10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ______________________________

FORM 10-Q 

______________________________ 

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

For the Quarterly Period Ended December 31, 2018 

or

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

001-36587

(Commission File Number)

 _____________________________

Catalent, Inc.

(Exact name of registrant as specified in its charter)

_____________________________ 

Delaware	20-8737688
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
14 Schoolhouse Road, Somerset, NJ	08873
(Address of principal executive offices)	(Zip code)

(732) 537-6200

Registrant's telephone number, including area code

______________________________ 

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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 x	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨
	Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not 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  ¨    No  x

On February 1, 2019, there were 145,632,701 shares of the Registrant's common stock, par value $0.01 per share, issued and outstanding.

Table of Contents

CATALENT, INC. and Subsidiaries

INDEX TO FORM 10-Q

For the Three Months Ended December 31, 2018 

Item		Page
Part I.	Financial Information
Item 1.	Financial Statements (unaudited)	6
	Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2018 and December 31, 2017	6
	Consolidated Statements of Comprehensive Income/(Loss) for the Three and Six Months Ended December 31, 2018 and December 31, 2017	7
	Consolidated Balance Sheets as of December 31, 2018 and June 30, 2018	8
	Consolidated Statement of Changes in Shareholders' Equity/(Deficit) as of December 31, 2018	9
	Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2018 and December 31, 2017	10
	Notes to Unaudited Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48
Part II.	Other Information	49
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	50
Signatures		51

2

Table of Contents

Special Note Regarding Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts, included in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.

These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments, and other factors they believe to be appropriate. Any forward-looking statement is subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements.

Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include, but are not limited to, those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (the "Fiscal 2018 10-K") and the following:

•We participate in a highly competitive market, and increased competition may adversely affect our business.

•The demand for our offerings depends in part on our customers’ research and development and the clinical and market success of their products. Our business, financial condition, and results of operations may be harmed if our customers spend less on, or are less successful in, these activities.

•We are subject to product and other liability risks that could exceed our anticipated costs or adversely affect our results of operations, financial condition, liquidity, and cash flows.

•Failure to comply with existing and future regulatory requirements could adversely affect our results of operations and financial condition or result in claims from customers.

•Failure to provide quality offerings to our customers could have an adverse effect on our business and subject us to regulatory actions or costly litigation.

•The services and offerings we provide are highly exacting and complex, and if we encounter problems providing the services or support required, our business could suffer.

•Our global operations are subject to economic, political, and regulatory risks, including the risks of changing regulatory standards or changing interpretations of existing standards, that could affect the profitability of our operations or require costly changes to our procedures.

•The exit of the United Kingdom (the "U.K.") from the European Union could have future adverse effects on our operations, revenues, and costs, and therefore our profitability.

•If we do not enhance our existing or introduce new technology or service offerings in a timely manner, our offerings may become obsolete over time, customers may not buy our offerings, and our revenue and profitability may decline.

•We and our customers depend on patents, copyrights, trademarks, trade secrets, and other forms of intellectual property protections, but these protections may not be adequate.

•Our future results of operations are subject to fluctuations in the costs, availability, and suitability of the components of the products we manufacture, including active pharmaceutical ingredients, excipients, purchased components, and raw materials.

•Changes in market access or healthcare reimbursement for our customers’ products in the United States ("U.S.") or internationally, including possible changes to the U.S. Affordable Care Act, could adversely affect our results of operations and financial condition by affecting demand for our offerings or the financial health of our customers.

3

Table of Contents

•As a global enterprise, fluctuations in the exchange rate of the U.S. dollar, our reporting currency, against foreign currencies could have a material adverse effect on our financial performance and results of operations.

•Tax legislative or regulatory initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.

•Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

•Changes to the estimated future profitability of the business may require that we establish an additional valuation allowance against all or some portion of our net U.S. deferred tax assets.

•We are dependent on key personnel.

•We use advanced information and communication systems to run our operations, compile and analyze financial and operational data, and communicate among our employees, customers, and counter-parties, and the risks generally associated with information and communications systems could adversely affect our results of operations. We are continuously working to install new, and upgrade existing, systems and provide employee awareness training around phishing, malware, and other cyber-security risks to enhance the protections available to us, but such protections may be inadequate to address malicious attacks or inadvertent compromises of data security.

•We engage, from time to time, in acquisitions and other transactions that may complement or expand our business or divest of non-strategic businesses or assets. We may not be able to complete such transactions, and such transactions, if executed, pose significant risks, including risks relating to our ability to successfully and efficiently integrate acquisitions or execute on dispositions and realize anticipated benefits therefrom. The failure to execute or realize the full benefits from any such transaction could have a negative effect on our operations.

•Our offerings or our customers’ products may infringe on the intellectual property rights of third parties.

•We are subject to environmental, health, and safety laws and regulations, which could increase our costs and restrict our operations in the future.

•We are subject to labor and employment laws and regulations, which could increase our costs and restrict our operations in the future.

•Certain of our pension plans are underfunded, and additional cash contributions we may make to increase the funding level will reduce the cash available for our business, such as the payment of our interest expense.

•Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or in our industry, expose us to interest-rate risk to the extent of our variable rate debt, and prevent us from meeting our obligations under our indebtedness. 

We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties, and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct, or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.

4

Table of Contents

Social Media

We use our website (www.catalent.com), our corporate Facebook page (https://www.facebook.com/CatalentPharmaSolutions), and our corporate Twitter account (@catalentpharma) as channels for the distribution of information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, Securities and Exchange Commission ("SEC") filings, and public conference calls and webcasts. The contents of our website and social media channels are not, however, a part of this report.

5

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

Catalent, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited; Dollars in millions, except per share data)

	Three Months Ended   December 31,				Six Months Ended   December 31,
	2018		2017		2018		2017
Net revenue	$	623.0	$	606.3	$	1,174.8	$	1,150.2
Cost of sales	421.6		418.9		824.9		822.7
Gross margin	201.4		187.4		349.9		327.5
Selling, general, and administrative expenses	123.2		114.8		238.7		222.3
Impairment charges and (gain)/loss on sale of assets	(0.1)		4.2		2.8		4.2
Restructuring and other	0.1		0.1		9.8		1.3
Operating earnings	78.2		68.3		98.6		99.7
Interest expense, net	25.5		27.2		53.6		51.5
Other expense, net	1.4		13.1		7.1		18.3
Earnings from continuing operations before income taxes	51.3		28.0		37.9		29.9
Income tax expense	2.3		49.9		3.3		48.0
Net earnings/(loss)	$	49.0	$	(21.9)	$	34.6	$	(18.1)
Earnings/(loss) per share:
Basic
Net earnings/(loss)	$	0.34	$	(0.16)	$	0.24	$	(0.14)
Diluted
Net earnings/(loss)	$	0.33	$	(0.16)	$	0.24	$	(0.14)

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

6

Table of Contents

Catalent, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income/(Loss)

(Unaudited; Dollars in millions)

	Three Months Ended   December 31,				Six Months Ended   December 31,
	2018		2017		2018		2017
Net earnings/(loss)	$	49.0	$	(21.9)	$	34.6	$	(18.1)
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustments	(17.6)		(13.4)		(26.4)		24.7
Pension and other post-retirement adjustments	0.6		0.5		1.0		0.9
Available for sale investments	—		(3.0)		—		(6.4)
Other comprehensive income/(loss), net of tax	(17.0)		(15.9)		(25.4)		19.2
Comprehensive income/(loss)	$	32.0	$	(37.8)	$	9.2	$	1.1

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

7

Table of Contents

Catalent, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited; Dollars in millions, except share and per share data)

	December 31, 2018		June 30, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	207.9	$	410.2
Trade receivables, net	551.3		555.8
Inventories	235.2		209.1
Prepaid expenses and other	77.1		65.2
Total current assets	1,071.5		1,240.3
Property, plant, and equipment, net	1,285.8		1,270.6
Other assets:
Goodwill	1,421.4		1,397.2
Other intangibles, net	581.0		544.9
Deferred income taxes	31.7		32.9
Other	50.2		45.2
Total assets	$	4,441.6	$	4,531.1
LIABILITIES AND SHAREHOLDER’S DEFICIT
Current liabilities:
Current portion of long-term obligations and other short-term borrowings	$	69.9	$	71.9
Accounts payable	184.4		192.1
Other accrued liabilities	260.0		312.9
Total current liabilities	514.3		576.9
Long-term obligations, less current portion	2,130.0		2,649.4
Pension liability	129.6		131.6
Deferred income taxes	50.1		32.5
Other liabilities	54.6		54.0
Commitment and contingencies (see Note 14)
Shareholders' equity:
Common stock $0.01 par value; 1.0 billion shares authorized on December 31, 2018 and June 30, 2018, 145,622,900 and 133,423,628 issued and outstanding on December 31, 2018 and June 30, 2018, respectively.	1.5		1.3
Preferred stock $0.01 par value; 100 million authorized on December 31, 2018 and June 30, 2018, 0 issued and outstanding on December 31, 2018 and June 30, 2018.	—		—
Additional paid in capital	2,735.1		2,283.3
Accumulated deficit	(822.4)		(872.1)
Accumulated other comprehensive income/(loss)	(351.2)		(325.8)
Total shareholder's equity	1,563.0		1,086.7
Total liabilities and shareholder’s equity	$	4,441.6	$	4,531.1

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

8

Table of Contents

Catalent, Inc. and Subsidiaries

Consolidated Statement of Changes in Shareholders' Equity/(Deficit)

(Unaudited; Dollars in millions, except share data in thousands)

	Shares of Common Stock	Common Stock		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income/(Loss)		Total Shareholders' Equity/ (Deficit)
Balance at June 30, 2018	133,423.6	$	1.3	$	2,283.3	$	(872.1)	$	(325.8)	$	1,086.7
Cumulative effect of change in accounting for ASC 606, net of tax						15.1				15.1
Equity offering, sale of common stock	11,431.4	0.1		445.4						445.5
Share issuances related to stock-based compensation	767.9	0.1		(0.1)						—
Stock-based compensation				17.5						17.5
Cash paid, in lieu of equity, for tax withholding				(11.0)						(11.0)
Net earnings						34.6				34.6
Other comprehensive income/(loss), net of tax								(25.4)		(25.4)
Balance at December 31, 2018	145,622.9	$	1.5	$	2,735.1	$	(822.4)	$	(351.2)	$	1,563.0

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

9

Table of Contents

Catalent, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited; Dollars in millions)

	Six Months Ended  December 31,
	2018		2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings/(loss)	$	34.6	$	(18.1)
Adjustments to reconcile earnings/(loss) from operations to net cash from operations:
Depreciation and amortization	107.5		85.8
Non-cash foreign currency transaction (gain)/loss, net	3.2		7.1
Amortization and write-off of debt financing costs	6.1		2.5
Asset impairments charges and (gain)/loss on sale of assets	2.8		4.2
Reclassification of financing fees paid	—		11.8
Stock-based compensation	17.5		15.5
Provision/(benefit) for deferred income taxes	(0.1)		35.6
Provision for bad debts and inventory	5.1		3.5
Change in operating assets and liabilities:
Decrease/(increase) in trade receivables	3.1		104.6
Decrease/(increase) in inventories	(26.0)		—
Increase/(decrease) in accounts payable	(11.3)		(0.4)
Other assets/accrued liabilities, net — current and non-current	(58.0)		(76.1)
Net cash provided by operating activities	84.5		176.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment and other productive assets	(81.3)		(82.9)
Proceeds from sale of property and equipment	—		1.8
Proceeds from sale of subsidiaries	—		3.4
Payment for acquisitions, net of cash acquired	(127.5)		(748.0)
Net cash (used in) investing activities	(208.8)		(825.7)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in other borrowings	(4.9)		(0.6)
Proceeds from borrowing, net	—		442.6
Payments related to long-term obligations	(503.4)		(9.4)
Financing fees paid	—		(15.6)
Proceeds from sale of common stock, net	445.5		277.8
Cash paid, in lieu of equity, for tax-withholding obligations	(11.0)		(12.4)
Net cash (used in)/provided by financing activities	(73.8)		682.4
Effect of foreign currency exchange on cash	(4.2)		8.5
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS	(202.3)		41.2
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	410.2		288.3
CASH AND EQUIVALENTS AT END OF PERIOD	$	207.9	$	329.5
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest paid	$	52.2	$	41.5
Income taxes paid, net	$	24.4	$	8.0

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

10

Table of Contents

Catalent, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Catalent, Inc. ("Catalent" or the "Company") directly and wholly owns PTS Intermediate Holdings LLC ("Intermediate Holdings"). Intermediate Holdings directly and wholly owns Catalent Pharma Solutions, Inc. ("Operating Company"). The financial results of Catalent are comprised of the financial results of Operating Company and its subsidiaries on a consolidated basis.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the year ending June 30, 2019. The consolidated balance sheet at June 30, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information on the Company's accounting policies and footnotes, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018 filed with the Securities and Exchange Commission (the "SEC").

In fiscal 2018, the Company engaged in a business reorganization to better align its internal business unit structure with its "Follow the Molecule" strategy and the increased focus on its biologics-related offerings. Under the revised structure, the Company created two new operating segments from the former Drug Delivery Solutions segment:

•Biologics and Specialty Drug Delivery, which encompasses biologic cell-line development and manufacturing, development and manufacturing services for blow-fill-seal unit doses, prefilled syringes, vials, and cartridges; analytical development and testing services for large molecules; and development and manufacturing for inhaled products for delivery via metered dose inhalers, dry powder inhalers, and intra-nasal sprays; and

•Oral Drug Delivery, which encompasses comprehensive formulation development, manufacturing, and analytical development capabilities using advanced processing technologies such as bioavailability enhancement, controlled release, particle size engineering, and taste-masking for solid oral-dose forms.

Each of the two new segments reports through a separate management team and ultimately reports to the Company's Chief Executive Officer who is designated as the Chief Operating Decision Maker for segment reporting purposes. The Company's operating segments are the same as its reporting segments. All prior-period comparative segment information has been restated to reflect the current reportable segments in accordance with Accounting Standards Codification ("ASC") 280, Segment Reporting.

Foreign Currency Translation

The financial statements of the Company’s operations outside the U.S. are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensive income/(loss) utilizing period-end exchange rates. In June 2018, as a result of the three-year cumulative consumer price index exceeding 100%, Argentina was classified as having a highly inflationary economy. Beginning on July 1, 2018, the Company accounts for its Argentine operations as highly inflationary.

Research and Development Costs

The Company expenses research and development costs as incurred. Costs incurred in connection with the development of new offerings and manufacturing process improvements are recorded within selling, general, and administrative expenses. Such research and development costs included in selling, general, and administrative expenses amounted to $1.0 million and $1.5 million for the three and six months ended December 31, 2018, respectively, and $1.5 million and $3.3 million for the three and six months ended December 31, 2017, respectively. Costs incurred in connection with research and

11

Table of Contents

development services the Company provides to customers and services performed in support of the commercial manufacturing process for customers are recorded within cost of sales. Such research and development costs included in cost of sales amounted to $14.3 million and $25.6 million for the three and six months ended December 31, 2018, respectively, and $12.4 million and $22.4 million for the three and six months ended December 31, 2017, respectively.

Recent Financial Accounting Standards

Recently Adopted Accounting Standards

In May 2014, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which was codified as ASC 606 and superseded nearly all existing revenue-recognition guidance. The guidance’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, the guidance creates a five-step model that requires a company to exercise judgment when considering the terms of the contracts and all relevant facts and circumstances. The five steps require a company to identify customer contracts, identify the separate performance obligations, determine the transaction price, allocate the transaction price to the separate performance obligations, and recognize revenue when or as each performance obligation is satisfied. The guidance allows for either full retrospective adoption, where the standard is applied to all periods presented, or modified retrospective adoption, where the standard is applied only to the most current period presented in the financial statements. The Company adopted the guidance as of July 1, 2018 using the modified retrospective approach applied to contracts that were not completed as of that date. The Company recorded a cumulative effect adjustment to the fiscal 2019 opening balance of its accumulated deficit upon adoption of this guidance, which decreased beginning accumulated deficit by $15.1 million.

The following table provides the impact of adopting the guidance on the Company’s financial statements:

	Three months Ended December 31, 2018						Six months Ended December 31, 2018
(Dollars in millions)	As Reported		Effects of Change		Amount without Adoption of ASC 606		As Reported		Effects of Change		Amount without Adoption of ASC 606
Net revenue	$	623.0	$	5.0	$	628.0	$	1,174.8	$	18.6	$	1,193.4
Cost of sales	421.6		20.2		441.8		824.9		31.6		856.5
Gross margin	201.4		(15.2)		186.2		349.9		(13.0)		336.9
Earnings from continuing operations before income taxes	51.3		(15.2)		36.1		37.9		(13.0)		24.9
Income tax expense	2.3		(4.0)		(1.7)		3.3		(3.8)		(0.5)
Net earnings/(loss)	$	49.0	$	(11.2)	$	37.8	$	34.6	$	(9.2)	$	25.4

The impact of ASC 606 on the Company's consolidated balance sheet is immaterial.

The adoption of ASC 606 resulted in three primary changes as compared to the previous revenue recognition guidance: (a) revenue from commercial product supply is recognized following successful completion of the required quality assurance process where it was previously recognized upon shipment of the product to the customer; (b) earlier recognition of revenue from certain commercial supply contract cancellations is recognized as variable consideration as the Company’s performance obligations are satisfied rather than only upon agreement of the amount with the customer; and (c) revenue from sourcing comparator drug product for clinical supply services is recorded net of the cost of procuring it rather than at full value with a corresponding expense. Refer to Note 2 for the Company's revenue recognition policy.

In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires entities to report the service cost component of the net periodic benefit cost in the same income statement line as other compensation costs arising from services rendered by employees during the reporting period. The other components of the net benefit costs will be presented in the income statement separately from the service cost and below the income from operations subtotal. The Company adopted this guidance as of July 1, 2018, on a retrospective basis, which had an effect on the consolidated statement of operations for the three and six months ended December 31, 2017. The following table summarizes the Company's As Previously Reported and As Adjusted changes to the consolidated statement of operations for the three and six months ended December 31, 2017:

12

Table of Contents

	Three Months Ended December 31, 2017				Six Months Ended December 31, 2017
(Dollars in millions)	As Previously Reported		As Adjusted		As Previously Reported		As Adjusted
Selling, general, and administrative expenses	$	114.3	$	114.8	$	221.3	$	222.3
Operating earnings	68.8		68.3		100.7		99.7
Other expense, net	13.6		13.1		19.3		18.3

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which reduces the complexity of and simplifies the application of hedge accounting by issuers. The ASU is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted. The Company early adopted this guidance as of July 1, 2018 on a prospective basis. The adoption of this guidance was not material to the Company's consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when an entity will apply modification accounting for changes to stock-based compensation arrangements. Modification accounting applies if the value, vesting conditions, or classification of an award changes. The Company adopted this guidance prospectively at the beginning of fiscal 2019. The adoption of this guidance was not material to the Company's consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides additional guidance on the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The Company adopted this guidance prospectively at the beginning of fiscal 2019. The adoption of this guidance was not material to the Company's consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which changes the accounting for equity investments and financial liabilities under the fair value option, and presentation and disclosure requirements for financial instruments. The ASU requires equity investments with readily determinable fair values to be measured at fair value and to recognize change in fair value in net earnings. The ASU is not applicable to equity investments accounted for under the equity method of accounting or those that result in consolidation of the investee. The Company adopted this guidance at the beginning of fiscal 2019. The adoption of this guidance was not material to the Company's consolidated financial statements.

New Accounting Standards Not Adopted as of December 31, 2018

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns 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. The ASU will be effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and allows for either a retrospective or prospective application. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits an entity to reclassify to retained earnings the stranded tax effects caused by the Tax Cuts and Jobs Act of 2017 on items within accumulated other comprehensive income/(loss). The ASU will be effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduces a new accounting model Credit Expected Credit Losses model ("CECL"). CECL requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models in current GAAP, which generally require that a loss be incurred before it is recognized. The new standard will also apply to receivables arising from revenue transactions such as contract assets and accounts receivables. The ASU will be effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

13

Table of Contents

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which will supersede ASC 840 Leases. The new guidance requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases and will be effective for public reporting entities in annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The guidance is required to be adopted using the modified retrospective approach. The Company anticipates that most of its operating leases will result in the recognition of additional assets and corresponding liabilities on its consolidated balance sheets. The Company continues to evaluate the impact of adopting this guidance on its consolidated financial statements.

2. REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606. The Company generally earns its revenue by supplying goods or providing services under contracts with its customers in three primary revenue streams: manufacturing and commercial product supply, development services, and clinical supply services. The Company measures the revenue from customers based on the consideration specified in its contracts, excluding any sales incentive or amount collected on behalf of a third party.

The company generally expenses sales commissions as incurred because either the amortization period is one year or less, or the balance with an amortization period greater than one year is not material.

The following tables allocate revenue for the three and six months ended December 31, 2018 by type of activity and reporting segment (in millions):

Three months ended December 31, 2018	Softgel Technologies		Biologics & Specialty Drug Delivery		Oral Drug Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	197.0	$	88.6	$	100.5	$	—	$	386.1
Development services	16.7		95.7		53.5		—		165.9
Clinical supply services	—		—		—		80.8		80.8
Total	$	213.7	$	184.3	$	154.0	$	80.8	$	632.8
			Inter-segment revenue elimination						(9.8)
					Combined net revenue				$	623.0

Six months ended December 31, 2018	Softgel Technologies		Biologics & Specialty Drug Delivery		Oral Drug Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	381.4	$	162.4	$	182.2	$	—	$	726.0
Development services	31.5		176.5		101.9		—		309.9
Clinical supply services	—		—		—		158.5		158.5
Total	$	412.9	$	338.9	$	284.1	$	158.5	$	1,194.4
			Inter-segment revenue elimination						(19.6)
					Combined net revenue				$	1,174.8

The following table allocates revenue by the location where the goods were made or the service performed:

(Dollars in millions)	Three months ended December 31, 2018		Six months ended December 31, 2018
United States	$	315.1	$	579.5
Europe	214.8		411.2
International Other	119.7		227.3
Elimination of revenue attributable to multiple locations	(26.6)		(43.2)
Total	$	623.0	$	1,174.8

14

Table of Contents

Manufacturing & Commercial Product Supply Revenue

Manufacturing and commercial product supply revenue consists of revenue earned by manufacturing products supplied to customers under long-term commercial supply arrangements. The Company recognizes revenue for manufacturing and supplying commercial products as control is transferred to the customer, which is measured based on product that has successfully completed contractually required quality assurance process. Revenue is measured based on the amount of consideration the Company expects to receive in exchange for providing these products and services. The contractual performance obligation generally includes manufacture and the completion of product quality release testing procedures specified in the contract. These activities are interdependent and thus are considered to be a single combined performance obligation. Payment is typically due 30 to 90 days after the goods are shipped to the customer based on the payment terms set forth in the applicable customer agreement.

Development Services Revenue

Development services contracts generally take the form of short-term, fee-for-service arrangements. Performance obligations vary, but frequently include (1) the delivery of a formulation report, analytical and stability testing report, or other report on product- or molecule-based studies or (2) the manufacture of products under development or otherwise not intended for commercial sale. The transaction prices for these arrangements include fixed consideration of the amounts stated in the contracts for each promised good or service, which are generally considered to be separate performance obligations. The Company recognizes revenue when or as control of each individual performance obligation is transferred to the customer and exercises judgment in determining the timing of revenue recognition by analyzing the point in time or period over which the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of the arrangement. Control generally transfers to the customer when services have been completed or the customer has accepted the product or service deliverable and the Company has right to payment based on the terms of the agreement.

In certain arrangements, the Company recognizes revenue over time as the Company satisfies performance obligations. Satisfaction of the performance obligations is measured using an output method measure of progress based on effort expended by the Company. In other arrangements, revenue is recognized when the customer has taken legal title to or accepted the product or service deliverable and the Company has a right to payment based on the terms of the arrangement.

Development services contracts may also include certain success-based milestone payments for completed performance obligations, such as regulatory approval and product validation prior to the commencement of commercial supply. Revenue associated with developmental milestones is considered variable consideration and is typically recognized when the success-based milestone is achieved, and no significant revenue reversal is anticipated.

The Company allocates consideration to each performance obligation based on the relative selling price. Payment is typically due 30 to 90 days following the completion of services provided to the customer based on the payment terms set forth in the applicable customer agreement. Certain development service arrangements require a portion of the contract consideration to be received in advance at the commencement of the contract and is initially recorded as a contract liability.

Clinical Supply Services Revenue

Clinical supply services contracts generally take the form of fee-for-service arrangements. Performance obligations for clinical supply services revenue typically include a combination of the following services: the manufacturing, packaging, storage, distribution, destruction, and inventory management of customer clinical trials materials. Performance obligations can also include the sourcing of comparator drug products on behalf of customers to be used in clinical trials to compare performance with the drug under clinical investigation. In certain arrangements, the Company recognizes revenue over time when the Company satisfies performance obligations. Satisfaction of the performance obligations is measured using an output method measure of progress based on effort expended by the Company. In other arrangements, revenue is recognized when the customer has taken legal title or accepted the product or service deliverable and the Company has right to payment based on the terms of the arrangement. Payment is typically due 30 to 90 days following the completion of services provided to the customer based on the payment terms set forth in the applicable customer agreement.

The Company records revenue for comparator sourcing arrangements on a net basis because it is acting as an agent that does not control the product or service before it is transferred to the customer. Payment for comparator sourcing activity is typically received in advance at the commencement of the contract and is initially recorded as a contract liability.

Contract Liabilities

Contract liabilities relate to cash consideration that the Company receives in advance of satisfying the related performance obligations. Changes in the contractual liabilities balance during the six months ended December 31, 2018 are as follows:

15

Table of Contents

(Dollars in millions)
Contract liability
Balance at June 30, 2018	$	100.9
Balance at December 31, 2018	$	112.4
Revenue recognized in the period from:
Amounts included in contracts liability at the beginning of the period	$	48.9

Remaining Performance Obligations

For the Softgel Technologies, Biologics and Specialty Drug Delivery, and Oral Drug Delivery segments, remaining performance obligations represent firm orders for manufacturing and commercial product supply, including minimum volume commitments and future development services, for which there are incomplete performance obligations. For the Clinical Supply Services segment, remaining performance obligations represent estimated future service revenues from work not yet completed under signed contracts. The remaining performance obligations as of December 31, 2018 were $1,274.5 million, including approximately $319.2 million related to our Clinical Supply Services segment. We expect to recognize approximately 58% of the remaining performance obligations in existence as of December 31, 2018 over the next six months, with the remaining recognized thereafter. 

3. BUSINESS COMBINATIONS

Juniper Pharmaceuticals Acquisition

On August 14, 2018, Operating Company acquired Juniper Pharmaceuticals, Inc., a Delaware corporation ("Juniper") through a tender offer and back-end merger, pursuant to the terms of an agreement and plan of merger (the "Juniper Merger Agreement"), and Juniper became a wholly owned subsidiary of Operating Company. Under the terms of the Juniper Merger Agreement, all outstanding options to purchase Juniper shares were canceled in exchange for cash equal to the product of the number of Juniper shares subject to the option and the difference between the price per share paid in the tender offer and the exercise price. Similarly, all outstanding restricted stock units in respect of Juniper shares were canceled in exchange for cash equal to the product of the number of units and the price per share paid in the tender offer. Juniper has expertise in formulation development and supply and augments the Company's pre-existing portfolio of solid-state screening, pre-formulation, formulation, analytical, and bioavailability enhancement solutions, including the development of drug products produced using spray-dried dispersion, with integrated development, analytical, and clinical manufacturing. Juniper also owns the ex-U.S. rights to and supplies for sale to its licensee of such rights CRINONE^®, a reproductive therapy. The primary operations of the acquired business are located in owned facilities aggregating 38,000 square feet in Nottingham, U.K. and is now included in the Oral Drug Delivery segment. Results of this segment include the results of Juniper for the period since the acquisition.

The aggregate purchase consideration, net of cash acquired, was $127.5 million, which was funded by cash on hand. As a result of the preliminary fair value allocations, the Company recognized intangible assets of $69.0 million and $10.0 million for product relationships and customer relationships, respectively. The remainder of the preliminary fair value was allocated to tangible assets acquired and goodwill. The fair value allocation is expected to be completed upon finalization of an independent appraisal over the next several months, but no later than one year from the acquisition date.

4. GOODWILL

The following table summarizes the changes between June 30, 2018 and December 31, 2018 in the carrying amount of goodwill in total and by reporting segment:

(Dollars in millions)	Softgel Technologies		Biologics and Specialty Drug Delivery		Oral Drug Delivery		Clinical Supply Services		Total
Balance at June 30, 2018	$	415.2	$	505.7	$	319.9	$	156.4	$	1,397.2
Additions	—		—		42.9		—		42.9
Foreign currency translation adjustments	(7.1)		(0.9)		(5.2)		(5.5)		(18.7)
Balance at December 31, 2018	$	408.1	$	504.8	$	357.6	$	150.9	$	1,421.4

The increase in goodwill in the Oral Drug Delivery reporting segment is a result of the Juniper acquisition. The Company did not record an impairment charge in the current period. 

16

Table of Contents

5. DEFINITE-LIVED LONG-LIVED ASSETS

The Company’s definite-lived long-lived assets include property, plant, and equipment as well as intangible assets with definite lives. Refer to Note 16, Supplemental Balance Sheet Information for details related to property, plant, and equipment.

The details of other intangibles, net as of December 31, 2018 and June 30, 2018 are as follows:

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
December 31, 2018
Amortized intangibles:
Core technology	18 years	$	168.0	$	(88.7)	$	79.3
Customer relationships	14 years	589.9		(158.4)		431.5
Product relationships	11 years	275.3		(205.1)		70.2
Total intangible assets		$	1,033.2	$	(452.2)	$	581.0

The increases in customer relationships and product relationships as of December 31, 2018 are associated with the acquisition of Juniper in August 2018.

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
June 30, 2018
Amortized intangibles:
Core technology	18 years	$	170.8	$	(85.3)	$	85.5
Customer relationships	14 years	587.0		(140.9)		446.1
Product relationships	12 years	210.5		(197.2)		13.3
Total intangible assets		$	968.3	$	(423.4)	$	544.9

Amortization expense was $19.5 million and $37.7 million for the three and six months ended December 31, 2018, respectively, and $16.1 million and $27.5 million for the three and six months ended December 31, 2017, respectively. Future amortization expense for the next five fiscal years is estimated to be:

(Dollars in millions)	Remainder  Fiscal 2019		2020		2021		2022		2023		2024
Amortization expense	$	33.8	$	58.4	$	58.4	$	58.4	$	58.4	$	58.3

17

Table of Contents

6. LONG-TERM OBLIGATIONS AND SHORT-TERM BORROWINGS

Long-term obligations and short-term borrowings consist of the following at December 31, 2018 and June 30, 2018:

(Dollars in millions)	Maturity as of December 31, 2018	December 31, 2018		June 30, 2018
Senior Secured Credit Facilities
Term loan facility U.S. dollar-denominated	May 2024	$	775.8	$	1,228.4
Term loan facility euro-denominated	May 2024	349.0		358.9
Euro-denominated 4.75% Senior Notes due 2024	December 2024	428.7		438.4
U.S. dollar-denominated 4.875% Senior Notes due 2026	January 2026	444.2		443.8
Deferred purchase consideration	October 2021	141.7		188.9
$200 million revolving credit facility	May 2022	—		—
Capital lease obligations	2020 to 2032	58.6		60.8
Other obligations	2018 to 2019	1.9		2.1
Total		2,199.9		2,721.3
Less: Current portion of long-term obligations and other short-term borrowings		69.9		71.9
Long-term obligations, less current portion		$	2,130.0	$	2,649.4

Senior Secured Credit Facilities and Third Amendment

On October 18, 2017, Operating Company completed Amendment No. 3 (the "Third Amendment") to its Amended and Restated Credit Agreement, dated as of May 20, 2014 (as subsequently amended, the "Credit Agreement"), governing the senior secured credit facilities that provide U.S. dollar, denominated term loans, euro-denominated term loans, and a revolving credit facility. The Third Amendment lowered the interest rate on U.S. dollar-denominated and euro-denominated term loans and the revolving credit facility and extended the maturity dates on the senior secured credit facilities by three years. From the Third Amendment, the applicable rate for U.S. dollar-denominated term loans is LIBOR (the London Interbank Offered Rate, subject to a floor of 1.00%) plus 2.25%, and the applicable rate for euro-denominated term loans is Euribor (the Euro Interbank Offered Rate published by the European Money Markets Institute, subject to a floor of 1.00%) plus 1.75%. The applicable rate for the revolving loans was initially set at LIBOR plus 2.25%, and such rate can additionally be reduced to LIBOR plus 2.00% in future periods based on a measure of Operating Company's total leverage ratio. The term loans and revolving loans will now mature in May 2024 and May 2022, respectively.

On July 27, 2018, the Company completed an underwritten public equity offering (the "2018 Equity Offering") and used the net proceeds coupled with cash on hand to repay $450.0 million of the outstanding borrowings under its U.S. dollar-denominated term loans on July 31, 2018.

Euro-denominated 4.75% Senior Notes due 2024

On December 9, 2016, Operating Company completed a private offering of €380.0 million aggregate principal amount of 4.75% Senior Notes due 2024 (the "Euro Notes"). The Euro Notes are fully and unconditionally guaranteed, jointly and severally, by all of the wholly owned U.S. subsidiaries of Operating Company that guarantee its senior secured credit facilities. The Euro Notes were offered in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and outside the United States only to non-U.S. investors pursuant to Regulation S under the Securities Act. The Euro Notes will mature on December 15, 2024, bear interest at the rate of 4.75% per annum and are payable semi-annually in arrears on June 15 and December 15 of each year.

18

Table of Contents

U.S. Dollar-denominated 4.875% Senior Notes due 2026

On October 18, 2017, Operating Company completed a private offering (the "Debt Offering") of $450.0 million aggregate principal amount of 4.875% Senior Notes due 2026 (the "USD Notes"). The USD Notes are fully and unconditionally guaranteed, jointly and severally, by all of the wholly owned U.S. subsidiaries of Operating Company that guarantee its senior secured credit facilities. The USD Notes were offered in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States only to non-U.S. investors pursuant to Regulation S under the Securities Act. The USD Notes will mature on January 15, 2026, bear interest at the rate of 4.875% per annum, and are payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The net proceeds of the Debt Offering, after payment of the initial purchasers' discount and related fees and expenses, were used to fund a portion of the consideration for the Catalent Indiana acquisition due at its closing.

Deferred Purchase Consideration

In connection with the acquisition of Catalent Indiana in October 2017, $200.0 million of the $950.0 million aggregate nominal purchase price is payable in $50 million installments, on each of the first four anniversaries of the closing date. The Company paid the first of these four payments in October 2018. The deferred purchase consideration was initially recorded at fair value and included a component of imputed interest.

Bridge Loan Facility

On September 18, 2017, contemporaneous with the Company entering into the agreement to acquire Catalent Indiana, Operating Company entered into a debt commitment letter with Morgan Stanley Senior Funding, Inc., JP Morgan Chase Bank, N.A., Royal Bank of Canada, RBC Capital Markets, Bank of America, N.A., and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as commitment parties. Pursuant to the debt commitment letter and subject to its terms and conditions, the commitment parties agreed to provide a senior unsecured bridge loan facility (the "Bridge Facility") of up to $700.0 million in the aggregate for the purpose of providing any back-up financing necessary to fund a portion of the consideration to be paid in the acquisition and related fees, costs, and expenses (the "Bridge Loan Commitment"). In connection with entering into the Bridge Facility, Operating Company incurred $6.1 million of associated fees. Operating Company did not draw on it to fund the acquisition and the Company expensed the $6.1 million in the second quarter of fiscal 2018 as part of other expense, net and the facility was closed.

Debt Covenants

Senior Secured Credit Facilities

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, Operating Company’s (and Operating Company’s restricted subsidiaries’) ability to incur additional indebtedness or issue certain preferred shares; create liens on assets; engage in mergers and consolidations; sell assets; pay dividends and distributions or repurchase capital stock; repay subordinated indebtedness; engage in certain transactions with affiliates; make investments, loans, or advances; make certain acquisitions; enter into sale and leaseback transactions; amend material agreements governing Operating Company’s subordinated indebtedness; and change Operating Company’s lines of business.

The Credit Agreement also contains change-of-control provisions and certain customary affirmative covenants and events of default. The revolving credit facility requires compliance with a net leverage covenant when there is a 30% or more draw outstanding at a period end. As of December 31, 2018, Operating Company was in compliance with all material covenants under the Credit Agreement.

Subject to certain exceptions, the Credit Agreement permits Operating Company and its restricted subsidiaries to incur certain additional indebtedness, including secured indebtedness. None of Operating Company’s non-U.S. subsidiaries or Puerto Rico subsidiaries is a guarantor of the loans.

Under the Credit Agreement, Operating Company’s ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and paying certain dividends is tied to ratios based on Adjusted EBITDA (which is defined as “Consolidated EBITDA” in the Credit Agreement). Adjusted EBITDA is based on the definitions in the Credit Agreement, is not defined under GAAP, and is subject to important limitations.

The Euro Notes and the USD Notes

The Indentures governing the Euro Notes and the USD Notes (the "Indentures") contain certain covenants that, among other things, limit the ability of Operating Company and its restricted subsidiaries to incur or guarantee more debt or issue certain preferred shares; pay dividends on, repurchase, or make distributions in respect of their capital stock or make other

19

Table of Contents

restricted payments; make certain investments; sell certain assets; create liens; consolidate, merge, sell; or otherwise dispose of all or substantially all of their assets; enter into certain transactions with their affiliates, and designate their subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of exceptions, limitations, and qualifications as set forth in the Indentures. The Indentures also contain customary events of default including, but not limited to, nonpayment, breach of covenants, and payment or acceleration defaults in certain other indebtedness of Operating Company or certain of its subsidiaries. Upon an event of default, either the holders of at least 30% in principal amount of each of the then-outstanding Euro Notes or the then-outstanding USD Notes, or either of the Trustees under the Indentures, may declare the applicable notes immediately due and payable; or in certain circumstances, the applicable notes will become automatically immediately due and payable. As of December 31, 2018, Operating Company was in compliance with all material covenants under the Indentures.

Fair Value of Debt Instruments

The estimated fair value of the senior secured credit facility, a Level 2 fair-value estimate, is based on the quoted market prices for the same or similar issues or on the current rates offered for debt of the same remaining maturities and considers collateral, if any. The estimated fair value of the Euro and USD Notes, a Level 1 fair-value estimate, is based on the quoted market prices of the instruments. The carrying amounts and the estimated fair values of financial instruments as of December 31, 2018 and June 30, 2018 are as follows:

		December 31, 2018				June 30, 2018
(Dollars in millions)	Fair Value Measurement	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Euro-denominated 4.75% Senior Notes	Level 1	$	428.7	$	428.7	$	438.4	$	457.6
U.S. Dollar-denominated 4.875% Senior Notes	Level 1	444.2		419.8		443.8		428.3
Senior Secured Credit Facilities & Other	Level 2	1,327.0		1,246.0		1,839.1		1,768.0
Total		$	2,199.9	$	2,094.5	$	2,721.3	$	2,653.9

7. EARNINGS PER SHARE

The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three and six months ended December 31, 2018 and 2017, respectively, are as follows (in millions, except share and per share data):

	Three Months Ended   December 31,				Six Months Ended   December 31,
	2018		2017		2018		2017
Net earnings/(loss)	$	49.0	$	(21.9)	$	34.6	$	(18.1)
Weighted average shares outstanding	145,058,230		132,983,262		143,285,870		129,327,188
Dilutive securities issuable-stock plans	1,602,109		—		1,775,739		—
Total weighted average diluted shares outstanding	146,660,339		132,983,262		145,061,609		129,327,188
Earnings/(loss) per share:
Basic	$	0.34	$	(0.16)	$	0.24	$	(0.14)
Diluted	$	0.33	$	(0.16)	$	0.24	$	(0.14)

 The computation of diluted earnings per share for the three and six months ended December 31, 2018 excludes the effect of the potential common shares issuable under employee-held stock options and restricted stock units of approximately 1.1 million and 1.0 million shares, respectively, because they are anti-dilutive. The computation of diluted earnings per share for the three and six months ended December 31, 2017 excludes the maximum effect of the potential common shares issuable under employee-held stock options and restricted stock units of approximately 2.6 million shares, and excludes restricted share awards of 2.1 million shares, because the Company had a net loss for the period and the effect would therefore be anti-dilutive.

20

Table of Contents

8. OTHER EXPENSE, NET

The components of other expense, net for the three and six months ended December 31, 2018 and 2017 are as follows:

	Three Months Ended   December 31,				Six Months Ended  December 31,
(Dollars in millions)	2018		2017		2018		2017
Other expense, net
Debt refinancing costs (1)	$	—	$	11.8	$	4.2	$	11.8
Foreign currency (gains) and losses (2)	0.7		1.3		2.4		6.9
Other	0.7		—		0.5		(0.4)
Total other expense, net	$	1.4	$	13.1	$	7.1	$	18.3

(1) The expense in the six months ended December 31, 2018 includes a write-off of $4.2 million of previously capitalized financing charges related to the Company's U.S. dollar term loan under its senior secured credit facility. The prior-year debt refinancing costs include financing charges related to the offering of the USD Notes and the Third Amendment and also include a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018 on the Bridge Facility. 

(2) Foreign currency remeasurement (gains) and losses include both cash and non-cash transactions.

9.  RESTRUCTURING AND OTHER COSTS

Restructuring Costs

From time to time, the Company has implemented plans to restructure certain operations, both domestically and internationally. The restructuring plans focused on various aspects of operations, including closing and consolidating certain manufacturing operations, rationalizing headcount and aligning operations in a strategic and more cost-efficient structure. In addition, the Company may incur restructuring charges in the future in cases where a material change in the scope of operation with its business occurs. Employee-related costs consist primarily of severance costs and also include outplacement services provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods. Facility exit and other costs consist of accelerated depreciation, equipment relocation costs and costs associated with planned facility expansions and closures to streamline Company operations.

Other Costs/(Income)

Other costs/(income) includes settlement charges, net of any insurance recoveries, related to the probable resolution of certain customer claims related to a previous temporary suspension of operations at a softgel manufacturing facility.

The following table summarizes the significant costs recorded within restructuring and other costs:

	Three Months Ended   December 31,				Six Months Ended  December 31,
(Dollars in millions)	2018		2017		2018		2017
Restructuring costs:
Employee-related reorganization	$	0.1	$	1.6	$	9.8	$	3.3
Facility exit and other costs	—		(0.7)		—		(0.2)
Total restructuring costs	$	0.1	$	0.9	$	9.8	$	3.1
Other - customer claims, net of insurance recoveries	—		(0.8)		—		(1.8)
Total restructuring and other costs	$	0.1	$	0.1	$	9.8	$	1.3

10. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to fluctuations in the applicable exchange rate on its investments in foreign operations. While the Company does not actively hedge against changes in foreign currency, the Company has mitigated its exposure from its investments in its European operations by denominating a portion of its debt in euros. At December 31, 2018, the Company had euro-denominated debt outstanding of $777.7 million that is designated and qualifies as a hedge of a net investment in foreign operations. For non-derivatives designated and qualifying as net investment hedges, the translation gains or losses are reported in accumulated other comprehensive income/(loss) as part of the cumulative translation adjustment. The non-hedge portions of

21

Table of Contents

the translation gains or losses are reported in the statement of operations. The following table includes net investment hedge activity during the three and six months ended December 31, 2018 and 2017.

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Unrealized foreign exchange gain/(loss) within other comprehensive income	$	15.6	$	(3.9)	$	11.4	$	(21.5)
Unrealized foreign exchange gain/(loss) within statement of operations	$	9.4	$	(2.8)	$	6.9	$	(16.2)

The net accumulated gain of the instrument designated as a hedge as of December 31, 2018 within other comprehensive income/(loss) was approximately $59.0 million. Amounts are reclassified out of accumulated other comprehensive income/(loss) into earnings when the entity to which the gains and losses relate is either sold or substantially liquidated. 

11. INCOME TAXES

U.S. Tax Reform

On December 22, 2017, the U.S. government enacted wide-ranging tax legislation, the Tax Cuts and Jobs Act (the "2017 Tax Act"). The 2017 Tax Act significantly revises U.S. tax law by, among other provisions, (a) lowering the applicable U.S. federal statutory income tax rate from 35% to 21%, (b) creating a partial territorial tax system that includes imposing a mandatory one-time transition tax on previously deferred foreign earnings, (c) creating provisions regarding the (1) Global Intangible Low Tax Income ("GILTI"), (2) the Foreign Derived Intangible Income ("FDII") deduction, and (3) the Base Erosion Anti-Abuse Tax ("BEAT"), and (d) eliminating or reducing certain income tax deductions, such as interest expense, executive compensation expenses, and certain employee expenses. While the impact of the mandatory one-time transition tax was recognized in fiscal 2018, the remaining provisions are effective for fiscal years after 2018.

ASC 740, Income Taxes ("ASC 740") requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the 2017 Tax Act’s provisions, the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which allowed companies to record the tax effects of the 2017 Tax Act on a provisional basis based on a reasonable estimate and then, if necessary, subsequently adjust such amounts during a limited measurement period as more information became available. The measurement period ended December 22, 2018 and our accounting for the tax effects of the Act through December 31, 2018 is complete as of December 31, 2018. For the three and six months ended December 31, 2018, the Company recorded a net benefit of $6.9 million, reducing the estimated net charge from $42.5 million previously recorded during fiscal 2018, to $35.6 million. This reduction was primarily related to additional foreign tax credit benefits associated with the mandatory transition tax charge for deemed repatriation of deferred foreign income. There were no other changes recorded to the tax provision related to the 2017 Tax Act. The Company continues to evaluate the potential impact of all provisions of the 2017 Tax Act, as the U.S. Treasury Department has and is expected to continue issuing guidance related to the 2017 Tax Act during the Company’s fiscal year 2019.

As noted above, the 2017 Tax Act subjects a US Company to tax on GILTI earned by certain foreign subsidiaries. The Company will account for GILTI in the year the tax is incurred as a period cost.

Other Tax Matters

The Company accounts for income taxes in accordance with ASC 740. Generally, fluctuations in the effective tax rate are primarily due to changes in U.S. and non-U.S. pretax income resulting from the Company’s business mix and changes in the tax impact of special items and other discrete tax items, which may have unique tax implications depending on the nature of the item. Such discrete items include, but are not limited to, changes in foreign statutory tax rates, the amortization of certain assets, and the tax impact of changes in its ASC 740 unrecognized tax benefit reserves. In the normal course of business, the Company is subject to examination by taxing authorities around the world, including such major jurisdictions as the United States, Germany, France, and the United Kingdom. The Company is no longer subject to examinations by the relevant tax authorities for years prior to fiscal year 2009. Under the terms of the 2007 purchase agreement by which the stockholders at that time acquired their interest in the Company, the Company is indemnified by its former owner for tax liabilities that may arise after the 2007 purchase that relate to tax periods prior to April 10, 2007. The indemnification agreement applies to, among other taxes, any and all federal, state, and international income-based taxes as well as related interest and penalties. As of December 31, 2018 and June 30, 2018, approximately $0.6 million and $0.7 million, respectively, of unrecognized tax benefit are subject to indemnification by the Company's former owner.

22

Table of Contents

ASC 740 includes guidance on the accounting for uncertainty in income taxes recognized in the financial statements. This standard provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeal or litigation process, based on the technical merits. As of December 31, 2018 and June 30, 2018, the Company had a total of $2.0 million and $2.2 million of unrecognized tax benefits, respectively.

As of December 31, 2018 and June 30, 2018, the Company had a total of $3.7 million and $4.1 million, respectively, of uncertain tax positions (including accrued interest and penalties). As of these dates, $2.0 million and $2.2 million, respectively, represent the amount of unrecognized tax benefits, which, if recognized, would favorably affect the effective income tax rate. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2018 and June 30, 2018, the Company has approximately $1.7 million and $2.0 million, respectively, of accrued interest and penalties related to uncertain tax positions. As of these dates, the portion of such interest and penalties subject to indemnification by its former owner is $1.3 million and $1.6 million, respectively.

12. EMPLOYEE RETIREMENT BENEFIT PLANS

Components of the Company’s net periodic benefit costs are as follows:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Components of net periodic benefit cost:
Service cost	$	0.9	$	0.9	$	1.8	$	1.8
Interest cost	1.9		1.8		3.8		3.6
Expected return on plan assets	(2.6)		(2.9)		(5.2)		(5.8)
Amortization (1)	0.6		0.6		1.2		1.2
Net amount recognized	$	0.8	$	0.4	$	1.6	$	0.8

(1)      Amount represents the amortization of unrecognized actuarial gains/(losses).

As previously disclosed, the Company notified the trustees of a multi-employer pension plan of its withdrawal from participation in such plan in fiscal 2012. The actuarial review process administered by the plan trustees ended in fiscal 2015. The liability reported reflects the present value of the Company's expected future long-term obligations. The estimated discounted value of the projected contributions related to such plans was $38.9 million and $39.0 million as of December 31, 2018 and June 30, 2018, respectively, and is included within pension liability on the consolidated balance sheets. The annual cash impact associated with the Company's obligations in such plan is approximately $1.7 million per year. 

13. EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

Description of Capital Stock

The Company is authorized to issue 1,000,000,000 shares of common stock, par value $0.01 per share ("Common Stock"), and 100,000,000 shares of preferred stock, par value $0.01 per share. Under the Company's certificate of incorporation, each share of Common Stock has one vote, and the Common Stock votes together as a single class.

Public Stock Offering

On July 27, 2018, the Company completed the 2018 Equity Offering, a public offering in which the Company sold 11.4 million shares, including the underwriters' over-allotment option, of Common Stock at a price of $40.24 per share, before underwriting discounts and commissions. Net of these discounts and commissions and other offering expenses, the Company obtained total net proceeds from the 2018 Equity Offering, including the over-allotment exercise, of $445.5 million. The net proceeds of the 2018 Equity Offering were used to repay a corresponding portion of the outstanding borrowings under Operating Company's U.S. dollar-denominated term loans.

On September 29, 2017, the Company completed a public offering (the "2017 Equity Offering"), pursuant to which the Company sold 7.4 million shares, including the underwriters' over-allotment option, of Common Stock at a price of $39.10 per share, before underwriting discounts and commissions. Net of these discounts and commissions and other offering expenses, the Company obtained total net proceeds from the 2017 Equity Offering, including the over-allotment exercise, of $277.8 million. The net proceeds of the 2017 Equity Offering were used to fund a portion of the consideration for the Catalent Indiana acquisition due at its closing.

23

Table of Contents

Outstanding Stock

Shares outstanding include shares of unvested restricted stock. Unvested restricted stock included in reportable shares outstanding was 0.7 million shares as of December 31, 2018. Shares of unvested restricted stock are excluded from our calculation of basic weighted average shares outstanding, but their dilutive impact is added back in the calculation of diluted weighted average shares outstanding, except when the effect would be anti-dilutive.

Stock Repurchase Program

On October 29, 2015, the Company’s Board of Directors authorized a share repurchase program to use up to $100.0 million to repurchase shares of outstanding Common Stock. Under the program, the Company is authorized to repurchase shares through open market purchases, privately negotiated transactions, or otherwise as permitted by applicable federal securities laws. There has been no purchase pursuant to this program as of December 31, 2018.

Accumulated Other Comprehensive Income/(loss)

The components of the changes in the cumulative translation adjustment, minimum pension liability, and available for sale investment for the three and six months ended December 31, 2018 and 2017 are presented below.

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Foreign currency translation adjustments:
Net investment hedge	$	15.6	$	(3.9)	$	11.4	$	(21.5)
Long-term intercompany loans	(10.8)		(2.3)		(14.1)		11.2
Translation adjustments	(18.9)		(5.2)		(21.7)		30.9
Total foreign currency translation adjustment, pretax	(14.1)		(11.4)		(24.4)		20.6
Tax expense/(benefit)	3.5		2.0		2.0		(4.1)
Total foreign currency translation adjustment, net of tax	$	(17.6)	$	(13.4)	$	(26.4)	$	24.7
Net change in minimum pension liability
Net gain recognized during the period	$	0.7	$	0.6	1.3		1.2
Total pension liability, pretax	0.7		0.6		1.3		1.2
Tax expense	0.1		0.1		0.3		0.3
Net change in minimum pension liability, net of tax	$	0.6	$	0.5	$	1.0	$	0.9
Net change in available for sale investment:
Net loss recognized during the period	$	—	$	(3.6)	—		(8.8)
Total available for sale investment, pretax	—		(3.6)		—		(8.8)
Tax benefit	—		(0.6)		—		(2.4)
Net change in available for sale investment, net of tax	$	—	$	(3.0)	$	—	$	(6.4)

For the three months ended December 31, 2018, the changes in accumulated other comprehensive income/(loss), net of tax by component are as follows:

(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Available for Sale Investment Adjustments		Total
Balance at September 30, 2018	$	(293.9)	$	(39.2)	$	(1.1)	$	(334.2)
Other comprehensive income/(loss) before reclassifications	(17.6)		—		—		(17.6)
Amounts reclassified from accumulated other comprehensive income/(loss)	—		0.6		—		0.6
Net current period other comprehensive income/(loss)	(17.6)		0.6		—		(17.0)
Balance at December 31, 2018	$	(311.5)	$	(38.6)	$	(1.1)	$	(351.2)

24

Table of Contents

For the six months ended December 31, 2018, the changes in accumulated other comprehensive income/(loss), net of tax by component are as follows:

(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Available for Sale Investment Adjustments		Total
Balance at June 30, 2018	$	(285.1)	$	(39.6)	$	(1.1)	$	(325.8)
Other comprehensive income/(loss) before reclassifications	(26.4)		—		—		(26.4)
Amounts reclassified from accumulated other comprehensive income/(loss)	—		1.0		—		1.0
Net current period other comprehensive income/(loss)	(26.4)		1.0		—		(25.4)
Balance at December 31, 2018	$	(311.5)	$	(38.6)	$	(1.1)	$	(351.2)

14. COMMITMENTS AND CONTINGENCIES 

SEC inquiry into Juniper Pharmaceuticals, Inc.

On August 14, 2018, Operating Company acquired Juniper pursuant to the Juniper Merger Agreement. On November 14, 2016, Juniper filed with the SEC restated audited consolidated financial statements for the fiscal years ended December 31, 2013 through December 31, 2015, including the unaudited consolidated financial information for each quarterly period within the fiscal years ended December 31, 2014 and 2015, and restated unaudited consolidated financial statements for the quarters ended March 31, 2016 and June 30, 2016 and the related quarters in 2015, in order to correct certain timing errors regarding how it recognized revenue from a supply contract with an affiliate of Merck KGaA. On January 24, 2017, Juniper received a subpoena from the SEC requesting information concerning these restatements and related issues. Juniper responded to the subpoena and is cooperating with the SEC’s inquiry, including the taking of testimony from former Juniper employees and others. The Company understands that the inquiry is ongoing but does not believe the outcome of the investigation will be material to it; nonetheless, the Company cannot provide any assurance regarding that outcome.

Other

From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business, including, without limitation, inquiries and claims concerning environmental contamination as well as litigation and allegations in connection with acquisitions, product liability, manufacturing or packaging defects, and claims for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of any of which could be significant. The Company intends to vigorously defend itself against any such litigation and does not currently believe that the outcome of any such litigation will have a material adverse effect on the Company’s financial statements. In addition, the healthcare industry is highly regulated and government agencies continue to scrutinize certain practices affecting government programs and otherwise.

From time to time, the Company receives subpoenas or requests for information relating to the business practices and activities of customers or suppliers from various governmental agencies or private parties, including from state attorneys general, the U.S. Department of Justice, and private parties engaged in patent infringement, antitrust, tort, and other litigation. The Company generally responds to such subpoenas and requests in a timely and thorough manner, which responses sometimes require considerable time and effort and can result in considerable costs being incurred. The Company expects to incur costs in future periods in connection with future requests.

15. SEGMENT INFORMATION

The Company conducts its business within the following operating segments: Softgel Technologies, Biologics and Specialty Drug Delivery, Oral Drug Delivery, and Clinical Supply Services. The Company evaluates the performance of its segments based on segment earnings before other (expense)/income, impairments, restructuring costs, interest expense, income tax expense/(benefit), and depreciation and amortization ("Segment EBITDA"). "EBITDA from operations" is consolidated earnings from operations before interest expense, income tax expense/(benefit), and depreciation and amortization. Segment EBITDA and EBITDA from operations are not defined in GAAP and may not be comparable to similarly titled measures used by other companies.

The following tables include net revenue and Segment EBITDA during the three and six months ended December 31, 2018 and 2017:

25

Table of Contents

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Softgel Technologies
Net revenue	$	213.7	$	228.1	$	412.9	$	447.8
Segment EBITDA	$	44.2	$	50.1	$	77.5	$	85.2
Biologics and Specialty Drug Delivery
Net revenue	184.3		148.7		338.9		240.4
Segment EBITDA	50.8		39.9		77.3		48.6
Oral Drug Delivery
Net revenue	154.0		137.2		284.1		271.8
Segment EBITDA	44.8		41.2		72.2		79.9
Clinical Supply Services
Net revenue	80.8		108.7		158.5		218.4
Segment EBITDA	21.0		19.0		41.2		35.7
Inter-segment revenue elimination	(9.8)		(16.4)		(19.6)		(28.2)
Unallocated costs (1)	(29.4)		(48.2)		(69.2)		(82.2)
Combined totals:
Net revenue	$	623.0	$	606.3	$	1,174.8	$	1,150.2
EBITDA from operations	$	131.4	$	102.0	$	199.0	$	167.2

(1) Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Impairment charges and gain/(loss) on sale of assets	$	0.1	$	(4.2)	$	(2.8)	$	(4.2)
Stock-based compensation	(7.5)		(8.5)		(17.5)		(15.5)
Restructuring and other special items (a)	(5.9)		(11.9)		(19.1)		(24.2)
Other (expense), net (b)	(1.4)		(13.1)		(7.1)		(18.3)
Non-allocated corporate costs, net	(14.7)		(10.5)		(22.7)		(20.0)
Total unallocated costs	$	(29.4)	$	(48.2)	$	(69.2)	$	(82.2)

(a) Restructuring and other special items include transaction and integration costs associated primarily with the acquisitions of Catalent Indiana and Juniper.

(b) Refer to Note 8, Other Expense for details of financing changes and foreign currency translation adjustments recorded within Other (expense), net.

Provided below is a reconciliation between net earnings/(loss) and EBITDA from operations:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Net earnings/(loss)	$	49.0	$	(21.9)	$	34.6	$	(18.1)
Depreciation and amortization	54.6		46.8		107.5		85.8
Interest expense, net	25.5		27.2		53.6		51.5
Income tax expense	2.3		49.9		3.3		48.0
EBITDA from operations	$	131.4	$	102.0	$	199.0	$	167.2

26

Table of Contents

The following table includes total assets for each segment, as well as reconciling items necessary to total the amounts reported in the consolidated financial statements: 

(Dollars in millions)	December 31, 2018		June 30, 2018
Assets
Softgel Technologies	$	1,385.0	$	1,402.0
Biologics and Specialty Drug Delivery	1,793.4		1,739.7
Oral Drug Delivery	1,211.9		1,074.2
Clinical Supply Services	642.0		613.0
Corporate and eliminations	(590.7)		(297.8)
Total assets	$	4,441.6	$	4,531.1

16. SUPPLEMENTAL BALANCE SHEET INFORMATION

Supplemental balance sheet information at December 31, 2018 and June 30, 2018 is detailed in the following tables.

Inventories

Work-in-process and finished goods inventories include raw materials, labor, and overhead. Total inventories consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Raw materials and supplies	$	157.3	$	137.1
Work-in-process	43.8		42.3
Finished goods	54.8		48.3
Total inventories, gross	255.9		227.7
Inventory cost adjustment	(20.7)		(18.6)
Inventories	$	235.2	$	209.1

Prepaid expenses and other

Prepaid expenses and other consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Prepaid expenses	$	20.8	$	19.2
Spare parts supplies	10.6		11.1
Prepaid income tax	11.0		7.2
Non-U.S. value-added tax	17.7		12.5
Other current assets	17.0		15.2
Prepaid expenses and other	$	77.1	$	65.2

27

Table of Contents

Property, plant, and equipment, net

Property, plant, and equipment, net consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Land, buildings, and improvements	$	940.0	$	928.1
Machinery, equipment, and capitalized software	1,037.6		988.1
Furniture and fixtures	16.3		14.9
Construction in progress	179.5		166.8
Property, plant, and equipment, at cost	2,173.4		2,097.9
Accumulated depreciation	(887.6)		(827.3)
Property, plant, and equipment, net	$	1,285.8	$	1,270.6

Depreciation expense was $35.1 million and $69.8 million for the three and six months ended December 31, 2018, respectively, and $30.7 million and $58.3 million for the three and six months ended December 31, 2017, respectively. Depreciation expense includes amortization of assets related to capital leases. The Company charges repairs and maintenance costs to expense as incurred. The amount of capitalized interest was immaterial for all periods presented. 

Other accrued liabilities

Other accrued liabilities consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Accrued employee-related expenses	$	72.8	$	104.3
Restructuring accrual	11.5		9.4
Accrued interest	10.9		16.5
Contract liability	112.4		100.9
Accrued income tax	6.5		25.9
Other accrued liabilities and expenses	45.9		55.9
Other accrued liabilities	$	260.0	$	312.9

28

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company

We are the leading global provider of advanced delivery technologies and development solutions for drugs, biologics, and consumer and animal health products. Our oral, injectable, and respiratory delivery technologies address the full diversity of the pharmaceutical industry, including small molecules, biologics, and consumer and animal health products. Through our extensive capabilities and deep expertise in product development, we help our customers take products to market faster, including nearly half of new drug products approved by the U.S. Food and Drug Administration in the last decade. Our advanced delivery technology platforms, which include those in our Softgel Technologies, Biologics and Specialty Drug Delivery, and Oral Drug Delivery segments, our proven formulation, manufacturing, and regulatory expertise, and our broad and deep intellectual property enable our customers to develop more products and better treatments for patients and consumers. Across both development and delivery, our commitment to reliably supply our customers’ and their patients' needs is the foundation for the value we provide; annually, we produce approximately 73 billion doses for nearly 7,000 customer products or approximately 1 in every 20 doses of such product taken each year by patients and consumers around the world. We believe that through our investments in growth-enabling capacity and capabilities, our ongoing focus on operational and quality excellence, the sales of existing customer products, the introduction of new customer products, our innovation activities and patents, and our entry into new markets, we will continue to benefit from attractive and differentiated margins and realize the growth potential from these areas.

Critical Accounting Policies and Estimates

We prepare our financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). These standards require management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, allowance for doubtful accounts, variable consideration in revenue recognition, inventory and long-lived asset valuation, goodwill and other intangible asset impairment, income taxes, derivative financial instruments, self-insurance accruals, loss contingencies, and restructuring charge reserves. Actual amounts may differ from these estimated amounts.

There was no material change to our critical accounting policies or in the underlying accounting assumptions and estimates from those described in our Fiscal 2018 10-K, other than recently adopted accounting principles as disclosed in Note 1 to the unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, which adoptions had no material impact on net earnings.

Non-GAAP Performance Metrics

Use of EBITDA from operations

Management measures operating performance based on consolidated earnings from operations before interest expense, expense/(benefit) for income taxes, and depreciation and amortization ("EBITDA from operations"). EBITDA from operations is not defined under GAAP, is not a measure of operating income, operating performance, or liquidity presented in accordance with GAAP, and is subject to important limitations.

We believe that the presentation of EBITDA from operations enhances an investor’s understanding of our financial performance. We believe this measure is a useful financial metric to assess our operating performance from period to period by excluding certain items that we believe are not representative of our core business and use this measure for business planning purposes. In addition, given the significant investments that we have made in the past in property, plant, and equipment, depreciation and amortization expenses represent a meaningful portion of our cost structure. We believe that EBITDA from operations will provide investors with a useful tool for assessing the comparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt, and to undertake capital expenditures because it eliminates depreciation and amortization expense. We present EBITDA from operations in order to provide supplemental information that we consider relevant for the readers of our consolidated financial statements, and such information is not meant to replace or supersede GAAP measures. Our definition of EBITDA from operations may not be the same as similarly titled measures used by other companies. The most directly comparable GAAP measure to EBITDA from operations is net earnings. Included in this report is a reconciliation of net earnings to EBITDA from operations.

29

Table of Contents

In addition, we evaluate the performance of our segments based on segment earnings before other expense, impairments, restructuring costs, interest expense, income tax expense/(benefit), and depreciation and amortization ("Segment EBITDA").

Use of Constant Currency

As exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of results on a constant currency basis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We use results on a constant currency basis as one measure to evaluate our performance. In this Quarterly Report on Form 10-Q, we compute constant currency by calculating current-year results using prior-year foreign currency exchange rates. We generally refer to such amounts calculated on a constant currency basis as excluding the impact of foreign exchange. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.

Other Non-GAAP Measures

Organic revenue growth and Segment EBITDA growth are useful measures calculated by the Company to explain the underlying results and trends in the business. Organic revenue growth and Segment EBITDA growth are measures used to show current year sales and earnings from existing operations and include joint ventures and revenue from product-participation-related activities entered into within the year. Organic revenue growth and Segment EBITDA growth exclude the impact of foreign currency, acquisitions of operating or legal entities, and divestitures within the year. These measures should be considered in addition to, not as a substitute for, performance measures reported in accordance with GAAP. These measures, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.

Three Months Ended December 31, 2018 Compared to the Three Months Ended December 31, 2017 

The below tables summarize several financial metrics we use to measure performance for the three months ended December 31, 2018 and three months ended December 31, 2017. Refer to the discussions below regarding performance and use of key financial metrics.

30

Table of Contents

We adopted Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), as of July 1, 2018 using the modified retrospective method. The reported results for the three and six months ended December 31, 2018 reflects the application of the new standard while the reported results for the three and six months ended December 31, 2017 were prepared under the previously effective guidance of ASC 605, Revenue Recognition.

Results for the three months ended December 31, 2018 compared to the three months ended December 31, 2017 were as follows:

	Three Months Ended   December 31,				FX Impact		Constant Currency Increase/(Decrease)
	2018		2017				Change $		Change %
Net revenue	$	623.0	$	606.3	$	(10.9)	$	27.6	5	%
Cost of products sold	421.6		418.9		(7.9)		10.6		3	%
Gross margin	201.4		187.4		(3.0)		17.0		9	%
Selling, general and administrative expenses	123.2		114.8		(1.0)		9.4		8	%
Impairment charges and (gain)/loss on sale of assets	(0.1)		4.2		0.2		(4.5)		*
Restructuring and other	0.1		0.1		—		—		*
Operating earnings	78.2		68.3		(2.2)		12.1		18	%
Interest expense, net	25.5		27.2		(0.2)		(1.5)		(6)	%
Other expense, net	1.4		13.1		(0.7)		(11.0)		(84)	%
Earnings from continuing operations before income taxes	51.3		28.0		(1.3)		24.6		88	%
Income tax expense	2.3		49.9		(0.1)		(47.5)		(95)	%
Net earnings/(loss)	$	49.0	$	(21.9)	$	(1.2)	$	72.1	*

 *Percentage not meaningful

Net Revenue

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Three Months Ended    December 31,
	Net Revenue
Revenue without acquisitions/divestitures	(1)	%
Impact of acquisitions	6	%
Impact of divestitures	—	%
Constant currency change	5	%
Foreign currency translation impact on reporting	(2)	%
Total % change	3	%

Net revenue increased $27.6 million, or 5%, compared to the three months ended December 31, 2017, excluding the impact of foreign exchange, primarily driven by growth from acquisitions. We acquired Cook Pharmica LLC (now doing business as Catalent Indiana, LLC, "Catalent Indiana") in October 2017, and Juniper Pharmaceuticals, Inc. ("Juniper") in August 2018. Net revenue decreased 1% without the impact of acquisitions or divestitures primarily related to a reduction in revenue from comparator sourcing arrangements within our Clinical Supply Services segment. As a result of the adoption of ASC 606, we recorded comparator sourcing arrangements on a net basis versus a gross basis, resulting in a decrease in net revenue of 5%, with no corresponding decrease to EBITDA, partially offset by increased net revenue within our Biologics and Specialty Drug Delivery segment.

31

Table of Contents

Gross Margin

Gross margin increased $17.0 million, or 9%, compared to the three months ended December 31, 2017, excluding the impact of foreign exchange, primarily as a result of the Catalent Indiana and the Juniper acquisitions. On a constant-currency basis, gross margin, as a percentage of revenue, increased 130 basis points to 32.2% in the three months ended December 31, 2018, compared to 30.9% in the prior-year period. As a result of the adoption of ASC 606, the Company recorded comparator sourcing arrangements on a net basis versus a gross basis, which resulted in an increase to gross margin percentage of 140 basis points.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased $9.4 million, or 8%, compared to the three months ended December 31, 2017, excluding the impact of foreign exchange, primarily due to increased employee-related costs of approximately $4 million as compared to the prior-year period. Selling, general, and administrative expenses further increased approximately $4 million as a result of the Juniper acquisition, which included approximately $3 million of incremental depreciation and amortization expense and $1 million related to incremental employee related costs.

Impairment Charges and Loss on Sale of Assets

Impairment charges for the three months ended December 31, 2018 and December 31, 2017 were $0.1 million and $4.2 million, respectively. The prior year included the loss on the sales of two Softgel Technologies segment manufacturing sites in the Asia Pacific region. The site divestitures were not material, either individually or in the aggregate, to the segment or to our business as a whole.

Restructuring and Other

Restructuring and other costs of $0.1 million for the three months ended December 31, 2018 were unchanged compared to the three months ended December 31, 2017. Restructuring expense will vary period-to-period based on site consolidation efforts and other efforts to further streamline the business.

Interest Expense, net

Interest expense, net of $25.5 million for the three months ended December 31, 2018 decreased by $1.7 million compared to the three months ended December 31, 2017, primarily driven by a $450 million payment on our U.S. dollar-denominated term loans on August 1, 2018, principally funded by our underwritten public equity offering of July 27, 2018 (the "2018 Equity Offering"), a $50 million payment on our deferred purchase consideration related to Catalent Indiana in October 2018, ordinary-course principal payments on our term loans, and an overall reduction in our interest rates on our senior secured credit facilities compared to the prior-year period partially offset by deferred purchase consideration for the Catalent Indiana acquisition in October 2017.

In October 2017, Operating Company completed a private offering of USD Notes. The USD Notes bear interest at the rate of 4.875% per annum and are payable semi-annually in arrears on January 15 and July 15 of each year. Concurrent with the USD Notes offering, Operating Company completed Amendment No. 3 (the "Third Amendment") to its Credit Agreement, which governs the senior secured credit facilities that provide U.S. dollar-denominated term loans, euro-denominated term loans, and a revolving credit facility. The Third Amendment lowered the interest rate on the term loans and the revolving credit facility. The applicable rate for U.S. dollar-denominated term loans decreased 0.50%, the applicable rate for euro-denominated term loans decreased 0.75%, and the applicable rate for the revolving loans decreased 1.25%. For additional information concerning the terms of the Credit Agreement and the Third Amendment, see Note 6 to the Consolidated Financial Statements.

A component of the purchase price for the Catalent Indiana acquisition consists of $200.0 million in deferred purchase consideration payable in four annual $50.0 million installments on the anniversary date of the acquisition. We made the first such payment in October 2018, and the present value of the balance is accounted for as debt, with the difference between the nominal value and the present value considered imputed interest expense.

Other Expense, net

Other expense, net of $1.4 million for the three months ended December 31, 2018 was primarily driven by non-cash foreign currency translation losses in the period of $0.7 million.

32

Table of Contents

Other expense, net of $13.1 million for the three months ended December 31, 2017 was primarily driven by $11.8 million of financing charges related to the USD Notes offering and the Third Amendment, and includes a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018 on a proposed bridge loan made available to us but not used for the purpose of providing back-up financing to fund a portion of the Catalent Indiana acquisition purchase price (the "Bridge Facility").

Income Tax Expense

On December 22, 2017, the U.S. government enacted wide-ranging tax legislation, the Tax Cuts and Jobs Act (the "2017 Tax Act"). The 2017 Tax Act significantly revises U.S. tax law by, among other provisions, (a) lowering the applicable U.S. federal statutory income tax rate from 35% to 21%, (b) creating a partial territorial tax system that includes imposing a mandatory one-time transition tax on previously deferred foreign earnings, (c) creating provisions regarding (1) Global Intangible Low Tax Income ("GILTI"), (2) the Foreign Derived Intangible Income ("FDII") deduction, and (3) the Base Erosion Anti-Abuse Tax ("BEAT"), and (d) eliminating or reducing certain income tax deductions, such as interest expense, executive compensation expenses, and certain employee expenses.

The SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which allowed companies to record the tax effects of the 2017 Tax Act on a provisional basis based on a reasonable estimate and then, if necessary, subsequently adjust such amounts during a limited measurement period as more information became available. The Company’s measurement period has expired as of December 31,2018. For the three months ended December 31, 2018, we recorded a net benefit of $6.9 million reducing the estimated net charge from $42.5 million previously recorded during fiscal 2018, to $35.6 million. This reduction is primarily related to additional foreign tax credit benefits associated with the mandatory transition tax charge for deemed repatriation of deferred foreign income. There were no other changes recorded to the tax provision related to the 2017 Tax Act. The Company continues to evaluate the potential impact of all provisions of the 2017 Tax Act, as the U.S. Treasury Department has and is expected to continue issuing guidance related to the 2017 Tax Act during the Company’s fiscal year 2019.

Our provision for income taxes for the three months ended December 31, 2018 was $2.3 million relative to earnings from operations before income taxes of $51.3 million. Our provision for income taxes for the three months ended December 31, 2017 was $49.9 million relative to earnings from operations before income taxes of $28.0 million. The income tax provision for the current period is not comparable to the same period of the prior year due to the impact of the 2017 Tax Act as previously discussed, changes in pretax income over many jurisdictions, and the impact of discrete items. Generally, fluctuations in the effective tax rate are primarily due to changes in our geographic pretax income resulting from our business mix and changes in the tax impact of permanent differences, restructuring, other special items, and other discrete tax items, which may have unique tax implications depending on the nature of the item.

33

Table of Contents

Segment Review

The following charts depict the percentages of revenue allocable to each of the Company's four segments for the three months ended December 31, 2018 compared to the three months ended December 31, 2017. Refer below for discussions regarding the segments' revenue and EBITDA performance.

Our results on a segment basis for the three months ended December 31, 2018 compared to the three months ended December 31, 2017 were as follows:

	Three Months Ended   December 31,				FX Impact		Constant Currency Increase/(Decrease)
	2018		2017				Change $		Change %
Softgel Technologies
Net revenue	$	213.7	$	228.1	$	(7.0)	$	(7.4)	(3)	%
Segment EBITDA	$	44.2	$	50.1	$	(1.4)	$	(4.5)	(9)	%
Biologics and Specialty Drug Delivery
Net revenue	184.3		148.7		(1.2)		36.8		25	%
Segment EBITDA	50.8		39.9		(0.3)		11.2		28	%
Oral Drug Delivery
Net revenue	154.0		137.2		(1.8)		18.6		14	%
Segment EBITDA	44.8		41.2		(0.8)		4.4		11	%
Clinical Supply Services
Net revenue	80.8		108.7		(1.2)		(26.7)		(25)	%
Segment EBITDA	21.0		19.0		(0.5)		2.5		13	%
Inter-segment revenue elimination	(9.8)		(16.4)		0.3		6.3		(38)	%
Unallocated Costs(1)	(29.4)		(48.2)		0.9		17.9		(37)	%
Combined Total
Net revenue	$	623.0	$	606.3	$	(10.9)	$	27.6	5	%
EBITDA from continuing operations	$	131.4	$	102.0	$	(2.1)	$	31.5	31	%

34

Table of Contents

(1) Unallocated costs include restructuring and special items, stock-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:

	Three Months Ended   December 31,
(Dollars in millions)	2018		2017
Impairment charges and gain/(loss) on sale of assets	$	0.1	$	(4.2)
Stock-based compensation	(7.5)		(8.5)
Restructuring and other special items (a)	(5.9)		(11.9)
Other (expense), net (b)	(1.4)		(13.1)
Non-allocated corporate costs, net	(14.7)		(10.5)
Total unallocated costs	$	(29.4)	$	(48.2)

(a) Restructuring and other special items include transaction and integration costs associated primarily with the acquisitions of Catalent Indiana and Juniper.

(b) Amounts for three months ended December 31, 2017 include $11.8 million of financing expenses related to the offering of the USD Notes and the Third Amendment and include a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018 on the Bridge Facility.

Provided below is a reconciliation of net earnings/(loss) to EBITDA from operations:

	Three Months Ended   December 31,
(Dollars in millions)	2018		2017
Net earnings/(loss)	$	49.0	$	(21.9)
Depreciation and amortization	54.6		46.8
Interest expense, net	25.5		27.2
Income tax expense	2.3		49.9
EBITDA from operations	$	131.4	$	102.0

Softgel Technologies segment

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Three Months Ended   December 31,
	Net Revenue		Segment EBITDA
Revenue/Segment EBITDA without divestitures	(1)	%	(9)	%
Impact of divestitures	(2)	%	—	%
Constant currency change	(3)	%	(9)	%
Foreign currency translation impact on reporting	(3)	%	(3)	%
Total % change	(6)	%	(12)	%

Softgel Technologies net revenue decreased by $7.4 million, or 3%, excluding the impact of foreign exchange, compared to the three months ended December 31, 2017, primarily driven by decreased volume in the segment's consumer health business of 5% resulting from a shortage in our ibuprofen supply, partially offset by increased volume demand in our European prescription business. 

Softgel Technologies segment EBITDA decreased $4.5 million, or 9%, compared to the three months ended December 31, 2017, excluding the impact of foreign exchange, driven primarily by a shortage in our ibuprofen supply, which led to a decrease in our consumer health business by 16%, partially offset by favorable shift in product mix within our European prescription business.

35

Table of Contents

In December 2017, we divested two manufacturing sites in Asia Pacific operated within the Softgel Technologies segment in order to better streamline our global operations. The site divestitures resulted in a decrease to net revenue of 2% and no impact to Segment EBITDA in the three months ended December 31, 2018 compared to the three months ended December 31, 2017.

Biologics and Specialty Drug Delivery segment

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Three Months Ended   December 31,
	Net Revenue		Segment EBITDA
Revenue/Segment EBITDA without acquisitions	15	%	18	%
Impact of acquisitions	10	%	10	%
Constant currency change	25	%	28	%
Foreign exchange fluctuation	(1)	%	(1)	%
Total % change	24	%	27	%

Net revenue in our Biologics and Specialty Drug Delivery segment increased by $36.8 million, or 25%, compared to the three months ended December 31, 2017, excluding the impact of foreign exchange. Net revenue without acquisitions increased by 15% due to favorable end-customer demand for our U.S. based drug substance biologics offerings of 9% and increased revenue within our respiratory and ophthalmic platform primarily as a result of timing of shipments in the prior year of 8%, partially offset by decreased end-market demand for our European-based drug product offerings of 2%. 

Biologics and Specialty Drug Delivery segment EBITDA increased by $11.2 million, or 28%, compared to the three months ended December 31, 2017, excluding the impact of foreign exchange. Segment EBITDA without acquisitions increased by 18%, primarily due to increased volume demand as discussed above.

On October 23, 2017, we acquired Catalent Indiana, which increased net revenue and Segment EBITDA in our Biologics and Specialty Drug Delivery segment by 10% and 10%, respectively, in the three months ended December 31, 2018 compared to the corresponding prior-year period.

Oral Drug Delivery segment

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Three Months Ended   December 31,
	Net Revenue		Segment EBITDA
Revenue without acquisitions/divestitures	(3)	%	(15)	%
Impact of acquisitions	17	%	26	%
Constant currency change	14	%	11	%
Foreign currency translation impact on reporting	(2)	%	(2)	%
Total % Change	12	%	9	%

Net revenue in our Oral Drug Delivery segment increased by $18.6 million, or 14%, compared to the three months ended December 31, 2017, excluding the impact of foreign exchange, primarily as a result of the Juniper acquisition. Revenue without acquisitions decreased 3%, primarily driven by decreased end-market demand for certain higher-margin offerings within our commercial oral delivery solutions platform, partially offset by increased demand for our development and analytical services platform.

Oral Drug Delivery segment EBITDA increased by $4.4 million, or 11%, compared to the three months ended December 31, 2017, excluding the impact of foreign exchange, primarily as a result of the Juniper acquisition. Segment EBITDA without acquisitions decreased 15%, primarily due to decreased volumes and an unfavorable mix shift related to certain higher-margin offerings primarily within our commercial oral delivery solutions platform, partially offset by increased volume related to fee-for-service development work and analytical testing in the U.S.

On August 14, 2018, we acquired Juniper, which increased net revenue and Segment EBITDA in our Oral Drug Delivery segment for the three months ended December 31, 2018, by 17% and 26%, respectively, compared to the prior-year period.

36

Table of Contents

Clinical Supply Services segment

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Three Months Ended   December 31,
	Net Revenue		Segment EBITDA
Revenue/Segment EBITDA	2	%	13	%
Comparator revenue recognition adoption impact	(27)	%	—	%
Constant currency change	(25)	%	13	%
Foreign currency translation impact on reporting	(1)	%	(2)	%
Total % Change	(26)	%	11	%

Clinical Supply Services net revenue decreased by $26.7 million, or 25%, excluding the impact of foreign exchange, compared to the three months ended December 31, 2017. As a result of the adoption of ASC 606, the Company recorded comparator sourcing arrangements on a net basis versus a gross basis resulting in a decrease to net revenue by 27%, partially offset by a 2% increase in revenue due to higher volume in our storage and distribution business.

Clinical Supply Services segment EBITDA increased by $2.5 million, or 13%, excluding the impact of foreign exchange, compared to the three months ended December 31, 2017, primarily due to increased sales volumes and favorable mix in our storage and distribution business and improved capacity utilization across the network.

Six Months Ended December 31, 2018 Compared to the Six Months Ended December 31, 2017

The below tables summarize several financial metrics we use to measure performance for the six months ended December 31, 2018 and six months ended December 31, 2017. Refer to the discussions below regarding performance and use of key financial metrics.

37

Table of Contents

	Six Months Ended   December 31,				FX Impact		Constant Currency Increase/(Decrease)
	2018		2017				Change $		Change %
Net revenue	$	1,174.8	$	1,150.2	$	(18.8)	$	43.4	4	%
Cost of products sold	824.9		822.7		(13.5)		15.7		2	%
Gross margin	349.9		327.5		(5.3)		27.7		8	%
Selling, general and administrative expenses	238.7		222.3		(1.6)		18.0		8	%
Impairment charges and (gain)/loss on sale of assets	2.8		4.2		(0.1)		(1.3)		(31)	%
Restructuring and other	9.8		1.3		(0.3)		8.8		*
Operating earnings	98.6		99.7		(3.3)		2.2		2	%
Interest expense, net	53.6		51.5		(0.1)		2.2		4	%
Other expense, net	7.1		18.3		(1.2)		(10.0)		(55)	%
Earnings from continuing operations before income taxes	37.9		29.9		(2.0)		10.0		33	%
Income tax expense	3.3		48.0		(0.1)		(44.6)		(93)	%
Net earnings/(loss)	$	34.6	$	(18.1)	$	(1.9)	$	54.6	*

 *Percentage not meaningful

Net Revenue

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Six Months Ended   December 31,
	Net Revenue
Revenue without acquisitions/divestitures	(5)	%
Impact of acquisitions	9	%
Impact of divestitures	—	%
Constant currency change	4	%
Foreign currency translation impact on reporting	(2)	%
Total % change	2	%

Net revenue increased by $43.4 million, or 4%, compared to the six months ended December 31, 2017, excluding the impact of foreign exchange, primarily due to acquisitions. We acquired Catalent Indiana in October 2017 and Juniper in August 2018. Further excluding the impact of acquisitions and divestitures, net revenue decreased 5%, primarily related to a reduction in revenue from comparator sourcing arrangements within our Clinical Supply Services segment. As a result of the adoption of ASC 606, we recorded comparator sourcing arrangements on a net basis versus a gross basis, resulting in a decrease in net revenue of 5%, with no corresponding decrease to EBITDA.

Gross Margin

Gross margin increased by $27.7 million, or 8%, compared to the six months ended December 31, 2017, excluding the impact of foreign exchange, primarily due to increased sales volumes as a result of acquisitions as discussed above. On a constant currency basis, gross margin, as a percentage of revenue, was 29.8% in the six months ended December 31, 2018, an increase from the prior year of 130 basis points, primarily as a result of the adoption of ASC 606, the Company recorded comparator sourcing arrangements on a net basis versus a gross basis, which resulted in an increase to gross margin percentage of 150 basis points.

Selling, General, and Administrative Expense

Selling, general, and administrative expense increased by $18 million, or 8%, compared to the six months ended December 31, 2017, excluding the impact of foreign exchange, primarily as a result of the Catalent Indiana and Juniper acquisitions by approximately $13 million, which included approximately $10 million of incremental depreciation and amortization expense and approximately $2 million of employee-related costs  Selling, general, and administrative expenses further increased by approximately $9 million due to increased employee-related costs, of which $2 million was non-cash

38

Table of Contents

equity compensation, as compared to the prior-year period, partially offset by a reduction of acquisition-related expenses during the year. 

Impairment Charges and Loss on Sale of Assets

Impairment charges for the six months ended December 31, 2018 and December 31, 2017 were $2.8 million and $4.2 million, respectively. Impairment charges in the current year were related to fixed assets that ceased being used and whose value was therefore not recoverable. The prior year included the loss on the sales of two Softgel Technologies segment manufacturing sites in the Asia Pacific region. The site divestitures were not material, either individually or in the aggregate, to the segment or to our business as a whole.

Restructuring and Other

Restructuring and other charges of $9.8 million for the six months ended December 31, 2018 increased by $8.5 million, compared to the six months ended December 31, 2017 and were driven by increases in employee-related actions to further streamline the business. Restructuring expense will vary period-to-period based on site consolidation efforts and other efforts to further streamline the business.

Interest Expense, net

Interest expense, net of $53.6 million for the six months ended December 31, 2018 increased by $2.1 million, or 4%, compared to the six months ended December 31, 2017, primarily driven by a higher average level of outstanding debt during the first quarter of fiscal 2019 and deferred purchase consideration for the Catalent Indiana acquisition in October 2017, partially offset by the 2018 Equity Offering, ordinary-course principal payments on our term loans, and an overall reduction in our interest rates on our senior secured credit facilities compared to the prior-year period.

Other Expense, net

Other expense, net of $7.1 million for the six months ended December 31, 2018 was primarily driven by a $4.2 million charge from the partial extinguishment of our U.S. dollar-denominated term loans on August 1, 2018 to reduce our debt discount and deferred financing costs. Other expense, net also includes non-cash foreign currency translation losses in the period of $2.4 million.

Other expense, net for the six months ended December 31, 2017 of $18.3 million was primarily driven by financing charges of $11.8 million related to the USD Notes offering and the Third Amendment, which included a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018. Other expense, net also included $6.9 million of foreign currency gains in the year.

Income Tax Expense

In December 2017, the U.S. government enacted wide-ranging tax legislation, the Tax Cuts and Jobs Act (the "2017 Tax Act"). The 2017 Tax Act significantly revised U.S. income tax law by, among other provisions, (a) lowering the applicable U.S. federal statutory income tax rate from 35% to 21%, (b) creating a partial territorial tax system that includes imposing a mandatory one-time transitional tax on previously deferred foreign earnings, (c) creating provisions regarding (1) income deemed to be Global Intangible Low Tax Income ("GILTI"), (2) the Foreign Derived Intangible Income ("FDII") deduction, and (3) the Base Erosion Anti-Abuse Tax ("BEAT"), and (d) eliminating or reducing certain income tax deductions, such as deductions for interest expense, executive compensation expense, and certain employee expenses.

The SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which allowed companies to record the tax effects of the 2017 Tax Act on a provisional basis based on a reasonable estimate and then, if necessary, subsequently adjust such amounts during a limited measurement period as more information became available. The Company’s measurement period has expired as of December 31,2018. For the three months ended December 31, 2018, we recorded a net benefit of $6.9 million reducing the estimated net charge from $42.5 million previously recorded during fiscal 2018, to $35.6 million. This reduction is primarily related to additional foreign tax credit benefits associated with the mandatory transition tax charge for deemed repatriation of deferred foreign income. There were no other changes recorded to the tax provision related to the 2017 Tax Act. The Company continues to evaluate the potential impact of all provisions of the 2017 Tax Act, as the U.S. Treasury Department has and is expected to continue issuing guidance related to the 2017 Tax Act during the Company’s fiscal year 2019.

Our provision for income taxes for the six months ended December 31, 2018 was $3.3 million relative to earnings from continuing operations before income taxes of $37.9 million. Our provision for income taxes for the six months ended December 31, 2017 was $48.0 million relative to earnings from continuing operations before income taxes of $29.9 million. The income tax provision for the current period is not comparable to the same period of the prior year due to the impact of the 2017 Tax Act,

39

Table of Contents

changes in pretax income over many jurisdictions, and the impact of discrete items including equity compensation. Generally, fluctuations in our effective tax rate are primarily due to changes in the geographic distribution of our pretax income resulting from our business mix and changes in the tax impact of permanent differences, restructuring, other special items, and other discrete tax items, which may have unique tax implications depending on the nature of the item.

Segment Review

The below charts depict the percentage of revenue allocable to each of the Company's four segments for the six months ended December 31, 2018 compared to the six months ended December 31, 2017. Refer below for discussions regarding the segments' revenue and EBITDA performance.

Our results on a segment basis for the six months ended December 31, 2018 compared to the six months ended December 31, 2017 were as follows:

	Six Months Ended   December 31,				FX Impact		Constant Currency Increase/(Decrease)
	2018		2017				Change $		Change %
Softgel Technologies
Net revenue	$	412.9	$	447.8	$	(13.3)	$	(21.6)	(5)	%
Segment EBITDA	77.5		85.2		(2.8)		(4.9)		(6)	%
Biologics and Specialty Drug Delivery
Net revenue	338.9		240.4		(1.6)		100.1		42	%
Segment EBITDA	77.3		48.6		(0.3)		29.0		60	%
Oral Drug Delivery
Net revenue	284.1		271.8		(2.3)		14.6		5	%
Segment EBITDA	72.2		79.9		(0.9)		(6.8)		(9)	%
Clinical Supply Services
Net revenue	158.5		218.4		(1.5)		(58.4)		(27)	%
Segment EBITDA	41.2		35.7		(0.7)		6.2		17	%
Inter-segment revenue elimination	(19.6)		(28.2)		(0.1)		8.7		(31)	%
Unallocated Costs (1)	(69.2)		(82.2)		1.6		11.4		(14)	%
Combined Total
Net revenue	$	1,174.8	$	1,150.2	$	(18.8)	$	43.4	4	%
EBITDA from continuing operations	$	199.0	$	167.2	$	(3.1)	$	34.9	21	%

40

Table of Contents

(1) Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate-directed costs, and other costs that are not allocated to the segments as follows:

	Six Months Ended   December 31,
(Dollars in millions)	2018		2017
Impairment charges and gain/(loss) on sale of assets	$	(2.8)	$	(4.2)
Equity compensation	(17.5)		(15.5)
Restructuring and other special items (a)	(19.1)		(24.2)
Other (expense), net (b)	(7.1)		(18.3)
Non-allocated corporate costs, net	(22.7)		(20.0)
Total unallocated costs	$	(69.2)	$	(82.2)

(a) Restructuring and other special items include transaction and integration costs associated with the acquisition of Catalent Indiana and Juniper.

(b) Other (expense), net of $7.1 million for the six months ended December 31, 2018 was primarily driven by a write-off of $4.2 million of previously capitalized financing charges related to the Company's U.S. dollar term loan under its senior secured credit facility. The six months ended December 31, 2017 includes financing charges of $11.8 million related to the USD Notes offering and the Third Amendment, which included a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018 on the unused Bridge Facility discussed. Foreign currency losses were also included within other (expense), net in both years.

Provided below is a reconciliation of net earnings/(loss) to EBITDA from continuing operations:

	Six Months Ended   December 31,
(Dollars in millions)	2018		2017
Net earnings/(loss)	$	34.6	$	(18.1)
Depreciation and amortization	107.5		85.8
Interest expense, net	53.6		51.5
Income tax expense	3.3		48.0
EBITDA from operations	$	199.0	$	167.2

Softgel Technologies segment

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Six Months Ended   December 31,
	Net Revenue		Segment EBITDA
Revenue / Segment EBITDA without divestitures	(3)	%	(6)	%
Impact of divestitures	(2)	%	—	%
Constant currency change	(5)	%	(6)	%
Foreign exchange fluctuation	(3)	%	(3)	%
Total % change	(8)	%	(9)	%

Softgel Technologies’ net revenue decreased $21.6 million, or 5%, excluding the impact of foreign exchange, as compared to the six months ended December 31, 2017. Net revenue decreased 3%, compared to the six months ended December 31, 2017, excluding the impact of divestitures. Excluding the reduction in product-participation revenue, net revenue without divestitures decreased 2%, primarily due to lower end-market volume demand for prescription products in North America coupled with a shortage in our ibuprofen supply, which occurred during the second quarter, and led to a decrease in our consumer health business of 2%.

Softgel Technologies’ Segment EBITDA decreased by $4.9 million, or 6%, compared to the six months ended December 31, 2017, excluding the impact of foreign exchange. Excluding the reduction of product participation profit of 4%, Segment EBITDA without divestitures decreased 2%, driven primarily by a shortage in our ibuprofen supply, which led to a decrease in our consumer health business by 8%, partially offset by a shift in product mix within our European prescription business.

41

Table of Contents

In December 2017, we divested two manufacturing sites in Asia Pacific in the Softgel Technologies segment in order to better streamline our global operations. The site divestitures resulted in a decrease to net revenue of 2% with no impact to Segment EBITDA in the six months ended December 31, 2018 compared to the six months ended December 31, 2017.

Biologics and Specialty Drug Delivery segment

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Six Months Ended   December 31,
	Net Revenue		Segment EBITDA
Revenue / Segment EBITDA without acquisitions	11	%	9	%
Impact of acquisitions	31	%	51	%
Constant currency change	42	%	60	%
Foreign exchange fluctuation	(1)	%	(1)	%
Total % change	41	%	59	%

Net revenue in our Biologics and Specialty Drug Delivery segment increased by $100.1 million, or 42%, compared to the six months ended December 31, 2017, excluding the impact of foreign exchange. Net revenue without acquisitions increased by 11%, driven primarily by favorable end-customer demand for our U.S. based drug substance biologics offerings of 7%, increased end-market demand for products within our respiratory and ophthalmic platform of 2%, and increased end-market demand for our European based drug product offerings of 2%.

Biologics and Specialty Drug Delivery segment EBITDA increased by $29 million, or 60%, compared to the six months ended December 31, 2017, excluding the impact of foreign exchange. Segment EBITDA without acquisitions increased by 9%, primarily due to increased volume from our U.S. drug substance biologics offerings and our European drug product offerings.

On October 23, 2017, we acquired Catalent Indiana, which increased net revenue and Segment EBITDA in our Biologics and Specialty Drug Delivery segment by 31% and 51%, respectively, in the six months ended December 31, 2018 compared to the corresponding prior-year period.

Oral Drug Delivery segment

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Six Months Ended   December 31,
	Net Revenue		Segment EBITDA
Revenue / Segment EBITDA without acquisitions	(6)	%	(26)	%
Impact of acquisitions	11	%	17	%
Constant currency change	5	%	(9)	%
Foreign exchange fluctuation	—	%	(1)	%
Total % Change	5	%	(10)	%

Net revenue in our Oral Drug Delivery segment increased by $14.6 million, or 5%, compared to the six months ended December 31, 2017, excluding the impact of foreign exchange, primarily resulting from our Juniper acquisition. Revenue without acquisitions decreased 6%, primarily driven by decreased end-market demand for certain higher-margin offerings primarily in our U.S. operations within our commercial oral delivery solutions platform. 

Oral Drug Delivery’s Segment EBITDA decreased by $6.8 million, or 9%, compared to the six months ended December 31, 2017, excluding the impact of foreign exchange. Segment EBITDA without acquisitions decreased 26%, primarily due to decreased volumes related to certain higher-margin offerings within our commercial oral delivery solutions platform.

On August 14, 2018, we acquired Juniper, which increased net revenue and Segment EBITDA in our Oral Drug Delivery segment for the six months ended December 31, 2018 by 11% and 17%, respectively, compared to the prior-year period.

42

Table of Contents

Clinical Supply Services segment

	2018 vs. 2017
Factors Contributing to Year-Over-Year Change	Six Months Ended   December 31,
	Net Revenue		Segment EBITDA
Revenue / Segment EBITDA	3	%	17	%
Comparator revenue recognition adoption impact	(30)	%	—	%
Constant currency change	(27)	%	17	%
Foreign exchange fluctuation	—	%	(2)	%
Total % Change	(27)	%	15	%

Clinical Supply Services’ net revenue decreased by $58.4 million, or 27%, compared to the six months ended December 31, 2017, excluding the impact of foreign exchange. As a result of the adoption of ASC 606, the Company recorded comparator sourcing arrangements on a net basis versus a gross basis resulting in a decrease to net revenue by 30%, partially offset by an increase in revenue primarily due to higher volume in our storage and distribution business and higher comparator sourcing volume as compared to the prior-year period.

Clinical Supply Services’ Segment EBITDA increased by $6.2 million, or 17%, excluding the impact of foreign exchange, as compared to the six months ended December 31, 2017, primarily due to increased sales volumes in our storage and distribution business, improved capacity utilization across the network, as well as increased profit from our lower-margin comparator sourcing.

Liquidity and Capital Resources

Sources and Uses of Cash

Our principal source of liquidity has been cash flows generated from operations and certain financing activities for acquisitions. The principal uses of cash are to fund planned operating and capital expenditures, business or asset acquisitions, interest payments on debt, and any mandatory or discretionary principal payments on debt issuances. As of December 31, 2018, Operating Company had available a $200 million revolving credit facility that matures in May 2022 (following the Third Amendment in October 2017), the capacity of which is reduced by $6.3 million in outstanding letters of credit. The revolving credit facility includes borrowing capacity available for letters of credit and for short-term borrowings, referred to as swing-line borrowings. As of December 31, 2018, we had no outstanding borrowings under our revolving credit facility.

On October 29, 2015, our Board of Directors authorized a share repurchase program to use up to $100.0 million to repurchase shares of our outstanding common stock, par value $0.01 ("Common Stock"). Under the program, we are authorized to repurchase shares through open market purchases, privately negotiated transactions, or otherwise as permitted by applicable federal securities laws. There has been no purchase pursuant to this program as of December 31, 2018.

Cash Flows

The following table summarizes our consolidated statement of cash flows:

	Six Months Ended   December 31,
(Dollars in millions)	2018		2017		$ Change
Net cash provided by/(used in):
Operating activities	$	84.5	$	176.0	$	(91.5)
Investing activities	$	(208.8)	$	(825.7)	$	616.9
Financing activities	$	(73.8)	$	682.4	$	(756.2)

43

Table of Contents

Operating Activities

For the six months ended December 31, 2018, cash provided by operating activities was $84.5 million, compared to $176.0 million for the corresponding prior-year period. Cash flow from operating activities for the six months ended December 31, 2018 decreased due to a higher collection of receivables during the corresponding prior-year period and higher inventory levels during the current-year six-month period compared to the prior-year period.

Investing Activities

For the six months ended December 31, 2018, cash used in investing activities was $208.8 million compared to $825.7 million for the six months ended December 31, 2017, primarily driven by $748.0 million of cash paid for the acquisition of Catalent Indiana, net of cash acquired during the prior-year six-month period, while cash paid for acquisition during the current-year six-months period was $127.5 million, net of cash acquired for the acquisition of Juniper in August 2018. Other use of cash in investing activities includes cash used in acquisitions of property, plant, and equipment, which totaled $81.3 million for the six months ended December 31, 2018 compared to $82.9 million in the six months ended December 31, 2017.

Financing Activities

For the six months ended December 31, 2018, cash used in financing activities was $73.8 million compared to cash provided by financing activities of $682.4 million for the six months ended December 31, 2017. The cash used in financing activities during the current six-month period is primarily driven by $450 million used in a partial paydown of the U.S. dollar-denominated term loan in July 2018, and the first installment payment on the deferred purchase consideration of which $44.0 million represents the deemed principal portion of the debt. These payments were offset by net proceeds of $445.5 million raised as part of the 2018 Equity Offering. In the 2018 Equity Offering, we sold 11.4 million shares, including the underwriters' over-allotment, of our Common Stock at a price to the public of $40.24 per share, before underwriting discounts and commissions. The net proceeds of $445.5 million include the effect of discounts and commissions and other offering expenses. We used the net proceeds to repay a corresponding portion of the outstanding borrowings under the U.S. dollar-denominated term loans. The cash provided by financing activities in the prior-year six-month period was primarily driven by net proceeds of $442 million and $277.8 million raised as part of our USD Notes offering and a primary offering of our Common Stock in September 2017 (the "2017 Equity Offering"), respectively, during the prior-year six-month period. In the 2017 Equity Offering, we sold 7.4 million shares, including the underwriters' over-allotment, at a price to the public of $39.10 per share, before underwriting discounts and commissions. The net proceeds of $277.8 million include the effect of discounts and commissions and other offering expenses. The net proceeds of the 2017 Equity Offering were used to fund a portion of the initial consideration for the Catalent Indiana acquisition.

Guarantees and Security

Senior Secured Credit Facilities

All obligations under the Credit Agreement and the guarantees of those obligations are secured by substantially all of the following assets of Operating Company and each guarantor (Operating Company's parent entity and each of Operating Company's material domestic subsidiaries), subject to certain exceptions:

•a pledge of 100% of the capital stock of Operating Company and 100% of the equity interests directly held by Operating Company and each guarantor in any wholly owned material subsidiary of Operating Company or any guarantor (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, will not include more than 65% of the voting stock of such non-U.S. subsidiary); and

•a security interest in, and mortgages on, substantially all tangible and intangible assets of Operating Company and of each guarantor, subject to certain limited exceptions.

The Euro Notes and the USD Notes

All obligations under the Euro Notes and the USD Notes are general, unsecured, and subordinated to all existing and future secured indebtedness of the guarantors to the extent of the value of the assets securing such indebtedness. The Euro Notes and the USD Notes are each separately guaranteed by all of Operating Company's wholly owned U.S. subsidiaries that guarantee the senior secured credit facilities. Neither the Euro Notes nor the USD Notes are guaranteed by either PTS Intermediate Holdings LLC or Catalent, Inc.

Debt Covenants

Senior Secured Credit Facilities

44

Table of Contents

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, Operating Company’s (and Operating Company’s restricted subsidiaries’) ability to incur additional indebtedness or issue certain preferred shares; create liens on assets; engage in mergers and consolidations; sell assets; pay dividends and distributions or repurchase capital stock; repay subordinated indebtedness; engage in certain transactions with affiliates; make investments, loans, or advances; make certain acquisitions; enter into sale and leaseback transactions; amend material agreements governing Operating Company’s subordinated indebtedness; and change Operating Company’s lines of business.

The Credit Agreement also contains change-of-control provisions and certain customary affirmative covenants and events of default. The revolving credit facility requires compliance with a net leverage covenant when there is a 30% or more draw outstanding at a period end. As of December 31, 2018, Operating Company was in compliance with all material covenants under the Credit Agreement.

Subject to certain exceptions, the Credit Agreement permits Operating Company and its restricted subsidiaries to incur certain additional indebtedness, including secured indebtedness. None of Operating Company's non-U.S. subsidiaries or its Puerto Rico subsidiary is a guarantor of the loans.

Under the Credit Agreement, Operating Company's ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and paying certain dividends is tied to ratios based on Adjusted EBITDA (which is defined as "Consolidated EBITDA" in the Credit Agreement). Adjusted EBITDA is based on the definitions in the Credit Agreement, is not defined under GAAP, and is subject to important limitations.

As market conditions warrant, we and our affiliates may from time to time seek to purchase our outstanding debt in privately negotiated or open-market transactions, by tender offer or otherwise. Subject to any applicable limitation contained in the Credit Agreement, any purchase made by us may be funded by the use of cash on our balance sheet or the incurrence of new secured or unsecured debt. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material. Any such purchase may be with respect to a substantial amount of a particular class or series of debt, with the attendant reduction in the trading liquidity of such class or series. In addition, any such purchases made at prices below the “adjusted issue price” (as defined for U.S. federal income tax purposes) may result in taxable cancellation of indebtedness income to us, which amounts may be material, and in related adverse tax consequences to us.

The Euro Notes and the USD Notes

The Indentures governing the Euro Notes and the USD Notes (the "Indentures") contain certain covenants that, among other things, limit the ability of Operating Company and its restricted subsidiaries to incur or guarantee more debt or issue certain preferred shares, pay dividends on, repurchase, or make distributions in respect of their capital stock or make other restricted payments; make certain investments; sell certain assets; create liens; consolidate, merge, sell, or otherwise dispose of all or substantially all of their assets; enter into certain transactions with their affiliates; and designate their subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of exceptions, limitations and qualifications as set forth in the Indentures. The Indentures also contain customary events of default including, but not limited to, nonpayment, breach of covenants, and payment or acceleration defaults in certain other indebtedness of Operating Company or certain of its subsidiaries. Upon an event of default, either the holders of at least 30% in principal amount of each of the then-outstanding Euro Notes or the then-outstanding USD Notes, or either of the Trustees under the Indentures, may declare the applicable notes immediately due and payable, or in certain circumstances, the applicable notes will become automatically immediately due and payable. As of December 31, 2018, Operating Company was in compliance with all material covenants under the Indentures.

As of December 31, 2018 and June 30, 2018, the amounts of cash and cash equivalents held by foreign subsidiaries were $179.0 million and $124.7 million, respectively, out of the total consolidated cash and cash equivalents of $207.9 million and $410.2 million, respectively. These balances are dispersed across many locations around the world.

Interest Rate Risk Management

A portion of the debt used to finance our operations is exposed to interest-rate fluctuations. We may use various hedging strategies and derivative financial instruments to create an appropriate mix of fixed- and floating-rate assets and liabilities. Historically, we have used interest-rate swaps to manage the economic effect of variable-rate interest obligations associated with our floating-rate term loans so that the interest payable on the term loans effectively becomes fixed at a certain rate, thereby reducing the impact of future interest-rate changes on our future interest expense. As of December 31, 2018, we did not have any interest-rate swap agreement in place that would have the economic effect of modifying the variable-rate interest obligations associated with our floating-rate term loans.

45

Table of Contents

Currency Risk Management

We are exposed to fluctuations in the euro-U.S. dollar exchange rate on our investments in our foreign operations in Europe. While we do not actively hedge against changes in foreign currency, we have mitigated the exposure of our investments in our European operations by denominating a portion of our debt in euros. At December 31, 2018, we had $777.7 million of euro-denominated debt outstanding that qualifies as a hedge of a net investment in foreign operations. Refer to Note 10 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion of net investment hedge activity in the period.

From time to time, we may use forward foreign currency exchange contracts to manage our exposure to the variability of cash flows primarily related to the foreign exchange rate changes of future foreign currency transaction costs. In addition, we may use such contracts to protect the value of existing foreign currency assets and liabilities. Currently, we do not use any forward foreign currency exchange contracts. We expect to continue to evaluate hedging opportunities for foreign currency in the future.

Contractual Obligations

Besides the change in our long-term obligations related to the $450.0 million partial paydown of outstanding borrowings under Operating Company's U.S. dollar-denominated term loans on July 31, 2018, there has been no significant change to our contractual obligations since our Fiscal 2018 10-K. Refer to Note 6 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a further discussion regarding our long-term obligations.

Off-Balance Sheet Arrangements

Other than operating leases and outstanding letters of credit as discussed above, we do not have any material off-balance sheet arrangements as of December 31, 2018.

46

Table of Contents

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to cash flow and earnings fluctuations as a result of certain market risks. These market risks primarily relate to changes in interest rates associated with our long-term debt obligations and foreign exchange rate changes.

Interest Rate Risk

The Company has historically used interest-rate swaps to manage the economic effect of variable-rate interest obligations associated with our floating-rate term loans so that the interest payable on the term loans effectively becomes fixed at a certain rate, thereby reducing the impact of future interest-rate changes on our future interest expense. As of December 31, 2018, we did not have any interest-rate swap agreements in place that would either have the economic effect of modifying the variable-rate interest obligations associated with our floating-rate term loans or would be considered an effective cash flow hedge for financial reporting purposes.

Foreign Currency Exchange Risk

By the nature of our global operations, we are exposed to cash flow and earnings fluctuations resulting from foreign exchange rate variation. These exposures are transactional and translational in nature. Since we manufacture and sell our products throughout the world, our foreign-currency risk is diversified. Principal drivers of this diversified foreign-exchange exposure include the European euro, British pound, Argentinean peso, Brazilian real, and Australian dollar. Our transactional exposure arises from the purchase and sale of goods and services in currencies other than the functional currency of our operational units. We also have exposure related to the translation of financial statements of our foreign subsidiaries into U.S. dollars, the functional currency of Operating Company. The financial statements of our operations outside the U.S. are measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of these foreign operations in U.S. dollars are accumulated as a component of accumulated other comprehensive income/(loss) utilizing period-end exchange rates. Foreign-currency transaction gains and losses calculated by utilizing weighted average exchange rates for the period are included in the statements of operations in other expense, net. Such foreign-currency transaction gains and losses include inter-company loans denominated in non-U.S. dollar currencies.

47

Table of Contents

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Executive Officer and our Senior Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any control or procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our President and Chief Executive Officer, and our Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our President and Chief Executive Officer and our Senior Vice President and Chief Financial Officer concluded that, as of December 31, 2018, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In October 2017, the Company acquired Catalent Indiana. During the six months ended December 31, 2018, we continued to integrate Catalent Indiana into the Company’s financial reporting processes and procedures and internal control over financial reporting. As part of this process, we have undertaken efforts to significantly enhance the internal controls of Catalent Indiana, which were not subject to the internal control requirements applicable to U.S. public companies prior to our acquisition, to bring them in line with our internal controls over financial reporting, and those efforts are ongoing.

48

Table of Contents

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

SEC inquiry into Juniper Pharmaceuticals, Inc.

On August 14, 2018, Operating Company acquired Juniper. On November 14, 2016, Juniper filed with the SEC restated audited consolidated financial statements for the fiscal years ended December 31, 2013 through December 31, 2015, including the unaudited consolidated financial information for each quarterly period within the fiscal years ended December 31, 2014 and 2015, and restated unaudited consolidated financial statements for the quarters ended March 31, 2016 and June 30, 2016 and the related quarters in 2015, in order to correct certain timing errors regarding how it recognized revenue from a supply contract with an affiliate of Merck KGaA. On January 24, 2017, Juniper received a subpoena from the SEC requesting information concerning these restatements and related issues. Juniper responded to the subpoena and is cooperating with the SEC’s inquiry, including the taking of testimony from former Juniper employees and others. The Company understands that the inquiry is ongoing but does not believe the outcome of the investigation will be material to it; nonetheless, the Company cannot provide any assurance regarding that outcome.

Other

From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business, including, without limitation, inquiries and claims concerning environmental contamination as well as litigation and allegations in connection with acquisitions, product liability, manufacturing or packaging defects, and claims for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of any of which could be significant. The Company intends to vigorously defend itself against any such litigation and does not currently believe that the outcome of any such litigation will have a material adverse effect on the Company’s financial statements. In addition, the healthcare industry is highly regulated and government agencies continue to scrutinize certain practices affecting government programs and otherwise.

From time to time, the Company receives subpoenas or requests for information relating to the business practices and activities of customers or suppliers from various governmental agencies or private parties, including from state attorneys general, the U.S. Department of Justice, and private parties engaged in patent infringement, antitrust, tort, and other litigation. The Company generally responds to such subpoenas and requests in a timely and thorough manner, which responses sometimes require considerable time and effort and can result in considerable costs being incurred. The Company expects to incur costs in future periods in connection with future requests.

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in the section entitled "Risk Factors" in our Fiscal 2018 10-K for the fiscal year ended June 30, 2018, which could materially affect our business, financial condition, or future results. The risks described in such report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. Other than what was disclosed in the Special Note Regarding Forward-Looking Statements, there has been no material change to the risk factors disclosed in our Fiscal 2018 10-K.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

Purchase of Equity Securities

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

Not applicable.

49

Table of Contents

Item 6. EXHIBITS

Exhibits:

3.1	Third Amended and Restated Certificate of Incorporation of Catalent, Inc., as filed with the Secretary of State of the State of Delaware on October 31, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 6, 2018)
3.2	Bylaws of Catalent, Inc., effective October 31, 2018 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Commission on November 6, 2018).
10.1	Catalent, Inc. 2018 Omnibus Incentive Plan with UK Sub-plan.*†
10.2	Catalent, Inc. 2019 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on November 6, 2018).†
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended*
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended*
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101.1	The following financial information from Catalent, Inc.’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2018 formatted in inline XBRL: (i) Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2018 and 2017; (ii) Consolidated Statements of Comprehensive Income/(Loss) for the Three and Six Months Ended December 31, 2018 and 2017 (iii) Consolidated Balance Sheets as of December 31, 2018 and June 30, 2018; (iv) Consolidated Statement of Changes in Shareholders’ Equity/(Deficit) as of December 31, 2018; (v) Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2018 and 2017; and (vi) Notes to Unaudited Consolidated Financial Statements.

* Filed herewith

** Furnished herewith

† Represents a management contract, compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.

50

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CATALENT, INC. (Registrant)
Date:	February 5, 2019	By:	/s/ John R. Chiminski
			John R. Chiminski
			President & Chief Executive Officer
Date:	February 5, 2019	By:	/s/ Wetteny Joseph
			Wetteny Joseph
			Senior Vice President & Chief Financial Officer

51

EX-10.1

Exhibit 10.1

CATALENT, INC.

2018 OMNIBUS INCENTIVE PLAN

1. Purpose. The purposes of the Catalent, Inc. 2018 Omnibus Incentive Plan are to provide a means through which the Company and its Affiliates (each as defined below) may attract and retain key personnel and to provide a means whereby directors, officers, employees, consultants and advisors (and prospective directors, officers, employees, consultants and advisors) of the Company and its Affiliates can acquire and maintain an equity interest in the Company, or be paid incentive compensation, including incentive compensation measured by reference to the value of Common Stock (as defined below), thereby strengthening their commitment to the welfare of the Company and its Affiliates and aligning their interests with those of the Company’s stockholders.

The Plan (as defined below) shall serve as the successor to the 2014 Omnibus Incentive Plan (the “2014 Plan”). If the Company’s stockholders approve this Plan, no additional grant of awards will be made under the 2014 Plan after the Effective Date. All outstanding awards under the 2014 Plan, however, shall continue in effect in accordance with their terms, consistent with the 2014 Plan.

2. Definitions.

2.1 The following definitions shall be applicable throughout the Plan.

(a)“Absolute Share Limit” has the meaning given such term in Section 5(b) of the Plan.

(b)“Affiliate” means any Person that directly or indirectly controls, is controlled by or is under common control with the Company. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting or other securities, by contract or otherwise.

(c) “Award” means, individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Stock-Based Award and Performance Compensation Award granted under the Plan.

(d)“Board” means the Board of Directors of the Company.

(e) “Cause” means, as to any Participant, unless the applicable Award agreement states otherwise, “Cause” as such term or any correlative term may be defined in any employment agreement with respect to such Participant in effect at the time of the Participant’s termination of employment with a Service Recipient, or, if there is no such employment agreement or such term or any correlative term is not defined therein, (i) the Participant’s willful failure to perform duties, which is not cured within 15 days following written notice, (ii) the Participant’s conviction or confessing to or becoming subject to proceedings that provide a reasonable basis for the Company to believe that the Participant has engaged in a (x) felony, (y) crime involving dishonesty, or (z) crime involving moral turpitude and which is demonstrably injurious to the Company or its Subsidiaries, (iii) the Participant’s willful malfeasance or misconduct that is demonstrably injurious to the Company or its Subsidiaries, or (iv) breach by the Participant of the material terms of any agreement with the Company or its Subsidiaries, including any non-competition, non-solicitation or confidentiality provision thereof. For purposes of this definition, no act or failure to act shall be deemed “willful” unless effected by the Participant other than in good faith.

(f) “Change in Control” means, unless the applicable Award agreement provides otherwise, any of the following:

(i) the acquisition (whether by purchase, merger, consolidation, combination or other similar transaction) by any Person of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of more than 50% (on a fully diluted basis) of either (A) the then outstanding shares of Common Stock, taking into account as outstanding for this purpose such Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; provided, however, that for purposes of this Plan, the following acquisitions shall not constitute a Change in Control: (I) any acquisition by the

Company or any Affiliate; (II) any acquisition by any employee benefit plan sponsored or maintained by the Company or any Affiliate; or (III) in respect of an Award held by a particular Participant, any acquisition by the Participant or any group of Persons including the Participant (or any entity controlled by the Participant or any group of Persons including the Participant);

(ii) during any period of twenty-four months, individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A under the Exchange Act, with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director; or

(iii) the sale, transfer or other disposition of all or substantially all of the assets of the Company to any Person that is not an Affiliate of the Company.

(g)“Code” means the Internal Revenue Code of 1986 and any successor thereto. Reference in the Plan to any section of the Code shall be deemed to include any regulation or other interpretative guidance under such section, and any amendment or successor provision to such section, regulation or guidance.

(h)“Committee” means the Compensation and Leadership Committee of the Board or subcommittee thereof if required with respect to actions taken to comply with Section 162(m) of the Code in respect of Awards or, if no such Compensation Committee or subcommittee thereof exists, the Board.

(i)“Common Stock” means the common stock, par value $0.01 per share, of the Company (and any stock or other securities into which such Common Stock may be converted or into which it may be exchanged).

(j)“Company” means Catalent, Inc., a Delaware corporation, and any successor thereto.

(k)“Date of Grant” means the date on which the granting of an Award is authorized, or such other date as may be specified in such authorization.

(l)“Designated Foreign Subsidiaries” means all Affiliates organized under the laws of any jurisdiction or country other than the United States of America that may be designated by the Board or the Committee from time to time.

(m) “Detrimental Activity” means any of the following: (i) unauthorized disclosure of any confidential or proprietary information of the Company or its Affiliates; (ii) any activity that would be grounds to terminate the Participant’s employment or service with the Service Recipient for Cause; (iii) whether in writing or orally, maligning, denigrating or disparaging the Company, its Affiliates or their respective predecessors and successors, or any of the current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, with respect to any of their respective past or present activities, or otherwise publishing (whether electronically, in writing or orally) statements that tend to portray any of the aforementioned persons or entities in an unfavorable light; (iv) the breach of any non-competition, non-solicitation or other agreement containing restrictive covenants, with the Company or its Affiliates; or (v) fraud or conduct contributing to any financial restatement or irregularity, as determined by the Committee in its sole discretion. Notwithstanding the foregoing, this definition is not intended to, and shall not be interpreted in a manner that limits or restricts a Participant (or any other person or entity) from (1) initiating communications directly with, cooperating with, providing relevant information to, or otherwise assisting in an investigation by (A) the SEC or any other governmental, regulatory, or legislative body regarding a possible violation of any federal law relating to fraud or any SEC rule or regulation; or (B) the U.S. Equal Employment Opportunity Commission or any other governmental authority with responsibility for the administration of fair employment practices laws regarding a possible violation of such laws; (2) responding to any inquiry from any such governmental, regulatory, or legislative body or official or governmental authority; or (3) participating, cooperating, testifying, or otherwise assisting in any governmental action, investigation, or proceeding relating to a possible violation of any such law, rule or regulation

(n)“Disability” means, as to any Participant, unless the applicable Award agreement states otherwise, “Disability” as such term may be defined in any employment agreement in effect at the time of the Participant’s termination of employment with a Service Recipient, or, if there is no such employment agreement or

such term is not defined therein, the Participant becomes physically or mentally incapacitated and is therefore unable for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period to perform the Participant’s duties.

(o)“Effective Date” means October 31, 2018, the date of the Company’s 2018 Annual Meeting of Shareholders (or, if such Annual Meeting is adjourned or otherwise postponed, such later date).

(p)“Eligible Director” means a person who is (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act,(ii) if required to comply with Section 162(m) of the Code, an “outside director” within the meaning of Section 162(m) of the Code and (iii) an “independent director” under the rules of the NYSE or any other securities exchange or inter-dealer quotation system on which the Common Stock is listed or quoted, or a person meeting any similar requirement under any successor rule or regulation.

(q)“Eligible Person” means any (i) individual employed by the Company or an Affiliate, (ii) director or officer of the Company or an Affiliate, (iii) consultant or advisor to the Company or an Affiliate who may be offered securities registrable pursuant to a registration statement on Form S-8 under the Securities Act, or (iv) any prospective employee, director, officer, consultant or advisor who has accepted an offer of employment or consultancy from the Company or one of its Affiliates (and would satisfy the provisions of clauses (i) through (iii) above once he or she begins employment with or providing services to the Company or one of its Affiliates).

(r)“Exchange Act” means the Securities Exchange Act of 1934 and any successor thereto. Reference in the Plan to any section of (or rule under) the Exchange Act shall be deemed to include any rule or interpretative guidance under such section or rule, and any amendment or successor provision to such section, rule or guidance.

(s)“Exercise Price” has the meaning given such term in Section 7(b) of the Plan.

(t)“Fair Market Value” means, on a given date, (i) if the Common Stock is listed on a national securities exchange, the closing sales price of the Common Stock reported on the primary exchange on which the Common Stock is listed and traded on such date, or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported, (ii) if the Common Stock is not listed on any national securities exchange but is quoted in an inter-dealer quotation system on a last-sale basis, the average between the closing bid price and ask price reported on such date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported, or (iii) if the Common Stock is not listed on a national securities exchange or quoted in an inter-dealer quotation system on a last-sale basis, the amount determined by the Committee in good faith to be the fair market value of the Common Stock.

(u)“GAAP” means those accounting principles generally accepted in the United States from time to time.

(v)“Immediate Family Members” has the meaning given such term in Section 14(b) of the Plan.

(w)“Incentive Stock Option” means an Option that is designated by the Committee as an incentive stock option as described in Section 422 of the Code and otherwise meets the requirements set forth in the Plan.

(x) “Indemnifiable Person” has the meaning given such term in Section 4(e) of the Plan.

(y)“Negative Discretion” means the discretion authorized by the Plan to be applied by the Committee to eliminate or reduce the size of a Performance Compensation Award consistent with Section 162(m) of the Code, to the extent applicable.

(z)“Nonqualified Stock Option” means an Option that is not an Incentive Stock Option.

(aa) “Non-Employee Director” means a member of the Board who is not an employee of the Company or any Affiliate.

(bb)“NYSE” means the New York Stock Exchange.

(cc)“Option” means an Award granted under Section 7 of the Plan.

(dd)“Option Period” has the meaning given such term in Section 7(c) of the Plan.

(ee) “Other Stock-Based Award” means an Award granted under Section 10 of the Plan.

(ff)“Participant” means an Eligible Person who has been selected by the Committee to participate in the Plan and to receive an Award pursuant to the Plan.

(gg)“Performance Compensation Award” means any Award designated by the Committee as a Performance Compensation Award pursuant to Section 11 of the Plan.

(hh)“Performance Criteria” means the criterion or criteria that the Committee shall select for purposes of establishing the Performance Goals for a Performance Period with respect to any Performance Compensation Award under the Plan.

(ii)“Performance Formula” means, for a Performance Period, the one or more objective formulae applied against the relevant Performance Goal to determine, with regard to the Performance Compensation Award of a particular Participant, whether all, some portion but less than all, or none of the Performance Compensation Award has been earned for the Performance Period.

(jj)“Performance Goals” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon the Performance Criteria.

(kk)“Performance Period” means one or more periods, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to, and the payment of, a Performance Compensation Award.

(ll)“Permitted Transferee” has the meaning given such term in Section 14(b) of the Plan.

(mm)“Person” means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).

(nn)“Plan” means this Catalent, Inc. 2018 Omnibus Incentive Plan, as it may be amended from time to time.

(oo)“Restricted Period” means the period determined by the Committee during which an Award is subject to restrictions or, as applicable, the period within which performance is measured for purposes of determining whether an Award has been earned.

(pp)“Restricted Stock” means Common Stock, subject to certain specified restrictions (which may include a requirement that the Participant remain continuously employed or provide continuous services for a specified period), granted under Section 9 of the Plan.

(qq)“Restricted Stock Unit” means an unfunded and unsecured promise to deliver shares of Common Stock, cash, other securities or other property, subject to certain restrictions (which may include a requirement that the Participant remain continuously employed or provide continuous services for a specified period), granted under Section 9 of the Plan.

(rr)“SAR Period” has the meaning given such term in Section 8(c) of the Plan.

(ss)“SEC” means the U.S. Securities and Exchange Commission.

(tt)“Securities Act” means the Securities Act of 1933 and any successor thereto. Reference in the Plan to any section of (or rule under) the Securities Act shall be deemed to include any rule or interpretative guidance under such section or rule, and any amendment or successor provision to such section, rule or guidance.

(uu)“Service Recipient” means, with respect to a Participant holding a given Award, either the Company or an Affiliate of the Company by which the original recipient of such Award is, or following a Termination was most recently, principally employed or to which such original recipient provides, or following a Termination was most recently providing, services, as applicable.

(vv)“Stock Appreciation Right” or “SAR” means an Award granted under Section 8 of the Plan.

(ww)“Strike Price” has the meaning given such term in Section 8(b) of the Plan.

(xx)“Subsidiary” means, with respect to any specified Person:

(i)any corporation, association or other business entity of which more than 50% of the total voting power of shares of such entity’s voting securities (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(ii)any partnership (or any comparable foreign entity) (A) the sole general partner (or functional equivalent thereof) or the managing general partner of which is such Person or Subsidiary of

such Person or (B) the only general partners (or functional equivalents thereof) of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

(yy)“Substitute Award” has the meaning given such term in Section 5(g) of the Plan.

(zz)“Sub-Plan” means any sub-plan to this Plan that has been adopted by the Board or the Committee for the purpose of permitting the offering of Awards to employees (and other service providers) of certain Designated Foreign Subsidiaries or otherwise outside the United States of America, with such sub-plan designed to comply with local laws applicable to offerings in applicable foreign jurisdictions or to obtain more favorable tax or other treatment for a Participant, the Company or its Affiliates. Although any Sub-Plan may be designated a separate and independent plan from the Plan in order to comply with applicable local laws, the Absolute Share Limit shall apply in the aggregate to the Plan and any Sub-Plan adopted hereunder.

(aaa)“Termination” means the termination of a Participant’s employment or service, as applicable, with the Service Recipient.

2.2 Rules of Construction. Unless the context otherwise requires:

(a)a capitalized term has the meaning assigned to it in this Plan;

(b)“or” shall be deemed in all cases, unless expressly noted otherwise, to be both inclusive and exclusive;

(c)an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(d)any contract, instrument, law, or regulation defined or referred to in this Plan means such contract, instrument, law, or regulation as from time to time amended, modified. or supplemented;

(e)references to “hereof”, “herein”, “hereunder”, “hereby” and similar terms shall refer to this entire Plan;

(f)references to “including” in this Plan shall mean “including, without limitation,” whether or not so specified;

(g)the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean “if”; and

(h)masculine pronouns and other words of masculine gender shall refer to individuals of any gender.

3. Effective Date; Duration. The Plan shall become effective as of the Effective Date, provided that the Plan is approved by the Company’s stockholders on such date. The expiration date of the Plan, on and after which date no Award may be granted hereunder, shall be the tenth anniversary of the Effective Date; provided, however, that such expiration shall not affect Awards then outstanding, and the terms and conditions of the Plan shall continue to apply to such Awards.

4. Administration.

(a)The Committee shall administer the Plan. To the extent required to comply with the provisions of Rule 16b-3 under the Exchange Act (if the Board is not acting as the Committee under the Plan) or necessary to obtain the exception for performance-based compensation under Section 162(m) of the Code, as applicable, it is intended that each member of the Committee shall, at the time he or she takes any action with respect to an Award under the Plan that is subject to Rule 16b-3, or Section 162(m) of the Code, as applicable, be an Eligible Director. However, the fact that a Committee member shall fail to qualify as an Eligible Director shall not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

(b)Subject to the provisions of the Plan and applicable law, the Committee shall have the sole and plenary authority, in addition to other express powers and authorizations conferred on the Committee by the Plan, to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of shares of Common Stock to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, shares of Common Stock, other securities, other Awards or other property, or canceled, forfeited, or suspended and

the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances the delivery of cash, shares of Common Stock, other securities, other Awards or other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant or of the Committee; (vii) interpret, administer, reconcile any inconsistency in, correct any defect in or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; (viii) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the Committee shall deem appropriate for the proper administration of the Plan; (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan; and (x) adopt Sub-Plans.

(c)Except to the extent prohibited by applicable law or the applicable rules and regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. Without limiting the generality of the foregoing, the Committee may delegate to one or more officers of the Company or any Subsidiary the authority to act on behalf of the Committee with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Committee herein, and which may be so delegated as a matter of law, except for grants of Awards to persons (i) who are Non-Employee Directors or otherwise are subject to Section 16 of the Exchange Act or (ii) who are, or who are reasonably expected to be, “covered employees” for purposes of Section 162(m) of the Code.

(d)Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award or any document evidencing an Award granted pursuant to the Plan shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all persons or entities, including the Company, any of its Affiliates, any Participant, any holder or beneficiary of any Award, and any stockholder of the Company.

(e)No member of the Board, the Committee or any employee or agent of the Company or any Subsidiary (each such person, an “Indemnifiable Person”) shall be liable for any action taken or omitted to be taken or any determination made with respect to the Plan or any Award hereunder (unless constituting fraud or a willful criminal act or omission). Each Indemnifiable Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense (including reasonable attorneys’ fees and expenses) that may be imposed upon or incurred by such Indemnifiable Person in connection with or resulting from any action, suit or proceeding to which such Indemnifiable Person may be a party or in which such Indemnifiable Person may be involved by reason of any action taken or omitted to be taken or determination made under the Plan or any Award agreement and against and from any and all amounts paid by such Indemnifiable Person with the Company’s approval, in settlement thereof, or paid by such Indemnifiable Person in satisfaction of any judgment in any such action, suit or proceeding against such Indemnifiable Person, and the Company shall advance to such Indemnifiable Person any such expenses promptly upon written request (which request shall include an undertaking by the Indemnifiable Person to repay the amount of such advance if it shall ultimately be determined as provided below that the Indemnifiable Person is not entitled to be indemnified); provided, that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to an Indemnifiable Person to the extent that a final judgment or other final adjudication (in either case not subject to further appeal) binding upon such Indemnifiable Person determines that any act, omission or determination of such Indemnifiable Person giving rise to the indemnification claim resulted from such Indemnifiable Person’s fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or the Company’s or any Subsidiary’s organizational documents or its Standards of Business Conduct or other applicable code of conduct. The foregoing right of indemnification shall not be exclusive of or otherwise supersede any other right of indemnification to which such Indemnifiable Persons may be entitled under the Company’s certificate of incorporation, bylaws or other organizational document, as a matter of law, individual indemnification agreement or contract or otherwise, or any other power that the Company may have to indemnify such Indemnifiable Persons or hold them harmless.

(f)Notwithstanding anything to the contrary contained in the Plan, the Board may, in its sole discretion, at any time and from time to time, grant Awards and administer the Plan with respect to such Awards. Any such action by the Board shall be subject to the applicable rules of the NYSE or any other securities exchange or inter-dealer quotation system on which the Common Stock is listed or quoted. In any such case, the Board shall have all the authority granted to the Committee under the Plan.

5. Grant of Awards; Shares Subject to the Plan; Limitations.

(a)The Committee may, from time to time, grant Awards to one or more Eligible Persons.

(b)Subject to Section 12 and Section 5(d) of the Plan, no more than 15,600,000 shares of Common Stock shall be available for Awards under the Plan (which share limit is comprised of (i) 13,415,141 new shares of Common Stock authorized for issuance under the Plan plus (ii) 2,184,859 shares of Common stock that remained available for future grants under the 2014 Plan as of July 1, 2018). The number of shares set forth in clause (ii) above will be reduced by one share for each share subject to an option or stock appreciation right granted under the 2014 Plan on or after July 1, 2018 and prior to the Effective Date and by 2.25 shares for each share subject to awards (other than options and stock appreciation rights) granted under the 2014 Plan on or after July 1, 2018 and prior to Effective Date (the aggregate share limit after such reduction and after adding any share added back to the Plan under Section 5(d) relating to an award under the 2014 Plan, the “Absolute Share Limit”). The Absolute Share Limit shall be reduced on a one-for-one basis for each share of Common Stock subject to an Option or Stock Appreciation Right granted under the Plan and by a fixed ratio of 2.25 shares of Common Stock for each share of Common Stock subject to an Award other than Option or Stock Appreciation Right granted under the Plan.

(c)Awards granted under the Plan shall be subject to the following limitations: (i) subject to Section 12 of the Plan, grants of Options or SARs under the Plan in respect of no more than 1,500,000 shares of Common Stock may be made to any individual Participant during any single fiscal year of the Company (for this purpose, if a SAR is granted in tandem with an Option (such that the SAR expires with respect to the number of shares of Common Stock for which the Option is exercised), only the shares underlying the Option shall count against this limitation); (ii) subject to Section 12 of the Plan, no more than the number of shares of Common Stock equal to the Absolute Share Limit may be issued in the aggregate pursuant to the exercise of Incentive Stock Options granted under the Plan; (iii) subject to Section 12 of the Plan, during any single fiscal year of the Company, no individual Participant may be granted Performance Compensation Awards that are denominated in shares of Common Stock pursuant to Section 11 of the Plan under which more than 750,000 shares of Common Stock may be earned in the aggregate; (iv) the maximum number of shares of Common Stock subject to Awards granted during a single fiscal year to any Non-Employee Director, taken together with any cash fees paid to such Non-Employee Director for services rendered for such fiscal year, shall not exceed $600,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes and counting compensation towards this limit for the year in which it is earned, and not a later year, in the event payment of the compensation is deferred); and (v) subject to Section 12 of the Plan, during any single fiscal year of the Company, no individual Participant may be granted Performance Compensation Awards that are denominated in cash under which more than $10,000,000 may be earned in the aggregate.

(d)Other than with respect to Substitute Awards, (i) to the extent that an Award under the Plan expires or is canceled, forfeited, terminated, settled in cash, or otherwise is settled without a delivery to the Participant of the full number of shares of Common Stock to which the Award related, and (ii) after June 30, 2018, an award granted under the 2014 Plan expires or is cancelled, forfeited, terminated, settled in cash, or otherwise is settled without a delivery to the Participant of the full number of shares of Common Stock to which the award related, then in each case the undelivered shares shall be added to the shares available for Awards under the Plan in accordance with Section 5(e) below. Shares of Common Stock withheld by the Company or tendered by the Participant in payment of the Exercise Price or taxes and other amounts relating to an Award (or, after June 30, 2018, shares withheld or tendered to pay the exercise price or taxes or other amounts relating to an award under the 2014 Plan), shall be deemed to constitute shares not issued to the Participant and shall in each case be added to the shares available for Awards under the Plan in accordance with Section 5(e); provided, however, that such shares shall not become available for issuance hereunder if either (i) the applicable shares are withheld or surrendered following the termination of the Plan or (ii) at the time the applicable shares are withheld or surrendered, it would constitute a material revision of the Plan subject to stockholder approval under any then-applicable rules of the national securities exchange on which the Common Stock is listed. Upon the exercise of any SAR under the Plan, the Absolute Share Reserve shall be reduced only by the net number of shares issued upon such exercise and not by the gross number of shares as to which such right is exercised.

(e)Any shares that again become available for Awards under the Plan pursuant to this Section 5 shall be added as (A) one share for every one share subject to Options or SARs granted under the Plan or options or stock appreciation rights granted under the 2014 Plan, and (B) as 2.25 shares for every one share subject to Awards other than Options or SARs granted under the Plan or awards other than options or stock appreciation rights granted under the 2014 Plan.

(f)Shares of Common Stock issued by the Company in settlement of Awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the open market or by private purchase or a combination of the foregoing. Following the Effective Date, no further award shall be granted under the 2014 Plan.

(g)Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity directly or indirectly acquired by the Company or with which the Company combines (“Substitute Awards”). Substitute Awards shall not be counted against the Absolute Share Limit (nor shall Substitute Awards be added to the Absolute Share Limit as provided above); provided, that Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding options intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code shall be counted against the aggregate number of shares of Common Stock available for Awards of Incentive Stock Options under the Plan. Subject to applicable stock exchange requirements, available shares under a stockholder approved plan of an entity directly or indirectly acquired by the Company or with which the Company combines (as appropriately adjusted to reflect the acquisition or combination transaction) may be used for Awards under the Plan and shall not reduce (or be added back to) the number of shares of Common Stock available for issuance under the Plan.

6. Eligibility. Participation in the Plan shall be limited to Eligible Persons.

7. Options.

(a)General. Each Option granted under the Plan shall be evidenced by an Award agreement, in written or electronic form, which agreement need not be the same for each Participant. Each Option so granted shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement. All Options granted under the Plan shall be Nonqualified Stock Options unless the applicable Award agreement expressly states that the Option is intended to be an Incentive Stock Option. Incentive Stock Options shall be granted only to Eligible Persons who are employees of the Company and its Affiliates, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive Stock Option unless the Plan has been approved by the stockholders of the Company in a manner intended to comply with the stockholder approval requirements of Section 422(b)(1) of the Code, provided that any Option intended to be an Incentive Stock Option shall not fail to be effective solely on account of a failure to obtain such approval, but rather such Option shall be treated as a Nonqualified Stock Option unless and until such approval is obtained. In the case of an Incentive Stock Option, the terms and conditions of such grant shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code. If for any reason an Option intended to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option or portion thereof shall be regarded as a Nonqualified Stock Option appropriately granted under the Plan.

(b)Exercise Price. Except as otherwise provided by the Committee in the case of Substitute Awards, the exercise price (“Exercise Price”) per share of Common Stock for each Option shall not be less than 100% of the Fair Market Value of such share (determined as of the Date of Grant); provided, however, that in the case of an Incentive Stock Option granted to an employee who, at the time of the grant of such Option, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Affiliate, the Exercise Price per share shall be no less than 110% of the Fair Market Value per share on the Date of Grant.

(c)Vesting and Expiration; Termination.

(i)Options shall vest and become exercisable in such manner and on such date or dates or upon such events as determined by the Committee; provided, however, that notwithstanding any such vesting date or event, the Committee may, in its sole discretion, accelerate the vesting of any Option at any time and for any reason. Options shall expire upon a date determined by the Committee, not to exceed ten years from the Date of Grant (the “Option Period”); provided, that if the Option Period (other than in the case of an Incentive Stock Option) would expire at a time when trading in the shares of Common Stock is prohibited by the Company’s insider trading policy (or Company-imposed “blackout period”), then the Option Period shall be automatically extended until the 30^th day following the expiration of such prohibition. Notwithstanding the foregoing, in no event shall the Option Period exceed five years from the Date of Grant in the case of an Incentive Stock Option granted to a Participant who on the Date of Grant owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Affiliate.

(ii)Unless otherwise provided by the Committee, whether in an Award agreement or otherwise, in the event of (A) a Participant’s Termination by the Service Recipient for Cause or should a Participant engage in conduct constituting Cause while holding one or more Options, all outstanding Options granted to such Participant shall immediately terminate and expire, (B) a Participant’s Termination due to death or Disability, each outstanding Option shall remain exercisable for one year thereafter (but in no event beyond the expiration of the Option Period) and (C) a Participant’s Termination for any other reason, each outstanding Option shall remain exercisable for ninety (90) days thereafter (but in no event beyond the expiration of the Option Period). During the applicable post-Termination exercise period under the foregoing clauses (B) and (C), the Option may not be exercised for more than the number of vested shares for which the Option is at the time exercisable. No additional shares shall vest under the Option following the Participant’s Termination except to the extent (if any) specifically authorized by the Committee in its sole discretion pursuant to an express written agreement with the Participant. Upon the expiration of the applicable exercise period under the foregoing clauses (B) and (C) or (if earlier) upon the expiration of the Option Period, the Option shall terminate and cease to be outstanding for any shares for which the Option has not been exercised.

(d)Method of Exercise and Form of Payment. No shares of Common Stock shall be issued pursuant to any exercise of an Option until payment in full of the Exercise Price therefor is received by the Company and the Participant has paid to the Company an amount equal to any income, employment or other applicable taxes or other amounts required to be withheld or accounted for to any applicable tax authority. Options which have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company (or telephonic instructions to the extent provided by the Committee) in accordance with the terms of the Option accompanied by payment of the Exercise Price. The Exercise Price shall be payable (i) in cash, check, cash equivalent or shares of Common Stock valued at the Fair Market Value at the time the Option is exercised (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of shares of Common Stock in lieu of actual issuance of such shares to the Company); provided, that such shares of Common Stock are not subject to any pledge or other security interest and have been held for the requisite period (if any) necessary to avoid any resulting charge to the Company’s earnings for financial reporting purposes; or (ii) by such other method as the Committee may permit in its sole discretion, including: (A) in other property having a fair market value on the date of exercise equal to the Exercise Price, (B) if there is a public market for the shares of Common Stock at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered (including telephonically to the extent permitted by the Committee) a copy of irrevocable instructions to a stockbroker to sell the shares of Common Stock otherwise issuable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price or (C) a “net exercise” procedure effected by withholding the minimum number of shares of Common Stock otherwise issuable in respect of an Option that are needed to pay the Exercise Price and all applicable required withholding and any other applicable taxes or other amount. Any fractional share of Common Stock shall be settled in cash.

(e)Notification upon Disqualifying Disposition of an Incentive Stock Option. Each Participant awarded an Incentive Stock Option under the Plan shall notify the Company in writing immediately after the date he or she makes a disqualifying disposition of any Common Stock acquired pursuant to the exercise of such Incentive Stock Option. A disqualifying disposition is any disposition (including any sale) of such Common Stock before the later of (A) two years after the Date of Grant of the Incentive Stock Option or (B) one year after the date of exercise of the Incentive Stock Option. The Company may, if determined by the Committee and in accordance with procedures established by the Committee, retain possession, as agent for the applicable Participant, of any Common Stock acquired pursuant to the exercise of an Incentive Stock Option until the end of the period described in the preceding sentence, subject to complying with any instructions from such Participant as to the sale of such Common Stock.

(f)Compliance with Laws, etc. Notwithstanding the foregoing, in no event shall a Participant be permitted to exercise an Option in a manner which the Committee determines would violate the Sarbanes-Oxley Act of 2002 or any other applicable law, any applicable rule of the SEC or any applicable rule or regulation of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded.

8. Stock Appreciation Rights.

(a)General. Each SAR granted under the Plan shall be evidenced by an Award agreement. Each SAR so granted shall be subject to the conditions set forth in this Section 8, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement. Any Option granted under the Plan may include tandem SARs. The Committee also may award SARs to Eligible Persons independent of any Option.

(b)Strike Price. Except as otherwise provided by the Committee in the case of Substitute Awards, the strike price (“Strike Price”) per share of Common Stock for each SAR shall not be less than 100% of the Fair Market Value of such share (determined as of the Date of Grant). Notwithstanding the foregoing, a SAR granted in tandem with (or in substitution for) an Option previously granted shall have a Strike Price equal to the Exercise Price of the corresponding Option.

(c)Vesting and Expiration; Termination.

(i)A SAR granted in connection with an Option shall become exercisable and shall expire according to the same vesting schedule and expiration provisions as the corresponding Option. A SAR granted independent of an Option shall vest and become exercisable in such manner and on such date or dates or upon such events as determined by the Committee; provided, however, that, notwithstanding any such vesting date or event, the Committee may, in its sole discretion, accelerate the vesting of any SAR at any time and for any reason. SARs shall expire upon a date determined by the Committee, not to exceed ten years from the Date of Grant (the “SAR Period”); provided that, if the SAR Period would expire at a time when trading in the shares of Common Stock is prohibited by the Company’s insider trading policy (or Company-imposed “blackout period”), then the SAR Period shall be automatically extended until the 30th day following the expiration of such prohibition.

(ii)Unless otherwise provided by the Committee, whether in an Award agreement or otherwise, in the event of (A) a Participant’s Termination by the Service Recipient for Cause or should a Participant engage in conduct constituting Cause while holding one or more SARs, all outstanding SARs granted to such Participant shall immediately terminate and expire, (B) a Participant’s Termination due to death or Disability, each outstanding SAR shall remain exercisable for one (1) year thereafter (but in no event beyond the expiration of the SAR Period) and (C) a Participant’s Termination for any other reason, each outstanding SAR shall remain exercisable for ninety (90) days thereafter (but in no event beyond the expiration of the SAR Period). During the applicable post-Termination exercise period under the foregoing clauses (B) and (C), the SAR may not be exercised for more than the number of vested shares for which the SAR is at the time exercisable. No additional share shall vest under the SAR following the Participant’s Termination except to the extent (if any) specifically authorized by the Committee in its sole discretion pursuant to an express written agreement with the Participant. Upon the expiration of the applicable exercise period under the foregoing clauses (B) and (C) or (if earlier) upon the expiration of the SAR Period, the SAR shall terminate and cease to be outstanding for any shares for which the SAR has not been exercised.

(d)Method of Exercise. SARs which have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the Award, specifying the number of SARs to be exercised and the date on which such SARs were awarded.

(e)Payment. Upon the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of shares subject to the SAR that are being exercised multiplied by the excess of the Fair Market Value of one share of Common Stock on the exercise date over the Strike Price, less an amount equal to any income, employment, or other applicable taxes or other amount required to be withheld or accounted for to any tax authority. The Company shall pay such amount in cash, in shares of Common Stock valued at Fair Market Value, or any combination thereof, as determined by the Committee. Any fractional share of Common Stock shall be settled in cash.

9. Restricted Stock and Restricted Stock Units.

(a)General. Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award agreement. Each Restricted Stock and Restricted Stock Unit grant shall be subject to the conditions set forth in this Section 9, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement.

(b)Stock Certificates and Book Entry; Escrow or Similar Arrangement. Upon the grant of Restricted Stock, the Committee shall cause a stock certificate registered in the name of the Participant to be issued or shall cause share(s) of Common Stock to be registered in the name of the Participant and held in book-entry form subject to the Company’s directions and, if the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than issued to the Participant pending the release of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) the appropriate stock power (endorsed in blank) with respect to

the Restricted Stock covered by such agreement. If a Participant shall fail to execute and deliver (in a manner permitted under Section 14(a) of the Plan or as otherwise determined by the Committee) an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement and blank stock power within the amount of time specified by the Committee, the Award shall be null and void. Subject to the restrictions set forth in this Section 9 and the applicable Award agreement, the Participant generally shall have the rights and privileges of a stockholder as to such Restricted Stock, including the right to vote such Restricted Stock; provided that any dividend payable on a share of Restricted Stock shall be held by the Company and delivered (without interest) to the Participant within fifteen (15) days following the date on which the restrictions on such Restricted Stock lapse (and the right to any such accumulated dividend shall be forfeited upon the forfeiture of the Restricted Stock to which such dividend relates). To the extent any share of Restricted Stock is forfeited, any stock certificate issued to the Participant evidencing such share shall be returned to the Company, and all rights of the Participant to such share and as a stockholder with respect thereto shall terminate without further obligation on the part of the Company.

(c)Restricted Period; Termination.

(i)The Restricted Period with respect to Restricted Stock and Restricted Stock Units shall lapse in such manner and on such date or dates or upon such events as determined by the Committee; provided, however, that, notwithstanding any such date or event, the Committee may, in its sole discretion, accelerate the lapse of the Restricted Period at any time and for any reason.

(ii)Unless otherwise provided by the Committee, whether in an Award agreement or otherwise, in the event of a Participant’s Termination for any reason prior to the time that such Participant’s Restricted Stock or Restricted Stock Units, as applicable, have vested, (x) all vesting with respect to such Participant’s Restricted Stock or Restricted Stock Units shall cease and (y) unvested shares of Restricted Stock and unvested Restricted Stock Units, as applicable, shall be forfeited to the Company by the Participant for no consideration as of the date of such Termination.

(d)Issuance of Restricted Stock and Settlement of Restricted Stock Units.

(i)Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in the applicable Award agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award agreement. If an escrow arrangement is used, upon such expiration, the Company shall issue to the Participant, or his or her beneficiary, without charge, the stock certificate (or, if applicable, a notice evidencing a book entry notation) evidencing the shares of Restricted Stock which have not then been forfeited and with respect to which the Restricted Period has expired (rounded down to the nearest full share). Dividends, if any, that may have been withheld by the Committee and attributable to any particular share of Restricted Stock shall be distributed to the Participant in cash or, at the sole discretion of the Committee, in shares of Common Stock having a Fair Market Value (on the date of distribution) equal to the amount of such dividends, upon the release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends.

(ii)Unless otherwise provided by the Committee in an Award agreement or otherwise, upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, the Company shall issue to the Participant, or his or her beneficiary, without charge, one share of Common Stock (or other securities or other property, as applicable) for each such outstanding Restricted Stock Unit; provided, however, that the Committee may, in its sole discretion, elect to (i) pay cash or part cash and part shares of Common Stock in lieu of issuing only shares of Common Stock in respect of such Restricted Stock Units or (ii) defer the issuance of shares of Common Stock (or cash or part shares of Common Stock and part cash, as the case may be) beyond the expiration of the Restricted Period if such extension would not cause adverse tax consequences under Section 409A of the Code. If a cash payment is made in lieu of issuing shares of Common Stock, the amount of such payment shall be equal to the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed with respect to such Restricted Stock Units. To the extent provided in an Award agreement, the holder of outstanding Restricted Stock Units shall be entitled to be credited with dividend equivalent payments (upon the payment by the Company of dividends on shares of Common Stock) either in cash or, at the sole discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such dividends (and interest may, at the sole discretion of the Committee, be credited on the amount of cash dividend equivalents at a rate and subject to such terms as determined by the Committee), which accumulated dividend equivalents (and interest thereon, if applicable) shall be payable at the same time as the underlying Restricted Stock Units

are settled following the release of restrictions on such Restricted Stock Units, and, if such Restricted Stock Units are forfeited, the Participant shall have no right to such dividend equivalent payments.

(e)Legends on Restricted Stock. Each certificate, if any, representing Restricted Stock awarded under the Plan, if any, shall bear a legend substantially in the form of the following, in addition to any other information the Company deems appropriate, until the lapse of all restrictions with respect to such shares of Common Stock:

TRANSFER OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED PURSUANT TO THE TERMS OF THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN AND A RESTRICTED STOCK AWARD AGREEMENT, BETWEEN CATALENT, INC. AND PARTICIPANT. A COPY OF SUCH PLAN AND AWARD AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF CATALENT, INC.

10. Other Stock-Based Awards. The Committee may issue unrestricted Common Stock, rights to receive grants of Awards at a future date, or other Awards denominated in Common Stock (including performance shares or performance units), under the Plan to Eligible Persons, alone or in tandem with other Awards, in such amounts as the Committee shall from time to time in its sole discretion determine. Each Other Stock-Based Award granted under the Plan shall be evidenced by an Award agreement. Each Other Stock-Based Award so granted shall be subject to such conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement, including those set forth in Section 14(c) of the Plan.

11. Performance Compensation Awards.

(a)General. The Committee shall have the authority, at or before the time of grant of any Award, to designate such Award as a Performance Compensation Award. The Committee shall also have the authority to make an award of a cash bonus to any Participant and designate such Award as a Performance Compensation Award.

(b)Discretion of Committee with Respect to Performance Compensation Awards. With regard to a particular Performance Period, the Committee shall have sole discretion to select the length of such Performance Period, the type(s) of Performance Compensation Awards to be issued, the Performance Criteria that will be used to establish the Performance Goal(s), the kind(s) or level(s) of the Performance Goal(s) that is (are) to apply and the Performance Formula. To the extent required under Section 162(m) of the Code, within the first ninety (90) days of a Performance Period (or, within any other maximum period allowed under Section 162(m) of the Code), the Committee shall, with regard to the Performance Compensation Awards to be issued for such Performance Period, exercise its discretion with respect to each of the matters enumerated in the immediately preceding sentence and record the same in writing.

(c)Performance Criteria. The Performance Criteria that will be used to establish the Performance Goal(s) may be based on the attainment of specific levels of performance of the Company (or the performance of one or more Affiliates, divisions or operational or business units, product lines, brands, business segments, administrative departments, or any combination of the foregoing) and may include one or more of the following: (i) net earnings or net income (before or after taxes); (ii) basic or diluted earnings per share (before or after taxes); (iii) net revenue or net revenue growth; (iv) gross revenue or gross revenue growth, gross profit or gross profit growth; (v) net operating profit (before or after taxes); (vi) return measures (including, but not limited to, return on investment, assets, capital, employed capital, invested capital, equity, or sales); (vii) cash flow measures (including, but not limited to, operating cash flow, free cash flow, and cash flow return on capital), which may but are not required to be measured on a per share basis; (viii) earnings before or after interest, taxes, depreciation, amortization or rent (including EBIT, EBITDA and EBITDAR); (ix) gross or net operating margins; (x) productivity ratios; (xi) share price (including, but not limited to, growth measures and total stockholder return, whether measured on an absolute or relative basis); (xii) expense targets or cost reduction goals, general and administrative expense savings; (xiii) operating efficiency; (xiv) objective measures of customer satisfaction; (xv) working capital targets; (xvi) measures of economic value added or other ‘value creation’ metrics; (xvii) inventory control; (xviii) enterprise value; (xix) sales; (xx) stockholder return; (xxi) client retention; (xxii) competitive market metrics; (xxiii) employee retention; (xxiv) timely completion of new product rollouts; (xxv) timely launch of new facilities; (xxvi) measurements related to a new purchasing “co-op”; (xxvii) objective measures of personal targets, goals or completion of projects (including but not limited to succession and hiring projects, completion of specific acquisitions, reorganizations or other corporate transactions or capital-raising transactions, expansions of specific business operations, achieving specified operational objectives, and meeting divisional or project budgets); (xxviii) system-wide revenues; (xxix) royalty income; (xxx) comparisons of continuing operations to other operations;

(xxxi) market share; (xxxii) cost of capital, debt leverage year-end cash position or book value; (xxxiii) strategic objectives, development of new product lines and related revenue, sales and margin targets, co-branding or international operations; or (xxxiv) any combination of the foregoing. Any one or more of the Performance Criteria may be stated as a percentage of another Performance Criteria, or used on an absolute or relative basis to measure the performance of the Company or one or more Affiliates as a whole or any divisions or operational or business units, product lines, brands, business segments, administrative departments of the Company or one or more Affiliates or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Criteria may be compared to the performance of a selected group of comparison companies, or a published or special index that the Committee, in its sole discretion, deems appropriate, or as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of Performance Goals pursuant to the Performance Criteria specified in this paragraph. To the extent required under Section 162(m) of the Code, the Committee shall, within the first ninety (90) days of a Performance Period (or, within any other maximum period allowed under Section 162(m) of the Code), define in an objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period. The Committee may also grant Performance Compensation Awards that are based on Performance Criteria other than those set forth above.

(d)Modification of Performance Goal(s). The Committee may specify adjustments or modifications to be made to the calculation of a Performance Goal for such Performance Period, based on and in order to appropriately reflect the following events, provided that, to the extent required under Section 162(m) of the Code, unless otherwise determined by the Committee at the time the Performance Compensation Award is granted, such adjustment or modification shall be specified during the first ninety (90) days of a Performance Period (or, within any other maximum period allowed under Section 162(m) of the Code), or at any time thereafter to the extent the exercise of such authority at such time would not cause the Performance Compensation Awards granted to any Participant for such Performance Period to fail to qualify as “performance-based compensation” under Section 162(m) of the Code: (i) an asset write-down; (ii) litigation or any claim judgment or settlement; (iii) the effect of a changes in tax law, an accounting principle, or another law, stock exchange listing standard, or regulatory rule affecting reported results; (iv) any reorganization or restructuring program; (v) any unusual, infrequently occurring or nonrecurring item or event or as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year; (vi) any acquisition or divestiture; (vii) any other specific, unusual, infrequently occurring or nonrecurring event, or objectively determinable category thereof; (viii) any foreign exchange gain or loss; (ix) discontinued operations and nonrecurring charges; and (x) a change in the Company’s fiscal year.

(e)Payment of Performance Compensation Awards.

(i)Condition to Receipt of Payment. Unless otherwise provided in the applicable Award agreement, a Participant must be employed by the Company on the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such Performance Period.

(ii)Limitation. Unless otherwise provided in the applicable Award agreement, a Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that: (A) the Performance Goals for such period are achieved; and (B) all or some of the portion of such Participant’s Performance Compensation Award has been earned for the Performance Period based on the application of the Performance Formula to such achieved Performance Goals.

(iii)Certification. Following the completion of a Performance Period, the Committee shall review and certify in writing whether, and to what extent, the Performance Goals for the Performance Period have been achieved and, if so, calculate and certify in writing that amount of the Performance Compensation Awards earned for the period based upon the Performance Formula. The Committee shall then determine the amount of each Participant’s Performance Compensation Award actually payable for the Performance Period and, in so doing, may apply Negative Discretion.

(iv)Use of Negative Discretion. In determining the actual amount of an individual Participant’s Performance Compensation Award for a Performance Period, the Committee may reduce or eliminate the amount of the Performance Compensation Award earned under the Performance Formula in the Performance Period through the use of Negative Discretion. Unless otherwise provided in the applicable Award agreement, the Committee shall have the discretion to (A) grant or provide payment in respect of Performance Compensation Awards for a Performance Period if the Performance Goals for such Performance Period have not been attained or (B) increase a Performance Compensation Award, subject to the applicable limitations set forth in Section 5 of the Plan.

(f)Timing of Award Payments. Unless otherwise provided in the applicable Award agreement, Performance Compensation Awards granted for a Performance Period shall be paid to Participants as soon as administratively practicable following completion of the certifications required by this Section 11. Any Performance Compensation Award that has been deferred shall not (between the date as of which the Award is deferred and the payment date) increase (i) with respect to a Performance Compensation Award that is payable in cash, by a measuring factor for each fiscal year greater than a reasonable rate of interest set by the Committee or (ii) with respect to a Performance Compensation Award that is payable in shares of Common Stock, by an amount greater than the appreciation of a share of Common Stock from the date such Award is deferred to the payment date. Any Performance Compensation Award that is deferred and is otherwise payable in shares of Common Stock shall be credited (during the period between the date as of which the Award is deferred and the payment date) with dividend equivalents (in a manner consistent with the methodology set forth in the last sentence of Section 9(d)(ii) of the Plan).

12. Changes in Capital Structure and Similar Events. In the event of (a) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to acquire shares of Common Stock or other securities of the Company, or other similar corporate transaction or event (including a Change in Control) that affects the shares of Common Stock, or (b) unusual or nonrecurring events (including a Change in Control) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, such that in either case an adjustment is determined by the Committee in its sole discretion to be necessary or appropriate, then the Committee shall make any such adjustments in such manner as it may deem equitable, including any or all of the following:

(i) adjusting any or all of (A) the Absolute Share Limit, (B) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) which may be issued in respect of Awards or with respect to which Awards may be granted under the Plan (including adjusting any or all of the limitations under Section 5 of the Plan) and (C) the terms of any outstanding Award, including (1) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (2) the Exercise Price or Strike Price with respect to any Award or (3) any applicable performance measures (including Performance Criteria and Performance Goals);

(ii)providing for a substitution or assumption of Awards (or awards of an acquiring company), accelerating the exercisability of, lapse of restrictions on, or termination of, Awards or providing for a period of time (which shall not be required to be more than ten (10) days) for Participants to exercise outstanding Awards prior to the occurrence of such event (and any such Award not so exercised shall terminate upon the occurrence of such event); and

(iii)cancelling any one or more outstanding Awards and causing to be paid to the holders holding vested Awards (including any Award that would vest as a result of the occurrence of such event but for such cancellation) the value of such Awards, if any, as determined by the Committee (which if applicable may be based upon the price per share of Common Stock received or to be received by other stockholders of the Company in such event), including, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the shares of Common Stock subject to such Option or SAR over the aggregate Exercise Price or Strike Price of such Option or SAR, respectively (it being understood that, in such event, any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess of, the Fair Market Value of a share of Common Stock subject thereto may be canceled and terminated without any payment or consideration therefor);

provided, however, that, in the case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor pronouncement thereto)), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring. Any adjustment in Incentive Stock Options under this Section 12 (other than any cancellation of Incentive Stock Options) shall be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Code, and any adjustments under this Section 12 shall be made in a manner that does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. Any such adjustment shall be conclusive and binding for all purposes. Payments to holders pursuant to clause (iii) above shall be made in cash

or, in the sole discretion of the Committee, in the form of such other consideration necessary for a Participant to receive property, cash, or securities (or combination thereof) as such Participant would have been entitled to receive upon the occurrence of the transaction if the Participant had been, immediately prior to such transaction, the holder of the number of shares of Common Stock covered by the Award at such time (less any applicable Exercise Price or Strike Price). In addition, prior to any payment or adjustment contemplated under this Section 12, the Committee may require a Participant to (A) represent and warrant as to the unencumbered title to his Awards, (B) bear such Participant’s pro rata share of any post-closing indemnity obligations, and be subject to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms, and similar conditions as the other holders of Common Stock, and (C) deliver customary transfer documentation as reasonably determined by the Committee.

13. Amendments and Termination.

(a)Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided that no such amendment, alteration, suspension, discontinuation or termination shall be made without stockholder approval if (i) such approval is necessary to comply with any regulatory requirement applicable to the Plan (including as necessary to comply with any rule or regulation of any securities exchange or inter-dealer quotation system on which the securities of the Company may be listed or quoted) or for any change in GAAP, (ii) it would increase the number of securities that may be issued under the Plan (except for increases pursuant to Section 5 or 12 of the Plan), or (iii) it would materially modify the requirements for participation in the Plan; provided, further, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary. Notwithstanding the foregoing, no amendment shall be made to the last proviso of Section 13(b) of the Plan without stockholder approval.

(b)Amendment of Award Agreements. The Committee may, to the extent consistent with the terms of any applicable Award agreement, waive any condition or right under, amend any term of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the associated Award agreement, prospectively or retroactively (including after a Participant’s Termination); provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant with respect to any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant; provided, further, that without stockholder approval, except as otherwise permitted under Section 12 of the Plan, (i) no amendment or modification may reduce the Exercise Price of any Option or the Strike Price of any SAR, (ii) the Committee may not cancel any outstanding Option or SAR and replace it with a new Option or SAR (with a lower Exercise Price or Strike Price, as the case may be) or other Award or cash payment that is greater than the intrinsic value (if any) of the cancelled Option or SAR, (iii) the Committee may not cancel an Option or SAR (when the Exercise Price or Strike Price per share exceeds the Fair Market Value of one share) in exchange for cash or another Award and (iv) the Committee may not take any other action which is considered a “repricing” for purposes of the stockholder approval rules of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or quoted.

14. General.

(a)Award Agreements. Each Award under the Plan shall be evidenced by an Award agreement, which shall be delivered to the Participant and shall specify the terms and conditions of the Award and any rule applicable thereto, including the effect on such Award of the death, Disability or Termination of a Participant, or of such other events as may be determined by the Committee. For purposes of the Plan, an Award agreement may be in any such form (written or electronic) as determined by the Committee (including a Board or Committee resolution, an employment agreement, a notice, a certificate or a letter) evidencing the Award. The Committee need not require an Award agreement to be signed by the Participant or a duly authorized representative of the Company.

(b)Nontransferability.

(i)Each Award shall be exercisable only by a Participant during the Participant’s lifetime, or, if permissible under applicable law, by the Participant’s legal guardian, representative or devisee. No Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

(ii)Notwithstanding the foregoing, the Committee may, in its sole discretion, permit Awards (other than Incentive Stock Options) to be transferred by a Participant, without consideration, subject to such rules as the Committee may adopt consistent with any applicable Award agreement to preserve the purposes of the Plan, to: (A) any person who is a “family member” of the Participant, as such term is used in the instructions to Form S-8 under the Securities Act or any successor form of registration statement promulgated by the SEC (collectively, the “Immediate Family Members”); (B) a trust solely for the benefit of the Participant and his or her Immediate Family Members; (C) a partnership or limited liability company whose only partners or stockholders are the Participant and his or her Immediate Family Members; or (D) a beneficiary to whom donations are eligible to be treated as “charitable contributions” for federal income tax purposes; (each transferee described in clauses (A), (B), (C) and (D) above is hereinafter referred to as a “Permitted Transferee”); provided that the Participant gives the Committee advance written notice describing the terms and conditions of the proposed transfer and the Committee notifies the Participant in writing that such a transfer would comply with the requirements of the Plan.

(iii)The terms of any Award transferred in accordance with the immediately preceding sentence shall apply to the Permitted Transferee and any reference in the Plan, or in any applicable Award agreement, to a Participant shall be deemed to refer to the Permitted Transferee, except that (A) Permitted Transferees shall not be entitled to transfer any Award, other than by will or the laws of descent and distribution, (B) Permitted Transferees shall not be entitled to exercise any transferred Option unless there shall be in effect a registration statement on an appropriate form covering the shares of Common Stock to be acquired pursuant to the exercise of such Option if the Committee determines, consistent with any applicable Award agreement, that such a registration statement is necessary or appropriate, (C) the Committee or the Company shall not be required to provide any notice to a Permitted Transferee, whether or not such notice is or would otherwise have been required to be given to the Participant under the Plan or otherwise, and (D) the consequences of the Termination of the Participant under the terms of the Plan and the applicable Award agreement shall continue to be applied with respect to the Participant, including that an Option shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Award agreement.

(c)Dividends and Dividend Equivalents. The Committee in its sole discretion may provide a Participant as part of an Award with dividends or dividend equivalents, payable in cash, shares of Common Stock, other securities, other Awards or other property, on such terms and conditions as may be determined by the Committee in its sole discretion, including accumulation of dividends or dividend equivalents, or reinvestment in additional shares of Common Stock, Restricted Stock or other Awards; provided that no dividend or dividend equivalent shall be payable in respect of outstanding (i) Options or SARs or (ii) other unearned Awards subject to any vesting condition (although dividends and dividend equivalents may be accumulated in respect of unearned Awards and paid within fifteen (15) days after such Awards are earned and become payable or distributable). Any dividend or dividend equivalent payable in connection with an unvested Award shall not be paid until and unless the underlying Award vests and shall be subject to risk of forfeiture to the same extent as the underlying Award.

(d)Tax Withholding.

(i)A Participant shall be required to pay to the Company or any Affiliate, and the Company or any Affiliate shall have the right and is hereby authorized to withhold, from any cash, share of Common Stock, other securities or other property issuable or deliverable under any Award or from any compensation or other amounts owing to a Participant, the amount (in cash, shares of Common Stock, other securities or other property) of any required withholding or any other applicable taxes or other amount in respect of an Award, its exercise, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Committee or the Company to satisfy all obligations for the payment of such withholding or any other applicable taxes and other amount.

(ii)Without limiting the generality of clause (i) above, the Committee may, in its sole discretion, permit a Participant to satisfy, in whole or in part, the foregoing withholding liability by (A) the delivery of shares of Common Stock (which are not subject to any pledge or other security interest) owned by the Participant having a Fair Market Value equal to such withholding liability or (B) having the Company withhold from the number of shares of Common Stock otherwise issuable or deliverable pursuant to the exercise or settlement of the Award a number of shares with a Fair Market Value equal to such withholding liability at a withholding rate determined by the Company in its sole discretion (but in no event to exceed the maximum statutory tax rates of the Participant’s applicable jurisdiction (or such other rate as would not trigger a negative accounting impact)). Any shares withheld in excess of the shares required to

satisfy withholding liability at the minimum statutory withholding rates shall not be added back to the share reserve under Section 5(e).

(e)No Claim to Awards; No Rights to Continued Employment; Waiver. No employee of the Company or any Affiliate, or other person, shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for a grant of any other Award. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants are similarly situated. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Company or any Affiliate, nor shall it be construed as giving any Participant any rights to continued service on the Board. The Company or any of its Affiliates may at any time dismiss a Participant from employment or discontinue any consulting relationship, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or any Award agreement. By accepting an Award under the Plan, a Participant shall thereby be deemed to have waived any claim to continued exercise or vesting of an Award or to damages or severance entitlement related to non-continuation of the Award beyond the period provided under the Plan or any Award agreement, except to the extent of any provision to the contrary in any written employment contract or other agreement between the Company and its Affiliates and the Participant, whether any such agreement is executed before, on or after the Date of Grant.

(f)International Participants. With respect to Participants who reside or work outside of the United States of America and who are not (and who are not expected to be) “covered employees” within the meaning of Section 162(m) of the Code, to the extent applicable, the Committee may in its sole discretion amend the terms of the Plan and create or amend Sub-Plans or amend outstanding Awards with respect to such Participants in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or its Affiliates.

(g)Designation and Change of Beneficiary. Each Participant may file with the Committee a written designation of one or more persons as the beneficiary(ies) who shall be entitled to receive the amounts payable with respect to an Award, if any, due under the Plan upon his or her death to the extent such beneficiary designation is valid under local law. A Participant may, from time to time, revoke or change his or her beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Committee. The last such designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by a Participant, the beneficiary shall be deemed to be his or her spouse or, if the Participant is unmarried at the time of death, his or her estate.

(h)Termination. Except as otherwise provided in an Award agreement, unless determined otherwise by the Committee at any point following such event: (i) neither a temporary absence from employment or service due to illness, vacation or leave of absence (including a call to active duty for military service through a Reserve or National Guard unit) nor a transfer from employment or service with one Service Recipient to employment or service with another Service Recipient (or vice-versa) shall be considered a Termination; and (ii) if a Participant undergoes a Termination of employment, but such Participant continues to provide services to the Company and its Affiliates in a non-employee capacity, such change in status shall not be considered a Termination for purposes of the Plan. Further, unless otherwise determined by the Committee, in the event that any Service Recipient ceases to be an Affiliate of the Company (by reason of sale, divestiture, spin-off, or other similar transaction), unless a Participant’s employment or service is transferred to another entity that would constitute a Service Recipient immediately following such transaction, such Participant shall be deemed to have suffered a Termination hereunder as of the date of the consummation of such transaction.

(i)No Rights as a Stockholder. Except as otherwise specifically provided in the Plan or any Award agreement, no person shall be entitled to the privileges of ownership in respect of shares of Common Stock that are subject to Awards hereunder until such shares have been issued or delivered to such person.

(j)Government and Other Regulations.

(i)The obligation of the Company to settle Awards in shares of Common Stock or other consideration shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any term or condition of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any share of Common Stock pursuant to an Award unless such share has been

properly registered for sale pursuant to the Securities Act or unless the Company has received an opinion of counsel (if the Company has requested such an opinion), satisfactory to the Company, that such share may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale under the Securities Act any share of Common Stock to be offered or sold under the Plan. The Committee shall have the authority to provide that all shares of Common Stock or other securities of the Company or any Affiliate issued under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, the applicable Award agreement, the federal securities laws, or the rules, regulations and other requirements of the SEC, any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or quoted and any other applicable federal, state, local or non-U.S. law, rule, regulation or other requirement, and, without limiting the generality of Section 9 of the Plan, the Committee may cause a legend or legends to be put on certificates representing shares of Common Stock or other securities of the Company or any Affiliate issued under the Plan to make appropriate reference to such restrictions or may cause such Common Stock or other securities of the Company or any Affiliate issued under the Plan in book-entry form to be held subject to the Company’s instructions or subject to appropriate stop-transfer orders. Notwithstanding any provision in the Plan to the contrary, the Committee reserves the right to add any additional term or provision to any Award granted under the Plan that it in its sole discretion deems necessary or advisable in order that such Award complies with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.

(ii)The Committee may cancel an Award or any portion thereof if it determines, in its sole discretion, that legal or contractual restrictions or blockage or other market considerations would make the Company’s acquisition of shares of Common Stock from the public markets, the Company’s issuance of Common Stock to the Participant, the Participant’s acquisition of Common Stock from the Company or the Participant’s sale of Common Stock to the public markets, illegal, impracticable or inadvisable.

(k)No Section 83(b) Election Without Consent of Company. No election under Section 83(b) of the Code or under a similar provision of law may be made unless expressly permitted by the terms of the applicable Award agreement or by action of the Committee in writing prior to the making of such election. If a Participant, in connection with the acquisition of shares of Common Stock under the Plan or otherwise, is expressly permitted to make such election and the Participant makes the election, the Participant shall notify the Company of such election within ten (10) days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to Section 83(b) of the Code or other applicable provision.

(l)Payments to Persons Other Than Participants. If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.

(m)Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including the granting of stock options otherwise than under this Plan, and such arrangements may be either applicable generally or only in specific cases.

(n)No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate, on the one hand, and a Participant or other person or entity, on the other hand. No provision of the Plan or any Award shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any asset in a trust or other entity to which contributions are made or otherwise to segregate any asset, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no right under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under general law.

(o)Reliance on Reports. Each member of the Committee and each member of the Board shall be fully justified in acting or failing to act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report made by the independent public accounting firm of the Company or any Affiliate or any other information furnished in connection with the Plan by any agent of the Company, the Committee or the Board, other than himself.

(p)Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefit under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company except as otherwise expressly provided in such other plan or as required by applicable law.

(q)Governing Law. The Plan shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof.

(r)Severability. If any provision of the Plan or any Award or Award agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

(s)Obligations Binding on Successors. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.

(t)Section 409A of the Code.

(i)Notwithstanding any provision of the Plan to the contrary, it is intended that the provisions of this Plan comply with Section 409A of the Code, and all provisions of this Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding any tax or penalty under Section 409A of the Code. Each Participant is solely responsible and liable for the satisfaction of any tax or penalty that may be imposed on or in respect of such Participant in connection with this Plan (including any tax or penalty under Section 409A of the Code), and neither the Company nor any Affiliate shall have any obligation to indemnify or otherwise hold such Participant (or any beneficiary) harmless from any such tax or penalty. With respect to any Award that is considered “deferred compensation” subject to Section 409A of the Code, references in the Plan to “termination of employment” (and substantially similar phrases) shall mean “separation from service” within the meaning of Section 409A of the Code. For purposes of Section 409A of the Code, each of the payments that may be made in respect of any Award granted under the Plan is designated as a separate payment.

(ii)Notwithstanding anything in the Plan to the contrary, if a Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payment in respect of any Award that is “deferred compensation” subject to Section 409A of the Code and would otherwise be payable upon the Participant’s “separation from service” (as defined in Section 409A of the Code) shall be made to such Participant prior to the date that is six months after the date of such Participant’s “separation from service” or, if earlier, the Participant’s date of death. Following any applicable six-month delay, all such delayed payments will be paid in a single lump sum on the earliest date permitted under Section 409A of the Code that is also a business day.

(iii)Unless otherwise provided by the Committee in an Award agreement or otherwise, in the event that the timing of any payment in respect of any Award (that otherwise is “deferred compensation” subject to Section 409A of the Code) would be accelerated upon the occurrence of (A) a Change in Control, no such acceleration shall be permitted unless the event giving rise to the Change in Control satisfies the definition of a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation, pursuant to Section 409A of the Code or (B) a Disability, no such acceleration shall be permitted unless the Disability also satisfies the definition of “disability” pursuant to Section 409A of the Code.

(u)Clawback/Forfeiture. Notwithstanding anything to the contrary in the Plan, an Award agreement may provide that the Committee may, in its sole discretion, cancel such Award if the Participant has engaged in or engages in any Detrimental Activity. The Committee may also provide in an Award agreement that, if

the Participant otherwise has engaged in or engages in any Detrimental Activity, the Participant will forfeit any gain realized on the vesting or exercise of such Award and must repay the gain to the Company. The Committee may also provide in an Award agreement that, if the Participant receives any amount in excess of what the Participant should have received under the terms of the Award for any reason (including by reason of a financial restatement, mistake in calculation or other administrative error), then the Participant shall be required to repay any such excess amount to the Company. Without limiting the foregoing, all Awards shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with applicable law.

(v)Expenses; Titles and Headings. The expenses of administering the Plan shall be borne by the Company and its Affiliates. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings shall control.

* * *

Adopted by Board: August 23, 2018

Approved by Shareholders: October 31, 2018

CATALENT, INC.

2018 OMNIBUS INCENTIVE PLAN (THE “PLAN”)

SUB-PLAN FOR U.K. EMPLOYEES (THE “SUB-PLAN”)

This Sub-Plan is a sub-plan of the Plan and has been created and approved in accordance with the provisions of Section 14(f) of the Plan. Terms defined in the Plan shall have the same meanings in this Sub-Plan unless otherwise defined in this Sub-Plan.

SECTION 1 Definitions. As used in this Sub-Plan and/or any Award agreement under this Sub-Plan, the following terms shall have the meanings set forth below.

(a)“Employer’s NICs” means the amount of secondary Class 1 national insurance contributions payable in respect of any Award.

(b)“FPO” means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 of the United Kingdom (as may be amended from time to time).

(c)“FSMA” means the Financial Services and Markets Act 2000 of the United Kingdom (as may be amended from time to time).

(d)“Group” has the meaning given to that term under FSMA.

(e)“U.K. Employee” means an employee or a former employee of the Company or of any Affiliate (provided that such Affiliate is a member of the Company’s Group) who is resident in the United Kingdom.

SECTION 2 Purpose.

(a)The purpose of this Sub-Plan is primarily to establish a sub-plan under the auspices of the Plan that will apply to Awards to be made to U.K. Employees. As a result:

(i)All Awards to U.K. Employees shall be made under this Sub-Plan;

(ii)No Awards shall be made under this Sub-Plan to any person other than a U.K. Employee, and this Sub-Plan shall not apply to any Awards made under the Plan to any such other person; and

(iii)Section 6 of the Plan shall be deemed amended accordingly insofar as it applies to this Sub-Plan.

(b)The provisions of the Sub-Plan vary from those applicable under the Plan so as to

(i) enable the Sub-Plan (and any Awards made or proposed to be made under the Sub-Plan, and communications concerning those Awards) to take advantage of certain exemptions available in the United Kingdom from certain prohibitions and restrictions which might otherwise apply to such grants and communications in the United Kingdom under the regulatory regime established under FSMA; and

(ii)take account of United Kingdom tax treatment of the Awards.

(c)No Award shall be granted under this Sub-Plan unless such Award relates to a type of investment set out or referred to in Article 60(1) of the FPO. The Plan shall be deemed amended accordingly insofar as it applies to this Sub-Plan.

SECTION 3 Interaction with the Plan.

(a)This Sub-Plan should be read in conjunction with the Plan and is subject to the terms and conditions of the Plan except to the extent that the terms and conditions of the Plan differ from or conflict with the terms set out in this Sub-Plan, in which event, the terms set out in this Sub-Plan shall prevail.

(b)Subject to the other provisions of this Sub-Plan, the provisions of the Plan will apply to this Sub-Plan as if references therein to the Plan were references to this Sub-Plan.

SECTION 4 Taxes.

(a)Section 14(d) of the Plan shall not apply to this Sub-Plan.

(b)All Awards under this Sub-Plan shall be subject to applicable United Kingdom taxes and national insurance contributions. As a condition to grant of any Award and the delivery, vesting and retention of Common Stock, cash or other property under any Award, the Participant shall be required to pay to the Company or any relevant Affiliate that employs the Participant, or make other arrangements satisfactory to the Company or the relevant Affiliate to provide for the payment of, any national, federal, state or local or other taxes, social security and employee’s United Kingdom national insurance contributions (“Employment Taxes”) that the Company or the relevant Affiliate is required to withhold, or in respect of which the Company or the relevant Affiliate is required to account to any tax authority including HM Revenue & Customs (“HMRC”), with respect to any income or gains arising or deemed to arise to the Participant in connection with any Award (including for the avoidance of doubt in connection with the holding or disposal of any Common Stock received pursuant to any Award). The Committee, in its discretion, may permit the satisfaction of such Employment Taxes by (A) permitting a Participant to satisfy, in whole or in part, the Employment Taxes through the delivery of shares of Common Stock (which are not subject to any pledge or other security interest) owned by the Participant having a Fair Market Value equal to such Employment Taxes or (B) having the Company withhold from the number of shares of Common Stock otherwise issuable or deliverable pursuant to the exercise or settlement of the Award a number of shares with a Fair Market Value equal to such Employment Taxes at a rate determined by the Company in its sole discretion (but in no event to exceed the maximum statutory tax rates in the U.K. (or such other rate as would not trigger a negative accounting impact)). The Company or the relevant Affiliate is authorized to withhold from (i) any Award made, (ii) any payment relating to an Award under this Sub-Plan, including from a distribution of Common Stock, and (iii) any payroll or other payment to a Participant, the amount of required Employment Taxes due or potentially payable in connection with any transaction involving an Award under this Sub-Plan to the maximum extent permitted by law and regulation. To the extent any amount is withheld by the Company in accordance with this section, such amount shall either be remitted to the relevant Affiliate on behalf of the Participant, or deemed to have been so remitted where the amount is paid to a relevant tax authority on behalf of such relevant Affiliate.

(c)The Participant may be required as a condition precedent to acquiring any shares of Common Stock or exercising any Option to enter into a joint election under Section 431(1) of the United Kingdom Income Tax (Earnings and Pensions) Act 2003 for the full disapplication of Chapter 2 of Part 7 of that Act.

(d)In accepting any relevant Award the Participant shall, if so required by the Company and to the extent lawful, agree with and undertake to the Company and any relevant Affiliate that is a “secondary contributor” in respect of Class I national insurance contributions payable in respect of the Award (or any Common Stock award in connection therewith) that the Company or relevant Affiliate may recover from the Participant the whole or part of any Employer’s NICs; and the Participant shall either (A) (if so required the Company) join with the Company or relevant Affiliate in making an election (in such terms and such form and subject to such approval by HMRC as provided in paragraph 3B of Schedule 1 to the Social Security Contributions and Benefits Act 1992) for the whole or part of any liability of the Company or relevant Affiliate for Employer’s NICs to be transferred to the Participant, or (B) enter into a joint agreement with the Company or relevant Affiliate at the time of the Award for the reimbursement by the Participant to the Company or relevant Affiliate for such Employer’s NICs.

SECTION 5 General.

(a)The Sub-Plan, and any Awards granted hereunder, shall be governed, construed and administered in accordance with the laws of the State of Delaware, without reference to its conflict of laws provisions.

(b)The terms and conditions provided in this Sub-Plan are severable and if (despite the provisions of Section 5(a) of this Sub-Plan) any one or more provisions (or the effect of any such provision) are determined to be illegal or otherwise unenforceable under any applicable law, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

(c)Except as expressly modified by this Sub-Plan, the terms of the Plan shall remain unmodified and in full force and effect.

* * *

Adopted by Compensation & Leadership Committee: January 28, 2019

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, John R. Chiminski, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended December 31, 2018 of Catalent, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 5, 2019

/s/ JOHN R. CHIMINSKI

John R. Chiminski

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Wetteny Joseph, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended December 31, 2018 of Catalent, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 5, 2019

/s/ WETTENY JOSEPH

Wetteny Joseph

Senior Vice President and

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of 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

In connection with the Quarterly Report of Catalent, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John R. Chiminski, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 5, 2019

/s/ JOHN R. CHIMINSKI

John R. Chiminski

President and

Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of 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

In connection with the Quarterly Report of Catalent, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Wetteny Joseph, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 5, 2019

/s/ WETTENY JOSEPH

Wetteny Joseph

Senior Vice President and

Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2018	Feb. 01, 2019
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Registrant Name	Catalent, Inc.
Entity Central Index Key	0001596783
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding (shares)		145,632,701

XML

Consolidated Statements of Operations - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Net revenue		$ 623.0	$ 606.3	$ 1,174.8	$ 1,150.2
Cost of sales		421.6	418.9	824.9	822.7
Gross margin		201.4	187.4	349.9	327.5
Selling, general, and administrative expenses		123.2	114.8	238.7	222.3
Impairment charges and (gain)/loss on sale of assets		(0.1)	4.2	2.8	4.2
Restructuring and other		0.1	0.1	9.8	1.3
Operating earnings		78.2	68.3	98.6	99.7
Interest expense, net		25.5	27.2	53.6	51.5
Other expense, net	[1]	1.4	13.1	7.1	18.3
Earnings from continuing operations, before income taxes		51.3	28.0	37.9	29.9
Income tax expense		2.3	49.9	3.3	48.0
Net earnings/(loss)		$ 49.0	$ (21.9)	$ 34.6	$ (18.1)
Earnings Per Share, Basic		$ 0.34	$ (0.16)	$ 0.24	$ (0.14)
Earnings Per Share, Diluted		$ 0.33	$ (0.16)	$ 0.24	$ (0.14)

[1] Refer to Note 8, Other Expense for details of financing changes and foreign currency translation adjustments recorded within Other (expense), net.

XML

Consolidated Statements of Comprehensive Income / (Loss) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Other comprehensive income/(loss), net of tax
Net earnings/(loss)	$ 49.0	$ (21.9)	$ 34.6	$ (18.1)
Foreign currency translation adjustments	(17.6)	(13.4)	(26.4)	24.7
Pension and other post-retirement adjustments	0.6	0.5	1.0	0.9
Available for sale investments	0.0	(3.0)	0.0	(6.4)
Other comprehensive income/(loss), net of tax	(17.0)	(15.9)	(25.4)	19.2
Comprehensive income/(loss)	$ 32.0	$ (37.8)	$ 9.2	$ 1.1

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2018	Jun. 30, 2018
Current assets:
Cash and cash equivalents	$ 207.9	$ 410.2
Trade receivables, net	551.3	555.8
Inventories	235.2	209.1
Prepaid expenses and other	77.1	65.2
Total current assets	1,071.5	1,240.3
Property, plant, and equipment, net	1,285.8	1,270.6
Other assets:
Goodwill	1,421.4	1,397.2
Other intangibles, net	581.0	544.9
Deferred income taxes	31.7	32.9
Other Assets, Noncurrent	50.2	45.2
Total assets	4,441.6	4,531.1
Liabilities and shareholder's equity
Current portion of long-term obligations and other short-term borrowings	69.9	71.9
Accounts payable	184.4	192.1
Other accrued liabilities	260.0	312.9
Total current liabilities	514.3	576.9
Long-term obligations, less current portion	2,130.0	2,649.4
Pension liability	129.6	131.6
Deferred income taxes	50.1	32.5
Other liabilities	54.6	54.0
Common Stock, Value, Outstanding	1.5	1.3
Preferred Stock, Value, Outstanding	0.0	0.0
Additional paid in capital	2,735.1	2,283.3
Accumulated deficit	(822.4)	(872.1)
Accumulated other comprehensive income/(loss)	(351.2)	(325.8)
Total shareholders' equity	1,563.0	1,086.7
Total liabilities and shareholders' equity	$ 4,441.6	$ 4,531.1

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Jun. 30, 2018
Statement of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	1,000,000,000	1,000,000,000
Common stock, shares issued (shares)	145,221,009	133,423,628
Common Stock, Shares, Outstanding	145,221,009	133,423,628
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	100,000,000	100,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0

XML

Consolidated Statement of Changes in Shareholder's Equity - 6 months ended Dec. 31, 2018 - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income/(Loss)
Beginning Balance at Jun. 30, 2018	$ 1,086.7	$ 1.3	$ 2,283.3	$ (872.1)	$ (325.8)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting for ASC 606, net of tax	15.1			15.1
Equity offering, sale of common stock	445.5	0.1	445.4
Stock Issued During Period, Value, Stock Options Exercised	0.0	0.1	(0.1)
Stock-based compensation	17.5		17.5
Cash paid, in lieu of equity, for tax withholding	(11.0)		(11.0)
Net earnings/(loss)	34.6			34.6
Other comprehensive income/(loss), net of tax	(25.4)				(25.4)
Ending Balance at Dec. 31, 2018	$ 1,563.0	$ 1.5	$ 2,735.1	$ (822.4)	$ (351.2)

XML

Consolidated Statement of Changes in Shareholder's Equity Consolidated Statement of Changes in Shareholders' Equity (Parenthetical)	6 Months Ended
	Dec. 31, 2018 shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance - Common Stock Outstanding (shares)	133,423,628
Ending Balance - Common Stock Outstanding (shares)	145,221,009
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance - Common Stock Outstanding (shares)	133,423,600
Equity offering, sale of common stock	11,431,400
Share issuances related to stock-based compensation	767,900
Ending Balance - Common Stock Outstanding (shares)	145,622,900

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings/(loss)	$ 34.6	$ (18.1)
Adjustments to reconcile earnings/(loss) from operations to net cash from operations:
Depreciation and amortization	107.5	85.8
Non-cash foreign currency transaction (gain)/loss, net	3.2	7.1
Amortization and write-off of debt financing costs	6.1	2.5
Asset impairments charges and (gain)/loss on sale of assets	2.8	4.2
Debt Related Commitment Fees and Debt Issuance Costs	0.0	11.8
Stock-based compensation	17.5	15.5
Provision/(benefit) for deferred income taxes	(0.1)	35.6
Provision for bad debts and inventory	5.1	3.5
Change in operating assets and liabilities:
Decrease/(increase) in trade receivables	3.1	104.6
Decrease/(increase) in inventories	(26.0)	0.0
Increase/(decrease) in accounts payable	(11.3)	(0.4)
Other assets/accrued liabilities, net — current and non-current	(58.0)	(76.1)
Net cash provided by operating activities	84.5	176.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment and other productive assets	(81.3)	(82.9)
Proceeds from Sale of Property, Plant, and Equipment	0.0	1.8
Proceeds from Divestiture of Interest in Consolidated Subsidiaries	0.0	3.4
Payment for acquisitions, net of cash acquired	(127.5)	(748.0)
Net cash (used in) investing activities	(208.8)	(825.7)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in other borrowings	(4.9)	(0.6)
Proceeds from Issuance of Debt	0.0	442.6
Payments related to long-term obligations	(503.4)	(9.4)
Payments of Debt Issuance Costs	0.0	15.6
Proceeds from sale of common stock, net	445.5	277.8
Cash paid, in lieu of equity, for tax withholding	(11.0)	(12.4)
Net cash (used in)/provided by financing activities	(73.8)	682.4
Effect of foreign currency exchange on cash	(4.2)	8.5
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS	(202.3)	41.2
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	410.2	288.3
CASH AND EQUIVALENTS AT END OF PERIOD	207.9	329.5
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest paid	52.2	41.5
Income taxes paid, net	$ 24.4	$ 8.0

XML

Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Catalent, Inc. ("Catalent" or the "Company") directly and wholly owns PTS Intermediate Holdings LLC ("Intermediate Holdings"). Intermediate Holdings directly and wholly owns Catalent Pharma Solutions, Inc. ("Operating Company"). The financial results of Catalent are comprised of the financial results of Operating Company and its subsidiaries on a consolidated basis.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the year ending June 30, 2019. The consolidated balance sheet at June 30, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information on the Company's accounting policies and footnotes, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018 filed with the Securities and Exchange Commission (the "SEC").

In fiscal 2018, the Company engaged in a business reorganization to better align its internal business unit structure with its "Follow the Molecule" strategy and the increased focus on its biologics-related offerings. Under the revised structure, the Company created two new operating segments from the former Drug Delivery Solutions segment:

•Biologics and Specialty Drug Delivery, which encompasses biologic cell-line development and manufacturing, development and manufacturing services for blow-fill-seal unit doses, prefilled syringes, vials, and cartridges; analytical development and testing services for large molecules; and development and manufacturing for inhaled products for delivery via metered dose inhalers, dry powder inhalers, and intra-nasal sprays; and

•Oral Drug Delivery, which encompasses comprehensive formulation development, manufacturing, and analytical development capabilities using advanced processing technologies such as bioavailability enhancement, controlled release, particle size engineering, and taste-masking for solid oral-dose forms.

Each of the two new segments reports through a separate management team and ultimately reports to the Company's Chief Executive Officer who is designated as the Chief Operating Decision Maker for segment reporting purposes. The Company's operating segments are the same as its reporting segments. All prior-period comparative segment information has been restated to reflect the current reportable segments in accordance with Accounting Standards Codification ("ASC") 280, Segment Reporting.

Foreign Currency Translation

The financial statements of the Company’s operations outside the U.S. are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensive income/(loss) utilizing period-end exchange rates. In June 2018, as a result of the three-year cumulative consumer price index exceeding 100%, Argentina was classified as having a highly inflationary economy. Beginning on July 1, 2018, the Company accounts for its Argentine operations as highly inflationary.

Research and Development Costs

The Company expenses research and development costs as incurred. Costs incurred in connection with the development of new offerings and manufacturing process improvements are recorded within selling, general, and administrative expenses. Such research and development costs included in selling, general, and administrative expenses amounted to $1.0 million and $1.5 million for the three and six months ended December 31, 2018, respectively, and $1.5 million and $3.3 million for the three and six months ended December 31, 2017, respectively. Costs incurred in connection with research and

development services the Company provides to customers and services performed in support of the commercial manufacturing process for customers are recorded within cost of sales. Such research and development costs included in cost of sales amounted to $14.3 million and $25.6 million for the three and six months ended December 31, 2018, respectively, and $12.4 million and $22.4 million for the three and six months ended December 31, 2017, respectively.

Recent Financial Accounting Standards

Recently Adopted Accounting Standards

In May 2014, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which was codified as ASC 606 and superseded nearly all existing revenue-recognition guidance. The guidance’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, the guidance creates a five-step model that requires a company to exercise judgment when considering the terms of the contracts and all relevant facts and circumstances. The five steps require a company to identify customer contracts, identify the separate performance obligations, determine the transaction price, allocate the transaction price to the separate performance obligations, and recognize revenue when or as each performance obligation is satisfied. The guidance allows for either full retrospective adoption, where the standard is applied to all periods presented, or modified retrospective adoption, where the standard is applied only to the most current period presented in the financial statements. The Company adopted the guidance as of July 1, 2018 using the modified retrospective approach applied to contracts that were not completed as of that date. The Company recorded a cumulative effect adjustment to the fiscal 2019 opening balance of its accumulated deficit upon adoption of this guidance, which decreased beginning accumulated deficit by $15.1 million.

The following table provides the impact of adopting the guidance on the Company’s financial statements:

	Three months Ended December 31, 2018						Six months Ended December 31, 2018
(Dollars in millions)	As Reported		Effects of Change		Amount without Adoption of ASC 606		As Reported		Effects of Change		Amount without Adoption of ASC 606
Net revenue	$	623.0	$	5.0	$	628.0	$	1,174.8	$	18.6	$	1,193.4
Cost of sales	421.6		20.2		441.8		824.9		31.6		856.5
Gross margin	201.4		(15.2)		186.2		349.9		(13.0)		336.9
Earnings from continuing operations before income taxes	51.3		(15.2)		36.1		37.9		(13.0)		24.9
Income tax expense	2.3		(4.0)		(1.7)		3.3		(3.8)		(0.5)
Net earnings/(loss)	$	49.0	$	(11.2)	$	37.8	$	34.6	$	(9.2)	$	25.4

The impact of ASC 606 on the Company's consolidated balance sheet is immaterial.

The adoption of ASC 606 resulted in three primary changes as compared to the previous revenue recognition guidance: (a) revenue from commercial product supply is recognized following successful completion of the required quality assurance process where it was previously recognized upon shipment of the product to the customer; (b) earlier recognition of revenue from certain commercial supply contract cancellations is recognized as variable consideration as the Company’s performance obligations are satisfied rather than only upon agreement of the amount with the customer; and (c) revenue from sourcing comparator drug product for clinical supply services is recorded net of the cost of procuring it rather than at full value with a corresponding expense. Refer to Note 2 for the Company's revenue recognition policy.

In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires entities to report the service cost component of the net periodic benefit cost in the same income statement line as other compensation costs arising from services rendered by employees during the reporting period. The other components of the net benefit costs will be presented in the income statement separately from the service cost and below the income from operations subtotal. The Company adopted this guidance as of July 1, 2018, on a retrospective basis, which had an effect on the consolidated statement of operations for the three and six months ended December 31, 2017. The following table summarizes the Company's As Previously Reported and As Adjusted changes to the consolidated statement of operations for the three and six months ended December 31, 2017:

	Three Months Ended December 31, 2017				Six Months Ended December 31, 2017
(Dollars in millions)	As Previously Reported		As Adjusted		As Previously Reported		As Adjusted
Selling, general, and administrative expenses	$	114.3	$	114.8	$	221.3	$	222.3
Operating earnings	68.8		68.3		100.7		99.7
Other expense, net	13.6		13.1		19.3		18.3

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which reduces the complexity of and simplifies the application of hedge accounting by issuers. The ASU is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted. The Company early adopted this guidance as of July 1, 2018 on a prospective basis. The adoption of this guidance was not material to the Company's consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when an entity will apply modification accounting for changes to stock-based compensation arrangements. Modification accounting applies if the value, vesting conditions, or classification of an award changes. The Company adopted this guidance prospectively at the beginning of fiscal 2019. The adoption of this guidance was not material to the Company's consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides additional guidance on the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The Company adopted this guidance prospectively at the beginning of fiscal 2019. The adoption of this guidance was not material to the Company's consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which changes the accounting for equity investments and financial liabilities under the fair value option, and presentation and disclosure requirements for financial instruments. The ASU requires equity investments with readily determinable fair values to be measured at fair value and to recognize change in fair value in net earnings. The ASU is not applicable to equity investments accounted for under the equity method of accounting or those that result in consolidation of the investee. The Company adopted this guidance at the beginning of fiscal 2019. The adoption of this guidance was not material to the Company's consolidated financial statements.

New Accounting Standards Not Adopted as of December 31, 2018

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns 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. The ASU will be effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and allows for either a retrospective or prospective application. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits an entity to reclassify to retained earnings the stranded tax effects caused by the Tax Cuts and Jobs Act of 2017 on items within accumulated other comprehensive income/(loss). The ASU will be effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduces a new accounting model Credit Expected Credit Losses model ("CECL"). CECL requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models in current GAAP, which generally require that a loss be incurred before it is recognized. The new standard will also apply to receivables arising from revenue transactions such as contract assets and accounts receivables. The ASU will be effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which will supersede ASC 840 Leases. The new guidance requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases and will be effective for public reporting entities in annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The guidance is required to be adopted using the modified retrospective approach. The Company anticipates that most of its operating leases will result in the recognition of additional assets and corresponding liabilities on its consolidated balance sheets. The Company continues to evaluate the impact of adopting this guidance on its consolidated financial statements.

XML

Revenue Recognition

6 Months Ended

Dec. 31, 2018

Revenue Recognition [Abstract]

Revenue from Contract with Customer [Policy Text Block]

REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606. The Company generally earns its revenue by supplying goods or providing services under contracts with its customers in three primary revenue streams: manufacturing and commercial product supply, development services, and clinical supply services. The Company measures the revenue from customers based on the consideration specified in its contracts, excluding any sales incentive or amount collected on behalf of a third party.

The company generally expenses sales commissions as incurred because either the amortization period is one year or less, or the balance with an amortization period greater than one year is not material.

The following tables allocate revenue for the three and six months ended December 31, 2018 by type of activity and reporting segment (in millions):

Three months ended December 31, 2018	Softgel Technologies		Biologics & Specialty Drug Delivery		Oral Drug Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	197.0	$	88.6	$	100.5	$	—	$	386.1
Development services	16.7		95.7		53.5		—		165.9
Clinical supply services	—		—		—		80.8		80.8
Total	$	213.7	$	184.3	$	154.0	$	80.8	$	632.8
			Inter-segment revenue elimination						(9.8)
					Combined net revenue				$	623.0

Six months ended December 31, 2018	Softgel Technologies		Biologics & Specialty Drug Delivery		Oral Drug Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	381.4	$	162.4	$	182.2	$	—	$	726.0
Development services	31.5		176.5		101.9		—		309.9
Clinical supply services	—		—		—		158.5		158.5
Total	$	412.9	$	338.9	$	284.1	$	158.5	$	1,194.4
			Inter-segment revenue elimination						(19.6)
					Combined net revenue				$	1,174.8

The following table allocates revenue by the location where the goods were made or the service performed:

(Dollars in millions)	Three months ended December 31, 2018		Six months ended December 31, 2018
United States	$	315.1	$	579.5
Europe	214.8		411.2
International Other	119.7		227.3
Elimination of revenue attributable to multiple locations	(26.6)		(43.2)
Total	$	623.0	$	1,174.8

Manufacturing & Commercial Product Supply Revenue

Manufacturing and commercial product supply revenue consists of revenue earned by manufacturing products supplied to customers under long-term commercial supply arrangements. The Company recognizes revenue for manufacturing and supplying commercial products as control is transferred to the customer, which is measured based on product that has successfully completed contractually required quality assurance process. Revenue is measured based on the amount of consideration the Company expects to receive in exchange for providing these products and services. The contractual performance obligation generally includes manufacture and the completion of product quality release testing procedures specified in the contract. These activities are interdependent and thus are considered to be a single combined performance obligation. Payment is typically due 30 to 90 days after the goods are shipped to the customer based on the payment terms set forth in the applicable customer agreement.

Development Services Revenue

Development services contracts generally take the form of short-term, fee-for-service arrangements. Performance obligations vary, but frequently include (1) the delivery of a formulation report, analytical and stability testing report, or other report on product- or molecule-based studies or (2) the manufacture of products under development or otherwise not intended for commercial sale. The transaction prices for these arrangements include fixed consideration of the amounts stated in the contracts for each promised good or service, which are generally considered to be separate performance obligations. The Company recognizes revenue when or as control of each individual performance obligation is transferred to the customer and exercises judgment in determining the timing of revenue recognition by analyzing the point in time or period over which the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of the arrangement. Control generally transfers to the customer when services have been completed or the customer has accepted the product or service deliverable and the Company has right to payment based on the terms of the agreement.

In certain arrangements, the Company recognizes revenue over time as the Company satisfies performance obligations. Satisfaction of the performance obligations is measured using an output method measure of progress based on effort expended by the Company. In other arrangements, revenue is recognized when the customer has taken legal title to or accepted the product or service deliverable and the Company has a right to payment based on the terms of the arrangement.

Development services contracts may also include certain success-based milestone payments for completed performance obligations, such as regulatory approval and product validation prior to the commencement of commercial supply. Revenue associated with developmental milestones is considered variable consideration and is typically recognized when the success-based milestone is achieved, and no significant revenue reversal is anticipated.

The Company allocates consideration to each performance obligation based on the relative selling price. Payment is typically due 30 to 90 days following the completion of services provided to the customer based on the payment terms set forth in the applicable customer agreement. Certain development service arrangements require a portion of the contract consideration to be received in advance at the commencement of the contract and is initially recorded as a contract liability.

Clinical Supply Services Revenue

Clinical supply services contracts generally take the form of fee-for-service arrangements. Performance obligations for clinical supply services revenue typically include a combination of the following services: the manufacturing, packaging, storage, distribution, destruction, and inventory management of customer clinical trials materials. Performance obligations can also include the sourcing of comparator drug products on behalf of customers to be used in clinical trials to compare performance with the drug under clinical investigation. In certain arrangements, the Company recognizes revenue over time when the Company satisfies performance obligations. Satisfaction of the performance obligations is measured using an output method measure of progress based on effort expended by the Company. In other arrangements, revenue is recognized when the customer has taken legal title or accepted the product or service deliverable and the Company has right to payment based on the terms of the arrangement. Payment is typically due 30 to 90 days following the completion of services provided to the customer based on the payment terms set forth in the applicable customer agreement.

The Company records revenue for comparator sourcing arrangements on a net basis because it is acting as an agent that does not control the product or service before it is transferred to the customer. Payment for comparator sourcing activity is typically received in advance at the commencement of the contract and is initially recorded as a contract liability.

Contract Liabilities

Contract liabilities relate to cash consideration that the Company receives in advance of satisfying the related performance obligations. Changes in the contractual liabilities balance during the six months ended December 31, 2018 are as follows:

(Dollars in millions)
Contract liability
Balance at June 30, 2018	$	100.9
Balance at December 31, 2018	$	112.4
Revenue recognized in the period from:
Amounts included in contracts liability at the beginning of the period	$	48.9

Remaining Performance Obligations

For the Softgel Technologies, Biologics and Specialty Drug Delivery, and Oral Drug Delivery segments, remaining performance obligations represent firm orders for manufacturing and commercial product supply, including minimum volume commitments and future development services, for which there are incomplete performance obligations. For the Clinical Supply Services segment, remaining performance obligations represent estimated future service revenues from work not yet completed under signed contracts. The remaining performance obligations as of December 31, 2018 were $1,274.5 million, including approximately $319.2 million related to our Clinical Supply Services segment. We expect to recognize approximately 58% of the remaining performance obligations in existence as of December 31, 2018 over the next six months, with the remaining recognized thereafter.

XML

Business Combinations

6 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

BUSINESS COMBINATIONS

Juniper Pharmaceuticals Acquisition

On August 14, 2018, Operating Company acquired Juniper Pharmaceuticals, Inc., a Delaware corporation ("Juniper") through a tender offer and back-end merger, pursuant to the terms of an agreement and plan of merger (the "Juniper Merger Agreement"), and Juniper became a wholly owned subsidiary of Operating Company. Under the terms of the Juniper Merger Agreement, all outstanding options to purchase Juniper shares were canceled in exchange for cash equal to the product of the number of Juniper shares subject to the option and the difference between the price per share paid in the tender offer and the exercise price. Similarly, all outstanding restricted stock units in respect of Juniper shares were canceled in exchange for cash equal to the product of the number of units and the price per share paid in the tender offer. Juniper has expertise in formulation development and supply and augments the Company's pre-existing portfolio of solid-state screening, pre-formulation, formulation, analytical, and bioavailability enhancement solutions, including the development of drug products produced using spray-dried dispersion, with integrated development, analytical, and clinical manufacturing. Juniper also owns the ex-U.S. rights to and supplies for sale to its licensee of such rights CRINONE^®, a reproductive therapy. The primary operations of the acquired business are located in owned facilities aggregating 38,000 square feet in Nottingham, U.K. and is now included in the Oral Drug Delivery segment. Results of this segment include the results of Juniper for the period since the acquisition.

The aggregate purchase consideration, net of cash acquired, was $127.5 million, which was funded by cash on hand. As a result of the preliminary fair value allocations, the Company recognized intangible assets of $69.0 million and $10.0 million for product relationships and customer relationships, respectively. The remainder of the preliminary fair value was allocated to tangible assets acquired and goodwill. The fair value allocation is expected to be completed upon finalization of an independent appraisal over the next several months, but no later than one year from the acquisition date.

XML

Goodwill

6 Months Ended

Dec. 31, 2018

Goodwill Disclosure [Abstract]

Goodwill

GOODWILL

The following table summarizes the changes between June 30, 2018 and December 31, 2018 in the carrying amount of goodwill in total and by reporting segment:

(Dollars in millions)	Softgel Technologies		Biologics and Specialty Drug Delivery		Oral Drug Delivery		Clinical Supply Services		Total
Balance at June 30, 2018	$	415.2	$	505.7	$	319.9	$	156.4	$	1,397.2
Additions	—		—		42.9		—		42.9
Foreign currency translation adjustments	(7.1)		(0.9)		(5.2)		(5.5)		(18.7)
Balance at December 31, 2018	$	408.1	$	504.8	$	357.6	$	150.9	$	1,421.4

The increase in goodwill in the Oral Drug Delivery reporting segment is a result of the Juniper acquisition. The Company did not record an impairment charge in the current period.

XML

Definite Lived Long-Lived Assets

6 Months Ended

Dec. 31, 2018

Intangible Assets Disclosure [Abstract]

Definite Lived Long-Lived Assets

DEFINITE-LIVED LONG-LIVED ASSETS

The Company’s definite-lived long-lived assets include property, plant, and equipment as well as intangible assets with definite lives. Refer to Note 16, Supplemental Balance Sheet Information for details related to property, plant, and equipment.

The details of other intangibles, net as of December 31, 2018 and June 30, 2018 are as follows:

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
December 31, 2018
Amortized intangibles:
Core technology	18 years	$	168.0	$	(88.7)	$	79.3
Customer relationships	14 years	589.9		(158.4)		431.5
Product relationships	11 years	275.3		(205.1)		70.2
Total intangible assets		$	1,033.2	$	(452.2)	$	581.0

The increases in customer relationships and product relationships as of December 31, 2018 are associated with the acquisition of Juniper in August 2018.

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
June 30, 2018
Amortized intangibles:
Core technology	18 years	$	170.8	$	(85.3)	$	85.5
Customer relationships	14 years	587.0		(140.9)		446.1
Product relationships	12 years	210.5		(197.2)		13.3
Total intangible assets		$	968.3	$	(423.4)	$	544.9

Amortization expense was $19.5 million and $37.7 million for the three and six months ended December 31, 2018, respectively, and $16.1 million and $27.5 million for the three and six months ended December 31, 2017, respectively. Future amortization expense for the next five fiscal years is estimated to be:

(Dollars in millions)	Remainder  Fiscal 2019		2020		2021		2022		2023		2024
Amortization expense	$	33.8	$	58.4	$	58.4	$	58.4	$	58.4	$	58.3

XML

Long-Term Obligations and Other Short-Term Borrowings

6 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Long-Term Obligations and Other Short-Term Borrowings

LONG-TERM OBLIGATIONS AND SHORT-TERM BORROWINGS

Long-term obligations and short-term borrowings consist of the following at December 31, 2018 and June 30, 2018:

(Dollars in millions)	Maturity as of December 31, 2018	December 31, 2018		June 30, 2018
Senior Secured Credit Facilities
Term loan facility U.S. dollar-denominated	May 2024	$	775.8	$	1,228.4
Term loan facility euro-denominated	May 2024	349.0		358.9
Euro-denominated 4.75% Senior Notes due 2024	December 2024	428.7		438.4
U.S. dollar-denominated 4.875% Senior Notes due 2026	January 2026	444.2		443.8
Deferred purchase consideration	October 2021	141.7		188.9
$200 million revolving credit facility	May 2022	—		—
Capital lease obligations	2020 to 2032	58.6		60.8
Other obligations	2018 to 2019	1.9		2.1
Total		2,199.9		2,721.3
Less: Current portion of long-term obligations and other short-term borrowings		69.9		71.9
Long-term obligations, less current portion		$	2,130.0	$	2,649.4

Senior Secured Credit Facilities and Third Amendment

On October 18, 2017, Operating Company completed Amendment No. 3 (the "Third Amendment") to its Amended and Restated Credit Agreement, dated as of May 20, 2014 (as subsequently amended, the "Credit Agreement"), governing the senior secured credit facilities that provide U.S. dollar, denominated term loans, euro-denominated term loans, and a revolving credit facility. The Third Amendment lowered the interest rate on U.S. dollar-denominated and euro-denominated term loans and the revolving credit facility and extended the maturity dates on the senior secured credit facilities by three years. From the Third Amendment, the applicable rate for U.S. dollar-denominated term loans is LIBOR (the London Interbank Offered Rate, subject to a floor of 1.00%) plus 2.25%, and the applicable rate for euro-denominated term loans is Euribor (the Euro Interbank Offered Rate published by the European Money Markets Institute, subject to a floor of 1.00%) plus 1.75%. The applicable rate for the revolving loans was initially set at LIBOR plus 2.25%, and such rate can additionally be reduced to LIBOR plus 2.00% in future periods based on a measure of Operating Company's total leverage ratio. The term loans and revolving loans will now mature in May 2024 and May 2022, respectively.

On July 27, 2018, the Company completed an underwritten public equity offering (the "2018 Equity Offering") and used the net proceeds coupled with cash on hand to repay $450.0 million of the outstanding borrowings under its U.S. dollar-denominated term loans on July 31, 2018.

Euro-denominated 4.75% Senior Notes due 2024

On December 9, 2016, Operating Company completed a private offering of €380.0 million aggregate principal amount of 4.75% Senior Notes due 2024 (the "Euro Notes"). The Euro Notes are fully and unconditionally guaranteed, jointly and severally, by all of the wholly owned U.S. subsidiaries of Operating Company that guarantee its senior secured credit facilities. The Euro Notes were offered in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and outside the United States only to non-U.S. investors pursuant to Regulation S under the Securities Act. The Euro Notes will mature on December 15, 2024, bear interest at the rate of 4.75% per annum and are payable semi-annually in arrears on June 15 and December 15 of each year.

U.S. Dollar-denominated 4.875% Senior Notes due 2026

On October 18, 2017, Operating Company completed a private offering (the "Debt Offering") of $450.0 million aggregate principal amount of 4.875% Senior Notes due 2026 (the "USD Notes"). The USD Notes are fully and unconditionally guaranteed, jointly and severally, by all of the wholly owned U.S. subsidiaries of Operating Company that guarantee its senior secured credit facilities. The USD Notes were offered in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States only to non-U.S. investors pursuant to Regulation S under the Securities Act. The USD Notes will mature on January 15, 2026, bear interest at the rate of 4.875% per annum, and are payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The net proceeds of the Debt Offering, after payment of the initial purchasers' discount and related fees and expenses, were used to fund a portion of the consideration for the Catalent Indiana acquisition due at its closing.

Deferred Purchase Consideration

In connection with the acquisition of Catalent Indiana in October 2017, $200.0 million of the $950.0 million aggregate nominal purchase price is payable in $50 million installments, on each of the first four anniversaries of the closing date. The Company paid the first of these four payments in October 2018. The deferred purchase consideration was initially recorded at fair value and included a component of imputed interest.

Bridge Loan Facility

On September 18, 2017, contemporaneous with the Company entering into the agreement to acquire Catalent Indiana, Operating Company entered into a debt commitment letter with Morgan Stanley Senior Funding, Inc., JP Morgan Chase Bank, N.A., Royal Bank of Canada, RBC Capital Markets, Bank of America, N.A., and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as commitment parties. Pursuant to the debt commitment letter and subject to its terms and conditions, the commitment parties agreed to provide a senior unsecured bridge loan facility (the "Bridge Facility") of up to $700.0 million in the aggregate for the purpose of providing any back-up financing necessary to fund a portion of the consideration to be paid in the acquisition and related fees, costs, and expenses (the "Bridge Loan Commitment"). In connection with entering into the Bridge Facility, Operating Company incurred $6.1 million of associated fees. Operating Company did not draw on it to fund the acquisition and the Company expensed the $6.1 million in the second quarter of fiscal 2018 as part of other expense, net and the facility was closed.

Debt Covenants

Senior Secured Credit Facilities

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, Operating Company’s (and Operating Company’s restricted subsidiaries’) ability to incur additional indebtedness or issue certain preferred shares; create liens on assets; engage in mergers and consolidations; sell assets; pay dividends and distributions or repurchase capital stock; repay subordinated indebtedness; engage in certain transactions with affiliates; make investments, loans, or advances; make certain acquisitions; enter into sale and leaseback transactions; amend material agreements governing Operating Company’s subordinated indebtedness; and change Operating Company’s lines of business.

The Credit Agreement also contains change-of-control provisions and certain customary affirmative covenants and events of default. The revolving credit facility requires compliance with a net leverage covenant when there is a 30% or more draw outstanding at a period end. As of December 31, 2018, Operating Company was in compliance with all material covenants under the Credit Agreement.

Subject to certain exceptions, the Credit Agreement permits Operating Company and its restricted subsidiaries to incur certain additional indebtedness, including secured indebtedness. None of Operating Company’s non-U.S. subsidiaries or Puerto Rico subsidiaries is a guarantor of the loans.

Under the Credit Agreement, Operating Company’s ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and paying certain dividends is tied to ratios based on Adjusted EBITDA (which is defined as “Consolidated EBITDA” in the Credit Agreement). Adjusted EBITDA is based on the definitions in the Credit Agreement, is not defined under GAAP, and is subject to important limitations.

The Euro Notes and the USD Notes

The Indentures governing the Euro Notes and the USD Notes (the "Indentures") contain certain covenants that, among other things, limit the ability of Operating Company and its restricted subsidiaries to incur or guarantee more debt or issue certain preferred shares; pay dividends on, repurchase, or make distributions in respect of their capital stock or make other

restricted payments; make certain investments; sell certain assets; create liens; consolidate, merge, sell; or otherwise dispose of all or substantially all of their assets; enter into certain transactions with their affiliates, and designate their subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of exceptions, limitations, and qualifications as set forth in the Indentures. The Indentures also contain customary events of default including, but not limited to, nonpayment, breach of covenants, and payment or acceleration defaults in certain other indebtedness of Operating Company or certain of its subsidiaries. Upon an event of default, either the holders of at least 30% in principal amount of each of the then-outstanding Euro Notes or the then-outstanding USD Notes, or either of the Trustees under the Indentures, may declare the applicable notes immediately due and payable; or in certain circumstances, the applicable notes will become automatically immediately due and payable. As of December 31, 2018, Operating Company was in compliance with all material covenants under the Indentures.

Fair Value of Debt Instruments

The estimated fair value of the senior secured credit facility, a Level 2 fair-value estimate, is based on the quoted market prices for the same or similar issues or on the current rates offered for debt of the same remaining maturities and considers collateral, if any. The estimated fair value of the Euro and USD Notes, a Level 1 fair-value estimate, is based on the quoted market prices of the instruments. The carrying amounts and the estimated fair values of financial instruments as of December 31, 2018 and June 30, 2018 are as follows:

		December 31, 2018				June 30, 2018
(Dollars in millions)	Fair Value Measurement	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Euro-denominated 4.75% Senior Notes	Level 1	$	428.7	$	428.7	$	438.4	$	457.6
U.S. Dollar-denominated 4.875% Senior Notes	Level 1	444.2		419.8		443.8		428.3
Senior Secured Credit Facilities & Other	Level 2	1,327.0		1,246.0		1,839.1		1,768.0
Total		$	2,199.9	$	2,094.5	$	2,721.3	$	2,653.9

XML

Earnings Per Share

6 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three and six months ended December 31, 2018 and 2017, respectively, are as follows (in millions, except share and per share data):

	Three Months Ended   December 31,				Six Months Ended   December 31,
	2018		2017		2018		2017
Net earnings/(loss)	$	49.0	$	(21.9)	$	34.6	$	(18.1)
Weighted average shares outstanding	145,058,230		132,983,262		143,285,870		129,327,188
Dilutive securities issuable-stock plans	1,602,109		—		1,775,739		—
Total weighted average diluted shares outstanding	146,660,339		132,983,262		145,061,609		129,327,188
Earnings/(loss) per share:
Basic	$	0.34	$	(0.16)	$	0.24	$	(0.14)
Diluted	$	0.33	$	(0.16)	$	0.24	$	(0.14)

 The computation of diluted earnings per share for the three and six months ended December 31, 2018 excludes the effect of the potential common shares issuable under employee-held stock options and restricted stock units of approximately 1.1 million and 1.0 million shares, respectively, because they are anti-dilutive. The computation of diluted earnings per share for the three and six months ended December 31, 2017 excludes the maximum effect of the potential common shares issuable under employee-held stock options and restricted stock units of approximately 2.6 million shares, and excludes restricted share awards of 2.1 million shares, because the Company had a net loss for the period and the effect would therefore be anti-dilutive.

XML

Other Income and Expense Other Income / Expense

6 Months Ended

Dec. 31, 2018

Other Income and Expenses [Abstract]

Other Income and Other Expense Disclosure [Text Block]

OTHER EXPENSE, NET

The components of other expense, net for the three and six months ended December 31, 2018 and 2017 are as follows:

	Three Months Ended   December 31,				Six Months Ended  December 31,
(Dollars in millions)	2018		2017		2018		2017
Other expense, net
Debt refinancing costs (1)	$	—	$	11.8	$	4.2	$	11.8
Foreign currency (gains) and losses (2)	0.7		1.3		2.4		6.9
Other	0.7		—		0.5		(0.4)
Total other expense, net	$	1.4	$	13.1	$	7.1	$	18.3

(1) The expense in the six months ended December 31, 2018 includes a write-off of $4.2 million of previously capitalized financing charges related to the Company's U.S. dollar term loan under its senior secured credit facility. The prior-year debt refinancing costs include financing charges related to the offering of the USD Notes and the Third Amendment and also include a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018 on the Bridge Facility. 

(2) Foreign currency remeasurement (gains) and losses include both cash and non-cash transactions.

XML

Restructuring and Other Restructuring and Other Costs (Notes)

6 Months Ended

Dec. 31, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

RESTRUCTURING AND OTHER COSTS

Restructuring Costs

From time to time, the Company has implemented plans to restructure certain operations, both domestically and internationally. The restructuring plans focused on various aspects of operations, including closing and consolidating certain manufacturing operations, rationalizing headcount and aligning operations in a strategic and more cost-efficient structure. In addition, the Company may incur restructuring charges in the future in cases where a material change in the scope of operation with its business occurs. Employee-related costs consist primarily of severance costs and also include outplacement services provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods. Facility exit and other costs consist of accelerated depreciation, equipment relocation costs and costs associated with planned facility expansions and closures to streamline Company operations.

Other Costs/(Income)

Other costs/(income) includes settlement charges, net of any insurance recoveries, related to the probable resolution of certain customer claims related to a previous temporary suspension of operations at a softgel manufacturing facility.

The following table summarizes the significant costs recorded within restructuring and other costs:

	Three Months Ended   December 31,				Six Months Ended  December 31,
(Dollars in millions)	2018		2017		2018		2017
Restructuring costs:
Employee-related reorganization	$	0.1	$	1.6	$	9.8	$	3.3
Facility exit and other costs	—		(0.7)		—		(0.2)
Total restructuring costs	$	0.1	$	0.9	$	9.8	$	3.1
Other - customer claims, net of insurance recoveries	—		(0.8)		—		(1.8)
Total restructuring and other costs	$	0.1	$	0.1	$	9.8	$	1.3

XML

Derivative Instruments and Hedging Activities

6 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIESThe Company is exposed to fluctuations in the applicable exchange rate on its investments in foreign operations. While the Company does not actively hedge against changes in foreign currency, the Company has mitigated its exposure from its investments in its European operations by denominating a portion of its debt in euros. At December 31, 2018, the Company had euro-denominated debt outstanding of $777.7 million that is designated and qualifies as a hedge of a net investment in foreign operations. For non-derivatives designated and qualifying as net investment hedges, the translation gains or losses are reported in accumulated other comprehensive income/(loss) as part of the cumulative translation adjustment. The non-hedge portions of

the translation gains or losses are reported in the statement of operations. The following table includes net investment hedge activity during the three and six months ended December 31, 2018 and 2017.

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Unrealized foreign exchange gain/(loss) within other comprehensive income	$	15.6	$	(3.9)	$	11.4	$	(21.5)
Unrealized foreign exchange gain/(loss) within statement of operations	$	9.4	$	(2.8)	$	6.9	$	(16.2)

The net accumulated gain of the instrument designated as a hedge as of December 31, 2018 within other comprehensive income/(loss) was approximately $59.0 million. Amounts are reclassified out of accumulated other comprehensive income/(loss) into earnings when the entity to which the gains and losses relate is either sold or substantially liquidated.

XML

Income Taxes

6 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

U.S. Tax Reform

On December 22, 2017, the U.S. government enacted wide-ranging tax legislation, the Tax Cuts and Jobs Act (the "2017 Tax Act"). The 2017 Tax Act significantly revises U.S. tax law by, among other provisions, (a) lowering the applicable U.S. federal statutory income tax rate from 35% to 21%, (b) creating a partial territorial tax system that includes imposing a mandatory one-time transition tax on previously deferred foreign earnings, (c) creating provisions regarding the (1) Global Intangible Low Tax Income ("GILTI"), (2) the Foreign Derived Intangible Income ("FDII") deduction, and (3) the Base Erosion Anti-Abuse Tax ("BEAT"), and (d) eliminating or reducing certain income tax deductions, such as interest expense, executive compensation expenses, and certain employee expenses. While the impact of the mandatory one-time transition tax was recognized in fiscal 2018, the remaining provisions are effective for fiscal years after 2018.

ASC 740, Income Taxes ("ASC 740") requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the 2017 Tax Act’s provisions, the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which allowed companies to record the tax effects of the 2017 Tax Act on a provisional basis based on a reasonable estimate and then, if necessary, subsequently adjust such amounts during a limited measurement period as more information became available. The measurement period ended December 22, 2018 and our accounting for the tax effects of the Act through December 31, 2018 is complete as of December 31, 2018. For the three and six months ended December 31, 2018, the Company recorded a net benefit of $6.9 million, reducing the estimated net charge from $42.5 million previously recorded during fiscal 2018, to $35.6 million. This reduction was primarily related to additional foreign tax credit benefits associated with the mandatory transition tax charge for deemed repatriation of deferred foreign income. There were no other changes recorded to the tax provision related to the 2017 Tax Act. The Company continues to evaluate the potential impact of all provisions of the 2017 Tax Act, as the U.S. Treasury Department has and is expected to continue issuing guidance related to the 2017 Tax Act during the Company’s fiscal year 2019.

As noted above, the 2017 Tax Act subjects a US Company to tax on GILTI earned by certain foreign subsidiaries. The Company will account for GILTI in the year the tax is incurred as a period cost.

Other Tax Matters

The Company accounts for income taxes in accordance with ASC 740. Generally, fluctuations in the effective tax rate are primarily due to changes in U.S. and non-U.S. pretax income resulting from the Company’s business mix and changes in the tax impact of special items and other discrete tax items, which may have unique tax implications depending on the nature of the item. Such discrete items include, but are not limited to, changes in foreign statutory tax rates, the amortization of certain assets, and the tax impact of changes in its ASC 740 unrecognized tax benefit reserves. In the normal course of business, the Company is subject to examination by taxing authorities around the world, including such major jurisdictions as the United States, Germany, France, and the United Kingdom. The Company is no longer subject to examinations by the relevant tax authorities for years prior to fiscal year 2009. Under the terms of the 2007 purchase agreement by which the stockholders at that time acquired their interest in the Company, the Company is indemnified by its former owner for tax liabilities that may arise after the 2007 purchase that relate to tax periods prior to April 10, 2007. The indemnification agreement applies to, among other taxes, any and all federal, state, and international income-based taxes as well as related interest and penalties. As of December 31, 2018 and June 30, 2018, approximately $0.6 million and $0.7 million, respectively, of unrecognized tax benefit are subject to indemnification by the Company's former owner.

ASC 740 includes guidance on the accounting for uncertainty in income taxes recognized in the financial statements. This standard provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeal or litigation process, based on the technical merits. As of December 31, 2018 and June 30, 2018, the Company had a total of $2.0 million and $2.2 million of unrecognized tax benefits, respectively.

As of December 31, 2018 and June 30, 2018, the Company had a total of $3.7 million and $4.1 million, respectively, of uncertain tax positions (including accrued interest and penalties). As of these dates, $2.0 million and $2.2 million, respectively, represent the amount of unrecognized tax benefits, which, if recognized, would favorably affect the effective income tax rate. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2018 and June 30, 2018, the Company has approximately $1.7 million and $2.0 million, respectively, of accrued interest and penalties related to uncertain tax positions. As of these dates, the portion of such interest and penalties subject to indemnification by its former owner is $1.3 million and $1.6 million, respectively.

XML

Employee Retirement Benefit Plans

6 Months Ended

Dec. 31, 2018

Defined Benefit Plan [Abstract]

Employee Retirement Benefit Plans

EMPLOYEE RETIREMENT BENEFIT PLANS

Components of the Company’s net periodic benefit costs are as follows:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Components of net periodic benefit cost:
Service cost	$	0.9	$	0.9	$	1.8	$	1.8
Interest cost	1.9		1.8		3.8		3.6
Expected return on plan assets	(2.6)		(2.9)		(5.2)		(5.8)
Amortization (1)	0.6		0.6		1.2		1.2
Net amount recognized	$	0.8	$	0.4	$	1.6	$	0.8

(1)      Amount represents the amortization of unrecognized actuarial gains/(losses).

As previously disclosed, the Company notified the trustees of a multi-employer pension plan of its withdrawal from participation in such plan in fiscal 2012. The actuarial review process administered by the plan trustees ended in fiscal 2015. The liability reported reflects the present value of the Company's expected future long-term obligations. The estimated discounted value of the projected contributions related to such plans was $38.9 million and $39.0 million as of December 31, 2018 and June 30, 2018, respectively, and is included within pension liability on the consolidated balance sheets. The annual cash impact associated with the Company's obligations in such plan is approximately $1.7 million per year.

XML

Equity and Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Dec. 31, 2018

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

Description of Capital Stock

The Company is authorized to issue 1,000,000,000 shares of common stock, par value $0.01 per share ("Common Stock"), and 100,000,000 shares of preferred stock, par value $0.01 per share. Under the Company's certificate of incorporation, each share of Common Stock has one vote, and the Common Stock votes together as a single class.

Public Stock Offering

On July 27, 2018, the Company completed the 2018 Equity Offering, a public offering in which the Company sold 11.4 million shares, including the underwriters' over-allotment option, of Common Stock at a price of $40.24 per share, before underwriting discounts and commissions. Net of these discounts and commissions and other offering expenses, the Company obtained total net proceeds from the 2018 Equity Offering, including the over-allotment exercise, of $445.5 million. The net proceeds of the 2018 Equity Offering were used to repay a corresponding portion of the outstanding borrowings under Operating Company's U.S. dollar-denominated term loans.

On September 29, 2017, the Company completed a public offering (the "2017 Equity Offering"), pursuant to which the Company sold 7.4 million shares, including the underwriters' over-allotment option, of Common Stock at a price of $39.10 per share, before underwriting discounts and commissions. Net of these discounts and commissions and other offering expenses, the Company obtained total net proceeds from the 2017 Equity Offering, including the over-allotment exercise, of $277.8 million. The net proceeds of the 2017 Equity Offering were used to fund a portion of the consideration for the Catalent Indiana acquisition due at its closing.

Outstanding Stock

Shares outstanding include shares of unvested restricted stock. Unvested restricted stock included in reportable shares outstanding was 0.7 million shares as of December 31, 2018. Shares of unvested restricted stock are excluded from our calculation of basic weighted average shares outstanding, but their dilutive impact is added back in the calculation of diluted weighted average shares outstanding, except when the effect would be anti-dilutive.

Stock Repurchase Program

On October 29, 2015, the Company’s Board of Directors authorized a share repurchase program to use up to $100.0 million to repurchase shares of outstanding Common Stock. Under the program, the Company is authorized to repurchase shares through open market purchases, privately negotiated transactions, or otherwise as permitted by applicable federal securities laws. There has been no purchase pursuant to this program as of December 31, 2018.

Accumulated Other Comprehensive Income/(loss)

The components of the changes in the cumulative translation adjustment, minimum pension liability, and available for sale investment for the three and six months ended December 31, 2018 and 2017 are presented below.

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Foreign currency translation adjustments:
Net investment hedge	$	15.6	$	(3.9)	$	11.4	$	(21.5)
Long-term intercompany loans	(10.8)		(2.3)		(14.1)		11.2
Translation adjustments	(18.9)		(5.2)		(21.7)		30.9
Total foreign currency translation adjustment, pretax	(14.1)		(11.4)		(24.4)		20.6
Tax expense/(benefit)	3.5		2.0		2.0		(4.1)
Total foreign currency translation adjustment, net of tax	$	(17.6)	$	(13.4)	$	(26.4)	$	24.7
Net change in minimum pension liability
Net gain recognized during the period	$	0.7	$	0.6	1.3		1.2
Total pension liability, pretax	0.7		0.6		1.3		1.2
Tax expense	0.1		0.1		0.3		0.3
Net change in minimum pension liability, net of tax	$	0.6	$	0.5	$	1.0	$	0.9
Net change in available for sale investment:
Net loss recognized during the period	$	—	$	(3.6)	—		(8.8)
Total available for sale investment, pretax	—		(3.6)		—		(8.8)
Tax benefit	—		(0.6)		—		(2.4)
Net change in available for sale investment, net of tax	$	—	$	(3.0)	$	—	$	(6.4)

For the three months ended December 31, 2018, the changes in accumulated other comprehensive income/(loss), net of tax by component are as follows:

(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Available for Sale Investment Adjustments		Total
Balance at September 30, 2018	$	(293.9)	$	(39.2)	$	(1.1)	$	(334.2)
Other comprehensive income/(loss) before reclassifications	(17.6)		—		—		(17.6)
Amounts reclassified from accumulated other comprehensive income/(loss)	—		0.6		—		0.6
Net current period other comprehensive income/(loss)	(17.6)		0.6		—		(17.0)
Balance at December 31, 2018	$	(311.5)	$	(38.6)	$	(1.1)	$	(351.2)

For the six months ended December 31, 2018, the changes in accumulated other comprehensive income/(loss), net of tax by component are as follows:

(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Available for Sale Investment Adjustments		Total
Balance at June 30, 2018	$	(285.1)	$	(39.6)	$	(1.1)	$	(325.8)
Other comprehensive income/(loss) before reclassifications	(26.4)		—		—		(26.4)
Amounts reclassified from accumulated other comprehensive income/(loss)	—		1.0		—		1.0
Net current period other comprehensive income/(loss)	(26.4)		1.0		—		(25.4)
Balance at December 31, 2018	$	(311.5)	$	(38.6)	$	(1.1)	$	(351.2)

XML

Commitments and Contingencies

6 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES 

SEC inquiry into Juniper Pharmaceuticals, Inc.

On August 14, 2018, Operating Company acquired Juniper pursuant to the Juniper Merger Agreement. On November 14, 2016, Juniper filed with the SEC restated audited consolidated financial statements for the fiscal years ended December 31, 2013 through December 31, 2015, including the unaudited consolidated financial information for each quarterly period within the fiscal years ended December 31, 2014 and 2015, and restated unaudited consolidated financial statements for the quarters ended March 31, 2016 and June 30, 2016 and the related quarters in 2015, in order to correct certain timing errors regarding how it recognized revenue from a supply contract with an affiliate of Merck KGaA. On January 24, 2017, Juniper received a subpoena from the SEC requesting information concerning these restatements and related issues. Juniper responded to the subpoena and is cooperating with the SEC’s inquiry, including the taking of testimony from former Juniper employees and others. The Company understands that the inquiry is ongoing but does not believe the outcome of the investigation will be material to it; nonetheless, the Company cannot provide any assurance regarding that outcome.

Other

From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business, including, without limitation, inquiries and claims concerning environmental contamination as well as litigation and allegations in connection with acquisitions, product liability, manufacturing or packaging defects, and claims for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of any of which could be significant. The Company intends to vigorously defend itself against any such litigation and does not currently believe that the outcome of any such litigation will have a material adverse effect on the Company’s financial statements. In addition, the healthcare industry is highly regulated and government agencies continue to scrutinize certain practices affecting government programs and otherwise.

From time to time, the Company receives subpoenas or requests for information relating to the business practices and activities of customers or suppliers from various governmental agencies or private parties, including from state attorneys general, the U.S. Department of Justice, and private parties engaged in patent infringement, antitrust, tort, and other litigation. The Company generally responds to such subpoenas and requests in a timely and thorough manner, which responses sometimes require considerable time and effort and can result in considerable costs being incurred. The Company expects to incur costs in future periods in connection with future requests.

XML

Segment Information

6 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company conducts its business within the following operating segments: Softgel Technologies, Biologics and Specialty Drug Delivery, Oral Drug Delivery, and Clinical Supply Services. The Company evaluates the performance of its segments based on segment earnings before other (expense)/income, impairments, restructuring costs, interest expense, income tax expense/(benefit), and depreciation and amortization ("Segment EBITDA"). "EBITDA from operations" is consolidated earnings from operations before interest expense, income tax expense/(benefit), and depreciation and amortization. Segment EBITDA and EBITDA from operations are not defined in GAAP and may not be comparable to similarly titled measures used by other companies.

The following tables include net revenue and Segment EBITDA during the three and six months ended December 31, 2018 and 2017:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Softgel Technologies
Net revenue	$	213.7	$	228.1	$	412.9	$	447.8
Segment EBITDA	$	44.2	$	50.1	$	77.5	$	85.2
Biologics and Specialty Drug Delivery
Net revenue	184.3		148.7		338.9		240.4
Segment EBITDA	50.8		39.9		77.3		48.6
Oral Drug Delivery
Net revenue	154.0		137.2		284.1		271.8
Segment EBITDA	44.8		41.2		72.2		79.9
Clinical Supply Services
Net revenue	80.8		108.7		158.5		218.4
Segment EBITDA	21.0		19.0		41.2		35.7
Inter-segment revenue elimination	(9.8)		(16.4)		(19.6)		(28.2)
Unallocated costs (1)	(29.4)		(48.2)		(69.2)		(82.2)
Combined totals:
Net revenue	$	623.0	$	606.3	$	1,174.8	$	1,150.2
EBITDA from operations	$	131.4	$	102.0	$	199.0	$	167.2

(1) Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Impairment charges and gain/(loss) on sale of assets	$	0.1	$	(4.2)	$	(2.8)	$	(4.2)
Stock-based compensation	(7.5)		(8.5)		(17.5)		(15.5)
Restructuring and other special items (a)	(5.9)		(11.9)		(19.1)		(24.2)
Other (expense), net (b)	(1.4)		(13.1)		(7.1)		(18.3)
Non-allocated corporate costs, net	(14.7)		(10.5)		(22.7)		(20.0)
Total unallocated costs	$	(29.4)	$	(48.2)	$	(69.2)	$	(82.2)

(a) Restructuring and other special items include transaction and integration costs associated primarily with the acquisitions of Catalent Indiana and Juniper.

(b) Refer to Note 8, Other Expense for details of financing changes and foreign currency translation adjustments recorded within Other (expense), net.

Provided below is a reconciliation between net earnings/(loss) and EBITDA from operations:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Net earnings/(loss)	$	49.0	$	(21.9)	$	34.6	$	(18.1)
Depreciation and amortization	54.6		46.8		107.5		85.8
Interest expense, net	25.5		27.2		53.6		51.5
Income tax expense	2.3		49.9		3.3		48.0
EBITDA from operations	$	131.4	$	102.0	$	199.0	$	167.2

The following table includes total assets for each segment, as well as reconciling items necessary to total the amounts reported in the consolidated financial statements: 

(Dollars in millions)	December 31, 2018		June 30, 2018
Assets
Softgel Technologies	$	1,385.0	$	1,402.0
Biologics and Specialty Drug Delivery	1,793.4		1,739.7
Oral Drug Delivery	1,211.9		1,074.2
Clinical Supply Services	642.0		613.0
Corporate and eliminations	(590.7)		(297.8)
Total assets	$	4,441.6	$	4,531.1

XML

Supplemental Balance Sheet Information

6 Months Ended

Dec. 31, 2018

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Information

SUPPLEMENTAL BALANCE SHEET INFORMATION

Supplemental balance sheet information at December 31, 2018 and June 30, 2018 is detailed in the following tables.

Inventories

Work-in-process and finished goods inventories include raw materials, labor, and overhead. Total inventories consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Raw materials and supplies	$	157.3	$	137.1
Work-in-process	43.8		42.3
Finished goods	54.8		48.3
Total inventories, gross	255.9		227.7
Inventory cost adjustment	(20.7)		(18.6)
Inventories	$	235.2	$	209.1

Prepaid expenses and other

Prepaid expenses and other consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Prepaid expenses	$	20.8	$	19.2
Spare parts supplies	10.6		11.1
Prepaid income tax	11.0		7.2
Non-U.S. value-added tax	17.7		12.5
Other current assets	17.0		15.2
Prepaid expenses and other	$	77.1	$	65.2

Property, plant, and equipment, net

Property, plant, and equipment, net consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Land, buildings, and improvements	$	940.0	$	928.1
Machinery, equipment, and capitalized software	1,037.6		988.1
Furniture and fixtures	16.3		14.9
Construction in progress	179.5		166.8
Property, plant, and equipment, at cost	2,173.4		2,097.9
Accumulated depreciation	(887.6)		(827.3)
Property, plant, and equipment, net	$	1,285.8	$	1,270.6

Depreciation expense was $35.1 million and $69.8 million for the three and six months ended December 31, 2018, respectively, and $30.7 million and $58.3 million for the three and six months ended December 31, 2017, respectively. Depreciation expense includes amortization of assets related to capital leases. The Company charges repairs and maintenance costs to expense as incurred. The amount of capitalized interest was immaterial for all periods presented. 

Other accrued liabilities

Other accrued liabilities consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Accrued employee-related expenses	$	72.8	$	104.3
Restructuring accrual	11.5		9.4
Accrued interest	10.9		16.5
Contract liability	112.4		100.9
Accrued income tax	6.5		25.9
Other accrued liabilities and expenses	45.9		55.9
Other accrued liabilities	$	260.0	$	312.9

XML

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the year ending June 30, 2019. The consolidated balance sheet at June 30, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information on the Company's accounting policies and footnotes, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018 filed with the Securities and Exchange Commission (the "SEC").

In fiscal 2018, the Company engaged in a business reorganization to better align its internal business unit structure with its "Follow the Molecule" strategy and the increased focus on its biologics-related offerings. Under the revised structure, the Company created two new operating segments from the former Drug Delivery Solutions segment:

•Biologics and Specialty Drug Delivery, which encompasses biologic cell-line development and manufacturing, development and manufacturing services for blow-fill-seal unit doses, prefilled syringes, vials, and cartridges; analytical development and testing services for large molecules; and development and manufacturing for inhaled products for delivery via metered dose inhalers, dry powder inhalers, and intra-nasal sprays; and

•Oral Drug Delivery, which encompasses comprehensive formulation development, manufacturing, and analytical development capabilities using advanced processing technologies such as bioavailability enhancement, controlled release, particle size engineering, and taste-masking for solid oral-dose forms.

Each of the two new segments reports through a separate management team and ultimately reports to the Company's Chief Executive Officer who is designated as the Chief Operating Decision Maker for segment reporting purposes. The Company's operating segments are the same as its reporting segments. All prior-period comparative segment information has been restated to reflect the current reportable segments in accordance with Accounting Standards Codification ("ASC") 280, Segment Reporting.

Foreign Currency Translation

Foreign Currency Translation

The financial statements of the Company’s operations outside the U.S. are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensive income/(loss) utilizing period-end exchange rates. In June 2018, as a result of the three-year cumulative consumer price index exceeding 100%, Argentina was classified as having a highly inflationary economy. Beginning on July 1, 2018, the Company accounts for its Argentine operations as highly inflationary.

Research and Development Costs

Research and Development Costs

The Company expenses research and development costs as incurred. Costs incurred in connection with the development of new offerings and manufacturing process improvements are recorded within selling, general, and administrative expenses. Such research and development costs included in selling, general, and administrative expenses amounted to $1.0 million and $1.5 million for the three and six months ended December 31, 2018, respectively, and $1.5 million and $3.3 million for the three and six months ended December 31, 2017, respectively. Costs incurred in connection with research and

development services the Company provides to customers and services performed in support of the commercial manufacturing process for customers are recorded within cost of sales. Such research and development costs included in cost of sales amounted to $14.3 million and $25.6 million for the three and six months ended December 31, 2018, respectively, and $12.4 million and $22.4 million for the three and six months ended December 31, 2017, respectively.

Recent Financial Accounting Standards

Recent Financial Accounting Standards

Recently Adopted Accounting Standards

In May 2014, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which was codified as ASC 606 and superseded nearly all existing revenue-recognition guidance. The guidance’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, the guidance creates a five-step model that requires a company to exercise judgment when considering the terms of the contracts and all relevant facts and circumstances. The five steps require a company to identify customer contracts, identify the separate performance obligations, determine the transaction price, allocate the transaction price to the separate performance obligations, and recognize revenue when or as each performance obligation is satisfied. The guidance allows for either full retrospective adoption, where the standard is applied to all periods presented, or modified retrospective adoption, where the standard is applied only to the most current period presented in the financial statements. The Company adopted the guidance as of July 1, 2018 using the modified retrospective approach applied to contracts that were not completed as of that date. The Company recorded a cumulative effect adjustment to the fiscal 2019 opening balance of its accumulated deficit upon adoption of this guidance, which decreased beginning accumulated deficit by $15.1 million.

The following table provides the impact of adopting the guidance on the Company’s financial statements:

	Three months Ended December 31, 2018						Six months Ended December 31, 2018
(Dollars in millions)	As Reported		Effects of Change		Amount without Adoption of ASC 606		As Reported		Effects of Change		Amount without Adoption of ASC 606
Net revenue	$	623.0	$	5.0	$	628.0	$	1,174.8	$	18.6	$	1,193.4
Cost of sales	421.6		20.2		441.8		824.9		31.6		856.5
Gross margin	201.4		(15.2)		186.2		349.9		(13.0)		336.9
Earnings from continuing operations before income taxes	51.3		(15.2)		36.1		37.9		(13.0)		24.9
Income tax expense	2.3		(4.0)		(1.7)		3.3		(3.8)		(0.5)
Net earnings/(loss)	$	49.0	$	(11.2)	$	37.8	$	34.6	$	(9.2)	$	25.4

The impact of ASC 606 on the Company's consolidated balance sheet is immaterial.

The adoption of ASC 606 resulted in three primary changes as compared to the previous revenue recognition guidance: (a) revenue from commercial product supply is recognized following successful completion of the required quality assurance process where it was previously recognized upon shipment of the product to the customer; (b) earlier recognition of revenue from certain commercial supply contract cancellations is recognized as variable consideration as the Company’s performance obligations are satisfied rather than only upon agreement of the amount with the customer; and (c) revenue from sourcing comparator drug product for clinical supply services is recorded net of the cost of procuring it rather than at full value with a corresponding expense. Refer to Note 2 for the Company's revenue recognition policy.

In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires entities to report the service cost component of the net periodic benefit cost in the same income statement line as other compensation costs arising from services rendered by employees during the reporting period. The other components of the net benefit costs will be presented in the income statement separately from the service cost and below the income from operations subtotal. The Company adopted this guidance as of July 1, 2018, on a retrospective basis, which had an effect on the consolidated statement of operations for the three and six months ended December 31, 2017. The following table summarizes the Company's As Previously Reported and As Adjusted changes to the consolidated statement of operations for the three and six months ended December 31, 2017:

	Three Months Ended December 31, 2017				Six Months Ended December 31, 2017
(Dollars in millions)	As Previously Reported		As Adjusted		As Previously Reported		As Adjusted
Selling, general, and administrative expenses	$	114.3	$	114.8	$	221.3	$	222.3
Operating earnings	68.8		68.3		100.7		99.7
Other expense, net	13.6		13.1		19.3		18.3

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which reduces the complexity of and simplifies the application of hedge accounting by issuers. The ASU is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted. The Company early adopted this guidance as of July 1, 2018 on a prospective basis. The adoption of this guidance was not material to the Company's consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when an entity will apply modification accounting for changes to stock-based compensation arrangements. Modification accounting applies if the value, vesting conditions, or classification of an award changes. The Company adopted this guidance prospectively at the beginning of fiscal 2019. The adoption of this guidance was not material to the Company's consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides additional guidance on the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The Company adopted this guidance prospectively at the beginning of fiscal 2019. The adoption of this guidance was not material to the Company's consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which changes the accounting for equity investments and financial liabilities under the fair value option, and presentation and disclosure requirements for financial instruments. The ASU requires equity investments with readily determinable fair values to be measured at fair value and to recognize change in fair value in net earnings. The ASU is not applicable to equity investments accounted for under the equity method of accounting or those that result in consolidation of the investee. The Company adopted this guidance at the beginning of fiscal 2019. The adoption of this guidance was not material to the Company's consolidated financial statements.

New Accounting Standards Not Adopted as of December 31, 2018

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns 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. The ASU will be effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and allows for either a retrospective or prospective application. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits an entity to reclassify to retained earnings the stranded tax effects caused by the Tax Cuts and Jobs Act of 2017 on items within accumulated other comprehensive income/(loss). The ASU will be effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduces a new accounting model Credit Expected Credit Losses model ("CECL"). CECL requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models in current GAAP, which generally require that a loss be incurred before it is recognized. The new standard will also apply to receivables arising from revenue transactions such as contract assets and accounts receivables. The ASU will be effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which will supersede ASC 840 Leases. The new guidance requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases and will be effective for public reporting entities in annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The guidance is required to be adopted using the modified retrospective approach. The Company anticipates that most of its operating leases will result in the recognition of additional assets and corresponding liabilities on its consolidated balance sheets. The Company continues to evaluate the impact of adopting this guidance on its consolidated financial statements.

XML

Basis of Presentation and Summary of Significant Accounting Policies Recent Financial Accounting Standards (Tables)

6 Months Ended

Dec. 31, 2018

Accounting Standards Update 2014-09

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Schedule of Prospective Adoption of New Accounting Pronouncements

The following table provides the impact of adopting the guidance on the Company’s financial statements:

	Three months Ended December 31, 2018						Six months Ended December 31, 2018
(Dollars in millions)	As Reported		Effects of Change		Amount without Adoption of ASC 606		As Reported		Effects of Change		Amount without Adoption of ASC 606
Net revenue	$	623.0	$	5.0	$	628.0	$	1,174.8	$	18.6	$	1,193.4
Cost of sales	421.6		20.2		441.8		824.9		31.6		856.5
Gross margin	201.4		(15.2)		186.2		349.9		(13.0)		336.9
Earnings from continuing operations before income taxes	51.3		(15.2)		36.1		37.9		(13.0)		24.9
Income tax expense	2.3		(4.0)		(1.7)		3.3		(3.8)		(0.5)
Net earnings/(loss)	$	49.0	$	(11.2)	$	37.8	$	34.6	$	(9.2)	$	25.4

Accounting Standards Update 2017-07

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Schedule of Prospective Adoption of New Accounting Pronouncements

The following table summarizes the Company's As Previously Reported and As Adjusted changes to the consolidated statement of operations for the three and six months ended December 31, 2017:

	Three Months Ended December 31, 2017				Six Months Ended December 31, 2017
(Dollars in millions)	As Previously Reported		As Adjusted		As Previously Reported		As Adjusted
Selling, general, and administrative expenses	$	114.3	$	114.8	$	221.3	$	222.3
Operating earnings	68.8		68.3		100.7		99.7
Other expense, net	13.6		13.1		19.3		18.3

XML

Revenue Recognition Revenue Recognition (Tables)

6 Months Ended

Dec. 31, 2018

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue

The following tables allocate revenue for the three and six months ended December 31, 2018 by type of activity and reporting segment (in millions):

Three months ended December 31, 2018	Softgel Technologies		Biologics & Specialty Drug Delivery		Oral Drug Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	197.0	$	88.6	$	100.5	$	—	$	386.1
Development services	16.7		95.7		53.5		—		165.9
Clinical supply services	—		—		—		80.8		80.8
Total	$	213.7	$	184.3	$	154.0	$	80.8	$	632.8
			Inter-segment revenue elimination						(9.8)
					Combined net revenue				$	623.0

Six months ended December 31, 2018	Softgel Technologies		Biologics & Specialty Drug Delivery		Oral Drug Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	381.4	$	162.4	$	182.2	$	—	$	726.0
Development services	31.5		176.5		101.9		—		309.9
Clinical supply services	—		—		—		158.5		158.5
Total	$	412.9	$	338.9	$	284.1	$	158.5	$	1,194.4
			Inter-segment revenue elimination						(19.6)
					Combined net revenue				$	1,174.8

The following table allocates revenue by the location where the goods were made or the service performed:

(Dollars in millions)	Three months ended December 31, 2018		Six months ended December 31, 2018
United States	$	315.1	$	579.5
Europe	214.8		411.2
International Other	119.7		227.3
Elimination of revenue attributable to multiple locations	(26.6)		(43.2)
Total	$	623.0	$	1,174.8

XML

Revenue Recognition Contractual Liabilities (Tables)

6 Months Ended

Dec. 31, 2018

Revenue Recognition and Deferred Revenue [Abstract]

Contractual Liabilities

Changes in the contractual liabilities balance during the six months ended December 31, 2018 are as follows:

(Dollars in millions)
Contract liability
Balance at June 30, 2018	$	100.9
Balance at December 31, 2018	$	112.4
Revenue recognized in the period from:
Amounts included in contracts liability at the beginning of the period	$	48.9

XML

Goodwill (Tables)

6 Months Ended

Dec. 31, 2018

Goodwill Disclosure [Abstract]

Goodwill - Rollforward

The following table summarizes the changes between June 30, 2018 and December 31, 2018 in the carrying amount of goodwill in total and by reporting segment:

(Dollars in millions)	Softgel Technologies		Biologics and Specialty Drug Delivery		Oral Drug Delivery		Clinical Supply Services		Total
Balance at June 30, 2018	$	415.2	$	505.7	$	319.9	$	156.4	$	1,397.2
Additions	—		—		42.9		—		42.9
Foreign currency translation adjustments	(7.1)		(0.9)		(5.2)		(5.5)		(18.7)
Balance at December 31, 2018	$	408.1	$	504.8	$	357.6	$	150.9	$	1,421.4

The increase in goodwill in the Oral Drug Delivery reporting segment is a result of the Juniper acquisition. The Company did not record an impairment charge in the current period.

XML

Definite Lived Long-Lived Assets (Tables)

6 Months Ended

Dec. 31, 2018

Intangible Assets Disclosure [Abstract]

Other Intangible Assets Subject to Amortization

The details of other intangibles, net as of December 31, 2018 and June 30, 2018 are as follows:

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
December 31, 2018
Amortized intangibles:
Core technology	18 years	$	168.0	$	(88.7)	$	79.3
Customer relationships	14 years	589.9		(158.4)		431.5
Product relationships	11 years	275.3		(205.1)		70.2
Total intangible assets		$	1,033.2	$	(452.2)	$	581.0

The increases in customer relationships and product relationships as of December 31, 2018 are associated with the acquisition of Juniper in August 2018.

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
June 30, 2018
Amortized intangibles:
Core technology	18 years	$	170.8	$	(85.3)	$	85.5
Customer relationships	14 years	587.0		(140.9)		446.1
Product relationships	12 years	210.5		(197.2)		13.3
Total intangible assets		$	968.3	$	(423.4)	$	544.9

Future Amortization Expense

Future amortization expense for the next five fiscal years is estimated to be:

(Dollars in millions)	Remainder  Fiscal 2019		2020		2021		2022		2023		2024
Amortization expense	$	33.8	$	58.4	$	58.4	$	58.4	$	58.4	$	58.3

XML

Long-Term Obligations and Other Short-Term Borrowings (Tables)

6 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Long-Term Obligations, Presented Net of Issue Discounts and Fees Paid to Lenders, and Other Short-Term Borrowings

Long-term obligations and short-term borrowings consist of the following at December 31, 2018 and June 30, 2018:

(Dollars in millions)	Maturity as of December 31, 2018	December 31, 2018		June 30, 2018
Senior Secured Credit Facilities
Term loan facility U.S. dollar-denominated	May 2024	$	775.8	$	1,228.4
Term loan facility euro-denominated	May 2024	349.0		358.9
Euro-denominated 4.75% Senior Notes due 2024	December 2024	428.7		438.4
U.S. dollar-denominated 4.875% Senior Notes due 2026	January 2026	444.2		443.8
Deferred purchase consideration	October 2021	141.7		188.9
$200 million revolving credit facility	May 2022	—		—
Capital lease obligations	2020 to 2032	58.6		60.8
Other obligations	2018 to 2019	1.9		2.1
Total		2,199.9		2,721.3
Less: Current portion of long-term obligations and other short-term borrowings		69.9		71.9
Long-term obligations, less current portion		$	2,130.0	$	2,649.4

XML

Long-Term Obligations and Other Short-Term Borrowings Fair Value of Financial Instruments (Tables)

6 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Schedule Of Carrying And Fair Value Of Financial Instruments Table

The carrying amounts and the estimated fair values of financial instruments as of December 31, 2018 and June 30, 2018 are as follows:

		December 31, 2018				June 30, 2018
(Dollars in millions)	Fair Value Measurement	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Euro-denominated 4.75% Senior Notes	Level 1	$	428.7	$	428.7	$	438.4	$	457.6
U.S. Dollar-denominated 4.875% Senior Notes	Level 1	444.2		419.8		443.8		428.3
Senior Secured Credit Facilities & Other	Level 2	1,327.0		1,246.0		1,839.1		1,768.0
Total		$	2,199.9	$	2,094.5	$	2,721.3	$	2,653.9

XML

Earnings Per Share Earnings Per Share (Tables)

6 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three and six months ended December 31, 2018 and 2017, respectively, are as follows (in millions, except share and per share data):

	Three Months Ended   December 31,				Six Months Ended   December 31,
	2018		2017		2018		2017
Net earnings/(loss)	$	49.0	$	(21.9)	$	34.6	$	(18.1)
Weighted average shares outstanding	145,058,230		132,983,262		143,285,870		129,327,188
Dilutive securities issuable-stock plans	1,602,109		—		1,775,739		—
Total weighted average diluted shares outstanding	146,660,339		132,983,262		145,061,609		129,327,188
Earnings/(loss) per share:
Basic	$	0.34	$	(0.16)	$	0.24	$	(0.14)
Diluted	$	0.33	$	(0.16)	$	0.24	$	(0.14)

XML

Other Income and Expense (Tables)

6 Months Ended

Dec. 31, 2018

Other Income and Expenses [Abstract]

Other Nonoperating Income and Expense [Text Block]

The components of other expense, net for the three and six months ended December 31, 2018 and 2017 are as follows:

	Three Months Ended   December 31,				Six Months Ended  December 31,
(Dollars in millions)	2018		2017		2018		2017
Other expense, net
Debt refinancing costs (1)	$	—	$	11.8	$	4.2	$	11.8
Foreign currency (gains) and losses (2)	0.7		1.3		2.4		6.9
Other	0.7		—		0.5		(0.4)
Total other expense, net	$	1.4	$	13.1	$	7.1	$	18.3

(1) The expense in the six months ended December 31, 2018 includes a write-off of $4.2 million of previously capitalized financing charges related to the Company's U.S. dollar term loan under its senior secured credit facility. The prior-year debt refinancing costs include financing charges related to the offering of the USD Notes and the Third Amendment and also include a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018 on the Bridge Facility. 

(2) Foreign currency remeasurement (gains) and losses include both cash and non-cash transactions.

XML

Restructuring and Other Restructuring and Other Costs (Tables)

6 Months Ended

Dec. 31, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs [Table Text Block]

The following table summarizes the significant costs recorded within restructuring and other costs:

	Three Months Ended   December 31,				Six Months Ended  December 31,
(Dollars in millions)	2018		2017		2018		2017
Restructuring costs:
Employee-related reorganization	$	0.1	$	1.6	$	9.8	$	3.3
Facility exit and other costs	—		(0.7)		—		(0.2)
Total restructuring costs	$	0.1	$	0.9	$	9.8	$	3.1
Other - customer claims, net of insurance recoveries	—		(0.8)		—		(1.8)
Total restructuring and other costs	$	0.1	$	0.1	$	9.8	$	1.3

XML

Derivative Instruments and Hedging Activities Net Investment Hedge Activity (Tables)

6 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosures [Line Items]

Schedule of Net Investment Hedge in Accumulated Other Comprehensive Income (Loss) and Statement of Financial Performance

The following table includes net investment hedge activity during the three and six months ended December 31, 2018 and 2017.

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Unrealized foreign exchange gain/(loss) within other comprehensive income	$	15.6	$	(3.9)	$	11.4	$	(21.5)
Unrealized foreign exchange gain/(loss) within statement of operations	$	9.4	$	(2.8)	$	6.9	$	(16.2)

XML

Employee Retirement Benefit Plans (Tables)

6 Months Ended

Dec. 31, 2018

Defined Benefit Plan [Abstract]

Components of Company's Net Periodic Benefit Costs

Components of the Company’s net periodic benefit costs are as follows:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Components of net periodic benefit cost:
Service cost	$	0.9	$	0.9	$	1.8	$	1.8
Interest cost	1.9		1.8		3.8		3.6
Expected return on plan assets	(2.6)		(2.9)		(5.2)		(5.8)
Amortization (1)	0.6		0.6		1.2		1.2
Net amount recognized	$	0.8	$	0.4	$	1.6	$	0.8

(1)      Amount represents the amortization of unrecognized actuarial gains/(losses).

XML

Equity and Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Dec. 31, 2018

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Comprehensive Income (Loss)

Accumulated Other Comprehensive Income/(loss)

The components of the changes in the cumulative translation adjustment, minimum pension liability, and available for sale investment for the three and six months ended December 31, 2018 and 2017 are presented below.

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Foreign currency translation adjustments:
Net investment hedge	$	15.6	$	(3.9)	$	11.4	$	(21.5)
Long-term intercompany loans	(10.8)		(2.3)		(14.1)		11.2
Translation adjustments	(18.9)		(5.2)		(21.7)		30.9
Total foreign currency translation adjustment, pretax	(14.1)		(11.4)		(24.4)		20.6
Tax expense/(benefit)	3.5		2.0		2.0		(4.1)
Total foreign currency translation adjustment, net of tax	$	(17.6)	$	(13.4)	$	(26.4)	$	24.7
Net change in minimum pension liability
Net gain recognized during the period	$	0.7	$	0.6	1.3		1.2
Total pension liability, pretax	0.7		0.6		1.3		1.2
Tax expense	0.1		0.1		0.3		0.3
Net change in minimum pension liability, net of tax	$	0.6	$	0.5	$	1.0	$	0.9
Net change in available for sale investment:
Net loss recognized during the period	$	—	$	(3.6)	—		(8.8)
Total available for sale investment, pretax	—		(3.6)		—		(8.8)
Tax benefit	—		(0.6)		—		(2.4)
Net change in available for sale investment, net of tax	$	—	$	(3.0)	$	—	$	(6.4)

Schedule of Accumulated Other Comprehensive Income (Loss)

For the three months ended December 31, 2018, the changes in accumulated other comprehensive income/(loss), net of tax by component are as follows:

(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Available for Sale Investment Adjustments		Total
Balance at September 30, 2018	$	(293.9)	$	(39.2)	$	(1.1)	$	(334.2)
Other comprehensive income/(loss) before reclassifications	(17.6)		—		—		(17.6)
Amounts reclassified from accumulated other comprehensive income/(loss)	—		0.6		—		0.6
Net current period other comprehensive income/(loss)	(17.6)		0.6		—		(17.0)
Balance at December 31, 2018	$	(311.5)	$	(38.6)	$	(1.1)	$	(351.2)

For the six months ended December 31, 2018, the changes in accumulated other comprehensive income/(loss), net of tax by component are as follows:

(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Available for Sale Investment Adjustments		Total
Balance at June 30, 2018	$	(285.1)	$	(39.6)	$	(1.1)	$	(325.8)
Other comprehensive income/(loss) before reclassifications	(26.4)		—		—		(26.4)
Amounts reclassified from accumulated other comprehensive income/(loss)	—		1.0		—		1.0
Net current period other comprehensive income/(loss)	(26.4)		1.0		—		(25.4)
Balance at December 31, 2018	$	(311.5)	$	(38.6)	$	(1.1)	$	(351.2)

XML

Segment Information (Tables)

6 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Net Revenue and Segment EBITDA

The following tables include net revenue and Segment EBITDA during the three and six months ended December 31, 2018 and 2017:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Softgel Technologies
Net revenue	$	213.7	$	228.1	$	412.9	$	447.8
Segment EBITDA	$	44.2	$	50.1	$	77.5	$	85.2
Biologics and Specialty Drug Delivery
Net revenue	184.3		148.7		338.9		240.4
Segment EBITDA	50.8		39.9		77.3		48.6
Oral Drug Delivery
Net revenue	154.0		137.2		284.1		271.8
Segment EBITDA	44.8		41.2		72.2		79.9
Clinical Supply Services
Net revenue	80.8		108.7		158.5		218.4
Segment EBITDA	21.0		19.0		41.2		35.7
Inter-segment revenue elimination	(9.8)		(16.4)		(19.6)		(28.2)
Unallocated costs (1)	(29.4)		(48.2)		(69.2)		(82.2)
Combined totals:
Net revenue	$	623.0	$	606.3	$	1,174.8	$	1,150.2
EBITDA from operations	$	131.4	$	102.0	$	199.0	$	167.2

(1) Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Impairment charges and gain/(loss) on sale of assets	$	0.1	$	(4.2)	$	(2.8)	$	(4.2)
Stock-based compensation	(7.5)		(8.5)		(17.5)		(15.5)
Restructuring and other special items (a)	(5.9)		(11.9)		(19.1)		(24.2)
Other (expense), net (b)	(1.4)		(13.1)		(7.1)		(18.3)
Non-allocated corporate costs, net	(14.7)		(10.5)		(22.7)		(20.0)
Total unallocated costs	$	(29.4)	$	(48.2)	$	(69.2)	$	(82.2)

(a) Restructuring and other special items include transaction and integration costs associated primarily with the acquisitions of Catalent Indiana and Juniper.

(b) Refer to Note 8, Other Expense for details of financing changes and foreign currency translation adjustments recorded within Other (expense), net.

Reconciliation of Earnings/(Loss) from Continuing Operations to EBITDA

Provided below is a reconciliation between net earnings/(loss) and EBITDA from operations:

	Three Months Ended   December 31,				Six Months Ended   December 31,
(Dollars in millions)	2018		2017		2018		2017
Net earnings/(loss)	$	49.0	$	(21.9)	$	34.6	$	(18.1)
Depreciation and amortization	54.6		46.8		107.5		85.8
Interest expense, net	25.5		27.2		53.6		51.5
Income tax expense	2.3		49.9		3.3		48.0
EBITDA from operations	$	131.4	$	102.0	$	199.0	$	167.2

Total Assets for Each Segment and Reconciling in Consolidated Financial Statements

The following table includes total assets for each segment, as well as reconciling items necessary to total the amounts reported in the consolidated financial statements: 

(Dollars in millions)	December 31, 2018		June 30, 2018
Assets
Softgel Technologies	$	1,385.0	$	1,402.0
Biologics and Specialty Drug Delivery	1,793.4		1,739.7
Oral Drug Delivery	1,211.9		1,074.2
Clinical Supply Services	642.0		613.0
Corporate and eliminations	(590.7)		(297.8)
Total assets	$	4,441.6	$	4,531.1

XML

Supplemental Balance Sheet Information (Tables)

6 Months Ended

Dec. 31, 2018

Balance Sheet Related Disclosures [Abstract]

Inventory

Inventories

Work-in-process and finished goods inventories include raw materials, labor, and overhead. Total inventories consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Raw materials and supplies	$	157.3	$	137.1
Work-in-process	43.8		42.3
Finished goods	54.8		48.3
Total inventories, gross	255.9		227.7
Inventory cost adjustment	(20.7)		(18.6)
Inventories	$	235.2	$	209.1

Prepaid and Other Assets

Prepaid expenses and other

Prepaid expenses and other consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Prepaid expenses	$	20.8	$	19.2
Spare parts supplies	10.6		11.1
Prepaid income tax	11.0		7.2
Non-U.S. value-added tax	17.7		12.5
Other current assets	17.0		15.2
Prepaid expenses and other	$	77.1	$	65.2

Property and Equipment

Property, plant, and equipment, net

Property, plant, and equipment, net consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Land, buildings, and improvements	$	940.0	$	928.1
Machinery, equipment, and capitalized software	1,037.6		988.1
Furniture and fixtures	16.3		14.9
Construction in progress	179.5		166.8
Property, plant, and equipment, at cost	2,173.4		2,097.9
Accumulated depreciation	(887.6)		(827.3)
Property, plant, and equipment, net	$	1,285.8	$	1,270.6

Other Accrued Liabilities

Other accrued liabilities

Other accrued liabilities consist of the following:

(Dollars in millions)	December 31, 2018		June 30, 2018
Accrued employee-related expenses	$	72.8	$	104.3
Restructuring accrual	11.5		9.4
Accrued interest	10.9		16.5
Contract liability	112.4		100.9
Accrued income tax	6.5		25.9
Other accrued liabilities and expenses	45.9		55.9
Other accrued liabilities	$	260.0	$	312.9

XML

Basis of Presentation and Summary of Significant Accounting Policies Research and Development Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Selling, General and Administrative Expenses
Research and Development Expense [Line Items]
Research and Development Expense	$ 1.0	$ 1.5	$ 1.5	$ 3.3
Cost of Sales
Research and Development Expense [Line Items]
Research and Development Expense	$ 14.3	$ 12.4	$ 25.6	$ 22.4

XML

Basis of Presentation and Summary of Significant Accounting Policies Recent Financial Accounting Standards (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of change in accounting for ASC 606, net of tax				$ 15.1
Net revenue		$ 623.0	$ 606.3	1,174.8	$ 1,150.2
Cost of sales		421.6	418.9	824.9	822.7
Gross margin		201.4	187.4	349.9	327.5
Earnings from continuing operations, before income taxes		51.3	28.0	37.9	29.9
Income tax expense		2.3	49.9	3.3	48.0
Net earnings/(loss)		49.0	(21.9)	34.6	(18.1)
Selling, general, and administrative expenses		123.2	114.8	238.7	222.3
Operating Income (Loss)		78.2	68.3	98.6	99.7
Other expense, net	[1]	1.4	13.1	7.1	18.3
Accumulated Deficit
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of change in accounting for ASC 606, net of tax				15.1
Accounting Standards Update 2017-07
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Selling, general, and administrative expenses			114.8		222.3
Operating Income (Loss)			68.3		99.7
Other expense, net			13.1		18.3
Accounting Standards Update 2017-07 | Previously Reported
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Selling, general, and administrative expenses			114.3		221.3
Operating Income (Loss)			68.8		100.7
Other expense, net			$ 13.6		$ 19.3
Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net revenue		628.0		1,193.4
Cost of sales		441.8		856.5
Gross margin		186.2		336.9
Earnings from continuing operations, before income taxes		36.1		24.9
Income tax expense		(1.7)		(0.5)
Net earnings/(loss)		37.8		25.4
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net revenue		5.0		18.6
Cost of sales		20.2		31.6
Gross margin		(15.2)		(13.0)
Earnings from continuing operations, before income taxes		(15.2)		(13.0)
Income tax expense		(4.0)		(3.8)
Net earnings/(loss)		$ (11.2)		$ (9.2)

[1] Refer to Note 8, Other Expense for details of financing changes and foreign currency translation adjustments recorded within Other (expense), net.

XML

Revenue Recognition Disaggregation of Revenue by type of activity and reporting segment (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue [Line Items]
Inter-segment revenue elimination	$ (9.8)	$ (16.4)	$ (19.6)	$ (28.2)
Net revenue	623.0	606.3	1,174.8	1,150.2
Softgel Technologies
Disaggregation of Revenue [Line Items]
Net revenue	213.7	228.1	412.9	447.8
Softgel Technologies | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	197.0		381.4
Softgel Technologies | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	16.7		31.5
Softgel Technologies | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	0.0		0.0
Biologics and Specialty Drug Delivery
Disaggregation of Revenue [Line Items]
Net revenue	184.3	148.7	338.9	240.4
Biologics and Specialty Drug Delivery | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	88.6		162.4
Biologics and Specialty Drug Delivery | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	95.7		176.5
Biologics and Specialty Drug Delivery | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	0.0		0.0
Oral Drug Delivery
Disaggregation of Revenue [Line Items]
Net revenue	154.0	137.2	284.1	271.8
Oral Drug Delivery | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	100.5		182.2
Oral Drug Delivery | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	53.5		101.9
Oral Drug Delivery | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	0.0		0.0
Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	80.8	$ 108.7	158.5	$ 218.4
Clinical Supply Services | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	0.0		0.0
Clinical Supply Services | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	0.0		0.0
Clinical Supply Services | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	80.8		158.5
Total Catalent before inter-segment revenue elimination
Disaggregation of Revenue [Line Items]
Net revenue	632.8		1,194.4
Total Catalent before inter-segment revenue elimination | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	386.1		726.0
Total Catalent before inter-segment revenue elimination | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	165.9		309.9
Total Catalent before inter-segment revenue elimination | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	$ 80.8		$ 158.5

XML

Revenue Recognition Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue [Line Items]
Elimination of revenue attributable to multiple locations	$ (26.6)		$ (43.2)
Net revenue	623.0	$ 606.3	1,174.8	$ 1,150.2
North America
Disaggregation of Revenue [Line Items]
Net revenue	315.1		579.5
Europe
Disaggregation of Revenue [Line Items]
Net revenue	214.8		411.2
International Other
Disaggregation of Revenue [Line Items]
Net revenue	$ 119.7		$ 227.3

XML

Revenue Recognition Contractual Liabilities (Details) - USD ($) $ in Millions	6 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Revenue Recognition and Deferred Revenue [Abstract]
Contract liability	$ 112.4	$ 100.9
Deferred Revenue, Revenue Recognized	$ 48.9

XML

Revenue Recognition Remaining Performance Obligations (Details) $ in Millions	Dec. 31, 2018 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 1,274.5
Revenue, Remaining Performance Obligation, Percentage to be recognized over the next six months	58.00%
Clinical Supply Services
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 319.2

XML

Business Combinations Acquisition (Details) - USD ($) $ in Millions		6 Months Ended
	Aug. 14, 2018	Dec. 31, 2018	Dec. 31, 2017
Business Combinations [Abstract]
Business Acquisition, Name of Acquired Entity	Juniper Pharmaceuticals, Inc.
Payments to Acquire Businesses, Net of Cash Acquired	$ 127.5	$ 127.5	$ 748.0

XML

Business Combinations Net Assets Acquired (Details) $ in Millions	Aug. 14, 2018 USD ($)
Product Relationships [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired	$ 69.0
Customer Relationships [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired	$ 10.0

XML

Goodwill - Rollforward (Detail) $ in Millions	6 Months Ended
	Dec. 31, 2018 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 1,397.2
Goodwill, Acquired During Period	42.9
Foreign currency translation adjustments	(18.7)
Ending balance	1,421.4
Softgel Technologies
Goodwill [Roll Forward]
Beginning balance	415.2
Goodwill, Acquired During Period	0.0
Foreign currency translation adjustments	(7.1)
Ending balance	408.1
Biologics and Specialty Drug Delivery
Goodwill [Roll Forward]
Beginning balance	505.7
Goodwill, Acquired During Period	0.0
Foreign currency translation adjustments	(0.9)
Ending balance	504.8
Oral Drug Delivery
Goodwill [Roll Forward]
Beginning balance	319.9
Goodwill, Acquired During Period	42.9
Foreign currency translation adjustments	(5.2)
Ending balance	357.6
Clinical Supply Services
Goodwill [Roll Forward]
Beginning balance	156.4
Goodwill, Acquired During Period	0.0
Foreign currency translation adjustments	(5.5)
Ending balance	$ 150.9

XML

Definite Lived Long-Lived Assets - Other Intangible Assets Subject to Amortization (Detail) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,033.2	$ 968.3
Accumulated Amortization	(452.2)	(423.4)
Net Carrying Value	$ 581.0	$ 544.9
Core technology [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	18 years	18 years
Gross Carrying Value	$ 168.0	$ 170.8
Accumulated Amortization	(88.7)	(85.3)
Net Carrying Value	$ 79.3	$ 85.5
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	14 years	14 years
Gross Carrying Value	$ 589.9	$ 587.0
Accumulated Amortization	(158.4)	(140.9)
Net Carrying Value	$ 431.5	$ 446.1
Product Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	11 years	12 years
Gross Carrying Value	$ 275.3	$ 210.5
Accumulated Amortization	(205.1)	(197.2)
Net Carrying Value	$ 70.2	$ 13.3

XML

Definite Lived Long-Lived Assets - Amortization Expense (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Intangible Assets Disclosure [Abstract]
Amortization expense	$ 19.5	$ 16.1	$ 37.7	$ 27.5
Remainder Fiscal 2019	33.8		33.8
2020	58.4		58.4
2021	58.4		58.4
2022	58.4		58.4
2023	58.4		58.4
2024	$ 58.3		$ 58.3

XML

Long-Term Obligations and Other Short-Term Borrowings - Long-Term Obligations, Presented Net of Issue Discounts and Fees Paid to Lenders, and Other Short-Term Borrowings (Detail) € in Millions, $ in Millions	Dec. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)	Oct. 18, 2017 USD ($)	Dec. 09, 2016 EUR (€)
Schedule Of Debt [Line Items]
Debt and Capital Lease Obligations	$ 2,199.9	$ 2,721.3
Debt, Current	69.9	71.9
Long-term obligations, less current portion	2,130.0	2,649.4
Term loan facility U.S. dollar-denominated
Schedule Of Debt [Line Items]
Debt and Capital Lease Obligations	775.8	1,228.4
Term loan facility euro-denominated
Schedule Of Debt [Line Items]
Debt and Capital Lease Obligations	349.0	358.9
Euro-denominated 4.75% Senior Notes due 2024
Schedule Of Debt [Line Items]
Debt and Capital Lease Obligations	428.7	438.4		€ 380.0
U.S. dollar-denominated 4.875% Senior Notes due 2026
Schedule Of Debt [Line Items]
Debt and Capital Lease Obligations	444.2	443.8	$ 450.0
Deferred purchase consideration
Schedule Of Debt [Line Items]
Debt and Capital Lease Obligations	141.7	188.9
$200 million revolving credit facility
Schedule Of Debt [Line Items]
Debt and Capital Lease Obligations	0.0	0.0
Capital lease obligations
Schedule Of Debt [Line Items]
Debt and Capital Lease Obligations	58.6	60.8
Other obligations
Schedule Of Debt [Line Items]
Debt and Capital Lease Obligations	$ 1.9	$ 2.1

XML

Long-Term Obligations and Other Short-Term Borrowings Long-Term Obligations and Other Short-Term Borrowings - Interest Rate (Details)	6 Months Ended
	Dec. 31, 2018
Euro-denominated 4.75% Senior Notes due 2024
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.75%
U.S. dollar-denominated 4.875% Senior Notes due 2026
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.875%
London Interbank Offered Rate (LIBOR) [Member] | Term loan facility U.S. dollar-denominated
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.25%
London Interbank Offered Rate (LIBOR) [Member] | Term loan facility euro-denominated
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.75%
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Term loan facility U.S. dollar-denominated
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.00%
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Term loan facility euro-denominated
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.00%
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | $200 million revolving credit facility
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.00%
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | $200 million revolving credit facility
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.25%

XML

Long-Term Obligations and Other Short-Term Borrowings Long-Term Obligations and Other Short-Term Borrowings (Details) € in Millions, $ in Millions	Jul. 31, 2018 USD ($)	Oct. 23, 2017 USD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Oct. 18, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 18, 2017 USD ($)	Dec. 09, 2016 EUR (€)
Debt Instrument [Line Items]
Debt and Capital Lease Obligations			$ 2,199.9	$ 2,721.3
Prepaid expenses and other			77.1	65.2
Deferred Purchase Consideration [Member]
Debt Instrument [Line Items]
Payments to Acquire Businesses, Gross		$ 950.0
Installment Payment for Acquisition, Next Twelve Months			50.0
Installment Payment for Acquisition, Year Two			50.0
Installment Payment for Acquisition, Year Three			50.0
Installment Payment for Acquisition, Year Four			50.0
Term loan facility U.S. dollar-denominated
Debt Instrument [Line Items]
Repayments of Secured Debt	$ 450.0
Debt and Capital Lease Obligations			775.8	1,228.4
Euro-denominated 4.75% Senior Notes due 2024
Debt Instrument [Line Items]
Debt and Capital Lease Obligations			428.7	438.4					€ 380.0
U.S. dollar-denominated 4.875% Senior Notes due 2026
Debt Instrument [Line Items]
Debt and Capital Lease Obligations			$ 444.2	$ 443.8		$ 450.0
Bridge Loan [Member]
Debt Instrument [Line Items]
Bridge Loan								$ 700.0
Prepaid expenses and other					$ 6.1		$ 6.1
Accrued Liabilities [Member] | Deferred Purchase Consideration [Member]
Debt Instrument [Line Items]
Payments to Acquire Businesses, Gross		$ 200.0

XML

Long-Term Obligations and Other Short-Term Borrowings Fair Value Measurements of Financial Instruments - Carrying Amounts and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Dec. 31, 2018	Jun. 30, 2018
Estimate of Fair Value Measurement [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure	$ 2,094.5	$ 2,653.9
Carrying Value [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure	2,199.9	2,721.3
Fair Value, Inputs, Level 1 [Member] | Euro-denominated 4.75% Senior Notes due 2024 | Estimate of Fair Value Measurement [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure	428.7	457.6
Fair Value, Inputs, Level 1 [Member] | Euro-denominated 4.75% Senior Notes due 2024 | Carrying Value [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure	428.7	438.4
Fair Value, Inputs, Level 1 [Member] | U.S. dollar-denominated 4.875% Senior Notes due 2026 | Estimate of Fair Value Measurement [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure	419.8	428.3
Fair Value, Inputs, Level 1 [Member] | U.S. dollar-denominated 4.875% Senior Notes due 2026 | Carrying Value [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure	444.2	443.8
Fair Value, Inputs, Level 2 [Member] | Term Loan Three Facility Dollar Denominated [Member] | Estimate of Fair Value Measurement [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure	1,246.0	1,768.0
Fair Value, Inputs, Level 2 [Member] | Term Loan Three Facility Dollar Denominated [Member] | Carrying Value [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure	$ 1,327.0	$ 1,839.1

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Earnings Per Share [Abstract]
Net earnings/(loss)			$ 34.6
Weighted average shares outstanding	145,058,230	132,983,262	143,285,870	129,327,188
Dilutive securities issuable-stock plans	1,602,109	0	1,775,739	0
Total weighted average diluted shares outstanding	146,660,339	132,983,262	145,061,609	129,327,188
Earnings Per Share, Basic	$ 0.34	$ (0.16)	$ 0.24	$ (0.14)
Earnings Per Share, Diluted	$ 0.33	$ (0.16)	$ 0.24	$ (0.14)

XML

Earnings Per Share Earnings Per Share - Additional Details (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Employee Stock Options and RSUs [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1.1	2.6	1.0	2.1

XML

Other Income and Expense (Details) - USD ($) $ in Millions		3 Months Ended			6 Months Ended
		Dec. 31, 2018	Dec. 31, 2017		Dec. 31, 2018		Dec. 31, 2017
Other Income and Expenses [Abstract]
Debt refinancing costs		$—	$11.8	[1]	$4.2	[1]	$11.8	[1]
Foreign Currency (gains) and losses	[2]	$ 0.7	$ 1.3		$ 2.4		$ 6.9
Other		0.7	0.0		0.5		(0.4)
Other expense, net	[3]	$ 1.4	$ 13.1		$ 7.1		$ 18.3

[1] The expense in the six months ended December 31, 2018 includes a write-off of $4.2 million of previously capitalized financing charges related to the Company's U.S. dollar term loan under its senior secured credit facility. The prior-year debt refinancing costs include financing charges related to the offering of the USD Notes and the Third Amendment and also include a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018 on the Bridge Facility.

[2] Foreign currency remeasurement (gains) and losses include both cash and non-cash transactions.

[3] Refer to Note 8, Other Expense for details of financing changes and foreign currency translation adjustments recorded within Other (expense), net.

XML

Restructuring and Other Restructuring and Other Costs (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Restructuring Cost and Reserve [Line Items]
Total restructuring costs	$ 0.1	$ 0.9	$ 9.8	$ 3.1
Other - customer claims net of insurance recoveries	0.0	(0.8)	0.0	(1.8)
Restructuring and other	0.1	0.1	9.8	1.3
Employee-related reorganization
Restructuring Cost and Reserve [Line Items]
Restructuring costs	0.1	1.6	9.8	3.3
Facility exit and other costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 0.0	$ (0.7)	$ 0.0	$ (0.2)

XML

Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Derivative [Line Items]
Total long-term debt	$ 2,199.9		$ 2,199.9		$ 2,721.3
Unrealized foreign exchange gain/(loss) within other comprehensive income	15.6	$ (3.9)	11.4	$ (21.5)
Unrealized foreign exchange gain/(loss) within statement of operations	9.4	$ (2.8)	6.9	$ (16.2)
Net accumulated gain related to investment hedges			59.0
Euro Denominated Debt Outstanding [Member]
Derivative [Line Items]
Total long-term debt	$ 777.7		$ 777.7

XML

Income Taxes U.S. Tax Reform (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
U.S. Tax Reform [Abstract]
Tax Cuts and Jobs Act, Tax Effect		$ 35.6		$ 42.5
Tax Cuts and Jobs Act, Net Benefit	$ 6.9	$ 6.9
U.S. federal statutory income tax rate		21.00%	35.00%

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Jun. 30, 2018
Income Tax Contingency [Line Items]
Unrecognized Tax Benefits	$ 2.0	$ 2.2
Unrecognized Tax Benefits, Including Income Tax Penalties and Interest Accrued	3.7	4.1
Unrecognized tax benefits that impact the effective income tax rate	2.0	2.2
Accrued interest related to uncertain tax positions	1.7	2.0
Interest and penalties subject to indemnification	1.3	1.6
Former Owner [Member]
Income Tax Contingency [Line Items]
Unrecognized Tax Benefits Subject to Indemnification	$ 0.6	$ 0.7

XML

Employee Retirement Benefit Plans - Components of Company's Net Periodic Benefit Costs (Detail) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Components of net periodic benefit cost:
Service cost		$ 0.9	$ 0.9	$ 1.8	$ 1.8
Interest cost		1.9	1.8	3.8	3.6
Expected return on plan assets		(2.6)	(2.9)	(5.2)	(5.8)
Amortization	[1]	0.6	0.6	1.2	1.2
Net amount recognized		0.8	$ 0.4	1.6	$ 0.8
Estimated discounted value of future employer contributions		38.9		38.9		$ 39.0
Estimated annual cash contribution		$ 1.7		$ 1.7

[1] Amount represents the amortization of unrecognized actuarial gains/(losses)

XML

Equity and Accumulated Other Comprehensive Income (Loss) - Equity (Details) - USD ($) $ / shares in Units, $ in Millions			6 Months Ended
	Jul. 27, 2018	Sep. 29, 2017	Dec. 31, 2018	Jun. 30, 2018
Equity [Abstract]
Common Stock, Shares Authorized			1,000,000,000	1,000,000,000
Common Stock, Par or Stated Value Per Share			$ 0.01	$ 0.01
Preferred Stock, Shares Authorized			100,000,000	100,000,000
Preferred Stock, Par or Stated Value Per Share			$ 0.01	$ 0.01
Equity offering, sale of common stock	11,400,000	7,400,000
Shares Issued, Price Per Share	$ 40.24	$ 39.10
Equity offering, sale of common stock	$ 445.5	$ 277.8	$ 445.5
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares			700,000
Stock Repurchase Program, Authorized Amount			$ 100.0

XML

Equity and Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Foreign currency translation adjustments:
Net investment hedge	$ 15.6	$ (3.9)	$ 11.4	$ (21.5)
Long-term intercompany loans	(10.8)	(2.3)	(14.1)	11.2
Translation adjustments	(18.9)	(5.2)	(21.7)	30.9
Total foreign currency translation adjustment, pretax	(14.1)	(11.4)	(24.4)	20.6
Tax expense/(benefit)	3.5	2.0	2.0	(4.1)
Total foreign currency translation adjustment, net of tax	(17.6)	(13.4)	(26.4)	24.7
Net change in minimum pension liability
Net gain/(loss) recognized during the period	0.7	0.6	1.3	1.2
Total pension liability, pretax	0.7	0.6	1.3	1.2
Tax expense/(benefit)	0.1	0.1	0.3	0.3
Net change in minimum pension liability, net of tax	0.6	0.5	1.0	0.9
Net change in available for sale investment [Abstract]
Net gain/(loss) recognized during the period	0.0	(3.6)	0.0	(8.8)
Total available for sale investment, pretax	0.0	(3.6)	0.0	(8.8)
Tax expense/(benefit)	0.0	(0.6)	0.0	(2.4)
Available for sale investments	$ 0.0	$ (3.0)	$ 0.0	$ (6.4)

XML

Equity and Accumulated Other Comprehensive Income (Loss) - Rollforward (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	$ (334.2)		$ (325.8)
Other comprehensive income/(loss) before reclassifications	(17.6)		(26.4)
Amounts reclassified from accumulated other comprehensive income/(loss)	0.6		1.0
Total foreign currency translation adjustment, net of tax	(17.6)	$ (13.4)	(26.4)	$ 24.7
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	0.6	0.5	1.0	0.9
Available for sale investments	0.0	(3.0)	0.0	(6.4)
Other comprehensive income/(loss), net of tax	(17.0)	$ (15.9)	(25.4)	$ 19.2
Ending Balance	(351.2)		(351.2)
Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	(293.9)		(285.1)
Other comprehensive income/(loss) before reclassifications	(17.6)		(26.4)
Amounts reclassified from accumulated other comprehensive income/(loss)	0.0		0.0
Ending Balance	(311.5)		(311.5)
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	(39.2)		(39.6)
Other comprehensive income/(loss) before reclassifications	0.0		0.0
Amounts reclassified from accumulated other comprehensive income/(loss)	0.6		1.0
Ending Balance	(38.6)		(38.6)
Available-for-sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	(1.1)		(1.1)
Other comprehensive income/(loss) before reclassifications	0.0		0.0
Amounts reclassified from accumulated other comprehensive income/(loss)	0.0		0.0
Ending Balance	$ (1.1)		$ (1.1)

XML

Segment Information - Net Revenue and Segment Ebitda (Detail) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue		$ 623.0	$ 606.3	$ 1,174.8	$ 1,150.2
Segment EBITDA		131.4	102.0	199.0	167.2
Inter-segment revenue elimination		(9.8)	(16.4)	(19.6)	(28.2)
Total unallocated costs	[1]	29.4	48.2	69.2	82.2
Softgel Technologies
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue		213.7	228.1	412.9	447.8
Segment EBITDA		44.2	50.1	77.5	85.2
Biologics and Specialty Drug Delivery
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue		184.3	148.7	338.9	240.4
Segment EBITDA		50.8	39.9	77.3	48.6
Oral Drug Delivery
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue		154.0	137.2	284.1	271.8
Segment EBITDA		44.8	41.2	72.2	79.9
Clinical Supply Services
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue		80.8	108.7	158.5	218.4
Segment EBITDA		$ 21.0	$ 19.0	$ 41.2	$ 35.7

[1] Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:

XML

Segment Information - Unallocated Costs (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Unallocated costs [Abstract]
Impairment Charges And Gain Loss On Sale Of Assets		$ 0.1	$ (4.2)	$ (2.8)	$ (4.2)
Stock-based compensation		(7.5)	(8.5)	(17.5)	(15.5)
Restructuring And Other Special Items	[1]	(5.9)	(11.9)	(19.1)	(24.2)
Other (expense), net	[2]	(1.4)	(13.1)	(7.1)	(18.3)
Non Allocated Corporate Costs Net		(14.7)	(10.5)	(22.7)	(20.0)
Segment Reporting Information Unallocated Expense	[3]	$ (29.4)	$ (48.2)	$ (69.2)	$ (82.2)

[1] Restructuring and other special items include transaction and integration costs associated primarily with the acquisitions of Catalent Indiana and Juniper.

[2] Refer to Note 8, Other Expense for details of financing changes and foreign currency translation adjustments recorded within Other (expense), net.

[3] Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:

XML

Segment Information - Reconciliation of Earnings / (Loss) from Continuing Operations to Ebitda (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Segment Reporting [Abstract]
Net earnings/(loss)	$ 49.0	$ (21.9)	$ 34.6	$ (18.1)
Depreciation and amortization	54.6	46.8	107.5	85.8
Interest expense, net	25.5	27.2	53.6	51.5
Income tax expense	2.3	49.9	3.3	48.0
EBITDA from operations	$ 131.4	$ 102.0	$ 199.0	$ 167.2

XML

Segment Information - Total Assets for Each Segment and Reconciling in Consolidated Financial Statements (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Jun. 30, 2018
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 4,441.6	$ 4,531.1
Softgel Technologies
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	1,385.0	1,402.0
Biologics and Specialty Drug Delivery
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	1,793.4	1,739.7
Oral Drug Delivery
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	1,211.9	1,074.2
Clinical Supply Services
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	642.0	613.0
Corporate and Eliminations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ (590.7)	$ (297.8)

XML

Supplemental Balance Sheet Information - Inventory (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Jun. 30, 2018
Inventory, Net [Abstract]
Raw materials and supplies	$ 157.3	$ 137.1
Work-in-process	43.8	42.3
Finished goods	54.8	48.3
Total inventories, gross	255.9	227.7
Inventory cost adjustment	(20.7)	(18.6)
Inventories	$ 235.2	$ 209.1

XML

Supplemental Balance Sheet Information - Prepaid and Other Assets (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Jun. 30, 2018
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid expenses	$ 20.8	$ 19.2
Spare parts supplies	10.6	11.1
Prepaid income tax	11.0	7.2
Non-U.S. value added tax	17.7	12.5
Other current assets	17.0	15.2
Prepaid expenses and other	$ 77.1	$ 65.2

XML

Supplemental Balance Sheet Information - Property and Equipment (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Property, Plant and Equipment, Net [Abstract]
Land Buildings And Improvements	$ 940.0		$ 940.0		$ 928.1
Machinery, equipment, and capitalized software	1,037.6		1,037.6		988.1
Furniture and fixtures	16.3		16.3		14.9
Construction in progress	179.5		179.5		166.8
Property, plant, and equipment, at cost	2,173.4		2,173.4		2,097.9
Accumulated depreciation	(887.6)		(887.6)		(827.3)
Property, plant, and equipment, net	1,285.8		1,285.8		$ 1,270.6
Depreciation Expense on Reclassified Assets	$ 35.1	$ 30.7	$ 69.8	$ 58.3

XML

Supplemental Balance Sheet Information - Other Accrued Liabilities (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Jun. 30, 2018
Balance Sheet Related Disclosures [Abstract]
Accrued employee-related expenses	$ 72.8	$ 104.3
Restructuring accrual	11.5	9.4
Accrued interest	10.9	16.5
Contract liability	112.4	100.9
Accrued income tax	6.5	25.9
Other accrued liabilities and expenses	45.9	55.9
Other accrued liabilities	$ 260.0	$ 312.9