West Pharmaceutical Services Annual Report 2018

FY2018 Annual Report · West Pharmaceutical Services

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2018
ANNUAL REPORT

West: By Your Side
for a Healthier World™

Our customers, the world’s leading pharmaceutical, biotechnology, generic drug and medical
device producers, are met with significant challenges and time constraints when bringing new
products to market. With West by their side we can, together, create and deliver new solutions
for injectable medicines that improve healthcare today and tomorrow.

Our quest to be an industry leader and
trusted partner to our customers began
nearly 100 years ago. Our mission—to
contain and deliver injectable therapies
that improve patients’ lives—serves to
remind our team of the important role West
plays in delivering healthcare to millions of
patients across the globe every day.

BY THE SIDE OF OUR CUSTOMERS

West’s top priority is delivering high-quality
products that meet the exact product
specifications and quality standards
customers require and expect. This
focus on quality includes excellence in
manufacturing, scientific and technical
expertise, and management. At the
manufacturing level, this means producing
clean, sterile, high-quality components to
minimize disruptions to our customers’
supply chain and bringing safe, effective
drug products to the market—and to the

patient—quickly and efficiently.

Our products and services address
the unique needs of our Biologics,
Pharmaceutical, Generics and Contract
Manufacturing customers. This year,
we introduced our Integrated Solutions
Program—a comprehensive approach that
combines West’s high-quality packaging
and delivery products with our expert
analytical testing, device manufacturing
and assembly, and regulatory expertise.

BY THE SIDE OF OUR TEAM
MEMBERS

With approximately 7,700 team members
across our global network, we are fortunate
to have a broad spectrum of people who
make up our Company. We understand
that diversity is key to our success and
know that a diverse workforce leads to
greater innovation, more opportunities,

better access to talent and stronger
business performance. We encourage
a culture of mutual respect, in which
everyone understands and values the
similarities and differences among our
team members, customers, communities
and other stakeholders.

BY THE SIDE OF OUR COMMUNITY

We are passionate about giving back to the
communities in which we live and work.
We recognize our responsibility to conduct
our business in a sustainable manner,
and we are proud of our team’s history
of giving and volunteering across the
globe. Together with the Herman O. West
Foundation, the Company contributes
to a wide range of organizations working
to improve the world and our local
communities.

1 West Pharmaceutical Services, Inc. | 2018 ANNUAL REPORT

2018 AWARDS

CPHI Excellence in
Pharma: Corporate
Social Responsibility

Packaging Award:
AccelTRA™

Innovation Award:
SelfDose™

EcoVadis Gold
Standard

CEO Connection
Mid-Market Social
Impact Award

~112 MILLION

COMPONENTS AND DEVICES MANUFACTURED EVERY DAY

7,700

TEAM MEMBERS GLOBALLY

GLOBAL ANNUAL
FOOD DRIVE
PROVIDED

~224K+ MEALS

WEST
LAUNCHED
ONLINE STORE
westpharma.com/store

WEST AND ITS GLOBAL TEAM
MEMBERS CONTRIBUTED TO

200+

CHARITABLE ORGANIZATIONS

2018 NET SALES
Business at a Glance

24%

21%

$1.7B

NET SALES BY
GEOGRAPHIC
LOCATION

44%

48%

41%

NET SALES BY
PRODUCT
CATEGORY

32%

NET SALES BY
MARKET
GROUP

21%

34%

Biologics

Generics

Pharma

Americas

Europe, Middle East, Africa

Asia Pacific

High-Value Components

Standard Packaging

Delivery Devices

Contract-Manufactured Products1

ANNUAL COMPARISON
Sustained, Consistent Growth

Reported
CAGR 4.8%

Constant-Currency
CAGR 6.7%

$1.72
BILLION

Adjusted-Diluted EPS
CAGR 12.1%

$2.81

$1.42
BILLION

$1.78

West Pharmaceutical Services, Inc.

S&P 500

S&P MidCap 400 Index

250%

200%

150%

100%

2014

2015

2016

2017

2018

2014

2015

2016

2017

2018

2013

2014

2015

2016

2017

2018

Net Sales
NET SALES2

Net Sales
ADJUSTED-DILUTED EPS3
(NON-GAAP)

Net Sales
5-YEAR TOTAL SHAREHOLDER RETURN4

1Non-proprietary products
2Please refer to “Note 3: Revenue” in our financial statements filed with our 2018 Form 10-K, which addresses new accounting guidance on revenue recognition.
3Please refer to our February 14, 2019 and January 9, 2019 current reports on Form 8-K for the reconciliation of Non-GAAP financial measures.
4Source: NASDAQ IR Insight

3 West Pharmaceutical Services, Inc. | 2018 ANNUAL REPORT

WEST PHARMACEUTICAL SERVICES, INC. & SUBSIDIARIES
Financial Summary

2018

2017

Net Sales1

$1,717.4

$1,599.1

Net Sales Growth Ex-Currency

5.6%

Diluted Earnings Per Share

As reported (GAAP)

$2.74

$1.99

Restructuring and related charges

Argentina currency devaluation

Tax law changes

Venezuela deconsolidation

0.08

0.02

(0.03)

–

0.64

0.15

As adjusted (Non-GAAP)

$2.81

$2.78

Our 2018 as-reported results include the impact of net restructuring and

related charges of $6.3 million ($0.08 per diluted share), a charge of $1.1

million ($0.02 per diluted share) related to the classification of Argentina’s

economy as highly inflationary under U.S. GAAP as of July 1, 2018, and

a net tax benefit of $2.5 million ($0.03 per diluted share) for the impact of

tax law changes, including the Tax Cuts and Jobs Act.

Our 2017 as-reported results include the impact of a discrete tax charge

of $48.8 million ($0.64 per diluted share) related to the Tax Cuts and

Jobs Act, and the impact of changes in enacted international tax rates

on previously recorded deferral tax asset and liability balances, as well

as a charge of $11.1 million ($0.15 per diluted share) related to the

deconsolidation of our Venezuelan subsidiary.

Adjusted results are intended to aid investors in understanding the

Company’s year-over-year results and are considered non-GAAP financial

measures. Non-GAAP financial measures should not be considered in

isolation or as an alternative to such measures determined in accordance

with GAAP. Our executive team uses these financial measures to evaluate

the performance of the Company in terms of profitability and efficiency, as

well as to compare operating results to prior periods.

For a discussion of non-GAAP financial measures, please refer to our

2018 Form 10-K filed on February 28, 2019 and our current Form 8-K

filed on February 14, 2019.

1Dollars in millions, except per share data

A Letter from West’s
President and CEO

We made good progress in 2018 executing on our market-led
strategy to deliver integrated containment and delivery solutions
for injectable medicines to our global pharmaceutical and biotech
customers. With a strong team in place, and the fundamentals of
the markets we serve driving strong demand for our products and
services, we are well-positioned to grow sales and expand profit
margins in 2019 and beyond.

2018 PERFORMANCE HIGHLIGHTS

In 2018, we reported net sales of $1.717
billion, which represents 5.6% of organic,
constant-currency growth over the prior
year. Our Proprietary Products business
segment sales grew organically by 3.9%, led
by good growth in our Generics market unit
and improved growth in our Pharma market
unit. Despite a slower start to the year, the
Biologics market unit ended 2018 with a
return to more typical growth. Our Contract
Manufacturing business segment sales grew
organically by an impressive 11.6%, due to a
focused strategy on healthcare drug delivery
and diagnostics.

Our efforts to optimize our manufacturing
network and operate more efficiently also
led to double-digit growth in operating cash
flow and healthy margins. As we have done
for 48 years running, we returned cash to
you, our shareholders, through quarterly
dividend payments that have increased on
an annual basis. We ended the year in a very
strong financial position that will enable us
to continue to invest in our business for the
long term.

OUR PURPOSE: TO IMPROVE
PATIENT LIVES

All 7,700 West team members are clear
on our Company’s vision, mission and
purpose—to be a world leader in the
containment and delivery of injectables

therapies to improve patient lives. The role
West plays in supporting the delivery of
healthcare around the world is critical and
has a direct impact on patient lives, and our
team members appreciate and embrace this
responsibility. Our 2018 results demonstrate
how they are bringing to life the values
which we espouse, across all aspects of our
business.

Passion for Customers is our first core value.
Our customers’ success is our success. We
work hard to deliver the critical high-quality
drug containment and delivery components
they require today, and ensure we are
continuously innovating to meet their needs
for tomorrow. Two great examples that
support this value were the introduction of a
new Integrated Solutions Program and the
launch of several new products in 2018.

Our new Integrated Solutions Program helps
our customers overcome the complexities
they face when bringing drug products to the
market. We offer a comprehensive portfolio
of services that includes technical testing
and analyses, regulatory and quality support
and device engineering development, all of
which are critical to ensuring complete and
accurate drug registration filings. These
services complement our high-value product
and device offerings. At West, our unrivaled
technical expertise helps our customers
“Simplify the Journey™” throughout the drug
development cycle.

5 West Pharmaceutical Services, Inc. | 2018 ANNUAL REPORT

We also launched several new products
this year to support the unique customer
groups we serve. Our AccelTRA™ product
line was extended to include additional vial
components. This product line helps our
Generics customers meet increasing quality
standards, ensure fast response to market
volatility and move product to market quickly.
In addition, we also launched Westar®
Select, our latest quality enhancement
offering, which provides customers with
a tighter particulate specification, and is
available through West’s optimized global
manufacturing network. These are both
good examples of our market-led strategy in
action—developing products and solutions
to address unique customer needs.

Our second core value centers around our
Leadership in Quality. We remind our team
daily that we can never compromise on
quality because patients are counting on
us. This patient-first focus was the theme
of our annual quality awareness week this
past year. During our Quality Week, each
West office holds events to reinforce the
importance of maintaining West’s top-
quality standards and provides education
and training for team members around our
policies and practices in this area.

Our Operations Team is responsible for
maintaining and continuously improving our
ability to manufacture and deliver the highest
quality products. In 2017, we started on a
path to globalize our plant operations, so all
our teams could work to one global standard
for service, quality and safety. In just its
second full year of operation, I am very
pleased to see that the team has significantly
improved plant utilization and maintained
our industry-leading quality metrics, all
while working to lower our capital spending
requirements. The team is executing on key
initiatives that will raise the bar on quality
and lead-times, while we work to support
new capacity for innovative products and
reduce overall cost.

Our final core value is meant to guide the
way we work, as One West Team. Working as
One West Team is about building a sense of
community both inside and outside the walls
of West. Internally, we foster an environment
where team members feel valued and
respected and have opportunities to excel
and grow in their jobs. It means we not only
appreciate, but celebrate the diversity of our
team, recognizing that diversity of thought,

experience, geographic region and more, will
propel us forward. It means we collaborate
to keep our working environments safe, day
in and day out. In 2018, our Recordable
Injury Rate (RIR) of 0.82 was the lowest
recorded since we began tracking this
metric over a decade ago, and represents a
18% improvement over 2017, and a 60%
improvement since 2015. Finally, our One
West Team value means we also look outside
the walls of West to support and give back to
the communities in which we operate.

OUR LONG-TERM OUTLOOK

We continue to see positive market trends
that support our business. More and more
prescription medicines are being developed
as injectable drugs. The bar for quality and
reliability continues to be raised by both
our customers and global regulators. Our
customers continue to request technical
and regulatory services to support the
packaging and delivery of their products,
as well as differentiated delivery devices to
improve patient adoption and adherence.
As the leader in our industry, we know
we are uniquely placed to address these
market needs.

Each year, we have seen growing interest
and demand for our high-value product
offerings, device platforms and our contract-
manufacturing services. Across each market
unit—Biologics, Generics, Pharma, and
Contract Manufacturing—customers are
seeking out West’s differentiated packaging
and delivery devices. We are seeing that
interest grow around the world, with faster
growth in the Asia Pacific and South America
regions. Sales in 2018 within the Asia Pacific
and South American markets represented
about 10% of total sales and have grown
by double-digits, further positioning the
Company to serve our global customer base.

We know our future long-term growth is also
predicated on the strength of our team and
its leaders. I was pleased to welcome two
new members onto our Executive Leadership
Team this year: Silji Abraham joined as our
Chief Digital and Transformation Officer in
March, and Bernard Birkett joined as our
new Chief Financial Officer in June, following
William Federici’s retirement. As West
continues to execute our long-term strategy,
the effective use of technology and strong
business processes will be critical to our
success, and I am confident Silji will speed
our transformation in both of these areas.

Bernard brings significant international
experience from his previous roles, along
with deep financial management skills. His
knowledge of this industry, results-oriented
leadership style and collaborative approach
will be an asset to our team. I also wish to
thank Bill Federici for his long and successful
service to the Company.

Our Board of Directors continues to guide
and support our leadership team, and we
are grateful for their continued commitment
to West. John Weiland, one of our longest-
standing board members, will retire this
year. During his 12 years of service, John
has been a constant, seeing the Company
through a great period of growth and
success. He will be missed, and we thank
him for his service to West.

Our work in 2018 has positioned us
well to deliver on our long-term financial
commitment to grow the business by 6-8%,
expand operating margins by 100 basis
points and increase our operating cash flow.
Our diverse portfolio of high-value products
and services is on track for continued growth
and will be fueled by new products and
line extensions. We are making significant
progress in our Global Operations to deliver
improved efficiencies, while deploying
cutting-edge manufacturing strategies
to advance our already strong position in
service and quality. We are confident in our
strategy for continued growth across the
geographies and markets we serve, for both
the short and long term, and look forward
to the coming year.

Thank you for your continued support
of West.

Sincerely,

Eric M. Green
President & CEO

18%

IMPROVEMENT IN
RECORDABLE INJURY
RATE (RIR) OVER 2017

10-15

SUSTAINABILITY
IMPROVEMENT
PROJECTS PER SITE

OUR TARGETED GIVING
CONTINUES TO FOCUS ON
CHILDREN, PEOPLE WITH
DISABILITIES, HEALTHCARE
AND EDUCATION

SUSTAINABILITY
RATINGS IN TOP

OF REPORTING
COMPANIES

Our Commitment

West is committed to working closely by our customers’ side to improve
patient’s health around the world. We also recognize our responsibility
to conduct business in a sustainable manner and strive to be a good
corporate citizen in the manner in which we operate our business.
Caring for our environment and the communities in which we live and
work is something we take very seriously, and is a defining characteristic
for West and our 7,700 team members around the globe.

Below are some highlights of our corporate responsibility activities in
2018. These activities and our global sustainability program will be
described in greater detail in our 2018 Corporate Responsibility Report
to be published later this year.

HEALTH & SAFETY

ENVIRONMENTAL SUSTAINABILITY

At West, we firmly believe in the importance
of cultivating a culture of safety where every
team member has a shared responsibility
and is engaged in ensuring a safe workplace.
During 2018, we implemented a new
Health, Safety and Environment (HSE)
Management System, designed with a global
and uniform approach to key areas of HSE,
utilizing leading indicators and proactive
activities to help reduce and/or eliminate
accidents within our facilities.

As a result of our proactive approach and
team member engagement in safety, we
saw our 2018 Recordable Injury Rate (RIR)
decrease to 0.82, an 18% improvement over
2017 and the lowest we have ever recorded.

As a company dedicated to creating a
healthier world, West is also committed to
creating a healthier environment. We strive
to be good stewards in all our decision
making—from the raw materials we use,
to our production and manufacturing
techniques, to how we package and
distribute and how we handle the waste
generated by our manufacturing processes.

Each of West’s manufacturing sites
is focused on 10–15 sustainability
improvement projects, targeting reductions
in greenhouse gas emissions, waste, energy
and water usage, as well as an increase in
recycling. We continue to seek renewable
energy procurement opportunities, which
will enable West to better utilize alternative
energy sources, further helping to reduce
our carbon footprint.

7 West Pharmaceutical Services, Inc. | 2018 ANNUAL REPORT

PHILANTHROPY

West’s giving strategy encompasses
community support through corporate
giving by West Pharmaceutical Services,
Inc.; the Herman O. West Foundation, an
independently managed 501(c)(3) entity
which awards scholarships and matching
gifts; and West without Borders, our team
member-led giving program.

Our targeted giving continues to focus on
children, people with disabilities, healthcare
and education. Across our global network
of sites, team members host West without
Borders campaigns for charities that
have special meaning to them and their
local community. For example, our team
members in Germany supported Fortschritt
StädteRegion Aachen e.V. (translated as
“Step Forward”), an organization committed
to helping physically and mentally disabled
children successfully step into their next
stage of life. Also, our team members
in Arizona raised funds for Upwards for
Children and Families, an organization
helping special needs children achieve their
utmost potential while empowering their
families to thrive. There are dozens of similar
programs sponsored by West team members
throughout the world.

RECOGNITION

In 2018, we were honored to be the
recipients of the Mid-Market Social Impact
Award by the CEO Connection, as well
as the Excellence in Pharma: Corporate
Social Responsibility Award by CPhI. Also in
2018, West once again achieved the Gold
Standard from EcoVadis, a leader in supplier
sustainability ratings, placing us in the top
5% of reporting companies.

These awards and recognitions are a
testament of our commitment to caring for
our environment, our team members, and to
the communities in which we operate.

CHAIRMAN’S
ADDRESS

In 2018, West celebrated its 95th birthday. It is an honor to serve as
chairperson of the Board of Directors for a Company that has been
successful for such a long period of time, and one that is serving such a
noble purpose—improving patient lives. These days, you hear a lot
about purpose and its importance in ensuring the long-term sustainability
of a corporation. The Board of Directors of your Company couldn’t agree
more. This past year, the Company continued to deliver significant value
to patients, the communities in which West is present, the team members
at West, and to you, its shareholders.

Healthcare systems across the world have treated patients with the more
than 41 billion items that West makes every year. West has reduced its
impact on the environment, and, at the same time, through the combined
efforts of the Herman O. West Foundation and West team members,
contributed approximately $2.5 million to charities and philanthropic
causes. The Company continues to invest in its employees through a
broad range of training and development programs, and with another year
of solid growth in 2018, has returned value to shareholders through share
repurchases and dividends.

The Board this year focused on several key areas we understand are of
concern to our shareholders—understanding and mitigating corporate
risk, driving corporate responsibility and developing a strong and diverse
talent pool inside the Company. I am happy to report that in all these
areas, the Company made great progress in 2018, but there is still
room for improvement. West has a robust risk management system in
place; a corporate responsibility program that was recognized this year
with industry awards; and a strong people strategy that is driving talent
management, succession planning, as well as diversity and inclusion
across the Company.

On behalf of the Board of Directors, I am pleased to report that we
believe West is in a strong position to continue its long history of making
a meaningful difference in healthcare, and in doing so, create long-
term value for all constituencies. We are all looking forward to another
successful year in 2019.

Sincerely,

Patrick J. Zenner
Chairman of the Board

2019
BOARD OF DIRECTORS

Mark A. Buthman
Retired Executive Vice President & Chief
Financial Officer
Kimberly-Clark Corporation
Director since 2011
Board committees: Compensation; Finance;
Nominating and Corporate Governance

Paula A. Johnson, M.D., MPH
President
Wellesley College
Director since 2005
Board committees: Innovation and
Technology; Nominating and Corporate
Governance

William F. Feehery, Ph.D.
President
Industrial Biosciences, DowDuPont
Director since 2012
Board committees: Audit; Compensation;
Nominating and Corporate Governance

Deborah L.V. Keller
Principal, Black Frame Advisors, LLC
Retired CEO, Covance Drug Development
Director since 2017
Board committees: Audit; Finance;
Innovation and Technology

Paolo Pucci
Chief Executive Officer
ArQule, Inc.
Director since 2016
Board committees: Finance; Innovation
and Technology

Patrick J. Zenner
Retired President & Chief Executive Officer
Hoffmann-La Roche, Inc.
Director since 2002
Chairman of the Board
Board committee: Nominating and
Corporate Governance

Eric M. Green
President & Chief Executive Officer
Director since 2015

Thomas W. Hofmann
Retired Senior Vice President & Chief
Financial Officer
Sunoco, Inc.
Director since 2007
Board committees: Audit; Compensation

Myla P. Lai-Goldman, M.D.
Executive Chair
GeneCentric Therapeutics, Inc.
Director since 2014
Board committees: Finance; Innovation
and Technology

Douglas A. Michels
Retired President & Chief Executive Officer
OraSure Technologies, Inc.
Director since 2011
Board committees: Audit; Compensation

HONORARY DIRECTOR

Morihiro Sudo
President
Daikyo Seiko, Ltd.

EXECUTIVE OFFICERS

Silji Abraham
Senior Vice President & Chief Digital and
Transformation Officer

Quintin J. Lai, Ph.D.
Vice President, Corporate Development,
Strategy & Investor Relations

Bernard J. Birkett
Senior Vice President, Chief Financial Officer
& Treasurer

Daniel Malone
Vice President & Controller

Annette F. Favorite
Senior Vice President & Chief Human
Resources Officer

Karen A. Flynn
Senior Vice President & Chief Commercial
Officer

Eric M. Green
President & Chief Executive Officer

George L. Miller
Senior Vice President, General Counsel
& Corporate Secretary

David A. Montecalvo
Senior Vice President, Global Operations
& Supply Chain

Eric Resnick
Vice President & Chief Technology Officer

BOARD COMMITTEES

Audit Committee
Thomas W. Hofmann, Chair

Compensation Committee
Douglas A. Michels, Chair

Finance Committee
Paolo Pucci, Chair

Innovation and Technology Committee
Myla P. Lai-Goldman, M.D., Chair

Nominating and Corporate Governance
Committee
William F. Feehery, Ph.D., Chair

INDEPENDENT DIRECTORS
The Board of Directors has designated directors who are independent of Management as “Independent Directors.” The Independent
Directors’ duties include annual evaluations of the Chief Executive Officer, his leadership succession plans and achievement of long-range
strategic initiatives.

9 West Pharmaceutical Services, Inc. | 2018 ANNUAL REPORT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018
or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-8036

WEST PHARMACEUTICAL SERVICES, INC.
(Exact name of registrant as specified in its charter)

Pennsylvania
(State or other jurisdiction of incorporation or organization)

23-1210010
(I.R.S. Employer Identification Number)

530 Herman O. West Drive, Exton, PA

(Address of principal executive offices)

19341-0645

(Zip Code)

Registrant’s telephone number, including area code: 610-594-2900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, par value $.25 per share

Name of each exchange on which registered
New York Stock Exchange

Securities 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

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

Indicate 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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes

Indicate 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 submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer

(Do not check if a smaller reporting company)

Accelerated filer
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

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

As of January 31, 2019, there were 74,186,169 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Document
Proxy Statement for the Annual Meeting of Shareholders to be held May 7, 2019

Parts Into Which Incorporated
Part III

TABLE OF CONTENTS

BUSINESS

PART I
ITEM 1.
ITEM 1A. RISK FACTORS
ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 2.
ITEM 3.
ITEM 4. MINE SAFETY DISCLOSURES
EXECUTIVE OFFICERS OF THE COMPANY

PROPERTIES
LEGAL PROCEEDINGS

PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED

STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
SELECTED FINANCIAL DATA

ITEM 6.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

ITEM 8.
ITEM 9.

RISK
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9B. OTHER INFORMATION

PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

ITEM 14.

DIRECTOR INDEPENDENCE
PRINCIPAL ACCOUNTING FEES AND SERVICES

PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 16.

FORM 10-K SUMMARY

SIGNATURES

EXHIBIT INDEX

Page
3
8
15
16
17
17
17

18
21

37
39

82
82
83

83
83

84
84

85
86

F-1

PART I

Unless otherwise indicated, or the context otherwise requires, references in this report to “the Company”, “we”,
“us”, “our” and “West” refer to West Pharmaceutical Services, Inc. and its majority-owned subsidiaries.

All trademarks and registered trademarks used in this report are our property, either directly or indirectly through
our subsidiaries, unless noted otherwise. Daikyo Crystal Zenith® (“CZ”) is a registered trademark of Daikyo Seiko,
Ltd. (“Daikyo”).

Throughout this report, references to “Notes” refer to the Notes to Consolidated Financial Statements included in
Part II, Item 8 of this Annual Report on Form 10-K (“Form 10-K”), unless otherwise indicated.

Information in this Form 10-K is current as of February 27, 2019, unless otherwise specified.

ITEM 1. BUSINESS

General

We are a leading global manufacturer in the design and production of technologically advanced, high-quality,
integrated containment and delivery systems for injectable drugs and healthcare products. Our products include a
variety of primary packaging, containment solutions, reconstitution and transfer systems, and drug delivery systems,
as well as contract manufacturing and analytical lab services. Our customers include the leading biologic, generic,
pharmaceutical, diagnostic, and medical device companies in the world. Our top priority is delivering quality
products that meet the exact product specifications and quality standards customers require and expect. This focus
on quality includes excellence in manufacturing, scientific and technical expertise and management, and enables us
to partner with our customers to deliver safe, effective drug products to patients quickly and efficiently.

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

Business Segments

Our business operations are organized into two reportable segments, Proprietary Products and Contract-
Manufactured Products.

Proprietary Products Segment

Our Proprietary Products reportable segment offers proprietary packaging, containment and drug delivery products,
along with analytical lab services, to biologic, generic and pharmaceutical drug customers. Our packaging products
include stoppers and seals for injectable packaging systems, which are designed to help ensure drug compatibility
and stability with active drug products, while also supporting operational efficiency for customers. This product
portfolio also includes syringe and cartridge components, including custom solutions for the specific needs of
injectable drug applications, as well as administration systems that can enhance the safe delivery of drugs through
advanced reconstitution, mixing and transfer technologies. We also provide films, coatings, washing and sterilization
processes and services to enhance the quality of packaging components and mitigate the risk of contamination and
compatibility issues.

This segment’s product portfolio also includes drug containment solutions, including CZ, a cyclic olefin polymer, in
the form of vials, syringes and cartridges. These products can provide a high-quality solution to glass
incompatibility issues and can stand up to cold storage environments, while reducing the risk of breakage that exists
with glass. In addition, we offer a variety of self-injection devices, designed to address the need to provide at-home
delivery of injectable therapies. These devices are patient-centric technologies that are easy-to-use and can be
combined with connected health technologies that have the potential to increase adherence.

In addition to our Proprietary Products product portfolio, we provide our customers with a range of integrated
services, including analytical lab services, pre-approval primary packaging support and engineering development,
regulatory expertise, and after-sales technical support. Offering the combination of primary packaging components,
containment solutions, and drug delivery devices, as well as a broad range of integrated services, helps to position us
as the leader in the integrated containment and delivery of injectable medicines.

This reportable segment has manufacturing facilities in North and South America, Europe, and Asia Pacific, with
affiliated companies in Mexico and Japan. Please refer to Item 2, Properties, for additional information on our
manufacturing and other sites.

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

Contract-Manufactured Products Segment

Our Contract-Manufactured Products reportable segment serves as a fully integrated business, focused on the
design, manufacture, and automated assembly of complex devices, primarily for pharmaceutical, diagnostic, and
medical device customers. These products include a variety of custom contract-manufacturing and assembly
solutions, which use such technologies as multi-component molding, in-mold labeling, ultrasonic welding and clean
room molding and device assembly. We manufacture customer-owned components and devices used in surgical,
diagnostic, ophthalmic, injectable, and other drug delivery systems, as well as consumer products.

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

This reportable segment has manufacturing operations in North America and Europe. Please refer to Item 2,
Properties, for additional information on our manufacturing and other sites.

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

International

We have significant operations outside of the United States (“U.S.”), which are managed through the same business
segments as our U.S. operations – Proprietary Products and Contract-Manufactured Products. Sales outside of the
U.S. accounted for 55.4% of our consolidated net sales in 2018. For a geographic breakdown of sales, please refer to
Note 18, Segment Information. Please refer to Item 2, Properties, for additional information on our manufacturing
and other sites.

Although the general business processes are similar to the domestic business, international operations are exposed to
additional risks. These risks include currency fluctuations relative to the U.S. Dollar (“USD”), multiple tax
jurisdictions and, particularly in South America, Israel and the Middle East, political and social issues that could
destabilize local markets and affect the demand for our products.

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

Raw Materials

We use three basic raw materials in the manufacture of our products: elastomers, aluminum and plastic. Elastomers
include both natural and synthetic materials. We currently have access to adequate supplies of these raw materials to
meet our production needs through agreements with suppliers.

We employ a supply chain management strategy in our business segments, which involves purchasing from
integrated suppliers that control their own sources of supply. Due to regulatory control over our production
processes and the cost and time involved in qualifying suppliers, we rely on single-source suppliers for many critical
raw materials. We purchase certain raw materials in the open market. This strategy increases the risk that our supply
chain may be interrupted in the event of a supplier production or distribution problem. These risks are managed,
where possible, by selecting suppliers with multiple manufacturing sites, rigorous quality control systems, surplus
inventory levels and other methods of maintaining supply in case of an interruption in production or distribution.

Intellectual Property

Intellectual property, including patents, trade secrets and know-how, is important to our business. We own or license
intellectual property rights, including issued patents and pending patent applications in the U.S. and in other
countries, that relate to various aspects of our products. In 2018, more than 120 patents were issued to West across
the globe. Some key value-added and proprietary products and processes are licensed from Daikyo. Our intellectual
property rights have been useful in establishing our market position and in the growth of our business, and are
expected to continue to be of value in the future.

Seasonality

Our business is not inherently seasonal.

Working Capital

We are required to carry significant amounts of inventory to meet customer requirements. In addition, some of our
supply agreements require us to purchase inventory in bulk orders, which increases inventory levels but decreases
the risk of supply interruption. For a more detailed discussion of working capital, please refer to the discussion in
Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations under the
caption Financial Condition, Liquidity and Capital Resources.

Marketing

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

Our Contract-Manufactured Products customers include many of the world’s largest pharmaceutical, diagnostic, and
medical device companies. Contract-Manufactured Products components generally are incorporated into our
customers’ manufacturing lines for further processing or assembly.

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

Our ten largest customers accounted for 37.1% of our consolidated net sales in 2018, but none of these customers
individually accounted for more than 10% of consolidated net sales. Please refer to Note 3, Revenue, and Note 18,
Segment Information, for additional information on our consolidated net sales.

Order Backlog

Order backlog includes firm orders placed by customers for manufacture over a period of time according to their
schedule or upon confirmation by the customer. We also have contractual arrangements with a number of our

customers. Products covered by these contracts are included in our backlog only as orders are received. Order
backlog may be positively or negatively impacted by several factors, including customer ordering patterns and the
necessary lead-time to deliver customer orders. Order backlog is one of many measures we use to understand future
demand, and should not be considered in isolation to predict future sales growth.

At December 31, 2018 and 2017, the order backlog for Proprietary Products was $407.3 million and $377.4 million,
respectively. The majority of the order backlog for Proprietary Products at December 31, 2018 is expected to be
filled during 2019.

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

Competition

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

In addition, there are a number of competitors supplying medical devices and medical device components, including
a number of pharmaceutical manufacturers who are also potential customers of our medical devices. We compete in
this market on the basis of our reputation for quality and reliability in engineering and project management, as well
as our knowledge of, and experience in, compliance with regulatory requirements.

We have specialized knowledge of container closure components, which is integral to developing delivery systems.
With our range of proprietary technologies, we compete with new and established companies in the area of drug
delivery devices, including suppliers of prefillable syringes, auto-injectors, safety needles and other proprietary
systems.

We differentiate ourselves from our competition by serving as an integrated drug containment and delivery systems
global supplier that can provide pre-approval primary packaging support and engineering development, analytical
services, regulatory expertise and after-sale technical support. Customers also appreciate the global scope of our
manufacturing capability and our ability to produce many products at multiple sites.

Our Contract-Manufactured Products business operates in very competitive markets for its products. The
competition varies from smaller regional companies to large global molders. Given the cost pressures they face,
many of our customers look to reduce costs by sourcing from low-cost locations. We differentiate ourselves by
leveraging our global capabilities and by employing new technologies such as high-speed automated assembly,
insert-molding, multi-shot precision molding and expertise with multiple-piece closure systems.

Research and Development Activities

We maintain our own research-scale production facilities and laboratories for developing new products, and offer
contract engineering design and development services to assist customers with new product development. Our
quality control, regulatory and laboratory testing capabilities are used to ensure compliance with applicable
manufacturing and regulatory standards for primary and secondary pharmaceutical packaging components and
delivery systems.

Commercial development of our new products and services for medical and pharmaceutical applications commonly
requires several years. New products that we develop may require separate approval as medical devices, and
products that are intended to be used in the packaging and delivery of pharmaceutical products are subject to both
customer acceptance of our products and regulatory approval of the customer’s products following our development
period.

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

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

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

Environmental Regulations

We are subject to various federal, state and local provisions regulating the discharge of materials into the
environment or otherwise relating to the protection of the environment. Our compliance with these laws and
regulations has not had a material impact on our financial position, results of operations or cash flows. There were
no required material capital expenditures for environmental controls in our facilities in 2018 and there are currently
no needed or planned material expenditures for 2019.

Employees

As of December 31, 2018, we employed approximately 7,700 people in our operations throughout the world,
including approximately 7,600 full-time employees.

Available Information

We maintain a website at www.westpharma.com. Our Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 are available on our website under the Investors - SEC Filings caption as soon as reasonably
practical after we electronically file the material with, or furnish it to, the U.S. Securities and Exchange Commission
(“SEC”). These filings are also available to the public over the Internet at the SEC’s website at www.sec.gov. You
may also read and copy any document we file at the SEC’s Public Reference Room at 100 F. Street, N.E.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference
Room.

Throughout this Form 10-K, we incorporate by reference certain information from parts of other documents filed
with the SEC and from our Proxy Statement for the 2019 Annual Meeting of Shareholders (“2019 Proxy
Statement”), which will be filed with the SEC within 120 days following the end of our 2018 fiscal year. Our 2019
Proxy Statement will be available on our website on or about March 31, 2019, under the caption Investors - Annual
Reports & Proxy.

Information about our corporate governance, including our Corporate Governance Principles and Code of Business
Conduct, as well as information about our Directors, Board Committees, Committee Charters, and instructions on
how to contact the Board, is available on our website under the Investors - Corporate Governance heading. We
intend to make any required disclosures regarding any amendments of our Code of Business Conduct or waivers
granted to any of our directors or executive officers under the caption Code of Business Conduct on our website.
Information relating to the West Pharmaceutical Services Dividend Reinvestment Plan is also available on our
website under the Investors - Transfer Agent/Dividend Reinvestment caption.

We will provide any of the foregoing information without charge upon written request to our Corporate Secretary,
West Pharmaceutical Services, Inc., 530 Herman O. West Drive, Exton, PA 19341.

ITEM 1A. RISK FACTORS

The statements in this section describe major risks to our business and should be considered carefully. In addition,
these statements constitute our cautionary statements under the Private Securities Litigation Reform Act of 1995.

Our disclosure and analysis in this Form 10-K contains some forward-looking statements that are based on
management’s beliefs and assumptions, current expectations, estimates and forecasts. We also provide forward-
looking statements in other materials we release to the public as well as oral forward-looking statements. Such
statements give our current expectations or forecasts of future events. They do not relate strictly to historical or
current facts. We have attempted, wherever possible, to identify forward-looking statements by using words such as
“estimate,” “expect,” “intend,” “believe,” “plan,” “anticipate” and other words and terms of similar meaning. In
particular, these include statements relating to future actions, business plans and prospects, new products, future
performance or results of current or anticipated products, sales efforts, expenses, interest rates, foreign-exchange
rates, economic effects, the outcome of contingencies, such as legal proceedings, and financial results.

Many of the factors that will determine our future results are beyond our ability to control or predict. Achievement of
future results is subject to known or unknown risks or uncertainties, including, without limitation, the risks set forth
below. Therefore, actual results could differ materially from past results and those expressed or implied in any
forward-looking statement. You should bear this in mind as you consider forward-looking statements.

Unless required by applicable securities law, we undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events or otherwise. We also refer you to further
disclosures we make on related subjects in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
to the SEC.

Our operating results may be adversely affected by unfavorable economic and market conditions.

The current uncertainty in the global economy, including the effects of recession or slow economic growth in the
U.S., Europe, and emerging markets in Asia and South America, may negatively affect our operating results.
Examples of the effects of these global economic challenges include: our suppliers’ and our customers’ inability to
access the credit markets at commercially reasonable rates; reduction in sales due to customers decreasing their
inventories in the near-term or long-term or due to liquidity difficulties; reduction in sales due to shortages of
materials we purchase from our suppliers; reduction in research and development efforts and expenditures by our
customers; our inability to hedge our currency and raw material risks sufficiently or at commercially reasonable
prices; insolvency of suppliers or customers; inflationary pressures on our supplies or our products; and increased
expenses due to growing global taxation of corporate profits or revenues. Our operating results in one or more
geographic regions may also be affected by uncertain or changing economic conditions within that region. If
economic and market conditions in the U.S. or Europe, or in emerging markets, weaken further, we may experience
material adverse impacts on our business, financial condition and results of operations.

Our sales and profitability are largely dependent on the sale of drug products delivered by injection and the
packaging of drug products. If the products developed by our customers in the future use another delivery
system, our sales and profitability could suffer.

Our business depends to a substantial extent on customers’ continued sales and development of products that are
delivered by injection. If our customers fail to continue to sell, develop and deploy injectable products or we are
unable to develop new products that assist in the delivery of drugs by alternative methods, our sales and profitability
may suffer.

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

Our business is subject to foreign currency exchange rate fluctuations. Sales outside of the U.S. accounted for 55.4%
of our consolidated net sales in 2018 and we anticipate that sales from international operations will continue to

represent a significant portion of our total sales in the future. In addition, many of our manufacturing facilities and
suppliers are located outside of the U.S. Further, we intend to continue our expansion into emerging and/or faster-
growing markets outside of the U.S. in the future. Virtually all of our international sales, assets and related operating
costs and expenses are earned, valued or incurred in the currency of the local country, primarily the Euro, the
Singapore Dollar (“SGD”), and the Danish Krone. In addition, we are exposed to Japanese Yen (“Yen”), as we
maintain a 25% ownership interest in, and we purchase finished goods and other materials from, Daikyo. We are
also exposed to currencies in emerging market countries, such as the Chinese Yuan, the Indian Rupee, and various
South American currencies. Our consolidated financial statements are presented in USD, and, therefore, we must
translate the reported values of our foreign assets, liabilities, revenues and expenses into USD, which can result in
significant fluctuations in the amount of those assets, liabilities, revenues or expenses. The exchange rates between
these foreign currencies and USD in recent years have fluctuated significantly and may continue to do so in the
future. Increases or decreases in the value of USD compared to these foreign currencies may negatively affect the
value of these items in our consolidated financial statements, which could have a material adverse effect on our
operating results.

In addition to translation risks, we incur currency transaction risk when we or one of our subsidiaries enters into a
purchase or sales transaction in a currency other than that entity’s local currency. In order to reduce our exposure to
fluctuations in certain exchange rates, we have entered, and expect to continue to enter, into hedging arrangements,
including the use of financial derivatives. There can be no certainty that we will be able to enter into or maintain
hedges of these currency risks, or that our hedges will be effective, which could have a significant effect on our
financial condition and operating results.

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

We compete with several companies across our major product lines. Because of the special nature of these products,
competition is based primarily on product design and performance, although total cost is becoming increasingly
important as pharmaceutical companies continue with aggressive cost-control programs across their operations.
Companies often compete on the basis of price. We aim to differentiate ourselves from our competition by being a
“full-service, value-added” global supplier that is able to provide pre-sale compatibility studies, engineering support,
and other services and sophisticated post-sale technical support on a global basis. However, we face continued
pricing pressure from our customers and competitors. If we are unable to resist or to offset the effects of continued
pricing pressure through our value-added services, improved operating efficiencies and reduced expenditures, or if
we have to reduce our prices, our sales and profitability may suffer.

Consolidation in the pharmaceutical and healthcare industries could adversely affect our future revenues and
operating income.

The pharmaceutical and healthcare industries have experienced a significant amount of consolidation. As a result of
this consolidation, competition to provide goods and services to customers has increased. In addition, group
purchasing organizations and integrated health delivery networks have served to concentrate purchasing decisions
for some customers, which has placed pricing pressure on suppliers. Further consolidation within the industries we
serve could exert additional pressure on the prices of our products.

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

The design, development, manufacturing, marketing and labeling of certain of our products and our customers’
products that incorporate our products are subject to regulation by governmental authorities in the U.S., Europe and
other countries, including the U.S. Food and Drug Administration (“FDA”), the European Medicines Agency, and
the National Medical Products Administration (China). Complying with governmental regulation can be costly and
can result in required modification or withdrawal of existing products and a substantial delay in the introduction of
new products. Failure to comply with applicable regulatory requirements or failure to obtain regulatory approval for

a new product could result in expenses and actions that could adversely affect our business and financial
performance.

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

The process of obtaining and maintaining FDA and other required regulatory approvals is expensive and time-
consuming. Historically, most medical devices that incorporate our technologies and medical devices that we
produce have been subject to the FDA’s 510(k) marketing approval process, which typically lasts from six to nine
months. Supplemental or full pre-market approval reviews require a significantly longer period, delaying
commercialization. Changes in regulation on a global scale must be monitored and actions taken to ensure ongoing
compliance. Pharmaceutical products that incorporate our technologies and medical devices that we produce are
subject to the FDA’s New Drug Application process, which typically takes a number of years to complete.
Additionally, biotechnology products that incorporate our technologies and medical devices that we produce are
subject to the FDA’s Biologics License Application process, which also typically takes a number of years to
complete. Outside of the U.S., sales of medical devices and pharmaceutical or biotechnology products are subject to
international regulatory requirements that vary from country to country. The time required to obtain approval for
sale internationally may be longer or shorter than that required for FDA approval. There is no certainty that any
regulatory approval may be obtained or maintained indefinitely, and our ability to launch products on to the market
and maintain market presence is not guaranteed.

Changes in the regulation of drug products and devices may increase competitive pressure and adversely
affect our business.

An effect of the governmental regulation of our medical devices and our customers’ drug products, devices, and
manufacturing processes is that compliance with regulations makes it difficult to change components and devices
produced by one supplier with those from another supplier, due to the large amount of data and information that
customers must generate to demonstrate that the components and devices are equivalent and pose no additional risk
to the patient. The regulation of our medical devices and our customers’ products that incorporate our components
and devices has increased over time. If the applicable regulations were to be modified in a way that reduced the level
of data and information needed to prove equivalency for a change from one supplier’s components or devices to
those made by another, it is likely that the competitive pressure would increase and adversely affect our sales and
profitability.

If we are not successful in protecting our intellectual property rights, our ability to compete may be affected.

Our patents, trademarks and other intellectual property are important to our business. We rely on patent, trademark,
copyright, trade secret, and other intellectual property laws, as well as nondisclosure and confidentiality agreements
and other methods, to protect our proprietary products, information, technologies and processes. We also have
obligations with respect to the non-use and non-disclosure of third-party intellectual property. We may need to
engage in litigation or similar activities to enforce our intellectual property rights, to protect our trade secrets or to
determine the validity and scope of proprietary rights of others. Any such litigation could require us to expend
significant resources and divert the efforts and attention of our management and other personnel from our business
operations. There can be no assurance that the steps we will take to prevent misappropriation, infringement or other
violation of our intellectual property or the intellectual property of others will be successful. In addition, effective
patent, copyright, trademark and trade secret protection may be unavailable or limited for some of our proprietary
products in some countries. Failure to protect our intellectual property or successfully invalidate or defend against
intellectual property protections of third parties could harm our business and results of operations. In addition, if
relevant and effective patent protection is not available or has expired, we may not be able to prevent competitors
from independently developing products and services similar or duplicative to ours.

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

We have manufacturing sites throughout the world. In some instances, however, the manufacturing of certain
product lines is concentrated in one or only a few of our plants. The functioning of our manufacturing and
distribution assets and systems could be disrupted for reasons either within or beyond our control, including, without
limitation: extreme weather or longer-term climatic changes; natural disasters; pandemic; war; accidental damage;
disruption to the supply of material or services; product quality and safety issues; systems failure; workforce actions;
or environmental contamination. There is a risk that incident management systems in place may prove inadequate
and that any disruption may materially adversely affect our ability to make and sell products and, therefore,
materially adversely affect our reputation, performance or financial condition.

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

The medical technology industry is subject to rapid technological changes, and we face significant competition
across our product lines and in each market in which our products are sold. We face this competition from a wide
range of companies, including large medical device companies, some of which have greater financial and marketing
resources than we do. We also face competition from firms that are more specialized than we are with respect to
particular markets. In some instances, competitors, including pharmaceutical companies, also offer, or are
attempting to develop, alternative therapies for diseases that may be delivered via their own, or without, a medical
device. The development of new or improved products, processes or technologies by other companies (such as
needle-free injection technology) may reduce customer demand for our products or render some of our products or
proposed products obsolete or less competitive. In addition, any failure or inability to meet increased customer
quality expectations could cause a reduction in demand.

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

Changes in U.S. social, political, regulatory, and economic conditions, or in laws and policies governing foreign
trade, manufacturing, development, immigration, and investment, could have an adverse effect on our financial
condition, results of operations and cash flows.

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

We conduct business in most of the major pharmaceutical markets in the world. Our international operations and our
ability to implement our overall business strategy (including our plan to continue expanding into emerging and/or
faster-growing markets outside of the U.S.) are subject to risks and uncertainties that can vary by country, and
include: transportation delays and interruptions; political and economic instability and disruptions, including the
United Kingdom’s referendum on withdrawal from the European Union; imposition of duties and tariffs; import and
export controls; the risks of divergent business expectations or cultural incompatibility inherent in establishing and
maintaining operations in foreign countries; difficulties in staffing and managing multi-national operations; labor
strikes and/or disputes; and potentially adverse tax consequences. Limitations on our ability to enforce legal rights
and remedies with third parties or our joint venture partners outside of the U.S. could also create exposure. In
addition, we may not be able to operate in compliance with foreign laws and regulations, or comply with applicable
customs, currency exchange control regulations, transfer pricing regulations or any other laws or regulations to
which we may be subject, in the event that these laws or regulations change. Any of these events could have an
adverse effect on our international operations in the future by reducing the demand for our products or decreasing
the prices at which we can sell our products, or otherwise have an adverse effect on our financial condition, results
of operations and cash flows.

Disruptions in the supply of key raw materials could adversely impact our operations.

We generally purchase our raw materials and supplies required for the production of our products in the open
market. For reasons of quality assurance, sole source availability or cost effectiveness, many components and raw
materials are available and/or purchased only from a single supplier. Due to the stringent regulations and
requirements of the FDA and other regulatory authorities regarding the manufacture of our products, we may not be
able to quickly establish additional or replacement sources for these components or materials or do so without
excessive cost. As a result, a reduction or interruption in supply, or an inability to secure alternative sources of raw
materials or components, could have a material adverse effect on our business and/or results of operations.

Unauthorized access to our or our customers’ information and systems could negatively impact our business.

Our systems and networks, as well as those of our customers, suppliers, service providers, and banks, have and may
in the future become the target of cyberattacks or information security breaches which, in turn, could result in the
unauthorized release and misuse of confidential or proprietary information about our company, our employees, or
our customers, as well as disrupt our operations or damage our facilities or those of third parties. Additionally, our
systems are subject to regulation to preserve the privacy of certain data held on those systems. We maintain an
extensive network of technical security controls, policy enforcement mechanisms and monitoring systems, in order
to address these threats. While these measures are designed to prevent, detect and respond to unauthorized activity in
our systems, certain types of attacks could result in financial or information losses and/or reputational harm. If we
cannot comply with regulations or prevent the unauthorized access, release and/or corruption of our or our
customers' confidential, classified or personally identifiable information, our reputation could be damaged, and/or
we could face financial losses. We may also be required to incur additional costs to modify or enhance our systems,
or to try to prevent or remediate any such attacks. Modifying or enhancing our systems may result in unanticipated
or prolonged disruption events, which could have a material adverse effect on our business and/or results of
operations.

Raw material and energy prices have a significant impact on our profitability. If raw material and/or energy
prices increase, and we cannot pass those price increases on to our customers, our profitability and financial
condition may suffer.

We use three basic raw materials in the manufacture of our products: elastomers (which include synthetic and
natural material), aluminum and plastic. In addition, our manufacturing facilities consume a wide variety of energy
products to fuel, heat and cool our operations. Supply and demand factors, which are beyond our control, generally
affect the price of our raw materials and utility costs. If we are unable to pass along increased raw material prices
and energy costs to our customers, our profitability, and thus our financial condition, may be adversely affected. The
prices of many of these raw materials and utilities are cyclical and volatile. For example, the prices of certain
commodities, particularly petroleum-based raw materials, have in the recent past exhibited rapid changes, affecting
the cost of synthetic elastomers and plastic. While we generally attempt to pass along increased costs to our
customers in the form of sales price increases, historically there has been a time delay between raw material and/or
energy price increases and our ability to increase the prices of our products. In some circumstances, we may not be
able to increase the prices of our products due to competitive pressure and other factors.

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

Our growth partly depends on new-product innovation and the development and commercialization of proprietary
multi-component systems for injectable drug administration and other healthcare applications. Product development
and commercialization is inherently uncertain and is subject to a number of factors outside of our control, including
any necessary regulatory approvals and commercial acceptance for the products. The ultimate timing and successful
commercialization of new products and systems requires substantial evaluations of the functional, operational,
clinical and economic viability of our products. In addition, the timely and adequate availability of filling capacity is
essential to both conducting definitive stability trials and the timing of commercialization of customers’ products in
CZ vials, syringes and cartridges. Delays, interruptions or failures in developing and commercializing new-product

innovations or proprietary multi-component systems could adversely affect future revenues and operating income. In
addition, adverse conditions may also result in future charges to recognize impairment in the carrying value of our
goodwill and other intangible assets, which could have a material adverse effect on our financial results.

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

We have historically engaged in acquisition activity and we may in the future engage in acquisitions or other
strategic transactions, such as joint ventures or investments in other entities. We may be unable to identify suitable
targets, opportunistic or otherwise, for acquisitions or other strategic transactions in the future. If we identify a
suitable candidate, our ability to successfully implement the strategic transaction would depend on a variety of
factors including our ability to obtain financing on acceptable terms, and to comply with the restrictions contained in
our debt agreements. Strategic transactions involve risks, including those associated with integrating the operations
or maintaining the operations as separate (as applicable), financial reporting, disparate technologies and personnel of
acquired companies, joint ventures or related companies; managing geographically dispersed operations or other
strategic investments; the diversion of management’s attention from other business concerns; the inherent risks in
entering markets or lines of business in which we have either limited or no direct experience; the potential loss of
key employees, customers and strategic partners of acquired companies, joint ventures or companies in which we
may make strategic investments; and potentially other unknown risks. We may not successfully integrate any
businesses or technologies we may acquire or strategically develop in the future and may not achieve anticipated
revenue and cost benefits relating to any such strategic transactions. Strategic transactions may be expensive, time
consuming and may strain our resources. Strategic transactions may not be accretive to our earnings and may
negatively impact our results of operations as a result of, among other things, the incurrence of debt, one-time write-
offs of goodwill, additional carrying costs of patent or trademark portfolios, and amortization expenses of other
intangible assets. In addition, strategic transactions that we may pursue could result in dilutive issuances of equity
securities.

Product defects could adversely affect the results of our operations.

The design, manufacture and marketing of pharmaceutical packaging and medical devices involve certain inherent
risks. Manufacturing or design defects, unanticipated use of our products, or inadequate disclosure of risks relating
to the use of our products can lead to injury or other adverse events. These events could lead to recalls or safety
alerts relating to our products (either voluntary or required by the FDA or similar governmental authorities in other
countries), and could result, in certain cases, in the removal of a product from the market. A recall could result in
significant costs, as well as negative publicity and damage to our reputation that could reduce demand for our
products. Personal injuries relating to the use of our products can also result in product liability claims being brought
against us. In some circumstances, such adverse events could also cause delays in new product approvals.

Our operations must comply with environmental statutes and regulations, and any failure to comply could
result in extensive costs which would harm our business.

The manufacture of some of our products involves the use, transportation, storage and disposal of hazardous or toxic
materials and is subject to various environmental protection and occupational health and safety laws and regulations
in the countries in which we operate. This has exposed us in the past, and could expose us in the future, to risks of
accidental contamination and events of non-compliance with environmental laws. Any such occurrences could result
in regulatory enforcement or personal injury and property damage claims or could lead to a shutdown of some of our
operations, which could have an adverse effect on our business and results of operations. We currently incur costs to
comply with environmental laws and regulations and these costs may become more significant.

A loss of key personnel or highly skilled employees could disrupt our operations.

Our future success depends, in large part, on our ability to retain key employees, including our executive officers,
individuals in technical, marketing, sales and research positions. Competition for experienced employees,
particularly for persons with specialized skills, can be intense. Our ability to recruit such talent will depend on a
number of factors, including compensation and benefits, work location and work environment. If we cannot
effectively recruit and retain qualified executives and employees, our business could be adversely affected. Although
we believe that we will be able to attract and retain talented personnel and replace key personnel should the need
arise, our inability to do so on a timely basis could disrupt the operations of the unit affected or our overall
operations. In addition, because of the complex nature of many of our products and programs, we are generally
dependent on an educated and highly skilled engineering staff and workforce. Our operations could be disrupted by
a shortage of available skilled employees.

The uncertain effects of potential climate change legislation could lead to significantly increased costs.

If legislation or regulations are enacted or promulgated in the U.S., Europe or Asia or any other jurisdictions in
which we do business that limit or reduce allowable greenhouse gas emissions and other emissions, such restrictions
could have a significant effect on our operating and financial decisions, including those involving capital
expenditures to reduce emissions, and our results of operations. Our manufacturing operations may not be able to
operate as planned if we are not able to comply with new legal and regulatory legislation around climate change, or
it may become too costly to operate in a profitable manner. Additionally, suppliers’ added expenses could be passed
on to us in the form of higher prices and we may not be able to pass on such expenses to our customers through
price increases.

Healthcare reform may adversely affect our results of operations.

Changes in the U.S. or international healthcare systems, including the Patient Protection and Affordable Care Act
(the “PPACA”), could result in reduced demand for our products, as our sales depend, in part, on the extent to which
pharmaceutical companies and healthcare providers and facilities are reimbursed by government authorities, private
insurers and other third-party payers for the costs of our products. The coverage policies and reimbursement levels
of third-party payers, which can vary among public and private sources, may affect which products customers
purchase and the prices they are willing to pay for these products in a particular jurisdiction. Legislative or
administrative reforms to reimbursement systems in the U.S. (including the possible termination of the PPACA and
potential replacement thereafter with a different system) or abroad (for example, those under consideration in
France, Germany, Italy and the United Kingdom) could significantly reduce reimbursement for our customers’
products, which could in turn reduce the demand for our products.

Moreover, in the coming years, additional changes could be made to global governmental healthcare programs that
could significantly impact the success of our products. We will continue to evaluate the PPACA, as amended, the
implementation of regulations or guidance related to various provisions of the PPACA by federal agencies, the
potential repeal and replacement of the PPACA, as well as trends and changes that may be encouraged by the
legislation and other healthcare legislation globally and that may potentially impact our business over time.

No assurance can be given that we will continue to pay or declare dividends.

We have historically paid dividends. However, there can be no assurance that we will pay or declare dividends in the
future. The actual declaration and payment of future dividends, the amount of any such dividends, and the
establishment of record and payment dates, if any, are subject to determination by our Board of Directors each
quarter after its review of our then-current strategy, applicable debt covenants and financial performance and
position, among other things. Our declaration and payment of future dividends is subject to risks and uncertainties,
including: deterioration of our financial performance or position; inability to declare a dividend in compliance with
applicable laws or debt covenants; an increase in our cash needs or decrease in available cash; and the business
judgment of the Board of Directors that a declaration of a dividend is not in our best interest.

Our results of operations and earnings may not meet guidance or expectations.

We provide public guidance on our expected results of operations for future periods. This guidance is comprised of
forward-looking statements subject to risks and uncertainties, including the risks and uncertainties described in this
Form 10-K and in our other public filings and public statements, and is based necessarily on assumptions we make
at the time we provide such guidance. Our guidance may not always be accurate. If, in the future, our results of
operations for a particular period do not meet our guidance or the expectations of investment analysts or if we
reduce our guidance for future periods, the market price of our common stock could decline significantly.

We are exposed to credit risk on accounts receivable and certain prepayments made in the normal course of
business. This risk is heightened during periods when economic conditions worsen.

A substantial majority of our outstanding trade receivables are not covered by collateral or credit insurance. In
addition, we have made prepayments associated with insurance premiums and other advances in the normal course
of business. While we have procedures to monitor and limit exposure to credit risk on trade receivables and other
current assets, there can be no assurance such procedures will effectively limit our credit risk and avoid losses,
which could have a material adverse effect on our financial condition and operating results.

If we fail to comply with our obligations under our distributorship or license agreements with Daikyo, the
agreements are terminated early or we are unable to renew these agreements on the same or substantially
similar terms, we could lose license rights that are important to our business.

Key value-added and proprietary products and processes are licensed from our affiliate, Daikyo, including but not
limited to, CZ, FluroTec® and B2-coating technologies. Our rights to these products and processes are licensed
pursuant to agreements that expire in 2027. However, if the agreements are terminated early, our business could be
adversely impacted.

ITEM IB. UNRESOLVED STAFF COMMENTS

As of the filing of this Form 10-K, there were no unresolved comments from the Staff of the SEC.

ITEM 2. PROPERTIES

Our corporate headquarters are located at 530 Herman O. West Drive, Exton, Pennsylvania.

The following table summarizes production facilities by segment and geographic region. All facilities shown are
owned except where otherwise noted.

Manufacturing:
North American Operations

United States

Clearwater, FL
Jersey Shore, PA
Kearney, NE
Kinston, NC
Lititz, PA
Scottsdale, AZ (2)
St. Petersburg, FL (1)

South American Operations

Brazil

Sao Paulo

Proprietary Products

European Operations

Asia Pacific Operations

China

Qingpu

India

Sri City
Singapore
Jurong

Denmark

Horsens

England

St. Austell

France

Le Nouvion
Le Vaudreuil

Germany

Eschweiler (1) (2)
Stolberg

Ireland

Waterford

Serbia

Kovin

Mold-and-Die Tool Shop:
North American Operations

United States

Upper Darby, PA

European Operations

England

Bodmin (2)

Contract Analytical Laboratory:
North American Operations

United States
Exton, PA

Contract-Manufactured Products

European Operations

Ireland

Dublin (2)

Manufacturing:
North American Operations

United States

Grand Rapids, MI
Phoenix, AZ (2)
Tempe, AZ (2)
Williamsport, PA

Puerto Rico
Cayey

(1) This manufacturing facility is also used for research and development activities.
(2) This facility is leased in whole or in part.

Our Proprietary Products reportable segment leases facilities located in Germany, Israel and New Jersey for research
and development, as well as other activities. Sales offices in various locations are leased under short-term
arrangements.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

EXECUTIVE OFFICERS OF THE COMPANY

The executive officers of the Company are set forth in this table. Generally, executive officers are elected by the
Board of Directors annually at the regular meeting of the Board of Directors following the Annual Meeting of
Shareholders. Additionally, executive officers may be elected upon hire or due to a promotion.

Name
Silji Abraham

Age
47

Bernard J. Birkett

Annette F. Favorite

Karen A. Flynn

Eric M. Green

Quintin J. Lai

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

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

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

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

Chief Executive Officer since April 2015 and President since December 2015.
Prior to joining West, he was Executive Vice President and President of the
Research Markets business unit at Sigma-Aldrich Corporation from 2013 to
2015. From 2009 to 2013, he served as Vice President and Managing Director,
International, where he was responsible for Asia Pacific and Latin America,
and prior thereto, held various commercial and operational roles.

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

Daniel Malone

George L. Miller

David A. Montecalvo

Eric Resnick

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

Senior Vice President, General Counsel and Corporate Secretary since joining
West in November 2015. Previously, he served as Senior Vice President,
General Counsel and Corporate Secretary for Sigma-Aldrich Corporation from
2009 to 2015. Prior to working at Sigma-Aldrich, he held senior legal
positions with Novartis AG, a global healthcare company.

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

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

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES

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

First Quarter
Low
High
$84.73
$102.80
$79.06
$88.30

Second Quarter
High
Low
$82.74
$102.14
$77.97
$99.91

Third Quarter
Low
High
$96.97
$124.51
$80.02
$96.81

Fourth Quarter
Low
High
$91.75
$125.09
$89.77
$103.36

Year

High
$125.09
$103.36

Low
$82.74
$77.97

2018
2017

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

Dividends

Our common stock paid a quarterly dividend of $0.13 per share in each of the first three quarters of 2017; $0.14 per
share in the fourth quarter of 2017 and each of the first three quarters of 2018; and $0.15 per share in the fourth
quarter of 2018.

Issuer Purchases of Equity Securities

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

Period

October 1 – 31, 2018

November 1 – 30, 2018

December 1 – 31, 2018

Total

Total number of
shares purchased
(1)(2)

Average price
paid per share
(1)(2)

— $

140

—

108.80

—

140

108.80

Total number of shares
purchased as
part of publicly
announced plans or

Maximum number (or
approximate dollar value)
of shares that may
yet be purchased
under the plans or
programs

(2)

(2) (3)

programs

—

(1) Includes 140 shares purchased on behalf of employees enrolled in the Non-Qualified Deferred

Compensation Plan for Designated Employees (Amended and Restated Effective December 1, 2018).
Under the plan, Company match contributions are delivered to the plan’s investment administrator,
who then purchases shares in the open market and credits the shares to individual plan accounts.

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

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

Performance Graph

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

Cumulative total return to shareholders is measured by dividing total dividends (assuming dividend reinvestment)
plus the per-share price change for the period by the share price at the beginning of the period. The Company’s
cumulative shareholder return is based on an investment of $100 on December 31, 2013 and is compared to the
cumulative total return of the S&P indices mentioned above over the period with a like amount invested.

ITEM 6. SELECTED FINANCIAL DATA

FIVE-YEAR SUMMARY
West Pharmaceutical Services, Inc. and Subsidiaries

(in millions, except per share data)
SUMMARY OF OPERATIONS
Net sales
Operating profit †
Net income

Net income per share:
Basic (1)
Diluted (2)
Weighted average common shares outstanding
Weighted average shares assuming dilution
Dividends declared per common share

YEAR-END FINANCIAL POSITION
Cash and cash equivalents
Working capital
Total assets
Total invested capital:
Total debt
Total equity
Total invested capital

PERFORMANCE MEASUREMENTS (3)
Gross margin (a)
Operating profitability (b) †
Effective tax rate (4)
Return on invested capital (c) †
Net debt-to-total invested capital (d)
Research and development expenses
Operating cash flow
Stock price range

2018

2017

2016

2015

2014

1,717.4
240.3
206.9

2.80
2.74
73.9
75.4
0.58

337.4
610.7
1,978.9

196.1
1,396.3
1,592.4

1,599.1
225.8
150.7

2.04
1.99
73.9
75.8
0.54

235.9
464.0
1,862.8

197.0
1,279.9
1,476.9

31.8%
14.0%
17.2%
13.0%
N/A

32.1%
14.1%
36.4%
10.2%
N/A

40.3
288.6

39.1
263.3
$125.09-82.74 $103.36-77.97

1,509.1
195.2
143.6

1.96
1.91
73.3
75.0
0.50

203.0
400.9
1,716.7

228.6
1,117.5
1,346.1

33.2%
12.9%
28.7%
10.4%
2.2%
36.8
219.4
$86.50-53.88

1,399.8
177.0
95.6

1.33
1.30
72.0
73.8
0.46

274.6
359.4
1,695.1

298.2
1,023.9
1,322.1

32.6%
12.6%
22.6%
10.5%
2.3%
34.1
212.4
$64.59-48.66

1,421.4
182.0
127.1

1.79
1.75
70.9
72.8
0.41

255.3
406.6
1,669.7

335.5
956.9
1,292.4

31.5%
12.8%
28.0%
10.2%
7.7%
37.3
182.9
$55.29-39.11

(1) Based on weighted average common shares outstanding.

(2) Based on weighted average shares, assuming dilution.

(3) Performance measurements represent indicators commonly used in the financial community. The following

performance measures are not in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”)
and should not be used as a substitute for the comparable U.S. GAAP financial measures. The non-U.S. GAAP
financial measures are included as management uses them in evaluating our results of operations, and believes
that this information provides users with a valuable insight into our overall performance and financial position.

(a) Net sales minus cost of goods and services sold, including applicable depreciation and amortization, divided

by net sales.

(b) Operating profit divided by net sales.
(c) Operating profit multiplied by one minus the effective tax rate divided by average total invested capital.
(d) Net debt (total debt less cash and cash equivalents) divided by total invested capital less cash and cash

equivalents.

(4) As a result of the Tax Cuts and Jobs Act (the “2017 Tax Act”), the federal statutory rate was reduced from 35.0%
to 21.0% effective for tax years beginning after December 31, 2017. Please refer to Note 16, Income Taxes, for
further discussion of the 2017 Tax Act.

† Reflects our adoption of the guidance issued by the Financial Accounting Standards Board (“FASB”) regarding

the presentation of net periodic pension and postretirement benefit cost (net benefit cost).

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

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

Net income in 2017 included the impact of a discrete tax charge of $48.8 million related to the 2017 Tax Act
and the impact of changes in enacted international tax rates on previously-recorded deferred tax asset and
liability balances, as well as a tax benefit of $33.1 million associated with our adoption of the guidance issued
by the FASB regarding share-based payment transactions and a charge of $11.1 million related to the
deconsolidation of our Venezuelan subsidiary.

Net income in 2016 included the impact of restructuring and related charges of $17.4 million (net of $9.0
million in tax), a charge related to the devaluation of the Venezuelan Bolivar of $2.7 million, a pension
curtailment gain of $1.3 million (net of $0.8 million in tax), and a discrete tax charge of $1.0 million.

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

Net income in 2014 included the impact of a charge for license costs associated with acquired in-process

research of $0.8 million (net of $0.4 million in tax) and discrete tax charges of $1.8 million.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

The following discussion is intended to further the reader’s understanding of the consolidated financial condition
and results of operations of our Company. It should be read in conjunction with our consolidated financial
statements and the accompanying footnotes included in Part II, Item 8 of this Form 10-K. These historical financial
statements may not be indicative of our future performance. This Management’s Discussion and Analysis of
Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are
based on our current expectations and could be affected by the uncertainties and risks discussed in Part I, Item 1A of
this Form 10-K.

Non-U.S. GAAP Financial Measures

For the purpose of aiding the comparison of our year-over-year results, we may refer to net sales and other financial
results excluding the effects of changes in foreign currency exchange rates. The constant-currency amounts are
calculated by translating the current year’s functional currency results at the prior-year period’s exchange rate. We
may also refer to consolidated operating profit and consolidated operating profit margin excluding the effects of
unallocated items. The re-measured results excluding effects from currency translation and excluding the effects of

unallocated items are not in conformity with U.S. GAAP and should not be used as a substitute for the comparable
U.S. GAAP financial measures. The non-U.S. GAAP financial measures are incorporated into our discussion and
analysis as management uses them in evaluating our results of operations, and believes that this information
provides users a valuable insight into our results.

Our Operations

We are a leading global manufacturer in the design and production of technologically advanced, high-quality,
integrated containment and delivery systems for injectable drugs and healthcare products. Our products include a
variety of primary packaging, containment solutions, reconstitution and transfer systems, and drug delivery systems,
as well as contract manufacturing and analytical lab services. Our customers include the leading biologic, generic,
pharmaceutical, diagnostic, and medical device companies in the world. Our top priority is delivering quality
products that meet the exact product specifications and quality standards customers require and expect. This focus
on quality includes excellence in manufacturing, scientific and technical expertise and management, so we can
partner with our customers to deliver safe, effective drug products to patients quickly and efficiently. The Company
was incorporated under the laws of the Commonwealth of Pennsylvania on July 27, 1923.

Our business operations are organized into two reportable segments, Proprietary Products and Contract-
Manufactured Products. Our Proprietary Products reportable segment offers proprietary packaging, containment and
drug delivery products, along with analytical lab services, to biologic, generic and pharmaceutical drug customers.
Our Contract-Manufactured Products reportable segment serves as a fully integrated business, focused on the
design, manufacture, and automated assembly of complex devices, primarily for pharmaceutical, diagnostic, and
medical device customers. We also maintain partnerships to share technologies and market products with affiliates in
Japan and Mexico.

2018 Financial Performance Summary

Consolidated net sales increased by $118.3 million, or 7.4%, in 2018. Excluding foreign currency translation effects,
consolidated net sales increased by $89.7 million, or 5.6%.

Net income in 2018 was $206.9 million, or $2.74 per diluted share, compared to $150.7 million, or $1.99 per diluted
share, in 2017. Net income in 2018 included the impact of restructuring and related charges of $7.2 million (net of
$1.9 million in tax), or $0.09 per diluted share, a gain on the sale of fixed assets as a result of our restructuring plans
of $0.9 million (net of $0.2 million in tax), or $0.01 per diluted share, a charge of $1.1 million, or $0.02 per diluted
share, related to the classification of Argentina’s economy as highly inflationary under U.S. GAAP as of July 1,
2018, a net tax benefit of $2.5 million, or $0.03 per diluted share, for the impact of tax law changes, including the
2017 Tax Act, and a tax benefit of $14.3 million, or $0.19 per diluted share, associated with our adoption in 2017 of
guidance issued by the FASB regarding share-based payment transactions. Net income in 2017 included the impact
of a discrete tax charge of $48.8 million, or $0.64 per diluted share, related to the 2017 Tax Act and the impact of
changes in enacted international tax rates on previously-recorded deferred tax asset and liability balances, a tax
benefit of $33.1 million, or $0.44 per diluted share, associated with our adoption of the guidance issued by the FASB
regarding share-based payment transactions, and a charge of $11.1 million, or $0.15 per diluted share, related to the
deconsolidation of our Venezuelan subsidiary.

On January 24, 2019, we issued a voluntary recall of our Vial2Bag® product line due to reports of potential
unpredictable or variable dosing under certain conditions. Our 2018 results included an $11.3 million provision for
product returns, recorded as a reduction of sales. Our inventory balance for these devices was $6.5 million at
December 31, 2018, which included estimated in-transit inventory being returned by our customers. We are working
to develop the support required to get the products back on the market, and we currently believe the returned
inventory will be saleable in 2019.

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

RESULTS OF OPERATIONS

We evaluate the performance of our segments based upon, among other things, segment net sales and operating
profit. Segment operating profit excludes general corporate costs, which include executive and director
compensation, stock-based compensation, adjustments to annual incentive plan expense for over- or under-
attainment of targets, certain pension and other retirement benefit costs, and other corporate facilities and
administrative expenses not allocated to the segments. Also excluded are items that we consider not representative of
ongoing operations. Such items are referred to as other unallocated items and generally include restructuring and
related charges, certain asset impairments and other specifically-identified income or expense items.

Percentages in the following tables and throughout this Results of Operations section may reflect rounding
adjustments.

Net Sales

The following table presents net sales, consolidated and by reportable segment:

($ in millions)

Proprietary Products

Year Ended December 31,

% Change

2018

2017

2016

2018/2017

2017/2016

$ 1,308.6

$ 1,236.9

$ 1,189.9

Contract-Manufactured Products

Intersegment sales elimination

409.1

(0.3)

362.5

(0.3)

Consolidated net sales

$ 1,717.4

$ 1,599.1

320.2
(1.0)
$ 1,509.1

5.8%

12.9%

—%

7.4%

3.9%

13.2%

—%

6.0%

2018 compared to 2017
Consolidated net sales increased by $118.3 million, or 7.4%, in 2018, including a favorable foreign currency
translation impact of $28.6 million. Excluding foreign currency translation effects, consolidated net sales increased
by $89.7 million, or 5.6%.

Proprietary Products – Proprietary Products net sales increased by $71.7 million, or 5.8%, in 2018, including a
favorable foreign currency translation impact of $23.8 million. Excluding foreign currency translation effects, net
sales increased by $47.9 million, or 3.9%, as growth in our high-value product offerings, including our Westar® and
FluroTec-coated components, our ready-to-use seals, stoppers, and plungers, and our NovaPure® products, as well as
sales price increases, partially offset the impact of the voluntary recall of Vial2Bag products and the deconsolidation
of our Venezuelan subsidiary as of April 1, 2017.

Contract-Manufactured Products – Contract-Manufactured Products net sales increased by $46.6 million, or
12.9%, in 2018, including a favorable foreign currency translation impact of $4.8 million. Excluding foreign
currency translation effects, net sales increased by $41.8 million, or 11.6%, despite the impact of the loss of a
consumer-product customer in early 2018. Higher sales volume, particularly in Ireland, contributed 10.4 percentage
points of the increase, and sales price increases contributed 1.2 percentage points of the increase.

2017 compared to 2016
Consolidated net sales increased by $90.0 million, or 6.0%, in 2017, including a favorable foreign currency
translation impact of $12.2 million. Excluding foreign currency translation effects, consolidated net sales increased
by $77.8 million, or 5.2%.

Proprietary Products – Proprietary Products net sales increased by $47.0 million, or 3.9%, in 2017, including a
favorable foreign currency translation impact of $8.4 million. Excluding foreign currency translation effects, net
sales increased by $38.6 million, or 3.2%. Proprietary Products sales growth in 2017 was slower than in 2016,
as customers continued to work down inventory purchased in 2016 mostly to address long production lead-times for
high-value products. Additional production capacity and staffing improved our lead-times, and we began to see

positive growth for customers in the Biologics and Generics market units. Higher sales volume contributed 2.2
percentage points of the increase, and sales price increases contributed 1.0 percentage points of the increase.

Contract-Manufactured Products – Contract-Manufactured Products net sales increased by $42.3 million, or
13.2%, in 2017, including a favorable foreign currency translation impact of $3.8 million. Excluding foreign
currency translation effects, net sales increased by $38.5 million, or 12.0%, primarily due to the initial commercial
ramp-up of projects that commenced in the latter half of 2016. Higher sales volume contributed 10.8 percentage
points of the increase, and sales price increases contributed 1.2 percentage points of the increase.

Gross Profit

The following table presents gross profit and related gross margins, consolidated and by reportable segment:

($ in millions)

Proprietary Products:

Gross profit

Gross profit margin

Contract-Manufactured Products:

Gross profit

Gross profit margin

Consolidated gross profit

Consolidated gross profit margin

Year Ended December 31,

% Change

2018

2017

2016

2018/2017

2017/2016

485.4

449.3

448.3

8.0 %

0.2%

37.1%

36.3%

37.7%

60.0

14.7%

545.4

31.8%

63.6

17.5%

512.9

32.1%

53.1

16.5%

501.4

33.2%

(5.7)%

19.8%

6.3 %

2.3%

2018 compared to 2017
Consolidated gross profit increased by $32.5 million, or 6.3%, in 2018, including a favorable foreign currency
translation impact of $9.3 million. Consolidated gross profit margin decreased by 0.3 margin points in 2018.

Proprietary Products – Proprietary Products gross profit increased by $36.1 million, or 8.0%, in 2018, including a
favorable foreign currency translation impact of $8.5 million. Proprietary Products gross profit margin increased by
0.8 margin points in 2018, as production efficiencies, a favorable mix of products sold, and sales price increases
were partially offset by the impact of under-absorbed overhead costs from our new facility in Waterford, Ireland and
the deconsolidation of our Venezuelan subsidiary as of April 1, 2017, as well as increased labor and depreciation
costs and higher raw material costs.

Contract-Manufactured Products – Contract-Manufactured Products gross profit decreased by $3.6 million, or
5.7%, in 2018, including a favorable foreign currency translation impact of $0.8 million. Contract-Manufactured
Products gross profit margin decreased by 2.8 margin points in 2018, due to unabsorbed overhead from plant
consolidation activities, start-up costs associated with the launch of new programs, an unfavorable mix of product
sales, and lower profitability on development and tooling agreements, and higher raw material costs, partially offset
by sales price increases and production efficiencies.

2017 compared to 2016
Consolidated gross profit increased by $11.5 million, or 2.3%, in 2017, including a favorable foreign currency
translation impact of $3.3 million. Consolidated gross profit margin decreased by 1.1 margin points in 2017.

Proprietary Products – Proprietary Products gross profit increased by $1.0 million, or 0.2%, in 2017, including a
favorable foreign currency translation impact of $2.6 million. Proprietary Products gross profit margin decreased by
1.4 margin points in 2017, as production efficiencies and modest price increases were more than offset by increased
material labor and overhead costs.

Contract-Manufactured Products – Contract-Manufactured Products gross profit increased by $10.5 million, or
19.8%, in 2017, including a favorable foreign currency translation impact of $0.7 million. Contract-Manufactured
Products gross profit margin increased by 1.0 margin points in 2017, as sales price increases, a favorable mix of
products sold, higher sales volume, and production efficiencies were partially offset by increased labor, overhead,
and depreciation costs.

Research and Development (“R&D”) Costs

The following table presents R&D costs, consolidated and by reportable segment:

Year Ended December 31,

% Change

($ in millions)

Proprietary Products

Contract-Manufactured Products

Consolidated R&D costs

2018

2017

2016

2018/2017

2017/2016

40.3

—

40.3

39.1

—

39.1

36.8

—

36.8

3.1%

—

3.1%

6.3%

—

6.3%

2018 compared to 2017
Consolidated R&D costs increased by $1.2 million, or 3.1%, in 2018. Efforts remain focused on the continued
investment in self-injection systems development, elastomeric packaging components, and formulation
development.

2017 compared to 2016
Consolidated R&D costs increased by $2.3 million, or 6.3%, in 2017, due to continued investment in self-injection
systems development and formulation development.

All of the R&D costs incurred during 2018 and 2017 related to Proprietary Products.

Selling, General and Administrative (“SG&A”) Costs

The following table presents SG&A costs, consolidated and by reportable segment and corporate:

Year Ended December 31,

% Change

2018

2017

2016

2018/2017

2017/2016

($ in millions)

Proprietary Products

Contract-Manufactured Products

Corporate

185.0

175.3

167.4

16.5

61.4

15.4

55.3

15.2

57.0

Consolidated SG&A costs

262.9

246.0

239.6

SG&A as a % of net sales

15.3%

15.4%

15.9%

5.5%

7.1%

11.0%

6.9%

4.7 %

1.3 %

(3.0)%

2.7 %

2018 compared to 2017
Consolidated SG&A costs increased by $16.9 million, or 6.9%, in 2018, including the impact of foreign currency
translation, which increased SG&A costs by $2.4 million.

Proprietary Products – Proprietary Products SG&A costs increased by $9.7 million, or 5.5%, in 2018, due to
higher commercial sales compensation costs and legal costs. Foreign currency translation increased Proprietary
Products SG&A costs by $2.3 million.

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

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

2017 compared to 2016
Consolidated SG&A costs increased by $6.4 million, or 2.7%, in 2017, including the impact of foreign currency
translation, which increased SG&A costs by $1.2 million.

Proprietary Products – Proprietary Products SG&A costs increased by $7.9 million, or 4.7%, in 2017, due to
increases in compensation costs, primarily related to headcount and merit increases. Foreign currency translation
increased Proprietary Products SG&A costs by $1.2 million.

Contract-Manufactured Products – Contract-Manufactured Products SG&A costs increased by $0.2 million, or
1.3%, in 2017, due to an increase in incentive compensation and travel costs.

Corporate – Corporate SG&A costs decreased by $1.7 million, or 3.0%, in 2017, due to decreases in U.S.
pension costs and stock-based compensation expense, partially offset by increases in headcount and outside services.

Other Expense

The following table presents other income and expense items, consolidated and by reportable segment and
unallocated items:

Expense (income)

($ in millions)

Proprietary Products

Year Ended December 31,

2018

2017

2016

(6.3) $

Contract-Manufactured Products

Corporate

Unallocated items

Consolidated other expense

(0.8)

(0.1)

9.1

1.9

(8.9) $
(0.1)
(0.1)
11.1

2.0

1.0
(0.3)
—

29.1

29.8

Other income and expense items, consisting of foreign exchange transaction gains and losses, gains and losses on
the sale of fixed assets, development and licensing income, contingent consideration, and miscellaneous income and
charges, are generally recorded within segment results.

2018 compared to 2017
Consolidated other expense decreased by $0.1 million in 2018.

Proprietary Products – Proprietary Products other income decreased by $2.6 million in 2018, primarily as we
recorded income of $9.1 million attributable to the reimbursement of certain costs related to a technology that we
subsequently licensed to a third party in 2017, partially offset by foreign exchange transaction gains in Europe in
2018. Please refer to Note 15, Other Expense, for further discussion of the $9.1 million attributable to the
reimbursement of certain costs.

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

Corporate – Corporate other income remained constant at $0.1 million in 2018.

Unallocated items – During 2018, we recorded $9.1 million in restructuring and related charges, a $1.1 million gain
on the sale of fixed assets as a result of our restructuring plans, and a charge of $1.1 million related to the
classification of Argentina’s economy as highly inflationary under U.S. GAAP as of July 1, 2018. Once fully

completed, we expect that our 2018 restructuring plan will provide annualized savings in the range of $13.5 million
to $14.5 million. Please refer to Note 15, Other Expense, for further discussion of these items.

2017 compared to 2016
Consolidated other expense decreased by $27.8 million in 2017.

Proprietary Products – Proprietary Products other (income) expense changed by $9.9 million in 2017, primarily as
we recorded income of $9.1 million attributable to the reimbursement of certain costs related to a technology that we
subsequently licensed to a third party.

Contract-Manufactured Products – Contract-Manufactured Products other income decreased by $0.2 million in
2017, due to gains on the sale of fixed assets recorded in 2016, partially offset by foreign exchange transaction gains
recorded in 2017.

Corporate – Corporate other income increased by $0.1 million in 2017.

Unallocated items – During 2017, as a result of the continued deterioration of conditions in Venezuela as well as
our continued reduced access to USD settlement controlled by the Venezuelan government, we recorded a charge of
$11.1 million related to the deconsolidation of our Venezuelan subsidiary, following our determination that we no
longer met the U.S. GAAP criteria for control of that subsidiary. Please refer to Note 15, Other Expense, for further
discussion of these items.

Operating Profit

The following table presents adjusted operating profit, consolidated and by reportable segment, corporate and
unallocated items:

Year Ended December 31,

% Change

2018

2017

2016

2018/2017

2017/2016

266.4

243.8

243.1

($ in millions)

Proprietary Products

Contract-Manufactured Products

Corporate

Adjusted consolidated operating profit

249.4

Adjusted consolidated operating profit margin

Unallocated items

Consolidated operating profit

Consolidated operating profit margin

14.5%

(9.1)

240.3

14.0%

44.3

(61.3)

48.3
(55.2)
236.9

14.8%
(11.1)
225.8

14.1%

38.2
(57.0)
224.3

14.9%
(29.1)
195.2

12.9%

9.3 %

(8.3)%

11.1 %

5.3 %

0.3 %

26.4 %

(3.2)%

5.6 %

6.4 %

15.7 %

2018 compared to 2017
Consolidated operating profit increased by $14.5 million, or 6.4%, in 2018, including a favorable foreign currency
translation impact of $6.6 million.

Proprietary Products – Proprietary Products operating profit increased by $22.6 million, or 9.3%, in 2018,
including a favorable foreign currency translation impact of $5.9 million, due to the factors described above.

Contract-Manufactured Products – Contract-Manufactured Products operating profit decreased by $4.0 million,
or 8.3%, in 2018, including a favorable foreign currency translation impact of $0.7 million, due to the factors
described above.

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

Unallocated items – Please refer to the Other Expense section for details.

Excluding the unallocated items, our adjusted consolidated operating profit margin decreased by 0.3 margin points
in 2018.

2017 compared to 2016
Consolidated operating profit increased by $30.6 million, or 15.7%, in 2017, including a favorable foreign currency
translation impact of $1.6 million.

Proprietary Products – Proprietary Products operating profit increased by $0.7 million, or 0.3%, in 2017, including
a favorable foreign currency translation impact of $0.9 million, due to the factors described above.

Contract-Manufactured Products – Contract-Manufactured Products operating profit increased by $10.1 million,
or 26.4%, in 2017, including a favorable foreign currency translation impact of $0.7 million, due to the factors
described above.

Corporate – Corporate costs decreased by $1.8 million, or 3.2%, in 2017, due to the factors described above.

Unallocated items – Please refer to the Other Expense section for details.

Excluding the unallocated items, our adjusted consolidated operating profit margin decreased by 0.1 margin points
in 2017.

Interest Expense, Net

The following table presents interest expense, net, by significant component:

($ in millions)

Interest expense

Capitalized interest

Interest income

Interest expense, net

Year Ended December 31,

% Change

2018

2017

2016

2018/2017

2017/2016

9.3

10.5

(0.9)

(2.1)

(2.7)

(1.3)

6.3

6.5

11.7
(3.6)
(1.1)
7.0

(11.4)%

(66.7)%

61.5 %

(3.1)%

(10.3)%

(25.0)%

18.2 %

(7.1)%

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

2017 compared to 2016
Interest expense, net, decreased by $0.5 million, or 7.1%, in 2017, due to lower interest expense resulting from less
average debt outstanding during 2017, as compared to 2016, partially offset by a decrease in capitalized interest.

Other Nonoperating Income

2018 compared to 2017
Other nonoperating income increased by $3.6 million in 2018, due to an increase in the expected return on pension
plan assets and a decrease in recognized actuarial losses for 2018. Please refer to Note 2, New Accounting Standards,
and Note 14, Benefit Plans, for information on guidance issued by the FASB on the presentation of net periodic

pension and postretirement benefit cost (net benefit cost) that we adopted as of January 1, 2018, on a retrospective
basis.

2017 compared to 2016
Other nonoperating income increased by $1.5 million in 2017, primarily due to an increase in the expected return on
pension plan assets for 2017.

Income Taxes

The provision for income taxes was $41.4 million, $80.9 million, and $54.4 million for the years 2018, 2017, and
2016, respectively, and the effective tax rate was 17.2%, 36.4%, and 28.7%, respectively.

During 2018, we recorded a net tax benefit of $2.5 million for the impact of tax law changes, including the 2017 Tax
Act, and a tax benefit of $14.3 million associated with our adoption in 2017 of guidance issued by the FASB
regarding share-based payment transactions. Please refer to Note 16, Income Taxes, for further discussion of the
2017 Tax Act.

During 2017, we recorded a discrete tax charge of $48.8 million related to the 2017 Tax Act and the impact of
changes in enacted international tax rates on previously-recorded deferred tax asset and liability balances, as well as
a tax benefit of $33.1 million associated with our adoption of the guidance issued by the FASB regarding share-
based payment transactions.

During 2016, we recorded a tax benefit of $9.0 million in connection with restructuring and related charges of $26.4
million, a discrete tax charge of $0.8 million related to the pension curtailment gain of $2.1 million, and a discrete
tax charge of $1.0 million resulting from the impact of changes in enacted tax rates on our previously-recorded
deferred tax asset and liability balances.

Please refer to Note 16, Income Taxes, for further discussion of our income taxes.

Equity in Net Income of Affiliated Companies

Equity in net income of affiliated companies represents the contribution to earnings from our 25% ownership
interest in Daikyo and our 49% ownership interest in four companies in Mexico. Equity in net income of affiliated
companies was $7.6 million, $9.2 million, and $8.2 million for the years 2018, 2017, and 2016, respectively. Equity
in net income of affiliated companies decreased by $1.6 million, or 17.4%, in 2018, primarily due to the impact of
gains on the sale of investment securities by Daikyo in 2017. Equity in net income of affiliated companies increased
by $1.0 million, or 12.2%, in 2017, due to the impact of gains on the sale of investment securities by Daikyo,
partially offset by foreign exchange transaction losses in Mexico.

Net Income

Net income in 2018 was $206.9 million, or $2.74 per diluted share, compared to $150.7 million, or $1.99 per diluted
share, in 2017. Our 2018 results included the impact of restructuring and related charges of $7.2 million (net of $1.9
million in tax), a gain on the sale of fixed assets as a result of our restructuring plans of $0.9 million (net of $0.2
million in tax), a charge of $1.1 million related to the classification of Argentina’s economy as highly inflationary
under U.S. GAAP as of July 1, 2018, a net tax benefit of $2.5 million for the impact of tax law changes, including
the 2017 Tax Act, and a tax benefit of $14.3 million associated with our adoption in 2017 of guidance issued by the
FASB regarding share-based payment transactions.

Net income in 2017 was $150.7 million, or $1.99 per diluted share, compared to $143.6 million, or $1.91 per diluted
share, in 2016. Our 2017 results included the impact of a discrete tax charge of $48.8 million related to the 2017 Tax
Act and the impact of changes in enacted international tax rates on previously-recorded deferred tax asset and
liability balances, as well as a tax benefit of $33.1 million associated with our adoption of the guidance issued by the

FASB regarding share-based payment transactions and a charge of $11.1 million related to the deconsolidation of
our Venezuelan subsidiary.

Net income in 2016 was $143.6 million, or $1.91 per diluted share, compared to $95.6 million, or $1.30 per diluted
share, in 2015. Our 2016 results included the impact of restructuring and related charges of $17.4 million (net of
$9.0 million in tax), a charge related to the devaluation of the Venezuelan Bolivar of $2.7 million, a pension
curtailment gain of $1.3 million (net of $0.8 million in tax), and a discrete tax charge of $1.0 million.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

The following table presents cash flow data for the years ended December 31:

($ in millions)

Net cash provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

Net Cash Provided by Operating Activities

2018

2017

2016

$
288.6
(100.8) $
(80.7) $

$
263.3
(133.6) $
(109.0) $

219.4
(175.8)
(113.9)

2018 compared to 2017
Net cash provided by operating activities increased by $25.3 million in 2018, primarily due to improved operating
results and a decrease in pension plan contributions in 2018.

2017 compared to 2016
Net cash provided by operating activities increased by $43.9 million in 2017, due to improved operating results.

Net Cash Used in Investing Activities

2018 compared to 2017
Net cash used in investing activities decreased by $32.8 million in 2018, mostly due to a $26.1 million decrease in
capital spending due to the completion of several major projects in 2017, including certain components of our new
facility in Waterford, Ireland.

2017 compared to 2016
Net cash used in investing activities decreased by $42.2 million in 2017, mostly due to a $39.4 million decrease in
capital spending due to the completion of several major projects, including certain components of our new facility in
Waterford, Ireland.

Net Cash Used in Financing Activities

2018 compared to 2017
Net cash used in financing activities decreased by $28.3 million in 2018, primarily due to lower debt repayment
activity in 2018.

2017 compared to 2016
Net cash used in financing activities decreased by $4.9 million in 2017, due to a decrease in net debt repayments,
partially offset by an increase in purchases under our share repurchase programs.

We paid cash dividends totaling $42.1 million ($0.57 per share), $39.1 million ($0.53 per share), and $35.8 million
($0.49 per share) during 2018, 2017, and 2016, respectively.

Liquidity and Capital Resources

The table below presents selected liquidity and capital measures as of:

($ in millions)

Cash and cash equivalents

Working capital

Total debt

Total equity

Net debt-to-total invested capital

December 31,
2018

December 31,
2017

337.4

610.7

196.1

1,396.3

N/A

235.9

464.0

197.0

1,279.9

N/A

Cash and cash equivalents include all instruments that have maturities of ninety days or less when purchased.
Working capital is defined as current assets less current liabilities. Net debt is defined as total debt less cash and cash
equivalents, and total invested capital is defined as the sum of net debt and total equity. Net debt and total invested
capital are non-U.S. GAAP financial measures that should not be used as a substitute for the comparable U.S. GAAP
financial measures. The non-U.S. GAAP financial measures are incorporated into our discussion and analysis as
management believes that this information provides users with a valuable insight into our overall performance and
financial position.

Cash and cash equivalents – Our cash and cash equivalents balance at December 31, 2018 consisted of cash held
in depository accounts with banks around the world and cash invested in high-quality, short-term investments. The
cash and cash equivalents balance at December 31, 2018 included $174.6 million of cash held by subsidiaries within
the U.S., and $162.8 million of cash held by subsidiaries outside of the U.S. In response to the 2017 Tax Act, we
reevaluated our position regarding permanent reinvestment of foreign subsidiary earnings and profits through 2017
(with the exception of China and Mexico) and decided that those profits were no longer permanently reinvested. As
of January 1, 2018, we reasserted indefinite reinvestment related to all post-2017 unremitted earnings in all of our
foreign subsidiaries. In general, it is our practice and intention to permanently reinvest the earnings of our foreign
subsidiaries and repatriate earnings only when the tax impact is de minimis, and that position has not changed
subsequent to the one-time transition tax under the 2017 Tax Act, except as noted above. Accordingly, no deferred
taxes have been provided for withholding taxes or other taxes that would result upon repatriation of approximately
$79.7 million of undistributed earnings from foreign subsidiaries to the U.S., as those earnings continue to be
permanently reinvested. Further, it is impracticable for us to estimate any future tax costs for any unrecognized
deferred tax liabilities associated with our indefinite reinvestment assertion, because the actual tax liability, if any,
would be dependent on complex analysis and calculations considering various tax laws, exchange rates,
circumstances existing when there is a repatriation, sale, or liquidation, or other factors.

Working capital - Working capital at December 31, 2018 increased by $146.7 million, or 31.6%, as compared to
December 31, 2017, including a decrease of $16.5 million due to foreign currency translation. Excluding the impact
of currency exchange rates, cash and cash equivalents, accounts receivable, inventories, and total current liabilities
increased by $107.1 million, $43.8 million, $7.0 million, and $11.3 million, respectively. The increase in accounts
receivable was due to increased sales activity, longer customer payment terms, and our adoption of the new revenue
recognition guidance. The increase in current liabilities was due to an increase in accrued salaries, wages and
benefits.

Debt and credit facilities - The $0.9 million decrease in total debt at December 31, 2018, as compared to
December 31, 2017, primarily resulted from foreign currency rate fluctuations.

Our sources of liquidity include our Credit Facility. At December 31, 2018, we had $28.6 million in outstanding
long-term borrowings under this facility, of which $4.6 million was denominated in Yen and $24.0 million was
denominated in Euro. These borrowings, together with outstanding letters of credit of $2.5 million, resulted in a
borrowing capacity available under our Credit Facility of $268.9 million at December 31, 2018. We do not expect

any significant limitations on our ability to access this source of funds. Please refer to Note 9, Debt, for further
discussion of our Credit Facility.

Pursuant to the financial covenants in our debt agreements, we are required to maintain established interest coverage
ratios and to not exceed established leverage ratios. In addition, the agreements contain other customary covenants,
none of which we consider restrictive to our operations. At December 31, 2018, we were in compliance with all of
our debt covenants, and we expect to continue to be in compliance with the terms of these agreements throughout
2019.

We believe that cash on hand and cash generated from operations, together with availability under our Credit
Facility, will be adequate to address our foreseeable liquidity needs based on our current expectations of our
business operations, capital expenditures and scheduled payments of debt obligations.

Commitments and Contractual Obligations

The following table summarizes our commitments and contractual obligations at December 31, 2018. These
obligations are not expected to have a material impact on liquidity.

($ in millions)
Purchase obligations (1)
Debt (excluding unamortized debt issuance costs)
Interest on debt and interest rate swaps (2)
Operating lease obligations
Other long-term liabilities (3)
Total contractual obligations (4)

Payments Due By Period

Total

Less than 1
year

1 - 3
years

3 - 5
years

More than
5 years

72.7 $
196.7
42.0
81.5
3.3
396.2 $

14.0 $
0.1
6.8
13.0
0.4
34.3 $

18.7 $
28.6
13.2
18.3
0.8
79.6 $

18.5 $
42.0
10.7
12.4
0.9
84.5 $

21.5
126.0
11.3
37.8
1.2
197.8

(1) Our business creates a need to enter into various commitments with suppliers. In accordance with U.S. GAAP,
these purchase obligations are not reflected in the accompanying consolidated balance sheets. These purchase
commitments do not exceed our projected requirements and are in the normal course of business.

(2) For fixed-rate long-term debt, interest was based on principal amounts and fixed coupon rates at year-end.
Future interest payments on variable-rate debt were calculated using principal amounts and the applicable
ending interest rate at year-end. Interest on fixed-rate derivative instruments was based on notional amounts and
fixed interest rates contractually obligated at year-end.

(3) Represents acquisition-related contingencies. In connection with certain business acquisitions, we agreed to

make payments to the sellers if and when certain operating milestones are achieved, such as sales and operating
income targets.

(4) This table does not include obligations pertaining to pension and postretirement benefits because the actual
amount and timing of future contributions may vary significantly depending upon plan asset performance,
benefit payments, and other factors. Contributions to our plans are expected to be $3.9 million in 2019. Please
refer to Note 14, Benefit Plans, for estimated benefit payments over the next ten years.

Reserves for uncertain tax positions - The table above does not include $3.9 million of total gross unrecognized tax
benefits as of December 31, 2018. Due to the high degree of uncertainty regarding the timing of potential cash
flows, we cannot reasonably estimate the settlement periods for amounts which may be paid.

Letters of credit - We have letters of credit totaling $2.5 million supporting the reimbursement of workers’
compensation and other claims paid on our behalf by insurance carriers. Our accrual for insurance obligations was

$3.4 million at December 31, 2018, of which $0.9 million is in excess of our deductible and, therefore, is
reimbursable by the insurance company.

OFF-BALANCE SHEET ARRANGEMENTS

At December 31, 2018, we had no off-balance sheet financing arrangements other than operating leases,
unconditional purchase obligations incurred in the ordinary course of business, and outstanding letters of credit
related to various insurance programs.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s discussion and analysis addresses consolidated financial statements that are prepared in accordance
with U.S. GAAP. The application of these principles requires management to make estimates and assumptions, some
of which are subjective and complex, that affect the amounts reported in the consolidated financial statements. We
believe the following accounting policies and estimates are critical to understanding and evaluating our results of
operations and financial position:

Revenue Recognition: Our revenue results from the sale of goods or services and reflects the consideration to
which we expect to be entitled in exchange for those goods or services. We record revenue based on a five-step
model, in accordance with Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”). Following the
identification of a contract with a customer, we identify the performance obligations (goods or services) in the
contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract,
and recognize the revenue when (or as) we satisfy the performance obligations by transferring the promised goods or
services to our customers. A good or service is transferred when (or as) the customer obtains control of that good or
service.

We recognize the majority of our revenue, primarily relating to Proprietary Products product sales, at a point in time,
following the transfer of control of our products to our customers, which typically occurs upon shipment or delivery,
depending on the terms of the related agreements.

We recognize revenue relating to our Contract-Manufactured Products product sales and certain Proprietary
Products product sales over time, as our performance does not create an asset with an alternative use to us and we
have an enforceable right to payment for performance completed to date.

We recognize revenue relating to our development and tooling agreements over time, as our performance creates or
enhances an asset that the customer controls as the asset is created or enhanced.

For revenue recognized over time, revenue is recognized by applying a method of measuring progress toward
complete satisfaction of the related performance obligation. When selecting the method for measuring progress, we
select the method that best depicts the transfer of control of goods or services promised to our customers.

Revenue for our Contract-Manufactured Products product sales, certain Proprietary Products product sales, and our
development and tooling agreements is recorded under an input method, which recognizes revenue on the basis of
our efforts or inputs to the satisfaction of a performance obligation (for example, resources consumed, labor hours
expended, costs incurred, time elapsed, or machine hours used) relative to the total expected inputs to the
satisfaction of that performance obligation. The input method that we use is based on costs incurred.

The majority of the performance obligations within our contracts are satisfied within one year or less. Performance
obligations satisfied beyond one year include those relating to a nonrefundable customer payment of $20.0 million
received in June 2013 in return for the exclusive use of the SmartDose® technology platform within a specific
therapeutic area. As of December 31, 2018, there was $6.5 million of unearned income related to this payment, of
which $0.9 million was included in other current liabilities and $5.6 million was included in other long-term
liabilities. The unearned income is being recognized as income on a straight-line basis over the remaining term of
the agreement. The agreement does not include a future minimum purchase commitment from the customer.

Our revenue can be generated from contracts with multiple performance obligations. When a sales agreement
involves multiple performance obligations, each obligation is separately identified and the transaction price is
allocated based on the amount of consideration we expect to be entitled in exchange for transferring the promised
good or service to the customer.

Some customers receive pricing rebates upon attaining established sales volumes. We record rebate costs when sales
occur based on our assessment of the likelihood that the required volumes will be attained. We also maintain an
allowance for product returns, as we believe that we are able to reasonably estimate the amount of returns based on
our substantial historical experience.

Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining
rights exceeds the measure of the remaining performance obligations, we record a contract asset. Contract assets are
recorded on the consolidated balance sheet in accounts receivable, net, and other assets (current and noncurrent
portions, respectively). Contract assets included in accounts receivable, net, relate to the unbilled amounts of our
product sales for which we have recognized revenue over time. Contract assets included in other assets represent the
remaining performance obligations of our development and tooling agreements. Conversely, if the measure of the
remaining performance obligations exceeds the measure of the remaining rights, we record a contract liability.
Contract liabilities are recorded on the consolidated balance sheet in other liabilities (current and noncurrent
portions, respectively) and represent cash payments received in advance of our performance.

Impairment of Long-Lived Assets: Long-lived assets, including property, plant and equipment, are tested for
impairment whenever circumstances indicate that the carrying value of these assets may not be recoverable. An asset
is considered impaired if the carrying value of the asset exceeds the sum of the future expected undiscounted cash
flows to be derived from the asset. Once an asset is considered impaired, an impairment loss is recorded within other
(income) expense for the difference between the asset’s carrying value and its fair value. For assets held and used in
the business, management determines fair value using estimated future cash flows to be derived from the asset,
discounted to a net present value using an appropriate discount rate. For assets held for sale or for investment
purposes, management determines fair value by estimating the proceeds to be received upon sale of the asset, less
disposition costs. During 2018, as part of our 2018 restructuring plan, we recorded within other expense a $2.2
million non-cash asset write-down associated with the discontinued use of certain equipment. During 2016, as part
of our 2016 restructuring plan, we recorded within other expense a $4.5 million non-cash asset write-down
associated with the discontinued use of certain equipment.

Impairment of Goodwill and Other Intangible Assets: Goodwill and indefinite-lived intangible assets are tested
for impairment at least annually, following the completion of our annual budget and long-range planning process, or
whenever circumstances indicate that the carrying value of these assets may not be recoverable. Goodwill is tested
for impairment at the reporting unit level, which is the same as, or one level below, our operating segments. In
January 2017, the FASB issued guidance which removes the second step of the goodwill impairment test. A
goodwill impairment charge will now be the amount by which a reporting unit’s carrying amount exceeds its fair
value, not to exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective for fiscal
years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted. We
adopted this guidance as of January 1, 2017, on a prospective basis. Considerable management judgment is
necessary to estimate fair value. Amounts and assumptions used in our goodwill impairment test, such as future
sales, future cash flows and long-term growth rates, are consistent with internal projections and operating plans.
Amounts and assumptions used in our goodwill impairment test are also largely dependent on the continued sale of
drug products delivered by injection and the packaging of drug products, as well as our timeliness and success in
new-product innovation or the development and commercialization of proprietary multi-component systems.
Changes in the estimate of fair value, including the estimate of future cash flows, could have a material impact on
our future results of operations and financial position. Recent accounting guidance also allows entities to first assess
qualitative factors, including macroeconomic conditions, industry and market considerations, cost factors, and
overall financial performance, to determine whether it is necessary to perform the quantitative goodwill impairment
test. As each of our reporting units had a fair value in excess of its carrying value of at least 180% within our 2016
annual impairment test, we elected to follow this guidance for our 2017 and 2018 annual impairment tests. Based
upon our assessment, we determined that it was not more likely than not that the fair value of each of our reporting

units was less than its carrying amount and determined that it was not necessary to perform the quantitative goodwill
impairment tests in 2017 and 2018.

At December 31, 2015, a trademark had been determined to have an indefinite life and, therefore, was not subject to
amortization. During 2016, as part of our 2016 restructuring plan, we recorded within other expense a $10.0 million
non-cash asset write-down associated with the discontinued use of this trademark.

Intangible assets with finite lives are amortized using the straight-line method over their estimated useful lives, and
reviewed for impairment whenever circumstances indicate that the carrying value of these assets may not be
recoverable. During 2016, as part of our 2016 restructuring plan, we recorded within other expense a $2.8 million
non-cash asset write-down associated with the discontinued use of a patent.

Employee Benefits: We maintain funded and unfunded defined benefit pension plans in the U.S. and a number of
other countries that cover employees who meet eligibility requirements. In addition, we sponsor postretirement
benefit plans which provide healthcare benefits for eligible employees who retire or become disabled. The
measurement of annual cost and obligations under these defined benefit postretirement plans is subject to a number
of assumptions, which are specific for each of our U.S. and foreign plans. The assumptions, which are reviewed at
least annually, are relevant to both the plan assets (where applicable) and the obligation for benefits that will
ultimately be provided to our employees. Two of the most critical assumptions in determining pension and retiree
medical plan expense are the discount rate and expected long-term rate of return on plan assets. Other assumptions
reflect demographic factors such as retirement age, rates of compensation increases, mortality and turnover and are
evaluated periodically and updated to reflect our actual experience. For our funded plans, we consider the current
and expected asset allocations of our plan assets, as well as historical and expected rates of return, in estimating the
long-term rate of return on plan assets. Under U.S. GAAP, differences between actual and expected results are
generally accumulated in other comprehensive income (loss) as actuarial gains or losses and subsequently amortized
into earnings over future periods.

Changes in key assumptions could have a material impact on our future results of operations and financial position.
We estimate that every 25-basis point reduction in our long-term rate of return assumption would increase pension
expense by $0.5 million, and every 25-basis point reduction in our discount rate would increase pension expense by
$0.5 million. A decrease in the discount rate increases the present value of benefit obligations. Our net pension
underfunded balance at December 31, 2018 was $52.5 million, compared to $48.5 million at December 31, 2017.
Our underfunded balance for other postretirement benefits was $6.0 million at December 31, 2018, compared to
$7.1 million at December 31, 2017.

Income Taxes: We estimate income taxes payable based upon current domestic and international tax legislation. In
addition, deferred income tax assets and liabilities are established to recognize differences between the tax basis and
financial statement carrying values of assets and liabilities. We maintain valuation allowances where it is more likely
than not that all or a portion of a deferred tax asset will not be realized. The recoverability of tax assets is subject to
our estimates of future profitability, generally at the respective subsidiary company and country level. Changes in
tax legislation, business plans and other factors may affect the ultimate recoverability of tax assets or final tax
payments, which could result in adjustments to tax expense in the period such change is determined.

When accounting for uncertainty in income taxes recognized in our financial statements, we apply a more-likely-
than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be
taken in a tax return.

Please refer to Note 1, Summary of Significant Accounting Policies and Note 2, New Accounting Standards, to our
consolidated financial statements for additional information on our significant accounting policies, recently adopted
accounting standards, and accounting standards issued but not yet adopted.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our ongoing business operations expose us to various risks, such as fluctuating interest rates, foreign currency
exchange rates and increasing commodity prices. These risk factors can impact our results of operations, cash flows
and financial position. To manage these market risks, we periodically enter into derivative financial instruments,
such as interest rate swaps, options and foreign exchange contracts for periods consistent with, and for notional
amounts equal to or less than, the underlying exposures. We do not purchase or hold any derivative financial
instruments for investment or trading purposes.

Foreign Currency Exchange Risk

Sales outside of the U.S. accounted for 55.4% of our consolidated net sales in 2018. Virtually all of these sales and
related operating costs are denominated in the currency of the local country and translated into USD for consolidated
reporting purposes. Although the majority of the assets and liabilities of these subsidiaries are denominated in the
functional currency of the subsidiary, they may also hold assets or liabilities denominated in other currencies. These
items may give rise to foreign currency transaction gains and losses. As a result, our results of operations and
financial position are exposed to changing currency exchange rates. We periodically use forward exchange contracts
to hedge certain transactions or to manage month-end balance sheet exposures on cross-currency intercompany
loans.

We have designated our €21.0 million Euro-denominated borrowings under our Credit Facility as a hedge of our net
investment in certain European subsidiaries. We also have ¥500.0 million in Yen-denominated borrowings under our
Credit Facility, which has been designated as a hedge of our net investment in Daikyo. At December 31, 2018, a
cumulative foreign currency translation loss on these hedges of $0.4 million (net of tax of $0.2 million) was
recorded within accumulated other comprehensive loss.

Interest Rate Risk

As a result of our normal borrowing activities, we have long-term debt with both fixed and variable interest rates.
Long-term debt consists of senior notes and revolving credit facilities. Our exposures to fluctuations in interest rates
are managed to the extent considered necessary by entering into interest rate swap agreements.

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

($ in millions)
Current Debt:
U.S. dollar denominated

Average interest rate - variable

Long-Term Debt:
U.S. dollar denominated

Average interest rate - fixed

Euro denominated

Average interest rate - variable

Yen denominated

Average interest rate - variable

Commodity Price Risk

2019

2020

2021

2022

2023 Thereafter

$ 0.1

Carrying
Value

Fair
Value

0.1 $

0.1

42.0

3.7%

126.0

168.0

164.6

3.9%

24.0

4.6

24.0

1.0%
4.6
1.0%

Many of our proprietary products are made from synthetic elastomers, which are derived from the petroleum
refining process. We purchase the majority of our elastomers via long-term supply contracts, some of which contain
clauses that provide for surcharges related to fluctuations in crude oil prices. In recent years, raw material costs have

fluctuated due to crude oil price fluctuations. We expect this volatility to continue. We will continue to pursue
pricing and hedging strategies, and ongoing cost control initiatives, to offset the effects on gross profit.

In November 2016, we purchased a series of call options for a total of 96,525 barrels of crude oil to mitigate our
exposure to such oil-based surcharges and protect operating cash flows with regards to a portion of our forecasted
elastomer purchases through November 2017. In November 2017, we purchased a series of call options for a total of
125,166 barrels of crude oil through May 2019. In April 2018, we purchased a series of call options for a total of
30,612 barrels of crude oil from December 2018 through August 2019.

During 2018, the gain recorded in cost of goods and services sold related to these options was $0.1 million. During
2017, the loss recorded in cost of goods and services sold related to these options was $0.3 million.

As of December 31, 2018, we had outstanding contracts to purchase 47,445 barrels of crude oil from January 2019
to August 2019 at a weighted-average strike price of $76.45 per barrel.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED STATEMENTS OF INCOME
West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, 2018, 2017 and 2016
(in millions, except per share data)

Net sales

Cost of goods and services sold

Gross profit

Research and development

Selling, general and administrative expenses

Other expense (Note 15)

Operating profit

Interest expense

Interest income
Other nonoperating income

Income before income taxes

Income tax expense

Equity in net income of affiliated companies

Net income

Net income per share:

Basic

Diluted

Weighted average shares outstanding:

Basic

Diluted

2018

2017

2016

1,717.4

1,599.1

1,172.0

1,086.2

1,509.1

1,007.7

545.4

40.3

262.9

1.9

240.3

8.4
(2.1)
(6.7)
240.7

41.4
(7.6)
206.9

2.80

2.74

73.9

75.4

512.9

39.1

246.0

2.0

225.8

7.8
(1.3)
(3.1)
222.4

80.9
(9.2)
150.7

2.04

1.99

73.9

75.8

501.4

36.8

239.6

29.8

195.2

8.1
(1.1)
(1.6)
189.8

54.4
(8.2)
143.6

1.96

1.91

73.3

75.0

Dividends declared per share

0.58

0.54

0.50

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, 2018, 2017 and 2016
(in millions)

Net income

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments

2018

2017

2016

206.9

150.7

143.6

(39.2)

68.8

(18.1)

Defined benefit pension and other postretirement plans:

Prior service (cost) credit arising during period, net of tax of $0, $0
and $1.1

Net actuarial (loss) gain arising during period, net of tax of $(0.2),

$1.3 and $(4.8)

Settlement effects arising during period, net of tax of $1.1

Less: amortization of actuarial loss, net of tax of $0.3, $0.5 and

$1.2

Less: amortization of prior service credit, net of tax of $(0.5),

$(0.5) and $(0.5)

Less: amortization of transition obligation

Net loss on investment securities, net of tax of $(0.1), $(2.5) and
$(0.1)

Net gain (loss) on derivatives, net of tax of $1.5, $(0.1) and $0.1

Other comprehensive (loss) income, net of tax

Comprehensive income

(0.3)

(0.7)
—

1.1

(1.5)
—

(0.1)
3.8
(36.9)
170.0

—

6.3

—

3.6

(3.5)
—

(4.7)
(1.0)
69.5

220.2

1.9

(11.1)
2.0

2.2

(0.9)
0.1

(0.2)
(0.1)
(24.2)
119.4

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED BALANCE SHEETS
West Pharmaceutical Services, Inc. and Subsidiaries at December 31, 2018 and 2017
(in millions, except per share data)

ASSETS
Current assets:

Cash and cash equivalents
Accounts receivable, net
Inventories
Other current assets

Total current assets
Property, plant and equipment
Less: accumulated depreciation and amortization
Property, plant and equipment, net
Investments in affiliated companies
Goodwill
Deferred income taxes
Intangible assets, net
Other noncurrent assets
Total Assets

LIABILITIES AND EQUITY
Current liabilities:

Notes payable and other current debt
Accounts payable
Pension and other postretirement benefits
Accrued salaries, wages and benefits
Income taxes payable
Other current liabilities

Total current liabilities
Long-term debt
Deferred income taxes
Pension and other postretirement benefits
Other long-term liabilities
Total Liabilities

Commitments and contingencies (Note 17)

Equity:

Preferred stock, 3.0 million shares authorized; 0 shares issued and outstanding in

2018 and 2017

Common stock, par value $.25 per share; 100.0 million shares authorized;
shares issued: 75.3 million and 75.2 million in 2018 and 2017; shares
outstanding: 74.1 million and 73.9 million in 2018 and 2017
Capital in excess of par value
Retained earnings
Accumulated other comprehensive loss
Treasury stock, at cost (1.2 million and 1.3 million shares in 2018 and 2017)

Total Equity
Total Liabilities and Equity

2018

2017

337.4
288.2
214.5
54.3
894.4
1,752.7
930.7
822.0
91.2
105.8
24.7
20.3
20.5
1,978.9

0.1
130.4
2.3
64.5
9.8
76.6
283.7
196.0
13.1
56.2
33.6
582.6

235.9
253.2
215.2
39.2
743.5
1,745.8
890.8
855.0
85.8
107.7
25.7
21.7
23.4
1,862.8

—
138.1
2.2
56.2
6.0
77.0
279.5
197.0
10.4
53.4
42.6
582.9

—

18.8
282.0
1,353.4
(154.2)
(103.7)
1,396.3
1,978.9

18.8
309.3
1,178.2
(117.3)
(109.1)
1,279.9
1,862.8

The accompanying notes are an integral part of the consolidated financial statements.

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N

CONSOLIDATED STATEMENTS OF CASH FLOWS
West Pharmaceutical Services, Inc. and Subsidiaries for the years ended December 31, 2018, 2017 and 2016
(in millions)

Cash flows from operating activities:

Net income
Adjustments to reconcile net income to net cash provided by operating
activities:

Depreciation
Amortization
Stock-based compensation
Non-cash restructuring charges
Pension curtailment gain
Venezuela deconsolidation
Contingent consideration payments in excess of acquisition-date
liability
Loss on sales of equipment
Deferred income taxes
Pension and other retirement plans, net
Equity in undistributed earnings of affiliates, net of dividends

Changes in assets and liabilities:

Increase in accounts receivable
Increase in inventories
(Increase) decrease in other current assets
Increase in accounts payable
Changes in other assets and liabilities

Net cash provided by operating activities
Cash flows from investing activities:

Capital expenditures
Purchase of investment in affiliated companies
Cash related to deconsolidated Venezuelan subsidiary
Other, net

Net cash used in investing activities
Cash flows from financing activities:
Repayments of long-term debt
Dividend payments
Contingent consideration payments up to amount of acquisition-date
liability
Proceeds from exercise of stock options and stock appreciation rights
Employee stock purchase plan contributions
Excess tax benefits from employee stock plans
Shares purchased under share repurchase programs
Shares repurchased for employee tax withholdings

Net cash used in financing activities
Effect of exchange rates on cash
Net increase (decrease) in cash and cash equivalents
Cash, including cash equivalents at beginning of period
Cash, including cash equivalents at end of period

Supplemental cash flow information:

2018

2017

2016

206.9

150.7

143.6

101.7
2.7
15.1
2.2
—
—

(0.6)
1.8
0.9
(7.9)
(5.9)

(43.8)
(7.0)
(6.2)
0.4
28.3
288.6

(104.7)
—
—
3.9
(100.8)

(0.1)
(42.1)

—
31.8
4.9
—
(70.8)
(4.4)
(80.7)
(5.6)
101.5
235.9
337.4

94.3
2.4
16.1
0.7
—
11.1

—
1.6
41.7
(6.9)
(7.0)

(39.7)
(3.6)
0.3
12.6
(11.0)
263.3

(130.8)
—
(6.0)
3.2
(133.6)

(34.9)
(39.1)

(0.7)
39.5
4.4
—
(74.4)
(3.8)
(109.0)
12.2
32.9
203.0
235.9

88.1
2.6
19.5
17.5
(2.1)
—

—
0.7
21.5
(6.5)
(6.8)

(23.3)
(21.2)
(2.4)
6.1
(17.9)
219.4

(170.2)
(8.4)
—
2.8
(175.8)

(69.8)
(35.8)

(0.3)
25.9
3.8
18.2
(52.2)
(3.7)
(113.9)
(1.3)
(71.6)
274.6
203.0

8.6
48.1
22.7
9.5

$
$
$
$

Interest paid, net of amounts capitalized
Income taxes paid, net
Accrued capital expenditures
Dividends declared, not paid

8.0
31.0
20.1
10.4
The accompanying notes are an integral part of the consolidated financial statements.

8.4
42.0
15.0
11.3

$
$
$
$

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of Significant Accounting Policies

Principles of Consolidation: The consolidated financial statements include the accounts of West after the
elimination of intercompany transactions. We have no participation or other rights in variable interest entities. As of
April 1, 2017, our consolidated financial statements exclude the results of our Venezuelan subsidiary. Please refer to
Note 15, Other Expense, for further discussion.

Use of Estimates: The financial statements are prepared in conformity with U.S. GAAP. These principles require
management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and
expenses and the disclosure of contingencies in the financial statements. Actual amounts realized may differ from
these estimates.

Cash and Cash Equivalents: Cash equivalents include time deposits, certificates of deposit and all highly liquid
debt instruments with maturities of three months or less at the time of purchase.

Accounts Receivable: Our accounts receivable balance was net of an allowance for doubtful accounts of $2.0
million and $0.5 million at December 31, 2018 and 2017, respectively. We record the allowance based on a specific
identification methodology.

Inventories: Inventories are valued at the lower of cost (on a first-in, first-out basis) and net realizable value. The
following is a summary of inventories at December 31:

($ in millions)
Raw materials
Work in process
Finished goods

2018

2017

90.4
42.2
81.9
214.5

88.6
31.8
94.8
215.2

Property, Plant and Equipment: Property, plant and equipment assets are carried at cost. Maintenance and minor
repairs and renewals are charged to expense as incurred. Costs incurred for computer software developed or
obtained for internal use are capitalized for application development activities and immediately expensed for
preliminary project activities or post-implementation activities. Upon sale or retirement of depreciable assets, costs
and related accumulated depreciation are eliminated, and gains or losses are recognized in other (income) expense.
Depreciation and amortization are computed principally using the straight-line method over the estimated useful
lives of the assets, or the remaining term of the lease, if shorter.

whenever circumstances indicate that the carrying value of these assets may not be recoverable. Goodwill is tested
for impairment at the reporting unit level, which is the same as, or one level below, our operating segments. In
January 2017, the FASB issued guidance which removes the second step of the quantitative goodwill impairment
test. A goodwill impairment charge will now be the amount by which a reporting unit’s carrying amount exceeds its
fair value, not to exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective for
fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted.
We adopted this guidance as of January 1, 2017, on a prospective basis. Recent accounting guidance also allows
entities to first assess qualitative factors, including macroeconomic conditions, industry and market considerations,
cost factors, and overall financial performance, to determine whether it is necessary to perform the quantitative
goodwill impairment test. As each of our reporting units had a fair value in excess of its carrying value of at least
180% within our 2016 annual impairment test, we elected to follow this guidance for our 2017 and 2018 annual
impairment tests. Based upon our assessment, we determined that it was not more likely than not that the fair value
of each of our reporting units was less than its carrying amount and determined that it was not necessary to perform
the quantitative goodwill impairment tests in 2017 and 2018.

Intangible assets with finite lives are amortized using the straight-line method over their estimated useful lives of 5
to 25 years, and reviewed for impairment whenever circumstances indicate that the carrying value of these assets
may not be recoverable. During 2016, as part of our 2016 restructuring plan, we recorded within other expense a
$2.8 million non-cash asset write-down associated with the discontinued use of a patent.

Employee Benefits: The measurement of the obligations under our defined benefit pension and postretirement
medical plans are subject to a number of assumptions. These include the rate of return on plan assets (for funded
plans) and the rate at which the future obligations are discounted to present value. For our funded plans, we consider
the current and expected asset allocations of our plan assets, as well as historical and expected rates of return, in
estimating the long-term rate of return on plan assets. U.S. GAAP requires the recognition of an asset or liability for
the funded status of a defined benefit postretirement plan, as measured by the difference between the fair value of
plan assets, if any, and the benefit obligation. For a pension plan, the benefit obligation is the projected benefit
obligation; for any other postretirement plan, such as a retiree health plan, the benefit obligation is the accumulated
postretirement benefit obligation. Please refer to Note 14, Benefit Plans, for a more detailed discussion of our
pension and other retirement plans.

Financial Instruments: All derivatives are recognized as either assets or liabilities in the balance sheet and recorded
at their fair value. For a derivative designated as hedging the exposure to variable cash flows of a forecasted
transaction (referred to as a cash flow hedge), the effective portion of the derivative’s gain or loss is initially reported
as a component of other comprehensive income (“OCI”), net of tax, and subsequently reclassified into earnings
when the forecasted transaction affects earnings. For a derivative designated as hedging the exposure to changes in
the fair value of a recognized asset or liability or a firm commitment (referred to as a fair value hedge), the
derivative’s gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on
the hedged item. For a derivative designated as hedging the foreign currency exposure of a net investment in a
foreign operation, the gain or loss is reported in OCI, net of tax, as part of the cumulative translation adjustment.
The ineffective portion of any derivative used in a hedging transaction is recognized immediately into earnings.
Derivative financial instruments that are not designated as hedges are also recorded at fair value, with the change in
fair value recognized immediately into earnings. We do not purchase or hold any derivative financial instrument for
investment or trading purposes.

Foreign Currency Translation: Foreign currency transaction gains and losses are recognized in the determination
of net income. Foreign currency translation adjustments of subsidiaries and affiliates operating outside of the U.S.
are accumulated in other comprehensive loss, a separate component of equity.

Revenue Recognition: Our revenue results from the sale of goods or services and reflects the consideration to
which we expect to be entitled in exchange for those goods or services. Revenue is recognized based on a five-step
model, in accordance with ASC 606. Following the identification of a contract with a customer, we identify the
performance obligations (goods or services) in the contract, determine the transaction price, allocate the transaction
price to the performance obligations in the contract, and recognize the revenue when (or as) we satisfy the
performance obligations by transferring the promised goods or services to our customers. A good or service is
transferred when (or as) the customer obtains control of that good or service. Some customers receive pricing
rebates upon attaining established sales volumes. We record rebate costs when sales occur based on our assessment
of the likelihood that the required volumes will be attained. We also maintain an allowance for product returns, as
we believe that we are able to reasonably estimate the amount of returns based on our substantial historical
experience. Please refer to Note 3, Revenue, for additional information.

Shipping and Handling Costs: Shipping and handling costs are included in cost of goods and services sold.
Shipping and handling costs billed to customers in connection with the sale are included in net sales.

Research and Development: Research and development expenditures are for the creation, engineering and
application of new or improved products and processes. Expenditures include primarily salaries and outside services
for those directly involved in research and development activities and are expensed as incurred.

Environmental Remediation and Compliance Costs: Environmental remediation costs are accrued when such
costs are probable and reasonable estimates are determinable. Cost estimates include investigation, cleanup and
monitoring activities; such estimates are adjusted, if necessary, based on additional findings. Environmental
compliance costs are expensed as incurred as part of normal operations.

Litigation: From time to time, we are involved in legal proceedings, investigations and claims generally incidental
to our normal business activities. In accordance with U.S. GAAP, we accrue for loss contingencies when it is
probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These estimates
are based on an analysis made by internal and external legal counsel considering information known at the time.
Legal costs in connection with loss contingencies are expensed as incurred.

Income Taxes: Deferred income taxes are recognized by applying enacted statutory tax rates, applicable to future
years, to temporary differences between the tax basis and financial statement carrying values of our assets and
liabilities. Valuation allowances are established when it is more likely than not that all or a portion of a deferred tax
asset will not be realized. In response to the 2017 Tax Act, we reevaluated our position regarding permanent
reinvestment of foreign subsidiary earnings and profits through 2017 (with the exception of China and Mexico) and
decided that those profits were no longer permanently reinvested. As of January 1, 2018, we reasserted indefinite
reinvestment related to all post-2017 unremitted earnings in all of our foreign subsidiaries. Please refer to Note 16,
Income Taxes, for additional information. We recognize interest costs related to income taxes in interest expense and
penalties within other (income) expense. The tax law ordering approach is used for purposes of determining whether
an excess tax benefit has been realized during the year.

Stock-Based Compensation: Under the fair value provisions of U.S. GAAP, stock-based compensation cost is
measured at the grant date based on the value of the award and is recognized as expense over the vesting period. In
order to determine the fair value of stock options on the grant date, we use the Black-Scholes valuation model.

Net Income Per Share: Basic net income per share is computed by dividing net income attributable to common
shareholders by the weighted average number of shares of common stock outstanding during each period. Net
income per share assuming dilution considers the dilutive effect of outstanding stock options and other stock awards
based on the treasury stock method. The treasury stock method assumes the use of exercise proceeds to repurchase
common stock at the average fair market value in the period.

Note 2: New Accounting Standards

Recently Adopted Standards

In March 2018, the FASB issued guidance which updates the income tax accounting in U.S. GAAP to reflect the
SEC’s interpretive guidance released on December 22, 2017, when the 2017 Tax Act was signed into law. This
guidance was effective immediately upon issuance. Please refer to Note 16, Income Taxes, for additional
information.

In May 2017, the FASB issued guidance which amends the scope of modification accounting for share-based
payment arrangements. The guidance focuses on changes to the terms or conditions of share-based payment awards
that would require the application of modification accounting and specifies that an entity would not apply
modification accounting if its fair value, vesting conditions and classification of the awards are the same
immediately before and after the modification. This guidance was effective for fiscal years, and interim periods
within those years, beginning after December 15, 2017. Early adoption was permitted. We adopted this guidance as
of January 1, 2018, on a prospective basis. The adoption did not have a material impact on our financial statements.

In March 2017, the FASB issued guidance on the presentation of net periodic pension and postretirement benefit
cost (net benefit cost). The guidance requires the bifurcation of net benefit cost. The service cost component will be
presented with other employee compensation costs in operating income (or capitalized in assets) and the other
components will be reported separately outside of operations, and will not be eligible for capitalization. This
guidance was effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.
Early adoption was permitted. We adopted this guidance as of January 1, 2018, on a retrospective basis. As a result
of this adoption, we reclassified net benefit cost components other than service cost from operating income to
outside of operations. Net periodic benefit cost for the year ended December 31, 2018 and 2017 was $4.1 million
and $7.3 million, respectively, of which $10.8 million and $10.4 million, respectively, related to service cost and
$6.7 million and $3.1 million, respectively, related to net benefit cost components other than service cost. The
adoption of this guidance had no impact on net income.

In November 2016, the FASB issued guidance on the classification and presentation of restricted cash in the
statement of cash flows. This guidance was effective for fiscal years, and interim periods within those years,
beginning after December 15, 2017. Early adoption was permitted. We adopted this guidance as of January 1, 2018,
on a retrospective basis. As of December 31, 2018 and 2017, we had no restricted cash.

In August 2016, the FASB issued guidance to reduce the diversity in how certain cash receipts and cash payments
are presented and classified in the statement of cash flows. This guidance was effective for fiscal years, and interim
periods within those years, beginning after December 15, 2017. Early adoption was permitted. We adopted this
guidance as of January 1, 2018, on a retrospective basis. The adoption did not have a material impact on our
financial statements.

In January 2016, the FASB issued guidance that addresses certain aspects of recognition, measurement, presentation,
and disclosure of financial instruments. This guidance was effective for fiscal years, and interim periods within those
years, beginning after December 15, 2017. We adopted this guidance as of January 1, 2018, on a prospective basis.
The adoption did not have a material impact on our financial statements.

In May 2014, the FASB issued guidance on the accounting for revenue from contracts with customers, ASC 606,
that supersedes most existing revenue recognition guidance, including industry-specific guidance. The core principle
requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In
addition, ASC 606 requires enhanced disclosures regarding the nature, timing and uncertainty of revenue and cash
flows arising from an entity’s contracts with customers. The FASB subsequently issued additional clarifying
standards to address issues arising from implementation of ASC 606. We adopted ASC 606 as of January 1, 2018, on
a modified retrospective basis. Please refer to Note 3, Revenue, for additional information.

Standards Issued Not Yet Adopted

In August 2018, the FASB issued guidance to align the requirements for capitalizing implementation costs incurred
in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs
incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software
license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by
this update. This guidance is effective for fiscal years, and interim periods within those years, beginning after
December 15, 2019. Early adoption is permitted, including adoption in any interim period. We are currently
evaluating our adoption timing and the impact that this guidance may have on our financial statements.

In August 2018, the FASB issued guidance which modifies the disclosure requirements for defined benefit pension
plans and other postretirement plans. The guidance removes disclosures that no longer are considered cost
beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant.
This guidance is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. We believe
that the adoption of this guidance will not have a material impact on our financial statements.

In August 2018, the FASB issued guidance which modifies the disclosure requirements on fair value measurements
by removing, modifying, or adding certain disclosures. This guidance is effective for fiscal years, and interim
periods within those years, beginning after December 15, 2019. Early adoption is permitted. We believe that the
adoption of this guidance will not have a material impact on our financial statements.

In June 2018, the FASB issued guidance which expands the scope of accounting for share-based payment
arrangements to include share-based payment transactions for acquiring goods and services from nonemployees.
This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15,
2018. Early adoption was permitted. We believe that the adoption of this guidance will not have a material impact on
our financial statements.

In February 2018, the FASB issued guidance to address a specific consequence of the 2017 Tax Act by allowing a
reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects
resulting from the 2017 Tax Act’s reduction of the U.S. federal corporate income tax rate. This guidance is effective
for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption was
permitted. We are currently evaluating our adoption timing and the impact that this guidance may have on our
financial statements.

In August 2017, the FASB issued guidance which expands and refines hedge accounting for both nonfinancial and
financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and
the hedged item in the financial statements. This guidance is effective for fiscal years, and interim periods within
those years, beginning after December 15, 2018. Early adoption was permitted. We believe that the adoption of this
guidance will not have a material impact on our financial statements.

In February 2016, the FASB issued guidance on the accounting for leases. This guidance requires lessees to
recognize lease assets and lease liabilities on the balance sheet and to expand disclosures about leasing
arrangements, both qualitative and quantitative. In terms of transition, the guidance requires adoption based upon a
modified retrospective approach. This guidance is effective for fiscal years, and interim periods within those years,
beginning after December 15, 2018. We continue to review the impact that the adoption of this guidance will have
on our financial statement disclosures, accounting policies, business processes, and internal controls. As of
December 31, 2018 and 2017, future minimum rental payments under non-cancelable operating leases were $81.5
million and $79.1 million, respectively.

Note 3: Revenue

Adoption of ASC 606

On January 1, 2018, we adopted ASC 606, on a modified retrospective basis, applied to those contracts which were
not completed as of January 1, 2018. As a result of our adoption, we recorded a cumulative-effect adjustment of
$11.4 million within retained earnings in our consolidated balance sheet as of January 1, 2018, to reflect a change in
the timing of revenue recognition under ASC 606, from point in time to over time, on our Contract-Manufactured
Products product sales, certain Proprietary Products product sales, development and tooling agreements, as well as
an acceleration on a portion of the remaining unearned income from a nonrefundable customer payment.

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

The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of
ASC 606 was as follows:

($ in millions)
Assets:
Accounts receivable, net
Inventories
Other current assets

Liabilities and Equity:
Other current liabilities
Deferred income taxes
Other long-term liabilities
Retained earnings

Balance at
December 31, 2017

Adjustments Due to
ASC 606

Balance at
January 1, 2018

253.2
215.2
39.2

77.0
10.4
42.6
1,178.2

25.0
(20.8)
(8.4)

(13.7) $
3.0
(4.9)
11.4

278.2
194.4
30.8

63.3
13.4
37.7
1,189.6

The impact of the adoption of ASC 606 on our consolidated income statement for 2018 was as follows:

($ in millions)
Net sales
Cost of goods and services sold
Other expense
Income tax expense
Net income

As Reported

Balances without
Adoption of
ASC 606

Effects of Change
(Lower)/Higher

1,717.4
1,172.0
1.9
41.4
206.9

1,720.9
1,172.0
1.2
42.6
209.9

(3.5)
—
0.7
(1.2)
(3.0)

The impact of the adoption of ASC 606 on our consolidated balance sheet as of December 31, 2018 was as follows:

($ in millions)
Assets:
Accounts receivable, net
Inventories
Other current assets

Liabilities and Equity:
Other current liabilities
Deferred income taxes
Other long-term liabilities
Retained earnings

Revenue Recognition

As Reported

Balances without
Adoption of
ASC 606

Effects of Change
Higher/(Lower)

288.2
214.5
54.3

76.6
13.1
33.6
1,353.4

264.3
234.4
63.4

87.7
11.3
37.8
1,345.0

23.9
(19.9)
(9.1)

(11.1)
1.8
(4.2)
8.4

Our revenue results from the sale of goods or services and reflects the consideration to which we expect to be
entitled in exchange for those goods or services. We record revenue based on a five-step model, in accordance with
ASC 606. Following the identification of a contract with a customer, we identify the performance obligations (goods
or services) in the contract, determine the transaction price, allocate the transaction price to the performance
obligations in the contract, and recognize the revenue when (or as) we satisfy the performance obligations by
transferring the promised goods or services to our customers. A good or service is transferred when (or as) the
customer obtains control of that good or service.

We recognize revenue relating to our development and tooling agreements over time, as our performance creates or
enhances an asset that the customer controls as the asset is created or enhanced.

The majority of the performance obligations within our contracts are satisfied within one year or less. Performance
obligations satisfied beyond one year include those relating to a nonrefundable customer payment of $20.0 million
received in June 2013 in return for the exclusive use of the SmartDose technology platform within a specific
therapeutic area. As of December 31, 2018, there was $6.5 million of unearned income related to this payment, of
which $0.9 million was included in other current liabilities and $5.6 million was included in other long-term

liabilities. The unearned income is being recognized as income on a straight-line basis over the remaining term of
the agreement. The agreement does not include a future minimum purchase commitment from the customer.

The following table presents the approximate percentage of our net sales by market group:

Biologics

Generics

Pharma

Contract-Manufactured Products

2018

2017 (1)

21%

34%

24%
100%

23%

20%

34%

23%
100%

(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method.

The following table presents the approximate percentage of our net sales by product category:

High-Value Components

Standard Packaging

Delivery Devices

Contract-Manufactured Products

2018

2017 (1)

41%

32%

24%

100%

41%

32%

23%

100%

(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method.

The following table presents the approximate percentage of our net sales by geographic location:

Americas

Europe, Middle East, Africa

Asia Pacific

2018

2017 (1)

48%

44%

100%

51%

42%

100%

(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Contract Assets and Liabilities

remaining performance obligations exceeds the measure of the remaining rights, we record a contract liability.
Contract liabilities are recorded on the consolidated balance sheet in other liabilities (current and noncurrent
portions, respectively) and represent cash payments received in advance of our performance.

The following table summarizes our contract assets and liabilities, excluding contract assets included in accounts
receivable, net:

Contract assets, December 31, 2017

Contract assets, December 31, 2018

Change in contract assets - increase (decrease)

Deferred income, December 31, 2017

Deferred income, December 31, 2018

Change in deferred income - decrease (increase)

($ in millions)

7.5

9.1

1.6

(33.6)
(33.4)
0.2

The decrease in deferred income during 2018 was primarily due to the recognition of revenue of $111.1 million,
including $28.9 million of revenue that was included in deferred income at the beginning of the year (of which $18.6
million was recognized in the cumulative-effect adjustment as of January 1, 2018), partially offset by additional cash
payments of $109.8 million received in advance of satisfying future performance obligations along with $1.1 million
in other adjustments.

Practical Expedients and Exemptions

We have elected to disregard the effects of a significant financing component, as we expect, at the inception of our
contracts, that the period between when we transfer a promised good or service to the customer and when the
customer pays for that good or service will be one year or less.

In addition, we have elected to omit the disclosure of the majority of our remaining performance obligations, which
are satisfied within one year or less.

Supply Chain Financing

We have entered into supply chain financing agreements with certain banks, pursuant to which we offer for sale
certain accounts receivable to such banks from time to time, subject to the terms of the applicable agreements. These
transactions result in a reduction in accounts receivable, as the agreements transfer effective control over, and credit
risk related to, the receivables to the banks. These agreements do not allow for recourse in the event of
uncollectibility, and we do not retain any interest in the underlying accounts receivable once sold. As of
December 31, 2018, we derecognized $5.7 million of accounts receivable under these agreements. Discount fees
related to the sale of such accounts receivable on our consolidated income statement for 2018 were not material.

Voluntary Recall

On January 24, 2019, we issued a voluntary recall of our Vial2Bag product line due to reports of potential
unpredictable or variable dosing under certain conditions. Our 2018 results included an $11.3 million provision for
product returns, recorded as a reduction of sales. Our inventory balance for these devices was $6.5 million at
December 31, 2018, which included estimated in-transit inventory being returned by our customers. We are working
to develop the support required to get the products back on the market, and we currently believe the returned
inventory will be saleable in 2019.

Note 4: Net Income Per Share

The following table reconciles the shares used in the calculation of basic net income per share to those used for
diluted net income per share:

(in millions)

Net income

Weighted average common shares outstanding

Dilutive effect of equity awards, based on the treasury stock method

Weighted average shares assuming dilution

2018

2017

2016

206.9

150.7

143.6

73.9

1.5

75.4

73.9

1.9

75.8

73.3

1.7

75.0

During 2018, 2017 and 2016, there were 0.4 million, 0.4 million, and 0.1 million shares, respectively, from stock-
based compensation plans not included in the computation of diluted net income per share because their impact was
antidilutive.

In February 2018, we announced a share repurchase program for calendar-year 2018 authorizing the repurchase of
up to 800,000 shares of our common stock from time to time on the open market or in privately-negotiated
transactions as permitted under the Securities Exchange Act of 1934 Rule 10b-18. The number of shares repurchased
and the timing of such transactions depended on a variety of factors, including market conditions. During 2018, we
purchased 800,000 shares of our common stock under the program at a cost of $70.8 million, or an average price of
$88.51 per share. Please refer to Note 19, Subsequent Events, for discussion of our share repurchase program for
calendar-year 2019.

Note 5: Property, Plant and Equipment

A summary of gross property, plant and equipment at December 31 is presented in the following table:

($ in millions)
Land
Buildings and improvements
Machinery and equipment
Molds and dies
Computer hardware and software
Construction in progress

Expected useful
lives (years)

5-50
10-15
4-7
3-10

2018

2017

20.9
569.1
806.7
115.8
151.1
89.1
1,752.7

21.4
539.2
793.4
114.5
144.6
132.7
1,745.8

Depreciation expense for the years ended December 31, 2018, 2017 and 2016 was $101.7 million, $94.3 million and
$88.1 million, respectively.

There were no capitalized leases included in buildings and improvements and machinery and equipment at
December 31, 2018 and 2017.

We capitalize interest on borrowings during the active construction period of major capital projects. Capitalized
interest is added to the cost of the underlying assets and is amortized over the useful lives of the assets. Capitalized
interest for the years ended December 31, 2018, 2017 and 2016 was $0.9 million, $2.7 million and $3.6 million,
respectively.

During 2018, as part of our 2018 restructuring plan, we recorded within other expense a $2.2 million non-cash asset
write-down associated with the discontinued use of certain equipment. During 2016, as part of our 2016
restructuring plan, we recorded within other expense a $4.5 million non-cash asset write-down associated with the
discontinued use of certain equipment.

Note 6: Affiliated Companies

At December 31, 2018, the following affiliated companies were accounted for under the equity method:

The West Company Mexico, S.A. de C.V.
Aluplast S.A. de C.V.
Pharma Tap S.A. de C.V.
Pharma Rubber S.A. de C.V.
Daikyo

Location
Mexico
Mexico
Mexico
Mexico
Japan

Ownership interest
49%
49%
49%
49%
25%

Unremitted income of affiliated companies included in consolidated retained earnings amounted to $75.8 million,
$69.9 million and $63.0 million at December 31, 2018, 2017 and 2016, respectively. Dividends received from
affiliated companies were $1.7 million in 2018, $2.2 million in 2017 and $1.4 million in 2016.

Our equity in net unrealized gains of Daikyo’s investment securities and derivative instruments, as well as pension
adjustments, included in accumulated other comprehensive loss was $0.4 million, $0.5 million and $5.3 million at
December 31, 2018, 2017 and 2016, respectively.

Our purchases from, and royalty payments made to, affiliates totaled $86.3 million, $86.7 million and $94.5 million,
respectively, in 2018, 2017 and 2016, of which $12.9 million and $12.4 million was due and payable as of
December 31, 2018 and 2017, respectively. The majority of these transactions related to a distributorship agreement
with Daikyo that allows us to purchase and re-sell Daikyo products. Sales to affiliates were $9.6 million, $8.1
million and $6.8 million, respectively, in 2018, 2017 and 2016, of which $1.6 million and $1.3 million was
receivable as of December 31, 2018 and 2017, respectively.

At December 31, 2018 and 2017, the aggregate carrying amount of our investment in affiliated companies that are
accounted for under the equity method was $77.8 million and $72.4 million, respectively. At December 31, 2018 and
2017, the aggregate carrying amount of our investment in affiliated companies that are not accounted for under the
equity method was $13.4 million. We have elected to record these investments, for which fair value was not readily
determinable, at cost, less impairment, adjusted for subsequent observable price changes. We test these investments
for impairment whenever circumstances indicate that the carrying value of the investments may not be recoverable.

Note 7: Goodwill and Intangible Assets

The changes in the carrying amount of goodwill by reportable segment were as follows:

($ in millions)
Balance, December 31, 2016
Foreign currency translation
Balance, December 31, 2017
Foreign currency translation
Balance, December 31, 2018

Proprietary
Products

Contract-
Manufactured
Products

Total

73.7
3.9
77.6
(1.6)
76.0

29.3
0.8
30.1
(0.3)
29.8

103.0
4.7
107.7
(1.9)
105.8

As of December 31, 2018, we had no accumulated goodwill impairment losses.

Intangible assets and accumulated amortization as of December 31 were as follows:

($ in millions)
Patents and licensing
Technology
Trademarks
Customer relationships
Customer contracts

Cost

19.6
3.3
2.0
29.3
11.0
65.2

2018
Accumulated
Amortization
$

2017
Accumulated
Amortization
$

Net

(15.1) $
(1.2)
(1.8)
(20.0)
(6.8)

4.5
2.1
0.2
9.3
4.2
(44.9) $ 20.3

Cost
$ 18.2
3.3
2.0
29.3
11.1
$ 63.9

Net

4.1
2.3
0.3
10.2
4.8
21.7

(14.1) $
(1.0)
(1.7)
(19.1)
(6.3)
(42.2) $

The cost basis of intangible assets includes a foreign currency translation loss of $0.3 million and a foreign currency
translation gain of $0.9 million for the years ended December 31, 2018 and 2017, respectively. Amortization
expense for the years ended December 31, 2018, 2017 and 2016 was $2.7 million, $2.4 million and $2.6 million,
respectively. Estimated annual amortization expense for the next five years is as follows: 2019 - $2.6 million, 2020 -
$2.6 million, 2021 - $2.1 million, 2022 - $2.1 million and 2023 - $2.1 million. During 2016, as part of our 2016
restructuring plan, we recorded within other expense a $2.8 million non-cash asset write-down associated with the
discontinued use of a patent and a $10.0 million non-cash asset write-down associated with the discontinued use of
an indefinite-lived trademark.

Note 8: Other Current Liabilities

Other current liabilities as of December 31 included the following:

($ in millions)

Deferred income

Other accrued expenses

Dividends payable

Restructuring obligations

Other

Total other current liabilities

2018

2017

25.5

26.2

11.3

3.3

10.3

76.6

18.4

27.7

10.4

2.1

18.4

77.0

Other consisted primarily of value-added taxes payable and accrued taxes other than income.

Note 9: Debt

The following table summarizes our long-term debt obligations, net of unamortized debt issuance costs and current
maturities, at December 31. The interest rates shown in parentheses are as of December 31, 2018.

($ in millions)

Note payable, due December 31, 2019

Credit Facility, due October 15, 2020 (1.00%)

Series A notes, due July 5, 2022 (3.67%)

Series B notes, due July 5, 2024 (3.82%)

Series C notes, due July 5, 2027 (4.02%)

Less: unamortized debt issuance costs

Total debt

Less: current portion of long-term debt

Long-term debt, net

Credit Facility

2018

2017

0.1

28.6

42.0

53.0

73.0

196.7

0.6

196.1

0.1

196.0

0.1

29.6

42.0

53.0

73.0

197.7

0.7

197.0

—

197.0

In October 2015, we entered into the Credit Facility, that replaced our prior revolving credit facility, which was
scheduled to expire in April 2017. The Credit Facility, which expires in October 2020, contains a $300.0 million
credit facility, which may be increased from time to time by up to $100.0 million in the aggregate, subject to the
satisfaction of certain conditions and upon approval by the banks. Up to $30.0 million of the Credit Facility is
available for swing-line loans and up to $30.0 million is available for the issuance of standby letters of credit.
Borrowings under the Credit Facility bear interest at either the base rate or at the applicable LIBOR rate, plus a
tiered margin based on the ratio of our total debt to modified earnings before interest, taxes, depreciation and
amortization, ranging from 0 to 75 basis points for base rate loans and 100 to 175 basis points for LIBOR rate loans.
Consistent with our previous revolving credit facility, the Credit Facility contains representations and covenants that
require compliance with, among other restrictions, a maximum leverage ratio and a minimum interest coverage
ratio. The Credit Facility also contains usual and customary default provisions, and limitations on liens securing
indebtedness, asset sales, distributions and acquisitions. As of December 31, 2018 and 2017, total unamortized debt
issuance costs of $0.6 million and $1.0 million, respectively, were recorded in other noncurrent assets and are being
amortized as additional interest expense over the term of the Credit Facility. A portion of these costs relate to our
prior credit facility.

At December 31, 2018, we had $28.6 million in outstanding long-term borrowings under the Credit Facility, of
which $4.6 million was denominated in Yen and $24.0 million in Euro. These borrowings, together with outstanding
letters of credit of $2.5 million, resulted in a borrowing capacity available under the Credit Facility of $268.9 million
at December 31, 2018. Please refer to Note 10, Derivative Financial Instruments, for a discussion of the foreign
currency hedges associated with this facility.

Private Placement

In 2012, we concluded a private placement issuance of $168.0 million in senior unsecured notes. The total amount
of the private placement issuance was divided into three tranches - $42.0 million 3.67% Series A Notes due July 5,
2022, $53.0 million 3.82% Series B Notes due July 5, 2024, and $73.0 million 4.02% Series C Notes due July 5,
2027 (the “Notes”). The Notes rank pari passu with our other senior unsecured debt. The weighted average of the
coupon interest rates on the Notes is 3.87%. As of December 31, 2018 and 2017, there were unamortized debt
issuance costs remaining of $0.6 million and $0.7 million, respectively, which are being amortized as additional
interest expense over the term of the Notes.

Covenants

Interest costs incurred during 2018, 2017 and 2016 were $9.3 million, $10.5 million and $11.7 million, respectively.
The aggregate annual maturities of long-term debt, excluding unamortized debt issuance costs, were as follows:
2019 - $0.1 million, 2020 - $28.6 million, none in 2021, 2022 - $42.0 million, none in 2023, and thereafter - $126.0
million.

Note 10: Derivative Financial Instruments

Our ongoing business operations expose us to various risks, such as fluctuating interest rates, foreign currency
exchange rates and increasing commodity prices. To manage these market risks, we periodically enter into derivative
financial instruments, such as interest rate swaps, options and foreign exchange contracts for periods consistent with,
and for notional amounts equal to or less than, the related underlying exposures. We do not purchase or hold any
derivative financial instruments for investment or trading purposes. All derivatives are recorded on the balance sheet
at fair value.

Interest Rate Risk

At December 31, 2016, we had a $34.9 million forward-start interest rate swap outstanding that hedged the
variability in cash flows due to changes in the applicable interest rate of our variable-rate five-year term loan. Under
this swap, we received variable interest rate payments based on one-month LIBOR plus a margin in return for
making monthly fixed interest payments at 5.41%. We designated this swap as a cash flow hedge.

On October 2, 2017, we paid the $33.1 million outstanding to extinguish the term loan and terminated the interest-
rate swap agreement.

Foreign Exchange Rate Risk

We have entered into forward exchange contracts, designated as fair value hedges, to manage our exposure to
fluctuating foreign exchange rates on cross-currency intercompany loans. As of December 31, 2018, the total
amount of these forward exchange contracts was €10.0 million, SGD 601.5 million and $13.4 million. As of
December 31, 2017, the total amount of these forward exchange contracts was €12.0 million, SGD 171.0 million
and $13.4 million.

In addition, we have entered into several foreign currency contracts, designated as cash flow hedges, for periods of
up to eighteen months, intended to hedge the currency risk associated with a portion of our forecasted transactions
denominated in foreign currencies. As of December 31, 2018, we had outstanding foreign currency contracts to
purchase and sell certain pairs of currencies, as follows:

(in millions)
Currency

USD

Yen

SGD

Sell

Purchase

USD

Euro

32.9

5,602.7

42.4

—

27.3

20.0

27.8

20.4

9.5

At December 31, 2018, a portion of our debt consisted of borrowings denominated in currencies other than USD.
We have designated our €21.0 million ($24.0 million) Euro-denominated borrowings under our Credit Facility as a
hedge of our net investment in certain European subsidiaries. A cumulative foreign currency translation loss of $0.2
million pre-tax ($0.1 million after tax) on this debt was recorded within accumulated other comprehensive loss as of
December 31, 2018. We have also designated our ¥500.0 million ($4.6 million) Yen-denominated borrowings under
our Credit Facility as a hedge of our net investment in Daikyo. At December 31, 2018, there was a cumulative
foreign currency translation loss of $0.4 million pre-tax ($0.3 million after tax) on this Yen-denominated debt, which
was also included within accumulated other comprehensive loss.

Commodity Price Risk

As of December 31, 2018, we had outstanding contracts to purchase 47,445 barrels of crude oil from January 2019
to August 2019 at a weighted-average strike price of $76.45 per barrel.

Effects of Derivative Instruments on Financial Position and Results of Operations

Please refer to Note 11, Fair Value Measurements, for the balance sheet location and fair values of our derivative
instruments as of December 31, 2018 and 2017.

The following table summarizes the effects of derivative instruments designated as hedges on OCI and earnings, net
of tax, for the year ended December 31:

Amount of Gain
(Loss)
Recognized in
OCI

Amount of Loss
(Gain) Reclassified
from Accumulated
OCI into Income

2018

2017

2018

2017

Location of Loss (Gain)
Reclassified from
Accumulated OCI into
Income

($ in millions)
Cash Flow Hedges:

Foreign currency hedge contracts

Interest rate swap contracts

Forward treasury locks

Total
Net Investment Hedges:

Foreign currency-denominated debt $

Total

0.4

2.2

—

2.6

0.8

(1.7) $

(2.0)

0.1

—

(3.6) $

0.6

0.3

—

0.3

1.2

1.1 Net sales

0.8 Cost of goods and services sold

0.5

0.2

2.6

Interest expense

(2.4) $

— $

— Other expense

—

During 2018 and 2017, there was no material ineffectiveness related to our hedges.

Note 11: Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in
the principal or most advantageous market for the asset or liability in an orderly transaction between market
participants on the measurement date. The following fair value hierarchy classifies the inputs to valuation techniques
used to measure fair value into one of three levels:

• Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or
indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted
prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following tables present the assets and liabilities recorded at fair value on a recurring basis:

($ in millions)

Assets:
Deferred compensation assets

Foreign currency contracts

Liabilities:

Contingent consideration

Deferred compensation liabilities

Foreign currency contracts

($ in millions)

Assets:

Deferred compensation assets

Foreign currency contracts

Liabilities:

Contingent consideration

Deferred compensation liabilities

Foreign currency contracts

Balance at

December 31,
2018

Basis of Fair Value Measurements

Level 1

Level 2

Level 3

8.7

6.5

15.2

1.7

9.8

0.2

11.7

8.7

—

8.7

— $

6.5

— $

9.8

—

9.8

—

0.2

Balance at

December 31,
2017

Basis of Fair Value Measurements

Level 1

Level 2

Level 3

8.9

0.5

9.4

4.9

9.9

5.1

19.9

8.9

—

8.9

— $

0.5

— $

9.9

—

9.9

—

5.1

—

1.7

—

1.7

—

4.9

—

4.9

Deferred compensation assets are included within other noncurrent assets and are valued using a market approach
based on quoted market prices in an active market. The fair value of our foreign currency contracts, included within
other current assets and other current liabilities, is valued using an income approach based on quoted forward
foreign exchange rates and spot rates at the reporting date. The fair value of our contingent consideration, included
within other current and other long-term liabilities, is discussed further in the section related to Level 3 fair value

measurements. The fair value of deferred compensation liabilities is based on quoted prices of the underlying
employees’ investment selections and is included within other long-term liabilities. Please refer to Note 10,
Derivative Financial Instruments, for further discussion of our derivatives.

Level 3 Fair Value Measurements

The fair value of the contingent consideration liability related to the SmartDose technology platform (the
"SmartDose contingent consideration") was initially determined using a probability-weighted income approach, and
is revalued at each reporting date or more frequently if circumstances dictate. Changes in the fair value of this
obligation are recorded as income or expense within other (income) expense in our consolidated statements of
income. The significant unobservable inputs used in the fair value measurement of the SmartDose contingent
consideration are the sales projections, the probability of success factors, and the discount rate. Significant increases
or decreases in any of those inputs in isolation would result in a significantly lower or higher fair value
measurement. As development and commercialization of the SmartDose technology platform progresses, we may
need to update the sales projections, the probability of success factors, and the discount rate used. This could result
in a material increase or decrease to the SmartDose contingent consideration.

The following table provides a summary of changes in our Level 3 fair value measurements:

Balance, December 31, 2016

Decrease in fair value recorded in earnings

Payments

Balance, December 31, 2017

Decrease in fair value recorded in earnings

Payments

Balance, December 31, 2018

Other Financial Instruments

($ in millions)

8.0
(2.4)
(0.7)
4.9
(2.6)
(0.6)
1.7

We believe that the carrying amounts of our cash and cash equivalents and accounts receivable approximate their
fair values due to their near-term maturities.

The estimated fair value of long-term debt is based on quoted market prices for debt issuances with similar terms
and maturities and is classified as Level 2 within the fair value hierarchy. At December 31, 2018, the estimated fair
value of long-term debt was $192.6 million compared to a carrying amount of $196.0 million. At December 31,
2017, the estimated fair value of long-term debt was $201.5 million and the carrying amount was $197.0 million.

Note 12: Accumulated Other Comprehensive Loss

The following table presents the changes in the components of accumulated other comprehensive loss, net of tax:

($ in millions)

Losses on
cash flow
hedges

Unrealized gains
on investment
securities

Defined benefit
pension and other
postretirement plans

Foreign
currency
translation

Total

Balance, December 31, 2016

(3.2) $

5.2

(45.4) $

(143.4) $ (186.8)

Other comprehensive (loss)
income before reclassifications

Amounts reclassified out

Other comprehensive (loss)
income, net of tax

Balance, December 31, 2017

Other comprehensive income
(loss) before reclassifications

Amounts reclassified out

Other comprehensive income
(loss), net of tax

(3.6)

2.6

(1.0)

(4.2)

2.6

1.2

3.8

Balance, December 31, 2018

(0.4) $

(4.7)
—

(4.7)
0.5

(0.1)
—

6.3

0.1

6.4
(39.0)

(1.0)
(0.4)

68.8

—

68.8
(74.6)

(39.2)
—

66.8

2.7

69.5
(117.3)

(37.7)
0.8

(0.1)
0.4

(1.4)
(40.4) $

(36.9)
(39.2)
(113.8) $ (154.2)

A summary of the reclassifications out of accumulated other comprehensive loss is presented in the following table
($ in millions):

Detail of components

2018

2017

Location on Statement of Income

Losses on cash flow hedges:

Foreign currency contracts

Interest rate swap contracts

Forward treasury locks

Total before tax

Tax expense

Net of tax

(0.7) $

(0.5)

—

(0.4)

(1.6)

0.4

(1.2) $

Interest expense

(1.3) Net sales
(1.2) Cost of goods and services sold
(0.7)
(0.4)
(3.6)
1.0
(2.6)

Interest expense

Amortization of defined benefit pension and
other postretirement plans:

Prior service credit

Actuarial losses

Total before tax

Tax expense

Net of tax

Total reclassifications for the period, net of tax

2.0

(1.4)
0.6

(0.2)

0.4

(0.8) $

(a)

2.1
(2.3)
(0.2)
0.1
(0.1)
(2.7)

(a) These components are included in the computation of net periodic benefit cost. Please refer to Note 14, Benefit
Plans, for additional details.

Note 13: Stock-Based Compensation

The West Pharmaceutical Services, Inc. 2016 Omnibus Incentive Compensation Plan (the “2016 Plan”) provides for
the granting of stock options, stock appreciation rights, restricted stock awards and performance awards to

employees and non-employee directors. A committee of the Board of Directors determines the terms and conditions
of awards to be granted. Vesting requirements vary by award. At December 31, 2018, there were 3,710,483 shares
remaining in the 2016 Plan for future grants.

Stock options and stock appreciation rights reduce the number of shares available by one share for each award
granted. All other awards under the 2016 Plan will reduce the total number of shares available for grant by an
amount equal to 2.5 times the number of shares awarded. If awards made under previous plans would entitle a plan
participant to an amount of West stock in excess of the target amount, the additional shares (up to a maximum
threshold amount) will be distributed under the 2016 Plan.

The following table summarizes our stock-based compensation expense recorded within selling, general and
administrative expenses for the years ended December 31:

($ in millions)
Stock option and appreciation rights
Performance share units, stock-settled
Performance share units, cash-settled
Performance share units, dividend equivalents
Employee stock purchase plan
Deferred compensation plans
Total stock-based compensation expense

2018

2017

2016

8.6
2.5
—
0.1
0.9
3.0
15.1

7.8
4.1
0.1
0.1
0.8
3.2
16.1

8.6
6.7
0.1
0.2
0.7
3.2
19.5

In addition, we recorded a $0.2 million charge during 2016 as part of our restructuring plan, which was recorded
within other expense. Please refer to Note 15, Other Expense, for further discussion of the 2016 restructuring plan.

The amount of unrecognized compensation expense for all non-vested awards as of December 31, 2018 was
approximately $19.1 million, which is expected to be recognized over a weighted average period of 1.7 years.

Stock Options

Stock options granted to employees vest in equal increments. All awards expire 10 years from the date of grant.
Upon the exercise of stock options, shares are issued in exchange for the exercise price of the options.

The following table summarizes changes in outstanding options:

(in millions, except per share data)
Options outstanding, January 1
Granted
Exercised
Forfeited
Options outstanding, December 31
Options exercisable, December 31

Weighted Average Exercise Price
Options outstanding, January 1
Granted
Exercised
Forfeited
Options outstanding, December 31
Options exercisable, December 31

2018

2017

2016

3.5
0.5
(1.0)
—
3.0
1.7

4.5
0.5
(1.5)
—
3.5
1.9

5.0
0.7
(1.1)
(0.1)
4.5
2.7

2018

2017

2016

$
$

48.76
90.36
35.95
75.32
58.93
45.32

$
$

38.11
84.09
26.15
60.92
48.76
35.44

$
$

31.77
61.98
22.50
45.91
38.11
27.17

As of December 31, 2018, the weighted average remaining contractual life of options outstanding and of options
exercisable was 6.4 years and 5.2 years, respectively.

As of December 31, 2018, the aggregate intrinsic value of total options outstanding was $117.5 million, of which
$89.3 million represented vested options.

The fair value of the options was estimated on the date of grant using a Black-Scholes option valuation model that
used the following weighted average assumptions in 2018, 2017 and 2016: a risk-free interest rate of 2.7%, 2.0%,
and 1.4%, respectively; stock volatility of 19.8%, 19.9%, and 20.4%, respectively; and dividend yields of 0.7%,
0.7%, and 0.9%, respectively. Stock volatility is estimated based on historical data and the impact from expected
future trends. Expected lives, which are based on prior experience, averaged 6 years for 2018, 2017 and 2016. The
weighted average grant date fair value of options granted in 2018, 2017 and 2016 was $20.16, $18.08 and $12.12,
respectively. Stock option expense is recognized over the vesting period, net of forfeitures.

For the years ended December 31, 2018, 2017 and 2016, the intrinsic value of options exercised was $61.3 million,
$91.7 million and $49.4 million, respectively. The grant date fair value of options vested during those same periods
was $8.3 million, $6.7 million and $5.8 million, respectively.

Stock Appreciation Rights

Stock appreciation rights (“SARs”) granted to eligible international employees vest in equal annual increments over
4 years of continuous service. All awards expire 10 years from the date of grant. The fair value of each cash-settled
SAR is adjusted at the end of each reporting period, with the resulting change reflected in expense. As of
December 31, 2018, SARs outstanding were 39,819, of which 25,659 were cash-settled and 14,160 were stock-
settled. Upon exercise of a cash-settled SAR, the employee receives cash for the difference between the grant date
price and the fair market value of the Company’s stock on the date of exercise. As a result of the cash settlement
feature, cash-settled SARs are recorded within other long-term liabilities. Upon exercise of a stock-settled SAR,
shares are issued in exchange for the exercise price of the stock-settled SAR. As a result of the stock settlement
feature, stock-settled SARs are recorded within equity.

The following table summarizes changes in outstanding SARs:

SARs outstanding, January 1

Granted

Exercised

Forfeited
SARs outstanding, December 31
SARs exercisable, December 31

Weighted Average Exercise Price
SARs outstanding, January 1
Granted
Exercised
Forfeited
SARs outstanding, December 31
SARs exercisable, December 31

2018

2017

2016

51,368

3,480

(14,629)

(400)
39,819
30,285

116,087

2,792
(67,511)
—
51,368
39,769

232,930

3,368
(114,976)
(5,235)
116,087
71,701

2018

2017

2016

38.55
89.64
28.45
63.43
46.48
36.91

$
$

31.13
83.47
27.65
—
38.55
30.77

$
$

27.79
68.40
24.95
42.28
31.13
26.65

$
$

Performance Awards

In addition to stock options and SAR awards, we grant performance share unit (“PSU”) awards to eligible
employees. These awards are earned based on the Company’s performance against pre-established targets, including
annual growth rate of revenue and return on invested capital, over a specified performance period. Depending on the
achievement of the targets, recipients of stock-settled PSU awards are entitled to receive a certain number of shares
of common stock, whereas recipients of cash-settled PSU awards are entitled to receive a payment in cash per unit
based on the fair market value of a share of our common stock at the end of the performance period.

The following table summarizes changes in our outstanding stock-settled PSU awards:

Non-vested stock-settled PSU awards, January 1
Granted at target level
Adjustments above/(below) target
Vested and converted
Forfeited
Non-vested stock-settled PSU awards, December 31

2018
341,944
102,307
(2,284)
(121,984)
(23,946)
296,037

2017
378,062
92,045
(11,369)
(116,684)
(110)
341,944

2016
422,726
115,035
19,339
(173,364)
(5,674)
378,062

Weighted Average Grant Date Fair Value
Non-vested stock-settled PSU awards, January 1
Granted at target level
Adjustments above/(below) target
Vested and converted
Forfeited
Non-vested stock-settled PSU awards, December 31 $

2018

2017

2016

64.38
90.45
33.86
93.00
68.65
76.84

54.47
84.01
42.85
50.06
73.64
64.38

45.60
60.47
38.71
59.64
49.86
54.47

Shares earned under PSU awards may vary from 0% to 200% of an employee’s targeted award. The fair value of
stock-settled PSU awards is based on the market price of our stock at the grant date and is recognized as expense
over the performance period, adjusted for estimated target outcomes and net of forfeitures. The weighted average
grant date fair value of stock-settled PSU awards granted during the years 2018, 2017 and 2016 was $90.45, $84.01
and $60.47, respectively. Including forfeiture and above-target achievement expectations, we expect that the stock-
settled PSU awards will convert to 108,626 shares to be issued over an average remaining term of one year.

The fair value of cash-settled PSU awards is also based on the market price of our stock at the grant date. These
awards are revalued at the end of each quarter based on changes in our stock price. As a result of the cash settlement
feature, cash-settled PSU awards are recorded within other long-term liabilities.

The following table summarizes changes in our outstanding cash-settled PSU awards:

2018

2017

2016

Non-vested cash-settled PSU awards, January 1
Granted at target level
Adjustments above/(below) target
Vested and converted
Forfeited
Non-vested cash-settled PSU awards, December 31

1,972
560
(30)
(910)
—
1,592

2,451
598
(107)
(970)
—
1,972

29,196
419
2,858
(29,032)
(990)
2,451

Weighted Average Grant Date Fair Value
Non-vested cash-settled PSU awards, January 1
Granted at target level
Adjustments above/(below) target
Vested and converted
Forfeited
Non-vested cash-settled PSU awards, December 31 $

2018

2017

2016

92.25
89.64
41.53
93.00
—
79.48

25.28
83.47
66.61
86.93
—
92.25

32.07
59.64
30.80
59.64
50.55
25.28

Employee Stock Purchase Plan

We also offer an Employee Stock Purchase Plan (“ESPP”), which provides for the sale of our common stock to
eligible employees at 85% of the current market price on the last trading day of each quarterly offering period.
Payroll deductions are limited to 25% of the employee’s base salary, not to exceed $25,000 in any one calendar year.
In addition, employees may not buy more than 2,000 shares during any offering period (8,000 shares per year).
Purchases under the ESPP were 55,669 shares, 56,218 shares and 60,839 shares for the years 2018, 2017 and 2016,
respectively. At December 31, 2018, there were approximately 3.9 million shares available for issuance under the
ESPP.

Deferred Compensation Plans

Our deferred compensation plans include a Non-Qualified Deferred Compensation Plan for Non-Employee
Directors, under which non-employee directors may defer all or part of their annual cash retainers. The deferred fees
may be credited to a stock-equivalent account. Amounts credited to this account are converted into deferred stock
units based on the fair market value of one share of our common stock on the last day of the quarter. For deferred
stock units ultimately paid in cash, a liability is calculated at an amount determined by multiplying the number of
units by the fair market value of our common stock at the end of each reporting period. In addition, deferred stock
awards are granted on the date of our annual meeting, and are distributed in shares of common stock. In 2018, we
granted 18,824 deferred stock awards, with a grant date fair value of $87.69. Similarly, a non-qualified deferred
compensation plan for eligible employees provides for the conversion of compensation into deferred stock units. As
of December 31, 2018, the two deferred compensation plans held a total of 429,777 deferred stock units, including
24,296 units to be paid in cash.

In addition, during 2018, we granted 15,942 restricted share awards at a weighted grant-date fair value of $96.77 per
share to new executive officers under the 2016 Plan. There were no grants of restricted share awards in 2017. During
2016, we granted 1,393 restricted share awards at a weighted grant-date fair value of $71.79 per share to new
executive officers under the 2016 Plan. The fair value of these awards is based on the market price of our stock at
the grant date and is recognized as expense over the vesting period.

Annual Incentive Plan

Under our annual incentive plan, participants are paid bonuses on the attainment of certain financial goals, which
they can elect to receive in either cash or shares of our common stock. If the employee elects payment in shares,

they are also given a restricted incentive stock award equal to one share for each four bonus shares issued. The
incentive stock awards vest at the end of four years provided that the participant has not made a disqualifying
disposition of their bonus shares. Incentive stock award grants were 1,500 shares, 1,800 shares and 2,400 shares in
2018, 2017 and 2016, respectively. Incentive stock forfeitures of 200 shares, 800 shares and 800 shares occurred in
2018, 2017 and 2016, respectively. Compensation expense is recognized over the vesting period based on the fair
market value of common stock on the award date: $93.00 per share granted in 2018, $86.93 per share granted in
2017 and $59.64 per share granted in 2016.

Note 14: Benefit Plans

Certain of our U.S. and international subsidiaries sponsor defined benefit pension plans. In addition, we provide
minimal death benefits for certain U.S. retirees and pay a portion of healthcare costs for retired U.S. salaried
employees and their dependents. Benefits for participants are coordinated with Medicare and the plan mandates
Medicare risk (“HMO”) coverage wherever possible and caps the total contribution for non-HMO coverage. We also
sponsor a defined contribution plan for certain salaried and hourly U.S. employees. Our 401(k) plan contributions
were $6.5 million for 2018, $5.7 million for 2017 and $4.9 million for 2016.

Pension and Other Retirement Benefits

The components of net periodic benefit cost and other amounts recognized in OCI were as follows:

($ in millions)
Net periodic benefit cost:
Service cost
Interest cost
Expected return on assets
Amortization of prior service credit
Amortization of transition obligation
Amortization of actuarial loss (gain)
Curtailment
Net periodic benefit cost
Other changes in plan assets and benefit
obligations recognized in OCI, pre-tax:
Net loss (gain) arising during period
Prior service credit arising during period
Amortization of prior service credit
Amortization of transition obligation
Amortization of actuarial (loss) gain
Curtailment
Foreign currency translation
Total recognized in OCI
Total recognized in net periodic benefit cost
and OCI

Pension benefits
2017

2018

2016

Other retirement benefits
2016
2017
2018

$ — $ — $

0.2
—
(0.7)
—
(2.4)
—

0.3
—
(0.7)
—
(2.6)
—

(2.9) $ (3.0) $

(1.4) $ (1.1) $

—
0.7
—
2.4
—
—
1.7

—
0.7
—
2.6
—
—
2.2

0.5
0.5
—
—
—
(1.4)
—
(0.4)

(0.1)
(3.0)
—
—
1.4
—
—
(1.7)

(1.2) $ (0.8) $

(2.1)

10.8
9.4
(15.7)
(1.3)
—
3.8
—
7.0

$ 10.4
9.8
(13.5)
(1.3)
—
4.9
—
$ 10.3

$ 10.2
10.5
(12.6)
(1.4)
0.1
4.8
(2.1)
9.5

3.5
0.3
1.3
—
(3.8)
—
(1.2)
0.1

$ (9.0) $ 19.2
—
1.4
(0.1)
(4.8)
(3.1)
(3.2)
9.4

—
1.3
—
(4.9)
—
2.6
$(10.0) $

7.1

$ 0.3

$ 18.9

Net periodic benefit cost by geographic location is as follows:

($ in millions)

U.S. plans

International plans

Net periodic benefit cost

Pension benefits

Other retirement benefits

2018

2017

2016

2018

2017

2016

4.8

2.2

7.0

7.3

3.0

10.3

7.1

2.4

9.5

(2.9) $
—
(2.9) $

(3.0) $
—
(3.0) $

(0.4)
—
(0.4)

In March 2017, the FASB issued guidance on the presentation of net periodic pension and postretirement benefit
cost (net benefit cost). We adopted this guidance as of January 1, 2018, on a retrospective basis. Please refer to Note
2, New Accounting Standards, for additional information.

Effective January 1, 2019, except for interest crediting, benefit accruals under our U.S. qualified and non-qualified
defined benefit pension plans will cease.

During 2016, we recorded a pension curtailment gain of $2.1 million in connection with our decision to freeze both
our U.S. qualified and non-qualified defined benefit pension plans as of January 1, 2019.

The following table presents the changes in the benefit obligation and the fair value of plan assets, as well as the
funded status of the plans:

($ in millions)
Change in benefit obligation:
Benefit obligation, January 1
Service cost
Interest cost
Participants’ contributions
Actuarial (loss) gain
Amendments/transfers in
Benefits/expenses paid
Foreign currency translation
Benefit obligation, December 31

Change in plan assets:
Fair value of assets, January 1
Actual return on assets
Employer contribution
Participants’ contributions
Benefits/expenses paid
Foreign currency translation
Fair value of assets, December 31

Funded status at end of year

Pension benefits

Other retirement benefits

2018

2017

2018

2017

(288.0) $
(10.8)
(9.4)
(0.6)
20.4
(0.3)
18.0
3.7
(267.0) $

239.5
(8.3)
2.7
0.6
(18.0)
(2.0)
214.5

(262.2) $
(10.4)
(9.8)
(0.7)
(11.8)
—
14.2
(7.3)
(288.0) $

192.4
34.4
23.2
0.7
(14.2)
3.0
239.5

(7.1) $
—
(0.2)
(0.6)
1.4
—
0.5
—
(6.0) $

— $
—
(0.1)
0.6
(0.5)
—
— $

(8.0)
—
(0.3)
(0.5)
1.2
—
0.5
—
(7.1)

—
—
—
0.5
(0.5)
—
—

(52.5) $

(48.5) $

(6.0) $

(7.1)

International pension plan assets, at fair value, included in the preceding table were $33.4 million and $34.7 million
at December 31, 2018 and 2017, respectively.

Amounts recognized in the balance sheet were as follows:

($ in millions)
Current liabilities
Noncurrent liabilities

Pension benefits

Other retirement benefits

2018

2017

2018

2017

(1.6) $
(50.9)
(52.5) $

(1.5) $
(47.0)
(48.5) $

(0.7) $
(5.3)
(6.0) $

(0.7)
(6.4)
(7.1)

The amounts in accumulated other comprehensive loss, pre-tax, consisted of:

($ in millions)
Net actuarial loss (gain)
Prior service cost (credit)
Total

Pension benefits

Other retirement benefits

2018

2017

2018

2017

73.0
0.9
73.9

74.5
(0.8)
73.7

(9.4) $
(1.7)
(11.1) $

(10.4)
(2.4)
(12.8)

The net actuarial loss and prior service credit for the defined benefit pension plans that will be amortized from
accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year are $2.1 million and
$0.1 million, respectively. The net actuarial gain and prior service credit for the other retirement benefits plan that
will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year
is $2.1 million and $0.7 million.

The accumulated benefit obligation for all defined benefit pension plans was $263.0 million and $283.7 million at
December 31, 2018 and 2017, respectively, including $64.0 million and $67.3 million, respectively, for international
pension plans.

All of the defined benefit pension plans have projected benefit obligations and accumulated benefit obligations in
excess of plan assets as of December 31, 2018 and 2017.

Benefit payments expected to be paid under our defined benefit pension and other retirement benefit plans in the
next ten years are as follows:

($ in millions)
2019
2020
2021
2022
2023
2024 to 2028

Domestic

International

Total

13.6
14.6
14.1
14.7
14.9
69.3
141.2

2.1
2.7
2.2
2.9
2.3
16.9
29.1

15.7
17.3
16.3
17.6
17.2
86.2
170.3

In 2019, we expect to contribute $3.2 million to pension plans, of which $2.3 million is for international plans. In
addition, we expect to contribute $0.7 million for other retirement benefits in 2019. We periodically consider
additional, voluntary contributions depending on the investment returns generated by pension plan assets, changes in
benefit obligation projections and other factors.

Weighted average assumptions used to determine net periodic benefit cost were as follows:

Discount rate
Rate of compensation increase
Long-term rate of return on assets

Pension benefits
2017
3.48%
4.01%
6.47%

2018
2.91%
4.00%
6.71%

Other retirement benefits
2016
2017
2018
4.30%
3.90%
—
—
—
—

2016
3.99% 3.45%
4.04%
6.95%

—
—

Weighted average assumptions used to determine the benefit obligations were as follows:

Discount rate
Rate of compensation increase

Pension benefits
2017
2018

Other retirement benefits

2018

2017

3.76%
4.01%

3.14%
3.80%

4.20%
—

3.45%
—

The discount rate used to determine the benefit obligations for U.S. pension plans was 4.30% and 3.65% as of
December 31, 2018 and 2017, respectively. The weighted average discount rate used to determine the benefit
obligations for all international plans was 2.19% and 1.62% as of December 31, 2018 and 2017, respectively. The
rate of compensation increase for U.S. plans was 4.25% for 2018 and 2017, while the weighted average rate for all
international plans was 2.60% for 2018 and 2.44% for 2017. Other retirement benefits were only available to U.S.
employees. The expected long-term rate of return for U.S. plans, which accounts for 84.45% of global plan assets,
was 7.00% for 2018, 7.00% for 2017 and 7.25% for 2016.

The assumed healthcare cost trend rate used to determine benefit obligations was 6.25% for all participants in 2018,
decreasing to 5.00% by 2024. A change in the assumed healthcare cost trend rate by one percentage point would
have an immaterial impact in the postretirement obligation. The assumed healthcare cost trend rate used to
determine net periodic benefit cost was 6.60% for all participants in 2018, decreasing to 5.00% by 2022. The effect
of a one percentage point increase or decrease in the rate would have an immaterial impact in the aggregate service
and interest cost components.

The weighted average asset allocations by asset category for our pension plans, at December 31, were as follows:

Equity securities
Debt securities
Other

2018

2017

23%
74%
3%
100%

63%
37%
—%
100%

Our U.S. pension plan is managed as a balanced portfolio comprised of two components: equity and fixed income
debt securities. Equity investments are used to maximize the long-term real growth of fund assets, while fixed
income investments are used to generate current income, provide for a more stable periodic return, and provide some
protection against a prolonged decline in the market value of equity investments. Temporary funds may be held as
cash. We maintain a long-term strategic asset allocation policy which provides guidelines for ensuring that the
fund’s investments are managed with the short-term and long-term financial goals of the fund, while allowing the
flexibility to react to unexpected changes in capital markets.

Diversification across and within asset classes is the primary means by which we mitigate risk. We maintain
guidelines for all asset and sub-asset categories in order to avoid excessive investment concentrations. Fund assets
are monitored on a regular basis. If at any time the fund asset allocation is not within the acceptable allocation range,
funds will be reallocated. We also review the fund on a regular basis to ensure that the investment returns received
are consistent with the short-term and long-term goals of the fund and with comparable market returns. We are

prohibited from pledging fund securities and from investing pension fund assets in our own stock, securities on
margin or derivative securities.

During the three months ended December 31, 2018, in anticipation of benefit accruals under our U.S. qualified and
non-qualified defined benefit pension plans ceasing effective January 1, 2019, except for interest crediting, we
changed the U.S. target asset allocations from 65% equity securities and 35% debt securities to 30% equity
securities and 70% debt securities.

The following are the U.S. target asset allocations and acceptable allocation ranges:

Equity securities
Debt securities
Other

Target
allocation
30%
70%
—%

Allocation
range
27% - 33%
67% - 73%
0% - 3%

The following tables present the fair value of our pension plan assets, utilizing the fair value hierarchy discussed in
Note 11, Fair Value Measurements. In accordance with U.S. GAAP, certain pension plan assets measured at net
asset value (“NAV”) have not been classified in the fair value hierarchy.

($ in millions)
Cash
Equity securities:

International mutual funds

Fixed income securities:

Mutual funds

Pension plan assets in the fair value hierarchy $
Pension plan assets measured at NAV
Pension plan assets at fair value

Balance at
December 31,
2018

Basis of Fair Value Measurements
Level 3
Level 2
Level 1

1.7

— $

17.7

13.9
33.3

—

—
— $

17.7

13.9
33.3
181.2
214.5

—

—
—

—

—
—

Balance at
December 31,
2017

Basis of Fair Value Measurements
Level 3
Level 2
Level 1

1.6

— $

15.5

17.5
34.6

—

—
— $

15.5

17.5
34.6
204.9
239.5

($ in millions)
Cash
Equity securities:

International mutual funds

Fixed income securities:

Mutual funds

Pension plan assets in the fair value hierarchy $
Pension plan assets measured at NAV
Pension plan assets at fair value

Note 15: Other Expense

Other expense consisted of:

($ in millions)

Restructuring and related charges:

Severance and post-employment benefits

Asset-related charges

Other charges

Total restructuring and related charges

Argentina currency devaluation

Venezuela deconsolidation

Venezuela currency devaluation

Development and licensing income

Contingent consideration

Other items

Total other expense

Restructuring and Related Charges

2018

2017

2016

3.1

2.2

3.8

9.1

1.1

—

—
(0.9)
(2.6)
(4.8)
1.9

— $

—

— $

—

11.1

—
(10.6)
(2.4)
3.9

2.0

8.9

17.3

0.2

26.4

—

2.7
(1.5)
2.3
(0.1)
29.8

In February 2018, our Board of Directors approved a restructuring plan designed to realign our manufacturing
capacity with demand. These changes are expected to be implemented over the following twelve to twenty-four
months. The plan will require restructuring and related charges in the range of $8.0 million to $13.0 million and
capital expenditures in the range of $9.0 million to $14.0 million.

During 2018, we recorded $8.8 million in restructuring and related charges associated with this plan, consisting of
$3.1 million for severance charges, $2.2 million for non-cash asset write-downs associated with the discontinued use
of certain equipment, and $3.5 million for other charges.

The following table presents activity related to our restructuring obligations related to our 2018 restructuring plan:

($ in millions)

Balance, December 31, 2017

Charges

Cash payments

Non-cash asset write-downs
Balance, December 31, 2018

Severance
and benefits

Asset-related
charges

Other
charges

Total

— $

3.1
(0.8)
—
2.3

2.2

—
(2.2)

3.5

—
(3.5)

— $

—

8.8
(0.8)
(5.7)
2.3

On February 15, 2016, our Board of Directors approved a restructuring plan designed to repurpose several of our
production facilities in support of growing high-value proprietary products and to realign operational and
commercial activities to meet the needs of our new market-focused commercial organization. During 2018, we
recorded $0.3 million in additional charges related to this restructuring plan. Our remaining restructuring obligations
related to our 2016 restructuring plan as of December 31, 2018 were $1.0 million.

Other Items

During 2018, we recorded a charge of $1.1 million related to the classification of Argentina’s economy as highly
inflationary under U.S. GAAP as of July 1, 2018.

On February 17, 2016, the Venezuelan government announced a devaluation of the Bolivar, from the previously-
prevailing official exchange rate of 6.3 Bolivars to USD to 10.0 Bolivars to USD, and streamlined the previous
three-tiered currency exchange mechanism into a dual currency exchange mechanism. As a result, during 2016, we
recorded a $2.7 million charge. In 2017, as a result of the continued deterioration of conditions in Venezuela as well
as our continued reduced access to USD settlement controlled by the Venezuelan government, we recorded a charge
of $11.1 million related to the deconsolidation of our Venezuelan subsidiary, following our determination that we no
longer met the U.S. GAAP criteria for control of that subsidiary. This charge included the derecognition of the
carrying amounts of our Venezuelan subsidiary’s assets and liabilities, as well as the write-off of our investment in
our Venezuelan subsidiary, related unrealized translation adjustments and the elimination of intercompany accounts.
As of April 1, 2017, our consolidated financial statements exclude the results of our Venezuelan subsidiary.

During 2018, 2017 and 2016, we recorded development income of $0.9 million, $1.5 million and $1.5 million,
respectively, related to a nonrefundable customer payment of $20.0 million received in June 2013 in return for the
exclusive use of the SmartDose technology platform within a specific therapeutic area. Please refer to Note 3,
Revenue, for additional information. In addition, during 2017, we recorded income of $9.1 million attributable to the
reimbursement of certain costs related to a technology that we subsequently licensed to a third party. The license of
technology to the third party may result in additional income in the future, contingent on commercialization of the
related product.

Contingent consideration represents changes in the fair value of the SmartDose contingent consideration. Please
refer to Note 11, Fair Value Measurements, for additional details.

Other items consist of foreign exchange transaction gains and losses, gains and losses on the sale of fixed assets, and
miscellaneous income and charges. Other items changed in 2018 as a result of foreign exchange transaction gains of
$5.5 million in 2018, as compared to foreign exchange transaction losses of $2.1 million in 2017, and a $1.1 million
gain on the sale of fixed assets as a result of our restructuring plans.

Note 16: Income Taxes

As a global organization, we and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various
state and foreign jurisdictions. During 2018, the statute of limitations for the 2014 U.S. federal tax year lapsed,
leaving tax years 2015 through 2018 open to examination. For U.S. state and local jurisdictions, tax years 2014
through 2018 are open to examination. We are also subject to examination in various foreign jurisdictions for tax
years 2011 through 2018.

A reconciliation of the beginning and ending amount of the liability for unrecognized tax benefits is as follows:

($ in millions)
Balance at January 1
Increase due to current year position
Increase due to prior year position
Reduction for expiration of statute of limitations/audits
Balance at December 31

2018

2017

3.2
0.8
0.4
(0.5)
3.9

6.2
0.4
0.1
(3.5)
3.2

In addition, we had balances in accrued liabilities for interest and penalties of $0.2 million and $0.1 million at
December 31, 2018 and 2017, respectively. As of December 31, 2018, we had $3.9 million of total gross
unrecognized tax benefits, which, if recognized, would favorably impact the effective income tax rate. It is
reasonably possible that, due to the expiration of statutes and the closing of tax audits, the amount of gross
unrecognized tax benefits may be reduced by approximately $0.4 million during the next twelve months, which
would favorably impact our effective tax rate.

The components of income before income taxes are:

($ in millions)
U.S. operations
International operations
Total income before income taxes

The related provision for income taxes consists of:

($ in millions)
Current:

Federal
State
International

Current income tax provision
Deferred:

Federal and state
International

Deferred income tax provision
Income tax expense

2018

2017

2016

132.9
107.8
240.7

96.5
125.9
222.4

84.5
105.3
189.8

2018

2017

2016

2.1
3.3
35.1
40.5

1.4
(0.5)
0.9
41.4

2.1
0.1
37.0
39.2

41.8
(0.1)
41.7
80.9

2.5
1.0
29.4
32.9

21.8
(0.3)
21.5
54.4

Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for
financial reporting and tax purposes.

The significant components of our deferred tax assets and liabilities at December 31 are:

($ in millions)
Deferred tax assets

Net operating loss carryforwards
Tax credit carryforwards
Restructuring and impairment charges
Pension and deferred compensation
Other
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:

Accelerated depreciation
Tax on undistributed earnings of subsidiaries
Other

Total deferred tax liabilities
Net deferred tax asset

2018

2017

18.4
10.5
—
27.2
11.4
(16.0)
51.5

31.3
6.6
2.0
39.9
11.6

19.7
13.7
0.1
28.3
14.3
(20.9)
55.2

26.3
9.8
3.8
39.9
15.3

A reconciliation of the U.S. federal corporate tax rate to our effective consolidated tax rate on income before income
taxes follows:

U.S. federal corporate tax rate
Tax on international operations other than U.S. tax rate
Reversal of prior valuation allowance
Adjustments to reserves for unrecognized tax benefits
U.S. tax on international earnings, net of foreign tax credits
State income taxes, net of federal tax effect
U.S. research and development credits
Excess tax benefits on share-based payments
Impact of 2017 Tax Act
Tax on undistributed earnings of subsidiaries
Venezuela deconsolidation
Other business credits and Section 199 Deduction
Other
Effective tax rate

2018

2017

2016

21.0%
4.8
—
0.2
(0.2)
2.3
(0.9)
(6.0)
(2.9)
(1.3)
—
—
0.2
17.2%

35.0%
(4.5)
(0.5)
(0.2)
0.1
0.2
(0.8)
(14.1)
15.9
4.4
1.7
(0.6)
(0.2)
36.4%

35.0%
(2.9)
(0.3)
(0.6)
(1.3)
0.8
(0.8)
—
—
—
—
(1.1)
(0.1)
28.7%

The 2017 Tax Act, which was signed into law on December 22, 2017, has resulted in significant changes to the U.S.
corporate income tax system. These changes include, but are not limited to, a federal statutory rate reduction from
35.0% to 21.0% effective for tax years beginning after December 31, 2017. Changes in tax rates and tax laws are
accounted for in the period of enactment. As a result, during the year ended December 31, 2017, we recorded a
discrete charge based upon our understanding of the 2017 Tax Act and the guidance available as of the date of that
filing. A significant portion of the discrete tax liability was attributable to a one-time mandatory deemed repatriation
tax of post-1986 undistributed foreign subsidiary earnings and profits (the “Transition Toll Tax”) of $27.9 million.
Additionally, due to the reduction of the federal statutory rate, we revalued our deferred assets and liabilities and
recorded a provisional $11.4 million federal tax expense, net of state tax impact, during the year ended December
31, 2017.

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 to address the application of U.S.
GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed
(including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017
Tax Act. We recognized the provisional tax impacts related to deemed repatriated earnings and the revaluation of
deferred tax assets and liabilities and included these amounts in our consolidated financial statements for the year
ended December 31, 2017. As of December 31, 2018, we finalized our calculations and tax positions used in our
analysis of the impact of the 2017 Tax Act in consideration of proposed regulations and other guidance issued during
2018. As a result, we recorded a $7.5 million tax benefit related to a reduction of the Transition Toll Tax and an
incremental tax expense of $4.0 million related to other adjustments. The final measurement reduced the Transition
Toll Tax expense to $20.4 million from $27.9 million. The net impact of these adjustments resulted in a benefit of
1.45% to the 2018 effective tax rate.

The 2017 Tax Act created a provision known as global intangible low-tax income (“GILTI”) that imposes a U.S. tax
on certain earnings of controlled foreign subsidiaries. We made an accounting policy election to reflect GILTI taxes,
if any, as a current income tax expense in the period incurred.

As of December 31, 2018, we have fully utilized all of our U.S. federal net operating loss carryforwards. State
operating loss carryforwards of $233.5 million created a deferred tax asset of $15.6 million, while foreign operating
loss carryforwards of $23.2 million created a deferred tax asset of $2.8 million. Management estimates that certain
state and foreign operating loss carryforwards are unlikely to be utilized and the associated deferred tax assets have
been fully reserved. State loss carryforwards expire as follows: $11.6 million in 2019 and $221.9 million thereafter.
Foreign loss carryforwards will begin to expire in 2025, while $20.2 million of the total $23.2 million will not
expire.

As of December 31, 2018, we have utilized all available foreign tax credit carryforwards against the Transition Toll
Tax. We have U.S. federal and state research and development credit carryforwards of $5.6 million and $2.6 million,
respectively. The $5.6 million of U.S. federal research and development credits expire as follows: $1.5 million
expire in 2037, $1.8 million expire in 2038, and $2.3 million expire in 2039. The $2.6 million of state research and
development credits expire as follows: $0.6 million expire in 2022, $0.5 million expire in 2023, and $1.5 million
expire after 2023. Additionally, we have available other state tax credits of $0.1 million which expire in 2020.

In response to the 2017 Tax Act, we reevaluated our position regarding permanent reinvestment of foreign
subsidiary earnings and profits through 2017 (with the exception of China and Mexico) and decided that those
profits were no longer permanently reinvested. As of January 1, 2018, we reasserted indefinite reinvestment related
to all post-2017 unremitted earnings in all of our foreign subsidiaries. In general, it is our practice and intention to
permanently reinvest the earnings of our foreign subsidiaries and repatriate earnings only when the tax impact is de
minimis, and that position has not changed subsequent to the one-time transition tax under the 2017 Tax Act, except
as noted above. Accordingly, no deferred taxes have been provided for withholding taxes or other taxes that would
result upon repatriation of approximately $79.7 million of undistributed earnings from foreign subsidiaries to the
U.S., as those earnings continue to be permanently reinvested. Further, it is impracticable for us to estimate any
future tax costs for any unrecognized deferred tax liabilities associated with our indefinite reinvestment assertion,
because the actual tax liability, if any, would be dependent on complex analysis and calculations considering various
tax laws, exchange rates, circumstances existing when there is a repatriation, sale, or liquidation, or other factors.

Note 17: Commitments and Contingencies

At December 31, 2018, we were obligated under various operating lease agreements. Rental expense in 2018, 2017
and 2016 was $14.5 million, $13.3 million and $11.7 million, respectively.

At December 31, 2018, future minimum rental payments under non-cancelable operating leases were:

Year
2019
2020
2021
2022
2023
Thereafter
Total

($ in millions)
13.0
10.5
7.8
6.9
5.5
37.8
81.5

At December 31, 2018, outstanding unconditional contractual commitments for the purchase of raw materials and
finished goods amounted to $72.7 million, of which $14.0 million is due to be paid in 2019.

We have letters of credit totaling $2.5 million supporting the reimbursement of workers’ compensation and other
claims paid on our behalf by insurance carriers. Our accrual for insurance obligations was $3.4 million at
December 31, 2018, of which $0.9 million is in excess of our deductible and, therefore, is reimbursable by the
insurance company.

Our SmartDose contingent consideration is payable to the selling shareholders based upon a percentage of product
sales over the life of the underlying product patent, with no cap on total payments. Given the length of the earnout
period and the uncertainty in forecasted product sales, we do not believe it is meaningful to estimate the upper end
of the range over the entire period. However, our estimated probable range which could become payable over the
next five years is between zero and $2.1 million.

Note 18: Segment Information

The following table presents information about our reportable segments, reconciled to consolidated totals:

($ in millions)
Net sales:

Proprietary Products
Contract-Manufactured Products

Intersegment sales elimination
Consolidated net sales

2018

2017

2016

1,308.6
409.1
(0.3)
1,717.4

1,236.9
362.5
(0.3)
1,599.1

1,189.9
320.2
(1.0)
1,509.1

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

We do not have any customers accounting for greater than 10% of consolidated net sales.

The following table presents net sales and property, plant and equipment, net, by the country in which the legal
subsidiary is domiciled and assets are located:

($ in millions)
United States
Germany
France
Other European countries
Other

2018

766.1
235.9
127.5
386.1
201.8
$ 1,717.4

Net Sales
2017

734.6
226.4
125.6
318.5
194.0
$ 1,599.1

2016

738.3
200.6
116.3
268.3
185.6
$ 1,509.1

Property, Plant and Equipment, Net
2017

2018

2016

315.3
99.3
42.5
232.5
132.4
822.0

323.8
108.8
43.1
244.9
134.4
855.0

329.3
96.8
37.1
192.3
122.8
778.3

The following tables provide summarized financial information for our segments:

($ in millions)
2018
Net sales
Operating profit
Interest expense
Interest income
Other nonoperating income
Income before income taxes
Segment assets
Capital expenditures
Depreciation and amortization expense

2017
Net sales
Operating profit
Interest expense
Interest income
Other nonoperating income
Income before income taxes
Segment assets
Capital expenditures
Depreciation and amortization expense

2016
Net sales
Operating profit
Interest expense
Interest income
Other nonoperating income
Income before income taxes
Segment assets
Capital expenditures
Depreciation and amortization expense

$
$

Proprietary
Products

Contract-
Manufactured
Products

Corporate
and
Elimination

Consolidated

$
$

409.1
44.3
—
—
—
44.3
301.4
20.7
17.2

362.5
48.3
—
—
—
48.3
286.4
18.6
16.4

320.2
38.2
—
—
—
38.2
261.1
34.0
14.9

(0.3) $
(70.4) $
8.4
(2.1)
(6.7)
(70.0) $
335.2
$
7.0
3.3

(0.3) $
(66.3) $
7.8
(1.3)
(3.1)
(69.7) $
255.1
$
5.0
3.2

(1.0) $
(86.1) $
8.1
(1.1)
(1.6)
(91.5) $
281.7
$
3.0
4.1

1,717.4
240.3
8.4
(2.1)
(6.7)
240.7
1,978.9
104.7
104.4

1,599.1
225.8
7.8
(1.3)
(3.1)
222.4
1,862.8
130.8
96.7

1,509.1
195.2
8.1
(1.1)
(1.6)
189.8
1,716.7
170.2
90.7

$
$

1,308.6
266.4
—
—
—
266.4
1,342.3
77.0
83.9

1,236.9
243.8
—
—
—
243.8
1,321.3
107.2
77.1

1,189.9
243.1
—
—
—
243.1
1,173.9
133.2
71.7

Note 19: Subsequent Events

In January 2019, we entered into an agreement to acquire the business of our distributor in South Korea. The
transaction is expected to close in April 2019.

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

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of West Pharmaceutical Services, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of West Pharmaceutical Services, Inc. and its
subsidiaries as of December 31, 2018 and 2017, and the related consolidated statements of income, comprehensive
income, equity and cash flows for each of the three years in the period ended December 31, 2018, including the
related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended
December 31, 2018 appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial
statements”). We also have audited the Company’s internal control over financial reporting as of December 31,
2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2018 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it
accounts for revenues from contracts with customers in 2018 and the manner in which it accounts for share-based
compensation award-related income tax effects in 2017.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.
Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s
internal control over financial reporting based on our audits. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting
was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We believe
that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 27, 2019

We have served as the Company’s auditor since 1963.

Quarterly Operating and Per Share Data (Unaudited)

($ in millions, except per share data)
2018
Net sales
Gross profit
Net income
Net income per share:
Basic
Diluted

2017
Net sales
Gross profit
Net income
Net income per share:
Basic
Diluted

First
Quarter
(1)

Second
Quarter
(2)

Third
Quarter
(3)

Fourth
Quarter
(4)

Full Year

$
$

415.7
134.4
43.6

0.59
0.58

387.7
134.2
60.9

0.83
0.81

$
$

447.5
142.2
56.1

0.76
0.75

397.6
125.0
38.8

0.53
0.51

$
$

431.7
135.6
55.2

0.75
0.73

398.2
125.1
51.0

0.69
0.67

$
$

422.5
133.2
52.0

$ 1,717.4
545.4
206.9

0.70
0.69

$
$

2.80
2.74

415.6
128.6
—

$ 1,599.1
512.9
150.7

— $
— $

2.04
1.99

The sum of the quarterly amounts may not equal full year due to rounding.

Factors affecting the comparability of the information reflected in the quarterly data:

(1) Net income for the first quarter of 2018 included the impact of restructuring and related charges of $2.7 million

($0.03 per diluted share), a net tax charge of $0.3 million ($0.01 per diluted share) for the estimated impact of
the 2017 Tax Act, and a tax benefit of $2.1 million ($0.03 per diluted share) associated with our adoption of the
guidance issued by the FASB regarding share-based payment transactions. Net income for the first quarter of
2017 included the impact of a tax benefit of $15.9 million ($0.21 per diluted share) associated with our adoption
of the guidance issued by the FASB regarding share-based payment transactions.

(2) Second quarter 2018 net income included the impact of restructuring and related charges of $1.6 million ($0.01
per diluted share), a net tax benefit of $4.8 million ($0.06 per diluted share) for the estimated impact of the 2017
Tax Act, and a tax benefit of $3.4 million ($0.04 per diluted share) associated with our adoption of the guidance
issued by the FASB regarding share-based payment transactions. Second quarter 2017 net income included the
impact of a tax benefit of $9.6 million ($0.13 per diluted share) associated with our adoption of the guidance
issued by the FASB regarding share-based payment transactions and a charge of $11.1 million ($0.15 per
diluted share) related to the deconsolidation of our Venezuelan subsidiary.

(3) Net income for the third quarter of 2018 included the impact of restructuring and related charges of $0.9 million
($0.01 per diluted share), a net tax charge of $0.4 million for the estimated impact of the 2017 Tax Act, a tax
benefit of $7.7 million ($0.10 per diluted share) associated with our adoption of the guidance issued by the
FASB regarding share-based payment transactions, and a charge of $1.1 million ($0.02 per diluted share)
related to the classification of Argentina’s economy as highly inflationary under U.S. GAAP as of July 1, 2018.
Net income for the third quarter of 2017 included the impact of a tax benefit of $4.8 million ($0.06 per diluted
share) associated with our adoption of the guidance issued by the FASB regarding share-based payment
transactions.

(4) Fourth quarter 2018 net income included the impact of restructuring and related charges of $2.1 million ($0.02
per diluted share), a gain on the sale of fixed assets as a result of our restructuring plans of $0.9 million ($0.01
per diluted share), a net tax charge of $1.6 million ($0.03 per diluted share) for the impact of tax law changes,

including the 2017 Tax Act, and a tax benefit of $1.1 million ($0.02 per diluted share) associated with our
adoption in 2017 of guidance issued by the FASB regarding share-based payment transactions. Fourth quarter
2017 net income included the impact of a discrete tax charge of $48.8 million ($0.64 per diluted share) related
to the 2017 Tax Act and the impact of changes in enacted international tax rates on previously-recorded deferred
tax asset and liability balances and a tax benefit of $2.8 million ($0.04 per diluted share) associated with our
adoption of the guidance issued by the FASB regarding share-based payment transactions.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure controls are controls and procedures designed to reasonably ensure that information required to be
disclosed in our reports filed under the Exchange Act, such as this annual report, is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include, without
limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed
under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management,
including our CEO and Chief Financial Officer (“CFO”), or persons performing similar functions, as appropriate, to
allow timely decisions regarding required disclosure. Our disclosure controls include some, but not all, components
of our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of our management, including our
CEO and CFO, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934), as of the end of the period covered by this Form 10-K. Based on this
evaluation, our CEO and CFO have concluded that, as of December 31, 2018, our disclosure controls and
procedures are effective.

Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting,
as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Our internal control over financial
reporting is a process designed under the supervision of our CEO and CFO to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of our financial statements for external reporting
purposes in accordance with U.S. generally accepted accounting principles.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018
based on the framework established in “Internal Control-Integrated Framework (2013)” issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has
determined that our internal control over financial reporting was effective as of December 31, 2018.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
No evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within
West have been detected. These inherent limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the
individual acts of some persons, by collusion of two or more people, or by management override of the controls. The
design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions. Also projections of any evaluation of effectiveness to future periods are subject to the risks that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

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

Changes in Internal Controls
During the fourth quarter ended December 31, 2018, there have been no changes to our internal control over
financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

On January 1, 2018, we adopted ASC 606. Although our adoption of ASC 606 resulted in no change to our internal
control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting, we did implement changes to our internal controls relating to revenue. These
changes included the development of new policies based on a five-step model provided in ASC 606, enhanced
contract review requirements, and other ongoing monitoring activities. These controls were designed to provide
assurance at a reasonable level of the fair presentation of our consolidated financial statements and related
disclosures.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information about our directors is incorporated by reference from the discussion under the heading Board of
Directors Nominee Information - Proposal 1 - Election of Directors in our 2019 Proxy Statement. Information about
our Code of Business Conduct is incorporated by reference from the discussion under the heading Corporate
Governance Documents - Code of Business Conduct in our 2019 Proxy Statement. Information regarding the
procedures by which our shareholders may recommend nominees to our Board of Directors is incorporated by
reference from the discussion under the heading Voting and Other Information - 2020 Shareholder Proposals or
Nominations included in our 2019 Proxy Statement. Information about our Audit Committee, including the members
of the committee, and our Audit Committee financial experts, is incorporated by reference from the discussion under
the heading Board and Director Information and Policies - Committees - Audit Committee in our 2019 Proxy
Statement. The balance of the information required by this item is contained in the discussion entitled Executive
Officers of the Company in Part I of this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

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

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

Information required by this Item is incorporated by reference from the discussion under the heading Stock
Ownership - Current Stock Ownership by Officers and Directors in our 2019 Proxy Statement.

Equity Compensation Plan Information Table

The following table sets forth information about the grants of stock options, restricted stock or other rights under all
of the Company’s equity compensation plans as of the close of business on December 31, 2018. The table does not
include information about tax-qualified plans such as the West 401(k) Plan or the West Contract Manufacturing
Savings and Retirement Plan.

Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights (a)

Weighted-
Average
Exercise Price of
Outstanding
Options,
Warrants and
Rights (b)

Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding Securities
Reflected in Columns (a))
(c)

3,642,288 (1) $

58.74 (2)

7,591,586 (3)

—
3,642,288

—
58.74

—
7,591,586

Plan Category

Equity compensation plans
approved by security holders
Equity compensation plans not
approved by security holders
Total

(1)

Includes 935,878 outstanding stock options, 185,253 restricted performance share units, 17,904 restricted
retention share units, 67,797 deferred stock-equivalents units and 584 restricted stock-equivalents units granted
to directors under the 2016 Plan. Includes 1,864,237 outstanding stock options, 14,160 outstanding stock-settled
stock appreciation rights, 94,746 restricted performance share units, 24,062 restricted retention share units and
171,422 deferred stock-equivalents units under the 2011 Plan (which was terminated in 2016). Includes 193,722
outstanding stock options and 72,523 deferred stock-equivalents units granted to directors under the Non-
Qualified Deferred Compensation Plan for Non-Employee Directors under the 2007 Omnibus Incentive
Compensation Plan (which was terminated in 2011). The average term of remaining options and stock-settled
stock appreciation rights granted is 6.4 years. No future grants or awards may be made under the terminated
plans. The total includes restricted performance share units at 100% of grant. The restricted performance share
unit payouts were at 96.6%, 89.8%, and 110.6% in 2018, 2017 and 2016, respectively. The total does not
include stock-equivalent units granted or credited to directors under the Non-Qualified Deferred Compensation
Plan for Non-Employee Directors to be settled only in cash.

(2) Restricted performance share and deferred stock-equivalent units are excluded when determining the weighted-

average exercise price of outstanding options.

(3) Represents 3,881,103 shares reserved under the Company’s Employee Stock Purchase Plan and 3,710,483
shares remaining available for issuance under the 2016 Plan. The estimated number of shares that could be
issued for 2018 from the Employee Stock Purchase Plan is 300,852. This number of shares is calculated by
multiplying the 244 shares per offering period per participant limit by 1,233, the number of current participants
in the plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

Information called for by this Item is incorporated by reference from the discussion under the heading Corporate
Governance Documents - Related Person Transactions and Procedures in our 2019 Proxy Statement. Information
about director independence is incorporated by reference from the discussion under the heading Corporate
Governance Documents - Director Independence in our 2019 Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information about the fees for professional services rendered by our independent auditors in 2018 and 2017 is
incorporated by reference from the discussion under the heading Independent Auditors and Fees - Fees Paid to

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

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) 1. Financial Statements

The following documents are included in Part II, Item 8:

Consolidated Statements of Income for the years ended December 31, 2018, 2017 and 2016
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016
Consolidated Balance Sheets at December 31, 2018 and 2017
Consolidated Statement of Equity for the years ended December 31, 2018, 2017 and 2016
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm

(a) 2. Financial Statement Schedules

Schedule II - Valuation and Qualifying Accounts

($ in millions)
For the year ended December 31, 2018
Allowances deducted from assets:

Deferred tax asset valuation allowance
Allowance for doubtful accounts

Total allowances deducted from assets

For the year ended December 31, 2017
Allowances deducted from assets:

Deferred tax asset valuation allowance
Allowance for doubtful accounts

Total allowances deducted from assets

For the year ended December 31, 2016
Allowances deducted from assets:

Deferred tax asset valuation allowance
Allowance for doubtful accounts

Total allowances deducted from assets

Balance at
beginning of
period

Charged
to costs
and
expenses

Deductions
(1)

Balance at
end of
period

20.9 $
0.5
21.4 $

(3.0) $
0.7
(2.3) $

18.7 $
0.4
19.1 $

2.5 $
(0.2)
2.3 $

20.1 $
0.6
20.7 $

(1.3) $
—
(1.3) $

(1.9) $
0.8
(1.1) $

(0.3) $
0.3
— $

(0.1) $
(0.2)
(0.3) $

16.0
2.0
18.0

20.9
0.5
21.4

18.7
0.4
19.1

__________________________
(1) Includes accounts receivable written off, the write-off or write-down of valuation allowances, and

translation adjustments.

All other schedules are omitted because they are either not applicable, not required or because the information
required is contained in the consolidated financial statements or notes thereto.

(a) 3. Exhibits - An index of the exhibits included in this Form 10-K is contained on pages F-1 through F-3 and is

(b)
(c)

incorporated herein by reference.
See subsection (a) 3. above.
Financial Statements of affiliates are omitted because they do not meet the tests of a significant subsidiary at
the 20% level.

ITEM 16. FORM 10-K SUMMARY

None.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, West Pharmaceutical
Services, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

WEST PHARMACEUTICAL SERVICES, INC.
(Registrant)

By: /s/ Bernard J. Birkett
Bernard J. Birkett
Senior Vice President, Chief Financial Officer and Treasurer

February 27, 2019

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

Signature

/s/ Eric M. Green

Eric M. Green

/s/ Bernard J. Birkett
Bernard J. Birkett

/s/ Daniel Malone
Daniel Malone

/s/ Mark A. Buthman
Mark A. Buthman

/s/ William F. Feehery, Ph.D.
William F. Feehery, Ph.D.

/s/ Thomas W. Hofmann
Thomas W. Hofmann

/s/ Paula A. Johnson, M.D., MPH
Paula A. Johnson, M.D., MPH

/s/ Deborah L.V. Keller
Deborah L.V. Keller

/s/ Myla P. Lai-Goldman, M.D.
Myla P. Lai-Goldman, M.D.

/s/ Douglas A. Michels
Douglas A. Michels

/s/ Paolo Pucci
Paolo Pucci

/s/ John H. Weiland
John H. Weiland

/s/ Patrick J. Zenner
Patrick J. Zenner

Title

Date

Director, President and Chief Executive Officer

February 27, 2019

(Principal Executive Officer)

Senior Vice President, Chief Financial Officer
and Treasurer
(Principal Financial Officer)

Vice President and Controller
(Principal Accounting Officer)

Director

February 27, 2019

February 19, 2019

Director and Chairman of the Board

February 19, 2019

Exhibit
Number
3.1

3.2

4.1

4.2

4.3

4.4 (1)

10.1

10.2

10.3 (2)

10.4 (2)

10.5 (2)

10.6 (2)

10.7 (2)

10.8 (2)

10.9 (2)

10.10 (2)

10.11 (2)

10.12 (2)

10.13 (2)

10.14 (2)

10.15 (2)

10.16 (2)

10.17 (2)

EXHIBIT INDEX

Description
Our Amended and Restated Articles of Incorporation are incorporated by reference from our Form
10-Q report for the quarter ended March 31, 2015.

Our Bylaws, as amended through May 5, 2015, are incorporated by reference from our Form 10-Q
report for the quarter ended March 31, 2015.

Form of stock certificate for common stock is incorporated by reference from our 1998 Form 10-K.

Article 5, 6, 8(c) and 9 of our Amended and Restated Articles of Incorporation are incorporated by
reference from our Form 10-Q report for the quarter ended March 31, 2015.

Article I and V of our Bylaws, as amended through May 5, 2015, are incorporated by reference
from our Form 10-Q report for the quarter ended March 31, 2015.

Instruments defining the rights of holders of long-term debt securities of West and its subsidiaries
have been omitted.

Credit Agreement, dated as of October 15, 2015, between West, certain of its subsidiaries, the
lenders party thereto from time to time, PNC Bank, National Association, as Administrative Agent
and PNC Capital Markets, LLC, as Sole Lead Arranger and Sole Bookrunner, is incorporated by
reference from our Form 8-K dated October 15, 2015.

Note Purchase Agreement, dated July 5, 2012, among the Company and the Purchasers named
therein is incorporated by reference from our Form 8-K filed on July 10, 2012.
2015 Long-Term Incentive Plan Award, dated as of June 30, 2015, between us and Patrick Zenner,
is incorporated by reference from our Form 10-Q report for the quarter ended June 30, 2015.

Employment Agreement, dated as of April 13, 2015, between us and Eric M. Green, is incorporated
by reference from our Form 8-K dated April 15, 2015.

Indemnification Agreement, dated as of April 24, 2015, between us and Eric M. Green, is
incorporated by reference from our Form 8-K dated April 30, 2015.

Sign-On Retention Award Notice, dated as of April 24, 2015, from us to Eric M. Green, is
incorporated by reference from our Form 8-K dated April 30, 2015.

Employment Agreement, dated May 29, 2018, between us and Bernard J. Birkett, is incorporated by
reference from our Form 8-K dated June 21, 2018.

Employment Agreement, dated August 28, 2016, between David Montecalvo and us, incorporated
by reference from our Form 10-Q report for the quarter ended September 30, 2016.
Supplemental Employees’ Retirement Plan, as amended and restated effective January 1, 2008, is
incorporated by reference from our 2008 Form 10-K report.

Non-Qualified Deferred Compensation Plan for Designated Employees, as amended and restated
effective December 1, 2018.
Deferred Compensation Plan for Outside Directors, as amended and restated effective June 30,
2013, is incorporated by reference from our 2013 Form 10-K report.

West Pharmaceutical Services, Inc. 2011 Omnibus Incentive Compensation Plan is incorporated by
reference from our Form 8-K filed on May 6, 2011.

2007 Omnibus Incentive Compensation Plan effective as of May 1, 2007, is incorporated by
reference to Exhibit 99.1 of the Company’s Form 8-K dated May 4, 2007.

Form of Executive 2006 Non-Qualified Stock Option Award is incorporated by reference from our
Form 10-Q report for the quarter ended March 31, 2006.

Form of Director 2006 Non-Qualified Stock Option Award Notice is incorporated by reference from
our Form 10-Q report for the quarter ended June 30, 2006.

Form of Director 2006 Stock Unit Award Notice is incorporated by reference from our Form 10-Q
report for the quarter ended June 30, 2006.

Form of 2007 Non-Qualified Stock Option and Performance-Vesting Share Unit Award, issued
pursuant to the 2004 Stock-Based Compensation Plan, is incorporated by reference from our Form
10-Q report for the quarter ended March 31, 2007.

F-1

Exhibit
Number
10.18 (2)

10.19 (2)

10.20 (2)

10.21 (2)

10.22 (2)

10.23 (2)

10.24

10.25 (2)

10.26 (3)

10.27 (3)

10.28 (3)

10.29 (3)

10.30 (3)

10.31 (3)

10.32 (3)

10.33 (3)

21.

23.

31.1

31.2

32.1*

32.2*

Description
Form of Director 2007 Deferred Stock Award, issued pursuant to the 2007 Omnibus Incentive
Compensation Plan, is incorporated by reference from our Form 10-Q report for the quarter ended
June 30, 2007.

Form of 2008 Non-Qualified Stock Option and Performance-Vesting Share Unit Award, issued
pursuant to the 2007 Omnibus Incentive Compensation Plan, is incorporated by reference from our
Form 10-Q report for the quarter ended March 31, 2008.

Form of Director 2008 Deferred Stock Award, issued pursuant to the 2007 Omnibus Incentive
Compensation Plan, is incorporated by reference from our 2008 Form 10-K report.

Form of 2009 Supplemental Long-Term Incentive Award, is incorporated by reference from our
Form 10-Q report for the quarter ended September 30, 2009.

Form of 2014 Long-Term Incentive Plan Award is incorporated by reference from our Form 10-Q
report for the quarter ended March 31, 2014.

Form of 2014 Stock-Settled Restricted Stock Unit Award is incorporated by reference from our
Form 10-Q report for the quarter ended June 30, 2014.

Indemnification agreements between us and each of our directors in the form of Exhibit 10.1 to our
Form 8-K report dated January 6, 2009, which is incorporated by reference.
Form of Change-in-Control Agreement between us and certain of our executive officers, is
incorporated by reference from our Form 10-Q report for the quarter ended September 30, 2017.

Agreement, effective as of January 1, 2005, between us and The Goodyear Tire & Rubber Company
is incorporated by reference from our Form 10-Q report for the quarter ended June 30, 2005.

First Agreement to Amend to Agreement, effective as of July 1, 2008, between us and The
Goodyear Tire & Rubber Company is incorporated by reference from our Form 10-Q report for the
quarter ended March 31, 2009.

Distributorship Agreement, dated and effective January 18, 2017, between Daikyo Seiko, Ltd. and
us is incorporate by reference from our 2016 Form 10-K report.

Amended and Restated Technology Exchange and Cross License Agreement, dated and effective
January 18, 2017, between Daikyo Seiko, Ltd. and us, incorporated by reference from our 2016
Form 10-K report.

Amended Agreement, dated and effective July 2, 2018, between Daikyo Seiko, Ltd. and us, is
incorporated by reference from Form 10-Q report for the quarter ended June 30, 2018.

Global Supply Agreement by and between ExxonMobil Chemical Company and us, entered into on
August 11, 2014, and effective January 1, 2014 through December 31, 2018 is incorporated by
reference from our Form 8-K report filed on August 15, 2014.

Amendment by and between ExxonMobil Chemical Company and us, incorporated by reference
from our Form 10-Q report for the quarter ended June 30, 2016.

Agreement, dated August 16, 2016, to amend Agreement by and between the Goodyear Tire &
Rubber Company and us, incorporated by reference from our Form 10-Q report for the quarter
ended September 30, 2016.
Subsidiaries of the Company.

Consent of Independent Registered Public Accounting Firm.

Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

101.SCH

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

F-2

Exhibit
Number
101.CAL

101.LAB

101.PRE

101.DEF

Description
XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

(1) We agree to furnish to the SEC, upon request, a copy of each instrument with respect to issuances of long-term

debt of the Company and its subsidiaries.

(2) Management compensatory plan.

(3) Certain portions of this exhibit have been omitted and filed separately with the SEC pursuant to a confidential

treatment order of the SEC.

* Furnished, not filed.

F-3

Written Affirmation
On May 22, 2018, Eric M. Green, West’s President & Chief Executive Officer,
submitted to the NYSE the Written Affirmation required by the rules of the
NYSE certifying that he was not aware of any violations by the Company of
NYSE Corporate Governance listing standards.

Section 302 and 906 Certifications
The certifications of Mr. Green and Bernard J. Birkett, West’s Chief Financial
Officer, made pursuant to Section 302 and Section 906 of the Sarbanes-
Oxley Act of 2002 regarding the quality of the Company’s public disclosures,
have been filed as exhibits to West’s 2018 Form 10-K.

Dividends
West Pharmaceutical Services has paid 193 consecutive quarterly common
stock cash dividends since becoming a public company in 1970. Dividends
usually are declared by the Board during the last month of each calendar
quarter and, if approved, typically are paid on the first Wednesday of
February, May, August and November to shareholders of record two weeks
prior to the payment date.

Publications
To receive copies of press releases or quarterly and annual reports filed with
the United States Securities and Exchange Commission, write to Investor
Relations at global headquarters, call 888-594-3222, or send a message
through West’s website, westpharma.com.

Dividend Reinvestment Plan
The West Pharmaceutical Services Dividend Reinvestment Plan for all
registered shareholders is a convenient and economical way for shareholders
to increase their investment in West through the purchase of additional
shares with dividends and voluntary cash payments. All brokerage
commissions and costs of administering the plan are paid by West. For
details of the plan and an enrollment form, please contact the Dividend
Reinvestment Department of Broadridge Corporate Issuer Solutions (see
Transfer Agent and Registrar).

Investor Online
http://investor.westpharma.com

Trademarks
Daikyo Crystal Zenith® is a registered trademark of Daikyo Seiko, Ltd. Crystal
Zenith technology is licensed from Daikyo Seiko, Ltd.

West without Borders is not affiliated with Doctors Without Borders®, which
is a registered service mark of Bureau International de Medecins San
Frontieres.

All other trademarks and registered trademarks used in this report are the
property of West Pharmaceutical Services, Inc. or its subsidiaries, in the
United States and other jurisdictions, unless noted otherwise.

INVESTOR
INFORMATION

Stock Listing
NYSE symbol: WST

Shareholders of Record
As of December 31, 2018: 810

Average Daily Trading Volume 2018
First Quarter:
407,454 shares
Second Quarter: 375,459 shares
Third Quarter: 354,748 shares
Fourth Quarter: 358,727 shares

Global Headquarters
West Pharmaceutical Services, Inc.
530 Herman O. West Drive
Exton, PA 19341 | USA
610-594-2900
www.westpharma.com

Annual Meeting
Tuesday, May 7, 2019, 9:30 a.m. Exton, PA

Code of Business Conduct
Available at http://investor.westpharma.com

Investor Relations Contact
Quintin J. Lai, Ph.D.
Vice President, Corporate Development, Strategy
& Investor Relations
610-594-3318
Quintin.Lai@westpharma.com

Transfer Agent and Registrar
Broadridge Financial Solutions, Inc.
51 Mercedes Way
Edgewood, NY 11717
877-830-4936
shareholder@broadridge.com

West Pharmaceutical Services, Inc.
530 Herman O. West Drive
Exton, PA 19341 | USA
610.594.2900
www.westpharma.com

11009 • 0319