UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 31,~~SEPTEMBER 30, 2021

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

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-11846

AptarGroup, Inc.


Delaware						36-3853103
(State of Incorporation)						(I.R.S. Employer Identification No.)

265 EXCHANGE DRIVE, SUITE 100, CRYSTAL LAKE, IL 60014

815-477-0424

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	ATR	New York Stock Exchange

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 þ No ◻

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

The number of shares outstanding of common stock, as of ~~April 23,~~October 22, 2021, was ~~65,714,946~~65,827,106 shares.

Table of Contents

AptarGroup, Inc.

Form 10-Q

Quarter Ended ~~March 31,~~September 30, 2021

INDEX


Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Income – Three and Nine Months Ended September ~~March~~ 3 1 , 30, 2021 and 2020	1

	Condensed Consolidated Statements of Comprehensive Income – Three and Nine Months Ended ~~March~~ September 3 1 , 30, 2021 and 2020	2

	Condensed Consolidated Balance Sheets – ~~March~~September 3 1 ~~, 202~~1 30, 2021 and December 31, 20 202020	3

	Condensed Consolidated Statements of Changes in Equity – Three and Nine Months Ended ~~March 31~~September , 30, 2021 and 2020	5

	Condensed Consolidated Statements of Cash Flows - ~~Three~~Nine Months Ended ~~March 31, 202~~1September 30, 2021 and 20 202020	67

	Notes to Condensed Consolidated Financial Statements	89

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2732

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4049

Item 4.	Controls and Procedures	4049

Part II.	OTHER INFORMATION

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4150

Item 6.	Exhibits	4251

	Signature	4352

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

AptarGroup, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


In thousands, except per share amounts	In thousands, except per share amounts	In thousands, except per share amounts

			Three Months Ended September 30,						Nine Months Ended September 30,
Three Months Ended March 31,				2021		2020
									2021		2020		2021		2020

Net Sales	Net Sales			$	776,754	$	721,553	Net Sales	$	825,442	$	759,153	$	2,413,228	$	2,180,011
Operating Expenses:	Operating Expenses:							Operating Expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	Cost of sales (exclusive of depreciation and amortization shown below)			488,705		451,256		Cost of sales (exclusive of depreciation and amortization shown below)	537,085		479,672		1,548,840		1,372,630
Selling, research & development and administrative	Selling, research & development and administrative			134,348		126,192		Selling, research & development and administrative	135,931		121,850		411,192		371,407
Depreciation and amortization	Depreciation and amortization			57,438		50,806		Depreciation and amortization	59,280		55,179		174,508		162,414
Restructuring initiatives	Restructuring initiatives			3,672		4,839		Restructuring initiatives	10,223		3,415		18,771		15,585
Total Operating Expenses	Total Operating Expenses			684,163		633,093		Total Operating Expenses	742,519		660,116		2,153,311		1,922,036
Operating Income	Operating Income			92,591		88,460		Operating Income	82,923		99,037		259,917		257,975

Other Income (Expense):	Other Income (Expense):							Other Income (Expense):
Interest expense	Interest expense			(7,415)		(8,388)		Interest expense	(8,011)		(8,851)		(22,601)		(25,973)
Interest income	Interest income			381		175		Interest income	401		249		1,406		599
Net investment gain				16,809		0
Net investment (loss) gain								Net investment (loss) gain	(9,021)		—		6,177		—
Equity in results of affiliates	Equity in results of affiliates			(515)		(799)		Equity in results of affiliates	(71)		(256)		(505)		(1,383)
Miscellaneous, net	Miscellaneous, net			(963)		(1,412)		Miscellaneous, net	13		(1,040)		(2,978)		(3,375)
Total Other Income (Expense)				8,297		(10,424)
Total Other Expense								Total Other Expense	(16,689)		(9,898)		(18,501)		(30,132)

Income before Income Taxes	Income before Income Taxes			100,888		78,036		Income before Income Taxes	66,234		89,139		241,416		227,843

Provision for Income Taxes	Provision for Income Taxes			16,949		22,786		Provision for Income Taxes	19,340		25,404		55,309		66,998

Net Income	Net Income			$	83,939	$	55,250	Net Income	$	46,894	$	63,735	$	186,107	$	160,845

Net Loss Attributable to Noncontrolling Interests				$	13	$	3
Net Loss (Income) Attributable to Noncontrolling Interests								Net Loss (Income) Attributable to Noncontrolling Interests	$	366	$	(19)	$	381	$	(37)

Net Income Attributable to AptarGroup, Inc.	Net Income Attributable to AptarGroup, Inc.			$	83,952	$	55,253	Net Income Attributable to AptarGroup, Inc.	$	47,260	$	63,716	$	186,488	$	160,808

Net Income Attributable to AptarGroup, Inc. per Common Share:	Net Income Attributable to AptarGroup, Inc. per Common Share:							Net Income Attributable to AptarGroup, Inc. per Common Share:
Basic	Basic			$	1.29	$	0.86	Basic	$	0.72	$	0.99	$	2.84	$	2.50
Diluted	Diluted			$	1.24	$	0.84	Diluted	$	0.70	$	0.95	$	2.75	$	2.42

Average Number of Shares Outstanding:	Average Number of Shares Outstanding:							Average Number of Shares Outstanding:
Basic	Basic			65,229		64,009		Basic	65,900		64,562		65,652		64,278
Diluted	Diluted			67,648		66,111		Diluted	67,801		66,922		67,799		66,483

Dividends per Common Share	Dividends per Common Share			$	0.36	$	0.36	Dividends per Common Share	$	0.38	$	0.36	$	1.12	$	1.08

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

Table of Contents

AptarGroup, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


In thousands	In thousands						In thousands

		Three Months Ended September 30,						Nine Months Ended September 30,
Three Months Ended March 31,			2021		2020
								2021		2020		2021		2020

Net Income	Net Income		$	83,939	$	55,250	Net Income	$	46,894	$	63,735	$	186,107	$	160,845
Other Comprehensive Income (Loss):	Other Comprehensive Income (Loss):						Other Comprehensive Income (Loss):
Foreign currency translation adjustments	Foreign currency translation adjustments		(48,482)		(42,229)		Foreign currency translation adjustments	(30,410)		42,425		(57,783)		19,292
Changes in derivative gains, net of tax			520		1,483
Changes in derivative gains (losses), net of tax							Changes in derivative gains (losses), net of tax	230		(147)		1,039		603
Defined benefit pension plan, net of tax	Defined benefit pension plan, net of tax						Defined benefit pension plan, net of tax
Actuarial gain, net of tax	Actuarial gain, net of tax		319		0		Actuarial gain, net of tax	87		—		529		—

Amortization of prior service cost included in net income, net of tax	Amortization of prior service cost included in net income, net of tax		33		71		Amortization of prior service cost included in net income, net of tax	25		73		90		216
Amortization of net loss included in net income, net of tax	Amortization of net loss included in net income, net of tax		2,354		1,565		Amortization of net loss included in net income, net of tax	2,333		1,490		7,041		4,423
Total defined benefit pension plan, net of tax	Total defined benefit pension plan, net of tax		2,706		1,636		Total defined benefit pension plan, net of tax	2,445		1,563		7,660		4,639
Total other comprehensive loss			(45,256)		(39,110)
Total other comprehensive (loss) income							Total other comprehensive (loss) income	(27,735)		43,841		(49,084)		24,534
Comprehensive Income	Comprehensive Income		38,683		16,140		Comprehensive Income	19,159		107,576		137,023		185,379
Comprehensive Loss Attributable to Noncontrolling Interests			13		3
Comprehensive Loss (Income) Attributable to Noncontrolling Interests							Comprehensive Loss (Income) Attributable to Noncontrolling Interests	832		(28)		847		(47)
Comprehensive Income Attributable to AptarGroup, Inc.	Comprehensive Income Attributable to AptarGroup, Inc.		$	38,696	$	16,143	Comprehensive Income Attributable to AptarGroup, Inc.	$	19,991	$	107,548	$	137,870	$	185,332

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

Table of Contents

AptarGroup, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


In thousands	In thousands					In thousands

		March 31, 2021		December 31, 2020			September 30, 2021		December 31, 2020
Assets	Assets					Assets
Cash and equivalents	Cash and equivalents	$	254,852	$	300,137	Cash and equivalents	$	114,557	$	300,137
Short-term investments	Short-term investments	0		243		Short-term investments	319		243
Total Cash and equivalents and Short-term investments	Total Cash and equivalents and Short-term investments	254,852		300,380		Total Cash and equivalents and Short-term investments	114,876		300,380
Accounts and notes receivable, less current expected credit loss ("CECL") of $6,151 in 2021 and $5,918 in 2020		621,093		566,623
Accounts and notes receivable, less current expected credit loss ("CECL") of $7,030 in 2021 and $5,918 in 2020						Accounts and notes receivable, less current expected credit loss ("CECL") of $7,030 in 2021 and $5,918 in 2020	662,112		566,623
Inventories	Inventories	394,179		379,379		Inventories	437,343		379,379
Prepaid and other	Prepaid and other	136,854		122,613		Prepaid and other	129,728		122,613
Total Current Assets	Total Current Assets	1,406,978		1,368,995		Total Current Assets	1,344,059		1,368,995
Land	Land	28,773		28,334		Land	28,582		28,334
Buildings and improvements	Buildings and improvements	577,724		579,616		Buildings and improvements	620,649		579,616
Machinery and equipment	Machinery and equipment	2,777,028		2,808,623		Machinery and equipment	2,835,425		2,808,623
Property, Plant and Equipment, Gross	Property, Plant and Equipment, Gross	3,383,525		3,416,573		Property, Plant and Equipment, Gross	3,484,656		3,416,573
Less: Accumulated depreciation	Less: Accumulated depreciation	(2,200,492)		(2,217,825)		Less: Accumulated depreciation	(2,235,692)		(2,217,825)
Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	1,183,033		1,198,748		Property, Plant and Equipment, Net	1,248,964		1,198,748
Investments in equity securities	Investments in equity securities	66,102		50,087		Investments in equity securities	62,343		50,087
Goodwill	Goodwill	883,543		898,521		Goodwill	986,779		898,521
Intangible assets, net	Intangible assets, net	331,032		344,309		Intangible assets, net	372,814		344,309
Operating lease right-of-use assets	Operating lease right-of-use assets	64,118		69,845		Operating lease right-of-use assets	55,952		69,845
Miscellaneous	Miscellaneous	57,833		59,548		Miscellaneous	60,574		59,548
Total Other Assets	Total Other Assets	1,402,628		1,422,310		Total Other Assets	1,538,462		1,422,310
Total Assets	Total Assets	$	3,992,639	$	3,990,053	Total Assets	$	4,131,485	$	3,990,053

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

Table of Contents

AptarGroup, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


In thousands, except share and per share amounts	In thousands, except share and per share amounts					In thousands, except share and per share amounts

		March 31, 2021		December 31, 2020			September 30, 2021		December 31, 2020
Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity					Liabilities and Stockholders’ Equity
Current Liabilities:	Current Liabilities:					Current Liabilities:
Notes payable, revolving credit facility and overdrafts	Notes payable, revolving credit facility and overdrafts	$	1,036	$	52,200	Notes payable, revolving credit facility and overdrafts	$	58,583	$	52,200
Current maturities of long-term obligations, net of unamortized debt issuance costs	Current maturities of long-term obligations, net of unamortized debt issuance costs	64,776		65,666		Current maturities of long-term obligations, net of unamortized debt issuance costs	142,674		65,666
Accounts payable, accrued and other liabilities	Accounts payable, accrued and other liabilities	690,117		662,463		Accounts payable, accrued and other liabilities	707,111		662,463
Total Current Liabilities	Total Current Liabilities	755,929		780,329		Total Current Liabilities	908,368		780,329
Long-Term Obligations, net of unamortized debt issuance costs	Long-Term Obligations, net of unamortized debt issuance costs	1,037,983		1,054,998		Long-Term Obligations, net of unamortized debt issuance costs	915,750		1,054,998
Deferred income taxes	Deferred income taxes	32,790		37,242		Deferred income taxes	41,662		37,242
Retirement and deferred compensation plans	Retirement and deferred compensation plans	146,568		145,959		Retirement and deferred compensation plans	153,829		145,959
Operating lease liabilities	Operating lease liabilities	47,530		52,212		Operating lease liabilities	41,394		52,212
Deferred and other non-current liabilities	Deferred and other non-current liabilities	71,044		68,528		Deferred and other non-current liabilities	74,489		68,528
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	—		—
Total Deferred Liabilities and Other	Total Deferred Liabilities and Other	297,932		303,941		Total Deferred Liabilities and Other	311,374		303,941
AptarGroup, Inc. stockholders’ equity	AptarGroup, Inc. stockholders’ equity					AptarGroup, Inc. stockholders’ equity
Common stock, $.01 par value, 199 million shares authorized, 70.0 and 69.5 million shares issued as of March 31, 2021 and December 31, 2020, respectively		700		695
Common stock, $.01 par value, 199 million shares authorized, 70.3 and 69.5 million shares issued as of September 30, 2021 and December 31, 2020, respectively						Common stock, $.01 par value, 199 million shares authorized, 70.3 and 69.5 million shares issued as of September 30, 2021 and December 31, 2020, respectively	703		695
Capital in excess of par value	Capital in excess of par value	874,623		849,161		Capital in excess of par value	902,601		849,161
Retained earnings	Retained earnings	1,704,336		1,643,825		Retained earnings	1,756,820		1,643,825
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(326,965)		(281,709)		Accumulated other comprehensive loss	(330,327)		(281,709)
Less: Treasury stock at cost, 4.4 and 4.5 million shares as of March 31, 2021 and December 31, 2020, respectively		(352,282)		(361,583)
Less: Treasury stock at cost, 4.5 and 4.5 million shares as of September 30, 2021 and December 31, 2020, respectively						Less: Treasury stock at cost, 4.5 and 4.5 million shares as of September 30, 2021 and December 31, 2020, respectively	(371,896)		(361,583)
Total AptarGroup, Inc. Stockholders’ Equity	Total AptarGroup, Inc. Stockholders’ Equity	1,900,412		1,850,389		Total AptarGroup, Inc. Stockholders’ Equity	1,957,901		1,850,389
Noncontrolling interests in subsidiaries	Noncontrolling interests in subsidiaries	383		396		Noncontrolling interests in subsidiaries	38,092		396
Total Stockholders’ Equity	Total Stockholders’ Equity	1,900,795		1,850,785		Total Stockholders’ Equity	1,995,993		1,850,785
Total Liabilities and Stockholders’ Equity	Total Liabilities and Stockholders’ Equity	$	3,992,639	$	3,990,053	Total Liabilities and Stockholders’ Equity	$	4,131,485	$	3,990,053

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

Table of Contents

AptarGroup, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


In thousands	In thousands																								In thousands

Three Months Ended	Three Months Ended	AptarGroup, Inc. Stockholders’ Equity																							Three Months Ended	AptarGroup, Inc. Stockholders’ Equity
March 31, 2021 and 2020		Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Common Stock Par Value			Treasury Stock				Capital in Excess of Par Value				Non- Controlling Interest			Total Equity
September 30, 2021 and 2020													September 30, 2021 and 2020	Retained Earnings							Accumulated Other Comprehensive (Loss) Income						Common Stock Par Value			Treasury Stock		Capital in Excess of Par Value			Non- Controlling Interest		Total Equity
				Retained Earnings						Accumulated Other Comprehensive (Loss) Income			Common Stock Par Value					Treasury Stock				Capital in Excess of Par Value						Non- Controlling Interest					Total Equity
Balance - December 31, 2019
Net income (loss)		55,253					—				—						—								—					(3)		55,250
Adoption of CECL standard		(1,377)			—			—			—				—				—					(1,377)
Balance - June 30, 2020																									Balance - June 30, 2020	$	1,573,392		$	(361,256)	$	690		$	(370,706)	$	803,511	$	355	$	1,645,986
Net income																									Net income	63,716			—		—			—		—		19		63,735

Foreign currency translation adjustments	Foreign currency translation adjustments	—			(42,229)			—			—				—				—			(42,229)			Foreign currency translation adjustments	—			42,416		—			—		—		9		42,425
Changes in unrecognized pension gains (losses) and related amortization, net of tax	Changes in unrecognized pension gains (losses) and related amortization, net of tax	—			1,636			—			—				—				—			1,636			Changes in unrecognized pension gains (losses) and related amortization, net of tax	—			1,563		—			—		—		—		1,563
Changes in derivative gains (losses), net of tax	Changes in derivative gains (losses), net of tax	—			1,483			—			—				—				—			1,483			Changes in derivative gains (losses), net of tax	—			(147)		—			—		—		—		(147)
Stock awards and option exercises	Stock awards and option exercises	—			—			3			8,665				14,971				—			23,639			Stock awards and option exercises	—			—		3			5,845		23,762		—		29,610
Cash dividends declared on common stock	Cash dividends declared on common stock	(23,031)			—			—			—				—				—			(23,031)			Cash dividends declared on common stock	(23,217)			—		—			—		—		—		(23,217)

Balance - March 31, 2020		$	1,554,665		$	(381,058)		$	689		$	(372,573)			$	785,567			$	333		$	1,587,623
Balance - September 30, 2020																									Balance - September 30, 2020	$	1,613,891		$	(317,424)	$	693		$	(364,861)	$	827,273	$	383	$	1,759,955

Balance - December 31, 2020		$	1,643,825		$	(281,709)		$	695		$	(361,583)			$	849,161			$	396		$	1,850,785
Balance - June 30, 2021																									Balance - June 30, 2021	$	1,734,638		$	(303,058)	$	702		$	(344,382)	$	898,382	$	381	$	1,986,663
Net income (loss)	Net income (loss)	83,952			—			—			—				—				(13)			83,939			Net income (loss)	47,260			—		—			—		—		(366)		46,894

Acquisitions of non-controlling interest																									Acquisitions of non-controlling interest	—			—		—			—		—		38,543		38,543
Foreign currency translation adjustments	Foreign currency translation adjustments	—			(48,482)			—			—				—				—			(48,482)			Foreign currency translation adjustments	—			(29,944)		—			—		—		(466)		(30,410)
Changes in unrecognized pension gains (losses) and related amortization, net of tax	Changes in unrecognized pension gains (losses) and related amortization, net of tax	—			2,706			—			—				—				—			2,706			Changes in unrecognized pension gains (losses) and related amortization, net of tax	—			2,445		—			—		—		—		2,445
Changes in derivative gains (losses), net of tax	Changes in derivative gains (losses), net of tax	—			520			—			—				—				—			520			Changes in derivative gains (losses), net of tax	—			230		—			—		—		—		230
Stock awards and option exercises	Stock awards and option exercises	—			—			5			9,301				25,462				—			34,768			Stock awards and option exercises	—			—		1			884		4,219		—		5,104
Cash dividends declared on common stock	Cash dividends declared on common stock	(23,441)			—			—			—				—				—			(23,441)			Cash dividends declared on common stock	(25,078)			—		—			—		—		—		(25,078)
Balance - March 31, 2021		$	1,704,336		$	(326,965)		$	700		$	(352,282)			$	874,623			$	383		$	1,900,795
Treasury stock purchased																									Treasury stock purchased	—			—		—			(28,398)		—		—		(28,398)
Balance - September 30, 2021																									Balance - September 30, 2021	$	1,756,820		$	(330,327)	$	703		$	(371,896)	$	902,601	$	38,092	$	1,995,993

Table of Contents


In thousands

Nine Months Ended	AptarGroup, Inc. Stockholders’ Equity
September 30, 2021 and 2020	Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Common Stock Par Value		Treasury Stock		Capital in Excess of Par Value		Non- Controlling Interest		Total Equity

Balance - December 31, 2019	$	1,523,820	$	(341,948)	$	686	$	(381,238)	$	770,596	$	336	$	1,572,252
Net income	160,808		—		—		—		—		37		160,845
Adoption of CECL standard	(1,377)		—		—		—		—		—		(1,377)
Foreign currency translation adjustments	—		19,282		—		—		—		10		19,292
Changes in unrecognized pension gains (losses) and related amortization, net of tax	—		4,639		—		—		—		—		4,639
Changes in derivative gains (losses), net of tax	—		603		—		—		—		—		603
Stock awards and option exercises	—		—		7		16,377		56,677		—		73,061
Cash dividends declared on common stock	(69,360)		—		—		—		—		—		(69,360)

Balance - September 30, 2020	$	1,613,891	$	(317,424)	$	693	$	(364,861)	$	827,273	$	383	$	1,759,955

Balance - December 31, 2020	$	1,643,825	$	(281,709)	$	695	$	(361,583)	$	849,161	$	396	$	1,850,785
Net income (loss)	186,488		—		—		—		—		(381)		186,107
Acquisitions of non-controlling interest	—		—		—		—		—		38,543		38,543
Foreign currency translation adjustments	—		(57,317)		—		—		—		(466)		(57,783)
Changes in unrecognized pension gains (losses) and related amortization, net of tax	—		7,660		—		—		—		—		7,660
Changes in derivative gains (losses), net of tax	—		1,039		—		—		—		—		1,039
Stock awards and option exercises	—		—		8		18,085		53,440		—		71,533
Cash dividends declared on common stock	(73,493)		—		—		—		—		—		(73,493)
Treasury stock purchased	—		—		—		(28,398)		—		—		(28,398)
Balance - September 30, 2021	$	1,756,820	$	(330,327)	$	703	$	(371,896)	$	902,601	$	38,092	$	1,995,993

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

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AptarGroup, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


In thousands, brackets denote cash outflows	In thousands, brackets denote cash outflows					In thousands, brackets denote cash outflows

Three Months Ended March 31,		2021		2020
Nine Months Ended September 30,						Nine Months Ended September 30,	2021		2020

Cash Flows from Operating Activities:	Cash Flows from Operating Activities:					Cash Flows from Operating Activities:
Net income	Net income	$	83,939	$	55,250	Net income	$	186,107	$	160,845
Adjustments to reconcile net income to net cash provided by operations:	Adjustments to reconcile net income to net cash provided by operations:					Adjustments to reconcile net income to net cash provided by operations:
Depreciation	Depreciation	47,627		42,792		Depreciation	144,637		132,394
Amortization	Amortization	9,811		8,014		Amortization	29,871		30,020
Stock-based compensation	Stock-based compensation	11,489		9,141		Stock-based compensation	29,720		26,191
Provision for CECL	Provision for CECL	342		1,251		Provision for CECL	1,016		2,345
Loss on disposition of fixed assets		91		54
Loss (gain) on disposition of fixed assets						Loss (gain) on disposition of fixed assets	(225)		475
Gain on remeasurement of equity securities	Gain on remeasurement of equity securities	(16,809)		0		Gain on remeasurement of equity securities	(6,177)		—
Deferred income taxes	Deferred income taxes	(3,580)		6		Deferred income taxes	(10,926)		(2,591)
Defined benefit plan expense	Defined benefit plan expense	7,475		5,775		Defined benefit plan expense	21,930		17,442
Equity in results of affiliates	Equity in results of affiliates	515		799		Equity in results of affiliates	505		1,383
Change in fair value of contingent consideration	Change in fair value of contingent consideration	975		0		Change in fair value of contingent consideration	3,110		4,270
Changes in balance sheet items, excluding effects from foreign currency adjustments:	Changes in balance sheet items, excluding effects from foreign currency adjustments:					Changes in balance sheet items, excluding effects from foreign currency adjustments:
Accounts and other receivables	Accounts and other receivables	(70,194)		(64,764)		Accounts and other receivables	(109,194)		(31,871)
Inventories	Inventories	(26,428)		(8,615)		Inventories	(71,482)		3,937
Prepaid and other current assets	Prepaid and other current assets	(16,995)		(11,787)		Prepaid and other current assets	(13,105)		(15,932)
Accounts payable, accrued and other liabilities	Accounts payable, accrued and other liabilities	49,764		51,523		Accounts payable, accrued and other liabilities	63,724		60,276
Income taxes payable	Income taxes payable	(3,121)		(5,278)		Income taxes payable	(1,656)		(4,865)
Retirement and deferred compensation plan liabilities	Retirement and deferred compensation plan liabilities	(5,156)		(1,312)		Retirement and deferred compensation plan liabilities	(6,400)		(1,569)
Other changes, net	Other changes, net	2,440		2,184		Other changes, net	(2,082)		(1,323)
Net Cash Provided by Operations	Net Cash Provided by Operations	72,185		85,033		Net Cash Provided by Operations	259,373		381,427
Cash Flows from Investing Activities:	Cash Flows from Investing Activities:					Cash Flows from Investing Activities:
Capital expenditures	Capital expenditures	(63,884)		(61,625)		Capital expenditures	(216,689)		(173,365)
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment	318		166		Proceeds from sale of property, plant and equipment	4,916		2,845
Maturity of short-term investment		243		0
Purchase of short-term investment, net						Purchase of short-term investment, net	(76)		—
Acquisition of business, net of cash acquired and release of escrow	Acquisition of business, net of cash acquired and release of escrow	0		(1,463)		Acquisition of business, net of cash acquired and release of escrow	(124,998)		(164,181)
Acquisition of intangible assets, net	Acquisition of intangible assets, net	0		(3,955)		Acquisition of intangible assets, net	—		(3,690)
Investment in equity securities	Investment in equity securities	0		(20,423)		Investment in equity securities	(5,871)		(38,455)

Notes receivable, net	Notes receivable, net	(593)		(785)		Notes receivable, net	(713)		(1,046)
Net Cash Used by Investing Activities	Net Cash Used by Investing Activities	(63,916)		(88,085)		Net Cash Used by Investing Activities	(343,431)		(377,892)
Cash Flows from Financing Activities:	Cash Flows from Financing Activities:					Cash Flows from Financing Activities:
Proceeds from notes payable and overdrafts	Proceeds from notes payable and overdrafts	4,019		8,148		Proceeds from notes payable and overdrafts	10,059		19,191
Repayments of notes payable and overdrafts	Repayments of notes payable and overdrafts	(3,180)		(2,030)		Repayments of notes payable and overdrafts	(11,702)		(33,162)
Repayments and proceeds of short term revolving credit facility, net	Repayments and proceeds of short term revolving credit facility, net	(52,000)		175,000		Repayments and proceeds of short term revolving credit facility, net	6,766		70,000
Proceeds from long-term obligations	Proceeds from long-term obligations	2,053		0		Proceeds from long-term obligations	11,660		1,316
Repayments of long-term obligations	Repayments of long-term obligations	(4,337)		(2,386)		Repayments of long-term obligations	(66,026)		(63,052)

Credit facility costs						Credit facility costs	(1,718)		—
Payment of contingent consideration obligation						Payment of contingent consideration obligation	—		(2,765)
Dividends paid	Dividends paid	(23,441)		(23,031)		Dividends paid	(73,493)		(69,360)
Proceeds from stock option exercises	Proceeds from stock option exercises	31,871		18,602		Proceeds from stock option exercises	53,979		51,098

Net Cash (Used) Provided by Financing Activities		(45,015)		174,303
Purchase of treasury stock						Purchase of treasury stock	(28,398)		—
Net Cash Used by Financing Activities						Net Cash Used by Financing Activities	(98,873)		(26,734)
Effect of Exchange Rate Changes on Cash	Effect of Exchange Rate Changes on Cash	(8,539)		(3,381)		Effect of Exchange Rate Changes on Cash	(7,482)		7,605
Net (Decrease) Increase in Cash and Equivalents and Restricted Cash		(45,285)		167,870
Net Decrease in Cash and Equivalents and Restricted Cash						Net Decrease in Cash and Equivalents and Restricted Cash	(190,413)		(15,594)
Cash and Equivalents and Restricted Cash at Beginning of Period	Cash and Equivalents and Restricted Cash at Beginning of Period	304,970		246,973		Cash and Equivalents and Restricted Cash at Beginning of Period	304,970		246,973
Cash and Equivalents and Restricted Cash at End of Period	Cash and Equivalents and Restricted Cash at End of Period	$	259,685	$	414,843	Cash and Equivalents and Restricted Cash at End of Period	$	114,557	$	231,379

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Restricted cash included in the line item prepaid and other on the Condensed Consolidated Balance Sheets as shown below represents amounts held in escrow related to the Fusion Acquisition and the Noble Acquisition.


Three Months Ended March 31,		2021		2020
Nine Months Ended September 30,						Nine Months Ended September 30,	2021		2020

Cash and equivalents	Cash and equivalents	$	254,852	$	410,840	Cash and equivalents	$	114,557	$	226,546
Restricted cash included in prepaid and other	Restricted cash included in prepaid and other	4,833		4,003		Restricted cash included in prepaid and other	—		4,833
Total Cash and Equivalents and Restricted Cash shown in the Statement of Cash Flows	Total Cash and Equivalents and Restricted Cash shown in the Statement of Cash Flows	$	259,685	$	414,843	Total Cash and Equivalents and Restricted Cash shown in the Statement of Cash Flows	$	114,557	$	231,379

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

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AptarGroup, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollars in Thousands, Except per Share Amounts, or as Otherwise Indicated)

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of AptarGroup, Inc. and our subsidiaries. The terms “AptarGroup”, “Aptar”, “Company”, “we”, “us” or “our” as used herein refer to AptarGroup, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain previously reported amounts have been reclassified to conform to the current period presentation.

In the opinion of management, the unaudited Condensed Consolidated Financial Statements (the “Condensed Consolidated Financial Statements”) include all normal recurring adjustments necessary for a fair statement of consolidated financial position, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. The accompanying Condensed Consolidated Financial Statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. Also, certain financial position data included herein was derived from the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 but does not include all disclosures required by U.S. GAAP. Accordingly, these Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations of any interim period are not necessarily indicative of the results that may be expected for the year.

Beginning July 1, 2018, we have applied highly inflationary accounting for our Argentinian subsidiary pursuant to U.S. GAAP. We have changed the functional currency from the Argentinian peso to the U.S. dollar. We remeasure our peso denominated assets and liabilities using the official rate. In September 2019, the President of Argentina reinstituted exchange controls restricting foreign currency purchases in an attempt to stabilize Argentina’s financial markets. As a result of these currency controls, a legal mechanism known as the Blue Chip Swap emerged in Argentina for reporting entities to transfer U.S. dollars. The Blue Chip Swap rate has diverged significantly from Argentina’s “official rate” due to the economic environment. During the second quarter of 2020, we transferred U.S. dollars into Argentina through the Blue Chip Swap method and we recognized a gain of $1.0 million. This gain helped to offset foreign currency losses due to our Argentinian peso exposure and devaluation against the U.S. dollar. During the third quarter of 2021, we utilized the Blue Chip Swap and recognized a gain of $1.4 million. Our Argentinian operations contributed less than 2.0% of consolidated net assets and revenues as of and for the nine months ended September 30, 2021.

There ~~are~~continues to be many uncertainties regarding the current COVID-19 pandemic, including the availability, adoption, and ~~effectiveness~~efficacy of ~~a vaccine,~~approved vaccines within certain areas of the ~~length of time it takes~~world and the potential for ~~normal economic and operating conditions to resume,~~ additional governmental actions that may be taken and/or ~~extensions~~extended in response to any further resurgence of ~~time for restrictions that have been imposed to date, and numerous other uncertainties. The pandemic has impacted certain markets within our business, our operations and our financial results during~~ the ~~three months ended March 31, 2021. NaN~~virus. No impairments were recorded as of ~~March 31,~~September 30, 2021 related to the COVID-19 pandemic. ~~While~~However, due to the ~~disruption is currently expected to be temporary, there is uncertainty around the duration. Due to significant~~general uncertainty surrounding the situation, including areas such as cost inflation, supply chain disruptions, and labor shortages, future results could ~~change~~be negatively affected by the pandemic and therefore our results could be materially impacted.

ADOPTION OF RECENT ACCOUNTING STANDARDS

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification.

Effective January 1, 2021, we adopted ASU 2020-10, Codification Improvements, which updates various codification topics by clarifying or improving disclosure requirements to align with the SEC's regulations, ~~and no material impacts were noted.~~

Effective January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued by the FASB in June 2016, as well as the clarifying amendments subsequently issued. We applied the guidance using a modified retrospective approach and accordingly recognized an amount of $1.4 million as the cumulative adjustment to opening retained earnings in the first quarter of 2020. This is based on management's best estimates of specific losses on individual exposures particularly on current trade receivables, as well as the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. On an ongoing basis, we will contemplate forward-looking economic conditions in recording lifetime expected credit losses for our financial assets measured at cost, such as our trade receivables and certain other assets.

In January 2017, the FASB issued ASU 2017-04, which provides guidance to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. As a result, impairment charges are required for the amount by which a reporting unit’s carrying amount exceeds its fair value up to the amount of its allocated goodwill. We adopted the standard on January 1, 2020 and did not record any impairment charges.

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In August 2018, the FASB issued ASU 2018-13, which amends disclosure requirements for fair value measurements. The new standard modifies disclosure requirements including removing requirements to disclose the valuation process for Level 3 measurements and adding requirements to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. We adopted the standard on January 1, 2020 and no material impacts were noted.

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In August 2018, the FASB issued ASU 2018-14, which amends disclosure requirements for defined benefit pension and other postretirement plans. The amendments in this update remove disclosures that are no longer considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. We adopted the standard during the fourth quarter of 2020 and appropriate disclosures are included in the notes to the financial statements to the extent applicable. The provisions of the new standard do not have any effect on our financial statements.

In August 2018, the FASB issued ASU 2018-15 to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. We adopted the standard on January 1, 2020 and no material impacts were noted.

Other accounting standards that have been issued by the FASB or other standards-setting bodies did not have a material impact on our Condensed Consolidated Financial Statements.

INCOME TAXES

We compute taxes on income in accordance with the tax rules and regulations of the many taxing authorities where the income is earned. The income tax rates imposed by these taxing authorities may vary substantially. Taxable income may differ from pre-tax income for financial accounting purposes. To the extent that these differences create ~~timing~~temporary differences between the tax basis of an asset or liability and our reported amount in the financial statements, an appropriate provision for deferred income taxes is made.

We maintain our assertion that the cash and distributable reserves at our non-U.S. affiliates are indefinitely reinvested. At ~~March 31,~~September 30, 2021, under currently enacted laws, we do not have a balance of foreign earnings that will be subject to U.S. taxation. We will provide for the necessary withholding and local income taxes when management decides that an affiliate should make a distribution. These decisions are made taking into consideration the financial requirements of the non-U.S. affiliates and the global cash management goals of the Company.

We provide a liability for the amount of unrecognized tax benefits from uncertain tax positions. This liability is provided whenever we determine that a tax benefit will not meet a more-likely-than-not threshold for recognition.

We are subject to the examination of our returns and other tax matters by the U.S. Internal Revenue Service and other tax authorities and governmental bodies. We believe that an adequate provision for any adjustments that may result from tax examinations exists. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner inconsistent with our expectations, we could be required to adjust its provision for income taxes in the period such resolution occurs. The resolution of each of these audits is not expected to be material to our Condensed Consolidated Financial Statements.

NOTE 2 – REVENUE

Revenue by segment and geography for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 is as follows:


		For the Three Months Ended March 31, 2021											For the Three Months Ended September 30, 2021
Segment	Segment	Europe		Domestic		Latin America		Asia		Total		Segment	Europe		Domestic		Latin America		Asia		Total
Pharma	Pharma	$	207,947	$	89,295	$	5,370	$	11,220	$	313,832	Pharma	$	202,893	$	89,620	$	5,318	$	15,394	$	313,225
Beauty + Home	Beauty + Home	189,240		98,807		34,342		24,557		346,946		Beauty + Home	193,772		109,103		40,441		30,772		374,088
Food + Beverage	Food + Beverage	28,502		67,063		9,253		11,158		115,976		Food + Beverage	36,824		81,514		11,991		7,800		138,129
Total	Total	$	425,689	$	255,165	$	48,965	$	46,935	$	776,754	Total	$	433,489	$	280,237	$	57,750	$	53,966	$	825,442

910

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		For the Three Months Ended March 31, 2020											For the Three Months Ended September 30, 2020
Segment	Segment	Europe		Domestic		Latin America		Asia		Total		Segment	Europe		Domestic		Latin America		Asia		Total
Pharma	Pharma	$	190,130	$	90,965	$	6,579	$	9,522	$	297,196	Pharma	$	206,376	$	92,932	$	4,846	$	11,604	$	315,758
Beauty + Home	Beauty + Home	186,950		81,845		36,181		19,584		324,560		Beauty + Home	165,701		109,175		37,921		24,434		337,231
Food + Beverage	Food + Beverage	28,769		57,590		8,034		5,404		99,797		Food + Beverage	29,688		60,439		6,668		9,369		106,164
Total	Total	$	405,849	$	230,400	$	50,794	$	34,510	$	721,553	Total	$	401,765	$	262,546	$	49,435	$	45,407	$	759,153


	For the Nine Months Ended September 30, 2021
Segment	Europe		Domestic		Latin America		Asia		Total
Pharma	$	623,060	$	272,442	$	15,982	$	40,916	$	952,400
Beauty + Home	575,383		311,589		113,665		80,643		1,081,280
Food + Beverage	97,728		220,551		33,129		28,140		379,548
Total	$	1,296,171	$	804,582	$	162,776	$	149,699	$	2,413,228


	For the Nine Months Ended September 30, 2020
Segment	Europe		Domestic		Latin America		Asia		Total
Pharma	$	598,319	$	264,995	$	18,412	$	32,487	$	914,213
Beauty + Home	505,063		285,369		103,995		67,150		961,577
Food + Beverage	86,298		172,507		21,191		24,225		304,221
Total	$	1,189,680	$	722,871	$	143,598	$	123,862	$	2,180,011

We perform our obligations under a contract with a customer by transferring goods and/or services in exchange for consideration from the customer. The timing of performance will sometimes differ from the timing of the receipt of the associated consideration from the customer, thus resulting in the recognition of a contract asset or a contract liability. We recognize a contract asset when we transfer control of goods or services to a customer prior to invoicing for the related performance obligation. The contract asset is transferred to accounts receivable when the product is shipped and invoiced to the customer. We recognize a contract liability if the customer's payment of consideration precedes the entity's performance.

The opening and closing balances of our contract asset and contract liabilities are as follows:


		Balance as of December 31, 2020		Balance as of March 31, 2021		Increase/ (Decrease)			Balance as of December 31, 2020		Balance as of September 30, 2021		Increase/ (Decrease)
Contract asset (current)	Contract asset (current)	$	16,109	$	15,490	$	(619)	Contract asset (current)	$	16,109	$	18,656	$	2,547
Contract asset (long-term)		$	0	$	0	$	0

Contract liability (current)	Contract liability (current)	$	87,188	$	102,721	$	15,533	Contract liability (current)	87,188		84,199		(2,989)
Contract liability (long-term)	Contract liability (long-term)	$	21,584	$	25,747	$	4,163	Contract liability (long-term)	21,584		21,725		141

The differences in the opening and closing balances of our contract asset and contract liabilities are primarily the result of timing differences between our performance and the customer’s payment. The total amount of revenue recognized during the current year against contract liabilities is ~~$18.7~~$80.4 million, including ~~$13.0~~$44.9 million relating to contract liabilities at the beginning of the year. Current contract assets and long-term contract assets are included within the Prepaid and Other and Miscellaneous assets, respectively, while current contract liabilities and long-term contract liabilities are included within Accounts Payable, Accrued and Other Liabilities and Deferred and Other Non-current Liabilities, respectively, within our Condensed Consolidated Balance Sheets.

Determining the Transaction Price

In most cases, the transaction price for each performance obligation is stated in the contract. In determining the variable amounts of consideration within the transaction price (such as volume-based customer rebates), we include an estimate of the expected amount of consideration as revenue. We apply the expected value method based on all of the information (historical, current, and forecast) that is reasonably available and identify reasonable estimates based on this information. We apply the method consistently throughout the contract when estimating the effect of an uncertainty on the amount of variable consideration to which we will be entitled.

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Product Sales

We primarily manufacture and sell drug delivery, dispensing, sealing and active material science solutions. The amount of consideration is typically fixed for ~~such~~ customers. At the time of delivery, the customer is invoiced the agreed-upon price. Revenue from product sales is typically recognized upon manufacture or shipment, when control of the goods transfers to the customer.

To determine when the control transfers, we typically assess, among other things, the shipping terms of the contract, shipping being one of the indicators of transfer of control. AFor a majority of product sales, ~~are sold FOB shipping point. For FOB shipping point shipments,~~ control of the goods transfers to the customer at the time of shipment of the goods. Once the goods are shipped, we are precluded from redirecting the shipment to another customer. Therefore, our performance obligation is satisfied at the time of shipment. ~~With respect to FOB destination~~For sales in which control transfers upon delivery, shipping and/or handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs and revenue is recorded upon final delivery to the customer location. We have elected to account for shipping and handling costs that occur after the customer has obtained control of a good as fulfillment costs rather than as a promised service. We do not have any material significant payment terms as payment is typically received shortly after the point of sale.

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There also exist instances where we manufacture highly customized products that have no alternative use to us and for which we have an enforceable right to payment for performance completed to date. For these products, we transfer control and recognize revenue over time by measuring progress towards completion using the Output Method based on the number of products produced. As we normally make our products to a customer’s order, the time between production and shipment of our products is typically within a few weeks. We believe this measurement provides a faithful depiction of the transfer of goods as the costs incurred reflect the value of the products produced.

As a part of our customary business practice, we offer a standard warranty that the products will materially comply with the technical specifications and will be free from material defects. Because such warranties are not sold separately, do not provide for any service beyond a guarantee of a product’s initial specifications, and are not required by law, there is no revenue deferral for these types of warranties.

Tooling Sales

We also build or contract for molds and other tools (collectively defined as “tooling”) necessary to produce our products. As with product sales, we recognize revenue when control of the tool transfers to the customer. If the tooling is highly customized with no alternative use to us and we have an enforceable right to payment for performance completed to date, we transfer control and recognize revenue over time by measuring progress towards completion using the Input Method based on costs incurred relative to total estimated costs to completion. Otherwise, revenue for the tooling is recognized at the point in time when the customer approves the tool. We do not have any material significant payment terms as payment is typically either received during the mold-build process or shortly after completion.

In certain instances, we offer extended warranties on our tools above and beyond the normal standard warranties. We normally receive payment at the inception of the contract and recognize revenue over the term of the contract. AtWe do not have any material extended warranties as of September 30, 2021 or December 31, 2020, $536 thousand of unearned revenue associated with outstanding contracts was reported in Accounts Payable, Accrued and Other Liabilities. At March 31, 2021, the unearned amount was $523 thousand. We expect to recognize approximately $98 thousand of the unearned amount during the remainder of 2021, $142 thousand in 2022, and $283 thousand thereafter.2020.

Service Sales

We also provide services to our pharmaceutical customers. As with product sales, we recognize revenue based on completion of each performance obligation of the service contract.

Contract Costs

We do not incur significant costs to obtain or fulfill revenue contracts.

Credit Risk

We are exposed to credit losses primarily through our product sales, tooling sales and services to our customers. We assess each customer’s ability to pay for the products we sell by conducting a credit review. The credit review considers our expected billing exposure and timing for payment and the customer’s established credit rating or our assessment of the customer’s creditworthiness based on our analysis of their financial statements when a credit rating is not available. We also consider contract terms and conditions, country and political risks, and business strategy in our evaluation. A credit limit is established for each customer based on the outcome of this review.

We monitor our ongoing credit exposure through active review of customer balances against contract terms and due dates. Our activities include timely account reconciliation, dispute resolution and payment confirmation. We may employ collection agencies and legal counsel to pursue recovery of defaulted receivables.

Current uncertainty in credit and market conditions due to the COVID-19 pandemic may slow our collection efforts if customers experience significant difficulty accessing credit and paying their obligations, which may lead to higher than normal accounts receivable and increased CECL charges.

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NOTE 3 - INVENTORIES

Inventories, by component net of reserves, consisted of:

March 31,
2021 December 31,
2020
Raw materials $ 115,645 $ 116,029
Work in process 124,097 115,870
Finished goods 154,437 147,480
Total $ 394,179 $ 379,379

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	September 30, 2021		December 31, 2020
Raw materials	$	139,678	$	116,029
Work in process	134,128		115,870
Finished goods	163,537		147,480
Total	$	437,343	$	379,379

NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill by reporting segment since December 31, 2020 are as follows:


		Pharma		Beauty + Home		Food + Beverage		Corporate & Other		Total			Pharma		Beauty + Home		Food + Beverage		Corporate & Other		Total
Goodwill	Goodwill	$	436,731	$	333,111	$	128,679	$	1,615	$	900,136	Goodwill	$	436,731	$	333,111	$	128,679	$	1,615	$	900,136
Accumulated impairment losses	Accumulated impairment losses	0		0		0		(1,615)		(1,615)		Accumulated impairment losses	—		—		—		(1,615)		(1,615)
Balance as of December 31, 2020	Balance as of December 31, 2020	$	436,731	$	333,111	$	128,679	$	0	$	898,521	Balance as of December 31, 2020	$	436,731	$	333,111	$	128,679	$	—	$	898,521

Acquisitions												Acquisitions	110,158		—		—		—		110,158
Foreign currency exchange effects	Foreign currency exchange effects	(10,456)		(4,266)		(256)		0		(14,978)		Foreign currency exchange effects	(15,961)		(5,607)		(332)		—		(21,900)
Goodwill	Goodwill	$	426,275	$	328,845	$	128,423	$	1,615	$	885,158	Goodwill	$	530,928	$	327,504	$	128,347	$	1,615	$	988,394
Accumulated impairment losses	Accumulated impairment losses	0		0		0		(1,615)		(1,615)		Accumulated impairment losses	—		—		—		(1,615)		(1,615)
Balance as of March 31, 2021		$	426,275	$	328,845	$	128,423	$	0	$	883,543
Balance as of September 30, 2021												Balance as of September 30, 2021	$	530,928	$	327,504	$	128,347	$	—	$	986,779

The table below shows a summary of intangible assets as of ~~March 31,~~September 30, 2021 and December 31, 2020.


			March 31, 2021						December 31, 2020								September 30, 2021						December 31, 2020
Weighted Average Amortization Period (Years)	Weighted Average Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization		Net Value		Gross Carrying Amount		Accumulated Amortization		Net Value		Weighted Average Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization		Net Value		Gross Carrying Amount		Accumulated Amortization		Net Value
Amortized intangible assets:	Amortized intangible assets:														Amortized intangible assets:
Patents	Patents	13.8	$	2,810	$	(1,440)	$	1,370	$	2,861	$	(1,477)	$	1,384	Patents	13.9	$	2,785	$	(1,436)	$	1,349	$	2,861	$	(1,477)	$	1,384
Acquired technology	Acquired technology	12.2	109,508		(38,415)		71,093		111,854		(36,943)		74,911		Acquired technology	11.5	140,224		(42,803)		97,421		111,854		(36,943)		74,911
Customer relationships	Customer relationships	13.5	283,761		(61,214)		222,547		286,644		(56,714)		229,930		Customer relationships	15.4	312,905		(71,872)		241,033		286,644		(56,714)		229,930
Trademarks and trade names	Trademarks and trade names	6.8	45,444		(18,615)		26,829		46,174		(17,437)		28,737		Trademarks and trade names	6.9	45,194		(21,544)		23,650		46,174		(17,437)		28,737
License agreements and other	License agreements and other	36.7	18,981		(9,788)		9,193		19,208		(9,861)		9,347		License agreements and other	37.6	16,504		(7,143)		9,361		19,208		(9,861)		9,347
Total intangible assets	Total intangible assets	13.3	$	460,504	$	(129,472)	$	331,032	$	466,741	$	(122,432)	$	344,309	Total intangible assets	14.4	$	517,612	$	(144,798)	$	372,814	$	466,741	$	(122,432)	$	344,309

Aggregate amortization expense for the intangible assets above for the ~~three months~~quarters ended ~~March 31,~~September 30, 2021 and 2020 was ~~$9,811~~$10,249 and ~~$8,014,~~$9,686, respectively. Aggregate amortization expense for the intangible assets above for the nine months ended September 30, 2021 and 2020 was $29,871 and $30,020, respectively.

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Future estimated amortization expense for the years ending December 31 is as follows:


2021	2021	$	27,995	(remaining estimated amortization for 2021)	2021	$	11,614	(remaining estimated amortization for 2021)
2022	2022	38,815			2022	43,874
2023	2023	38,545			2023	43,791
2024	2024	35,406			2024	40,651
2025 and thereafter	2025 and thereafter	190,271			2025 and thereafter	232,884

Future amortization expense may fluctuate depending on changes in foreign currency rates. The estimates for amortization expense noted above are based upon foreign exchange rates as of ~~March 31,~~September 30, 2021.

NOTE 5 – INCOME TAXES

The effective tax rate for the three months ended ~~March 31,~~September 30, 2021 and 2020, respectively, was ~~16.8%~~29.2% and ~~29.2%~~28.5%. The higher reported effective tax rate for the three months ended ~~March 31,~~September 30, 2021 reflects ~~additional~~lower tax benefits from employee stock-based compensation offset in part by a more favorable mix of ~~$5.1 million and a $2.9 million benefit from changes in U.S. state tax laws during the quarter. A lower~~earnings.

The effective tax rate ~~in France~~ for the nine months ended September 30, 2021 and 2020, respectively, was 22.9% and 29.4%. The effective tax rate for the nine months ended September 30, 2021 reflects higher additional tax benefits than the prior year from employee stock-based compensation and a more favorable mix of ~~earnings also contributed to the lower tax rate in the current quarter.~~

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earnings.

NOTE 6 – DEBT

Notes Payable, Revolving Credit Facility and Overdrafts

At ~~March 31,~~September 30, 2021 and December 31, 2020, our notes payable, revolving credit facility and overdrafts consisted of the following:

March 31,
2021 December 31,
2020
Notes payable 0.0% $ 0 $ 200
Revolving credit facility 0.00% 0 52,000
Overdrafts 8.10% 1,036 0
$ 1,036 $ 52,200


	September 30, 2021		December 31, 2020
Notes payable 0.0%	$	—	$	200
Revolving credit facility 1.00% to 1.08%	58,583		52,000
	$	58,583	$	52,200

~~We maintain a~~On June 30, 2021, we entered into an amended and restated multi-currency revolving credit facility (the "revolving credit facility") with ~~2 tranches that~~a syndicate of banks to replace the existing facility (the "prior credit facility") maturing July 2022 and to amend and restate the unsecured term loan facility extended to our wholly-owned UK subsidiary under the prior credit facility (as amended, the "amended term facility"). The revolving credit facility matures in ~~July 2022 which~~June 2026, subject to a maximum of 2 one-year extensions in certain circumstances, and provides for unsecured financing of up to ~~$300~~$600 million ~~that is~~ available in the U.S. and ~~up to €150 million that is available~~ to our wholly-owned UK subsidiary. ~~NaN~~The amended term facility matures in July 2022. The revolving credit facility can be drawn in various currencies including USD, EUR, GBP, and CHF to the equivalent of $600 million, which may be increased by up to $300 million subject to the satisfaction of certain conditions. As of September 30, 2021, $47 million was utilized under the revolving credit facility in the U.S., €10 million (approximately $11.6 million) was utilized by our wholly-owned UK subsidiary and $56 million remained outstanding under the amended term facility. As of December 31, 2020, under our prior credit facility, we utilized $52.0 million under the U.S. revolving facility and no balance was utilized under ~~our U.S. facility or our~~the euro-based revolving credit ~~facility as of March 31, 2021. We utilized $52.0 million under our U.S. facility and 0 balance was utilized on our euro-based revolving credit facility as of December 31, 2020.~~facility.

There are 0no compensating balance requirements associated with our revolving credit facility. Each borrowing under the revolving credit facility will bear interest at rates based on LIBOR (in the case of USD), EURIBOR (in the case of EUR), SONIA (in the case of GBP), SARON (in the case of CHF), prime rates or other similar rates, in each case plus an applicable margin. The revolving credit facility provides mechanics relating to a transition away from LIBOR (in the case of USD) and the designated benchmark rates for other available currencies and the replacement of any such applicable benchmark by a replacement alternative benchmark rate or mechanism for loans made in the applicable currency. A facility fee on the total amount of the revolving credit facility is also payable quarterly, regardless of usage. The applicable margins for borrowings under the revolving credit facility and the facility fee percentage may change from time to time depending on changes in our consolidated leverage ratio.

In October 2020, we entered into an unsecured money market borrowing arrangement to provide short term financing of up to $30 million that is available in the U.S. No borrowing on this facility is permitted over a quarter end date. As such, 0no balance was utilized under this arrangement as of ~~March 31,~~September 30, 2021 or December 31, 2020.

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Long-Term Obligations

At ~~March 31,~~September 30, 2021 and December 31, 2020, our long-term obligations consisted of the following:


		March 31, 2021		December 31, 2020			September 30, 2021		December 31, 2020
Notes payable 0.00% – 10.90%, due in monthly and annual installments through 2028		$	12,108	$	14,002
Notes payable 0.00% – 8.92%, due in monthly and annual installments through 2028						Notes payable 0.00% – 8.92%, due in monthly and annual installments through 2028	$	24,967	$	14,002
Senior unsecured notes 3.2%, due in 2022	Senior unsecured notes 3.2%, due in 2022	75,000		75,000		Senior unsecured notes 3.2%, due in 2022	75,000		75,000
Senior unsecured debts 1.5% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022		112,000		112,000
Senior unsecured debts 1.26% USD floating swapped to 1.36% EUR fixed, due in 2022						Senior unsecured debts 1.26% USD floating swapped to 1.36% EUR fixed, due in 2022	56,000		112,000
Senior unsecured notes 3.5%, due in 2023	Senior unsecured notes 3.5%, due in 2023	125,000		125,000		Senior unsecured notes 3.5%, due in 2023	125,000		125,000
Senior unsecured notes 1.0%, due in 2023	Senior unsecured notes 1.0%, due in 2023	117,260		122,100		Senior unsecured notes 1.0%, due in 2023	115,830		122,100
Senior unsecured notes 3.4%, due in 2024	Senior unsecured notes 3.4%, due in 2024	50,000		50,000		Senior unsecured notes 3.4%, due in 2024	50,000		50,000
Senior unsecured notes 3.5%, due in 2024	Senior unsecured notes 3.5%, due in 2024	100,000		100,000		Senior unsecured notes 3.5%, due in 2024	100,000		100,000
Senior unsecured notes 1.2%, due in 2024	Senior unsecured notes 1.2%, due in 2024	234,520		244,200		Senior unsecured notes 1.2%, due in 2024	231,660		244,200
Senior unsecured notes 3.6%, due in 2025	Senior unsecured notes 3.6%, due in 2025	125,000		125,000		Senior unsecured notes 3.6%, due in 2025	125,000		125,000
Senior unsecured notes 3.6%, due in 2026	Senior unsecured notes 3.6%, due in 2026	125,000		125,000		Senior unsecured notes 3.6%, due in 2026	125,000		125,000
Finance Lease Liabilities	Finance Lease Liabilities	28,389		30,025		Finance Lease Liabilities	31,197		30,025
Unamortized debt issuance costs	Unamortized debt issuance costs	(1,518)		(1,663)		Unamortized debt issuance costs	(1,230)		(1,663)
		$	1,102,759	$	1,120,664		$	1,058,424	$	1,120,664
Current maturities of long-term obligations	Current maturities of long-term obligations	(64,776)		(65,666)		Current maturities of long-term obligations	(142,674)		(65,666)
Total long-term obligations	Total long-term obligations	$	1,037,983	$	1,054,998	Total long-term obligations	$	915,750	$	1,054,998

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The aggregate long-term maturities, excluding finance lease liabilities, which are disclosed in Note 7, due annually from the current balance sheet date for the next five years are:


Year One	$	~~60,808~~138,734
Year Two	~~134,839~~121,784
Year Three	~~344,773~~460,593
Year Four	~~285,040~~53,725
Year Five	~~250,259~~253,471
Thereafter	~~169~~150

Covenants

Our revolving credit facility and corporate long-term obligations require us to satisfy certain financial and other covenants including:

Requirement

Level at ~~March 31,~~September 30, 2021

Consolidated Leverage Ratio (1)

Maximum of 3.50 to 1.00

~~1.55~~1.76 to 1.00

Consolidated Interest Coverage Ratio (1)

Minimum of 3.00 to 1.00

~~17.69~~19.39 to 1.00

(1)Definitions of ratios are included as part of the revolving credit facility agreement and the private placement agreements.

NOTE 7 – LEASES

We lease certain warehouse, plant and office facilities as well as certain equipment under ~~noncancelable~~non-cancelable operating and finance leases expiring at various dates through the year 2034. Most of the operating leases contain renewal options and certain leases include options to purchase the related asset during or at the end of the lease term.

Amortization expense related to finance leases is included in depreciation expense while rent expense related to operating leases is included within cost of sales and selling, research & development and administrative expenses (“SG&A”).

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The components of lease expense for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 were as follows:


		Three Months Ended September 30,						Nine Months Ended September 30,
Three Months Ended March 31,			2021		2020
								2021		2020		2021		2020
Operating lease cost	Operating lease cost		$	5,789	$	5,254	Operating lease cost	$	5,423	$	6,076	$	17,256	$	17,171

Finance lease cost:	Finance lease cost:						Finance lease cost:
Amortization of right-of-use assets	Amortization of right-of-use assets		$	976	$	1,199	Amortization of right-of-use assets	$	1,107	$	905	$	3,182	$	3,010
Interest on lease liabilities	Interest on lease liabilities		$	312	$	348	Interest on lease liabilities	343		356		1,030		1,073
Total finance lease cost	Total finance lease cost		$	1,288	$	1,547	Total finance lease cost	$	1,450	$	1,261	$	4,212	$	4,083

Short-term lease and variable lease costs	Short-term lease and variable lease costs		$	3,128	$	2,448	Short-term lease and variable lease costs	$	3,353	$	2,466	$	8,925	$	7,344

Supplemental cash flow information related to leases was as follows:


Three Months Ended March 31,		2021		2020
Nine Months Ended September 30,						Nine Months Ended September 30,	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	Operating cash flows from operating leases	$	5,755	$	5,328	Operating cash flows from operating leases	$	17,310	$	17,060
Operating cash flows from finance leases	Operating cash flows from finance leases	349		369		Operating cash flows from finance leases	1,052		1,089
Financing cash flows from finance leases	Financing cash flows from finance leases	1,198		1,657		Financing cash flows from finance leases	3,392		3,678

Right-of-use assets obtained in exchange for lease obligations:	Right-of-use assets obtained in exchange for lease obligations:					Right-of-use assets obtained in exchange for lease obligations:
Operating leases	Operating leases	$	1,496	$	5,233	Operating leases	$	6,890	$	19,255
Finance leases	Finance leases	47		220		Finance leases	5,707		3,356

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NOTE 8 – RETIREMENT AND DEFERRED COMPENSATION PLANS

Effective January 1, 2021, our domestic noncontributory retirement plans were ~~amended~~closed to ~~provide that no individual~~new employees and employees who ~~became an employee after December 31, 2020 could become a participant and that no employee whose employment terminated and who was~~were rehired after December 31, ~~2020 may accrue benefits under the plan with respect to the period of employment which begins on the date that reemployment commences.~~2020. These employees ~~will~~are instead be eligible for additional contribution to their defined contribution 401(k) employee savings plan. All domestic employees with hire/rehire dates prior to January 1, 2021 ~~will~~are still be eligible for the domestic pension plans and ~~will still~~ continue to accrue plan benefits after this date.

Components of Net Periodic Benefit Cost:


		Domestic Plans				Foreign Plans					Domestic Plans				Foreign Plans
Three Months Ended March 31,		2021		2020		2021		2020
Three Months Ended September 30,										Three Months Ended September 30,	2021		2020		2021		2020
Service cost	Service cost	$	4,227	$	3,577	$	2,078	$	1,768	Service cost	$	4,074	$	3,570	$	2,037	$	1,867
Interest cost	Interest cost	1,611		1,987		218		340		Interest cost	1,601		1,761		203		360
Expected return on plan assets	Expected return on plan assets	(3,073)		(3,422)		(723)		(634)		Expected return on plan assets	(3,060)		(3,062)		(675)		(671)
Amortization of net loss	Amortization of net loss	2,503		1,548		589		514		Amortization of net loss	2,498		1,422		568		544
Amortization of prior service cost	Amortization of prior service cost	0		0		45		97		Amortization of prior service cost	—		—		34		101
Net periodic benefit cost	Net periodic benefit cost	$	5,268	$	3,690	$	2,207	$	2,085	Net periodic benefit cost	$	5,113	$	3,691	$	2,167	$	2,201


	Domestic Plans				Foreign Plans
Nine Months Ended September 30,	2021		2020		2021		2020
Service cost	$	12,242	$	10,709	$	6,186	$	5,402
Interest cost	4,816		5,284		629		1,040
Expected return on plan assets	(9,197)		(9,186)		(2,119)		(1,936)
Amortization of net loss	7,502		4,264		1,748		1,572
Amortization of prior service cost	—		—		123		293
Net periodic benefit cost	$	15,363	$	11,071	$	6,567	$	6,371

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The components of net periodic benefit cost, other than the service cost component, are included in the line Miscellaneous, net in the Condensed Consolidated Statements of Income.

~~EMPLOYER CONTRIBUTIONS~~Employer Contributions

We currently have 0no minimum funding requirements for our domestic and foreign plans. ~~There were 0 payments~~We contributed $1.0 million to our ongoing domestic supplemental executive retirement plan (SERP) annuity contracts during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and we do not expect additional significant payments during 2021. We have contributed approximately ~~$1.0~~$2.8 million to our foreign defined benefit plans during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and do not expect additional significant contributions during 2021.

NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME

Changes in Accumulated Other Comprehensive (Loss) Income by Component:


		Foreign Currency		Defined Benefit Pension Plans		Derivatives		Total			Foreign Currency		Defined Benefit Pension Plans		Derivatives		Total
Balance - December 31, 2019	Balance - December 31, 2019	$	(257,124)	$	(83,147)	$	(1,677)	$	(341,948)	Balance - December 31, 2019	$	(257,124)	$	(83,147)	$	(1,677)	$	(341,948)
Other comprehensive income (loss) before reclassifications										Other comprehensive income (loss) before reclassifications	19,282		—		(4,342)		14,940
Amounts reclassified from accumulated other comprehensive income										Amounts reclassified from accumulated other comprehensive income	—		4,639		4,945		9,584
Net current-period other comprehensive income										Net current-period other comprehensive income	19,282		4,639		603		24,524
Balance - September 30, 2020										Balance - September 30, 2020	$	(237,842)	$	(78,508)	$	(1,074)	$	(317,424)

Balance - December 31, 2020										Balance - December 31, 2020	$	(178,025)	$	(102,322)	$	(1,362)	$	(281,709)
Other comprehensive (loss) income before reclassifications	Other comprehensive (loss) income before reclassifications	(42,229)		0		5,026		(37,203)		Other comprehensive (loss) income before reclassifications	(57,317)		529		7,346		(49,442)
Amounts reclassified from accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)	0		1,636		(3,543)		(1,907)		Amounts reclassified from accumulated other comprehensive income (loss)	—		7,131		(6,307)		824
Net current-period other comprehensive (loss) income	Net current-period other comprehensive (loss) income	(42,229)		1,636		1,483		(39,110)		Net current-period other comprehensive (loss) income	(57,317)		7,660		1,039		(48,618)
Balance - March 31, 2020		$	(299,353)	$	(81,511)	$	(194)	$	(381,058)

Balance - December 31, 2020		$	(178,025)	$	(102,322)	$	(1,362)	$	(281,709)
Other comprehensive income (loss) before reclassifications		(48,482)		319		5,061		(43,102)
Amounts reclassified from accumulated other comprehensive income (loss)		0		2,387		(4,541)		(2,154)
Net current-period other comprehensive (loss) income		(48,482)		2,706		520		(45,256)
Balance - March 31, 2021		$	(226,507)	$	(99,616)	$	(842)	$	(326,965)
Balance - September 30, 2021										Balance - September 30, 2021	$	(235,342)	$	(94,662)	$	(323)	$	(330,327)

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Reclassifications Out of Accumulated Other Comprehensive (Loss) Income:


Details about Accumulated Other Comprehensive Income Components	Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income				Affected Line in the Statement Where Net Income is Presented	Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income				Affected Line in the Statement Where Net Income is Presented
Three Months Ended March 31,		2021		2020
Three Months Ended September 30,							Three Months Ended September 30,	2021		2020

Defined Benefit Pension Plans	Defined Benefit Pension Plans						Defined Benefit Pension Plans
Amortization of net loss	Amortization of net loss	$	3,092	$	2,062	(1)	Amortization of net loss	$	3,066	$	1,966	(1)
Amortization of prior service cost	Amortization of prior service cost	45		97		(1)	Amortization of prior service cost	34		101		(1)
		3,137		2,159		Total before tax		3,100		2,067		Total before tax
		(750)		(523)		Tax impact		(742)		(504)		Tax impact
		$	2,387	$	1,636	Net of tax		$	2,358	$	1,563	Net of tax
Derivatives	Derivatives						Derivatives
Changes in cross currency swap: interest component	Changes in cross currency swap: interest component	$	(12)	$	(763)	Interest Expense	Changes in cross currency swap: interest component	$	2	$	(146)	Interest Expense
Changes in cross currency swap: foreign exchange component	Changes in cross currency swap: foreign exchange component	(4,529)		(2,780)		Miscellaneous, net	Changes in cross currency swap: foreign exchange component	(3,052)		6,099		Miscellaneous, net
		$	(4,541)	$	(3,543)	Net of tax		$	(3,050)	$	5,953	Net of tax
Total reclassifications for the period	Total reclassifications for the period	$	(2,154)	$	(1,907)		Total reclassifications for the period	$	(692)	$	7,516

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Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income				Affected Line in the Statement Where Net Income is Presented
Nine Months Ended September 30,	2021		2020

Defined Benefit Pension Plans
Amortization of net loss	$	9,250	$	5,836	(1)
Amortization of prior service cost	123		293		(1)
	9,373		6,129		Total before tax
	(2,242)		(1,490)		Tax impact
	$	7,131	$	4,639	Net of tax
Derivatives
Changes in cross currency swap: interest component	$	(16)	$	(1,434)	Interest Expense
Changes in cross currency swap: foreign exchange component	(6,291)		6,379		Miscellaneous, net
	$	(6,307)	$	4,945	Net of tax
Total reclassifications for the period	$	824	$	9,584

(1)These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax. See Note 8 – Retirement and Deferred Compensation Plans for additional details.

NOTE 10 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We maintain a foreign exchange risk management policy designed to establish a framework to protect the value of our non-functional currency denominated transactions from adverse changes in exchange rates. Sales of our products can be denominated in a currency different from the currency in which the related costs to produce the product are denominated. Changes in exchange rates on such inter-country sales or intercompany loans can impact our results of operations. Our policy is not to engage in speculative foreign currency hedging activities, but to minimize our net foreign currency transaction exposure, defined as firm commitments and transactions recorded and denominated in currencies other than the functional currency. We may use foreign currency forward exchange contracts, options and cross currency swaps to economically hedge these risks.

For derivative instruments designated as hedges, we formally document the nature and relationships between the hedging instruments and the hedged items, as well as the risk management objectives, strategies for undertaking the various hedge transactions, and the method of assessing hedge effectiveness at inception. Quarterly thereafter, we formally assess whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. Additionally, in order to designate any derivative instrument as a hedge of an anticipated transaction, the significant characteristics and expected terms of any anticipated transaction must be specifically identified, and it must be probable that the anticipated transaction will occur. All derivative financial instruments used as hedges are recorded at fair value in the Condensed Consolidated Balance Sheets (See Note 11 - Fair Value).

Cash Flow Hedge

For derivative instruments that are designated and qualify as cash flow hedges, the changes in fair values are recorded in accumulated other comprehensive loss and included in changes in derivative gain/loss. The changes in the fair values of derivatives designated as cash flow hedges are reclassified from accumulated other comprehensive loss to net income when the underlying hedged item is recognized in earnings. Cash flows from the settlement of derivative contracts designated as cash flow hedges offset cash flows from the underlying hedged items and are included in operating activities in the Condensed Consolidated Statements of Cash Flows.

During 2017, our wholly-owned UK subsidiary borrowed $280 million in term loan borrowings under ~~a new~~our prior credit facility. In order to mitigate the currency risk of U.S. dollar debt on a euro functional currency entity and to mitigate the risk of variability in interest rates, we entered into a EUR/USD floating-to-fixed cross currency interest rate swap in the notional amount of $280 million to effectively hedge the foreign exchange and interest rate exposure on the $280 million term loan. This EUR/USD swap agreement fixed our U.S. dollar floating-rate debt to 1.36% euro fixed-rate debt. Related to this hedge, approximately ~~$0.8~~$0.3 million of loss is included in accumulated other comprehensive loss at ~~March 31,~~September 30, 2021. The amount expected to be recognized into earnings during the next 1210 months related to the interest component of our cross currency swap based on prevailing foreign exchange and interest rates at ~~March 31,~~September 30, 2021 is a ~~loss~~gain of ~~$0.5 million.~~$8 thousand. The amount expected to be recognized into earnings during the next 1210 months related to the foreign exchange component of our cross currency swap is dependent on fluctuations in currency exchange rates. As of ~~March 31,~~September 30, 2021, the fair ~~values~~value of the cross currency swap ~~were~~was a ~~$3.0~~$0.7 million liability. The swap contract expires on July 20, 2022.

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Hedge of Net Investments in Foreign Operations

A significant number of our operations are located outside of the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of our foreign subsidiaries. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial condition and results of operations. Conversely, a strengthening U.S. dollar has a dilutive effect. In some cases, we maintain debt in these subsidiaries to offset the net asset exposure. We do not otherwise actively manage this risk using derivative financial instruments. In the event we plan on a full or partial liquidation of any of our foreign subsidiaries where our net investment is likely to be monetized, we will consider hedging the currency exposure associated with such a transaction.

Other

As of ~~March 31,~~September 30, 2021, we have recorded the fair value of foreign currency forward exchange contracts of ~~$0.2~~$0.3 million in prepaid and other and ~~$0.5~~$0.2 million in accounts payable, accrued and other liabilities on the balance sheet. All forward exchange contracts outstanding as of ~~March 31,~~September 30, 2021 had an aggregate notional contract amount of ~~$52.0~~$47.5 million.

Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2021 and December 31, 2020


			March 31, 2021				December 31, 2020						September 30, 2021				December 31, 2020
		Balance Sheet Location	Derivatives Designated as Hedging Instruments		Derivatives not Designated as Hedging Instruments		Derivatives Designated as Hedging Instruments		Derivatives not Designated as Hedging Instruments			Balance Sheet Location	Derivatives Designated as Hedging Instruments		Derivatives not Designated as Hedging Instruments		Derivatives Designated as Hedging Instruments		Derivatives not Designated as Hedging Instruments
Derivative Assets	Derivative Assets										Derivative Assets
Foreign Exchange Contracts	Foreign Exchange Contracts	Prepaid and other	$	0	$	166	$	0	$	322	Foreign Exchange Contracts	Prepaid and other	$	—	$	254	$	—	$	322

			$	0	$	166	$	0	$	322			$	—	$	254	$	—	$	322

Derivative Liabilities	Derivative Liabilities										Derivative Liabilities
Foreign Exchange Contracts	Foreign Exchange Contracts	Accounts payable, accrued and other liabilities	$	0	$	504	$	0	$	146	Foreign Exchange Contracts	Accounts payable, accrued and other liabilities	$	—	$	226	$	—	$	146
Cross Currency Swap Contract (1)	Cross Currency Swap Contract (1)	Accounts payable, accrued and other liabilities	3,027		0		8,309		0		Cross Currency Swap Contract (1)	Accounts payable, accrued and other liabilities	738		—		8,309		—
			$	3,027	$	504	$	8,309	$	146			$	738	$	226	$	8,309	$	146

__________________________

(1)This cross currency swap contract is composed of both an interest component and a foreign exchange component.

The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Three Months Ended ~~March 31,~~September 30, 2021 and 2020


Derivatives in Cash Flow Hedging Relationships	Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Location of (Loss) Gain Recognized in Income on Derivatives	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income on Derivative				Total Amount of Affected Income Statement Line Item		Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Location of (Loss) Gain Recognized in Income on Derivatives	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income on Derivative				Total Amount of Affected Income Statement Line Item
		2021		2020			2021		2020					2021		2020			2021		2020
Cross currency swap contract:	Cross currency swap contract:												Cross currency swap contract:
Interest component	Interest component	$	532	$	2,246	Interest expense	$	12	$	763	$	(7,415)	Interest component	$	228	$	(1)	Interest expense	$	(2)	$	146	$	(8,011)
Foreign exchange component	Foreign exchange component	4,529		2,780		Miscellaneous, net	4,529		2,780		(963)		Foreign exchange component	3,052		(6,099)		Miscellaneous, net	3,052		(6,099)		13
		$	5,061	$	5,026		$	4,541	$	3,543				$	3,280	$	(6,100)		$	3,050	$	(5,953)

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The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Nine Months Ended September 30, 2021 and 2020


Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative				Location of (Loss) Gain Recognized in Income on Derivatives	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income on Derivative				Total Amount of Affected Income Statement Line Item
	2021		2020			2021		2020
Cross currency swap contract:
Interest component	$	1,055	$	2,037	Interest expense	$	16	$	1,434	$	(22,601)
Foreign exchange component	6,291		(6,379)		Miscellaneous, net	6,291		(6,379)		(2,978)
	$	7,346	$	(4,342)		$	6,307	$	(4,945)

The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the Three Months Ended ~~March 31,~~September 30, 2021 and 2020


Derivatives Not Designated as Hedging Instruments	Location of (Loss) Gain Recognized in Income on Derivatives	Amount of (Loss) Gain Recognized in Income on Derivatives
		2021		2020
Foreign Exchange Contracts	Other (Expense) Income: Miscellaneous, net	$	1,518	$	(994)
		$	1,518	$	(994)

The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the Nine Months Ended September 30, 2021 and 2020


Derivatives Not Designated as Hedging Instruments	Derivatives Not Designated as Hedging Instruments	Location of (Loss) Gain Recognized in Income on Derivatives	Amount of (Loss) Gain Recognized in Income on Derivatives				Derivatives Not Designated as Hedging Instruments	Location of (Loss) Gain Recognized in Income on Derivatives	Amount of (Loss) Gain Recognized in Income on Derivatives
			2021		2020				2021		2020
Foreign Exchange Contracts	Foreign Exchange Contracts	Other (Expense) Income: Miscellaneous, net	$	(513)	$	1,747	Foreign Exchange Contracts	Other (Expense) Income: Miscellaneous, net	$	(171)	$	(187)
			$	(513)	$	1,747			$	(171)	$	(187)

Gross Amounts Offset in the Statement of Financial Position Net Amounts Presented in the Statement of Financial Position Gross Amounts not Offset in the Statement of Financial Position
Gross Amount Financial Instruments Cash Collateral Received Net Amount
Description
March 31, 2021
Derivative Assets $ 166 — $ 166 — — $ 166
Total Assets $ 166 — $ 166 — — $ 166
Derivative Liabilities $ 3,531 — $ 3,531 — — $ 3,531
Total Liabilities $ 3,531 — $ 3,531 — — $ 3,531
December 31, 2020
Derivative Assets $ 322 — $ 322 — — $ 322
Total Assets $ 322 — $ 322 — — $ 322
Derivative Liabilities $ 8,455 — $ 8,455 — — $ 8,455
Total Liabilities $ 8,455 — $ 8,455 — — $ 8,455

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			Gross Amounts Offset in the Statement of Financial Position	Net Amounts Presented in the Statement of Financial Position		Gross Amounts not Offset in the Statement of Financial Position
	Gross Amount					Financial Instruments	Cash Collateral Received	Net Amount

September 30, 2021
Derivative Assets	$	254	—	$	254	—	—	$	254
Total Assets	$	254	—	$	254	—	—	$	254

Derivative Liabilities	$	964	—	$	964	—	—	$	964
Total Liabilities	$	964	—	$	964	—	—	$	964

December 31, 2020
Derivative Assets	$	322	—	$	322	—	—	$	322
Total Assets	$	322	—	$	322	—	—	$	322

Derivative Liabilities	$	8,455	—	$	8,455	—	—	$	8,455
Total Liabilities	$	8,455	—	$	8,455	—	—	$	8,455

NOTE 11 – FAIR VALUE

Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

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

•Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

•Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

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As of ~~March 31,~~September 30, 2021, the fair values of our financial assets and liabilities were categorized as follows:


		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
Assets	Assets									Assets
Investment in equity securities (1)	Investment in equity securities (1)	$	22,206	$	22,206	$	0	$	0	Investment in equity securities (1)	$	11,908	$	11,908	$	—	$	—
Foreign exchange contracts (2)	Foreign exchange contracts (2)	166		0		166		0		Foreign exchange contracts (2)	254		—		254		—

Total assets at fair value	Total assets at fair value	$	22,372	$	22,206	$	166	$	0	Total assets at fair value	$	12,162	$	11,908	$	254	$	—
Liabilities	Liabilities									Liabilities
Foreign exchange contracts (2)	Foreign exchange contracts (2)	$	504	$	0	$	504	$	0	Foreign exchange contracts (2)	$	226	$	—	$	226	$	—
Cross currency swap contract (2)	Cross currency swap contract (2)	3,027		0		3,027		0		Cross currency swap contract (2)	738		—		738		—
Contingent consideration obligation	Contingent consideration obligation	32,115		0		0		32,115		Contingent consideration obligation	34,250		—		—		34,250
Total liabilities at fair value	Total liabilities at fair value	$	35,646	$	0	$	3,531	$	32,115	Total liabilities at fair value	$	35,214	$	—	$	964	$	34,250

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As of December 31, 2020, the fair values of our financial assets and liabilities were categorized as follows:


		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
Assets	Assets									Assets
Foreign exchange contracts (2)	Foreign exchange contracts (2)	$	322	$	0	$	322	$	0	Foreign exchange contracts (2)	$	322	$	—	$	322	$	—

Total assets at fair value	Total assets at fair value	$	322	$	0	$	322	$	0	Total assets at fair value	$	322	$	—	$	322	$	—
Liabilities	Liabilities									Liabilities
Foreign exchange contracts (2)	Foreign exchange contracts (2)	$	146	$	0	$	146	$	0	Foreign exchange contracts (2)	$	146	$	—	$	146	$	—
Cross currency swap contract (2)	Cross currency swap contract (2)	8,309		0		8,309		0		Cross currency swap contract (2)	8,309		—		8,309		—
Contingent consideration obligation	Contingent consideration obligation	31,140		0		0		31,140		Contingent consideration obligation	31,140		—		—		31,140
Total liabilities at fair value	Total liabilities at fair value	$	39,595	$	0	$	8,455	$	31,140	Total liabilities at fair value	$	39,595	$	—	$	8,455	$	31,140

(1)Investment in PureCycle Technologies ~~(PCT).~~("PCT" or "PureCycle" ). See Note 1718 - Investment in Equity Securities for discussion of this investment.

(2)Market approach valuation technique based on observable market transactions of spot and forward rates.

The carrying amounts of our other current financial instruments such as cash and equivalents, accounts and notes receivable, notes payable and current maturities of long-term obligations approximate fair value due to the short-term maturity of the instruments. We consider our long-term obligations a Level 2 liability and utilize the market approach valuation technique based on interest rates that are currently available to us for issuance of debt with similar terms and maturities. The estimated fair value of our long-term obligations was ~~$1.1~~$0.9 billion as of ~~March 31,~~September 30, 2021 and $1.1 billion as of December 31, 2020.

As discussed in Note 19 - Acquisitions of our Annual Report on Form 10-K for the year ended December 31, 2020, we have a contingent consideration obligation to the selling equity holders of:

–Fusion Packaging, Inc. ("Fusion") in connection with the acquisition of 100% of the equity interests of Fusion (the "Fusion Acquisition") based on 2022 cumulative performance targets, and

–Noble International Holdings, Inc., Genia Medical, Inc. and JBCB Holdings, LLC (collectively referred to as "Noble") in connection with the acquisition of 100% of the equity interests of Noble (the "Noble Acquisition") based on 2024 cumulative performance targets.

We consider these obligations Level 3 liabilities and have estimated the aggregate fair value for these contingent consideration arrangements as follows:


		March 31, 2021		December 31, 2020			September 30, 2021		December 31, 2020
Fusion Acquisition	Fusion Acquisition	$	27,460	$	26,910	Fusion Acquisition	$	28,340	$	26,910
Noble Acquisition	Noble Acquisition	4,655		4,230		Noble Acquisition	5,910		4,230

		$	32,115	$	31,140		$	34,250	$	31,140

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Changes in the fair value of these obligations are recorded within selling, research & development and administrative expenses in our Condensed Consolidated Statements of Income. Significant changes to the inputs, as noted above, can result in a significantly higher or lower fair value measurement. The following table provides a summary of changes in our Level 3 fair value measurements:


Balance, December 31, 2020	$	31,140

Increase in fair value recorded in earnings	~~975~~3,110

Balance, ~~March 31,~~September 30, 2021	$	~~32,115~~34,250

NOTE 12 - COMMITMENTS AND CONTINGENCIES

In the normal course of business, we are subject to a number of lawsuits and claims both actual and potential in nature. While management believes the resolution of these claims and lawsuits will not have a material adverse effect on our financial position, our results of operations or cash flows, claims and legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur and could include amounts in excess of any accruals which management has established. Were such unfavorable final outcomes to occur, it is possible that they could have a material adverse effect on our financial position, results of operations and cash flows.

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Under our Certificate of Incorporation, we have agreed to indemnify our officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have a directors and officers liability insurance policy that covers a portion of our exposure. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal. We have 0no liabilities recorded for these agreements as of ~~March 31,~~September 30, 2021 and December 31, 2020.

In March 2017, the Supreme Court of Brazil issued a decision that a certain state value added tax should not be included in the calculation of federal gross receipts taxes. The decision reduces our gross receipts tax in Brazil prospectively and ~~potentially,~~ retrospectively. IfIn May 2021, the Supreme Court of Brazil ~~grants full~~issued a judgment establishing rules for the refund of amounts paid in excess based on the calculation methodology to be applied. In June 2021 and June 2020, we received favorable court decisions of $1.6 million and $0.7 million, respectively, for the retrospective ~~recovery,~~right to recover part of our claim. These amounts were recorded in cost of sales. On September 30, 2021, we ~~estimate remaining potential~~received a formal decision statement from the Federal Regional Court of Brazil that the favorable court decisions are final. As a result, in September, we recorded recoveries of ~~approximately $1.0~~$2.7 million in cost of sales. We estimate an additional $2.6 million to ~~$6.8~~$3.0 million including ~~interest. Due to uncertainties around our remaining court recovery claims, we~~interest may be received, but have not recorded any further amounts ~~relating~~due to uncertainty in the ~~retrospective nature of this matter.~~estimate and collectability.

In December 2019, tax authorities in Brazil notified us of a tax assessment of approximately $6.1 million, including interest and penalties of $2.3 million and $0.8 million, respectively, relating to differences in tax classification codes used for import duties for the period from January 2015 to August 2018. We are vigorously contesting the assessment, including interest and penalties, and have filed an administrative defense appeal in December 2019. In June 2020, an unfavorable decision was issued on the first administrative defense appeal. We filed a second administrative defense appeal in August 2020. We still believe we have a strong defense. Due to uncertainty in the amount of assessment and the timing of our appeal, 0no liability is recorded as of ~~March 31,~~September 30, 2021.

NOTE 13 – STOCK REPURCHASE PROGRAM

On April 18, 2019, we announced a share repurchase authorization of up to $350 million of common stock. This authorization replaces previous authorizations and has no expiration date. We may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions.

During the three and nine months ended ~~March 31,~~September 30, 2021, we repurchased approximately 220 thousand shares for approximately $28.4 million. During the three and nine months ended September 30, 2020, we did not repurchase any shares. As of ~~March 31,~~September 30, 2021, there was ~~$278.5~~$250.1 million of authorized share repurchases available to us.

NOTE 14 – STOCK-BASED COMPENSATION

We issue restricted stock units (“RSUs”), which consist of time-based and performance-based awards, to employees under stock awards plans approved by stockholders. In addition, RSUs are issued to non-employee directors under a Restricted Stock Unit Award Agreement for Directors pursuant to the Company’s 2018 Equity Incentive Plan. RSUs granted to employees vest according to a specified performance period and/or vesting period. Time-based RSUs generally vest over three years. Performance-based RSUs vest at the end of the specified performance period, generally three years, assuming required performance or market vesting conditions are met. Performance-based RSUs have one of two vesting conditions: (1) based on our internal financial performance metrics and (2) based on our total shareholder return (“TSR”) relative to total shareholder returns of an industrial peer group. At the time of vesting, the vested shares of common stock are issued in the employee’s name. In addition, RSU awards are generally net settled (shares are withheld to cover the employee tax obligation). RSUs granted to directors are only time-based and generally vest over one year.

~~Table of Contents~~

The fair value of both time-based RSUs and performance-based RSUs pertaining to internal performance metrics is determined using the closing price of our common stock on the grant date. The fair value of performance-based RSUs pertaining to TSR is estimated using a Monte Carlo simulation. Inputs and assumptions used to calculate the fair value are shown in the table below. The fair value of these RSUs is expensed over the vesting period using the straight-line method or using the graded vesting method when an employee becomes eligible to retain the award at retirement.

Three Months Ended March 31, 2021 2020
Fair value per stock award $ 171.63 $ 94.98
Grant date stock price $ 141.59 $ 83.93
Assumptions:
Aptar's stock price expected volatility 21.40 % 23.80 %
Expected average volatility of peer companies 50.00 % 48.50 %
Correlation assumption 58.10 % 63.50 %
Risk-free interest rate 0.32 % 0.31 %
Dividend yield assumption 1.02 % 1.72 %

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Nine Months Ended September 30,	2021			2020
Fair value per stock award	$	171.63		$	94.98
Grant date stock price	$	141.59		$	83.93
Assumptions:
Aptar's stock price expected volatility	21.40		%	23.80		%
Expected average volatility of peer companies	50.00		%	48.50		%
Correlation assumption	58.10		%	63.50		%
Risk-free interest rate	0.32		%	0.31		%
Dividend yield assumption	1.02		%	1.72		%

A summary of RSU activity as of ~~March 31,~~September 30, 2021 and changes during the ~~three~~nine month period then ended is presented below:


		Time-Based RSUs			Performance-Based RSUs				Time-Based RSUs			Performance-Based RSUs
		Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value			Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2021	Nonvested at January 1, 2021	576,198	$	92.47	590,064	$	100.27	Nonvested at January 1, 2021	576,198	$	92.47	590,064	$	100.27
Granted	Granted	128,297	137.97		169,268	152.47		Granted	143,807	138.89		169,974	152.51
Vested	Vested	(118,349)	89.95		(71,994)	128.70		Vested	(220,723)	96.13		(72,139)	128.66
Forfeited	Forfeited	(2,785)	95.77		(31,338)	91.23		Forfeited	(3,918)	102.54		(32,561)	92.26
Nonvested at March 31, 2021		583,361	$	106.33	656,000	$	111.05
Nonvested at September 30, 2021								Nonvested at September 30, 2021	495,364	$	108.36	655,338	$	111.09

Included in the ~~March 31,~~activity for the nine months ended September 30, 2021 time-based RSUs are ~~12,379~~10,007 units granted to non-employee directors and 12,379 units vested related to non-employee directors.


Three Months Ended March 31,		2021		2020
Nine Months Ended September 30,						Nine Months Ended September 30,	2021		2020
Compensation expense	Compensation expense	$	11,262	$	8,281	Compensation expense	$	29,493	$	24,497
Fair value of units vested	Fair value of units vested	19,116		9,303		Fair value of units vested	29,671		11,188
Intrinsic value of units vested	Intrinsic value of units vested	25,699		11,475		Intrinsic value of units vested	39,752		13,475

The actual tax benefit realized for the tax deduction from RSUs was approximately ~~$2.1~~$5.5 million in the ~~three~~nine months ended ~~March 31,~~September 30, 2021. As of ~~March 31,~~September 30, 2021, there was ~~$69.9~~$50.9 million of total unrecognized compensation cost relating to RSU awards which is expected to be recognized over a weighted-average period of 1.9 years.

Historically we issued stock options to our employees and non-employee directors. Beginning in 2019, we no longer issue stock options. Stock options were awarded with the exercise price equal to the market price on the date of grant and generally vest over three years and expire 10 years after grant. For stock option grants, we used historical data to estimate expected life and volatility.

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A summary of option activity under our stock plans during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 is presented below:

Stock Awards Plans Director Stock Option Plans
Options Weighted Average
Exercise Price Options Weighted Average
Exercise Price
Outstanding, January 1, 2021 3,998,047 $ 70.28 99,200 $ 60.80
Granted 0 0 0 0
Exercised (507,468) 63.37 (29,500) 58.76
Forfeited or expired (4,519) 75.27 0 0
Outstanding at March 31, 2021 3,486,060 $ 71.28 69,700 $ 61.66
Exercisable at March 31, 2021 3,486,060 $ 71.28 69,700 $ 61.66
Weighted-Average Remaining Contractual Term (Years):
Outstanding at March 31, 2021 4.7 2.5
Exercisable at March 31, 2021 4.7 2.5
Aggregate Intrinsic Value:
Outstanding at March 31, 2021 $ 245,389 $ 5,577
Exercisable at March 31, 2021 $ 245,389 $ 5,577
Intrinsic Value of Options Exercised During the Three Months Ended:
March 31, 2021 $ 37,454 $ 2,474
March 31, 2020 $ 18,202 $ 1,385



	Stock Awards Plans				Director Stock Option Plans
	Options		Weighted Average Exercise Price		Options		Weighted Average Exercise Price
Outstanding, January 1, 2021	3,998,047		$	70.28	99,200		$	60.80
Granted	—		—		—		—
Exercised	(841,091)		64.57		(47,500)		57.40
Forfeited or expired	(10,153)		75.46		—		—
Outstanding at September 30, 2021	3,146,803		$	71.79	51,700		$	63.91
Exercisable at September 30, 2021	3,146,803		$	71.79	51,700		$	63.91
Weighted-Average Remaining Contractual Term (Years):
Outstanding at September 30, 2021	4.3				2.3
Exercisable at September 30, 2021	4.3				2.3
Aggregate Intrinsic Value:
Outstanding at September 30, 2021	$	153,196			$	2,924
Exercisable at September 30, 2021	$	153,196			$	2,924
Intrinsic Value of Options Exercised During the Nine Months Ended:
September 30, 2021	$	65,139			$	4,248
September 30, 2020	$	44,086			$	2,183


Three Months Ended March 31,		2021		2020
Nine Months Ended September 30,						Nine Months Ended September 30,	2021		2020
Compensation expense (included in SG&A)	Compensation expense (included in SG&A)	$	185	$	743	Compensation expense (included in SG&A)	$	185	$	1,409
Compensation expense (included in Cost of sales)	Compensation expense (included in Cost of sales)	42		117		Compensation expense (included in Cost of sales)	42		285
Compensation expense, Total	Compensation expense, Total	$	227	$	860	Compensation expense, Total	$	227	$	1,694
Compensation expense, net of tax	Compensation expense, net of tax	174		648		Compensation expense, net of tax	174		1,289
Grant date fair value of options vested	Grant date fair value of options vested	2,421		7,565		Grant date fair value of options vested	2,421		7,601

The reduction in stock option expense is due to our move to RSUs as discussed above. Cash received from option exercises was approximately ~~$31.9 million.~~$54.0 million during the nine months ended September 30, 2021. The actual tax benefit realized for the tax deduction from option exercises was approximately ~~$9.1~~$15.4 million and ~~$4.8~~$10.8 million in the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and ~~March 31,~~ 2020, respectively. As of ~~March 31,~~September 30, 2021, there is no remaining valuation of stock option awards to be expensed in future periods.

NOTE 15 – EARNINGS PER SHARE

Basic net income per share is calculated by dividing net income attributable to Aptar by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing the net income attributable to Aptar by the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to stock-based compensation awards. Stock-based compensation awards for which total employee proceeds exceed the average market price over the applicable period would have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share. The reconciliation of basic and diluted earnings per share for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 is as follows:

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		Three Months Ended									Three Months Ended
		March 31, 2021				March 31, 2020					September 30, 2021				September 30, 2020
		Diluted		Basic		Diluted		Basic			Diluted		Basic		Diluted		Basic
Consolidated operations	Consolidated operations									Consolidated operations
Income available to common stockholders	Income available to common stockholders	$	83,952	$	83,952	$	55,253	$	55,253	Income available to common stockholders	$	47,260	$	47,260	$	63,716	$	63,716

Average equivalent shares	Average equivalent shares									Average equivalent shares
Shares of common stock	Shares of common stock	65,229		65,229		64,009		64,009		Shares of common stock	65,900		65,900		64,562		64,562
Effect of dilutive stock-based compensation	Effect of dilutive stock-based compensation									Effect of dilutive stock-based compensation
Stock options	Stock options	1,869		—		1,810		—		Stock options	1,464		—		1,809		—
Restricted stock	Restricted stock	550		—		292		—		Restricted stock	437		—		551		—
Total average equivalent shares	Total average equivalent shares	67,648		65,229		66,111		64,009		Total average equivalent shares	67,801		65,900		66,922		64,562
Net income per share	Net income per share	$	1.24	$	1.29	$	0.84	$	0.86	Net income per share	$	0.70	$	0.72	$	0.95	$	0.99


	Nine Months Ended
	September 30, 2021				September 30, 2020
	Diluted		Basic		Diluted		Basic
Consolidated operations
Income available to common stockholders	$	186,488	$	186,488	$	160,808	$	160,808

Average equivalent shares
Shares of common stock	65,652		65,652		64,278		64,278
Effect of dilutive stock-based compensation
Stock options	1,688		—		1,770		—
Restricted stock	459		—		435		—
Total average equivalent shares	67,799		65,652		66,483		64,278
Net income per share	$	2.75	$	2.84	$	2.42	$	2.50

NOTE 16 – SEGMENT INFORMATION

We are organized into 3 reporting segments. Operations that sell dispensing systems, drug delivery systems, sealing solutions and services to the prescription drug, consumer health care, injectables, and active material science solutions markets form the Pharma segment. Operations that sell dispensing systems and sealing solutions primarily to the beauty, personal care and home care markets form the Beauty + Home segment. Operations that sell dispensing systems and sealing solutions to the food and beverage markets form the Food + Beverage segment.

The accounting policies of the segments are the same as those described in Part II, Item 8, Note 1 - Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2020. We evaluate performance of our reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives, acquisition-related costs, net investment gains and losses related to observable market price changes on equity securities and other special items.

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Financial information regarding our reporting segments is shown below:


		Three Months Ended September 30,						Nine Months Ended September 30,
Three Months Ended March 31,			2021		2020
								2021		2020		2021		2020
Total Sales:	Total Sales:						Total Sales:
Pharma	Pharma		$	315,811	$	299,590	Pharma	$	317,358	$	317,610	$	961,718	$	921,085
Beauty + Home	Beauty + Home		353,377		330,466		Beauty + Home	378,158		342,710		1,098,176		979,645
Food + Beverage	Food + Beverage		116,703		100,301		Food + Beverage	138,735		106,667		381,356		305,991
Total Sales	Total Sales		$	785,891	$	730,357	Total Sales	$	834,251	$	766,987	$	2,441,250	$	2,206,721
Less: Intersegment Sales:	Less: Intersegment Sales:						Less: Intersegment Sales:
Pharma	Pharma		$	1,979	$	2,394	Pharma	$	4,133	$	1,852	$	9,318	$	6,872
Beauty + Home	Beauty + Home		6,431		5,906		Beauty + Home	4,070		5,479		16,896		18,068
Food + Beverage	Food + Beverage		727		504		Food + Beverage	606		503		1,808		1,770
Total Intersegment Sales	Total Intersegment Sales		$	9,137	$	8,804	Total Intersegment Sales	$	8,809	$	7,834	$	28,022	$	26,710
Net Sales:	Net Sales:						Net Sales:
Pharma	Pharma		$	313,832	$	297,196	Pharma	$	313,225	$	315,758	$	952,400	$	914,213
Beauty + Home	Beauty + Home		346,946		324,560		Beauty + Home	374,088		337,231		1,081,280		961,577
Food + Beverage	Food + Beverage		115,976		99,797		Food + Beverage	138,129		106,164		379,548		304,221
Net Sales	Net Sales		$	776,754	$	721,553	Net Sales	$	825,442	$	759,153	$	2,413,228	$	2,180,011
Adjusted EBITDA (1):	Adjusted EBITDA (1):						Adjusted EBITDA (1):
Pharma	Pharma		$	108,484	$	108,342	Pharma	$	100,738	$	112,436	$	315,201	$	324,877
Beauty + Home	Beauty + Home		35,356		34,247		Beauty + Home	43,789		34,733		117,055		92,954
Food + Beverage	Food + Beverage		19,990		15,407		Food + Beverage	22,379		20,351		61,995		53,543
Corporate & Other, unallocated	Corporate & Other, unallocated		(11,607)		(13,828)		Corporate & Other, unallocated	(12,745)		(10,964)		(40,311)		(34,071)
Acquisition-related costs (2)	Acquisition-related costs (2)		0		(2,274)		Acquisition-related costs (2)	(1,793)		(221)		(4,227)		(6,087)
Restructuring Initiatives (3)	Restructuring Initiatives (3)		(3,672)		(4,839)		Restructuring Initiatives (3)	(10,223)		(3,415)		(18,771)		(15,585)
Net investment gain (4)			16,809		0
Net investment (loss) gain (4)							Net investment (loss) gain (4)	(9,021)		—		6,177		—
Depreciation and amortization	Depreciation and amortization		(57,438)		(50,806)		Depreciation and amortization	(59,280)		(55,179)		(174,508)		(162,414)
Interest Expense	Interest Expense		(7,415)		(8,388)		Interest Expense	(8,011)		(8,851)		(22,601)		(25,973)
Interest Income	Interest Income		381		175		Interest Income	401		249		1,406		599
Income before Income Taxes	Income before Income Taxes		$	100,888	$	78,036	Income before Income Taxes	$	66,234	$	89,139	$	241,416	$	227,843

(1)We evaluate performance of our reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives, acquisition-related costs, net investment gains and losses related to observable market price changes on equity securities and other special items.

(2)Acquisition-related costs include transaction costs and purchase accounting adjustments related to acquisitions and investments (see Note 17 – Acquisitions and Note 18 – Investment in ~~our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020~~Equity Securities for further details).

(3)Restructuring Initiatives includes expense items for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 as follows (see Note 1819 – Restructuring Initiatives for further details):


		Three Months Ended September 30,						Nine Months Ended September 30,
Three Months Ended March 31,			2021		2020
								2021		2020		2021		2020
Restructuring Initiatives by Segment	Restructuring Initiatives by Segment						Restructuring Initiatives by Segment
Pharma	Pharma		$	35	$	(31)	Pharma	$	13	$	300	$	86	$	158
Beauty + Home	Beauty + Home		1,096		4,907		Beauty + Home	5,442		3,144		7,995		15,375
Food + Beverage	Food + Beverage		(79)		103		Food + Beverage	131		(31)		169		147
Corporate & Other	Corporate & Other		2,620		(140)		Corporate & Other	4,637		2		10,521		(95)
Total Restructuring Initiatives	Total Restructuring Initiatives		$	3,672	$	4,839	Total Restructuring Initiatives	$	10,223	$	3,415	$	18,771	$	15,585

(4)Net investment (loss) gain represents the change in fair value of our investment in PCT (see Note 1718 – Investment in Equity Securities for further details).

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NOTE 17 – ACQUISITIONS

Business Combinations

On September 2, 2021, following the signature of a share purchase agreement on July 22, 2021 and the approval of the French Ministry of Economy under the foreign investment clearance regulations, we completed the acquisition of 64.3% of the share capital of Voluntis (the “Voluntis Acquisition”). Voluntis, based in Paris, France and Boston, MA, is a pioneer in digital therapeutics. We acquired from certain members of the management and certain shareholders the entirety of their shares representing approximately 64.3% of the share capital of Voluntis (on a non-diluted basis) at a price of €8.70 per share for approximately €50.8 million (approximately $60.4 million) funded with available cash on hand. This values the full company equity (on a fully diluted basis) at approximately €79.1 million (approximately $93.9 million). Aptar launched a mandatory cash simplified tender offer to acquire Voluntis's remaining shares for the same price of €8.70 per share (the "tender offer"). During September 2021, Aptar acquired €8.4 million (approximately $9.9 million) of additional shares from the tender offer, bringing the total investment as of September 30, 2021 to approximately €59.2 million (approximately $70.3 million) representing 74.9% of the total share capital, and implies a non-controlling interest valued at €19.9 million (approximately $23.6 million). If the regulatory conditions are met upon completion of the tender offer, Aptar intends to implement a mandatory squeeze-out on the remaining outstanding shares of Voluntis on the same financial terms as those of the tender offer. The squeeze-out will be funded with available cash on hand. We are in the process of finalizing purchase accounting.Subsequent to quarter end, the tender offer was completed with available cash on hand and we acquired an additional 21.6% of the share capital for €17.1 million (approximately $19.8 million), resulting in Aptar owning 96.5% of the share capital of Voluntis. The squeeze-out is expected to be completed before the end of the fourth quarter of 2021.

On August 17, 2021, we completed the acquisition (the "Hengyu Acquisition") of 80% of the equity interests of Weihai Hengyu Medical Products Co., Ltd. ("Hengyu"). Hengyu, a leading Chinese manufacturer of elastomeric and plastic components used in injectable drug delivery, is based in Weihai, China. Under the terms of the agreement, 90% of the estimated purchase price for 80% ownership, RMB 347.7 million (approximately $53.6 million), was paid to the sellers in August 2021, with available cash on hand. A final purchase price adjustment of RMB 1.5 million (approximately $0.2 million) was recorded to Accounts payable, accrued and other liabilities and will be paid in the fourth quarter of 2021. The remaining 10% of the acquisition price for 80% ownership, RMB 38.7 million (approximately $6.0 million), is payable to the sellers eighteen months after closing plus simple interest of 4% and will be funded with available cash on hand. This values the full company equity (on a fully diluted basis) at RMB 484.9 million (approximately $74.8 million) and implies a non-controlling interest valued at RMB 97 million (approximately $15 million) as of the acquisition date. Pursuant to the agreement, we have the option to acquire the remaining 20% of the equity of Hengyu upon the fifth anniversary of the closing date. We are in the process of finalizing purchase accounting.

On April 1, 2020, we completed the Fusion Acquisition for a purchase price of approximately $163.8 million (net of $1.0 million of cash acquired), which was funded by a draw on our prior credit facility and cash on hand. Fusion, based in Dallas, TX, is a global leader in the design, engineering and distribution of luxury packaging for the beauty industry. As part of the Fusion Acquisition, we are also obligated to pay to the selling equity holders of Fusion certain contingent consideration based on 2022 cumulative financial performance metrics as defined in the purchase agreement. Based on a projection as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $19.1 million utilizing a Black-Scholes valuation model. During the fourth quarter of 2020, a $3.6 million fair value true-up was recorded as an adjustment to the opening balance of goodwill and contingent liability. As of September 30, 2021, we have estimated the aggregate fair value for this contingent consideration arrangement to be $28.3 million.

As of the acquisition date, $5.7 million was held in restricted cash pending the finalization of a working capital adjustment and indemnity escrow. During the third quarter of 2020, $2.0 million related to the working capital escrow was released from restriction, resulting in a refund from seller of $294 thousand and a corresponding decrease to our purchase price and associated goodwill balance. During the second quarter of 2021, the remaining restricted cash was released. The results of Fusion's operations have been included in the Condensed Consolidated Financial Statements within our Beauty + Home segment since the date of acquisition.

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The following table summarizes the assets acquired and liabilities assumed as of the acquisition dates at estimated fair value.



	2021		2020
Assets
Cash and equivalents	$	3,852	$	1,010
Accounts receivable	5,208		4,380
Inventories	606		386
Other Receivable	286		—
Prepaid and other	2,051		1,090
Property, plant and equipment	16,259		2,885
Goodwill	110,135		103,130
Intangible assets	63,808		79,900
Operating lease right-of-use assets	2,309		4,744
Other miscellaneous assets	100		65
Liabilities
Current maturities of long-term obligations, net of unamortized debt issuance costs	1,410		—
Accounts payable, accrued and other liabilities	9,663		5,641
Deferred income taxes	16,792		—
Operating lease liabilities	2,306		4,207
Deferred and other non-current liabilities	5,770		322
Net assets acquired	$	168,673	$	187,420

The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition dates:



	2021			2020
	Weighted-Average Useful Life (in Years)	Estimated Fair Value of Assets		Weighted-Average Useful Life (in Years)	Estimated Fair Value of Assets
Acquired technology	10	$	32,145	4	$	4,600
Customer relationships	11.5	30,258		13	62,300
Trademarks and trade names	0	—		4	10,300
License agreements and other	0.25	1,405		0.25	2,700
Total		$	63,808		$	79,900

Goodwill in the amounts of $71.9 million and $38.2 million were recorded in the Pharma segment related to the Voluntis and Hengyu Acquisitions, respectively. Goodwill in the amount of $103.1 million was recorded related to the Fusion Acquisition which is included in the Beauty + Home segment. Goodwill is calculated as the excess of the consideration transferred over the net assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill acquired in 2021 acquisitions, largely consists of developed technologies and customer relationships, while goodwill acquired in 2020 acquisitions consists of unique relationships, brand equity and proprietary technology that has been established creating niches such as turnkey solutions for the beauty market related to the Fusion Acquisition as well as the abilities of acquired companies to maintain their competitive advantage from a technical viewpoint. Goodwill will not be amortized, but will be tested for impairment at least annually. For the 2021 and 2020 acquisitions, goodwill of $80.6 million is deductible for tax purposes.

Asset Acquisition

On October 16, 2020, we completed our acquisition of the assets of Cohero Health, Inc. ("Cohero Health") for $2.4 million. The net assets acquired and the results of Cohero Health's operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition. Based in New York, Cohero Health develops innovative digital tools and technologies to improve respiratory care, reduce avoidable costs and optimize medication utilization.

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NOTE 1718 – INVESTMENT IN EQUITY SECURITIES

Our investment in equity securities consisted of the following:


		March 31, 2021		December 31, 2020			September 30, 2021		December 31, 2020
Equity Method Investments:	Equity Method Investments:					Equity Method Investments:
BTY	BTY	$	32,632	$	33,020	BTY	$	32,884	$	33,020
Sonmol	Sonmol	5,400		5,598		Sonmol	5,819		5,598
Kali Care	Kali Care	456		535		Kali Care	420		535
Desotec GmbH	Desotec GmbH	897		964		Desotec GmbH	921		964

Other Investments:	Other Investments:					Other Investments:
PureCycle	PureCycle	22,206		5,397		PureCycle	11,908		5,397
YAT						YAT	5,895		—
Loop	Loop	2,894		2,894		Loop	2,894		2,894
Others	Others	1,617		1,679		Others	1,602		1,679
		$	66,102	$	50,087		$	62,343	$	50,087

Equity method investments

BTY

On January 1, 2020, we acquired 49% of the equity interests in 3 related companies: Suzhou Hsing Kwang, Suqian Hsing Kwang and Suzhou BTY (collectively referred to as “BTY”) for an approximate purchase price of $32 million. We have a call option to acquire an additional 26% to 31% of BTY’s equity interests following the initial lock-up period of 5 years based on a predetermined formula. Subsequent to the second lock-up period, which ends 3 years after the initial lock-up period, we have a call option to acquire the remaining equity interests of BTY based on a predetermined formula. Additionally, the selling shareholders of BTY have a put option for the remaining equity interest to be acquired by Aptar based on a predetermined formula. The BTY entities are leading Chinese manufacturers of high quality, decorative metal components, metal-plastic sub-assemblies, and complete color cosmetics packaging solutions for the beauty industry.

Sonmol

On April 1, 2020, we invested $5 million to acquire 30% of the equity interests in Healthcare, Inc., Shanghai Sonmol Internet Technology Co., Ltd. and its subsidiary, Shanghai Sonmol Medical Equipment Co., Ltd. (collectively referred to as “Sonmol”), a pharmaceutical and leading Chinese digital respiratory therapeutics company that provides consumer electric devices and connected devices for asthma control, and develops digital therapies and services platforms targeting chronic respiratory illnesses and other diseases.

Kali Care

During 2017, we invested $5 million to acquire 20% of the equity interests in Kali Care, a technology company that provides digital monitoring systems for medical devices. During the fourth quarter of 2020, we recognized an other than temporary impairment of $3.0 million ($2.3 million after-tax) on our underlying assets in this investment as a result of a reassessment of the future value of the business and continued reduction in operating cash flows. In addition to our investment, we also hold a note receivable from Kalicare for $1.5 million which is included in accounts and notes receivable in the Condensed Consolidated Balance Sheets.

Desotec GmbH

During 2009, we invested €574 thousand to acquire 23% of the equity interests in Desotec GmbH, a leading manufacturer of special assembly machines for bulk processing for the pharmaceutical, beauty and home and food and beverages markets.

Other investments

During August 2019, we invested an aggregate amount of $3.5 million in 2 preferred equity investments in sustainability companies Loop and PureCycle Technologies (“PureCycle”) that were accounted for at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. During 2020, we invested an additional $1.4 million in these 2 equity investments and also received $333 thousand of equity in PureCycle in exchange for our resource dedication for technological partnership and support. In November 2020, we increased the value of the PureCycle investment by $3.1 million based on observable price changes.

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In March 2021, PureCycle was purchased by a special purpose acquisition company and was subsequently listed on Nasdaq under the ticker PCT. At that time, our investment in PureCycle was converted into shares of ~~PCT.~~PCT resulting in less than a 1% ownership interest. This investment is now recorded at fair value based on observable market prices for identical assets and the change in fair value is recorded as a net investment gain or loss in the Condensed Consolidated Statements of Income. In ~~March~~September 2021, we received $333 thousand of shares of PCT in exchange for our resource dedication for technological partnership and support.For the three and nine months ended September 30, 2021, we recorded ana net unrealized ~~gain~~loss on our investment in PureCycle of ~~$16.8 million.~~$9.0 million and a net unrealized gain of $6.2 million, respectively.

On July 7, 2021, we invested approximately $5.9 million to acquire 10% of the equity interests in YAT, a multi-functional, science-driven online skincare solutions company.

There were 0no indications of impairment noted in the ~~three~~nine months ended ~~March 31,~~September 30, 2021 related to these investments.

NOTE 1819 – RESTRUCTURING INITIATIVES

In late 2017, we began a business transformation to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness. The primary focus of the plan is the Beauty + Home segment; however, certain global general and administrative functions are also being addressed. For the three and nine months ended ~~March 31,~~September 30, 2021, we recognized $10.2 million and $18.8 million of restructuring costs related to this plan, respectively. For the three and nine months ended September 30, 2020, we recognized ~~$3.7~~$3.4 million and ~~$4.8~~$15.6 million of restructuring costs related to this plan, respectively. Using current exchange rates, we estimate total implementation costs of approximately ~~$125~~$135 million for these initiatives, including costs that have been recognized to date. The cumulative expense incurred as of ~~March 31,~~September 30, 2021 was ~~$116.7 million.~~$131.8 million and we do not expect additional, significant restructuring costs related to this plan. We have also made total capital investments related to this plan of approximately $50 million, with no further significant capital investments expected.

As of ~~March 31,~~September 30, 2021 we have recorded the following activity associated with the business transformation:


		Beginning Reserve at 12/31/2020		Net Charges for the Three Months Ended 3/31/2021		Cash Paid		Interest and FX Impact		Ending Reserve at 3/31/2021			Beginning Reserve at 12/31/2020		Net Charges for the Nine Months Ended 9/30/2021		Cash Paid		Interest and FX Impact		Ending Reserve at 9/30/2021
Employee severance	Employee severance	$	7,956	$	(260)	$	(2,425)	$	(163)	$	5,108	Employee severance	$	7,956	$	293	$	(5,506)	$	(179)	$	2,564
Professional fees and other costs	Professional fees and other costs	2,533		3,932		(3,223)		(42)		3,200		Professional fees and other costs	2,533		18,478		(20,117)		(46)		848
Totals	Totals	$	10,489	$	3,672	$	(5,648)	$	(205)	$	8,308	Totals	$	10,489	$	18,771	$	(25,623)	$	(225)	$	3,412

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

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, OR AS OTHERWISE INDICATED)

RESULTS OF OPERATIONS


		Three Months Ended September 30,						Nine Months Ended September 30,
Three Months Ended March 31,			2021		2020
								2021		2020		2021		2020
Net sales	Net sales		100.0	%	100.0	%	Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales (exclusive of depreciation and amortization shown below)	Cost of sales (exclusive of depreciation and amortization shown below)		62.9		62.5		Cost of sales (exclusive of depreciation and amortization shown below)	65.1		63.2		64.2		63.0
Selling, research & development and administrative	Selling, research & development and administrative		17.3		17.5		Selling, research & development and administrative	16.5		16.1		17.0		17.0
Depreciation and amortization	Depreciation and amortization		7.4		7.0		Depreciation and amortization	7.2		7.3		7.2		7.5
Restructuring initiatives	Restructuring initiatives		0.5		0.7		Restructuring initiatives	1.2		0.4		0.8		0.7
Operating income	Operating income		11.9		12.3		Operating income	10.0		13.0		10.8		11.8
Other income (expense)	Other income (expense)		1.1		(1.5)		Other income (expense)	(2.0)		(1.3)		(0.8)		(1.3)
Income before income taxes	Income before income taxes		13.0		10.8		Income before income taxes	8.0		11.7		10.0		10.5
Net Income	Net Income		10.8		7.7		Net Income	5.7		8.4		7.7		7.4
Effective tax rate	Effective tax rate		16.8	%	29.2	%	Effective tax rate	29.2	%	28.5	%	22.9	%	29.4	%
Adjusted EBITDA margin (1)	Adjusted EBITDA margin (1)		19.6	%	20.0	%	Adjusted EBITDA margin (1)	18.7	%	20.6	%	18.8	%	20.1	%

(1)Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under "Non-U.S. GAAP Measures".

SIGNIFICANT DEVELOPMENTS

~~During~~There continues to be many uncertainties regarding the ~~first~~current COVID-19 pandemic, including the availability, adoption, and efficacy of approved vaccines within certain areas of the world and the potential for additional governmental actions that may be taken and/or extended in response to any further resurgence of the virus. No impairments were recorded as of September 30, 2021 related to the COVID-19 pandemic. However, due to the general uncertainty surrounding the situation, including areas such as cost inflation, supply chain disruptions, and labor shortages, future results could be negatively affected by the pandemic and therefore our results could be materially impacted.

NET SALES

We reported net sales of $825.4 million for the quarter ended September 30, 2021, which represents a 9% increase compared to $759.2 million reported during the third quarter of 2020. The average U.S. dollar exchange rate weakened compared to the euro and other major currencies, resulting in a positive currency translation impact of 1%. There was no significant impact from our acquisitions of Voluntis and Hengyu during the third quarter of 2021. Therefore, core sales, which exclude acquisitions and changes in foreign currency rates, increased by 8% in the third quarter of 2021 ~~financial results~~compared to the same period in 2020. Inflation had a strong impact on our core sales during the current quarter. Of our 8% core sales increase, approximately 5% is due to price adjustments related to the passing through of higher resin and ~~operations continued~~other input costs. Our Beauty + Home and Food + Beverage segments both reported strong core sales growth as several of their applications recovered from depressed sales during the COVID-19 pandemic in the third quarter of 2020. Our Pharma segment continues to be ~~adversely~~negatively impacted by the ~~novel coronavirus ("COVID-19") pandemic. The significance~~prolonged drawing down of ~~the impacts to our segments are discussed herein. While we~~inventory by certain drug delivery device customers as fewer illnesses and fewer doctor visits have resulted in lower consumption of allergic rhinitis, cough and cold and certain ~~applications that have benefited from the pandemic such as injectables and personal care, these benefits are more than offset by the adverse impact on sales~~pulmonary categories.


Third Quarter 2021 Net Sales Change over Prior Year	Pharma		Beauty + Home		Food + Beverage		Total
Core Sales Growth	(2)	%	10	%	28	%	8	%
Acquisitions	—	%	—	%	—	%	—	%
Currency Effects (1)	1	%	1	%	2	%	1	%
Total Reported Net Sales Growth	(1)	%	11	%	30	%	9	%

Table of ~~our beauty products sold via duty free travel and retail stores and a reduction of our products used for bottled water and on-the-go beverage applications.~~Contents

As each of our segments produce dispensing systems that have been determined to be essential products by various government agencies around the world, our facilities remained operational during the quarter. We have taken a variety of measures to ensure the availability and functioning of our critical infrastructure, to promote the safety and security of our employees and to support the communities in which we operate. We are following public and private sector policies and initiatives to reduce the transmission of COVID-19, such as the imposition of travel restrictions, the promotion of social distancing and the adoption of work-from-home arrangements, and all of these policies and initiatives have impacted our operations. Due to the dynamic nature of the situation, we are not able at this time to estimate the impact of COVID-19 on our future financial results and operations, but the impact could be material for the remainder of fiscal year 2021 and could be material during any future periods affected either directly or indirectly by this pandemic.

~~NET SALES~~

Reported net sales for the first ~~three~~nine months of 2021 increased 8%11% to ~~$776.8 million~~$2.41 billion compared to ~~$721.6 million~~$2.18 billion for the first ~~three~~nine months of 2020. The average U.S. dollar exchange rate weakened compared to the euro and other major currencies in which we operate, resulting in a positive currency translation impact of 5%4%. The acquisition of Fusion Packaging, Inc. ("Fusion") positively impacted sales by 2%1%. Therefore, core sales, which exclude acquisitions and changes in foreign currency rates, increased by 1%6% in the first ~~three~~nine months of 2021 compared to the same period in ~~2020 due to~~2020. As mentioned above, we benefited from the ~~positive impact~~pass through of higher resin and other input costs during the first nine months of 2021. This represents approximately 4% of our 6% core sales increase ~~in resin prices.~~for the current year. Operationally, the sales recovery within our beauty and beverage markets, along with the continued strong sales ~~growth within~~to our injectables ~~market was~~and active material science solutions customers, more than offset bythe impact of inventory drawdowns in our prescription and certain consumer healthcare markets. ~~We also recognized strong sales growth within our food market while the beauty and beverage markets continued to be significantly impacted by the COVID-19 pandemic.~~


Three Months Ended March 31, 2021 Net Sales Change over Prior Year		Pharma		Beauty + Home		Food + Beverage		Total
Nine Months Ended September 30, 2021 Net Sales Change over Prior Year										Nine Months Ended September 30, 2021 Net Sales Change over Prior Year	Pharma		Beauty + Home		Food + Beverage		Total
Core Sales Growth	Core Sales Growth	—	%	(3)	%	14	%	1	%	Core Sales Growth	—	%	6	%	22	%	6	%
Acquisitions	Acquisitions	—	%	6	%	—	%	2	%	Acquisitions	—	%	2	%	—	%	1	%
Currency Effects (1)	Currency Effects (1)	6	%	4	%	2	%	5	%	Currency Effects (1)	4	%	4	%	3	%	4	%
Total Reported Net Sales Growth	Total Reported Net Sales Growth	6	%	7	%	16	%	8	%	Total Reported Net Sales Growth	4	%	12	%	25	%	11	%

(1)Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

~~Table of Contents~~

The following table sets forth, for the periods indicated, net sales sourced by geographic location:


		Three Months Ended September 30,					Nine Months Ended September 30,
Three Months Ended March 31,			2021		% of Total			2020		% of Total
													2021		% of Total		2020		% of Total		2021		% of Total		2020		% of Total

Domestic	Domestic		$	255,165	33	%		$	230,400	32	%	Domestic	$	280,237	34	%	$	262,546	35	%	$	804,582	33	%	$	722,871	33	%
Europe	Europe		425,689		55	%		405,849		56	%	Europe	433,489		53	%	401,765		53	%	1,296,171		54	%	1,189,680		55	%
Latin America	Latin America		48,965		6	%		50,794		7	%	Latin America	57,750		7	%	49,435		6	%	162,776		7	%	143,598		6	%
Asia	Asia		46,935		6	%		34,510		5	%	Asia	53,966		6	%	45,407		6	%	149,699		6	%	123,862		6	%

For further discussion on net sales by reporting segment, please refer to the analysis of segment net sales and segment Adjusted EBITDA on the following pages.

COST OF SALES (EXCLUSIVE OF DEPRECIATION AND AMORTIZATION SHOWN BELOW)

Cost of sales ~~("COS"~~(“COS”) as a percent of net sales increased ~~slightly~~ to ~~62.9%~~65.1% in the third quarter of 2021 compared to 63.2% in the third quarter of 2020. Our COS percentage was negatively impacted by both changes in our mix of sales and inflation. During the third quarter of 2021, we reported a lower percentage of our higher-margin Pharma product sales compared to the same period in 2020. During 2021, we also incurred inflationary cost increases. As discussed above, we experienced increases in several input costs including resin, metals, freight and labor. While we maintain our normal pass-through of resin prices and have implemented general price increases to offset other cost increases, there is no margin on resin pass-through costs which increases our COS as a percentage of sales.

COS as a percent of net sales increased to 64.2% in the first ~~three~~nine months of 2021 compared to ~~62.5%~~63.0% in the same period a year ago. ~~This~~As discussed above, this increase in COS is mainly due to ~~the decreased~~a shift in sales mix from our higher-margin pharma markets along with inflationary material and smaller percentage of our Pharma business compared to the total during the first quarter of 2021. As discussed below, within the Pharma segment we experienced declines in sales to our higher margin prescription and consumer healthcare markets which leads to an overall increase in COS as a percentage of net sales.labor cost increases. We also ~~experienced higher resin costs, higher freight costs and logistic delays, and temporary inefficiencies in~~recognized increased tooling sales during 2021, which typically carry lower margins than our ~~manufacturing process related to the COVID-19 pandemic.~~product sales.

SELLING, RESEARCH & DEVELOPMENT AND ADMINISTRATIVE

Selling, research & development and administrative expenses ("(“SG~~&A"~~&A”) increased by ~~$8.2~~approximately $14.1 million to ~~$134.3~~$135.9 million in the third quarter of 2021 compared to $121.9 million during the same period in 2020. Excluding changes in foreign currency rates, SG&A increased by approximately $12.9 million in the quarter. Approximately $1.4 million of this increase is due incremental SG&A costs incurred by our newly consolidated entities (Voluntis and Hengyu) during the third quarter of 2021. The remaining increase is mainly due to higher compensation costs and higher professional fees, especially transaction costs related to our announced acquisitions. SG&A as a percentage of net sales increased to 16.5% compared to 16.1% in the same period of the prior year.

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SG&A increased by $39.8 million to $411.2 million in the first ~~three~~nine months of 2021 compared to ~~$126.2~~$371.4 million during the same period a year ago. Excluding changes in foreign currency rates, SG&A increased by approximately ~~$2.8~~$26.7 million in the first ~~three~~nine months of 2021 compared to the first ~~three~~nine months of 2020. ~~The~~Of this increase, ~~is due~~$3.4 million relates to ~~$3.4 million~~three months of incremental SG&A costs ~~from~~in 2021 as our Fusion acquisition ~~of Fusion~~was completed subsequent to March 31, 2020. As mentioned above, we also have approximately $1.4 million of incremental SG&A associated with the consolidation of Voluntis and Hengyu during the third quarter of 2021. The remaining ~~decrease in SG&A~~increase is mainly due to higher compensation costs and professional fees, which includes transaction costs related to ~~cost saving initiatives put in place due to COVID-19, such as lower travel and entertainment spending.~~our announced acquisitions. For the first nine months, SG&A as a percentage of net sales ~~decreased to 17.3% compared to 17.5% in the same period of the prior year primarily due to these cost savings measures.~~remained consistent with 2020 at 17.0%.

DEPRECIATION AND AMORTIZATION

Reported depreciation and amortization expenses increased by approximately ~~$6.6~~$4.1 million to ~~$57.4~~$59.3 million in the ~~first three months~~third quarter of 2021 compared to ~~$50.8~~$55.2 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately ~~$4.3~~$3.5 million in the ~~first three months of 2021~~quarter compared to the same period ~~a year ago. The majority~~in 2020. Approximately $0.8 million of this increase is due to ~~$2.4 million of~~ incremental depreciation and amortization ~~costs related to~~associated with our ~~Fusion acquisition.~~acquisitions of Voluntis and Hengyu during the third quarter of 2021. We have also increased our capital spending during the current and prior year to support our growth strategy. Depreciation and amortization as a percentage of net sales ~~increased~~decreased to ~~7.4%~~7.2% in the ~~first three months~~third quarter of 2021 compared to ~~7.0%~~7.3% in the same period of the prior ~~year.~~year due to an increase in sales.

Reported depreciation and amortization expenses increased by approximately $12.1 million to $174.5 million in the first nine months of 2021 compared to $162.4 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately $6.2 million in the first nine months of 2021 compared to the same period a year ago. As mentioned above, approximately $0.8 million of this increase is due to our acquisitions of Voluntis and Hengyu during the third quarter of 2021 and the remaining increase relates to higher capital spending during the current and prior year to support our growth strategy. Depreciation and amortization as a percentage of net sales decreased to 7.2% in the first nine months of 2021 compared to 7.5% in the same period of the prior year due to an increase in sales.

RESTRUCTURING INITIATIVES

In late 2017, we began a business transformation plan to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness. The primary focus of the plan is the Beauty + Home segment; however, certain global general and administrative functions are also being addressed. Restructuring costs related to this plan for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 are as follows:


		Three Months Ended September 30,						Nine Months Ended September 30,
Three Months Ended March 31,			2021		2020
								2021		2020		2021		2020
Restructuring Initiatives by Segment	Restructuring Initiatives by Segment						Restructuring Initiatives by Segment
Pharma	Pharma		$	35	$	(31)	Pharma	$	13	$	300	$	86	$	158
Beauty + Home	Beauty + Home		1,096		4,907		Beauty + Home	5,442		3,144		7,995		15,375
Food + Beverage	Food + Beverage		(79)		103		Food + Beverage	131		(31)		169		147
Corporate & Other	Corporate & Other		2,620		(140)		Corporate & Other	4,637		2		10,521		(95)
Total Restructuring Initiatives	Total Restructuring Initiatives		$	3,672	$	4,839	Total Restructuring Initiatives	$	10,223	$	3,415	$	18,771	$	15,585

~~Table~~As of ~~Contents~~

Wethe end of September 2021, we have successfully ~~implemented~~completed the vast majority of our planned initiatives related to our transformation plan, including ~~successfully~~ implementing new commercial strategies, reducing costs and adding capabilities in Asia and in fast growing application fields that we believe will position the segment for future growth and profitability. However, the COVID-19 global pandemic ~~has caused several initiatives that were expected to be completed in 2020 to be delayed, including the planned closure of two facilities in the U.S., and~~ resulted in a significant decline in our beauty business. While our Beauty + Home segment continues to be profitable, the disruption caused by the pandemic, including higher operating costs, have more than offset any expected growth in earnings from our transformation. Though we believe the beauty market remains a long-term attractive growth market and we remain committed to completing our remaining transformation initiatives, we expect the return to growth to be gradual and non-linear as this market is highly correlated to the return to post-pandemic normal consumer behavior, including travel, which has proven to be sporadic and uncertain. ~~We estimate total implementation costs of approximately$125 million for these initiatives.~~ The cumulative expense incurred ~~to date is $116.7~~for this transformation plan was $131.8 million. We ~~have~~ also made capital investments of approximately $50 million related to this ~~plan, with no further significant capital investments expected.~~plan.

OPERATING INCOME

Operating income decreased approximately $16.1 million to $82.9 million in the third quarter of 2021 compared to $99.0 million in the same period a year ago. Excluding changes in foreign currency rates, operating income decreased by approximately $17.2 million in the quarter compared to the same period a year ago. The majority of this decrease is due to higher cost of sales compared to the third quarter of 2020 due to our changing segment sales mix along with significantly higher input costs related to the current inflationary environment discussed above. We also realized higher restructuring costs as we completed the vast majority of our planned initiatives related to our business transformation plan. Operating income as a percentage of net sales decreased to 10.0% in the third quarter of 2021 compared to 13.0% in the prior year period.

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For the first ~~three~~nine months of 2021, operating income increased approximately ~~$4.1~~$1.9 million to ~~$92.6~~$259.9 million compared to ~~$88.5~~$258.0 million in the same period of the prior year. Excluding changes in foreign currency rates, operating income decreased by approximately ~~$2.8~~$11.9 million in the first ~~three~~nine months of 2021 compared to the same period a year ago. ~~The majority~~As mentioned above, higher cost of ~~this decrease is due to the impact of lower~~ sales ~~and operational inefficiencies~~ related to ~~the COVID-19 pandemic when comparing the current quarter results to the pre-COVID-19 results in the first quarter of 2020. We also experienced higher~~our product mix and inflationary input ~~costs with increased resin and transportation prices.~~cost increases drove this change. Operating income as a percentage of net sales decreased to ~~11.9%~~10.8% in the first ~~three~~nine months of 2021 compared to ~~12.3%~~11.8% for the same period in the prior year.

NET OTHER INCOME (EXPENSE)

Net other ~~income (expense) improved $18.7~~expense in the third quarter of 2021 increased $6.8 million to ~~$8.3~~$16.7 million ~~of income for the three months ended March 31, 2021~~ from ~~$10.4~~$9.9 million ~~of expense~~ in the same period of the prior year. ~~$16.8~~We realized a $9.0 million ~~of this improvement is a gain~~loss on our investment in PureCycle Technologies (“PureCycle”). during the third quarter of 2021. As discussed in Note 1718 - Investment in Equity Securities of the Condensed Consolidated Financial Statements, our investment in PureCycle was converted into shares of PCT, a publicly traded entity, during the first quarter of 2021. This investment is now recorded at fair value based on observable market prices for identical assets and the change in fair value is recorded as a net investment gain or loss in the Condensed Consolidated Statements of Income. We believe that unrealized cost investment gains and losses ~~whether realized from sales or unrealized~~ from changes in market prices are not considered relevant to understanding our reported consolidated earnings or evaluating our periodic economic performance. ~~We believe~~Other than the investment loss in PCT, we benefited from lower net investment gains and losses recorded in earnings, including the changes in market prices for equity securities, in any given period has little analytical or predictive value. We also realized $1.0 million of lower interest ~~expense during the first quarter of 2021~~expenses as we ~~continue~~have continued to reduce outstanding debt ~~with our strong free cash flow generation~~ over the past year. ~~Within miscellaneous~~Miscellaneous expense ~~an increase in pension costs was more than offset by~~also improved as a net favorable impact on ~~our hedging activities during the first quarter~~foreign currency contracts, including an Argentina Blue Chip Swap gain of ~~2021 compared~~$1.4 million, more than compensated for higher pension costs related to the decline in discount rates.

Net other expense decreased $11.6 million to $18.5 million of expense for the nine months ended September 30, 2021 from $30.1 million of expense in the same period of the prior ~~year period.~~year. $6.2 million of this improvement is the gain on our PureCycle investment as discussed above. We also benefited from lower net interest expense, which more than offset our increase in pension costs.

PROVISION FOR INCOME TAXES

The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings and related estimated full year-taxes, adjusted for the impact of discrete quarterly items. The effective tax rate for the three months ended ~~March 31,~~September 30, 2021 and 2020, respectively, was ~~16.8%~~29.2% and ~~29.2%~~28.5%. The higher reported effective tax rate for the three months ended ~~March 31,~~September 30, 2021 reflects lower tax benefits from employee stock-based compensation offset in part by a more favorable mix of earnings.

The effective tax rate for the nine months ended September 30, 2021 and 2020, respectively, was 22.9% and 29.4%. The effective tax rate for the nine months ended September 30, 2021 reflects additional tax benefits from employee stock-based compensation ~~of $5.1 million and a $2.9 million benefit from changes in U.S. state tax laws during the quarter. A lower tax rate in France for 2021~~ and a more favorable mix of ~~earnings also contributed to the lower tax rate in the current quarter.~~earnings.

NET INCOME ATTRIBUTABLE TO APTARGROUP, INC.

We reported net income attributable to AptarGroup of ~~$84.0~~$47.3 million and $186.5 million in the three and nine months ended ~~March 31,~~September 30, 2021, compared to ~~$55.3~~$63.7 million and $160.8 million for the same ~~period~~periods in the prior year.

~~Table of Contents~~

PHARMA SEGMENT

Operations that sell dispensing systems, drug delivery systems, sealing solutions and services to the prescription drug, consumer health care, injectables and active material science solutions markets form ~~the~~our Pharma segment.

Three Months Ended March 31, 2021 2020
Net Sales $ 313,832 $ 297,196
Adjusted EBITDA (1) 108,484 108,342
Adjusted EBITDA margin (1) 34.6 % 36.5 %

~~(1)Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization,unallocated corporate expenses,~~restructuring initiatives, acquisition-related costs, net investment gains and losses related to observable market price changes on equity securities and other special items. Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under "Non-U.S. GAAP Measures".

Net sales for the first three months of 2021 increased by 6% to $313.8 million compared to $297.2 million in the first three months of 2020. Changes in currency rates positively impacted net sales by 6%. Therefore, core sales for the first three months of 2021 were even with the same period of the prior year. Core sales of our products to the injectables and active material science solutions markets increased 14% and 5% respectively due to strong demand for our vaccine components and active material science solutions. Core sales to the prescription drug and consumer health care markets decreased 8% and 1%, respectively as fewer non-critical doctor visits and lower incidence of cold and flu illnesses this season have resulted in certain Pharma customers drawing down inventory levels of allergy and other respiratory treatment delivery devices.

Three Months Ended March 31, 2021
Net Sales Change over Prior Year Prescription
Drug Consumer
Health Care
Injectables Active Material Science Solutions Total
Core Sales Growth (8) % (1) % 14 % 5 % — %
Currency Effects (1) 6 % 7 % 7 % 3 % 6 %
Total Reported Net Sales Growth (2) % 6 % 21 % 8 % 6 %

~~(1)Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.~~

Adjusted EBITDA in the first three months of 2021 increased slightly to $108.5 million compared to $108.3 million reported in the same period of the prior year. While first quarter core sales were at the same level as the first quarter of 2020, we experienced lower margins due to a shift in mix away from our more profitable prescription and consumer healthcare products. This reduction in margin was more than offset by cost savings initiatives and the translation of our foreign entity results to the U.S. dollar.

~~BEAUTY + HOME SEGMENT~~

~~Operations that sell dispensing systems and sealing solutions to the beauty, personal care and home care markets form the Beauty + Home segment.~~


		Three Months Ended September 30,								Nine Months Ended September 30,
Three Months Ended March 31,			2021			2020
										2021			2020			2021			2020

Net Sales	Net Sales		$	346,946		$	324,560		Net Sales	$	313,225		$	315,758		$	952,400		$	914,213
Adjusted EBITDA (1)	Adjusted EBITDA (1)		35,356			34,247			Adjusted EBITDA (1)	100,738			112,436			315,201			324,877
Adjusted EBITDA margin (1)	Adjusted EBITDA margin (1)		10.2		%	10.6		%	Adjusted EBITDA margin (1)	32.2		%	35.6		%	33.1		%	35.5		%

(1)Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives, acquisition-related costs, net investment gains and losses related to observable market price changes on equity securities and other special items. Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under "Non-U.S. GAAP Measures".

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Net sales for the Pharma segment decreased 1% in the third quarter of 2021 to $313.2 million compared to $315.8 million in the third quarter of 2020. Changes in currencies positively affected net sales by 1% in the third quarter of 2021. There was no significant impact from our acquisitions of Voluntis and Hengyu during the third quarter of 2021. Therefore, core sales decreased by 2% in the third quarter of 2021 compared to the third quarter of 2020. Core sales of our products to the injectables market increased 16% due to continued strong demand for our vaccine components. Sales of our active material science solutions decreased 15% due to two large tooling projects during the third quarter of 2020. Removing the effect of these one-time tooling sales, material science solutions would have continued its trend of strong double-digit core sales growth on increased demand for our diagnostics and probiotics applications. Core sales of our products to the consumer health care market increased 5% as strong revenue from our eye care customers more than compensated for continued softness in the nasal saline and decongestant markets. Core sales of our products to the prescription drug market decreased 9% as fewer non-critical doctor visits and lower incidence of cold and flu illnesses this season have resulted in certain Pharma customers drawing down inventory levels as sectors such as allergic rhinitis are impacted by low levels of patient consumption.


Third Quarter 2021 Net Sales Change over Prior Year	Prescription Drug		Consumer Health Care		Injectables		Active Material Science Solutions		Total
Core Sales Growth	(9)	%	5	%	16	%	(15)	%	(2)	%
Acquisitions	—	%	—	%	1	%	—	%	—	%
Currency Effects (1)	1	%	1	%	1	%	—	%	1	%
Total Reported Net Sales Growth	(8)	%	6	%	18	%	(15)	%	(1)	%

Net sales for the first nine months of 2021 increased by 4% to $952.4 million compared to $914.2 million in the first nine months of 2020. Changes in currency rates positively impacted net sales by 4%. Therefore, core sales for the first nine months of 2021 were at a comparable level to the first nine months of 2020. Similar to the third quarter discussion above, core sales of our products to the injectables and active material science solutions markets increased 15% and 2%, respectively, due to strong demand for our vaccine components and active material solutions. While sales to our consumer health care market increased by 1%, core sales to the prescription drug market decreased 8% as both markets continue to feel the impact of fewer non-critical doctor visits and lower incidence of illnesses this season which is leading to our customers destocking inventory.


Nine Months Ended September 30, 2021 Net Sales Change over Prior Year	Prescription Drug		Consumer Health Care		Injectables		Active Material Science Solutions		Total
Core Sales Growth	(8)	%	1	%	15	%	2	%	—	%
Acquisitions	—	%	—	%	—	%	—	%	—	%
Currency Effects (1)	4	%	5	%	5	%	2	%	4	%
Total Reported Net Sales Growth	(4)	%	6	%	20	%	4	%	4	%

(1)Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

Adjusted EBITDA in the third quarter of 2021 decreased 10% to $100.7 million compared to $112.4 million reported in the same period of the prior year. While we reported strong product growth in our injectables and active material science solutions markets, lower sales in certain of our higher-margin prescription and consumer health care applications, along with lower tooling sales, drove our Adjusted EBITDA margins lower during the third quarter of 2021. We were also impacted by the inflationary environment discussed above as higher input costs negatively impacted our margins.

Adjusted EBITDA in the first nine months of 2021 decreased 3% to $315.2 million compared to $324.9 million reported in the same period of the prior year. As discussed above, growth in our injectables and active material science solutions markets, along with favorable translation of our foreign entity results to the U.S. dollar, were offset by lower product sales in certain of our prescription and consumer healthcare markets. This shift in the mix of sales between our markets, along with higher input costs, led to a lower Adjusted EBITDA margin as a percentage of sales.

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BEAUTY + HOME SEGMENT

Operations that sell dispensing systems and sealing solutions to the beauty, personal care and home care markets form our Beauty + Home segment.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020

Net Sales	$	374,088		$	337,231		$	1,081,280		$	961,577
Adjusted EBITDA (1)	43,789			34,733			117,055			92,954
Adjusted EBITDA margin (1)	11.7		%	10.3		%	10.8		%	9.7		%

Reported net sales for the quarter ended September 30, 2021 increased 11% to $374.1 million compared to $337.2 million in the third quarter of the prior year. Changes in currency rates positively impacted net sales by 1% in the third quarter of 2021. Therefore, core sales increased 10% in the third quarter of 2021 compared to the same quarter of the prior year. Approximately half of this growth came from increased volumes, while the remaining amount is mainly due to the pass-through of higher input costs as discussed above. Core sales of our products to the beauty market increased 18% as consumer demand for products with our fragrance and facial skincare solutions continued to gradually improve over prior year levels. Personal care core sales increased 4% as higher sales to the hair care, body care and sun care markets were partially offset by declines in personal cleansing, as hand sanitizer demand also has begun to normalize. Core sales to the home care markets decreased 5% on lower demand for household cleaners.


Third Quarter 2021 Net Sales Change over Prior Year	Personal Care		Beauty		Home Care		Total
Core Sales Growth	4	%	18	%	(5)	%	10	%

Currency Effects (1)	1	%	1	%	1	%	1	%
Total Reported Net Sales Growth	5	%	19	%	(4)	%	11	%

For the first ~~three~~nine months of 2021, net sales increased 7%12% to ~~$346.9~~$1,081.3 million compared to ~~$324.6~~$961.6 million in the first ~~three~~nine months of the prior year. Changes in currency rates positively impacted net sales by 4% while our acquisition of Fusion improved sales by 6%2% in the first ~~quarter~~nine months of 2021. Therefore, core sales ~~decreased~~increased by 3%6% in the first ~~three~~nine months of 2021 compared to the same period in the prior year. ~~The COVID-19 pandemic~~Consistent with the third quarter, approximately half of this growth came from pass-through of higher input cost while the remaining amount is due to increased volumes, as sales for many of our applications continued to ~~negatively impact core sales to the beauty market during the first quarter of 2021 due to lower retail sales and duty free sales related to domestic and international travel reductions.~~gradually recover. Core sales of our products to the beauty market ~~decreased 10%~~increased 11% during the first ~~three~~nine months of 2021 as we experienced ~~a reduction~~an increase in ~~orders from customers providing~~demand for both fragrance and skin care ~~products as the first quarter of 2020 was only in the beginning stages of the COVID-19 pandemic. However, personal~~products. Personal care core sales increased 2% as ~~increased~~higher sales of our ~~hand sanitizer and liquid soap dispensers more than compensated for softness in our deodorant,~~ hair care and ~~sun~~body care applications ~~while many consumers continue to shelter in place.~~more than offset the lower demand for our hand sanitizer dispensing solutions. Core sales to the home care markets increased ~~13%~~11% on strong demand for our ~~air~~dish care ~~industrial~~ and automotive products.


Three Months Ended March 31, 2021 Net Sales Change over Prior Year		Personal Care		Beauty		Home Care		Total
Nine Months Ended September 30, 2021 Net Sales Change over Prior Year										Nine Months Ended September 30, 2021 Net Sales Change over Prior Year	Personal Care		Beauty		Home Care		Total
Core Sales Growth	Core Sales Growth	2	%	(10)	%	13	%	(3)	%	Core Sales Growth	2	%	11	%	11	%	6	%
Acquisitions	Acquisitions	—	%	11	%	—	%	6	%	Acquisitions	—	%	4	%	—	%	2	%
Currency Effects (1)	Currency Effects (1)	4	%	5	%	4	%	4	%	Currency Effects (1)	3	%	5	%	3	%	4	%
Total Reported Net Sales Growth	Total Reported Net Sales Growth	6	%	6	%	17	%	7	%	Total Reported Net Sales Growth	5	%	20	%	14	%	12	%

(1)Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

Adjusted EBITDA in the third quarter of 2021 increased 26% to $43.8 million compared to $34.7 million in the same period in the prior year. As discussed above, increases in product sales volumes drove the majority of our Adjusted EBITDA growth in the third quarter of 2021. Inflationary increases negatively impacted our current period results as price pass throughs were not enough to offset the full effect of rising material and labor costs. However, we were able to compensate for this impact with improved operational performance and a $2.7 million favorable value added tax ruling in Brazil.

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Adjusted EBITDA in the first ~~three~~nine months of 2021 increased 3%26% to ~~$35.4~~$117.1 million compared to ~~$34.2~~$93.0 million reported in the same period in the prior year. ~~This improvement is due~~Similar to the third quarter discussion above, product sales growth drove the majority of the Adjusted EBITDA improvement in the first nine months of 2021 while operational improvements were able to offset the impact of inflation. We also reported incremental profit ~~from our Fusion acquisition~~ during the first quarter of 2021 ~~partially offset by lower sales to~~as our Fusion acquisition was effective at the ~~beauty market noted above along with higher resin and other input costs incurred during~~beginning of the ~~first~~second quarter ~~of 2021. These cost increases are partially offset by operational improvements which are mainly driven from our transformation initiatives.~~2020.

FOOD + BEVERAGE SEGMENT

Operations that sell dispensing systems and sealing solutions to the food and beverage markets form ~~the~~our Food + Beverage segment.


		Three Months Ended September 30,								Nine Months Ended September 30,
Three Months Ended March 31,			2021			2020
										2021			2020			2021			2020

Net Sales	Net Sales		$	115,976		$	99,797		Net Sales	$	138,129		$	106,164		$	379,548		$	304,221
Adjusted EBITDA (1)	Adjusted EBITDA (1)		19,990			15,407			Adjusted EBITDA (1)	22,379			20,351			61,995			53,543
Adjusted EBITDA margin (1)	Adjusted EBITDA margin (1)		17.2		%	15.4		%	Adjusted EBITDA margin (1)	16.2		%	19.2		%	16.3		%	17.6		%

~~Net~~Reported sales for the ~~first three months of~~quarter ended September 30, 2021 increased ~~by 16%~~approximately 30% to ~~$116.0~~$138.1 million compared to ~~$99.8~~$106.2 million in the ~~first three months~~third quarter of ~~2020.~~the prior year. Changes in currency rates positively impacted net sales by 2%. Therefore, core sales for the third quarter of 2021 increased 28% compared to the same quarter of the prior year. Approximately 17% of the reported 28% core sales increase is due to passing through higher resin and other input costs as we experienced high inflationary cost increases during the third quarter of 2021. However even without these price increases, we reported strong growth in both our food and beverage markets. Volumes rose on increased demand for specialty food dispensing closures as consumers continued to cook at home, and we realized a recovery from lower beverage sales in the third quarter of the prior year as consumer demand has begun to normalize. We also benefited from higher tooling sales during the current year quarter compared to 2020.


Third Quarter 2021 Net Sales Change over Prior Year	Food		Beverage		Total
Core Sales Growth	20	%	52	%	28	%

Currency Effects (1)	2	%	3	%	2	%
Total Reported Net Sales Growth	22	%	55	%	30	%

Net sales for the first nine months of 2021 increased by ~~14%~~25% to $379.5 million compared to $304.2 million in the first ~~three~~nine months of 2020. Changes in currency rates positively impacted net sales by 3%. Therefore, core sales increased by 22% in the first nine months of 2021 compared to the same period in the prior year. ~~Strong~~As discussed above, strong product and tooling sales, ~~and~~along with the pass-through of higher ~~resin~~material costs, positively impacted the first ~~three~~nine months of ~~2021 by $7.5 million~~2021. Approximately 13% of the reported 22% core sales increase is due to passing through higher resin and ~~$6.2 million, respectively.~~other input costs. Core sales to the food market increased ~~19%~~20% while core sales to the beverage market increased 2%26% in the first ~~three~~nine months of 2021 compared to the same period of the prior year. For the food markets, ~~the~~we realized strong ~~pantry stocking that we experienced during the fourth quarter of 2020 continued into the first quarter of 2021~~growth as consumers continued to cook at ~~home during the COVID-19 pandemic. While the~~home. The beverage market also reported 2% growth ~~in core~~as sales ~~during the quarter, this increase is all related to the pass through of higher resin prices. Sales~~ of our premium bottled water and on-the-go functional drink products continued to ~~be negatively impacted by~~recover from the COVID-19 ~~pandemic.~~pandemic low levels last year.

~~Table of Contents~~


Three Months Ended March 31, 2021 Net Sales Change over Prior Year		Food		Beverage		Total
Nine Months Ended September 30, 2021 Net Sales Change over Prior Year								Nine Months Ended September 30, 2021 Net Sales Change over Prior Year	Food		Beverage		Total
Core Sales Growth	Core Sales Growth	19	%	2	%	14	%	Core Sales Growth	20	%	26	%	22	%

Currency Effects (1)	Currency Effects (1)	2	%	2	%	2	%	Currency Effects (1)	3	%	5	%	3	%
Total Reported Net Sales Growth	Total Reported Net Sales Growth	21	%	4	%	16	%	Total Reported Net Sales Growth	23	%	31	%	25	%

(1)Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

Adjusted EBITDA in the ~~first three months~~third quarter of 2021 increased ~~30%~~10% to ~~$20.0~~$22.4 million compared to ~~$15.4~~$20.4 million reported in the same period of the prior year. ~~Strong~~The higher product and tooling sales ~~to the food market, as~~ discussed above ~~drove a large part~~more than compensated for the impact of increasing input costs and higher compensation costs. While we maintain our normal pass-through of resin prices to offset these increases, there is no margin on resin pass-through costs which negatively impacts our Adjusted EBITDA margins.

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Adjusted EBITDA in the first nine months of 2021 increased 16% to $62.0 million compared to $53.5 million reported in the same period of the prior year. As discussed above, strong product and tooling sales more than offset the negative impact of the timing of our ~~adjusted~~resin pass-through and other inflationary input cost increases. However, the lack of margin on these pass-through costs has a negative impact on our Adjusted EBITDA ~~growth during the first quarter of 2021.~~margins.

CORPORATE & OTHER

In addition to our three reporting segments, we assign certain costs to “Corporate & Other,” which is presented separately in Note 16 – Segment Information of the Notes to the Condensed Consolidated Financial Statements. For Corporate & Other, Adjusted EBITDA (which excludes net interest, taxes, depreciation, amortization, restructuring initiatives, acquisition-related costs, net investment gains and losses related to observable market price changes on equity securities and other special items) primarily includes certain professional fees, compensation and information system costs which are not allocated directly to our reporting segments.

For the quarter ended September 30, 2021, Corporate & Other expenses increased to $12.7 million from $11.0 million in the third quarter of 2020. The majority of this increase relates to higher compensation costs and higher professional fees during the third quarter of 2021 compared to the third quarter of 2020. Corporate & Other expenses in the first ~~three~~nine months of 2021 ~~decreased~~increased to ~~$11.6~~$40.3 million compared to ~~$13.8~~$34.1 million reported in the same period of the prior year. ~~On a constant currency basis, Corporate & Other expense decreased $3.5 million.~~ As discussed above, ~~part of~~ this ~~decrease~~increase is mainly due tohigher compensation cost ~~saving initiatives put in place due to COVID-19. We also benefited from a net favorable impact on our hedging activities during the first quarter of 2021.~~and professional fees.

NON-U.S. GAAP MEASURES

In addition to the information presented herein that conforms to accounting principles generally accepted in the United States of America ("U.S. ~~GAAP,~~GAAP"), we also present financial information that does not conform to U.S. GAAP, which are referred to as non-U.S. GAAP financial measures. Management may assess our financial results both on a U.S. GAAP basis and on a non-U.S. GAAP basis. We believe it is useful to present these non-U.S. GAAP financial measures because they allow for a better period over period comparison of operating results by removing the impact of items that, in management’s view, do not reflect our core operating performance. These non-U.S. GAAP financial measures should not be considered in isolation or as a substitute for U.S. GAAP financial results, but should be read in conjunction with the unaudited Condensed Consolidated Statements of Income and other information presented herein. Investors are cautioned against placing undue reliance on these non-U.S. GAAP measures. Further, investors are urged to review and consider carefully the adjustments made by management to the most directly comparable U.S. GAAP financial measure to arrive at these non-U.S. GAAP financial measures.

In our Management’s Discussion and Analysis, we exclude the impact of foreign currency translation when presenting net sales information, which we define as “constant currency.” Changes in net sales excluding the impact of foreign currency translation is a non-U.S. GAAP financial measure. As a worldwide business, it is important that we take into account the effects of foreign currency translation when we view our results and plan our strategies. Consequently, when our management looks at our financial results to measure the core performance of our business, we may exclude the impact of foreign currency translation by translating our prior period results at current period foreign currency exchange rates. As a result, our management believes that these presentations are useful internally and may be useful to investors. We also exclude the impact of material acquisitions when comparing results to prior periods. Changes in operating results excluding the impact of acquisitions are non-U.S. GAAP financial measures. We believe it is important to exclude the impact of acquisitions on period over period results in order to evaluate performance on a more comparable basis.

We present earnings before net interest and taxes (“EBIT”) and earnings before net interest, taxes, depreciation and amortization (“EBITDA”). We also present our adjusted earnings before net interest and taxes (“Adjusted EBIT”) and adjusted earnings before net interest, taxes, depreciation and amortization (“Adjusted EBITDA”), both of which exclude the business transformation charges (restructuring initiatives), acquisition-related costs, purchase accounting adjustments related to acquisitions and investments and net investment gains and losses related to observable market price changes on equity securities. Our Outlook is also provided on a non-U.S. GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled, such as tax and exchange rates, or reliably predicted because they are not part of our routine activities, such as restructuring initiatives and acquisition-related costs.

We provide a reconciliation of Net Debt to Net Capital as a non-U.S. GAAP measure. “Net Debt” is calculated as interest bearing debt less cash and equivalents and short-term investments while “Net Capital” is calculated as stockholders’ equity plus Net Debt. Net Debt to Net Capital measures a company’s financial leverage, which gives users an idea of a company's financial structure, or how it is financing its operations, along with insight into its financial strength. We believe that it is meaningful to take into consideration the balance of our cash, cash equivalents and short-term investments when evaluating our leverage. If needed, such assets could be used to reduce our gross debt position.

~~Table of Contents~~

Finally, we provide a reconciliation of free cash flow as a non-U.S. GAAP measure. Free cash flow is calculated as cash provided by operating activities less capital expenditures. We use free cash flow to measure cash flow generated by operations that is available for dividends, share repurchases, acquisitions and debt repayment. We believe that it is meaningful to investors in evaluating our financial performance and measuring our ability to generate cash internally to fund our initiatives.

Three Months Ended
March 31, 2021
Consolidated Pharma Beauty + Home Food + Beverage Corporate & Other Net Interest
Net Sales $ 776,754 $ 313,832 $ 346,946 $ 115,976 $ — $ —
Reported net income $ 83,939
Reported income taxes 16,949
Reported income before income taxes 100,888 87,670 9,688 10,010 554 (7,034)
Adjustments:
Restructuring initiatives 3,672 35 1,096 (79) 2,620
Net investment gain (16,809) (16,809)
Adjusted earnings before income taxes 87,751 87,705 10,784 9,931 (13,635) (7,034)
Interest expense 7,415 7,415
Interest income (381) (381)
Adjusted earnings before net interest and taxes (Adjusted EBIT) 94,785 87,705 10,784 9,931 (13,635) —
Depreciation and amortization 57,438 20,779 24,572 10,059 2,028
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 152,223 $ 108,484 $ 35,356 $ 19,990 $ (11,607) $ —
Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 19.6 % 34.6 % 10.2 % 17.2 %

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		Three Months Ended																	Three Months Ended
		March 31, 2020																	September 30, 2021

		Consolidated			Pharma			Beauty + Home			Food + Beverage			Corporate & Other		Net Interest			Consolidated			Pharma			Beauty + Home			Food + Beverage			Corporate & Other		Net Interest
Net Sales	Net Sales	$	721,553		$	297,196		$	324,560		$	99,797		$	—	$	—	Net Sales	$	825,442		$	313,225		$	374,088		$	138,129		$	—	$	—

Reported net income	Reported net income	$	55,250															Reported net income	$	46,894
Reported income taxes	Reported income taxes	22,786																Reported income taxes	19,340
Reported income before income taxes	Reported income before income taxes	78,036			89,854			7,108			5,962			(16,675)		(8,213)		Reported income before income taxes	66,234			75,611			14,443			12,027			(28,237)		(7,610)
Adjustments:	Adjustments:																	Adjustments:
Restructuring initiatives	Restructuring initiatives	4,839			(31)			4,907			103			(140)				Restructuring initiatives	10,223			13			5,442			131			4,637
Net investment loss																		Net investment loss	9,021												9,021
Transaction costs related to acquisitions																		Transaction costs related to acquisitions	1,793			1,793			—			—			—

Transaction costs related to acquisitions		1,384			—			1,384			—			—
Purchase accounting adjustments related to acquisitions and investments		1,390			1,128			262			—			—
Adjusted earnings before income taxes	Adjusted earnings before income taxes	85,649			90,951			13,661			6,065			(16,815)		(8,213)		Adjusted earnings before income taxes	87,271			77,417			19,885			12,158			(14,579)		(7,610)
Interest expense	Interest expense	8,388														8,388		Interest expense	8,011														8,011
Interest income	Interest income	(175)														(175)		Interest income	(401)														(401)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	Adjusted earnings before net interest and taxes (Adjusted EBIT)	93,862			90,951			13,661			6,065			(16,815)		—		Adjusted earnings before net interest and taxes (Adjusted EBIT)	94,881			77,417			19,885			12,158			(14,579)		—
Depreciation and amortization	Depreciation and amortization	50,806			17,891			20,586			9,342			2,987				Depreciation and amortization	59,280			23,321			23,904			10,221			1,834
Purchase accounting adjustments included in Depreciation and amortization above		(500)			(500)			—			—			—

Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	144,168		$	108,342		$	34,247		$	15,407		$	(13,828)	$	—	Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	154,161		$	100,738		$	43,789		$	22,379		$	(12,745)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	20.0		%	36.5		%	10.6		%	15.4		%					Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	18.7		%	32.2		%	11.7		%	16.2		%

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Net Debt to Net Capital Reconciliation March 31, December 31,
2021 2020
Notes payable, revolving credit facility and overdrafts $ 1,036 $ 52,200
Current maturities of long-term obligations, net of unamortized debt issuance costs 64,776 65,666
Long-Term Obligations, net of unamortized debt issuance costs 1,037,983 1,054,998
Total Debt 1,103,795 1,172,864
Less:
Cash and equivalents 254,852 300,137
Short-term investments — 243
Net Debt $ 848,943 $ 872,484
Total Stockholders' Equity $ 1,900,795 $ 1,850,785
Net Debt 848,943 872,484
Net Capital $ 2,749,738 $ 2,723,269
Net Debt to Net Capital 30.9 % 32.0 %


	Three Months Ended
	September 30, 2020

	Consolidated			Pharma			Beauty + Home			Food + Beverage			Corporate & Other		Net Interest
Net Sales	$	759,153		$	315,758		$	337,231		$	106,164		$	—	$	—

Reported net income	$	63,735
Reported income taxes	25,404
Reported income before income taxes	89,139			92,202			7,944			10,884			(13,289)		(8,602)
Adjustments:
Restructuring initiatives	3,415			300			3,144			(31)			2

Transaction costs related to acquisitions	221			210			11			—			—

Adjusted earnings before income taxes	92,775			92,712			11,099			10,853			(13,287)		(8,602)
Interest expense	8,851														8,851
Interest income	(249)														(249)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	101,377			92,712			11,099			10,853			(13,287)		—
Depreciation and amortization	55,179			19,724			23,634			9,498			2,323

Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	156,556		$	112,436		$	34,733		$	20,351		$	(10,964)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	20.6		%	35.6		%	10.3		%	19.2		%

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	Nine Months Ended
	September 30, 2021

	Consolidated			Pharma			Beauty + Home			Food + Beverage			Corporate & Other		Net Interest
Net Sales	$	2,413,228		$	952,400		$	1,081,280		$	379,548		$	—	$	—

Reported net income	$	186,107
Reported income taxes	55,309
Reported income before income taxes	241,416			245,087			36,253			31,728			(50,457)		(21,195)
Adjustments:
Restructuring initiatives	18,771			86			7,995			169			10,521
Net investment gain	(6,177)												(6,177)
Transaction costs related to acquisitions	4,227			4,227			—			—			—

Adjusted earnings before income taxes	258,237			249,400			44,248			31,897			(46,113)		(21,195)
Interest expense	22,601														22,601
Interest income	(1,406)														(1,406)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	279,432			249,400			44,248			31,897			(46,113)		—
Depreciation and amortization	174,508			65,801			72,807			30,098			5,802

Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	453,940		$	315,201		$	117,055		$	61,995		$	(40,311)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	18.8		%	33.1		%	10.8		%	16.3		%

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	Nine Months Ended
	September 30, 2020

	Consolidated			Pharma			Beauty + Home			Food + Beverage			Corporate & Other		Net Interest
Net Sales	$	2,180,011		$	914,213		$	961,577		$	304,221		$	—	$	—

Reported net income	$	160,845
Reported income taxes	66,998
Reported income before income taxes	227,843			267,523			2,297			25,365			(41,968)		(25,374)
Adjustments:
Restructuring initiatives	15,585			158			15,375			147			(95)

Transaction costs related to acquisitions	4,812			210			4,602			—			—
Purchase accounting adjustments related to acquisitions and investments	4,642			1,421			3,221			—			—
Adjusted earnings before income taxes	252,882			269,312			25,495			25,512			(42,063)		(25,374)
Interest expense	25,973														25,973
Interest income	(599)														(599)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	278,256			269,312			25,495			25,512			(42,063)		—
Depreciation and amortization	162,414			56,232			70,159			28,031			7,992
Purchase accounting adjustments included in Depreciation and amortization above	(3,367)			(667)			(2,700)			—			—
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	437,303		$	324,877		$	92,954		$	53,543		$	(34,071)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	20.1		%	35.5		%	9.7		%	17.6		%

Free Cash Flow Reconciliation March 31, March 31,
2021 2020
Net Cash Provided by Operations $ 72,185 $ 85,033
Less:
Capital Expenditures 63,884 61,625
Free Cash Flow $ 8,301 $ 23,408

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Net Debt to Net Capital Reconciliation	September 30,			December 31,
	2021			2020

Notes payable, revolving credit facility and overdrafts	$	58,583		$	52,200
Current maturities of long-term obligations, net of unamortized debt issuance costs	142,674			65,666
Long-Term Obligations, net of unamortized debt issuance costs	915,750			1,054,998
Total Debt	1,117,007			1,172,864
Less:
Cash and equivalents	114,557			300,137
Short-term investments	319			243
Net Debt	$	1,002,131		$	872,484

Total Stockholders' Equity	$	1,995,993		$	1,850,785
Net Debt	1,002,131			872,484
Net Capital	$	2,998,124		$	2,723,269

Net Debt to Net Capital	33.4		%	32.0		%


Free Cash Flow Reconciliation	September 30,		September 30,
	2021		2020

Net Cash Provided by Operations	$	259,373	$	381,427

Less:
Capital Expenditures	216,689		173,365
Free Cash Flow	$	42,684	$	208,062

FOREIGN CURRENCY

Because of our international presence, movements in exchange rates may have a significant impact on the translation of the financial statements of our foreign subsidiaries. Our primary foreign exchange exposure is to the euro, but we also have foreign exchange exposure to the Chinese yuan, Brazilian real, Mexican peso, Swiss franc and other Asian, European and South American currencies. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial statements. Conversely, a strengthening U.S. dollar has a dilutive effect. In some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Any changes in exchange rates on such inter-country sales could materially impact our results of operations. During the ~~first~~third quarter of 2021, the U.S. dollar ~~weakened~~strengthened compared to the major European currencies and ~~the Chinese yuan, while it appreciated against most~~ Latin America currencies. This resulted in ~~an additive~~a dilutive impact on our translated results during the ~~first~~third quarter of 2021 when compared to the ~~first~~third quarter of 2020.

Beginning July 1, 2018, we have applied highly inflationary accounting for our Argentinian subsidiary pursuant to U.S. GAAP. We have changed the functional currency from the Argentinian peso to the U.S. dollar. We remeasure our peso denominated assets and liabilities using the official rate. In September 2019, the President of Argentina reinstituted exchange controls restricting foreign currency purchases in an attempt to stabilize Argentina’s financial markets. As a result of these currency controls, a legal mechanism known as the Blue Chip Swap emerged in Argentina for reporting entities to transfer U.S. dollars. The Blue Chip Swap rate has diverged significantly from Argentina’s “official rate” due to the economic environment. During the second quarter of 2020, we transferred U.S. dollars into Argentina through the Blue Chip Swap method and we recognized a gain of $1.0 million. This gain helped to offset foreign currency losses due to our Argentinian peso exposure and devaluation against the U.S. dollar. During the third quarter of 2021, we utilized the Blue Chip Swap and recognized a gain of $1.4 million.As of and for the nine months ended September 30, 2021, our Argentinian operations contributed less than 2.0% of consolidated net assets and revenues.

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QUARTERLY TRENDS

Our results of operations in the last quarter of the year typically are negatively impacted by customer plant shutdowns in December. Several of the markets we serve are impacted by the seasonality of underlying consumer products. This, in turn, may have an impact on our net sales and results of operations for those markets. ~~However, we~~We believe the diversification of our product portfolio minimizes fluctuations in our overall quarterly financial statements and results in an immaterial seasonality impact on our Condensed Consolidated ~~Financials~~Financial Statements when viewed quarter over quarter.

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However, uncertainties related to the economic recovery from the COVID-19 pandemic may impact noted historical trends.

LIQUIDITY AND CAPITAL RESOURCES

Given ~~the diversification of~~ our ~~segments, the~~current low level of leverage relative to others in our industry and our ability to generate strong levels of cash flow from operations, we believe we are in a strong financial position and have the financial resources to meet our business requirements in the foreseeable future. We have historically used cash flow from operations, our revolving credit facilities, proceeds from stock options and debt, as needed, as our primary sources of liquidity. Our primary uses of liquidity are to invest in equipment and facilities that are necessary to support our growth and to make acquisitions that will contribute to the achievement of our strategic objectives. ~~Amid~~Due to uncertainty amid the COVID-19 pandemic, ~~we have been focused on preserving our liquidity; however, we intend to continue to pay quarterly dividends to our stockholders, invest~~ in ~~our business and make acquisitions as we consider necessary to achieve our strategic objectives. In~~ the event that customer demand decreases significantly for a prolonged period of time ~~due to the COVID-19 pandemic~~ and adversely impacts our cash flows from operations, we would have the ability to restrict and significantly reduce capital expenditure levels as well as evaluate our acquisition strategy. A prolonged and significant reduction in capital expenditure levels could increase future repairs and maintenance costs as well as have a negative impact on operating margins if we were unable to invest in new innovative products.

Cash and equivalents and restricted cash decreased to ~~$259.7~~$114.6 million at ~~March 31,~~September 30, 2021 from $305.0 million at December 31, ~~2020.~~2020 primarily due to acquisitions made in the third quarter, as described below. Total short and long-term interest bearing debt of $1.1 billion at ~~March 31,~~September 30, 2021 was slightly lower than the $1.2 billion at December 31, 2020. The ratio of our Net Debt (interest bearing debt less cash and equivalents) to Net Capital (stockholders’ equity plus Net Debt) ~~decreased~~increased to ~~30.9%~~33.4% at ~~March 31,~~September 30, 2021 compared to 32.0% at December 31, 2020. See the reconciliation under "Non-U.S. GAAP Measures".

In the first ~~three~~nine months of 2021, our operations provided approximately ~~$72.2~~$259.4 million in net cash flow compared to ~~$85.0~~$381.4 million for the same period a year ago. In both periods, cash flow from operations was primarily derived from earnings before depreciation and amortization. The decrease in cash provided by operations during the first ~~three~~nine months of 2021 is primarily attributable to an increase in working capital, ~~requirements which offset~~driven by an increase in accounts receivable on higher ~~net income.~~September sales in 2021 compared to 2020 and higher inventory levels driven by higher input costs and built in anticipation of a continued recovery from the pandemic and continued supply chain disruptions.

We used ~~$63.9~~$343.4 million in cash for investing activities during the first ~~three~~nine months of 2021 compared to ~~$88.1~~$377.9 million during the same period a year ago. Our investment in capital projects increased ~~$2.3~~$43.3 million during the first ~~three~~nine months of 2021 compared to the first ~~three~~nine months of ~~2020.~~2020 which is primarily related to additional investments in capacity for our injectables division. Our 2021 estimated cash outlays for capital expenditures are expected to be in the range of approximately $300 to $330 million but could vary due to changes in exchange rates as well as the timing of capital projects. ~~Our decline~~During 2021, $125.0 million was utilized to fund the Voluntis and Hengyu acquisitions. Additionally, we invested $5.9 million for a 10% equity interest in YAT. Compared to 2020, $158.1 million of cash ~~utilization is a result~~was utilized to fund the Fusion Acquisition. Additionally, we invested $32.0 million in our 49% equity interest of ~~no payments~~BTY and $5.0 million in our 30% equity interest of Sonmol, which are accounted for ~~business combinations or~~as equity method investments during the first ~~three~~nine months of ~~2021, whereas during the first three months of 2020 we invested approximately $20.4 million in our BTY investment.~~2020.

Financing activities used ~~$45.0~~$98.9 million in cash during the first ~~three~~nine months of 2021 compared to ~~$174.3~~$26.7 million in cash ~~provided~~used by financing activities during the same period a year ago. During the first ~~three~~nine months of 2021, we used cash on hand to repay ~~net short term revolving debt of $52.0 million and paid $23.4~~$56.0 million of ~~dividends.~~the outstanding balance on the amended term loan, paid $73.5 million of dividends and purchased $28.4 million of treasury stock. We received proceeds from stock option exercises of ~~$31.9~~$54.0 million and received net proceeds from our revolving credit facility of $6.8 million.

~~We hold U.S. dollar~~

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On June 30, 2021, we entered into an amended and ~~euro-denominated debt to align our capital structure with our earnings base. We also maintain a~~restated multi-currency revolving credit facility ~~with~~(the "revolving credit facility") to replace the existing facility (the "prior credit facility") maturing July 2022 and to amend and restate the unsecured term loan facility extended to our wholly-owned UK subsidiary under the prior credit facility (as amended, the "amended term facility"). The revolving credit facility matures in June 2026, subject to a maximum of two ~~tranches, providing~~one-year extensions in certain circumstances, and provides for unsecured financing of up to ~~$300~~$600 million ~~that is~~ available in the U.S. and ~~up to €150 million that is available~~ to our wholly-owned UK subsidiary. The amended term facility matures in July 2022. The revolving credit facility can be drawn in various currencies including USD, EUR, GBP and CHF to the equivalent of $600 million, which may be increased by up to $300 million subject to the satisfaction of certain conditions. Each borrowing under the revolving credit facility will bear interest at rates based on LIBOR (in the case of USD), EURIBOR (in the case of EUR), SONIA (in the case of GBP), SARON (in the case of CHF), prime rates or other similar rates, in each case plus an applicable margin. The revolving credit facility provides mechanics relating to a transition away from LIBOR (in the case of USD) and the designated benchmark rates for other available currencies and the replacement of any such applicable benchmark by a replacement alternative benchmark rate or mechanism for loans made in the applicable currency. A facility fee on the total amount of the revolving credit facility is also payable quarterly, regardless of usage. The applicable margins for borrowings under the revolving credit facility and the facility fee percentage may change from time to time depending on changes in our consolidated leverage ratio. ~~No balance~~As of September 30, 2021, $47 million was utilized under ~~our U.S. facility or our euro-based~~the revolving credit facility ~~as of March 31, 2021. The $52.0~~in the U.S., €10 million ~~balance at December 31, 2020~~(approximately $11.6 million) was utilized by our wholly-owned UK subsidiary and $56 million remained outstanding under ~~our U.S. credit facility was repaid during~~ the ~~first quarter of 2021.~~amended term facility. Credit facility balances are included in notes payable, ~~including~~ revolving credit ~~facilities~~facility and overdrafts on the Condensed Consolidated Balance Sheets.

Our revolving credit facility and corporate long-term obligations require us to satisfy certain financial and other covenants including:


	Requirement	Level at ~~March 31,~~September 30, 2021
Consolidated Leverage Ratio (1)	Maximum of 3.50 to 1.00	~~1.55~~1.76 to 1.00
Consolidated Interest Coverage Ratio (1)	Minimum of 3.00 to 1.00	~~17.69~~19.39 to 1.00

(1)Definitions of ratios are included as part of the revolving credit facility agreement and the private placement agreements.

Based upon the above consolidated leverage ratio covenant, we have the ability to borrow approximately an additional ~~$1.1~~$1.0 billion before the 3.50 to 1.00 maximum ratio requirement is exceeded.

In addition, in October 2020, we entered into an unsecured money market borrowing arrangement to provide short term financing of up to $30 million that is available in the U.S. No borrowing on this facility is permitted over a quarter end date. As such, no balance was utilized under this arrangement as of ~~March 31,~~September 30, 2021.

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Our foreign operations have historically met cash requirements with the use of internally generated cash or uncommitted short-term borrowings. We also have committed financing arrangements in both the U.S. and the UK as detailed above. We manage our global cash requirements considering (i) available funds among the many subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances.

We facilitate a supply chain finance program ("SCF") across Europe and the U.S. that is administered by a third-party platform. Eligible suppliers can elect to receive early payment of invoices, less an interest deduction, and negotiate their receivable sales arrangements through the third-party platform on behalf of the respective SCF bank. We are not a party to those agreements, and the terms of our payment obligations are not impacted by a supplier's participation in the SCF. Accordingly, we have concluded that this program continues to be a trade payable program and is not indicative of a borrowing arrangement.

All outstanding amounts related to suppliers participating in the SCF are recorded within Accounts payable, accrued and other liabilities in our Condensed Consolidated Balance Sheets, and associated payments are included in operating activities within our Condensed Consolidated Statements of Cash Flows. As of ~~March 31,~~September 30, 2021 and December 31, 2020, the amounts due to suppliers participating in the SCF and included in Accounts payable, accrued and other liabilities were approximately ~~$26~~$31 million and $23 million, respectively.

Collection and payment periods tend to be longer for our operations located outside the United States due to local business practices. We have also seen an increasing trend in pressure from certain customers to lengthen their payment terms. As the majority of our products are made to order, we have not needed to keep significant amounts of finished goods inventory to meet customer requirements. However, some of our contracts specify an amount of finished goods safety stock we are required to maintain.

To the extent our financial position allows and there is a clear financial benefit, we from time-to-time benefit from early payment discounts with some suppliers. We are also lengthening the payment terms with our suppliers to be in line with customer trends. While we have offered third party alternatives for our suppliers to receive payments sooner, we generally do not utilize these offerings from our customers as the economic conditions currently are not beneficial for us.

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On ~~April 15,~~October 14, 2021, the Board of Directors declared a quarterly cash dividend of $0.38 per share payable on ~~May 19,~~November 17, 2021 to stockholders of record as of ~~April 28,~~October 27, 2021.

CONTINGENCIES

The Company, in the normal course of business, is subject to a number of lawsuits and claims both actual and potential in nature. Please refer to Note 12 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for a discussion of contingencies affecting our business.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have significant off-balance sheet arrangements.

RECENTLY ISSUED ACCOUNTING STANDARDS

We have reviewed the recently issued accounting standards updates to the FASB’s Accounting Standards Codification that have future effective dates. Standards that have been adopted during 2021 are discussed in Note 1 – Summary of Significant Accounting Policies of the Notes to Condensed Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments to this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 was further amended in January 2021 by ASU 2021-01 which clarified the applicability of certain provisions. Both standards are effective upon issuance and can be adopted any time prior to December 31, 2022. The guidance in ASU 2020-04 and ASU 2021-01 is optional and may be elected over time as reference rate reform activities occur. As of ~~March 31,~~September 30, 2021, we have not yet modified any contracts as a result of reference rate reform and are evaluating the impact this standard may have on our Condensed Consolidated Financial Statements.

Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our Condensed Consolidated Financial Statements upon adoption.

OUTLOOK

~~Table~~In the fourth quarter, the demand outlook in each market will vary, yet we expect core sales growth in each of ~~Contents~~

~~OUTLOOK~~

~~Current underlying demand conditions in~~ our ~~markets are not~~segments. Demand for our beauty products, elastomer components and active material solutions is expected to ~~change dramatically from what we experienced in the first quarter. We anticipate that demand~~increase, while strong fourth quarter 2020 provides difficult comparisons for our prescription drug delivery and ~~consumer health care devices will remain under pressure compared~~food and beverage markets. Margins are expected to ~~the prior year as customers~~ continue to ~~reduce existing inventories. In certain other markets,~~be impacted by rising input costs, including raw materials and transportation, supply chain disruptions, including labor shortages, and sales mix. Our focus remains on continuing to generate yields across all our businesses while navigating the headwinds we expect to have easier comparisons to the prior year second quarter which was the period most severely impacted by pandemic lockdowns. We also expect our results to be negatively impacted by timing of passing through higher resin and other raw material costs.encounter.

We expect earnings per share for the ~~second~~fourth quarter of 2021, excluding any restructuring expenses, acquisition-related costs and changes in the fair value of equity investments, to be in the range of ~~$0.91~~$0.88 to ~~$0.99~~$0.96 and this guidance is based on an effective tax rate range of ~~26%~~28% to ~~28%~~30%.

FORWARD-LOOKING STATEMENTS

Certain statements in Management’s Discussion and Analysis and other sections of this Form 10-Q are forward-looking and involve a number of risks and uncertainties, including certain statements set forth in the Significant Developments, Restructuring Initiatives, Quarterly Trends, Liquidity and Capital Resources, Contingencies and Outlook sections of this Form 10-Q. Words such as “expects,” “anticipates,” “believes,” “estimates,” “future,” “potential”, "are optimistic" and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are based on our beliefs as well as assumptions made by and information currently available to us. Accordingly, our actual results may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist in our operations and business environment including, but not limited to:

•pandemics, including the impact of COVID-19 on our global supply chain and our global customers and operations, which has elevated and may or will continue to elevate many of the risks and uncertainties discussed below;

•our ability to preserve organizational culture and maintain employee productivity in the work-from-home environment caused by the current pandemic;

•the availability of raw materials and components (particularly from sole sourced suppliers) as well as the financial viability of these suppliers;

•economic conditions worldwide, including inflationary (and potential ~~deflationary or inflationary~~deflationary) conditions in regions we rely on for growth;

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•fluctuations in the cost of materials, components, transportation cost as a result of supply chain disruptions and labor shortages, and other input costs (particularly resin, metal, anodization costs, and energy costs);

•political conditions worldwide;

•significant fluctuations in foreign currency exchange rates or our effective tax rate;

•the impact of tax reform legislation, changes in tax rates and other tax-related events or transactions that could impact our effective tax rate;

•financial conditions of customers and suppliers;

•consolidations within our customer or supplier bases;

•changes in customer and/or consumer spending levels;

•loss of one or more key accounts;

•~~fluctuations~~the availability of direct labor workers and the increase in ~~the cost of materials, components, transportation cost as a result of on-going container shortages, and other input costs (particularly resin, metal, anodization costs, and energy costs);~~direct labor costs;

•our ability to successfully implement facility expansions and new facility projects;

•our ability to offset inflationary impacts with cost containment, productivity initiatives or price increases;

•changes in capital availability or cost, including interest rate fluctuations;

•volatility of global credit markets;

•our ability to identify potential new acquisitions and to successfully acquire and integrate such operations, ~~and products,~~ including the successful integration of the businesses we have acquired, including contingent consideration valuation;

•our ability to build out acquired businesses and integrate the product/service offerings of the acquired entities into our existing product/service portfolio;

•direct or indirect consequences of acts of war, terrorism or social unrest;

•cybersecurity threats that could impact our networks and reporting systems;

•the impact of natural disasters and other weather-related occurrences;

•fiscal and monetary policies and other regulations;

•changes or difficulties in complying with government regulation;

•changing regulations or market conditions regarding environmental sustainability;

•work stoppages due to labor disputes;

•competition, including technological advances;

•our ability to protect and defend our intellectual property rights, as well as litigation involving intellectual property rights;

•the outcome of any legal proceeding that has been or may be instituted against us and others;

•our ability to meet future cash flow estimates to support our goodwill impairment testing;

•the demand for existing and new products;

•the success of our customers’ products, particularly in the pharmaceutical industry;

•our ability to manage worldwide customer launches of complex technical products, particularly in developing markets;

•difficulties in product development and uncertainties related to the timing or outcome of product development;

•significant product liability claims;

•~~the execution of our business transformation plan;~~ and

•other risks associated with our operations.

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Although we believe that our forward-looking statements are based on reasonable assumptions, there can be no assurance that actual results, performance or achievements will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Please refer to Item 1A (Risk Factors) of Part I included in our Annual Report on Form 10-K for the year ended December 31, 2020.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A significant number of our operations are located outside of the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of our subsidiaries. Our primary foreign exchange exposure is to the euro, but we also have foreign exchange exposure to the Chinese yuan, Brazilian real, Mexican peso, Swiss franc and other Asian, European, and South American currencies. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial condition and results of operations. Conversely, a strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on our financial condition and results of operations. Additionally, in some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Any changes in exchange rates on such inter-country sales may impact our results of operations.

The table below provides information as of ~~March 31,~~September 30, 2021 about our forward currency exchange contracts. The majority of the contracts expire before the end of the ~~second~~fourth quarter of 2021.


Buy/Sell	Buy/Sell	Contract Amount (in thousands)		Average Contractual Exchange Rate	Min / Max Notional Volumes	Buy/Sell	Contract Amount (in thousands)		Average Contractual Exchange Rate	Min / Max Notional Volumes

EUR / USD	EUR / USD	$	17,784	1.2069	11,457 - 18,027	EUR / USD	$	18,075	1.1820	14,895 - 32,090
EUR / BRL	EUR / BRL	9,112		6.5198	9,112 - 9,652	EUR / BRL	10,029		6.3748	10,029 - 10,533
CZK / EUR	CZK / EUR	5,450		0.0383	3,572 - 5,450	CZK / EUR	4,898		0.0391	1,230 - 7,198
EUR / INR		3,880		89.8200	3,880 - 3,918
EUR / MXN						EUR / MXN	3,304		23.9712	2,254 - 3,304
EUR / THB	EUR / THB	4,143		36.5925	3,635 - 4,143	EUR / THB	3,237		38.9226	3,237 - 3,651
CHF / EUR						CHF / EUR	2,657		0.9223	2,657 - 2,725
MXN / USD	MXN / USD	1,300		0.0485	0 - 1,300	MXN / USD	2,400		0.0498	1,600 - 2,400
EUR / CHF						EUR / CHF	1,373		1.0795	14 - 1,373
GBP / EUR						GBP / EUR	975		1.1670	975 - 1,729
EUR / GBP	EUR / GBP	70		0.8707	70 - 990	EUR / GBP	311		0.8545	0 - 648
CHF / EUR		3,220		0.9186	3,220 - 3,585
EUR / CNY		1,172		7.7831	0 - 1,172
EUR / MXN		645		24.7225	366 - 645
GBP / EUR		992		1.1355	992 - 1,876
USD / EUR	USD / EUR	1,086		0.8316	1,086 - 5,696	USD / EUR	207		0.8453	207 - 3,406
USD / CNY		3,100		6.5175	0 - 3,100
Total	Total	$	51,954			Total	$	47,466

As of ~~March 31,~~September 30, 2021, we have recorded the fair value of foreign currency forward exchange contracts of ~~$0.2~~$0.3 million in prepaid and other and ~~$0.5~~$0.2 million in accounts payable, accrued and other liabilities on the Condensed Consolidated Balance Sheets. We also entered into a EUR/USD floating-to-fixed cross currency interest rate swap on July 20, 2017 to effectively hedge the foreign exchange and interest rate exposure on the $280 million bank term loan drawn by our wholly-owned UK subsidiary. The fair value of this cash flow hedge is ~~$3.0~~$0.7 million reported in accounts payable, accrued and other liabilities on the Condensed Consolidated Balance Sheets.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Management has evaluated, with the participation of the chief executive officer and chief financial officer of the Company, the effectiveness of our disclosure controls and procedures (as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of ~~March 31,~~September 30, 2021. Based on that evaluation, the chief executive officer and chief financial officer have concluded that these controls and procedures were effective as of such date.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

NoDuring the fiscal quarter ended September 30, 2021, we implemented enterprise resource planning ("ERP") systems at one operating facility. Consequently, the control environments have been modified at this location to incorporate the controls contained within the new ERP systems. Except for the foregoing, no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during our fiscal quarter ended ~~March 31,~~September 30, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Amid the COVID-19 pandemic, we have implemented remote work arrangements and restricted non-essential business travel. These arrangements have not materially affected our ability to maintain our business operations, including the operation of financial reporting systems, internal control over financial reporting and disclosure controls and procedures.

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PART II - OTHER INFORMATION

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

RECENT SALES OF UNREGISTERED SECURITIES

Certain French employees are eligible to participate in the FCP Aptar Savings Plan (the “Plan”). An independent agent purchases shares of common stock available under the Plan for cash on the open market and we do not issue shares. We do not receive any proceeds from the purchase of common stock under the Plan. The agent under the Plan is ~~Banque Nationale de Paris~~BNP Paribas Fund Services. No underwriters are used under the Plan. All shares are sold in reliance upon the exemption from registration under the Securities Act of 1933 provided by Regulation S promulgated under that Act. During the quarter ended ~~March 31,~~September 30, 2021, the Plan purchased ~~15,003~~4,055 shares of our common stock on behalf of the participants at an average price of ~~$134.57,~~$124.90, for an aggregate amount of ~~$2.0 million. The Plan~~$506 thousand, and sold ~~4,378~~315 shares of our common stock on behalf of the participants at an average price of ~~$141.47,~~$138.82, for an aggregate amount of ~~$619 thousand during the same period.~~$44 thousand. At ~~March 31,~~September 30, 2021, the Plan owned ~~95,752~~106,982 shares of our common stock.

ISSUER PURCHASES OF EQUITY SECURITIES

On April 18, 2019, we announced a share purchase authorization of up to $350 million of common stock. This authorization ~~replaces~~replaced previous authorizations and has no expiration date. We may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions.

During the three and nine months ended ~~March 31,~~September 30, 2021, we ~~did not repurchase any shares.~~repurchased approximately 220 thousand shares for approximately $28.4 million. As of ~~March 31,~~September 30, 2021, there was ~~$278.5~~$250.1 million of authorized share repurchases available to us. ~~Amid~~

The following table summarizes our purchases of our securities for the COVID-19 pandemic, we have been focused on preserving our liquidity and therefore temporarily suspended our share repurchase plan in 2020. While we continue to assess the impact the pandemic is having on our business throughout 2021, we removed the aforementioned suspension during the first quarter ~~of 2021 in order to preserve our flexibility to make repurchases from time to time depending on market conditions.~~ended September 30, 2021:



Period	Total Number Of Shares Purchased	Average Price Paid Per Share		Total Number Of Shares Purchased As Part Of Publicly Announced Plans Or Programs	Dollar Value Of Shares That May Yet Be Purchased Under The Plans Or Programs (in millions)

7/1 - 7/31/21	—	$	—	—	$	278.5
8/1 - 8/31/21	145,100	129.73		145,100	259.7
9/1 - 9/30/21	75,000	127.66		75,000	250.1
Total	220,100	$	129.02	220,100	$	250.1

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ITEM 6. EXHIBITS


~~Exhibit 10.1~~						~~Addendum to Employment Agreement between Aptar Mezzovico SA and Marc Prieur dated April 14, 2021.~~

Exhibit 31.1						Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2						Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101						The following information from our Quarterly Report on Form 10-Q for the ~~first~~third quarter of fiscal 2021, filed with the SEC on ~~April 30,~~October 29, 2021, formatted in Inline Extensible Business Reporting Language (XBRL): (i) the Cover Page, (ii) the Condensed Consolidated Statements of Income – Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020, (iii) the Condensed Consolidated Statements of Comprehensive Income – Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020, (iv) the Condensed Consolidated Balance Sheets – ~~March 31,~~September 30, 2021 and December 31, 2020, (v) the Condensed Consolidated Statements of Changes in Equity – Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020, (vi) the Condensed Consolidated Statements of Cash Flows - ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2021 and 2020 and (vii) the Notes to Condensed Consolidated Financial Statements.
Exhibit 104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

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SIGNATURE

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.


						AptarGroup, Inc.
						(Registrant)

			By			/s/ ROBERT W. KUHN
						Robert W. Kuhn
						Executive Vice President and Chief Financial Officer
						(Duly Authorized Officer and
						Principal Accounting and Financial Officer)


						Date: ~~April 30,~~October 29, 2021

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Net Debt to Net Capital Reconciliation	March 31,			December 31,
	2021			2020

Notes payable, revolving credit facility and overdrafts	$	1,036		$	52,200
Current maturities of long-term obligations, net of unamortized debt issuance costs	64,776			65,666
Long-Term Obligations, net of unamortized debt issuance costs	1,037,983			1,054,998
Total Debt	1,103,795			1,172,864
Less:
Cash and equivalents	254,852			300,137
Short-term investments	—			243
Net Debt	$	848,943		$	872,484

Total Stockholders' Equity	$	1,900,795		$	1,850,785
Net Debt	848,943			872,484
Net Capital	$	2,749,738		$	2,723,269

Net Debt to Net Capital	30.9		%	32.0		%