10-Q

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 September 30, 2021

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 ¨  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).       ☒ Yes ¨  No

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

Large accelerated filer	☒	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 to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).       ¨ Yes    ☒ No 

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

Title of each class	Trading symbols(s)	Name of each exchange on which registered
Common Stock	CTLT	New York Stock Exchange

On October 26, 2021, there were 171,188,042 shares of the Registrant's common stock, par value $0.01 per share, issued and outstanding.

CATALENT, INC.

Index to Form 10-Q

For the Three Months Ended September 30, 2021

 

Item		Page
Part I.	Financial Information
Item 1.	Financial Statements (unaudited)	5
	Consolidated Statements of Operations for the Three Months Ended September 30, 2021 and September 30, 2020	5
	Consolidated Statements of Comprehensive Income for the Three Months Ended September 30, 2021 and September 30, 2020	6
	Consolidated Balance Sheets as of September 30, 2021 and June 30, 2021	7
	Consolidated Statement of Changes in Shareholders' Equity for the Three Months Ended September 30, 2021 and September 30, 2020	8
	Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2021 and September 30, 2020	9
	Notes to Unaudited Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	41
Part II.	Other Information	42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
Signatures		44

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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, 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, 2021 (the “Fiscal 2021 10-K”) and others, which are summarized below:

Risks Relating to Our Business and the Industry in Which We Operate

•Our business, financial condition, and operations may be adversely affected by global health epidemics, including the pandemic resulting from the SARS-Co-V-2 strain of coronavirus and its variants (“COVID-19”).

•The continually evolving nature of the COVID-19 pandemic and the resulting public health response, including the changing demand for various COVID-19 vaccines and treatments from both patients and governments around the world, may affect sales of the COVID-19 products we manufacture.

•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.

•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.

•We are a part of the highly regulated healthcare industry, subject to stringent regulatory standards and other applicable laws and regulations, which can change unexpectedly and may adversely impact our business.

•Any failure to implement fully, monitor, and improve our quality management strategy could lead to quality or safety issues and expose us to significant costs, potential liability and adverse publicity.

•If we cannot keep pace with rapid technological advances, our services may become uncompetitive or obsolete.

•Any failure to protect or maintain our intellectual property may adversely affect our competitive edge and result in loss of revenue and reputation.

•Future price fluctuations, material shortages of raw materials, or changes in healthcare policies may have an adverse effect on our results of operations and financial conditions.

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

•We may be unable to attract or retain key personnel.

•We may be unsuccessful in integrating our acquisitions, and we may expend substantial amounts of cash and incur debt in making acquisitions.

•Our global operations are subject to economic, and political risks, which could affect the profitability of our operations or require costly changes to our procedures.

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

•Tax legislative or regulatory initiatives, new interpretations or developments concerning existing tax laws, or challenges to our tax positions could adversely affect our results of operations and financial condition.

•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

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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.

•Cell and gene therapies are relatively new modes of treatment and subject to changing public opinion, continuing research, and increased regulatory scrutiny, each of which may affect our customers' ability to conduct their business, or obtain approvals for their therapies, and thereby adversely affect our cell or gene therapy offerings.

Risks Relating to Our Indebtedness

•Our substantial leverage could limit our ability to operate our business and to finance future operations or acquisitions that would enhance our growth.

•Our debt agreements contain restrictions that may limit our flexibility in conducting certain current and future operations.

•We may not be able to pay our indebtedness when it becomes due.

•Our current and potential future use of derivative financial instruments may expose us to economic losses in the event of price or currency fluctuations.

Risks Relating to Our Series A Preferred Stock

•The outstanding shares of our Series A Convertible Preferred Stock, par value $0.01 ("Series A Preferred Stock") reduce the relative voting power of holders of our common stock, par value $0.01 (the “Common Stock”), dilute the ownership of those holders, and may adversely affect the market price of our Common Stock.

•The holders of our Series A Preferred Stock have special rights to exercise influence over us and our board of directors.

Risks Relating to Ownership of Our Common Stock

•Our stock price has historically been and may continue to be volatile.

•Because we have no plan to pay cash dividends on our Common Stock for the foreseeable future, receiving a return on an investment in our Common Stock may require a sale for a net price greater than was paid for it.

•Provisions in our organizational documents could delay or prevent a change of control.

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.

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.

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PART I.    FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

Catalent, Inc.

Consolidated Statements of Operations

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

	Three Months Ended   September 30,
	2021		2020
Net revenue	$	1,025	$	846
Cost of sales	701		597
Gross margin	324		249
Selling, general, and administrative expenses	183		165
Gain on sale of subsidiary	(1)		—
Other operating expense	4		2
Operating earnings	138		82
Interest expense, net	26		26
Other expense (income), net	9		(11)
Earnings before income taxes	103		67
Income tax expense (benefit)	10		(15)
Net earnings	93		82
Less: Net earnings attributable to preferred shareholders	(9)		(13)
Net earnings attributable to common shareholders	$	84	$	69
Earnings per share:
Basic
Net earnings	$	0.49	$	0.42
Diluted
Net earnings	$	0.49	$	0.41

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

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Catalent, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited; dollars in millions)

	Three Months Ended   September 30,
	2021		2020
Net earnings	$	93	$	82
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	(14)		16
Pension and other post-retirement adjustments	1		—
Derivatives and hedges	1		—
Other comprehensive income (loss), net of tax	(12)		16
Comprehensive income	$	81	$	98

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

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Catalent, Inc.

Consolidated Balance Sheets

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

 

	September 30, 2021		June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,969	$	896
Trade receivables, net of allowance for credit losses of $15 and $12, respectively	831		1,012
Inventories	622		563
Prepaid expenses and other	459		376
Marketable securities	50		71
Total current assets	3,931		2,918
Property, plant, and equipment, net of accumulated depreciation of $1,215 and $1,179, respectively	2,581		2,524
Other assets:
Goodwill	2,531		2,519
Other intangibles, net	793		817
Deferred income taxes	70		66
Other long-term assets	277		268
Total assets	$	10,183	$	9,112
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations and other short-term borrowings	$	79	$	75
Accounts payable	363		385
Other accrued liabilities	654		736
Total current liabilities	1,096		1,196
Long-term obligations, less current portion	4,225		3,166
Pension liability	133		137
Deferred income taxes	171		164
Other liabilities	178		175
Commitment and contingencies (see Note 15)
Total liabilities	5,803		4,838
Redeemable preferred stock, $0.01 par value; 1.0 million shares authorized at September 30 and June 30, 2021; 384,777 shares issued and outstanding at September 30 and June 30, 2021	359		359
Shareholders' equity:
Common stock, $0.01 par value; 1.0 billion shares authorized at September 30 and June 30, 2021; 171.0 million and 170.5 million issued and outstanding at September 30 and June 30, 2021, respectively	2		2
Preferred stock, $0.01 par value; 99 million authorized at September 30 and June 30, 2021; 0 issued and outstanding at September 30 and June 30, 2021	—		—
Additional paid in capital	4,234		4,205
Retained earnings	114		25
Accumulated other comprehensive loss	(329)		(317)
Total shareholders' equity	4,021		3,915
Total liabilities, redeemable preferred stock, and shareholders' equity	$	10,183	$	9,112

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

7

Catalent, Inc.

Consolidated Statement of Changes in Shareholders' Equity

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

Three Months Ended September 30, 2021

	Shares of Common Stock	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders' Equity		Redeemable Preferred Stock
Balance at June 30, 2021	170,549	$	2	$	4,205	$	25	$	(317)	$	3,915	$	359
Share issuances related to stock-      based compensation	484	—		—		—		—		—		—
Stock-based compensation	—	—		21		—		—		21		—
Cash paid, in lieu of equity, for      tax withholding	—	—		(4)		—		—		(4)		—
Exercise of stock options	—	—		8		—		—		8		—
Employee stock purchase plan	—	—		4		—		—		4		—
Preferred dividend ($12.50 per       share of redeemable preferred       stock)	—	—		—		(4)		—		(4)		—
Net earnings	—	—		—		93		—		93		—
Other comprehensive loss, net of tax	—	—		—		—		(12)		(12)		—
Balance at September 30, 2021	171,033	$	2	$	4,234	$	114	$	(329)	$	4,021	$	359

Three Months Ended September 30, 2020

Columns may not foot due to rounding	Shares of Common Stock	Common Stock		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Shareholders' Equity		Redeemable Preferred Stock
Balance at June 30, 2020	162,788	$	2	$	3,819	$	(535)	$	(386)	$	2,900	$	607
Equity offering, sale of common stock	1,162	—		82		—		—		82		—
Share issuances related to stock-      based compensation	617	—		—		—		—		—		—
Stock-based compensation	—	—		19		—		—		19		—
Cash paid, in lieu of equity, for      tax withholding	—	—		(20)		—		—		(20)		—
Employee stock purchase plan				1						1
Preferred dividend	—	—		—		(8)		—		(8)		—
Net earnings	—	—		—		82		—		82		—
Other comprehensive income, net    of tax	—	—		—		—		16		16		—
Balance at September 30, 2020	164,567	$	2	$	3,901	$	(461)	$	(370)	$	3,072	$	607

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

8

Catalent, Inc.

Consolidated Statements of Cash Flows

(Unaudited; dollars in millions)

	Three Months Ended September 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	93	$	82
Adjustments to reconcile net earnings to net cash from operations:
Depreciation and amortization	81		69
Non-cash foreign currency transaction (gain) loss, net	9		(4)
Amortization of debt issuance costs	2		2
Impairments charges and (gain) loss on sale of assets	3		2
Gain on sale of subsidiary	(1)		—
Financing-related charges	4		—
Gain on derivative instrument	(2)		(9)
Stock-based compensation	21		19
Benefit for deferred income taxes	(8)		(11)
Provision for bad debts and inventory	10		8
Change in operating assets and liabilities:
Decrease in trade receivables	185		144
Increase in inventories	(63)		(66)
(Decrease) increase in accounts payable	(6)		7
Other assets/accrued liabilities, net—current and non-current	(165)		(93)
Net cash provided by operating activities	163		150
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisition of property, equipment, and other productive assets	(154)		(150)
Proceeds from maturity of marketable securities	20		—
Settlement on sale of subsidiaries, net	(3)		—
Payment for acquisitions, net of cash acquired	(26)		—
Payment made for investments	(4)		(1)
Net cash used in investing activities	(167)		(151)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in other borrowings	—		(4)
Proceeds from borrowing, net	1,096		—
Payments related to long-term obligations	(3)		(2)
Financing fees paid	(15)		—
Dividends paid	(4)		(8)
Proceeds from sale of common stock, net	—		82
Cash paid, in lieu of equity, for tax-withholding obligations	(4)		(20)
Exercise of stock options	8		—
Other financing activities	4		2
Net cash provided by financing activities	1,082		50
Effect of foreign currency exchange on cash and cash equivalents	(5)		5
NET INCREASE IN CASH AND CASH EQUIVALENTS	1,073		54
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	896		953
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,969	$	1,007
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest paid	$	40	$	43
Income taxes paid, net	$	15	$	9

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

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Catalent, Inc.

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 (“U.S. 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 U.S. 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 three months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending June 30, 2022. The consolidated balance sheet at June 30, 2021 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. 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, 2021 filed with the Securities and Exchange Commission (the “SEC”).

Reclassifications

Certain prior-period amounts have been reclassified to conform to the current period presentation. These reclassifications did not have a material impact on the consolidated statements of operations, consolidated balance sheets, consolidated statements of cash flows, or notes to the consolidated financial statements.

Foreign Currency Translation

The financial statements of the Company’s operations are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of operations outside the U.S. into U.S. dollars are accumulated as a component of other comprehensive income utilizing period-end exchange rates. Since July 1, 2018, the Company has accounted for its Argentine operations as highly inflationary.

Depreciation Expense

Depreciation expense was $58 million and $46 million, for the three months ended September 30, 2021 and 2020, respectively. Depreciation expense includes amortization of assets related to finance leases. The Company charges repairs and maintenance costs to expense as incurred.

Research and Development Costs

The Company expenses research and development costs as incurred. Research and development costs amounted to $6 million for both the three months ended September 30, 2021 and 2020.

Marketable Securities

The Company classifies its marketable securities as available-for-sale, because it may sell certain of its marketable securities prior to the stated maturity for various reasons, including management of liquidity, credit risk, duration, relative return, and asset allocation. The Company determines the fair value of each marketable security in its portfolio at each period end and recognizes gains and losses in the portfolio in other comprehensive income. As of September 30, 2021, the amortized cost basis of marketable securities approximates fair value and all outstanding marketable securities mature within one year.

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Recent Financial Accounting Standards

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the incremental approach for intra-period allocation, deferred tax recognition requirement for changes in equity method investments and non U.S. subsidiaries, and methodology for calculating income taxes in an interim period. The guidance also simplifies certain aspects of the accounting for franchise taxes, the accounting for step-up in the tax basis of goodwill, and accounting for the change in the enacted change in tax laws or rates. The Company adopted the guidance on July 1, 2021. The adoption of this guidance did not have a material impact on the Company’s financial condition or results of operations.

In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plan, which removes certain disclosures and added additional disclosures around weighted-average interest crediting rates for cash balance plans and explanation for significant gains and losses related to change in the benefit obligation for the period. The Company adopted the guidance on July 1, 2021. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

New Accounting Standards Not Adopted as of September 30, 2021

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for the discontinuation of a reference rate such as LIBOR, formerly known as the London Interbank Offered Rate, because of reference rate reform. The expedients and exceptions provided by the guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

2.    REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. 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 months ended September 30, 2021 and 2020, by type of activity and reporting segment (in millions):

Three Months Ended September 30, 2021	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	134	$	207	$	88	$	—	$	429
Development services	412		36		58		—		506
Clinical supply services	—		—		—		96		96
Total	$	546	$	243	$	146	$	96	$	1,031
			Inter-segment revenue elimination						(6)
					Combined net revenue				$	1,025

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Three Months Ended September 30, 2020	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	90	$	190	$	104	$	—	$	384
Development services	287		31		55		—		373
Clinical supply services	—		—		—		93		93
Total	$	377	$	221	$	159	$	93	$	850
			Inter-segment revenue elimination						(4)
					Combined net revenue				$	846

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

	Three Months Ended September 30,
(Dollars in millions)	2021		2020
United States	$	630	$	517
Europe	351		281
Other	72		69
Elimination of revenue attributable to multiple locations	(28)		(21)
Total	$	1,025	$	846

Contract Liabilities

Contract liabilities relate to cash consideration that the Company receives in advance of satisfying the related performance obligations. The contract liabilities balance (current and non-current) as of September 30, 2021 and June 30, 2021 are as follows:

(Dollars in millions)
Balance at June 30, 2021	$	321
Balance at September 30, 2021	$	299
Revenue recognized in the period from amounts included in contracts liability at the beginning of the period:	$	82

Contract liabilities that will be recognized within 12 months of September 30, 2021 are accounted for in Other accrued liabilities and those that will be recognized longer than 12 months after September 30, 2021 are accounted for within Other liabilities.

Contract Assets

Contract assets primarily relate to the Company's conditional right to receive consideration for services that have been performed for a customer as of September 30, 2021 relating to the Company's development services but had not yet been invoiced as of September 30, 2021. Contract assets are transferred to trade receivables, net when the Company’s right to receive the consideration becomes unconditional. Contract assets totaled $224 million and $181 million as of September 30, 2021 and June 30, 2021, respectively. Contract assets are included in prepaid expenses and other in the consolidated balance sheets.

3.    BUSINESS COMBINATIONS AND DIVESTITURES

Skeletal Cell Therapy Support SA Acquisition

In November 2020, the Company acquired 100% of the equity interest in Skeletal Cell Therapy Support SA (“Skeletal”) for $15 million, as well as related supply agreements with the seller. Skeletal operates a cell therapy manufacturing facility in Gosselies, Belgium. The operations were assigned to the Company’s Biologics segment, expanding the Company’s cell therapy capacity for clinical and commercial supply. The acquisition, when combined with the Company's other European-based facilities and capabilities in cell therapy, has created an integrated European center of excellence in cell therapy.

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The Company accounted for the Skeletal acquisition using the acquisition method in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and allocated the purchase price among the acquired assets, recognizing goodwill of $9 million. The Company allocated the remainder of the purchase price to trade receivables, property, plant, and equipment, and other current and non-current assets and liabilities assumed in the acquisition. Results for the three months ended September 30, 2021 were not material to the Company’s statement of operations, financial position, or cash flows.

Acorda Therapeutics, Inc. Acquisition

In February 2021, the Company acquired the manufacturing and packaging operations of Acorda Therapeutics, Inc.'s (“Acorda”) dry powder inhaler and spray dry manufacturing business, including its manufacturing facility located near Boston, Massachusetts, for $83 million, subject to customary adjustments. In connection with the purchase, Acorda and the Company entered into a long-term supply agreement, under which the Company will continue the manufacture and packaging of an Acorda product at the facility. The facility and operations became part of the Company’s Oral and Specialty Delivery segment. Results of the business acquired were not material to the Company's statement of operations, financial position, or cash flows for the three months ended September 30, 2021.

The Company accounted for the Acorda transaction using the acquisition method in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and preliminarily allocated the purchase price among the acquired assets, recognizing property, plant, and equipment of $79 million, inventory of $2 million, and goodwill of $2 million. The remainder of the purchase price was preliminarily allocated to other current and non-current assets and liabilities assumed in the acquisition.

The Company has not completed its analysis regarding the assets acquired and liabilities assumed. Therefore, the allocation to goodwill and inventory are preliminary and subject to finalization. The Company expects to finalize its allocation over the next several months, but, in any event, within one year from the closing.

Delphi Genetics SA Acquisition

In February 2021, the Company acquired 100% of the equity interest in Delphi Genetics SA (“Delphi”) for $50 million, subject to customary adjustments. Delphi is a plasmid DNA (pDNA) cell and gene therapy contract development and manufacturing organization based in Gosselies, Belgium. The facility and operations acquired became part of the Company’s Biologics segment. Results of the business acquired were not material to the Company's statement of operations, financial position, or cash flows for the three months ended September 30, 2021.

The Company accounted for the Delphi transaction using the acquisition method in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and preliminarily allocated the purchase price recognizing property, plant, and equipment of $4 million, intangible assets of $7 million, other current assets of $3 million, assumed debt of $6 million, other current liabilities of $1 million and goodwill of $43 million.

The Company has not completed its analysis regarding the assets acquired and liabilities assumed. Therefore, the allocation to property, plant, and equipment, intangible assets, goodwill, and income taxes are preliminary and subject to finalization. The Company expects to finalize its allocation over the next several months, but, in any event, within one year from the acquisition date.

Hepatic Cell Therapy Support SA Asset Acquisition

In April 2021, the Company acquired 100% of the equity interest in Hepatic Cell Therapy Support SA (“Hepatic”) for approximately $15 million, net of cash acquired and debt assumed. Hepatic operates a manufacturing facility at the same location where Skeletal operates a cell therapy manufacturing facility in Gosselies, Belgium. The facility acquired expands the Company’s cell therapy capacity for clinical and commercial supply in its Biologics segment.

The Company accounted for the Hepatic transaction as an asset acquisition in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and allocated the purchase price to the assets acquired and liabilities assumed recognizing property, plant, and equipment of $13 million, other current and non-current assets of $3 million, and assumed debt of $1 million.

RheinCell Therapeutics GmbH Acquisition

In August 2021, the Company acquired 100% of the equity interest in RheinCell Therapeutics GmbH (“RheinCell”) for approximately $26 million, net of cash acquired. RheinCell is a developer and manufacturer of cGMP-grade induced

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pluripotent stem cells (“iPSCs”) based in Lagenfeld, Germany. The operations acquired became part of the Company’s Biologics segment and builds upon Catalent’s existing custom cell therapy process development and manufacturing capabilities with proprietary cGMP cell lines for iPSC-based therapies.

The Company accounted for the RheinCell transaction using the acquisition method in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and preliminarily allocated the purchase price recognizing $3 million of other assets, $4 million of other current liabilities and goodwill of $27 million. Results of the business acquired were not material to the Company's statement of operations, financial position, or cash flows for the three months ended September 30, 2021.

The Company has not completed its analysis regarding the assets acquired and liabilities assumed. Therefore, the allocation to property, plant, and equipment, intangible assets, goodwill, and income taxes are preliminary and subject to finalization. The Company expects to finalize its allocation over the next several months, but, in any event, within one year from the acquisition date.

Bettera Holdings, LLC Acquisition

In August 2021, the Company entered into an agreement to acquire Bettera Holdings, LLC (“Bettera”) for approximately $1.00 billion, subject to customary adjustments. Bettera is a manufacturer of nutraceuticals and nutritional supplements in gummy, soft chew, and lozenge delivery formats. On October 1, 2021, the Company completed the acquisition. For further details, see Note 18, Subsequent Events.

Blow-Fill-Seal Divestiture

In March 2021, the Company sold 100% of the shares of Catalent USA Woodstock, Inc. and certain related assets (collectively, the “Blow-Fill-Seal Business”) to a subsidiary of SK Capital Partners, LP for $300 million cash, a $50 million note receivable (estimated fair value of $47 million) as well as potential additional contingent consideration (up to $50 million) dependent upon the performance of aspects of the Blow-Fill-Seal Business. The Blow-Fill-Seal Business was part of the Oral and Specialty Delivery segment. The carrying value of the net assets sold was $149 million, which included goodwill of $54 million. As a result of the sale, the Company realized a gain from sale of subsidiary of $182 million, net of transaction costs, for the fiscal year ended June 30, 2021.

During three months ended September 30, 2021, the Company settled a post-closing purchase price adjustment, which resulted in a gain on sale of subsidiary of $1 million.

All consideration received was measured at its divestiture date fair value. The Company valued the total consideration received from divestiture of the Blow-Fill-Seal Business as follows:

(Dollars in millions)	Fair value of consideration received
Cash, gross	$	300
Note receivable (1)	47
Contingent consideration (2)	—
Other (3)	(16)
Total	$	331

(1)    The note receivable, which provides for interest at a rate of 5.0% paid in kind, had an estimated fair value of $47 million, which is the $50 million aggregate principal amount less a $3 million discount determined using a discounted cash flow model with the market interest rate as a significant input.

(2)    The Company determined that the estimated fair value of the contingent consideration from the sale of the Blow-Fill-Seal     Business at September 30, 2021 is zero, and therefore, no contingent consideration was recorded as a result of the divestiture of the Blow-Fill-Seal Business. If any contingent consideration is subsequently received, it will be recorded in the period in which it is received. The Company has elected an accounting policy to recognize increases in the carrying amount of the contingent consideration asset using the gain contingency guidance in ASC 450, Contingencies.

(3)    Other includes $8 million of transaction expenses, a working capital adjustment of $6 million, and a $2 million assumption of liabilities to create cumulative net cash proceeds of $284 million.

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4.    GOODWILL

The following table summarizes the changes between June 30, 2021 and September 30, 2021 in the carrying amount of goodwill in total and by segment:

(Dollars in millions)	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Balance at June 30, 2021	$	1,531	$	516	$	316	$	156	$	2,519
Additions(1)	25		—		—		—		25
Foreign currency translation adjustments	(6)		(4)		(2)		(1)		(13)
Balance at September 30, 2021	$	1,550	$	512	$	314	$	155	$	2,531

(1) The addition to goodwill in the Biologics segment relates to the RheinCell acquisition and the Delphi acquisition. For further details, see Note 3, Business Combinations and Divestitures.

The Company recorded no impairment charge to goodwill in the current period.

5.    OTHER INTANGIBLES, NET

The details of other intangibles as of September 30, 2021 and June 30, 2021 are as follows:

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
September 30, 2021
Amortized intangibles:
Core technology	19 years	$	139	$	(95)	$	44
Customer relationships	13 years	1,018		(321)		697
Product relationships	8 years	252		(210)		42
Other	5 years	19		(9)		10
Total other intangibles		$	1,428	$	(635)	$	793

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
June 30, 2021
Amortized intangibles:
Core technology	19 years	$	140	$	(94)	$	46
Customer relationships	14 years	1,024		(306)		718
Product relationships	11 years	281		(237)		44
Other	5 years	17		(8)		9
Total other intangibles		$	1,462	$	(645)	$	817

Amortization expense related to other intangible assets was $23 million for both the three months ended September 30, 2021 and 2020.

Future amortization expense related to other intangible assets for the next five fiscal years is estimated to be:

(Dollars in millions)	Remainder  Fiscal 2022		2023		2024		2025		2026		2027
Amortization expense	$	69	$	92	$	91	$	90	$	82	$	69

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6.    LONG-TERM OBLIGATIONS AND SHORT-TERM BORROWINGS

Long-term obligations and short-term borrowings consisted of the following at September 30, 2021 and June 30, 2021:

(Dollars in millions)	Maturity	September 30, 2021		June 30, 2021
Senior secured credit facilities
Term loan facility B-3	February 2028	$	1,444	$	997
5.000% senior notes due 2027	July 2027	500		500
2.375% Euro senior notes due 2028(1)	March 2028	965		984
3.125% senior notes due 2029	February 2029	550		550
3.500% senior notes due 2030	April 2030	650		—
Deferred purchase consideration	October 2021	50		50
Financing lease obligations	2021 to 2038	188		193
Other obligations	2021 to 2028	3		3
Unamortized discount and debt issuance costs		(46)		(36)
Total debt		$	4,304	$	3,241
Less: current portion of long-term obligations and other short-term      borrowings		79		75
Long-term obligations, less current portion		$	4,225	$	3,166

(1) The decrease in euro-denominated debt is primarily due to large fluctuations in foreign currency exchange rates.

Senior Secured Credit Facilities and Sixth Amendment to the Credit Agreement

In September 2021, Operating Company entered into Amendment No. 6 (the "Sixth Amendment") to its Amended and Restated Credit Agreement, dated May 20, 2014 (as subsequently amended, the "Credit Agreement"). Pursuant to the Sixth Amendment, Operating Company incurred an additional $450 million aggregate principal amount of U.S. dollar-denominated term loans (the "Incremental Term B-3 Loans") and amended the quarterly amortization from 0.25% to 0.2506% for the Incremental Term B-3 Loans and all of the remaining U.S. dollar-denominated term loans outstanding (together with the Incremental Term B-3 Loans, the “Term B-3 Loans”). The Incremental Term B-3 Loans otherwise feature the same principal terms as the existing Term B-3 Loans, with an interest rate of one-month LIBOR (subject to a floor of 0.50%) plus 2.00% per annum and a maturity date of February 2028. The proceeds of the Incremental Term B-3 Loans, after payment of the offering fees and expenses, were used in part to fund a portion of the consideration paid at the closing of the Bettera acquisition.

3.500% Senior Notes due 2030

In September 2021, Operating Company completed a private offering of $650 million aggregate principal amount of 3.500% Senior Notes due 2030 (the "2030 Notes"). The 2030 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 2030 Notes were offered in the U.S. to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and outside the U.S. only to non-U.S. investors pursuant to Regulation S under the Securities Act. The 2030 Notes will mature on April 1, 2030 and bear interest at the rate of 3.500% per annum payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022. The proceeds of the 2030 Notes, after payment of the offering fees and expenses, were used to fund a portion of the consideration paid at the closing of the Bettera acquisition.

Deferred Purchase Consideration

In connection with the acquisition of Catalent Indiana, LLC in October 2017, $200 million of the $950 million aggregate nominal purchase price was payable in $50 million installments on each of the first four anniversaries of the closing date. The Company made installment payments in October 2018, October 2019, and October 2020 and paid the final installment in October 2021.

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Measurement of the Estimated Fair Value of Debt

The estimated fair value of the Company’s senior secured credit facilities and other senior indebtedness is classified as a Level 2 determination (see Note 11, Fair Value Measurements, for a description of the method by which fair value classifications are determined) in the fair-value hierarchy and is calculated by using a discounted cash flow model with a market interest rate as a significant input. The carrying amounts and the estimated fair values of the Company’s principal categories of debt as of September 30, 2021 and June 30, 2021 are as follows:

		September 30, 2021				June 30, 2021
(Dollars in millions)	Fair Value Measurement	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
5.000% senior notes due 2027	Level 2	$	500	$	527	$	500	$	539
2.375% Euro senior notes due 2028	Level 2	965		982		984		993
3.125% senior notes due 2029	Level 2	550		531		550		524
3.500% senior notes due 2030	Level 2	650		642		—		—
Senior secured credit facilities & other	Level 2	$	1,685	$	1,638	$	1,243	$	1,209
Subtotal		$	4,350	$	4,320	$	3,277	$	3,265
Unamortized discount and debt issuance costs		(46)		—		(36)		—
Total debt		$	4,304	$	4,320	$	3,241	$	3,265

7.    EARNINGS PER SHARE

The Company computes earnings per share of the Company’s common stock, par value $0.01 (the “Common Stock”) using the two-class method required due to the participating nature of the Series A Preferred Stock (as defined and discussed in Note 14, Equity, Redeemable Preferred Stock and Accumulated Other Comprehensive Loss). Diluted net earnings per share is computed using the weighted average number of shares of Common Stock outstanding plus the weighted average number of shares of Common Stock that would be issued assuming exercise or conversion of all potentially dilutive instruments. Dilutive securities having an anti-dilutive effect on diluted net earnings per share are excluded from the calculation. The dilutive effect of the securities that are issuable under the Company’s equity incentive plans are reflected in diluted earnings per share by application of the treasury stock method. The Company applies the if-converted method to compute the potentially dilutive effect of the Series A Preferred Stock. The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three and three months ended September 30, 2021 and 2020, respectively, are as follows:

	Three Months Ended   September 30,
(In millions except per share data)	2021		2020
Net earnings	$	93	$	82
Less: Net earnings attributable to preferred shareholders	(9)		(13)
Net earnings attributable to common shareholders	$	84	$	69
Weighted average shares outstanding - basic	171		164
Weighted average dilutive securities issuable - stock plans	1		2
Weighted average shares outstanding - diluted	172		166
Earnings per share:
Basic	$	0.49	$	0.42
Diluted	$	0.49	$	0.41

The Company's Series A Preferred Stock is deemed a participating security, meaning that it has the right to participate in undistributed earnings with the Company's Common Stock. On November 23, 2020 (the “Partial Conversion Date”), holders of Series A Preferred Stock converted 265,223 shares and $2 million of unpaid accrued dividends into shares of Common Stock (the “Partial Conversion”). The holders received 20.33 shares of Common Stock for each converted preferred share, resulting in

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the issuance of 5,392,280 shares of Common Stock. See Note 14, Equity, Redeemable Preferred Stock and Accumulated Other Comprehensive Loss for further details.

The diluted weighted average number of shares outstanding as of September 30, 2021 and 2020, respectively, did not include the shares of Common Stock associated with the Series A Preferred Stock due to their antidilutive effect:

	Three Months Ended   September 30,
(share counts in millions)	2021	2020
Stock options	—	—
Time-based restricted stock units	—	—
Performance-based restricted stock units	—	—
Series A Preferred Stock	8	13

8.    OTHER EXPENSE (INCOME), NET

The components of other expense (income), net for the three months ended September 30, 2021 and 2020 are as follows:

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Other expense (income), net
Debt financing costs (1)	$	4	$	—
Foreign currency losses (gains)(2)	9		(1)
Other (3)	(4)		(10)
Total other expense (income), net	$	9	$	(11)

(1) Debt financing costs for the three months ended September 30, 2021 includes $4 million of financing charges related to the Company’s Incremental Term B-3 Loans.

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

(3) Other, for the three months ended September 30, 2021 and 2020 includes unrealized gains of $2 million and $9 million, respectively, related to the fair value of the derivative liability associated with the Series A Preferred Stock.

9.     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 equipment relocation costs and costs associated with planned facility expansions and closures to streamline Company operations.

During the fiscal year ended June 30, 2021, the Company adopted a plan to reduce costs and optimize its infrastructure in Europe by closing its Clinical Supply Services facility in Bolton, U.K. In connection with this restructuring plan, the Company reduced its headcount by approximately 170 employees and incurred cumulative charges of $8 million, primarily associated with employee severance benefits. For the three months ended September 30, 2021, restructuring charges associated with the Bolton facility closure were $1 million.

Total restructuring charges were $1 million for both the three months ended September 30, 2021 and 2020.

10.    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

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The Company is exposed to fluctuations in the currency exchange rates on its applicable to its investments in operations outside the U.S. 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 September 30, 2021, the Company had euro-denominated debt outstanding of $965 million (U.S. dollar equivalent), that is designated and qualifies as a hedge of a net investment in European operations. For non-derivatives designated and qualifying as net investment hedges, the effective portion of translation gains or losses are reported in accumulated other comprehensive loss as part of the cumulative translation adjustment. The non-hedge portions of the euro-denominated debt translation gains or losses are reported in the consolidated statement of operations. The following table includes net investment hedge activity during the three months ended September 30, 2021 and 2020.

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Unrealized foreign exchange gain (loss) within other comprehensive income	$	22	$	(32)
Unrealized foreign exchange loss within statement of operations	$	(3)	$	(2)

The net accumulated gain on the instrument designated as a hedge as of September 30, 2021 within other comprehensive loss was approximately $28 million. Amounts are reclassified out of accumulated other comprehensive loss into earnings when the entity to which the gains and losses relate is either sold or substantially liquidated.

Preferred Stock Derivative Liability

As discussed in Note 14, Equity, Redeemable Preferred Stock, and Accumulated Other Comprehensive Loss, in May 2019, the Company issued shares of Series A Preferred Stock in exchange for net proceeds of $646 million after taking into account the $4 million issuance cost.

The dividend rate used to determine the amount of the quarterly dividend payable on shares of the Series A Preferred Stock is subject to adjustment so as to provide holders of shares of Series A Preferred Stock with certain protections against a decline in the trading price of shares of Common Stock. The Company determined that this feature should be accounted for as a derivative liability, since the feature fluctuates inversely to changes in the trading price and is also linked to the performance of the S&P 500 stock index. Accordingly, the Company bifurcated the adjustable dividend feature from the remainder of the Series A Preferred Stock and accounted for this feature as a derivative liability at fair value.

The Company recorded a total gain of $2 million and $9 million on the change in the estimated fair value of the derivative liability for the three months ended September 30, 2021 and 2020, respectively, which is reflected as other expense (income), net in the consolidated statements of operations.

A portion of the derivative liability was settled on the Partial Conversion Date due to the Partial Conversion. The fair value of the derivative liability as of the Partial Conversion Date was $9 million, of which $4 million was related to the converted portion of the outstanding shares of Series A Preferred Stock. See Note 14, Equity, Redeemable Preferred Stock, and Accumulated Other Comprehensive Loss for details of the Partial Conversion.

Interest-Rate Swap

Pursuant to its interest rate and risk management strategy, in April 2020, the Company entered into an interest-rate swap agreement with Bank of America N.A. as a hedge against the economic effect of a portion of the variable interest obligation associated with its U.S. dollar-denominated term loans under its senior secured credit facilities, so that the interest payable on that portion of the debt becomes fixed at a certain rate, thereby reducing the impact of future interest rate changes on future interest expense.

In February 2021, in connection with an amendment to the Credit Agreement, the Company settled the interest-rate swap agreement with Bank of America N.A. The Company paid $2 million in cash to Bank of America N.A to settle the interest-rate swap agreement. This loss is deferred in stockholders’ equity, net of income taxes, as a component of accumulated other comprehensive loss, and amortized as an adjustment to interest expense, net over the original term of the formerly outstanding term loans. The net amount of deferred losses on cash flow hedges that is expected to be reclassified from accumulated other comprehensive loss into interest expense, net within the next twelve months is not material.

In February 2021, the Company entered into a new interest-rate swap agreement with Bank of America N.A. as a hedge against the economic effect of a portion of the variable interest obligation associated with its Term B-3 Loans, so that the interest payable on that portion of the Term B-3 Loans becomes fixed at a certain rate, thereby reducing the impact of future

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interest rate changes on future interest expense. As a result of entering into the interest-rate swap agreement, the floating portion of the applicable rate on $500 million of the Term B-3 Loans is now effectively fixed at 0.9985%.

The new interest-rate swap agreement qualifies for and is designated as a cash-flow hedge. The Company evaluates hedge effectiveness at the inception of the hedge and on an ongoing basis. The cash flows associated with the interest-rate swap are reported in net cash provided by operating activities in the consolidated statements of cash flows. The unrealized gain or loss from the mark-to-market of the interest rate swap valuations during the three months ended September 30, 2021 and the fiscal year ended June 30, 2021 was immaterial in each period.

A summary of the estimated fair value of the interest-rate swap reported in the consolidated balance sheets is stated in the table below:

	September 30, 2021			June 30, 2021
(Dollars in millions)	Balance Sheet Classification	Estimated Fair Value		Balance Sheet Classification	Estimated Fair Value
Interest-rate swap	Other long-term assets	$	3	Other long-term assets	$	2

11. FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement, defines fair value as the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which Level 1 and Level 2 are considered observable and Level 3 is considered unobservable:

Level 1 – Quoted prices in active markets for identical assets or liabilities.                      

Level 2 – Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.                      

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Value is determined using pricing models, discounted cash flow methodologies, or similar techniques and also includes instruments for which the determination of fair value requires significant judgment or estimation.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses of the Company approximate fair value based on the short maturities of these instruments.

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification as of the end of each reporting period. The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis and the fair value measurement for such assets and liabilities at September 30, 2021 and June 30, 2021, respectively:

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(Dollars in millions)	Basis of Fair Value Measurement
September 30, 2021	Total		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	50	$	50	$	—	$	—
Interest-rate swap	3		—		3		—
Trading securities	1		1		—		—
Liabilities:
Series A Preferred Stock derivative liability	1		—		—		1
June 30, 2021
Assets:
Marketable securities	$	71	$	71	$	—	$	—
Interest-rate swap	2		—		2		—
Trading securities	1		1		—		—
Liabilities:
Series A Preferred Stock derivative liability	3		—		—		3

The fair value of the interest-rate swap agreement is determined at the end of each reporting period based on valuation models that use interest rate yield curves and discount rates as inputs. The discount rates are based on U.S. deposit or U.S. Treasury rates. The significant inputs used in the valuation models are readily available in public markets or can be derived from observable market transactions, and the valuation is therefore classified as Level 2 in the fair-value hierarchy.

The estimated fair value of the Series A Preferred Stock derivative is determined using an option pricing methodology, specifically both a Monte Carlo simulation and a binomial lattice model. The methodology incorporates the terms and conditions of the preferred stock arrangement, historical stock price volatility, the risk-free interest rate, a credit spread based on the yield indexes of high-yield bonds, and the trading price of shares of the Common Stock. The calculation of the estimated fair value of the derivative liability is highly sensitive to changes in unobservable inputs, such as the expected volatility and the Company’s credit spread. The estimated fair value of the Series A Preferred Stock derivative liability is classified as Level 3 in the fair-value hierarchy due to the significant management judgment required to make the assumptions underlying the calculation of value.

The following table sets forth a summary of changes in the estimated fair value of the Series A Preferred Stock derivative liability from June 30, 2021 to September 30, 2021:

(Dollars in millions)	Fair Value Measurements of Series A Preferred Stock Derivative Liability Using Significant Unobservable Inputs (Level 3)
Balance at June 30, 2021	$	3
Change in estimated fair value of Series A Preferred Stock derivative liability	(2)
Balance at September 30, 2021	$	1

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Long-lived assets, goodwill, and other intangible assets are subject to non-recurring fair value measurement for the evaluation of potential impairment. Other than the fair value estimates disclosed in Note 3, Business Combinations and Divestitures, there was no non-recurring fair value measurement during the three months ended September 30, 2021 and 2020.

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12.    INCOME TAXES

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Generally, fluctuations in the effective tax rate are due to changes in relative amounts of U.S. and non-U.S. pretax income, the tax impact of special items, and other discrete tax items. Discrete items include, but are not limited to, changes in non-U.S. statutory tax rates, the amortization of certain assets, changes in the Company’s reserve for uncertain tax positions, and the tax impact of certain equity compensation.

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, and the United Kingdom. The Company is no longer subject to examinations by the relevant tax authorities for years prior to fiscal year 2009. The Company is presently under audit in select jurisdictions in the United States and in Europe, but no material impact is expected to the financial results once these audits are completed.

ASC 740 includes guidance on the accounting for uncertain income tax positions recognized in the Company's tax filings. 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 both September 30, 2021 and June 30, 2021, the Company's reserve against uncertain income tax positions remained substantially unchanged at approximately $5 million. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense.

The Company recorded a provision for income taxes for the three months ended September 30, 2021 of $10 million relative to earnings before income taxes of $103 million. The Company recorded a benefit for income taxes for the three months ended September 30, 2020 of $15 million relative to earnings before income taxes of $67 million. The increased income tax provision for the current period was largely the result of an increase in the amount and relative mix of pretax income across several jurisdictions. This was partially offset by discrete tax benefits recognized in the quarter relating to equity compensation deductions and to a lesser extent non U.S. tax credits claimed on an amended U.S. federal income tax return filing. The prior-year quarter income tax benefit was largely driven by the recognition of additional non U.S. tax credits claimed on an amended U.S. federal income tax filing. The provision/benefit for income taxes in each of these periods was also impacted by the relative amount and mix of permanent tax adjustments included in the income tax computation and other discrete tax items recognized in the periods.

13.    EMPLOYEE RETIREMENT BENEFIT PLANS

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

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Components of net periodic benefit cost:
Selling, general, and administrative expenses:
Service cost	$	1	$	1
Other expense (income), net:
Interest cost	1		1
Expected return on plan assets	(2)		(2)
Amortization (1)	1		—
Net amount recognized	$	1	$	—

(1) Amount represents the amortization of unrecognized actuarial 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 million as of September 30, 2021 and June 30, 2021, 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 $2 million per year.    

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14.    EQUITY, REDEEMABLE PREFERRED STOCK AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Description of Capital Stock

The Company is authorized to issue 1,000,000,000 shares of its Common Stock and 100,000,000 shares of preferred stock, par value $0.01 per share. In accordance with the Company’s amended and restated certificate of incorporation, each share of Common Stock has one vote, and the Common Stock votes together as a single class.

Redeemable Preferred Stock

In May 2019, the Company designated 1,000,000 shares of its preferred stock, par value $0.01, as its Series A Convertible Preferred Stock (the “Series A Preferred Stock”), pursuant to a certificate of designation of preferences, rights, and limitations (as amended, the “Certificate of Designation”) filed with the Delaware Secretary of State, and issued and sold 650,000 shares of the Series A Preferred Stock for an aggregate purchase price of $650 million, to affiliates of Leonard Green & Partners, L.P., each share having an initial stated value of $1,000 (as such value may be adjusted in accordance with the terms of the Certificate of Designation). The Series A Preferred Stock ranks senior to the Company’s Common Stock with respect to dividend rights and rights upon the voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Company.

Proceeds from the offering of the Series A Preferred Stock, net of stock issuance costs, were $646 million, $40 million of which was allocated to the dividend-adjustment feature at its issuance and separately accounted for as a derivative liability. Any change in the fair value of derivative liability during a fiscal quarter is recorded as a non-operating expense in the consolidated statement of operations. See Note 10, Derivative Instruments and Hedging Activities, for detail concerning the change in fair value during the three months ended September 30, 2021.

As described in Note 7, Earnings Per Share, on the Partial Conversion Date, holders of Series A Preferred Stock converted 265,223 shares (approximately 41% of their holdings) and $2 million of unpaid accrued dividends into shares of Common Stock. The holders received 20.33 shares of Common Stock for each converted preferred share, resulting in the issuance of 5,392,280 shares of Common Stock. There was no gain or loss recognized upon the Partial Conversion as it occurred in accordance with the terms of the Certificate of Designation. The Company has 384,777 shares of Series A Preferred Stock that remain outstanding at September 30, 2021.

As a result of the Partial Conversion, additional paid in capital increased $253 million, which includes $4 million related to the fair value of the portion of the derivative liability that was settled upon the Partial Conversion and $2 million related to an unpaid accrued dividend. See Note 10, Derivative Instruments and Hedging Activities, for detail concerning the change in fair value during the three months ended September 30, 2021.

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Accumulated Other Comprehensive Loss

The components of the changes in the cumulative translation adjustment, derivatives and hedges, minimum pension liability, and marketable securities for the three months ended September 30, 2021 and 2020 are presented below.

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Foreign currency translation adjustments:
Net investment hedge	$	22	$	(32)
Long-term intercompany loans	(3)		6
Translation adjustments	(28)		35
Total foreign currency translation adjustment, pretax	(9)		9
Tax expense (benefit)	5		(7)
Total foreign currency translation adjustment, net of tax	$	(14)	$	16
Net change in derivatives and hedges:
Net gain recognized during the period	$	1	$	—
Total derivatives and hedges, pretax	1		—
Tax expense	—		—
Net change in derivatives and hedges, net of tax	$	1	$	—
Net change in minimum pension liability:
Net gain recognized during the period	$	1	$	—
Total pension liability, pretax	1		—
Tax expense	—		—
Net change in minimum pension liability, net of tax	$	1	$	—

For the three months ended September 30, 2021, the changes in accumulated other comprehensive loss, net of tax by component are as follows:

(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Derivatives and Hedges		Marketable Securities		Other		Total
Balance at June 30, 2021	$	(268)	$	(47)	$	—	$	(1)	$	(1)	$	(317)
Other comprehensive (loss) income before     reclassifications	(14)		—		1		—		—		(13)
Amounts reclassified from accumulated other     comprehensive loss	—		1		—		—		—		1
Net current period other comprehensive (loss)     income	(14)		1		1		—		—		(12)
Balance at September 30, 2021	$	(282)	$	(46)	$	1	$	(1)	$	(1)	$	(329)

15.    COMMITMENTS AND CONTINGENCIES

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 consolidated financial statements. In addition, the healthcare industry is highly regulated and government agencies continue to scrutinize certain practices affecting government programs and otherwise.

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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.

16.    SEGMENT INFORMATION

The Company conducts its business within the following operating segments: Biologics, Softgel and Oral Technologies, Oral and Specialty 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”).

Segment EBITDA is subject to important limitations. These consolidated financial statements include information concerning Segment EBITDA (a) because Segment EBITDA is an operational measure used by management in the assessment of the operating segments, the allocation of resources to the segments, and the setting of strategic goals and annual goals for the segments, and (b) in order to provide supplemental information that the Company considers relevant for the readers of the consolidated financial statements. The Company’s presentation of Segment EBITDA may not be comparable to similarly titled measures used by other companies.

The following tables include net revenue and Segment EBITDA for each of the Company's current reporting segments during the three months ended September 30, 2021 and 2020:

(Dollars in millions)	Three Months Ended   September 30,
	2021		2020
Net revenue:
Biologics	$	546	$	377
Softgel and Oral Technologies	243		221
Oral and Specialty Delivery	146		159
Clinical Supply Services	96		93
Inter-segment revenue elimination	(6)		(4)
Total net revenue	$	1,025	$	846

(Dollars in millions)	Three Months Ended   September 30,
	2021		2020
Segment EBITDA reconciled to net earnings:
Biologics	$	166	$	107
Softgel and Oral Technologies	41		38
Oral and Specialty Delivery	33		21
Clinical Supply Services	26		25
Sub-Total	$	266	$	191
Reconciling items to net earnings
Unallocated costs (1)	(56)		(29)
Depreciation and amortization	(81)		(69)
Interest expense, net	(26)		(26)
Income tax (expense) benefit	(10)		15
Net earnings	$	93	$	82

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

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(Dollars in millions)	Three Months Ended   September 30,
	2021		2020
Impairment charges and gain (loss) on sale of assets	$	(3)	$	(2)
Stock-based compensation	(21)		(19)
Restructuring and other special items (a)	(8)		(5)
Gain on sale of subsidiary (b)	1		—
Other (expense) income, net (c)	(9)		11
Unallocated corporate costs, net	(16)		(14)
Total unallocated costs	$	(56)	$	(29)

(a)    Restructuring and other special items during the three months ended September 30, 2021 include (i) transaction and integration costs associated with the Delphi, Hepatic, and RheinCell acquisitions (ii) transaction costs associated with the Bettera acquisition, and (iii) restructuring costs associated with the closure of the Company's Clinical Supply Services facility in Bolton, U.K. Restructuring and other special items during the three months ended September 30, 2020 include transaction and integration costs associated with acquisitions of facilities in Italy and Belgium, the disposal of a site in Australia, and other restructuring initiatives across the Company's network of sites.

(b)    Gain on sale of subsidiary for the three months ended September 30, 2021 is affiliated with the sale of the Blow-Fill-Seal Business.

(c)    Refer to Note 8, Other Expense (Income), Net for details of financing charges and foreign currency translation adjustments recorded within other expense (income), net.

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)	September 30, 2021		June 30, 2021
Assets:
Biologics	$	5,027	$	4,973
Softgel and Oral Technologies	1,577		1,604
Oral and Specialty Delivery	1,241		1,269
Clinical Supply Services	482		483
Corporate and eliminations	1,856		783
Total assets	$	10,183	$	9,112

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17. SUPPLEMENTAL BALANCE SHEET INFORMATION

Supplemental balance sheet information at September 30, 2021 and June 30, 2021 is detailed in the following tables.

Inventories

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

(Dollars in millions)	September 30, 2021		June 30, 2021
Raw materials and supplies	$	482	$	469
Work-in-process	203		151
Total inventories, gross	685		620
Inventory cost adjustment	(63)		(57)
Total inventories	$	622	$	563

Prepaid expenses and other

Prepaid expenses and other consist of the following:

(Dollars in millions)	September 30, 2021		June 30, 2021
Prepaid expenses	$	64	$	46
Contract assets	224		181
Spare parts supplies	31		30
Prepaid income tax	23		22
Non-U.S. value-added tax	64		50
Other current assets	53		47
Total prepaid expenses and other	$	459	$	376

Other accrued liabilities

Other accrued liabilities consist of the following:

(Dollars in millions)	September 30, 2021		June 30, 2021
Accrued employee-related expenses	$	155	$	184
Operating lease liabilities	14		16
Restructuring accrual	2		4
Accrued interest	11		27
Contract liabilities	283		305
Accrued income tax	25		30
Other	164		170
Total other accrued liabilities	$	654	$	736

18.     SUBSEQUENT EVENTS

Bettera Holdings, LLC Acquisition

In October 2021, the Company acquired Bettera for approximately $1.00 billion in cash, subject to customary adjustments. The Company funded this acquisition through a combination of additional borrowings under its senior secured credit facilities and the net proceeds of the 2030 Notes. For further detail on the Company’s additional borrowings and 2030 Notes, see Note 6, Long-Term Obligations and Short-Term Borrowings.

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The operations acquired have become part of the Company’s Softgel and Oral Technologies segment. The initial accounting for this acquisition is pending. Significant, relevant information needed to complete the initial accounting analysis is not yet available because the valuation of the assets acquired and liabilities assumed is not complete. As a result, determining these values is not practicable and the Company is unable to disclose these values or provide other related disclosures at this time.

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

The Company

We provide differentiated development and manufacturing solutions for drugs, protein-based biologics, cell and gene therapies, and consumer health products at over fifty facilities across four continents under rigorous quality and operational standards. Our oral, injectable, and respiratory delivery technologies, along with our state-of-the-art protein and cell and gene therapy manufacturing capacity, address a wide and growing range of modalities and therapeutic and other categories across the biopharmaceutical and consumer health industries. Through our extensive capabilities, growth-enabling capacity, and deep expertise in product development, regulatory compliance, and clinical trial supply, we can help our customers take products to market faster, including nearly half of new drug products approved by the U.S. Food and Drug Administration (the “FDA”) in the last decade. Our development and manufacturing platforms, which include those in our Biologics, Softgel and Oral Technologies, and Oral and Specialty Delivery segments, our proven formulation, supply, and regulatory expertise, and our broad and deep development and manufacturing know-how enable our customers to advance and then bring to market more products and better treatments for patients and consumers. Our commitment to reliably supply our customers’ and their patients’ needs is the foundation for the value we provide; annually, we produce more than 70 billion of doses for nearly 7,000 customer products, or approximately 1 in every 24 doses of such products taken each year by patients and consumers around the world. We believe that through our investments in state-of-the-art facilities and capacity expansion, including investments in facilities focused on new treatment modalities and other attractive market segments, our continuous improvement activities devoted to operational and quality excellence, the sales of existing and introduction of new customer products, and, in some cases, our innovation activities and patents, we will continue to attract premium opportunities and realize the growth potential from these areas.

We currently operate in four operating segments, which also constitute our four reporting segments: Biologics, Softgel and Oral Technologies, Oral and Specialty Delivery, and Clinical Supply Services.

The COVID-19 Pandemic

Our response to COVID-19

Since the start of the COVID-19 pandemic, we have taken and continue to take steps to protect our employees, ensure the integrity and quality of our products and services, and to maintain business continuity for our customers and their patients who depend on us to manufacture and supply critical products to the market. To address the multiple dimensions of the pandemic, senior, multi-disciplinary teams reporting directly to our Chief Executive Officer have been continuously monitoring the global situation, executing mitigation activities whenever and wherever required, and implementing a phased and structured return to our facilities as circumstances have permitted for those employees who have been working remotely.

Among other things, we implemented measures to avoid or reduce infection or contamination in line with guidelines issued by the U.S. Centers for Disease Control and Prevention, the World Health Organization, and local authorities where we operate, re-emphasized good hygiene practices, restricted non-employee access to our sites, reorganized our workflows where permitted to maximize physical distancing, limited employee travel, facilitated safer alternatives to travel to and from work, and employed remote-working strategies. We have reviewed and will continue to analyze our supply chain to identify any risk, delay, or concern that may have an impact on our ability to deliver our services and products. To date, we have not identified any significant risk, delay, or concern that would have a substantial effect on such delivery. We have adopted various procedures to minimize and manage any future disruption to our ongoing operations, including the creation and activation of new and existing business continuity plans when needed. Our existing procedures, which are consistent with current good manufacturing practices and other regulatory standards, are intended to assure the integrity of our supply against any contamination. We have a detailed response plan to manage any impact of the virus on employee health, site operations, and product supply, including immediate assessment of the health of employees reporting symptoms, comprehensive risk assessment of any impact to quality, additional cleaning protocols, and alternative shift patterns to compensate should fewer employees be available.

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Impact of COVID-19 on Our Business and Results of Operations

We continue to assess any impact the COVID-19 pandemic may have on our business and results of operations. We have seen increased demand and significant revenue increases and the potential for further revenue increases from COVID-19-related products, particularly in our Biologics segment. As part of our response to the COVID-19 pandemic, we accelerated and enhanced certain of our capital improvement plans to expand capacity for manufacturing drug substance and drug product for protein-based biologics and cell and gene therapies, particularly at our drug product facilities in Bloomington, Indiana, Anagni, Italy, and our commercial-scale viral vector manufacturing facility in Maryland. We have also implemented various strategies to protect our financial condition and results of operations should we experience a reduction in demand for COVID-19 related products, such as ensuring contractual take-or-pay and minimum volume requirements for the manufacture of certain COVID-19 related products. However, the extent and duration of revenue associated with COVID-19-related products is uncertain and dependent, in important respects, on factors outside our control.

The COVID-19-vaccines we manufacture are still pending approval from the FDA and other non-U.S. regulatory authorities and may not receive approval. The future duration and extent of the COVID-19 pandemic and the future demand for COVID-19 vaccines and therapies is unknown. Public opinion of certain COVID-19 vaccines and therapies and the product owners and manufacturers can change quickly and affect the demand for certain products and services, although they should not affect any required minimum payment for a COVID-19 related product subject to a “take-or-pay” provision. In addition, any concentration of revenue from certain COVID-19 vaccine products enhances our operational risk with respect to quality, security, regulatory inspections and business disruption resulting from any unforeseen event that affects any of the facilities and communities in which we manufacture COVID-19 vaccines. Because some of our work on COVID-19 vaccines is performed under subcontracts to U.S. government contracts, new regulations affecting U.S. federal government prime and subcontractors may affect our operations, efficiency, and ability to deliver on our obligations to customers for COVID-19 vaccines, COVID-19 related products, and other unrelated products and services. We have implemented various mechanisms to protect our customers, their material and product, and our business continuity, such as enhanced security measures at certain facilities and heightened cybersecurity controls.

Critical Accounting Policies and Estimates

We prepare our financial statements in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Management made certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with U.S. GAAP. These estimates and assumptions affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities in the consolidated financial statements. These estimates also affect the reported amount of net earnings during the reporting periods. Actual results could differ from those estimates. Because of the size of the financial statement elements to which they relate, some of our accounting policies and estimates have a more significant impact on the consolidated financial statements than others.

There was no material change to our critical accounting policies or in the underlying accounting assumptions and estimates from those described in our Fiscal 2021 10-K, other than recently adopted accounting principles disclosed in Note 1, Basis of Presentation and Summary of Significant Accounting Policies to the unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q (the “Consolidated Financial Statements”), which adoptions had no material impact on our financial condition or results of operations.

Non-GAAP Metrics

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, adjusted for the income or loss attributable to non-controlling interests (“EBITDA from operations”). EBITDA from operations is not defined under U.S. GAAP, is not a measure of operating income, operating performance, or liquidity presented in accordance with U.S. 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

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we consider relevant for the readers of our Consolidated Financial Statements, and such information is not meant to replace or supersede U.S. 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 measure to EBITDA from operations defined under U.S. GAAP is net earnings. Included in this Management’s Discussion and Analysis is a reconciliation of net earnings to EBITDA from operations.

In addition, we evaluate the performance of our segments based on segment earnings before non-controlling interests, other (income) 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 currency exchange. These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. GAAP. Results on a constant-currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with U.S. GAAP.

Other Non-GAAP Measures

Organic revenue growth and Segment EBITDA growth are measures we use 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. Organic revenue growth and Segment EBITDA growth exclude the impact of foreign currency exchange, 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 U.S. 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 U.S. GAAP.

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

The below tables summarize several financial metrics we use to measure performance for the three months ended September 30, 2021 and three months ended September 30, 2020. Refer to the discussions below regarding performance and use of key financial metrics.

Results for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 were as follows:        

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	Three Months Ended   September 30,				FX Impact		Constant Currency Increase (Decrease)
(Dollars in millions)	2021		2020				Change $		Change %
Net revenue	$	1,025	$	846	$	7	$	172	20	%
Cost of sales	701		597		4		100		17	%
Gross margin	324		249		3		72		29	%
Selling, general, and administrative expenses	183		165		1		17		11	%
Gain on sale of subsidiary	(1)		—		—		(1)		*
Other operating expense	4		2		1		1		19	%
Operating earnings	138		82		1		55		67	%
Interest expense, net	26		26		1		(1)		*
Other expense (income), net	9		(11)		—		20		(171)	%
Earnings before income taxes	103		67		—		36		52	%
Income tax expense (benefit)	10		(15)		—		25		(168)	%
Net earnings	$	93	$	82	$	—	$	11	12	%

Net Revenue

	2021 vs. 2020
Year-Over-Year Change	Three Months Ended September 30,
	Net Revenue
Organic	23	%
Impact of acquisitions	—	%
Impact of divestitures	(3)	%
Constant currency change	20	%
Foreign currency translation impact on reporting	1	%
Total % change	21	%

Net revenue increased $172 million, or 20%, excluding the impact of foreign exchange, compared to the three months ended September 30, 2020. Net revenue decreased 3% due to the sale of Catalent USA Woodstock, Inc. (the “Blow-Fill-Seal Business”) in March 2021. Net revenue increased 23% organically on a constant-currency basis, primarily due to (i) robust end-market demand for our drug product and drug substance offerings for COVID-19-related programs in our Biologics segment, and (ii) increased demand for our customers' prescription products, a return to growth in our consumer health products, particularly in cough, cold, and over-the-counter pain relief products, and growth in development services in our Softgel and Oral Technologies segment.

Gross Margin

Gross margin increased $72 million, or 29%, compared to the three months ended September 30, 2020, excluding the impact of foreign exchange, primarily as a result of the strong margin profile for our drug product and drug substance offerings for COVID-19 related programs in our Biologics segment, a decline in costs in the Oral and Specialty Delivery segment associated with the voluntary U.S. recall of a recently launched product within our respiratory specialty platform, and increased demand for our prescription products and development growth in our Softgel and Oral Technologies segment, partially offset by an $10 million increase in depreciation and amortization expense. On a constant-currency basis, gross margin, as a percentage of revenue, increased 210 basis points to 31.5% in the three months ended September 30, 2021, compared to 29.4% in the prior-year period, primarily due to the factors described above.

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Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased by $17 million, or 11%, compared to the three months ended September 30, 2020, excluding the impact of foreign exchange, which includes $1 million in net incremental expenses from acquired and divested companies. The year-over-year increase in selling, general, and administrative expenses was primarily due to a $10 million increase in employee-related costs principally incurred for wages and bonuses, $3 million in increases in information technology expenses associated with additional cyber security initiatives, $3 million in transaction costs associated with our Bettera acquisition, and a $2 million increase in stock-based compensation, which was partially offset by $6 million in cost savings associated with our health and welfare benefit programs.

Other Operating Expense

Other operating expense for the three months ended September 30, 2021 remained consistent compared to the three months ended September 30, 2020 when excluding the impact of foreign exchange.

Interest Expense, net

Interest expense, net of $26 million for the three months ended September 30, 2021 was unchanged compared to the three months ended September 30, 2020, excluding the impact of foreign exchange. The savings from repayment of our formerly outstanding term loans and 4.875% senior notes due 2026 were offset by interest expenses on our new tranche of term loans and our newly outstanding 3.500% senior notes due 2030 (the “2030 Notes”). The year-over-year change also includes a $4 million reduction in capitalized interest costs for the three months ended September 30, 2021.

For additional information concerning our debt and financing arrangements, including the changing mix of debt and equity in our capital structure, see “Liquidity and Capital Resources” and Note 6, Long-Term Obligations and Short-Term Borrowings to our Consolidated Financial Statements.

Other Expense (Income), net

Other expense, net of $9 million for the three months ended September 30, 2021 was primarily driven by $9 million of non-cash foreign currency translation losses and $4 million of financing charges related to our outstanding term loans, partially offset by a $2 million gain related to the change in fair value of the derivative liability arising from the dividend-adjustment mechanism of our Series A Preferred Stock.

Other income, net of $11 million for the three months ended September 30, 2020 was primarily driven by a gain of $9 million related to the change in fair value of the derivative liability arising from the dividend-adjustment mechanism of our Series A Preferred Stock.

Income Tax Expense (Benefit)

Our provision for income taxes for the three months ended September 30, 2021 was $10 million relative to earnings before income taxes of $103 million. Our benefit for income taxes for the three months ended September 30, 2020 was $15 million relative to earnings before income taxes of $67 million. The increased income tax provision for the current period was largely the result of an increase in the amount and relative mix of pretax income across several jurisdictions. This was partially offset by discrete tax benefits recognized in the quarter relating to equity compensation deductions and to a lesser extent non-U.S. tax credits claimed on an amended U.S. federal income tax return filing. The prior-year quarter income tax benefit was largely driven by the recognition of additional non-U.S. tax credits claimed on an amended U.S. federal income tax filing. The provision (benefit) for income taxes in each of these periods was also impacted by the relative amount and mix of permanent tax adjustments included in the income tax computation and other discrete tax items recognized in the periods.

Segment Review

The following charts depict the percentages of net revenue from each of our four reporting segments for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. Refer below for discussions regarding each segment’s net revenue and EBITDA performance and to “Non-GAAP Metrics” for a discussion of our use of Segment EBITDA, a measure that is not defined under U.S. GAAP.

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Our results on a segment basis for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 were as follows:

	Three Months Ended   September 30,				FX Impact		Constant Currency Increase (Decrease)
(Dollars in millions)	2021		2020				Change $		Change %
Biologics
Net revenue	$	546	$	377	$	1	$	168	44	%
Segment EBITDA	166		107		1		58		55	%
Softgel and Oral Technologies
Net revenue	243		221		1		21		9	%
Segment EBITDA	41		38		—		3		9	%
Oral and Specialty Delivery
Net revenue	146		159		3		(16)		(10)	%
Segment EBITDA	33		21		1		11		48	%
Clinical Supply Services
Net revenue	96		93		2		1		2	%
Segment EBITDA	26		25		1		—		—	%
Inter-segment revenue elimination	(6)		(4)		—		(2)		(60)	%
Unallocated Costs (1)	(56)		(29)		(1)		(26)		(90)	%
Combined totals
Net revenue	$	1,025	$	846	$	7	$	172	20	%
EBITDA from operations	$	210	$	162	$	2	$	46	29	%

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

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	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Impairment charges and gain (loss) on sale of assets	$	(3)	$	(2)
Stock-based compensation	(21)		(19)
Restructuring and other special items (a)	(8)		(5)
Gain on sale of subsidiary (b)	1		—
Other (expense) income, net (c)	(9)		11
Unallocated corporate costs, net	(16)		(14)
Total unallocated costs	$	(56)	$	(29)

(a)    Restructuring and other special items during the three months ended September 30, 2021 include (i) transaction and integration costs associated with the acquisitions of Delphi, Hepatic, and RheinCell, (ii) transaction costs relating to the Bettera acquisition, and (iii) restructuring costs associated with the closure of our Clinical Supply Services facility in Bolton, U.K. Restructuring and other special items during the three months ended September 30, 2020 include transaction and integration costs associated with acquisitions of facilities in Italy and Belgium, the disposal of a site in Australia, and other restructuring initiatives across our network of sites.

(b)    For the three months ended September 30, 2021, gain on sale of subsidiary is affiliated with divestiture of the Blow-Fill-Seal Business.

(c)    Refer to Note 8, Other Expense (Income), Net for details of financing charges and foreign currency translation adjustments recorded within other expense (income), net in our Consolidated Financial Statements.

Provided below is a reconciliation of net earnings to EBITDA from operations:

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Net earnings	$	93	$	82
Depreciation and amortization	81		69
Interest expense, net	26		26
Income tax expense (benefit)	10		(15)
EBITDA from operations	$	210	$	162

Biologics segment

	2021 vs. 2020
Year-Over-Year Change	Three Months Ended   September 30,
	Net Revenue		Segment EBITDA
Organic	44	%	56	%
Impact of acquisitions	—	%	(1)	%
Constant currency change	44	%	55	%
Foreign exchange fluctuation	1	%	—	%
Total % change	45	%	55	%

Biologics net revenue increased by $168 million, or 44%, excluding the impact of foreign exchange, compared to the three months ended September 30, 2020. The increase was driven by robust end-market demand for our global drug product, and drug substance offerings, primarily related to demand for COVID-19 related programs.

Biologics Segment EBITDA increased by $58 million, or 55%, excluding the impact of foreign exchange, compared to the three months ended September 30, 2020. The increase was driven by robust end-market demand for our global drug product, and drug substance offerings, primarily related to demand for COVID-19 related programs.     

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Softgel and Oral Technologies segment

	2021 vs. 2020
Year-Over-Year Change	Three Months Ended   September 30,
	Net Revenue		Segment EBITDA
Organic	9	%	9	%
Constant currency change	9	%	9	%
Foreign currency translation impact on reporting	1	%	—	%
Total % change	10	%	9	%

Softgel and Oral Technologies net revenue increased by $21 million, or 9%, excluding the impact of foreign exchange, compared to the three months ended September 30, 2020. The increase was driven by strong end-market demand for prescription products, a return to growth in our consumer health products, particularly in cough, cold, and over-the-counter pain relief products, and growth in development services within North America.

Softgel and Oral Technologies Segment EBITDA increased $3 million, or 9%, excluding the impact of foreign exchange, compared to the three months ended September 30, 2020. The increase, similar to that of net revenue, was driven by an increase in end-market demand in prescription products, a return to growth in our consumer health products, particularly in cough, cold, and over-the-counter pain relief products, and strong development growth.

Oral and Specialty Delivery segment

	2021 vs. 2020
Year-Over-Year Change	Three Months Ended   September 30,
	Net Revenue		Segment EBITDA
Organic	3	%	104	%
Impact of acquisitions	1	%	(22)	%
Impact of divestitures	(14)	%	(34)	%
Constant currency change	(10)	%	48	%
Foreign currency translation impact on reporting	2	%	7	%
Total % change	(8)	%	55	%

Oral and Specialty Delivery net revenue decreased by $16 million, or 10%, excluding the impact of foreign exchange, compared to the three months ended September 30, 2020. Net revenue increased 3%, compared to the three months ended September 30, 2020, excluding the impact of acquisitions and divestitures, primarily driven by demand for early-phase development programs.

Oral and Specialty Delivery Segment EBITDA increased by $11 million, or 48%, excluding the impact of foreign exchange, compared to the three months ended September 30, 2020. Segment EBITDA increased 104%, compared to the three months ended September 30, 2020, excluding the impact of acquisitions and divestitures. The increase from prior-year period was primarily driven by the decrease in voluntary recall costs from a previously launched product in our respiratory and specialty platform and increased demand for early-phase development programs.

We completed the Acorda acquisition in February 2021, which increased net revenue and unfavorably impacted Segment EBITDA on an inorganic basis by 1% and 22%, respectively, in the three months ended September 30, 2021, compared to the corresponding prior-year period.

We completed the Blow-Fill-Seal divestiture in March 2021, which decreased net revenue and unfavorably impacted Segment EBITDA on an inorganic basis by 14% and 34%, respectively, in the three months ended September 30, 2021, compared to the corresponding prior-year period.

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Clinical Supply Services segment

	2021 vs. 2020
Year-Over-Year Change	Three Months Ended   September 30,
	Net Revenue		Segment EBITDA
Organic	2	%	—	%
Constant currency change	2	%	—	%
Foreign currency translation impact on reporting	1	%	3	%
Total % change	3	%	3	%

Clinical Supply Services net revenue increased by $1 million, or 2%, excluding the impact of foreign exchange, compared to the three months ended September 30, 2020. The increase was driven by growth in our manufacturing and packaging and storage and distribution offerings in North America.

Clinical Supply Services Segment EBITDA was unchanged when excluding the impact of foreign exchange, compared to the three months ended September 30, 2020. Strong demand in our manufacturing and packaging and storage and distribution offerings in North America was partially offset by initialization costs at new facilities in North America and Asia.

Liquidity and Capital Resources

Sources and Uses of Cash

Our principal sources of liquidity have been cash flows generated from operations and occasional capital market activities. The principal uses of cash are to fund operating and capital expenditures, business or asset acquisitions, interest payments on debt, the payment of the last portion of deferred purchase consideration from the Catalent Indiana, LLC acquisition, which we paid in October 2021, the payment of the quarterly dividend on the Series A Preferred Stock, and any mandatory or discretionary principal payment on our debt. At the current stated value of the Series A Preferred Stock outstanding as of September 30, 2021, the aggregate amount of each regular quarterly dividend, if paid in cash, is approximately $5 million. As of September 30, 2021, Catalent Pharma Solutions, Inc., our principal operating subsidiary (“Operating Company”), following the September 2021 execution of Amendment No. 6 to the amended and restated credit agreement, dated as of May 20, 2014, governing our senior secured credit facilities (as amended, the “Credit Agreement”), had available a $725 million revolving credit facility that matures in May 2024, the capacity of which was reduced by $5 million in letters of credit outstanding as of September 30, 2021. The revolving credit facility includes borrowing capacity available for letters of credit and for short-term borrowings, referred to as swing-line borrowings.

On October 1, 2021, we acquired Bettera Holdings, LLC ("Bettera") and paid approximately $1.00 billion in cash. Bettera is a manufacturer of nutraceuticals specializing in gummy, soft chew, and lozenge delivery systems. We funded this acquisition through a combination of additional borrowings under our senior secured credit facilities and the net proceeds of the 2030 Notes.

We believe that our cash on hand, cash from operations, and available borrowings under our revolving credit facility will be adequate to meet our future liquidity needs for at least the next twelve months, including our quarterly regular dividend on the Series A Preferred Stock, if paid in cash, as well as the amounts expected to become due with respect to our pending capital projects. We have no significant maturity under any of our bank or note debt until the July 2027 maturity of our 5.000% senior notes due 2027 (the "2027 Notes”). As of September 30, 2021, we had only one remaining payment of $50 million, which was paid in October 2021, on the deferred purchase consideration for the acquisition of Catalent Indiana, LLC.

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Cash Flows

The following table summarizes our consolidated statements of cash flows:

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020		$ Change
Net cash provided by (used in):
Operating activities	$	163	$	150	$	13
Investing activities	$	(167)	$	(151)	$	(16)
Financing activities	$	1,082	$	50	$	1,032

Operating Activities

For the three months ended September 30, 2021, cash provided by operating activities was $163 million, compared to $150 million for the corresponding prior-year period. The increase in cash flow from operating activities for the three months ended September 30, 2021 is primarily due to an increase in operating earnings, which increased from $82 million in the corresponding prior-year period to $138 million for the three months ended September 30, 2021 and a favorable impact from the timing of collection of trade receivables, which was partially offset by an unfavorable impact from the increase in contract assets.

Investing Activities

For the three months ended September 30, 2021, cash used in investing activities was $167 million, compared to $151 million for the three months ended September 30, 2020. The increase in cash used in investing activities was primarily driven by a $26 million increase in cash used for business acquisition activities and a $4 million increase in cash used for purchases of property, plant, and equipment, partially offset by $20 million in proceeds from the maturity of marketable securities.

Financing Activities

For the three months ended September 30, 2021, cash provided by financing activities was $1.08 billion, compared to $50 million for the three months ended September 30, 2020. The increase in cash provided by financing activities was primarily driven by a $1.1 billion increase net cash received from the issuance of the 2030 Notes and incurrence of our new tranche of term loans. Cash provided by financing activities for the three months ended September 30, 2020 was primarily driven by the July 2020 exercise of an over-allotment option on 1.2 million additional shares by the underwriter for the equity offering in June 2020, resulting in net proceeds of $82 million.

Guarantees and Security

The Senior Notes

All obligations under Operating Company's 2027 Notes, 2.375% euro-denominated senior notes due 2028, 3.125% senior notes due 2029, and 2030 Notes (collectively, the "Senior 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. Each of the Senior Notes is separately guaranteed by all of our wholly owned U.S. subsidiaries that guarantee the senior secured credit facilities. None of the Senior Notes is guaranteed by either PTS Intermediate Holdings LLC or Catalent, Inc.

Debt Covenants

Senior Secured Credit Facilities

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our (and our 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 our subordinated indebtedness; and change our lines of business.

The Credit Agreement also contains change-of-control provisions and certain customary affirmative covenants and events of default. The 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 September 30, 2021, we were in compliance with all material covenants under the Credit Agreement.

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

Under the Credit Agreement, our 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 U.S. 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 hand or the incurrence of new secured or unsecured debt. The amounts involved in any such purchase transaction, 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 purchase 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, or in related adverse tax consequences to us.

The Senior Notes

The several indentures governing each series of the Senior Notes (collectively, the “Indentures”) contain certain covenants that, among other things, limit our ability 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 series of Senior Notes, or the applicable Trustee under the Indentures, may declare the applicable Senior Notes immediately due and payable; or in certain circumstances, the applicable Senior Notes will become automatically immediately due and payable. As of September 30, 2021, Operating Company was in compliance with all material covenants under the Indentures.

Geographic Allocation of Cash

As of September 30, 2021 and June 30, 2021, our non-U.S. subsidiaries held cash and cash equivalents of $311 million and $351 million, respectively, out of the total consolidated cash and cash equivalents of $1.97 billion and $896 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. In February 2021, we replaced one interest-rate swap agreement with Bank of America N.A. with another, and each acts or acted as a hedge against the economic effect of a portion of the variable-interest obligation associated with our U.S. dollar-denominated term loans under our senior secured credit facilities, so that the interest payable on that portion of the debt becomes fixed at a certain rate, thereby reducing the impact of future interest-rate changes on future interest expense. The applicable rate for the U.S. dollar-denominated term loan under the Credit Agreement was LIBOR (subject to a floor of 0.50%) plus 2.00% as of September 30, 2021; however, as a result of the interest-rate swap agreement, the floating portion of the applicable rate on $500 million of the term loan was effectively fixed at 0.9985% as of September 30, 2021.

Currency Risk Management

We are exposed to fluctuations in the euro-U.S. dollar exchange rate on our investments in our 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 September 30, 2021, we had $965 million of euro-denominated debt outstanding that qualifies as a hedge of a net investment in European operations. Refer to Note 10, Derivative Instruments and Hedging Activities, to our Consolidated Financial Statements for further discussion of net investment hedge activity in the period.

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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 continue to evaluate hedging opportunities for foreign currency in the future.

Off-Balance Sheet Arrangements

Other than short-term operating leases and outstanding letters of credit as discussed above, we do not have any material off-balance sheet arrangement as of September 30, 2021.

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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

We have 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.

In February 2021, we replaced one interest-rate swap agreement with Bank of America N.A. with another, and each acts or acted as a hedge against the economic effect of a portion of the variable-interest obligation associated with our term loans under our senior secured credit facilities, so that the interest payable on that portion of the debt becomes fixed at a certain rate, thereby reducing the impact of future interest-rate changes on future interest expense. The applicable rate for the U.S. dollar-denominated term loan under our Credit Agreement was LIBOR (subject to a floor of 0.50%) plus 2.00% as of September 30, 2021; however, as a result of the interest-rate swap agreement, the floating portion of the applicable rate on $500 million of the term loan was effectively fixed at 0.9985% as of September 30, 2021.

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, and Brazilian real. 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 non-U.S. subsidiaries into U.S. dollars, our functional currency. The financial statements of our operations outside the U.S. are measured using the local currency as the functional currency, except in Argentina. Adjustments to translate the assets and liabilities of these non U.S. 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 (income), net. Such foreign-currency transaction gains and losses include inter-company loans denominated in non-U.S. dollar currencies.

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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 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 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 Chief Executive Officer and our Senior Vice President and Chief Financial Officer concluded that, as of September 30, 2021, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

During the three months ended September 30, 2021, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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PART II.    OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

From time to time, we 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. We intend to vigorously defend ourselves against any such litigation and do not currently believe that the outcome of any such litigation will have a material adverse effect on our consolidated 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, we receive 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. We generally respond 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. We expect 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 2021 10-K, 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, 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 2021 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.

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ITEM 6.    EXHIBITS

Exhibits:

2.1	Membership Interest Purchase Agreement, dated August 29, 2021, by and among Catalent Pharma Solutions, Inc., Bettera Holdings, LLC, the members of Bettera Holdings, LLC, and Highlander Partners Candy, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on August 30, 2021).
4.1	Indenture, dated September 29, 2021, by and among Catalent Pharma Solutions, Inc., the subsidiary guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 29, 2021).
4.1.1	Form of 3.500% Senior Notes due 2030 (included as part of Exhibit 4.1 above).
10.1	Amendment No. 6 to Amended and Restated Credit Agreement, dated as of September 29, 2021, by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, JP Morgan Chase Bank, N.A., as the administrative agent, collateral agent, swing line lender, and letter of credit issuer, and the lenders and other parties thereto, which amends that certain Amended and Restated Credit Agreement, dated as of May 20, 2014 (as amended), by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, JP Morgan Chase Bank, N.A., as the successor administrative agent, collateral agent, swing line lender, and letter of credit issuer, and the lenders and other parties thereto (incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 29, 2021).
10.2	Form of Management Incentive Plan for the fiscal year ending June 30, 2022. † *
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	The following financial information from Catalent, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 formatted in inline XBRL: (i) Consolidated Statements of Operations for the Three Months Ended September 30, 2021 and 2020; (ii) Consolidated Statements of Comprehensive Income for the Three Months Ended September 30, 2021 and 2020 (iii) Consolidated Balance Sheets as of September 30, 2021 and June 30, 2021; (iv) Consolidated Statement of Changes in Shareholders’ Equity as of September 30, 2021 and 2020; (v) Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2021 and 2020; and (vi) Notes to Unaudited Consolidated Financial Statements.
104	The cover page of this Quarterly Report on Form 10-Q, formatted as Inline XBRL and contained in Exhibit 101.

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

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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:	November 2, 2021	By:	/s/ RICKY HOPSON
			Ricky Hopson
			Vice President, Chief Accounting Officer

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EX-10.2

Exhibit 10.2

Management Incentive Plan

FY2022 Summary

Introduction

The Management Incentive Plan (MIP) is a variable annual cash incentive program under the Catalent, Inc. 2018 Omnibus Incentive Plan (the Plan) that rewards performance against annual individual and business-based goals. Individual performance goals designed to support the broader business goals are established each year between eligible participants and their respective managers. The Compensation and Leadership Committee (the Committee) of the Board of Directors (the Board) of Catalent, Inc. (Catalent or the Company) selects the business-based goals for the MIP from among the corporate financial and strategic growth objectives approved each year by the Board.

Eligibility for the MIP is based on several criteria, including position in the organization and past performance. MIP participants are expected to play an important role in achieving the Company’s strategic goals and contributing to the growth of the Company and its people. Key features of the MIP, including funding and the determination and payment of individual awards, are described in this summary.

Market-Based Program

Catalent believes that providing competitive market-based compensation is critical to attracting, engaging, and retaining key talent and the critical skill sets and expertise necessary to make Catalent successful. With this in mind, Catalent’s incentive programs, including the MIP, are reviewed on an annual basis taking into account market compensation trends, annual financial goals, and changes in business strategies. Where appropriate, a review is performed and changes are generally agreed prior to the start of the fiscal year, although the Company reserves the right to make changes at any time, including but not limited to terminating the program.

Business and Individual Performances Are Used to Determine the MIP Award

At the beginning of each fiscal year, a target MIP payout is set for each participant, usually expressed as a percentage of base salary. The amount actually paid to the participant following the end of the fiscal year is dependent on both (a) the participant’s business achievement factor, or BF, and (b) the individual performance factor, or IPF, assigned to the participant, each as described further below. For fiscal 2022, the BF is weighted 70% and the IPF is weighted 30%, which results in an overall combined performance factor that is expressed as a percentage and then applied against the target. The total MIP payout can range from 0% to 200% of the target MIP payout, based on the 0% to 200% performance range for each of the BF and IPF.

MIP FY2022 Summary

Business Performance Factors Combine for a Business Achievement Factor (BF)

The business performance factors measure achievement against a set of goals fixed each year by the Board and the Committee. For fiscal 2022, the Committee has elected to keep the same metrics as FY21 and measure performance by targeting Budget-Based EBITDA (earnings before interest, taxes, depreciation, and amortization) and Budget-Based Revenue.1 Performance against both targets will be examined concurrently, using a matrix to convert revenue and EBITDA achievement relative to the budget-based goals set at the beginning of the year to determine the BF. This year’s matrix is set forth below. Linear interpolation will apply for results that fall between two consecutive revenue or EBITDA achievement levels specified in the matrix.

Alignment of Business Performance with Participant’s Role

Catalent believes that the MIP acts best as an incentive when there is meaningful alignment between the business performance factors used to measure a participant’s achievement and the participant’s ability to enhance the performance of the overall organization given the participant’s position within the organization. Depending on a participant’s role, the business performance factors can be weighted among one, two, or three organizational levels (i.e., overall Catalent, the principal business unit (BU) to which the participant’s efforts are directed (if any), and the principal site and/or region to which the participant’s efforts are directed (if any)). In some cases, the business performance factors may also be weighted differently for participants who support multiple BUs and/or sites. For participants with multiple business performance factors, the business factor calculation is performed separately for each segment, then combined as a weighted average, in order to determine an overall combined BF. The following chart provides several examples of weightings for the business performance factors.

1Because the MIP measures achievement against budget, adjustments to Budget-Based EBITDA and Budget-Based Revenue that are used in determining the budget will also apply when measuring performance, and results in foreign currencies will be converted to U.S. dollars at the currency exchange rates used to determine the budget.

-2-

MIP FY2022 Summary

	Business Performance Factors Weighting
Position Category (1)	Overall Catalent	Business Unit	Site/ Region (3)
ELT and Corporate	100%	–	–
BU Functional Leaders (2)	50%	50%	–
Site/Region-Based Leaders	30%	30%	40%
Site-Based Participants	0%	40%	60%

(1)    There may be cases in which different weightings are used for a given participant.

(2)    Includes positions that support business unit-wide initiatives (e.g., VPs of operations, quality, or finance for a BU).

(3)    This weighting may take into account site/regional results, which may include the results of multiple BUs and sites.

Individual Performance Factor (IPF)

Each year, MIP participants, in collaboration with their managers, establish appropriate individual performance goals based on their roles. These goals should be aligned with the business performance goals established for Catalent overall. At fiscal year-end, managers determine each participant’s IPF based on the participant’s overall performance for the year, including achievement of the participant’s individual performance goals. The IPF ranges from 0 to 200%. MIP participants who receive a performance rating of “Did Not Meet Expectations” receive a zero IPF and will not be eligible for payout under the MIP regardless of the BF achievement.

Sample MIP calculation for illustrative purposes:

In this example, we assume that all relevant business metrics perform at target. We also assume that the participant has a base salary of $100,000 and a MIP target of 15%, and that the participant ends the fiscal year with an IPF of 100%.

Bonus Eligible Compensation	X	Bonus Target %
			X 70% X BF
US$100,000	X	15%	US$10,500		Final Award US$15,000
		US$15,000		=
			X 30% X IPF
			US$4,500
Salary in the fiscal year is prorated based on hire date or salary change effective date		MIP target % assigned to the plan participant; may be a blended % due to promotions or other changes in role during the FY	70% + 30%		The MIP bonus amount for the fiscal year

-3-

MIP FY2022 Summary

Performance Updates During the Fiscal Year

The MIP design is open and transparent, reflecting Catalent’s confidence that Company leaders can deliver on its challenging but achievable goals.

Throughout the fiscal year, participants should review their progress against their personal goals with their managers. The senior management team will also provide updates on Catalent’s progress against its business goals. These individual and team updates will help participants to track their and the Company’s progress toward annual MIP funding and payout.

Effect of Employment Status Changes on Eligibility (Subject to Local Laws)

Your eligibility to receive a MIP award is affected by your employment status at payout. Listed below are payout provisions pertaining to different termination scenarios:

Event	Occurring prior to April 1, 2022	Occurring between April 1, 2022 and MIP payment (scheduled for Sept. 2022)
Voluntary termination (including resignation and job abandonment)	Not eligible for payout
Involuntary termination for cause or for other than reduction-in-force/restructure/divestiture* 2	Not eligible for payout
Involuntary termination due to reduction-in-force/restructure/divestiture	Not eligible for payout	Employees with continuous MIP-eligible service through the date of termination, where at least 90 days of that service occurred in fiscal 2022, will be eligible for payout at the normal payout date based on actual company/BU/site results (pro-rated for the portion of the year in service) and IPF as determined by the employees’ manager (similarly pro-rated)
Death or Disability** ** The definition of Disability shall be as set forth in the Plan. 3	Employees with continuous MIP-eligible service through the date of death or Disability, where at least 90 days of that service occurred in fiscal 2022, will be eligible for payout at the normal payout date based on actual company/BU/site results (pro-rated for the portion of the year in service) and IPF as determined by the employees’ manager (similarly pro-rated)
Retirement*** s e riod of service (calculated in months) equals sixty-five (65) years, so long as the participant is at least fifty-five (55) years old.4	Not eligible for payout	Employees with at least 90 days of MIP-eligible service in fiscal 2022 will be eligible for payout at the normal payout date based on actual company/BU/site results (pro-rated for the portion of the year in service) and IPF as determined by the employees’ manager (similarly pro-rated)
Certain leaves of absence (LOA) may affect eligibility. Applicable LOA policies should be consulted on a regional basis.

* Management reserves the right to determine in its sole discretion whether an individual termination of a participant is for cause.

** The definition of Disability shall be as set forth in the Plan.

*** A termination (other than a termination when grounds existed for a termination for cause at the time thereof) initiated by a participant that occurs on or after the date on which the sum of the participant’s age and period of service (calculated in months) equals sixty-five (65) years, so long as the participant is at least fifty-five (55) years old.

-4-

MIP FY2022 Summary

Eligibility Guidelines for New Hires and Newly Eligible Employees

If an employee’s start date or entry into a MIP-eligible position during the fiscal year is between July 1 and March 31 of a fiscal year, then the MIP target amount for that employee will be prorated to reflect the portion of that fiscal year during which the employee was eligible. Any employee with a start date or entry into a MIP-eligible position during the final quarter of a fiscal year (April 1 through June 30) will not be eligible for participation in the MIP for that fiscal year.

Timetable for Bonus Determination and Payment

•After the close of the fiscal year, BF determinations are made and overall MIP funding is calculated.

•At the appropriate time during the Catalent annual performance management cycle, year-end performance reviews are completed and managers determine and assign MIP-eligible participants an applicable IPF value based on assessments of individual performance against goals.

•Individual MIP awards are typically communicated within 90 days of the end of the fiscal year (generally in September).

Clawback/Forfeiture

A participant’s participation in the MIP may be cancelled by the Committee in its sole discretion, or the Committee in its sole discretion may require that a MIP award paid to a participant be forfeited and repaid to the Company, if the participant has engaged in or engages in any Detrimental Activity, as defined in the Plan and summarized below. In addition, if a participant receives any amount in excess of what the participant should have received under the terms of the MIP due to error, omission, or any other 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 MIP awards are subject to reduction, cancellation, forfeiture, or recoupment to the extent necessary to comply with applicable law.

“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 a participant’s employment 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 U.S. Securities and Exchange Commission (the SEC) or any other governmental, regulatory, or legislative body regarding a possible violation of any federal law relating to fraud or

-5-

MIP FY2022 Summary

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, otherwise assisting in any governmental action, investigation, or proceeding relating to a possible violation of any such law, rule or regulation.

Important Information Regarding the Summary

•Participation in the MIP in any year is not a guarantee of participation in any future year.

•The application of the MIP to any given individual may vary depending on various circumstances, including the terms of any applicable employment contract, applicable regional laws governing employment, benefits, or payments under benefit plans applicable to only a subset of employees, and the terms of any applicable collective bargaining or employment agreement.

•The Company reserves the right to modify or cancel the MIP at any time, with or without notice to employees, to the fullest extent permitted by applicable law.

•Separation from Catalent employment may affect a participant’s ability to participate in the MIP or the amount of the participant’s benefits in ways that are not fully described in this summary plan description. For example, employees generally must be employed at the time of payout to receive any MIP bonus payment, and voluntary separation before payment will result in disqualification from eligibility.

•Employees with questions concerning eligibility for the MIP or the terms and conditions of the plan may contact their Catalent Human Resources representatives.

-6-

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 Annual Report on Form 10-Q for the period ended September 30, 2021 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: November 2, 2021

/s/ JOHN R. CHIMINSKI

John R. Chiminski

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, Thomas Castellano, certify that:

1.I have reviewed this Annual Report on Form 10-Q for the period ended September 30, 2021 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: November 2, 2021

/s/ THOMAS CASTELLANO

Thomas Castellano

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 Annual Report of Catalent, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John R. Chiminski, 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: November 2, 2021

/s/ JOHN R. CHIMINSKI

John R. Chiminski

Chief Executive Officer

EX-32.2

Exhibit 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

In connection with the Annual Report of Catalent, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas Castellano, 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: November 2, 2021

/s/ THOMAS CASTELLANO

Thomas Castellano

Senior Vice President and

Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2021	Oct. 26, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-36587
Entity Registrant Name	Catalent, Inc.
Entity Incorporation, State or Country Code	DE
Entity Address, State or Province	NJ
Entity Tax Identification Number	20-8737688
Entity Address, Address Line One	14 Schoolhouse Road,
Entity Address, City or Town	Somerset,
Entity Address, Postal Zip Code	08873
City Area Code	(732)
Local Phone Number	537-6200
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock
Trading Symbol	CTLT
Security Exchange Name	NYSE
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Central Index Key	0001596783
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding (shares)		171,188,042

XML

Consolidated Statements of Operations - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Net revenue		$ 1,025	$ 846
Cost of sales		701	597
Gross margin		324	249
Selling, general, and administrative expenses		183	165
Payments for (Proceeds from) Businesses and Interest in Affiliates	[1]	(1)	0
Operating earnings		138	82
Interest expense, net		26	26
Other (income)/expense, net		9	(11)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total		103	67
Income tax expense		10	(15)
Net earnings/(loss)		93	82
Net earnings/(loss)		93	82
Participating Securities, Distributed and Undistributed Earnings (Loss), Basic		9	13
Net Income (Loss) Available to Common Stockholders, Basic		$ 84	$ 69
Earnings Per Share, Basic		$ 0.49	$ 0.42
Earnings Per Share, Diluted		$ 0.49	$ 0.41
Other Cost and Expense, Operating		$ 4	$ 2

[1] (b)    Gain on sale of subsidiary for the three months ended September 30, 2021 is affiliated with the sale of the Blow-Fill-Seal Business

XML

Consolidated Statements of Comprehensive Income / (Loss) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Other comprehensive income/(loss), net of tax
Net earnings/(loss)	$ 93	$ 82
Foreign currency translation adjustments	(14)	16
Pension and other post-retirement adjustments	1	0
Net change in derivatives and hedges, net of tax	1	0
Other comprehensive income/(loss), net of tax	(12)	16
Comprehensive income/(loss)	$ 81	$ 98

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2021	Jun. 30, 2021
Current assets:
Cash and cash equivalents	$ 1,969	$ 896
Trade receivables, net	831	1,012
Inventories	622	563
Prepaid expenses and other	459	376
Marketable Securities	50	71
Total current assets	3,931	2,918
Property, plant, and equipment, net	2,581	2,524
Other assets:
Goodwill	2,531	2,519
Other intangibles, net	793	817
Deferred Income Tax Assets, Net	70	66
Other Assets, Noncurrent	277	268
Total assets	10,183	9,112
Current Liabilities:
Debt, Current	79	75
Accounts payable	363	385
Other accrued liabilities	654	736
Total current liabilities	1,096	1,196
Long-term obligations, less current portion	4,225	3,166
Pension liability	133	137
Deferred Income Taxes	171	164
Other liabilities	178	175
Total liabilities	5,803	4,838
Temporary Equity, Carrying Amount, Attributable to Parent	359	359
Common Stock, Value, Outstanding	2	2
Preferred Stock, Value, Outstanding	0	0
Additional paid in capital	4,234	4,205
Accumulated deficit	114	25
Accumulated other comprehensive income/(loss)	(329)	(317)
Total shareholders' equity	4,021	3,915
Total liabilities, redeemable preferred stock, and shareholders’ equity	$ 10,183	$ 9,112

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2021	Jun. 30, 2021
Statement of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share		$ 0.01
Common Stock, Shares Authorized	1,000,000,000	1,000,000,000
Common stock, shares issued (shares)	171,032,640	170,549,341
Common Stock, Shares, Outstanding	171,032,640	170,549,341
Preferred Stock, Par or Stated Value Per Share	$ 0.01
Preferred Stock, Shares Authorized	100,000,000	100,000,000
Preferred Stock, Shares Issued	384,777	384,777
Preferred Stock, Shares Outstanding	384,777	384,777
Accounts Receivable, Allowance for Credit Loss, Current	$ 15	$ 12
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 1,215	$ 1,179

XML

Consolidated Statement of Changes in Shareholder's Equity - USD ($)	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income/(Loss)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Temporary Equity, Carrying Amount, Attributable to Parent	$ 607,000,000
Common Stock, Shares, Outstanding		162,788,000
Temporary Equity, Carrying Amount, Attributable to Parent	607,000,000
Beginning Balance at Jun. 30, 2020	2,900,000,000	$ 2,000,000	$ 3,819,000,000	$ (535,000,000)	$ (386,000,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity offering, sale of common stock,	82,000,000	0	82,000,000
Stock Issued During Period, Value, Stock Options Exercised	0	0	0
Stock-based compensation	19,000,000		19,000,000
Cash paid, in lieu of equity, for tax withholding	(20,000,000)		(20,000,000)
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	1,000,000		1,000,000
Dividends, Preferred Stock	8,000,000			8,000,000
Net earnings/(loss)	82,000,000			82,000,000
Other comprehensive income/(loss), net of tax	16,000,000				16,000,000
Ending Balance at Sep. 30, 2020	3,072,000,000	$ 2,000,000	3,901,000,000	(461,000,000)	(370,000,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity offering, sale of common stock		1,162,000
Temporary Equity, Carrying Amount, Attributable to Parent	607,000,000
Common Stock, Shares, Outstanding		164,567,000
Temporary Equity, Carrying Amount, Attributable to Parent	607,000,000
Temporary Equity, Carrying Amount, Attributable to Parent	$ 359,000,000
Common Stock, Shares, Outstanding	170,549,341	170,549,000,000
Temporary Equity, Carrying Amount, Attributable to Parent	$ 359,000,000
Beginning Balance at Jun. 30, 2021	3,915,000,000	$ 2,000,000	4,205,000,000	25,000,000	(317,000,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity offering, sale of common stock,		0
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	0
Stock Issued During Period, Value, Conversion of Convertible Securities			(253,000,000)
Stock-based compensation	21,000,000		21,000,000
Cash paid, in lieu of equity, for tax withholding	(4,000,000)		(4,000,000)
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	4,000,000		4,000,000
APIC, Share-based Payment Arrangement, Option, Increase for Cost Recognition	8,000,000		8,000,000
Dividends, Preferred Stock	4,000,000			4,000,000
Net earnings/(loss)	93,000,000			93,000,000
Other comprehensive income/(loss), net of tax	(12,000,000)				(12,000,000)
Ending Balance at Sep. 30, 2021	4,021,000,000	$ 2,000,000	$ 4,234,000,000	$ 114,000,000	$ (329,000,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		484,000,000
Temporary Equity, Carrying Amount, Attributable to Parent	$ 359,000,000
Common Stock, Shares, Outstanding	171,032,640	171,033,000,000
Temporary Equity, Carrying Amount, Attributable to Parent	$ 359,000,000

XML

Consolidated Statement of Changes in Shareholder's Equity Consolidated Statement of Changes in Shareholders' Equity (Parenthetical)	3 Months Ended
	Sep. 30, 2020 shares
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance - Common Stock Outstanding (shares)	162,788,000
Equity offering, sale of common stock	1,162,000
Share issuances related to stock-based compensation	617,000
Ending Balance - Common Stock Outstanding (shares)	164,567,000

XML

Consolidated Statements of Cash Flows - USD ($)		3 Months Ended
		Sep. 30, 2021	Sep. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings/(loss)		$ 93,000,000	$ 82,000,000
Adjustments to reconcile earnings/(loss) from operations to net cash from operations:
Depreciation and amortization		81,000,000	69,000,000
Non-cash foreign currency transaction (gain)/loss, net		9,000,000	4,000,000
Amortization and write-off of debt financing costs		2,000,000	2,000,000
Asset impairments charges and (gain)/loss on sale of assets		3,000,000	(2,000,000)
Payments for (Proceeds from) Businesses and Interest in Affiliates	[1]	(1,000,000)	0
Debt Call Premium Fees		4,000,000	0
Derivative, Gain (Loss) on Derivative, Net		(2,000,000)	(9,000,000)
Stock-based compensation		21,000,000	19,000,000
Provision/(benefit) for deferred income taxes		(8,000,000)	11,000,000
Provision for bad debts and inventory		10,000,000	8,000,000
Change in operating assets and liabilities:
Decrease/(increase) in trade receivables		185,000,000	144,000,000
Decrease/(increase) in inventories		(63,000,000)	(66,000,000)
Increase/(decrease) in accounts payable		(6,000,000)	7,000,000
Other assets/accrued liabilities, net — current and non-current		(165,000,000)	(93,000,000)
Net Cash Provided by (Used in) Operating Activities, Total		163,000,000	150,000,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment and other productive assets		(154,000,000)	(150,000,000)
Proceeds from Sale and Maturity of Marketable Securities		20,000,000	0
Settlement on sale of subsidiaries, net		3,000,000	0
Payment for acquisitions, net of cash acquired		26,000,000	0
Payments to Acquire Investments		4,000,000	1,000,000
Net cash (used in) investing activities		(167,000,000)	(151,000,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in other borrowings		0	(4,000,000)
Proceeds from Issuance of Debt		1,096,000,000	0
Payments related to long-term obligations		(3,000,000)	(2,000,000)
Payments of Debt Issuance Costs		(15,000,000)	0
Dividends and Interest Paid		(4,000,000)	(8,000,000)
Proceeds from sale of common stock, net		0	82,000,000
Cash paid, in lieu of equity, for tax withholding		(4,000,000)	(20,000,000)
Proceeds from (Repurchase of) Equity [Abstract]
Proceeds from Stock Options Exercised		8,000,000	0
Proceeds from (Payments for) Other Financing Activities		4,000,000	2,000,000
Net cash (used in)/provided by financing activities		1,082,000,000	50,000,000
Effect of foreign currency exchange on cash		(5,000,000)	5,000,000
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS		1,073,000,000	54,000,000
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		896,000,000	953,000,000
CASH AND EQUIVALENTS AT END OF PERIOD		1,969,000,000	1,007,000,000
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest paid		40,000,000	43,000,000
Income taxes paid, net		$ 15,000,000	$ 9,000,000

[1] (b)    Gain on sale of subsidiary for the three months ended September 30, 2021 is affiliated with the sale of the Blow-Fill-Seal Business

XML

Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2021

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 (“U.S. 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 U.S. 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 three months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending June 30, 2022. The consolidated balance sheet at June 30, 2021 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. 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, 2021 filed with the Securities and Exchange Commission (the “SEC”).

Reclassifications

Certain prior-period amounts have been reclassified to conform to the current period presentation. These reclassifications did not have a material impact on the consolidated statements of operations, consolidated balance sheets, consolidated statements of cash flows, or notes to the consolidated financial statements.

Foreign Currency Translation

The financial statements of the Company’s operations are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of operations outside the U.S. into U.S. dollars are accumulated as a component of other comprehensive income utilizing period-end exchange rates. Since July 1, 2018, the Company has accounted for its Argentine operations as highly inflationary.

Depreciation Expense

Depreciation expense was $58 million and $46 million, for the three months ended September 30, 2021 and 2020, respectively. Depreciation expense includes amortization of assets related to finance leases. The Company charges repairs and maintenance costs to expense as incurred.

Research and Development Costs

The Company expenses research and development costs as incurred. Research and development costs amounted to $6 million for both the three months ended September 30, 2021 and 2020.

Marketable Securities

The Company classifies its marketable securities as available-for-sale, because it may sell certain of its marketable securities prior to the stated maturity for various reasons, including management of liquidity, credit risk, duration, relative return, and asset allocation. The Company determines the fair value of each marketable security in its portfolio at each period end and recognizes gains and losses in the portfolio in other comprehensive income. As of September 30, 2021, the amortized cost basis of marketable securities approximates fair value and all outstanding marketable securities mature within one year.

Recent Financial Accounting Standards

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the incremental approach for intra-period allocation, deferred tax recognition requirement for changes in equity method investments and non U.S. subsidiaries, and methodology for calculating income taxes in an interim period. The guidance also simplifies certain aspects of the accounting for franchise taxes, the accounting for step-up in the tax basis of goodwill, and accounting for the change in the enacted change in tax laws or rates. The Company adopted the guidance on July 1, 2021. The adoption of this guidance did not have a material impact on the Company’s financial condition or results of operations.

In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plan, which removes certain disclosures and added additional disclosures around weighted-average interest crediting rates for cash balance plans and explanation for significant gains and losses related to change in the benefit obligation for the period. The Company adopted the guidance on July 1, 2021. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

New Accounting Standards Not Adopted as of September 30, 2021

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for the discontinuation of a reference rate such as LIBOR, formerly known as the London Interbank Offered Rate, because of reference rate reform. The expedients and exceptions provided by the guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

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Revenue Recognition

3 Months Ended

Sep. 30, 2021

Revenue Recognition [Abstract]

Revenue from Contract with Customer [Policy Text Block]

REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. 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 months ended September 30, 2021 and 2020, by type of activity and reporting segment (in millions):

Three Months Ended September 30, 2021	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	134	$	207	$	88	$	—	$	429
Development services	412		36		58		—		506
Clinical supply services	—		—		—		96		96
Total	$	546	$	243	$	146	$	96	$	1,031
			Inter-segment revenue elimination						(6)
					Combined net revenue				$	1,025

Three Months Ended September 30, 2020	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	90	$	190	$	104	$	—	$	384
Development services	287		31		55		—		373
Clinical supply services	—		—		—		93		93
Total	$	377	$	221	$	159	$	93	$	850
			Inter-segment revenue elimination						(4)
					Combined net revenue				$	846

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

	Three Months Ended September 30,
(Dollars in millions)	2021		2020
United States	$	630	$	517
Europe	351		281
Other	72		69
Elimination of revenue attributable to multiple locations	(28)		(21)
Total	$	1,025	$	846

Contract Liabilities

Contract liabilities relate to cash consideration that the Company receives in advance of satisfying the related performance obligations. The contract liabilities balance (current and non-current) as of September 30, 2021 and June 30, 2021 are as follows:

(Dollars in millions)
Balance at June 30, 2021	$	321
Balance at September 30, 2021	$	299
Revenue recognized in the period from amounts included in contracts liability at the beginning of the period:	$	82

Contract liabilities that will be recognized within 12 months of September 30, 2021 are accounted for in Other accrued liabilities and those that will be recognized longer than 12 months after September 30, 2021 are accounted for within Other liabilities.

Contract Assets

Contract assets primarily relate to the Company's conditional right to receive consideration for services that have been performed for a customer as of September 30, 2021 relating to the Company's development services but had not yet been invoiced as of September 30, 2021. Contract assets are transferred to trade receivables, net when the Company’s right to receive the consideration becomes unconditional. Contract assets totaled $224 million and $181 million as of September 30, 2021 and June 30, 2021, respectively. Contract assets are included in prepaid expenses and other in the consolidated balance sheets.

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Business Combinations

3 Months Ended

Sep. 30, 2021

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

BUSINESS COMBINATIONS AND DIVESTITURES

Skeletal Cell Therapy Support SA Acquisition

In November 2020, the Company acquired 100% of the equity interest in Skeletal Cell Therapy Support SA (“Skeletal”) for $15 million, as well as related supply agreements with the seller. Skeletal operates a cell therapy manufacturing facility in Gosselies, Belgium. The operations were assigned to the Company’s Biologics segment, expanding the Company’s cell therapy capacity for clinical and commercial supply. The acquisition, when combined with the Company's other European-based facilities and capabilities in cell therapy, has created an integrated European center of excellence in cell therapy.

The Company accounted for the Skeletal acquisition using the acquisition method in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and allocated the purchase price among the acquired assets, recognizing goodwill of $9 million. The Company allocated the remainder of the purchase price to trade receivables, property, plant, and equipment, and other current and non-current assets and liabilities assumed in the acquisition. Results for the three months ended September 30, 2021 were not material to the Company’s statement of operations, financial position, or cash flows.

Acorda Therapeutics, Inc. Acquisition

In February 2021, the Company acquired the manufacturing and packaging operations of Acorda Therapeutics, Inc.'s (“Acorda”) dry powder inhaler and spray dry manufacturing business, including its manufacturing facility located near Boston, Massachusetts, for $83 million, subject to customary adjustments. In connection with the purchase, Acorda and the Company entered into a long-term supply agreement, under which the Company will continue the manufacture and packaging of an Acorda product at the facility. The facility and operations became part of the Company’s Oral and Specialty Delivery segment. Results of the business acquired were not material to the Company's statement of operations, financial position, or cash flows for the three months ended September 30, 2021.

The Company accounted for the Acorda transaction using the acquisition method in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and preliminarily allocated the purchase price among the acquired assets, recognizing property, plant, and equipment of $79 million, inventory of $2 million, and goodwill of $2 million. The remainder of the purchase price was preliminarily allocated to other current and non-current assets and liabilities assumed in the acquisition.

The Company has not completed its analysis regarding the assets acquired and liabilities assumed. Therefore, the allocation to goodwill and inventory are preliminary and subject to finalization. The Company expects to finalize its allocation over the next several months, but, in any event, within one year from the closing.

Delphi Genetics SA Acquisition

In February 2021, the Company acquired 100% of the equity interest in Delphi Genetics SA (“Delphi”) for $50 million, subject to customary adjustments. Delphi is a plasmid DNA (pDNA) cell and gene therapy contract development and manufacturing organization based in Gosselies, Belgium. The facility and operations acquired became part of the Company’s Biologics segment. Results of the business acquired were not material to the Company's statement of operations, financial position, or cash flows for the three months ended September 30, 2021.

The Company accounted for the Delphi transaction using the acquisition method in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and preliminarily allocated the purchase price recognizing property, plant, and equipment of $4 million, intangible assets of $7 million, other current assets of $3 million, assumed debt of $6 million, other current liabilities of $1 million and goodwill of $43 million.

The Company has not completed its analysis regarding the assets acquired and liabilities assumed. Therefore, the allocation to property, plant, and equipment, intangible assets, goodwill, and income taxes are preliminary and subject to finalization. The Company expects to finalize its allocation over the next several months, but, in any event, within one year from the acquisition date.

Hepatic Cell Therapy Support SA Asset Acquisition

In April 2021, the Company acquired 100% of the equity interest in Hepatic Cell Therapy Support SA (“Hepatic”) for approximately $15 million, net of cash acquired and debt assumed. Hepatic operates a manufacturing facility at the same location where Skeletal operates a cell therapy manufacturing facility in Gosselies, Belgium. The facility acquired expands the Company’s cell therapy capacity for clinical and commercial supply in its Biologics segment.

The Company accounted for the Hepatic transaction as an asset acquisition in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and allocated the purchase price to the assets acquired and liabilities assumed recognizing property, plant, and equipment of $13 million, other current and non-current assets of $3 million, and assumed debt of $1 million.

RheinCell Therapeutics GmbH Acquisition

In August 2021, the Company acquired 100% of the equity interest in RheinCell Therapeutics GmbH (“RheinCell”) for approximately $26 million, net of cash acquired. RheinCell is a developer and manufacturer of cGMP-grade induced

pluripotent stem cells (“iPSCs”) based in Lagenfeld, Germany. The operations acquired became part of the Company’s Biologics segment and builds upon Catalent’s existing custom cell therapy process development and manufacturing capabilities with proprietary cGMP cell lines for iPSC-based therapies.

The Company accounted for the RheinCell transaction using the acquisition method in accordance with ASC 805. The Company funded the entire purchase price with cash on hand and preliminarily allocated the purchase price recognizing $3 million of other assets, $4 million of other current liabilities and goodwill of $27 million. Results of the business acquired were not material to the Company's statement of operations, financial position, or cash flows for the three months ended September 30, 2021.

The Company has not completed its analysis regarding the assets acquired and liabilities assumed. Therefore, the allocation to property, plant, and equipment, intangible assets, goodwill, and income taxes are preliminary and subject to finalization. The Company expects to finalize its allocation over the next several months, but, in any event, within one year from the acquisition date.

Bettera Holdings, LLC Acquisition

In August 2021, the Company entered into an agreement to acquire Bettera Holdings, LLC (“Bettera”) for approximately $1.00 billion, subject to customary adjustments. Bettera is a manufacturer of nutraceuticals and nutritional supplements in gummy, soft chew, and lozenge delivery formats. On October 1, 2021, the Company completed the acquisition. For further details, see Note 18, Subsequent Events.

Blow-Fill-Seal Divestiture

In March 2021, the Company sold 100% of the shares of Catalent USA Woodstock, Inc. and certain related assets (collectively, the “Blow-Fill-Seal Business”) to a subsidiary of SK Capital Partners, LP for $300 million cash, a $50 million note receivable (estimated fair value of $47 million) as well as potential additional contingent consideration (up to $50 million) dependent upon the performance of aspects of the Blow-Fill-Seal Business. The Blow-Fill-Seal Business was part of the Oral and Specialty Delivery segment. The carrying value of the net assets sold was $149 million, which included goodwill of $54 million. As a result of the sale, the Company realized a gain from sale of subsidiary of $182 million, net of transaction costs, for the fiscal year ended June 30, 2021.

During three months ended September 30, 2021, the Company settled a post-closing purchase price adjustment, which resulted in a gain on sale of subsidiary of $1 million.

All consideration received was measured at its divestiture date fair value. The Company valued the total consideration received from divestiture of the Blow-Fill-Seal Business as follows:

(Dollars in millions)	Fair value of consideration received
Cash, gross	$	300
Note receivable (1)	47
Contingent consideration (2)	—
Other (3)	(16)
Total	$	331

(1)    The note receivable, which provides for interest at a rate of 5.0% paid in kind, had an estimated fair value of $47 million, which is the $50 million aggregate principal amount less a $3 million discount determined using a discounted cash flow model with the market interest rate as a significant input.

(2)    The Company determined that the estimated fair value of the contingent consideration from the sale of the Blow-Fill-Seal     Business at September 30, 2021 is zero, and therefore, no contingent consideration was recorded as a result of the divestiture of the Blow-Fill-Seal Business. If any contingent consideration is subsequently received, it will be recorded in the period in which it is received. The Company has elected an accounting policy to recognize increases in the carrying amount of the contingent consideration asset using the gain contingency guidance in ASC 450, Contingencies.

(3)    Other includes $8 million of transaction expenses, a working capital adjustment of $6 million, and a $2 million assumption of liabilities to create cumulative net cash proceeds of $284 million.

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Goodwill

3 Months Ended

Sep. 30, 2021

Goodwill Disclosure [Abstract]

Goodwill

GOODWILL

The following table summarizes the changes between June 30, 2021 and September 30, 2021 in the carrying amount of goodwill in total and by segment:

(Dollars in millions)	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Balance at June 30, 2021	$	1,531	$	516	$	316	$	156	$	2,519
Additions(1)	25		—		—		—		25
Foreign currency translation adjustments	(6)		(4)		(2)		(1)		(13)
Balance at September 30, 2021	$	1,550	$	512	$	314	$	155	$	2,531

(1) The addition to goodwill in the Biologics segment relates to the RheinCell acquisition and the Delphi acquisition. For further details, see Note 3, Business Combinations and Divestitures.

The Company recorded no impairment charge to goodwill in the current period.

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Other Intangibles, Net

3 Months Ended

Sep. 30, 2021

Intangible Assets Disclosure [Abstract]

Definite Lived Long-Lived Assets

INTANGIBLES, NET

The details of other intangibles as of September 30, 2021 and June 30, 2021 are as follows:

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
September 30, 2021
Amortized intangibles:
Core technology	19 years	$	139	$	(95)	$	44
Customer relationships	13 years	1,018		(321)		697
Product relationships	8 years	252		(210)		42
Other	5 years	19		(9)		10
Total other intangibles		$	1,428	$	(635)	$	793

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
June 30, 2021
Amortized intangibles:
Core technology	19 years	$	140	$	(94)	$	46
Customer relationships	14 years	1,024		(306)		718
Product relationships	11 years	281		(237)		44
Other	5 years	17		(8)		9
Total other intangibles		$	1,462	$	(645)	$	817

Amortization expense related to other intangible assets was $23 million for both the three months ended September 30, 2021 and 2020.

Future amortization expense related to other intangible assets for the next five fiscal years is estimated to be:

(Dollars in millions)	Remainder  Fiscal 2022		2023		2024		2025		2026		2027
Amortization expense	$	69	$	92	$	91	$	90	$	82	$	69

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Long-Term Obligations and Other Short-Term Borrowings

3 Months Ended

Sep. 30, 2021

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 consisted of the following at September 30, 2021 and June 30, 2021:

(Dollars in millions)	Maturity	September 30, 2021		June 30, 2021
Senior secured credit facilities
Term loan facility B-3	February 2028	$	1,444	$	997
5.000% senior notes due 2027	July 2027	500		500
2.375% Euro senior notes due 2028(1)	March 2028	965		984
3.125% senior notes due 2029	February 2029	550		550
3.500% senior notes due 2030	April 2030	650		—
Deferred purchase consideration	October 2021	50		50
Financing lease obligations	2021 to 2038	188		193
Other obligations	2021 to 2028	3		3
Unamortized discount and debt issuance costs		(46)		(36)
Total debt		$	4,304	$	3,241
Less: current portion of long-term obligations and other short-term      borrowings		79		75
Long-term obligations, less current portion		$	4,225	$	3,166

(1) The decrease in euro-denominated debt is primarily due to large fluctuations in foreign currency exchange rates.

Senior Secured Credit Facilities and Sixth Amendment to the Credit Agreement

In September 2021, Operating Company entered into Amendment No. 6 (the "Sixth Amendment") to its Amended and Restated Credit Agreement, dated May 20, 2014 (as subsequently amended, the "Credit Agreement"). Pursuant to the Sixth Amendment, Operating Company incurred an additional $450 million aggregate principal amount of U.S. dollar-denominated term loans (the "Incremental Term B-3 Loans") and amended the quarterly amortization from 0.25% to 0.2506% for the Incremental Term B-3 Loans and all of the remaining U.S. dollar-denominated term loans outstanding (together with the Incremental Term B-3 Loans, the “Term B-3 Loans”). The Incremental Term B-3 Loans otherwise feature the same principal terms as the existing Term B-3 Loans, with an interest rate of one-month LIBOR (subject to a floor of 0.50%) plus 2.00% per annum and a maturity date of February 2028. The proceeds of the Incremental Term B-3 Loans, after payment of the offering fees and expenses, were used in part to fund a portion of the consideration paid at the closing of the Bettera acquisition.

3.500% Senior Notes due 2030

In September 2021, Operating Company completed a private offering of $650 million aggregate principal amount of 3.500% Senior Notes due 2030 (the "2030 Notes"). The 2030 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 2030 Notes were offered in the U.S. to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and outside the U.S. only to non-U.S. investors pursuant to Regulation S under the Securities Act. The 2030 Notes will mature on April 1, 2030 and bear interest at the rate of 3.500% per annum payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022. The proceeds of the 2030 Notes, after payment of the offering fees and expenses, were used to fund a portion of the consideration paid at the closing of the Bettera acquisition.

Deferred Purchase Consideration

In connection with the acquisition of Catalent Indiana, LLC in October 2017, $200 million of the $950 million aggregate nominal purchase price was payable in $50 million installments on each of the first four anniversaries of the closing date. The Company made installment payments in October 2018, October 2019, and October 2020 and paid the final installment in October 2021.

Measurement of the Estimated Fair Value of Debt

The estimated fair value of the Company’s senior secured credit facilities and other senior indebtedness is classified as a Level 2 determination (see Note 11, Fair Value Measurements, for a description of the method by which fair value classifications are determined) in the fair-value hierarchy and is calculated by using a discounted cash flow model with a market interest rate as a significant input. The carrying amounts and the estimated fair values of the Company’s principal categories of debt as of September 30, 2021 and June 30, 2021 are as follows:

		September 30, 2021				June 30, 2021
(Dollars in millions)	Fair Value Measurement	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
5.000% senior notes due 2027	Level 2	$	500	$	527	$	500	$	539
2.375% Euro senior notes due 2028	Level 2	965		982		984		993
3.125% senior notes due 2029	Level 2	550		531		550		524
3.500% senior notes due 2030	Level 2	650		642		—		—
Senior secured credit facilities & other	Level 2	$	1,685	$	1,638	$	1,243	$	1,209
Subtotal		$	4,350	$	4,320	$	3,277	$	3,265
Unamortized discount and debt issuance costs		(46)		—		(36)		—
Total debt		$	4,304	$	4,320	$	3,241	$	3,265

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Earnings Per Share

3 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The Company computes earnings per share of the Company’s common stock, par value $0.01 (the “Common Stock”) using the two-class method required due to the participating nature of the Series A Preferred Stock (as defined and discussed in Note 14, Equity, Redeemable Preferred Stock and Accumulated Other Comprehensive Loss). Diluted net earnings per share is computed using the weighted average number of shares of Common Stock outstanding plus the weighted average number of shares of Common Stock that would be issued assuming exercise or conversion of all potentially dilutive instruments. Dilutive securities having an anti-dilutive effect on diluted net earnings per share are excluded from the calculation. The dilutive effect of the securities that are issuable under the Company’s equity incentive plans are reflected in diluted earnings per share by application of the treasury stock method. The Company applies the if-converted method to compute the potentially dilutive effect of the Series A Preferred Stock. The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three and three months ended September 30, 2021 and 2020, respectively, are as follows:

	Three Months Ended   September 30,
(In millions except per share data)	2021		2020
Net earnings	$	93	$	82
Less: Net earnings attributable to preferred shareholders	(9)		(13)
Net earnings attributable to common shareholders	$	84	$	69
Weighted average shares outstanding - basic	171		164
Weighted average dilutive securities issuable - stock plans	1		2
Weighted average shares outstanding - diluted	172		166
Earnings per share:
Basic	$	0.49	$	0.42
Diluted	$	0.49	$	0.41

The Company's Series A Preferred Stock is deemed a participating security, meaning that it has the right to participate in undistributed earnings with the Company's Common Stock. On November 23, 2020 (the “Partial Conversion Date”), holders of Series A Preferred Stock converted 265,223 shares and $2 million of unpaid accrued dividends into shares of Common Stock (the “Partial Conversion”). The holders received 20.33 shares of Common Stock for each converted preferred share, resulting in

the issuance of 5,392,280 shares of Common Stock. See Note 14, Equity, Redeemable Preferred Stock and Accumulated Other Comprehensive Loss for further details.

The diluted weighted average number of shares outstanding as of September 30, 2021 and 2020, respectively, did not include the shares of Common Stock associated with the Series A Preferred Stock due to their antidilutive effect:

	Three Months Ended   September 30,
(share counts in millions)	2021	2020
Stock options	—	—
Time-based restricted stock units	—	—
Performance-based restricted stock units	—	—
Series A Preferred Stock	8	13

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Other (Income)/ Expense, Net

3 Months Ended

Sep. 30, 2021

Other Income and Expenses [Abstract]

Other Income and Other Expense Disclosure [Text Block]

OTHER EXPENSE (INCOME), NET

The components of other expense (income), net for the three months ended September 30, 2021 and 2020 are as follows:

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Other expense (income), net
Debt financing costs (1)	$	4	$	—
Foreign currency losses (gains)(2)	9		(1)
Other (3)	(4)		(10)
Total other expense (income), net	$	9	$	(11)

(1) Debt financing costs for the three months ended September 30, 2021 includes $4 million of financing charges related to the Company’s Incremental Term B-3 Loans.

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

(3) Other, for the three months ended September 30, 2021 and 2020 includes unrealized gains of $2 million and $9 million, respectively, related to the fair value of the derivative liability associated with the Series A Preferred Stock.

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Restructuring and Other Costs

3 Months Ended

Sep. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring and other

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 equipment relocation costs and costs associated with planned facility expansions and closures to streamline Company operations.

During the fiscal year ended June 30, 2021, the Company adopted a plan to reduce costs and optimize its infrastructure in Europe by closing its Clinical Supply Services facility in Bolton, U.K. In connection with this restructuring plan, the Company reduced its headcount by approximately 170 employees and incurred cumulative charges of $8 million, primarily associated with employee severance benefits. For the three months ended September 30, 2021, restructuring charges associated with the Bolton facility closure were $1 million.

Total restructuring charges were $1 million for both the three months ended September 30, 2021 and 2020.

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Derivative Instruments and Hedging Activities

3 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIESRisk Management Objective of Using Derivatives

The Company is exposed to fluctuations in the currency exchange rates on its applicable to its investments in operations outside the U.S. 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 September 30, 2021, the Company had euro-denominated debt outstanding of $965 million (U.S. dollar equivalent), that is designated and qualifies as a hedge of a net investment in European operations. For non-derivatives designated and qualifying as net investment hedges, the effective portion of translation gains or losses are reported in accumulated other comprehensive loss as part of the cumulative translation adjustment. The non-hedge portions of the euro-denominated debt translation gains or losses are reported in the consolidated statement of operations. The following table includes net investment hedge activity during the three months ended September 30, 2021 and 2020.

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Unrealized foreign exchange gain (loss) within other comprehensive income	$	22	$	(32)
Unrealized foreign exchange loss within statement of operations	$	(3)	$	(2)

The net accumulated gain on the instrument designated as a hedge as of September 30, 2021 within other comprehensive loss was approximately $28 million. Amounts are reclassified out of accumulated other comprehensive loss into earnings when the entity to which the gains and losses relate is either sold or substantially liquidated.

Preferred Stock Derivative Liability

As discussed in Note 14, Equity, Redeemable Preferred Stock, and Accumulated Other Comprehensive Loss, in May 2019, the Company issued shares of Series A Preferred Stock in exchange for net proceeds of $646 million after taking into account the $4 million issuance cost.

The dividend rate used to determine the amount of the quarterly dividend payable on shares of the Series A Preferred Stock is subject to adjustment so as to provide holders of shares of Series A Preferred Stock with certain protections against a decline in the trading price of shares of Common Stock. The Company determined that this feature should be accounted for as a derivative liability, since the feature fluctuates inversely to changes in the trading price and is also linked to the performance of the S&P 500 stock index. Accordingly, the Company bifurcated the adjustable dividend feature from the remainder of the Series A Preferred Stock and accounted for this feature as a derivative liability at fair value.

The Company recorded a total gain of $2 million and $9 million on the change in the estimated fair value of the derivative liability for the three months ended September 30, 2021 and 2020, respectively, which is reflected as other expense (income), net in the consolidated statements of operations.

A portion of the derivative liability was settled on the Partial Conversion Date due to the Partial Conversion. The fair value of the derivative liability as of the Partial Conversion Date was $9 million, of which $4 million was related to the converted portion of the outstanding shares of Series A Preferred Stock. See Note 14, Equity, Redeemable Preferred Stock, and Accumulated Other Comprehensive Loss for details of the Partial Conversion.

Interest-Rate Swap

Pursuant to its interest rate and risk management strategy, in April 2020, the Company entered into an interest-rate swap agreement with Bank of America N.A. as a hedge against the economic effect of a portion of the variable interest obligation associated with its U.S. dollar-denominated term loans under its senior secured credit facilities, so that the interest payable on that portion of the debt becomes fixed at a certain rate, thereby reducing the impact of future interest rate changes on future interest expense.

In February 2021, in connection with an amendment to the Credit Agreement, the Company settled the interest-rate swap agreement with Bank of America N.A. The Company paid $2 million in cash to Bank of America N.A to settle the interest-rate swap agreement. This loss is deferred in stockholders’ equity, net of income taxes, as a component of accumulated other comprehensive loss, and amortized as an adjustment to interest expense, net over the original term of the formerly outstanding term loans. The net amount of deferred losses on cash flow hedges that is expected to be reclassified from accumulated other comprehensive loss into interest expense, net within the next twelve months is not material.

In February 2021, the Company entered into a new interest-rate swap agreement with Bank of America N.A. as a hedge against the economic effect of a portion of the variable interest obligation associated with its Term B-3 Loans, so that the interest payable on that portion of the Term B-3 Loans becomes fixed at a certain rate, thereby reducing the impact of future

interest rate changes on future interest expense. As a result of entering into the interest-rate swap agreement, the floating portion of the applicable rate on $500 million of the Term B-3 Loans is now effectively fixed at 0.9985%.

The new interest-rate swap agreement qualifies for and is designated as a cash-flow hedge. The Company evaluates hedge effectiveness at the inception of the hedge and on an ongoing basis. The cash flows associated with the interest-rate swap are reported in net cash provided by operating activities in the consolidated statements of cash flows. The unrealized gain or loss from the mark-to-market of the interest rate swap valuations during the three months ended September 30, 2021 and the fiscal year ended June 30, 2021 was immaterial in each period.

A summary of the estimated fair value of the interest-rate swap reported in the consolidated balance sheets is stated in the table below:

	September 30, 2021			June 30, 2021
(Dollars in millions)	Balance Sheet Classification	Estimated Fair Value		Balance Sheet Classification	Estimated Fair Value
Interest-rate swap	Other long-term assets	$	3	Other long-term assets	$	2

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Fair Value Measures and Disclosures

3 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Disclosures

FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement, defines fair value as the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which Level 1 and Level 2 are considered observable and Level 3 is considered unobservable:

Level 1 – Quoted prices in active markets for identical assets or liabilities.                      

Level 2 – Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.                      

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Value is determined using pricing models, discounted cash flow methodologies, or similar techniques and also includes instruments for which the determination of fair value requires significant judgment or estimation.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses of the Company approximate fair value based on the short maturities of these instruments.

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification as of the end of each reporting period. The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis and the fair value measurement for such assets and liabilities at September 30, 2021 and June 30, 2021, respectively:

(Dollars in millions)	Basis of Fair Value Measurement
September 30, 2021	Total		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	50	$	50	$	—	$	—
Interest-rate swap	3		—		3		—
Trading securities	1		1		—		—
Liabilities:
Series A Preferred Stock derivative liability	1		—		—		1
June 30, 2021
Assets:
Marketable securities	$	71	$	71	$	—	$	—
Interest-rate swap	2		—		2		—
Trading securities	1		1		—		—
Liabilities:
Series A Preferred Stock derivative liability	3		—		—		3

The fair value of the interest-rate swap agreement is determined at the end of each reporting period based on valuation models that use interest rate yield curves and discount rates as inputs. The discount rates are based on U.S. deposit or U.S. Treasury rates. The significant inputs used in the valuation models are readily available in public markets or can be derived from observable market transactions, and the valuation is therefore classified as Level 2 in the fair-value hierarchy.

The estimated fair value of the Series A Preferred Stock derivative is determined using an option pricing methodology, specifically both a Monte Carlo simulation and a binomial lattice model. The methodology incorporates the terms and conditions of the preferred stock arrangement, historical stock price volatility, the risk-free interest rate, a credit spread based on the yield indexes of high-yield bonds, and the trading price of shares of the Common Stock. The calculation of the estimated fair value of the derivative liability is highly sensitive to changes in unobservable inputs, such as the expected volatility and the Company’s credit spread. The estimated fair value of the Series A Preferred Stock derivative liability is classified as Level 3 in the fair-value hierarchy due to the significant management judgment required to make the assumptions underlying the calculation of value.

The following table sets forth a summary of changes in the estimated fair value of the Series A Preferred Stock derivative liability from June 30, 2021 to September 30, 2021:

(Dollars in millions)	Fair Value Measurements of Series A Preferred Stock Derivative Liability Using Significant Unobservable Inputs (Level 3)
Balance at June 30, 2021	$	3
Change in estimated fair value of Series A Preferred Stock derivative liability	(2)
Balance at September 30, 2021	$	1

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Long-lived assets, goodwill, and other intangible assets are subject to non-recurring fair value measurement for the evaluation of potential impairment. Other than the fair value estimates disclosed in Note 3, Business Combinations and Divestitures, there was no non-recurring fair value measurement during the three months ended September 30, 2021 and 2020.

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Income Taxes

3 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Generally, fluctuations in the effective tax rate are due to changes in relative amounts of U.S. and non-U.S. pretax income, the tax impact of special items, and other discrete tax items. Discrete items include, but are not limited to, changes in non-U.S. statutory tax rates, the amortization of certain assets, changes in the Company’s reserve for uncertain tax positions, and the tax impact of certain equity compensation.

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, and the United Kingdom. The Company is no longer subject to examinations by the relevant tax authorities for years prior to fiscal year 2009. The Company is presently under audit in select jurisdictions in the United States and in Europe, but no material impact is expected to the financial results once these audits are completed.

ASC 740 includes guidance on the accounting for uncertain income tax positions recognized in the Company's tax filings. 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 both September 30, 2021 and June 30, 2021, the Company's reserve against uncertain income tax positions remained substantially unchanged at approximately $5 million. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense.

The Company recorded a provision for income taxes for the three months ended September 30, 2021 of $10 million relative to earnings before income taxes of $103 million. The Company recorded a benefit for income taxes for the three months ended September 30, 2020 of $15 million relative to earnings before income taxes of $67 million. The increased income tax provision for the current period was largely the result of an increase in the amount and relative mix of pretax income across several jurisdictions. This was partially offset by discrete tax benefits recognized in the quarter relating to equity compensation deductions and to a lesser extent non U.S. tax credits claimed on an amended U.S. federal income tax return filing. The prior-year quarter income tax benefit was largely driven by the recognition of additional non U.S. tax credits claimed on an amended U.S. federal income tax filing. The provision/benefit for income taxes in each of these periods was also impacted by the relative amount and mix of permanent tax adjustments included in the income tax computation and other discrete tax items recognized in the periods.

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Employee Retirement Benefit Plans

3 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Employee Retirement Benefit Plans

EMPLOYEE RETIREMENT BENEFIT PLANS

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

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Components of net periodic benefit cost:
Selling, general, and administrative expenses:
Service cost	$	1	$	1
Other expense (income), net:
Interest cost	1		1
Expected return on plan assets	(2)		(2)
Amortization (1)	1		—
Net amount recognized	$	1	$	—

(1) Amount represents the amortization of unrecognized actuarial 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 million as of September 30, 2021 and June 30, 2021, 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 $2 million per year.

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Equity and Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Sep. 30, 2021

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

Equity, Redeemable Preferred Stock and Accumulated Other Comprehensive Loss

EQUITY, REDEEMABLE PREFERRED STOCK AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Description of Capital Stock

The Company is authorized to issue 1,000,000,000 shares of its Common Stock and 100,000,000 shares of preferred stock, par value $0.01 per share. In accordance with the Company’s amended and restated certificate of incorporation, each share of Common Stock has one vote, and the Common Stock votes together as a single class.

Redeemable Preferred Stock

In May 2019, the Company designated 1,000,000 shares of its preferred stock, par value $0.01, as its Series A Convertible Preferred Stock (the “Series A Preferred Stock”), pursuant to a certificate of designation of preferences, rights, and limitations (as amended, the “Certificate of Designation”) filed with the Delaware Secretary of State, and issued and sold 650,000 shares of the Series A Preferred Stock for an aggregate purchase price of $650 million, to affiliates of Leonard Green & Partners, L.P., each share having an initial stated value of $1,000 (as such value may be adjusted in accordance with the terms of the Certificate of Designation). The Series A Preferred Stock ranks senior to the Company’s Common Stock with respect to dividend rights and rights upon the voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Company.

Proceeds from the offering of the Series A Preferred Stock, net of stock issuance costs, were $646 million, $40 million of which was allocated to the dividend-adjustment feature at its issuance and separately accounted for as a derivative liability. Any change in the fair value of derivative liability during a fiscal quarter is recorded as a non-operating expense in the consolidated statement of operations. See Note 10, Derivative Instruments and Hedging Activities, for detail concerning the change in fair value during the three months ended September 30, 2021.

As described in Note 7, Earnings Per Share, on the Partial Conversion Date, holders of Series A Preferred Stock converted 265,223 shares (approximately 41% of their holdings) and $2 million of unpaid accrued dividends into shares of Common Stock. The holders received 20.33 shares of Common Stock for each converted preferred share, resulting in the issuance of 5,392,280 shares of Common Stock. There was no gain or loss recognized upon the Partial Conversion as it occurred in accordance with the terms of the Certificate of Designation. The Company has 384,777 shares of Series A Preferred Stock that remain outstanding at September 30, 2021.

As a result of the Partial Conversion, additional paid in capital increased $253 million, which includes $4 million related to the fair value of the portion of the derivative liability that was settled upon the Partial Conversion and $2 million related to an unpaid accrued dividend. See Note 10, Derivative Instruments and Hedging Activities, for detail concerning the change in fair value during the three months ended September 30, 2021.

Accumulated Other Comprehensive Loss

The components of the changes in the cumulative translation adjustment, derivatives and hedges, minimum pension liability, and marketable securities for the three months ended September 30, 2021 and 2020 are presented below.

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Foreign currency translation adjustments:
Net investment hedge	$	22	$	(32)
Long-term intercompany loans	(3)		6
Translation adjustments	(28)		35
Total foreign currency translation adjustment, pretax	(9)		9
Tax expense (benefit)	5		(7)
Total foreign currency translation adjustment, net of tax	$	(14)	$	16
Net change in derivatives and hedges:
Net gain recognized during the period	$	1	$	—
Total derivatives and hedges, pretax	1		—
Tax expense	—		—
Net change in derivatives and hedges, net of tax	$	1	$	—
Net change in minimum pension liability:
Net gain recognized during the period	$	1	$	—
Total pension liability, pretax	1		—
Tax expense	—		—
Net change in minimum pension liability, net of tax	$	1	$	—

For the three months ended September 30, 2021, the changes in accumulated other comprehensive loss, net of tax by component are as follows:

(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Derivatives and Hedges		Marketable Securities		Other		Total
Balance at June 30, 2021	$	(268)	$	(47)	$	—	$	(1)	$	(1)	$	(317)
Other comprehensive (loss) income before     reclassifications	(14)		—		1		—		—		(13)
Amounts reclassified from accumulated other     comprehensive loss	—		1		—		—		—		1
Net current period other comprehensive (loss)     income	(14)		1		1		—		—		(12)
Balance at September 30, 2021	$	(282)	$	(46)	$	1	$	(1)	$	(1)	$	(329)

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Commitments and Contingencies	3 Months Ended
	Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	COMMITMENTS AND CONTINGENCIES 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 consolidated 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.

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Segment Information

3 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company conducts its business within the following operating segments: Biologics, Softgel and Oral Technologies, Oral and Specialty 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”).

Segment EBITDA is subject to important limitations. These consolidated financial statements include information concerning Segment EBITDA (a) because Segment EBITDA is an operational measure used by management in the assessment of the operating segments, the allocation of resources to the segments, and the setting of strategic goals and annual goals for the segments, and (b) in order to provide supplemental information that the Company considers relevant for the readers of the consolidated financial statements. The Company’s presentation of Segment EBITDA may not be comparable to similarly titled measures used by other companies.

The following tables include net revenue and Segment EBITDA for each of the Company's current reporting segments during the three months ended September 30, 2021 and 2020:

(Dollars in millions)	Three Months Ended   September 30,
	2021		2020
Net revenue:
Biologics	$	546	$	377
Softgel and Oral Technologies	243		221
Oral and Specialty Delivery	146		159
Clinical Supply Services	96		93
Inter-segment revenue elimination	(6)		(4)
Total net revenue	$	1,025	$	846

(Dollars in millions)	Three Months Ended   September 30,
	2021		2020
Segment EBITDA reconciled to net earnings:
Biologics	$	166	$	107
Softgel and Oral Technologies	41		38
Oral and Specialty Delivery	33		21
Clinical Supply Services	26		25
Sub-Total	$	266	$	191
Reconciling items to net earnings
Unallocated costs (1)	(56)		(29)
Depreciation and amortization	(81)		(69)
Interest expense, net	(26)		(26)
Income tax (expense) benefit	(10)		15
Net earnings	$	93	$	82

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

(Dollars in millions)	Three Months Ended   September 30,
	2021		2020
Impairment charges and gain (loss) on sale of assets	$	(3)	$	(2)
Stock-based compensation	(21)		(19)
Restructuring and other special items (a)	(8)		(5)
Gain on sale of subsidiary (b)	1		—
Other (expense) income, net (c)	(9)		11
Unallocated corporate costs, net	(16)		(14)
Total unallocated costs	$	(56)	$	(29)

(a)    Restructuring and other special items during the three months ended September 30, 2021 include (i) transaction and integration costs associated with the Delphi, Hepatic, and RheinCell acquisitions (ii) transaction costs associated with the Bettera acquisition, and (iii) restructuring costs associated with the closure of the Company's Clinical Supply Services facility in Bolton, U.K. Restructuring and other special items during the three months ended September 30, 2020 include transaction and integration costs associated with acquisitions of facilities in Italy and Belgium, the disposal of a site in Australia, and other restructuring initiatives across the Company's network of sites.

(b)    Gain on sale of subsidiary for the three months ended September 30, 2021 is affiliated with the sale of the Blow-Fill-Seal Business.

(c)    Refer to Note 8, Other Expense (Income), Net for details of financing charges and foreign currency translation adjustments recorded within other expense (income), net.

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)	September 30, 2021		June 30, 2021
Assets:
Biologics	$	5,027	$	4,973
Softgel and Oral Technologies	1,577		1,604
Oral and Specialty Delivery	1,241		1,269
Clinical Supply Services	482		483
Corporate and eliminations	1,856		783
Total assets	$	10,183	$	9,112

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Supplemental Balance Sheet Information

3 Months Ended

Sep. 30, 2021

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Information

SUPPLEMENTAL BALANCE SHEET INFORMATION

Supplemental balance sheet information at September 30, 2021 and June 30, 2021 is detailed in the following tables.

Inventories

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

(Dollars in millions)	September 30, 2021		June 30, 2021
Raw materials and supplies	$	482	$	469
Work-in-process	203		151
Total inventories, gross	685		620
Inventory cost adjustment	(63)		(57)
Total inventories	$	622	$	563

Prepaid expenses and other

Prepaid expenses and other consist of the following:

(Dollars in millions)	September 30, 2021		June 30, 2021
Prepaid expenses	$	64	$	46
Contract assets	224		181
Spare parts supplies	31		30
Prepaid income tax	23		22
Non-U.S. value-added tax	64		50
Other current assets	53		47
Total prepaid expenses and other	$	459	$	376

Other accrued liabilities

Other accrued liabilities consist of the following:

(Dollars in millions)	September 30, 2021		June 30, 2021
Accrued employee-related expenses	$	155	$	184
Operating lease liabilities	14		16
Restructuring accrual	2		4
Accrued interest	11		27
Contract liabilities	283		305
Accrued income tax	25		30
Other	164		170
Total other accrued liabilities	$	654	$	736

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Subsequent Events (Notes)

3 Months Ended

Sep. 30, 2021

Subsequent Events [Abstract]

Subsequent Events [Text Block]

SUBSEQUENT EVENTS

Bettera Holdings, LLC Acquisition

In October 2021, the Company acquired Bettera for approximately $1.00 billion in cash, subject to customary adjustments. The Company funded this acquisition through a combination of additional borrowings under its senior secured credit facilities and the net proceeds of the 2030 Notes. For further detail on the Company’s additional borrowings and 2030 Notes, see Note 6, Long-Term Obligations and Short-Term Borrowings.

The operations acquired have become part of the Company’s Softgel and Oral Technologies segment. The initial accounting for this acquisition is pending. Significant, relevant information needed to complete the initial accounting analysis is not yet available because the valuation of the assets acquired and liabilities assumed is not complete. As a result, determining these values is not practicable and the Company is unable to disclose these values or provide other related disclosures at this time.

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

3 Months Ended

Sep. 30, 2021

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 (“U.S. 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 U.S. 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 three months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending June 30, 2022. The consolidated balance sheet at June 30, 2021 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. 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, 2021 filed with the Securities and Exchange Commission (the “SEC”).

Reclassification, Policy

Reclassifications

Certain prior-period amounts have been reclassified to conform to the current period presentation. These reclassifications did not have a material impact on the consolidated statements of operations, consolidated balance sheets, consolidated statements of cash flows, or notes to the consolidated financial statements.

Foreign Currency Translation

Foreign Currency Translation

The financial statements of the Company’s operations are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of operations outside the U.S. into U.S. dollars are accumulated as a component of other comprehensive income utilizing period-end exchange rates. Since July 1, 2018, the Company has accounted for its Argentine operations as highly inflationary.

Depreciation Expense

Depreciation expense was $58 million and $46 million, for the three months ended September 30, 2021 and 2020, respectively. Depreciation expense includes amortization of assets related to finance leases. The Company charges repairs and maintenance costs to expense as incurred.

Research and Development Costs

Research and Development Costs

The Company expenses research and development costs as incurred. Research and development costs amounted to $6 million for both the three months ended September 30, 2021 and 2020.

Marketable Securities

The Company classifies its marketable securities as available-for-sale, because it may sell certain of its marketable securities prior to the stated maturity for various reasons, including management of liquidity, credit risk, duration, relative return, and asset allocation. The Company determines the fair value of each marketable security in its portfolio at each period end and recognizes gains and losses in the portfolio in other comprehensive income. As of September 30, 2021, the amortized cost basis of marketable securities approximates fair value and all outstanding marketable securities mature within one year.

Recent Financial Accounting Standards

Recent Financial Accounting Standards

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the incremental approach for intra-period allocation, deferred tax recognition requirement for changes in equity method investments and non U.S. subsidiaries, and methodology for calculating income taxes in an interim period. The guidance also simplifies certain aspects of the accounting for franchise taxes, the accounting for step-up in the tax basis of goodwill, and accounting for the change in the enacted change in tax laws or rates. The Company adopted the guidance on July 1, 2021. The adoption of this guidance did not have a material impact on the Company’s financial condition or results of operations.

In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plan, which removes certain disclosures and added additional disclosures around weighted-average interest crediting rates for cash balance plans and explanation for significant gains and losses related to change in the benefit obligation for the period. The Company adopted the guidance on July 1, 2021. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

New Accounting Standards Not Adopted as of September 30, 2021

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for the discontinuation of a reference rate such as LIBOR, formerly known as the London Interbank Offered Rate, because of reference rate reform. The expedients and exceptions provided by the guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

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Revenue from Contract with Customer (Policies)

3 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Policy Text Block]

REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. 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 months ended September 30, 2021 and 2020, by type of activity and reporting segment (in millions):

Three Months Ended September 30, 2021	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	134	$	207	$	88	$	—	$	429
Development services	412		36		58		—		506
Clinical supply services	—		—		—		96		96
Total	$	546	$	243	$	146	$	96	$	1,031
			Inter-segment revenue elimination						(6)
					Combined net revenue				$	1,025

Three Months Ended September 30, 2020	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	90	$	190	$	104	$	—	$	384
Development services	287		31		55		—		373
Clinical supply services	—		—		—		93		93
Total	$	377	$	221	$	159	$	93	$	850
			Inter-segment revenue elimination						(4)
					Combined net revenue				$	846

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

	Three Months Ended September 30,
(Dollars in millions)	2021		2020
United States	$	630	$	517
Europe	351		281
Other	72		69
Elimination of revenue attributable to multiple locations	(28)		(21)
Total	$	1,025	$	846

Contract Liabilities

Contract liabilities relate to cash consideration that the Company receives in advance of satisfying the related performance obligations. The contract liabilities balance (current and non-current) as of September 30, 2021 and June 30, 2021 are as follows:

(Dollars in millions)
Balance at June 30, 2021	$	321
Balance at September 30, 2021	$	299
Revenue recognized in the period from amounts included in contracts liability at the beginning of the period:	$	82

Contract liabilities that will be recognized within 12 months of September 30, 2021 are accounted for in Other accrued liabilities and those that will be recognized longer than 12 months after September 30, 2021 are accounted for within Other liabilities.

Contract Assets

Contract assets primarily relate to the Company's conditional right to receive consideration for services that have been performed for a customer as of September 30, 2021 relating to the Company's development services but had not yet been invoiced as of September 30, 2021. Contract assets are transferred to trade receivables, net when the Company’s right to receive the consideration becomes unconditional. Contract assets totaled $224 million and $181 million as of September 30, 2021 and June 30, 2021, respectively. Contract assets are included in prepaid expenses and other in the consolidated balance sheets.

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Revenue Recognition (Tables)

3 Months Ended

Sep. 30, 2021

Revenue Recognition and Deferred Revenue [Abstract]

Contractual Liabilities

The contract liabilities balance (current and non-current) as of September 30, 2021 and June 30, 2021 are as follows:

(Dollars in millions)
Balance at June 30, 2021	$	321
Balance at September 30, 2021	$	299
Revenue recognized in the period from amounts included in contracts liability at the beginning of the period:	$	82

Geographical [Member]

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue

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

	Three Months Ended September 30,
(Dollars in millions)	2021		2020
United States	$	630	$	517
Europe	351		281
Other	72		69
Elimination of revenue attributable to multiple locations	(28)		(21)
Total	$	1,025	$	846

Product and Service[Member]

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue

The following tables allocate revenue, for the three months ended September 30, 2021 and 2020, by type of activity and reporting segment (in millions):

Three Months Ended September 30, 2021	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	134	$	207	$	88	$	—	$	429
Development services	412		36		58		—		506
Clinical supply services	—		—		—		96		96
Total	$	546	$	243	$	146	$	96	$	1,031
			Inter-segment revenue elimination						(6)
					Combined net revenue				$	1,025

Three Months Ended September 30, 2020	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Manufacturing & commercial product supply	$	90	$	190	$	104	$	—	$	384
Development services	287		31		55		—		373
Clinical supply services	—		—		—		93		93
Total	$	377	$	221	$	159	$	93	$	850
			Inter-segment revenue elimination						(4)
					Combined net revenue				$	846

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Business Combinations (Table)

3 Months Ended

Sep. 30, 2021

Business Acquisition [Line Items]

Disposal Groups, Including Discontinued Operations

The Company valued the total consideration received from divestiture of the Blow-Fill-Seal Business as follows:

(Dollars in millions)	Fair value of consideration received
Cash, gross	$	300
Note receivable (1)	47
Contingent consideration (2)	—
Other (3)	(16)
Total	$	331

(1)    The note receivable, which provides for interest at a rate of 5.0% paid in kind, had an estimated fair value of $47 million, which is the $50 million aggregate principal amount less a $3 million discount determined using a discounted cash flow model with the market interest rate as a significant input.

(2)    The Company determined that the estimated fair value of the contingent consideration from the sale of the Blow-Fill-Seal     Business at September 30, 2021 is zero, and therefore, no contingent consideration was recorded as a result of the divestiture of the Blow-Fill-Seal Business. If any contingent consideration is subsequently received, it will be recorded in the period in which it is received. The Company has elected an accounting policy to recognize increases in the carrying amount of the contingent consideration asset using the gain contingency guidance in ASC 450, Contingencies.

(3)    Other includes $8 million of transaction expenses, a working capital adjustment of $6 million, and a $2 million assumption of liabilities to create cumulative net cash proceeds of $284 million.

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Goodwill (Tables)

3 Months Ended

Sep. 30, 2021

Goodwill Disclosure [Abstract]

Goodwill - Rollforward

The following table summarizes the changes between June 30, 2021 and September 30, 2021 in the carrying amount of goodwill in total and by segment:

(Dollars in millions)	Biologics		Softgel and Oral Technologies		Oral and Specialty Delivery		Clinical Supply Services		Total
Balance at June 30, 2021	$	1,531	$	516	$	316	$	156	$	2,519
Additions(1)	25		—		—		—		25
Foreign currency translation adjustments	(6)		(4)		(2)		(1)		(13)
Balance at September 30, 2021	$	1,550	$	512	$	314	$	155	$	2,531

(1) The addition to goodwill in the Biologics segment relates to the RheinCell acquisition and the Delphi acquisition. For further details, see Note 3, Business Combinations and Divestitures.

The Company recorded no impairment charge to goodwill in the current period.

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Other Intangibles, Net (Tables)

3 Months Ended

Sep. 30, 2021

Intangible Assets Disclosure [Abstract]

Other Intangible Assets Subject to Amortization

The details of other intangibles as of September 30, 2021 and June 30, 2021 are as follows:

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
September 30, 2021
Amortized intangibles:
Core technology	19 years	$	139	$	(95)	$	44
Customer relationships	13 years	1,018		(321)		697
Product relationships	8 years	252		(210)		42
Other	5 years	19		(9)		10
Total other intangibles		$	1,428	$	(635)	$	793

(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
June 30, 2021
Amortized intangibles:
Core technology	19 years	$	140	$	(94)	$	46
Customer relationships	14 years	1,024		(306)		718
Product relationships	11 years	281		(237)		44
Other	5 years	17		(8)		9
Total other intangibles		$	1,462	$	(645)	$	817

Future Amortization Expense

Future amortization expense related to other intangible assets for the next five fiscal years is estimated to be:

(Dollars in millions)	Remainder  Fiscal 2022		2023		2024		2025		2026		2027
Amortization expense	$	69	$	92	$	91	$	90	$	82	$	69

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

3 Months Ended

Sep. 30, 2021

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 consisted of the following at September 30, 2021 and June 30, 2021:

(Dollars in millions)	Maturity	September 30, 2021		June 30, 2021
Senior secured credit facilities
Term loan facility B-3	February 2028	$	1,444	$	997
5.000% senior notes due 2027	July 2027	500		500
2.375% Euro senior notes due 2028(1)	March 2028	965		984
3.125% senior notes due 2029	February 2029	550		550
3.500% senior notes due 2030	April 2030	650		—
Deferred purchase consideration	October 2021	50		50
Financing lease obligations	2021 to 2038	188		193
Other obligations	2021 to 2028	3		3
Unamortized discount and debt issuance costs		(46)		(36)
Total debt		$	4,304	$	3,241
Less: current portion of long-term obligations and other short-term      borrowings		79		75
Long-term obligations, less current portion		$	4,225	$	3,166

(1) The decrease in euro-denominated debt is primarily due to large fluctuations in foreign currency exchange rates.

Fair Value Disclosures [Abstract]

Schedule Of Carrying And Fair Value Of Financial Instruments Table

The carrying amounts and the estimated fair values of the Company’s principal categories of debt as of September 30, 2021 and June 30, 2021 are as follows:

		September 30, 2021				June 30, 2021
(Dollars in millions)	Fair Value Measurement	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
5.000% senior notes due 2027	Level 2	$	500	$	527	$	500	$	539
2.375% Euro senior notes due 2028	Level 2	965		982		984		993
3.125% senior notes due 2029	Level 2	550		531		550		524
3.500% senior notes due 2030	Level 2	650		642		—		—
Senior secured credit facilities & other	Level 2	$	1,685	$	1,638	$	1,243	$	1,209
Subtotal		$	4,350	$	4,320	$	3,277	$	3,265
Unamortized discount and debt issuance costs		(46)		—		(36)		—
Total debt		$	4,304	$	4,320	$	3,241	$	3,265

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Earnings Per Share (Tables)

3 Months Ended

Sep. 30, 2021

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 three months ended September 30, 2021 and 2020, respectively, are as follows:

	Three Months Ended   September 30,
(In millions except per share data)	2021		2020
Net earnings	$	93	$	82
Less: Net earnings attributable to preferred shareholders	(9)		(13)
Net earnings attributable to common shareholders	$	84	$	69
Weighted average shares outstanding - basic	171		164
Weighted average dilutive securities issuable - stock plans	1		2
Weighted average shares outstanding - diluted	172		166
Earnings per share:
Basic	$	0.49	$	0.42
Diluted	$	0.49	$	0.41

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The diluted weighted average number of shares outstanding as of September 30, 2021 and 2020, respectively, did not include the shares of Common Stock associated with the Series A Preferred Stock due to their antidilutive effect:

	Three Months Ended   September 30,
(share counts in millions)	2021	2020
Stock options	—	—
Time-based restricted stock units	—	—
Performance-based restricted stock units	—	—
Series A Preferred Stock	8	13

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Other Income and Expense (Tables)

3 Months Ended

Sep. 30, 2021

Other Income and Expenses [Abstract]

Schedule of Other Nonoperating Income (Expense)

The components of other expense (income), net for the three months ended September 30, 2021 and 2020 are as follows:

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Other expense (income), net
Debt financing costs (1)	$	4	$	—
Foreign currency losses (gains)(2)	9		(1)
Other (3)	(4)		(10)
Total other expense (income), net	$	9	$	(11)

(1) Debt financing costs for the three months ended September 30, 2021 includes $4 million of financing charges related to the Company’s Incremental Term B-3 Loans.

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

(3) Other, for the three months ended September 30, 2021 and 2020 includes unrealized gains of $2 million and $9 million, respectively, related to the fair value of the derivative liability associated with the Series A Preferred Stock.

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

3 Months Ended

Sep. 30, 2021

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 months ended September 30, 2021 and 2020.

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Unrealized foreign exchange gain (loss) within other comprehensive income	$	22	$	(32)
Unrealized foreign exchange loss within statement of operations	$	(3)	$	(2)

Schedule of Interest Rate Derivatives

A summary of the estimated fair value of the interest-rate swap reported in the consolidated balance sheets is stated in the table below:

	September 30, 2021			June 30, 2021
(Dollars in millions)	Balance Sheet Classification	Estimated Fair Value		Balance Sheet Classification	Estimated Fair Value
Interest-rate swap	Other long-term assets	$	3	Other long-term assets	$	2

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Fair Value Measures and Disclosures (Tables)

3 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis and the fair value measurement for such assets and liabilities at September 30, 2021 and June 30, 2021, respectively:

(Dollars in millions)	Basis of Fair Value Measurement
September 30, 2021	Total		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	50	$	50	$	—	$	—
Interest-rate swap	3		—		3		—
Trading securities	1		1		—		—
Liabilities:
Series A Preferred Stock derivative liability	1		—		—		1
June 30, 2021
Assets:
Marketable securities	$	71	$	71	$	—	$	—
Interest-rate swap	2		—		2		—
Trading securities	1		1		—		—
Liabilities:
Series A Preferred Stock derivative liability	3		—		—		3

Schedule of Derivative Liabilities at Fair Value [Table Text Block]

The following table sets forth a summary of changes in the estimated fair value of the Series A Preferred Stock derivative liability from June 30, 2021 to September 30, 2021:

(Dollars in millions)	Fair Value Measurements of Series A Preferred Stock Derivative Liability Using Significant Unobservable Inputs (Level 3)
Balance at June 30, 2021	$	3
Change in estimated fair value of Series A Preferred Stock derivative liability	(2)
Balance at September 30, 2021	$	1

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Employee Retirement Benefit Plans (Tables)

3 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Components of Company's Net Periodic Benefit Costs

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

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Components of net periodic benefit cost:
Selling, general, and administrative expenses:
Service cost	$	1	$	1
Other expense (income), net:
Interest cost	1		1
Expected return on plan assets	(2)		(2)
Amortization (1)	1		—
Net amount recognized	$	1	$	—

(1) Amount represents the amortization of unrecognized actuarial 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 million as of September 30, 2021 and June 30, 2021, 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 $2 million per year.

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

3 Months Ended

Sep. 30, 2021

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

Schedule of Comprehensive Income (Loss)

Accumulated Other Comprehensive Loss

The components of the changes in the cumulative translation adjustment, derivatives and hedges, minimum pension liability, and marketable securities for the three months ended September 30, 2021 and 2020 are presented below.

	Three Months Ended   September 30,
(Dollars in millions)	2021		2020
Foreign currency translation adjustments:
Net investment hedge	$	22	$	(32)
Long-term intercompany loans	(3)		6
Translation adjustments	(28)		35
Total foreign currency translation adjustment, pretax	(9)		9
Tax expense (benefit)	5		(7)
Total foreign currency translation adjustment, net of tax	$	(14)	$	16
Net change in derivatives and hedges:
Net gain recognized during the period	$	1	$	—
Total derivatives and hedges, pretax	1		—
Tax expense	—		—
Net change in derivatives and hedges, net of tax	$	1	$	—
Net change in minimum pension liability:
Net gain recognized during the period	$	1	$	—
Total pension liability, pretax	1		—
Tax expense	—		—
Net change in minimum pension liability, net of tax	$	1	$	—

Schedule of Accumulated Other Comprehensive Income (Loss)

For the three months ended September 30, 2021, the changes in accumulated other comprehensive loss, net of tax by component are as follows:

(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Derivatives and Hedges		Marketable Securities		Other		Total
Balance at June 30, 2021	$	(268)	$	(47)	$	—	$	(1)	$	(1)	$	(317)
Other comprehensive (loss) income before     reclassifications	(14)		—		1		—		—		(13)
Amounts reclassified from accumulated other     comprehensive loss	—		1		—		—		—		1
Net current period other comprehensive (loss)     income	(14)		1		1		—		—		(12)
Balance at September 30, 2021	$	(282)	$	(46)	$	1	$	(1)	$	(1)	$	(329)

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Segment Information (Tables)

3 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Net Revenue by Segment

(Dollars in millions)	Three Months Ended   September 30,
	2021		2020
Net revenue:
Biologics	$	546	$	377
Softgel and Oral Technologies	243		221
Oral and Specialty Delivery	146		159
Clinical Supply Services	96		93
Inter-segment revenue elimination	(6)		(4)
Total net revenue	$	1,025	$	846

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

(Dollars in millions)	Three Months Ended   September 30,
	2021		2020
Segment EBITDA reconciled to net earnings:
Biologics	$	166	$	107
Softgel and Oral Technologies	41		38
Oral and Specialty Delivery	33		21
Clinical Supply Services	26		25
Sub-Total	$	266	$	191
Reconciling items to net earnings
Unallocated costs (1)	(56)		(29)
Depreciation and amortization	(81)		(69)
Interest expense, net	(26)		(26)
Income tax (expense) benefit	(10)		15
Net earnings	$	93	$	82

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

(Dollars in millions)	Three Months Ended   September 30,
	2021		2020
Impairment charges and gain (loss) on sale of assets	$	(3)	$	(2)
Stock-based compensation	(21)		(19)
Restructuring and other special items (a)	(8)		(5)
Gain on sale of subsidiary (b)	1		—
Other (expense) income, net (c)	(9)		11
Unallocated corporate costs, net	(16)		(14)
Total unallocated costs	$	(56)	$	(29)

(a)    Restructuring and other special items during the three months ended September 30, 2021 include (i) transaction and integration costs associated with the Delphi, Hepatic, and RheinCell acquisitions (ii) transaction costs associated with the Bettera acquisition, and (iii) restructuring costs associated with the closure of the Company's Clinical Supply Services facility in Bolton, U.K. Restructuring and other special items during the three months ended September 30, 2020 include transaction and integration costs associated with acquisitions of facilities in Italy and Belgium, the disposal of a site in Australia, and other restructuring initiatives across the Company's network of sites.

(b)    Gain on sale of subsidiary for the three months ended September 30, 2021 is affiliated with the sale of the Blow-Fill-Seal Business.

(c)    Refer to Note 8, Other Expense (Income), Net for details of financing charges and foreign currency translation adjustments recorded within other expense (income), net.

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)	September 30, 2021		June 30, 2021
Assets:
Biologics	$	5,027	$	4,973
Softgel and Oral Technologies	1,577		1,604
Oral and Specialty Delivery	1,241		1,269
Clinical Supply Services	482		483
Corporate and eliminations	1,856		783
Total assets	$	10,183	$	9,112

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Supplemental Balance Sheet Information (Tables)

3 Months Ended

Sep. 30, 2021

Balance Sheet Related Disclosures [Abstract]

Inventory

Inventories

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

(Dollars in millions)	September 30, 2021		June 30, 2021
Raw materials and supplies	$	482	$	469
Work-in-process	203		151
Total inventories, gross	685		620
Inventory cost adjustment	(63)		(57)
Total inventories	$	622	$	563

Prepaid and Other Assets

Prepaid expenses and other

Prepaid expenses and other consist of the following:

(Dollars in millions)	September 30, 2021		June 30, 2021
Prepaid expenses	$	64	$	46
Contract assets	224		181
Spare parts supplies	31		30
Prepaid income tax	23		22
Non-U.S. value-added tax	64		50
Other current assets	53		47
Total prepaid expenses and other	$	459	$	376

Other Accrued Liabilities

Other accrued liabilitiesOther accrued liabilities consist of the following:

(Dollars in millions)	September 30, 2021		June 30, 2021
Accrued employee-related expenses	$	155	$	184
Operating lease liabilities	14		16
Restructuring accrual	2		4
Accrued interest	11		27
Contract liabilities	283		305
Accrued income tax	25		30
Other	164		170
Total other accrued liabilities	$	654	$	736

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Basis of Presentation and Summary of Significant Accounting Policies Research and Development Expense (Details) $ in Millions	3 Months Ended
	Sep. 30, 2021 USD ($)
Research and Development Expense [Line Items]
Research and Development Expense	$ 6

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Revenue Recognition Disaggregation of Revenue by type of activity and reporting segment (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Disaggregation of Revenue [Line Items]
Inter-segment revenue elimination	$ (6)	$ (4)
Net revenue	1,025	846
Biologics
Disaggregation of Revenue [Line Items]
Net revenue	546	377
Biologics | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	134	90
Biologics | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	412	287
Biologics | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Softgel and Oral Technologies
Disaggregation of Revenue [Line Items]
Net revenue	243	221
Softgel and Oral Technologies | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	207	190
Softgel and Oral Technologies | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	36	31
Softgel and Oral Technologies | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Oral and Specialty Drug Delivery
Disaggregation of Revenue [Line Items]
Net revenue	146	159
Oral and Specialty Drug Delivery | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	88	104
Oral and Specialty Drug Delivery | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	58	55
Oral and Specialty Drug Delivery | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	96	93
Clinical Supply Services | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Clinical Supply Services | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Clinical Supply Services | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	96	93
Total Catalent before inter-segment revenue elimination
Disaggregation of Revenue [Line Items]
Net revenue	1,031	850
Total Catalent before inter-segment revenue elimination | Manufacturing & Commercial Product Supply
Disaggregation of Revenue [Line Items]
Net revenue	429	384
Total Catalent before inter-segment revenue elimination | Development Services
Disaggregation of Revenue [Line Items]
Net revenue	506	373
Total Catalent before inter-segment revenue elimination | Clinical Supply Services
Disaggregation of Revenue [Line Items]
Net revenue	$ 96	$ 93

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Revenue Recognition Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Disaggregation of Revenue [Line Items]
Elimination of revenue attributable to multiple locations	$ (28)	$ (21)
Net revenue	1,025	846
United States
Disaggregation of Revenue [Line Items]
Net revenue	630	517
Europe
Disaggregation of Revenue [Line Items]
Net revenue	351	281
International Other
Disaggregation of Revenue [Line Items]
Net revenue	$ 72	$ 69

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Revenue Recognition Contractual Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Revenue Recognition and Deferred Revenue [Abstract]
Contract with Customer, Liability	$ 299	$ 321
Contract with Customer, Liability, Revenue Recognized	82
Contract with Customer, Asset, Purchase	$ 224	$ 181

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Business Combinations Acquisition Purchase Agreement (Details) - USD ($)						3 Months Ended
		Aug. 01, 2021	Feb. 23, 2021	Feb. 11, 2021	Nov. 16, 2020	Sep. 30, 2021	Sep. 30, 2020
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired						$ (26,000,000)	$ 0
Goodwill, Acquired During Period	[1]					$ 25,000,000
Skeletal Cell Therapy Support SA [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred					$ 15,000,000
Goodwill, Acquired During Period					$ 9,000,000
Acorda Therapeutics, Inc [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred				$ 83,000,000
Goodwill, Acquired During Period				$ 2,000,000
Delphi Genetics SA [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred			$ 50,000,000
Goodwill, Acquired During Period			$ 43,000,000
RheinCell Therapeutics
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired		$ 26,000,000
Goodwill, Acquired During Period		$ 27,000,000

[1] The addition to goodwill in the Biologics segment relates to the RheinCell acquisition and the Delphi acquisition. For further details, see Note 3, Business Combinations and Divestitures.

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Business Combinations Net Assets Acquired (Details) - USD ($)						3 Months Ended
	Aug. 01, 2021	Mar. 31, 2021	Feb. 23, 2021	Feb. 11, 2021	Nov. 16, 2020	Sep. 30, 2021	Sep. 30, 2020
Net Assets Acquired from Business Combinations
Payments to Acquire Businesses, Net of Cash Acquired						$ (26,000,000)	$ 0
Payments to Acquire Businesses, Net of Cash Acquired						(26,000,000)	$ 0
Skeletal Cell Therapy Support SA [Member]
Net Assets Acquired from Business Combinations
Business Combination, Consideration Transferred					$ 15,000,000
Acorda Therapeutics, Inc [Member]
Net Assets Acquired from Business Combinations
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment				$ 79,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory				2,000,000
Business Combination, Consideration Transferred				$ 83,000,000
Delphi Genetics SA [Member]
Net Assets Acquired from Business Combinations
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment			$ 4,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles			7,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt			6,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities			1,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets			3,000,000
Business Combination, Consideration Transferred			$ 50,000,000
Hepatic Cell Therapy Support SA
Net Assets Acquired from Business Combinations
Payments to Acquire Assets, Investing Activities		$ 15,000,000
Asset Acquisition, Recognized Identifiable Assets Acquired and Liabilities Assumed, PPE		13,000,000
Asset Acquisition, Recognized Identifiable Assets Acquired and Liabilities Assumed,		3,000,000
Asset Acquisition, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt		$ 1,000,000
RheinCell Therapeutics
Net Assets Acquired from Business Combinations
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	$ 4,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets	3,000,000
Payments to Acquire Businesses, Net of Cash Acquired	26,000,000
Payments to Acquire Businesses, Net of Cash Acquired	$ 26,000,000
Zenyatta
Net Assets Acquired from Business Combinations
Payments to Acquire Businesses, Net of Cash Acquired						1,000,000,000
Payments to Acquire Businesses, Net of Cash Acquired						$ 1,000,000,000

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Business Combinations, Divestitures (Details) - USD ($) $ in Millions		3 Months Ended		12 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Business Acquisition, Contingent Consideration [Line Items]
Payments for (Proceeds from) Businesses and Interest in Affiliates	[1]	$ 1	$ 0
Goodwill, Acquired During Period	[2]	$ 25
Notes Receivable Interest Rate		5.00%
Blow-Fill-Seal Business, Woodstock [Member]
Business Acquisition, Contingent Consideration [Line Items]
Proceeds from Divestiture of Businesses and Interests in Affiliates		$ 300
Payments for (Proceeds from) Businesses and Interest in Affiliates		1		$ 182
Cash and Noncash Divestiture, Amount of Consideration Received		331
Business Combination, Acquired Receivable, Fair Value	[3]	47
Business Combination, Acquired Receivables, Gross Contractual Amount		50
Business Combination, Contingent Consideration, Asset	[4]	0
Business Combination, Consideration Transferred, Other	[5]	16
Goodwill, Acquired During Period		54
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High		50
Business Acquisition, Carrying Value, Net Assets		149
Business Combination, Loan Discount		3
Business Acquisition, Transaction Costs		8
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities		2
Business Combination, Working Capital Adjustments		6
Proceeds From Divestiture Of Businesses, Net Cash Proceeds		$ 284

[1] (b)    Gain on sale of subsidiary for the three months ended September 30, 2021 is affiliated with the sale of the Blow-Fill-Seal Business

[2] The addition to goodwill in the Biologics segment relates to the RheinCell acquisition and the Delphi acquisition. For further details, see Note 3, Business Combinations and Divestitures.

[3] The note receivable, which provides for interest at a rate of 5.0% paid in kind, had an estimated fair value of $47 million, which is the $50 million aggregate principal amount less a $3 million discount determined using a discounted cash flow model with the market interest rate as a significant input.

[4] The Company determined that the estimated fair value of the contingent consideration from the sale of the Blow-Fill-Seal     Business at September 30, 2021 is zero, and therefore, no contingent consideration was recorded as a result of the divestiture of the Blow-Fill-Seal Business. If any contingent consideration is subsequently received, it will be recorded in the period in which it is received. The Company has elected an accounting policy to recognize increases in the carrying amount of the contingent consideration asset using the gain contingency guidance in ASC 450, Contingencies.

[5] Other includes $8 million of transaction expenses, a working capital adjustment of $6 million, and a $2 million assumption of liabilities to create cumulative net cash proceeds of $284 million.

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Goodwill - Rollforward (Detail) $ in Millions	3 Months Ended
	Sep. 30, 2021 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 2,519
Goodwill, Acquired During Period	25	[1]
Foreign currency translation adjustments	(13)
Ending balance	2,531
Biologics
Goodwill [Roll Forward]
Beginning balance	1,531
Goodwill, Acquired During Period	25	[1]
Foreign currency translation adjustments	(6)
Ending balance	1,550
Softgel and Oral Technologies
Goodwill [Roll Forward]
Goodwill, Acquired During Period	0	[1]
Foreign currency translation adjustments	(4)
Ending balance	512
Oral and Specialty Drug Delivery
Goodwill [Roll Forward]
Beginning balance	316
Goodwill, Acquired During Period	0	[1]
Foreign currency translation adjustments	(2)
Ending balance	314
Clinical Supply Services
Goodwill [Roll Forward]
Beginning balance	156
Goodwill, Acquired During Period	0	[1]
Foreign currency translation adjustments	(1)
Ending balance	155
Softgel and Oral Technologies
Goodwill [Roll Forward]
Beginning balance	$ 516

[1] The addition to goodwill in the Biologics segment relates to the RheinCell acquisition and the Delphi acquisition. For further details, see Note 3, Business Combinations and Divestitures.

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Other Intangibles, Net (Detail) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Mar. 31, 2021	Jun. 30, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,428.0		$ 1,462.0
Accumulated Amortization	(635.0)		(645.0)
Net Carrying Value	$ 793.0		817.0
Core technology [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	19 years	19 years
Gross Carrying Value	$ 139.0		140.0
Accumulated Amortization	(95.0)		(94.0)
Net Carrying Value	$ 44.0		46.0
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	13 years	14 years
Gross Carrying Value	$ 1,018.0		1,024.0
Accumulated Amortization	(321.0)		(306.0)
Net Carrying Value	$ 697.0		718.0
Product Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	8 years	11 years
Gross Carrying Value	$ 252.0		281.0
Accumulated Amortization	(210.0)		(237.0)
Net Carrying Value	$ 42.0		44.0
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life	5 years	5 years
Gross Carrying Value	$ 19.0		17.0
Accumulated Amortization	(9.0)		(8.0)
Net Carrying Value	$ 10.0		$ 9.0

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Other Intangibles, Net (Detail) $ in Millions	3 Months Ended
	Sep. 30, 2021 USD ($)
Intangible Assets Disclosure [Abstract]
Amortization expense	$ 23
Remainder Fiscal 2021	69
2022	92
2023	91
2024	90
2025	82
2026	$ 69

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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) - USD ($) $ in Millions		Sep. 30, 2021	Jun. 30, 2021
Schedule Of Debt [Line Items]
Total long-term debt		$ 4,304	$ 3,241
Debt, Current		79	75
Long-term obligations, less current portion		4,225	3,166
Term loan facility B-3 U.S. dollar-denominated
Schedule Of Debt [Line Items]
Total long-term debt		1,444	997
Deferred purchase consideration
Schedule Of Debt [Line Items]
Total long-term debt		50	50
Capital lease obligations
Schedule Of Debt [Line Items]
Total long-term debt		188	193
Other obligations
Schedule Of Debt [Line Items]
Total long-term debt		$ 3	3
3.500% Senior US Denominated Notes
Schedule Of Debt [Line Items]
Debt Instrument, Interest Rate, Stated Percentage		3.50%
Estimate of Fair Value Measurement [Member]
Schedule Of Debt [Line Items]
Total long-term debt		$ 4,320	3,265
Debt Instrument, Fair Value Disclosure		4,320	3,265
Estimate of Fair Value Measurement [Member] | Debt Issuance Costs
Schedule Of Debt [Line Items]
Total long-term debt		0	0
Carrying Value [Member]
Schedule Of Debt [Line Items]
Total long-term debt		4,304	3,241
Debt Instrument, Fair Value Disclosure		4,350	3,277
Carrying Value [Member] | Debt Issuance Costs
Schedule Of Debt [Line Items]
Total long-term debt		46	36
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | U.S Dollar-denominated 5.00% Senior Notes [Member]
Schedule Of Debt [Line Items]
Debt Instrument, Fair Value Disclosure		527	539
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | 2.375% Senior Euro Denominated Notes [Member]
Schedule Of Debt [Line Items]
Debt Instrument, Fair Value Disclosure		982	993
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | 3.125% Senior US Denominated Notes
Schedule Of Debt [Line Items]
Debt Instrument, Fair Value Disclosure		531	524
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | 3.500% Senior US Denominated Notes
Schedule Of Debt [Line Items]
Debt Instrument, Fair Value Disclosure		642	0
Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | U.S Dollar-denominated 5.00% Senior Notes [Member]
Schedule Of Debt [Line Items]
Debt Instrument, Fair Value Disclosure		500	500
Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | 2.375% Senior Euro Denominated Notes [Member]
Schedule Of Debt [Line Items]
Debt Instrument, Fair Value Disclosure	[1]	965	984
Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | 3.125% Senior US Denominated Notes
Schedule Of Debt [Line Items]
Debt Instrument, Fair Value Disclosure		550	550
Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | 3.500% Senior US Denominated Notes
Schedule Of Debt [Line Items]
Debt Instrument, Fair Value Disclosure		$ 650	$ 0

[1] The decrease in euro-denominated debt is primarily due to large fluctuations in foreign currency exchange rates.

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Long-Term Obligations and Other Short-Term Borrowings Long-Term Obligations and Other Short-Term Borrowings (Details) - USD ($) $ in Millions		3 Months Ended
	Oct. 23, 2017	Sep. 30, 2021	Jun. 30, 2021
Debt Instrument [Line Items]
Total long-term debt		$ 4,304.0	$ 3,241.0
Payments to Acquire Businesses, Gross	$ 950.0
Payable Installments for Business Acquisition	50.0
Term loan facility B-3 U.S. dollar-denominated
Debt Instrument [Line Items]
Total long-term debt		1,444.0	$ 997.0
Debt Instrument, Increase (Decrease), Other, Net		$ 450.0
Term loan facility B-3 U.S. dollar-denominated | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		2.00%
Term loan facility B-3 U.S. dollar-denominated | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		0.50%
Accrued Liabilities [Member]
Debt Instrument [Line Items]
Payments to Acquire Businesses, Gross	$ 200.0

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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		Sep. 30, 2021	Jun. 30, 2021
Estimate of Fair Value Measurement [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure		$ 4,320	$ 3,265
Carrying Value [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure		4,350	3,277
U.S Dollar-denominated 5.00% Senior Notes [Member] | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure		527	539
U.S Dollar-denominated 5.00% Senior Notes [Member] | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure		500	500
2.375% Senior Euro Denominated Notes [Member] | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure		982	993
2.375% Senior Euro Denominated Notes [Member] | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure	[1]	965	984
3.125% Senior US Denominated Notes | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure		531	524
3.125% Senior US Denominated Notes | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure		550	550
Senior Secured Credit Facilities & Other [Member] | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure		1,638	1,209
Senior Secured Credit Facilities & Other [Member] | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member]
Fair Value Measurements Of Financial Instruments [Line Items]
Debt Instrument, Fair Value Disclosure		$ 1,685	$ 1,243

[1] The decrease in euro-denominated debt is primarily due to large fluctuations in foreign currency exchange rates.

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Earnings Per Share Earnings Per Share - Additional Details (Details) - USD ($) $ / shares in Units, $ in Millions	Nov. 23, 2020	Jun. 30, 2021
Earnings Per Share [Abstract]
Conversion of Stock, Shares Converted	265,223
Dividends, Preferred Stock, Stock	$ 2
Convertible Preferred Stock, Shares Issued upon Conversion	20.33
Stock Issued During Period, Shares, Conversion of Convertible Securities	5,392,280
Common Stock, Par or Stated Value Per Share		$ 0.01

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Share [Abstract]
Net earnings/(loss)	$ 93	$ 82
Participating Securities, Distributed and Undistributed Earnings (Loss), Basic	9	13
Net Income (Loss) Available to Common Stockholders, Basic	$ 84	$ 69
Dilutive securities issuable-stock plans	1,000,000	2,000,000
Total weighted average diluted shares outstanding	172,000,000	166,000,000
Earnings Per Share, Basic	$ 0.49	$ 0.42
Earnings Per Share, Diluted	$ 0.49	$ 0.41
Weighted Average Number of Shares Outstanding, Basic	171,000,000	164,000,000

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Diluted earnings per share due to their antidilutive effect (Detail) - shares shares in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Series A Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	8	13
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0
Performance Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0

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Other Income and Expense (Details) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2021	Sep. 30, 2020
Other Income and Expenses [Abstract]
Foreign Currency (gains) and losses	[1]	$ 9	$ (1)
Other	[2]	(4)	(10)
Other (income)/expense, net		9	(11)
Gain (Loss) on Extinguishment of Debt		4
Derivative, Gain (Loss) on Derivative, Net		2	$ 9
Other Nonoperating Expense	[3]	$ 4

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

[2] Other, for the three months ended September 30, 2021 and 2020 includes unrealized gains of $2 million and $9 million, respectively, related to the fair value of the derivative liability associated with the Series A Preferred Stock.

[3] Debt financing costs for the three months ended September 30, 2021 includes $4 million of financing charges related to the Company’s Incremental Term B-3 Loans.

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Restructuring and Other Costs (Details) $ in Millions	3 Months Ended
	Sep. 30, 2021 USD ($)
Restructuring and Related Activities [Abstract]
Restructuring and other	$ 1

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Restructuring and Other Costs Individual Site (Details) $ in Millions	3 Months Ended
	Sep. 30, 2021 USD ($) employees
Restructuring Cost and Reserve [Line Items]
Restructuring and other	$ 1
Bolton CS [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other	$ 1
Bolton CS [Member] | Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Number of Positions Eliminated | employees	170
Restructuring and Related Cost, Expected Cost	$ 8

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Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions			3 Months Ended
	Nov. 23, 2020	May 17, 2019	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Derivative [Line Items]
Total long-term debt			$ 4,304		$ 3,241
Unrealized foreign exchange gain/(loss) within other comprehensive income			22	$ (32)
Unrealized foreign exchange gain/(loss) within statement of operations			(3)	(2)
Net accumulated gain related to investment hedges			28
Proceeds from Issuance of Redeemable Preferred Stock		$ 646
Payments of Stock Issuance Costs		$ 4
Derivative Liability					3
Derivative, Gain (Loss) on Derivative, Net			2	$ 9
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Purchases, Sales, Issues, Settlements	$ 4
Cash Paid to Settle, Interest Rate Swap Agreement			2
Embedded Derivative, Fair Value of Embedded Derivative Liability	$ 9		1
Interest Rate Cash Flow Hedge Liability at Fair Value					$ 2
Euro Denominated Debt Outstanding [Member]
Derivative [Line Items]
Total long-term debt			965
U.S. Denominated Term Loan [Member]
Derivative [Line Items]
Total Debt, U.S Denominated Term Loan			$ 500
Debt Instrument, Interest Rate, Effective Percentage			0.9985%

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Fair value measurement recurring basis - USD ($) $ in Millions		3 Months Ended		12 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Fair Value Disclosures [Abstract]
Marketable Securities		$ 50		$ 71
Trading Securities at Fair Value		1		1
Interest Rate Cash Flow Hedge Asset at Fair Value		3		2
Interest Rate Cash Flow Hedge Liability at Fair Value				2
Series A Preferred Stock derivative liability		1		3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Marketable Securities		50		71
Trading Securities at Fair Value		1		1
Interest Rate Cash Flow Hedge Asset at Fair Value		3		2
Series A Preferred Stock derivative liability		1		3
Interest Rate Cash Flow Hedge Liability at Fair Value				2
Payments for (Proceeds from) Businesses and Interest in Affiliates	[1]	1	$ 0
Blow-Fill-Seal Business, Woodstock [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Payments for (Proceeds from) Businesses and Interest in Affiliates		1		182
Fair Value, Inputs, Level 1 [Member]
Fair Value Disclosures [Abstract]
Marketable Securities		50		71
Trading Securities at Fair Value		1		1
Interest Rate Cash Flow Hedge Asset at Fair Value		0		0
Series A Preferred Stock derivative liability		0		0
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Marketable Securities		50		71
Trading Securities at Fair Value		1		1
Interest Rate Cash Flow Hedge Asset at Fair Value		0		0
Series A Preferred Stock derivative liability		0		0
Fair Value, Inputs, Level 2 [Member]
Fair Value Disclosures [Abstract]
Marketable Securities		0		0
Trading Securities at Fair Value		0		0
Interest Rate Cash Flow Hedge Asset at Fair Value		3		2
Series A Preferred Stock derivative liability		0		0
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Marketable Securities		0		0
Trading Securities at Fair Value		0		0
Interest Rate Cash Flow Hedge Asset at Fair Value		3		2
Series A Preferred Stock derivative liability		0		0
Fair Value, Inputs, Level 3 [Member]
Fair Value Disclosures [Abstract]
Marketable Securities		0		0
Trading Securities at Fair Value		0		0
Interest Rate Cash Flow Hedge Asset at Fair Value		0		0
Series A Preferred Stock derivative liability		1		3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Marketable Securities		0		0
Trading Securities at Fair Value		0		0
Interest Rate Cash Flow Hedge Asset at Fair Value		0		0
Series A Preferred Stock derivative liability		$ 1		$ 3

[1] (b)    Gain on sale of subsidiary for the three months ended September 30, 2021 is affiliated with the sale of the Blow-Fill-Seal Business

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Unrecognized Tax Benefits, Including Income Tax Penalties and Interest Accrued	$ 5
Income tax expense(benefit)	$ 10	$ (15)

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Employee Retirement Benefit Plans - Components of Company's Net Periodic Benefit Costs (Detail) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2021	Sep. 30, 2020
Components of net periodic benefit cost:
Service cost		$ 1	$ 1
Interest cost		1	1
Expected return on plan assets		(2)	(2)
Amortization	[1]	1	0
Net amount recognized		1	0
Estimated discounted value of future employer contributions		38
Estimated annual cash contribution		$ 2	$ 2

[1] Amount represents the amortization of unrecognized actuarial losses.

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Equity and Accumulated Other Comprehensive Income (Loss) - Equity (Details) - USD ($)		3 Months Ended
	Nov. 23, 2020	Sep. 30, 2020	Sep. 30, 2021	Jun. 30, 2021	May 17, 2019
Equity [Abstract]
Common Stock, Shares Authorized			1,000,000,000	1,000,000,000
Preferred Stock, Shares Authorized			100,000,000	100,000,000
Equity offering, sale of common stock, net		$ 82,000,000
Embedded Derivative, Estimate of Embedded Derivative Liability					$ 40,000,000
Conversion of Stock, Shares Converted	265,223
Dividends, Preferred Stock, Stock	$ 2,000,000
Convertible Preferred Stock, Shares Issued upon Conversion	20.33
Stock Issued During Period, Shares, Conversion of Convertible Securities	5,392,280
Preferred Stock, Shares Outstanding			384,777	384,777
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Purchases, Sales, Issues, Settlements	$ 4,000,000
Auction Market Preferred Securities, Stock Series [Line Items]
Preferred Stock, Shares Authorized			100,000,000	100,000,000
Preferred Stock, Par or Stated Value Per Share			$ 0.01
Preferred Stock, Shares Issued			384,777	384,777
Embedded Derivative, Estimate of Embedded Derivative Liability					$ 40,000,000
Series A [Member]
Equity [Abstract]
Preferred Stock, Shares Authorized			1,000,000
Auction Market Preferred Securities, Stock Series [Line Items]
Preferred Stock, Shares Authorized			1,000,000
Preferred Stock, Par or Stated Value Per Share			$ 0.01
Preferred Stock, Shares Issued					650,000
Preferred Stock, Issuance Value					$ 650,000,000
Preferred Stock, Value, Issued					1,000
Preferred stock issuance Value, Net					$ 646,000,000

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Equity and Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Foreign currency translation adjustments:
Net investment hedge	$ 22	$ (32)
Long-term intercompany loans	(3)	6
Translation adjustments	(28)	35
Total foreign currency translation adjustment, pretax	(9)	9
Tax expense/(benefit)	5	(7)
Total foreign currency translation adjustment, net of tax	(14)	16
Net change in derivatives and hedges
Net loss recognized during the period	1	0
Total derivatives and hedges, pretax	1	0
Tax expense/(benefit)	0	0
Net change in derivatives and hedges, net of tax	1	0
Net change in minimum pension liability
Net gain/(loss) recognized during the period	1	0
Total pension liability, pretax	1	0
Tax expense/(benefit)	0	0
Pension and other post-retirement adjustments	$ 1	$ 0

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Equity and Accumulated Other Comprehensive Income (Loss) - Rollforward (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	$ (317)
Other comprehensive income/(loss) before reclassifications	(13)
Amounts reclassified from accumulated other comprehensive income/(loss)	1
Total foreign currency translation adjustment, net of tax	(14)	$ 16
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	1	0
Net change in derivatives and hedges, net of tax	1	0
Other comprehensive income/(loss), net of tax	(12)	$ 16
Ending Balance	(329)
Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	(268)
Other comprehensive income/(loss) before reclassifications	(14)
Amounts reclassified from accumulated other comprehensive income/(loss)	0
Total foreign currency translation adjustment, net of tax	(14)
Ending Balance	(282)
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	(47)
Other comprehensive income/(loss) before reclassifications	0
Amounts reclassified from accumulated other comprehensive income/(loss)	1
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	1
Ending Balance	(46)
AOCI, Derivative Qualifying as Hedge, Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	0
Other comprehensive income/(loss) before reclassifications	1
Amounts reclassified from accumulated other comprehensive income/(loss)	0
Net change in derivatives and hedges, net of tax	1
Ending Balance	1
ACOI, Accumulated Gain (Loss), Marketable Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	(1)
Other comprehensive income/(loss) before reclassifications	0
Amounts reclassified from accumulated other comprehensive income/(loss)	0
Available for sale investments	0
Ending Balance	(1)
Available-for-sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	(1)
Other comprehensive income/(loss) before reclassifications	0
Amounts reclassified from accumulated other comprehensive income/(loss)	0
Other Comprehensive Income, Other, Net of Tax	0
Ending Balance	$ (1)

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Segment Information - Net Revenue and Segment Ebitda (Detail) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2021	Sep. 30, 2020
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items]
Net revenue		$ 1,025	$ 846
Inter-segment revenue elimination		(6)	(4)
Segment Reporting Information Unallocated Expense	[1]	(56)	(29)
Biologics
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items]
Net revenue		546	377
Segment EBITDA		166	107
Softgel and Oral Technologies
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items]
Net revenue		243	221
Segment EBITDA		41	38
Oral and Specialty Drug Delivery
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items]
Net revenue		146	159
Segment EBITDA		33	21
Clinical Supply Services
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items]
Net revenue		96	93
Segment EBITDA		26	25
Total Catalent sub-total of Segment Reporting [Member]
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items]
Segment EBITDA		$ 266	$ 191

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

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Segment Information, EBITDA, Reconciling Items (Detail) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2021	Sep. 30, 2020
Unallocated costs [Abstract]
Impairment Charges And Gain Loss On Sale Of Assets		$ 3	$ 2
Stock-based compensation		21	19
Restructuring And Other Special Items	[1]	8	5
Payments for (Proceeds from) Businesses and Interest in Affiliates	[2]	1	0
Other income/(expense),net	[3]	(9)	11
Other (income)/expense, net		(9)	11
Non Allocated Corporate Costs Net		16	14
Segment Reporting Information Unallocated Expense	[4]	$ 56	$ 29

[1] (a)    Restructuring and other special items during the three months ended September 30, 2021 include (i) transaction and integration costs associated with the Delphi, Hepatic, and RheinCell acquisitions (ii) transaction costs associated with the Bettera acquisition, and (iii) restructuring costs associated with the closure of the Company's Clinical Supply Services facility in Bolton, U.K. Restructuring and other special items during the three months ended September 30, 2020 include transaction and integration costs associated with acquisitions of facilities in Italy and Belgium, the disposal of a site in Australia, and other restructuring initiatives across the Company's network of sites.

[2] (b)    Gain on sale of subsidiary for the three months ended September 30, 2021 is affiliated with the sale of the Blow-Fill-Seal Business

[3] (c)    Refer to Note 8, Other Expense (Income), Net for details of financing charges and foreign currency translation adjustments recorded within other expense (income), net.

[4] Unallocated costs include restructuring and special items, stock-based compensation, gain on sale of subsidiary, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows:                                                            

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Segment Information - Reconciliation of Earnings / (Loss) from Continuing Operations to Ebitda (Detail) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2021	Sep. 30, 2020
Segment Reporting [Abstract]
Segment Reporting Information Unallocated Expense	[1]	$ 56	$ 29
Depreciation and amortization		81	69
Interest expense, net		26	26
Income tax expense(benefit)		10	(15)
Earnings/(loss) from continuing operations		$ 93	$ 82

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

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Segment Information - Total Assets for Each Segment and Reconciling in Consolidated Financial Statements (Detail) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets		$ 10,183		$ 9,112
Payments for (Proceeds from) Businesses and Interest in Affiliates	[1]	1	$ 0
Biologics
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets		5,027		4,973
Softgel and Oral Technologies
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets		1,577		1,604
Oral and Specialty Drug Delivery
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets		1,241		1,269
Clinical Supply Services
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets		482		483
Corporate and Eliminations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets		$ 1,856		$ 783

[1] (b)    Gain on sale of subsidiary for the three months ended September 30, 2021 is affiliated with the sale of the Blow-Fill-Seal Business

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Supplemental Balance Sheet Information - Inventory (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Jun. 30, 2021
Inventory, Net [Abstract]
Raw materials and supplies	$ 482	$ 469
Work-in-process	203	151
Total inventories, gross	685	620
Inventory cost adjustment	(63)	(57)
Inventories	$ 622	$ 563

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Supplemental Balance Sheet Information - Prepaid and Other Assets (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Jun. 30, 2021
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid expenses	$ 64	$ 46
Contract with Customer, Asset, Net, Current	224	181
Spare parts supplies	31	30
Prepaid income tax	23	22
Non-U.S. value added tax	64	50
Other current assets	53	47
Prepaid expenses and other	$ 459	$ 376

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Supplemental Balance Sheet Information - Property and Equipment (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Property, Plant and Equipment, Net [Abstract]
Accumulated depreciation	$ (1,215)		$ (1,179)
Property, plant, and equipment, net	2,581		$ 2,524
Depreciation Expense	$ 58	$ 46

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Supplemental Balance Sheet Information - Other Accrued Liabilities (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Jun. 30, 2021
Balance Sheet Related Disclosures [Abstract]
Accrued employee-related expenses	$ 155	$ 184
Accrued Operating Lease, Liabilities	14	16
Restructuring accrual	2	4
Accrued interest	11	27
Contract liability	283	305
Accrued income tax	25	30
Other accrued liabilities and expenses	164	170
Other accrued liabilities	$ 654	$ 736

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Supplemental Balance Sheet Information - Other Long-Term Assets (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Jun. 30, 2021
Balance Sheet Related Disclosures [Abstract]
Other Assets, Noncurrent	$ 277	$ 268

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Subsequent Events (Details) $ in Millions	3 Months Ended
	Dec. 31, 2021 USD ($)
Zenyatta | Subsequent Event [Member]
Subsequent Event
Business Combination, Consideration Transferred	$ 1,000

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Label	Element	Value
Amended Debt Instrument Quarterly Amortization Rate	ctlt_AmendedDebtInstrumentQuarterlyAmortizationRate	0.2506%
Debt Instrument Quarterly Amortization Rate	ctlt_DebtInstrumentQuarterlyAmortizationRate	0.25%