SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER 30, 2017~~

MARCH 31, 2023

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

FOR THE TRANSITION PERIOD FROMTO

265 EXCHANGE DRIVE,SUITE E, 301,CRYSTAL LAKE, ~~ILLINOIS~~IL 60014

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

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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ 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. ~~(Check one):~~

Accelerated filer ☐

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 ☑

~~Indicate the~~þ

The number of shares outstanding of ~~each of the issuer’s classes of~~ common stock, as of ~~the latest practicable date.~~

April 24, 2023, was 65,521,443 shares.

Quarter Ended ~~September 30, 2017~~

March 31, 2023

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

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Net Sales

$
624,326

$
589,729

$
1,843,388

$
1,792,066

Operating Expenses:

Cost of sales (exclusive of depreciation and amortization shown below)

408,081

381,041

1,192,967

1,145,107

Selling, research & development and administrative

95,748

86,695

292,923

285,841

Depreciation and amortization

40,087

39,667

114,660

115,944

543,916

507,403

1,600,550

1,546,892

Operating Income

80,410

82,326

242,838

245,174

Other (Expense) Income:

Interest expense

(9,733)

(8,753)

(25,707)

(26,547)

Interest income

1,113

715

2,086

1,759

Equity in results of affiliates

(72)

(15)

(142)

(187)

Miscellaneous, net

(2,200)

728

(509)

(995)

(10,892)

(7,325)

(24,272)

(25,970)

Income before Income Taxes

69,518

75,001

218,566

219,204

Provision for Income Taxes

15,989

21,901

48,043

63,187

Net Income

$
53,529

$
53,100

$
170,523

$
156,017

Net Income Attributable to Noncontrolling Interests

$
(6)

$
(2)

$
(6)

$
(8)

Net Income Attributable to AptarGroup, Inc.

$
53,523

$
53,098

$
170,517

$
156,009

Net Income Attributable to AptarGroup, Inc. per Common Share:

Basic

$
0.86

$
0.84

$
2.73

$
2.48

Diluted

$
0.83

$
0.82

$
2.64

$
2.40

Average Number of Shares Outstanding:

Basic

62,592

62,858

62,527

62,878

Diluted

64,821

64,690

64,626

64,989

Dividends per Common Share

$
0.32

$
0.30

$
0.96

$
0.90


In thousands, except per share amounts


Three Months Ended March 31,	2023		2022

Net Sales	$	860,067	$	844,932
Operating Expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	557,422		542,728
Selling, research & development and administrative	147,923		145,541
Depreciation and amortization	59,259		58,665
Restructuring initiatives	11,524		291
Total Operating Expenses	776,128		747,225
Operating Income	83,939		97,707

Other (Expense) Income:
Interest expense	(10,228)		(8,930)
Interest income	672		288
Net investment gain (loss)	188		(1,250)
Equity in results of affiliates	(131)		(86)
Miscellaneous, net	(1,171)		(1,103)
Total Other Expense	(10,670)		(11,081)

Income before Income Taxes	73,269		86,626

Provision for Income Taxes	18,683		24,255

Net Income	$	54,586	$	62,371

Net Loss Attributable to Noncontrolling Interests	$	178	$	52

Net Income Attributable to AptarGroup, Inc.	$	54,764	$	62,423

Net Income Attributable to AptarGroup, Inc. per Common Share:
Basic	$	0.84	$	0.95
Diluted	$	0.82	$	0.93

Average Number of Shares Outstanding:
Basic	65,372		65,543
Diluted	66,735		67,146

Dividends per Common Share	$	0.38	$	0.38

See accompanying ~~Unaudited~~unaudited Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands, brackets denote cash outflows

Nine Months Ended September 30,

2017

2016

Cash Flows from Operating Activities:

Net income

$
170,523

$
156,017

Adjustments to reconcile net income to net cash provided by operations:

Depreciation

107,017

109,156

Amortization

7,643

6,788

Stock based compensation

15,005

17,823

Provision for doubtful accounts

124

369

Deferred income taxes

(2,265)

(661)

Defined benefit plan expense

12,932

12,632

Equity in results of affiliates

142

187

Changes in balance sheet items, excluding effects from foreign currency adjustments:

Accounts and other receivables

(46,038)

(54,243)

Inventories

(1,392)

(11,284)

Prepaid and other current assets

(10,839)

(14,244)

Accounts payable and accrued liabilities

49,158

3,491

Income taxes payable

2,061

(595)

Retirement and deferred compensation plan liabilities

(20,621)

(14,419)

Other changes, net

(18,288)

(8,597)

Net Cash Provided by Operations

265,162

202,420

Cash Flows from Investing Activities:

Capital expenditures

(120,803)

(92,366)

Proceeds from sale of property and equipment, including insurance proceeds

2,345

2,049

Settlement of derivative

(66,155)

—

Maturity of short-term investments

—

29,485

Acquisition of business, net of cash acquired

—

(202,985)

Acquisition of intangible assets

—

(2,491)

Investment in unconsolidated affiliate

(5,000)

—

Notes receivable, net

451

777

Net Cash Used by Investing Activities

(189,162)

(265,531)

Cash Flows from Financing Activities:

(Repayments of) proceeds from notes payable

(63,905)

132,622

Proceeds from long-term obligations

625,525

5,950

Repayments of long-term obligations

(4,836)

(53,512)

Dividends paid

(60,002)

(56,597)

Credit facility costs

(2,937)

—

Proceeds from stock option exercises

66,686

49,457

Purchase of treasury stock

(72,270)

—

Common stock repurchased and retired

(40,994)

(84,790)

Excess tax benefit from exercise of stock options

—

7,960

Net Cash Provided by Financing Activities

447,267

1,090

Effect of Exchange Rate Changes on Cash

29,112

4,857

Net Increase (Decrease) in Cash and Equivalents

552,379

(57,164)

Cash and Equivalents at Beginning of Period

466,287

489,901

Cash and Equivalents at End of Period

$
1,018,666

$
432,737


In thousands, brackets denote cash outflows

Three Months Ended March 31,	2023		2022

Cash Flows from Operating Activities:
Net income	$	54,586	$	62,371
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	48,297		47,638
Amortization	10,963		11,027
Stock-based compensation	15,042		13,362
Provision for CECL	2,203		1,393
Gain on disposition of fixed assets	(302)		(182)
Net (gain) loss on remeasurement of equity securities	(188)		1,250
Deferred income taxes	(5,483)		(2,859)
Defined benefit plan expense	3,537		6,225
Equity in results of affiliates	131		86
Change in fair value of contingent consideration	—		(1,050)
Changes in balance sheet items, excluding effects from foreign currency adjustments:
Accounts and other receivables	(7,845)		(28,977)
Inventories	(17,415)		(21,758)
Prepaid and other current assets	(20,578)		(10,629)
Accounts payable, accrued and other liabilities	24,639		32,012
Income taxes payable	(364)		1,697
Retirement and deferred compensation plan liabilities	(7,809)		(19,913)
Other changes, net	(1,110)		384
Net Cash Provided by Operations	98,304		92,077
Cash Flows from Investing Activities:
Capital expenditures	(77,825)		(73,058)
Proceeds from government grants	—		7,955
Proceeds from sale of property, plant and equipment	635		446
Maturity of short-term investment	—		24

Acquisition of businesses, net of cash acquired and release of escrow	(11,209)		—
Acquisition of intangible assets, net	(650)		—

Proceeds from sale of investment in equity securities	—		1,088
Notes receivable, net	(132)		(4,876)
Net Cash Used by Investing Activities	(89,181)		(68,421)
Cash Flows from Financing Activities:
Proceeds from notes payable and overdrafts	16,086		9,172
Repayments of notes payable and overdrafts	(7,473)		(11,293)
Repayments and proceeds of short term revolving credit facility, net	—		(144,345)
Proceeds from long-term obligations	210		402,153
Repayments of long-term obligations	(2,888)		(2,795)
Debt issuance costs	—		(3,766)

Dividends paid	(24,848)		(24,912)
Proceeds from stock option exercises	13,809		3,688
Purchase of treasury stock	(19,729)		(15,983)
Net Cash (Used) Provided by Financing Activities	(24,833)		211,919
Effect of Exchange Rate Changes on Cash	788		(2,871)
Net (Decrease) Increase in Cash and Equivalents and Restricted Cash	(14,922)		232,704
Cash and Equivalents and Restricted Cash at Beginning of Period	142,732		122,925
Cash and Equivalents and Restricted Cash at End of Period	$	127,810	$	355,629

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 Metaphase acquisition.


Three Months Ended March 31,	2023		2022

Cash and equivalents	$	126,810	$	355,629
Restricted cash included in prepaid and other	1,000		—
Total Cash and Equivalents and Restricted Cash shown in the Statement of Cash Flows	$	127,810	$	355,629

See accompanying ~~Unaudited~~unaudited Notes to Condensed Consolidated Financial Statements.

Notes to Condensed Consolidated Financial Statements

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

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying ~~Unaudited~~unaudited Condensed Consolidated Financial Statements include the accounts of AptarGroup, Inc. and our subsidiaries. The terms “AptarGroup”, “Aptar”, “Company”, “we”, “us” or ~~“Company”~~“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~~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 ~~Unaudited~~ 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 ~~the Company believes~~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~~audited Consolidated Financial Statements included in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2022 but does not include all disclosures required by U.S. GAAP. Accordingly, these ~~Unaudited~~ Condensed Consolidated Financial Statements and related notes should be read in conjunction with the ~~Audited~~audited Consolidated Financial Statements and notes thereto included in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022. The results of operations of any interim period are not necessarily indicative of the results that may be expected for the year.

ADOPTION OF RECENT ACCOUNTING ~~PRONOUNCEMENTS~~

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.

In May 2014, the FASB amended the guidance for recognition of revenue from customer contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB decided to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also decided to allow early adoption of the standard, but not before the original effective date of December 15, 2016. Subsequent to the initial standards, the FASB has also issued several ASUs to clarify specific revenue recognition topics. We continue to evaluate the impact the adoption of this standard will have on our Consolidated Financial Statements. The majority of our revenues are derived from product sales and tooling sales. We are also evaluating our service, license, exclusivity and royalty arrangements, which need to be reviewed individually to ensure proper accounting under the new standard. To date, our internal project team has reviewed a substantial portion of contracts. While we continue to assess the potential impacts of the new standard, we currently believe the pronouncement will affect the way we account for tooling contracts. We currently recognize revenue for these contracts when the title and risk of loss transfers to the customer. Under the new guidance, we expect we will be required to recognize revenue for certain contracts over the time required to build the tool. We also continue to progress in updating our internal controls along with reviewing and developing the additional disclosures required by the standard. We currently anticipate adopting the modified retrospective transition method for implementing this guidance on the standard’s effective date.

~~In July 2015,~~September 2022, the FASB issued ~~new guidance~~ASU 2022-04, Liabilities-Supplier Finance Programs (Topic 405), which enhances the transparency of supplier finance programs and requires certain disclosures for ~~simplifying the measurement of inventory.~~a buyer in a supplier finance program. The ~~core principle of the guidance is that an entity should measure inventory at the lower of cost or net realizable value. This standard is~~requirements are effective for ~~annual reporting periods~~fiscal years beginning after December 15, ~~2016. The Company adopted the requirements of the standard and the impact was not material to our current year financial statements.~~

In March 2016, the FASB issued guidance that eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies2022, including interim periods within those fiscal years, except for the equity method. The guidance requires that an equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. The new standard is effective for fiscal years and interim periods beginning after December 15, 2016. The adoption of the new rules did not have an impactamendment on ~~our financial statements.~~

In March 2016, the FASB issued guidance that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The new standard is effective for fiscal years and interim periods beginning after December 15, 2016. The Company has prospectively adopted the standard resulting in $0.5 million and $8.8 million of additional tax deductions that would have been previously recorded in stockholders’ equity now being reported as a reduction in tax expense for the three and nine months ended September 30, 2017, respectively. The amount of excess tax benefits and deficiencies recognized in the provision for income taxes will fluctuate from period to period based on the price of the Company’s stock, the volume of share-based instruments settled or vested, and the value assigned to share-based instruments under U.S. GAAP. We have also prospectively adopted the standard for the presentation of the condensed consolidated statements of cash flows. The impact of excess tax benefits from exercise of stock options is now shown within cash flows from operating activities instead of cash flows from financing activities. In addition, the Company has elected to continue its current practice of estimating expected forfeitures.

In August 2017, the FASB issued new guidance to improve the accounting for hedging activities. The guidance changes the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the guidance makes certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The new standardroll forward information, which is effective for fiscal years beginning after December ~~15, 2018~~13, 2023. Early adoption is permitted. We adopted this guidance in the fourth quarter of 2022.

In March 2020, the FASB issued ASU 2020-04, which provides optional expedients and ~~interim periods within those fiscal years. However, early application~~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 could be adopted any time prior to December 31, 2022. The guidance in ASU 2020-04 and ASU 2021-01 is ~~permitted~~optional and may be elected over time as reference rate reform activities occur. During 2021, we amended the revolving credit facility to provide mechanics relating to a transition away from LIBOR 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. We are evaluating any ~~interim period after the issuance of this guidance. The Company has chosen to adopt~~further impact this standard inmay have on our Condensed Consolidated Financial Statements and anticipate no further significant impacts. We plan on adopting this guidance during the ~~current period. See details in Note 8 – Derivative Instruments and Hedging Activities.~~

second quarter of 2023.

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.

~~RETIREMENT OF COMMON STOCK~~

During the first nine months of 2017, the Company repurchased 1.4 million shares of common stock, of which 512 thousand shares were immediately retired. During the first nine months of 2016, the Company repurchased and immediately retired 1.1 million shares of common stock. Common stock was reduced by the number of shares retired at $0.01 par value per share. The Company allocates the excess purchase price over par value between additional paid-in capital and retained earnings.

INCOME TAXES

~~The Company computes~~

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 U.S. GAAP financial accounting purposes. To the extent that these differences create timing differences between the tax basis of an asset or liability and our reported amount in the U.S. GAAP financial statements, an appropriate provision for deferred income taxes is made.

~~The Company considers numerous factors to determine which foreign~~

We maintain our assertion that the cash and distributable reserves at our non-U.S. affiliates are indefinitely reinvested with the following exceptions: all earnings in Germany and the pre-2020 earnings in Italy, Switzerland and Columbia. Under current U.S. tax laws, all of our non-U.S. earnings are ~~permanently reinvested in foreign operations.~~subject to U.S. taxation on a current or deferred basis. We will provide for the necessary withholding tax, local income taxes, and U.S. federal and state taxes when management decides that an affiliate should make a distribution. These ~~include~~decisions are made taking into consideration the financial requirements of the ~~U.S. parent company~~non-U.S. affiliates and ~~those of~~ our foreign subsidiaries, the U.S. funding needs for dividend payments and stock repurchases, and the tax consequences of remitting earnings to the U.S. From this analysis, current year repatriation decisions are made in an attempt toglobal cash management goals.

We provide a proper mix of debt and stockholder capital both within the U.S. and for non-U.S. operations. During 2016, the Company decided to repatriate a portion of our 2016 and 2017 foreign earnings. In the first quarter of 2017, the Company repatriated €250 million ($263 million) of foreign earnings, most of which was used to reduce existing debt levels and fund stock repurchases. To better balance our capital structure, the Company repatriated an additional €700 million ($751 million) of foreign earnings in the third quarter of 2017. The Company recognized a $5 million tax benefit for the nine months ended September 30, 2017 associated with these repatriation activities. The Company maintains its assertion that the approximately $614 million of remaining foreign earnings are permanently reinvested. As such, the Company does not provide for taxes on these earnings.

~~The Company provides~~ a liability for the amount of unrecognized tax benefits from uncertain tax positions. This liability is provided whenever ~~the Company determines~~we determine that a tax benefit will not meet a more-likely-than-not threshold for recognition. ~~See Note 4 - Income Taxes for more information.~~

~~REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS~~

~~During the second quarter of 2017, the Company determined that the impact of restricted stock unit (RSU) vesting was incorrectly presented~~We are subject to taxation and file income tax returns in the U.S. federal jurisdiction and many state and foreign jurisdictions. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. 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 our 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 ~~Statement~~Financial Statements.

SUPPLY CHAIN FINANCE PROGRAM

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 ~~Cash Flows. The effect~~invoices, less an interest deduction, and negotiate their receivable sales arrangements through the third-party platform on behalf of ~~correcting~~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 ~~error resulted~~program continues to be a trade payable program and is not indicative of a borrowing arrangement. Under these agreements, the average payment terms range from 60 to 120 days and are based on industry standards and best practices within each of our regions.

All outstanding amounts related to suppliers participating in a reduction to Net Cash Provided by Operations with a corresponding increase to Net Cash (Used) Provided by Financing Activities. As this correction represented a reclassification between two accountsthe SCF are recorded within ~~the~~Accounts payable, accrued and other liabilities in our Condensed Consolidated ~~Statement of Cash Flows, the~~Balance Sheets, and associated payments are included in operating activities within our Condensed Consolidated Statements of ~~Income,~~Cash Flows. As of March 31, 2023, the amounts due to suppliers participating in the SCF and included in Accounts payable, accrued and other liabilities were approximately $38.5 million.

We have lengthened the payment terms with our suppliers to be in line with customer trends. While we have offered a third party alternative 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.

Segment financial information for the prior periods has been recast to conform to the current presentation. Refer to Note 16 - Segment Information. Revenue by segment and geography based on shipped from locations for the three months ended March 31, 2023 and 2022 is as follows:


	For the Three Months Ended March 31, 2023
Segment	Europe		Domestic		Latin America		Asia		Total
Aptar Pharma	$	227,116	$	102,274	$	7,223	$	19,433	$	356,046
Aptar Beauty	212,010		59,288		35,252		19,839		326,389
Aptar Closures	57,340		86,916		20,141		13,235		177,632
Total	$	496,466	$	248,478	$	62,616	$	52,507	$	860,067


	For the Three Months Ended March 31, 2022
Segment	Europe		Domestic		Latin America		Asia		Total
Aptar Pharma	$	211,007	$	106,341	$	7,855	$	17,259	$	342,462
Aptar Beauty	187,759		69,380		29,690		22,251		309,080
Aptar Closures	56,365		104,284		20,199		12,542		193,390
Total	$	455,131	$	280,005	$	57,744	$	52,052	$	844,932

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 invoicing for 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, 2022		Balance as of March 31, 2023		Increase/ (Decrease)
Contract asset (current)	$	16,736	$	20,390	$	3,654

Contract liability (current)	80,241		96,839		16,598
Contract liability (long-term)	25,361		31,692		6,331

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 invoicing. The total amount of revenue recognized during the current year against contract liabilities is $29.3 million, including $21.2 million relating to contract liabilities at the beginning of the year. Current 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 ~~Sheet~~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.

We primarily manufacture and sell drug delivery, consumer product dispensing and active material science solutions. The amount of consideration is typically fixed for customers. At the time of delivery, the customer is invoiced at 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. For a majority of product sales, 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. 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.

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.

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 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. We do not have any material extended warranties as of March 31, 2023 or December 31, 2022.

We also provide services to our customers. As with product sales, we recognize revenue based on completion of each performance obligation of the service contract. Milestone deliverables and upfront payments are tied to specific performance obligations and recognized upon satisfaction of the individual performance obligation.

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

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 ~~Condensed Consolidated Statements~~customer’s established credit rating or our assessment of ~~Changes in Equity were not impacted by this change. The Company determined~~ the ~~correction was not material to previously issued~~customer’s creditworthiness based on our analysis of their financial statements ~~but was significant enough~~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 ~~revise. Following is a summary~~pursue recovery of ~~the previously issued financial statement line items impacted by this revision for all periods and statements included in this report:~~

defaulted receivables.

As Previously


Reported

Adjustment

As Revised

Revised Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2016

Retirement and deferred compensation plan liabilities

$
(12,525)

$
(1,894)

$
(14,419)

Net Cash Provided by Operations

204,314

(1,894)

202,420

Proceeds from stock option exercises

47,563

1,894

49,457

Net Cash (Used) Provided by Financing Activities

(804)

1,894

1,090

NOTE 23 - INVENTORIES

Inventories, by component net of reserves, consisted of:

NOTE 34 – GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill ~~since December~~for the three months ended March 31, ~~2016~~2023 by reporting segment are as ~~follows by reporting segment:~~

Beauty +



Food +

Corporate


Home

Pharma

Beverage

& Other

Total

Goodwill

$
211,371

$
180,050

$
16,101

$
1,615

$
409,137

Accumulated impairment losses

—

—

—

(1,615)

(1,615)

Balance as of December 31, 2016

$
211,371

$
180,050

$
16,101

$
—

$
407,522

Foreign currency exchange effects

10,887

20,064

674

—

31,625

Goodwill

$
222,258

$
200,114

$
16,775

$
1,615

$
440,762

Accumulated impairment losses

—

—

—

(1,615)

(1,615)

Balance as of September 30, 2017

$
222,258

$
200,114

$
16,775

$
—

$
439,147

follows:



	Aptar Pharma		Aptar Beauty		Aptar Closures		Total
Balance as of December 31, 2022	$	498,742	$	319,011	$	127,879	$	945,632
Reclassification due to segment change	—		(39,472)		39,472		—
Acquisition	—		3,549		239		3,788
Foreign currency exchange effects	4,663		1,330		189		6,182
Balance as of March 31, 2023	$	503,405	$	284,418	$	167,779	$	955,602

The table below shows a summary of intangible assets as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016.~~

2022.

Aggregate amortization expense for the intangible assets above for the ~~quarters ended September 30, 2017 and 2016 was $2,708 and $2,553, respectively. Aggregate amortization expense for the intangible assets above for the nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022 was ~~$7,643~~$10,963 and ~~$6,788,~~$11,027, respectively.

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

2017

$
2,572

(remaining estimated amortization for 2017)
2018

10,851

2019

10,667

2020

9,464

2021 and thereafter

63,206


2023	$	33,697	(remaining estimated amortization for 2023)
2024	41,457
2025	39,971
2026	37,519
2027	24,778
Thereafter	133,386

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 ~~September 30, 2017.~~

March 31, 2023.

NOTE ~~4 —~~5 – INCOME TAXES

The ~~reported~~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 ~~decreased to 23.0%~~ for the three months ended ~~September 30, 2017 compared to 29.2% for the same period ended September 30, 2016, resulting in a decrease to the Provision for Income Taxes of approximately $6 million.~~March 31, 2023 and 2022, respectively, was 25.5% and 28.0%. The ~~reported~~lower effective tax rate ~~decreased to 22.0%~~ for ~~the nine months ended September 30, 2017 compared to 28.8% for the same period ended September 30, 2016, resulting in a decrease to the Provision for Income Taxes of approximately $15 million. For~~ the three months ended ~~September 30, 2017, the decrease in the tax rate~~March 31, 2023 reflects a benefit of 4.5% recognized upon a foreign tax settlement. For the nine months ended September 30, 2017, the decrease in the tax rate reflects a 4.0% benefit from the new accounting standard for employee share-based compensation payments, which the Company adopted in 2017, a 1.6% benefit in connection with our repatriation activities, which was primarily related to tax benefits ~~associated with the forward contracts discussed~~from amended U.S. tax filings of $1.3 million and an increase in ~~Note 8~~tax benefits from share based compensation of $0.8 million.

NOTE 6 – ~~Derivative Instruments~~DEBT

Notes Payable, Revolving Credit Facility and ~~Hedging Activities and a 1.4% benefit from the foreign tax settlement previously mentioned.~~

~~The Company had approximately $3.6 and $6.4 million recorded for income tax uncertainties as of September 30, 2017~~Overdrafts

At March 31, 2023 and December 31, ~~2016, respectively. The change is primarily attributable to a $2.2 million reduction related to a foreign tax settlement, along with other settlements~~2022, our notes payable, revolving credit facility and currency fluctuations. The uncertain amounts, if recognized, that would impact the effective tax rate are $3.6 and $6.4 million, respectively. The Company estimates that it is reasonably possible that the liability for uncertain tax positions will decrease by no more than $1.9 million in the next twelve months from the resolution of various uncertain positions as a resultoverdrafts consisted of the ~~completion of tax audits, litigation and the expiration of the statute of limitations in various jurisdictions.~~

following:


	March 31, 2023		December 31, 2022


Overdrafts 1.46% to 15.40%	12,733		3,810
	$	12,733	$	3,810

~~NOTE 5 – LONG –TERM OBLIGATIONS~~

~~During the third quarter of 2017, the Company~~On June 30, 2021, we entered into ~~the borrowing arrangements summarized below through our wholly owned UK subsidiary to better balance our capital structure.~~

Debt Type

Amount

Term/Maturity

Interest Rate

Bank term loan

$
280,000

5 year amortizing/July 2022

2.56% floating swapped to 1.36% fixed

Bank revolver

€
150,000

5 year/July 2022

1.10% floating

Private placement

€
100,000

6 year/July 2023

0.98% fixed

Private placement

€
200,000

7 year/July 2024

1.17% fixed

~~The Company also maintains a 5-year~~an amended and restated multi-currency revolving credit facility ~~that~~(the "revolving credit facility") with a syndicate of banks to replace the then-existing facility maturing July 2022 (the "prior credit facility") 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 one-year extensions in certain circumstances, and provides for unsecured financing of up to $600 million available in the U.S. and to our wholly-owned UK subsidiary. The amended term facility matured in July 2022 and was repaid in full. 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 March 31, 2023 and ~~matures~~December 31, 2022, no balance was utilized under the revolving credit facility in ~~July~~the U.S. and no balance was utilized by our wholly-owned UK subsidiary.

There are no 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, no balance was utilized under this arrangement as of March 31, 2023 or December 31, 2022.

Long-Term Obligations

On March 7, 2022, we issued $400 million aggregate principal amount of 3.60% Senior Notes due March 2032 in an underwritten public offering. The form and terms of the notes were established pursuant to an Indenture, dated as of March 7, 2022, as amended and supplemented by a First Supplemental Indenture, dated as of March 7, 2022, each between the Company and U.S. Bank Trust Company, National Association, as trustee. Interest is payable semi-annually in arrears. The notes are unsecured obligations and rank equally in right of payment with all of our other existing and future senior, unsecured indebtedness.

At March 31, 2023 and December 31, 2022, our long-term obligations consisted of the following:


	March 31, 2023		December 31, 2022
Notes payable 0.00% – 16.42%, due in monthly and annual installments through 2028	$	28,093	$	29,167
Senior unsecured notes 1.0%, due in 2023	108,455		106,995
Senior unsecured notes 3.4%, due in 2024	50,000		50,000
Senior unsecured notes 3.5%, due in 2024	100,000		100,000
Senior unsecured notes 1.2%, due in 2024	216,910		213,990
Senior unsecured notes 3.6%, due in 2025	125,000		125,000
Senior unsecured notes 3.6%, due in 2026	125,000		125,000
Senior unsecured notes 3.6%, due in 2032, net of discount of $0.9 million	399,076		399,050
Finance Lease Liabilities	26,486		26,934
Unamortized debt issuance costs	(4,371)		(4,558)
	$	1,174,649	$	1,171,578
Current maturities of long-term obligations	(218,731)		(118,981)
Total long-term obligations	$	955,918	$	1,052,597

The aggregate long-term maturities, excluding finance lease liabilities and unamortized debt issuance costs, which are discussed in Note 7, due annually from the current balance sheet date for the next five years and thereafter are:


Year One	$	215,607
Year Two	276,944
Year Three	258,681
Year Four	2,030
Year Five	74
Thereafter	399,198

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

~~Requirement~~

Requirement

Level at ~~September 30, 2017~~

March 31, 2023

Consolidated Leverage Ratio ~~(a)~~

(1)

Maximumof 3.50 to 1.00

~~1.17~~1.80 to 1.00

Consolidated Interest Coverage Ratio ~~(a)~~

(1)

Minimum of 3.00 to 1.00

~~13.38~~14.19 to 1.00

~~(a)~~

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

(1)Definitions of ratios are included as part of the ~~following:~~

Unamortized




Debt Issuance



Principal

Costs

Net

Notes payable 0.61% – 18.00%, due in monthly and annual installments through 2025

$
17,103

$
—

$
17,103

Senior unsecured notes 6.0%, due in 2018

75,000

62

74,938

Senior unsecured notes 3.8%, due in 2020

84,000

138

83,862

Senior unsecured notes 3.2%, due in 2022

75,000

156

74,844

Senior unsecured debts 2.6% floating, equal annual installments through 2022

280,000

755

279,245

Senior unsecured notes 3.5%, due in 2023

125,000

291

124,709

Senior unsecured notes 1.0%, due in 2023

118,190

418

117,772

Senior unsecured notes 3.4%, due in 2024

50,000

118

49,882

Senior unsecured notes 3.5%, due in 2024

100,000

291

99,709

Senior unsecured notes 1.2%, due in 2024

236,380

835

235,545

Senior unsecured notes 3.6%, due in 2025

125,000

314

124,686

Senior unsecured notes 3.6%, due in 2026

125,000

314

124,686

Capital lease obligations

879

—

879

$
1,411,552

$
3,692

$
1,407,860

Current maturities of long-term obligations

(136,392)

(62)

(136,330)

Total long-term obligations

$
1,275,161

$
3,631

$
1,271,530

revolving credit facility agreement and the private placement agreements.

We lease certain warehouse, plant and office facilities as well as certain equipment under non-cancelable operating and finance leases expiring at various dates through the year 2037. 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 ("COS") and selling, research & development and administrative expenses (“SG&A”).

The components of lease expense for the three months ended March 31, 2023 and 2022 were as follows:



Three Months Ended March 31,	2023		2022
Operating lease cost	$	5,414	$	5,281

Finance lease cost:
Amortization of right-of-use assets	$	911	$	1,129
Interest on lease liabilities	299		325
Total finance lease cost	$	1,210	$	1,454

Short-term lease and variable lease costs	$	4,912	$	3,982

Supplemental cash flow information related to leases was as follows:

~~At December 31, 2016, the Company’s long-term obligations consisted of the following:~~

Unamortized




Debt Issuance



Principal

Costs

Net

Notes payable 0.61% – 16.00%, due in monthly and annual installments through 2025

$
18,246

$
—

$
18,246

Senior unsecured notes 6.0%, due in 2018

75,000

37

74,963

Senior unsecured notes 3.8%, due in 2020

84,000

119

83,881

Senior unsecured notes 3.2%, due in 2022

75,000

138

74,862

Senior unsecured notes 3.5%, due in 2023

125,000

256

124,744

Senior unsecured notes 3.4%, due in 2024

50,000

104

49,896

Senior unsecured notes 3.5%, due in 2024

100,000

256

99,744

Senior unsecured notes 3.6%, due in 2025

125,000

269

124,731

Senior unsecured notes 3.6%, due in 2026

125,000

269

124,731

Capital lease obligations

1,542

—

1,542

$
778,788

$
1,448

$
777,340

Current maturities of long-term obligations

(4,603)

—

(4,603)

Total long-term obligations

$
774,185

$
1,448

$
772,737

NOTE ~~6 —~~8 – RETIREMENT AND DEFERRED COMPENSATION PLANS

Effective January 1, 2021, our domestic noncontributory retirement plans were closed to new employees and employees who were rehired after December 31, 2020. These employees are instead 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 are still eligible for the domestic pension plans and continue to accrue plan benefits after this date.

Components of Net Periodic Benefit Cost:

Domestic Plans

Foreign Plans

Nine Months Ended September 30,

2017

2016

2017

2016

Service cost

$
7,279

$
6,781

$
4,166

$
3,449

Interest cost

5,257

5,082

1,321

1,432

Expected return on plan assets

(7,409)

(6,353)

(1,781)

(1,651)

Amortization of net loss

2,403

2,462

1,400

1,165

Amortization of prior service cost

—

—

296

265

Net periodic benefit cost

$
7,530

$
7,972

$
5,402

$
4,660

Employer Contributions

We currently have no minimum funding ~~requirement, we contributed $24.7 million~~requirements for our domestic and foreign plans. There were no contributions to our domestic defined benefit plans during the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2023 and we do not expect additional significant payments during 2023. We ~~also expect to contribute approximately $2.5~~contributed $0.3 million to our foreign defined benefit plans ~~in 2017,~~during the three months ended March 31, 2023 and ~~as of September 30, 2017, we have contributed approximately $2.0 million of that amount.~~

do not expect additional significant contributions during 2023.

NOTE 7—9 – ACCUMULATED OTHER COMPREHENSIVE INCOME

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

Foreign

Defined Benefit




Currency

Pension Plans

Other

Total

Balance -  December 31, 2015

$
(206,725)

$
(55,550)

$
(72)

$
(262,347)

Other comprehensive income before reclassifications

44,329

—

—

44,329

Amounts reclassified from accumulated other comprehensive income

(82)

2,511

19

2,448

Net current-period other comprehensive income

44,247

2,511

19

46,777

Balance -  September 30, 2016

$
(162,478)

$
(53,039)

$
(53)

$
(215,570)

Balance -  December 31, 2016

$
(259,888)

$
(59,775)

$
(46)

$
(319,709)

Other comprehensive income before reclassifications

69,493

—

(9,237)

60,256

Amounts reclassified from accumulated other comprehensive income

—

2,699

5,667

8,366

Net current-period other comprehensive income

69,493

2,699

(3,570)

68,622

Balance -  September 30, 2017

$
(190,395)

$
(57,076)

$
(3,616)

$
(251,087)


	Foreign Currency		Defined Benefit Pension Plans		Derivatives		Total
Balance - December 31, 2021	$	(249,500)	$	(66,486)	$	(55)	$	(316,041)
Other comprehensive (loss) income before reclassifications	(23,080)		(783)		1,192		(22,671)
Amounts reclassified from accumulated other comprehensive income (loss)	—		1,608		(1,604)		4
Net current-period other comprehensive (loss) income	(23,080)		825		(412)		(22,667)
Balance - March 31, 2022	$	(272,580)	$	(65,661)	$	(467)	$	(338,708)

Balance - December 31, 2022	$	(328,740)	$	(5,951)	$	(6,675)	$	(341,366)
Other comprehensive (loss) income before reclassifications	25,007		61		(1,367)		23,701
Amounts reclassified from accumulated other comprehensive income	—		192		—		192
Net current-period other comprehensive income (loss)	25,007		253		(1,367)		23,893
Balance - March 31, 2023	$	(303,733)	$	(5,698)	$	(8,042)	$	(317,473)

Reclassifications Out of Accumulated Other Comprehensive (Loss) Income:

Amount Reclassified from

Details about Accumulated Other

Accumulated Other

Affected Line in the Statement

Comprehensive Income Components

Comprehensive Income

Where Net Income is Presented

Three Months Ended September 30,

2017

2016



Defined Benefit Pension Plans

Amortization of net loss

$
1,294

$
1,208

(a)

Amortization of prior service cost

104

89

(a)

1,398

1,297

Total before tax

(474)

(460)

Tax benefit

$
924

$
837

Net of tax

Foreign Currency

Foreign currency gain

$
—

$
(82)

Miscellaneous, net

—

(82)

Total before tax

—

—

Tax benefit

$
—

$
(82)

Net of tax

Other

Changes in treasury locks

$
11

$
10

Interest Expense

Changes in cross currency swap: interest component

(678)

—

Interest Expense

Changes in cross currency swap: foreign exchange component

7,481

—

Miscellaneous, net

6,814

10

Total before tax

(1,161)

(4)

Tax benefit

$
5,653

$
6

Net of tax

Total reclassifications for the period

$
6,577

$
761

~~(a)~~

These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax (see Note 6 – Retirement and Deferred Compensation Plans for additional details).


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,	2023		2022

Defined Benefit Pension Plans
Amortization of net loss	$	228	$	2,111	(1)
Amortization of prior service cost	43		38		(1)
	271		2,149		Total before tax
	(79)		(541)		Tax impact
	$	192	$	1,608	Net of tax
Derivatives
Changes in cross currency swap: interest component	$	—	$	(20)	Interest Expense
Changes in cross currency swap: foreign exchange component	—		(1,584)		Miscellaneous, net
	$	—	$	(1,604)	Net of tax
Total reclassifications for the period	$	192	$	4

(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.

Amount Reclassified from

Details about Accumulated Other

Accumulated Other

Affected Line in the Statement

Comprehensive Income Components

Comprehensive Income

Where Net Income is Presented

Nine Months Ended September 30,

2017

2016



Defined Benefit Pension Plans

Amortization of net loss

$
3,803

$
3,627

(b)

Amortization of prior service cost

296

265

(b)

4,099

3,892

Total before tax

(1,400)

(1,381)

Tax benefit

$
2,699

$
2,511

Net of tax

Foreign Currency

Foreign currency gain

$
—

$
(82)

Miscellaneous, net

—

(82)

Total before tax

—

—

Tax benefit

$
—

$
(82)

Net of tax

Other

Changes in treasury locks

$
32

$
30

Interest Expense

Changes in cross currency swap: interest component

(678)

—

Interest Expense

Changes in cross currency swap: foreign exchange component

7,481

—

Miscellaneous, net

6,835

30

Total before tax

(1,168)

(11)

Tax benefit

$
5,667

$
19

Net of tax

Total reclassifications for the period

$
8,366

$
2,448

~~(b)~~

~~These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax (see Note 6~~NOTE 10 – ~~Retirement and Deferred Compensation Plans for additional details).~~

~~NOTE 8 —~~ DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

~~The Company maintains~~

We maintain a foreign exchange risk management policy designed to establish a framework to protect the value of ~~the Company’s~~our non-functional currency denominated transactions from adverse changes in exchange rates. Sales of ~~the Company’s~~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 ~~the Company’s~~our results of operations. ~~The Company’s~~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. ~~The Company~~We may use foreign currency forward exchange contracts, options and cross currency swaps to economically hedge these risks.

For derivative instruments designated as hedges, ~~the Company~~we formally ~~documents~~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, ~~the Company~~we formally ~~assesses~~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 911 - Fair Value).

~~CASH FLOW HEDGE~~

For derivative instruments that are designated and qualify as a cash flow ~~hedge,~~hedges, the changes in fair values are recorded in accumulated other comprehensive loss and included in ~~unrealized (losses) gains on cash flow hedges.~~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.

Net Investment Hedge

As disclosed in Note 5 – Long-Term Obligations, our wholly owned UK subsidiary borrowed $280 million in term loan borrowings under a new 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 swap on July 20, 2017 in the notional amount of $280 million to effectively hedge the foreign exchange and interest rate exposure on the $280 million term loan. Related to this hedge, approximately $3.6 million of net after-tax loss is included in accumulated other comprehensive earnings at September 30, 2017. The amount expected to be recognized into earnings during the next 12 months related to the interest component of our cross currency swap based on prevailing foreign exchange and interest rates at September 30, 2017 is $3.3 million. The amount expected to be recognized into earnings during the next 12 months related to the foreign exchange component of our cross currency swap is dependent on fluctuations in currency exchange rates. As of September 30, 2017, the fair value of the cross currency swap was a $12.1 million liability. The swap contract expires on July 20, 2022.

~~HEDGE OF NET INVESTMENTS IN FOREIGN OPERATIONS~~

A significant number of ~~the Company’s~~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 ~~the Company’s~~our foreign subsidiaries. A ~~weakening~~strengthening U.S. dollar relative to foreign currencies has ~~an additive~~a dilutive translation effect on ~~the Company’s~~our financial condition and results of operations. Conversely, a ~~strengthening~~weakening U.S. dollar has ~~a dilutive~~an additive effect. ~~The Company in~~In some cases, ~~maintains~~we maintain debt in these subsidiaries to offset the net asset exposure. ~~The Company does not otherwise actively manage this risk using derivative financial instruments.~~ In the event ~~the Company plans~~we plan on a full or partial liquidation of any of our foreign subsidiaries where ~~the Company’s~~our net investment is likely to be monetized, ~~the Company~~we will consider hedging the currency exposure associated with such a transaction.

~~OTHER~~

On July 6, 2022, we entered into a seven year USD/EUR fixed-to-fixed cross currency interest rate swap to effectively hedge the interest rate exposure relating to $203 million of the $400 million 3.60% Senior Notes due March 2032, which were issued by AptarGroup, Inc. on March 7, 2022. This USD/EUR swap agreement exchanged $203 million of fixed-rate 3.60% U.S. dollar debt to €200 million of fixed-rate 2.5224% euro debt. We pay semi-annual fixed rate interest payments on the euro notional amount of €2.5 million and receive semi-annual fixed rate interest payments on the USD notional amount of $3.7 million. This swap has been designated as a net investment hedge to effectively hedge the foreign exchange risk associated with €200 million of our euro denominated net assets. We elected the spot method for recording the net investment hedge. Gains and losses resulting from the settlement of the excluded components are recorded in interest expense in the Condensed Consolidated Statements of Income. Gains and losses resulting from the fair value adjustments to the cross currency swap agreements are recorded in accumulated other comprehensive (loss) income as the swaps are effective in hedging the designated risk. As of March 31, 2023, the fair value of the cross currency swap was a $10.7 million liability. The swap agreement will mature on September ~~30, 2017, the Company has~~15, 2029.

As of March 31, 2023, we have recorded the fair value of foreign currency forward exchange contracts of ~~$0.3~~$0.8 million in ~~prepaid~~Prepaid and other and ~~$0.4~~$0.8 million in ~~accounts~~Accounts payable, accrued and ~~accrued~~other liabilities inon the ~~balance sheet.~~Condensed Consolidated Balance Sheets. All forward exchange contracts outstanding as of ~~September 30, 2017~~March 31, 2023 had an aggregate notional contract amount of ~~$85.3~~$68.1 million.

Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~

September 30, 2017

December 31, 2016

Derivatives

Derivatives

Derivatives

not

Derivatives

not

Designated

Designated

Designated

Designated

Balance Sheet

as Hedging

as Hedging

as Hedging

as Hedging

Location

Instruments

Instruments

Instruments

Instruments

Derivative Assets

Foreign Exchange Contracts

Prepaid and other

$
—

$
327

$
—

$
1,612

$
—

$
327

$
—

$
1,612

Derivative Liabilities

Foreign Exchange Contracts

Accounts payable and accrued liabilities

$
—

$
375

$
—

$
2,881

Cross Currency Swap Contract (1)

Accounts payable and accrued liabilities

12,097

—

—

—

$
12,097

$
375

$
—

$
2,881

2022


		March 31, 2023				December 31, 2022
	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
Foreign Exchange Contracts	Prepaid and other	$	—	$	773	$	—	$	1,107

		$	—	$	773	$	—	$	1,107

Derivative Liabilities
Foreign Exchange Contracts	Accounts payable, accrued and other liabilities	$	—	$	778	$	—	$	269
Cross Currency Swap Contract (1)	Accounts payable, accrued and other liabilities	10,651		—		8,840		—
		$	10,651	$	778	$	8,840	$	269

__________________________

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

~~Table of Contents~~

The Effect of ~~Cash Flow Hedge Accounting~~Derivatives Designated as Hedging Instruments on Accumulated Other Comprehensive Income (Loss) for the ~~Quarters Ended September 30, 2017 and September 30, 2016~~

Amount of Gain (Loss)

Total Amount

Amount of Gain (Loss)

Location of (Loss)

Reclassified from

of Affected

Derivatives in Cash

Recognized in

Gain Recognized

Accumulated

Income

Flow Hedging

Other Comprehensive

in Income on

Other Comprehensive

Statement

Relationships

Income on Derivative

Derivatives

Income on Derivative

Line Item


2017

2016



2017

2016


Cross currency swap contract:

Interest component

$
(3,648)

$
—

Interest expense

$
678

$
—

$
(9,733)

Foreign exchange component

(7,481)

—

Miscellaneous, net

(7,481)

—

(2,200)

$
(11,129)

$
—

$
(6,803)

$
—

$
(11,933)

~~The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016~~

2022

Amount of Gain (Loss)

Total Amount

Amount of Gain (Loss)

Location of (Loss)

Reclassified from

of Affected

Derivatives in Cash

Recognized in

Gain Recognized

Accumulated

Income

Flow Hedging

Other Comprehensive

in Income on

Other Comprehensive

Statement

Relationships

Income on Derivative

Derivatives

Income on Derivative

Line Item


2017

2016



2017

2016


Cross currency swap contract:

Interest component

$
(3,648)

$
—
��
Interest expense

$
678

$
—

$
(25,707)

Foreign exchange component

(7,481)

—

Miscellaneous, net

(7,481)

—

(509)

$
(11,129)

$
—

$
(6,803)

$
—

$
(26,216)


Derivatives Designated as Hedging Instruments	Amount of Gain Recognized in Other Comprehensive Income on Derivative				Location of Gain Recognized in Income on Derivatives	Amount of Gain Reclassified from Accumulated Other Comprehensive Income on Derivative				Total Amount of Affected Income Statement Line Item
	2023		2022			2023		2022
Cross currency swap agreement:
Interest component	$	—	$	(392)	Interest expense	$	—	$	20	$	(10,228)
Foreign exchange component	(1,367)		1,584		Miscellaneous, net	—		1,584		(1,171)
	$	(1,367)	$	1,192		$	—	$	1,604

Table of Contents

The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the ~~Quarters Ended September 30, 2017 and September 30, 2016~~

Amount of (Loss) Gain

Derivatives Not Designated

Location of (Loss) Gain Recognized

Recognized in Income

as Hedging Instruments

in Income on Derivatives

on Derivatives




2017

2016

Foreign Exchange Contracts

Other (Expense) Income:
Miscellaneous, net

$
(15,534)

$
3,191

$
(15,534)

$
3,191

~~The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016~~

2022


Derivatives Not Designated as Hedging Instruments	Location of Loss Recognized in Income on Derivatives	Amount of Loss Recognized in Income on Derivatives
		2023		2022
Foreign Exchange Contracts	Other (Expense) Income: Miscellaneous, net	$	(860)	$	(2,100)
		$	(860)	$	(2,100)

~~Table of Contents~~



			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

March 31, 2023
Derivative Assets	$	773	—	$	773	—	—	$	773
Total Assets	$	773	—	$	773	—	—	$	773

Derivative Liabilities	$	11,429	—	$	11,429	—	—	$	11,429
Total Liabilities	$	11,429	—	$	11,429	—	—	$	11,429

December 31, 2022
Derivative Assets	$	1,107	—	$	1,107	—	—	$	1,107
Total Assets	$	1,107	—	$	1,107	—	—	$	1,107

Derivative Liabilities	$	9,109	—	$	9,109	—	—	$	9,109
Total Liabilities	$	9,109	—	$	9,109	—	—	$	9,109

Gross Amounts not Offset

Gross Amounts

Net Amounts

in the Statement of

Offset in the

Presented in

Financial Position


Gross

Statement of

the Statement of

Financial

Cash Collateral

Net

Amount

Financial Position

Financial Position

Instruments

Received

Amount

Description

September 30, 2017

Derivative Assets

$
327

—

$
327

—

—

$
327

Total Assets

$
327

—

$
327

—

—

$
327

Derivative Liabilities

$
12,472

—

$
12,472

—

—

$
12,472

Total Liabilities

$
12,472

—

$
12,472

—

—

$
12,472

December 31, 2016

Derivative Assets

$
1,612

—

$
1,612

—

—

$
1,612

Total Assets

$
1,612

—

$
1,612

—

—

$
1,612

Derivative Liabilities

$
2,881

—

$
2,881

—

—

$
2,881

Total Liabilities

$
2,881

—

$
2,881

—

—

$
2,881

As part of our repatriation activities, during the second quarter of 2017 we had a €700 million intercompany receivable balance on a U.S. Dollar functional subsidiary. In order to minimize the foreign currency risk, the Company executed foreign currency forward contracts to sell Euros and receive U.S. Dollars. These foreign currency forward contracts matured on July 27, 2017, which coincided with the date of the planned repatriation and resulted in the Company delivering €700 million in cash and receiving approximately $751 million in cash. At maturity, the foreign exchange transaction loss on the forward contract amounted to $66.2 million. This impact was offset by the revaluation of the €700 million intercompany accounts receivable balance that had $69.5 million gain during the same period. Therefore, the forward points on these forward contracts had a $3.3 million favorable impact on other (expense) income miscellaneous, net for the nine months ended September 30, 2017.

NOTE ~~9 —~~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 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

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

•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.

Table of Contents

As of ~~September 30, 2017,~~March 31, 2023, the fair values of our financial assets and liabilities were categorized as follows:

Total

Level 1

Level 2

Level 3

Assets

Foreign exchange contracts (a)

$
327

$
—

$
327

$
—

Total assets at fair value

$
327

$
—

$
327

$
—

Liabilities

Foreign exchange contracts (a)

$
375

$
—

$
375

$
—

Cross currency swap contract (a)

12,097

—

12,097

—

Total liabilities at fair value

$
12,472

$
—

$
12,472

$
—


	Total		Level 1		Level 2		Level 3
Assets
Investment in equity securities (1)	$	5,485	$	5,485	$	—	$	—
Foreign exchange contracts (2)	773		—		773		—

Convertible notes	5,650		—		—		5,650
Total assets at fair value	$	11,908	$	5,485	$	773	$	5,650
Liabilities
Foreign exchange contracts (2)	$	778	$	—	$	778	$	—
Cross currency swap contract (2)	10,651		—		10,651		—
Contingent consideration obligation	25,310		—		—		25,310
Total liabilities at fair value	$	36,739	$	—	$	11,429	$	25,310

~~Table of Contents~~

As of December 31, ~~2016,~~2022, the fair values of our financial assets and liabilities were categorized as follows:


	Total		Level 1		Level 2		Level 3
Assets
Investment in equity securities (1)	$	5,297	$	5,297	$	—	$	—
Foreign exchange contracts (2)	1,107		—		1,107		—

Convertible note	5,650		—		—		5,650
Total assets at fair value	$	12,054	$	5,297	$	1,107	$	5,650
Liabilities
Foreign exchange contracts (2)	$	269	$	—	$	269	$	—
Cross currency swap contract (2)	8,840		—		8,840		—
Contingent consideration obligation	25,310		—		—		25,310
Total liabilities at fair value	$	34,419	$	—	$	9,109	$	25,310

Total

Level 1

Level 2

Level 3

Assets

Foreign exchange contracts (a)

$
1,612

$
—

$
1,612

$
—

Total assets at fair value

$
1,612

$
—

$
1,612

$
—

Liabilities

Foreign exchange contracts (a)

$
2,881

$
—

$
2,881

$
—

Total liabilities at fair value

$
2,881

$
—

$
2,881

$
—

(1)Investment in PureCycle Technologies ("PCT" or "PureCycle"). See Note 18 – Investment in Equity Securities for discussion of this investment.

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

~~(a)~~

~~Market approach valuation technique based on observable market transactions of spot and forward rates.~~

The carrying amounts of ~~the Company’s~~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. The Company considers~~instrument. We consider our long-term debt obligations a Level 2 liability and ~~utilizes~~utilize the market approach valuation technique based on interest rates that are currently available to ~~the Company~~us for issuance of debt with similar terms and maturities. The estimated fair value of ~~the Company’s~~our long-term obligations was ~~$1.2 billion~~$828.9 million as of ~~September 30, 2017~~March 31, 2023 and ~~$739~~$868.7 million as of December 31, ~~2016.~~

2022.

During the first quarter of 2022, we invested $5.0 million in a convertible note in Enable Injections, Inc. This investment is recorded at fair value and is a Level 3 fair value measurement.

During the second quarter of 2022, we invested $1.0 million in a convertible note in Siklus Refill Pte. Ltd. ("Siklus"). During the fourth quarter of 2022, Siklus repaid $0.4 million of its convertible note. This investment is recorded at fair value and is a Level 3 fair value measurement.

As discussed in Note 12 – Fair Value of our Annual Report on Form 10-K for the year ended December 31, 2022, 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.

Table of Contents

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


	March 31, 2023		December 31, 2022
Fusion Acquisition	$	25,310	$	25,310
Noble Acquisition	—		—

	$	25,310	$	25,310

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, 2022	$	25,310

Decrease in fair value recorded in earnings	—
Payments	—
Balance, March 31, 2023	$	25,310

Subsequent to March 31, 2023, we repaid the outstanding contingent consideration obligation to the selling equity holders of Fusion.

NOTE ~~10 -~~12 – COMMITMENTS AND CONTINGENCIES

~~The Company, in~~

In the normal course of business, iswe 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 ~~the Company’s~~our financial position, or results of operations or cash flows, claims and legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur ~~and~~that 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.

Under our Certificate of Incorporation, ~~the Company has~~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 ~~the Company~~we could be required to make under these indemnification agreements is unlimited; however, ~~the Company has~~we have a directors and officers liability insurance policy that covers a portion of our exposure. As a result of our insurance policy coverage, ~~the Company believes~~we believe the estimated fair value of these indemnification agreements is minimal. ~~The Company has~~We have no liabilities recorded for these agreements as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016.~~

~~An environmental investigation, undertaken~~2022.

A fire caused damage to ~~assess areas of possible contamination, was completed at the Company’s~~our facility in ~~Jundiaí, São Paulo, Brazil. The facility is primarily an internal supplier~~Annecy, France in June 2016. We were insured for the damages caused by the fire, including business interruption insurance. During the second quarter of ~~anodized aluminum components for certain~~2022, we filed a lawsuit against the insurance company to recover a part of our ~~dispensing systems. The testing~~claim. No gain contingencies have been recognized as our ability to realize those gains remains uncertain.

We are periodically subject to loss contingencies resulting from custom duties assessments. We accrue for anticipated costs when an assessment has indicated that ~~soil~~a loss is probable and ~~groundwater~~can be reasonably estimated. We have received claims worth approximately $13 million in ~~certain areas~~principal and $5 million to $6 million for interest and penalties. We are currently defending our position with respect to these claims in the respected administrative procedures. Due to uncertainty in the amount of the facility were impacted above acceptable levels established by local regulations. In March 2017, the Company reported the findings to the relevant environmental authority, the Environmental Company of the State of São Paulo – CETESB. The Company is in the preliminary stages of further assessing the affected areas to determine the full extent of the impactassessment and the scope of any required remediation. Initial costs for further investigation and possible remediation, which are based on assumptions about the area of impact and customary remediation costs, are estimated to be in the range of $1.5 million to $3.0 million. The range of possible loss associated with this environmental contingency is subject to considerable uncertainty due to the incomplete status of the investigation and preliminary naturetiming of our ~~discussions with CETESB.~~ appeal, no liability is recorded as of March 31, 2023.

We will continue to evaluate these liabilities periodically based on available information, including the ~~range~~progress of ~~likely costs as~~remedial investigations, the ~~investigation proceeds and we have further clarity on~~status of discussions with regulatory authorities regarding the ~~nature~~methods and extent of remediation ~~that will be required. We note that~~and the ~~contamination, or any failure to complete any required remediation in a timely manner, could~~apportionment of costs and penalties among potentially result in fines or penalties. We accrued $1.5 million (operating expense) in the first quarter of 2017 relating to this contingency. The amount is periodically reviewed, and adjusted as necessary, as the matter continues to evolve. Based on the current status of the investigation, no adjustment to the accrual was necessary for the quarter ended September 30, 2017.

responsible parties.

NOTE ~~11 —~~13 – STOCK REPURCHASE PROGRAM

On ~~October 20, 2016, the Company~~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. ~~Aptar~~We may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions.

~~Table of Contents~~

During the three ~~and nine~~ months ended ~~September 30, 2017, the Company~~March 31, 2023 and 2022, we repurchased approximately ~~546~~171 thousand ~~and 1.4 million~~ shares for ~~approximately $45.5~~$19.7 million and ~~$113.3 million, respectively. During the three and nine months ended September 30, 2016, the Company repurchased approximately 463~~140 thousand ~~and 1.1 million~~ shares for ~~approximately $36.1 million and $84.8~~$16.0 million, respectively. As of ~~September 30, 2017,~~March 31, 2023, there was ~~$190.2~~$88.5 million of authorized share repurchases ~~available to~~remaining under the ~~Company.~~

existing authorization.

Table of Contents

NOTE ~~12 —~~14 – STOCK-BASED COMPENSATION

~~The Company issues stock options and~~

We issue restricted stock units (“RSUs”), which consist of time-based and performance-based awards, to employees under ~~Stock Awards Plans~~stock awards plans approved by stockholders. In addition, RSUs are issued to non-employee directors under a ~~Director~~ Restricted Stock Unit ~~Plan and~~Award Agreement for Directors pursuant to the ~~2016~~Company’s 2018 Equity Incentive ~~Plan,~~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.

For awards granted in the first quarter of 2023 and thereafter, our performance-based RSUs will vest solely based on our return on invested capital ("ROIC"). Award share payouts depend on the extent to which the ROIC performance goal has been achieved, but the final payout is adjusted by a total shareholder return ("TSR") modifier.

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.

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,	2023			(1)	2022
Fair value per stock award	$	116.17			$	141.95
Grant date stock price	$	111.38			$	114.52
Assumptions:
Aptar's stock price expected volatility	20.00		%		20.20		%
Expected average volatility of peer companies	39.70		%		41.70		%
Correlation assumption	33.30		%		41.20		%
Risk-free interest rate	3.83		%		2.04		%
Dividend yield assumption	1.36		%		1.33		%

(1)The 2023 award inputs and assumptions are related to PSU-ROIC awards with a TSR modifier.

A summary of RSU activity as of March 31, 2023 and changes during the three month period then ended is presented below:



	Time-Based RSUs			Performance-Based RSUs
	Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2022	426,361	$	111.60	610,871	$	118.77
Granted	103,658	108.78		151,264	115.69
Vested	(148,620)	103.67		(2,290)	113.02
Forfeited	(2,059)	114.42		(3,584)	124.06
Nonvested at March 31, 2023	379,340	$	113.97	756,261	$	118.14


Three Months Ended March 31,	2023		2022
Compensation expense	$	12,071	$	13,362
Fair value of units vested	14,587		12,361
Intrinsic value of units vested	17,046		15,291

The actual tax benefit realized for the tax deduction from RSUs was approximately $2.5 million in the three months ended March 31, 2023. As of March 31, 2023, there was $61.2 million of total unrecognized compensation cost relating to RSU awards which is expected to be recognized over a weighted-average period of 2.2 years.

Table of Contents

Historically we issued stock options to our employees and non-employee directors. We did not issue stock options between 2019 and 2022. Stock options were ~~formally issued to non-employee directors under a Director Stock Option Plan. Options are~~ awarded in the first quarter of 2023 with the exercise price equal to the market price on the date of grant based on the Black-Scholes model and generally ~~become exercisable~~vest over three years and expire 10 years after grant. ~~RSUs granted to employees generally vest over three years. Director RSUs generally vest over one year.~~

Compensation expense attributable to employee stock options for the first nine months of 2017 was approximately $12.6 million ($8.6 million after tax). The income tax benefit related to this compensation expense was approximately $4.0 million. Approximately $11.0 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. Compensation expense attributable to stock options for the first nine months of 2016 was approximately $15.5 million ($10.4 million after tax). The income tax benefit related to this compensation expense was approximately $5.1 million. Approximately $13.7 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales.

The Company uses historical data to estimate expected life and volatility. The weighted-average fair value of stock options granted under the ~~Stock Awards Plans was $11.86~~stock awards plans were $19.84 and ~~$10.59~~$24.23 per share for executive officers and all others employees, respectively, during the first ~~nine~~three months of ~~2017 and 2016, respectively.~~2023. The executive awards were issued with a 10% premium. These values were estimated on the respective dates of grant ~~dates~~ using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Stock Awards Plans:


Nine Months Ended September 30,

2017

2016


Dividend Yield

1.7
%
1.8
%
Expected Stock Price Volatility

15.8
%
16.9
%
Risk-free Interest Rate

2.2
%
1.6
%
Expected Life of Option (years)

6.7

6.7


Stock Award Plans:
Three Months Ended March 31,	2023
Dividend Yield	1.41	%
Expected Stock Price Volatility	16.55	%
Risk-free Interest Rate	3.57	%
Expected Life of Option (years)	7

A summary of option activity under ~~the Company’s~~our stock plans during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 is presented below:

Stock Awards Plans

Director Stock Option Plans




Weighted Average



Weighted Average

Options

Exercise Price

Options

Exercise Price

Outstanding, January 1, 2017

8,070,444

$
56.36

281,334

$
56.45

Granted

1,622,082

74.90

—

—

Exercised

(1,345,252)

46.67

(66,367)

53.23

Forfeited or expired

(122,282)

71.42

—

—

Outstanding at September 30, 2017

8,224,992

$
61.38

214,967

$
57.44

Exercisable at September 30, 2017

5,310,730

$
55.44

214,967

$
57.44

Weighted-Average Remaining Contractual Term (Years):

Outstanding at September 30, 2017

6.3

5.3

Exercisable at September 30, 2017

5.0

5.3

Aggregate Intrinsic Value:

Outstanding at September 30, 2017

$
206,938

$
6,255

Exercisable at September 30, 2017

$
165,175

$
6,255

Intrinsic Value of Options Exercised During the Nine Months Ended:

September 30, 2017

$
44,734

$
1,995

September 30, 2016

$
38,514

$
536



	Stock Awards Plans				Director Stock Option Plans
	Options		Weighted Average Exercise Price		Options		Weighted Average Exercise Price
Outstanding, January 1, 2023	2,623,944		$	73.34	51,700		$	63.91
Granted	314,524		116.20		—		—
Exercised	(208,987)		66.19		(3,500)		56.49
Forfeited or expired	(2,867)		71.70		—		—
Outstanding at March 31, 2023	2,726,614		$	78.83	48,200		$	64.45
Exercisable at March 31, 2023	2,412,090		$	73.96	48,200		$	64.45
Weighted-Average Remaining Contractual Term (Years):
Outstanding at March 31, 2023	4.0				0.9
Exercisable at March 31, 2023	3.2				0.9
Aggregate Intrinsic Value:
Outstanding at March 31, 2023	$	107,907			$	2,590
Exercisable at March 31, 2023	$	106,692			$	2,590
Intrinsic Value of Options Exercised During the Three Months Ended:
March 31, 2023	$	10,118			$	218
March 31, 2022	$	3,780			$	—

~~Table of Contents~~


Three Months Ended March 31,	2023
Compensation expense (included in SG&A)	$	2,734
Compensation expense (included in Cost of sales)	237
Compensation expense, Total	$	2,971
Compensation expense, net of tax	2,971

The ~~fair value of~~increase in stock option expense is due to the newly issued options ~~vested during the nine months ended September 30, 2017 and 2016 was $16.9 million and $17.2 million, respectively.~~as discussed above. Cash received from option exercises for the three months ended March 31, 2023 and 2022 was approximately ~~$66.7~~$13.8 million and ~~the~~$3.7 million, respectively. The actual tax benefit realized for the tax deduction from option exercises was approximately ~~$13.7~~$2.5 million and $0.3 million in the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2023 and 2022, respectively. As of ~~September 30, 2017, the remaining valuation~~March 31, 2023, there was $4.1 million of total unrecognized compensation cost relating to stock option awards to be expensed in future ~~periods was $16.4 million and~~periods.

Table of Contents

NOTE 15 – EARNINGS PER SHARE

Basic net income per share is calculated by dividing net income attributable to Aptar by the ~~related~~ weighted-average ~~period over which it is expected to be recognized is 2.0 years.~~

~~The fair value~~number of ~~RSU grants is the market price of the underlying~~common shares ~~on the grant date. A summary of RSU activity as of September 30, 2017, and changes~~outstanding during the ~~nine month period then ended,~~period. Diluted net income per share is ~~presented below:~~

Director Restricted

Stock Awards Plans

Stock Unit Plan



Weighted Average



Weighted Average

RSUs

Grant-Date Fair Value

RSUs

Grant-Date Fair Value

Nonvested at January 1,  2017

72,127

$
69.31

15,745

$
75.56

Granted

89,110

74.43

14,793

80.45

Vested

(51,963)

68.52

(15,745)

75.56

Nonvested at September 30, 2017

109,274

$
73.86

14,793

$
80.45

~~Compensation expense recorded~~calculated by dividing the net income attributable to ~~RSUs for~~Aptar by the ~~first nine months~~weighted-average number of ~~2017~~common and 2016 was approximately $2.4 million and $2.3 million, respectively. The actual tax benefit realized for the tax deduction from RSUs was approximately $1.6 million in the nine months ended September 30, 2017. The fair value of units vestedcommon equivalent shares outstanding during the ~~nine months ended September 30, 2017~~applicable period. The difference between basic and 2016 was $4.7 million and $1.9 million, respectively. The intrinsic value of units vested during the nine months ended September 30, 2017 and 2016 was $5.2 million and $2.3 million, respectively. As of September 30, 2017, there was $6.2 million of total unrecognized compensation cost relating to RSU awards which is expected to be recognized over a weighted-average period of 2.1 years.

The Company has a long-term incentive program for certain employees. Each award is based on the cumulative total shareholder return of our common stock during a three year performance period compared to a peer group. The total expected expense related to this program for awards outstanding as of September 30, 2017 is approximately $4.0 million, of which $1.5 million and $973 thousand was recognized in the first nine months of 2017 and 2016, respectively.

~~NOTE 13 — EARNINGS PER SHARE~~

~~Aptar’s authorized common stock consists of 199 million shares, having a par value of $0.01 each. Information related to the calculation of~~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 months ended March 31, 2023 and 2022 is as follows:

Three Months Ended


September 30, 2017

September 30, 2016

Diluted

Basic

Diluted

Basic

Consolidated operations

Income available to common stockholders

$
53,523

$
53,523

$
53,098

$
53,098

Average equivalent shares

Shares of common stock

62,592

62,592

62,858

62,858

Effect of dilutive stock based compensation

Stock options

2,171

—

1,791

—

Restricted stock

58

—

41

—

Total average equivalent shares

64,821

62,592

64,690

62,858

Net income per share

$
0.83

$
0.86

$
0.82

$
0.84


	Three Months Ended
	March 31, 2023				March 31, 2022
	Diluted		Basic		Diluted		Basic
Consolidated operations
Income available to common stockholders	$	54,764	$	54,764	$	62,423	$	62,423

Average equivalent shares
Shares of common stock	65,372		65,372		65,543		65,543
Effect of dilutive stock-based compensation
Stock options	906		—		1,193		—
Restricted stock	457		—		410		—
Total average equivalent shares	66,735		65,372		67,146		65,543
Net income per share	$	0.82	$	0.84	$	0.93	$	0.95

~~Table of Contents~~

Nine Months Ended

September 30, 2017

September 30, 2016


Diluted

Basic

Diluted

Basic

Consolidated operations

Income available to common stockholders

$
170,517

$
170,517

$
156,009

$
156,009

Average equivalent shares

Shares of common stock

62,527

62,527

62,878

62,878

Effect of dilutive stock based compensation

Stock options

2,046

—

2,059

—

Restricted stock

53

—

52

—

Total average equivalent shares

64,626

62,527

64,989

62,878

Net income per share

$
2.64

$
2.73

$
2.40

$
2.48

NOTE ~~14 —~~16 – SEGMENT INFORMATION

~~The Company is organized into~~

During the year ended December 31, 2022, our organizational structure consisted of three market-focused business segments: Pharma, Beauty+Home and Food+Beverage. Effective January 1, 2023, we realigned two of our segments, allowing us to better serve our customers and positioning us for long-term profitable growth. We continue to have three reporting ~~segments. Operations~~segments; Aptar Pharma and Aptar Beauty are named for the markets they serve with multiple product platforms, while Aptar Closures is named primarily for a single product platform that ~~sell dispensing systems and sealing solutions primarily to the~~serves all available markets.

We combined all of our closures operations into a single segment - Aptar Closures. The Aptar Closures business serves multiple markets, including food, beverage, personal care, home care, beauty and ~~home care markets form the~~healthcare. Closures that were developed in Beauty + Home moved to Aptar Closures together with the operations of legacy Food + Beverage. Aptar's food protection business and our elastomeric flow-control technology business continue to report through the Aptar Closures segment. ~~Operations that sell~~

At the same time, we are simplifying and focusing our Beauty + Home segment to better leverage our complex spray and dispensing ~~systems~~solutions for prestige and ~~sealing solutions primarily~~premium brands in the beauty and personal care markets. For many of our customers, personal care products are considered part of "beauty" and so we renamed this segment, simply, Aptar Beauty. The segment realignment had no impact on our consolidated statements of income, balance sheets, and cash flows. Segment financial information for the prior periods has been recast to conform to the prescription drug, consumer health care and injectables markets form the Pharma segment. Operations that sell dispensing systems and sealing solutions primarily to the food and beverage markets form the Food + Beverage segment. current presentation.

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 ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

2022. 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 unrealized investment gains and losses related to observable market price changes on equity securities and other special items.

Table of Contents

Financial information regarding ~~the Company’s reportable~~our reporting segments is shown below:

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Total Sales:

Beauty + Home

$
338,068

$
319,244

$
992,476

$
984,008

Pharma

199,551

191,190

598,168

565,363

Food + Beverage

91,852

82,952

269,159

257,435

Total Sales

629,471

593,386

1,859,803

1,806,806

Less: Intersegment Sales:

Beauty + Home

$
4,320

$
3,214

$
14,163

$
13,321

Pharma

4

(4)

7

—

Food + Beverage

821

447

2,245

1,419

Total Intersegment Sales

$
5,145

$
3,657

$
16,415

$
14,740

Net Sales:

Beauty + Home

$
333,748

$
316,030

$
978,313

$
970,687

Pharma

199,547

191,194

598,161

565,363

Food + Beverage

91,031

82,505

266,914

256,016

Net Sales

$
624,326

$
589,729

$
1,843,388

$
1,792,066

Segment Income (1):

Beauty + Home

$
21,837

$
25,380

$
69,248

$
79,455

Pharma

55,426

55,037

174,288

166,870

Food + Beverage

11,668

10,101

31,385

32,977

Corporate & Other

(10,793)

(7,479)

(32,734)

(35,310)

Interest Expense

(9,733)

(8,753)

(25,707)

(26,547)

Interest Income

1,113

715

2,086

1,759

Income before Income Taxes

$
69,518

$
75,001

$
218,566

$
219,204



Three Months Ended March 31,	2023		2022
Total Sales:
Aptar Pharma	$	356,111	$	346,672
Aptar Beauty	333,338		315,368
Aptar Closures	180,439		196,068
Total Sales	$	869,888	$	858,108
Less: Intersegment Sales:
Aptar Pharma	$	65	$	4,210
Aptar Beauty	6,949		6,288
Aptar Closures	2,807		2,678
Total Intersegment Sales	$	9,821	$	13,176
Net Sales:
Aptar Pharma	$	356,046	$	342,462
Aptar Beauty	326,389		309,080
Aptar Closures	177,632		193,390
Net Sales	$	860,067	$	844,932
Adjusted EBITDA (1):
Aptar Pharma	$	109,298	$	115,552
Aptar Beauty	37,205		34,550
Aptar Closures	26,008		24,183
Corporate & Other, unallocated	(18,836)		(17,970)
Acquisition-related costs (2)	(255)		—
Restructuring Initiatives (3)	(11,524)		(291)
Net unrealized investment gain (loss) (4)	188		(2,091)
Depreciation and amortization	(59,259)		(58,665)
Interest Expense	(10,228)		(8,930)
Interest Income	672		288
Income before Income Taxes	$	73,269	$	86,626

~~(1)~~

The Company evaluates performance of our business units and allocates resources based upon segment income. Segment income is defined as earnings before net interest expense, certain corporate expenses and income taxes.

(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 unrealized 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 for further details).

Table of Contents

~~Note 15 – INSURANCE SETTLEMENT RECEIVABLE~~

A fire caused damage to Aptar’s facility in Annecy, France in June 2016. The fire was contained to one of three production units and there were no reported injuries. Aptar Annecy supplies anodized aluminum components for certain Aptar dispensing systems. While repairs are underway, Aptar will source from its network of suppliers as well as from its anodizing facility in Brazil. The Company is insured(3)Restructuring Initiatives includes expense items for the ~~damages caused by~~three months ended March 31, 2023 and 2022 as follows (see Note 19 – Restructuring Initiatives for further details):



Three Months Ended March 31,	2023		2022
Restructuring Initiatives by Plan:
Optimization initiative	$	11,540	$	—
Prior year initiatives	(16)		291
Total Restructuring Initiatives	$	11,524	$	291

Restructuring Initiatives by Segment:
Aptar Pharma	$	1,131	$	—
Aptar Beauty	9,291		111
Aptar Closures	522		180
Corporate & Other	580		—
Total Restructuring Initiatives	$	11,524	$	291

(4)Net unrealized investment gain (loss) represents the ~~fire,~~change in fair value of our investment in PCT (see Note 18 – Investment in Equity Securities for further details).

NOTE 17 – ACQUISITIONS

Business Combinations

On March 1, 2023, we completed the acquisition of all the outstanding capital stock of iD SCENT. Located in Lyon, France, iD SCENT is an expert producer of paper fragrance sampling solutions that present multiple sustainability features. The purchase price was approximately $9.1 million (net of $1.4 million cash acquired) and was funded with cash on hand. The results of iD SCENT have been included in the consolidated financial statements within our Aptar Beauty segment since the date of acquisition. We are in the process of finalizing the purchase accounting.

Also on March 1, 2023, we completed the acquisition of 80% of the equity interest of Gulf Closures W.L.L. ( "Gulf Closures"). Gulf Closures, located in Bahrain, is a closure manufacturer for beverage products. The purchase price for 80% ownership was approximately $2.1 million (net of $1.2 million cash acquired) and was funded with cash on hand. This values the full company equity at approximately $3.3 million and implies a non-controlling interest valued at approximately $0.7 million as of the acquisition date. The results of Gulf Closures have been included in the consolidated financial statements within our Aptar Closures segment since the date of acquisition. We are in the process of finalizing the purchase accounting.

On August 31, 2022, we completed the acquisition of all the outstanding capital stock of Metaphase Design Group Inc. ("Metaphase"). Metaphase, located in St. Louis, Missouri, is a leading expert in ergonomic and industrial design of handheld devices including ~~business interruption insurance,~~medical devices. The purchase price was approximately $5.1 million (net of $0.1 million cash acquired) and ~~it does not expect this incident~~was funded with cash on hand. As of the acquisition date, $1.0 million was held in restricted cash for an indemnity escrow. The results of Metaphase have been included in the consolidated financial statements within our Aptar Pharma segment since the date of acquisition.

Table of Contents

NOTE 18 – INVESTMENT IN EQUITY SECURITIES

Our investment in equity securities consisted of the following:


	March 31, 2023		December 31, 2022
Equity Method Investments:
BTY	$	31,611	$	31,490
Sonmol	4,905		4,997

Desotec GmbH	879		863

Other Investments:
PureCycle	5,485		5,297
YAT	5,532		5,508
Loop	2,894		2,894
Others	1,275		1,259
	$	52,581	$	52,308

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 $32.0 million. We have a ~~material impact~~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 ~~its financial results. Losses related~~a predetermined formula. Subsequent to the ~~fire of $4.5 million and $14.4 million were incurred during~~second lock-up period, which ends 3 years after the three and nine months ended September 30, 2017, respectively. During the three and nine months ended September 30, 2016, losses related to the fire of $4.9 million and $5.5 million were incurred, respectively. For the nine months ended September 30, 2017,initial lock-up period, we have ~~received insurance proceeds~~a call option to acquire the remaining equity interests of ~~$12.0 million. As our cash receipts are in excess~~BTY based on a predetermined formula. Additionally, the selling shareholders of ~~costs incurred, we currently~~BTY have a ~~prepayment~~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 ~~$1.0~~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 $5.0 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”). Sonmol is a leading Chinese pharmaceutical company that provides consumer electric devices and connected devices for asthma control.

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 closures markets.

Other Investments

In prior years, we have invested, through a series of transactions, an aggregate amount of $2.9 million in preferred equity investments in Loop, a sustainability company.

In prior years, we have also invested, through a series of transactions, $3.0 million in PureCycle and received $0.7 million of equity 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. 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 resulting in less than a 1% ownership interest. This investment is now recorded at ~~September 30, 2017, which~~fair value based on observable market prices for identical assets and the change in fair value is ~~included in Accounts Payable and Accrued Liabilities~~recorded as a net investment gain or loss in the Condensed Consolidated ~~Balance Sheet. In many cases, our insurance coverage exceeds~~Statements of Income.

We have sold the amount of these recognized losses. No gain contingencies have been recognized as our ability to realize those gains remains uncertain. Profitability was negatively impacted by $1.4 million and $4.1 millionfollowing PCT shares related to the Annecy fire during the three and nine months ended September 30, 2017, respectively. During the three and nine months ended September 30, 2016, profitability was negatively impacted by $1.4 million. These costs are included in the Beauty + Home segment.

~~NOTE 16 – ACQUISITIONS~~

On February 29, 2016, the Company completed its acquisition of MegaPlast GmbH and its subsidiaries along with Megaplast France S.a.r.l. and Mega Pumps L.P. (Mega Airless). Mega Airless is a leading provider of innovative all-plastic airless dispensing systems for the beauty, personal care and pharmaceutical markets and operates two manufacturing facilities in Germany and one in the United States. The purchase price paid for Mega Airless was approximately $223.2 million ($203.0 million net of cash received) and was funded by cash on hand and borrowings on our revolving line of credit.

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

February 29, 2016

Assets

Cash and equivalents

$
20,197

Accounts receivable

8,275

Inventories

8,373

Prepaid and other

378

Property, plant and equipment

47,768

Goodwill

105,561

Intangible assets

72,106

Other miscellaneous assets

8

Liabilities

Current maturities of long-term obligations

319

Accounts payable and accrued liabilities

7,398

Long-term obligations

13,402

Deferred income taxes

18,366

Net assets acquired

$
223,181

~~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 date:~~

Weighted-Average

Estimated

Useful Life

Fair Value

(in years)

of Asset

Customer relationships

11

$
57,120

Technology

15

10,838

Trademark

4

4,148

Total

$
72,106

PureCycle investment:


	Shares Sold	Proceeds		Realized Gain

March 2022	107,600	$	1,088	$	841
August 2022	50,000	$	511	$	372

Table of Contents

~~Goodwill~~For the three months ended March 31, 2023 and 2022, we recorded the following net investment gain/(loss) on our investment in PureCycle:


	Three Months Ended March 31,
		2023		2022
Net investment gain (loss)		$	188	$	(1,250)

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.

Other than the expected $1.4 million credit loss reserve against the outstanding note receivable from one of our venture investments, Kali Care, there were no indications of impairment noted in the ~~amount~~three months ended March 31, 2023 related to these investments.

NOTE 19 – RESTRUCTURING INITIATIVES

During the third quarter of ~~$105.6~~2022, we began an initiative to better leverage our fixed cost base through growth and cost reduction measures. For the three months ended March 31, 2023, we recognized $11.5 million ~~was recorded for the acquisition~~ of Mega Airless, of which $49.8 million and $55.8 million is included in the Beauty + Home and Pharma segments, respectively. 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 largely consists of leveraging the Company’s commercial presence in selling the Mega Airless line of products in markets where Mega Airless did not previously operate and the ability of Mega Airlessrestructuring costs related to maintain its competitive advantage from a technical viewpoint. Goodwill will not be amortized, but will be tested for impairment at least annually. We do not expect any of the goodwill will be deductible for tax purposes.

this initiative. The ~~unaudited pro forma results presented below include the effects of the Mega Airless acquisition as if it had occurred~~cumulative expense incurred as of ~~January 1, 2015. The unaudited pro forma results reflect certain adjustments related to~~March 31, 2023 was $17.8 million.

As of March 31, 2023, we have recorded the ~~acquisition, such as the amortization~~following activity associated with estimates for the acquired intangible assets and fair value adjustments for inventory. The 2016 pro forma earnings were adjusted to exclude $4.2 million after tax ($5.6 million pretax) of transaction costs, including consulting, legal and advisory fees. The 2016 pro forma earnings were also adjusted to exclude $1.7 million after tax ($2.6 million pretax) of nonrecurring expense related to the fair value adjustment to acquisition-date inventory.

The pro forma results do not include any synergies or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been completed on the date indicated.

Three Months Ended


Nine Months Ended


September 30, 2016

September 30, 2016

Net Sales

$
589,729

$
1,801,626

Net Income Attributable to AptarGroup Inc.

53,526

163,140

Net Income per common share — basic

0.85

2.59

Net Income per common share — diluted

0.83

2.51

In February 2017, the Company acquired a 20% minority investment in Kali Care, Inc. for $5.0 million. Kali Care, Inc. (“Kali Care”) is a Silicon Valley-based technology company, which provides digital monitoring systems for ophthalmic medication. Kali Care’s sensing technology allows clinicians to collect real time compliance data and is a powerful tool for ophthalmologists in managing the care of their patients and represents an additional investment into connected devices for our ~~Pharma applications. This investment is being accounted for under the equity method of accounting from the date of acquisition.~~

optimization initiative:


	Beginning Reserve at 12/31/2022		Net Charges for the Three Months Ended 3/31/2023		Cash Paid		Interest and FX Impact		Ending Reserve at 3/31/2023
Employee severance	$	4,993	$	10,295	$	(2,179)	$	27	$	13,136
Professional fees and other costs	—		1,245		(787)		5		463
Totals	$	4,993	$	11,540	$	(2,966)	$	32	$	13,599

Table of Contents

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 March 31,	2023		2022
Net sales	100.0	%	100.0	%
Cost of sales (exclusive of depreciation and amortization shown below)	64.8		64.2
Selling, research & development and administrative	17.2		17.2
Depreciation and amortization	6.9		7.0
Restructuring initiatives	1.3		—
Operating income	9.8		11.6
Interest expense	(1.2)		(1.1)
Other expense	(0.1)		(0.2)
Income before income taxes	8.5		10.3
Net Income	6.3		7.4
Effective tax rate	25.5	%	28.0	%
Adjusted EBITDA margin (1)	17.9	%	18.5	%

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Net sales

100.0
%

100.0
%

100.0
%

100.0
%

Cost of sales (exclusive of depreciation and amortization shown below)

65.4

64.6

64.7

63.9

Selling, research & development and administrative

15.3

14.7

15.9

16.0

Depreciation and amortization

6.4

6.7

6.2

6.5

Operating income

12.9

14.0

13.2

13.6

Other expense

(1.8)

(1.3)

(1.3)

(1.4)

Income before income taxes

11.1

12.7

11.9

12.2

Net Income

8.6

9.0

9.3

8.7

Effective tax rate

23.0
%

29.2
%

22.0
%

28.8
%

Adjusted EBITDA margin (1)

18.9
%

20.8
%

19.4
%

20.5
%

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

During the year ended December 31, 2022, our organizational structure consisted of three market-focused business segments: Pharma, Beauty + Home and Food + Beverage. Effective January 1, 2023, we realigned two of our segments, allowing us to better serve our customers and positioning us for long-term profitable growth. We continue to have three reporting segments; Aptar Pharma and Aptar Beauty are named for the markets they serve with multiple product platforms, while Aptar Closures is primarily named for a single product platform that serves all available markets. Previously reported amounts have been reclassified to conform to the current period presentation.

~~(1)~~

~~Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation of Non-U.S. GAAP measures starting on page 30.~~

NET SALES

~~We reported~~

Reported net sales for the first three months of ~~$624.3~~2023 increased 2% to $860.1 million compared to $844.9 million for the ~~quarter ended September 30, 2017, which represents a 6% increase compared to the $589.7 million reported during the third quarter~~first three months of ~~2016.~~2022. The average U.S. dollar exchange rate ~~weakened~~strengthened compared to the ~~Euro~~euro and ~~most~~ other major currencies ~~related to our business. This resulted~~in which we operate, resulting in a ~~positive~~negative currency translation impact of 3%2%. There was no significant impact from our acquisitions of Metaphase, iD SCENT, and Gulf Closures on our consolidated results during the first quarter of 2023. Therefore, core sales, which ~~exclude~~excludes acquisitions and changes in foreign currency rates, increased 3%by 4% in the ~~third quarter~~first three months of ~~2017~~2023 compared to the ~~third quarter~~same period in 2022. The combination of ~~2016. Core sales~~strong volume growth, especially for products in ~~the third quarter of 2017 were negatively impacted by 2% coming from lower custom tooling sales compared~~our prescription, consumer healthcare and beauty applications, along with price increases to ~~the prior year. All three segments reported~~recover inflationary cost increases continue to have a strong impact on our core sales. Of our 4% core sales ~~improvements in the third quarter of 2017 with the~~ increase, ~~mainly driven by product sales growth in our Food + Beverage and Beauty + Home segments. Pharma sales growth was negatively impacted by $13.0 million lower tooling sales~~approximately half is due to ~~a significant consumer health care tooling project that was recognized in~~inflationary price adjustments while improved volumes and product mix represented the ~~third quarter~~remaining half of ~~2016.~~

Third Quarter 2017

Beauty

Food +

Net Sales Change over Prior Year

+ Home

Pharma

Beverage

Total

Core Sales Growth

3
%
1
%
8
%
3
%
Currency Effects (1)

3
%
3
%
2
%
3
%
Total Reported Net Sales Growth

6
%
4
%
10
%
6
%
the increase.


Three Months Ended March 31, 2023 Net Sales Change over Prior Year	Aptar Pharma		Aptar Beauty		Aptar Closures		Total
Reported Net Sales Growth	4	%	6	%	(8)	%	2	%
Currency Effects (1)	3	%	3	%	1	%	2	%
Acquisitions	—	%	—	%	(1)	%	—	%
Core Sales Growth	7	%	9	%	(8)	%	4	%

~~(1)~~

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

For the first nine months of 2017, we reported net sales of $1.84 billion, 3% above the first nine months of 2016 reported net sales of $1.79 billion. Changes in foreign currency rates were immaterial for the first nine months and therefore had no impact on consolidated reported sales. The acquisition of Mega Airless positively impacted sales by 1%. Therefore, core sales for the first nine months of 2017 increased by 2% compared to the first nine months of 2016. Tooling sales did not significantly impact our consolidated results as increases in Food + Beverage and Beauty + Home tooling sales were offset by lower Pharma tooling sales due to the 2016 consumer health care project mentioned above.

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

Table of Contents

First Nine Months of 2017

Beauty

Food +

Net Sales Change over Prior Year

+ Home

Pharma

Beverage

Total

Core Sales Growth

—
%
6
%
5
%
2
%
Acquisitions

1
%
—
%
—
%
1
%
Currency Effects (1)

—
%
—
%
(1)
%
—
%
Total Reported Net Sales Growth

1
%
6
%
4
%
3
%

~~(1)~~

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

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

Three Months Ended September 30,

Nine Months Ended September 30,

2017

% of Total

2016

% of Total

2017

% of Total

2016

% of Total

Domestic

$
164,345

26%

$
153,295

26%

$
484,984

26%

$
475,550

27%

Europe

350,631

56%

335,876

57%

1,057,841

57%

1,019,699

57%

Latin America

65,557

11%

60,424

10%

176,965

10%

166,661

9%

Asia

43,793

7%

40,134

7%

123,598

7%

130,156

7%



Three Months Ended March 31,	2023		% of Total		2022		% of Total

Domestic	$	248,478	29	%	$	280,005	33	%
Europe	496,466		58	%	455,131		54	%
Latin America	62,616		7	%	57,744		7	%
Asia	52,507		6	%	52,052		6	%

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

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

~~Our cost~~

For the first three months of ~~sales (“COS”)~~2023, COS as a percent of net sales increased to ~~65.4% in the third quarter of 2017~~64.8% compared to ~~64.6%~~64.2% in the third quarter of 2016. Our COS percentage was negatively impacted by continued operational inefficiencies in our custom decorative packaging business in Europe. We also experienced approximately $1.6 million of higher material costs in the third quarter of 2017 compared to the same period in ~~2016.~~

Cost of sales as a percent of net sales increased to 64.7% in the first nine months of 2017 compared to 63.9% in the same period a year ago. As mentioned above, our COS percentage was negatively impacted by operational inefficiencies in our custom decorative packaging business in Europe. Our COS percentage was also negatively impacted by approximately $7.6 million2022. This increase is due to ~~higher material~~incremental startup costs ~~in the first nine months of 2017 compared to the same period in 2016.~~

and inefficiencies for our injectables division capacity expansion and Enterprise Resource Planning ("ERP") system implementation.

SELLING, RESEARCH & DEVELOPMENT AND ADMINISTRATIVE

~~Our Selling, Research & Development and Administrative expenses (“~~

SG~~&A”)~~&A increased by ~~approximately $9.1~~$2.4 million to $147.9 million in the ~~third quarter~~first three months of ~~2017~~2023 compared to $145.5 million during the same period ~~a year ago.~~in 2022. Excluding changes in foreign currency rates, SG&A increased by approximately ~~$6.5~~$5.7 million in the ~~quarter. The~~first three months of 2023 compared to the first three months of 2022. This increase is ~~mainly~~partially related to higher compensation costs, including accruals related to our current short-term incentive compensation program and the timing of certain equity compensation arrangement expense recognition. We also experienced an increase in information systems costs due to ~~increases in~~the implementation of our enterprise reporting system, along with higher professional fees for internal projects and ~~salary expenses~~higher travel costs compared to 2022. Incremental costs related to ~~specific projects during the third quarter~~our acquisitions of ~~2017 along with other normal inflationary increases. Due to this increased strategic spending,~~Metaphase, iD SCENT, and Gulf Closures were not significant. SG&A as a percentage of net sales ~~increased to 15.3% compared to 14.7% in the same period of the prior year.~~

~~SG&A increased by approximately $7.1 million to $292.9 million~~remained consistent at 17.2% in the first ~~nine~~three months of 2017 compared to $285.8 million during the same period a year ago. Excluding changes in foreign currency rates, SG&A increased by approximately $7.4 million in the first nine months of 2017 compared to the first nine months of 2016. This increase is mainly due to the increase in specific projects mentioned above. During 2017, we also recognized $1.3 million of professional fees related to our acquisition of a minority investment in Kali Care, Inc.2023 and $1.5 million of incremental operating costs related to the two additional months of Mega Airless activity. We also recognized $1.5 million for the estimated costs to remediate environmental contamination found at the Company’s facility in Brazil. These increases were offset by one-time transaction costs of $5.6 million related to the Mega Airless acquisition in 2016, which did not repeat in 2017. Due to higher sales, SG&A as a percentage of net sales decreased to 15.9% compared to 16.0% in the same period of the prior year.

2022.

~~Table of Contents~~

DEPRECIATION AND AMORTIZATION

Reported depreciation and amortization expenses increased by approximately ~~$0.4~~$0.6 million to $59.3 million in the ~~third quarter~~first three months of ~~2017~~2023 compared to $58.7 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization ~~decreased~~increased by approximately ~~$0.9~~$2.1 million in the ~~quarter~~first three months of 2023 compared to the same period a year ago. ~~This decrease is due~~The majority of this increase relates to ~~several large investments becoming fully depreciated~~higher capital spending during ~~2017. Due~~the current and prior year to ~~the reported sales increasing more than~~support our growth strategy. Incremental depreciation and amortization ~~expenses, depreciation~~costs related to our acquisitions of Metaphase, iD SCENT, and Gulf Closures were not significant. Depreciation and amortization as a percentage of net sales decreased to ~~6.4%~~6.9% in the ~~third quarter~~first three months of ~~2017~~2023 compared to ~~6.7%~~7.0% in the same period of the prior year.

For the first nine months of 2017, reported depreciation and amortization expenses decreased by approximately $1.3 million compared to the first nine months of 2016. Excluding changes in foreign currency rates, depreciation and amortization decreased by approximately $1.4 million compared to the same period a year ago. Incremental depreciation and amortization costs of $2.6 million related to the two additional months of Mega Airless activity in 2017 was offset by the several large investments becoming fully depreciated, as discussed above. As depreciation and amortization expenses decreased due to the lapsing of these large investments, depreciation and amortization as a percentage of net sales decreased to 6.2% compared to 6.5% in the first nine months of 2017 compared to the same period of the prior year.

~~OPERATING INCOME~~

~~Operating income decreased approximately $1.9 million in~~

RESTRUCTURING INITIATIVES

During the third quarter of ~~2017 compared~~2022, we began an initiative to better leverage our fixed cost base through growth and cost reduction measures. For the ~~same period a year ago. Excluding changes in foreign currency rates,~~three months ended March 31, 2023, we recognized $11.5 million of restructuring costs related to this initiative. The cumulative expense incurred as of March 31, 2023 was $17.8 million.

Restructuring costs for the three months ended March 31, 2023 and 2022 are as follows:



Three Months Ended March 31,	2023		2022
Restructuring Initiatives by Plan:
Optimization initiative	$	11,540	$	—
Prior year initiatives	(16)		291
Total Restructuring Initiatives	$	11,524	$	291

Restructuring Initiatives by Segment:
Aptar Pharma	$	1,131	$	—
Aptar Beauty	9,291		111
Aptar Closures	522		180
Corporate & Other	580		—
Total Restructuring Initiatives	$	11,524	$	291

Table of Contents

OPERATING INCOME

For the first three months of 2023, operating income decreased by approximately ~~$4.8~~$13.8 million ~~in the quarter~~to $83.9 million compared to the same period a year ago. This decrease is mainly due to certain operational inefficiencies in Europe and increased strategic spending as discussed above. Operating income as a percentage of net sales decreased to 12.9% in the third quarter of 2017 compared to 14.0% for the same period in the prior year.

~~Operating income decreased approximately $2.4 million to $242.8 million in the first nine months of 2017 compared to $245.2~~$97.7 million in the same period of the prior year. Excluding changes in foreign currency rates, operating income decreased by approximately ~~$1.7~~$11.0 million in the first ~~nine~~three months of ~~2017~~2023 compared to the same period a year ~~ago. The remaining decrease is~~ago, mainly due to ~~the softness in sales from~~ our ~~Beauty + Home segment, increased strategic spending and certain operational inefficiencies as discussed~~restructuring initiative mentioned above. ~~2016 operating income was negatively impacted by $5.6 million of transaction costs and $2.6 million of purchase accounting adjustments related to our Mega Airless acquisition.~~ Operating income as a percentage of net sales decreased to ~~13.2%~~9.8% in the first ~~nine~~three months of ~~2017~~2023 compared to ~~13.6%~~11.6% for the same period in the prior year.

INTEREST EXPENSE

Interest expense increased by $1.3 million in the first three months of 2023 primarily as a result of our $400 million 3.60% Senior Notes due March 2032, which were issued on March 7, 2022. See Note 6 – Debt of the Condensed Consolidated Financial Statements for further details.

NET OTHER EXPENSE

Net other expense decreased $1.7 million to $0.4 million of expense for the three months ended March 31, 2023 from $2.2 million of expense in the ~~third~~same period of the prior year. Of this net expense decrease, $1.4 million is due to the increase in fair value of our investment in PureCycle. As discussed in Note 18 – 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 ~~2017~~2021. This investment is recorded at fair value based on observable market prices for identical assets with the change in fair value being recorded as a net investment gain or loss in the Condensed Consolidated Statements of Income.

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, 2023 and 2022, respectively, was 25.5% and 28.0%. The lower effective tax rate for the three months ended March 31, 2023 reflects tax benefits from amended U.S. tax filings of $1.3 million and an increase in tax benefits from share based compensation of $0.8 million.

NET INCOME ATTRIBUTABLE TO APTARGROUP, INC.

We reported net income attributable to AptarGroup, Inc. of $54.8 million and $62.4 million in the three months ended March 31, 2023 and 2022, respectively.

APTAR PHARMA SEGMENT

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



Three Months Ended March 31,	2023			2022

Net Sales	$	356,046		$	342,462
Adjusted EBITDA (1)	109,298			115,552
Adjusted EBITDA margin (1)	30.7		%	33.7		%

(1)Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization,unallocated corporate expenses,restructuring initiatives, acquisition-related costs, net unrealized 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".

Table of Contents

Net sales for the first three months of 2023 increased by 4% to ~~$10.9~~$356.0 million ~~from $7.3~~compared to $342.5 million in the first three months of 2022. Changes in currency rates negatively impacted net sales by 3%, while the acquisition of Metaphase did not have a significant impact during the first three months of 2023. Therefore, core sales increased by 7% in the first three months of 2023 compared to the same period in the prior year. Strong core sales growth for our products to the prescription and consumer health care markets more than compensated for lower sales to the injectables and active material science solutions markets. Core sales to the prescription drug market increased 37% on solid demand for our allergic rhinitis, asthma and emergency medical devices. The 24% core sales growth in the consumer health care market was driven by higher demand for our nasal decongestant, saline rinses, eye care and cough and cold solutions. Core sales of our products to the injectables market declined 34% primarily due to the shutdown of operations during the cutover to our new ERP system, leaving this division with approximately 15% fewer shipping days in the current quarter. In addition, we were up against strong prior year comparisons as we experienced strong sales of our elastomeric components for COVID-19 and other vaccines during the prior year period which did not repeat during the first three months of 2023. Similarly, core sales of our active material science solutions decreased 32% mainly on strong prior year period demand for our Activ-Film products used with at-home COVID-19 test kits that did not repeat during the first three months of 2023. Digital Health currently does not represent a significant percentage of the total Pharma sales.


Three Months Ended March 31, 2023 Net Sales Change over Prior Year	Prescription Drug		Consumer Health Care		Injectables		Active Material Science Solutions		Digital Health		Total
Reported Net Sales Growth	32	%	20	%	(35)	%	(33)	%	(11)	%	4	%
Currency Effects (1)	5	%	4	%	2	%	1	%	1	%	3	%
Acquisitions	—	%	—	%	(1)	%	—	%	—	%	—	%
Core Sales Growth	37	%	24	%	(34)	%	(32)	%	(10)	%	7	%

(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 2023 decreased 5% to $109.3 million compared to $115.6 million in the same period of the prior year. ~~This increase is primarily due~~The positive impact of our strong core sales growth in the prescription drug and consumer healthcare divisions was offset by the impact of lower COVID-19 related sales in our injectables and active material science solutions divisions, as discussed above. We were further impacted by the incremental startup costs for the injectables division capacity expansion and ERP system implementation which led to ~~$2.4 million~~a lower Adjusted EBITDA margin of ~~unfavorable currency impacts during~~30.7% in the ~~third quarter~~first three months of ~~2017, mainly related to the weakening of the Argentinian peso~~2023 compared to the Euro and the lack of a developed market to effectively hedge this exposure. We incurred a $1.0 million increase in interest expense related to new European borrowing arrangements due to a €700 million repatriation to the U.S. that was completed33.7% in the ~~third quarter. However, we also realized $0.4 million of additional interest income as most of the repatriated cash was still available in the U.S. during the third quarter of 2017.~~

Net other expenses for the nine months ended September 30, 2017 decreased to $24.3 million from $26.0 million in the same period of the prior year. This decrease is mainly due to $0.8 million of lower interest expense as we were able to repay our revolving credit facility in the U.S. along with a $0.3 million increase in interest income related to the cash repatriation discussed above.

~~EFFECTIVE TAX RATE~~

~~The reported effective tax rate decreased to 23.0% for the~~first three months ~~ended September 30, 2017 compared to 29.2% for the same period ended September 30, 2016. The current year rate includes a benefit~~ of ~~4.5% from a foreign tax settlement.~~

The reported effective tax rate also decreased to 22.0% for the nine months ended September 30, 2017 compared to 28.8% for the nine months ended September 30, 2016. The current year rate for nine months includes a 4.0% benefit from the new accounting standard for employee share-based payments, which the Company has adopted in 2017 and an additional 1.6% benefit in connection with our repatriation activities, which was primarily related to tax benefits associated with the forward contracts discussed in Note 8 to the Unaudited Notes to the Condensed Consolidated Financial Statements. The foreign tax settlement provided an additional benefit of 1.4% for the nine month period as well. The tax rate for 2016 reflected benefits attributable to investment incentives and tax refunds in France.

2022.

APTAR BEAUTY SEGMENT

~~Table of Contents~~

~~NET INCOME ATTRIBUTABLE TO APTARGROUP, INC.~~

We reported net income attributable to AptarGroup, Inc. of $53.5 million and $170.5 million in the three and nine months ended September 30, 2017, respectively, compared to $53.1 million and $156.0 million for the same periods in the prior year.

~~BEAUTY + HOME SEGMENT~~

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



Three Months Ended March 31,	2023			2022

Net Sales	$	326,389		$	309,080
Adjusted EBITDA (1)	37,205			34,550
Adjusted EBITDA margin (1)	11.4		%	11.2		%

(1)Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring initiatives, acquisition-related costs, net unrealized 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 ~~Beauty + Home segment.~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Net Sales

$
333,748

$
316,030

$
978,313

$
970,687

Segment Income

21,837

25,380

69,248

79,455

Segment Income as a percentage of Net Sales

6.5%

8.0%

7.1%

8.2%

Adjusted EBITDA margin (1)

12.8%

14.9%

13.2%

14.9%

reconciliation under "Non-U.S. GAAP Measures".

~~(1)~~

~~Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation of Non-U.S. GAAP measures starting on page 30.~~

~~Net~~For the first three months of 2023, reported net sales ~~for the quarter ended September 30, 2017~~ increased 6% to ~~$333.7~~$326.4 million compared to ~~$316.0~~$309.1 million in the ~~third quarter~~first three months of the prior year. Changes in currency rates ~~positively~~negatively impacted net sales by approximately 3%. Therefore, core sales increased 3% in the third quarter of 2017 compared to the same quarter of the prior year. Geographically, strong sales in North America, Latin America and Asia offset continued weakness in Europe, mainly due to lower sales of our products to the prestige fragrance markets. From a market perspective, we experienced strong personal care and home care core sales increases of 4% andby 9%, respectively while beauty sales were flat when compared to the prior year quarter. The increase in personal care sales mainly relates to new body care products while the increase in the home care market is due to new product sales for automotive applications. Core sales for the beauty market were flat as increases in sampling and promotion products offset lower fragrance and cosmetic sales.

Third Quarter 2017

Personal

Home

Net Sales Change over Prior Year

Care

Beauty

Care

Total

Core Sales Growth

4
%
—
%
9
%
3
%
Currency Effects (1)

3
%
3
%
2
%
3
%
Total Reported Net Sales Growth

7
%
3
%
11
%
6
%

~~(1)~~

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

~~Net sales increased 1%~~ in the first ~~nine~~three months of 2017 to $978.3 million compared to $970.7 million in the first nine months of the prior year. The Mega Airless acquisition positively affected net sales by 1% in the first nine months of 2017 while changes in currency rates did not have any impact. Therefore, core sales were flat for the first nine months of 20172023 compared to the same period in the prior year. ~~Personal care sales were flat as increases in~~Approximately 6% of this growth came from the pass-through of higher input costs while the remaining increase is due to higher product volumes. Core sales of our products to the ~~body~~beauty market increased 17% during the first three months of 2023 on higher sales in both prestige and mass fragrance, along with sales growth of our skin care ~~market~~and color cosmetic solutions. Personal care core sales were flat as strong demand for our sun care applications was offset by ~~general~~ softness in ~~other markets we serve. Sales to the beauty market decreased slightly as higher sampling~~baby and ~~promotion~~hair care product sales ~~mostly offset lower~~. Core sales toof our ~~prestige fragrance market. Sales to the~~ home care market ~~decreased 2% as new product sales~~products declined 16% mainly due to ~~the automotive market were not able to completely offset~~ lower ~~insecticide sales predominately in North America~~demand from our air care and ~~Latin America related to the unusually high demand for these products in 2016.~~

First Nine Months of 2017

Personal

Home

Net Sales Change over Prior Year

Care

Beauty

Care

Total

Core Sales Growth

—
%
(1)
%
(2)
%
—
%
Acquisitions

1
%
1
%
—
%
1
%
Currency Effects (1)

—
%
—
%
1
%
—
%
Total Reported Net Sales Growth

1
%
—
%
(1)
%
1
%

~~(1)~~

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

surface cleaner customers.

Table of Contents


Three Months Ended March 31, 2023 Net Sales Change over Prior Year	Personal Care		Beauty		Home Care		Total
Reported Net Sales Growth	(3)	%	13	%	(17)	%	6	%
Currency Effects (1)	3	%	4	%	1	%	3	%
Acquisitions	—	%	—	%	—	%	—	%
Core Sales Growth	—	%	17	%	(16)	%	9	%

~~Segment income~~

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

Adjusted EBITDA in the ~~third quarter~~first three months of ~~2017 decreased 14%~~2023 increased 8% to ~~$21.8~~$37.2 million compared to ~~$25.4~~$34.6 million reported in the same period in the prior ~~year. We continue~~year, mainly due to ~~experience~~ operational ~~inefficiencies in~~improvements and improved sales volumes discussed above. Therefore, our ~~custom decorative packaging business in Europe. We also experienced $2.0 million of higher material costs and some unfavorable currency impacts in Argentina during the third quarter of 2017.~~

~~Segment income~~Adjusted EBITDA margin improved from 11.2% in the first ~~nine~~quarter of 2022 to 11.4% during the first three months of 2017 decreased approximately 13% to $69.2 million compared to $79.5 million reported in the same period in the prior year. The decrease compared to the prior year is mostly due to the productivity issues and increased material costs discussed above. We also recognized $1.5 million for the estimated costs to remediate environmental contamination found at the Company’s anodizing facility in Brazil.

~~PHARMA~~2023.

APTAR CLOSURES SEGMENT

Operations that sell dispensing systems, ~~and~~ sealing solutions ~~primarily~~and food service trays to the ~~prescription drug, consumer health~~food, beverage, personal care, home care, beauty and ~~injectables~~healthcare markets form our Aptar Closures segment. Aptar's food protection business and elastomeric flow-control technology business continue to report through the ~~Pharma~~Aptar Closures segment.



Three Months Ended March 31,	2023			2022

Net Sales	$	177,632		$	193,390
Adjusted EBITDA (1)	26,008			24,183
Adjusted EBITDA margin (1)	14.6		%	12.5		%

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Net Sales

$
199,547

$
191,194

$
598,161

$
565,363

Segment Income

55,426

55,037

174,288

166,870

Segment Income as a percentage of Net Sales

27.8%

28.8%

29.1%

29.5%

Adjusted EBITDA margin (1)

33.2%

34.1%

34.2%

34.9%

(1)Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization,unallocated corporate expenses,restructuring initiatives, acquisition-related costs, net unrealized 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".

~~(1)~~

~~Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation of Non-U.S. GAAP measures starting on page 30.~~

Net sales for the Pharma segment increased by 4% in the third quarter of 2017 to $199.5 million compared to $191.2 million in the third quarter of 2016. Changes in currency positively affected net sales by 3% in the third quarter of 2017. Therefore, core sales increased by 1% in the third quarter of 2017 compared to the third quarter of 2016. Included in the core sales growth is a negative impact of 7% from lower custom tooling sales compared to the prior year. For the injectables market, strong customer sales in the current quarter along with lower sales in 2016 due to the timing of certain validations of our new capacity in Europe led to a 15% increase in core sales. The prescription drug market reported a core sales increase of 2% on higher asthma and COPD product sales during the third quarter of 2017. The consumer health care market reported a core sales decrease of 6% solely due to a significant amount of custom tooling sales recognized in the third quarter of 2016. Device sales to the consumer health care market remained strong mainly due to increases in nasal decongestant and nasal saline sales.

Third Quarter 2017

Prescription

Consumer

Net Sales Change over Prior Year

Drug

Health Care

Injectables

Total

Core Sales Growth

2
%
(6)
%
15
%
1
%
Currency Effects (1)

3
%
3
%
5
%
3
%
Total Reported Net Sales Growth

5
%
(3)
%
20
%
4
%

~~(1)~~

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

Net sales for the first ~~nine~~three months of ~~2017 increased~~2023 decreased by 6%8% to ~~$598.2~~$177.6 million compared to ~~$565.4~~$193.4 million in the first ~~nine~~three months of ~~2016.~~2022. Changes in currency rates ~~did not impact~~negatively impacted net sales by 1%, while our acquisition of Gulf Closures positively impacted net sales by 1%. Therefore, core sales decreased by 8% in the first ~~nine~~three months of ~~2017. Therefore, core sales increased by 6% in the first nine months of 2017~~2023 compared to the same period in the prior year primarily due to the pass through of lower resin costs along with lower product volumes and tooling sales. As our Closures segment typically passes the impact of resin costs faster than the other segments, we were negatively impacted by lower resin costs near the end of the quarter. Approximately three quarters of the 8% core sales decrease is due to passing through lower resin costs. Volumes were also lower as customers continued to work through their inventory levels, primarily in North America and Latin America. Core sales to the food and personal care markets decreased 7% and 19%, respectively, while core sales to the beverage market increased 4% in the first three months of 2023 compared to the same period of the prior year. For the food market, we were up against strong prior year period results, mainly for sauces and condiment applications, due to strong demand as COVID-19 pandemic-related restrictions eased during the same period last year. The ~~consumer health~~personal care market reported a core sales increase of 7%. As discussed above, strong demand for our products used on nasal decongestants and nasal salines were offset by a decrease in tooling sales related to a consumer health care project recognized in the third quarter of 2016. The prescription drug market reported a core sales increase of 4% on strong asthma, COPD and allergic rhinitis product sales during the first nine months of 2017. Corewas also negatively impacted with lower sales of our body and hair care applications. The beverage market reported growth across the majority of its applications, including products sold to ~~the injectables markets increased 11% due to improved sales of~~ our ~~components used on antithrombotic~~functional drink and ~~small molecule products as well as the ramp up of our increased capacities in Europe.~~

juice customers.

(2)Other includes beauty, home care and healthcare markets.

First Nine Months of 2017

Prescription

Consumer

Net Sales Change over Prior Year

Drug

Health Care

Injectables

Total

Core Sales Growth

4
%
7
%
11
%
6
%
Currency Effects (1)

—
%
—
%
(1)
%
—
%
Total Reported Net Sales Growth

4
%
7
%
10
%
6
%

~~(1)~~

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

~~Segment income~~Adjusted EBITDA in the ~~third quarter~~first three months of ~~2017~~2023 increased 1%8% to ~~$55.4~~$26.0 million compared to ~~$55.0~~$24.2 million reported in the same period of the prior year. ~~This increase is mainly~~Our profitability was positively impacted by a favorable product mix and a focus on containing costs within our new segment structure. As discussed above, the majority of our sales decrease was due to ~~increased device sales discussed above. However,~~passing through lower resin costs. These pass-throughs typically do not carry any margin, but the lower ~~percentage increase is due to the mix of business as~~sales favorably impacts our ~~injectable products carry a lower~~Adjusted EBITDA margin. Therefore, our Adjusted EBITDA margin ~~than prescription products. We were also negatively impacted by some unfavorable manufacturing variances and currency impacts in Argentina.~~

~~Segment income~~improved from 12.5% in the first ~~nine~~quarter of 2022 to 14.6% during the first three months of 2017 increased approximately 4% to $174.3 million compared to $166.9 million reported in the same period of the prior year. Strong sales volumes across all three markets were able to offset unfavorable currency impacts and manufacturing variances, $1.3 million of professional fees related to our acquisition of a minority investment in Kali Care, Inc. and start-up costs related to our new injectable capacity in North America.

~~FOOD + BEVERAGE SEGMENT~~

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

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Net Sales

$
91,031

$
82,505

$
266,914

$
256,016

Segment Income

11,668

10,101

31,385

32,977

Segment Income as a percentage of Net Sales

12.8%

12.2%

11.8%

12.9%

Adjusted EBITDA margin (1)

19.9%

19.6%

18.6%

19.9%

~~(1)~~

~~Adjusted EBITDA margins are calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation of Non-U.S. GAAP measures starting on page 30.~~

Net sales for the quarter ended September 30, 2017 increased approximately 10% to $91.0 million compared to $82.5 million in the third quarter of the prior year. Changes in foreign currency rates had a favorable impact of 2% on the total segment sales. Therefore, core sales increased by 8% in the third quarter of 2017 compared to the third quarter of 2016. Core sales to the food market increased 3% while core sales to the beverage market increased 18% in the third quarter of 2017 compared to the same period of the prior year. Sales to the food market increased mainly due to strong sales of our products used on sauces and condiments as well as increased sales to our baby food customers. For the beverage market, we recognized strong product sales to our functional drink and bottled water customers. For the segment, we also benefitted from a $1.9 million increase in tooling sales along with a $1.3 million increase on the pass-through of resin price changes in the third quarter ended September 30, 2017 compared to the third quarter of the prior year.

Third Quarter 2017

Net Sales Change over Prior Year


Food

Beverage

Total

Core Sales Growth

3
%
18
%
8
%
Currency Effects (1)

2
%
2
%
2
%
Total Reported Net Sales Growth

5
%
20
%
10
%

~~(1)~~

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

Net sales for the first nine months of 2017 increased by 4% to $266.9 million compared to $256.0 million in the first nine months of 2016. Changes in currency rates negatively impacted net sales by 1% in the first nine months of 2017. Therefore, core sales increased by 5% in the first nine months of 2017 compared to the same period in the prior year. Core sales to both the food and beverage markets increased 5% in the first nine months of 2017 compared to the same period of the prior year. As discussed above, sales to the food market increased due to strong sales of our products used on sauces and condiments. We also realized increases in sales of our products used on cooking oils and infant nutrition products. For the beverage market, strong sales to our bottled water customers offset a slight decrease in functional drink application sales. Sales for the first nine months of 2017 were also favorably impacted by higher tooling sales of $4.4 million.

First Nine Months of 2017

Net Sales Change over Prior Year


Food

Beverage

Total

Core Sales Growth

5
%
5
%
5
%
Currency Effects (1)

—
%
(1)
%
(1)
%
Total Reported Net Sales Growth

5
%
4
%
4
%

~~(1)~~

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

Segment income in the third quarter of 2017 increased approximately 16% to $11.7 million compared to $10.1 million reported in the same period of the prior year. This increase is mainly due to both an increase in product and tooling sales during the quarter as discussed above.

Segment income in the first nine months of 2017 decreased approximately 5% to $31.4 million compared to $33.0 million reported in the same period of the prior year. Negative product mix, along with legal fees to defend our intellectual property, more than offset the impact of our increase in sales and led to lower segment income during the first nine months of 2017 compared to the same period in 2016.

CORPORATE & OTHER

In addition to our three ~~operating business~~reporting segments, ~~Aptar assigns~~we assign certain costs to “Corporate & Other,” which is presented separately in Note ~~14 to~~16 – Segment Information of the ~~Unaudited~~ 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 unrealized 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 ~~operating~~reporting segments.

Corporate & Other expense increased to $10.8 million for the quarter ended September 30, 2017 compared to $7.5 million in the third quarter of the prior year. This increase is mainly due to increases in professional fees and salary expenses related to specific projects.

~~Corporate & Other expense~~Adjusted EBITDA in the first ~~nine~~three months of ~~2017 decreased~~2023 increased to ~~$32.7~~$18.8 million compared to ~~$35.3~~$18.0 million reported in the same period of the prior year. This ~~decrease~~increase is mainly ~~due to $5.6 million of transaction costs~~ related to higher incentive compensation costs, including accruals related to our current short-term incentive compensation program and the ~~Mega Airless acquisition reported in the first quarter~~timing of ~~2016, which more than offset the increases in professional fees and salaries mentioned above.~~

equity compensation expense recognition including substantive vesting conditions for retirement eligible employees.

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 ~~Aptar’s~~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~~Condensed Consolidated Statements of ~~income~~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 ~~MD&A,~~Management’s Discussion and Analysis, we exclude the impact of foreign currency translation when presenting net sales and other 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 ~~feel~~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 impact of transaction~~restructuring initiatives, acquisition-related costs, ~~and~~ purchase accounting adjustments ~~that affected the inventory values~~ related to acquisitions and investments and net unrealized 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 exchange rates and changes in the ~~Mega Airless acquisition.~~

~~Finally, we~~fair value of equity investments, or reliably predicted because they are not part of our routine activities, such as restructuring and acquisition costs.

We provide a reconciliation of Net Debt to Net Capital as a non-U.S. GAAP measure. ~~Net Debt~~“Net Debt” is calculated as interest bearing debt less cash ~~cash~~and equivalents and short-term investments while ~~Net Capital~~“Net Capital” is calculated as ~~stockholder’s~~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.

Three Months Ended

September 30, 2017


Consolidated

Beauty + Home

Pharma

Food + Beverage

Corporate & Other

Net Interest
Net Sales

$
624,326

$
333,748

$
199,547

$
91,031

$
-

$
-

Reported net income

$
53,529

Reported income taxes

15,989

Reported income before income taxes

69,518

21,837

55,426

11,668

(10,793)

(8,620)
Adjustments:

None

Earnings before income taxes

69,518

21,837

55,426

11,668

(10,793)

(8,620)
Interest expense

9,733

9,733
Interest income

(1,113)

(1,113)
Earnings before net interest and taxes (EBIT)

78,138

21,837

55,426

11,668

(10,793)

-
Depreciation and amortization

40,087

20,790

10,834

6,448

2,015

-
Earnings before net interest, taxes, depreciation and amortization (EBITDA)

$
118,225

$
42,627

$
66,260

$
18,116

$
(8,778)

$
-

Segment income margins (Income before income taxes / Reported Net Sales)

6.5%

27.8%

12.8%

EBITDA margins (EBITDA / Reported Net Sales)

18.9%

12.8%

33.2%

19.9%

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 plus proceeds from government grants related to 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

September 30, 2016


Consolidated

Beauty + Home

Pharma

Food + Beverage

Corporate & Other

Net Interest
Net Sales

$
589,729

$
316,030

$
191,194

$
82,505

$
-

$
-

Reported net income

$
53,100

Reported income taxes

21,901

Reported income before income taxes

75,001

25,380

55,037

10,101

(7,479)

(8,038)
Adjustments:

None

Earnings before income taxes

75,001

25,380

55,037

10,101

(7,479)

(8,038)
Interest expense

8,753

8,753
Interest income

(715)

(715)
Earnings before net interest and taxes (EBIT)

83,039

25,380

55,037

10,101

(7,479)

-
Depreciation and amortization

39,667

21,653

10,185

6,064

1,765

-
Earnings before net interest, taxes, depreciation and amortization (EBITDA)

$
122,706

$
47,033

$
65,222

$
16,165

$
(5,714)

$
-

Segment income margins (Income before income taxes / Reported Net Sales)

8.0%

28.8%

12.2%

EBITDA margins (EBITDA / Reported Net Sales)

20.8%

14.9%

34.1%

19.6%

Nine Months Ended

September 30, 2017


Consolidated

Beauty + Home

Pharma

Food + Beverage

Corporate & Other

Net Interest
Net Sales

$
1,843,388

$
978,313

$
598,161

$
266,914

$
-

$
-

Reported net income

$
170,523

Reported income taxes

48,043

Reported income before income taxes

218,566

69,248

174,288

31,385

(32,734)

(23,621)
Adjustments:

None

Earnings before income taxes

218,566

69,248

174,288

31,385

(32,734)

(23,621)
Interest expense

25,707

25,707
Interest income

(2,086)

(2,086)
Earnings before net interest and taxes (EBIT)

242,187

69,248

174,288

31,385

(32,734)

-
Depreciation and amortization

114,660

60,017

30,462

18,371

5,810

-
Earnings before net interest, taxes, depreciation and amortization (EBITDA)

$
356,847

$
129,265

$
204,750

$
49,756

$
(26,924)

$
-

Segment income margins (Income before income taxes / Reported Net Sales)

7.1%

29.1%

11.8%

EBITDA margins (EBITDA / Reported Net Sales)

19.4%

13.2%

34.2%

18.6%


	Three Months Ended
	March 31, 2023

	Consolidated			Aptar Pharma			Aptar Beauty			Aptar Closures			Corporate & Other		Net Interest
Net Sales	$	860,067		$	356,046		$	326,389		$	177,632		$	—	$	—

Reported net income	$	54,586
Reported income taxes	18,683
Reported income before income taxes	73,269			82,390			7,432			13,295			(20,292)		(9,556)
Adjustments:
Restructuring initiatives	11,524			1,131			9,291			522			580
Net unrealized investment gain	(188)												(188)
Transaction costs related to acquisitions	255			—			199			56			—

Adjusted earnings before income taxes	84,860			83,521			16,922			13,873			(19,900)		(9,556)
Interest expense	10,228														10,228
Interest income	(672)														(672)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	94,416			83,521			16,922			13,873			(19,900)		—
Depreciation and amortization	59,259			25,777			20,283			12,135			1,064

Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	153,675		$	109,298		$	37,205		$	26,008		$	(18,836)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	17.9		%	30.7		%	11.4		%	14.6		%


	Three Months Ended
	March 31, 2022

	Consolidated			Aptar Pharma			Aptar Beauty			Aptar Closures			Corporate & Other		Net Interest
Net Sales	$	844,932		$	342,462		$	309,080		$	193,390		$	—	$	—

Reported net income	$	62,371
Reported income taxes	24,255
Reported income before income taxes	86,626			92,206			14,008			10,646			(21,592)		(8,642)
Adjustments:
Restructuring initiatives	291			—			111			180			—
Net unrealized investment loss	2,091												2,091


Adjusted earnings before income taxes	89,008			92,206			14,119			10,826			(19,501)		(8,642)
Interest expense	8,930														8,930
Interest income	(288)														(288)
Adjusted earnings before net interest and taxes (Adjusted EBIT)	97,650			92,206			14,119			10,826			(19,501)		—
Depreciation and amortization	58,665			23,346			20,431			13,357			1,531

Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)	$	156,315		$	115,552		$	34,550		$	24,183		$	(17,970)	$	—

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)	18.5		%	33.7		%	11.2		%	12.5		%

Nine Months Ended

September 30, 2016


Consolidated

Beauty + Home

Pharma

Food + Beverage

Corporate & Other

Net Interest
Net Sales

$
1,792,066

$
970,687

$
565,363

$
256,016

$
-

$
-

Reported net income

$
156,017

Reported income taxes

63,187

Reported income before income taxes

219,204

79,455

166,870

32,977

(35,310)

(24,788)
Adjustments:

Transaction costs related to the Mega Airless acquisition

5,640

5,640

Purchase accounting adjustments related to Mega Airless inventory

2,577

2,151

426

Adjusted earnings before income taxes

227,421

81,606

167,296

32,977

(29,670)

(24,788)
Interest expense

26,547

26,547
Interest income

(1,759)

(1,759)
Adjusted earnings before net interest and taxes (Adjusted EBIT)

252,209

81,606

167,296

32,977

(29,670)

-
Depreciation and amortization

115,944

63,150

29,802

17,960

5,032

-
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA)

$
368,153

$
144,756

$
197,098

$
50,937

$
(24,638)

$
-

Segment income margins (Income before income taxes / Reported Net Sales)

8.2%

29.5%

12.9%

Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales)

20.5%

14.9%

34.9%

19.9%


Net Debt to Net Capital Reconciliation	March 31,			December 31,
	2023			2022

Notes payable, revolving credit facility and overdrafts	$	12,733		$	3,810
Current maturities of long-term obligations, net of unamortized debt issuance costs	218,731			118,981
Long-Term Obligations, net of unamortized debt issuance costs	955,918			1,052,597
Total Debt	1,187,382			1,175,388
Less:
Cash and equivalents	126,810			141,732

Net Debt	$	1,060,572		$	1,033,656

Total Stockholders' Equity	$	2,127,757		$	2,068,204
Net Debt	1,060,572			1,033,656
Net Capital	$	3,188,329		$	3,101,860

Net Debt to Net Capital	33.3		%	33.3		%

Net Debt to Net Capital Reconciliation


September 30,


December 31,

2017

2016

Notes payable

$
109,910

$
169,213

Current maturities of long-term obligations, net of unamortized debt issuance costs

136,330

4,603

Long-Term Obligations, net of unamortized debt issuance costs

1,271,530

772,737

Total Debt

1,517,770

946,553

Less:

Cash and equivalents

1,018,666

466,287

Net Debt

$
499,104

$
480,266

Total Stockholders' Equity

$
1,321,824

$
1,174,242

Net Debt

499,104

480,266

Net Capital

$
1,820,928

$
1,654,508

Net Debt to Net Capital

27.4%

29.0%


Free Cash Flow Reconciliation	March 31,		March 31,
	2023		2022

Net Cash Provided by Operations	$	98,304	$	92,077
Capital Expenditures	(77,825)		(73,058)
Proceeds from Government Grants	—		7,955
Free Cash Flow	$	20,479	$	26,974

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,~~euro, but we also have foreign exchange exposure to the Chinese ~~Yuan,~~yuan, Brazilian ~~Real,~~real, Mexican ~~Peso,~~peso, Swiss ~~Franc~~franc and other Asian, European and South American currencies. A ~~weakening~~strengthening U.S. dollar relative to foreign currencies has ~~an additive~~a dilutive translation effect on our financial statements. Conversely, a ~~strengthening~~weakening U.S. dollar has ~~a dilutive~~an additive effect. In some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. We manage our exposures to foreign exchange principally with forward exchange contracts to economically hedge recorded transactions and firm purchase and sales commitments denominated in foreign currencies. ChangesAny changes in exchange rates on such inter-country sales could materially impact our results of operations.

During the first three months of 2023, the U.S. dollar strengthened compared to the major European currencies. This resulted in a dilutive impact on our translated results during the first quarter of 2023 when compared to the first quarter of 2022.

Our results of operations in the last quarter of the year typically are negatively impacted by customer plant shutdowns in December. InSeveral of the ~~future,~~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. The diversification of our product portfolio minimizes fluctuations in aour overall quarterly ~~period could be impacted by factors such as the~~financial statements and results in an immaterial seasonality ~~of certain products within~~impact on our ~~segments, changes in foreign currency rates, changes in product mix, changes in material costs, changes in growth rates in the markets to which our products are sold, recognition of equity based~~Condensed Consolidated Financial Statements when viewed quarter over quarter.

Generally, we have incurred higher stock-based compensation ~~expense for retirement eligible employees in the period of grant and changes in general economic conditions in any of the countries in which we do business.~~

~~We generally incur higher employee stock option~~ expense in the first quarter compared with the rest of the fiscal ~~year.~~year due to the timing and recognition of stock-based expense from substantive vesting for retirement eligible employees. Our estimated stock option expense on a pre-tax basis ~~(in $ millions)~~ for the year ~~2017~~2023 compared to 2022 is as follows:

2017

First Quarter

$
6.9

Second Quarter

3.0

Third Quarter

2.6

Fourth Quarter (estimated for 2017)

2.7

$
15.2


	2023		2022
First Quarter	$	15,042	$	13,362
Second Quarter (estimated for 2023)	8,963		8,774
Third Quarter (estimated for 2023)	8,823		9,805
Fourth Quarter (estimated for 2023)	8,520		8,996
	$	41,348	$	40,937

LIQUIDITY AND CAPITAL RESOURCES

Given our 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 and other credit facilities, proceeds from stock ~~option exercises~~options and debt, as needed, as our primary sources of liquidity. Our primary uses of ~~liquidity~~cash are to invest in equipment and facilities that are necessary to support our growth, ~~and~~pay quarterly dividends to stockholders, to make acquisitions and repurchase shares of our common stock that will contribute to the achievement of our strategic objectives.

~~Other uses of liquidity include paying dividends to stockholders and repurchasing shares of our common stock. The majority of these cash needs are met using U.S. funds.~~ Due to uncertain macroeconomic conditions, including rising interest rates and the strengthening U.S. dollar, which helped mitigate the tax cost of repatriation, and proposed tax reforms on unrepatriated earnings, we voluntarily repatriated approximately €250 million ($263 million)inflationary environment, in the first quarter of 2017 and another €700 million ($751 million) in the third quarter of 2017 from Europe to the U.S. We believe that these repatriations provide us with significant resources to meet our U.S. funding needs for the next several years. In the event that customer demand ~~would decrease~~decreases significantly for a prolonged period of time and ~~negatively impact~~adversely impacts our cash ~~flow~~flows from operations, we would have the ability to restrict and significantly reduce capital expenditure levels and share repurchases, as well as ~~evaluate~~reevaluate our acquisition ~~strategy and dividend and share repurchase programs.~~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 $127.8 million at March 31, 2023 from $142.7 million at December 31, 2022. Total short and long-term interest bearing debt of $1.2 billion at March 31, 2023 was consistent with the $1.2 billion at December 31, 2022. The ratio of our Net Debt (interest bearing debt less cash and equivalents) to Net Capital (stockholders’ equity plus Net Debt) remained a consistent 33.3% at March 31, 2023 and December 31, 2022. See the reconciliation under "Non-U.S. GAAP Measures".

In the first ~~nine~~three months of ~~2017,~~2023, our operations provided approximately ~~$265.2~~$98.3 million in net cash flow compared to ~~$202.4~~$92.1 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 increase in cash provided by ~~operations~~operating activities during the first three months of 2023 is primarily attributable to ~~profit growth and a decrease in~~improved working capital ~~requirements.~~

management as well as a $15.2 million contribution to our domestic benefit plan during the first quarter of 2022.

We used ~~$189.2~~$89.2 million in cash for investing activities during the first ~~nine~~three months of ~~2017~~2023 compared to ~~$265.5~~$68.4 million during the same period a year ago. ~~The decrease is due primarily~~During 2023, approximately $9.1 million was utilized to fund the ~~Mega Airless~~iD Scent acquisition ~~in 2016 of $203.0~~and $2.1 million ~~net of cash received.~~was utilized to fund the Gulf Closures acquisition. Our investment in capital projects net of government grant proceeds increased ~~$28.4~~$12.7 million ~~for~~during the first ~~nine~~three months of ~~2017~~2023 compared to the first ~~nine~~three months of ~~2016. We also invested $5 million for a 20% minority investment in a technology company which provides digital monitoring systems for medical devices.~~2022. Our ~~2017~~2023 estimated cash outlays for capital expenditures net of government grant proceeds are expected to be in the range of approximately ~~$155~~$280 million to ~~$160 million but could vary due to changes in exchange rates as well as the timing of capital projects.~~

$300 million.

Financing activities ~~provided $447.3~~used $24.8 million in cash during the first ~~nine~~three months of ~~2017,~~2023 compared to ~~$1.1~~$211.9 million in cash provided by financing activities during the same period a year ago. During ~~2017,~~the first three months of 2023, we repatriated $1.0 billion from Europe to the U.S., which was partially funded by committed financing arrangements in the U.K. discussed below. These funds were initially used to repay $160 million outstanding on the U.S. revolving credit facility and repurchase $113.3paid $24.8 million of ~~common stock. For 2016, proceeds from notes payable were used to partially finance the acquisition of Mega Airless and to repurchase and retire common stock. Proceeds~~dividends, received $13.8 million from stock option exercises ~~were offset by the cash paid to stockholders in dividends during 2017~~ and ~~2016.~~

Cash and equivalents increased to $1.0 billion at September 30, 2017 from $466.3 million at December 31, 2016 mainly due to the $1.0 billion repatriation from Europe to the U.S as discussed below. Total short and long-term interest bearing debt increased intreasury stock. During the first ~~nine months~~quarter of ~~2017 to $1.5 billion~~2022, we received proceeds from ~~$946.6~~long-term obligations of $402.2 million ~~at December 31, 2016~~ primarily ~~due to~~from the ~~additional debt taken on in Europe to fund the repatriation. The ratio~~issuance of $400 million of our ~~Net Debt (interest bearing debt less cash~~3.60% Senior Notes due March 2032 and ~~cash equivalents less short-term investments)~~we repaid $144.3 million related to ~~Net Capital (stockholder’s equity plus Net Debt) was 27.4% at September 30, 2017 compared to 29.0% at December 31, 2016. See the reconciliation of Non-U.S. GAAP measures starting on page 30.~~

~~On July 20, 2017, the Company replaced its $300 million~~our revolving credit ~~facility with a new 5-year multi-currency revolving credit facility with two tranches, providing for~~facility.

In October 2020, we entered into an unsecured money market borrowing arrangement to provide short term financing of up to ~~$300~~$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, 2023.

On June 30, 2021, we entered into an amended and restated multi-currency revolving credit facility (the "revolving credit facility") with a syndicate of banks to replace the then existing facility maturing July 2022 (the "prior credit facility") 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 one-year extensions in certain circumstances, and provides for unsecured financing of up to ~~€150~~$600 million ~~that is~~ available in the U.S. and to our ~~wholly owned~~wholly-owned UK subsidiary. The amended term facility matured in July 2022 and was paid in full. 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 ~~Aptar’s~~our consolidated leverage ratio. ~~At September 30, 2017, we had an outstanding~~As of March 31, 2023 and December 31, 2022, no balance ~~of €90 million~~was utilized under the credit facility. At December 31, 2016, we had an outstanding balance of $166 million under the credit facility. We incurred approximately $734 thousand and $370 thousand in interest and fees related to thisrevolving credit facility ~~during~~in the ~~nine months ended September 30, 2017~~U.S. and ~~2016, respectively.~~

no balance was utilized by our wholly-owned UK subsidiary. Credit facility balances are included in notes payable, revolving credit 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:

~~(a)~~

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

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

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

On July 6, 2022, we entered into an agreement to swap approximately $200 million of our fixed USD debt to fixed EUR debt which would generate interest savings of approximately $0.5 million per quarter based upon exchange rates as of the transaction date.

On April 20, 2023, the Board of Directors declared a quarterly cash dividend of $0.38 per share payable on May 25, 2023 to stockholders of record as of May 4, 2023.

Our foreign operations have historically met cash requirements with the use of internally generated cash or uncommitted short-term borrowings. ~~Following the repatriation of cash to the U.S. discussed above, the majority of our $1.0 billion in cash and equivalents is located within the U.S. and we now~~We also have committed financing arrangements in both the ~~U.K.~~U.S. and the UK as detailed ~~below.~~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.

~~During the third quarter of 2017, the Company entered into the borrowing arrangements summarized below through our wholly owned UK subsidiary to better balance our capital structure.~~


~~Debt type~~	~~Amount~~	~~Term/Maturity~~	~~Interest rate~~
~~Bank term loan~~	~~$280 million~~	~~5 year amortizing/July 2022~~	~~2.56% floating swapped to 1.36% fixed~~
~~Bank revolver~~	~~€150 million~~	~~5 year/July 2022~~	~~1.10% floating~~
~~Private placement~~	~~€100 million~~	~~6 year/July 2023~~	~~0.98% fixed~~
~~Private placement~~	~~€200 million~~	~~7 year/July 2024~~	~~1.17% fixed~~

Aptar also entered into a EUR/USD floating-to-fixed cross currency swap on July 20, 2017 to mitigate the currency risk of U.S. dollar debt on a Euro functional currency entity and to also mitigate the risk of variability in interest rates on the $280 million bank term loan. The Company expects its future European cash flows will be sufficient to service this new debt.

~~On October 19, 2017, the Board of Directors declared a quarterly cash dividend of $0.32 per share payable on November 22, 2017 to stockholders of record as of November 1, 2017.~~

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 1012 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for a discussion of contingencies affecting ~~the Company’s~~our business.

~~OFF-BALANCE SHEET ARRANGEMENTS~~

We lease certain warehouse, plant and office facilities as well as certain equipment under noncancelable operating leases expiring at various dates through the year 2027. Most of the operating leases contain renewal options and certain equipment leases include options to purchase during or at the end of the lease term. Other than operating lease obligations, we do not have any 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 ~~are effective for 2017~~have been adopted during 2023 are discussed in Note 1 – Summary of Significant Accounting Policies of the Notes to Condensed Consolidated Financial Statements.

In January 2016, the FASB issued new guidance that generally requires companies to measure investments in other entities, except those accounted for under the equity method, at fair value and recognize any changes in fair value in net income. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017. The Company does not believe that this new guidance will have a material impact on its consolidated financial statements.

In February 2016, the FASB issued new guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this guidance.

In June 2016, the FASB issued guidance that changes the accounting for measurement of credit losses on financial instruments. The guidance replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information when recording credit loss estimates. The new standard is effective for fiscal years and interim periods beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance.

In August 2016, the FASB issued guidance to increase comparability among organizations on how certain cash receipts and cash payments are presented and classified in the Statement of Cash Flows. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017. The Company is currently evaluating the impact of adopting this guidance.

In January 2017, the FASB issued 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 will be required for the amount by which the reporting units carrying amount exceeds its fair value up to the amount of its allocated goodwill. The new standard is effective for the annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company does not believe that this new guidance will have a material impact on its consolidated financial statements.

In March 2017, the FASB issued guidance to disaggregate the current service cost component from the other components of net periodic benefit costs. The service cost component should be presented within compensation costs while the other components should be presented outside of income from operations. The guidance also clarifies that only the service cost component is eligible for capitalization. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017. The Company is currently evaluating the impact of adopting this guidance.

In May 2017, the FASB issued clarification on applying the standards for stock compensation accounting. The new standard provides guidance on which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017. The Company is currently evaluating the impact of adopting this guidance.

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 ~~consolidated financial statements~~Condensed Consolidated Financial Statements upon adoption.

Looking forward to the ~~fourth~~second quarter, we expect ~~continued~~our proprietary pharma dispensing devices and beauty businesses to grow. We expect revenue ~~growth in each of~~from our ~~three operating segments. We also anticipate that raw material costs~~injectables division will ramp up as the division moves past its ERP system implementation and ~~lower results~~we expect a gradual improvement in our ~~custom decorative packaging business~~Closures segment as customers, especially in ~~Europe will negatively impact profitability.~~ North America, continue to work through their inventory.

We expect earnings per share for the ~~fourth~~second quarter of 2023, excluding any restructuring expenses, changes in the fair value of equity investments and acquisition costs, to be in the range of ~~$0.68~~$1.11 to ~~$0.73 per share, compared to $0.77 per share reported in the prior year. Our~~$1.19 and this guidance ~~range~~ is based on an effective tax rate range of ~~26.5%~~26% to 28.5%, which includes an estimate of the potential tax benefit from our adoption of the new accounting standard for share-based compensation. Prior year earnings per share included approximately $0.08 related to certain tax benefits.

28%.

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”~~“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 or other events 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:

~~economic conditions worldwide, including potential deflationary conditions in regions we rely on for growth;~~

~~political conditions worldwide;~~

•geopolitical conflicts worldwide including the invasion of Ukraine by the Russian military and the resulting indirect impact on demand from our customers selling their products into these countries, as well as rising input costs and certain supply chain disruptions;

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

•lower demand and asset utilization due to an economic recession either globally or in key markets we operate within;

~~financial conditions of customers and suppliers;~~

•economic conditions worldwide, including inflationary conditions and potential deflationary conditions in other regions we rely on for growth;

~~consolidations within our customer or supplier bases;~~

•the execution of our fixed cost initiatives, including our optimization initiative;

~~changes in customer and/or consumer spending levels;~~

•the availability of direct labor workers and the increase in direct labor costs, especially in North America;

~~loss of one or more key accounts;~~

•our ability to preserve organizational culture and maintain employee productivity in the hybrid work environment prompted by the pandemic;

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

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

~~fluctuations in the cost of materials, components and other input costs (particularly resin, metal, anodization costs and transportation and energy costs);~~

•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);

~~the possible impact and consequences of the fire at the Company’s facility in Annecy, France;~~

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

~~the impact and extent of contamination found at the Company’s facility in Brazil;~~

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

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

•financial conditions of customers and suppliers;

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

•consolidations within our customer or supplier bases;

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

•changes in customer and/or consumer spending levels;

~~volatility of global credit markets;~~

•loss of one or more key accounts;

~~the timing and magnitude of capital expenditures;~~

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

~~our ability to identify potential new acquisitions and to successfully acquire and integrate such operations or products;~~

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

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

•changes in capital availability or cost, including rising interest rates;

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

•volatility of global credit markets;

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

~~fiscal and monetary policies and other regulations, including changes in worldwide tax rates;~~

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

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

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

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

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

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

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

~~the demand for existing and new products;~~

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

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

•fiscal and monetary policies and other regulations;

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

•changes or difficulties in complying with government regulation;

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

•changing regulations or market conditions regarding environmental sustainability;

~~significant product liability claims; and~~

•work stoppages due to labor disputes;

~~other risks associated with our operations.~~

•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; and

•other risks associated with our operations.

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”)~~(Risk Factors) of Part I included in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, 2022 for additional ~~risk factors affecting the Company.~~

risks and uncertainties that may cause our actual results or other events to differ materially from those expressed or implied in such forward-looking statements.

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 ~~entities.~~subsidiaries. Our primary foreign exchange exposure is to the ~~Euro,~~euro, but we also have foreign exchange exposure to the Chinese ~~Yuan,~~yuan, Brazilian ~~Real,~~real, Mexican ~~Peso~~peso, Swiss franc and ~~Swiss Franc, among~~ other Asian, European and South American currencies. A strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on our financial condition and results of operations. Conversely, 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.

We manage our exposures to foreign exchange principally with forward exchange contracts to hedge certain firm purchase and sales commitments and intercompany cash transactions denominated in foreign currencies.

The table below provides information as of ~~September 30, 2017~~March 31, 2023 about our forward currency exchange contracts. The majority of the contracts expire before the end of ~~2017.~~

the second quarter of 2023.

Average

Min / Max



Contract Amount

Contractual

Notional

Buy/Sell

(in thousands)

Exchange Rate

Volumes

Swiss Franc / Euro

$
53,078

0.8786

53,078-66,509

Euro / Indian Rupee

11,263

76.0763

11,263-11,680

Euro / U.S. Dollar

8,556

1.1926

7,215-9,002

Euro / Brazilian Real

6,633

3.7988

6,633-7,155

Euro / Indonesian Rupiah

2,256

16,785.0000

1,962-2,256

U.S. Dollar / Euro

1,267

0.8438

1,267-2,325

Czech Koruna / Euro

1,083

0.0385

312-1,534

British Pound / Euro

584

1.0984

584-1,321

U.S. Dollar / Mexican Peso

338

17.8579

301-880

Euro / Swiss Franc

255

1.1405

0-255

Total

$
85,313


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

EUR / USD	$	24,248	1.0774	10,203 - 24,248
EUR / BRL	10,293		5.7560	10,077 - 10,293
EUR / CNY	8,507		7.3596	2,712 - 8,507
MXN / USD	5,000		0.0524	4,500 - 7,000
EUR / THB	4,980		35.5741	4,859 - 5,185
USD / CNY	4,000		6.8828	3,500 - 4,000
USD / MXN	3,000		19.2196	0 - 3,000
CZK / EUR	2,529		0.0416	2,529 - 5,513
EUR / MXN	2,181		20.6538	2,181 - 3,796
USD / EUR	872		0.9341	872 - 4,336
GBP / EUR	869		1.1306	798 - 1,503
CHF - EUR	744		1.0111	744 - 1,309
CHF - USD	328		1.0761	0 - 328
EUR - GBP	316		0.8821	0 - 316
USD - GBP	179		0.8306	179 - 602
EUR - CHF	94		0.9951	0 - 93
Total	$	68,140

As of ~~September 30, 2017, the Company has~~March 31, 2023, we have recorded the fair value of foreign currency forward exchange contracts of ~~$0.3~~$0.8 million in prepaid and other and ~~$0.4~~$0.8 million in accounts payable, accrued and ~~accrued~~other liabilities on the ~~balance sheet. Aptar also~~Condensed Consolidated Balance Sheets. On July 6, 2022, we entered into a ~~EUR/USD floating-to-fixed~~seven year USD/EUR fixed-to-fixed cross currency interest rate swap ~~on July 20, 2017~~ to effectively hedge the ~~foreign exchange and~~ interest rate exposure relating to $203 million of the $400 million 3.60% Senior Notes due March 2032 which were issued by AptarGroup, Inc. on ~~the $280~~March 7, 2022. This USD/EUR swap agreement exchanged $203 million ~~bank term loan drawn by its wholly owned UK subsidiary.~~of fixed-rate 3.60% USD debt to €200 million of fixed-rate 2.5224% EUR debt. The fair value of this ~~cash flow~~net investment hedge is ~~$12.1~~$10.7 million ~~and is~~ reported in ~~accounts~~Accounts payable, accrued and ~~accrued~~other liabilities on the ~~balance sheet.~~

Condensed Consolidated Balance Sheets.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

~~The Company’s management~~

Management has evaluated, with the participation of the chief executive officer and chief financial officer of the Company, the effectiveness of ~~the Company’s~~our disclosure controls and procedures (as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of ~~September 30, 2017.~~March 31, 2023. 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

~~No change~~

During the fiscal quarter ended March 31, 2023, we implemented ERP systems at two operating units. Consequently, the control environments have been modified at these locations to incorporate the controls contained within the new ERP systems. Except for the foregoing, no changes in ~~the Company’s~~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 ~~the Company’s~~our fiscal quarter ended ~~September 30, 2017~~March 31, 2023 that materially affected, or isare reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 2. UNREGISTEREDSALES 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 ~~September 30, 2017,~~March 31, 2023, the Plan purchased ~~3,500~~11,883 shares of our common stock on behalf of the participants at an average price of ~~$81.89,~~$118.19, for an aggregate amount of ~~$287 thousand,~~$1.4 million, and sold no2,025 shares of our common stock on behalf of the ~~participants.~~participants at an average price of $115.89, for an aggregate amount of $235 thousand. At ~~September 30, 2017,~~March 31, 2023, the Plan owned ~~75,136~~127,990 shares of our common stock.

ISSUER PURCHASES OF EQUITY SECURITIES

On ~~October 20, 2016, the Company~~April 18, 2019, we announced a share ~~repurchase~~purchase authorization of up to $350 million of common stock. This authorization ~~replaces~~replaced previous authorizations and has no expiration date. ~~Aptar~~We may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions.

~~The Company spent $45.5 million to repurchase~~


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


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

~~Class~~		~~Outstanding at October 26, 2017~~
~~Common Stock, $.01 par value per share~~				~~62,293,828 shares~~


Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Income -– Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 3 1 , 202 3 and ~~2016~~202 2	1 1

	Condensed Consolidated Statements of Comprehensive Income – Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 3 1 , 202 3 and ~~2016~~202 2	2 2

	Condensed Consolidated Balance Sheets – ~~September 30, 2017~~March 31 , 202 3 and December 31, ~~2016~~202 2	3 3

	Condensed Consolidated Statements of Changes in Equity – ~~Nine~~ Three Months Ended ~~September 30, 2017~~March 3 1 , 202 3 and ~~2016~~202 2	5 5

	Condensed Consolidated Statements of Cash Flows - ~~Nine~~Three Months Ended ~~September 30, 2017~~March 3 1 , 202 3 and ~~2016~~202 2	6 6

	Notes to Condensed Consolidated Financial Statements	8 7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28 24

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40 39

Item 4.	Controls and Procedures	40 39

Part II.	OTHER INFORMATION

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41 40

Item 6.	Exhibits	42 41

	Signature	43 42


In thousands

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016

Net Income	$	53,529	$	53,100	$	170,523	$	156,017
Other Comprehensive Income:
Foreign currency translation adjustments		17,903		13,792		69,505		44,239
Changes in treasury locks, net of tax		7		6		21		19
Net loss on derivatives, net of tax		(3,591)		—		(3,591)		—
Defined benefit pension plan, net of tax
Amortization of prior service cost included in net income, net of tax		74		58		210		174
Amortization of net loss included in net income, net of tax		850		779		2,489		2,337
Total defined benefit pension plan, net of tax		924		837		2,699		2,511
Total other comprehensive income		15,243		14,635		68,634		46,769
Comprehensive Income		68,772		67,735		239,157		202,786
Comprehensive Income Attributable to Noncontrolling Interests		(11)		(1)		(18)		—
Comprehensive Income Attributable to AptarGroup, Inc.	$	68,761	$	67,734	$	239,139	$	202,786


In thousands

		September 30,		December 31,
		2017		2016
Assets
Current Assets:
Cash and equivalents	$	1,018,666	$	466,287
Accounts and notes receivable, less allowance for doubtful accounts of $3,245 in 2017 and $2,989 in 2016		510,144		433,127
Inventories		323,404		296,914
Prepaid and other		89,181		73,842
		1,941,395		1,270,170
Property, Plant and Equipment:
Buildings and improvements		408,718		368,260
Machinery and equipment		2,168,639		1,938,352
		2,577,357		2,306,612
Less: Accumulated depreciation		(1,744,586)		(1,545,384)
		832,771		761,228
Land		25,668		23,093
		858,439		784,321
Other Assets:
Investments in affiliates		9,485		4,241
Goodwill		439,147		407,522
Intangible assets		96,760		94,489
Miscellaneous		63,628		46,042
		609,020		552,294
Total Assets	$	3,408,854	$	2,606,785


In thousands, except share and per share amounts

		September 30,		December 31,
		2017		2016

Liabilities and Stockholders’ Equity
Current Liabilities:
Notes payable	$	109,910	$	169,213
Current maturities of long-term obligations, net of unamortized debt issuance costs		136,330		4,603
Accounts payable and accrued liabilities		458,797		369,139
		705,037		542,955
Long-Term Obligations, net of unamortized debt issuance costs		1,271,530		772,737
Deferred Liabilities and Other:
Deferred income taxes		18,438		16,803
Retirement and deferred compensation plans		87,223		94,545
Deferred and other non-current liabilities		4,802		5,503
Commitments and contingencies		—		—
		110,463		116,851
Stockholders’ Equity:
AptarGroup, Inc. stockholders’ equity
Common stock, $.01 par value, 199 million shares authorized, 66.6 and 66.0 million shares issued as of September 30, 2017 and December 31, 2016, respectively		666		660
Capital in excess of par value		599,608		546,682
Retained earnings		1,271,576		1,197,234
Accumulated other comprehensive (loss)		(251,087)		(319,709)
Less: Treasury stock at cost, 4.3 and 3.9 million shares as of September 30, 2017 and December 31, 2016, respectively		(299,249)		(250,917)
Total AptarGroup, Inc. Stockholders’ Equity		1,321,514		1,173,950
Noncontrolling interests in subsidiaries		310		292
Total Stockholders’ Equity		1,321,824		1,174,242
Total Liabilities and Stockholders’ Equity	$	3,408,854	$	2,606,785


In thousands

	AptarGroup, Inc. Stockholders’ Equity
			Accumulated
			Other		Common				Capital in		Non-
	Retained		Comprehensive		Stock		Treasury		Excess of		Controlling		Total
	Earnings		(Loss) Income		Par Value		Stock		Par Value		Interest		Equity
Balance - December 31, 2015	$	1,185,681	$	(262,347)	$	667	$	(270,052)	$	495,462	$	295	$	1,149,706
Net income		156,009		—		—		—		—		8		156,017
Foreign currency translation adjustments		—		44,247		—		—		—		(8)		44,239
Changes in unrecognized pension gains/losses and related amortization, net of tax		—		2,511		—		—		—		—		2,511
Changes in treasury locks, net of tax		—		19		—		—		—		—		19
Stock awards and option exercises		—		—		9		17,195		58,037		—		75,241
Cash dividends declared on common stock		(56,597)		—		—		—		—		—		(56,597)
Common stock repurchased and retired		(75,996)		—		(11)		—		(8,783)		—		(84,790)
Balance - September 30, 2016	$	1,209,097	$	(215,570)	$	665	$	(252,857)	$	544,716	$	295	$	1,286,346

Balance - December 31, 2016	$	1,197,234	$	(319,709)	$	660	$	(250,917)	$	546,682	$	292	$	1,174,242
Net income		170,517		—		—		—		—		6		170,523
Foreign currency translation adjustments		—		69,493		—		—		—		12		69,505
Changes in unrecognized pension gains/losses and related amortization, net of tax		—		2,699		—		—		—		—		2,699
Changes in treasury locks, net of tax		—		21		—		—		—		—		21
Changes in derivative gains/losses, net of tax		—		(3,591)		—		—		—		—		(3,591)
Stock awards and option exercises		—		—		11		23,938		57,742		—		81,691
Cash dividends declared on common stock		(60,002)		—		—		—		—		—		(60,002)
Treasury stock purchased		—		—		—		(72,270)		—		—		(72,270)
Common stock repurchased and retired		(36,173)		—		(5)		—		(4,816)		—		(40,994)
Balance - September 30, 2017	$	1,271,576	$	(251,087)	$	666	$	(299,249)	$	599,608	$	310	$	1,321,824


	As Previously
	Reported		Adjustment		As Revised
Revised Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2016
Retirement and deferred compensation plan liabilities	$	(12,525)	$	(1,894)	$	(14,419)
Net Cash Provided by Operations		204,314		(1,894)		202,420
Proceeds from stock option exercises		47,563		1,894		49,457
Net Cash (Used) Provided by Financing Activities		(804)		1,894		1,090


	Beauty +				Food +		Corporate
	Home		Pharma		Beverage		& Other		Total
Goodwill	$	211,371	$	180,050	$	16,101	$	1,615	$	409,137
Accumulated impairment losses		—		—		—		(1,615)		(1,615)
Balance as of December 31, 2016	$	211,371	$	180,050	$	16,101	$	—	$	407,522
Foreign currency exchange effects		10,887		20,064		674		—		31,625
Goodwill	$	222,258	$	200,114	$	16,775	$	1,615	$	440,762
Accumulated impairment losses		—		—		—		(1,615)		(1,615)
Balance as of September 30, 2017	$	222,258	$	200,114	$	16,775	$	—	$	439,147


		September 30, 2017							December 31, 2016
																March 31, 2023						December 31, 2022
Weighted Average		Gross						Gross
Amortization Period		Carrying		Accumulated		Net		Carrying		Accumulated		Net
	(Years)	Amount		Amortization		Value		Amount		Amortization		Value
Weighted Average Amortization Period (Years)														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:
Patents	0.2	$	7,695	$	(7,680)	$	15	$	6,859	$	(6,839)	$	20	Patents	8.8	$	8,133	$	(2,141)	$	5,992	$	8,044	$	(1,968)	$	6,076
Acquired technology	15.0		46,817		(13,610)		33,207		41,731		(10,040)		31,691	Acquired technology	11.4	139,729		(60,291)		79,438		135,191		(56,628)		78,563
Customer relationships	12.2		68,126		(11,763)		56,363		63,006		(6,696)		56,310	Customer relationships	13.4	307,992		(105,722)		202,270		305,994		(99,130)		206,864
Trademarks and trade names														Trademarks and trade names	7.2	44,657		(29,877)		14,780		43,998		(28,190)		15,808
License agreements and other	7.6		21,352		(14,177)		7,175		18,516		(12,048)		6,468	License agreements and other	38.9	15,540		(7,212)		8,328		15,425		(6,992)		8,433
Total intangible assets	11.8	$	143,990	$	(47,230)	$	96,760	$	130,112	$	(35,623)	$	94,489	Total intangible assets	13.2	$	516,051	$	(205,243)	$	310,808	$	508,652	$	(192,908)	$	315,744


2017	$	2,572	(remaining estimated amortization for 2017)
2018		10,851
2019		10,667
2020		9,464
2021 and thereafter		63,206


Debt Type	Amount		Term/Maturity	Interest Rate
Bank term loan	$	280,000	5 year amortizing/July 2022	2.56% floating swapped to 1.36% fixed
Bank revolver	€	150,000	5 year/July 2022	1.10% floating
Private placement	€	100,000	6 year/July 2023	0.98% fixed
Private placement	€	200,000	7 year/July 2024	1.17% fixed


			Unamortized
			Debt Issuance
	Principal		Costs		Net
Notes payable 0.61% – 18.00%, due in monthly and annual installments through 2025	$	17,103	$	—	$	17,103
Senior unsecured notes 6.0%, due in 2018		75,000		62		74,938
Senior unsecured notes 3.8%, due in 2020		84,000		138		83,862
Senior unsecured notes 3.2%, due in 2022		75,000		156		74,844
Senior unsecured debts 2.6% floating, equal annual installments through 2022		280,000		755		279,245
Senior unsecured notes 3.5%, due in 2023		125,000		291		124,709
Senior unsecured notes 1.0%, due in 2023		118,190		418		117,772
Senior unsecured notes 3.4%, due in 2024		50,000		118		49,882
Senior unsecured notes 3.5%, due in 2024		100,000		291		99,709
Senior unsecured notes 1.2%, due in 2024		236,380		835		235,545
Senior unsecured notes 3.6%, due in 2025		125,000		314		124,686
Senior unsecured notes 3.6%, due in 2026		125,000		314		124,686
Capital lease obligations		879		—		879
	$	1,411,552	$	3,692	$	1,407,860
Current maturities of long-term obligations		(136,392)		(62)		(136,330)
Total long-term obligations	$	1,275,161	$	3,631	$	1,271,530


	Domestic Plans				Foreign Plans					Domestic Plans				Foreign Plans
Three Months Ended September 30,	2017		2016		2017		2016

Three Months Ended March 31,									Three Months Ended March 31,	2023		2022		2023		2022
Service cost	$	2,426	$	2,261	$	1,447	$	1,148	Service cost	$	2,409	$	3,945	$	1,470	$	1,970
Interest cost		1,752		1,694		459		477	Interest cost	2,158		1,742		903		373
Expected return on plan assets		(2,470)		(2,118)		(627)		(550)	Expected return on plan assets	(3,094)		(3,227)		(580)		(727)
Amortization of net loss		801		820		493		388	Amortization of net loss	—		1,667		228		444
Amortization of prior service cost		—		—		104		89	Amortization of prior service cost	—		—		43		38
Net periodic benefit cost	$	2,509	$	2,657	$	1,876	$	1,552	Net periodic benefit cost	$	1,473	$	4,127	$	2,064	$	2,098


	Foreign		Defined Benefit
	Currency		Pension Plans		Other		Total
Balance - December 31, 2015	$	(206,725)	$	(55,550)	$	(72)	$	(262,347)
Other comprehensive income before reclassifications		44,329		—		—		44,329
Amounts reclassified from accumulated other comprehensive income		(82)		2,511		19		2,448
Net current-period other comprehensive income		44,247		2,511		19		46,777
Balance - September 30, 2016	$	(162,478)	$	(53,039)	$	(53)	$	(215,570)

Balance - December 31, 2016	$	(259,888)	$	(59,775)	$	(46)	$	(319,709)
Other comprehensive income before reclassifications		69,493		—		(9,237)		60,256
Amounts reclassified from accumulated other comprehensive income		—		2,699		5,667		8,366
Net current-period other comprehensive income		69,493		2,699		(3,570)		68,622
Balance - September 30, 2017	$	(190,395)	$	(57,076)	$	(3,616)	$	(251,087)


	Amount Reclassified from
Details about Accumulated Other	Accumulated Other				Affected Line in the Statement
Comprehensive Income Components	Comprehensive Income				Where Net Income is Presented
Three Months Ended September 30,	2017		2016

Defined Benefit Pension Plans
Amortization of net loss	$	1,294	$	1,208	(a)
Amortization of prior service cost		104		89	(a)
		1,398		1,297	Total before tax
		(474)		(460)	Tax benefit
	$	924	$	837	Net of tax
Foreign Currency
Foreign currency gain	$	—	$	(82)	Miscellaneous, net
		—		(82)	Total before tax
		—		—	Tax benefit
	$	—	$	(82)	Net of tax
Other
Changes in treasury locks	$	11	$	10	Interest Expense
Changes in cross currency swap: interest component		(678)		—	Interest Expense
Changes in cross currency swap: foreign exchange component		7,481		—	Miscellaneous, net
		6,814		10	Total before tax
		(1,161)		(4)	Tax benefit
	$	5,653	$	6	Net of tax
Total reclassifications for the period	$	6,577	$	761


						Amount of Gain (Loss)				Total Amount
	Amount of Gain (Loss)				Location of (Loss)	Reclassified from				of Affected
Derivatives in Cash	Recognized in				Gain Recognized	Accumulated				Income
Flow Hedging	Other Comprehensive				in Income on	Other Comprehensive				Statement
Relationships	Income on Derivative				Derivatives	Income on Derivative				Line Item
	2017		2016			2017		2016
Cross currency swap contract:
Interest component	$	(3,648)	$	—	Interest expense	$	678	$	—	$	(9,733)
Foreign exchange component		(7,481)		—	Miscellaneous, net		(7,481)		—		(2,200)
	$	(11,129)	$	—		$	(6,803)	$	—	$	(11,933)


		Amount of (Loss) Gain
Derivatives Not Designated	Location of (Loss) Gain Recognized	Recognized in Income
as Hedging Instruments	in Income on Derivatives	on Derivatives
		2017		2016
Foreign Exchange Contracts	Other (Expense) Income: Miscellaneous, net	$	(15,534)	$	3,191
		$	(15,534)	$	3,191


						Gross Amounts not Offset
			Gross Amounts	Net Amounts		in the Statement of
			Offset in the	Presented in		Financial Position
	Gross		Statement of	the Statement of		Financial	Cash Collateral	Net
	Amount		Financial Position	Financial Position		Instruments	Received	Amount
Description
September 30, 2017
Derivative Assets	$	327	—	$	327	—	—	$	327
Total Assets	$	327	—	$	327	—	—	$	327

Derivative Liabilities	$	12,472	—	$	12,472	—	—	$	12,472
Total Liabilities	$	12,472	—	$	12,472	—	—	$	12,472

December 31, 2016
Derivative Assets	$	1,612	—	$	1,612	—	—	$	1,612
Total Assets	$	1,612	—	$	1,612	—	—	$	1,612

Derivative Liabilities	$	2,881	—	$	2,881	—	—	$	2,881
Total Liabilities	$	2,881	—	$	2,881	—	—	$	2,881


Stock Awards Plans:
Nine Months Ended September 30,	2017		2016

Dividend Yield	1.7	%	1.8	%
Expected Stock Price Volatility	15.8	%	16.9	%
Risk-free Interest Rate	2.2	%	1.6	%
Expected Life of Option (years)	6.7		6.7


				Director Restricted
	Stock Awards Plans			Stock Unit Plan
		Weighted Average			Weighted Average
	RSUs	Grant-Date Fair Value		RSUs	Grant-Date Fair Value
Nonvested at January 1, 2017	72,127	$	69.31	15,745	$	75.56
Granted	89,110		74.43	14,793		80.45
Vested	(51,963)		68.52	(15,745)		75.56
Nonvested at September 30, 2017	109,274	$	73.86	14,793	$	80.45


	Three Months Ended
	September 30, 2017				September 30, 2016
	Diluted		Basic		Diluted		Basic
Consolidated operations
Income available to common stockholders	$	53,523	$	53,523	$	53,098	$	53,098

Average equivalent shares
Shares of common stock		62,592		62,592		62,858		62,858
Effect of dilutive stock based compensation
Stock options		2,171		—		1,791		—
Restricted stock		58		—		41		—
Total average equivalent shares		64,821		62,592		64,690		62,858
Net income per share	$	0.83	$	0.86	$	0.82	$	0.84


	Nine Months Ended
	September 30, 2017				September 30, 2016
	Diluted		Basic		Diluted		Basic
Consolidated operations
Income available to common stockholders	$	170,517	$	170,517	$	156,009	$	156,009

Average equivalent shares
Shares of common stock		62,527		62,527		62,878		62,878
Effect of dilutive stock based compensation
Stock options		2,046		—		2,059		—
Restricted stock		53		—		52		—
Total average equivalent shares		64,626		62,527		64,989		62,878
Net income per share	$	2.64	$	2.73	$	2.40	$	2.48


	February 29, 2016
Assets
Cash and equivalents	$	20,197
Accounts receivable		8,275
Inventories		8,373
Prepaid and other		378
Property, plant and equipment		47,768
Goodwill		105,561
Intangible assets		72,106
Other miscellaneous assets		8
Liabilities
Current maturities of long-term obligations		319
Accounts payable and accrued liabilities		7,398
Long-term obligations		13,402
Deferred income taxes		18,366
Net assets acquired	$	223,181


	Weighted-Average	Estimated
	Useful Life	Fair Value
	(in years)	of Asset
Customer relationships	11	$	57,120
Technology	15		10,838
Trademark	4		4,148
Total		$	72,106


Third Quarter 2017	Beauty				Food +
Net Sales Change over Prior Year	+ Home		Pharma		Beverage		Total

Core Sales Growth	3	%	1	%	8	%	3	%
Currency Effects (1)	3	%	3	%	2	%	3	%
Total Reported Net Sales Growth	6	%	4	%	10	%	6	%


First Nine Months of 2017	Beauty				Food +
Net Sales Change over Prior Year	+ Home		Pharma		Beverage		Total

Core Sales Growth	—	%	6	%	5	%	2	%
Acquisitions	1	%	—	%	—	%	1	%
Currency Effects (1)	—	%	—	%	(1)	%	—	%
Total Reported Net Sales Growth	1	%	6	%	4	%	3	%


Third Quarter 2017	Personal				Home
Net Sales Change over Prior Year	Care		Beauty		Care		Total

Core Sales Growth	4	%	—	%	9	%	3	%
Currency Effects (1)	3	%	3	%	2	%	3	%
Total Reported Net Sales Growth	7	%	3	%	11	%	6	%


Third Quarter 2017	Prescription		Consumer
Net Sales Change over Prior Year	Drug		Health Care		Injectables		Total

Core Sales Growth	2	%	(6)	%	15	%	1	%
Currency Effects (1)	3	%	3	%	5	%	3	%
Total Reported Net Sales Growth	5	%	(3)	%	20	%	4	%


Three Months Ended March 31, 2023 Net Sales Change over Prior Year	Food		Beverage		Personal Care		Other (2)		Total
Reported Net Sales Growth	(8)	%	6	%	(19)	%	(10)	%	(8)	%
Currency Effects (1)	1	%	—	%	—	%	1	%	1	%
Acquisitions	—	%	(2)	%	—	%	—	%	(1)	%
Core Sales Growth	(7)	%	4	%	(19)	%	(9)	%	(8)	%


	2017
First Quarter	$	6.9
Second Quarter		3.0
Third Quarter		2.6
Fourth Quarter (estimated for 2017)		2.7
	$	15.2



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

Swiss Franc / Euro	$	53,078	0.8786	53,078-66,509
Euro / Indian Rupee		11,263	76.0763	11,263-11,680
Euro / U.S. Dollar		8,556	1.1926	7,215-9,002
Euro / Brazilian Real		6,633	3.7988	6,633-7,155
Euro / Indonesian Rupiah		2,256	16,785.0000	1,962-2,256
U.S. Dollar / Euro		1,267	0.8438	1,267-2,325
Czech Koruna / Euro		1,083	0.0385	312-1,534
British Pound / Euro		584	1.0984	584-1,321
U.S. Dollar / Mexican Peso		338	17.8579	301-880
Euro / Swiss Franc		255	1.1405	0-255
Total	$	85,313


					Dollar Value Of
				Total Number Of Shares	Shares that May Yet be
	Total Number			Purchased as Part Of	Purchased Under The
	Of Shares	Average Price		Publicly Announced	Plans or Programs
Period	Purchased	Paid Per Share		Plans Or Programs	(in millions)

7/1 – 7/31/17	—	$	—	—	$	235.7
8/1 – 8/31/17	252,308		82.22	252,308		215.0
9/1 – 9/30/17	293,254		84.56	293,254		190.2
Total	545,562	$	83.48	545,562	$	190.2



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)

1/1 - 1/31/23	—	$	—	—	$	108.3
2/1 - 2/28/23	57,000	115.42		57,000	101.6
3/1 - 3/31/23	114,000	115.35		114,000	88.5
Total	171,000	$	115.38	171,000	$	88.5