Catalent
Annual Report 2015

Plain-text annual report

Morningstar® Document Research℠ FORM 10-KCatalent, Inc. - CTLTFiled: September 02, 2015 (period: June 30, 2015)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 ______________________________FORM 10-K______________________________ x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended June 30, 2015oro TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from toCommission File Number: 001-36587______________________________ CATALENT, INC.(Exact name of registrant as specified in its charter)______________________________ Delaware20-8737688(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)14 Schoolhouse RoadSomerset, New Jersey08873(Address of principal executive offices)(Zip Code)Registrant’s telephone number, including area code: (732) 537-6200______________________________ Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, $0.01 par value per shareNew York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act: None______________________________ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No xIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90days. Yes x No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submittedand posted 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 submitand post such files). Yes x No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not becontained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of“large accelerated filer,” “accelerated filer,” and “smaller reporting company" in Rule 12b-2 of the Exchange Act.Large accelerated filero Accelerated fileroNon-accelerated filerx(Do not check if a smaller reporting company)Smaller reporting companyoIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x As of December 31, 2014, the aggregate market value of the registrant's voting and non-voting common equity held by non-affiliates was $1.4 billion. On September 1,2015 there were 124,519,427 shares of the Registrant’s Common Stock, par value $0.01 per share, issued and outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant's Proxy Statement relating to the 2015 Annual Meeting of Shareholders are incorporated by reference into Part III of this report. 1Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents CATALENT, INC.INDEX TO ANNUAL REPORT ON FORM 10-KFor the Year Ended June 30, 2015Item Page PART I Special Note Regarding Forward-Looking Statements3 Item 1.Business6 Item 1A.Risk Factors18 Item 1B.Unresolved Staff Comments30 Item 2.Properties31 Item 3.Legal Proceedings32 Item 4.Mine Safety Disclosures33 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities34 Item 6.Selected Financial Data36 Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations38 Item 7A.Quantitative and Qualitative Disclosures About Market Risk62 Item 8.Financial Statements and Supplementary Data63 Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure107 Item 9A.Controls and Procedures107 Item 9B.Other Information108 PART III Item 10.Directors, Executive Officers and Corporate Governance109 Item 11.Executive Compensation109 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters109 Item 13.Certain Relationships and Related Transactions, and Director Independence109 Item 14.Principal Accountant Fees and Services109 PART IV Item 15.Exhibits and Financial Statement Schedules110 Signatures1142Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents PART ISpecial Note Regarding Forward-Looking StatementsIn addition to historical information, this Annual Report on Form 10-K of Catalent, Inc. (“Catalent” or the “Company”) contains “forward-lookingstatements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements ofhistorical facts, included in this Annual Report on Form 10-K are forward-looking statements. In some cases, you can identify these forward-lookingstatements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,”“intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.These statements are based on assumptions and assessments made by our management in light of their experience and, their perception of historicaltrends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statement is subject tovarious risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from thoseindicated in these statements.Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include, but are not limited to, those described under the section entitled “Risk Factors” in this Annual Report on Form 10-K for the fiscalyear ended June 30, 2015 and the following:•We participate in a highly competitive market, and increased competition may adversely affect our business.•The demand for our offerings depends in part on our customers’ research and development and the clinical and market success of theirproducts. Our business, financial condition and results of operations may be harmed if our customers spend less on, or are less successful, inthese activities.•We are subject to product and other liability risks that could adversely affect our results of operations, financial condition, liquidity, andcash flows.•Failure to comply with existing and future regulatory requirements could adversely affect our results of operations and financial condition.•Failure to provide quality offerings to our customers could have an adverse effect on our business and subject us to regulatory actions andcostly litigation.•The services and offerings we provide are highly exacting and complex, and if we encounter problems providing the services or supportrequired, our business could suffer.•Our global operations are subject to economic, political and regulatory risks.•If we do not enhance our existing or introduce new technology or service offerings in a timely manner, our offerings may become obsoleteover time, customers may not buy our offerings and our revenue and profitability may decline.•We and our customers depend on patents, copyrights, trademarks, trade secrets and other forms of intellectual property protections, butthese protections may not be adequate.•Our future results of operations are subject to fluctuations in the costs, availability, and suitability of the components of the products wemanufacture, including active pharmaceutical ingredients, excipients, purchased components, and raw materials.•Changes in market access or healthcare reimbursement for our customers’ products in the United States or internationally could adverselyaffect our results of operations and financial condition by affecting demand for our offerings.•As a global enterprise, fluctuations in the exchange rate of the U.S. dollar against foreign currencies could have a material adverse effect onour financial performance and results of operations.3Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents •Tax legislation initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.•Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.•We are dependent on key personnel.•Risks generally associated with information and communications systems could adversely affect our results of operations.•We have in the past engaged and may in the future engage in acquisitions and other transactions that may complement or expand ourbusiness or divest of non-strategic businesses or assets. We may not be able to complete such transactions, and such transactions, ifexecuted, pose significant risks and could have a negative effect on our operations.•Our offerings and our customers’ products may infringe on the intellectual property rights of third parties.•We are subject to environmental, health and safety laws and regulations, which could increase our costs and restrict our operations in thefuture.•We are subject to labor and employment laws and regulations, which could increase our costs and restrict our operations in the future.•Certain of our pension plans are underfunded, and additional cash contributions we may make will reduce the cash available for ourbusiness, such as the payment of our interest expense.•Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react tochanges in the economy or in our industry, expose us to interest-rate risk to the extent of our variable rate debt and prevent us from meetingour obligations under our indebtedness.•Affiliates of The Blackstone Group L.P. (“Blackstone”) have substantial influence over us and their interests may conflict with ours oryours in the future.We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that areimportant to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even ifsubstantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that (i) we havecorrectly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respectto these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) our strategy, which is based in part on thisanalysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made and weundertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments orotherwise, except as required by law.Social MediaWe use our website (www.catalent.com), our corporate Facebook page (https://www.facebook.com/CatalentPharmaSolutions) and our corporate Twitteraccount (@catalentpharma) as channels of distribution of Company information. The information we post through these channels may be deemed material.Accordingly, investors should monitor these channels, in addition to following our press releases, Securities and Exchange Commission ("SEC") filings andpublic conference calls and webcasts. The contents of our website and social media channels are not, however, a part of this report.4Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Trademarks and Service MarksWe have U.S. or foreign registration in the following marks, among others: “ADVASEPT®,” “OptiForm®,” “GPEx®,” “Liqui-Gels®,” “Vegicaps®,”“Zydis®,” and “Zydis®Nano”. This Annual Report on Form 10-K also includes trademarks and trade names owned by other parties, and these trademarks andtrade names are the property of their respective owners. We use certain other trademarks and service marks, including OptiShell™, OptiDose™, OptiMelt™,OptiPact™, SMARTag™, OptiGel™, OptiGel™ Bio, Easyburst™, Savorgel™, Galacorin™ and Softdrop™ on an unregistered basis in the United States andabroad.Solely for convenience, the trademarks, service marks and trade names identified in this Annual Report on Form 10-K may appear without the ® and ™symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rightsof the applicable licensors to these trademarks, service marks, and trade names.5Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 1.BUSINESSOverviewWe are the leading global provider of advanced delivery technologies and development solutions for drugs, biologics and consumer health products.Our oral, injectable, and respiratory delivery technologies address the full diversity of the pharmaceutical industry including small molecules, large moleculebiologics and consumer health products. Through our extensive capabilities and deep expertise in product development, we help our customers take productsto market faster, including nearly half of new drug products approved by the Food and Drug Administration (the "FDA") in the last decade. Our advanceddelivery technology platforms, broad and deep intellectual property, and proven formulation, manufacturing and regulatory expertise enable our customersto develop more products and better treatments. Across both development and delivery, our commitment to reliably supply our customers’ needs is thefoundation for the value we provide; annually, we produce more than 70 billion doses for nearly 7,000 customer products. We believe that through ourinvestments in growth-enabling capacity and capabilities, our ongoing focus on operational and quality excellence, the sales of existing customer products,the introduction of new customer products, our patents and innovation activities, and our entry into new markets, we will continue to benefit from attractiveand differentiated margins, and realize the growth potential from these areas.Since 2010, we have made investments to expand our sales and marketing activities, leading to growth in the number of active development programsfor our customers in both of our two main strategic areas. This has further enhanced our extensive, long-duration relationships and long-term contracts with abroad and diverse range of industry-leading customers. In the fiscal year ended June 30, 2015, we did business with 82 of the top 100 branded drug marketers,19 of the top 20 generics marketers, 40 of the top 50 biologics marketers, and 23 of the top 25 consumer health marketers globally. Selected key customersinclude Pfizer, Johnson & Johnson, GlaxoSmithKline, Novartis, Roche, Actavis and Teva. We have many long-standing relationships with our customers,particularly in advanced delivery technologies, where we tend to follow a prescription molecule through all phases of its lifecycle, from the original brandprescription, development and launch to generics or over-the-counter switch. A prescription pharmaceutical product relationship with an innovator will oftenlast for nearly two decades, extending from mid-clinical development through the end of the product’s life cycle. We serve customers who require innovativeproduct development, superior quality, advanced manufacturing and skilled technical services to support their development and marketed product needs.Our broad and diverse range of technologies closely integrates with our customers’ molecules to yield final dose forms, and this generally results in theinclusion of Catalent in our customers’ prescription product regulatory filings. Both of these factors translate to long-duration supply relationships at anindividual product level.We believe our customers value us because our depth of development solutions and advanced delivery technologies, intellectual property, consistentand reliable supply, geographic reach, and substantial expertise enable us to create a broad range of business and product solutions that can be customized tofit their individual needs. Today we employ approximately 900 scientists and technicians and hold approximately 1,300 patents and patent applications inadvanced delivery, drug and biologics formulation and manufacturing. The aim of our offerings is to allow our customers to bring more products to marketfaster, and develop and market differentiated new products that improve patient outcomes. We believe our leading market position, significant global scale,and diversity of customers, offerings, regulatory categories, products, and geographies reduce our exposure to potential strategic and product shifts within theindustry.We provide a number of proprietary, differentiated technologies, products and service offerings to our customers across our advanced deliverytechnologies and development solutions platforms. The core technologies within our advanced delivery technologies platform include softgel capsules, ourZydis oral dissolving tablets, blow-fill-seal unit dose liquids and a range of other oral, injectable and respiratory technologies. The technologies and serviceofferings within our development solutions platform span the drug development process, ranging from OptiForm formula optimization technology, MicronTechnologies particle size engineering for small molecules, and GPEx and SMARTag platforms for development of biologics and antibody-drug conjugates(ADCs), to formulation, analytical services, early stage clinical development, clinical trials supply and regulatory consulting. Our offerings serve a criticalneed in the development and manufacturing of difficult-to-formulate products across a number of product types.We have advanced our technologies and grown our service offerings over more than 80 years through internal development, strategic alliances, in-licensing and acquisitions. We initially introduced our softgel capsule technology in the 1930s and have continued to expand our range of new,technologically enhanced offerings. Since fiscal 2013, we have launched OptiShell, OptiDose, OptiMelt, Zydis Nano and Zydis Bio, and in fiscal 2015 welaunched OptiPact. To extend the reach of our technologies and services, we have also formed several active partnerships, including recent partnerships withBASF (Germany), CEVEC (Germany), and CTC Bio (South Korea), and have active relationships with research universities around the world. We have alsoaugmented our portfolio through nine acquisitions since fiscal 2012, including significantly expanding6Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents the scale of our Development and Clinical Services business through the acquisition of the Aptuit CTS business in February 2012, adding an ADC businessthrough the completion of our acquisition of the Redwood BioScience business in October 2014, and extending our particle engineering capabilities via ourNovember 2014 acquisition of Micron Technologies, a leader in the category. We believe our own internal innovation, supplemented by current and futureexternal partnerships and acquisitions, will continue to strengthen and extend our leadership positions in the delivery and development of drugs, biologicsand consumer health products. HistoryCatalent was formed in April 2007, when affiliates of Blackstone acquired the core of the Pharmaceutical Technologies and Services (“PTS”) segmentof Cardinal Health, Inc. (“Cardinal”). Cardinal had created PTS through a series of acquisitions beginning with R.P. Scherer Corporation in 1998, with theintent of creating the world’s leading outsourcing provider of specialized, market-leading solutions to the global pharmaceutical and biotechnologyindustry. We are a holding company that indirectly owns Catalent Pharma Solutions, Inc. (the "Operating Company"), which owns, directly or indirectly, allof our operating subsidiaries. Since our 2007 acquisition, we have regularly reviewed our portfolio of offerings and operations in the context of our strategicgrowth plan, and, as a result, we have sold five businesses and consolidated operations at four facilities, integrating them into the remaining facility network.We have also actively acquired new businesses and facilities, completing nine transactions since fiscal 2012. In July 2014, we completed the initial publicoffering of our common stock (the "IPO"), which is now listed on the New York Stock Exchange (the “NYSE”) under the symbol “CTLT.”Our Competitive StrengthsLeading Provider of Advanced Delivery Technologies and Development SolutionsWe are the leading global provider of advanced delivery technologies and development solutions for drugs, biologics and consumer health products. Inthe last decade, we have earned revenue with respect to nearly half of the drugs based on new chemical entities (“NCEs”) approved by the FDA, and over thepast three years with respect to nearly 80% of the top 200 largest-selling compounds globally. With approximately 900 scientists and technicians worldwideand approximately 1,300 patents and patent applications, our expertise is in providing differentiated technologies and solutions that help our customersbring more products and better treatments to market faster. For example, in the high-value area of NCEs, approximately 90% of NCE softgel approvals by theFDA over the last 25 years have been developed and supplied by us.Diversified Operating PlatformWe are diversified by virtue of our geographic scope, our large customer base, the extensive range of products we produce, our broad service offerings,and our ability to provide solutions at nearly every stage of a product’s lifecycle. We produce nearly 7,000 distinct items across multiple categories,including brand and generic prescription drugs and biologics, over-the-counter, consumer health and veterinary products, medical devices and diagnostics.In fiscal 2015, our top 20 products represented approximately 20% of total revenue, with no single customer accounting for greater than 10% of revenue andwith no individual product greater than 3%. We serve approximately 1,000 customers in approximately 80 countries, with a majority of our fiscal 2015revenues coming from outside the United States. This diversity, combined with long product lifecycles and close customer relationships, has contributed tothe stability of our business. It has also allowed us to reduce our exposure to potential strategic, customer and product shifts as well as to payer-driven pricingpressures experienced by our branded drug and biologic customers.Longstanding, Extensive Relationships with Blue Chip CustomersWe have longstanding, extensive relationships with leading pharmaceutical and biotechnology customers. In fiscal 2015, we did business with 82 ofthe top 100 branded drug marketers, 19 of the top 20 generics marketers, 40 of the top 50 biologics marketers, and 23 of the top 25 consumer health marketersglobally, as well as with nearly 1,000 other customers, including emerging and specialty companies, which are often more reliant on outside partners as aresult of their more virtual business models. Regardless of size, our customers seek innovative product development, superior quality, advancedmanufacturing and skilled technical services to support their development and marketed product needs.We believe our customers value us because our depth of development solutions and advanced delivery technologies, consistent and reliable supply,geographic reach and substantial expertise enable us to create a broad range of tailored solutions, many of which are unavailable from other individualproviders.7Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Deep, Broad and Growing Technology FoundationOur breadth of proprietary and patented technologies and long track record of innovation substantially differentiate us from other industry participants.Within our oral technologies business, our leading softgel platforms, including Liqui-Gels, OptiShell and Vegicaps capsules, and our modified releasetechnologies, including the Zydis family, OptiDose and OptiMelt technologies, provide formulation expertise to solve complex delivery challenges for ourcustomers. We offer advanced technologies for delivery of small molecules and biologics via respiratory, ophthalmic and injectable routes, including theblow-fill-seal unit dose technology, ADVASEPT glass-free vials, and prefilled syringes. We also provide advanced biologics formulation options, includingGene Product Expression (“GPEx”) cell-line and SMARTag antibody-drug conjugate technologies. We have a market leadership position within respiratorydelivery, including metered dose and dry powder inhalers, and intra-nasal forms. We have reinforced our leadership position in advanced deliverytechnologies over the last three years, as we have launched more than a dozen new technology platforms and applications, including in fiscal 2015 theaddition of particle size engineering technologies for small molecules through our acquisition of Micron Technologies, a recognized market leader in thespace. Our culture of creativity and innovation is grounded in our advanced delivery technologies, our scientists and engineers, and our patents andproprietary manufacturing processes throughout our global network. Our global product development team drives a focused application of resources to ourhighest priority opportunities for both new customer product introductions and platform technology development. As of June 30, 2015, we hadapproximately 700 product development programs in active development across our businesses.Long-Duration Relationships Provide SustainabilityOur broad and diverse range of technologies closely integrates with our customers’ molecules to yield final dose forms, and this generally results in theinclusion of Catalent in our customers’ prescription product regulatory filings. Both of these factors translate to long-duration supply relationships at anindividual product level, to which we apply our expertise in contracting to produce long-duration commercial supply agreements. These agreementstypically have initial terms of three to ten years with regular renewals of one to three years (see “Contractual Arrangements” for more detail). Nearly 70% ofour fiscal 2015 advanced delivery technology platform revenues (comprised of our Oral Technologies and Medication Delivery Solutions reportingsegments) were covered by such long-term contractual arrangements. We believe this base provides us with a sustainable competitive advantage. Significant Recent Growth InvestmentsWe have made significant investments over time to establish a global manufacturing network, and today employ 5.1 million square feet ofmanufacturing and laboratory space across five continents. We have invested approximately $577 million in the last five fiscal years in gross capitalexpenditures. Growth-related investments in facilities, capacity and capabilities across our businesses have positioned us for future growth in areas alignedwith anticipated future demand. Through our focus on operational, quality and regulatory excellence, we drive ongoing and continuous improvements insafety, productivity and reliable supply to customer expectations, which we believe further differentiate us. Our manufacturing network and capabilitiesallow us the flexibility to reliably supply the changing needs of our customers while consistently meeting their quality, delivery and regulatory complianceexpectations.High Standards of Regulatory Compliance and Operational and Quality ExcellenceWe operate our plants in accordance with current good manufacturing practices (“cGMP”), following our own high standards that are consistent withthose of many of our large global pharmaceutical and biotechnology customers. We have more than 1,100 employees around the globe focused on qualityand regulatory compliance. More than half of our facilities are registered with the FDA, with the remaining facilities registered with other applicableregulatory agencies, such as the European Medicines Agency (the “EMA”). In some cases, facilities are registered with multiple regulatory agencies. In fiscal2015, we underwent 65 regulatory audits and, over the last five fiscal years, we successfully completed more than 250 regulatory audits. We also undergonearly 500 customer and internal audits annually. We believe our quality and regulatory track record to be a competitive differentiator for Catalent.Strong and Experienced Management TeamMost of our executive leadership team has been in place since fiscal 2010. Today, our management team has more than 200 years of combined anddiverse experience within the pharmaceutical and healthcare industries. With an average of more than 20 years of functional experience, this team possessesdeep knowledge and a wide network of industry relationships.8Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Our StrategyWe are pursuing the following key growth initiatives:“Follow the Molecule” by Providing Solutions to our Customers across all Phases of the Product LifecycleWe intend to use our advanced delivery technologies and development solutions across the entire lifecycle of our customers’ products to drive futuregrowth. Our development solutions span the drug development process, starting with our platforms for development of small molecules, biologics andantibody-drug conjugates, to formulation and analytical services, through early stage clinical development and manufacturing of clinical trials supply, toregulatory consulting. Once a molecule is ready for late-stage trials and subsequent commercialization, we provide our customers with a range of advanceddelivery technologies and manufacturing expertise that allow them to deliver their molecules to the end-users in appropriate dosage forms. The relationshipbetween a molecule and our advanced delivery technologies typically starts with developing and manufacturing the innovator product, then extendsthroughout the molecule’s commercial life, including through potential generic launches or over-the-counter (“OTC”) conversion. For prescription products,we are typically the sole and/or exclusive provider, and are reflected in customers’ new drug applications.Our breadth of solutions gives us multiple entry points into the lifecycle of our customers’ molecules. Our initial commercial opportunity arises duringthe discovery and development of a molecule, when our development and particle engineering solutions can be applied. Once a product reaches late-stagedevelopment, we can provide our customers with drug delivery solutions for the commercialization of their products. We have two additional entry pointsduring the commercial phase: upon loss-of-exclusivity and upon OTC conversion. At these points, we partner with the makers and marketers of both genericand OTC products to provide them with advanced delivery technologies that can be applied to their products through these stages of the product lifecycle.Our revenues from our advanced delivery technologies are primarily driven by volumes and, as a result, the loss of exclusivity may not have a significantnegative impact if we continue to work with both branded and generic partners.An example of this can be found in a leading over-the-counter respiratory brand, which today uses both our Zydis fast dissolve and our Liqui-Gelssoftgel technologies. We originally began development of the prescription format of this product for our multinational pharmaceutical company partner in1992 to address specific patient sub-segment needs. After four years of development, we then commercially supplied the prescription Zydis product for sixyears, and we continue to provide the Zydis form during the switch to OTC status in the United States and other markets in the early 2000s. More recently, weproactively brought a softgel product concept for the brand to the customer, which the customer elected to develop and launch as well. By following thismolecule, we have built a strong, 24-year long relationship across multiple formats and markets.Continue to Grow Through New Product Launches and ProjectsWe intend to grow by supplementing our existing diverse base of commercialized advanced delivery technology products with new developmentprograms. As of June 30, 2015, our product development teams were working on approximately 700 new customer programs. Our base of active developmentprograms has expanded in recent years from growing market demand, as well as from our investments since 2010 to expand our global sales and marketingfunction; once developed and approved in the future, we expect these programs to add to long-duration commercial revenues under long-term contracts andgrow our existing product base. In the year ended June 30, 2015, we introduced 165 new products, which is in line with new product introductions in the yearended June 30, 2014. We also expect that our expanded offerings and capacity such as bioanalytical testing and metered dose inhaler production, ouracquisition of Micron Technologies, our expanded presence in Brazil, and our market entry into China will further expand our active advanced deliverytechnologies development programs, and position us for future growth. Our development solutions business is driven by thousands of projects annually,ranging from individual short-duration analytical projects to multi-year clinical supply programs.9Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Accelerate Growth with Existing Customers through Increased Penetration and Broadening of ServicesWhile we have a broad presence across the pharmaceutical and biotechnology industries, we believe there are significant opportunities for additionalrevenue growth in our existing customer base, by providing advanced delivery solutions for new pipeline or commercial molecules, and by expanding therange and depth of our development solutions used by those customers. Within our top 50 customers, nearly 75% use less than half of our individualofferings. In order to ensure we provide the most value to our customers, we have increased our field sales and marketing force by approximately 20% sincefiscal 2009. We have continued to follow a targeted account strategy, designating certain accounts as global accounts, based on current materiality,partnering approach and growth potential. We also designate other accounts as growth accounts, based primarily on partnering approach and potential tobecome global accounts in the future. In both cases, we assign incremental business development product development resources to identify and pursue newopportunities to partner. Global accounts represented nearly 32% of our revenues in fiscal 2015, while growth accounts represented approximately 9% ofrevenues in that same period.Enter Into and Expand Into Attractive Technologies and GeographiesWe have made a number of internal investments in new geographies and markets, including the construction of a state-of-the-art biomanufacturingfacility in Wisconsin to serve the growing global biologics development market, the acquisition of particle engineering provider Micron Technologies toextend our drug solubility enhancement capabilities, and the acquisition of the SMARTag™ antibody-drug conjugate technology to address the growingneed for improved targeted delivery of therapeutic compounds directly to tumor sites.In addition, we intend to increase our presence in emerging/high-growth geographies and other markets where we are currently only narrowlyrepresented, including China, Brazil, Japan, and the animal health market. We have made recent investments in such high-growth areas, including theestablishment of the first provider in China of end-to-end clinical supply solutions, and a softgel facility in China focused initially on the export of cost-advantaged consumer health products, as well as our acquisition of a Brazilian softgel provider in fiscal 2014.Capitalize on Our Substantial Technology PlatformWe have a broad and diverse technology platform that is supported by approximately 1,300 patents and patent applications in more than 125 familiesacross advanced delivery technologies, drug and biologics formulation and manufacturing. This platform is supported by substantial know-how and tradesecrets that provide us with additional competitive advantages. For example, we have significant softgel fill and formulation databases and substantialsoftgel regulatory approval expertise, and as a result, approximately 90% of NCE softgel approvals by the FDA over the last 25 years have been developedand supplied by us.In addition to resolving product challenges for our customers’ molecules, for more than two decades we have applied our technology platforms anddevelopment expertise to proactively develop proof of concept products, whether improved versions of existing drugs, new generic formulations orinnovative consumer health products. In the consumer health area, we file product dossiers with regulators in relevant jurisdictions for Catalent-createdproducts, which help contribute sustainable growth to our consumer health business. We expect to continue to seek proactive development and other non-traditional relationships to increase demand for and value realized from our technology platforms. These activities have provided us with opportunities tocapture an increased share of end-market value through out-licensing, profit-sharing and other arrangements.Leverage Existing Infrastructure and Operational Discipline to Drive Profitable GrowthThrough our existing infrastructure, including our global network of operating locations and programs, we promote operational discipline and drivemargin expansion. With our Lean Six Sigma programs, a global procurement function and conversion cost productivity metrics in place, we have created aculture of functional excellence and cost accountability. We intend to continue to apply this discipline to further leverage our operational network forprofitable growth. Since fiscal 2009, we have expanded gross margin by over 600 basis points and Adjusted EBITDA margin by over 400 basis points.10Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Pursue Strategic Acquisitions and Licensing to Build upon our Existing PlatformWe operate in highly fragmented markets in both our advanced delivery technologies and development solutions businesses. Within those markets, thefive top players represent only 30% and 10% of the total market share, respectively, by revenue. Our broad platform, global infrastructure and diversifiedcustomer base provide us with a strong foundation from which to consolidate within these markets and to generate operating leverage through suchacquisitions. Since fiscal 2012, we have executed nine transactions, investing more than $700 million, and have demonstrated an ability to efficiently andeffectively integrate these acquisitions.We intend to continue to opportunistically source and execute bolt-on acquisitions within our existing business areas, as well as to undertaketransactions that provide us with expansion opportunities within new geographic markets or adjacent market segments. We have a dedicated corporatedevelopment team in place to identify these opportunities and have a rigorous and financially disciplined process for evaluating, executing and integratingsuch acquisitions.Our Reportable SegmentsOur offerings and services are summarized below by reporting segment.SegmentOfferings and ServicesFiscal 2015Revenue* (Dollars in millions) Oral TechnologiesFormulation, development and manufacturing of prescription and consumer healthproducts using our proprietary softgel, Liqui-Gels, Vegicaps, OptiShell, OptiDose,OptiMelt, OptiPact, and Zydis technologies; as well as other proprietary and conventionaloral drug delivery technologies.$1,141.1Medication Delivery SolutionsFormulation, development, and manufacturing for prefilled syringes and other injectableformats; blow-fill-seal unit dose development and manufacturing, including ourADVASEPT technology; and biologic cell line development and manufacturing,including our GPEx and SMARTag technologies.$261.9Development & Clinical ServicesManufacturing, packaging, storage, distribution and inventory management for globalclinical trials of drugs and biologics; analytical and bioanalytical development andtesting; scientific consulting services; development services and manufacturing forconventional oral dose forms; and development and manufacturing of products.$438.8*Segment Revenue includes inter-segment revenue of $11.0 million.This table should be read in conjunction with Note 17 to the Consolidated Financial Statements.Oral TechnologiesOur Oral Technologies segment provides advanced oral delivery technologies, including formulation, development and manufacturing of oral doseforms for prescription and consumer health products across all phases of a molecule’s lifecycle. These oral dose forms include softgel, modified releasetechnologies (“MRT”) and immediate release solid oral products. At certain facilities we also provide integrated primary packaging services for the productswe manufacture. In fiscal 2015, we generated approximately $787.5 million in revenue from our softgel products and approximately $391.5 million inrevenue from our MRT products (including intra-segment revenue of approximately $37.9 million).Through our Softgel Technologies business, we provide formulation, development and manufacturing services for soft gelatin capsules, or “softgels,”which we first commercialized in the 1930s and have continually enhanced. We are the market leader in overall softgel manufacturing, and hold the leadingmarket position in the prescription arena. Our principal softgel technologies include traditional softgel capsules (in which the shell is made from animal-derived materials) and Vegicaps and OptiShell capsules (in which the shell is made from vegetable-derived materials), which are used in a broad range ofcustomer products including prescription drugs, over-the-counter medications, and vitamins and supplements. Softgel capsules encapsulate liquid, paste oroil-based active compounds in solution or suspension within an outer shell, filling and sealing the capsule simultaneously. We typically perform allencapsulation for a product within one of our softgel facilities, with active ingredients provided by customers or sourced directly by us. Softgels havehistorically been used to solve formulation challenges or technical issues for a specific drug, to help improve the clinical performance of compounds, toprovide important market differentiation, particularly for over-the-counter compounds, and to provide safe handling of hormonal, potent and cytotoxic drugs.We also participate in the softgel vitamin, mineral and supplement business in selected regions around the11Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents world. With the 2001 introduction of our vegetable-derived softgel shell, Vegicaps capsules, consumer health manufacturers have been able to extend thesoftgel dose form to a broader range of active ingredients and serve patient/consumer populations that were previously inaccessible due to religious, dietaryor cultural preferences. In recent years this platform has been extended to pharmaceutical active ingredients via the OptiShell platform. Our Vegicaps andOptiShell capsules are patent protected in most major global markets. Physician and patient studies we have conducted have demonstrated a preference forsoftgels versus traditional tablet and hard capsule dose forms in terms of ease of swallowing, real or perceived speed of delivery, ability to remove oreliminate unpleasant odor or taste and, for physicians, perceived improved patient adherence with dosing regimens.Through our Modified Release Technologies business we provide formulation, development and manufacturing services for fast-dissolve tablets andboth proprietary and conventional controlled release products. We launched our orally dissolving tablet business in 1986 with the introduction of Zydistablets, a unique oral dosage form that is freeze-dried in its package, can be swallowed without water, and typically dissolves in the mouth in less than threeseconds. Most often used for indications, drugs and patient groups that can benefit from rapid oral disintegration, the Zydis technology is utilized in a widerange of products and indications, including treatments for a variety of central nervous system-related conditions such as migraines, Parkinson’s Disease,schizophrenia, and pain relief and consumer healthcare products targeting allergy relief. Zydis tablets continue to be used in new ways by our customers aswe extend the application of the technology to new categories, such as for immunotherapies, vaccines and biologics delivery. More recently we have addedtwo new technology platforms to the Modified Release Technologies business portfolio, including the highly flexible OptiDose tab-in-tab technology,already commercially proven in Japan and the OptiMelt hot melt extrusion technology. We plan to continue to expand the development pipeline of customerproducts for all of our Modified Release Technologies products. Representative Oral Technologies business customers include Pfizer, Novartis,GlaxoSmithKline, Eli Lilly, Johnson & Johnson and Allergan.Medication Delivery SolutionsOur Medication Delivery Solutions segment provides formulation, development and manufacturing services for delivery of drugs and biologics,administered via injection, inhalation and ophthalmic routes, using both traditional and advanced technologies. Our range of injectable manufacturingofferings includes filling drugs or biologics into pre-filled syringes, with flexibility to accommodate other formats within our existing network, increasinglyfocused on complex pharmaceuticals and biologics. With our range of technologies we are able to meet a wide range of specifications, timelines and budgets.The complexity of the manufacturing process, the importance of experience and know-how, regulatory compliance, and high start-up capital requirementscreate significant barriers to entry and, as a result, limit the number of competitors in the market. For example, blow-fill-seal is an advanced aseptic processingtechnology which uses a continuous process to form, fill with drug, and seal a plastic container in a sterile environment. Blow-fill-seal units are currentlyused for a variety of pharmaceuticals in liquid form, such as respiratory, ophthalmic and otic products. We are a leader in the outsourced blow-fill-seal market,and operate one of the largest capacity commercial manufacturing blow-fill-seal facilities in the world. Our sterile blow-fill-seal manufacturing has significantcapacity and flexibility of manufacturing configurations. This business provides flexible and scalable solutions for unit-dose delivery of complexformulations such as suspensions and emulsions. Further, the business provides engineering and manufacturing solutions related to complex containers. Ourregulatory expertise can lead to decreased time to commercialization, and our dedicated development production lines support feasibility, stability andclinical runs. In fiscal 2015, we announced the completion and opening of a large-scale expansion at our Winchester, KY manufacturing facility, doubling itsfootprint to 180,000 square feet and substantially expanding its capacity to handle fluid bed and other complex manufacturing tasks in the business segment.We plan to continue to expand our product line in existing and new markets, and in higher margin specialty products with additional respiratory, ophthalmic,injectable and nasal applications. Representative customers include Pfizer, Sanofi-Aventis, Novartis, Roche and Teva.Our biologics offerings include our formulation development and cell-line manufacturing based on our advanced and patented GPEx technology,which is used to develop stable, high-yielding mammalian cell lines for both innovator and bio-similar biologic compounds. Our GPEx technology canprovide rapid cell line development, high biologics production yields, flexibility and versatility. We believe our development stage SMARTag next-generation antibody-drug conjugate technology will provide more precision targeting for delivery of drugs to tumors or other locations, with improved safetyversus existing technologies. In fiscal 2013, we launched our recently completed biologics facility in Madison, Wisconsin, with expanded capability andcapacity to produce clinical-scale biologic supplies; combined with offerings from our other businesses and external partners, we now provide the broadestrange of technologies and services supporting the development and launch of new biologic entities, biosimilars or biobetters to bring a product from gene tomarket commercialization, faster.12Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Development and Clinical ServicesOur Development and Clinical Services segment provides manufacturing, packaging, storage and inventory management for drugs and biologics inclinical trials. We offer customers flexible solutions for clinical supplies production, and provide distribution and inventory management support for bothsimple and complex clinical trials. This includes dose form manufacturing or over-encapsulation where needed; supplying placebos, comparator drugprocurement and clinical packages and kits for physicians and patients; inventory management; investigator kit ordering and fulfillment; and return supplyreconciliation and reporting. We support trials in all regions of the world through our facilities and distribution network. In fiscal 2013, we established ourfirst clinical supply services facility in China as a joint venture and assumed full ownership in fiscal 2015. We are the leading provider of integrateddevelopment solutions and one of the leading providers of clinical trial supplies and respiratory products.We also offer analytical chemical and cell-based testing and scientific services, stability testing, respiratory products formulation and manufacturing,regulatory consulting, and bioanalytical testing for biologic products. Our respiratory product capabilities include development and manufacturing servicesfor inhaled products for delivery via metered dose inhalers, dry powder inhalers and intra-nasal sprays. We also provide formulation development and clinicaland commercial manufacturing for conventional and specialty oral dose forms. We provide global regulatory and clinical support services for our customers’regulatory and clinical strategies during all stages of development. Demand for our offerings is driven by the need for scientific expertise and depth andbreadth of services offered, as well as by the reliable supply thereof, including quality, execution and performance. We acquired Micron Technologies inNovember 2014, extending our particle engineering capabilities.Development and Product Supply Chain SolutionsIn addition to our proprietary offerings, we are also differentiated in the market by our ability to bring together our development solutions andadvanced delivery technologies to offer innovative development and product supply solutions which can be combined or tailored in many ways to enableour customers to take their drugs, biologics and consumer health products from laboratory to market. Once a product is on the market, we can providecomprehensive integrated product supply, from the sourcing of the bulk active ingredient to comprehensive manufacturing and packaging to the testingrequired for release to distribution. Customer solutions we develop are flexible, scalable and creative, so that they meet the unique needs of both large andemerging companies, and for products of all sizes. We believe that our development and product supply solutions will continue to contribute to our futuregrowth.Sales and MarketingOur target customers include large pharmaceutical and biotechnology companies, mid-size, emerging and specialty pharmaceutical and biotechnologycompanies, and consumer health companies, along with companies in other selected healthcare market segments such as animal health and medical devicesand companies in adjacent industries, such as cosmetics. We have longstanding, extensive relationships with leading pharmaceutical and biotechnologycustomers. In fiscal 2015, we did business with 82 of the top 100 branded drug marketers, 19 of the top 20 generics marketers, 40 of the top 50 biologicsmarketers, and 23 of the top 25 consumer health marketers globally, as well as with nearly 1,000 other customers. Faced with access, pricing andreimbursement pressures as well as other market challenges, large pharmaceutical and biotechnology companies have increasingly sought partners toenhance the clinical competitiveness of their drugs and biologics and improve the productivity of their research and development activities, while reducingtheir fixed cost base. Many mid-size, emerging and specialty pharmaceutical and biotechnology companies, while facing the same pricing and marketpressures, have chosen not to build a full infrastructure, but rather to partner with other companies through licensing agreements or outsourcing to access thecritical skills, technologies and services required to bring their products to market. Consumer health companies require rapidly developed, innovative doseforms and formulations to keep up in the fast-paced over-the-counter medication and vitamins markets. These market segments are all critically important toour growth, but require distinct solutions, marketing and sales approaches, and market strategy.We follow a hybrid demand generation organization model, with global and growth account teams offering the full breadth of Catalent’s solutions toselected accounts, and technical specialist teams providing the in-depth technical knowledge and practical experience essential for each individual offering.All business development and field sales representatives ultimately report to a single sales head, and significant ongoing investments are made to enhancetheir skills and capabilities. Our sales organization currently consists of more than 150 full-time, experienced sales professionals, supported by inside salesand sales operations. We also have built a dedicated strategic marketing team, providing strategic market and product planning and management for ourofferings. As part of our marketing efforts, we participate in major trade shows relevant to the offerings globally and ensure adequate visibility to ourofferings and solutions through a comprehensive print and on-line advertising and publicity program. We believe that Catalent is a strong brand with highoverall awareness in our established markets and target customers, and that our brand identity has become a competitive advantage for us.13Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Global AccountsWe manage selected accounts globally due to their substantial current business and growth potential by establishing strategic plans, goals and targets.We recorded approximately 32% of our total revenue in fiscal 2015 from these global accounts. Each global account is assigned a dedicated businessdevelopment professional with substantial industry experience. These account leaders, along with the leadership of the sales and marketing functionmembers of the executive leadership team, are responsible for managing and extending the overall account relationship. Growing sales, profitability, andincreasing account penetration are key goals and are directly linked to compensation. Account leaders also work closely with the rest of the salesorganization to ensure alignment around critical priorities for the accounts.Emerging, Specialty and Virtual AccountsEmerging, specialty and virtual pharmaceutical and biotechnology companies are expected to be critical drivers of industry growth globally.Historically, many of these companies have chosen not to build a full infrastructure, but rather partner with other companies to produce their products. Weexpect them to continue to do so in the future, providing a critical source for future integrated solutions demand. We expect to continue to increase ourpenetration of geographic clusters of emerging companies in North America, Europe, South America and Asia. We regularly use active pipeline and productscreening and customer targeting to identify the optimal candidates for partnering based on product profiles, funding status, and relationships, to ensure thatour technical sales specialists and field sales representatives develop custom solutions designed to address the specific needs of customers in the market.Contractual ArrangementsWe generally enter into a broad range of contractual arrangements with our customers, including agreements with respect to feasibility, development,supply, licenses, and quality. The terms of these contracts vary significantly depending on the offering and customer requirements. Some of our agreementsmay include a variety of revenue arrangements such as fee-for-service, royalties, profit-sharing and fixed fees. We generally secure pricing and contractmechanisms in our supply agreements that allow for periodic resetting of pricing terms and, in some cases, these agreements provide for our ability torenegotiate pricing in the event of certain price increases for the raw materials utilized in the products we make. Our typical supply agreements includeindemnification from our customers for product liability and intellectual property matters and caps on our contractual liabilities, subject in each case tonegotiated exclusions. In addition, our manufacturing supply agreement terms range from three to ten years with regular renewals of one to three years,although some of our agreements are terminable upon much shorter notice periods, such as 30 or 90 days. For our development solutions offerings, we mayenter into master service agreements, which provide for standardized terms and conditions and make it easier and faster for customers with multipledevelopment needs to access our offerings.BacklogWhile we generally have long-term supply agreements that provide for a revenue stream over a period of years, our backlog represents, as of a point intime, future service revenues from work not yet completed. For our Oral Technologies and Medication Delivery Solutions segments, backlog represents firmorders for manufacturing services and includes minimum volumes, where applicable. For our Development and Clinical Services segment, backlog representsestimated future service revenues from work not yet completed under signed contracts. Using these methods of reporting backlog, as of June 30, 2015, ourbacklog was approximately $827.6 million, as compared to approximately $782.1 million as of June 30, 2014, including approximately $417.7 million and$373.8 million, respectively, related to our Development and Clinical Services segment. We expect to recognize approximately 77% of revenue from thebacklog in existence as of June 30, 2015 by the completion of the fiscal year ending June 30, 2016.To the extent projects are delayed, the timing of our revenue could be affected. If a customer cancels an order, we may be reimbursed for the costs wehave incurred. For orders that are placed inside a contractual firm period, we generally have a contractual right to payment in the event of cancellation.Fluctuations in our reported backlog levels also result from the timing and order pattern of our customers who often seek to manage their level of inventoryon hand. Because of customer ordering patterns, our backlog reported for certain periods may fluctuate and may not be indicative of future results.Manufacturing CapabilitiesWe operate manufacturing facilities, development centers and sales offices throughout the world. We have thirty-one facilities on five continents with5.1 million square feet of manufacturing, lab and related space. Our manufacturing capabilities include the full suite of competencies relevant to support eachsite’s activities, including regulatory, quality assurance and in-house validation.14Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We operate our plants in accordance with cGMP. More than half of our facilities are registered with the FDA, with the remaining facilities beingregistered with other applicable regulatory agencies, such as the EMA. In some cases certain facilities are registered with multiple regulatory agencies.We have invested approximately $385.9 million of cash outflows in our manufacturing facilities since fiscal 2013 through improvements andexpansions in our facilities, including approximately $141.0 million on capital expenditures in fiscal 2015. We believe that our facilities and equipment arein good condition, are well maintained and are able to operate at or above present levels for the foreseeable future, in all material respects.Our manufacturing operations are focused on employee health and safety, regulatory compliance, operational excellence, continuous improvement,and process standardization across the organization. In fiscal 2015, we achieved approximately 98% on-time shipment delivery versus customer request dateacross our network as a result of this focus. Our manufacturing operations are structured around an enterprise management philosophy and methodology thatutilizes principles and tools common to a number of quality management programs, including Six Sigma and Lean Manufacturing.Raw MaterialsWe use a broad and diverse range of raw materials in the design, development and manufacture of our products. This includes, but is not limited to, keymaterials such as gelatin, starch, and iota carrageenan for the Oral Technologies segment; packaging films for our Development & Clinical Services segment,and resin for our blow-fill-seal business in our Medication Delivery Solutions segment. The raw materials that we use are sourced externally on a global basis.Globally, our supplier relationships could be interrupted due to natural disasters and international supply disruptions, including those caused by pandemics,geopolitical and other issues. For example, the supply of gelatin is obtained from a limited number of sources. In addition, much of the gelatin we use isbovine-derived. Past concerns of contamination from Bovine Spongiform Encephalopathy (“BSE”) have narrowed the number of possible sources ofparticular types of gelatin. If there were a future disruption in the supply of gelatin from any one or more key suppliers, there can be no assurance that wecould obtain an alternative supply from our other suppliers. If future restrictions were to emerge on the use of bovine-derived gelatin from certain geographicsources due to concerns of contamination from BSE, any such restriction could hinder our ability to timely supply our customers with products and the use ofalternative non-bovine-derived gelatin for specific customer products could be subject to lengthy formulation, testing and regulatory approval.We work very closely with our suppliers to assure continuity of supply while maintaining excellence in material quality and reliability, and we have anactive and effective supplier audit program. We continually evaluate alternate sources of supply, although we do not frequently pursue regulatoryqualification of alternative sources for key raw materials due to the strength of our existing supplier relationships, the reliability of our current supplier baseand the time and expense associated with the regulatory process. Although a change in suppliers could require significant effort or investment by us incircumstances where the items supplied are integral to the performance of our products or incorporate specialized material such as gelatin, we do not believethat the loss of any existing supply arrangement would have a material adverse effect on our business. See “Risk Factors-Risks Relating to Our Business andIndustry-Our future results of operations are subject to fluctuations in the costs, availability, and suitability of the components of the products wemanufacture, including active pharmaceutical ingredients, excipients, purchased components, and raw materials.”CompetitionWe compete on several fronts both domestically and internationally, including with other companies that offer advanced delivery technologies ordevelopment services to pharmaceutical, biotechnology and consumer health companies based in North America, South America, Europe and the Asia-Pacific region. We also may compete with the internal operations of those pharmaceutical, biotechnology and consumer health manufacturers that choose tosource these services internally, where possible.Competition is driven by proprietary technologies and know-how (where relevant), consistency of operational performance, quality, price, value andspeed. While we do have competitors who compete with us in our individual offerings, we do not believe we have competition from any directly comparablecompanies.Research and Development CostsOur research activities are primarily directed toward the development of new offerings and manufacturing process improvements. Costs incurred inconnection with the development of new offerings and manufacturing process improvements are recorded within selling, general, and administrativeexpenses. Such research and development costs included in selling,15Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.general, and administrative expenses amounted to $12.2 million, $17.5 million and $14.5 million for the fiscal years ended June 30, 2015, June 30, 2014 andJune 30, 2013, respectively. Costs incurred in connection with research and development services we provide to customers and services performed in supportof the commercial manufacturing process for customers are recorded within cost of sales. Such research and development costs included in cost of salesamounted to $41.3 million, $34.0 million and $35.0 million for the fiscal years ended June 30, 2015, June 30, 2014 and June 30, 2013, respectively.EmployeesAs of June 30, 2015, we had approximately 8,700 employees in thirty-one facilities on five continents: ten facilities are in the United States, withcertain employees at one facility being represented by a labor organization with their terms and conditions of employment being subject to a collectivebargaining agreement. National works councils and/or labor organizations are active at all twelve of our European facilities consistent with laborenvironments/laws in European countries. Similar relationships with labor organizations or national works councils exist in our plants in Argentina, Brazil,and Australia. Our management believes that our employee relations are satisfactory. North AmericaEuropeSouth AmericaAsia PacificTotalApproximate Number of Employees3,6003,5009007008,700Intellectual PropertyWe rely on a combination of know-how, trade secrets, patents, copyrights and trademarks and other intellectual property laws, nondisclosure and othercontractual provisions and technical measures to protect a number of our offerings, services and intangible assets. These proprietary rights are important toour ongoing operations. Certain of our operations and products are under intellectual property licenses from third parties, and in certain instances we licenseour technology to third parties. We also have a long track record of innovation across our lines of business and, to further encourage active innovation, wehave developed incentive compensation systems linked to patent filings and other recognition and reward programs for scientists and non-scientists alike.We have applied in the United States and certain foreign countries for registration of a number of trademarks, service marks and patents, some of whichhave been registered and issued, and also hold common law rights in various trademarks and service marks. We hold approximately 1,300 patents and patentapplications worldwide in advanced drug delivery and biologics formulations and technologies, and manufacturing and other areas.We hold patents and license rights relating to certain aspects of our formulations, nutritional and pharmaceutical dosage forms, mammalian cellengineering, and sterile manufacturing services. We also hold patents relating to certain processes and products. We have a number of pending patentapplications in the United States and certain foreign countries, and intend to pursue additional patents as appropriate. We have enforced and will continue toenforce our intellectual property rights in the United States and worldwide.We do not consider any particular patent, trademark, license, franchise or concession to be material to our overall business.Regulatory MattersThe manufacture, distribution and marketing of the healthcare products of our customers are subject to extensive ongoing regulation by the FDA, otherUnited States (“U.S.”) governmental authorities and foreign regulatory authorities. Certain of our subsidiaries are required to register for permits and/orlicenses with, and must comply with the operating and security standards of, the Drug Enforcement Agency (the “DEA”), the FDA, the Department of Healthand Human Services (the “DHHS”), the European Union (the “EU”) member states and various state boards of pharmacy, state health departments and/orcomparable state agencies as well as foreign agencies, and certain accrediting bodies depending upon the type of operations and location of productdistribution, manufacturing and sale.In addition, certain of our subsidiaries are subject to the United States Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, theControlled Substances Act and comparable state and foreign regulations in certain of their activities.16Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Laws regulating the manufacture and distribution of healthcare products also exist in most other countries where our subsidiaries conduct business. Inaddition our international manufacturing operations are subject to local certification requirements, and must comply with domestic and/or foreign goodmanufacturing practices and quality system regulations established by the FDA and/or applicable foreign regulatory authorities.We are also subject to various federal, state, local, foreign and transnational laws, regulations and recommendations, both in the United States andabroad, relating to safe working conditions, laboratory and manufacturing practices and the use, transportation and disposal of hazardous or potentiallyhazardous substances. In addition, U.S. and international import and export laws and regulations require us to abide by certain standards relating to the cross-border transit of finished goods, raw materials and supplies and the handling of information. We are also subject to various other laws and regulationsconcerning the conduct of our foreign operations, including the U.S. Foreign Corrupt Practices Act, the U.K. Anti-Bribery Act and other anti-bribery laws andlaws pertaining to the accuracy of our internal books and records.The costs associated with complying with the various applicable federal regulations, as well as state, local, foreign and transnational regulations, couldbe significant and the failure to comply with such legal requirements could have an adverse effect on our results of operations and financial condition. See“Risk Factors-Risks Relating to Failure to comply with existing and future regulatory requirements could adversely affect our results of operations andfinancial condition,” for additional discussion of the costs associated with complying with the various regulations.In fiscal 2015, we underwent 65 regulatory audits and, over the last five fiscal years, we successfully completed more than 250 regulatory audits, withmore than 50% resulting in no reported observations.Quality AssuranceWe are committed to ensuring and maintaining the highest standard of regulatory compliance while providing high quality products to our customers.To meet these commitments, we have developed and implemented a Catalent-wide quality management system throughout the organization. We have morethan 1,100 employees around the globe focusing on quality and regulatory compliance. Our senior management team is actively involved in setting qualitypolicies, standards and internal position papers as well as managing internal and external quality performance. Our quality assurance department providesquality leadership and supervises our quality systems programs. An internal audit program monitors compliance with applicable regulations, standards andinternal policies. In addition, our facilities are subject to periodic inspection by the FDA and other equivalent local, state and foreign regulatory authoritiesand customers. All FDA, DEA and other regulatory inspectional observations have been resolved or are on track to be completed at the prescribed timeframeprovided in response to the agency. We believe that our operations are in compliance in all material respects with the regulations under which our facilitiesare governed.Environmental MattersOur operations are subject to a variety of environmental, health and safety laws and regulations, including those of the U.S. Environmental ProtectionAgency (the “EPA”) and equivalent state, local and foreign regulatory agencies in each of the jurisdictions in which we operate. These laws and regulationsgovern, among other things, air emissions, wastewater discharges, the use, handling and disposal of hazardous substances and wastes, soil and groundwatercontamination and employee health and safety. Our manufacturing facilities use, in varying degrees, hazardous substances in their processes. Thesesubstances include, among others, chlorinated solvents, and in the past chlorinated solvents were used at one or more of our facilities, including a number weno longer own or operate. As at our current facilities, contamination at such formerly owned or operated properties can result and has resulted in liability tous, for which we have recorded appropriate reserves as needed. We believe that our operations are in compliance in all material respects with the environment,health and safety regulations applicable to our facilities.Available InformationWe file annual, quarterly and special reports and other information with the SEC. Our filings with the SEC are available to the public on the SEC’swebsite at www.sec.gov. Those filings are also available to the public on, or accessible through, our website for free via the “Investors” section atwww.catalent.com.The information we file with the SEC or contained on or accessible through our corporate website or any other website that we may maintain is notincorporated by reference and is not part of this Annual Report on Form 10-K. You may also read and copy, at SEC prescribed rates, any document we filewith the SEC at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington D.C. 20549. You can call the SEC at 1-800-SEC-0330 to obtaininformation on the operation of the Public Reference Room.17Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 1A.RISK FACTORSIf any of the following risks actually occur, our business, financial condition, operating results or cash flow could be materially and adverselyaffected. Additional risks or uncertainties not presently known to us, or that we currently believe are immaterial, may also impair our business operations.Risks Relating to Our Business and IndustryWe participate in a highly competitive market and increased competition may adversely affect our business.We operate in a market that is highly competitive. We compete on several fronts, both domestically and internationally, including competing withother companies that provide similar offerings to pharmaceutical, biotechnology and consumer health companies based in North America, Latin America,Europe and the Asia-Pacific region. We also may compete with the internal operations of those pharmaceutical, biotechnology and consumer healthmanufacturers that choose to source these offerings internally, where possible.We face material competition in each of our markets. Competition is driven by proprietary technologies and know-how, capabilities, consistency ofoperational performance, quality, price, value and speed. Some competitors may have greater financial, research and development, operational and marketingresources than we do. Competition may also increase as additional companies enter our markets or use their existing resources to compete directly with ours.Expanded competition from companies in low-cost jurisdictions, such as India and China, may in the future adversely affect our results of operations or limitour growth. Greater financial, research and development, operational and marketing resources may allow our competitors to respond more quickly with new,alternative or emerging technologies. Changes in the nature or extent of our customer requirements may render our offerings obsolete or non-competitive andcould adversely affect our results of operations and financial condition.The demand for our offerings depends in part on our customers’ research and development and the clinical and market success of their products. Ourbusiness, financial condition and results of operations may be harmed if our customers spend less on, or are less successful in, these activities.Our customers are engaged in research, development, production and marketing of pharmaceutical, biotechnology and consumer health products. Theamount of customer spending on research, development, production and marketing, as well as the outcomes of such research, development, and marketingactivities, have a large impact on our sales and profitability, particularly the amount our customers choose to spend on our offerings. Our customers determinethe amounts that they will spend based upon, among other things, available resources and their need to develop new products, which, in turn, is dependentupon a number of factors, including their competitors’ research, development and production initiatives, and the anticipated market uptake, clinical andreimbursement scenarios for specific products and therapeutic areas. In addition, consolidation in the industries in which our customers operate may have animpact on such spending as customers integrate acquired operations, including research and development departments and their budgets. Our customersfinance their research and development spending from private and public sources. A reduction in spending by our customers could have a material adverseeffect on our business, financial condition and results of operations. If our customers are not successful in attaining or retaining product sales due to marketconditions, reimbursement issues or other factors, our results of operations may be materially adversely affected.We are subject to product and other liability risks that could adversely affect our results of operations, financial condition, liquidity and cash flows.We are subject to potentially significant product liability and other liability risks that are inherent in the design, development, manufacture andmarketing of our offerings. We may be named as a defendant in product liability lawsuits, which may allege that our offerings have resulted or could result inan unsafe condition or injury to consumers. Such lawsuits could be costly to defend and could result in reduced sales, significant liabilities and diversion ofmanagement’s time, attention and resources. Even claims without merit could subject us to adverse publicity and require us to incur significant legal fees.Furthermore, product liability claims and lawsuits, regardless of their ultimate outcome, could have a material adverse effect on our business operations,financial condition and reputation and on our ability to attract and retain customers. We have historically sought to manage this risk through thecombination of product liability insurance and contractual indemnities and liability limitations in our agreements with customers and vendors. Theavailability of product liability insurance for companies in the pharmaceutical industry is generally more limited than insurance available to companies inother industries. Insurance carriers providing product liability insurance to those in the pharmaceutical and biotechnology industries generally limit theamount of available policy limits, require larger self-insured retentions and exclude coverage for certain products and claims.18Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents We maintain product liability insurance with annual aggregate limits in excess of $25 million. There can be no assurance that a successful product liabilityclaim or other liability claim would be adequately covered by our applicable insurance policies or by any applicable contractual indemnity or liabilitylimitations.Failure to comply with existing and future regulatory requirements could adversely affect our results of operations and financial condition.The healthcare industry is highly regulated. We are subject to various local, state, federal, foreign and transnational laws and regulations, which includethe operating and security standards of the DEA, the FDA, various state boards of pharmacy, state health departments, the DHHS, the EU member states andother comparable agencies and, in the future, any changes to such laws and regulations could adversely affect us. In particular, we are subject to laws andregulations concerning good manufacturing practices and drug safety. Our subsidiaries may be required to register for permits and/or licenses with, and maybe required to comply with the laws and regulations of the DEA, the FDA, the DHHS, foreign agencies including the EMA, and other various state boards ofpharmacy, state health departments and/or comparable state agencies as well as certain accrediting bodies depending upon the type of operations andlocation of product distribution, manufacturing and sale.The manufacture, distribution and marketing of our offerings for use in our customers’ products are subject to extensive ongoing regulation by theFDA, the DEA, the EMA, and other equivalent local, state, federal and foreign regulatory authorities. Failure by us or by our customers to comply with therequirements of these regulatory authorities could result in warning letters, product recalls or seizures, monetary sanctions, injunctions to halt manufactureand distribution, restrictions on our operations, civil or criminal sanctions, or withdrawal of existing or denial of pending approvals, including those relatingto products or facilities. In addition, such a failure could expose us to contractual or product liability claims as well as contractual claims from our customers,including claims for reimbursement for lost or damaged active pharmaceutical ingredients, which cost could be significant.In addition, any new offering or product classified as a pharmaceutical product must undergo lengthy and rigorous clinical testing and other extensive,costly and time-consuming procedures mandated by the FDA, the EMA and other equivalent local, state, federal and foreign regulatory authorities. We or ourcustomers may elect to delay or cancel anticipated regulatory submissions for current or proposed new products for any number of reasons.Although we believe that we comply in all material respects with applicable laws and regulations, there can be no assurance that a regulatory agency ortribunal would not reach a different conclusion concerning the compliance of our operations with applicable laws and regulations. In addition, there can beno assurance that we will be able to maintain or renew existing permits, licenses or any other regulatory approvals or obtain, without significant delay, futurepermits, licenses or other approvals needed for the operation of our businesses. Any noncompliance by us with applicable laws and regulations or the failureto maintain, renew or obtain necessary permits and licenses could have an adverse effect on our results of operations and financial condition.Failure to provide quality offerings to our customers could have an adverse effect on our business and subject us to regulatory actions and costlylitigation.Our results depend on our ability to execute and improve when necessary our quality management strategy and systems, and effectively train andmaintain our employee base with respect to quality management. Quality management plays an essential role in determining and meeting customerrequirements, preventing defects and improving our offerings. While we have a network of quality systems throughout our business units and facilities thatrelate to the design, formulation, development, manufacturing, packaging, sterilization, handling, distribution and labeling of our customers’ products whichuse our offerings, quality and safety issues may occur with respect to any of our offerings. A quality or safety issue could have an adverse effect on ourbusiness, financial condition and results of operations and may subject us to regulatory actions, including product recalls, product seizures, injunctions tohalt manufacture or distribution, restrictions on our operations, or civil sanctions, including monetary sanctions and criminal actions. In addition, such anissue could subject us to costly litigation, including claims from our customers for reimbursement for the cost of lost or damaged active pharmaceuticalingredients, the cost of which could be significant.The services and offerings we provide are highly exacting and complex, and if we encounter problems providing the services or support required, ourbusiness could suffer.The offerings we provide are highly exacting and complex, particularly in our Medication Delivery Solutions segment, due in part to strict regulatoryrequirements. From time to time, problems may arise in connection with facility operations or during preparation or provision of an offering, in both cases fora variety of reasons including, but not limited to, equipment19Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents malfunction, sterility variances or failures, failure to follow specific protocols and procedures, problems with raw materials, environmental factors anddamage to, or loss of, manufacturing operations due to fire, flood or similar causes. Such problems could affect production of a particular batch or series ofbatches, requiring the destruction of product, or could halt facility production altogether. This could, among other things, lead to increased costs, lostrevenue, damage to customer relations, reimbursement to customers for lost active pharmaceutical ingredients, time and expense spent investigating thecause and, depending on the cause, similar losses with respect to other batches or products. Production problems in our drug and biologic manufacturingoperations could be particularly significant because the cost of raw materials is often higher than in our other businesses. If problems are not discoveredbefore the product is released to the market, recall and product liability costs may also be incurred. In addition, such risks may be greater at facilities that arenew or going through significant expansion or renovation.Our global operations are subject to a number of economic, political and regulatory risks.We conduct our operations in various regions of the world, including North America, South America, Europe and the Asia-Pacific region. Globaleconomic and regulatory developments affect businesses such as ours in many ways. Our operations are subject to the effects of global competition,including potential competition from manufacturers in low-cost jurisdictions such as India and China. Local jurisdiction risks include regulatory risks arisingfrom local laws. Our global operations are also affected by local economic environments, including inflation and recession. Political changes, some of whichmay be disruptive, can interfere with our supply chain and customers and some or all of our activities in a particular location. While some of these risks canbe hedged using derivatives or other financial instruments and some are insurable, such attempts to mitigate these risks are costly and not always successful.Also, fluctuations in foreign currency exchange rates can adversely affect our consolidated financial results.If we do not enhance our existing or introduce new technology or service offerings in a timely manner, our offerings may become obsolete over time,customers may not buy our offerings and our revenue and profitability may decline.The healthcare industry is characterized by rapid technological change. Demand for our offerings may change in ways we may not anticipate because ofsuch evolving industry standards as well as a result of evolving customer needs that are increasingly sophisticated and varied and the introduction by othersof new offerings and technologies that provide alternatives to our offerings. Several of our higher margin offerings are based on proprietary technologies. Thepatents for these technologies will ultimately expire, and these offerings may become subject to competition. Without the timely introduction of enhanced ornew offerings, our offerings may become obsolete over time, in which case our revenue and operating results would suffer. For example, if we are unable torespond to changes in the nature or extent of the technological or other needs of our pharmaceutical customers through enhancing our offerings, ourcompetition may develop offering portfolios that are more competitive than ours and we could find it more difficult to renew or expand existing agreementsor obtain new agreements. Innovations directed at continuing to offer enhanced or new offerings generally will require a substantial investment before we candetermine their commercial viability, and we may not have the financial resources necessary to fund these innovations.The success of enhanced or new offerings will depend on several factors, including our ability to:•properly anticipate and satisfy customer needs, including increasing demand for lower cost products;•enhance, innovate, develop and manufacture new offerings in an economical and timely manner;•differentiate our offerings from competitors’ offerings;•achieve positive clinical outcomes for our customers’ new products;•meet safety requirements and other regulatory requirements of governmental agencies;•obtain valid and enforceable intellectual property rights; and•avoid infringing the proprietary rights of third parties.Even if we succeed in creating enhanced or new offerings from these innovations, they may still fail to result in commercially successful offerings ormay not produce revenue in excess of the costs of development, and they may be quickly rendered obsolete by changing customer preferences or theintroduction by our competitors of offerings embodying new technologies or features. Finally, innovations may not be accepted quickly in the marketplacebecause of, among other things, entrenched patterns of clinical practice, the need for regulatory clearance and uncertainty over market access or governmentor third-party reimbursement.20Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents We and our customers depend on patents, copyrights, trademarks, trade secrets and other forms of intellectual property protections, but, theseprotections may not be adequate.We rely on a combination of know-how, trade secrets, patents, copyrights and trademarks and other intellectual property laws, nondisclosure and othercontractual provisions and technical measures to protect a number of our offerings and intangible assets. These proprietary rights are important to ourongoing operations. There can be no assurance that these protections will prove meaningful against competitive offerings or otherwise be commerciallyvaluable or that we will be successful in obtaining additional intellectual property or enforcing our intellectual property rights against unauthorized users.Our exclusive rights under certain of our offerings are protected by patents, some of which will expire in the near term. When patents covering an offeringexpire, loss of exclusivity may occur and this may force us to compete with third parties, thereby affecting our revenue and profitability. We do not currentlyexpect any material loss of revenue to occur as a result of the expiration of any Catalent patent.Our proprietary rights may be invalidated, circumvented or challenged. We have in the past been subject to patent oppositions before the EuropeanPatent Office and we may in the future be subject to patent oppositions in Europe or other jurisdictions in which we hold patent rights. In addition, in thefuture, we may need to take legal actions to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of theproprietary rights of others. The outcome of any such legal action may be unfavorable to us.These legal actions regardless of outcome might result in substantial costs and diversion of resources and management attention. Although we usereasonable efforts to protect our proprietary and confidential information, there can be no assurance that our confidentiality and non-disclosure agreementswill not be breached, our trade secrets will not otherwise become known by competitors or that we will have adequate remedies in the event of unauthorizeduse or disclosure of proprietary information. Even if the validity and enforceability of our intellectual property is upheld, a court might construe ourintellectual property not to cover the alleged infringement. In addition, intellectual property enforcement may be unavailable in some foreign countries.There can be no assurance that our competitors will not independently develop technologies that are substantially equivalent or superior to our technologyor that third parties will not design around our patent claims to produce competitive offerings. The use of our technology or similar technology by otherscould reduce or eliminate any competitive advantage we have developed, cause us to lose sales or otherwise harm our business.We have applied in the United States and certain foreign countries for registration of a number of trademarks, service marks and patents, some of whichhave been registered or issued, and also claim common law rights in various trademarks and service marks. In the past, third parties have opposed ourapplications to register intellectual property and there can be no assurance that they will not do so in the future. It is possible that in some cases we may beunable to obtain the registrations for trademarks, service marks and patents for which we have applied and a failure to obtain trademark and patentregistrations in the United States or other countries could limit our ability to protect our trademarks and proprietary technologies and impede our marketingefforts in those jurisdictions.Our use of certain intellectual property rights is also subject to license agreements with third parties for certain patents, software and informationtechnology systems and proprietary technologies. If these license agreements were terminated for any reason, it could result in the loss of our rights to thisintellectual property, our operations may be materially adversely affected and we may be unable to commercialize certain offerings.In addition, many of our branded pharmaceutical customers rely on patents to protect their products from generic competition. Because incentives existin some countries, including the United States, for generic pharmaceutical companies to challenge these patents, pharmaceutical and biotechnologycompanies are under the ongoing threat of a challenge to their patents. If our customers’ patents were successfully challenged and as a result subjected togeneric competition, the market for our customers’ products could be significantly adversely affected, which could have an adverse effect on our results ofoperations and financial condition.Our future results of operations are subject to fluctuations in the costs, availability, and suitability of the components of the products wemanufacture, including active pharmaceutical ingredients, excipients, purchased components, and raw materials.We depend on various active pharmaceutical ingredients, components, compounds, raw materials, and energy supplied primarily by others for ourofferings. This includes, but is not limited to, gelatin, starch, iota carrageenan, petroleum-based products and resin. Also, our customers frequently providetheir active pharmaceutical or biologic ingredient for formulation or incorporation in the finished product. It is possible that any of our customer supplierrelationships could be interrupted due to21Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents natural disasters, international supply disruptions caused by pandemics, geopolitical issues and other events, or could be terminated in the future.For example, gelatin is a key component in our Oral Technologies segment. Gelatin is available from only a limited number of sources. In addition,much of the gelatin we use is bovine-derived. Past concerns of contamination from BSE have narrowed the number of possible sources of particular types ofgelatin. If there were a future disruption in the supply of gelatin from any one or more key suppliers, we may not be able to obtain an adequate alternativesupply from our other suppliers. If future restrictions were to emerge on the use of bovine-derived gelatin due to concerns of contamination from BSE, anysuch restriction could hinder our ability to timely supply our customers with products and the use of alternative non-bovine-derived gelatin could be subjectto lengthy formulation, testing and regulatory approval.Any sustained interruption in our receipt of adequate supplies could have an adverse effect on us. In addition, while we have processes intended toreduce volatility in component and material pricing, we may not be able to successfully manage price fluctuations and future price fluctuations or shortagesmay have an adverse effect on our results of operations.Changes in market access or healthcare reimbursement for our customers’ products in the United States or internationally could adversely affect ourresults of operations and financial condition.The healthcare industry has changed significantly over time, and we expect the industry to continue to evolve. Some of these changes, such as ongoinghealthcare reform, adverse changes in governmental or private funding of healthcare products and services, legislation or regulations governing patientaccess to care and privacy, or the delivery, pricing or reimbursement approval of pharmaceuticals and healthcare services or mandated benefits, may causehealthcare industry participants to change the amount of our offerings they purchase or the price they are willing to pay for our offerings. Changes in thehealthcare industry’s pricing, selling, inventory, distribution or supply policies or practices could also significantly reduce our revenue and results ofoperations. In particular, volatility in individual product demand may result from changes in public or private payer reimbursement or coverage.Fluctuations in the exchange rate of the U.S. dollar and other foreign currencies could have a material adverse effect on our financial performanceand results of operations.As a company with many international operations, certain revenues, costs, assets and liabilities, including a portion of our senior secured creditfacilities, are denominated in currencies other than the U.S. dollar. As a result, changes in the exchange rates of these currencies or any other applicablecurrency to the U.S. dollar will affect our revenues, earnings and cash flows and could result in unrealized and realized exchange losses despite any efforts wemay undertake to manage or mitigate our exposure to foreign currency fluctuations.Tax legislation initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.We are a large multinational corporation with operations in the United States and international jurisdictions, including North America, South America,Europe and the Asia-Pacific region. As such, we are subject to the tax laws and regulations of the United States federal, state and local governments and ofmany international jurisdictions. From time to time, various legislative initiatives may be proposed that could adversely affect our tax positions. There can beno assurance that our effective tax rate or tax payments will not be adversely affected by these initiatives. In addition, United States federal, state and local, aswell as international tax laws and regulations are extremely complex and subject to varying interpretations. There can be no assurance that our tax positionswill not be challenged by relevant tax authorities or that we would be successful in any such challenge.22Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.We have net operating loss carryforwards available to reduce future taxable income. Utilization of our net operating loss carryforwards may be subjectto a substantial limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and comparable provisions of state, local andforeign tax laws due to changes in ownership of our company that may occur in the future. Under Section 382 of the Code and comparable provisions of state,local and foreign tax laws, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change by value in its equityownership over a three-year period, the corporation’s ability to carryforward its pre-change net operating loss carryforwards to reduce its post-change incomemay be limited. We may experience ownership changes in the future as a result of future changes in our stock ownership. As a result, if we generate taxableincome in future years, our ability to use our pre-change net operating loss carryforwards to reduce U.S. federal and state taxable income may be subject tolimitations, which could result in increased future tax liability to us.We may be required to re-establish a full valuation allowance against our U.S. deferred tax assets in the future.We have deferred tax assets for net operating loss carryforwards and other temporary differences. We currently do not maintain a valuation allowance fora portion of our U.S. net deferred tax assets. We may experience, in the future, a decline in U.S. federal taxable income, resulting from a decline inprofitability of our U.S. operations, an increased level of debt in the U.S. or other factors. In assessing our ability to realize our U.S. deferred tax assets, we mayconclude that it is more likely than not that some portion or all of our U.S. deferred tax assets will not be realized. As a result, we may be required to record afull valuation allowance against our U.S. deferred tax assets, which could adversely impact our effective income tax rate.We are dependent on key personnel.We depend on senior executive officers and other key personnel, including our technical personnel, to operate and grow our business and to developnew enhancements, offerings and technologies. The loss of any of these officers or other key personnel combined with a failure to attract and retain suitablyskilled technical personnel could adversely affect our operations.In addition to our executive officers, we rely on approximately 150 senior employees to lead and direct the Company. Our senior leadership team(“SLT”) is comprised of our executive officers and other vice presidents and directors who hold critical positions and possess specialized talents andcapabilities that give us a competitive advantage in the market. The members of the SLT hold positions such as general manager of manufacturing, generalmanager of analytical and development laboratories, vice president/general manager of business unit commercial development, director of operations, andvice president of quality and regulatory activities.With respect to our technical talent, we have approximately 900 scientists and technicians whose areas of expertise and specialization cover subjectssuch as advanced delivery, drug and biologics formulation and manufacturing. Many of our sites and laboratories are located in competitive labor marketslike Morrisville, North Carolina; Brussels, Belgium; Woodstock, Illinois; Madison, Wisconsin; and Schorndorf, Germany. Global and regional competitorsand, in some cases, customers and suppliers, compete for the same skills and talent as we do.Risks generally associated with information and communications systems could adversely affect our results of operations.We rely on information systems in our business to obtain, rapidly process, analyze and manage data to:•facilitate the manufacture and distribution of thousands of inventory items to and from our facilities;•receive, process and ship orders on a timely basis;•manage the accurate billing and collections for thousands of customers;•manage the accurate accounting and payment for thousands of vendors; and•schedule and operate our global network of development, manufacturing and packaging facilities.Our results of operations could be adversely affected if these systems are interrupted, damaged by unforeseen events or fail for any extended period oftime, including due to the actions of third parties.23Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents We may in the future engage in acquisitions and other transactions that may complement or expand our business or divest of non-strategicbusinesses or assets. We may not be able to complete such transactions, and such transactions, if executed, pose significant risks and could have anegative effect on our operations.Our future success may be dependent on opportunities to buy other businesses or technologies and possibly enter into joint ventures that couldcomplement, enhance or expand our current business or offerings and services or that might otherwise offer us growth opportunities. We may facecompetition from other companies in pursuing acquisitions in the pharmaceutical and biotechnology industry. Our ability to acquire targets may also belimited by applicable antitrust laws and other regulations in the United States and other foreign jurisdictions in which we do business. To the extent that weare successful in making acquisitions, we may have to expend substantial amounts of cash, incur debt and assume loss-making divisions. We may not be ableto complete such transactions, for reasons including, but not limited to, a failure to secure financing. Any transactions that we are able to identify andcomplete may involve a number of risks, including the diversion of management’s attention to integrate the acquired businesses or joint ventures, thepossible adverse effects on our operating results during the integration process, the potential loss of customers or employees in connection with theacquisition, delays or reduction in realizing expected synergies, unexpected liabilities relating to a joint venture of acquired business and our potentialinability to achieve our intended objectives for the transaction. In addition, we may be unable to maintain uniform standards, controls, procedures andpolicies, and this may lead to operational inefficiencies.To the extent that we are not successful in completing divestitures, as such may be determined by future strategic plans and business performance, wemay have to expend substantial amounts of cash, incur debt and continue to absorb loss-making or under-performing divisions. Any divestitures that we areunable to complete may involve a number of risks, including diversion of management’s attention, a negative impact on our customer relationships, costsassociated with retaining the targeted divestiture, closing and disposing of the affected business or transferring business to other facilities.Our offerings and our customers’ products may infringe on the intellectual property rights of third parties.From time to time, third parties have asserted intellectual property infringement claims against us and our customers and there can be no assurance thatthird parties will not assert infringement claims against either us or our customers in the future. While we believe that our offerings do not infringe in anymaterial respect upon proprietary rights of other parties and/or that meritorious defenses would exist with respect to any assertions to the contrary, there canbe no assurance that we would not be found to infringe on the proprietary rights of others. Patent applications in the United States and some foreign countriesare generally not publicly disclosed until the patent is issued or published, and we may not be aware of currently filed patent applications that relate to ourofferings or processes. If patents later issue on these applications, we may be found liable for subsequent infringement. There has been substantial litigationin the pharmaceutical and biotechnology industries with respect to the manufacture, use and sale of products that are the subject of conflicting patent rights.Any claims that our offerings or processes infringe these rights (including claims arising through our contractual indemnification of our customers),regardless of their merit or resolution, could be costly and may divert the efforts and attention of our management and technical personnel. We may notprevail in such proceedings given the complex technical issues and inherent uncertainties in intellectual property litigation. If such proceedings result in anadverse outcome, we could, among other things, be required to:•pay substantial damages (potentially treble damages in the United States);•cease the manufacture, use or sale of the infringing offerings or processes;•discontinue the use of the infringing technology;•expend significant resources to develop non-infringing technology;•license technology from the third party claiming infringement, which license may not be available on commercially reasonable terms, or may notbe available at all; and•lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of ourintellectual property against others.In addition, our customers’ products may be subject to claims of intellectual property infringement and such claims could materially affect our businessif their products cease to be manufactured or they have to discontinue the use of the infringing technology.Any of the foregoing could affect our ability to compete or have a material adverse effect on our business, financial condition and results of operations.24Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents We are subject to environmental, health and safety laws and regulations, which could increase our costs and restrict our operations in the future.Our operations are subject to a variety of environmental, health and safety laws and regulations, including those of the EPA and the U.S. OccupationalSafety & Health Administration and equivalent local, state, and foreign regulatory agencies in each of the jurisdictions in which we operate. These laws andregulations govern, among other things, air emissions, wastewater discharges, the use, handling and disposal of hazardous substances and wastes, soil andgroundwater contamination and employee health and safety. Any failure by us to comply with environmental, health and safety requirements could result inthe limitation or suspension of production or subject us to monetary fines or civil or criminal sanctions, or other future liabilities in excess of our reserves. Weare also subject to laws and regulations governing the destruction and disposal of raw materials and non-compliant products, the handling of regulatedmaterial that are included in our offerings, and the disposal of our offerings at the end of their useful life. In addition, compliance with environmental, healthand safety requirements could restrict our ability to expand our facilities or require us to acquire costly pollution control equipment, incur other significantexpenses or modify our manufacturing processes. Our manufacturing facilities may use, in varying degrees, hazardous substances in their processes. Thesesubstances include, among others, chlorinated solvents, and in the past chlorinated solvents were used at one or more of our facilities, including a number weno longer own or operate. As at our current facilities, contamination at such formerly owned or operated properties can result and has resulted in liability tous. In the event of the discovery of new or previously unknown contamination either at our facilities or at third-party locations, including facilities weformerly owned or operated, the issuance of additional requirements with respect to existing contamination, or the imposition of other cleanup obligationsfor which we are responsible, we may be required to take additional, unplanned remedial measures for which no reserves have been recorded. We areconducting monitoring and cleanup of contamination at certain facilities currently or formerly owned or operated by us. We have established accountingreserves for certain contamination liabilities but cannot assure you that such liabilities will not exceed our reserves.We are subject to labor and employment laws and regulations, which could increase our costs and restrict our operations in the future.We employ approximately 8,700 employees worldwide, including approximately 3,600 employees in North America, 3,500 in Europe, 900 in SouthAmerica and 700 in the Asia/Pacific region. Certain employees at one of our North American facilities are represented by a labor organization, and nationalworks councils and/or labor organizations are active at all of our European facilities consistent with labor environments/laws in European countries. Similarrelationships with labor organizations or national works councils exist in our plants in Argentina, Brazil and Australia. Our management believes that ouremployee relations are satisfactory. However, further organizing activities or collective bargaining may increase our employment-related costs and we may besubject to work stoppages and other labor disruptions. Moreover, as employers are subject to various employment-related claims, such as individual and classactions relating to alleged employment discrimination, wage-hour and labor standards issues, such actions, if brought against us and successful in whole or inpart, may affect our ability to compete or have a material adverse effect on our business, financial condition and results of operations.Certain of our pension plans are underfunded, and additional cash contributions we may make will reduce the cash available for our business, suchas the payment of our interest expense.Certain of our current and former employees in the United States, United Kingdom, Germany, France, Japan and Australia are participants in definedbenefit pension plans that we sponsor. As of June 30, 2015, the underfunded amount of our pension plans on a worldwide basis was approximately $101.7million, primarily related to our fiscal 2012 plans in the United Kingdom and Germany. In addition, we have an estimated obligation of approximately $39.5million, as of June 30, 2015, related to our withdrawal from a multiemployer pension plan in which we participated, resulting in a total underfunded amountrelated to our pension plans of $141.2 million as of June 30, 2015. In general, the amount of future contributions to the underfunded plans will depend uponasset returns and a number of other factors and, as a result, the amount we may be required to contribute to such plans in the future may vary. Such cashcontributions to the plans will reduce the cash available for our business to pursue strategic growth initiatives or the payment of interest expense on the notesor our other indebtedness.25Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Risks Relating to Our IndebtednessOur substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes inthe economy or in our industry, expose us to interest-rate risk to the extent of our variable rate debt and prevent us from meeting our obligationsunder our indebtedness.We are highly leveraged. As of June 30, 2015, we had $1,826.8 million (dollar equivalent) of senior indebtedness; an additional $188.3 million of un-utilized capacity and $11.7 million of outstanding letters of credit under our revolving credit facility.Our high degree of leverage could have important consequences for us, including:•increasing our vulnerability to adverse economic, industry or competitive developments;•exposing us to the risk of increased interest rates because certain of our borrowings, including borrowings under our senior secured creditfacilities, are at variable rates of interest;•exposing us to the risk of fluctuations in exchange rates because certain of our borrowings, including certain of our senior secured term loanfacilities, are denominated in euros;•making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any ofour debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreementsgoverning such indebtedness;•restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;•limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements,acquisitions and general corporate or other purposes; and•limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantagecompared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverageprevents us from exploiting.Our total interest expense, net was $105.0 million, $163.1 million and $203.2 million for fiscal years 2015, 2014 and 2013, respectively. After takinginto consideration our ratio of fixed-to-floating rate debt, a 100 basis point increase in such rates would increase our annual interest expense byapproximately $0.6 million.Despite our high indebtedness level, we and our subsidiaries will still be able to incur significant additional amounts of debt, which could furtherexacerbate the risks associated with our substantial indebtedness.We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although the agreements governing our indebtednesscontain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions and,under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial.Our debt agreements contain restrictions that limit our flexibility in operating our business.The agreements governing our outstanding indebtedness contain various covenants that limit our ability to engage in specified types of transactions.These covenants limit the ability of our subsidiary, Catalent Pharma Solutions, Inc., and its restricted subsidiaries to, among other things:•incur additional indebtedness and issue certain preferred stock;•pay certain dividends on, repurchase or make distributions in respect of capital stock or make other restricted payments;•place limitations on distributions from restricted subsidiaries;•issue or sell capital stock of restricted subsidiaries;•guarantee certain indebtedness;•make certain investments;•sell or exchange assets;•enter into transactions with affiliates;26Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents •create certain liens; and•consolidate, merge or transfer all or substantially all of their assets and the assets of their subsidiaries on a consolidated basis.A breach of any of these covenants could result in a default under one or more of these agreements, including as a result of cross default provisions, and,in the case of our revolving credit facility, permit the lenders to cease making loans to us.We may utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable-rateindebtedness and we will be exposed to risks related to counterparty credit worthiness or non-performance of these instruments.We may enter into pay-fixed interest-rate swaps to limit our exposure to changes in variable interest rates. Such instruments may result in economiclosses should exchange rates decline to a point lower than our fixed-rate commitments. We will be exposed to credit-related losses that could adversely affectour results of operations in the event of fluctuations in the fair value of the interest-rate swaps due to a change in the credit worthiness or non-performance bythe counterparties to the interest-rate swaps.Risks Related to Ownership of Our Common StockOur stock price may change significantly, and you may not be able to resell shares of our common stock at or above the price you paid or at all, andyou could lose all or part of your investment as a result.The trading price of our common stock has been, and continues to be volatile. Since shares of our common stock were offered for sale in our initialpublic offering on July 31, 2014 through June 30, 2015, our common stock price ranged from $19.85 to $32.11. The trading price of our common stock maybe adversely affected due to a number of factors such as those listed in “Risks Related to Our Business and Our Industry” and the following:•results of operations that vary from the expectations of securities analysts and investors;•results of operations that vary from those of our competitors;•changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securitiesanalysts and investors;•declines in the market prices of stocks generally, or those of pharmaceutical or other healthcare companies;•strategic actions by us or our competitors;•announcements by us or our competitors of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures, otherstrategic relationships or capital commitments;•changes in general economic or market conditions or trends in our industry or markets;•changes in business or regulatory conditions;•future sales of our common stock or other securities;•investor perceptions or the investment opportunity associated with our common stock relative to other investment alternatives;•the public response to press releases or other public announcements by us or third parties, including our filings with the SEC;•announcements relating to litigation;•guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;•the development and sustainability of an active trading market for our stock;•changes in accounting principles; and•other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.27Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. Inaddition, price volatility may be greater if the public float and trading volume of our common stock is low, and the amount of public float on any given daycan vary depending on whether our stockholders choose to hold for the long term.In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securitieslitigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome ofsuch litigation.Because we have no plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unlessyou sell your common stock for a price greater than that which you paid for it.We currently intend to retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cashdividend for the foreseeable future. The declaration, amount and payment of any future dividend on shares of our common stock will be at the sole discretionof our board of directors. Our board of directors may take into account general and economic conditions, our financial condition and results of operations, ouravailable cash and current and anticipated cash needs, possible future favorable deployment of our cash, our future capital requirements, contractual, legal,tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us and such other factors asour board of directors may deem relevant. In addition, our ability to pay dividends is limited by covenants of our outstanding indebtedness and may belimited by covenants of any future indebtedness we or our subsidiaries incur. As a result, you may not receive any return on an investment in our commonstock unless you sell our common stock for a price greater than that which you paid for it.If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and tradingvolume could decline.The trading market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business.We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrade our stock or our industry, or change their viewsregarding the stock of any of our competitors or other healthcare sector companies, or publish inaccurate or unfavorable research about our business, the priceof our stock could decline. If one or more of these analysts ceases coverage of the Company or fails to publish reports on us regularly, we could lose visibilityin the market, which in turn could cause our stock price or trading volume to decline.Future sales, or the perception of future sales of common stock, by us or our existing stockholders could cause the market price for our commonstock to decline.The sale of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price ofshares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in thefuture at a time and at a price that we deem appropriate.As of September 1, 2015, 151,304 shares of our common stock, representing less than 1% of our total outstanding shares of common stock, are“restricted securities” within the meaning of Rule 144 of the Securities Act (“Rule 144”) and subject to certain restrictions on resale. Restricted securities maybe sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144.In addition, 1,242,291 shares of common stock will be eligible for sale upon exercise of vested options. A total of 6.7 million shares of common stockwas reserved for issuance under the 2014 Omnibus Incentive Plan, of which 4,335,548 shares of common stock remain available for future issuance atSeptember 1, 2015. These shares can be sold in the public market upon issuance, subject to restrictions under the securities laws applicable to resales byaffiliates.Pursuant to a registration rights agreement, certain holders of restricted shares, subject to certain conditions, may require us to register or otherwisefacilitate the sale under the Securities Act of their shares of common stock. Any exercise of their registration rights, or any sale by one or more of them of asubstantial number of shares, could cause the then-prevailing market price of our common stock to decline. The shares subject to the registration rightsagreement represent approximately 23.6% of our outstanding common stock.The market price of shares of our common stock could drop significantly if the holders of these shares sell them or are perceived by the market asintending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of shares of our common stockthat we wish to issue or other securities. In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares ofour common stock issued in connection with an investment or acquisition could constitute a material portion of then-outstanding shares of our commonstock. Any issuance of additional securities in connection with investments or acquisitions may result in dilution to you.28Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Anti-takeover provisions in our organizational documents could delay or prevent a change of control.Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may have an anti-takeover effect andmay delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in itsbest interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.These provisions provide for, among other things:•a classified board of directors with staggered three-year terms;•the ability of our board of directors to issue one or more series of preferred stock;•advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;•certain limitations on convening special stockholder meetings;•the removal of directors only for cause and only upon the affirmative vote of holders of at least 66 2/3% of the shares of common stock entitled tovote generally in the election of directors; and•that certain provisions may be amended only by the affirmative vote of at least 66 2/3% of the shares of common stock entitled to vote generally inthe election of directors.These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third-party’s offer may be considered beneficialby many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.Affiliates of Blackstone have substantial influence over us, and their interests may conflict with ours or yours in the future.Affiliates of Blackstone beneficially own approximately 21% of our common stock. As a result, investment funds associated with or designated byaffiliates of Blackstone have the ability to influence the election of the members of our board of directors and thereby affect our policies and operations,including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock,the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and amended and restated bylaws and theentering into of extraordinary transactions, and their interests may not in all cases be aligned with your interests. In addition, Blackstone may have an interestin pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involverisks to you.Blackstone is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that competedirectly or indirectly with us. For example, Blackstone has made investments in Biomet, Inc., Emcure Pharmaceuticals Ltd., Apria Healthcare Group Inc.,Nycomed Holding A/S, DJO Global LLC, Independent Clinical Services Ltd, Southern Cross Healthcare Group PLC, Stiefel Laboratories, Inc., Team HealthHoldings, Inc. and Vanguard Health Systems, Inc.Our amended and restated certificate of incorporation provides that none of Blackstone, any of its affiliates or any director who is not employed by us(including any non-employee director who serves as one of our officers in both his director and officer capacities) or his or her affiliates has any duty torefrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Blackstonealso may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be availableto us. So long as Blackstone continues to own a significant amount of our combined voting power, Blackstone will continue to be able to strongly influenceour decisions, and, so long as Blackstone and its affiliates collectively own at least 5% of all outstanding shares of our stock entitled to vote generally in theelection of directors, it will be able to appoint individuals to our board of directors under a stockholders agreement. The concentration of ownership coulddeprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of the Company and ultimately might affect the marketprice of our common stock.29Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 1B.UNRESOLVED STAFF COMMENTSNone.30Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 2.PROPERTIESOur principal executive offices are located at 14 Schoolhouse Road, Somerset, New Jersey. We also operate manufacturing operations, developmentcenters, and sales offices throughout the world. We have thirty-one facilities on five continents with approximately 5.1 million square feet of manufacturing,lab and related space. Our manufacturing capabilities encompass a full suite of competencies including regulatory, quality assurance and in-house validationat all of the production sites. The following table sets forth our manufacturing and laboratory facilities by area and region as of June 30, 2015: Facility Sites Country Region Segment Total SquareFootage Leased/Owned1Eberbach Germany Europe Oral Technologies 370,580 Leased2St. Petersburg, FL USA North America Oral Technologies 328,073 Owned3Somerset, NJ USA North America Oral Technologies 265,000 Owned4Buenos Aires Argentina South America Oral Technologies 265,000 Owned5Swindon United Kingdom Europe Oral Technologies 253,314 Owned6Haining China Asia Pacific Oral Technologies 219,930 Owned7Winchester, KY USA North America Oral Technologies 180,000 Owned8Schorndorf Germany Europe Oral Technologies 166,027 Owned9Braeside Australia Asia Pacific Oral Technologies 163,100 Owned10Sorocaba Brazil South America Oral Technologies 124,685 Owned11Kakegawa Japan Asia Pacific Oral Technologies 107,300 Owned12Aprilia Italy Europe Oral Technologies 92,010 Owned13Beinheim France Europe Oral Technologies 78,100 Owned14Dee Why Australia Asia Pacific Oral Technologies 59,836 Leased15Indaiatuba Brazil South America Oral Technologies 53,800 Owned16Woodstock, IL USA North America Medication Delivery Solutions 421,665 Owned17Brussels Belgium Europe Medication Delivery Solutions 302,961 Owned18Limoges France Europe Medication Delivery Solutions 179,000 Owned19Madison, WI USA North America Medication Delivery Solutions 102,723 Leased20Emeryville, CA USA North America Medication Delivery Solutions 6,418 Leased21Kansas City, MO USA North America Development & Clinical Services 410,000 Owned22Philadelphia, PA USA North America Development & Clinical Services 206,878 Leased/Owned23Bathgate United Kingdom Europe Development & Clinical Services 191,000 Owned24Morrisville, NC USA North America Development & Clinical Services 186,406 Leased25Deeside United Kingdom Europe Development & Clinical Services 127,533 Leased26Malvern, PA USA North America Development & Clinical Services 84,000 Leased27Bolton United Kingdom Europe Development & Clinical Services 60,830 Owned28Schorndorf Germany Europe Development & Clinical Services 54,693 Owned29Shanghai China Asia Pacific Development & Clinical Services 31,000 Leased30Dartford United Kingdom Europe Development & Clinical Services 20,250 Leased31Singapore Singapore Asia Pacific Development & Clinical Services 7,942 Leased Total 5,120,054 31Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 3.LEGAL PROCEEDINGSFrom time to time, we may be involved in legal proceedings arising in the ordinary course of business, including, without limitation, inquiries andclaims concerning environmental contamination as well as litigation and allegations in connection with acquisitions, product liability, manufacturing orpackaging defects and claims for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of which could be significant. Weintend to vigorously defend ourselves against such other litigation and do not currently believe that the outcome of any such other litigation will have amaterial adverse effect on our financial statements. In addition, the healthcare industry is highly regulated in the U.S. and abroad and governmental agenciescontinue to scrutinize certain practices affecting governmental programs, international operations and otherwise.From time to time, we receive subpoenas or requests for information from various governmental agencies, including from state attorneys general and theU.S. Department of Justice relating to the business practices of customers or suppliers. We generally respond to such subpoenas and requests in a timely andthorough manner, which responses sometimes require considerable time and effort and can result in considerable costs being incurred by us. We expect toincur additional costs in the future in connection with existing and future requests.32Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 4.MINE SAFETY DISCLOSURESNot Applicable.33Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents PART IIITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIESThe principal market for trading of the Company’s common stock is the NYSE. The Company’s common stock began trading on the NYSE under thesymbol CTLT as of July 31, 2014. Prior to that date there was no public market for our common stock.The following table sets forth the high and low sale prices per share for our common stock as reported on the NYSE for the period indicated: Common Stock Market Prices4th Quarter 3rd Quarter 2nd Quarter 1st QuarterFiscal year ended June 30, 2015 High$32.11 $31.66 $30.18 $25.17Low$26.17 $26.32 $22.85 $19.85As of September 1, 2015 we had approximately 35 holders of record of our common stock. This number does not include beneficial owners whoseshares were held in street name.We have no current plans to pay dividends on our common stock. Any decision to declare and pay dividends in the future will be made at the solediscretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractualrestrictions and other factors that our board of directors may deem relevant. Because we are a holding company and have no direct operations, we will only beable to pay dividends from funds we receive from our subsidiaries. In addition, our ability to pay dividends will be limited by covenants in our existingindebtedness and may be limited by the agreements governing other indebtedness we or our subsidiaries incur in the future. See “Management's Discussionand Analysis of Financial Condition and Results of Operations − Debt Covenants.”We did not declare or pay any dividends on our common stock in fiscal 2015 or fiscal 2014.Recent Sales of Unregistered SecuritiesWe did not sell any registered securities during the period covered by this Annual Report on Form 10-K.Purchases of Equity SecuritiesThere was no purchase by us, on our behalf, or on behalf of any affiliate of our registered equity securities during the period covered by this AnnualReport on Form 10-K.34Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Performance GraphSet forth below is a line graph comparing the cumulative total shareholder return on the Company’s common stock since July 31, 2014 (the date ourcommon stock commenced trading on the NYSE) through June 30, 2015, based on the market price of the Company’s common stock and assumingreinvestment of dividends, with the cumulative total shareholder return of companies on the Standard & Poor’s Composite 1500 Index and Standard & Poor’s1500 Healthcare Index. The graph assumes that $100 was invested in the Company’s common stock and in each index at the market close on July 31, 2014.The stock price performance of the following graph is not necessarily indicative of future stock performance.35Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 6.SELECTED FINANCIAL DATAThe following table sets forth our selected historical financial and operating data for, or as of the end of, each of the five years ended June 30, 2015. Theselected financial data as of June 30, 2015 and 2014, and for the fiscal years ended June 30, 2015, 2014 and 2013 has been derived from our auditedconsolidated financial statements included in “Financial Statements and Supplementary Data.” The financial data as of June 30, 2013, 2012 and 2011 and forthe years ended June 30, 2012 and 2011 have been derived from our audited consolidated financial statements not included in this Annual Report on Form10-K. This table should be read in conjunction with the Consolidated Financial Statements and the Notes thereto. Year Ended June 30,(Dollars in millions, except as noted)2015 2014 2013 2012 2011Statement of Operations Data: Net revenue$1,830.8 $1,827.7 $1,800.3 $1,694.8 $1,531.8Cost of sales1,215.5 1,229.1 1,231.7 1,136.2 1,029.7Gross margin615.3 598.6 568.6 558.6 502.1Selling, general and administrative expenses337.3 334.8 340.6 348.1 288.3Impairment charges and (gain)/loss on sale of assets4.7 3.2 5.2 1.8 3.6Restructuring and other13.4 19.7 18.4 19.5 12.5Property and casualty (gain)/loss, net (1)— — — (8.8) 11.6Operating earnings/(loss)259.9 240.9 204.4 198.0 186.1Interest expense, net105.0 163.1 203.2 183.2 165.5Other (income)/expense, net42.4 10.4 25.1 (3.8) 26.0Earnings/(loss) from continuing operations before income taxes112.5 67.4 (23.9) 18.6 (5.4)Income tax expense/(benefit)(97.7) 49.5 27.0 0.5 23.7Earnings/(loss) from continuing operations210.2 17.9 (50.9) 18.1 (29.1)Earnings/(loss) from discontinued operations, net of tax0.1 (2.7) 1.2 (41.3) (21.0)Net earnings/(loss)210.3 15.2 (49.7) (23.2) (50.1)Less: Net earnings/(loss) attributable to noncontrolling interest,net of tax(1.9) (1.0) (0.1) 1.2 3.9Net earnings/(loss) attributable to Catalent$212.2 $16.2 $(49.6) $(24.4) $(54.0) Basic earnings per share attributable to Catalent commonshareholders: Earnings/(loss) from continuing operations$1.77 $0.25 $(0.68) $0.23 $(0.44)Net earnings/(loss)1.77 0.22 (0.66) (0.33) (0.72)Diluted earnings per share attributable to Catalent commonshareholders: Earnings/(loss) from continuing operations$1.75 $0.25 $(0.68) $0.22 $(0.44)Net earnings/(loss)1.75 0.21 (0.66) (0.32) (0.72)(1)In March 2011, a U.K. based packaging facility was damaged by fire. The 2011 and 2012 amounts reported are net of insurance recovery.36Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Year Ended June 30,(Dollars in millions)2015 2014 2013 2012 2011Balance Sheet Data (at period end): Cash and cash equivalents$151.3 $74.4 $106.4 $139.0 $205.1Goodwill1,061.5 1,097.1 1,023.4 1,029.9 906.0Total assets3,145.4 3,090.2 2,949.5 3,032.1 2,729.1Long term debt, including current portion and other short termborrowing1,887.9 2,710.6 2,691.6 2,683.5 2,346.6Total liabilities2,505.6 3,457.5 3,359.8 3,382.8 2,939.0Total shareholders’ equity/(deficit)$634.0 $(371.8) $(410.3) $(350.7) $(209.9) Year Ended June 30,(Dollars in millions)2015 2014 2013 2012 2011Other Financial Data: Capital expenditures$141.0 $122.4 $122.5 $104.2 $87.3Ratio of Earnings to Fixed Charges (2)2.0x 1.4x — 1.1x —Net cash provided by/(used in) continuing operations: Operating activities171.7 180.2 139.1 87.7 111.6Investing activities(271.8) (175.2) (122.1) (538.2) (83.3)Financing activities196.5 (42.1) (49.3) 352.9 (26.1)Net cash provided by/(used in) discontinued operations:0.1 2.1 (1.4) 43.9 21.0Effect of foreign currency on cash$(19.6) $3.0 $1.1 $(12.4) $17.9(2)The ratio of earnings to fixed charges is calculated by dividing the sum of earnings from continuing operations before income taxes, equity inearnings (loss) from non-consolidated investments and fixed charges, by fixed charges. Fixed charges consist of interest expenses, capitalizedinterest and imputed interest on our leased obligations. For fiscal years 2011 and 2013, earnings were insufficient to cover fixed charges by $4.0million and $25.9 million, respectively. For fiscal years 2012, 2014 and 2015, the ratio of earnings to fixed charges was 1.1x, 1.4x, and 2.0x,respectively.37Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Item 6. SelectedFinancial Data” and our consolidated financial statements and related notes that appear elsewhere in this Annual Report on Form 10-K. In addition tohistorical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs.Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differencesinclude those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Item 1A. Risk Factors.”OverviewWe are the leading global provider of advanced delivery technologies and development solutions for drugs, biologics and consumer health products.Our oral, injectable, and respiratory delivery technologies provide delivery solutions across the full diversity of the pharmaceutical industry including smallmolecules, large molecule biologics and consumer health products. Through our extensive capabilities and deep expertise in product development, we helpour customers take products to market faster, including nearly half of new drug products approved by the FDA in the last decade. Our advanced deliverytechnology platforms, broad and deep intellectual property, and proven formulation, manufacturing and regulatory expertise enable our customers to developmore products and better treatments. Across both development and delivery, our commitment to reliably supply our customers’ needs is the foundation forthe value we provide; annually, we produce more than 70 billion doses for nearly 7,000 customer products. We believe that through our investments ingrowth-enabling capacity and capabilities, our ongoing focus on operational and quality excellence, the sales of existing customer products, the introductionof new customer products, our patents and innovation activities, and our entry into new markets, we will continue to benefit from attractive and differentiatedmargins, and realize the growth potential from these areas.For financial reporting purposes, we present three distinct financial reporting segments based on criteria established by U.S. GAAP: Oral Technologies,Medication Delivery Solutions and Development and Clinical Services. The Oral Technologies segment includes the Softgel Technologies and ModifiedRelease Technologies operating segments.Oral TechnologiesOur Oral Technologies segment provides advanced oral delivery technologies, including formulation, development and manufacturing of oral doseforms for prescription and consumer health products across all phases of a molecule’s lifecycle. These oral dose forms include softgel, modified releasetechnologies and immediate release solid oral products. At certain facilities we also provide integrated primary packaging services for the products wemanufacture. In fiscal 2015, we generated approximately $787.5 million in revenue from our softgel products and approximately $391.5 million in revenuefrom our MRT products (including intra-segment revenue of approximately $37.9 million).Through our Softgel Technologies business, we provide formulation, development and manufacturing services for soft gelatin capsules, or “softgels,”which we first commercialized in the 1930s and have continually enhanced. We are the market leader in overall softgel manufacturing, and hold the leadingmarket position in the prescription arena. Our principal softgel technologies include traditional softgel capsules (in which the shell is made from animal-derived materials) and Vegicaps and OptiShell capsules (in which the shell is made from vegetable-derived materials), which are used in a broad range ofcustomer products, including prescription drugs, over-the-counter medications, and vitamins and supplements. Softgel capsules encapsulate liquid, paste oroil-based active compounds in solution or suspension within an outer shell, filling and sealing the capsule simultaneously. We perform all encapsulationwithin one of our softgel facilities, with active ingredients provided by customers or sourced directly by us. Softgels have historically been used to solveformulation challenges or technical issues for a specific drug, to help improve the clinical performance of compounds, to provide important marketdifferentiation, particularly for over-the-counter compounds, and to provide safe handling of hormonal, potent and cytotoxic drugs. We also participate in thesoftgel vitamin, mineral and supplement business in selected regions around the world. With the 2001 introduction of our vegetable-derived softgel shell,Vegicaps capsules, consumer health manufacturers have been able to extend the softgel dose form to a broader range of active ingredients and servepatient/consumer populations that were previously inaccessible due to religious, dietary or cultural preferences. In recent years this platform has beenextended to pharmaceutical active ingredients via the OptiShell platform. Our Vegicaps and OptiShell capsules are patent protected in most major globalmarkets. Physician and patient studies we have conducted have demonstrated a preference for softgels versus traditional tablet and hard capsule dose forms interms of ease of swallowing, real or perceived speed of delivery, ability to remove or eliminate unpleasant odor or taste and, for physicians, perceivedimproved patient adherence with dosing regimens.38Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Through our Modified Release Technologies business we provide formulation, development and manufacturing services for fast-dissolve tablets andboth proprietary and conventional controlled release products. We launched our orally dissolving tablet business in 1986 with the introduction of Zydistablets, a unique oral dosage form that is freeze-dried in its package, can be swallowed without water, and typically dissolves in the mouth in less than threeseconds. Most often used for indications, drugs and patient groups that can benefit from rapid oral disintegration, the Zydis technology is utilized in a widerange of products and indications, including treatments for a variety of central nervous system-related conditions such as migraines, Parkinson’s Disease,schizophrenia, and pain relief. Zydis tablets continue to be used in new ways by our customers as we extend the application of the technology to newcategories, such as for immunotherapies, vaccines and biologics delivery. More recently we have added two new technology platforms to the ModifiedRelease Technologies business portfolio, including the highly flexible OptiDose tab-in-tab technology, already commercially proven in Japan; and theOptiMelt hot melt extrusion technology. We plan to continue to expand the development pipeline of customer products for all of our Modified Releasetechnologies products.Representative Oral Technologies business customers include Pfizer, Novartis, GlaxoSmithKline, Eli Lilly, Johnson & Johnson and Allergan.We have fifteen Oral Technologies facilities in ten countries, including three in North America, five in Europe, three in South America and four in theAsia-Pacific region. Our Oral Technologies segment represented approximately 62% of total net revenue for fiscal 2015 on a combined basis before inter-segment eliminations.Medication Delivery SolutionsOur Medication Delivery Solutions segment provides formulation, development and manufacturing services for delivery of drugs and biologics,administered via injection, inhalation and ophthalmic routes, using both traditional and advanced technologies. Our range of injectable manufacturingofferings includes filling drugs or biologics into pre-filled syringes, with flexibility to accommodate other formats within our existing network, focusedincreasingly on complex pharmaceuticals and biologics. With our wide variety of technologies we are able to meet a wide range of specifications, timelinesand budgets. The complexity of the manufacturing process, the importance of experience and know-how, regulatory compliance, and high start-up capitalrequirements create significant barriers to entry and, as a result, limit the number of competitors in the market. For example, blow-fill-seal is an advancedaseptic processing technology that uses a continuous process to form, fill with drug, and seal a plastic container in a sterile environment. Blow-fill-seal unitsare currently used for a variety of pharmaceuticals in liquid form, such as respiratory, ophthalmic and otic products. We are a leader in the outsourced blow-fill-seal market, and operate one of the largest capacity commercial manufacturing blow-fill-seal facilities in the world. Our sterile blow-fill-sealmanufacturing has significant capacity and flexibility in its manufacturing configurations. This business provides flexible and scalable solutions for unit-dose delivery of complex formulations such as suspensions and emulsions, products that are temperature, light and/or oxygen-sensitive. We also provideinnovative design and engineering container design and manufacturing solutions related to complex container design and manufacturing. Our regulatoryexpertise can lead to decreased time to commercialization, and our dedicated development production lines support feasibility, stability and clinical runs.We plan to continue to expand our product line in existing and new markets, and in higher margin specialty products with additional respiratory, ophthalmic,injectable and nasal applications. Representative customers include Pfizer, Sanofi-Aventis, Novartis, Roche and Teva.Our biologics offerings include our formulation development and cell-line manufacturing based on our advanced and patented GPEx technology,which is used to develop stable, high-yielding mammalian cell lines for both innovator and bio-similar biologic compounds. Our GPEx technology canprovide rapid cell line development, high biologics production yields, flexibility and versatility. We believe our development stage SMARTag next-generation antibody-drug conjugate technology will provide more precision targeting for delivery of drugs to tumors or other locations, with improved safetyversus existing technologies. In fiscal 2013, we launched a new biologics facility in Madison, Wisconsin, with expanded capability and capacity to produceclinical scale biologic supplies; combined with offerings from other businesses of Catalent and external partners, we now provide the broadest range oftechnologies and services supporting the development and launch of new biologic entities, biosimilars or biobetters to bring a product from gene to marketcommercialization, faster.We have five Medication Delivery Solutions manufacturing facilities, including three in North America and two in Europe. Our Medication DeliverySolutions segment represented approximately 14% of total net revenue for fiscal 2015 on a combined basis before inter-segment eliminations.39Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Development and Clinical ServicesOur Development and Clinical Services segment provides manufacturing, packaging, storage and inventory management for drugs and biologics inclinical trials. We offer customers flexible solutions for clinical supplies production, and provide distribution and inventory management support for bothsimple and complex clinical trials. This includes dose form manufacturing or over-encapsulation where needed; supplying placebos, comparator drugprocurement and clinical packages and kits for physicians and patients; inventory management; investigator kit ordering and fulfillment; and return supplyreconciliation and reporting. We support trials in all regions of the world through our facilities and distribution network. In fiscal 2012, we substantiallyexpanded this business via our acquisition of the clinical trial supplies (CTS) business of Aptuit.We also offer analytical chemical and cell-based testing and scientific services, stability testing, respiratory products formulation and manufacturing,regulatory consulting, and bioanalytical testing for biologic products. Our respiratory product capabilities include development and manufacturing servicesfor inhaled products for delivery via metered dose inhalers, dry powder inhalers and intra-nasal sprays. We also provide formulation development and clinicaland commercial manufacturing for conventional and specialty oral dose forms. We provide global regulatory and clinical support services for our customers’regulatory and clinical strategies during all stages of development. Demand for our offerings is driven by the need for scientific expertise and depth andbreadth of services offered, as well as by the reliable supply thereof, including quality, execution and performance.We have eleven Development and Clinical Service facilities, including four in North America, five in Europe and two in the Asia Pacific region. OurDevelopment and Clinical Services segment represented approximately 24% of total net revenue for fiscal 2015 on a combined basis before inter-segmenteliminations.Critical Accounting Policies and EstimatesThe following disclosure supplements the descriptions of our accounting policies contained in Note 1 to our Consolidated Financial Statements (the“Consolidated Financial Statements”) included elsewhere in this Annual Report on Form 10-K in regard to significant areas of judgment. Management wasrequired to make certain estimates and assumptions during the preparation of the Consolidated Financial Statements in accordance with generally acceptedaccounting principles. These estimates and assumptions affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilitiesin our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. They also affect the reported amount of net earningsduring the reporting periods. Actual results could differ from those estimates. Because of the size of the financial statement elements to which they relate,some of our accounting policies and estimates have a more significant impact on our consolidated financial statements than others.Management has discussed the development and selection of these critical accounting policies and estimates with the audit committee of the board ofdirectors. A discussion of some of our more significant accounting policies and estimates follows.Revenues and ExpensesNet RevenueWe sell products and services directly to our pharmaceutical, biotechnology and consumer health customers. The majority of our business is conductedthrough supply or development agreements. The majority of our revenue is charged on a price-per-unit basis and is recognized either upon shipment ordelivery of the product or service. Revenue generated from research and development arrangements are generally priced by project and are recognized eitherupon completion of the required service or achievement of a specified project phase or milestone.Our overall net revenue is generally affected by the following factors:•Changes in the level or timing of research and development activities and sales activities by our customers;•Fluctuations in overall economic activity within the geographic markets in which we operate;•Change in the level of competition we face from our competitors;•New intellectual property we develop and expiration of our patents;•Changes in prices of our products and services, which are generally relatively stable due to our long-term contracts; and40Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents •Fluctuations in exchange rates between foreign currencies, in which a substantial portion of our revenues and expenses are denominated, andthe U.S. dollar.Operating ExpensesCost of sales consists of direct costs incurred to manufacture and package products and costs associated with supplying other revenue-generatingservices. Cost of sales includes labor costs for employees involved in the production process and the cost of raw materials and components used in theprocess or product. Cost of sales also includes labor costs of employees supporting the production process, such as production management, quality,engineering, and other support services. Other costs in this category include the external research and development costs on behalf of our customers,depreciation of fixed assets, utility costs, freight, operating lease expenses and other general manufacturing expenses.Selling, general and administrative expenses consist of all expenditures incurred in connection with the sales and marketing of our products, as well asadministrative expenses to support our businesses. The category includes salaries and related benefit costs of employees supporting our sales and marketing,finance, human resources, information technology and legal functions, research and development costs in pursuit of our own proactive development andcosts related to executive management. Other costs in this category include depreciation of fixed assets, amortization of our intangible assets, professionalfees, and marketing and other expenses to support selling and administrative areas.Direct expenses incurred by a segment are included in that segment’s results. Shared sales and marketing, information technology services and generaladministrative costs are allocated to each segment based upon the specific activity being performed for each segment or are charged on the basis of thesegment’s respective revenues or other applicable measurement. Certain corporate expenses are not allocated to the segments. We do not allocate thefollowing costs to the segments:•Impairment charges and (gain)/loss on sale of assets;•Equity compensation;•Restructuring expenses and other special items;•Sponsor advisory fee and the related termination fee incurred in connection with our initial public offering;•Noncontrolling interest; and•Other income/(expense), net.Our operating expenses are generally affected by the following factors:•The utilization rate of our facilities: as our utilization rate increases, we achieve greater economies of scale as fixed manufacturing costs arespread over a larger number of units produced;•Production volumes: as volumes change, the level of resources employed also fluctuate, including raw materials, component costs,employment costs and other related expenses, and our utilization rate may also be affected;•The mix of different products or services that we sell;•The cost of raw materials, components and general expense;•Implementation of cost control measures and our ability to effect cost savings through our Operational Excellence, Lean Manufacturing andLean Six Sigma programs; and•Fluctuations in exchange rates between foreign currencies, in which a substantial portion of our revenues and expenses are denominated, andthe U.S. dollar.Allowance for Inventory ObsolescenceWe write down our inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of the inventory and theestimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than thoseprojected, additional inventory write-downs may be required resulting in a charge to income in the period such determination was made.Long-lived and Other Definite-Lived Intangible AssetsWe allocate the cost of an acquired company to the tangible and identifiable intangible assets and liabilities acquired, with the remaining amountbeing recorded as goodwill. Certain intangible assets are amortized over their estimated useful life.41Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents We assess the impairment of identifiable intangibles if events or changes in circumstances indicate that the carrying value of the asset may not berecoverable. Factors that we consider important that could trigger an impairment review include the following:•Significant under-performance relative to historical or projected future operating results;•Significant changes in the manner of use of the acquired assets or the strategy of the overall business;•Significant negative industry or economic trends; and•Recognition of goodwill impairment charges.If we determine that the carrying value of intangibles and/or long-lived assets may not be recoverable based on the existence of one or more of theabove indicators of impairment, we measure any impairment based on fair value, which we derive either by the estimated cash flows expected to result fromthe use of the asset and its eventual disposition or on assumptions we believe marketplace participants would utilize and comparable marketplaceinformation in similar arm’s length transactions. We then compare weighted values to the asset’s carrying amount. Any impairment loss recognized wouldrepresent the excess of the asset’s carrying value over its estimated fair value. Significant estimates and judgments are required when estimating such fairvalues. If it is determined that these assets are impaired, an impairment charge would be recorded and the amount could be material. See Note 4 to ourConsolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for further discussion.GoodwillWe account for purchased goodwill and intangible assets with indefinite lives in accordance with Accounting Standard Codification (“ASC”) 350Goodwill, Intangible and Other Assets. Under ASC 350, goodwill and intangible assets with indefinite lives are tested for impairment at least annuallyutilizing both qualitative and quantitative assessments. Our annual goodwill impairment test was conducted as of April 1, 2015. We assess goodwill forpossible impairment by comparing the carrying value of our reporting units to their fair values. We determine the fair value of our reporting units utilizingestimated future discounted cash flows and incorporate assumptions that we believe marketplace participants would utilize. In addition, we use comparativemarket information and other factors to corroborate the discounted cash flow results. No reporting units were at risk of failing step one in the goodwillimpairment test under the provisions of ASC 350 as of April 1, 2015. See Note 3 to our Consolidated Financial Statements included elsewhere in this AnnualReport on Form 10-K for further discussion.Derivative Instruments and Hedging ActivitiesWe may use derivative instruments as part of our overall strategy to manage our exposure to market risks primarily associated with fluctuations ininterest rates. As a matter of policy, we do not use derivatives for trading or speculative purposes.As required by ASC 815 Derivatives and Hedging (ASC 815), we record all derivatives on the balance sheet at fair value. The accounting for changes inthe fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship andapply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated andqualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest-rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, orother types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of anet investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedginginstrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge orthe earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economicallyhedge certain of its risk, even though hedge accounting does not apply or we elect not to apply hedge accounting under ASC 815.Income TaxesIn accordance with ASC 740 Income Taxes (ASC 740), we account for income taxes using the asset and liability method. The asset and liability methodrequires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax basesand financial reporting bases of our assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates in the respective jurisdictionsin which we operate. Deferred taxes are not provided on the undistributed earnings of subsidiaries outside of the United States when it is expected that these42Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents earnings will be permanently reinvested. We have not made any provision for U.S. income taxes on the undistributed earnings of foreign subsidiaries as thoseearnings are considered permanently reinvested in the operations of those foreign subsidiaries.We had valuation allowances of $82.4 million and $218.2 million as of June 30, 2015 and 2014, respectively, against our deferred tax assets. Weconsidered all available evidence, both positive and negative, in assessing the need for a valuation allowance for deferred tax assets. We evaluated threepossible sources of taxable income when assessing the realization of deferred tax assets: •Future reversals of existing taxable temporary differences; •Tax planning strategies; and•Future taxable income exclusive of reversing temporary differences and carryforwards.We considered the need to maintain a valuation allowance on deferred tax assets based on management’s assessment of whether it is more likely thannot that deferred tax assets would be realized based on future reversals of existing taxable temporary differences and the ability to generate sufficient taxableincome within the carryforward period available under the applicable tax law. The deferred tax liabilities are expected to reverse in the same period andjurisdiction and are of the same character as the temporary differences giving rise to a portion of the deferred tax assets. During the year ended June 30, 2015, we released the majority of our U.S. federal valuation allowance of $136.7 million based on projected U.S. futureearnings in excess of the $294.1 million required to realize its net U.S. federal deferred tax assets. Of the $294.1 million, $329.5 million relates to the federalnet operating loss carryforward (NOL), which expires in the years 2028 to 2032. The remaining $35.4 million relates to other net deferred tax liabilities.The reversal of the valuation allowance was the result of a continuing trend of U.S. taxable income and the expectation that this trend will continue,rather than relying on tax planning strategies to support the realization of deferred tax assets. We have experienced three consecutive years of positive U.S.taxable earnings as of the current quarter and expect to sustain this position in the future, due to the positive impact on U.S. earnings from reduced interestexpense resulting from a reduction in our external debt, among other factors.While the U.S. federal valuation allowance was reversed, the U.S. state valuation allowance on $483.8 million of pre-apportioned state net operatinglosses were maintained. Due to uncertainty around earnings, apportionment, certain restrictions at the state level, and the history of tax losses, anticipatedutilization rates were not sufficient to overcome the negative evidence and allow a release.ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustainedupon examination, including resolution of any related appeal or litigation process, based on the technical merits. We recognized no material adjustment inthe liability for unrecognized income tax benefits.The calculation of our income tax liabilities involves dealing with uncertainties in the application of complex domestic and foreign income taxregulations. Unrecognized tax benefits are generated when there are differences between tax positions taken in a tax return and amounts recognized in theConsolidated Financial Statements. Tax benefits are recognized in the Consolidated Financial Statements when it is more likely than not that a tax positionwill be sustained upon examination. To the extent we prevail in matters for which liabilities have been established, or are required to pay amounts in excessof our liabilities, our effective income tax rate in a given period could be materially affected. An unfavorable income tax settlement may require the use ofcash and result in an increase in our effective income tax rate in the year it is resolved. A favorable income tax settlement would be recognized as a reductionin the effective income tax rate in the year of resolution. At June 30, 2015 and 2014, we recorded unrecognized tax benefits and related interest and penaltiesof $73.2 million and $65.9 million, respectively.The anticipated future trends included in our assessment of the realizability of our deferred tax assets are the same assumptions and anticipated futuretrends that were incorporated into the estimated fair value of our reporting units for purposes of testing goodwill for impairment. Such assumptions andanticipated future trends were also incorporated into other assessments of our tangible and intangible assets for impairment, as applicable. We are notcurrently relying on any tax-planning strategy to support the realization of deferred tax assets.New Accounting PronouncementsRefer to Note 1 to the Consolidated Financial Statements for a description of recent accounting pronouncements.43Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Factors Affecting our PerformanceFluctuations in Operating ResultsOur financial reporting periods operate on a June 30 fiscal year end. Our revenue and net earnings are generally higher in our third and fourth quartersof each fiscal year. These fluctuations are primarily the result of the timing of our, and our customers’, annual operational maintenance periods at locations inEurope and the United Kingdom, the seasonality associated with pharmaceutical and biotechnology budgetary spending decisions, clinical trial and researchand development schedules and, to a lesser extent, the time of the year some of our customers’ products are in higher demand.Acquisition and Related Integration EffortsOur growth and profitability are affected by the acquisitions we are able to complete and the speed at which we integrate those acquisitions into ourexisting operating platforms. Since January 1, 2012, we have completed nine acquisitions, the largest of which was the February 2012 purchase of the AptuitCTS business. Since that acquisition, we consolidated one operation in December 2012 and completed the consolidation of a second operation in December2013. In February 2012, we acquired the remaining 49% ownership interest in our German softgel joint venture. We commenced two joint ventures in Chinain fiscal 2013 and 2014, and completed the acquisition of the partner’s interest in one venture in fiscal 2015. We purchased a softgel operation in Brazil infiscal 2014 and have integrated it into our softgel business. Further, in October 2014, the Company acquired the remaining shares of Redwood BioscienceInc. (“Redwood”) and its SMARTag ADC technology platform. The acquired business is based in the U.S. and is included in the Medication DeliverySolutions segment. Additionally, in November 2014, the Company acquired 100% of the shares of MTI Pharma Solutions, Inc. (“Micron Technologies”), acompany specializing in particle size reduction (micronization), milling and analytical contract services. The acquired business is based in the U.S. and theU.K. and is included in the Development and Clinical Services segment. Our efforts to integrate Redwood and Micron Technologies are substantiallycomplete.Foreign Exchange RatesSignificant portions of our revenues and costs are affected by changes in foreign exchange rates. Our operating network is global and, as a result, ourrevenues and operating expenses are influenced by changes in foreign exchange rates. In fiscal 2015, approximately 56% of our revenue was generated fromour operations outside the United States. Much of the revenue generated outside the United States and many of the expenses associated with our operationsoutside the United States are denominated in currencies other than the U.S. dollar, particularly the British pound, the euro, the Brazilian real, the Argentinepeso, the Japanese yen and the Australian dollar. Changes in those currencies relative to the U.S. dollar will impact our revenues and expenses.Components of our Revenue, Costs and ExpensesRevenueWe sell products and services directly to our pharmaceutical, biotechnology and consumer health customers. The majority of our business is conductedthrough supply or development agreements. Contractual provisions, which may include pricing, are sometimes adjusted through arm’s-length negotiationswith customers in the course of renewing a contract. Our revenue is charged on a price-per-unit or service basis and is recognized either upon shipment ordelivery of the product or service. Revenue generated from research and development arrangements are generally priced by project and are recognized eitherupon completion of the required service or achievement of a specified project phase or milestone. The broad capabilities we have to serve our customersprovides us limited concentration risk with no customer exceeding 10% and no single product generating more than 3% of revenue.Costs and ExpensesCost of sales consists of direct costs incurred to manufacture products and costs associated with supplying other revenue-generating services. Cost ofsales includes labor costs for employees involved in the production process and the cost of raw materials and components used in the process or product. Costof sales also includes labor costs of employees supporting the production process, such as production management, quality, engineering, and other supportservices. Other costs in this category include the external research and development costs, depreciation of fixed assets used in the manufacturing process,utility costs, freight, operating lease expenses and other general manufacturing expenses.Selling, general and administration expenses consist of all expenditures incurred in connection with the sales and marketing of our products, as well asadministrative expenses to support our businesses. The category includes salaries and44Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents related benefit costs of employees supporting sales and marketing, finance, human resources, information technology, research and development costs andcosts related to executive management. Other costs in this category include depreciation of other fixed assets, amortization of our intangible assets,professional fees, marketing and other expenses to support selling and administrative areas.Trends Affecting Our BusinessIndustryWe participate in nearly every sector of the $800 billion annual revenue global pharmaceutical industry, including but not limited to the prescriptiondrug and biologic sectors as well as consumer health, which includes the over-the-counter and vitamins and nutritional supplement sectors. Innovativepharmaceuticals continue to play a critical role in the global market, while generic drug share is increasing in both developed and developing markets.Sustained developed market demand and rapid growth in emerging economies is driving the consumer health product growth rate to more than double thatfor pharmaceuticals. Payors, both public and private, have sought to limit the economic impact of such demand through greater use of generic drugs, accessand spending controls and health technology assessment techniques, favoring products that deliver truly differentiated outcomes.New Molecule Development and R&D SourcingContinued strengthening in early stage development pipelines for drugs and biologics, compounded by increasing clinical trial breadth andcomplexity, sustain our belief in the attractive growth prospects for development solutions. Large companies are in many cases reconfiguring their R&Dresources, increasingly involving the appointment of strategic partners for important outsourced functions. Additionally, an increasing portion of compoundsin development are from companies who less frequently have full R&D infrastructure, and thus are more likely to need strategic development solutionspartners.DemographicsAging population demographics in developed countries, combined with health care reforms in many global markets that are expanding access totreatments to a greater proportion of their populations, will continue to drive increases in demand for both pharmaceutical and consumer healthproducts. Increasing economic affluence in developing regions will further increase demand for health care treatments, and we are taking active steps to allowus to participate effectively in these growth regions and product categories.Finally, we believe the market access and payor pressures our customers face, global supply chain complexity, and the increasing demand for improvedtreatments will continue to escalate the need for product differentiation, improved outcomes and treatment cost reduction, all of which can often be addressedusing our advanced delivery technologies.Non-GAAP Performance MetricsUse of EBITDA from continuing operationsManagement measures operating performance based on consolidated earnings from continuing operations before interest expense, expense/(benefit) forincome taxes and depreciation and amortization, which is further adjusted for the income or loss attributable to noncontrolling interests (“EBITDA fromcontinuing operations”). EBITDA from continuing operations is not defined under U.S. GAAP and is not a measure of operating income, operatingperformance or liquidity presented in accordance with U.S. GAAP and is subject to important limitations.We believe that the presentation of EBITDA from continuing operations enhances an investor’s understanding of our financial performance. Webelieve this measure is a useful financial metric to assess our operating performance from period to period by excluding certain items that we believe are notrepresentative of our core business and use this measure for business planning purposes. In addition, given the significant investments that we have made inthe past in property, plant and equipment, depreciation and amortization expenses represent a meaningful portion of our cost structure. We believe thatdisclosing EBITDA from continuing operations will provide investors with a useful tool for assessing the comparability between periods of our ability togenerate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures because it eliminates depreciation andamortization expense. We present EBITDA from continuing operations in order to provide supplemental information that we consider relevant for the readersof our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, and such information is not meant to replace or supersedeU.S. GAAP45Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents measures. Our definition of EBITDA from continuing operations may not be the same as similarly titled measures used by other companies.In addition, we evaluate the performance of our segments based on segment earnings before noncontrolling interest, other (income)/expense,impairments, restructuring costs, interest expense, income tax expense/(benefit), and depreciation and amortization (“Segment EBITDA”).Use of Constant CurrencyAs exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of results on a constant currencybasis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to priorperiods. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We use results on aconstant currency basis as one measure to evaluate our performance. In this Annual Report on Form 10-K, we calculate constant currency by calculatingcurrent-year results using prior-year foreign currency exchange rates. We generally refer to such amounts calculated on a constant currency basis as excludingthe impact of foreign exchange. These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. GAAP.Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures ofperformance presented in accordance with U.S. GAAP.Fiscal Year Ended June 30, 2015 compared to the Fiscal Year Ended June 30, 2014Results for the fiscal year ended June 30, 2015 compared to the fiscal year ended June 30, 2014 were as follows: Fiscal Year Ended June 30, FX impact(unfavorable) /favorable Constant Currency Increase/(Decrease)(Dollars in millions)2015 2014 Change $ Change %Net revenue$1,830.8 $1,827.7 $(117.9) $121.0 7 %Cost of sales1,215.5 1,229.1 (82.2) 68.6 6 %Gross margin615.3 598.6 (35.7) 52.4 9 %Selling, general and administrative expenses337.3 334.8 (11.0) 13.5 4 %Impairment charges and (gain)/loss on sale of assets4.7 3.2 (0.1) 1.6 50 %Restructuring and other13.4 19.7 (2.0) (4.3) (22)%Operating earnings/(loss)259.9 240.9 (22.6) 41.6 17 %Interest expense, net105.0 163.1 (1.2) (56.9) (35)%Other (income)/expense, net42.4 10.4 (5.2) 37.2 *Earnings/(loss) from continuing operations before income taxes112.5 67.4 (16.2) 61.3 91 %Income tax expense/(benefit)(97.7) 49.5 (4.3) (142.9) *Earnings/(loss) from continuing operations210.2 17.9 (11.9) 204.2 *Net earnings/(loss) from discontinued operations, net of tax0.1 (2.7) — 2.8 *Net earnings/(loss)210.3 15.2 (11.9) 207.0 *Less: Net earnings/(loss) attributable to noncontrolling interest,net of tax(1.9) (1.0) 0.1 (1.0) *Net earnings/(loss) attributable to Catalent$212.2 $16.2 $(12.0) $208.0 * * Percentage not meaningfulNet RevenueNet revenue increased by $121.0 million, or 7%, as compared to the twelve months ended June 30, 2014, excluding the impact of foreign exchange.The increase in net revenue was driven by increased sales across all three reportable segments, led primarily by our Oral Technologies segment.Gross Margin46Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Gross margin increased by $52.4 million, or 9%, as compared to the twelve months ended June 30, 2014, excluding the impact of foreign exchange. Ona constant currency basis, gross margin, as a percentage of revenue, increased 60 basis points to 33.4% in the twelve months ended June 30, 2015 ascompared to 32.8% in the prior year. The increase in gross margin was primarily due to increased sales across all three reportable segments and a favorableshift in revenue mix within our modified release technologies business within our Oral Technologies segment and within our analytical services integratedoperations within our Development and Clinical Services segment. Growth in gross margin was partially offset by an unfavorable shift in product mix fromour softgel offering within our Oral Technologies segment.Selling, General and Administrative ExpenseSelling, general and administrative expense increased by $13.5 million, or 4%, as compared to the twelve months ended June 30, 2014, excluding theimpact of foreign exchange, primarily due to $12 million of incremental expense related to entities we acquired during the year. The $12 million wasprimarily comprised of non-cash depreciation and amortization expense of $7 million, integration costs of $4 million, and employee compensation costs of$1 million. In addition, selling, general and administrative expense increased $4.5 million related to our non-cash equity compensation plans as a result of achange from a cash-based long-term incentive plan to an equity-based long-term incentive plan. These costs were partially offset by a $12.9 millionreduction in expense due to the elimination of the recurring sponsor advisory fee agreement as a result of our IPO during the first quarter.Restructuring and OtherRestructuring and other charges of $13.4 million for the twelve months ended June 30, 2015 decreased by $6.3 million, or 32%, compared to the twelvemonths ended June 30, 2014. The twelve months ended June 30, 2015 included restructuring initiatives enacted to improve cost efficiency primarily relatedto employee severance expenses. The prior period charges included restructuring initiatives across several of our operations enacted to improve costefficiency, including site consolidation in pursuit of synergies related to the Aptuit CTS acquisition and employee-related severance expenses during thetwelve months ended June 30, 2014.Interest Expense, netInterest expense, net, of $105.0 million for the twelve months ended June 30, 2015 decreased by $58.1 million, or 36%, compared to the twelve monthsended June 30, 2014, primarily driven by lower levels of outstanding debt as compared to the prior year. The Company redeemed $350 million of SeniorNotes and $275 million of Senior Subordinated Notes on August 28, 2014 and September 4, 2014, respectively. In addition, the Company reduced anaggregate of $234.5 million of outstanding borrowings under an unsecured term loan during the first quarter. The funds utilized to reduce our debt levelswere generated by proceeds from our IPO, which was completed during the first quarter of fiscal 2015. The decrease in interest expense, net was partiallyoffset by incremental borrowings of $191 million during the second quarter of fiscal 2015 in support of acquisitions.Other (Income)/Expense, netOther expense, net of $42.4 million for the twelve months ended June 30, 2015 increased from $10.4 million in the twelve months ended June 30,2014. The increase was primarily driven by a sponsor advisory fee agreement termination fee of $29.8 million, which we agreed to pay in connection with ourIPO. In addition, we incurred $21.8 million of expense associated with the early redemption of our Senior Notes and pre-payment of an unsecured term loan,of which $9.8 million was a cash expense. Offsetting these other expense items were non-recurring non-cash purchase accounting gains, net, of approximately$8.9 million related to acquisitions completed during the period and $2.4 million of non-cash net gains associated with foreign exchange. Other expense, netfor the twelve months ended June 30, 2014, was primarily driven by expenses of approximately $11 million related to the May 2014 refinancing of ourSenior Secured Credit Facility and the write off of unamortized deferred financing fees. Also included were non-cash unrealized gains related to foreigncurrency translation, partially offset by realized losses related to foreign currency translation.47Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Provision/(Benefit) for Income TaxesOur benefit for income taxes for the twelve months ended June 30, 2015 was $97.7 million relative to earnings before income taxes of $112.5 million.Our provision for income taxes for the twelve months ended June 30, 2014 was $49.5 million relative to earnings before income taxes of $67.4 million. Theincome tax benefit for the current period is not comparable to the same period of the prior year due to changes in pretax income over many jurisdictions andthe impact of discrete items. Generally, fluctuations in the effective tax rate are primarily due to changes in our geographic pretax income resulting from ourbusiness mix and changes in the tax impact of permanent differences, restructuring, other special items and other discrete tax items, which may have uniquetax implications depending on the nature of the item. Our effective tax rate at June 30, 2015 reflects the release of the U.S. federal valuation allowance and anincrease in a tax reserve related to an adjustment to inter-company interest income in Germany, partially offset by a corresponding deduction in the UnitedKingdom.Segment ReviewThe Company’s results on a segment basis for the fiscal year ended June 30, 2015 compared to the fiscal year ended June 30, 2014 were as follows: Fiscal Year Ended June 30, FX impact(unfavorable) /favorable Constant Currency Increase/(Decrease)(Dollars in millions)2015 2014 Change $ Change %Oral Technologies Net revenue$1,141.1 $1,180.1 $(95.7) $56.7 5%Segment EBITDA313.7 324.3 (27.7) 17.1 5%Medication Delivery Solutions Net revenue261.9 246.1 (15.3) 31.1 13%Segment EBITDA53.9 48.7 (2.5) 7.7 16%Development and Clinical Services Net revenue438.8 412.2 (7.0) 33.6 8%Segment EBITDA93.4 83.5 (2.2) 12.1 14%Inter-segment revenue elimination(11.0) (10.7) 0.1 (0.4) 4%Unallocated Costs (1)(100.8) (82.1) 7.5 (26.2) 32%Combined Total Net revenue$1,830.8 $1,827.7 $(117.9) $121.0 7% EBITDA from continuing operations$360.2 $374.4 $(24.9) $10.7 3%(1)Unallocated costs includes equity-based compensation, certain acquisition-related costs, impairment charges, certain other corporate directed costs,and other costs that are not allocated to the segments as follows: Fiscal Year Ended June 30,(Dollars in millions)2015 2014Impairment charges and gain/(loss) on sale of assets$(4.7) $(3.2)Equity compensation(9.0) (4.5)Restructuring and other special items (2)(27.2) (29.4)Sponsor advisory fee— (12.9)Noncontrolling interest1.9 1.0 Other income/(expense), net (3)(42.4) (10.4)Non-allocated corporate costs, net(19.4) (22.7)Total unallocated costs$(100.8) $(82.1)(2)Segment results do not include restructuring and certain acquisition-related costs.48Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents (3)Amounts for fiscal 2015 primarily relate to the expense associated with the termination of the sponsor advisory fee agreement of $29.8 millionresulting from the IPO, expenses related to financing transactions of $21.8 million, non-recurring non-cash purchase accounting gains ofapproximately $8.9 million related to acquisitions completed.Provided below is a reconciliation of earnings/(loss) from continuing operations to EBITDA from continuing operations: Fiscal Year Ended June 30,(Dollars in millions)2015 2014Earnings/(loss) from continuing operations$210.2 $17.9Depreciation and amortization140.8 142.9Interest expense, net105.0 163.1Income tax (benefit)/expense(97.7) 49.5Noncontrolling interest1.9 1.0EBITDA from continuing operations$360.2 $374.4Oral Technologies segment 2015 vs. 2014 Factors Contributing to Year-Over-Year ChangeFiscal Year Ended June 30, Net Revenue Segment EBITDAOrganic revenue / Segment EBITDA4 % 5 %Impact of acquisitions1 % — %Impact of divestitures / business restructuring— % — %Constant currency change5 % 5 %Foreign exchange fluctuation(8)% (9)%Total % Change(3)% (4)%Oral Technologies’ net revenue increased $56.7 million, or 5%, excluding the impact of foreign exchange. The primary driver was an increase in salesfrom our modified release technologies business and higher end market demand for certain customer products using our softgel offering totalingapproximately $36 million, or 3%, as compared to the twelve months ended June 30, 2014. Revenue also increased as a result of higher revenue from productparticipation related activities of approximately $20 million, or 2%, as compared to the prior year.Oral Technologies’ segment EBITDA increased by $17.1 million, or 5%, as compared to the twelve months ended June 30, 2014, excluding the impactof foreign exchange. The increase was primarily driven by increased profit from our product participation related activities coupled with higher revenues andtiming of contractual settlements related to our core manufacturing operations within our modified release technologies platform, partially offset byunfavorable product mix in our softgel offering.49Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Medication Delivery Solutions segment 2015 vs. 2014 Factors Contributing to Year-Over-Year ChangeFiscal Year Ended June 30, Net Revenue Segment EBITDAOrganic revenue / Segment EBITDA12 % 20 %Impact of acquisitions1 % (4)%Impact of divestitures / business restructuring— % — %Constant currency change13 % 16 %Foreign exchange fluctuation(7)% (5)%Total % Change6 % 11 %Net revenue in our Medication Delivery Solutions segment increased by $31.1 million, or 13%, as compared to the twelve months ended June 30,2014, excluding the impact of foreign exchange, due to increased revenue across all of our offerings. The segment growth was driven by increased demandfor products utilizing our blow-fill-seal technology platform of approximately 7%, increased demand from our biologics offerings of approximately 4%, andincreased demand for our injectable products at our European pre-filled syringe operations of approximately 2%.Medication Delivery Solutions’ segment EBITDA increased by $7.7 million, or 16%, as compared to the twelve months ended June 30, 2014 excludingthe impact of foreign exchange. The increase was primarily attributable to favorable product mix within our blow-fill-seal technology platform and increasedprofit generated from our biologics offerings, partially offset by unfavorable revenue mix from our injectable products at our European pre-filled syringeoperations.Development and Clinical Services segment 2015 vs. 2014 Factors Contributing to Year-Over-Year ChangeFiscal Year Ended June 30, Net Revenue Segment EBITDAOrganic revenue / Segment EBITDA4 % 10 %Impact of acquisitions4 % 4 %Impact of divestitures / business restructuring— % — %Constant currency change8 % 14 %Foreign exchange fluctuation(2)% (2)%Total % Change6 % 12 %Development and Clinical Services’ net revenue increased by $33.6 million, or 8%, as compared to the twelve months ended June 30, 2014, excludingthe impact of foreign exchange. Net revenue increased 4% as a result of the Micron Technologies acquisition completed during the second quarter of fiscal2015. Organically, the Development and Clinical Services’ net revenue increased 4% as compared to the prior year, primarily due to growth in analyticalservices of $15 million, or 4%, as a result of our integrated oral solids development and manufacturing capabilities.Development and Clinical Services’ segment EBITDA increased by $12.1 million, or 14%, excluding the impact of foreign exchange, as compared tothe twelve months ended June 30, 2014. Segment EBITDA increased 4% as a result of the Micron Technologies acquisition discussed above. Excluding theimpact of the acquisition, segment EBITDA increased 10%, primarily due to increased demand for our integrated oral solids development and manufacturingcapabilities within analytical services.50Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Fiscal Year Ended June 30, 2014 compared to Fiscal Year Ended June 30, 2013Results for the fiscal year ended June 30, 2014 compared to the fiscal year ended June 30, 2013 are as follows: Fiscal Year Ended June 30, FX impact(unfavorable) /favorable Constant Currency Increase/(Decrease)(Dollars in millions)2014 2013 Change $ Change %Net revenue$1,827.7 $1,800.3 $(1.6) $29.0 2 %Cost of products sold1,229.1 1,231.7 0.2 (2.8) *Gross margin598.6 568.6 (1.8) 31.8 6 %Selling, general and administrative expenses334.8 340.6 (0.2) (5.6) (2)%Impairment charges and (gain)/loss on sale of assets3.2 5.2 0.1 (2.1) (40)%Restructuring and other19.7 18.4 0.1 1.2 7 %Operating earnings/(loss)240.9 204.4 (1.8) 38.3 19 %Interest expense, net163.1 203.2 1.4 (41.5) (20)%Other (income)/expense, net10.4 25.1 (2.6) (12.1) (48)%Earnings/(loss) from continuing operations before income taxes67.4 (23.9) (0.6) 91.9 *Income tax expense/(benefit)49.5 27.0 (1.3) 23.8 88 %Earnings/(loss) from continuing operations17.9 (50.9) 0.7 68.1 *Net earnings/(loss) from discontinued operations, net of tax(2.7) 1.2 — (3.9) *Net earnings/(loss)15.2 (49.7) 0.7 64.2 *Less: Net earnings/(loss) attributable to noncontrolling interest,net of tax(1.0) (0.1) — (0.9) *Net earnings/(loss) attributable to Catalent$16.2 $(49.6) $0.7 $65.1 ** Percentage not meaningfulNet RevenueNet revenue increased by $29.0 million, or 2%, as compared to the twelve months ended June 30, 2013 excluding the impact of foreign exchange. Theincrease in net revenue was primarily due to increased demand for our softgel offering within our Oral Technologies segment and increased demand in ourMedication Delivery Solutions segment, partially offset by decreased sales within our modified release technologies business included in Oral Technologiesattributable to the prior year period including approximately $39 million of packaging services related revenue. In June 2013, we wound down our U.K.packaging services operation and no material revenue is included in the fiscal 2014 period.Gross MarginGross margin increased by $31.8 million, or 6%, as compared to the twelve months ended June 30, 2013 on a constant currency basis. The increase ingross margin was primarily due to a favorable shift in revenue mix within our Medication Delivery Solutions segment and modified release technologiesbusiness within our Oral Technologies segment as well as increased demand for our softgel offering within our Oral Technologies segment.Selling, General and Administrative ExpenseSelling, general and administrative expense decreased by $5.6 million, as compared to the twelve months ended June 30, 2013 excluding the impact offoreign exchange, primarily due to decreased integration costs related to the acquisition of the Aptuit CTS business and decreased amortization anddepreciation expense, partially offset by employee compensation costs driven by inflationary increases.51Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Restructuring and OtherRestructuring and other charges of $19.7 million for the twelve months ended June 30, 2014 increased by $1.3 million, or 7%, compared to the twelvemonths ended June 30, 2013. The prior period charges primarily related to headcount reduction within our Oral Technologies segment during the twelvemonths ended June 30, 2013. The twelve months ended June 30, 2014 included restructuring initiatives across several of our operations which were enactedto improve cost efficiency, including the consolidation of our former Allendale clinical services operation into our Philadelphia location and employeerelated severance expenses.Interest Expense, netInterest expense, net of $163.1 million for the twelve months ended June 30, 2014 decreased by $40.1 million, or 20%, compared to the twelve monthsended June 30, 2013, primarily driven by the absence of interest-rate swaps in the fiscal 2014 period coupled with a lower average interest-rate as a result ofdebt refinancing activity that occurred during the third quarter of fiscal 2013.Other (Income)/Expense, netOther expense, net of $10.4 million for the twelve months ended June 30, 2014 decreased from $25.1 million in the twelve months ended June 30,2013. Other expense, net for the twelve months ended June 30, 2013 was primarily driven by expenses related to the October 2012 redemption of certainformer senior indebtedness, which included expenses related to call premiums paid and the write-off of unamortized deferred financing fees. Other expense,net of $10.4 million for the twelve months ended June 30, 2014 was primarily driven by expenses of approximately $11 million related to the May 2014refinancing of our Senior Secured Credit Facility and the write off of unamortized deferred financing fees. Also included were non-cash unrealized gainsrelated to foreign currency translation, partially offset by realized losses related to foreign currency translation.Provision/(Benefit) for Income TaxesOur provision for income taxes for the twelve months ended June 30, 2014 was $49.5 million relative to earnings before income taxes of $67.4 million.Our provision for income taxes for the twelve months ended June 30, 2013 was $27.0 million relative to losses before income taxes of $23.9 million. Theincome tax provision for the fiscal 2014 period is not comparable to the same period of the prior year due to changes in pretax income over manyjurisdictions and the impact of discrete items. Generally, fluctuations in the effective tax rate are primarily due to changes in our geographic pretax incomeresulting from our business mix and changes in the tax impact of permanent differences, restructuring, other special items and other discrete tax items, whichmay have unique tax implications depending on the nature of the item. Our effective tax rate at June 30, 2014 reflects an increase in a tax reserve related tothe potential disallowance of certain tax benefits in the United Kingdom, partially offset by a deferred tax benefit resulting from a reduction in the UnitedKingdom statutory tax rate during the first quarter of fiscal 2014 and benefits derived from operations outside the United States, which are generally taxed atlower rates than the U.S. statutory rate of 35%.52Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Segment ReviewThe Company’s results on a segment basis for the fiscal year ended June 30, 2014 compared to the fiscal year ended June 30, 2013 are as follows: Fiscal Year Ended June 30, FX impact(unfavorable) /favorable Constant Currency Increase/(Decrease)(Dollars in millions)2014 2013 Change $ Change %Oral Technologies Net revenue$1,180.1 $1,186.3 $(13.5) $7.3 1 %Segment EBITDA324.3 315.7 (4) 12.6 4 %Medication Delivery Solutions Net revenue246.1 219.3 5.6 21.2 10 %Segment EBITDA48.7 31.5 1 16.2 51 %Development and Clinical Services Net revenue412.2 404.8 6.4 1.0 *Segment EBITDA83.5 75.0 2.0 6.5 9 %Inter-segment revenue elimination(10.7) (10.1) (0.1) (0.5) 5 %Unallocated Costs(1)(82.1) (90.6) 2.5 6.0 (7)%Combined Total Net revenue$1,827.7 $1,800.3 $(1.6) $29.0 2 % EBITDA from continuing operations$374.4 $331.6 $1.5 $41.3 12 %*Percentage not meaningful(1)Unallocated costs includes equity-based compensation, certain acquisition-related costs, impairment charges, certain other corporate directed costs, andother costs that are not allocated to the segments as follows: Fiscal Year Ended June 30,(Dollars in millions)2014 2013Impairment charges and gain/(loss) on sale of assets$(3.2) $(5.2)Equity compensation(4.5) (2.8)Restructuring and other special items (2)(29.4) (29.0)Property and casualty losses— —Sponsor advisory fee(12.9) (12.4)Noncontrolling interest1.0 0.1Other income/(expense), net (3)(10.4) (25.1)Non-allocated corporate costs, net(22.7) (16.2)Total unallocated costs$(82.1) $(90.6)(2)Segment results do not include restructuring and certain acquisition-related costs(3)Primarily relates to realized and unrealized gains/(losses) related to foreign currency translation and expenses related to financing transactions duringthe period.Provided below is a reconciliation of earnings/(loss) from continuing operations to EBITDA from continuing operations:53Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Fiscal Year Ended June 30,(Dollars in millions)2014 2013Earnings/(loss) from continuing operations$17.9 $(50.9)Depreciation and amortization142.9 152.2Interest expense, net163.1 203.2Income tax (benefit)/expense49.5 27.0Noncontrolling interest1.0 0.1EBITDA from continuing operations$374.4 $331.6Oral Technologies segment 2014 vs. 2013 Factors Contributing to Year-Over-Year ChangeFiscal Year Ended June 30, Net Revenue Segment EBITDAOrganic Growth / Segment EBITDA1 % 3 %Impact of acquisitions2 % 1 %Impact of divestitures / business restructuring(2)% — %Constant currency change1 % 4 %Foreign exchange fluctuation(2)% (1)%Total % Change(1)% 3 %Oral Technologies’ net revenue increased $7.3 million during fiscal 2014, or 1%, excluding the impact of foreign exchange. The increase is primarilydue to favorable demand for our softgel offering of approximately $29 million, or 2%, as compared to the fiscal year ended June 30, 2013, partially offset bydecreased sales of approximately $21 million, or 2% within our modified release technologies business which was attributable to the fiscal 2013 periodincluding approximately $39 million of packaging services related revenue. In June 2013 we wound down our U.K. packaging services operation and nomaterial revenue is included in the fiscal 2014 period.Oral Technologies’ segment EBITDA increased by $12.6 million, or 4%, as compared to the twelve months ended June 30, 2013 excluding the impactof foreign exchange. The increase was primarily driven by favorable product mix in both our softgel offering and modified release technologies platformwithin our Oral Technologies segment.Medication Delivery Solutions segment 2014 vs. 2013 Factors Contributing to Year-Over-Year ChangeFiscal Year Ended June 30, Net Revenue Segment EBITDAOrganic Growth / Segment EBITDA10% 51%Impact of acquisitions—% —%Impact of divestitures / business restructuring—% —%Constant currency change10% 51%Foreign exchange fluctuation2% 4%Total % Change12% 55%Net revenue in our Medication Delivery Solutions segment increased by $21.2 million, or 10%, as compared to the twelve months ended June 30,2013, excluding the impact of foreign exchange, primarily due to increased demand for injectable products at our European pre-filled syringe operations ofapproximately $15 million, or 7%, as well as increased demand for products utilizing our blow-fill-seal technology platform of approximately $7 million, or3%.54Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Medication Delivery Solutions’ segment EBITDA increased by $16.2 million, or 51%, as compared to the twelve months ended June 30, 2013excluding the impact of foreign exchange. The increase was primarily attributable to the increased demand for injectable and blow-fill-seal products as notedabove.Development and Clinical Services segment 2014 vs. 2013 Factors Contributing to Year-Over-Year ChangeFiscal Year Ended June 30, Net Revenue Segment EBITDAOrganic Growth / Segment EBITDA—% 9%Impact of acquisitions—% —%Impact of divestitures / business restructuring—% —%Constant currency change—% 9%Foreign exchange fluctuation2% 2%Total % Change2% 11%Development and Clinical Services’ net revenue was level as compared to the twelve months ended June 30, 2013, excluding the impact of foreignexchange. Increased demand from our analytical service operations of approximately $18 million, or 5%, was offset by lower revenue for manufacturing andpackaging services of approximately $18 million, or 5%. As we consolidated two of our clinical services operations in pursuit of acquisition synergies, weexperienced revenue declines due to the hesitancy of customers to renew or place new business while we transitioned customer clinical studies.Development and Clinical Services’ segment EBITDA increased by $6.5 million, or 9%, excluding the impact of foreign exchange, as compared to thetwelve months ended June 30, 2013, primarily due to increased demand for analytical services and favorable revenue mix across the segment, partially offsetby decreased demand for manufacturing and packaging services.Liquidity and Capital ResourcesOverviewOur principal source of liquidity has been cash flow generated from operations. The principal uses of cash are to fund planned operating and capitalexpenditures, business or asset acquisitions, interest payments on debt and any mandatory or discretionary principal payments on our debt. As of June 30,2015, our financing needs were supported by a five-year $200 million revolving credit facility that matures in May 2019 and is reduced by $11.7 million inletters of credit. The revolving credit facility includes borrowing capacity available for letters of credit and for short-term borrowings, referred to as swing-lineborrowings. As of June 30, 2015, we had no outstanding borrowings under our revolving credit facility.We continue to believe that our cash from operations and available borrowings under the revolving credit facility will be adequate to meet our futureliquidity needs for at least the next twelve months. We have no significant debt maturity until the senior secured term loans mature in May 2021.Cash FlowsFiscal Year Ended June 30, 2015 Compared to the Fiscal Year Ended June 30, 2014The following table summarizes our Consolidated Statement of Cash Flows from continuing operations for the fiscal year ended June 30, 2015compared with the fiscal year ended June 30, 2014: Fiscal Year Ended June 30, (in millions)2015 2014 $ ChangeNet cash provided by/(used in): Operating activities from continuing operations$171.7 $180.2 $(8.5)Investing activities from continuing operations$(271.8) $(175.2) $(96.6)Financing activities from continuing operations$196.5 $(42.1) $238.655Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Operating activitiesFor the fiscal year ended June 30, 2015, cash provided by operating activities from continuing operations was $171.7 million compared to $180.2million for the comparable prior-year period. Cash provided by operating activities decreased compared to the same period last year by $8.5 million drivenby net cash outflows associated with working capital changes compared to the previous period. These cash outflows were offset by higher earnings fromcontinuing operations in the fiscal year ended June 30, 2015 as compared to the year ended June 30, 2014 which benefited from lower interest expense in thecurrent year as a result of paying down high-interest debt with proceeds from the IPO.Investing activitiesFor the fiscal year ended June 30, 2015, cash used in investing activities from continuing operations was $271.8 million, which primarily related toacquisitions of property, plant and equipment of $138.2 million, intangible asset additions of $2.8 million, and acquisitions of $130.8 million. We acquiredthe remaining interest in Redwood and purchased the stock of MTI Pharma Solutions, Inc. (Micron Technologies). Cash used in investing activities fromcontinuing operations for the comparable prior-year period was $175.2 million, which was primarily related to the acquisition of property, plant andequipment of $122.4 million and $53.7 million for acquisition activities, including the purchases of a softgel manufacturing business in Brazil and a 67%controlling interest in a softgel manufacturing facility located in Haining, China.Financing activitiesFor the fiscal year ended June 30, 2015, cash provided by financing activities was $196.5 million compared to cash used in financing activities of$42.1 million in the same period a year ago. The net proceeds raised in connection with our IPO of $948.8 million were primarily used to fund debt paymentsin the first quarter of $863.8 million. The current year also includes $12.6 million of call premiums paid in connection with the early termination of certaindebt instruments in the period. Additionally, on December 1, 2014, we entered into Amendment No. 1 to our credit agreement to provide additional seniorsecured financing of incremental dollar and euro-denominated term loan facilities of $100 million and €72.8 million ($91 million), respectively. Theproceeds of the borrowing were primarily used to pay the remaining $40.5 million outstanding on the unsecured term loans, fund acquisitions completed inthe second quarter of $111.6 million and for general corporate purposes. Although we completed two secondary offerings of our common stock during fiscal2015, we did not sell shares of our common stock in these offerings and did not receive any of the proceeds.Fiscal Year Ended June 30, 2014 Compared to the Fiscal Year Ended June 30, 2013The following table summarizes our Consolidated Statement of Cash Flows from continuing operations for the fiscal year ended June 30, 2014compared with the fiscal year ended June 30, 2013: Fiscal Year Ended June 30, (in millions)2014 2013 $ ChangeNet cash provided by/(used in): Operating activities from continuing operations$180.2 $139.1 $41.1Investing activities from continuing operations$(175.2) $(122.1) $(53.1)Financing activities from continuing operations$(42.1) $(49.3) $7.2Operating activitiesFor the fiscal year ended June 30, 2014, cash provided by operating activities from continuing operations was $180.2 million compared to $139.1million for the fiscal 2013 period. Cash provided by operating activities from continuing operations increased compared to the fiscal 2013 period by $41.1million primarily due to increased revenues and lower interest expense, driven by the absence of interest-rate swaps in the fiscal 2014 period and an overalllower weighted interest-rate as a result of debt refinancing activity during fiscal 2013.Investing activitiesFor the fiscal year ended June 30, 2014, cash used in investing activities from continuing operations was $175.2 million, which primarily related toacquisitions of property, plant and equipment of $122.4 million. During the fiscal year ended June 30, 2014, we also expended $53.7 million for acquisitionactivities, including the purchase of a 100% interest in a softgel manufacturing business in Brazil and a 67% controlling interesting in a softgelmanufacturing facility located in Haining, China. There were no acquisitions in the fiscal 2013 period. Cash used in investing activities from continuingoperations for56Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents the comparable prior year period was $122.1 million, which primarily related to the acquisition of property, plant and equipment of $122.5 million.Financing activitiesFor the fiscal year ended June 30, 2014, cash used in financing activities was $42.1 million compared to cash used in financing activities of $49.3million in the fiscal 2013 period. The $42.1 million used in financing activities attributable to the fiscal year ended June 30, 2014 was comprised of $1,741.3million, in principal payments offset by net borrowings of $1,723.7 million primarily related to refinancing our Secured Credit Agreement during the fourthquarter of fiscal 2014. In addition, a net decrease of $17.5 million in short-term borrowings was due primarily to the full repayment of certain indebtednessacquired in connection with two business combinations executed during the period and the repayment of the short-term borrowings outside of the UnitedStates. In the comparable period ended June 30, 2013 cash flows used in financing activities consisted largely of fees paid related to financing activity duringthe period, normal term loan principal payments and payment of other long-term obligations as well as cash inflows and outflows associated with debtrefinancing activities during the year.Debt and Financing ArrangementsSenior Secured Credit FacilitiesOn May 20, 2014, we entered into the Amended and Restated Credit Agreement to provide senior secured financing consisting of a seven-year $1,400.0million term loan (the “Dollar Term Loan”), a seven-year €250.0 million term loan and a five-year $200 million revolving credit facility, the proceeds ofwhich were used to prepay in full all outstanding all term loans under its previous senior secured facility. A $200 million revolving credit facility replacedthe prior facility and includes borrowing capacity available for letters of credit and for short-term borrowings, referred to as the swing line borrowings.Borrowings under the term loan facilities and the revolving credit facility bear interest, at our option, at a rate equal to a margin over either (a) a base ratedetermined by reference to the higher of (1) the rate of interest published by The Wall Street Journal as its “prime lending rate” and (2) the federal funds rateplus 1/2 of 1% or (b) a LIBOR rate determined by reference to the London Interbank Offered Rate set by ICE Benchmark Administration (or any successorthereto). The applicable margin for the term loans and borrowings under the revolving credit facility may be reduced if we attain a certain total net leverageratio. The applicable margin for borrowings is 3.50% for loans based on a LIBOR rate and 2.50% for loans based on the base rate. The LIBOR rate for termloans is subject to a floor of 1.00% and the base rate for term loans is subject to a floor of 2.00%.On December 1, 2014, we entered into Amendment No. 1 to the Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) toprovide additional senior secured financing of incremental Dollar and Euro denominated term loan facilities of $100 million and €72.8 million ($91 million),respectively. The incremental term loans have substantially similar terms as our existing term loan facilities. The proceeds of the borrowing were primarilyused to pay the remaining $40.5 million outstanding on the unsecured term loans, fund acquisitions completed in the second quarter of $111.6 million andgeneral corporate purposes.As of June 30, 2015, there were $11.7 million in outstanding letters of credit, which reduced the borrowing capacity under the $200 million revolvingcredit facility.Redemption of Notes and Unsecured Term Loan PrepaymentOn July 29, 2014, we provided notice of our election to redeem the entire $350.0 million aggregate principal amount outstanding 7.875% senior notesdue 2018 and redeemed them on August 28, 2014 at a redemption price of 101.5% of their principal amount plus accrued and unpaid interest. Theredemption was funded with proceeds from the IPO.On August 5, 2014, we provided notice of its election to redeem the entire €225.0 million aggregate principal amount outstanding of 9.75% seniorsubordinated notes due 2017 and redeemed them on September 4, 2014 at a redemption price of 101.625% of their principal amount plus accrued and unpaidinterest. The redemption was funded with proceeds from the IPO.On August 6, 2014, we repaid $114.5 million of the outstanding borrowings under the unsecured term loans with proceeds from the IPO. On September12, 2014, we repaid $120.0 million of the outstanding borrowings under the unsecured term loans with proceeds from the additional shares purchased by therepresentatives of the underwriters in connection with the IPO. On December 1, 2014, we repaid the remaining $40.5 million outstanding on the unsecuredterm loans with proceeds from the incremental senior secured term loans.57Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Guarantees and SecurityAll obligations under the Senior Secured Credit Facilities, and the guarantees of those obligations, are secured by substantially all of the followingassets of the Company and each guarantor, subject to certain exceptions:•a pledge of 100% of the capital stock of the borrower and 100% of the equity interests directly held by the borrower and each guarantor in anywholly owned material subsidiary of the borrower or any guarantor (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, willnot include more than 65% of the voting stock of such non-U.S. subsidiary); and•a security interest in, and mortgages on, substantially all tangible and intangible assets of the borrower and of each guarantor, subject to certainlimited exceptions.Debt CovenantsThe Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our (and our restrictedsubsidiaries’) ability to incur additional indebtedness or issue certain preferred shares; create liens on assets; engage in mergers and consolidations; sellassets; pay dividends and distributions or repurchase capital stock; engage in certain transactions with affiliates; make investments, loans or advances; makecertain acquisitions; enter into sale and leaseback transactions and change our lines of business.The Credit Agreement also contains change of control provisions and certain customary affirmative covenants and events of default. The revolvingcredit facility requires compliance with a net leverage covenant when there is a 30% or more draw outstanding at a period end. As of June 30, 2015, we werein compliance with all material covenants related to our long-term debt obligations.Subject to certain exceptions, our Credit Agreement permits us and our restricted subsidiaries to incur certain additional indebtedness, includingsecured indebtedness. None of our non-U.S. subsidiaries or Puerto Rico subsidiaries is a guarantor of the loans.Liquidity in Foreign SubsidiariesAs of June 30, 2015 and June 30, 2014, the amounts of cash and cash equivalents held by foreign subsidiaries were $116.3 million and $53.5 million,respectively, out of the total consolidated cash and cash equivalents of $151.3 million and $74.4 million, respectively. We believe that the amount of fundsheld by foreign subsidiaries as of such dates not readily convertible into other foreign currencies, including U.S. dollars, was $1.7 million and $3.5 million,respectively. Based on our domestic cash flows from operations and our other sources of liquidity, we believe we have sufficient access to funds for ourexpected future domestic liquidity needs. Our intent is to continue to reinvest undistributed earnings of our foreign local entities and we do not currentlyplan to repatriate them to fund our operations in the United States. In the event we need to repatriate funds from outside of the United States, such repatriationwould likely be subject to restrictions by local laws and/or tax consequences including foreign withholding taxes or U.S. income taxes. It is not feasible toestimate the amount of U.S. tax that might be payable on the remittance of such earnings.Historical and Adjusted EBITDAUnder the Credit Agreement, the ability of the Operating Company to engage in certain activities such as incurring certain additional indebtedness,making certain investments and paying certain dividends is tied to ratios based on Adjusted EBITDA (which is defined as “Consolidated EBITDA” in thecredit agreement). Adjusted EBITDA is a covenant compliance measure in our Credit Agreement, particularly those covenants governing debt incurrence andrestricted payments. Adjusted EBITDA is not defined under U.S. GAAP and is subject to important limitations. Because not all companies use identicalcalculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.The most directly comparable GAAP measure to EBITDA from continuing operations and Adjusted EBITDA is earnings/(loss) from continuingoperations. In calculating Adjusted EBITDA, we add back certain non-cash, non-recurring and other items that are included in the definitions of EBITDAfrom continuing operations and consolidated net income, as required in the Credit Agreement. Adjusted EBITDA, among other things:•does not include non-cash stock-based employee compensation expense and certain other non-cash charges;•does not include cash and non-cash restructuring, severance and relocation costs incurred to realize future cost savings and enhance ouroperations;58Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents •adds back noncontrolling interest expense, which represents minority investors’ ownership of certain of our consolidated subsidiaries and is,therefore, not available to us; and•includes estimated cost savings that have not yet been fully reflected in our results.A reconciliation between earnings / (loss) from continuing operations and Adjusted EBITDA, which also shows the adjustments from EBITDA fromcontinuing operations, follows: Twelve Months Ended June 30 2015June 30, 2014Earnings/(loss) from continuing operations $210.2$17.9Interest expense, net 105.0163.1Income tax expense/(benefit) (1) (97.7)49.5Depreciation and amortization 140.8142.9Noncontrolling interest 1.91.0EBITDA from continuing operations 360.2374.4Equity compensation 9.04.5Impairment charges and (gain)/loss on sale of assets 4.73.2Financing related expenses and other (2) 21.811.0U.S. GAAP Restructuring 13.419.7Acquisition, integration and other special items 13.89.8Foreign exchange loss/(gain) (included in other, net) (3) (2.7)(3.5)Other adjustments (4) 22.90.3Sponsor advisory fee (5) —12.9Subtotal 443.1432.3Estimated cost savings ——Adjusted EBITDA $443.1$432.3FX impact (unfavorable) $(27.5) Adjusted EBITDA - Constant Currency $470.6$432.3(1)Represents the amount of income tax-related expense/(benefit) recorded within our net earnings/(loss) that may not result in cash payment or receipt.(2)Financing-related expenses for the three months ended September 30, 2014 include $20.6 million of early debt termination expenses incurred inconnection with the repayment of debt with the net proceeds of the IPO. See footnote 4 for an additional $29.8 million of IPO-related costs; totaling$50.4 million.(3)Foreign exchange gain of $2.7 million for the twelve months ended June 30, 2015 included $16.4 million of unrealized foreign currency exchangerate gains primarily driven by losses of $31.4 million related to inter-company loans denominated in a currency different from the functionalcurrency of either the borrower or the lender, partially offset by foreign currency exchange gains of $47.8 million driven by the ineffective portion ofthe net investment hedge related to the Euro-denominated debt. The foreign exchange adjustment was also affected by the exclusion of realizedforeign currency exchange rate losses from the non-cash and cash settlement of inter-company loans of $13.7 million. Inter-company loans arebetween our entities and do not reflect the ongoing results of the Company’s trade operations.Foreign exchange gain of $3.5 million for the twelve months ended June 30, 2014 included $17.1 million of unrealized foreign currency exchangerate gains primarily driven by gains of $26.6 million related to inter-company loans denominated in a currency different from the functionalcurrency of either the borrower or the lender, partially offset by foreign currency exchange losses of $9.5 million driven by the ineffective portion ofthe net investment59Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents hedge related to the Euro-denominated debt. The foreign exchange adjustment was also affected by the exclusion of realized foreign currencyexchange rate losses from the non-cash and cash settlement of inter-company loans of $13.6 million. Inter-company loans are between our entitiesand do not reflect the ongoing results of the company’s trade operations.(4)Other Adjustments for the twelve months ended June 30, 2015 includes $29.8 million for a sponsor advisory agreement termination fee paid inconnection with the IPO. See footnote 2 for an additional $20.6 million of IPO-related costs; totaling $50.4 million.(5)Represents the amount of sponsor advisory fee for each respective period. The sponsor advisory fee agreement was terminated in connection with thecompletion of our IPO.Interest Rate Risk ManagementA portion of the debt used to finance our operations is exposed to interest-rate fluctuations. We may use various hedging strategies and derivativefinancial instruments to create an appropriate mix of fixed-and floating-rate assets and liabilities. Historically, we have used interest-rate swaps to manage theeconomic effect of variable rate interest obligations associated with our floating rate term loans so that the interest payable on the term loans effectivelybecomes fixed at a certain rate, thereby reducing the impact of future interest-rate changes on our future interest expense. As of June 30, 2015, we did nothave any interest-rate swap agreements in place that would have the economic effect of modifying the variable interest obligations associated with ourfloating-rate term loans. During fiscal year 2013, our two U.S. dollar-denominated and one euro-denominated interest-rate swap agreements, which weredesignated as effective cash flow hedges for financial reporting purposes, matured. Our Japanese yen interest-rate swap, effective as an economic hedge butnot designated as effective for financial reporting purposes also matured during fiscal 2013.Currency Risk ManagementWe are exposed to fluctuations in the EUR-USD exchange rate on its investments in foreign operations in Europe. While we do not actively hedgeagainst changes in foreign currency, we have mitigated the exposure of our investments in our European operations by denominating a portion of our debt ineuros. At June 30, 2015, we had $355.8 million of euro-denominated debt outstanding that qualifies as a hedge of a net investment in foreign operations.Refer to Note 8 to our Consolidated Financial Statements for further discussion of net investment hedge activity in the period.Periodically, we may utilize forward currency exchange contracts to manage our exposure to the variability of cash flows primarily related to theforeign exchange rate changes of future foreign currency transaction costs. In addition, we may utilize foreign currency forward contracts to protect the valueof existing foreign currency assets and liabilities. Currently, we do not utilize foreign currency exchange contracts. We expect to continue to evaluatehedging opportunities for foreign currency in the future.Contractual ObligationsThe following table summarizes our significant contractual obligations as of June 30, 2015: (Dollars in millions)Total Fiscal 2016 Fiscal 2017 -Fiscal 2018 Fiscal 2019 -Fiscal 2020 Thereafter Long-term debt obligations (1)$1,848.9 $22.4 $39.2 $37.2 $1,750.1 Interest on long-term obligations (2)517.6 84.8 166.1 162.6 104.1 Capital lease obligations (3)55.5 1.9 4.8 5.9 42.9 Operating lease obligations (4)35.8 8.4 11.3 8.3 7.8 Purchase obligations (5)57.6 51.1 4.0 2.5 — Other long-term liabilities (6)40.5 2.3 4.4 3.5 30.3 Total$2,555.9 $170.9 $229.8 $220.0 $1,935.2(1)Represents gross maturities of our long-term debt obligations excluding capital lease obligations as of June 30, 2015. (2)Represents estimated interest payments relating to our long-term obligations including capital lease obligations. Estimated future interest paymentson our variable-rate debt obligations were calculated using the interest and exchange rates as of June 30, 2015.60Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents (3)Represents maturities of our capital lease obligations included within long-term debt as of June 30, 2015. (4)Represents minimum rental payments for operating leases having initial or remaining non-cancelable lease terms. (5)Purchase obligations includes agreements to purchase goods or services that are enforceable, specify all significant terms, including the following:fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and approximate timing of the transaction. Purchaseobligations disclosed above may include estimates of the time period in which cash outflows will occur. Purchase orders entered into in the normalcourse of business and authorizations to purchase that involve no firm commitment from either party are excluded from the above table. In addition,contracts that can be unilaterally canceled with no termination fee or with proper notice are excluded from our total purchase obligations except forthe amount of the termination fee or the minimum amount of goods that must be purchased during the requisite notice period. (6)Primarily relates to certain long-term employee-related liabilities for operations that we have discontinued.The table excludes our retirement and other post-retirement benefits ("OPEB") obligations. The timing and amount of payments for these obligationsmay be affected by a number of factors, including the funded status of the plans. In fiscal 2016, we are not required to make contributions to our plans tosatisfy regulatory funding standards. Beyond fiscal 2016, the actual amounts required to be contributed are dependent upon, among other things, interestrates, underlying asset returns and the impact of legislative or regulatory actions related to pension funding obligations. Payments due under our OPEB plansare not required to be funded in advance, but are paid as medical costs are incurred by covered retiree populations, and are principally dependent upon thefuture cost of retiree medical benefits under our plans. Refer to Note 10 to the Consolidated Financial Statements for further discussion.Off-Balance Sheet ArrangementsOther than operating leases and letters of credit under the senior secured credit facility, we do not have any material off-balance sheet arrangements asof June 30, 2015. See Note 6 to the Consolidated Financial Statements for further detail.61Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKWe are exposed to cash flow and earnings fluctuations as a result of certain market risks. These market risks primarily relate to changes in interest ratesassociated with our long-term debt obligations and foreign exchange rate changes.Interest Rate RiskThe Company has historically used interest-rate swaps to manage the economic effect of variable rate interest obligations associated with our floating-rate term loans so that the interest payable on the term loans effectively becomes fixed at a certain rate, thereby reducing the impact of future interest-ratechanges on our future interest expense. As of June 30, 2015, we did not have any interest-rate swap agreements in place that would either have the economiceffect of modifying the variable interest obligations associated with our floating-rate term loans or would be considered effective cash flow hedges forfinancial reporting purposes. Our two U.S. dollar-denominated and one euro-denominated interest-rate swap agreements, which were designated as effectivecash flow hedges for financial reporting purposes, matured in April 2013. Our Japanese yen interest-rate swap, effective as an economic hedge but notdesignated as effective for financial reporting purposes, matured in May 2013.In February 2013, in connection with the refinancing our €44.9 million term loan, we de-designated €35.0 million of the €240.0 million notionalEuribor-based interest-rate swap. Prior to de-designation, the effective portion of the change in fair value of the derivative was recorded as a component ofother comprehensive income/(loss). The other comprehensive income/(loss) balance associated with the de-designated portion of the derivative wasreclassified to earnings during the second half of fiscal 2013.Foreign Currency Exchange RiskBy the nature of our global operations, we are exposed to cash flow and earnings fluctuations resulting from foreign exchange rate variation. Theseexposures are transactional and translational in nature. Since we manufacture and sell our products throughout the world, our foreign currency risk isdiversified. Principal drivers of this diversified foreign exchange exposure include the European euro, British pound, Argentinean peso, Brazilian real andAustralian dollar. Our transactional exposure arises from the purchase and sale of goods and services in currencies other than the functional currency of ouroperational units. We also have exposure related to the translation of financial statements of our foreign divisions into U.S. dollars, the functional currency ofthe parent. The financial statements of our operations outside the U.S. are measured using the local currency as the functional currency. Adjustments totranslate the assets and liabilities of these foreign operations in U.S. dollars are accumulated as a component of other comprehensive income/(loss) utilizingperiod-end exchange rates. Foreign currency transaction gains and losses calculated by utilizing weighted average exchange rates for the period are includedin the statements of operations in “other expense, net.” Such foreign currency transaction gains and losses include inter-company loans denominated in non-U.S. dollar currencies.62Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAINDEX TO FINANCIAL STATEMENTSConsolidated Financial Statements as of June 30, 2015 and 2014 and for the years ended June 30, 2015, 2014 and 2013 Report of Independent Registered Public Accounting Firm64 Consolidated Statements of Operations65 Consolidated Statements of Comprehensive Income/(Loss)66 Consolidated Balance Sheets67 Consolidated Statement of Changes in Shareholders’ Equity/(Deficit)68 Consolidated Statements of Cash Flows69 Notes to Consolidated Financial Statements7063Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Report of Independent Registered Public Accounting FirmThe Board of Directors and Shareholders ofCatalent, Inc.We have audited the accompanying consolidated balance sheets of Catalent, Inc. and subsidiaries as of June 30, 2015 and 2014, and the related consolidatedstatements of operations, comprehensive income/(loss), changes in shareholders’ equity/(deficit), and cash flows for each of the three years in the periodended June 30, 2015. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule arethe responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engagedto perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reportingas a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management,and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Catalent,Inc. and subsidiaries at June 30, 2015 and 2014 and the consolidated results of their operations and their cash flows for each of the three years in the periodended June 30, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, whenconsidered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein./s/ Ernst & Young LLPMetroPark, New JerseySeptember 2, 201564Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Catalent, Inc. and SubsidiariesConsolidated Statements of Operations(Dollars in millions, except per share data) Year ended June 30, 2015 2014 2013Net revenue$1,830.8 $1,827.7 $1,800.3Cost of sales1,215.5 1,229.1 1,231.7Gross margin615.3 598.6 568.6Selling, general and administrative expenses337.3 334.8 340.6Impairment charges and (gain)/loss on sale of assets4.7 3.2 5.2Restructuring and other13.4 19.7 18.4Operating earnings/(loss)259.9 240.9 204.4Interest expense, net105.0 163.1 203.2Other (income)/expense, net42.4 10.4 25.1Earnings/(loss) from continuing operations before income taxes112.5 67.4 (23.9)Income tax expense/(benefit)(97.7) 49.5 27.0Earnings/(loss) from continuing operations210.2 17.9 (50.9)Net earnings/(loss) from discontinued operations, net of tax0.1 (2.7) 1.2Net earnings/(loss)210.3 15.2 (49.7)Less: Net earnings/(loss) attributable to noncontrolling interest, net of tax(1.9) (1.0) (0.1)Net earnings/(loss) attributable to Catalent$212.2 $16.2 $(49.6) Amounts attributable to Catalent: Earnings/(loss) from continuing operations less net income (loss) attributable tononcontrolling interest212.1 18.9 (50.8)Net earnings/(loss) attributable to Catalent212.2 16.2 (49.6) Earnings per share attributable to Catalent: Basic Earnings/(loss) continuing operations1.77 0.25 (0.68)Net earnings/(loss)1.77 0.22 (0.66)Diluted Earnings/(loss) continuing operations1.75 0.25 (0.68)Net earnings/(loss)1.75 0.21 (0.66)The accompanying notes are an integral part of these consolidated financial statements.65Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Catalent, Inc. and SubsidiariesConsolidated Statements of Comprehensive Income/(Loss)(Dollars in millions) Year Ended June 30, 201520142013Net earnings/(loss)$210.3 $15.2 $(49.7)Other comprehensive income/(loss), net of tax Foreign currency translation adjustments(144.0) 32.4 (47.9)Defined benefit pension plan(6.4) (15.5) 8.7Deferred compensation/(benefit)0.6 1.7 0.8Earnings/(loss) on derivatives for the period— — 24.5Other comprehensive income/(loss), net of tax(149.8) 18.6 (13.9)Comprehensive income/(loss)60.5 33.8 (63.6)Comprehensive income/(loss) attributable to noncontrolling interest(1.9) (0.6) (0.1)Comprehensive income/(loss) attributable to Catalent$62.4 $34.4 $(63.5)The accompanying notes are an integral part of these consolidated financial statements.66Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Catalent, Inc. and SubsidiariesConsolidated Balance Sheets(Dollars in millions except per share data) June 30, 2015 June 30, 2014ASSETS Current assets: Cash and cash equivalents$151.3 $74.4Trade receivables, net372.4 403.7Inventories132.9 134.8Prepaid expenses and other80.9 74.6Total current assets737.5 687.5Property, plant, and equipment, net885.2 873.0Other assets: Goodwill1,061.5 1,097.1Other intangibles, net368.7 357.6Deferred income taxes64.1 26.3Other28.4 48.7Total assets$3,145.4 $3,090.2LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND SHAREHOLDERS’ EQUITY/(DEFICIT)Current liabilities: Current portion of long-term obligations and other short-term borrowings$23.8 $25.2Accounts payable128.2 148.1Other accrued liabilities247.0 279.7Total current liabilities399.0 453.0Long-term obligations, less current portion1,864.1 2,685.4Pension liability143.7 154.7Deferred income taxes56.3 103.2Other liabilities42.5 61.2Commitment and contingencies (see Note 16)— — Redeemable noncontrolling interest5.8 4.5 Shareholders’ equity/(deficit): Common stock $0.01 par value; 1.0 billion and 84,000,000 shares authorized in 2015 and 2014,respectively; 124,319,279 and 74,821,348 shares issued and outstanding in 2015 and 2014,respectively.1.2 0.7Preferred stock $0.01 par value; 100 million and 0 authorized in 2015 and 2014, respectively, 0 issuedand outstanding in 2015 and 2014. Additional paid in capital1,973.7 1,031.4Accumulated deficit(1,166.9) (1,379.1)Accumulated other comprehensive income/(loss)(174.0) (24.2)Total Catalent shareholders’ equity/(deficit)634.0 (371.2)Noncontrolling interest— (0.6)Total shareholders’ equity/(deficit)634.0 (371.8)Total liabilities, redeemable noncontrolling interest and shareholders’ equity/(deficit)$3,145.4 $3,090.2The accompanying notes are an integral part of these consolidated financial statements67Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Catalent, Inc. and SubsidiariesConsolidated Statement of Changes in Shareholders’ Equity/(Deficit)(Dollars in millions, except share data in thousands) Shares ofCommon Stock CommonStock Additional Paidin Capital AccumulatedDeficit Accumulated OtherComprehensive(Loss)/Income NoncontrollingInterest TotalShareholders’Equity/(Deficit)Balance at June 30, 201274,756.1 $0.7 $1,023.2 $(1,345.7) $(28.9) $— $(350.7)Equity contribution40.0 0.7 0.5 1.2Equity compensation 2.8 2.8Net earnings/(loss) (49.6) (0.1) (49.7)Other comprehensive income/(loss), net of tax (13.9) (13.9)Balance at June 30, 201374,796.1 0.71,026.7(1,395.3)(42.8)0.4(410.3)Equity contribution25.2 0.2 (0.4) (0.2)Equity compensation 4.5 4.5Net earnings/(loss) 16.2 (0.6) 15.6Other comprehensive income/(loss), net of tax 18.6 18.6Balance at June 30, 201474,821.3 0.7 1,031.4 (1,379.1) (24.2) (0.6) (371.8)Equity contribution48,875.0 0.5 946.1 946.6Stock option exercises623.0 Equity compensation 9.0 9.0Cash paid, in lieu of equity,for tax withholding (10.3) (10.3)Noncontrolling interestownership changes (2.5) 1.0 (1.5)Net earnings/(loss) 212.2 (0.4) 211.8Other comprehensive income/(loss), net of tax (149.8) (149.8)Balance at June 30, 2015124,319.3 $1.2 $1,973.7 $(1,166.9) $(174.0) $— $634.0 The accompanying notes are an integral part of these consolidated financial statements68Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Catalent, Inc. and SubsidiariesConsolidated Statements of Cash Flows(Dollars in millions) Year ended June 30, 2015 2014 2013CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings/(loss)$210.3 $15.2 $(49.7)Net earnings/(loss) from discontinued operations0.1 (2.7) 1.2Earnings/(loss) from continuing operations210.2 17.9 (50.9)Adjustments to reconcile (loss)/earnings from continued operations to net cash from operations: Depreciation and amortization140.8 142.9 152.2Non-cash foreign currency transaction (gains)/losses, net(16.4) (17.1) 6.6Amortization and write off of debt financing costs16.0 14.0 19.0Asset impairments and (gain)/loss on sale of assets4.7 3.2 5.2Non-cash gain on acquisition(8.9) — —Call premium and financing fees paid12.6 7.2 10.8Equity compensation9.0 4.5 2.8Provision/(benefit) for deferred income taxes(120.7) (15.1) 8.3Provision for bad debts and inventory12.7 9.8 10.4Change in operating assets and liabilities: Decrease/(increase) in trade receivables(7.5) (38.0) (23.6)Decrease/(increase) in inventories(19.2) (8.5) (10.5)Increase/(decrease) in accounts payable(11.7) (7.6) 17.9Other accrued liabilities and operating items, net(49.9) 67.0 (9.1)Net cash provided by/(used in) operating activities from continuing operations171.7 180.2 139.1Net cash provided by/(used in) operating activities from discontinued operations0.1 (1.9) (1.4)Net cash provided by/(used in) operating activities171.8 178.3 137.7CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment and other productive assets(141.0) (122.4) (122.5)Proceeds from sale of property and equipment— 0.9 2.9Payment for acquisitions, net(130.8) (53.7) (2.5)Net cash provided by/(used in) investing activities from continuing operations(271.8) (175.2) (122.1)Net cash provided by/(used in) investing activities from discontinued operations— 4.0 —Net cash provided by/(used in) investing activities(271.8) (171.2) (122.1)CASH FLOWS FROM FINANCING ACTIVITIES: Net change in short-term borrowings— (17.5) (3.9)Proceeds from Borrowing, net150.4 1,723.7 672.7Payments related to long-term obligations(879.8) (1,741.3) (708.5)Call premium and financing fees paid(12.6) (7.2) (10.8)Equity contribution948.8 0.2 1.2Cash paid, in lieu of equity, for tax withholding obligation(10.3) — —Net cash (used in)/provided by financing activities from continuing operations196.5 (42.1) (49.3)Net cash (used in)/provided by financing activities from discontinued operations— — —Net cash (used in)/provided by financing activities196.5 (42.1) (49.3)Effect of foreign currency on cash(19.6) 3.0 1.1NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS76.9 (32.0) (32.6)CASH AND EQUIVALENTS AT BEGINNING OF PERIOD74.4 106.4 139.0CASH AND EQUIVALENTS AT END OF PERIOD$151.3 $74.4 $106.4SUPPLEMENTARY CASH FLOW INFORMATION: Interest paid$107.1 $153.8 $200.1Income taxes paid, net$34.0 $21.0 $14.2The accompanying notes are an integral part of these consolidated financial statements69Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Catalent, Inc. and SubsidiariesNotes to Consolidated Financial Statements(Dollars in millions, except per share data) 1.BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBusinessCatalent, Inc. (“Catalent” or the “Company”) directly and wholly owns PTS Intermediate Holdings LLC (“Intermediate Holdings”). IntermediateHoldings directly and wholly owns Catalent Pharma Solutions, Inc. (the “Operating Company”). The financial results of Catalent are primarily comprised ofthe financial results of Operating Company and its subsidiaries on a consolidated basis.In July 2014, the Company’s board of directors and holders of the requisite number of outstanding shares of its capital stock approved an amendment tothe Company’s amended and restated certificate of incorporation to effect a 70-for-1 stock split of its outstanding common stock (the “stock split”). The stocksplit became effective on July 17, 2014 upon the filing of the Company’s Certificate of Amendment of the Amended and Restated Certificate ofIncorporation with the Delaware Secretary of State. On the effective date of the stock split, (i) each outstanding share of common stock was increased toseventy shares of common stock, (ii) the number of shares of common stock issuable under each outstanding option to purchase common stock wasproportionately increased on a one-to-seventy basis, (iii) the exercise price of each outstanding option to purchase common stock was proportionatelydecreased on a one-to-seventy basis, and (iv) the number of shares underlying each restricted stock unit was proportionately increased on a one-to-seventybasis. All of the share and per share information referenced throughout the financial statements and notes to the consolidated financial statements have beenretroactively adjusted to reflect this stock split.On July 31, 2014, the Company commenced an initial public offering of its common stock (the “IPO”). As part of its IPO, the Company sold a total of48.9 million shares at a price of $20.50 per share, before underwriting discounts and commissions. Net of these discounts and commissions and other offeringexpenses, the Company obtained total proceeds from the IPO, including the underwriters’ over-allotment option, of $952.2 million, which it used to fullyredeem the outstanding Senior Subordinated Notes, redeem the outstanding Senior Notes, repay portions of the Company’s unsecured term loan, and pay toBlackstone and certain other shareholders an advisory agreement termination fee of $29.8 million (recorded within other income/(expense), net on theConsolidated Statement of Operations), and for other corporate purposes. The Company’s common stock began trading on the New York Stock Exchange(the “NYSE”) under the symbol “CTLT” as of the IPO. Refer to Note 6 for further discussion regarding debt repayments.On March 9, 2015, an affiliate of The Blackstone Group, L.P. that owned shares in the Company (“Blackstone”), Genstar Capital and Aisling Capital(collectively the "selling stockholders") completed a secondary offering of 27.3 million shares of the Company’s common stock, including 3.6 million sharessold pursuant to the over-allotment option granted to the underwriters at a price of $29.50 per share before underwriting discounts and commissions. On June2, 2015, the selling stockholders completed an additional secondary offering of 16.1 million shares, including 2.1 million shares sold pursuant to the over-allotment option, at a price of $29.00 per share, before underwriting discounts and commissions. The Company did not sell any stock in either secondaryoffering and did not receive any proceeds of the sales. Blackstone’s ownership in the Company was reduced to 32.7%following the March offering and to20.8% following the June offering, and as a result the Company has not qualified as a “controlled company” under applicable NYSE listing standards sinceMarch 9, 2015.We are the leading global provider of development solutions and advanced delivery technologies for drugs, biologics and consumer health products.Through our extensive capabilities and deep expertise in product development, we help our customers bring more products to market, faster. Our advanceddelivery technology platforms, the broadest and most diverse combination of intellectual property and proven formulation, manufacturing and regulatoryexpertise available to the industry, enable our customers to bring more products and better treatments to the market. Across both development and delivery,our commitment to reliably supply our customers’ needs serves as the foundation for the value we provide. We operate through four operating segments:Development and Clinical Services, Softgel Technologies, Modified Release Technologies, and Medication Delivery Solutions. We believe that through ourprior and ongoing investments in growth-enabling capacity and capabilities, our entry into new markets, our ongoing focus on operational and qualityexcellence, our innovation activities, the sales of existing customer products, and the introduction of new customer products, we will continue to benefit fromattractive margins and realize the growth potential from these areas.For financial reporting purposes, we present three financial reporting segments based on criteria established by U.S. GAAP: Development and ClinicalServices, Oral Technologies and Medication Delivery Solutions. The Oral Technologies segment includes the Softgel Technologies and Modified ReleaseTechnologies (“MRT”) businesses.70Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Oral TechnologiesThe Company’s Oral Technologies segment provides advanced oral delivery technologies, including formulation, development and manufacturing oforal dose forms for prescription and consumer health products across all phases of a molecule’s lifecycle. These oral dose forms include softgel, modifiedrelease technology and immediate release solid oral technology products. At certain facilities the Company also provides integrated primary packagingservices for the products the Company manufactures. In fiscal 2015, the Company generated approximately $787.5 million in revenue from its softgelproducts and approximately $391.5 million in revenue from its MRT products (including intra-segment revenue of approximately $37.9 million).Through the Softgel Technologies business, the Company provides formulation, development and manufacturing services for soft gelatin capsules, or“softgels,” which the Company first commercialized in the 1930s. The Company is the market leader in overall softgel manufacturing and holds the leadingmarket position in the prescription arena. The Company’s principal softgel technologies include traditional softgel capsules (in which the shell is made fromanimal-derived materials) and Vegicaps and OptiShell capsules (in which the shell is made from vegetable-derived materials), which are used in a broad rangeof customer products including prescription drugs, over-the-counter medications, and vitamins and supplements. Softgel capsules encapsulate liquid, paste oroil-based active compounds in solution or suspension within an outer shell, filling and sealing the capsule simultaneously. The Company performs allencapsulation within one of the Company’s softgel facilities, with active ingredients provided by customers or sourced directly by the Company. Softgelshave historically been used to solve formulation challenges or technical issues for a specific drug, to help improve the clinical performance of compounds, toprovide important market differentiation, particularly for over-the-counter compounds, and to provide safe handling of hormonal, potent and cytotoxic drugs.The Company also participates in the softgel over-the-counter and vitamin, mineral and supplement business in selected regions around the world. With the2001 introduction of the Company’s vegetable-derived softgel shell, Vegicaps capsules, consumer health manufacturers have been able to extend the softgeldose form to a broader range of active ingredients and serve patient/consumer populations that were previously inaccessible due to religious, dietary orcultural preferences. In recent years this platform has been extended to pharmaceutical active ingredients via the OptiShell platform. The Company’sVegicaps and OptiShell capsules are patent protected in most major global markets. Physician and patient studies that the Company has conducted havedemonstrated a preference for softgels versus traditional tablet and hard capsule dose forms in terms of ease of swallowing, real or perceived speed of delivery,ability to remove or eliminate unpleasant odor or taste and, for physicians, perceived improved patient adherence with dosing regimens.Through the Company’s Modified Release Technologies business, the Company provides formulation, development and manufacturing services forfast-dissolve tablets and both proprietary and conventional controlled release products. The Company launched its orally dissolving tablet business in 1986with the introduction of Zydis tablets, a unique oral dosage form that is freeze-dried in its package, can be swallowed without water, and typically dissolvesin the mouth in less than three seconds. Most often used for indications, drugs and patient groups that can benefit from rapid oral disintegration, the Zydistechnology is utilized in a wide range of products and indications, including treatments for a variety of central nervous system-related conditions such asmigraines, Parkinson’s Disease, schizophrenia, and pain relief. Zydis tablets continue to be used in new ways by its customers as the Company extends theapplication of the technology to new categories, such as for immunotherapies, vaccines and biologics delivery. More recently, the Company has added twonew technology platforms to the Modified Release business portfolio, including the highly flexible OptiDose tab-in-tab technology, already commerciallyproven in Japan, and the OptiMelt hot melt extrusion technology. The Company plans to continue to expand the development pipeline of customer productsfor all of its modified release technologies. Representative Oral Technologies business customers include Pfizer, Novartis, GlaxoSmithKline, Eli Lilly,Johnson & Johnson and Allergan.Medication Delivery SolutionsThe Company’s Medication Delivery Solutions segment provides formulation, development and manufacturing services for delivery of drugs andbiologics, administered via injection, inhalation and ophthalmic routes, using both traditional and advanced technologies. The Company’s range ofinjectable manufacturing offerings includes filling drugs or biologics into pre-filled syringes, with flexibility to accommodate other formats within itsexisting network, focused increasingly on complex pharmaceuticals and biologics. With the Company’s wide variety of technologies, it is able to meet awide range of specifications, timelines and budgets. The complexity of the manufacturing process, the importance of experience and know-how, regulatorycompliance, and high start-up capital requirements create significant barriers to entry and, as a result, limit the number of competitors in the market. Forexample, blow-fill-seal is an advanced aseptic processing technology that uses a continuous process to form, fill with drug, and seal a plastic container in asterile environment. Blow-fill-seal units are currently used for a variety of pharmaceuticals in liquid form, such as respiratory, ophthalmic and otic products.The Company is a leader in the outsourced blow-fill-seal market, and operates one of the largest capacity commercial manufacturing blow-fill-seal facilitiesin the world. The Company’s sterile blow-fill-seal business provides flexible and scalable solutions for unit-dose delivery of complex formulations71Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents such as suspensions and emulsions, as well as innovative design and engineering container design and manufacturing solutions. The Company’s regulatoryexpertise can lead to decreased time to commercialization, and its dedicated development production lines support feasibility, stability and clinical runs. TheCompany plans to continue to expand its product line in existing and new markets, and in higher margin specialty products with additional respiratory,ophthalmic, and injectable applications. Representative customers include Pfizer, Sanofi-Aventis, Novartis, Roche and Teva.The Company’s biologics offerings include its formulation development and cell-line manufacturing based on its advanced and patented Gene ProductExpression (“GPEx”) technology, which is used to develop stable, high-yielding mammalian cell lines for both innovator and bio-similar biologiccompounds. The Company’s GPEx technology can provide rapid cell line development, high biologics production yields, flexibility and versatility. TheCompany believes its development stage SMARTag next-generation antibody-drug conjugate technology will provide more precision targeting for deliveryof drugs to tumors or other locations, with improved safety versus existing technologies. In fiscal 2013, the Company launched its new biologics facility inMadison, Wisconsin, with expanded capability and capacity to produce clinical-scale biologic supplies; combined with offerings from other businesses ofCatalent and external partners, the Company now provides the broadest range of technologies and services supporting the development and launch of newbiologic entities, biosimilars or biobetters to bring a product from gene to market commercialization, faster. Additionally, in fiscal 2015, the Companycompleted a large-scale expansion at its Winchester, Kentucky manufacturing facility, doubling its footprint to 180,000 square feet.Development and Clinical ServicesThe Company’s Development & Clinical Services segment provides manufacturing, packaging, storage and inventory management for drugs andbiologics in clinical trials. The Company offers customers flexible solutions for clinical supplies production, and provides distribution and inventorymanagement support for both simple and complex clinical trials. This includes dose-form manufacturing or over-encapsulation where needed; supplyingplacebos, comparator drug procurement and clinical packages and kits for physicians and patients; inventory management; investigator kit ordering andfulfillment; and return supply reconciliation and reporting. The Company supports trials in all regions of the world through its facilities and distributionnetwork. In fiscal 2013, the Company formed a joint venture with ShangPharma Corporation to expand its clinical supply services network into China andacquired the remaining interest in the venture in fiscal 2015.The Company also offers analytical chemical and cell-based testing and scientific services, stability testing, respiratory products formulation andmanufacturing, regulatory consulting, and bioanalytical testing for biologic products. The Company’s respiratory product capabilities include developmentand manufacturing services for inhaled products for delivery via metered dose inhalers, dry powder inhalers and intra-nasal sprays. The Company alsoprovides formulation development and clinical and commercial manufacturing for conventional and specialty oral dose forms. The Company provides globalregulatory and clinical support services for its customers’ regulatory and clinical strategies during all stages of development. Demand for the Company’sofferings is driven by the need for scientific expertise and depth and breadth of services offered, as well as by the reliable supply thereof, including quality,execution and performance. The Company acquired Micron Technologies in November 2014, extending its particle engineering capabilities. The Companyis the leading provider of integrated development solutions and one of the leading providers of clinical trial supplies and respiratory products.Basis of PresentationThese financial statements include all of the Company’s subsidiaries, including those operating outside the United States (U.S) and are prepared inaccordance with accounting principles generally accepted in the United States (U.S. GAAP). All significant transactions among the Company’s businesseshave been eliminated.ReclassificationsThe Company made certain reclassifications to conform components of the prior periods’ income tax rate reconciliation, which is included in Footnote9 Income Taxes, to current year presentation. There was no impact to the consolidated financial statements as a result of this reclassification. Use of EstimatesThe preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect amountsreported in the financial statements and accompanying notes. Such estimates include, but are not limited to, allowance for doubtful accounts, inventory andlong-lived asset valuation, goodwill and other intangible asset valuation and impairment, equity-based compensation, income taxes, derivative financialinstruments and pension plan asset and liability valuation. Actual amounts may differ from these estimated amounts.72Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Foreign Currency TranslationThe financial statements of the Company’s operations outside the U.S. are generally measured using the local currency as the functional currency.Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensiveincome/(loss) utilizing period-end exchange rates. The currency fluctuation related to certain long-term inter-company loans deemed to not be repayable inthe foreseeable future have been recorded within the cumulative translation adjustment, a component of other comprehensive income/(loss). In addition, thecurrency fluctuation associated with the portion of the Company’s euro-denominated debt designated as a net investment hedge is included as a componentof other comprehensive income/(loss). Foreign currency transaction gains and losses calculated by utilizing weighted average exchange rates for the periodare included in the statements of operations in “other expense, net.” Such foreign currency transaction gains and losses include inter-company loans that arelong-term in nature.Revenue RecognitionIn accordance with ASC 605 Revenue Recognition, the Company recognizes revenue when persuasive evidence of an arrangement exists, productdelivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured. In cases where theCompany has multiple contracts with the same customer, the Company evaluates those contracts to assess if the contracts are linked or are separatearrangements. Factors the Company considers include the timing of negotiation, interdependency with other contracts or elements and payment terms. TheCompany and its customers generally view each contract discussion as a separate arrangement.Manufacturing and packaging service revenue is recognized upon delivery of the product in accordance with the terms of the contract, which specifywhen transfer of title and risk of loss occurs. Some of the Company’s manufacturing contracts with its customers have annual minimum purchaserequirements. At the end of the contract year, revenue is recognized for the unfilled purchase obligation in accordance with the contract terms. Developmentservice contracts generally take the form of a fee-for-service arrangement. After the Company has evidence of an arrangement, the price is determinable andthere is a reasonable expectation regarding payment, the Company recognizes revenue at the point in time the service obligation is completed and acceptedby the customer. Examples of output measures include a formulation report, analytical and stability testing, clinical batch production or packaging and thestorage and distribution of a customer’s clinical trial material. Development service revenue is primarily driven by the Company’s Development and ClinicalServices segment.Arrangements containing multiple elements, including service arrangements, are accounted for in accordance with the provisions of ASC 605-25,Revenue Recognition: Multiple-Element Arrangements. The Company determines the separate units of account in accordance with ASC 605-25. If thedeliverable meets the criteria of a separate unit of accounting, the arrangement consideration is allocated to each element based upon its relative selling price.In determining the best evidence of selling price of a unit of account the Company utilizes vendor-specific objective evidence (“VSOE”), which is the pricethe Company charges when the deliverable is sold separately. When VSOE is not available, management uses relevant third-party evidence (“TPE”) of sellingprice, if available. When neither VSOE nor TPE of selling price exists, management uses its best estimate of selling price.Cash and Cash EquivalentsAll liquid investments purchased with an original maturity of three months or less are considered to be cash and equivalents. The carrying value ofthese cash equivalents approximates fair value.Receivables and Allowance for Doubtful AccountsTrade receivables are primarily comprised of amounts owed to the Company through its operating activities and are presented net of an allowance fordoubtful accounts. The Company monitors past due accounts on an ongoing basis and establishes appropriate reserves to cover probable losses. An accountis considered past due on the first day after its due date. The Company makes judgments as to its ability to collect outstanding receivables and provideallowances when it is assessed that all or a portion of the receivable will not be collected. The Company determines its allowance by considering a number offactors, including the length of time accounts receivable are past due, the Company’s previous loss history, the specific customer’s ability to pay itsobligation to the Company, and the condition of the general economy and the customer’s industry. The Company writes off accounts receivable when theybecome uncollectible.73Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Concentrations of Credit Risk and Major CustomersConcentration of credit risk, with respect to accounts receivable, is limited due to the large number of customers and their dispersion across differentgeographic areas. The customers are primarily concentrated in the pharmaceutical and healthcare industry. The Company normally does not require collateralor any other security to support credit sales. The Company performs ongoing credit evaluations of its customers’ financial conditions and maintains reservesfor credit losses. Such losses historically have been within the Company’s expectations. During fiscal years 2015 and 2014, no single customer exceeded10% of revenue or accounts receivable.InventoriesInventory is stated at the lower of cost or market, using the first-in, first-out (“FIFO”) method. The Company provides reserves for excess, obsolete orslow-moving inventory based on changes in customer demand, technology developments or other economic factors. Inventory consists of costs associatedwith raw material, labor and overhead.GoodwillThe Company accounts for purchased goodwill and intangible assets with indefinite lives in accordance with ASC 350 Goodwill, Intangible and OtherAssets. Under ASC 350, goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment at least annually. TheCompany’s annual goodwill impairment test was conducted as of April 1, 2015. The Company assesses goodwill for possible impairment by comparing thecarrying value of its reporting units to their fair values. The Company determines the fair value of its reporting units utilizing estimated future discountedcash flows and incorporates assumptions that it believes marketplace participants would utilize. In addition, the Company uses comparative marketinformation and other factors to corroborate the discounted cash flow results.Property and Equipment and Other Definite Lived Intangible AssetsProperty and equipment are stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets,including capital lease assets that are amortized over the shorter of their useful lives or the terms of the respective leases. The Company generally uses thefollowing range of useful lives for its property and equipment categories: buildings and improvements—5 to 50 years; machinery and equipment—3 to 10years; and furniture and fixtures—3 to 7 years. Depreciation expense was $94.3 million for the fiscal year ended June 30, 2015, $100.5 million for the fiscalyear ended June 30, 2014, and $108.8 million for the fiscal year ended June 30, 2013. Depreciation expense includes amortization of assets related to capitalleases. The Company charges repairs and maintenance costs to expense as incurred. The amount of capitalized interest was immaterial for all periodspresented.Intangible assets with finite lives, primarily including customer relationships, patents and trademarks are amortized over their useful lives. TheCompany evaluates the recoverability of its other long-lived assets, including amortizing intangible assets, if circumstances indicate impairment may haveoccurred pursuant to ASC 360 Property, Plant and Equipment. This analysis is performed by comparing the respective carrying values of the assets to thecurrent and expected future cash flows, on an un-discounted basis, to be generated from such assets. If such analysis indicates that the carrying value of theseassets is not recoverable, the carrying value of such assets is reduced to fair value through a charge to the Consolidated Statements of Operations. Fair value isdetermined based on assumptions the Company believes marketplace participants would utilize and comparable marketplace information in similar arm’slength transactions. The Company recorded impairment charges related to definite lived intangible assets and property, plant and equipment, net of gains onsale, of approximately $4.7 million, $3.2 million and $5.2 million, as of June 30, 2015, June 30, 2014 and June 30, 2013 respectively.74Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Post-Retirement and Pension PlansThe Company sponsors various retirement and pension plans, including defined benefit retirement plans and defined contribution retirement plans. The measurement of the related benefit obligations and the net periodic benefit costs recorded each year are based upon actuarial computations, whichrequire management’s judgment as to certain assumptions. These assumptions include the discount rates used in computing the present value of the benefitobligations and the net periodic benefit costs, the expected future rate of salary increases (for pay-related plans) and the expected long-term rate of return onplan assets (for funded plans). The discount rates are derived based on a hypothetical yield curve represented by a series of annualized individual discountrates. The expected long-term rate of return on plan assets is based on the target asset allocation and the average expected rate of growth for the asset classesinvested. The average expected rate of growth is derived from a combination of historic returns, current market indicators, the expected risk premium for eachasset class and the opinion of professional advisors. The Company uses a measurement date of June 30 for all its retirement and postretirement benefit plans.Derivative Instruments, Hedging Activities, and Fair ValueDerivatives InstrumentsThe Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages itsexposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks,including interest-rate, liquidity, and credit risk primarily by managing the amount, sources and duration of its debt funding and the use of derivativefinancial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities thatresult in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivativefinancial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known orexpected cash payments principally related to the Company’s borrowings. The Company does not net any of its derivative positions under master nettingarrangements.Hedging ActivitiesThe Company’s objectives in using interest-rate derivatives are to add stability to interest expense and to manage its exposure to interest-ratemovements. To accomplish this objective, the Company has primarily used interest-rate swaps as part of its interest-rate risk management strategy. Interest-rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-ratepayments over the life of the agreements without exchange of the underlying notional amount.The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges for financial reporting purposes isrecorded in accumulated other comprehensive income on the balance sheet and is subsequently reclassified into earnings in the period that the hedgedforecasted transaction affects earnings. During the fiscal year 2013, the Company used such derivatives to hedge the variable cash flows associated withexisting variable-rate debt; however, as of June 30, 2015 and June 30, 2014, the Company did not have any such derivatives in place. The ineffective portionof the change in fair value of a derivative is recognized directly in earnings.The Company is exposed to fluctuations in the EUR-USD exchange rate on its investments in foreign operations in Europe. While the Company doesnot actively hedge against changes in foreign currency, it has mitigated the exposure of investments in its European operations through a net-investmenthedge by denominating a portion of its debt in euros.Fair ValueThe Company is required to measure certain assets and liabilities at fair value, either upon initial measurement or for subsequent accounting orreporting. The Company uses fair value extensively in the initial measurement of net assets acquired in a business combination and when accounting for andreporting on certain financial instruments. The Company estimates fair value using an exit price approach, which requires, among other things, that itdetermine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is consideredfrom the perspective of market participants, considering the highest and best use of assets and, for liabilities, assuming the risk of non-performance will be thesame before and after the transfer. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and reliesheavily on estimates and assumptions. When estimating fair value, depending on the nature and complexity of the assets or liability, the Company may useone or all of the following approaches:•Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets orliabilities.75Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents •Cost approach, which is based on the cost to acquire or construct comparable assets less an allowance for functional and/or economicobsolescence.•Income approach, which is based on the present value of the future stream of net cash flows.These fair value methodologies depend on the following types of inputs:•Quoted prices for identical assets or liabilities in active markets (called Level 1 inputs).•Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that aredirectly or indirectly observable (called Level 2 inputs).•Unobservable inputs that reflect estimates and assumptions (called Level 3 inputs).Self-InsuranceThe Company is partially self-insured for certain employee health benefits and partially self-insured for product liability and workers compensationclaims. Accruals for losses are provided based upon claims experience and actuarial assumptions, including provisions for incurred but not reported losses.Shipping and HandlingShipping and handling costs are included in cost of sales in the Consolidated Statements of Operations. Shipping and handling revenue received wasimmaterial for all periods presented and is presented within net revenues.Accumulated Other Comprehensive Income/(Loss)Accumulated other comprehensive income/(loss), which is reported in the accompanying Consolidated Statements of Changes in Shareholders’ Equity,consists of net earnings/(loss), foreign currency translation, deferred compensation, minimum pension liability and unrealized gains and losses fromderivatives.Research and Development CostsThe Company expenses research and development costs as incurred. Costs incurred in connection with the development of new offerings andmanufacturing process improvements are recorded within selling, general, and administrative expenses. Such research and development costs included inselling, general, and administrative expenses amounted to $12.2 million, $17.5 million and $14.5 million for fiscal years ended June 30, 2015, June 30, 2014and June 30, 2013, respectively. Costs incurred in connection with research and development services the Company provides to customers and servicesperformed in support of the commercial manufacturing process for customers are recorded within cost of sales. Such research and development costs includedin cost of sales amounted to $41.3 million, $34.0 million and $35.0 million for fiscal years ended June 30, 2015, June 30, 2014 and June 30, 2013,respectively.Earnings / (Loss) Per ShareThe Company reports net earnings (loss) per share in accordance with ASC 260 Earnings per Share. Under ASC 260, basic earnings per share, whichexcludes dilution, is computed by dividing net earnings or loss available to common stockholders by the weighted average number of common sharesoutstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could be exercised or converted into common shares,and is computed by dividing net earnings or loss available to common stockholders by the weighted average of common shares outstanding plus the dilutivepotential common shares. Diluted earnings per share include in-the-money stock options, restricted stock units, and restricted stock using the treasury stockmethod. During a loss period, the assumed exercise of in-the-money stock options has an anti-dilutive effect and therefore, these instruments are excludedfrom the computation of diluted earnings per share in a loss period.76Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Income TaxesIn accordance with ASC 740 Income Taxes, the Company accounts for income taxes using the asset and liability method. The asset and liability methodrequires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax basesand financial reporting bases of the Company’s assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates in the respectivejurisdictions in which the Company operates. In assessing the ability to realize deferred tax assets, the Company considers whether it is more likely than notthat some portion or all of the deferred tax assets will not be realized. The calculation of the Company’s tax liabilities involves dealing with uncertainties inthe application of complex tax regulations in each of its tax jurisdictions. The number of years with open tax audits varies depending on the tax jurisdiction.A number of years may lapse before a particular matter is audited and finally resolved. The Company applies ASC 740 to determine the accounting foruncertain tax positions. This guidance clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required tomeet before being recognized in the financial statements and providing guidance on derecognition, measurement, classification, interest and penalties,accounting in interim periods, disclosure and transition.Equity-Based CompensationThe Company accounts for its equity-based compensation awards in accordance with ASC 718 Compensation-Stock Compensation. Under ASC 718,companies recognize compensation expense using a fair value based method for costs related to share-based payments including stock options and restrictedstock units. The expense is measured based on the grant date fair value of the awards that are expected to vest, and the expense is recorded over theapplicable requisite service period. In the absence of an observable market price for a share-based award, the fair value is based upon a valuationmethodology that takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of theunderlying shares, the expected volatility of the underlying share price based on peer companies, the expected dividends on the underlying shares and therisk-free interest rate.The terms of the Company’s equity-based compensation plans permit shares that are issued upon an employee’s exercise of an option to be withheldthrough a net settlement transaction as a means of paying the exercise price, meeting tax withholding requirements, or both.Recent Financial Accounting StandardsIn July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2015-11, Simplifying the Measurement ofInventory. The new standard changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. Thestandard is effective for public entities for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. Entities are required todisclose the nature and reason for the change in accounting principle in the first interim and annual period of adoption. Catalent is currently evaluating theimpact of this standard on its consolidated results of operations and financial position.In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The new standardrequires that debt issuance costs be presented in the balance sheet as a direct reduction from the carrying value of the associated debt liability, consistent withthe presentation of a debt discount. The standard is effective for public entities for annual and interim periods beginning after December 15, 2015. Earlyadoption is permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. Catalent iscurrently evaluating the impact of this standard on its consolidated results of operations and financial position.In June 2014, the FASB issued Accounting Standard Update No. 2014-12 Accounting for Share Based Payments When the Terms of an Award ProvideThat a Performance Target Could be Achieved after the Requisite Service Period. The new standard provides guidance for accounting for share-basedpayments when the terms of an award provide that a performance target could be achieved after the requisite service period. The standard states that aperformance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as aperformance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effectivefor annual periods beginning after December 15, 2015. Catalent does not expect a material impact on its consolidated results of operations and financialposition upon adoption. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. The new standard will supersedenearly all existing revenue recognition guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods orservices to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Indoing so, the standard creates a five-step model that requires a company to exercise judgment when considering the terms of the contracts and all relevantfacts and circumstances. The77Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents five steps require a company to identify customer contracts, identify the separate performance obligations, determine the transaction price, allocate thetransaction price to the separate performance obligations and recognize revenue when each performance obligation is satisfied. On July 9, 2015, the FASBapproved a one-year deferral of the effective date so that the standard is effective for public entities for annual and interim periods beginning after December15, 2017. The standard allows for either full retrospective adoption, where the standard is applied to all periods presented, or modified retrospective adoptionwhere the standard is applied only to the most current period presented in the financial statements. Early adoption is permitted. Catalent is currentlyevaluating the impact of this standard on its consolidated results of operations and financial position.In April 2014, the FASB issued Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of anEntity (“ASU 2014-08”). ASU 2014-08 changes the requirements for reporting discontinued operations under ASC Subtopic 250-20 by limiting discontinuedoperations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations andfinancial results. The disclosure requirements for discontinued operations under ASU 2014-08 will be expanded in order to provide users of financialstatements with more information about the assets, liabilities, revenues and expenses of discontinued operations. ASU 2014-08 is effective on a prospectivebasis for (1) all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15,2014, and interim periods within those years, and (2) all businesses that are classified as held for sale on acquisition that occur within annual periodsbeginning on or after December 15, 2014 and interim periods within those years. Catalent does not expect a material impact on its consolidated results ofoperations and financial position upon adoption.In March 2013, the FASB issued Accounting Standards Update No. 2013-05 Parent’s Accounting for the Cumulative Translation Adjustment uponDerecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The new standard resolves thediversity in practice concerning the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investmentin a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets within a foreign entity. The guidance is effective forfiscal years and interim reporting periods within those fiscal years beginning after December 15, 2013. The guidance applies prospectively to derecognitionevents occurring after the effective date; prior periods are not to be adjusted. Adoption did not have a material impact on the disclosures included in theCompany’s consolidated financial statements.In February 2013, the FASB issued Accounting Standards Update No. 2013-04 Obligations Resulting from Joint and Several Liability Arrangements(“ASU 2013-04”). ASU 2013-04 provides guidance for the recognition, measurement, and disclosure resulting from joint and several liability arrangements.Examples of obligations that fall within the scope of the guidance include certain debt arrangements, other contractual obligations, and settled litigation.The new guidance is effective on a retrospective basis for fiscal years and interim periods within those fiscal years beginning after December 15, 2013.Adoption did not have a material impact on the disclosures included in the Company’s consolidated financial statements.2.BUSINESS COMBINATIONSDuring the twelve months ended June 30, 2015, the Company completed acquisitions which were immaterial, individually and in the aggregate, to theoverall consolidated financial position and results of operations of the Company. Notably, in October 2014, the Company acquired the remaining shares ofRedwood Bioscience Inc. and its SMARTag Antibody-Drug Conjugate (ADC) technology platform. The acquired business is based in the U.S. and isincluded in the Medication Delivery Solutions segment. Additionally, in November 2014, the Company acquired 100% of the shares of MTI PharmaSolutions, Inc. (Micron Technologies), a company specializing in particle size reduction (micronization), milling and analytical contract services. Theacquired business is based in the U.S. and the U.K. and is included in the Development and Clinical Services segment.The Company’s consolidated balance sheet as of June 30, 2015 includes the fair value allocation for these acquisitions which was completed in thefiscal year. Aggregate purchase consideration for both acquisitions totaled $110.8 million. As a result of the preliminary fair value allocation, the Companyrecognized intangible assets of $56 million, comprised of $34 million of Customer Relationships and $22 million of Core Technology. The remainder of fairvalue was allocated to tangible assets acquired and goodwill.3.GOODWILLThe following table summarizes the changes between June 30, 2015 and June 30, 2014 in the carrying amount of goodwill in total and by reportingsegment: 78Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents (Dollars in millions)OralTechnologies MedicationDeliverySolutions Development& ClinicalServices TotalBalance at June 30, 2013 (1)$833.2 $— $190.2 $1,023.4Additions/(impairments)32.6 — — 32.6Foreign currency translation adjustments26.0 — 15.1 41.1Balance at June 30, 2014891.8 — 205.3 1,097.1Additions/(impairments)2.1 19.9 39.0 61.0Foreign currency translation adjustments(81.9) — (14.7) (96.6)Balance at June 30, 2015$812.0 $19.9 $229.6 $1,061.5(1)The opening balance is reflective of impairment charges recorded in fiscal 2008 and fiscal 2009 related to the Medication Delivery Solutions segmentof approximately $158.0 million.No goodwill impairment charges were required during the current or comparable prior year period. When required, impairment charges are recordedwithin the consolidated statements of operations as impairment charges and (gain)/loss on sale of assets.4.DEFINITE-LIVED LONG-LIVED ASSETSThe Company’s definite-lived long-lived assets include property, plant and equipment as well as other intangible assets with definite lives. Refer toNote 18 Supplemental Balance Sheet Information for details related to property, plant and equipment.The details of other intangible assets subject to amortization as of June 30, 2015 and June 30, 2014, are as follows:(Dollars in millions)Weighted AverageLife GrossCarryingValue AccumulatedAmortization NetCarryingValueJune 30, 2015 Amortized intangibles: Core technology18 years $177.6 $(57.6) $120.0Customer relationships14 years 259.2 (81.8) 177.4Product relationships12 years 222.9 (151.6) 71.3Total intangible assets $659.7 $(291.0) $368.7 (Dollars in millions)Weighted AverageLife GrossCarryingValue AccumulatedAmortization NetCarryingValueJune 30, 2014 Amortized intangibles: Core technology20 years $150.2 $(53.3) $96.9Customer relationships14 years 234.6 (68.0) 166.6Product relationships12 years 237.6 (143.5) 94.1Total intangible assets $622.4 $(264.8) $357.6Amortization expense was $46.5 million, $42.4 million, and $43.4 million for the fiscal year ended June 30, 2015, June 30, 2014, and June 30, 2013,respectively. Future amortization expense for the next five years is estimated to be:(Dollars in millions)2016 2017 2018 2019 2020Amortization expense$47.6 $46.9 $46.8 $40.8 $26.179Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents The Company impaired definite lived intangible assets of $3.4 million in the fiscal year ended June 30, 2015. There was no intangible asset impairmentin the fiscal years ended June 30, 2014 and June 30, 2013, respectively.5.RESTRUCTURING AND OTHER COSTSThe Company has implemented plans to restructure certain operations, both domestically and internationally. The restructuring plans focused onvarious aspects of operations, including closing and consolidating certain manufacturing operations, rationalizing headcount and aligning operations in astrategic and more cost-efficient structure. In addition, the Company may incur restructuring charges in the future in cases where a material change in thescope of operation with its business occurs.The following table summarizes the significant costs recorded within restructuring costs: Year ended June 30,(Dollars in millions) 2015 2014 2013Restructuring costs: Employee-related reorganization (1)$11.5 $16.5 $15.1Asset impairments— — 0.7Facility exit and other costs (2)1.9 3.2 2.6Total restructuring costs$13.4 $19.7 $18.4(1)Employee-related costs consist primarily of severance costs and also include outplacement services provided to employees who have beeninvoluntarily terminated and duplicate payroll costs during transition periods.(2)Facility exit and other costs consist of accelerated depreciation, equipment relocation costs and costs associated with planned facility expansionsand closures to streamline Company operations.6.LONG-TERM OBLIGATIONS AND OTHER SHORT-TERM BORROWINGSLong-term obligations and other short-term borrowings consist of the following at June 30, 2015 and June 30, 2014:(Dollars in millions)Maturity June 30, 2015 June 30, 2014Senior Secured Credit Facilities Term loan facility dollar-denominatedMay 2021 $1,471.0 $1,383.9 Term loan facility euro-denominatedMay 2021 355.8 338.69 3/4 % Senior Subordinated euro-denominated NotesApril 2017 — 293.97 7/8 % Senior NotesOctober 2018 — 348.7Senior Unsecured Term Loan FacilityDecember 2017 — 274.3$200 million Revolving Credit FacilityMay 2019 — —Capital lease obligations2020 to 2032 55.5 64.0Other obligations2016 to 2018 5.6 7.2Total 1,887.9 2,710.6Less: Current portion of long-term obligations and other short-term borrowings 23.8 25.2Long-term obligations, less current portion $1,864.1 $2,685.4Senior Secured Credit FacilitiesOn May 20, 2014, the Operating Company entered into the Amended and Restated Credit Agreement to provide senior secured financing consisting ofa seven-year $1,400.0 million dollar term loan (the “Dollar Term Loan”), a seven-year €250.0 million euro term loan (the “Euro Term Loan”) and a five-year$200.0 million revolving credit facility (the "revolving credit facility"), the proceeds of which were used to prepay in full all outstanding Refinancing DollarTerm-1 Loans, Refinancing Dollar Term-2 Loans and Extended Euro Term Loans. The revolving credit facility includes borrowing capacity available forletters of credit and for short-term borrowings, referred to as the swing line borrowings. Borrowings under the term loan facilities and the revolving creditfacility bear interest, at the Company’s option, at a rate equal to a margin over either (a) a base rate determined by reference to the higher of (1) the rate ofinterest published by The Wall Street Journal as its “prime lending rate” and (2) the federal funds rate plus one half of 1% or (b) a LIBOR rate determined byreference to the London80Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Interbank Offered Rate set by ICE Benchmark Administration (or any successor thereto). The applicable margin for the term loans and borrowings under therevolving credit facility may be reduced subject to the Company attaining a certain total net leverage ratio. The applicable margin for borrowings is 3.50%for loans based on a LIBOR rate and 2.50% for loans based on base rate. The LIBOR rate for term loans is subject to a floor of 1.00% and the base rate for termloans is subject to a floor of 2.00%. Cash paid associated with this financing activity approximated $23.9 million. The Company expensed $7.2 million ofunamortized deferred finance costs and debt discounts.On December 1, 2014, the Operating Company entered into Amendment No. 1 to the Amended and Restated Credit Agreement (as amended, the"Credit Agreement") to provide additional senior secured financing of incremental dollar- and euro- denominated term loan facilities of $100 million and€72.8 million ($91 million), respectively. The incremental term loans have substantially similar terms as Catalent’s existing term loan facilities. The proceedsof the borrowing were primarily used to pay the remaining $40.5 million outstanding on the unsecured term loans, fund acquisitions completed in the secondquarter of $111.6 million and general corporate purposes. The Company incurred approximately $2.8 million in financing costs, of which $1.2 million wasrecorded in other (income) / expense, net in the consolidated statement of operations.As of June 30, 2015, there were $11.7 million in outstanding letters of credit that reduced the borrowing capacity under the approximately $200 millionrevolving line of credit.Redemption of Notes and Unsecured Term Loan PrepaymentIn July 2014, the Company provided notice of its election to redeem the entire $350.0 million aggregate principal amount outstanding of 7.875%senior notes due 2018 and redeemed them in August 2014 at a redemption price of 101.5% of their principal amount plus accrued and unpaid interest. Theredemption was funded with proceeds from the IPO. In connection with the redemption the Company recorded $5.3 million in expense related to the callpremium and expensed $5.9 million of unamortized debt discount and deferred financing costs, both in other (income) / expense, net in the consolidatedstatements of operations.In August 2014, the Company provided notice of its election to redeem the entire €225.0 million aggregate principal amount outstanding of 9.75%senior subordinated notes due 2017 and redeemed them in September 2014 at a redemption price of 101.625% of their principal amount plus accrued andunpaid interest. The redemption was funded with proceeds from the IPO. In connection with the redemption the Company recorded $4.5 million in expenserelated to the call premium and expensed $4.0 million of unamortized debt discount and deferred financing costs, both in other (income) / expense, net in theconsolidated statements of operations.In August 2014, the Company repaid $114.5 million of the outstanding borrowings under the unsecured term loans with proceeds from the IPO. InSeptember 2014, the Company repaid $120.0 million of the outstanding borrowings under the unsecured term loans with proceeds from the additional sharespurchased by the representatives of the underwriters in connection with the IPO. In connection with the debt payments, the Company expensed $0.9 millionof unamortized debt discount and deferred financing costs in other (income) / expense, net in the consolidated statements of operations. In December 2014,the Company paid the remaining $40.5 million outstanding on the unsecured term loans with proceeds from the incremental senior secured term loans.Long-Term and Other ObligationsOther obligations consist primarily of capital leases for buildings and other loans for business and working capital needs.Maturities of long-term obligations, including capital leases of $55.5 million, and other short-term borrowings for future fiscal years are:(Dollars in millions)20162017201820192020ThereafterTotalMaturities of long-term and other obligations$24.322.921.121.421.71,793.0$1,904.4Debt Issuance CostsDebt issuance costs are capitalized within prepaid expenses and other assets on the balance sheet and amortized over the life of the related obligationthrough charges to interest expense in the Consolidated Statements of Operations. The unamortized total of debt issuance costs were approximately $9.5million and $19.7 million as of June 30, 2015 and June 30, 2014, respectively. Amortization of debt issuance costs, excluding amounts expensed as part ofthe current year financing activity, totaled $2.2 million and $10.2 million for the fiscal years ended June 30, 2015 and June 30, 2014, respectively.81Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Guarantees and SecurityAll obligations under the Senior Secured Credit Facilities, and the guarantees of those obligations, are secured by substantially all of the followingassets of the Operating Company and each guarantor, subject to certain exceptions:•a pledge of 100% of the capital stock of the borrower and 100% of the equity interests directly held by the borrower and each guarantor in anywholly owned material subsidiary of the borrower or any guarantor (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, willnot include more than 65% of the voting stock of such non-U.S. subsidiary); and•a security interest in, and mortgages on, substantially all tangible and intangible assets of the borrower and of each guarantor, subject to certainlimited exceptions.Debt CovenantsThe Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s (and theCompany’s restricted subsidiaries’) ability to incur additional indebtedness or issue certain preferred shares; create liens on assets; engage in mergers andconsolidations; sell assets; pay dividends and distributions or repurchase capital stock; engage in certain transactions with affiliates; make investments, loansor advances; make certain acquisitions; enter into sale and leaseback transactions and change its lines of business.The Credit Agreement also contains change of control provisions and certain customary affirmative covenants and events of default. The revolvingcredit facility requires compliance with a net leverage covenant when there is a 30% or more draw outstanding at a period end. As of June 30, 2015, theCompany was in compliance with all material covenants related to its long-term obligations.Subject to certain exceptions, the Credit Agreement permits the Company and its restricted subsidiaries to incur certain additional indebtedness,including secured indebtedness. None of the Company’s non-U.S. subsidiaries or Puerto Rico subsidiaries is a guarantor of the loans.Under the Credit Agreement, the Company’s ability to engage in certain activities such as incurring certain additional indebtedness, making certaininvestments and paying certain dividends is tied to ratios based on Adjusted EBITDA (which is defined as “Consolidated EBITDA” in the Credit Agreement).Adjusted EBITDA is based on the definitions in the Credit Agreement and is not defined under U.S. GAAP, and is subject to important limitations.Fair Value of Debt MeasurementsThe estimated fair value of the long-term debt, which is considered a Level 2 liability, is based on the quoted market prices for the same or similarissues or on the current rates offered for debt of the same remaining maturities and considers collateral, if any. The carrying amounts and the estimated fairvalues of financial instruments as of June 30, 2015 and June 30, 2014 are as follows: June 30, 2015 June 30, 2014(Dollars in millions)CarryingValue Estimated FairValue CarryingValue Estimated FairValueLong-term debt and other$1,887.9 $1,854.7 $2,710.6 $2,680.282Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents 7.EARNINGS PER SHAREThe reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the fiscal years ended June 30, 2015,2014 and 2013 are as follows (in millions, except per share data): Year ended June 30, 2015 2014 2013Earnings / (loss) from continuing operations less net income / (loss) attributable tononcontrolling interest$212.1 $18.9 $(50.8)Earnings / (loss) from discontinued operations0.1 (2.7) 1.2Net earnings / (loss) attributable to Catalent$212.2 $16.2 $(49.6) Weighted average shares outstanding119,575,568 75,045,147 74,970,628Dilutive securities issuable-stock plans1,773,068 1,078,710 —Total weighted average diluted shares outstanding121,348,636 76,123,857 74,970,628 Basic earnings per share of common stock: Earnings / (loss) from continuing operations$1.77 $0.25 $(0.68)Earnings / (loss) from discontinued operations— (0.03) 0.02Net earnings / (loss) attributable to Catalent$1.77 $0.22 $(0.66) Diluted earnings per share of common stock-assuming dilution: Earnings / (loss) from continuing operations$1.75 $0.25 $(0.68)Earnings / (loss) from discontinued operations— (0.04) 0.02Net earnings / (loss) attributable to Catalent$1.75 $0.21 $(0.66)The computation of diluted earnings per share for June 30, 2015 and 2014 excludes the effect of potential shares issuable under the Company's pre-IPOemployee stock option plan of 2.1 million and 2.3 million options, respectively, because the vesting provisions of those awards specify performance ormarket-based conditions that had not been met as of the period end. The computation of diluted earnings per share for June 30, 2013 excludes the effect ofthe potential common shares issuable under the employee stock option plan of approximately 6.5 million shares, and excludes restricted share awards of 0.3million, because the Company had a net loss for the year and the effect would therefore be anti-dilutive.8.DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIESRisk Management Objective of Using DerivativesThe Company is exposed to fluctuations in the applicable exchange rate on its investments in foreign operations. While the Company does notactively hedge against changes in foreign currency, the Company has mitigated the exposure of its investments in its European operations by denominating aportion of its debt in euros. At June 30, 2015, the Company had euro-denominated debt outstanding of $355.8 million that qualifies as a hedge of a netinvestment in foreign operations. For non-derivatives designated and qualifying as net investment hedges, the effective portion of the translation gains orlosses are reported in accumulated other comprehensive income/(loss) as part of the cumulative translation adjustment. The ineffective portions of thetranslation gains or losses are reported in the statement of operations. The following table includes net investment hedge activity during fiscal year endedJune 30, 2015 and June 30, 2014:(Dollars in millions)June 30, 2015 June 30, 2014Unrealized foreign exchange gain/(loss) within other comprehensive income$30.0 $(13.6)Unrealized foreign exchange gain/(loss) within statement of operations$47.7 $(9.6)83Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents The net accumulated gain of this net investment as of June 30, 2015 within other comprehensive income/(loss) was approximately $79.5 million.Amounts are reclassified out of accumulated other comprehensive income/(loss) into earnings when the entity to which the gains and losses reside is eithersold or substantially liquidated.Cash Flow Hedges of Interest Rate RiskDuring fiscal 2013, the Company’s two U.S. dollar-denominated and one euro-denominated interest-rate swap agreements, which were designated aseffective cash flow hedges for financial reporting purposes, matured. Its Japanese yen interest-rate swap, effective as an economic hedge but not designated aseffective for financial reporting purposes also matured during fiscal 2013. As of June 30, 2015, the Company did not have any interest-rate swap agreementsin place that would have the economic effect of modifying the variable interest obligations associated with our floating rate term loans.On February 28, 2013, in connection with the refinancing of the Company’s €44.9 million term loan, Catalent de-designated €35.0 million of the€240.0 million notional Euribor-based interest-rate swap. Prior to de-designation, the effective portion of the change in fair value of the derivative wasrecorded as a component of other comprehensive income/(loss). The other comprehensive income/(loss) balance associated with the de-designated portion ofthe derivative was reclassified to earnings when the originally hedged forecasted interest payments on the hedged debt affected earnings. The amount oflosses reclassified into earnings as a result of the discontinuance of a portion of the Euribor-based interest-rate swap as a cash flow hedge for the fiscal yearended June 30, 2013 was $0.1 million.The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Statementof Operations for the fiscal years ended June 30, 2015, June 30, 2014 and June 30, 2013, (Dollars in millions)The Effect of Derivative Instruments on the Consolidated Statement of Operations for theFiscal Years Ended June 30, 2015, June 30, 2014 and June 30, 2013Derivatives in ASC 815 CashFlow Hedging RelationshipsAmount of (Gain) or LossRecognized in OCI onDerivative (Effective Portion)Location of (Gain) orLoss Reclassified fromAccumulated OCI intoIncome (EffectivePortion)Amount of (Gain) or LossReclassified fromAccumulated OCI intoIncome (EffectivePortion)Location of (Gain) or LossRecognized in Income onDerivative (Ineffective Portionand Amount excluded fromEffectiveness Testing)Amount of (Gain) or LossRecognized in Income onDerivative (IneffectivePortion and Amountexcluded fromEffectiveness Testing)Fiscal Year 2015: Interest Rate Swaps$—Interest expense, net$—Other (income)/expense, net$—Fiscal Year 2014: Interest Rate Swaps$—Interest expense, net$—Other (income)/expense, net$—Fiscal Year 2013: Interest Rate Swaps$1.1Interest income/(expense), net$21.6Other (income)/expense, net$0.19.INCOME TAXESEarnings/(loss) from continuing operations before income taxes and discontinued operations are as follows for the fiscal years ended 2015, 2014, and2013: Fiscal Year Ended June 30,(Dollars in millions)2015 2014 2013U.S. Operations$25.8 $(75.6) $(124.9)Non-U.S. Operation$86.7 $143.0 $101.0 $112.5 $67.4 $(23.9)84Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents The provision /(benefit) for income taxes consists of the following for the fiscal years ended 2015, 2014, and 2013: Fiscal Year Ended June 30,(Dollars in millions)2015 2014 2013Current: Federal$— $— $(0.4)State and local(0.8) (1.2) (2.4)Non-U.S.31.9 55.7 21.2Total$31.1 $54.5 $18.4Deferred: Federal$(125.3) $5.3 $8.8State and local(1.1) 0.4 (0.3)Non-U.S.(2.4) (10.7) 0.1Total(128.8) (5.0) 8.6 Total provision/(benefit)$(97.7) $49.5 $27.0 A reconciliation of the provision/(benefit) based on the federal statutory income tax rate to the Company’s effective income tax rate is as follows for thefiscal years ended 2015, 2014, and 2013: Fiscal Year Ended June 30,(Dollars in millions)2015 2014 2013Provision at U.S. federal statutory tax rate$39.4 $23.6 $(8.4)State and local income taxes(2.4) 0.6 0.6Foreign tax rate differential(23.9) (25.5) (15.1)Permanent items1.7 24.6 52.6Unrecognized tax positions14.7 34.2 —Tax valuation allowance(133.2) (9.5) 3.8Foreign tax credit - Non U.S.(0.1) (0.8) (3.3)Withholding tax and other foreign taxes1.4 6.2 4.7Change in tax rate1.3 (5.0) (4.6)Tax effect of OCI deferred taxes - U.S.— — 2.9Foreign currency impact on permanently reinvested loans2.7 — —Other0.7 1.1 (6.2) $(97.7) $49.5 $27.0The income tax benefit for the current period is not comparable to the same period of the prior year due to changes in pretax income over manyjurisdictions and the impact of discrete items. Generally, fluctuations in the effective tax rate are primarily due to changes in the geographic mix of pretaxincome and changes in the tax impact of permanent differences, restructuring, other special items and other discrete tax items, which may have unique taximplications depending on the nature of the item. The effective tax rate at June 30, 2015 reflects the release of the U.S. federal valuation allowance and anincrease in a tax reserve related to an adjustment to inter-company interest income in Germany, partially offset by a corresponding deduction in the UnitedKingdom due to enacted tax rate changes.As of June 30, 2015, the Company had $412.5 million of undistributed earnings from non-U.S. subsidiaries that are intended to be permanentlyreinvested in non-U.S. operations. As these earnings are considered permanently reinvested, no U.S. tax provision has been accrued related to the repatriationof these earnings. It is not feasible to estimate the amount of U.S. tax that might be payable on the eventual remittance of such earnings.85Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Deferred income taxes arise from temporary differences between financial reporting and tax reporting bases of assets and liabilities, and operating lossand tax credit carryforwards for tax purposes. The components of the deferred income tax assets and liabilities are as follows at June 30, 2015 and 2014: Fiscal Year Ended June 30,(Dollars in millions)2015 2014Deferred income tax assets: Accrued liabilities$24.0 $25.1Equity compensation8.4 10.0Loss and tax credit carryforwards204.0 196.2Foreign currency18.4 23.2Pension38.8 50.6Property-related9.7 11.8Intangibles10.5 16.3Other17.1 16.9Other comprehensive income4.1 4.0Total deferred income tax assets335.0 354.1Valuation allowance(82.4) (218.2)Net deferred income tax assets$252.6 $135.9 Fiscal Year Ended June 30,(Dollars in millions)2015 2014Deferred income tax liabilities: Accrued liabilities(0.6) (0.2)Equity compensation— —Foreign currency(0.4) (0.1)Property-related(44.5) (15.1)Goodwill and other intangibles(156.1) (164.7)Other(1.8) (1.2)Other comprehensive income(23.2) (19.8)Total deferred income tax liabilities$(226.6) (201.1) Net deferred tax asset/(liability)$26.0 $(65.2)Deferred tax assets and liabilities in the preceding table are in the following captions in the balance sheet at June 30, 2015 and 2014: Fiscal Year Ended June 30,(Dollars in millions)2015 2014Current deferred tax asset$19.7 $12.7Non-current deferred tax asset64.1 26.3Current deferred tax liability1.5 1.0Non-current deferred tax liability56.3 103.2Net deferred tax asset/(liability)$26.0 $(65.2)At June 30, 2015, the Company has federal net operating loss carryforwards of $344.6 million, all of which are subject to Internal Revenue CodeSection 382 limitations; $13.2 million, because they were generated in years prior to April 10, 2007,86Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents when the Company was owned by Cardinal, and the remainder due to a change in ownership event when Blackstone, Genstar Capital, and Aisling Capitalcompleted a secondary offering of the Company’s stock in March 2015. The federal loss carryforwards will expire in fiscal years 2022 through 2033. AtJune 30, 2015, the Company has state tax loss carryforwards of $483.8 million. Approximately $181.5 million of these losses are state tax losses generated inperiods prior to the period ending June 30, 2007. Substantially all state carryforwards have a twenty year carryforward period. In accordance with ASC 718,$56.8 million of federal and state losses were generated in the current and prior tax years as a result of tax deductions for equity. Such deductions are notbeing recognized for financial statement purposes because a cash tax benefit was not realized by the Company, as determined using a with-and-withoutapproach as described in ASC 740-20. As a result, these deductions are not reflected in the federal and state net operating loss carryforward amounts indicatedabove. At June 30, 2015, the Company has international tax loss carryforwards of $101.8 million. Substantially all of these carryforwards are available for atleast three years or have an indefinite carryforward period.The Company had valuation allowances of $82.4 million and $218.2 million as of June 30, 2015 and 2014, respectively, against our deferred tax assets.The Company considered all available evidence, both positive and negative, in assessing the need for a valuation allowance for deferred tax assets.Three possible sources of taxable income were evaluated when assessing the realization of deferred tax assets:•Future reversals of existing taxable temporary differences;•Tax planning strategies; and•Future taxable income exclusive of reversing temporary differences and carryforwards.The Company considered the need to maintain a valuation allowance on deferred tax assets based on management’s assessment of whether it is morelikely than not that deferred tax assets would be realized based on future reversals of existing taxable temporary differences and the ability to generatesufficient taxable income within the carryforward period available under the applicable tax law. The deferred tax liabilities are expected to reverse in thesame period and jurisdiction and are of the same character as the temporary differences giving rise to a portion of the deferred tax assets.During the current period, the Company released the majority of its U.S. federal valuation allowance of $136.7 million based on projected U.S. futureearnings in excess of the $294.1 million required to realize its net U.S. federal deferred tax assets. Of the $294.1 million, $329.5 million relates to the federalnet operating loss carryforward (NOL) which expires in the years 2028 to 2032. The remaining $35.4 million relates to other net deferred tax liabilities. Avaluation allowance of $10.4 million was retained on U.S. federal deferred tax assets for capital losses.The reversal of the valuation allowance was the result of a continuing trend of U.S. taxable income and the expectation that this trend will continue,rather than relying on tax planning strategies to support the realization of deferred tax assets. We have experienced three consecutive years of positive U.S.taxable earnings as of the current quarter and expect to sustain this position in the future, due to the positive impact on U.S. earnings from reduced interestexpense resulting from a reduction in our external debt, among other factors.While the U.S. federal valuation allowance was reversed, the U.S. state valuation allowance on $483.8 million of pre-apportioned state net operatinglosses were maintained. Due to uncertainty around earnings, apportionment, certain restrictions at the state level, and the history of tax losses, anticipatedutilization rates were not sufficient to overcome the negative evidence and allow a release.As part of the 2007 acquisition from Cardinal, the Company has been indemnified by Cardinal for tax liabilities that may arise in the future that relateto tax periods prior to April 10, 2007 (the “Formation Date”). The indemnification agreement includes, among other taxes, any and all Federal, state andinternational income based taxes as well as any interest and penalties that may be related thereto.Similarly, as part of the 2012 purchase of the CTS business from Aptuit, Inc., the Company has been indemnified by Aptuit, Inc. for tax liabilities thatmay arise in the future that relate to tax periods prior to February 17, 2012. The indemnification agreement includes, among other taxes, any and all Federal,state and international income based taxes as well as any interest and penalties that may be related thereto.Additionally, as part of the 2015 purchase of the Micron Technologies businesses, the Company has been indemnified for tax liabilities that may arisein the future that relate to tax periods prior to the acquisition, on November 3, 2014. The indemnification agreement includes, among other taxes, any and allFederal, state and international income-based taxes as well as any interest and penalties that may be related thereto.87Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents The amount of income taxes the Company may pay is subject to ongoing audits by federal, state and foreign tax authorities, which may result inproposed assessments. The Company’s estimate for the potential outcome for any uncertain tax issue is highly judgmental. The Company assesses its incometax positions and record benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and informationavailable at the reporting date. For those tax positions for which it is more likely than not that a tax benefit will be sustained, the Company records theamount that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.Interest and penalties are accrued, where applicable.ASC 740 includes guidance on the accounting for uncertainty in income taxes recognized in the financial statements. This standard also provides that atax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, includingresolutions of any related appeals or litigation processes, based on the technical merits. As of June 30, 2015, the Company had a total of $66.9 million ofunrecognized tax benefits. A reconciliation of our unrecognized tax benefit, excluding accrued interest for June 30, 2015, June 30, 2014 and June 30, 2013are as follows:(Dollars in millions)Balance at June 30, 2013$37.7Additions based on tax positions related to the current year7.5Additions for tax positions of prior years25.1Reductions for tax positions of prior years(4.8)Settlements$(4.9)Balance at June 30, 2014$60.6Additions based on tax positions related to the current year7.3Additions for tax positions of prior years5.5Reductions for tax positions of prior years(5.4)Settlements(0.5)Lapse of the applicable statute of limitations(0.6)Balance at June 30, 2015$66.9Of this amount, $46.7 million and $41.4 million represent the amount of unrecognized tax benefits that, if recognized, would favorably impact theeffective income tax rate as of June 30, 2015 and June 30, 2014, respectively. An additional $20.2 million represents the amount of unrecognized tax benefitsthat, if recognized, would not impact the effective income tax rate due to a full valuation allowance.In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including major jurisdictions suchas Germany, United Kingdom, France, the United States, and various states. The Company is no longer subject to examinations by the relevant tax authoritiesfor years prior to fiscal 2005.The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of June 30, 2015, the Company hasapproximately $6.3 million of accrued interest related to uncertain tax positions, an increase of $1.2 million from the prior year. The Company hadapproximately $5.1 million and $5.0 million of accrued interest related to uncertain tax positions as of June 30, 2014 and 2013, respectively. The portion ofsuch interest and penalties subject to indemnification by Cardinal is $2.3 million, an increase of $0.3 million from the prior year.10.EMPLOYEE RETIREMENT BENEFIT PLANSThe Company sponsors various retirement plans, including defined benefit pension plans and defined contribution plans. Substantially all of theCompany’s domestic non-union employees are eligible to participate in an employer-sponsored retirement savings plans, which include features underSection 401(k) of the Internal Revenue Code of 1986, as amended, and provide for company matching contributions. The Company’s contributions to theplans are determined by its Board of Directors subject to certain minimum requirements as specified in the plans. The Company uses a measurement date ofJune 30 for all of its retirement and postretirement benefit plans.In addition, the Company has recorded obligations related to its withdrawal from a multi-employer pension plan related to a former commercialpackaging site, a clinical services site and a former printed components operation. The Company’s withdrawal from these multi-employer pension plans hasbeen classified as a mass withdrawal under the Multiemployer Pension Plan Amendments Act of 1980, and, as amended, under the Pension Protection Act of2006. The withdrawal from the plan resulted in the recognition of liabilities associated with the Company’s long-term obligations in prior year periods not88Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents presented, which were primarily recorded as an expense within discontinued operations. The estimated discounted value of the projected contributionsrelated to these plans is $39.5 million and $39.6 million as of June 30, 2015 and June 30, 2014, respectively. The annual cash impact associated with theCompany’s long-term obligation approximates $1.7 million per year.The following table provides a reconciliation of the change in projected benefit obligation and fair value of plan assets for the defined benefit retirement andother retirement plans, excluding the multi-employer pension plan liability:At June 30,Retirement Benefits Other Post-Retirement Benefits(Dollars in millions)2015 2014 2015 2014Accumulated Benefit Obligation$316.0 $324.4 $3.7 $4.4 Change in Benefit Obligation Benefit obligation at beginning of year333.8 289.1 4.4 4.9Company service cost2.7 2.8 — —Interest cost11.4 12.2 0.2 0.2Employee contributions— — — —Plan amendments— — — —Curtailments(1.6) — — —Settlements— (1.7) — —Special termination benefits— — — —Divestitures— — — —Business combinations— — — —Benefits paid(9.6) (10.9) (0.2) (0.3)Actual expenses— (0.1) — —Actuarial (gain)/loss20.8 24.3 (0.7) (0.4)Exchange rate gain/(loss)(33.8) 18.1 — —Benefit obligation at end of year323.7 333.8 3.7 4.4 Change in Plan Assets Fair value of plan assets at beginning of year222.2 198.4 — —Actual return on plan assets18.4 14.0 — —Company contributions9.0 8.6 0.2 0.3Employee contributions— — — —Settlements— (1.7) — —Special company contributions to fund termination benefits— — — —Divestitures— — — —Business combinations— — — —Benefits paid(9.6) (10.9) (0.2) (0.3)Actual expenses— (0.1) — —Exchange rate gain/(loss)(18.0) 13.9 — —Fair value of plan assets at end of year222.0 222.2 — — Funded Status Funded status at end of year(101.7) (111.4) (3.7) (4.4)Employer contributions between measurement date and reportingdate— — — —Net pension asset (liability)(101.7) (111.4) (3.7) (4.4)89Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents The following table provides a reconciliation of the net amount recognized in the Consolidated Balance Sheets:At June 30,Retirement Benefits Other Post-Retirement Benefits(Dollars in millions)2015 2014 2015 2014Amounts Recognized in Statement of Financial Position Noncurrent assets$0.6 $0.7 $— $—Current liabilities(0.9) (1.0) (0.8) (0.4)Noncurrent liabilities(101.4) (111.1) (2.9) (4.0)Total asset/(liability)(101.7) (111.4) (3.7) (4.4) Amounts Recognized in Accumulated Other ComprehensiveIncome Transition (asset)/obligation— — — —Prior service cost0.1 0.2 — —Net (gain)/loss63.2 52.2 (1.6) (0.9)Total accumulated other comprehensive income at the end of theyear63.3 52.4 (1.6) (0.9) Additional Information for Plan with ABO in Excess of PlanAssets Projected benefit obligation309.6 318.1 3.7 4.4Accumulated benefit obligation304.1 311.2 3.7 4.4Fair value of plan assets207.3 206.0 — — Additional Information for Plan with PBO in Excess of PlanAssets Projected benefit obligation309.6 318.1 3.7 4.4Accumulated benefit obligation304.1 311.2 3.7 4.4Fair value of plan assets207.3 206.0 — — Components of Net Periodic Benefit Cost Service Cost2.7 2.8 — —Interest Cost11.4 12.2 0.2 0.2Expected return on plan assets(10.5) (10.4) — —Amortization of unrecognized: Transition (asset)/obligation— — — —Prior service cost— — — —Net (gain)/loss1.8 1.3 (0.1) —Ongoing periodic cost5.4 5.9 0.1 0.2Settlement/curtailment expense/(income)(0.2) 0.2 — —Net periodic benefit cost5.2 6.1 0.1 0.290Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents At June 30,Retirement Benefits Other Post-Retirement Benefits(Dollars in millions)2015 2014 2015 2014Other Changes in Plan Assets and Benefit Obligations Recognizedin Other Comprehensive Income Net (gain)/loss arising during the year$13.0 $20.7 (0.7) (0.3)Prior service cost (credit) during the year— — — —Transition asset/(obligation) recognized during the year— — — —Prior service cost recognized during the year— — — —Net gain/(loss) recognized during the year(3.2) (1.5) 0.1 —Exchange rate gain/(loss) recognized during the year(0.6) 0.5 — —Total recognized in other comprehensive income$9.2 $19.7 $(0.6) $(0.3)Total Recognized in Net Periodic Benefit Cost and OtherComprehensive Income Total recognized in net periodic benefit cost and othercomprehensive income$14.4 $27.3 $(0.5) $(0.2)Estimated Amounts to be Amortized from Accumulated OtherComprehensive Income into Net Periodic Benefit Cost Amortization of: Transition (asset)/obligation$— $— $— $—Prior service cost/(credit)— — — —Net (gain)/loss2.9 2.0 (0.1) (0.1)Financial Assumptions Used to Determine Benefit Obligations atthe Balance Sheet Date Discount rate (%)3.38% 3.73% 3.69% 3.67%Rate of compensation increases (%)2.06% 2.10% N/A N/AFinancial Assumptions Used to Determine Net Periodic BenefitCost for Financial Year Discount rate (%)3.73% 4.14% 3.67% 3.92%Rate of compensation increases (%)2.10% 2.51% N/A N/AExpected long-term rate of return (%)5.11% 5.11% N/A N/AExpected Future Contributions Financial Year 2016$7.6 $0.8 91Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents At June 30,Retirement Benefits Other Post-Retirement Benefits(Dollars in millions)2015 2014 2015 2014Expected Future Benefit Payments Financial Year 201610.5 9.7 0.8 0.420179.5 11.3 0.3 0.4201811.1 10.6 0.3 0.4201911.2 12.7 0.3 0.4202013.9 12.7 0.3 0.42021-202572.0 77.5 1.1 1.6 Actual Asset Allocation (%) Equities34.2% 34.0% —% —%Government Bonds28.2% 27.0% —% —%Corporate Bonds17.3% 17.1% —% —%Property3.1% 3.0% —% —%Insurance Contracts8.5% 9.5% —% —%Other8.7% 9.4% —% —%Total100.0% 100.0% —% —% Actual Asset Allocation (Amount) Equities75.7 75.7 — —Government Bonds62.7 60.0 — —Corporate Bonds38.5 37.9 — —Property6.9 6.6 — —Insurance Contracts18.9 21.0 — —Other19.3 21.0 — —Total222.0 222.2 — — Target Asset Allocation (%) Equities34.5% 34.3% —% —%Government Bonds24.8% 24.5% —% —%Corporate Bonds22.1% 21.7% —% —%Property3.5% 3.6% —% —%Insurance Contracts6.3% 7.1% —% —%Other8.8% 8.8% —% —%Total100.0% 100.0% —% —%The Company employs a building block approach in determining the long-term rate of return for plan assets. Historical markets are studied and long-term historical relationships between equities and fixed income are preserved consistent with the widely accepted capital market principle that assets withhigher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capitalmarket assumptions are determined. The long-term portfolio return is established via a building block approach with proper consideration of diversificationand rebalancing. Peer data and historical returns are reviewed to check for reasonability and appropriateness.Plan assets are recognized and measured at fair value in accordance with the accounting standards regarding fair value measurements. The following arevaluation techniques used to determine the fair value of each major category of assets:•Short-term Investments, Equity securities, Fixed Income Securities, and Real Estate are valued using quoted market prices or other valuationmethods, and thus are classified within Level 1 or Level 2.92Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents •Insurance Contracts and Other include investments with some observable and unobservable prices that are adjusted by cash contributions anddistributions, and thus are classified within Level 2 or Level 3.The following table provides a summary of plan assets that are measured in fair value as of June 30, 2015, aggregated by the level in the fair valuehierarchy within which those measurements fall: (Dollars in millions)Total Assets Level 1 Level 2 Level 3 Equity Securities$75.7 $— $75.7 — Debt Securities101.2 — 101.2 — Real Estate6.9 — 0.3 6.6 Other38.2 — 17.3 20.9 Total$222.0 $— $194.5 $27.5Level 3 real estate assets consist of a U.K. Property fund ("UBS Life Triton Property Fund") that directly invests in properties that are held in the U.K.The funds are priced using the Net Asset Value ("NAV") of the fund and investors also get Bid and Offer prices on a monthly basis. Investment properties aremeasured at fair value as determined by third-party independent appraisers. Their value is ascertained by reference to the market value, having regard towhether they are let or un-let at the date of valuation, in accordance with the Appraisal and Valuation Manual issued by the Royal Institution of CharteredSurveyors.Level 3 other assets consist of an insurance contract in the UK to fulfill the benefit obligations for a portion of the participant benefits. The value of thiscommitment is determined using the same assumptions and methods used to value the UK Retirement & Death Benefit Plan pension liability. Level 3 otherassets also include the partial funding of a pension liability relating to current and former employees of the Company’s Eberbach facility through a Companypromissory note or loan with an annual rate of interest of 5%. The value of this commitment fluctuates due to contributions and benefit payments in additionto loan interest.The following table provides a summary of plan assets that are measured in fair value as of June 30, 2014, aggregated by the level in the fair valuehierarchy within which those measurements fall: (Dollars in millions)Total Assets Level 1 Level 2 Level 3 Equity Securities$75.7 $6.1 $69.6 — Debt Securities97.9 26.8 71.1 — Real Estate6.6 — 0.4 6.2 Other42.0 — 18.1 23.9 Total$222.2 $32.9 $159.2 $30.193Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents The following table provides a reconciliation of the beginning and ending balances of level 3 assets as well as the changes during the periodattributable to assets held and those purchases, sales, settlements, contributions and benefits that were paid:Asset Category Allocations - June 30, 2015Total (Level 3)Fair Value Measurement Fair Value Measurement Fair Value MeasurementAll figures in U.S. DollarsUsing Significant Using Significant Using Significant(Dollars in millions)Unobservable Inputs Unobservable Inputs Unobservable Inputs Total (Level 3) Insurance Contracts OtherBeginning Balance at June 30, 2014$30.1 $4.7 $25.4Actual return on plan assets: Relating to assets still held at the reporting date(2.0) 0.2 (2.2)Relating to assets sold during the period— — —Purchases, sales, settlements, contributions andbenefits paid(0.6) (0.2) (0.4)Transfers in and/or out of Level 3— — —Ending Balance at June 30, 2015$27.5 $4.7 $22.8The investment policy reflects the long-term nature of the plans’ funding obligations. The assets are invested to provide the opportunity for bothincome and growth of principal. This objective is pursued as a long-term goal designed to provide required benefits for participants without undue risk. It isexpected that this objective can be achieved through a well-diversified asset portfolio. All equity investments are made within the guidelines of quality,marketability and diversification mandated by the Employee Retirement Income Security Act (“ERISA”) (for plans subject to ERISA) and other relevant legalrequirements. Investment managers are directed to maintain equity portfolios at a risk level approximately equivalent to that of the specific benchmarkestablished for that portfolio. Assets invested in fixed income securities and pooled fixed income portfolios are managed actively to pursue opportunitiespresented by changes in interest rates, credit ratings or maturity premiums.At June 30,Other Post-Retirement Benefits(Actual dollar amounts)2015 2014 Assumed Healthcare Cost Trend Rates at the Balance Sheet Date Healthcare cost trend rate – initial (%) Pre-65n/a 7.60%Post-6511.35% 10.91%Healthcare cost trend rate – ultimate (%) Pre-65n/a 4.70%Post-654.64% 4.70%Year in which ultimate rates are reached Pre-65n/a 2021Post-652022 2020Effect of 1% Change in Healthcare Cost Trend Rate Healthcare cost trend rate up 1% on APBO at balance sheet date$171,309 $278,651on total service and interest cost8,181 11,363Effect of 1% Change in Healthcare Cost Trend Rate Healthcare cost trend rate down 1% on APBO at balance sheet date$(152,189) $(245,360)on total service and interest cost(7,282) (10,008)Expected Future Contributions Financial Year 2016$830,044 94Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents 11.RELATED PARTY TRANSACTIONSAdvisor Transaction and Management FeesPrior to the IPO, the Company was party to a transaction and advisory fee agreement with affiliates of Blackstone and certain other investors in BHPPTS Holdings L.L.C. (the “Investors”), pursuant to which the Company historically paid an annual sponsor advisory fee to Blackstone and the other Investorsfor certain monitoring, advisory and consulting services to the Company. In connection with the IPO, the Company paid the Investors an advisory agreementtermination fee of $29.8 million in August 2014, which was recorded within other (income)/expense, net in the Consolidated Statements of Operations, andterminated the agreement. As a result, the Company did not have management fees for fiscal year ended June 30, 2015. For fiscal years ended June 30, 2014and 2013, this management fee was approximately $12.9 million and $12.4 million, respectively. This fee was recorded as expense within selling, generaland administrative expenses in the Consolidated Statements of Operations.In connection with each of two secondary offerings of our common stock demanded by Blackstone during fiscal 2015 following the IPO, we enteredinto underwriting agreements with Blackstone, the other shareholders selling in the offerings, and the underwriters managing the offerings setting forth theterms of the offerings and making various representations to the underwriters regarding various facts and circumstances relating to the offerings. Theunderwriting agreements required us to pay certain expenses relating to the offerings and to indemnify Blackstone, the other sellers, and the underwriters forthe offerings against liabilities arising from breaches of our representations and certain other matters relating to the offerings.Other Related Party TransactionsThe Company participates in an employer health program agreement with Equity Healthcare LLC (“Equity Healthcare”). Equity Healthcare negotiateswith providers of standard administrative services for health benefit plans and other related services for cost discounts and quality of service monitoringcapability by Equity Healthcare. Because of the combined purchasing power of its client participants, Equity Healthcare is able to negotiate pricing terms forproviders that are believed to be more favorable than the companies could obtain for themselves on an individual basis. In consideration for these services,the Company paid Equity Healthcare a fee of $2.80 and $2.70 per participating employee per month in calendar years 2015 and 2014, respectively. As ofJune 30, 2015, the Company had approximately 2,500 employees enrolled in its health benefit plans in the United States. Equity Healthcare is an affiliate ofBlackstone.12.EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)Description of Capital Stock and Initial Public OfferingThe Company is authorized to issue 1,000,000,000 shares of common stock, par value $0.01 per share, and 100,000,000 shares of preferred stock, parvalue $0.01 per share. In accordance with the Company’s amended and restated certificate of incorporation, each share of common stock has one vote, andthe common stock votes together as a single class. In July 2014, the Company’s board of directors and holders of the requisite number of outstanding sharesof its capital stock have approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 70-for-1 stock split. Thestock split became effective on July 17, 2014 upon the filing with the Delaware Secretary of State of an amendment to the Company’s amended and restatedcertificate of incorporation. Refer to Note 1 for further discussion of the Company’s July 2014 recapitalization and discussion of the Company’s publicofferings of common stock.95Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Accumulated other comprehensive income/(loss)Accumulated other comprehensive income/(loss) by component and changes for the fiscal years June 30, 2015, June 30, 2014 and June 30, 2013consists of:(Dollars in millions)Foreign CurrencyTranslation Adjustments UnrealizedGains/(Losses) onDerivatives Deferred Compensation Pension LiabilityAdjustments Other ComprehensiveIncome/(Loss)Balance at June 30, 2012$29.5 $(24.5) $0.7 $(34.6) $(28.9)Activity, net of tax(47.9) 24.5 0.8 8.7 (13.9)Balance at June 30, 2013(18.4) — 1.5 (25.9) (42.8)Activity, net of tax32.4 — 1.7 (15.5) 18.6Balance at June 30, 201414.0 — 3.2 (41.4) (24.2)Activity, net of tax(144.0) — 0.6 (6.4) (149.8)Balance at June 30, 2015$(130.0) $— $3.8 $(47.8) $(174.0)The components of the changes in the cumulative translation adjustment and minimum pension liability for the fiscal years ended June 30, 2015,June 30, 2014 and June 30, 2013 consists of: Year Ended June 30, 2015 2014 2013Foreign currency translation adjustments: Net investment hedge$30.0 $(13.6) $(20.9)Long term inter-company loans(9.0) 28.3 (4.8)Translation adjustments(152.7) 17.7 (22.2)Total cumulative translation adjustment, pretax(131.7) 32.4 (47.9) Tax (1)(12.3) — —Total cumulative translation adjustment, net of tax$(144.0) $32.4 $(47.9) Net change in minimum pension liability Net gain/(loss) arising during the year$(12.3) $(20.4) $9.5Net (gain)/loss recognized during the year3.1 1.5 1.1Foreign Exchange Translation and Other0.6 (0.5) (0.4)Total Pension, pretax(8.6) (19.4) 10.2Tax2.2 3.9 (1.5)Net change in minimum pension liability, net of tax$(6.4) $(15.5) $8.7(1)Tax related to foreign currency translation adjustments primarily relates to the Net investment hedge activity.96Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents 13.EQUITY-BASED COMPENSATION2007 Stock Incentive PlanThe Company’s stock-based compensation is comprised of stock options and restricted stock units. Awards issued under the Company’s pre-IPOincentive compensation plan, known as the 2007 PTS Holdings Corp. Stock Incentive Plan, as amended (the “2007 Plan”), were generally issued for thepurpose of retaining key employees and directors. The Company adopted two forms of non-qualified stock option agreements (each, a “Form OptionAgreement”) for awards granted under the 2007 Plan. Under the Company’s Form Option Agreement adopted in 2009, a portion of the stock option awardsvest in equal annual installments over a five-year period contingent solely upon the participant’s continued employment with the Company, or one of itssubsidiaries, another portion of the stock option awards vest over a specified performance period upon achievement of pre-determined operating performancetargets over time and the remaining portion of the stock option awards vest upon realization of certain internal rates of return or multiple of investment goals.Under the Company’s other Form Option Agreement, adopted in 2013, a portion of the stock option awards vest over a specified performance period uponachievement of pre-determined operating performance targets over time while the other portion of the stock option awards vest upon realization of a specifiedmultiple of investment goal. The Form Option Agreements include certain forfeiture provisions upon a participant’s separation from service with theCompany. Following the IPO, the Company decided not to grant any further awards under the 2007 Plan; however, all outstanding awards granted prior tothe IPO remained outstanding in accordance with the terms of the 2007 Plan.2014 Omnibus Incentive PlanIn connection with the IPO, the Company’s Board of Directors adopted the 2014 Omnibus Incentive Plan effective July 31, 2014 (the “2014 Plan”). The2014 Plan provides certain members of management, employees and directors of the Company and its subsidiaries with the opportunity to obtain variousincentives, including grants of stock options and restricted stock units. A maximum of 6,700,000 shares of common stock may be issued under the 2014 Plan.Restricted stock units under the 2014 Plan may be granted to members of management and directors. At the IPO, the Company granted to members ofmanagement restricted stock units that had certain performance-related vesting requirements (“performance stock units”). These restricted stock units had agrant date fair value of $14.7 million, which represents approximately 692,000 shares of common stock. Under the 2014 Plan, the performance share unitsvest based on achieving Company financial performance metrics established at the outset of each three-year performance period. The metrics for fiscal 2015are a mix of cumulative revenue growth and cumulative EBITDA growth targets. The performance share units vest following the end of the three-yearperformance period based on achievement of the targets. The restricted stock awards vest on the third anniversary of the date of grant subject to theparticipant’s continued employment with the Company.Stock options were also granted as part of the IPO under the 2014 Plan for selected executives of the Company with an aggregate intrinsic value of $2.3million, which represents approximately 509,000 shares of common stock. Each stock option vests in equal annual installments over a four-year period fromthe date of grant, contingent solely upon the participant’s continued employment with the Company.Stock Compensation ExpenseStock compensation expense recognized in the consolidated statements of income was $9.0 million, $4.5 million and $2.8 million in fiscal years 2015,2014 and 2013, respectively. All stock compensation expense is classified in selling, general and administrative expenses along with the wages and benefitsof the option participants. Stock compensation expense is based on awards expected to vest, and therefore has been reduced by estimated forfeitures.Forfeitures are required to be estimated at the time of grant and revised in subsequent periods, if necessary, if actual forfeitures differ from those estimates.Methodology and AssumptionsStock options are granted with an exercise price equal to the fair market value on the date of grant. In the 2007 Plan, stock options granted generallyvest in equal annual installments over a five year period from the grant date. Stock options granted typically have a contractual term of 10 years. The grant-date fair value, adjusted for estimated forfeitures, is recognized as expense on a ratable basis over the substantive vesting period. The fair value of stockoptions is determined using the Black-Scholes-Merton option pricing model for service and performance based awards, and an adaptation of the Black-Scholes-Merton option valuation model, which takes into consideration the internal rate of return thresholds, for market based awards. This model adaptationis essentially equivalent to the use of path dependent-lattice model.The weighted average of assumptions used in estimating the fair value of stock options granted during each year were as follows:97Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Year Ended June 30, 2015 2014 2013Expected volatility32% 31% 30% - 31%Expected life (in years)6.25 5.66 - 6.50 5.82 - 6.50Risk-free interest rates2% 0.3% - 2.2% 0.3% - 1.9%Dividend yieldNone None NoneThe Company is newly public, and as a result has limited relevant historical volatility experience; therefore, the expected volatility assumption isbased on the historical volatility of closing share price of a comparable peer group. The Company selected peer companies from the pharmaceutical industrywith similar characteristics to us, including market capitalization, number of employees and product focus. In addition, since the Company does not have apattern of exercise behavior of option holders, the Company used the simplified method to determine the expected life of each option, which is the mid-pointbetween the vesting date and the end of the contractual term. The risk-free interest-rate for the expected life of the option is based on the comparableU.S. Treasury yield curve in effect at the time of grant. The weighted-average grant-date fair value of stock options in 2015, 2014, and 2013 was $7.23 pershare, $5.41 per share and $4.23 per share, respectively.The following table summarizes stock option activity and shares outstanding for the year ended June 30, 2015: TimePerformanceMarket Weighted AverageNumberWAAggregateNumberWAAggregateNumberWAAggregate ExerciseofContractualIntrinsicofContractualIntrinsicofContractualIntrinsic PricesharesTermValuesharesTermValuesharesTermValueOutstanding as of June30, 2014$13.962,632,2805.96$24,001,4101,563,7307.55$9,483,9702,337,8607.06$16,702,850Granted$20.97784,0786.25———————Exercised$11.70(1,279,524)—21,268,432(340,900)—5,517,749———Forfeited$16.05(129,135)——(125,580)——(264,250)——Expired / Canceled——————————Outstanding as of June30, 2015$15.622,007,6996.8325,979,8731,097,2506.8714,296,0902,073,6105.8130,739,825Expected to vest as ofJune 30, 2015$15.561,934,1206.7525,327,0721,071,9566.8514,025,6241,399,0485.6321,319,082Vested and expected tovest as of June 30,2015$12.83961,9324.96$16,107,185467,9365.54$7,485,413———In fiscal 2015, participants exercised the option to purchase 623 thousand shares, resulting in $10.3 million of cash paid on behalf of participants forwithholding taxes. The intrinsic value of the options exercised in fiscal 2015 was $26.8 million. The total fair value of options vested during the period was$3.6 million.In fiscal 2014, participants exercised the option to purchase 20 thousand shares, resulting in an inconsequential impact on the Company’s cash balanceand income tax accounts. The intrinsic value of the options exercised in fiscal 2014 was $0.4 million.As of June 30, 2015, $4.8 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over a weighted-average period of approximately 3.08 years.Restricted Stock UnitsThe Company may grant restricted stock units ("RSUs") to employees for recognition and retention purposes. RSUs generally vest over a three to five-year period. The grant-date fair value, adjusted for estimated forfeitures, is recognized as expense ratably on a graded vesting schedule over the vestingperiod. The fair value of RSUs is determined based on the number of shares granted and the fair value of the Company’s common stock on the date of grant.98Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents The following table summarizes non-vested RSU activity for the year ended June 30, 2015: RSU Units Weighted Average Grant-Date Fair ValueNon-vested as of June 30, 201455,020 $17.43Granted (1)800,654 21.49Vested26,703 12.94Forfeited55,671 21.27Non-vested as of June 30, 2015773,300 $21.51(1)The number of shares granted in fiscal 2015 increased as compared to the prior year as a result of a change from a cash-based long-term incentive planto an equity-based long-term incentive plan for the Company’s senior employees.As of June 30, 2015, $10.5 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over a weighted-average period of approximately 2.1 years. The weighted-average grant-date fair value of RSUs in fiscal years 2015 and 2014 was $21.49 and $21.64,respectively. There were no RSU grants in fiscal year 2013. The fair value of RSUs vested in fiscal 2015, 2014 and 2013 was $0.6 million, $0.6 million and$0.6 million, respectively.14.OTHER (INCOME) / EXPENSE, NETThe components of Other (Income) / Expense, net for the twelve months ended June 30, 2015, 2014, 2013 are as follows: Twelve Months Ended June 30,(Dollars in millions)2015 2014 2013Other (Income) / Expense, net Debt extinguishment costs$21.8 $11.1 $17.0Gain on acquisition, net (1)(8.9) — —Sponsor advisory agreement termination fee (2)29.8 — —Foreign currency (gains) and losses(2.4) (2.5) 3.2 Other2.1 1.8 4.9Total Other (Income) / Expense$42.4 $10.4 $25.1(1)Included within Other (income) / expense, net are gains associated with acquisitions completed during the respective periods. Such income eventsare non-standard in nature and not reflective of the Company’s core operating results. During the twelve months ended June 30, 2015, the Companyrecorded a gain of $3.2 million on the re-measurement of a cost investment in an entity that became a wholly owned subsidiary as of October 2014, a$7.0 million bargain purchase gain for an acquisition completed in July 2014, and a $1.3 million loss on the redeemable noncontrolling interest inJune 2015.(2)The Company paid a sponsor advisory agreement termination fee of $29.8 million in connection with its IPO.15.REDEEMABLE NONCONTROLLING INTERESTIn July 2013, the Company acquired a 67% controlling interest in a softgel manufacturing facility located in Haining, China. The noncontrollinginterest shareholders have the right to jointly sell the remaining 33% interest to Catalent during the 30-day period following the third anniversary of closingfor a price based on the greater of (1) an amount that would provide the noncontrolling interest shareholders a return on their investment of a predeterminedamount per annum on their pro rata share of the initial valuation or (2) a multiple of the sum of the target’s earnings before interest, taxes, depreciation andamortization and amortization less net debt for the four quarters immediately preceding such sale. Noncontrolling interest with redemption features, such asthe arrangement described above, that are not solely within the Company’s control are considered redeemable noncontrolling interests, which is consideredtemporary equity and is therefore reported outside of permanent equity on the Company’s consolidated balance sheet at the greater of the initial carryingamount adjusted for the noncontrolling interest’s share of net income/(loss) or its redemption value.99Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents In June 2015, the Company reached an agreement to acquire the remaining 33% from the noncontrolling interest shareholders for purchaseconsideration of $5.8 million. As a result of the purchase agreement, the Company recorded a $1.3 million loss in Other Income/Expense, net to reflect thecurrent redemption value as of June 30, 2015. The transaction is expected to close in fiscal 2016 after customary closing conditions are met, includingregulatory approvals.16.COMMITMENTS AND CONTINGENCIESRental Payments and ExpenseThe future minimum rental payments for operating leases having initial or remaining non-cancelable lease terms in excess of one year at June 30, 2015are:(Dollars in millions)20162017201820192020ThereafterTotalMinimum rental payments$8.4$6.0$5.3$4.2$4.1$7.8$35.8Rental expense relating to operating leases was approximately $10.0 million, $9.5 million, and $9.4 million for the fiscal years ended June 30, 2015,June 30, 2014 and June 30, 2013, respectively. Sublease rental income was not material for any period presented.Other MattersAs previously disclosed with regard to the Company’s participation in a multi-employer pension plan, the Company notified the plan trustees of itswithdrawal from such plan in fiscal 2012. The actuarial review process, which is administered by the plan trustees, was completed during the third quarter offiscal 2015, and the resulting estimated liability reflects the present value of its expected future long-term obligations. The annual cash impact associatedwith the Company’s long-term obligation approximates $1.7 million per year. Refer to Note 10 to the Consolidated Financial Statements for furtherdiscussion.From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business, including, without limitation,inquiries and claims concerning environmental contamination as well as litigation and allegations in connection with acquisitions, product liability,manufacturing or packaging defects and claims for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of which couldbe significant. The Company intends to vigorously defend itself against such other litigation and does not currently believe that the outcome of any suchother litigation will have a material adverse effect on the Company’s financial statements. In addition, the healthcare industry is highly regulated andgovernmental agencies continue to scrutinize certain practices affecting governmental programs and otherwise.From time to time, the Company receives subpoenas or requests for information from various governmental agencies, including from state attorneysgeneral and the U.S. Department of Justice relating to the business practices of customers or suppliers. The Company generally responds to such subpoenasand requests in a timely and thorough manner, which responses sometimes require considerable time and effort and can result in considerable costs beingincurred. The Company expects to incur costs in future periods in connection with existing and future requests.17.SEGMENT INFORMATIONThe Company conducts its business within the following operating segments: Softgel Technologies, Modified Release Technologies, MedicationDelivery Solutions and Development & Clinical Services. The Softgel Technologies and Modified Release Technologies segments are aggregated into onereportable operating segment – Oral Technologies. The Company evaluates the performance of its segments based on segment earnings beforenoncontrolling interest, other (income) expense, impairments, restructuring costs, interest expense, income tax (benefit)/expense, and depreciation andamortization (“Segment EBITDA”). EBITDA from continuing operations is consolidated earnings from continuing operations before interest expense,income tax (benefit)/expense, depreciation and amortization and is adjusted for the income or loss attributable to noncontrolling interest. The Company’spresentation of Segment EBITDA and EBITDA from continuing operations may not be comparable to similarly titled measures used by other companies.100Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents The following tables include net revenue and Segment EBITDA during the fiscal years ended June 30, 2015, June 30, 2014, and June 30, 2013:(Dollars in millions)Fiscal Year Ended June 30,2015 2014 2013Oral Technologies Net revenue$1,141.1 $1,180.1 $1,186.3Segment EBITDA$313.7 $324.3 $315.7Medication Delivery Solutions Net revenue261.9 246.1 219.3Segment EBITDA53.9 48.7 31.5Development and Clinical Services Net revenue438.8 412.2 404.8Segment EBITDA93.4 83.5 75.0Inter-segment revenue elimination(11.0) (10.7) (10.1)Unallocated costs (1)(100.8) (82.1) (90.6)Combined Total Net revenue$1,830.8 $1,827.7 $1,800.3 EBITDA from continuing operations$360.2 $374.4 $331.6 (1)Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs,and other costs that are not allocated to the segments as follows:(Dollars in millions)Fiscal Year Ended June 30,2015 2014 2013Impairment charges and gain/(loss) on sale of assets$(4.7) $(3.2) $(5.2)Equity compensation(9.0) (4.5) (2.8)Restructuring and other items (2)(27.2) (29.4) (29.0)Sponsor advisory fee— (12.9) (12.4)Noncontrolling interest1.9 1.0 0.1Other income/(expense), net (3)(42.4) (10.4) (25.1)Non-allocated corporate costs, net(19.4) (22.7) (16.2)Total unallocated costs$(100.8) $(82.1) $(90.6)(2)Segment results do not include restructuring and certain acquisition-related costs.(3)Amounts primarily relate to the expense associated with the termination of the sponsor advisory services agreement of $29.8 million in connectionwith the IPO, expenses related to financing transactions of $21.8 million and acquisition-related gains of $8.9 million, all during the current year;and foreign currency translation gains and losses during all periods presented.101Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Provided below is a reconciliation of earnings/(loss) from continuing operations to EBITDA from continuing operations:(Dollars in millions)Fiscal Year Ended June 30,2015 2014 2013Earnings/(loss) from continuing operations$210.2 $17.9 $(50.9)Depreciation and amortization140.8 142.9 152.2Interest expense, net105.0 163.1 203.2Income tax (benefit)/expense(97.7) 49.5 27.0Noncontrolling interest1.9 1.0 0.1EBITDA from continuing operations$360.2 $374.4 $331.6The following table includes total assets for each segment, as well as reconciling items necessary to total the amounts reported in the ConsolidatedFinancial Statements:(Dollars in millions)June 30, 2015 June 30, 2014Assets Oral Technologies$2,477.3 $2,585.6Medication Delivery Solutions247.8 292.8Development and Clinical Services703.2 672.1Corporate and eliminations(282.9) (460.3)Total assets$3,145.4 $3,090.2The following tables include depreciation and amortization expense and capital expenditures for the fiscal years ended June 30, 2015, June 30, 2014and June 30, 2013 for each segment, as well as reconciling items necessary to total the amounts reported in the Consolidated Financial statements:Depreciation and Amortization Expense(Dollars in millions)Fiscal Year Ended June 30,2015 2014 2013Oral Technologies$73.6 $80.8 $86.7Medication Delivery Solutions23.7 22.6 20.6Development and Clinical Services36.6 30.9 33.2Corporate6.9 8.6 11.7Total depreciation and amortization expense$140.8 $142.9 $152.2Capital Expenditures(Dollars in millions)Fiscal Year Ended June 30,2015 2014 2013Oral Technologies$75.6 $56.1 $47.7Medication Delivery Solutions22.6 25.0 47.7Development and Clinical Services24.0 28.2 21.3Corporate18.8 13.1 5.8Total capital expenditure$141.0 $122.4 $122.5102Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents The following table presents revenue and long-lived assets by geographic area: Net Revenue Long-Lived Assets(1)(Dollars in millions)Fiscal Year Ended June 30, 2015 2014 2013 June 30, 2015 June 30, 2014United States$799.3 $682.3 $695.8 $479.0 $413.7Europe795.4 888.8 863.2 314.6 348.5International Other268.6 278.8 270.1 91.6 110.8Eliminations(32.5) (22.2) (28.8) — —Total$1,830.8 $1,827.7 $1,800.3 $885.2 $873.0(1)Long-lived assets include property and equipment, net of accumulated depreciation.18.SUPPLEMENTAL BALANCE SHEET INFORMATIONSupplementary balance sheet information at June 30, 2015 and June 30, 2014 is detailed in the following tables.InventoriesWork-in-process and finished goods inventories include raw materials, labor and overhead. Total inventories consisted of the following:(Dollars in millions)June 30, 2015 June 30, 2014Raw materials and supplies$76.9 $84.1Work-in-process26.3 23.8Finished goods43.8 39.8Total inventory, gross147.0 147.7Inventory reserve(14.1) (12.9)Inventories$132.9 $134.8Prepaid expenses and otherPrepaid expenses and other current assets consist of the following:(Dollars in millions)June 30, 2015 June 30, 2014Prepaid expenses$22.0 $16.6Spare parts supplies11.5 12.5Deferred income taxes19.7 12.7Other current assets27.7 32.8Prepaid expenses and other$80.9 $74.6103Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Property, plant, and equipment, netProperty, plant, and equipment, net consist of the following:(Dollars in millions)June 30, 2015 June 30, 2014Land, buildings and improvements$637.6 $619.0Machinery, equipment and capitalized software727.9 683.6Furniture and fixtures10.1 8.1Construction in progress97.6 110.9Property and equipment, at cost1,473.2 1,421.6Accumulated depreciation(588.0) (548.6)Property, plant, and equipment, net$885.2 $873.0Other assetsOther assets consist of the following:(Dollars in millions)June 30, 2015 June 30, 2014Deferred long-term debt financing costs$9.5 $19.7Other18.9 29.0Total other assets$28.4 $48.7104Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Other accrued liabilitiesOther accrued liabilities consist of the following:(Dollars in millions)June 30, 2015 June 30, 2014Accrued employee-related expenses$87.8 $86.7Restructuring accrual7.3 10.3Deferred income taxes1.5 1.0Accrued interest0.2 12.2Deferred revenue and fees39.0 47.1Accrued income tax55.8 61.5Other accrued liabilities and expenses55.4 60.9Other accrued liabilities$247.0 $279.7Allowance for doubtful accountsTrade receivables allowance for doubtful accounts activity is as follows:(Dollars in millions)June 30, 2015 June 30, 2014 June 30, 2013Trade receivables allowance for doubtful accounts Beginning balance$5.4 $5.7 $4.2Charged to cost and expenses2.7 0.5 2.1Deductions and other(1.1) (1.0) (0.6)Impact of foreign exchange(0.4) 0.2 Closing balance$6.6 $5.4 $5.7Inventory reserveInventory reserve activity is as follows:(Dollars in millions)June 30, 2015 June 30, 2014 June 30, 2013Inventory reserve Beginning balance$12.9 $11.8 $8.5Charged to cost and expenses9.5 10.2 8.7Deductions(6.5) (9.5) (5.9)Impact of foreign exchange(1.8) 0.4 0.5Closing balance$14.1 $12.9 $11.819. SUBSEQUENT EVENTS During the preparation of its consolidated financial statements, the Company completed an evaluation of the impact of subsequent events anddetermined there was no significant subsequent event requiring disclosure in or adjustment to these financial statements.105Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents 20.QUARTERLY FINANCIAL DATA (UNAUDITED)The following table summarizes the Company’s unaudited quarterly results of operation.(Dollars in millions, except per share data)Fiscal Year 2015, By QuartersFirst Second Third FourthNet revenue$418.3 $455.8 $446.6 $510.1Gross margin125.3 156.1 152.2 181.7Earnings/(loss) from continuing operations less net income (loss) attributable tononcontrolling interest(19.9) 46.7 31.5 153.8Net earnings/(loss) from discontinued operations, net of tax0.4 (0.2) — (0.1)Net earnings/(loss) attributable to Catalent$(19.5) $46.5 $31.5 $153.7 Earnings per share attributable to Catalent: Basic Earnings/(loss) from continuing operations$(0.19) $0.38 $0.25 $1.23Net earnings/(loss)$(0.18) $0.37 $0.25 $1.23Diluted Earnings/(loss) from continuing operations$(0.19) $0.37 $0.25 $1.22Net earnings/(loss)$(0.18) $0.37 $0.25 $1.22(Dollars in millions, except per share data)Fiscal Year 2014, By QuartersFirst Second Third FourthNet revenue$414.3 $440.7 $453.1 $519.6Gross margin119.2 137.4 151.7 190.3Earnings/(loss) from continuing operations less net income (loss) attributable tononcontrolling interest1.9 (18.6) 8.4 27.2Net earnings/(loss) from discontinued operations, net of tax(0.4) (0.6) (1.7) —Net earnings/(loss) attributable to Catalent$1.5 $(19.2) $6.7 $27.2 Earnings per share attributable to Catalent: Basic Earnings/(loss) from continuing operations$0.03 $(0.25) $0.11 $0.36Net earnings/(loss)$0.02 $(0.26) $0.09 $0.36Diluted Earnings/(loss) from continuing operations$0.02 $(0.25) $0.11 $0.36Net earnings/(loss)$0.02 $(0.26) $0.09 $0.36106Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.ITEM 9A.CONTROLS AND PROCEDURESDisclosure Controls and ProceduresWe maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports underthe Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such informationis accumulated and communicated to the Company’s management, including the Company’s President and Chief Executive Officer, and the Company’sExecutive Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures,no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management,with the participation of the Company’s President and Chief Executive Officer, and the Company’s Executive Vice President and Chief Financial Officer, hasevaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by thisAnnual Report on Form 10-K. Based upon that evaluation, the Company’s President and Chief Executive Officer and the Company’s Executive VicePresident and Chief Financial Officer concluded that, as of June 30, 2015, the Company’s disclosure controls and procedures were effective to accomplishtheir objectives at the reasonable assurance level.Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Our internal control overfinancial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of our consolidatedfinancial statements in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of ourmanagement and directors; and•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have amaterial effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because either conditions change or the degree ofcompliance with our policies and procedures may deteriorate. Our management has assessed the effectiveness of our internal control over financial reporting as of June 30, 2015. In making this assessment,management used the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on this assessment, our management concluded that our internal control over financial reporting was effective asof June 30, 2015. Changes in Internal Control over Financial ReportingThere was no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under theExchange Act) that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, theCompany’s internal control over financial reporting.107Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 9B.OTHER INFORMATIONIran Threat Reduction and Syria Human Rights Act of 2012Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (“ITRSHRA”), which added Section 13(r) of theExchange Act, the Company hereby incorporates by reference herein Exhibit 99.1 of this report, which includes disclosures publicly filed and/or provided toBlackstone by Travelport Worldwide Limited, which may be considered our affiliate.108Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents PART IIIITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEInformation concerning our Directors and Executive Officers, “Section 16(a) Beneficial Ownership Reporting Compliance,” definitive shareholdercommunications with our Board of Directors, and corporate governance may be found in our Proxy Statement for the 2015 Annual Meeting of Shareholders,which will be filed within 120 days after June 30, 2015, the close of our fiscal year covered by this Annual Report on Form 10-K (the “Proxy Statement”).Such information is incorporated by reference.ITEM 11.EXECUTIVE COMPENSATIONInformation concerning executive compensation may be found in our Proxy Statement, which will be filed within 120 days after June 30, 2015, the closeof our fiscal year. Such information is incorporated herein by reference.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSInformation regarding security ownership of certain beneficial owners and management may be found in the Proxy Statement, which will be filed within120 days after June 30, 2015, the close of our fiscal year. Such information is incorporated herein by reference.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCEInformation regarding certain relationships and related party transactions, and director independence may be found in our Proxy Statement, which willbe filed within 120 days after June 30, 2015, the close of our fiscal year. Such information is incorporated herein by reference.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICESInformation regarding the fees paid to and services performed by our independent accountants may be found in our Proxy Statement, which will be filedwithin 120 days after June 30, 2015, the close of our fiscal year. Such information is incorporated herein by reference.109Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a)(1) Financial Statements. The Financial Statements listed in the Index to Financial Statements, are filed under Item 8 of this Annual Report on Form 10-K.(a)(2) Financial Statements Schedule.Deferred Tax Assets - Valuation Allowance(Dollars in millions)Beginning Balance Current Period(Charge) / Benefit Deductions and Other Ending BalanceYear ended June 30, 2013 Tax Valuation Allowance$(203.3) $(9.1) $4.0 $(208.4) Year ended June 30, 2014 Tax Valuation Allowance$(208.4) $(16.1) $6.3 $(218.2) Year ended June 30, 2015 Tax Valuation Allowance$(218.2) $107.7 $28.1 $(82.4)(b) Exhibits.The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respectto the terms of the agreements or other documents themselves and you should not rely on them for that purpose. In particular, any representation or warrantymade by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describethe actual state of affairs as of the date they were made or at any other time.Exhibit No.Description3.1 Amended and Restated Certificate of Incorporation of Catalent, Inc. (incorporated by reference to Exhibit 3.1 to the Company’sCurrent Report on Form 8-K filed on August 5, 2014, File No. 001-36587) 3.2 Amended and Restated Bylaws of Catalent, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report onForm 8-K filed on August 5, 2014, File No. 001-36587) 10.1 Stockholders Agreement, dated as of August 5, 2014, between Catalent, Inc. and Blackstone Healthcare Partners L.L.C.(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No.001-36587) 10.2 Registration Rights Agreement, dated as of August 5, 2014, by and among Catalent, Inc. and certain of its stockholders(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 5, 2014, File No.001-36587) 10.3 Form of Severance Agreement between named executive officers and Catalent Pharma Solutions, Inc. (incorporated byreference to Exhibit 10.3 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 17, 2010, FileNo. 333-147871) † 10.4 Offer Letter, dated August 25, 2009, between William Downie and Catalent Pharma Solutions, Inc. (incorporated by referenceto Exhibit 10.4 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 4, 2012, File No. 333-147871) † 10.5 Letter Agreement, dated November 18, 2010, between Catalent Pharma Solutions, Inc. and William Downie (incorporated byreference to Exhibit 10.6 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 4, 2012, FileNo. 333-147871) † 110Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents 10.6 Employment Agreement, dated as of October 11, 2011, and effective as of September 26, 2011, by and between CatalentPharma Solutions, Inc. and Matthew Walsh (including Form of Restricted Stock Unit Agreement and Form of NonqualifiedStock Option Agreement) (incorporated by reference to Exhibit 10.42 to Catalent Pharma Solutions, Inc.’s Annual Report onForm 10-K filed on September 4, 2012, File No. 333-147871) † 10.7 Management Equity Subscription Agreement dated September 8, 2010 by and between Catalent, Inc. (formerly known as PTSHoldings Corp.) and Melvin D. Booth (incorporated by reference to Exhibit 10.7 to Catalent Pharma Solutions, Inc.’s AnnualReport on Form 10-K filed on September 17, 2010, File No. 333-147871) † 10.8 Amended and Restated Management Equity Subscription Agreement dated as of October 11, 2011 by and between Catalent,Inc. (formerly known as PTS Holdings Corp.) and Matthew Walsh (incorporated by reference to Exhibit 10.43 to CatalentPharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 4, 2012, File No. 333-147871) † 10.9 Form of Unit Subscription Agreement (incorporated by reference to Exhibit 10.12 to Catalent Pharma Solutions, Inc.’sAmendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008, File No. 333-147871) † 10.10 Form of Management Equity Subscription Agreement (incorporated by reference to Exhibit 10.13 to Catalent PharmaSolutions, Inc.’s Amendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008, File No. 333-147871) † 10.11 Form of Nonqualified Stock Option Agreement (executives) (incorporated by reference to Exhibit 10.14 to Catalent PharmaSolutions, Inc.’s Amendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008, File No. 333-147871) † 10.12 Form of Nonqualified Stock Option Agreement (non-employee directors) (incorporated by reference to Exhibit 10.15 toCatalent Pharma Solutions, Inc.’s Amendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008, FileNo. 333-147871) † 10.13 2007 PTS Holdings Corp. Stock Incentive Plan (incorporated by reference to Exhibit 10.16 to Catalent Pharma Solutions, Inc.’sRegistration Statement on Form S-4 filed on December 6, 2007, File No. 333-147871) † 10.14 Amendment No. 1 to the 2007 PTS Holdings Corp. Stock Incentive Plan, dated September 8, 2010 (incorporated by referenceto Exhibit 10.16 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 17, 2010, File No. 333-147871) † 10.15 Amendment No. 2 to the 2007 PTS Holdings Corp. Stock Incentive Plan, dated June 25, 2013 (incorporated by reference toExhibit 10.45 to Catalent, Inc.’s Amendment No. 1 to the Registration Statement on Form S-1/A as filed on September 28,2014, File No. 333-193542) † 10.16 Form of Nonqualified Stock Option Agreement (executives) approved October 23, 2009 (incorporated by reference to Exhibit10.1 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 12, 2010, File No. 333-147871) † 10.17 Form of Nonqualified Stock Option Agreement Amendment (executives) approved October 23, 2009 (incorporated byreference to Exhibit 10.3 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 12, 2010), FileNo. 333-147871) † 10.18 Form of Nonqualified Stock Option Agreement (executives) approved June 25, 2013 (incorporated by reference to Exhibit10.45 of Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 10, 2013, File No. 333-147871) † 10.19 Form of Nonqualified Stock Option Agreement (Chief Executive Officer) approved June 25, 2013 (incorporated by reference toExhibit 10.46 of Catalent Pharma Solutions Inc.’s Annual Report on Form 10-K filed on September 10, 2013, File No. 333-147871) † 10.20 Form of Nonqualified Stock Option Agreement (John R. Chiminski) approved October 23, 2009 (incorporated by reference toExhibit 10.4 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 12, 2010, File No. 333-147871) † 10.21 Form of Restricted Stock Unit Agreement (John R. Chiminski) approved October 23, 2009 (incorporated by reference toExhibit 10.5 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 12, 2010, File No. 333-147871) † 111Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents 10.22 Catalent Pharma Solutions, LLC Deferred Compensation Plan (incorporated by reference to Exhibit 10.19 to Catalent PharmaSolutions, Inc.’s Annual Report on Form 10-K filed on September 28, 2009, File No. 333-147871) † 10.23 First Amendment to the Catalent Pharma Solutions, LLC Deferred Compensation Plan (incorporated by reference to Exhibit10.1 to Catalent Pharma Solutions, Inc.’s Quarterly Report on Form 10-Q filed on February 17, 2009, File No. 333-147871) † 10.24 Second Amendment to the Catalent Pharma Solutions, LLC Deferred Compensation Plan (incorporated by reference to Exhibit10.21 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 28, 2009, File No. 333-147871) † 10.25 Catalent, Inc. 2014 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report onForm 8-K filed on August 5, 2014, File No. 001-36587) † 10.26 Form of Stock Option Agreement for U.S. Employees (incorporated by reference to Exhibit 10.4 to the Company’s CurrentReport on Form 8-K filed on August 5, 2014, File No. 001-36587) † 10.27 Form of Restricted Stock Unit Agreement for U.S. Employees (incorporated by reference to Exhibit 10.5 to the Company’sCurrent Report on Form 8-K filed on August 5, 2014, File No. 001-36587) † 10.28 Form of Restricted Stock Unit Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.6 to theCompany’s Current Report on Form 8-K filed on August 5, 2014, File No. 001-36587) † 10.29 Form of Stock Option Agreement for Non-U.S. Employees (incorporated by reference to Exhibit 10.7 to the Company’s CurrentReport on Form 8-K filed on August 5, 2014, File No. 001-36587) † 10.30 Form of Restricted Stock Unit Agreement for Non-U.S. Employees (incorporated by reference to Exhibit 10.8 to the Company’sCurrent Report on Form 8-K filed on August 5, 2014, File No. 001-36587) † 10.31 Amended and Restated Credit Agreement, dated as of May 20, 2014, relating to the Credit Agreement, dated as of April 10,2007, as amended, among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding,Inc., as the administrative agent, collateral agent and swing line lender and other lenders as parties thereto (incorporated byreference to Exhibit 10.1 to Catalent Pharma Solutions, Inc.’s Current Report on Form 8-K filed on May 27, 2014, File No. 333-147871) 10.32 Form of Performance Share Unit for U.S. Employees (incorporated by reference to Exhibit 10.1 to the Company’s QuarterlyReport on Form 10-Q filed on November 13, 2014, File No. 001-36587) † 10.33 Form of Performance Share Unit for Non-U.S. Employees (incorporated by reference to Exhibit 10.2 to the Company’sQuarterly Report on Form 10-Q filed on November 13, 2014, File No. 001-36587)† 10.34 Intellectual Property Security Agreement, dated as of April 10, 2007, among PTS Acquisition Corp., Cardinal Health 409, Inc.,PTS Intermediate Holdings LLC, Certain Subsidiaries of Holdings Identified Therein and Morgan Stanley Senior Funding, Inc.(incorporated by reference to Exhibit 10.21 to Catalent Pharma Solutions, Inc.’s Registration Statement on Form S-4 filed onDecember 6, 2007, File No. 333-147871) 10.35 Intellectual Property Security Agreement Supplement, dated as of July 1, 2008, to the Intellectual Property Security Agreement,dated as of April 10, 2007, among PTS Acquisition Corp., Cardinal Health 409, Inc., PTS Intermediate Holdings LLC, CertainSubsidiaries of Holdings Identified Therein and Morgan Stanley Senior Funding, Inc. (incorporated by reference to Exhibit10.28 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 29, 2008, File No. 333-147871) 10.36 Amendment No. 1, dated December 1, 2014 to Amended and Restated Credit Agreement, dated as of May 20, 2014 amongCatalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc., as the administrativeagent, collateral agent and swing line lender and other lenders as parties thereto (incorporated by reference to Exhibit 10.1 tothe Company’s Current Report on Form 8-K filed on December 2, 2014, File No. 001-36587) 10.37 Employment Agreement, dated October 22, 2014 by and among Catalent, Inc. and John R. Chiminski (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 24, 2014), File No. 001-36587 †112Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents 10.38 Relocation agreement, dated November 18, 2010, between William Downie and Catalent Pharma Solutions, Inc. † * 10.39 Offer letter, dated May 4, 2009, between Stephen Leonard and Catalent Pharma Solutions, Inc. † * 10.40 Offer letter, dated April 18, 2011, between Sharon Johnson and Catalent Pharma Solutions, Inc. † * 10.41 Relocation agreement, dated April 6, 2011, between Sharon Johnson and Catalent Pharma Solutions, Inc. † * 12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges* 21.1 Subsidiaries of the Registrant* 23.1 Consent of Ernst & Young LLP* 31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of1934, as amended* 31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of1934, as amended* 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002** 32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002** 101.1 The following materials are formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements ofOperations, (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) theConsolidated Statement of Changes in Shareholders’ Equity (Deficit), (v) the Consolidated Statements of Cash Flows and (vi)Notes to Consolidated Financial Statements * Filed herewith** Furnished herewith † Represents a management contract, compensatory plan or arrangement in which directors and/or executive officers are eligible toparticipate.113Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. CATALENT, INC. Date:September 2, 2015By: /s/ STEVEN L. FASMAN Steven L. Fasman Senior Vice President & General Counseland SecretaryPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated. Signature TitleDate /s/ JOHN R. CHIMINSKI President & Chief Executive Officer (Principal ExecutiveOfficer) and DirectorSeptember 2, 2015John R. Chiminski /s/ CHINH E. CHU Chairman of the Board and DirectorSeptember 2, 2015Chinh E. Chu /s/ MELVIN D. BOOTH DirectorSeptember 2, 2015Melvin D. Booth /s/ J. MARTIN CARROLL DirectorSeptember 2, 2015J. Martin Carroll /s/ ROLF CLASSON DirectorSeptember 2, 2015Rolf Classon /s/ BRUCE MCEVOY DirectorSeptember 2, 2015Bruce McEvoy /s/ GREGORY T. LUCIER DirectorSeptember 2, 2015Gregory T. Lucier /s/ JAMES QUELLA DirectorSeptember 2, 2015James Quella /s/ JACK STAHL DirectorSeptember 2, 2015Jack Stahl /s/ MATTHEW M. WALSH Executive Vice President & Chief Financial OfficerSeptember 2, 2015Matthew M. Walsh (Principal Financial Officer and Principal Accounting Officer) 114Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 10.1PERFORMANCE SHARE UNIT GRANT NOTICEUNDER THECATALENT, INC.2014 OMNIBUS INCENTIVE PLANCatalent, Inc. (the “Company”), pursuant to its 2014 Omnibus Incentive Plan, as it may be amended from time to time (the “Plan”),hereby grants to the Participant set forth below the target number of Performance Share Units (which are performance-based RestrictedStock Units for purposes of the Plan) as set forth below. The Performance Share Units are subject to all of the terms and conditions asset forth herein and in the Performance Share Unit Agreement (attached hereto or previously provided to the Participant in connectionwith a prior grant) and the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein(including Exhibit A attached hereto) shall have the meaning set forth in the Plan or the Performance Share Unit Agreement.Participant:[Insert Participant Name]Date of Grant:[Insert Date of Grant]Performance Period:The period commencing on and ending on .Target Number ofPerformance Share Units:[Insert Target Number of PSUs], subject to adjustment as set forth in the Plan. * * *Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS PERFORMANCE SHARE UNIT GRANTNOTICE, THE PERFORMANCE SHARE UNIT AGREEMENT AND THE PLAN, AND, AS AN EXPRESS CONDITION TOTHE GRANT OF PERFORMANCE SHARE UNITS HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THISPERFORMANCE SHARE UNIT GRANT NOTICE, THE PERFORMANCE SHARE UNIT AGREEMENT AND THE PLAN.THE PARTICIPANT’S RIGHTS UNDER THE PERFORMANCE SHARE UNIT GRANT NOTICE AND THEPERFORMANCE SHARE UNIT AGREEMENT WILL LAPSE SIXTY (60) DAYS FROM THE DATE OF GRANT AND THEPERFORMANCE SHARE UNITS WILL BE FORFEITED ON SUCH DATE IF THE PARTICIPANT SHALL NOT HAVEACCEPTED THIS PERFORMANCE SHARE UNIT GRANT NOTICE AND THE PERFORMANCE SHARE UNITAGREEMENT BY SUCH DATE.This Performance Share Unit Grant Notice may be signed in counterparts, each of which shall be an original, with the same effect as ifthe signatures thereto and hereto were upon the same instrument.CATALENT, INC. PARTICIPANT________________________________ ________________________________By:Title:_________________________1To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this awardelectronically, such acceptance shall constitute the Participant’s signature hereof.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.PERFORMANCE SHARE UNIT AGREEMENTUNDER THECATALENT, INC.2014 OMNIBUS INCENTIVE PLANPursuant to the Performance Share Unit Grant Notice (the “Grant Notice”) delivered to the Participant (as defined in the Grant Notice),and subject to the terms of this Performance Share Unit Agreement (this “Performance Share Unit Agreement”) and the Catalent, Inc.2014 Omnibus Incentive Plan, as it may be amended from time to time (the “Plan”), Catalent, Inc. (the “Company”) and the Participantagree as follows.1.Definitions. Whenever the following terms are used in this Performance Share Unit Agreement, they shall have themeanings set forth below. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan or the GrantNotice, as applicable.(a)Employment. The term “Employment” means the Participant’s employment as an employee of the Companyor any of its Affiliates or Subsidiaries.(b) Restrictive Covenant Violation. The term “Restrictive Covenant Violation” shall mean the Participant’s breach ofthe Restrictive Covenants set forth in Section 10 or any covenant regarding confidentiality, competitive activity, solicitation of theCompany’s or any of its Affiliates’ or Subsidiaries’ vendors, suppliers, customers or employees or any similar provision applicable to oragreed to by the Participant.(c) Retirement. The term “Retirement” shall mean a Termination by the Participant that occurs on or after the date onwhich the Participant attains the age of sixty-five (65) and has completed at least ten (10) years of Employment (other than aTermination when grounds existed for a Termination for Cause at the time thereof).(d) Termination Date. The term “Termination Date” shall mean the date upon which the Participant incurs aTermination for any reason.2.Grant of Performance Share Units. Subject to the terms and conditions set forth herein, in the Grant Notice and inthe Plan, for good and valuable consideration, the Company hereby grants to the Participant the Target Number of Performance ShareUnits (which are performance-based Restricted Stock Units for purposes of the Plan) provided in the Grant Notice (with eachPerformance Share Unit representing an unfunded, unsecured right to receive one share of Common Stock). The Company may makeone or more additional grants of Performance Share Units to the Participant under this Performance Share Unit Agreement by providingthe Participant with a new Grant Notice and new Exhibit A, to the extent applicable, which may also include any terms and conditionsdiffering from this Performance Share Unit Agreement to the extent provided therein. The Company reserves all rights with respect tothe granting of additional Performance Share Units hereunder and makes no implied promise to grant additional Performance ShareUnits.3. Vesting. Subject to the conditions contained herein and in the Plan, the Performance Share Units shall vest as provided onExhibit A or in Section 6 below. With respect to any Performance Share Unit, the period of time that such Performance Share Unitremains subject to vesting shall be its Restricted Period.4. Dividend Equivalents. The Performance Share Units shall be entitled to be credited with dividend equivalent paymentsupon the payment by the Company of dividends on shares of Common Stock. Such dividend equivalents will be provided in shares ofCommon Stock having a Fair Market Value equal to the amount of such applicable dividends, and shall be shall be payable at the sametime as the Performance Share Units are settled in accordance with Section 5 below. In the event that any Performance Share Unit isforfeited by its terms, the Participant shall have no right to dividend equivalent payments in respect of such forfeited Performance ShareUnits.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.5. Settlement of Performance Share Units. Upon expiration of the Restricted Period with respect to any outstandingPerformance Share Units that have not previously been forfeited in accordance with Exhibit A or Section 6 below, the Company shallissue to the Participant as soon as practicable (but no later than March 15 of the year following the year in which the Restricted Periodexpires) one share of Common Stock for each Performance Share Unit and such Performance Share Unit shall be cancelled; provided,however, that the Committee may, in its sole discretion, elect to defer the issuance of such shares beyond the expiration of theRestricted Period if such extension would not cause adverse tax consequences under Section 409A of the Code.6. Treatment on Termination.(a) Subject to clauses (b) - (d) below, in the event of a Termination prior to the Regular Vesting Date, the CIC VestingDate or the Time Vesting Date (each as defined on Exhibit A), as applicable, (i) all vesting with respect to the Participant’s PerformanceShare Units shall cease and (ii) unvested Performance Share Units shall be forfeited to the Company by the Participant for noconsideration as of the Termination Date.(b) Death. If the Participant incurs a Termination due to death, the Target Number of Performance Share Units or thenumber of Converted PSUs (as defined on Exhibit A) to the extent applicable, shall, to the extent not then vested or previously forfeitedor cancelled, become fully vested, the Restricted Period shall expire and any unvested Performance Share Units will immediately beforfeited to the Company by the Participant for no consideration.(c) Disability/Retirement. If the Participant incurs a Termination due to Disability or Retirement, in each case, thenumber of Performance Share Units as determined in accordance with Exhibit A, to the extent applicable, shall, to the extent not thenvested or previously forfeited or cancelled, continue to vest as provided on Exhibit A as if the Participant had continued Employmentthrough the Regular Vesting Date, the CIC Vesting Date or the Time Vesting Date, as applicable, subject to the Participant’s compliancewith the restrictive covenants set forth in Section 10 and the Participant’s execution, delivery and non-revocation of a waiver andrelease of claims in favor of the Company and its Affiliates and Subsidiaries in a form prescribed by the Company on or prior to the 60thday following the Termination Date; provided, however, in the case of a Termination due to Retirement, the number of PerformanceShare Units, if any, that shall vest, as determined in accordance with Exhibit A shall be multiplied by a fraction, the numerator of whichis equal to the number of days between and including the first day of the Performance Period and the date the Participant incurs aTermination due to Retirement and the denominator of which is 1095. Upon the Regular Vesting Date, the CIC Vesting Date or theTime Vesting Date, as applicable, the Restricted Period shall expire and any unvested Performance Share Units will immediately beforfeited to the Company by the Participant for no consideration.(d) Change in Control. In the event of a Change in Control, to the extent the acquiring or successor entity assumes,continues or substitutes for the Performance Share Units as provided for and described on Exhibit A hereto, if the Participant incurs aTermination by the Service Recipient without Cause (other than due to death or Disability) during the period commencing on the dateof the consummation of a Change in Control and ending on the date that is eighteen (18) months following the consummation of suchChange in Control, the number of Converted PSUs shall, to the extent not then vested or previously forfeited or cancelled, become fullyvested, the Restricted Period shall expire and any unvested Performance Share Units will immediately be forfeited to the Company bythe Participant for no consideration.7. Non-Transferability. The Performance Share Units are not transferable by the Participant except to Permitted Transferees inaccordance with Section 14(b) of the Plan. Whenever the word “Participant” is used in any provision of this Agreement undercircumstances where the provision should logically be construed to apply to executors, the administrators or the person or persons towhom the Performance Share Units may be transferred by will or by the laws of descent and distribution in accordance with Section 14of the Plan, the word “Participant” shall be deemed to include such person or persons. Except as otherwise provided herein, noassignment or transfer of the Performance Share Units, or of the rights represented thereby, whether voluntary or involuntary, byoperationSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.of law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon suchassignment or transfer the Performance Share Units shall terminate and become of no further effect.8. Rights as Stockholder. Except as otherwise expressly provided for herein, the Participant or a Permitted Transferee of thePerformance Share Units shall have no rights as a stockholder with respect to any share of Common Stock underlying a PerformanceShare Unit unless and until the Participant shall have become the holder of record or the beneficial owner of such Common Stock, andno adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which therecord date is prior to the date upon which the Participant shall become the holder of record or the beneficial owner thereof.9. Repayment of Proceeds; Clawback Policy. If a Restrictive Covenant Violation occurs or the Company discovers after aTermination that grounds existed for Cause at the time thereof, then the Participant shall be required, in addition to any other remedyavailable (on a non-exclusive basis), to pay to the Company, within ten (10) business days of the Company’s request to the Participanttherefor, an amount equal to the aggregate after-tax proceeds (taking into account all amounts of tax that would be recoverable upon aclaim of loss for payment of such proceeds in the year of repayment) the Participant received upon the sale or other disposition of, ordistributions in respect of, the Performance Share Units and any shares issued in respect thereof. Any reference in this PerformanceShare Unit Agreement to grounds existing for a Termination for Cause shall be determined without regard to any notice period, cureperiod, or other procedural delay or event required prior to finding of or termination with, Cause. The Performance Share Units and allproceeds thereof shall be subject to the Company’s Clawback Policy, as in effect from time to time, to the extent the Participant is adirector or “officer” as defined under Rule 16a-1(f) of the Exchange Act.10. Restrictive Covenants.(a) To the extent that the Participant is a party to an employment or similar agreement with the Company or one of itsAffiliates or Subsidiaries containing non-competition, non-solicitation, non-interference or confidentiality restrictions (or two or moresuch restrictions), those restrictions and related enforcement provisions under such agreement shall govern and the following provisionsof this Section 10 shall not apply.(b) Competitive Activity(i)The Participant shall be deemed to have engaged in “Competitive Activity” if, during the period commencingon the Date of Grant and ending on the date that is 12 months after the Termination Date (the “Restricted Activity Period”), theParticipant, whether on the Participant’s own behalf or on behalf of or in conjunction with any other Person (as defined below), directlyor indirectly, violates any of the following prohibitions:(I) During the Restricted Activity Period, the Participant will not, whether on the Participant’s own behalf or on behalfof or in conjunction with any person, firm, part-nership, joint venture, association, corporation or other business organization, entity orenterprise whatsoever (“Person”), directly or indirectly, solicit or assist in soliciting in competition with the Company or any of itsSubsidiaries, the business of any client or prospective client:(1)with whom the Participant had personal contact or dealings on behalf of the Company or any of itsSubsidiaries during the one year period preceding the Termination Date;(2)with whom employees reporting to the Participant have had personal contact or dealings on behalf of theCompany or any of its Subsidiaries during the one year immediately preceding the Termination Date; orSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(3)for whom the Participant had direct or indirect responsibility during the one year immediately preceding theTermination Date.(II) During the Restricted Activity Period, the Participant will not directly or indirectly:(1)engage in any business that competes with the business of the Company or any of its Subsidiaries, including,but not limited to, providing formulation/dose form technologies and/or contract services to pharmaceutical, biotechnology, over-the-counter and vitamin/mineral supplements companies related to pre-clinical and clinical development, formulation, analysis,manufacturing and/or packaging and any other technology, product or service of the type developed, manufactured or sold by theCompany or any of its Subsidiaries (including, without limitation, any other business which the Company or any of its Subsidiarieshave plans to engage in as of the Termination Date) in any geographical area where the Company or any of its Subsidiaries conductbusiness (a “Competitive Business”);(2)enter the employ of, or render any services to, any Person (or any division or controlled or controllingAffiliate of any Person) who or which engages in a Competitive Business;(3)acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directlyor indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or(4)interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the Dateof Grant) between the Company or any of its Subsidiaries and customers, clients, suppliers, or investors of the Company or any of itsSubsidiaries.Notwithstanding anything to the contrary in this Performance Share Unit Agreement, the Participant may, directly or indirectly own,solely as an investment, securities of any entity engaged in the business of the Company or any of its Subsidiaries which are publiclytraded on a national or regional stock exchange or on the over-the-counter market if the Participant (i) is not a controlling person of, ora member of a group which controls, such Person and (ii) does not, directly or indirectly, own 5% or more of any class of securities ofsuch Person.(III) During the Restricted Activity Period, the Participant will not, whether on the Participant’s own behalf or onbehalf of or in conjunction with any Person, directly or indirectly:(1)solicit or encourage any employee of the Company or any of its Subsidiaries to leave the employment of theCompany or any of its Subsidiaries; or(2)hire any such employee who was employed by the Company or any of its Subsidiaries as of the TerminationDate or who left the employment of the Company or any of its Subsidiaries coincident with, or within six (6) months prior to or after,the Termination Date; provided, however, that this restriction shall cease to apply to any employee who has not been employed by theCompany or any of its Subsidiaries for at least six (6) months.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(IV) During the Restricted Activity Period, the Participant will not, directly or indirectly, solicit or encourage to ceaseto work with the Company or any of its Subsidiaries any consultant then under contract with the Company or any of its Subsidiaries.(ii) It is expressly understood and agreed that although the Participant and the Company consider the restrictionscontained in this Section 10(b) to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that thetime or territory or any other restriction contained in this Performance Share Unit Agreement is an unenforceable restriction against theParticipant, the provisions of this Performance Share Unit Agreement shall not be rendered void but shall be deemed amended to applyas to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to beenforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Performance Share UnitAgreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect theenforceability of any of the other restrictions contained herein.(c) Confidentiality(i) The Participant will not at any time (whether during or after the Participant’s Employment) (x) retain or use for thebenefit, purposes or account of the Participant or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer orprovide access to any person outside the Company and its Affiliates and Subsidiaries (other than its professional advisers who arebound by confidentiality obligations), any non-public, proprietary or confidential information --including without limitation tradesecrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and otherintellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers,clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government andregulatory activities and approvals -- concerning the past, current or future business, activities and operations of the Company, itsSubsidiaries or Affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis(“Confidential Information”) without the prior written authorization of the Board.(ii) “Confidential Information” shall not include any information that is (x) generally known to the industry or thepublic other than as a result of the Participant’s breach of this covenant or any breach of other confidentiality obligations by thirdparties, (y) made legitimately available to the Participant by a third party without breach of any known confidentiality obligation, or (z)required by law to be disclosed or in any judicial or administrative process; provided that the Participant shall give prompt writtennotice to the Company of such requirement, disclose no more information than is so required, and cooperate, at the Company’s cost,with any attempts by the Company to obtain a protective order or similar treatment.(iii) Except as required by law, the Participant will not disclose to anyone, other than the Participant’s immediatefamily and legal or financial or tax advisors or lender, each of whom the Participant agrees to instruct not to disclose, the existence orcontents of this Performance Share Unit Agreement (unless this Performance Share Unit Agreement shall be publicly available as aresult of a regulatory filing made by the Company or one of its Affiliates or Subsidiaries); provided, that the Participant may disclose toany prospective future employer the provisions of Section 10 of this Performance Share Unit Agreement provided they agree tomaintain the confidentiality of such terms.(iv) Upon Termination, the Participant shall (x) cease and not thereafter commence use of any ConfidentialInformation or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name,logo, domain name or other source indicator) owned or used by the Company, its Subsidiaries or Affiliates; (y) immediately destroy,delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda,books, papers, plans, computer files, letters and other data) in the Participant’s possession or control (including any of the foregoingstored or located in the Participant’s office, home, laptop or other computer, whether or not Company property) that containConfidential Information or otherwise relate to the business of the Company or one of its Affiliates or Subsidiaries, except thatSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.the Participant may retain only those portions of any personal notes, notebooks and diaries that do not contain any ConfidentialInformation; and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other ConfidentialInformation of which the Participant is or becomes aware.(d) Equitable Relief.Notwithstanding the remedies set forth in Section 9 above and notwithstanding any other remedy which wouldotherwise be available to the Company at law or in equity, the Company and the Participant agree and acknowledge that if an actual orthreatened Restrictive Covenant Violation occurs, the Company will be entitled to an injunction and/or other equitable relief restrainingthe Participant from the Restrictive Covenant Violation without the necessity of posting a bond or proving actual damages.11. Tax Withholding. The provisions of Section 14(d) of the Plan are incorporated herein by reference and made a part hereof.12. Notice. Every notice or other communication relating to this Performance Share Unit Agreement between the Companyand the Participant shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as mayfrom time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided that, unless anduntil some other address be so designated, all notices or communications by the Participant to the Company shall be mailed or deliveredto the Company at its principal executive office, to the attention of the Company’s General Counsel, and all notices or communicationsby the Company to the Participant may be given to the Participant personally or may be mailed to the Participant at the Participant’s lastknown address, as reflected in the Company’s records. Notwithstanding the above, all notices and communications between theParticipant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the proceduresestablished by such third-party plan administrator and communicated to the Participant from time to time.13. No Right to Continued Employment. Neither the Plan nor this Performance Share Unit Agreement nor the granting of thePerformance Share Units evidenced hereby shall be construed as giving the Participant the right to be retained in the employ of, or inany consulting relationship to, the Company or any of its Affiliates or Subsidiaries. Further, the Company, or, if different, the ServiceRecipient, may at any time dismiss the Participant or discontinue any consulting relationship, free from any liability or any claim underthe Plan or this Performance Share Unit Agreement, except as otherwise expressly provided herein.14. Data Privacy. The Participant hereby explicitly and unambiguously consents to the collection, use and transfer, inelectronic or other form, of the Participant’s personal data as described in this Performance Share Unit Agreement and any otherPerformance Share Unit grant materials by and among, as applicable, the Service Recipient, the Company and its other Affiliates orSubsidiaries for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan.The Participant understands that the Company and the Service Recipient may hold certain personal information aboutthe Participant, including, but not limited to, the Participant’s name, home address and telephone number, date of birth, socialinsurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in theCompany, details of all Performance Share Units or any other entitlement to shares of stock awarded, canceled, exercised, vested,unvested or outstanding in the Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managingthe Plan.The Participant understands that Data will be transferred to Morgan Stanley Smith Barney LLC, or such other stockplan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation,administration and management of the Plan. The Participant understands that the recipients of the Data may be located in the UnitedStates or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections thanthe Participant’s country. The Participant understands that the Participant may request a list with the names and addresses of anypotentialSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.recipients of the Data by contacting the Participant’s local human resources representative. The Participant authorizes the Company,Morgan Stanley Smith Barney LLC and any other possible recipients which may assist the Company (presently or in the future) withimplementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form,for the sole purpose of implementing, administering and managing the Participant’s participation in the Plan. The Participantunderstands that Data will be held only as long as is necessary to implement, administer and manage the Participant’s participation inthe Plan. The Participant understands that the Participant may, at any time, view Data, request additional information about thestorage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any casewithout cost, by contacting in writing the Participant’s local human resources representative. Further, the Participant understands thatthe Participant is providing the consents herein on a purely voluntary basis. If the Participant does not consent, or if the Participantlater seeks to revoke the Participant’s consent, the Participant’s Employment and career with the Service Recipient will not beadversely affected; the only adverse consequence of refusing or withdrawing the Participant’s consent is that the Company would notbe able to grant Performance Share Units or other equity awards to the Participant or administer or maintain such awards. Therefore,the Participant understands that refusing or withdrawing the Participant’s consent may affect the Participant’s ability to participate inthe Plan. For more information on the consequences of the Participant’s refusal to consent or withdrawal of consent, the Participantunderstands that the Participant may contact the Participant’s local human resources representative.15. Binding Effect. This Performance Share Unit Agreement shall be binding upon the heirs, executors, administrators andsuccessors of the parties hereto.16. Waiver and Amendments. Subject to Section 13(b) of the Plan, the Committee may waive any conditions or rights under,amend any terms of, or alter, suspend, discontinue, cancel or terminate, this Performance Share Unit Agreement, prospectively orretroactively (including after the Participant’s Termination); provided that any such waiver, amendment, alteration, suspension,discontinuance, cancellation or termination that would materially and adversely affect the rights of the Participant hereunder shall not tothat extent be effective without the consent of the Participant. No waiver by either of the parties hereto of their rights hereunder shall bedeemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specificallystates that it is to be construed as a continuing waiver.17. Governing Law; Venue. This Performance Share Unit Agreement shall be construed and interpreted in accordance withthe laws of the State of Delaware, without regard to the principles of conflicts of law thereof. For purposes of litigating any dispute thatarises under this grant or this Performance Share Unit Agreement, the parties hereby submit to and consent to the jurisdiction of theState of New Jersey, agree that such litigation shall be conducted in the courts of Somerset County, or the federal courts for the UnitedStates for the District of New Jersey, where this grant is made and/or to be performed.18. Plan. The terms and provisions of the Plan are incorporated herein by reference. In the event of a conflict or inconsistencybetween the terms and provisions of the Plan and the provisions of this Performance Share Unit Agreement, the Plan shall govern andcontrol.19. Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents relatedto current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents byelectronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by theCompany or a third party designated by the Company.20. Imposition of Other Requirements. The Company reserves the right to impose any other requirements on theParticipant’s participation in the Plan, on the Performance Share Units and on any shares acquired under the Plan, to the extent theCompany determines it is necessary or advisable for legal or administrative reasons, and to require the Participant to sign any additionalagreements or undertakings that may be necessary to accomplish the foregoing.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.21. Section 409A of the Code. The Performance Share Units are not intended to constitute “nonqualified deferredcompensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and otherinterpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after thedate hereof, “Section 409A”). However, notwithstanding any other provision of the Plan, the Grant Notice or this Performance ShareUnit Agreement, if at any time the Committee determines that the Performance Share Units (or any portion thereof) may be subject toSection 409A, the Committee shall have the right in its sole discretion (without any obligation to do so or to indemnify the Participant orany other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Performance Share UnitAgreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take anyother actions, as the Committee determines are necessary or appropriate either for the Performance Share Units to be exempt from theapplication of Section 409A or to comply with the requirements of Section 409A.22. Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that, depending on his or her country,the Participant may be subject to insider trading restrictions and/or market abuse laws, which may affect his or her ability to acquire orsell shares of Common Stock or rights to shares of Common Stock (e.g., Performance Share Units) under the Plan during such times asthe Participant is considered to have “inside information” regarding the Company (as defined by the laws in the Participant’s country).Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under anyapplicable Company insider trading policy. The Participant is responsible for ensuring compliance with any applicable restrictions andis advised to consult his or her personal legal advisor on this matter.23. Entire Agreement. This Performance Share Unit Agreement, the Grant Notice and the Plan constitute the entireunderstanding between the Participant and the Company regarding the Performance Share Units. This Performance Share UnitAgreement, the Grant Notice and the Plan supersede any prior agreements, commitments or negotiations concerning the PerformanceShare Units.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit A1. Vesting/Change in Control. Except as otherwise expressly provided in Section 6 of the Performance Share Unit Agreement,provided the Participant has not incurred a Termination on or prior to the Regular Vesting Date (as defined below), the PerformanceShare Units granted hereunder shall vest upon the date on which the Committee determines the cumulative Revenue (as defined below)growth during the Performance Period and the cumulative EBITDA (as defined below) growth during the Performance Period, in eachcase, as of the last day of the Performance Period, which determination shall be made no later than the seventy-fifth (75th) day followingthe end of the Performance Period (the “Regular Vesting Date”) and in an amount, if any, equal to the product of (1) the Target Numberof Performance Share Units and (2) the Cumulative Performance Percentage (as defined and described below). Upon the RegularVesting Date, the Restricted Period shall expire and any vested Performance Share Units shall be settled in accordance with Section 5 ofthe Performance Share Unit Agreement. Any Performance Share Units that do not become vested in accordance with this Exhibit A (tothe extent not previously forfeited pursuant to Section 6 of the Performance Share Unit Agreement) shall, effective as of the RegularVesting Date, be forfeited by the Participant without consideration.Notwithstanding the foregoing:(i) in the event of a Change in Control on or prior to July 1, 2015, to the extent the acquiring or successor entity does not assume,continue or substitute for the Performance Share Units, the Target Number of Performance Share Units, to the extent not then vested orpreviously forfeited or cancelled, shall become fully vested and on such date the Restricted Period shall expire (the date of such vestingand expiration, the “CIC Vesting Date”);(ii) in the event of a Change in Control after July 1, 2015 but prior to the end of the Performance Period, to the extent the acquiring orsuccessor entity does not assume, continue or substitute for the Performance Share Units, a number of Performance Share Units equal tothe number that would have vested based on the Cumulative Performance Percentage measured as of the last day of the fiscal yearimmediately preceding the date of the Change in Control (such day, the “End Date”) based on actual growth between July 1, 2014through and including the End Date, measuring cumulative growth as of the End Date, to the extent not then vested or previouslyforfeited or cancelled, shall become fully vested and the Restricted Period with respect to such Performance Share Units shall expire onthe CIC Vesting Date;(iii) in the event of a Change in Control on or prior to July 1, 2015, to the extent the acquiring or successor entity assumes, continuesor substitutes for the Performance Share Units, in lieu of the vesting schedule in the first paragraph above, the Target Number ofPerformance Share Units will be subject to the following vesting schedule: provided the Participant has not incurred a Termination priorto the Time Vesting Date (as defined below), such Performance Share Units shall vest on June 30, 2017 (the “Time Vesting Date”) and,on the Time Vesting Date, the Restricted Period with respect to such Converted PSUs (as defined below) shall expire; and(iv) in the event of a Change in Control after July 1, 2015, to the extent the acquiring or successor entity assumes, continues orsubstitutes for the Performance Share Units, in lieu of the vesting schedule in the first paragraph above, a number of Performance ShareUnits equal to the number that would have vested based on the Cumulative Performance Percentage measured as of the End Date basedon actual growth between [ ] through and including the End Date, measuring cumulative growth as of the End Date, will be subject tothe following vesting schedule: provided the Participant has not incurred a Termination prior to the Time Vesting Date, suchPerformance Share Units shall vest on the Time Vesting Date and, on the Time Vesting Date, the Restricted Period with respect to suchConverted PSUs shall expire.Any Performance Share Units that do not vest or become Converted PSUs, as applicable, shall immediately be forfeited without anyfurther action by the Company or the Participant and without any payment of consideration therefor.For purposes of this Exhibit A and the Performance Share Unit Agreement, the term “Converted PSUs” shall mean those PerformanceShare Units that result from conversion pursuant to clause (iii) or clause (iv) above.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.2. Cumulative Performance Percentage. A number of Performance Share Units granted hereunder shall vest, if at all, based on theCumulative Performance Percentage which is based on the cumulative Revenue (as defined below) growth during the PerformancePeriod and the cumulative EBITDA (as defined below) growth during the Performance Period, determined as of the last day of thePerformance Period in accordance with this Section 2.For purposes of this Exhibit A:“Revenue” shall mean net revenue as presented in the Company’s annual Securities and Exchange Commission filings but will beadjusted to [ ] fiscal year average foreign exchange rates. Future performance will be translated at constant foreign exchange rates inorder to gauge performance against revenue goals in consideration of foreign currency fluctuations, which may occur. Revenue targetsmay also be adjusted during the Performance Period for any unusual items as defined and interpreted by the Committee including, butnot limited to acquisitions and divestitures.“EBITDA” shall mean the Company’s internally adjusted EBITDA which is generally calculated in the same manner as AdjustedEBITDA is calculated for purposes of the Company’s indentures governing its notes and its credit agreement governing its seniorunsecured term loan facility, except for the impact of foreign exchange and other non-operational matters. EBITDA is based on [ ]fiscal year average foreign exchange rates and future performance will be translated at constant foreign exchange rates in order togauge performance against EBITDA goals in consideration of foreign currency fluctuations, which may occur. EBITDA targets mayalso be adjusted during the Performance Period for any unusual items as defined and interpreted by the Committee including, but notlimited to acquisitions and divestitures.The Cumulative Performance Percentage shall be equal to the sum of twenty-five percent (25%) of the Revenue PerformancePercentage and seventy-five percent (75%) of the EBITDA Performance Percentage as outlined and determined below.Cumulative Revenue Growth(during the Performance Period expressed as a percentageassuming the starting point for Revenue growth is $ million)Revenue Performance Percentage %- %%%%%%%%%%%% %+%Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Cumulative EBITDA Growth(during the Performance Period expressed as a percentageassuming the starting point for EBITDA growth is $ million)EBITDA Performance Percentage%%%%%%%%%%%%%%%+%Cumulative Performance Percentage(the Revenue and EBITDA dollar amounts reflected below assume the full Performance Period runs and such amounts reflect Revenueand EBITDA for the 20[ ], 20[ ] and 20[ ] fiscal years, in the aggregate) Cumulative EBITDA(75%)(in millions)$$$$$CumulativeRevenue (25%)(in millions)$ % % % % %$ % % % % %$ % % % % %$ % % % % %$ % % % % %The Revenue Performance Percentage, EBITDA Performance Percentage and Cumulative Performance Percentage shall each be a linearinterpolation for any achievement that falls between the above targets, provided that there shall be no linear interpolation if thecumulative Revenue growth increases on average by less than [ ]% as of the last day of the Performance Period and/or the cumulativeEBITDA growth increases on average by less than [ ]% as of the last day of the Performance Period. The maximum possible payout is []percent ([ ]%) of the Target Number of Performance Share Units if cumulative Revenue growth increases on average by at least [ ]percent ([ ]%) as of the last day of the Performance Period and cumulative EBITDA growth increases on average by at least [ ] percent([ ]%) as of the last day of the Performance Period.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ExExhibit 10.2PERFORMANCE SHARE UNIT GRANT NOTICE FOR NON-U.S. PARTICIPANTSUNDER THECATALENT, INC.2014 OMNIBUS INCENTIVE PLANCatalent, Inc. (the “Company”), pursuant to its 2014 Omnibus Incentive Plan, as it may be amended from time to time (the “Plan”),hereby grants to the Participant set forth below the target number of Performance Share Units (which are performance-based RestrictedStock Units for purposes of the Plan) as set forth below. The Performance Share Units are subject to all of the terms and conditions asset forth herein and in the Performance Share Unit Agreement for Non-U.S. Participants, including any special terms and conditions forthe Participant’s country set forth in Appendix A (both attached hereto), and the Plan, all of which are incorporated herein in theirentirety. Capitalized terms not otherwise defined herein (including Exhibit A attached hereto) shall have the meaning set forth in thePlan or the Performance Share Unit Agreement.Participant:[Insert Participant Name]Date of Grant:[Insert Date of Grant]Performance Period:The period commencing on and ending on .Target Number ofPerformance Share Units:[Insert Target Number of PSUs], subject to adjustment as set forth in the Plan. * * *Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS PERFORMANCE SHARE UNIT GRANTNOTICE, THE PERFORMANCE SHARE UNIT AGREEMENT (INCLUDING APPENDIX A) AND THE PLAN, AND, AS ANEXPRESS CONDITION TO THE GRANT OF PERFORMANCE SHARE UNITS HEREUNDER, AGREES TO BE BOUND BYTHE TERMS OF THIS PERFORMANCE SHARE UNIT GRANT NOTICE, THE PERFORMANCE SHARE UNITAGREEMENT (INCLUDING APPENDIX A) AND THE PLAN. THE PARTICIPANT’S RIGHTS UNDER THEPERFORMANCE SHARE UNIT GRANT NOTICE AND THE PERFORMANCE SHARE UNIT AGREEMENT (INCLUDINGAPPENDIX A) WILL LAPSE SIXTY (60) DAYS FROM THE DATE OF GRANT AND THE PERFORMANCE SHARE UNITSWILL BE FORFEITED ON SUCH DATE IF THE PARTICIPANT SHALL NOT HAVE ACCEPTED THIS PERFORMANCESHARE UNIT GRANT NOTICE AND THE PERFORMANCE SHARE UNIT AGREEMENT BY SUCH DATE.This Performance Share Unit Grant Notice may be signed in counterparts, each of which shall be an original, with the same effect as ifthe signatures thereto and hereto were upon the same instrument.CATALENT, Inc. Participant ________________________________ ________________________________By:Title:_____________________________1To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this awardelectronically, such acceptance shall constitute the Participant’s signature hereof.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.PERFORMANCE SHARE UNIT AGREEMENT FOR NON-U.S. PARTICIPANTSUNDER THECATALENT, INC.2014 OMNIBUS INCENTIVE PLANPursuant to the Performance Share Unit Grant Notice for Non-U.S. Participants (the “Grant Notice”) delivered to the Participant (asdefined in the Grant Notice), and subject to the terms of this Performance Share Unit Agreement for Non-U.S. Participants (the“Performance Share Unit Agreement”), including any special terms and conditions for the Participant’s country set forth in Appendix Aattached hereto (collectively, along with Exhibit A, this “Agreement”), and the Catalent, Inc. 2014 Omnibus Incentive Plan, as it may beamended from time to time (the “Plan”), Catalent, Inc. (the “Company”) and the Participant agree as follows.1.Definitions. Whenever the following terms are used in this Agreement, they shall have the meanings set forth below.Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan or the Grant Notice, as applicable.(a)Employment. The term “Employment” means the Participant’s employment as an employee of the Companyor any of its Affiliates or Subsidiaries.(b) Restrictive Covenant Violation. The term “Restrictive Covenant Violation” shall mean the Participant’s breach ofthe Restrictive Covenants set forth in Section 10 or any covenant regarding confidentiality, competitive activity, solicitation of theCompany’s or any of its Affiliates’ or Subsidiaries’ vendors, suppliers, customers or employees or any similar provision applicable to oragreed to by the Participant.(c) Retirement. The term “Retirement” shall mean a Termination by the Participant that occurs on or after the date onwhich the Participant attains the age of sixty-five (65) and has completed at least ten (10) years of Employment (other than aTermination when grounds existed for a Termination for Cause at the time thereof).(d) Termination Date. The term “Termination Date” shall mean the date upon which the Participant incurs aTermination for any reason.2. Grant of Performance Share Units. Subject to the terms and conditions set forth herein, in the Grant Notice and in thePlan, for good and valuable consideration, the Company hereby grants to the Participant the Target Number of Performance Share Units(which are performance-based Restricted Stock Units for purposes of the Plan) provided in the Grant Notice (with each PerformanceShare Unit representing an unfunded, unsecured right to receive one share of Common Stock). The Company may make one or moreadditional grants of Performance Share Units to the Participant under this Agreement by providing the Participant with a new GrantNotice and new Exhibit A, to the extent applicable, which may also include any terms and conditions differing from this Agreement tothe extent provided therein. The Company reserves all rights with respect to the granting of additional Performance Share Unitshereunder and makes no implied promise to grant additional Performance Share Units.3. Vesting. Subject to the conditions contained herein and in the Plan, the Performance Share Units shall vest as provided onExhibit A or in Section 6 below. With respect to any Performance Share Unit, the period of time that such Performance Share Unitremains subject to vesting shall be its Restricted Period.4. Dividend Equivalents. The Performance Share Units shall be entitled to be credited with dividend equivalent paymentsupon the payment by the Company of dividends on shares of Common Stock. Such dividend equivalents will be provided in shares ofCommon Stock having a Fair Market Value equal to the amount of such applicable dividends, and shall be shall be payable at the sametime as the Performance Share Units are settled in accordance with Section 5 below. In the event that any Performance Share Unit isforfeited by its terms, the Participant shall have no right to dividend equivalent payments in respect of such forfeited Performance ShareUnits.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.5. Settlement of Performance Share Units. Upon expiration of the Restricted Period with respect to any outstandingPerformance Share Units that have not previously been forfeited in accordance with Exhibit A or Section 6 below, the Company shallissue to the Participant as soon as practicable (but no later than March 15 of the year following the year in which the Restricted Periodexpires) one share of Common Stock for each Performance Share Unit and such Performance Share Unit shall be cancelled; provided,however, that the Committee may, in its sole discretion, elect to defer the issuance of such shares beyond the expiration of theRestricted Period if such extension would not cause adverse tax consequences under Section 409A of the Code.6. Treatment on Termination.(a) Subject to clauses (b) - (d) below, in the event of a Termination prior to the Regular Vesting Date, the CIC VestingDate or the Time Vesting Date (each as defined on Exhibit A), as applicable, (i) all vesting with respect to the Participant’s PerformanceShare Units shall cease and (ii) unvested Performance Share Units shall be forfeited to the Company by the Participant for noconsideration as of the Termination Date.(b) Death. If the Participant incurs a Termination due to death, the Target Number of Performance Share Units or thenumber of Converted PSUs (as defined on Exhibit A) to the extent applicable, shall, to the extent not then vested or previously forfeitedor cancelled, become fully vested, the Restricted Period shall expire and any unvested Performance Share Units will immediately beforfeited to the Company by the Participant for no consideration.(c) Disability/Retirement. If the Participant incurs a Termination due to Disability or Retirement, in each case, the number ofPerformance Share Units as determined in accordance with Exhibit A, to the extent applicable, shall, to the extent not then vested orpreviously forfeited or cancelled, continue to vest as provided on Exhibit A as if the Participant had continued Employment through theRegular Vesting Date, the CIC Vesting Date or the Time Vesting Date, as applicable, subject to the Participant’s compliance with therestrictive covenants set forth in Section 10 and the Participant’s execution, delivery and non-revocation of a waiver and release ofclaims in favor of the Company and its Affiliates and Subsidiaries in a form prescribed by the Company on or prior to the 60th dayfollowing the Termination Date; provided, however, in the case of a Termination due to Retirement, the number of Performance ShareUnits, if any, that shall vest, as determined in accordance with Exhibit A shall be multiplied by a fraction, the numerator of which isequal to the number of days between and including the first day of the Performance Period and the date the Participant incurs aTermination due to Retirement and the denominator of which is 1095. Upon the Regular Vesting Date, the CIC Vesting Date or theTime Vesting Date, as applicable, the Restricted Period shall expire and any unvested Performance Share Units will immediately beforfeited to the Company by the Participant for no consideration.Notwithstanding the above, if the Company receives an opinion of counsel that there has been a legal judgment and/or legaldevelopment in the Participant's jurisdiction that would cause the continued vesting of the Performance Share Units after Terminationdue to Retirement being deemed unlawful and/or discriminatory, the unvested Performance Share Units shall be treated as set forth inthe remaining provisions of this Section 6.(d) Change in Control. In the event of a Change in Control, to the extent the acquiring or successor entity assumes,continues or substitutes for the Performance Share Units as provided for and described on Exhibit A hereto, if the Participant incurs aTermination by the Service Recipient without Cause (other than due to death or Disability) during the period commencing on the dateof the consummation of a Change in Control and ending on the date that is eighteen (18) months following the consummation of suchChange in Control, the number of Converted PSUs shall, to the extent not then vested or previously forfeited or cancelled, become fullyvested, the Restricted Period shall expire and any unvested Performance Share Units will immediately be forfeited to the Company bythe Participant for no consideration.7. Non-Transferability. The Performance Share Units are not transferable by the Participant except to Permitted Transferees inaccordance with Section 14(b) of the Plan. Whenever the word “Participant” is used in any provision of this Agreement undercircumstances where the provision should logically be construed to apply to executors, the administrators or the person or persons towhom the Performance Share Units may be transferred bySource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.will or by the laws of descent and distribution in accordance with Section 14 of the Plan, the word “Participant” shall be deemed toinclude such person or persons. Except as otherwise provided herein, no assignment or transfer of the Performance Share Units, or ofthe rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the assignee ortransferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Performance Share Units shallterminate and become of no further effect.8. Rights as Stockholder. Except as otherwise expressly provided for herein, the Participant or a Permitted Transferee of thePerformance Share Units shall have no rights as a stockholder with respect to any share of Common Stock underlying a PerformanceShare Unit unless and until the Participant shall have become the holder of record or the beneficial owner of such Common Stock, andno adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which therecord date is prior to the date upon which the Participant shall become the holder of record or the beneficial owner thereof.9. Repayment of Proceeds; Clawback Policy. If a Restrictive Covenant Violation occurs or the Company discovers after aTermination that grounds existed for Cause at the time thereof, then the Participant shall be required, in addition to any other remedyavailable (on a non-exclusive basis), to pay to the Company, within ten (10) business days of the Company’s request to the Participanttherefor, an amount equal to the aggregate after-tax proceeds (taking into account all amounts of tax that would be recoverable upon aclaim of loss for payment of such proceeds in the year of repayment) the Participant received upon the sale or other disposition of, ordistributions in respect of, the Performance Share Units and any shares issued in respect thereof. Any reference in this Agreement togrounds existing for a Termination for Cause shall be determined without regard to any notice period, cure period, or other proceduraldelay or event required prior to finding of or termination with, Cause. The Performance Share Units and all proceeds thereof shall besubject to the Company’s Clawback Policy, as in effect from time to time, to the extent the Participant is a director or “officer” asdefined under Rule 16a-1(f) of the Exchange Act.10. Restrictive Covenants.(a) To the extent that the Participant is a party to an employment or similar agreement with the Company or one of itsAffiliates or Subsidiaries containing non-competition, non-solicitation, non-interference or confidentiality restrictions (or two or moresuch restrictions), those restrictions and related enforcement provisions under such agreement shall govern and the following provisionsof this Section 10 shall not apply.(b) Competitive Activity(i)The Participant shall be deemed to have engaged in “Competitive Activity” if, during the period commencingon the Date of Grant and ending on the date that is 12 months after the Termination Date (the “Restricted Activity Period”), theParticipant, whether on the Participant’s own behalf or on behalf of or in conjunction with any other Person (as defined below),directly or indirectly, violates any of the following prohibitions:(I) During the Restricted Activity Period, the Participant will not, whether on the Participant’s own behalf or onbehalf of or in conjunction with any person, firm, part-nership, joint venture, association, corporation or otherbusiness organization, entity or enterprise whatsoever (“Person”), directly or indirectly, solicit or assist insoliciting in competition with the Company or any of its Subsidiaries, the business of any client or prospectiveclient:(1)with whom the Participant had personal contact or dealings on behalf of the Company or any of itsSubsidiaries during the one year period preceding the Termination Date;Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(2)with whom employees reporting to the Participant have had personal contact or dealings on behalf of theCompany or any of its Subsidiaries during the one year immediately preceding the Termination Date; or(3)for whom the Participant had direct or indirect responsibility during the one year immediately precedingthe Termination Date.(II) During the Restricted Activity Period, the Participant will not directly or indirectly:(1)engage in any business that competes with the business of the Company or any of its Subsidiaries,including, but not limited to, providing formulation/dose form technologies and/or contract services topharmaceutical, biotechnology, over-the-counter and vitamin/mineral supplements companies related topre-clinical and clinical development, formulation, analysis, manufacturing and/or packaging and anyother technology, product or service of the type developed, manufactured or sold by the Company orany of its Subsidiaries (including, without limitation, any other business which the Company or any of itsSubsidiaries have plans to engage in as of the Termination Date) in any geographical area where theCompany or any of its Subsidiaries conduct business (a “Competitive Business”);(2)enter the employ of, or render any services to, any Person (or any division or controlled or controllingAffiliate of any Person) who or which engages in a Competitive Business;(3)acquire a financial interest in, or otherwise become actively involved with, any Competitive Business,directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee orconsultant; or(4)interfere with, or attempt to interfere with, business relationships (whether formed before, on or after theDate of Grant) between the Company or any of its Subsidiaries and customers, clients, suppliers, orinvestors of the Company or any of its Subsidiaries.Notwithstanding anything to the contrary in this Agreement, the Participant may, directly or indirectly own, solely as aninvestment, securities of any entity engaged in the business of the Company or any of its Subsidiaries which are publicly tradedon a national or regional stock exchange or on the over-the-counter market if the Participant (i) is not a controlling person of, ora member of a group which controls, such Person and (ii) does not, directly or indirectly, own 5% or more of any class ofsecurities of such Person.(III) During the Restricted Activity Period, the Participant will not, whether on the Participant’s own behalf oron behalf of or in conjunction with any Person, directly or indirectly:(1)solicit or encourage any employee of the Company or any of its Subsidiaries to leave the employment ofthe Company or any of its Subsidiaries; or(2)hire any such employee who was employed by the Company or any of its Subsidiaries as of theTermination Date or who left the employment of the Company or any of its Subsidiaries coincident with,or within six (6) months prior to or after, the Termination Date; provided, however, that this restrictionshall cease to apply to any employee who has not been employed by the Company or any of itsSubsidiaries for at least six (6) months.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(IV) During the Restricted Activity Period, the Participant will not, directly or indirectly, solicit or encourage tocease to work with the Company or any of its Subsidiaries any consultant then under contract with the Companyor any of its Subsidiaries.(ii) It is expressly understood and agreed that although the Participant and the Company consider the restrictionscontained in this Section 10(b) to be reasonable, if a final judicial determination is made by a court of competent jurisdictionthat the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against theParticipant, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to suchmaximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable.Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, andsuch restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of theother restrictions contained herein.(c) Confidentiality(i) The Participant will not at any time (whether during or after the Participant’s Employment) (x) retain or use for thebenefit, purposes or account of the Participant or any other Person; or (y) disclose, divulge, reveal, communicate, share, transferor provide access to any person outside the Company and its Affiliates and Subsidiaries (other than its professional adviserswho are bound by confidentiality obligations), any non-public, proprietary or confidential information --including withoutlimitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae,technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs,products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising,sales, marketing, promotions, government and regulatory activities and approvals -- concerning the past, current or futurebusiness, activities and operations of the Company, its Subsidiaries or Affiliates and/or any third party that has disclosed orprovided any of same to the Company on a confidential basis (“Confidential Information”) without the prior writtenauthorization of the Board.(ii) “Confidential Information” shall not include any information that is (x) generally known to the industry or thepublic other than as a result of the Participant’s breach of this covenant or any breach of other confidentiality obligations bythird parties; (y) made legitimately available to the Participant by a third party without breach of any known confidentialityobligation; or (z) required by law to be disclosed or in any judicial or administrative process; provided that the Participant shallgive prompt written notice to the Company of such requirement, disclose no more information than is so required, andcooperate, at the Company’s cost, with any attempts by the Company to obtain a protective order or similar treatment.(iii) Except as required by law, the Participant will not disclose to anyone, other than the Participant’s immediate familyand legal or financial or tax advisors or lender, each of whom the Participant agrees to instruct not to disclose, the existence orcontents of this Agreement (unless this Agreement shall be publicly available as a result of a regulatory filing made by theCompany or one of its Affiliates or Subsidiaries); provided, that the Participant may disclose to any prospective future employerthe provisions of Section 10 of this Agreement provided they agree to maintain the confidentiality of such terms.(iv) Upon Termination, the Participant shall (x) cease and not thereafter commence use of any Confidential Informationor intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo,domain name or other source indicator) owned or used by the Company, its Subsidiaries or Affiliates; (y) immediately destroy,delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (includingmemoranda, books, papers, plans, computer files, letters and other data) in the Participant’s possession or control (including anyof the foregoing stored or located in the Participant’s office, home, laptop or other computer, whether or not Company property)that contain Confidential Information or otherwise relate to the business of the Company or one of its Affiliates or Subsidiaries,except that the Participant may retain only those portions of any personal notes,Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.notebooks and diaries that do not contain any Confidential Information; and (z) notify and fully cooperate with the Companyregarding the delivery or destruction of any other Confidential Information of which the Participant is or becomes aware.(d) Equitable Relief.Notwithstanding the remedies set forth in Section 9 above and notwithstanding any other remedy which wouldotherwise be available to the Company at law or in equity, the Company and the Participant agree and acknowledge that if an actual orthreatened Restrictive Covenant Violation occurs, the Company will be entitled to an injunction and/or other equitable relief restrainingthe Participant from the Restrictive Covenant Violation without the necessity of posting a bond or proving actual damages.11. Tax Withholding.(a) Responsibility for Taxes. The Participant acknowledges that, regardless of any action taken by the Company or, if different,the Service Recipient, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account orother tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participant (“Tax-Related Items”)is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company or the Service Recipient.The Participant further acknowledges that the Company and/or the Service Recipient (1) make no representations or undertakingsregarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Share Units, including, but notlimited to, the grant, vesting or settlement of the Performance Share Units, the subsequent sale of shares of Common Stock acquiredpursuant to such settlement and the receipt of any dividends and/or any dividend equivalents; and (2) do not commit to and are underno obligation to structure the terms of the grant or any aspect of the Performance Share Units to reduce or eliminate the Participant’sliability for Tax-Related Items or achieve any particular tax result. Further, if the Participant is subject to Tax-Related Items in more thanone jurisdiction, the Participant acknowledges that the Company and/or the Service Recipient (or former Service Recipient, asapplicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.(b) Satisfaction of Withholding Obligations. Prior to any relevant taxable or tax withholding event, as applicable, theParticipant agrees to make adequate arrangements satisfactory to the Company and/or the Service Recipient to satisfy all Tax-RelatedItems. In this regard, the Participant authorizes the Company and/or the Service Recipient, or their respective agents, at their discretion,to satisfy their withholding obligations with regard to all Tax-Related Items by any of the means described in Section 14(d) of the Planor by such other means or method as the Committee in its sole discretion and without notice to the Participant deems appropriate.Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicableminimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case theParticipant will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. Ifthe obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, the Participant is deemedto have been issued the full number of shares of Common Stock subject to the vested Performance Share Units, notwithstanding that anumber of the shares of Common Stock is held back solely for the purpose of paying the Tax-Related Items.Finally, the Participant agrees to pay to the Company or the Service Recipient any amount of Tax-Related Items that theCompany or the Service Recipient may be required to withhold or account for as a result of the Participant’s participation in the Planthat cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the shares or the proceeds ofthe sale of shares of Common Stock, if the Participant fails to comply with the Participant’s obligations in connection with the Tax-Related Items.12. Notice. Every notice or other communication relating to this Agreement between the Company and the Participant shall bein writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time bedesignated by it in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other addressbe so designated, all notices or communications by theSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Participant to the Company shall be mailed or delivered to the Company at its principal executive office, to the attention of theCompany’s General Counsel, and all notices or communications by the Company to the Participant may be given to the Participantpersonally or may be mailed to the Participant at the Participant’s last known address, as reflected in the Company’s records.Notwithstanding the above, all notices and communications between the Participant and any third-party plan administrator shall bemailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator andcommunicated to the Participant from time to time.13. No Right to Continued Employment. Neither the Plan nor this Agreement nor the granting of the Performance Share Unitsevidenced hereby shall be construed as giving the Participant the right to be retained in the employ of, or in any consulting relationshipto, the Company or any of its Affiliates or Subsidiaries. Further, the Company, or, if different, the Service Recipient, may at any timedismiss the Participant or discontinue any consulting relationship, free from any liability or any claim under the Plan or this Agreement,except as otherwise expressly provided herein.14. Nature of Grant. In accepting the grant of the Performance Share Units, the Participant acknowledges, understands andagrees that:(a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended,suspended or terminated by the Company at any time, to the extent permitted by the Plan;(b) the grant of the Performance Share Units is voluntary and occasional and does not create any contractual or other right toreceive future grants of Performance Share Units, or benefits in lieu of Performance Share Units, even if Performance Share Units havebeen granted in the past;(c) all decisions with respect to future Performance Share Units or other grants, if any, will be at the sole discretion of theCompany;(d) the Performance Share Unit grant and the Participant’s participation in the Plan shall not be interpreted as forming anemployment or service contract with the Company, or any Affiliate or Subsidiary;(e) the Participant is voluntarily participating in the Plan;(f) the Performance Share Units and the shares of Common Stock subject to the Performance Share Units, and the income andvalue of same, are not intended to replace any pension rights or compensation;(g) the Performance Share Units and the shares of Common Stock subject to the Performance Share Units, and the income andvalue of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating anyseverance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards,pension or retirement or welfare benefits or similar payments;(h) the future value of the underlying shares of Common Stock is unknown, indeterminable and cannot be predicted withcertainty;(i) no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance Share Units resultingfrom a Termination (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in thejurisdiction where the Participant is employed or the terms of the Participant’s employment agreement, if any), and in consideration ofthe grant of the Performance Share Units to which the Participant is otherwise not entitled, the Participant irrevocably agrees never toinstitute any claim against the Company, any of its Affiliates or Subsidiaries, waives the Participant’s ability, if any, to bring any suchclaim, and releases the Company, its Affiliates and Subsidiaries from any such claim; if, notwithstanding the foregoing, any such claimis allowed by a court of competent jurisdiction, then, by participating in the Plan, the Participant shall beSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to requestdismissal or withdrawal of such claim;(j) unless otherwise provided in the Plan or by the Company in its discretion, the Performance Share Units and the benefitsevidenced by this Agreement do not create any entitlement to have the Performance Share Units or any such benefits transferred to, orassumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transactionaffecting the Common Stock of the Company; and(m) the Participant acknowledges and agrees that neither the Company, nor any Affiliate or Subsidiary shall be liable for anyforeign exchange rate fluctuation between the Participant’s local currency and the United States Dollar that may affect the value of thePerformance Share Units or of any amounts due to the Participant pursuant to the settlement of the Performance Share Units or thesubsequent sale of any shares of Common Stock acquired upon settlement.15. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Companymaking any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of theunderlying shares of Common Stock. The Participant is hereby advised to consult with the Participant’s own personal tax, legal andfinancial advisors regarding the Participant’s participation in the Plan before taking any action related to the Plan.16. Data Privacy. The Participant hereby explicitly and unambiguously consents to the collection, use and transfer, inelectronic or other form, of the Participant’s personal data as described in this Agreement and any other Performance Share Unitgrant materials by and among, as applicable, the Service Recipient, the Company and its other Affiliates or Subsidiaries for theexclusive purpose of implementing, administering and managing the Participant’s participation in the Plan.The Participant understands that the Company and the Service Recipient may hold certain personal information aboutthe Participant, including, but not limited to, the Participant’s name, home address and telephone number, date of birth, socialinsurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in theCompany, details of all Performance Share Units or any other entitlement to shares of stock awarded, canceled, exercised, vested,unvested or outstanding in the Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managingthe Plan.The Participant understands that Data will be transferred to Morgan Stanley Smith Barney LLC, or such other stockplan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation,administration and management of the Plan. The Participant understands that the recipients of the Data may be located in the UnitedStates or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections thanthe Participant’s country. The Participant understands that the Participant may request a list with the names and addresses of anypotential recipients of the Data by contacting the Participant’s local human resources representative. The Participant authorizes theCompany, Morgan Stanley Smith Barney LLC and any other possible recipients which may assist the Company (presently or in thefuture) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic orother form, for the sole purpose of implementing, administering and managing the Participant’s participation in the Plan. TheParticipant understands that Data will be held only as long as is necessary to implement, administer and manage the Participant’sparticipation in the Plan. The Participant understands that the Participant may, at any time, view Data, request additional informationabout the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, inany case without cost, by contacting in writing the Participant’s local human resources representative. Further, the Participantunderstands that the Participant is providing the consents herein on a purely voluntary basis. If the Participant does not consent, or ifthe Participant later seeks to revoke the Participant’s consent, the Participant’s Employment and career with the Service Recipient willnot be adversely affected; the only adverse consequence of refusing or withdrawing the Participant’s consent is that the Companywould not be able to grant Performance Share Units or other equity awards to the Participant or administer or maintain such awards.Therefore, the Participant understands that refusing or withdrawing theSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Participant’s consent may affect the Participant’s ability to participate in the Plan. For more information on the consequences of theParticipant’s refusal to consent or withdrawal of consent, the Participant understands that the Participant may contact theParticipant’s local human resources representative.17. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the partieshereto.18. Waiver and Amendments. Subject to Section 13(b) of the Plan, the Committee may waive any conditions or rightsunder, amend any terms of, or alter, suspend, discontinue, cancel or terminate, this Agreement, prospectively or retroactively(including after the Participant’s Termination); provided that any such waiver, amendment, alteration, suspension, discontinuance,cancellation or termination that would materially and adversely affect the rights of the Participant hereunder shall not to that extent beeffective without the consent of the Participant. No waiver by either of the parties hereto of their rights hereunder shall be deemed toconstitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it isto be construed as a continuing waiver.19. Governing Law; Venue. This Agreement shall be construed and interpreted in accordance with the laws of the State ofDelaware, without regard to the principles of conflicts of law thereof. For purposes of litigating any dispute that arises under this grantor this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of New Jersey, agree that such litigationshall be conducted in the courts of Somerset County, or the federal courts for the United States for the District of New Jersey, wherethis grant is made and/or to be performed.20. Plan. The terms and provisions of the Plan are incorporated herein by reference. In the event of a conflict orinconsistency between the terms and provisions of the Plan and the provisions of this Agreement, the Plan shall govern and control.21. Language. If the Participant has received this Agreement or any other document related to the Plan translated into alanguage other than English and if the meaning of the translated version is different than the English version, the English version willcontrol.22. Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents relatedto current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents byelectronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by theCompany or a third party designated by the Company.23. Imposition of Other Requirements. The Company reserves the right to impose any other requirements on theParticipant’s participation in the Plan, on the Performance Share Units and on any shares acquired under the Plan, to the extent theCompany determines it is necessary or advisable for legal or administrative reasons, and to require the Participant to sign anyadditional agreements or undertakings that may be necessary to accomplish the foregoing.24. Section 409A of the Code. The Performance Share Units are not intended to constitute “nonqualified deferredcompensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and otherinterpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued afterthe date hereof, “Section 409A”). However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if atany time the Committee determines that the Performance Share Units (or any portion thereof) may be subject to Section 409A, theCommittee shall have the right in its sole discretion (without any obligation to do so or to indemnify the Participant or any other personfor failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures(including amendments, policies and procedures with retroactive effect), or take any other actions, as the Committee determines arenecessary or appropriate either forSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.the Performance Share Units to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.25. Appendix. Notwithstanding any provisions in this Agreement, the Performance Share Unit grant shall be subject to anyspecial terms and conditions set forth in Appendix A to this Performance Share Unit Agreement for the Participant’s country.Moreover, if the Participant relocates to one of the countries included in Appendix A, the special terms and conditions for such countrywill apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary oradvisable for legal or administrative reasons. Appendix A constitutes part of this Performance Share Unit Agreement.26. Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that, depending on his or her country,the Participant may be subject to insider trading restrictions and/or market abuse laws, which may affect his or her ability to acquire orsell shares of Common Stock or rights to shares of Common Stock (e.g., Performance Share Units) under the Plan during such times asthe Participant is considered to have “inside information” regarding the Company (as defined by the laws in the Participant’s country).Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under anyapplicable Company insider trading policy. The Participant is responsible for ensuring compliance with any applicable restrictions andis advised to consult his or her personal legal advisor on this matter.27. Entire Agreement. This Agreement, the Grant Notice and the Plan constitute the entire understanding between theParticipant and the Company regarding the Performance Share Units. This Agreement, the Grant Notice and the Plan supersede anyprior agreements, commitments or negotiations concerning the Performance Share Units.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit A1. Vesting/Change in Control. Except as otherwise expressly provided in Section 6 of the Performance Share Unit Agreement,provided the Participant has not incurred a Termination on or prior to the Regular Vesting Date (as defined below), the PerformanceShare Units granted hereunder shall vest upon the date on which the Committee determines the cumulative Revenue (as defined below)growth during the Performance Period and the cumulative EBITDA (as defined below) growth during the Performance Period, in eachcase, as of the last day of the Performance Period, which determination shall be made no later than the seventy-fifth (75th) day followingthe end of the Performance Period (the “Regular Vesting Date”) and in an amount, if any, equal to the product of (1) the Target Numberof Performance Share Units and (2) the Cumulative Performance Percentage (as defined and described below). Upon the RegularVesting Date, the Restricted Period shall expire and any vested Performance Share Units shall be settled in accordance with Section 5 ofthe Performance Share Unit Agreement. Any Performance Share Units that do not become vested in accordance with this Exhibit A (tothe extent not previously forfeited pursuant to Section 6 of the Performance Share Unit Agreement) shall, effective as of the RegularVesting Date, be forfeited by the Participant without consideration.Notwithstanding the foregoing:(i) in the event of a Change in Control on or prior to July 1, 2015, to the extent the acquiring or successor entity does not assume,continue or substitute for the Performance Share Units, the Target Number of Performance Share Units, to the extent not then vested orpreviously forfeited or cancelled, shall become fully vested and on such date the Restricted Period shall expire (the date of such vestingand expiration, the “CIC Vesting Date”);(ii) in the event of a Change in Control after July 1, 2015 but prior to the end of the Performance Period, to the extent the acquiring orsuccessor entity does not assume, continue or substitute for the Performance Share Units, a number of Performance Share Units equal tothe number that would have vested based on the Cumulative Performance Percentage measured as of the last day of the fiscal yearimmediately preceding the date of the Change in Control (such day, the “End Date”) based on actual growth between July 1, 2014through and including the End Date, measuring cumulative growth as of the End Date, to the extent not then vested or previouslyforfeited or cancelled, shall become fully vested and the Restricted Period with respect to such Performance Share Units shall expire onthe CIC Vesting Date;(iii) in the event of a Change in Control on or prior to July 1, 2015, to the extent the acquiring or successor entity assumes, continuesor substitutes for the Performance Share Units, in lieu of the vesting schedule in the first paragraph above, the Target Number ofPerformance Share Units will be subject to the following vesting schedule: provided the Participant has not incurred a Termination priorto the Time Vesting Date (as defined below), such Performance Share Units shall vest on June 30, 2017 (the “Time Vesting Date”) and,on the Time Vesting Date, the Restricted Period with respect to such Converted PSUs (as defined below) shall expire; and(iv) in the event of a Change in Control after July 1, 2015, to the extent the acquiring or successor entity assumes, continues orsubstitutes for the Performance Share Units, in lieu of the vesting schedule in the first paragraph above, a number of Performance ShareUnits equal to the number that would have vested based on the Cumulative Performance Percentage measured as of the End Date basedon actual growth between [ ] through and including the End Date, measuring cumulative growth as of the End Date, will be subject tothe following vesting schedule: provided the Participant has not incurred a Termination prior to the Time Vesting Date, suchPerformance Share Units shall vest on the Time Vesting Date and, on the Time Vesting Date, the Restricted Period with respect to suchConverted PSUs shall expire.Any Performance Share Units that do not vest or become Converted PSUs, as applicable, shall immediately be forfeited without anyfurther action by the Company or the Participant and without any payment of consideration therefor.For purposes of this Exhibit A and the Performance Share Unit Agreement, the term “Converted PSUs” shall mean those PerformanceShare Units that result from conversion pursuant to clause (iii) or clause (iv) above.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.2. Cumulative Performance Percentage. A number of Performance Share Units granted hereunder shall vest, if at all, based on theCumulative Performance Percentage which is based on the cumulative Revenue (as defined below) growth during the PerformancePeriod and the cumulative EBITDA (as defined below) growth during the Performance Period, determined as of the last day of thePerformance Period in accordance with this Section 2.For purposes of this Exhibit A:“Revenue” shall mean net revenue as presented in the Company’s annual Securities and Exchange Commission filings but will beadjusted to [ ] fiscal year average foreign exchange rates. Future performance will be translated at constant foreign exchange rates inorder to gauge performance against revenue goals in consideration of foreign currency fluctuations, which may occur. Revenue targetsmay also be adjusted during the Performance Period for any unusual items as defined and interpreted by the Committee including, butnot limited to acquisitions and divestitures.“EBITDA” shall mean the Company’s internally adjusted EBITDA which is generally calculated in the same manner as AdjustedEBITDA is calculated for purposes of the Company’s indentures governing its notes and its credit agreement governing its seniorunsecured term loan facility, except for the impact of foreign exchange and other non-operational matters. EBITDA is based on [ ]fiscal year average foreign exchange rates and future performance will be translated at constant foreign exchange rates in order togauge performance against EBITDA goals in consideration of foreign currency fluctuations, which may occur. EBITDA targets mayalso be adjusted during the Performance Period for any unusual items as defined and interpreted by the Committee including, but notlimited to acquisitions and divestitures.The Cumulative Performance Percentage shall be equal to the sum of twenty-five percent (25%) of the Revenue PerformancePercentage and seventy-five percent (75%) of the EBITDA Performance Percentage as outlined and determined below.Cumulative Revenue Growth(during the Performance Period expressed as a percentageassuming the starting point for Revenue growth is $ million)Revenue Performance Percentage %- %%%%%%%%%%%%%+%Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Cumulative EBITDA Growth(during the Performance Period expressed as a percentageassuming the starting point for EBITDA growth is $ million)EBITDA Performance Percentage %- %%%%%%%%%%%%%%%+%Cumulative Performance Percentage(the Revenue and EBITDA dollar amounts reflected below assume the full Performance Period runs and such amounts reflect Revenueand EBITDA for the 20[ ], 20[ ] and 20[ ] fiscal years, in the aggregate) Cumulative EBITDA(75%)(in millions)$$$$$CumulativeRevenue (25%)(in millions)$%%%%%$%%%%%$%%%%%$%%%%%$%%%%%The Revenue Performance Percentage, EBITDA Performance Percentage and Cumulative Performance Percentage shall each be a linearinterpolation for any achievement that falls between the above targets, provided that there shall be no linear interpolation if thecumulative Revenue growth increases on average by less than [ ]% as of the last day of the Performance Period and/or the cumulativeEBITDA growth increases on average by less than [ ]% as of the last day of the Performance Period. The maximum possible payout is [] percent ([ ]%) of the Target Number of Performance Share Units if cumulative Revenue growth increases on average by at least [ ]percent ([ ]%) as of the last day of the Performance Period and cumulative EBITDA growth increases on average by at least [ ] percent([ ]%) as of the last day of the Performance Period.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.APPENDIX APERFORMANCE SHARE UNIT AGREEMENT FOR NON-U.S. PARTICIPANTSUNDER THECATALENT, INC.2014 OMNIBUS INCENTIVE PLANCOUNTRY-SPECIFIC TERMS AND CONDITIONSAll capitalized terms used in this Appendix A that are not defined herein have the meanings defined in the Plan or the PerformanceShare Unit Agreement for Non-U.S. Participants (the “Performance Share Unit Agreement”). This Appendix A constitutes part of thePerformance Share Unit Agreement.Terms and ConditionsThis Appendix A includes additional or different terms and conditions that govern the Performance Share Units if the Participant worksor resides in one of the countries listed below. The Participant understands that if the Participant is a citizen or resident of a countryother than the one in which he or she is currently working, transfers Employment and/or residency after the Date of Grant or isconsidered a resident of another country for local law purposes, the Company shall, in its discretion, determine to what extent the termsand conditions contained herein shall apply to the Participant.NotificationsThis Appendix A also includes information regarding exchange controls and certain other issues of which the Participant should beaware with respect to participation in the Plan. The information is based on the securities, exchange control and other laws in effect inthe respective countries as of May 2014. Such laws are often complex and change frequently. As a result, the Participant should notrely on the information in this Appendix A as the only source of information relating to the consequences of participation in the Planbecause the information may be out of date at the time the Performance Share Units vest or at the time the Participant sells the shares ofCommon Stock.In addition, the information contained herein is general in nature and may not apply to the Participant’s particular situation, and theCompany is not in a position to assure the Participant of a particular result. Accordingly, the Participant should seek appropriateprofessional advice as to how the relevant laws in the Participant’s country may apply to his or her situation. Finally, if the Participant is a citizen or resident of a country other than the one in which he or she is currently working, transfersEmployment and/or residency after the Date of Grant or is considered a resident of another country for local law purposes, theinformation contained herein may not apply to the Participant.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ARGENTINANotificationsSecurities Law Information. Neither the Performance Share Units nor the underlying shares of Common Stock are publicly offered orlisted on any stock exchange in Argentina. The offer is private and not subject to the supervision of any Argentine governmentalauthority.Exchange Control Information. If the Participant transfers proceeds from the sale of shares of Common Stock or the receipt of anydividends paid on such shares into Argentina within 10 days of sale/receipt (i.e., if the proceeds have not been held in a U.S. bank orbrokerage account for at least 10 days prior to transfer), the Participant must deposit 30% of the proceeds into a non-interest bearingaccount in Argentina for 365 days. If the Participant has satisfied the 10 day holding obligation, the Argentine bank handling thetransaction may still request certain documentation in connection with the Participant’s request to transfer proceeds into Argentina,including evidence of the sale and proof of the source of funds used to purchase the shares of Common Stock. If the bank determinesthat the 10-day rule or any other rule or regulation promulgated by the Argentine Central Bank has not been satisfied, it will require that30% of the transfer amount be placed in a non-interest bearing dollar denominated mandatory deposit account for a holding period of365 days. The Participant must comply with any and all Argentine currency exchange restrictions, approvals and reporting requirements inconnection with the vesting of the Performance Share Units and the subsequent sale of any shares of Common Stock acquired at vestingand the receipt of any dividends.Please note that exchange control regulations in Argentina are subject to frequent change. The Participant should consult with his orher personal legal advisor regarding any exchange control obligations the Participant may have in connection with the Participant’sparticipation in the Plan.Foreign Asset/Account Reporting Information. The Participant must report any shares of Common Stock acquired under the Plan andheld by the Participant on December 31st of each year on the Participant’s annual tax return for that year. The Participant is stronglyadvised to consult the Participant’s personal tax advisor to ensure compliance with this tax reporting obligation.AUSTRALIATerms and ConditionsVesting. The following provisions supplement the Performance Share Unit Grant Notice and Sections 3 and 6 and Exhibit A of thePerformance Share Unit Agreement:Notwithstanding Section 6(c) of the Performance Share Unit Agreement, if the Participant incurs a Termination due to Disability orRetirement, the Target Number of Performance Share Units shall, to the extent not then vested or previously forfeited or cancelled,become fully vested and the Restricted Period shall expire.Data Privacy. The following provisions supplement Section 16 of the Performance Share Unit Agreement:The Company can be contacted at 14 Schoolhouse Rd, Somerset, NJ 08873. The Service Recipient can be contacted at CatalentAustralia Pty. Ltd., 217-221 Governor Road, Braeside, Victoria, Australia 3195.The Participant’s personal information will be held in accordance with the Service Recipient’s privacy policy, a copy of which can beobtained by contacting the Service Recipient at the address indicated above. The Service Recipient’s privacy policy contains, amongother things, details of how the Participant can access and seek correction of personalSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.information held in connection with this Performance Share Units, how the Participant can complain about a breach of the AustralianPrivacy Principles and how the Service Recipient will deal with such a complaint.The Participant understands and agrees that Data may be transferred to recipients located outside of Australia, including the UnitedStates and any other country where the Company has operations.NotificationsSecurities Law Information. If the Participant acquires shares of Common Stock pursuant to the Performance Share Units and offersthe shares of Common Stock for sale to a person or entity resident in Australia, such offer may be subject to disclosure requirementsunder Australian law. The Participant should obtain legal advice as to his or her disclosure obligations prior to making any such offer.Exchange Control Information. The Participant is responsible for reporting cash transactions inbound (e.g., the remittance of cashproceeds received upon sale of shares of Common Stock) exceeding A$10,000 and for inbound international fund transfers of anyvalue, which do not involve an Australian bank.BELGIUMNotificationsForeign Asset/Account Reporting Information. The Participant is required to report any security or bank account (including abrokerage account) opened and maintained outside Belgium on his or her annual tax return.BRAZILTerms and ConditionsCompliance with Law. By accepting the Performance Share Units, the Participant acknowledges his or her agreement to comply withapplicable Brazilian laws and to pay any and all applicable Tax-Related Items associated with the Performance Share Units, the receiptof any dividends, and the sale of shares of Common Stock acquired under the Plan.NotificationsExchange Control Information. If the Participant is resident or domiciled in Brazil, the Participant will be required to submit annuallya declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights isequal to or greater than US$100,000. Assets and rights that must be reported include shares of Common Stock acquired under the Plan.CHINATerms and ConditionsThe following terms and conditions will be applicable to the Participant to the extent that the Company, in its discretion, determines thatthe Participant’s participation in the Plan will be subject to exchange control restrictions in the People’s Republic of China (“PRC”), asimplemented by the PRC State Administration of Foreign Exchange (“SAFE”).Vesting. The following provisions supplement the Performance Share Unit Grant Notice and Sections 3 and 6 and Exhibit A of thePerformance Share Unit Agreement:Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Notwithstanding anything to the contrary in the Performance Share Unit Agreement, the Performance Share Units shall not vest and noshares of Common Stock will be issued to the Participant unless and until all necessary exchange control or other approvals with respectto the Performance Share Units under the Plan have been obtained from SAFE or its local counterpart (“SAFE Approval”). In the eventthat SAFE Approval has not been obtained prior to any date(s) on which the Performance Share Units are scheduled to vest inaccordance with the Vesting Schedule set forth on Exhibit A, the Performance Share Units will not vest until the seventh day of themonth following the month in which SAFE Approval is obtained (the “Actual Vesting Date”). If the Participant incurs a Terminationprior to the Actual Vesting Date, the Participant shall not be entitled to vest in any portion of the Performance Share Units and thePerformance Share Units shall be forfeited without any liability to the Company or its Affiliates.Notwithstanding Section 6(c) of the Performance Share Unit Agreement, if the Participant incurs a Termination due to Disability orRetirement on or after the Actual Vesting Date, the Target Number of Performance Share Units shall, to the extent not then vested orpreviously forfeited or cancelled, become fully vested and the Restricted Period shall expire.Settlement of Performance Share Units and Sale of Shares. Notwithstanding anything to the contrary in the Plan or the PerformanceShare Unit Agreement, due to PRC exchange control restrictions the Participant agrees that any shares of Common Stock acquired atsettlement of the Performance Share Units may be immediately sold at settlement or, at the Company’s discretion, at a later time(including when the Participant terminates Employment for any reason). If, however, the sale of the shares of Common Stock is notpermissible under the Company’s insider trading policy, the Company retains the discretion to postpone the issuance of the shares ofCommon Stock subject to the vested Performance Share Units until such time that the sale is again permissible and to then immediatelysell the shares of Common Stock subject to the Performance Share Units. The Participant further agrees that the Company is authorizedto instruct its designated broker to assist with the mandatory sale of the shares of Common Stock (on the Participant’s behalf pursuant tothis authorization), and the Participant expressly authorizes such broker to complete the sale of such shares of Common Stock. TheParticipant acknowledges that the Company’s designated broker is under no obligation to arrange for the sale of shares of CommonStock at any particular price. Upon the sale of the shares of Common Stock, the Company agrees to pay the cash proceeds from thesale, less any brokerage fees or commissions, to the Participant in accordance with applicable exchange control laws and regulationsand provided any liability for Tax-Related Items has been satisfied. Due to fluctuations in the share price and/or the United States Dollarexchange rate between the settlement date and (if later) the date on which the shares of Common Stock are sold, the sale proceeds maybe more or less than the market value of the shares of Common Stock on the settlement date (which is the amount relevant todetermining the Participant’s tax liability). The Participant understands and agrees that the Company is not responsible for the amountof any loss the Participant may incur and that the Company assumes no liability for any fluctuation in the share price and/or UnitedStates Dollar exchange rate.Exchange Control Restrictions. The Participant understands and agrees that he or she will be required to immediately repatriate toChina the proceeds from the sale of any shares of Common Stock acquired under the Plan or from any cash dividends paid or suchshares. The Participant further understands that such repatriation of the proceeds may need to be effected through a special exchangecontrol account established by the Company or any Affiliate or Subsidiary, and the Participant hereby consents and agrees that theproceeds may be transferred to such account by the Company (or its designated broker) on the Participant’s behalf prior to beingdelivered to the Participant. The Participant also agrees to sign any agreements, forms and/or consents that may be reasonably requestedby the Company (or the Company’s designated broker) to effectuate such transfers.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The proceeds may be paid to the Participant in U.S. dollars or local currency at the Company’s discretion. If the proceeds are paid to theParticipant in U.S. dollars, the Participant understands that he or she will be required to set up a U.S. dollar bank account in China sothat the proceeds may be deposited into this account. If the proceeds are paid to the Participant in local currency, (i) the Participantacknowledges that the Company is under no obligation to secure any particular exchange conversion rate and that the Company mayface delays in converting the proceeds to local currency due to exchange control restrictions, and (ii) the Participant agrees to bear anycurrency fluctuation risk between the time the shares of Common Stock are sold or dividends are paid and the time the proceeds areconverted to local currency and distributed to the Participant. The Participant agrees to comply with any other requirements that may beimposed by the Company in the future in order to facilitate compliance with exchange control requirements in China.NotificationsForeign Asset/Account Reporting Information. Effective from January 1, 2014, PRC residents are required to report to SAFE detailsof their foreign financial assets and liabilities, as well as details of any economic transactions conducted with non-PRC residents, eitherdirectly or through financial institutions. Under these rules, the Participant may be subject to reporting obligations for the PerformanceShare Units and/or the shares of Common Stock acquired under the Plan and any Plan-related transactions. The Participant shouldconsult his or her personal legal advisor regarding the details of this reporting obligation.FRANCETerms and ConditionsType of Performance Share Units. The Performance Share Units are not granted as “French-qualified” awards and are not intended toqualify for the special tax and social security treatment applicable to shares granted for no consideration under Sections L. 225-197 toL. 225-197-6 of the French Commercial Code, as amended.Consent to Receive Information in English. By accepting the Performance Share Units, the Participant confirms having read andunderstood the documents related to the Performance Share Units (the Plan and the Agreement) which were provided in the Englishlanguage. The Participant accepts the terms of these documents accordingly.Consentement Relatif à l'Utilisation de la Langue Anglaise. En acceptant l’Attribution, le Participant confirme avoir lu et compris lesdocuments relatifs à cette Attribution (le Plan et le Contrat d'Attribution) qui ont été remis en langue anglaise. Le Participant accepteles termes de ces documents en conséquence.NotificationsForeign Asset/Account Reporting Information. The Participant is required to report all foreign accounts (whether open, current orclosed) to the French tax authorities when filing his or her annual tax return.GERMANYNotificationsExchange Control Information. Cross-border payments in excess of €12,500 must be reported electronically to the German FederalBank (Bundesbank). In the case of payments made or received in connection with securities (including proceeds realized upon the saleof shares of Common Stock), the report must be made by the 5th day of the month following the month in which the payment wasmade or received. The form of the report (“Allgemeine Meldeportal Statistik”) can be accessed via the Bundesbank’s website(www.bundesbank.de) and is available in both German and English. The Participant understands that if the Participant makes orreceives a payment in excess of this amount, the Participant is responsible for complying with applicable reporting requirements.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ITALYTerms and ConditionsData Privacy. This provision replaces Section 16 of the Performance Share Unit Agreement:The Participant understands that the Service Recipient, the Company and any other Affiliate and Subsidiary may hold certainpersonal information about the Participant, including, the Participant’s name, home address and telephone number, date of birth,social insurance number or other identification number, salary, nationality, job title, any shares of Common Stock or directorshipsheld in the Company, details of the Performance Share Units or any other entitlement to shares of Common Stock awarded, canceled,exercised, vested, unvested or outstanding in the Participant’s favor (“Personal Data”) and will process such data for the exclusivepurpose of implementing, managing and administering the Plan.The Participant also understands that providing the Company with Personal Data is mandatory for compliance with local law andnecessary for the performance of the Plan and that the Participant’s refusal to provide such Personal Data would make it impossiblefor the Company to perform its contractual obligations and may affect the Participant’s ability to participate in the Plan. TheControllers of personal data processing are Catalent, Inc., 14 Schoolhouse Road, Somerset, NJ 08873, and Catalent Italy, SpA, ViaNettunense KM 20, 100 04011 Aprilia (LT), Italy, which is also the Company’s representative in Italy for privacy purposes pursuantto Legislative Decree no 196/2003.The Participant understands that Personal Data will not be publicized, but it may be accessible by the Service Recipient and itsinternal and external personnel in charge of processing of such Personal Data and by the Personal Data Processor (the “Processor”),if any. An updated list of Processors and other transferees of Personal Data is available upon request from the Service Recipient.Furthermore, Personal Data may be transferred to Morgan Stanley Smith Barney LLC, Service Recipient and any banks, otherfinancial institutions or brokers involved in the management and administration of the Plan. The Participant understands that theCompany and/or its Affiliates and Subsidiaries will transfer Personal Data amongst themselves as necessary for the purpose ofimplementation, administration and management of the Participant’s participation in the Plan, and that the Company and/or itsAffiliates and Subsidiaries may each further transfer Personal Data to third parties assisting the Company in the implementation,administration and management of the Plan, including any requisite transfer to Morgan Stanley Smith Barney LLC or another thirdparty with whom the Participant may elect to deposit any shares of Common Stock acquired under the Plan. Such recipients mayreceive, possess, use, retain and transfer the Personal Data in electronic or other form, for the purposes of implementing,administering and managing the Participant’s participation in the Plan. The Participant understands that these recipients may belocated in or outside the European Economic Area in such countries as in the United States that may not provide the same level ofprotection as intended under Italian data privacy laws. Should the Company exercise its discretion in suspending all necessary legalobligations connected with the management and administration of the Plan, it will delete the Participant’s Personal Data as soon as ithas accomplished all the necessary legal obligations connected with the management and administration of the Plan.The Participant understands that Personal Data processing related to the purposes specified above shall take place under automatedor non-automated conditions, anonymously when possible, that comply with the purposes for which Personal Data are collected andwith confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to LegislativeDecree no. 196/2003.The processing activity, including communication, the transfer of the Participant’s Personal Data abroad, including outside of theEuropean Economic Area, as herein specified and pursuant to applicable laws and regulations, does not require the Participant’sconsent thereto as the processing is necessary to performance of contractual obligations related to implementation, administrationand management of the Plan. The Participant understands that, pursuant to Section 7 of the Legislative Decree no. 196/2003, theParticipant has the right to, including but not limited to,Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.access, delete, update, ask for rectification of the Participant’s Personal Data and estop, for legitimate reason, the Personal Dataprocessing.Furthermore, the Participant is aware that the Participant’s Personal Data will not be used for direct marketing purposes. In addition,the Personal Data provided can be reviewed and questions or complaints can be addressed by contacting the Participant’s humanresources department.Plan Document Acknowledgement. By accepting the Performance Share Units, the Participant acknowledges that (a) the Participanthas received the Plan and the Agreement; (b) the Participant has reviewed those documents in their entirety and fully understands thecontents thereof; and (c) the Participant accepts all provisions of the Plan and the Agreement. The Participant further acknowledges thatthe Participant has read and specifically and expressly approves, without limitation, the following sections of the Performance ShareUnit Agreement: “Treatment on Termination”; “Non-Transferability”; “Repayment of Proceeds; Clawback Policy”; “RestrictiveCovenants”; “Tax Withholding”; “No Right to Continued Employment”; “Nature of Grant”; “No Advice Regarding Grant”; “DataPrivacy” as replaced by the above provision; “Waiver and Amendments”; “Governing Law; Venue”; “Electronic Delivery andAcceptance”; “Imposition of Other Requirements”; and “Appendix.”NotificationsForeign Asset/Account Reporting Information. If, at any time during the fiscal year, the Participant holds foreign financial assets(including cash and/or shares of Common Stock) which may generate income taxable in Italy, the Participant is required to report theseassets on his or her annual tax return (UNICO Form, RW Schedule) for the year during which the assets are held, or on a special form ifno tax return is due. These reporting obligations will also apply to the Participant if the Participant is the beneficial owner of foreignfinancial assets under Italian money laundering provisions.Foreign Asset Tax Information. The value of the financial assets held outside of Italy by Italian residents is subject to a foreign assettax. Beginning in 2014, such tax is levied at an annual rate of 2 per thousand (0.2%). The taxable amount will be the fair market valueof the financial assets (e.g., shares of Common Stock) assessed at the end of the calendar year. The Participant is responsible forcomplying with any reporting and/or payment obligations that may arise in connection with this tax.JAPANNotificationsForeign Asset/Account Reporting Information. If the Participant holds assets (e.g., shares of Common Stock acquired under the Plan,proceeds from the sale of shares of Common Stock and, possibly, Performance Share Units) outside of Japan with a value exceeding¥50 million as of December 31 of any calendar year, the Participant is required to report such to the Japanese tax authorities by March15th of the following year. The Participant should consult with his or her personal tax advisor regarding the details of this reportingobligation.SINGAPORENotificationsSecurities Law Information. The Performance Share Units are granted pursuant to the “Qualifying Person” exemption under section273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”). The Plan has not been lodged or registered as a prospectuswith the Monetary Authority of Singapore. The Participant should note that the Performance Share Units are subject to section 257 ofthe SFA and the Participant will not be able to make (i) any subsequent sale of the shares of Common Stock in Singapore or (ii) anyoffer of such subsequent sale of the shares of Common Stock in Singapore, unless such sale or offer is made pursuant to the exemptionsunder Part XIII Division 1Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Subdivision (4) (other than section 280) of the SFA.Director Notification Requirement. Directors, associate directors and shadow directors2 of a Singaporean Affiliate or Subsidiary aresubject to certain notification requirements under the Singapore Companies Act and must notify the Singaporean Affiliate orSubsidiary in writing of an interest (e.g., Performance Share Units, shares of Common Stock, etc.) in the Company or any relatedcompanies within two business days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest (e.g., when theshares of Common Stock are sold), or (iii) becoming a director (if such an interest exists at the time).SWITZERLANDNotificationsSecurities Law Information. The offer of the Performance Share Units is considered a private offering in Switzerland and is thereforenot subject to securities registration in Switzerland.UNITED KINGDOMTerms and ConditionsForm of Settlement. Notwithstanding any discretion contained in the Plan or anything to the contrary in the Performance Share UnitAgreement, the Performance Share Units are payable in shares of Common Stock only.Tax Withholding. The following provisions supplement Section 11 of the Performance Share Unit Agreement:If payment or withholding of the income tax due in connection with the Performance Share Units is not made within ninety (90) days ofthe end of the tax year in which the taxable event occurs or such other period specified in Section 222(1)(c) of the U.K. Income Tax(Earnings and Pensions) Act 2003 (the “Due Date”), the amount of any uncollected income tax shall constitute a loan owed by theParticipant to the Service Recipient, effective on the Due Date. The Participant agrees that the loan will bear interest at the official rate ofHer Majesty’s Revenue and Customs (“HMRC”) and will be immediately due and repayable by the Participant, and the Companyand/or the Service Recipient may recover it at any time thereafter by any of the means referred to in Section 11 of the PerformanceShare Unit Agreement.Notwithstanding the foregoing, if the Participant is an executive officer or director of the Company (within the meaning of Section13(k) of the Exchange Act), the Participant shall not be eligible for a loan to cover the income tax due as described above. Instead, theamount of any uncollected income tax may constitute a benefit to the Participant on which additional income tax and NationalInsurance contributions may be payable. The Participant acknowledges that the Participant will be responsible for reporting and payingany income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying the Company or theService Recipient (as applicable) for the value of any employee National Insurance contributions due on this additional benefit. TheParticipant further acknowledges that the Company or the Service Recipient may recover such amounts from the Participant by any ofthe means referred to in Section 11 of the Performance Share Unit Agreement._____________________________2 A shadow director is an individual who is not on the board of directors of a company but who has sufficient control so that the board of directors acts inaccordance with the “directions or instructions” of the individual.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Joint Election. As a condition of the Participant’s participation in the Plan, the Participant agrees to accept any liability for secondaryClass 1 National Insurance contributions which may be payable by the Company and/or the Service Recipient in connection with thePerformance Share Units and any event giving rise to Tax-Related Items (the “Service Recipient’s Liability”). Without limitation to theforegoing, the Participant agrees to execute the following joint election with the Company (the “Joint Election”), the form of such JointElection being formally approved by HMRC, and to execute any other consents or elections required to accomplish the transfer of theService Recipient’s Liability to the Participant. The Participant further agrees to execute such other joint elections as may be requiredbetween the Participant and any successor to the Company and/or the Service Recipient. The Participant further agrees that theCompany and/or the Service Recipient may collect the Service Recipient’s Liability from him or her by any of the means set forth inSection 11 of the Performance Share Unit Agreement.If the Participant does not enter into the Joint Election prior to the vesting of the Performance Share Units or any other event giving riseto Tax-Related Items, he or she will not be entitled to vest in the Performance Share Units or receive any benefit in connection with thePerformance Share Units unless and until he or she enters into the Joint Election and no shares of Common Stock or other benefitpursuant to the Performance Share Units will be issued to the Participant under the Plan, without any liability to the Company and/or theService Recipient.URUGUAYThere are no country-specific provisions.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ATTACHMENT TO APPENDIX FOR THE UNITED KINGDOMImportant Note on the Joint Election to TransferService Recipient National Insurance ContributionsAs a condition of participation in the Catalent, Inc. 2014 Omnibus Incentive Plan (the “Plan”) and the Performance Share Unitsthat have been granted to you (the “Participant”) by Catalent, Inc. (the “Company”), the Participant is required to enter into ajoint election to transfer to the Participant any liability for employer National Insurance contributions (the “Service Recipient’sLiability”) that may arise in connection with the Performance Share Units or in connection with any future Performance ShareUnits that may be granted by the Company to the Participant under the Plan (the “Joint Election”).If the Participant does not agree to enter into the Joint Election, the Performance Share Units will be worthless as the Participantwill not be able to vest in the Performance Share Units or receive any benefit in connection with the Performance Share Units.By entering into the Joint Election:1.the Participant agrees that any Service Recipient’s Liability that may arise in connection with or pursuant to the vesting ofthe Performance Share Units (or any performance share units granted to the Participant under the Plan) or the acquisitionof shares of the Company’s common stock or other taxable events in connection with the Performance Share Units (or anyother performance share units granted under the Plan) will be transferred to the Participant;2.the Participant authorises the Company and/or the Participant’s employer to recover an amount sufficient to cover theService Recipient’s Liability by any method set forth in the Performance Share Unit Agreement and/or the Joint Election;and3.the Participant acknowledges that even if he or she has accepted the Joint Election via the Company's online procedure,the Company or the Participant’s employer may still require the Participant to sign a paper copy of the Joint Election (ora substantially similar form) if the Company determines such is necessary to give effect to the Joint Election.By accepting the Performance Share Units through the Company’s online acceptance procedure (or by signing the PerformanceShare Unit Agreement), the Participant is agreeing to be bound by the terms of the Joint Election.Please read the terms of the Joint Election carefully beforeaccepting the Performance Share Unit Agreementand the Joint Election.Please print and keep a copy of the Joint Electionfor your records.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.CATALENT, INC.2014 OMNIBUS Incentive Plan(UK Employees)Election To Transfer the Service Recipient’s National Insurance Liability to the Employee1. PartiesThis Election is between:(A)You, the individual who has gained access to this Election (the “Employee”), who is employed by one of the U.K.companies listed in the Schedule below (the “Service Recipient”) and who is eligible to receive Performance Share Units(“Performance Share Units”) granted by Catalent, Inc. pursuant to the terms and conditions of the 2014 OmnibusIncentive Plan (the “Plan”), and(B)Catalent, Inc. of 14 Schoolhouse Road, Somerset, NJ 08873, United States of America (the “Company”), which maygrant Performance Share Units under the Plan and is entering into this Form of Election on behalf of the ServiceRecipient .2. Purpose of Election2.1This Election relates to Performance Share Units granted by the Company under the Plan on or after September __, 2014.2.2 In this Election the following words and phrases have the following meanings:“Taxable Event” means, in relation to the Performance Share Units:(i)the acquisition of securities pursuant to the Performance Share Units (within section 477(3)(a) of ITEPA); and/or(ii)the assignment or release of the Performance Share Units in return for consideration (within section 477(3)(b) ofITEPA); and/or(iii)the receipt of a benefit in connection with the Performance Share Units, other than a benefit within (i) or (ii) above(within section 477(3)(c) of ITEPA); and/or(iv)post-acquisition charges relating to the Performance Share Units and/or shares acquired pursuant to the PerformanceShare Units (within section 427 of ITEPA); and/or(v)post-acquisition charges relating to the Performance Share Units and/or shares acquired pursuant to the PerformanceShare Units (within section 439 of ITEPA).“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.“SSCBA” means the Social Security Contributions and Benefits Act 1992.2.3This Election relates to the Service Recipient’s secondary Class 1 National Insurance Contributions (the “Service Recipient’sLiability”) which may arise on the occurrence of a Taxable Event in respect of the Performance Share Units pursuant to section4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the SSCBA.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.2.4This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being givenretrospective effect by virtue of section 4B(2) of either the SSCBA or the Social Security Contributions and Benefits (NorthernIreland) Act 1992.2.5This Election does not apply to the extent that it relates to relevant employment income which is employment income of theearner by virtue of Chapter 3A of Part VII of ITEPA (employment income: securities with artificially depressed market value).3. ElectionThe Employee and the Company jointly elect that the entire liability of the Service Recipient to pay the Service Recipient’sLiability on the Taxable Event is hereby transferred to the Employee. The Employee understands that by signing thePerformance Share Unit Agreement to accept the grant of the Performance Share Units he or she will become personally liablefor the Service Recipient’s Liability covered by this Election. This Election is made in accordance with paragraph 3B(1) ofSchedule 1 to SSCBA.4. Payment of the Service Recipient’s Liability4.1The Employee hereby authorises the Company and/or the Service Recipient to collect the Service Recipient’s Liability from theEmployee at any time after the Taxable Event:(i)by deduction from salary or any other payment payable to the Employee at any time on or after the date of the TaxableEvent; and/or(ii)directly from the Employee by payment in cash or cleared funds; and/or(iii)by arranging, on behalf of the Employee, for the sale of some of the securities which the Employee is entitled to receivein respect of the Performance Share Units; and/or(iv)by any other means specified in the Performance Share Unit Agreement.4.2The Company hereby reserves for itself and the Service Recipient the right to withhold the transfer of any securities in respect ofthe Performance Share Units to the Employee until full payment of the Service Recipient’s Liability is received.4.3The Company agrees to procure the remittance by the Service Recipient of the Service Recipient’s Liability to HM Revenue andCustoms on behalf of the Employee within 14 days after the end of the UK tax month during which the Taxable Event occurs(or within 17 days after the end of the UK tax month during which the Taxable Event occurs, if payments are madeelectronically).5. Duration of Election5.1The Employee and the Company agree to be bound by the terms of this Election regardless of whether the Employee istransferred abroad or is not employed by the Service Recipient on the date on which the Service Recipient’s Liability becomesdue.5.2Any reference in this Election to the Company and/or the Service Recipient shall include that entity's successors in title andassigns as permitted in accordance with the terms of the relevant Plan and relevant Agreement. This Election will continue ineffect in respect of any awards which replace the Performance Share Units in circumstances where section 483 of ITEPAapplies.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.This Election will continue in effect until the earliest of the following:(i)the Employee and the Company agree in writing that it should cease to have effect;(ii)the date the Company serves written notice on the Employee terminating its effect;(iii)the date HM Revenue and Customs withdraws approval of this Election; or(iv)after due payment of the Service Recipient’s Liability in respect of the entirety of the Performance Share Units to whichthis Election relates or could relate, such that the Election ceases to have effect in accordance with its terms.Acceptance by the EmployeeThe Employee acknowledges that by signing the Performance Share Unit Agreement to accept the grant of the Performance ShareUnits, the Employee agrees to be bound by the terms of this Election.Acceptance by the CompanyThe Company acknowledges that, by arranging for the scanned signature of an authorised representative to appear on this Election, theCompany agrees to be bound by the terms of this Election.Signed for and on behalf of the Company __________________By:Title:Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.SCHEDULE OF EMPLOYER COMPANIESThe Employers to which this Form of Election relates are: Catalent UK Packaging LimitedLancaster Way, Wingates Industrial Park,Registered Number: 00714877Corporation Tax District: [insert]Westhoughton, Bolton,Lancashire UK, BL5 3XXPAYE Reference: [insert]Catalent UK Swindon Zydis LimitedFrankland Road,Registered Number: SCO70691Corporation Tax District: [insert]Blagrove, Swindon,Wiltshire, UK SN5 8YGPAYE Reference: [insert]Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 10.38 Catalent Pharma Solutions14Schoolhouse RoadSomerset NJ 08873T (732) 537-6500www.catalent.comPrivate & ConfidentialNovember 18, 2010Dear Will:I am pleased to confirm the terms of your assignment and transfer from Swindon to the Somerset, NJ location in your role as Senior Vice President, GlobalSales & Marketing.Salary and MIPEffective November 1, 2010 your annual base salary of 245,000 British Pounds will be converted to 375,000 US dollars based on the average daily exchangerate during the prior six-month calendar period (i.e., January-June) and administered from Catalent's U.S. payroll on a bi-weekly basis. You will continue tobe eligible to participate in our Management Incentive Plan and your target incentive will remain at 75% of your base salary.Health and Welfare PlansYour assignment is effective October 11, 2010 and your anticipated duration is twenty-four (24) months. Your eligibility for the US Benefits plans (Medical,Dental and Vision, Life, Accident and Disability) is effective October 11, 2010. Details of these plans and your entitlements under the plans will be providedunder separate cover.Pension PlanA "shadow payroll" will be established in Swindon in order to maintain your continued participation in the UK Defined Contribution Pension Plan (the"Fidelity Plan"). This payroll arrangement will also allow you to continue your participation with the UK National Insurance Contribution program (NIC).With assistance from Deloitte, Catalent will ensure that tax relief is provided via the year-end tax filing process for any employee pension contributions madeduring the assignment period.Social Security CardPrimacy Relocation Services Destination Team will assist you in applying for a U.S. Social Security card which is needed for income tax purposes and forproper enrolment in Catalent U.S. Benefits Plans.Shipment of Household GoodsCatalent will pay for the movement and storage of your household goods consistent with the Catalent Long-Tern International Assignment Policy for yourUS assignment and return to the UK.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Housing AccommodationCatalent will pay your rental lease expanses for a period up to twenty-four (24) months from the effective date of your assignment exclusive of utilities andany other ancillary expenses. Catalent will pay the taxes due as a result of providing this benefit during the rental period.Car and Fuel AllowanceFor the two-year period of your assignment in the United States you will continue to be eligible for your car and fuel allowance which will be converted toU.S. dollars at the same exchange rate in effect for your base salary conversion and paid through the U.S. payroll (13,000 GBP x 1.5306 = 19,900 USD peryear). You are responsible for any tax due on the taxable portion of this benefit.Tax AssistanceA tax orientation meeting with Deliotte will be arranged in the very near future to discuss tax assistance and answer any questions you may have. You will beresponsible for paying all taxes in any jurisdiction arising from sources of personal income, as well as your Catalent compensation with the exception ofrental lease expenses as described above. The services of Deloitte will be retained to assist with preparing individual income tax returns related to yourtransfer period. Please note that you are responsible for filing your tax returns on timely basis with the assistance of Deloitte.Employment StatusNothing in the agreement changes your employment status or guarantees continued employment while you are on this assignment.Please contact me if you have any additional questions.Yours Sincerely,Harry WeiningerSVP, Human ResourcesSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 10.39 Catalent Pharma Solutions14Schoolhouse RoadSomerset NJ 08873T (732) 537-6500www.catalent.comMay 4, 2009Mr. Steve LeonardDear Steve:Congratulations on your offer of employment Catalent is the leading provider of pharmaceutical development services, drug-delivery technologies,manufacturing and packaging services to the global pharmaceutical and biotechnology industry. We take great pride in hiring executives who have talent,drive and commitment, and we are extremely delighted to have you join our team.Attached is important information about our organization, your individual position, benefits and rewards. I encourage you to review all materials thoroughlyand contact me with questions.I am pleased to confirm in writing our offer of employment to you. The major provisions of your offer are:1.Position: Your position is Senior Vice President, Global Operations reporting directly to myself. As the SVP of Global Operations you will also be amember of Catalent's Executive Leadership Team.2.Pay: Your base bi-weekly rate of pay will be $13,461.53 (annualized to $350,000). The official Catalent workweek starts on Monday and runsthrough Sunday. Catalent employees are paid every other Friday, one week in arrears according to the payroll schedule included in your packet.3.Sign-On Bonus: You will receive a sign on bonus of $200,000, to be paid within 30 days from the start of your employment. Please note allapplicable taxes and withholdings will apply to this bonus payment. If you voluntarily terminate employment with Catalent within twelve (12)months of your start date, you will be obligated to repay Catalent the full amount of the sign on bonus.4.Performance: Your performance and merit reviews will follow the standard annual review calendar for Catalent.5.Rewards: Catalent is pleased to offer a comprehensive, competitive compensation program that rewards talented employees for their performance.a.You will be eligible for participation in our short-term incentive plan, which we call our Management Incentive Plan (MIP). Your targetincentive for fiscal year 2010 (July 1, 2009 - June 30, 2010) will be 75% of your annual base salary, prorated to reflect the number of days youare employed during the fiscal year. For fiscal year 2010, 50% of your target incentive will be guaranteed. Annual bonus payments aredetermined based upon the achievement of specific financial and management agenda objectives. This will be explained to you in more detailwhen you come on board, but I am happy to answer any questions you may have in the interim.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.b.You will be eligible for our health, life, disability and 401(k) retirement savings plans on your first day of employment. You will receive moreinformation on these benefits during your new hire orientation.c.You will be eligible to participate in Catalent's Deferred Compensation Plan that enables you to save over the IRS limits in the qualified 401(k)plan. Complete details on the features of this plan and how to enroll will be mailed to your home following hire date.d.We will recommend to the Board of Directors of PTS Holdings Corp. (parent entity of Catalent) that you be awarded stock options to acquireshares of common stock of PTS Holdings Corp. with an aggregate value of $3,000,000 dollars with an exercise price per share equal to the FairMarket Value on the date of grant (as such term is defined in the Equity Documents). The grant of your award will be subject to your investmentof $300,000 in cash to purchase shares of common stock of PTS Holdings Corp. at a per share purchase price equal to the Fair Market Value;$100,000 of which will be invested within 30 days of the grant date of your options and the remaining portion to be invested following thepayment of the MIP bonus (as applicable) associated with the next three fiscal years and per the following amounts: FY2010 ($75,000), FY2011($75,000) and FY2012 ($50,000). (The payment of MIP (as applicable) has historically occurred the beginning of September.)The grant of your award is also subject to the approval of the Board of Directors of PTS Holdings Corp. and the date of the grant will be the datethe Board of Directors approves your award. The timing of the approval of your recommended grant is dependent on your acceptance and startdate. The complete terms and conditions of this equity award, including vesting provisions and restrictive covenants such as a non-compete,will be communicated to you as part of the Equity Documents that you will receive, pending approval of the award. Equity Documents as usedherein is defined as the PTS Holdings Corp. Management Equity Subscription Agreement, PTS Holdings Corp. Securityholders Agreement,2007 PTS Holdings Corp. Stock Incentive Plan, and the Non-Qualified Stock Option Agreement to the 2007 PTS Holdings Corp. StockIncentive Plan.6.Severance: A separate severance agreement letter is being prepared that will provide to you severance equal to your annual base salary and MlPtarget bonus, subject to the terms of the agreement.7.Paid Time Off: Upon joining Catalent you will receive seven (7) paid company holidays (New Years Day, Memorial Day, Independence Day, LaborDay, Thanksgiving Day and the day following, and Christmas Day).a.During the 2009 calendar year, you will be eligible to receive a prorated Paid Time Off (PTO) benefit based on your start date.b.Beginning January 2010, you will be eligible to receive up to 26 days of PTO. PTO includes vacation, sick and personal days, all of which needto be used during the 2010 calendar year.8.Screening: Consistent with our policies for all Catalent personnel and the special consideration of our industry, this offer is contingent upon thetaking of a company-paid drug screening test, the results of which must be negative, as well as an acceptable background check.a. The drug screen must be completed within five days of receipt of this offer.b.The background check must be complete prior to your start of employment. Please sign and fax back at least one week prior to your start datethe following documents authorizing us to move forward with the initiation of the required background check:1.Signed copy of this offer2.Background Check- Notice & AcknowledgmentSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.9.Terms: Notwithstanding anything to the contrary herein, employment with Catalent is not for any definite period of time and is terminable, with orwithout notice, at the will of either you or the company at any time for any reason. There shall be no contract, express or implied, of employment.10.Confidentiality: Catalent does not hire people for the purpose of acquiring their current or former employer's trade secrets, intellectual property, orother confidential or proprietary information, and Catalent does not want access to any materials containing such information. Consequently, anydocuments, computer discs, etc. containing any such information should be returned to your current or former employer, and in no case may suchinformation be brought to, or used, at Catalent.11.Ethics: As a company founded on a core set of values, you will be provided with Catalent's Standards of Business Conduct and be prepared to sign aletter of compliance.12.Orientation: Orientation for new hires is conducted monthly at the Somerset facility. We will work out a mutually agreeable day and time for yourorientation to receive information about the benefits program, as well as technology training. If possible, on your first day, please bring. thenecessary identification to fill out your 1-9 form. Typical identification items include your driver's license and social security card.13.Start Date: Your first day of employment is to be mutually agreed upon.As mentioned above, please fax back a signed copy of this offer, a copy of your resume and the completed Background Check - Notice & Acknowledgmentto commence your background investigation to Harry Weininger at 732-537-5932.If you have any questions, please feel free to call me at 732-537-6401 or Harry Weininger, SVP-Human Resources at 732-537-6432.Sincerely,John ChiminskiPresident and Chief Executive OfficerCatalent Pharma Solutions, Inc.Enclosurescc: H. WeiningerI accept the above offer of employment: Steve Leonard DateSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 10.40 Catalent Pharma SolutionsFrankland Road,Blagrove, SwindonWiltshire, SN5 8YS,United Kingdomtel +44 (0)1793 864000fax +44 (0)1793 613394www.catalent.comTERMS & CONDITIONS OF EMPLOYMENT STATEMENTManagement personnel As at and effective from:18th April 2011Name:Sharon JohnsonJob Title:SVP, Global QualityThe Principal Place of Employment:Swindon, WiltsContinuous service from:27th July 20091.Job Description:Your job title is outlined above or such other title as the Company (Catalent Pharma Solutions) may give you in its discretion from time to time. Theprincipal duties of your job are set out in your job description. In addition to these duties you will carry out other duties that the Company may from time totime direct.2.Hours:Your hours of work are as detailed within the attached offer letter. You may be asked to work outside these hours when necessary. The Company shall beentitled to change the hours of work and, if appropriate shift pattern, when necessary to meet the operational demands of the business.3.Salary:Your basic salary, as detailed in the attached offer letter, will be paid to you monthly on the last day of each month by credit transfer and is subject to reviewin September each year. The appointment does not attract overtime payment.4.Authorised Deductions from SalaryYou hereby authorise the Company to deduct from your remuneration any sums due from you to the Company including, without limitation, anyoverpayments, loans or advances made to you by the Company, any overpayments in respect of annual leave taken in excess of your entitlement, the cost ofrepairing any damage or loss to the Company's property caused by you and any losses suffered by the Company as a result of negligence or breach of duty byyou.5.Annual Leave:The annual leave year runs from January to December. Upon commencement of employment you will receive the appropriate pro-rata amount of holidays.Upon termination you will receive the appropriate pro-rata leave entitlement and in the circumstances where annual leave taken exceeds entitlement, thenecessary deduction will be made from your final salary.Further information about your annual entitlement is included in the Company's Human Resources Policy and Procedures - Annual Leave.6.Sickness:Company Sick Pay will be paid during sickness absence in accordance to the applicable schedule, available from HR. In cases where the Company considersit has good reason to doubt such absence is genuine, payment may be reduced or withheld. Payments are conditional on notification requirements.The Company shall be entitled to review your sickness record at any stage of absence and may dismiss you on the grounds of such absence notwithstandingthat your entitlement to sick pay has not been exhausted.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.If the nature of your illness or injury is such that the Company has reasonable grounds to believe your absence may be extensive, you will be referred to theOccupational Health Department, Company Doctor and/or, with your written consent, further information may be requested from your GP or other Specialists.The Company has the right to dismiss even if the sick pay allowance has not been exhausted.Abuse of the Company's sick pay scheme will result in disciplinary action being taken.In cases where payment under the scheme is withheld, employees may appeal against the decision through the Grievance Procedure (explained in theCompany's Human Resources Policies & Procedures - Grievance Procedure).For details of notification, certification, statutory sick pay and sickness on holiday you should refer to the Company's Human Resources Policies &Procedures - Absence.7.Medical Examination:You may be required to submit yourself to a medical examination by a doctor or Occupational Health Practitioner appointed by the Company at any timeduring your employment. You hereby agree that you will authorise both your own doctor and the doctor / Occupational Health Practitioner appointed by theCompany to disclose in confidence to the Company details of any medical condition from which you are suffering, the results of any examination and todiscuss with the Company any matters relating to your health and which might impair the proper discharge of your duties.You agree to comply with the Company's Drug & Alcohol Policy as detailed in the Company's Human Resources Policies & Procedures8.Pension and Life Assurance:Provided you are age 18 years or over, you may be entitled to become a member of the appropriate Pension Scheme operated by the Company from time totime. The Company reserves the right to modify or withdraw any Pension Scheme at any time. Details of the appropriate Scheme applicable will be discussedwith you upon joining the Company.You will have Life Assurance cover of four times your basic salary from the date of commencement of employment.9.Notice:By the Employee: You will be required to give 3 months' notice to the Company. This may be reduced at the Company's discretion, such reduction not to beunreasonably withheld.By the Company: The Company will give you 3 months' notice of termination.The Company reserves the right to make a payment in lieu of notice.The Company may dismiss you without notice in the event of gross misconduct by you.10.Garden Leave:The Company shall be entitled to require you to remain at home during your notice period save to the extent that your attendance at work is specificallyrequired and requested by the Company. During this time you may not undertake any form of paid or unpaid employment without the prior written consent ofthe Company. During this period the Company will require you to co-operate fully with the Company as required.11.Union Membership and Collective Agreement:There is no collective agreement applicable to these terms and conditions.12.Health & Safety:You are required to comply with your obligations under the Health & Safety at Work Act 1974 and any other relevant health and safety legislation. Thisrequirement includes the reporting to your manager of any unsafe working conditions, practices, equipment or machinery and all accidents/incidents at work,even if there are no injuries and property is not damaged.You agree to comply with all Company and site Health and Safety Policies and Procedures.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.13.Positive Work Environment:The Company does not tolerate inappropriate verbal, non-verbal or physical conduct by any employee because of another's gender, race, religion or belief,age, pregnancy and maternity leave, gender reassignment, marriage or civil partnership, sexual orientation or disability or any other basis prohibited bylegislation. The Company likewise does not tolerate conduct that harasses, disrupts or interferes with another's work performance or that creates anintimidating, offensive, abusive or hostile work environment. Each employee is responsible for maintaining a harassment-free and discrimination freeenvironment. This requirement includes the reporting to your manager or the Human Resources Department of any such activity that you become aware of.Please refer to the full procedures contained within the Company's Human Resources Policies and Procedures - Equal Opportunities and Harrassment.14.Search:As a condition of your employment, you will, if required by a Security Officer appointed by the Company, or somebody appointed to act on behalf of theCompany, submit yourself and your belongings (including locker and car) to a search to ascertain whether you are in possession of any of the Company'sproperty. If requested to submit to a search, you may ask for a colleague who is then reasonably available to be present throughout the search. The Companyis anxious that a search should be carried out with the minimum of embarrassment to all concerned and therefore, the Company expects you to co-operatefully. The search will be conducted by a Security Officer and one other person nominated by the Company both being of the same sex as yourself.If you decline to cooperate with the search without any good reason, this will be deemed a serious breach of contract and the Company reserves the right totake such action against you as is appropriate and this may include your dismissal.15.Outside Activities:In order for the Company to establish whether any outside employment and positions you may undertake will interfere with your duties or be contrary to theinterests of the Company, you must disclose all such activities to your Manager. The Company reserves the right to require you to refrain from activitieswhich, in the reasonable opinion of the Company, conflicts with your duties or adversely effect the interests of the Company.16.Confidentiality:You will not except as authorised by the Company or compelled by a Court of competent jurisdiction, reveal to any persons or company whatsoever any ofthe trade secrets or confidential operations, processes or details of any information concerning the organisation, transactions, business, finance, affairs,formulas, methods of manufacture, details of customer prices or contracts, research programmes, Company machines, staffing of the Company or anyCompany within the Catalent Pharma Solutions Group or any of its customers or potential customers which may come to your knowledge during youremployment and shall keep with complete secrecy all such information which shall be deemed confidential and will not use or attempt to use any suchinformation entrusted to you except in the course of your employment and will not use or attempt to use any such information in any manner which mayinjure or cause loss either directly or indirectly to the Company, any Company within the Catalent Pharma Solutions Group or their respective customers orpotential customers of their respective business. If you arecompelled by a Court of competent jurisdiction, you shall immediately notify the Company prior to such disclosure being made and assist the Company inany way possible in limiting as far as possible the ambit of such disclosure.You will deliver up to the Company on request from time to time and on termination of your employment all notes and records (including copies) made,acquired or received by you relating to your work for the Company and all other material containing confidential information of the Company or itscustomers or potential customers.This restriction shall continue to apply after termination of this agreement without limit in point of time but shall cease to apply to information or knowledgewhich may come into the public domain.The Company from time to time enters into development agreements and the like with other companies and such agreements do from time to time imposerestrictions upon the Company's staff to protect the information disclosed to enable the project to be undertaken. The Company always endeavours to ensurethat such agreements are reasonable both to the Company and its employees and if you are involved in a particular project, you will agree to be bound by theterms of such agreement.17.Intellectual Property Rights:(a)For the purposes of this clause "Intellectual Property" includes patents, trade marks (whether registered or unregistered), registered or unregistereddesigns, utility models, copyrights, applications for any of the foregoing and the right to apply for them in any part of the world, discoveries, creations,inventions or improvements upon or additions to an invention, confidential information, know-how and any research effort relating to any of theabove-mentioned, business names whetherSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.registrable or not, moral rights and any similar rights in any country.(b)The parties foresee that you may make, discover or create Intellectual Property in the course of your duties under this agreement and agree that in thisrespect you have a special obligation to further the interest of the Company.(c)Subject to the provisions of the Patents Act 1977 and the Copyright Designs and Patents Act 1988, if at any time during your employment under thisagreement you make or discover or participate in the making or discovery of any Intellectual Property relating to or capable of being used in thebusiness for the time being carried on by the Company or any of its associated companies, full details of the Intellectual Property shall immediately becommunicated by you to the Company and such intellectual property shall be the absolute property of the Company. At the request and expense of theCompany, you shall give and supply all such information, data, drawings and assistance as may be requisite, to enable the Company to exploit theIntellectual Property to the best advantage of the Company and you shall execute all documents and do all things which may be necessary or desirablefor obtaining patent or other protection for the Intellectual Property in such parts of the world as may be specified by the Company and for vesting thesame in the Company or as it may direct.(d)You irrevocably appoint the Company to be your attorney in your name and on your behalf, to sign, execute or do any such instrument or thing andgenerally to use your name for the purpose of giving to the Company (or its nominee) the full benefit of the provisions of this clause and for theavoidance of doubt, you herebyagree that a certificate in writing signed by a Director of the Company, which states that any instrument or act falling within the Company's authorityunder this clause shall be conclusive evidence that such is the case.(e)If the Intellectual Property made, discovered or created by you is not the property of the Company, the Company shall, subject to the provisions of thePatents Act 1977 and the Copyright Designs and Patent Act 1988 have the right to acquire for itself or its nominee your rights in the IntellectualProperty within three months after disclosure pursuant to sub-clause (c) above on fair and reasonable terms to be agreed by the parties. You agree not todisclose such Intellectual Property to any person during the three month period. If fair and reasonable terms cannot be agreed within two months afterdisclosure pursuant to sub-clause (c), they shall be settled in default of agreement by a patent agent agreed by the parties or in default of agreement,nominated by the President for the time being of the Chartered Institute of Patent Agents. Such patent agent shall act as an expert and not as arbitratorand accordingly the provisions of any statutes relating to arbitration shall not apply to the patent agent's decision. The costs of the patent agent shall beborne by the Company.(f)The rights and obligations under this clause shall continue in force after termination of this agreement in respect of Intellectual Property made duringyour employment under this agreement and shall be binding upon your personal representatives.18.Restraint:For a period of 6 months from the termination of your employment you will not directly orindirectly:(a)be an agent of, a consultant for or an employee in any business which competes with any business carried on by the Company at the date oftermination of your employment save that you shall be free to be an agent of, a consultant for or an employee of any business so far as your dutiesand work shall relate exclusively to work of a kind or nature with which you were not concerned to a material extent during the last year of youremployment with the Company.(b)solicit, canvass or approach any person, firm or company who, to your knowledge, was provided with goods or services by the Company at anytime during the last year of your employment or was negotiating with the Company for the provision of goods or services by the Company at thatdate of termination, or offer to that person, firm or company, goods or services similar to those provided to him by the Company during the lastyear of your employment with the Company or which were the subject of negotiations at the date of termination; or(c)accept orders from any person, firm or company for goods or services similar to or competitive with the goods or services previously provided tohim by the Company during the last year of your employment or which were the subject of negotiations at that termination.save that the restrictions above shall only apply to the United Kingdom of Great Britain and Northern Ireland.Until the expiration of 12 months from the termination of your employment (for whatever reason) you will not solicit or entice away from the Company orengage or employ any person employed by the Company in any executive, sales, marketing, research or technical support capacity at that date of terminationor within a period of three months immediately before or procure that such person be engaged or employed by any other business which competes with anybusiness carried on by the Company at the date of the termination of your employment.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Each provision set out in the above clauses is independent and severable from the remaining provisions and enforceable accordingly. If any provision ofthese clauses shall be unenforceable for any reason but would be enforceable in part if the wording thereof were deleted, it shall apply with such deletions asmay be necessary to make it enforceable.19.Grievance Procedure:Please refer to the full procedure contained within the Company's Human Resources Policies & Procedures - Grievance Procedure.20.Disciplinary Procedure:Please refer to the full procedure contained within the Company's Human Resources Policies & Procedures - Disciplinary Procedure.21.Data Protection:Catalent respects the privacy of its employees. In accordance with the Data Protection Act 1998 the Company hereby notifies you that it holds personal datarelating to you for the purposes of managing and administrating your employment relationship and for Company's compliance with applicable laws. Inaddition, personal data may be transferred to third parties that provide services to Catalent or to the Company headquarters in the USA for Companyreporting and statistical purposes and for the administration of any US-managed benefits. Your signature to this contract constitutes your consent to the useand the transfer of your personal data by Company for these purposes. You have a right to request a copy of certain personal information collected and storedby Catalent, and to require Catalent to correct any inaccuracies in such information.22.Changes to Employment Terms:The Company reserves the right to make reasonable changes to the terms and conditions of your employment, which will be confirmed to you in writing.23.Miscellaneous:The parties to this agreement submit to the English Courts. It shall be governed by and shall be construed in accordance with the laws of England.Signed on behalf of the Company [ ] Date [ ]Signed by the employee [ ] Date [ ]Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 10.41 Catalent Pharma SolutionsFrankland Road,Blagrove, SwindonWiltshire, SN5 8YS,United Kingdomtel +44 (0)1793 864000fax +44 (0)1793 613394www.catalent.com 6th April 2011PRIVATE & CONFIDENTIALSharon JohnsonSVP Global QualityCatalent Pharma SolutionsDear SharonFurther to recent discussions I write to confirm that with effect from 18th April 2011, you will return to working in the UK, located fromour Swindon facility.This letter subject to your acceptance and in conjunction with the enclosed documentation, will form the basis of your continuedemployment with Catalent Pharma Solutions.Working HoursYour hours of work are 37.5 per week, working Monday to Friday. The Company shall be entitled to change the hours of work whennecessary.PayYour basic salary will be £210,000 per annum. This will be reviewed in September 2011, and annually thereafterBonusYou will be entitled to participate in the Catalent Management Incentive Plan and your bonus potential under this plan will be 75% ofsalary. This is based on the Company financial year from 1 July to 30 June and usually paid in September. The Company reserves theright to vary, modify or withdraw any bonus scheme at any time.LTIPYou will retain eligibility for the PTS Holdings Corp Equity Plan as per your existing terms and conditions.RelocationYou will receive a tax free relocation of £8,000 payable against receipt of relocation expenses incurred e.g., temporary livingaccommodation in accordance with the Relocation Policy and HMRC guidelines.Within this we commit to provide for a 1 bedroom apartment locally. Expense incurred in support of this commitment that go beyondthe tax free allowance will be supported by Catalent, however; you will be responsible for the respective tax liability associated withany non tax free allocation. Funding of a 1 bedroom apartment in the locality will be on an on-going basis and subject to annual review.Please contact David Lloyd to discuss identification of a suitable property.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.In addition, we will cover your international relocation related costs in supporting your return from the US to the UK e.g., movement ofhousehold goods etc.Car & Fuel AllowanceYou will be entitled to a car allowance of £9,200 per annum and a fuel allowance of £4,200 per annum. These are non-pensionableallowances subject to tax and National Insurance paid in equal monthly instalments.Private Medical InsuranceYou will continue to receive non-contributory family membership of the Company's private medical insurance scheme.Annual LeaveIn addition to normal statutory holidays your annual entitlement is 24 days, rising to 26 days after the completion of 5 years service and28 days after completion of 10 years service.PensionYou will be eligible to join the Company's pension plan. Details of the Catalent Pharma Solutions Group Personal Pension Plan isenclosed along with an application form. To join the plan you must complete and return the application form.Terms and Conditions of Employment StatementEnclosed are your Terms and Conditions of Employment, please sign and return one copy to me along with the attached form to signifyacceptance.In the meantime should you have any immediate queries then please do not hesitate to contact me.Yours sincerelyDavid LloydRegional HR Diretor UK & IreI, Sharon Johnson, confirm acceptance of my appointment on the terms and conditions outlined within the enclosed letter dated 6thApril 2011.SignedDateSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 10.42 Catalent Pharma SolutionsFrankland Road,Blagrove, SwindonWiltshire, SN5 8YS,United Kingdomtel +44 (0)1793 864000fax +44 (0)1793 613394www.catalent.comJune 18, 2013Sharon JohnsonDear Sharon,This letter confirms the terms and conditions that apply to your international assignment relocation benefits. If you have any questions or concerns regarding this information, pleasereach out to Irene da Silva in Corporate Benefits at 732-537-4649 or via email at Irene.daSilva@Catalent.com.PRE-ASSIGNMENT ADMINISTRATIONA.Assignment LetterThe assignment letter will formally summarize the terms and conditions of the international assignment as outlined in the policy guidelines.You will receive an assignment letter from your HR Business Partner that will be signed by you, your manager, and the Vice President, Human Resources for your business unitpresident prior to the pre-move visit.B.Passports, Visa, Work and/or Residence PermitsCosts associated with obtaining passports, Visas, Work and Residence Permits will be reimbursed by Catalent for you and your spouse.However, it is your personal responsibility to make all necessary arrangements for obtaining a passport for each family member. It generally takes several weeks for a passportto be issued, so you should begin the process as soon as possible.Each country has its own immigration laws that regulate the requirements for obtaining Visas, Work and Residence Permits. Your Visas are currently in progress with Dornbaum& Peregoy, LLC, our immigration attorneys.PRE-ASSIGNMENT BENEFITSA.Pre-Move VisitDuring your pre-move visit you will meet local management, assess the proposed assignment, become familiar with the host location, and locate housing.Before accepting the assignment you and your spouse will take a trip to the host location. During the visit, Catalent will pay for an outside consultant to provide destinationservices to help you and your spouse find housing and familiarize you with the community in which you will live.The pre-move visit should not exceed six (6) working days, and expenses for round trip economy airfare (if you want to upgrade flight accommodations, you will beresponsible for the difference between the price of the economy accommodations and the desired flight accommodations), transportation, meals, and lodging will bereimbursed.If you are not able to secure permanent housing accommodations during the pre-move visit, then you will have to continue the search for housing upon relocation to the hostlocation.B.Assignment OrientationDuring the assignment orientation your international assignment benefits, including compensation, expatriate allowances, relocation and taxes will be reviewed with you.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Prior to accepting the assignment, you and your spouse should have a one day orientation program which includes:a meeting with home country human resources to discusscompensation, benefits and expatriate allowances, in person, when feasible. Additionally, Catalent partners with Deloitte to manage the tax equalization and filing processes, andCornerstone Relocation Group to administer the relocation policy benefits and manage the day-to-day requirements of your move. The responsible representatives from ourpartners will independently arrange a teleconference orientation briefing to discuss, respectively, the tax equalization policy and tax filing requirements, and review therelocation policy and address any questions regarding the actual move. It is recommended that both you and your spouse participate in these initial calls, when possible.C.Cultural OrientationThe cultural orientation will provide you and your spouse with a better understanding of the different culture in which you will be living.A cultural 2 day orientation program will be provided for you and your spouse.The program will address cultural differences, life-style adjustments, business etiquette, and other living issues that may impact you and your spouse.D.RelocationA Miscellaneous Allowance equal to $10,000 (all taxes on this payment will be paid by you) will be provided and is intended to cover incidental expenses incurred during themove that are not covered by Relocation Policy, such as:•Laundry/dry cleaning, newspapers, movies•Driver’s license/automobile registration•Carpet and drapery purchase/installation•Pet shipment, shots, quarantine and boarding•Cable TV, satellite, phone and utility hook-up/installationIn addition, you are eligible for up to an additional $20,000 for miscellaneous expenses incurred above the $10,000 payment noted above. You will also be responsible for thetaxes on these funds as they are used as well. You must submit receipts to Cornerstone as the expenses are incurred and they will reimburse you accordingly.The relocation counselor will book your move with a mover who is best suited to provide you with quality service based on your location. Once the move is booked arepresentative will be contacting you to arrange for a pre-move survey.The following expenses and services are covered:•Packing and unpacking of ordinary household goods.•Shipping of all goods normally associated with a household.•Reasonable and normal crating costs may be covered for ordinary household goods as recommended by the movers.•Disconnection and reconnection of usual household appliances. (Does not include the installation of a gas line or electrical outlet where one is not already present.)•Pick-up of packing materials in new location, within a reasonable amount of time.This is not an all-inclusive list, you should discuss any questions with your relocation services consultant.E.Destination ServicesYou and your husband will have access to destinations services paid by the Company, for up to two (2) days of assistance. Outside vendors will be available to assist you withissues such as housing, medical care, transportation, shopping, social networking, etc.F.Temporary LivingYou and your spouse will be provided with an initial 30 days of reasonably priced company-paid temporary accommodations (based on “going market rate” of the localtemporary living accommodations), which may be either a hotel or corporate housing, depending on the location and availability. The Relocation Counselor will assist indetermining the best option for the host destination. Should delays occur with the shipment of household goods, the expense of rental furniture will be covered by Catalent forup to 60 days.G.Language LessonsLanguage lessons may be provided for you and your spouse (this benefit is a joint decision between the employee and management). The company may provide a sufficientamount of language training to enable you and your spouse to attain functional proficiency in the host country language.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.It is strongly recommended that language training begin before relocating to the host location in an effort to ease the transition. Language lessons may continue in the hostlocation and must begin within the first 12 months of the relocation. With management approval, you and your spouse are eligible for reimbursement of language trainingexpenses, capped at $3,500 or equivalent local currency for both. Immersion training (combined culture and language) may be considered depending upon need andcircumstances.COMPENSATION AND BENEFITSBased on the temporary nature of an International Assignment, you will remain in your home country compensation and benefits structures.A.Base SalaryBase salary, merit increases, legally required country increases, and promotional increases will continue to be based on the current administration guidelines for ELT members.B.Incentive BonusesBonuses will be administered and paid in keeping with the current administration guidelines of the MIP Plan.C.BenefitsCoverage for you and your spouse will be provided that mirrors your current coverage in the UK. The details of this plan are being finalized and will be provided to you as soon asadministratively possible.D.Vacations and HolidaysVacation is designated by home country policy. Public holidays are designated by host country policy.EXPATRIATE ALLOWANCESA.Cost of Living Allowance (COLA)A COLA will only be provided to an International Assignee who experiences a higher cost for goods and services in the host location. The COLA is intended to help preserve theInternational Assignee’s home country purchasing power.Your estimated monthly COLA allowance is 674.75 GBP to start as soon as you are out of temporary housing.The COLA pay is based on statistical data includes pricing information from the home and host location, and consideration for exchange rate fluctuations, inflationary changes,salary level, and family size. The COLA will be adjusted on a regular basis (twice a year) to reflect changes in these areas and may increase or decrease with eachupdate. The COLA will be effective when the International Assignee has moved into permanent accommodations in the host country.All taxes related to the COLA will be paid by the company.B.Host Country PayIf it is legally possible, you may receive a portion of your pay in host country currency from the host country payroll (host pay).Based on data from an outside consultant, anamount of host pay will be recommended for goods and services spending in the host location. However, you may decide to receive a different amount to meet your personalneeds. Deloitte will be able to provide further detail during your orientation call with them.C.Host Country HousingCatalent reimburses host country housing. The budget range is established by host country management and the guidelines provided by the outside consultant. Housing allowanceincludes rent and utilities (excluding phone).If you decide on housing that is above the limit set by management, then the additional amount will be your responsibility.Your host country housing budget is up to $3,750 per month. The monthly amount for utilities is to be determine and will be provided to you as soon as it is obtained.The company will pay all taxes related to the reimbursement of housing.Due to many financial, legal and tax complications, Catalent strongly discourages International Assignees from purchasing a home in the host location. Should you decide topurchase a home in the host location, all costs associated with the purchase and sale of the home will be your responsibility, including all taxes.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.D.Home Country Housing ContributionShould you decide to sell your primary residence, a housing norm will be assessed based on the expected cost of housing and utilities in the home location. You would thencontribute a portion of your base salary through payroll withholdings. The housing contribution will be assessed in the event you have been relieved of any home country housingobligations through the sale of your permanent residence. This housing contribution will equal the lower of your previous total housing costs or an outside consultant’s amountbased on average housing costs in the home country.E.Home Country ResidenceIf you decide to leave your home vacant during the assignment; no housing contribution will be deducted. With proper management approval, property management fees will bereimbursed. Once approved, you would submit the monthly statement to Cornerstone for reimbursement to you or payment to the management firm.If you rent your home and lose the tenant, the housing contribution will be suspended.Prior to the start of the assignment, you must find an acceptable rental management firm to manage your property. The costs for the firm must be approved by the home countryadministrator before a contract is signed.With the proper approval, the following will be reimbursed:•Real-estate commissions each time the home is rented•Ongoing rental/property management feesOTHER BENEFITSA.Spouse/Domestic Partner Career and Transition AssistanceWhile gainful employment may not be possible as a result of employment and immigration regulations, Catalent recognizes the importance of supporting the assimilation andacclimation process to ease the acculturation process. Your spouse is eligible for career and transition assistance in the new location through a preferred supplier. The assistanceincludes resume development, interviewing/negotiation skills, development of a job search action plan, career focusing, vocational testing, acclimation resources, and more. If yourspouse would like to take advantage of this service, they should contact the relocation services counselor. This benefit is a considered taxable income and will be tax assisted.B.Home LeaveYou and your spouse are eligible for home leave after 12 months in the host location. Additional home leaves are earned each 12 months on assignment, provided that theassignment is intended to last at least 3 months after home leave is completed.Home leave may be advanced after 8 months in the host location in order to return for summer vacation or the December holidays. Catalent will allow you to advance your homeleave prior to 8 months for the December holidays.The following guidelines apply:•The duration of home leave may last up to your full unused annual vacation entitlement. An additional vacation day will be provided for travel at the beginning and the end ofhome leave.•Round-trip economy airfare will be reimbursed for you and your spouse.•Costs of transportation to/from airports, transfer taxes, if applicable, exclusively between the home/host locations, lodging and expenses during transit are reimbursed, includingcharges on excess baggage up to the weight limits allowed for first class passengers.•All expenses incurred at the destination are your responsibility.•All allowances continue during home leave.•The company will pay no more than the cost of returning to the home country, if you choose to visit another country.•Home leave entitlement cannot be transferred between family members and there will be no cash payments in lieu of home leave. Home leave is applicable for you and yourspouse.The timing of your home leave should be agreed by host country management. Approval and reimbursement of home leave expenses should be handled by host country humanresources.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.C.Emergency LeaveEmergency situations include, but are not limited to, the serious illness of your spouse or yourself, or the death/serious illness of a dependent child, parent, brother, sister,grandparent, or grandchild residing in the home location and/or threat of a terrorist attack or civil unrest in the host country. Approval for emergency travel due to medicalemergency must be obtained from the human resources representative in the host location. For any other kind of emergency, assignees and members of their families should followthe guidelines of the home country embassy.The following will be reimbursed:•Round-trip economy airfare.•Costs of lodging and expenses during transit.D.Sale of Home Country AutomobilesAssistance is provided for the disposition of one personal automobile if you have a company car prior to the assignment, and up to two personal automobiles if you do not have acompany car.For cars that are owned, Catalent will reimburse you for loss on the sale, capped at $5,000 per vehicle up to two vehicles (yours and your spouse’s). The reimbursement will be thedifference between the wholesale price and the retail price, and will be reimbursed with proof of sale and documentation verifying the resale value (i.e. Kelley Blue Book).Catalentwill also reimburse lease cancellation fees. The sale information should be submitted to Cornerstone and they will coordinate your reimbursement.E.Car AssistanceIf you were provided a car or car allowance in your home country then a comparable benefit will be provided at the assignment location. Catalent will also provide a car benefit ifthis is a common practice in the host location regardless of home country practice.If your car allowance is not sufficient to cover the cost of a rental until your car arrives or you purchase/lease a vehicle; Catalent will reimburse the difference of the rental car forup to 60 days upon arrival at the host location. Receipts must be submitted to Cornerstone for reimbursement to you.F.Repatriation ProgramInternational assignees that successfully completed their assignment are viewed by Catalent as the most experience and knowledgeable cadre of the company. Thus, an assignee withthe assistance of the business unit head of human resources will need to discuss and understand how the assignment will be structured into his/her career path.Therefore, every attempt will be made by the Company to bring you to your home country and provide you with a new position that meets your level of unique experience andknowledge acquired over the course of the international assignment.Should you leave the organization on an involuntary basis (except for cause) prior to the completion of your assignment Catalent will be responsible for the repatriation of you andyour spouse to your home country.Tax Equalization & Other Services:A.Income Tax AssistanceAs a result of your long term assignment to the United States you will be subject to US tax return filing requirements. The Company will pay the reasonable and customary cost forthe Company’s designated tax advisors for the preparation and filing of the US and UK tax returns for the duration of your assignment.B.Tax EqualizationThe intent of the tax equalization policy is to establish procedures to ensure that income taxes remain a neutral aspect of the assignment. A hypothetical Home Country tax andsocial security contribution will be calculated and deducted from your compensation package in accordance with Catalent Pharma Solutions International Assignments Policy andpolicy guidelines issued by the Company. Catalent Pharma Solutions will bear the cost of actual income taxes due in the Home and/or Host Country on company compensation(including all Assignment -related allowances as appropriate).A tax equalization calculation will be prepared at the end of each fiscal year to determine whether sufficienthypothetical tax has been withheld during the year. Deloitte will reach out to you with details regarding your tax equalization.C.Foreign Tax CreditsAs mentioned above, it is expected that Catalent Pharma Solutions will generally pay all actual Host Country taxes on your employment income. As such, any foreign tax creditsgranted under US tax laws which result from Host Country tax payments are for the sole benefit of the Company. ‘Excess’ foreign tax credits which accrue during the assignmentperiod that cannot be fully utilized during the assignment period may be carried forward to future tax years. In such instances, the Company may ask you to participate in the taxequalization program in years after repatriation to utilize some of the excess tax credits and offset some of the assignment related costs incurred by the Company.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Termination of Employment:a.If you decide to voluntarily terminate your employment relationship with Catalent prior to the completion of your assignment in the US, Catalent will not be responsible for anycost or expenses associated with the repatriation to your home country.b.If the employment relationship is terminated by Catalent, for other than just cause, Catalent will reimburse you for reasonable, actual and supported expenses related to your andyour families’ return to the United Kingdom, provided that the relocation takes place and is completed within six (6) months after the completion of the employment relationship.Repayment Obligations:a.In accordance with the International Assignment Policy, if you voluntarily leave the Company within twelve (12) months of your relocation you will be required to repay thecompany 100% of any and all relocation cost incurred and associated with relocation to the host country. Should you leave the company after one (1) year but less than two (2)years after you are relocated, you will be required to repay 50% of any and all relocation costs incurred associated with relocation with the host country.b.Additionally, you acknowledge a report of direct expenses incurred as a result of this relocation will be reported to the appropriate Federal and State tax agencies by the Companyand reflected on your earnings statements. You fully understand that you must declare such income for the tax year during which the expenses are incurred.c.You further acknowledge that should you fail for any reason, under your control, to begin the assignment on the designated date, be discharged for disciplinary action to includebut not limited to unlawful or criminal conduct, falsification of records, physical violence, destruction of company property, improper discrimination, harassment of otheremployees, including sexual harassment or voluntarily terminate your employment with the Company, it is agreed you will reimburse the Company for any and all expenses,including tax liability paid to you or on your behalf, related to the relocation.d.Finally, you authorize the Company to withhold in the maximum amount permitted by law, payment of any and all monies due to you in the nature of wages, vacation pay,commissions, bonus, reimbursable business expenses or any other compensation due to you, to satisfy this obligation. You agree that if the foregoing withholding is insufficient toliquidate this obligation, then the balance shall become immediately due and payable without notice or demand. You also agree that you will be responsible to pay any legalexpenses associated with the collection of this debt obligation.General Provisions:By agreeing to the terms and conditions of this letter you expressly agree that any differences that may exist between you and Catalent Pharma Solutions, LLC, will be resolvedaccording to the laws of the State of New Jersey.If any local benefits policy is inconsistent with the terms and conditions of this letter, the terms and conditions of this letter will take precedence.Sincerely,William Hopf VP,Total Rewardscc:Personnel FileBy signing below you express your understanding and agreement with the terms and conditions detailed above. Sharon JohnsonDateSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 12.1Statement Regarding Computation of Ratio of Earnings to Fixed Charges Year Ended June 30,(Dollars in millions, except for ratios)2015 2014 2013 2012 2011Earnings/(loss) from continuing operations before incometaxes and noncontrolling interest112.5 67.4 (23.9) 18.6 (5.4) Plus Fixed Charges: Interest expense105.0 163.1 204.6 185.1 166.0Capital interest1.6 2.5 2.3 0.6 0.1Estimated interest within rental expense4.2 3.4 3.3 4.7 5.5Total Fixed Charges110.8 169.0 210.2 190.4 171.6Plus: amortization of capitalized interest0.3 0.6 0.3 1.0 1.5Less: Interest expense capitalized1.6 2.5 2.3 0.6 0.1Earnings222.0 234.5 184.3 209.4 167.6Ratio of earnings to fixed charges (1)2.0 1.4 * 1.1 *Shortfall (25.9) (4.0)*Ratios not meaningful(1)The ratio of earnings to fixed charges is calculated by dividing the sum of earnings from continuing operations before income taxes, equity inearnings (loss) from non-consolidated investments and fixed charges, by fixed charges. Fixed charges consist of interest expenses, capitalizedinterest and imputed interest on our leased obligations. For fiscal years 2011 and 2013, earnings were insufficient to cover fixed charges by $4.0million and $25.9 million, respectively. For fiscal year 2012, 2014, and 2015 the ratio of earnings to fixed charges was 1.1, 1.4,and 2.0, respectively.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibits 21.1 CATALENT, INC. SUBSIDIARIES As of June 30, 2015 NAME (STATE OF ORGANIZATION) WHOLLY OWNED SUBSIDIARIES OF CATALENT, INC.1Catalent Argentina S.A.I.C. (ARGENTINA)2Catalent Australia Holding Pty Ltd (AUSTRALIA)3Catalent Australia Pty Ltd (AUSTRALIA)4Catalent Belgium Holding S.A. (BELGIUM)5Catalent Belgium S.A. (BELGIUM)6Catalent Brasil Ltda (BAZIL)7Catalent China Holdings Limited (CAYMAN ISLANDS)8Catalent Cosmetics AG (SWITZERLAND)9Catalent CTS (Edinburgh) Limited (UNITED KINGDOM)10Catalent CTS (Kansas City), LLC (DELAWARE)11Catalent CTS (Singapore) Pvt Ltd (SINGAPORE)12Catalent CTS Informatics, Inc. (DELAWARE)13Catalent CTS UK Holding Limited (UNITED KINGDOM)14Catalent CTS, LLC (DELAWARE)15Catalent France Beinheim S.A. (FRANCE)16Catalent France Limoges Holding S.A.S. (FRANCE)17Catalent France Limoges S.A.S. (FRANCE)18Catalent Germany Eberbach GmbH (GERMANY)19Catalent Germany Holding II GmbH (GERMANY)20Catalent Germany Holding III GmbH (GERMANY)21Catalent Germany Schorndorf GmbH (GERMANY)22Catalent Italy Holding Srl (ITALY)23Catalent Italy S.p.A. (ITALY)24Catalent Japan K.K. (JAPAN)25Catalent Netherlands Holding B.V. (NETHERLANDS)26Catalent Pharma Solutions GmbH (SWITZERLAND)27Catalent Pharma Solutions Limited (UNITED KINGDOM)28Catalent Pharma Solutions, Inc. (DELAWARE)29Catalent Pharma Solutions, LLC (DELAWARE)30Catalent Pharmaceutical Consulting (Shanghai) Co., Ltd. (CHINA)31Catalent (Shanghai) Clinical Trial Supplies Co Ltd. (CHINA)32Catalent Singapore Holdings Pte. Ltd. (SINGAPORE)33Catalent U.K. Packaging Limited (UNITED KINGDOM)34Catalent U.K. Swindon Zydis Limited (UNITED KINGDOM)35Catalent Uruguay S.A. (URUGUAY)36Catalent US Holding I, LLC (DELAWARE)37Catalent US Holding II, LLC (DELAWARE)Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.38Catalent USA Packaging, LLC (DELAWARE)39Catalent USA Woodstock, Inc. (ILLINOIS)40Micron Holding Company, Inc. (DELAWARE)41Micron Technologies, Inc. (PENNSYLVANIA)42Micron Technologies Limited (UNITED KINGDOM)43MTI Pharma Solutions Limited (UNITED KINGDOM)44MTI Pharma Solutions, Inc. (DELAWARE)45Pharmapak Technologies Pty. Ltd. (AUSTRALIA)46PTS Intermediate Holdings LLC (DELAWARE)47R.P. Scherer Technologies, LLC (NEVADA)48Redwood Bioscience Inc. (DELAWARE)49Zhejiang Catalent Jiang Yuan Tang Biotechnology Co., Ltd. (CHINA)50R.P. Scherer DDV B.V. (NETHERLANDS)Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-197726) pertaining to the Catalent, Inc. 2014 OmnibusIncentive Plan and the 2007 PTS Holdings Corp. Stock Incentive Plan of our report dated September 2, 2015, with respect to the consolidated financialstatements and schedule of Catalent, Inc., included in its Annual Report (Form 10-K) for the year ended June 30, 2015, filed with the Securities and ExchangeCommission./s/ Ernst & Young LLPMetroPark, New JerseySeptember 2, 2015Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 31.1CERTIFICATION PURSUANT TO SECTION 302OF THE SARBANES-OXLEY ACT OF 2002I, John R. Chiminski, certify that:1.I have reviewed this Annual Report on Form 10-K for the fiscal year ended June 30, 2015 of Catalent, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andc.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.Date: September 2, 2015/s/ JOHN R. CHIMINSKIJohn R. ChiminskiPresident and Chief Executive Officer(Principal Executive Officer)Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 31.2CERTIFICATION PURSUANT TO SECTION 302OF THE SARBANES-OXLEY ACT OF 2002I, Matthew Walsh, certify that:1.I have reviewed this Annual Report on Form 10-K for the fiscal year ended June 30, 2015 of Catalent, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andc.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.Date: September 2, 2015/s/ MATTHEW M. WALSHMatthew M. WalshExecutive Vice President andChief Financial Officer(Principal Financial Officer)Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 32.1Certification of the Chief Executive OfficerPursuant to 18 U.S.C. Section 1350,As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report of Catalent, Inc. (the “Company”) on Form 10-K for the period ended June 30, 2015 as filed with the Securitiesand Exchange Commission on the date hereof (the “Report”), I, John R. Chiminski, President and Chief Executive Officer of the Company, certify, pursuantto 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.Date: September 2, 2015/s/ JOHN R. CHIMINSKIJohn R. ChiminskiPresident andChief Executive OfficerSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 32.2Certification of the Chief Executive OfficerPursuant to 18 U.S.C. Section 1350,As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report of Catalent, Inc. (the “Company”) on Form 10-K for the period ended June 30, 2015 as filed with the Securitiesand Exchange Commission on the date hereof (the “Report”), I, Matthew M. Walsh, Executive Vice President and Chief Financial Officer of the Company,certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.Date: September 2, 2015/s/ MATTHEW M. WALSHMatthew M. WalshExecutive Vice President andChief Financial OfficerSource: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit 99.1Section 13(r) DisclosureThe disclosures by Travelport Worldwide Limited with respect to the fiscal periods ended September 30, 2014, December 31, 2014, March 31, 2015 andJune 30, 2015 reproduced below were publicly filed with the Securities and Exchange Commission by Travelport Worldwide Limited in accordance withSection 13(r) of the Securities Exchange Act of 1934, as amended. Travelport Worldwide Limited may be considered an affiliate of The Blackstone GroupL.P., and therefore an affiliate of Catalent, Inc. (the “Company”). The Company did not independently verify or participate in the preparation of thesedisclosures.Form 10-Q for the fiscal quarter ended September 30, 2014:“As part of our global business in the travel industry, we provide certain passenger travel-related Travel Commerce Platform and Technology Services to IranAir. We also provide certain Technology Services to Iran Air Tours. All of these services are either exempt from applicable sanctions prohibitions pursuant toa statutory exemption permitting transactions ordinarily incident to travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office ofForeign Assets Control. Subject to any changes in the exempt/licensed status of such activities, we intend to continue these business activities, which aredirectly related to and promote the arrangement of travel for individuals.The gross revenue and net profit attributable to these activities in the quarter ended September 30, 2014 were approximately $171,000 and $124,000,respectively.”Form 10-K for the fiscal year ended December 31, 2014:“As part of our global business in the travel industry, we provide certain passenger travel related Travel Commerce Platform and Technology Services to IranAir. We also provide certain Technology Services to Iran Air Tours. All of these services are either exempt from applicable sanctions prohibitions pursuant toa statutory exemption permitting transactions ordinarily incident to travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office ofForeign Assets Control. Subject to any changes in the exempt/licensed status of such activities, we intend to continue these business activities, which aredirectly related to and promote the arrangement of travel for individuals.The gross revenue and net profit attributable to these activities for the year ended December 31, 2014 were approximately $660,000 and $470,000,respectively."Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Form 10-Q for the fiscal quarter ended March 31, 2015: “As part of our global business in the travel industry, we provide certain passenger travel related Travel Commerce Platform and Technology Services to IranAir. We also provide certain Technology Services to Iran Air Tours. All of these services are either exempt from applicable sanctions prohibitions pursuant toa statutory exemption permitting transactions ordinarily incident to travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office ofForeign Assets Control. Subject to any changes in the exempt/licensed status of such activities, we intend to continue these business activities, which aredirectly related to and promote the arrangement of travel for individuals.The gross revenue and net profit attributable to these activities in the quarter ended March 31, 2015 were approximately $157,000 and $109,000,respectively."Form 10-Q for the fiscal quarter ended June 30, 2015: “As part of our global business in the travel industry, we provide certain passenger travel related Travel Commerce Platform and Technology Services to IranAir. We also provide certain Technology Services to Iran Air Tours. All of these services are either exempt from applicable sanctions prohibitions pursuant toa statutory exemption permitting transactions ordinarily incident to travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office ofForeign Assets Control. Subject to any changes in the exempt/licensed status of such activities, we intend to continue these business activities, which aredirectly related to and promote the arrangement of travel for individuals.The gross revenue and net profit attributable to these activities in the quarter ended June 30, 2015 were approximately $145,000 and $104,000,respectively.”Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: Catalent, Inc., 10-K, September 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

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