 177.0 | | |]

| Net income | | | [added: 346.2 | | |] 241.7 | | | 206.9 | | | 150.7 | | | 143.6 | | | [removed: 95.6 | | |]

| Basic [removed: (1)] [added: (2)] | | | $ | [removed: 3.27] [added: 4.68] | | $ | [removed: 2.80] [added: 3.27] | | $ | [removed: 2.04] [added: 2.80] | | $ | [removed: 1.96] [added: 2.04] | | $ | [removed: 1.33] [added: 1.96] | |

| Diluted [removed: (2)] [added: (3)] | | | [added: 4.57 | | |] 3.21 | | | 2.74 | | | 1.99 | | | 1.91 | | | [removed: 1.30 | | |]

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

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

| Dividends declared per common share | | | $ | [removed: 0.62] [added: 0.66] | | $ | [removed: 0.58] [added: 0.62] | | $ | [removed: 0.54] [added: 0.58] | | $ | [removed: 0.50] [added: 0.54] | | $ | [removed: 0.46] [added: 0.50] | |

| Cash and cash equivalents | | | $ | [removed: 439.1] [added: 615.5] | | $ | [removed: 337.4] [added: 439.1] | | $ | [removed: 235.9] [added: 337.4] | | $ | [removed: 203.0] [added: 235.9] | | $ | [removed: 274.6] [added: 203.0] | |

| Working capital | | | [added: 870.3 | | |] 717.1 | | | 610.7 | | | 464.0 | | | 400.9 | | | [removed: 359.4 | | |]

| Total assets | | | [added: 2,793.8 | | |] 2,341.4 | | | 1,978.9 | | | 1,862.8 | | | 1,716.7 | | | [removed: 1,695.1 | | |]

| Total debt | | | [added: 255.2 | | |] 257.3 | | | 196.1 | | | 197.0 | | | 228.6 | | | [removed: 298.2 | | |]

| Total equity | | | [added: 1,854.5 | | |] 1,573.2 | | | 1,396.3 | | | 1,279.9 | | | 1,117.5 | | | [removed: 1,023.9 | | |]

| Total invested capital | | | $ | [removed: 1,830.5] [added: 2,109.7] | | $ | [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] | |

| PERFORMANCE MEASUREMENTS [removed: (3)] [added: (4)] | | | | | | | | | | | | | | | | | |

| Gross margin (a) | | | [removed: 32.9] [added: 35.8] | | % | [removed: 31.8] [added: 32.9] | | % | [removed: 32.1] [added: 31.8] | | % | [removed: 33.2] [added: 32.1] | | % | [removed: 32.6] [added: 33.2] | | % |

| Operating profitability (b) † | | | [removed: 16.1] [added: 19.0] | | % | [removed: 14.0] [added: 16.1] | | % | [removed: 14.1] [added: 14.0] | | % | [removed: 12.9] [added: 14.1] | | % | [removed: 12.6] [added: 12.9] | | % |

| Effective tax rate [removed: (4)] [added: (5)] | | | [removed: 20.2] [added: 18.1] | | % | [removed: 17.2] [added: 20.2] | | % | [removed: 36.4] [added: 17.2] | | % | [removed: 28.7] [added: 36.4] | | % | [removed: 22.6] [added: 28.7] | | % |

| Return on invested capital (c) † | | | [removed: 13.8] [added: 16.9] | | % | [removed: 13.0] [added: 13.8] | | % | [removed: 10.2] [added: 13.0] | | % | [removed: 10.4] [added: 10.2] | | % | [removed: 10.5] [added: 10.4] | | % |

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

| Research and development expenses | | | $ | [removed: 38.9] [added: 46.9] | | $ | [removed: 40.3] [added: 38.9] | | $ | [removed: 39.1] [added: 40.3] | | $ | [removed: 36.8] [added: 39.1] | | $ | [removed: 34.1] [added: 36.8] | |

| Operating cash flow | | | [added: 472.5 | | |] 367.2 | | | 288.6 | | | 263.3 | | | 219.4 | | | [removed: 212.4 | | |]

| Stock price range | | | [added: $305-124.53 | | |] $152.12-93.08 | | | $125.09-82.74 | | | $103.36-77.97 | | | $86.50-53.88 | | | [removed: $64.59-48.66 | | |]

[removed: (1)] [added: (2)] Based on weighted average common shares outstanding.

[removed: (2)] [added: (3)] Based on weighted average shares, assuming dilution.

[removed: (3)] [added: (4)] Performance measurements represent indicators commonly used in the financial community.

[removed: The] [added: Certain of 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.

[removed: (4)] [added: (5)] 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 17, [removed: *Income Taxes*,] [added: *[Income Taxes](#ic7db5523d9d74649b8592a121b55d512_157)*,] for further discussion of the 2017 Tax Act.

(1) Results for reporting periods beginning after January 1, 2018 are presented under Accounting Standards Codification ("ASC") 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods.

Factors affecting the comparability of the information reflected in the selected financial data:

▪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.

▪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 estimated impact of the 2017 Tax Act, and a tax benefit of $14.3 million associated with stock-based compensation.

▪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 stock-based compensation 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.

West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

[added: |] (in millions, except per share data) [added: | | | 2020 | | | | | | 2019 | | |]

| | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2017] [added: 2018] | | |

| Net sales | | | | | | $ | [removed: 1,839.9] [added: 2,146.9] | | | | | $ | [removed: 1,717.4] [added: 1,839.9] | | | | | $ | [removed: 1,599.1] [added: 1,717.4] | |

| Cost of goods and services sold | | | | | | [removed: 1,234.2] [added: 1,379.1] | | | | | | [removed: 1,172.0] [added: 1,234.2] | | | | | | [removed: 1,086.2] [added: 1,172.0] | | |

| Gross profit | | | | | | [removed: 605.7] [added: 767.8] | | | | | | [removed: 545.4] [added: 605.7] | | | | | | [removed: 512.9] [added: 545.4] | | |

| Research and development | | | | | | [removed: 38.9] [added: 46.9] | | | | | | [removed: 40.3] [added: 38.9] | | | | | | [removed: 39.1] [added: 40.3] | | |

| Selling, general and administrative expenses | | | | | | [removed: 272.7] [added: 302.0] | | | | | | [removed: 262.9] [added: 272.7] | | | | | | [removed: 246.0] [added: 262.9] | | |

| Other [removed: (income)] expense [added: (income)] (Note 16) | | | | | | [removed: (2.5)] [added: 12.0] | | | | | | [removed: 1.9] [added: (2.5)] | | | | | | [removed: 2.0] [added: 1.9] | | |

| Operating profit | | | | | | [removed: 296.6] [added: 406.9] | | | | | | [removed: 240.3] [added: 296.6] | | | | | | [removed: 225.8] [added: 240.3] | | |

| Interest expense | | | | | | [removed: 8.5] [added: 8.2] | | | | | | [removed: 8.4] [added: 8.5] | | | | | | [removed: 7.8] [added: 8.4] | | |

| Interest income | | | | | | [removed: (3.8)] [added: (1.4)] | | | | | | [removed: (2.1)] [added: (3.8)] | | | | | | [removed: (1.3)] [added: (2.1)] | | |

| Other nonoperating [removed: expense] (income) [added: expense] | | | | | | [removed: 0.1] [added: (1.2)] | | | | | | [removed: (6.7)] [added: 0.1] | | | | | | [removed: (3.1)] [added: (6.7)] | | |

| Income before income taxes | | | | | | [removed: 291.8] [added: 401.3] | | | | | | [removed: 240.7] [added: 291.8] | | | | | | [removed: 222.4] [added: 240.7] | | |

| Income tax expense | | | | | | [removed: 59.0] [added: 72.5] | | | | | | [removed: 41.4] [added: 59.0] | | | | | | [removed: 80.9] [added: 41.4] | | |

| Equity in net income of affiliated companies | | | | | | [removed: (8.9)] [added: (17.4)] | | | | | | [removed: (7.6)] [added: (8.9)] | | | | | | [removed: (9.2)] [added: (7.6)] | | |

| Net income | | | | | | $ | [removed: 241.7] [added: 346.2] | | | | | $ | [removed: 206.9] [added: 241.7] | | | | | $ | [removed: 150.7] [added: 206.9] | |

| Basic | | | | | | $ | [removed: 3.27] [added: 4.68] | | | | | $ | [removed: 2.80] [added: 3.27] | | | | | $ | [removed: 2.04] [added: 2.80] | |

| Diluted | | | | | | $ | [removed: 3.21] [added: 4.57] | | | | | $ | [removed: 2.74] [added: 3.21] | | | | | $ | [removed: 1.99] [added: 2.74] | |

| Basic | | | | | | [removed: 74.0] [added: 73.9] | | | | | | [removed: 73.9] [added: 74.0] | | | | | | 73.9 | | |

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

| | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2017] [added: 2018] | | |

| Net income | | | $ | [removed: 241.7] [added: 346.2] | | | | | $ | [removed: 206.9] [added: 241.7] | | | | | $ | [removed: 150.7] [added: 206.9] | |

| Foreign currency translation adjustments | | | [removed: 4.9] [added: 40.1] | | | | | | [removed: (39.2)] [added: 4.9] | | | | | | [removed: 68.8] [added: (39.2)] | | |

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

| Net actuarial [removed: (loss) gain] [added: loss] arising during period, net of tax of [added: $(0.7),] $(0.3), [removed: $(0.2)] and [removed: $1.3] [added: $(0.2)] | | | [removed: (1.9)] [added: (2.5)] | | | | | | [removed: (0.7)] [added: (1.9)] | | | | | | [removed: 6.3] [added: (0.7)] | | |

| Settlement effects arising during period, net of tax of [removed: $0.8] [added: $0.9, $0.8, and $0] | | | [removed: 2.7] [added: 2.9] | | | | | | [removed: —] [added: 2.7] | | | | | | — | | |

| Less: amortization of actuarial (gain) loss, net of tax of $0, [removed: $0.3] [added: $0,] and [removed: $0.5] [added: $0.3] | | | [removed: (0.2)] [added: (0.1)] | | | | | | [removed: 1.1] [added: (0.2)] | | | | | | [removed: 3.6] [added: 1.1] | | |

| Less: amortization of prior service credit, net of tax of $(0.1), [removed: $(0.5)] [added: $(0.1)] and [removed: $(0.5)] [added: $(0.5).] | | | (0.5) | | | | | | [removed: (1.5)] [added: (0.5)] | | | | | | [removed: (3.5)] [added: (1.5)] | | |

| Net (loss) gain on derivatives, net of tax of [added: $(0.6),] $(0.2), [removed: $1.5] and [removed: $(0.1)] [added: $1.5] | | | [removed: (0.4)] [added: (1.1)] | | | | | | [removed: 3.8] [added: (0.4)] | | | | | | [removed: (1.0)] [added: 3.8] | | |

| Other comprehensive income (loss), net of tax | | | [removed: 4.6] [added: 39.0] | | | | | | [removed: (36.9)] [added: 4.6] | | | | | | [removed: 69.5] [added: (36.9)] | | |

| Comprehensive income | | | $ | [removed: 246.3] [added: 385.2] | | | | | $ | [removed: 170.0] [added: 246.3] | | | | | $ | [removed: 220.2] [added: 170.0] | |

West Pharmaceutical Services, Inc. and Subsidiaries at December 31, [removed: 2019] [added: 2020] and [removed: 2018][added: 2019]

| | | | [added: 2020 | | | | | |] 2019 | | | | | | 2018 | | |

| Cash and cash equivalents | | | $ | [removed: 439.1] [added: 615.5] | | | | | $ | [removed: 337.4] [added: 439.1] | |

| Accounts receivable, net | | | [removed: 319.3] [added: 385.3] | | | | | | [removed: 288.2] [added: 319.3] | | |

| Inventories | | | [removed: 235.7] [added: 321.3] | | | | | | [removed: 214.5] [added: 235.7] | | |

| Other current assets | | | [removed: 64.6] [added: 51.6] | | | | | | [removed: 54.3] [added: 64.6] | | |

| Total current assets | | | [removed: 1,058.7] [added: 1,373.7] | | | | | | [removed: 894.4] [added: 1,058.7] | | |

| Property, plant and equipment | | | [removed: 1,820.1] [added: 2,035.5] | | | | | | [removed: 1,752.7] [added: 1,820.1] | | |

West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, 2020, 2019 and 2018

| Deferred compensation benefits | | | 22.9 | | | | | | 17.8 | | |

West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, 2020, 2019 and 2018

| Activity related to stock-based compensation | | | — | | | | | | — | | | | | | (5.4) | | | | | | (0.7) | | | | | | 65.9 | | | | | | — | | | | | | — | | | | | | 60.5 | | |

| Balance, December 31, 2020 | | | 75.3 | | | | | | $ | 18.8 | | | | | $ | 267.3 | | | | | 1.3 | | | | | | $ | (167.7) | | | | | $ | 1,846.7 | | | | | $ | (110.6) | | | | | $ | 1,854.5 | |

West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, 2020, 2019 and 2018

| Net income | | | $ | 346.2 | | | | | $ | 241.7 | | | | | $ | 206.9 | |

| Fixed asset impairments and sale of equipment, net | | | 7.7 | | | | | | 0.8 | | | | | | 1.8 | | |

West has been actively monitoring the novel coronavirus (“COVID-19”) situation and its impact globally.

Our production facilities continued to operate during the year as they had prior to the COVID-19 pandemic, other than for enhanced safety measures intended to prevent the spread of the virus and higher levels of production at certain plant locations to meet additional customer demand.

The remote working arrangements and travel restrictions imposed by various governments had limited impact on our ability to maintain operations during the year, as our manufacturing operations have generally been exempted from stay-at-home orders.

Under the current expected credit loss model, we have adopted a provision matrix approach, utilizing historical loss rates based on the number of days past due, adjusted to reflect current economic conditions and forecasts of future economic conditions.

| | | | $ | 321.3 | | | | | $ | 235.7 | |

We had no finance leases as of December 31, 2020.

We adopted this guidance and the respective disclosure updates are reflected in our financial statements, which did not have a material impact.

We adopted this guidance as of January 1, 2020, on a prospective basis.

We adopted this guidance as of January 1, 2020.

We adopted this guidance as of January 1, 2020, on a modified retrospective basis, to the accounts receivable and contract asset balances as of January 1, 2020.

Under the current expected credit loss model, we have adopted a provision matrix approach, utilizing historical loss rates based on the number of days past due, adjusted to reflect current economic conditions and forecasts of future economic conditions.

The effect of the adoption on the financial statement line items of accounts receivable and contract assets was not material as of January 1, 2020.

As a result of our adoption, we recorded a cumulative-effect adjustment of $0.1 million within retained earnings in our consolidated balance sheet as of January 1, 2020, to reflect the incremental estimated lifetime expected credit losses on the accounts receivable balance as of January 1, 2020.

We have not presented the amortized cost basis within each credit quality indicator by year of origination as all of our accounts receivable are due within one year or less.

In March 2020, the FASB issued guidance which provides optional expedients and exceptions to address the impact of reference rate reform where contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate need to be discontinued.

This guidance was effective upon issuance and generally can be applied through December 31, 2022.

We also maintain an allowance for product returns, as we believe that we are able to reasonably estimate the amount of returns based on our substantial historical experience and specific identification of customer claims.

| Contract-Manufactured Products | | | 23 | | % | | | | 24 | | % | | | | 24 | | % | | | | | | | | | | | | |

| | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | | | | | | | | | |

The Company has entered into new capacity reservation agreements, which include the receipt of up-front cash and therefore caused an increase in the deferred income account balance.

The Company expects revenue related to the capacity reservation agreements to be recognized over the next 1 to 2 years.

On October 21, 2020 we received market clearance from the FDA for our Vial2BagAdvancedTM 20mm Admixture Device and continue to work to get the products back on the market.

| Net income | | | $ | 346.2 | | | | | $ | 241.7 | | | | | $ | 206.9 | |

There were no shares purchased during the three months ended December 31, 2020.

| | | | | | | | | | $ | 2,035.5 | | | | | $ | 1,820.1 | |

| ($ in millions) | | | 2020 | | | | | | 2019 | | |

| ($ in millions) | | | 2020 | | | | | | 2019 | | |

| 2021 | | | $ | 12.4 | |

| 2022 | | | 10.4 | | |

| 2023 | | | 9.3 | | |

| Net loss on investment securities, net of tax of $0, $(0.1) and $(2.5) | | | — | | | | | | (0.1) | | | | | | (4.7) | | |

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

| Balance, December 31, 2016 | | | 73.7 | | | | | | $ | 18.4 | | | | | $ | 260.4 | | | | | 0.6 | | | | | | $ | (46.1) | | | | | $ | 1,071.6 | | | | | $ | (186.8) | | | | | $ | 1,117.5 | |

| Activity related to stock-based compensation | | | 1.5 | | | | | | 0.4 | | | | | | 44.1 | | | | | | (0.1) | | | | | | 11.4 | | | | | | — | | | | | | — | | | | | | 55.9 | | |

| Other adjustments to capital in excess of par value | | | — | | | | | | — | | | | | | 4.8 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4.8 | | |

| Venezuela deconsolidation | | | — | | | | | | — | | | | | | 11.1 | | |

| Loss on sales of equipment | | | 0.8 | | | | | | 1.8 | | | | | | 1.6 | | |

| Cash related to deconsolidated Venezuelan subsidiary | | | — | | | | | | — | | | | | | (6.0) | | |

| Contingent consideration payments up to amount of acquisition-date liability | | | — | | | | | | — | | | | | | (0.7) | | |

As of April 1, 2017, our consolidated financial statements exclude the results of our Venezuelan subsidiary.

We record the allowance based on a specific identification methodology.

| | | | $ | 235.7 | | | | | $ | 214.5 | |

at the present value of the unpaid lease payments at the lease commencement date.

In July 2019, the FASB issued guidance which clarifies or improves a variety of ASC disclosure and presentation requirements by aligning them with the SEC’s regulations, thereby eliminating redundancies and making the codification easier to apply.

This guidance was effective upon issuance.

In June 2018, the FASB issued guidance which expands the scope of accounting for share-based payment arrangements to include share-based payment transactions for acquiring goods and services from nonemployees.

This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018.

Early adoption was permitted.

In February 2018, the FASB issued guidance to address a specific consequence of the 2017 Tax Act by allowing a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the 2017 Tax Act’s reduction of the U.S. federal corporate income tax rate.

We adopted this guidance as of January 1, 2019, on a prospective basis, but elected to not reclassify from accumulated other comprehensive income (loss) to retained earnings the stranded tax effects resulting from the 2017 Tax Act’s reduction of the U.S. federal corporate income tax rate.

In August 2017, the FASB issued guidance which expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements.

In February 2016, the FASB issued guidance on the accounting for leases, ASC 842.

This guidance requires lessees to recognize lease assets and lease liabilities on the balance sheet and to expand disclosures about leasing arrangements, both qualitative and quantitative.

In terms of transition, the guidance requires adoption based upon a modified retrospective approach.

We adopted this guidance as of January 1, 2019, using the modified retrospective approach that allows companies to apply ASC 842 as of the effective date and on a prospective basis.

Early adoption is permitted.

this guidance.

Early adoption is permitted, including adoption in any interim period.

We believe that the adoption of this guidance will not have a material impact on our financial statements, primarily as we have not historically had a material amount of accounts receivable write-offs.

Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods.

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.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

We continue to work to get the products back on the market.

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

transactions as permitted under Exchange Act Rule 10b-18.

| | | | | | | | | | $ | 1,820.1 | | | | | $ | 1,752.7 | |

There were no capitalized leases included in buildings and improvements and machinery and equipment at December 31, 2019 and 2018.

As a result of our adoption of ASC 842, we recorded operating lease right-of-use assets of $71.0 million and operating lease liabilities of $73.1 million for operating leases where we are the lessee in our consolidated balance sheet as of January 1, 2019.

costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received.

Based on this evaluation, our CEO and CFO have concluded that, as of December 31, [removed: 2019,] [added: 2020,] our disclosure controls and procedures are effective.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] 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: 2019.][added: 2020.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] 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: 2019,] [added: 2020,] 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.

Internal control over financial reporting has inherent limitations.

Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.

Internal control over financial reporting also can be circumvented by collusion or improper management override.

Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting.

However, these inherent limitations are known features of the financial reporting process.

Therefore, it is possible to design into the process safeguards

to reduce, though not eliminate, this risk.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

No evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within West have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Also projections of any evaluation of effectiveness to future periods are subject to the risks that controls

may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

On January 1, 2019, we adopted ASC 842.

Although our adoption of ASC 842 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 leases.

These changes included the development of new policies, 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 is incorporated by reference from the discussion under the heading *Proposal 1 - Election of Directors*; *Corporate Governance Documents and Policies - Ethics and Our Code of Business Conduct*; *Voting and Other Information - [removed: 2021] [added: 2022] Shareholder Proposals or Nominations;* and *Board and Director Information and Policies - Committees - Audit Committee* in our [removed: 2020] [added: 2021] Proxy Statement.

Information about director and executive compensation is incorporated by reference from the discussion under the headings *Director Compensation, Compensation Committee Report, Compensation Discussion and Analysis,* and *Compensation Tables* in our [removed: 2020] [added: 2021] Proxy Statement.

Information required by this Item is incorporated by reference from the discussion under the heading *Stock Ownership* in our [removed: 2020] [added: 2021] Proxy Statement.

The following table sets forth information about the grants of stock options, [removed: restricted stock or] [added: all share units and] other rights under all of the Company’s equity compensation plans as of the close of business on December 31, [removed: 2019.][added: 2020.]

(1) Includes [removed: 1,207,157] [added: 1,259,456] outstanding stock options, [removed: 264,691 restricted] [added: 222,799] performance share units, [removed: 25,892] [added: 27,062] restricted retention share units, [removed: 64,544] [added: 144,866] deferred stock-equivalents units, and [removed: 494] [added: 308] restricted stock-equivalents units granted to directors under the 2016 Plan.

Includes [removed: 1,462,578] [added: 1,104,631] outstanding stock options, [removed: 12,160] [added: 3,628] outstanding stock-settled stock appreciation rights, [removed: 13,459 restricted retention share units,] and 108,074 deferred stock-equivalents units under the 2011 Plan (which was terminated in 2016).

Includes [removed: 68,400] [added: 18,700] outstanding stock options [removed: and 54,058 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 restricted performance share unit payouts were at [added: 82.61%,] 49.39%, [removed: 96.6%,] and [removed: 89.8%] [added: 96.6%] in [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017,] [added: 2018,] respectively.

(2) [removed: Restricted performance] [added: All] share [added: units] and deferred stock-equivalent units are excluded when determining the weighted-average exercise price of outstanding options.

(3) Represents [removed: 3,829,712] [added: 3,793,218] shares reserved under the Company’s Employee Stock Purchase Plan and [removed: 3,119,314] [added: 2,761,911] shares remaining available for issuance under the 2016 Plan.

The estimated number of shares that could be issued for [removed: 2019] [added: 2020] from the Employee Stock Purchase Plan is [removed: 277,210.][added: 173,019.]

This number of shares is calculated by multiplying the [removed: 190] [added: 107] shares per offering period per participant limit by [removed: 1,459,] [added: 1,617,] the number of current participants in the plan.

| Equity compensation plans approved by security holders | | | 2,889,524 | | | (1) | | | $ | 81.3 | | (2) | | | 6,555,129 | | | (3) | | |

| Total | | | 2,889,524 | | | | | | 81.3 | | | | | | 6,555,129 | | | | | |

| Equity compensation plans approved by security holders | | | 3,281,507 | | | (1) | | | $ | 67.05 | | (2) | | | 7,226,236 | | | (3) | | |

| Total | | | 3,281,507 | | | | | | $ | 67.05 | | | | | 7,226,236 | | | | | |

Information called for by this Item is incorporated by reference from the discussion under the heading *Corporate Governance Documents and Policies - Related Person Transactions and Procedures* in our [removed: 2020] [added: 2021] Proxy Statement.

Information about director independence is incorporated by reference from the discussion under the heading *Corporate Governance Documents and Policies - Director Independence* in our [removed: 2020] [added: 2021] Proxy Statement.

Information is incorporated by reference from the discussion under the heading *Independent Auditors and Fees - Fees Paid to PricewaterhouseCoopers LLP* and *Independent Auditors and Fees - Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services* in our [removed: 2020] [added: 2021] Proxy Statement.

Consolidated Statements of Income for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

Consolidated Balance Sheets at December 31, [removed: 2019] [added: 2020] and [removed: 2018][added: 2019]

Consolidated Statement of Equity for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

| ($ in millions) | | | Balance at beginning of period | | | Charged to costs and expenses [added: (1)] | | | Deductions [removed: (1)] [added: (2)] | | | Balance at end of period | | |

| For the year ended December 31, [removed: 2017] [added: 2020] | | | | | | | | | | | | | | |

| Deferred tax asset valuation allowance | | | $ | [removed: 18.7] [added: 15.9] | | $ | [removed: 2.5] [added: —] | | $ | [removed: (0.3)] [added: (0.8)] | | $ | [removed: 20.9] [added: 15.1] | |

| Allowance for doubtful accounts | | | [removed: 0.4] [added: 0.5] | | | [removed: (0.2)] [added: 0.7] | | | [removed: 0.3] [added: (0.1)] | | | [removed: 0.5] [added: 1.1] | | |

| Total allowances deducted from assets | | | $ | [removed: 19.1] [added: 16.4] | | $ | [removed: 2.3] [added: 0.7] | | $ | [removed: —] [added: (0.9)] | | $ | [removed: 21.4] [added: 16.2] | |

[removed: (1)Includes] [added: (2)Includes] accounts receivable written off, the write-off or write-down of valuation allowances, and translation adjustments.

(1)Included within the allowance for doubtful accounts activity is the effect of the modified retrospective application of a new accounting standard mentioned in Note 2.

__________________________

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of West Pharmaceutical Services, Inc. [added: and] in the capacities and on the dates indicated.

| /s/ Eric M. Green | | | Director, President and Chief Executive Officer | | | February [removed: 21, 2020] [added: 23, 2021] | | |

| /s/ Bernard J. Birkett | | | Senior Vice President and Chief Financial Officer | | | February [removed: 21, 2020] [added: 23, 2021] | | |