______________________________

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

_____________________________


Delaware				20-8737688

~~Delaware~~	~~20-8737688~~
~~(State~~ (State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

14 Schoolhouse Road
Somerset, NJ		New Jersey		08873
~~(Address~~ (Address of principal executive offices)_______					(Zip code)

~~______________________________~~____________________________________

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	CTLT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes x¨ 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). x☒ Yes ¨ No

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

Large accelerated filerx

☒

Accelerated filer¨

Non-accelerated filer¨

~~(Do not check if a smaller reporting company)~~

Smaller reporting company¨

Emerging growth company¨

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

On ~~February 2, 2018,~~January 31, 2024, there were ~~133,318,679~~180,737,675 shares of the Registrant's common stock, par value $0.01 per share, issued and outstanding.

CATALENT, INC. ~~and Subsidiaries~~

For the Three and Six Months Ended December 31, ~~2017~~2023

Special Note Regarding Forward-Looking Statements

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

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

Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include, but are not limited to, those summarized below, in addition to those described more fully (i) from time to time in reports that we have filed or in the future may file with the Securities and Exchange Commission (the “SEC”), and (ii) under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2017~~2023 (the "Fiscal 2023 10-K").

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

~~We participate in a highly competitive market,~~•Actions of activist shareholders could impact the pursuit of our business strategies and ~~increased competition may~~ adversely affect our ~~business.~~results of operations, financial condition, or share price.

•We anticipate being subject to increasing focus by our investors, regulators, customers, and other stakeholders on environmental, social, and governance (“ESG”) matters.

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

•We have experienced, and may continue to experience, productivity issues and higher-than-expected costs at certain of our facilities, which have resulted in, and may continue to result in, material and adverse impacts on our financial condition and results of operations.

•The declining demand for various COVID-19 vaccines and treatments from both patients and governments around the world has affected and may continue to affect sales of the COVID-19 products we manufacture and our financial condition.

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

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

~~Changes in market access or healthcare reimbursement for our customers’ products~~•Our goodwill has been subject to impairment and may be subject to further impairment in the United States or internationally, including the possible repeal or replacement of the Affordable Care Act in the United States, could adversely affect our results of operations and financial condition by affecting demand for our offerings.

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

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

•We may become subject to litigation, other proceedings, and government investigations relating to us or our operations, and the ultimate outcome of any such matter may have an impact on our business, prospects, financial condition, and results of operations.

•Our global operations are subject to economic and political risks, including risks resulting from continuing inflation, disruptions to global supply chains, destabilization of a regional or national banking system, or from the Ukrainian-Russian war or the effect of the evolving nature of the recent war in Gaza between Israel and Hamas, which could affect the profitability of ~~the business may~~our operations or require ~~that we establish an additional valuation allowance against all or some portion of~~costly changes to our ~~net U.S. deferred tax assets.~~procedures.

~~We are dependent on key personnel.~~

~~We engage, from time to time, in acquisitions~~•Artificial intelligence-based platforms present new risks and other transactions that may complement or expand our business or divest of non-strategic businesses or assets. We may not be able to complete such transactions, and such transactions, if executed, pose significant risks, including risks relatingchallenges to our ~~ability~~business.

•Our cash, cash equivalents, and financial investments could be adversely affected if the financial institutions in which we hold our cash, cash equivalents, and financial investments fail.

Risks Relating to ~~successfully and efficiently integrate acquisitions and realize anticipated benefits therefrom.~~ Our Indebtedness

•The ~~failure to execute or realize the full benefits from any such transaction could have a negative effect on our operations.~~

•Despite our high indebtedness level, we and our subsidiaries are still capable of incurring significant additional debt, which could further exacerbate the risks associated with our substantial indebtedness.

•Our interest expense on our variable-rate debt may continue to increase if and to the extent that policymakers combat inflation through interest-rate increases on benchmark financial products.

•Despite the limitations in our debt agreements, we retain the ability to take certain actions that may interfere with our ability to timely pay our substantial indebtedness.

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

•We are currently using and may in the future use derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable-rate indebtedness or changes in currency exchange rates, and any such instrument may expose us to risks related to counterparty credit worthiness or non-performance of these instruments.

Risks Relating to Ownership of Our Common Stock

•We do not presently maintain effective disclosure controls and procedures due to material weaknesses we have identified in our internal controls over financial reporting. Failure to remediate these material weaknesses or any other material weakness or significant deficiencies have resulted in a revision of our financial statements, in the future could result in material misstatements in our financial statements and have caused, and in the future could cause us to fail to timely meet our periodic reporting obligations.

•Our stock price has historically been and may continue to be volatile, and a holder of shares of our Common Stock may not be able to resell such shares at or above the price such stockholder paid, or at all, and could lose all or part of such investment as a result.

•Future sales, or the perception of future sales, of our Common Stock, by us or our existing stockholders could cause the market price for our Common Stock to decline.

•We are no longer eligible to use the Form S-3 registration statement, which could impair our capital-raising activities.

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

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

We use our website ~~(www.catalent.com)~~(catalent.com), ~~our corporate~~ Facebook page ~~(https://www.facebook.com/~~(facebook.com/CatalentPharmaSolutions), LinkedIn page (linkedin.com/company/catalent-pharma-solutions/) and ~~our corporate~~ Twitter account (@catalentpharma) as channels ~~for the~~of distribution of

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Catalent, Inc. ~~and Subsidiaries~~

Consolidated Statements of Operations

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


	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
Net revenue	$	1,024	$	1,149	$	2,006	$	2,171
Cost of sales	853		762		1,666		1,526
Gross margin	171		387		340		645
Selling, general, and administrative expenses	250		226		455		422

Goodwill impairment (adjustments) charges	(2)		—		687		—
Other operating expense, net	35		23		36		25
Operating (loss) earnings	(112)		138		(838)		198
Interest expense, net	66		47		124		79
Other expense (income), net	4		(23)		17		2
(Loss) earnings before income taxes	(182)		114		(979)		117
Income tax expense (benefit)	24		33		(14)		36


Net (loss) earnings	$	(206)	$	81	$	(965)	$	81









Earnings (loss) per share:
Basic

Net (loss) earnings	$	(1.13)	$	0.45	$	(5.31)	$	0.45
Diluted

Net (loss) earnings	$	(1.13)	$	0.44	$	(5.31)	$	0.45

Three Months Ended
December 31, Six Months Ended
December 31,
2017 2016 2017 2016
Net revenue $ 606.3
$ 483.7
$ 1,150.2
$ 925.9
Cost of sales 418.9
335.8
822.7
653.9
Gross margin 187.4
147.9
327.5
272.0
Selling, general and administrative expenses 114.3
96.2
221.3
194.4
Impairment charges and (gain)/loss on sale of assets 4.2
0.5
4.2
0.5
Restructuring and other 0.1
3.3
1.3
4.4
Operating earnings 68.8
47.9
100.7
72.7
Interest expense, net 27.2
22.8
51.5
44.9
Other expense/(income), net 13.6
(1.8 ) 19.3
(3.9 )
Earnings from continuing operations, before income taxes 28.0
26.9
29.9
31.7
Income tax expense 49.9
9.5
48.0
9.7
Net earnings/(loss) $ (21.9 ) $ 17.4
$ (18.1 ) $ 22.0

Earnings per share:
Basic
Net earnings/(loss) $ (0.16 ) $ 0.14
$ (0.14 ) $ 0.18
Diluted

Net earnings/(loss) $ (0.16 ) $ 0.14
$ (0.14 ) $ 0.17

Catalent, Inc. ~~and Subsidiaries~~

Consolidated Statements of Comprehensive ~~Income/(Loss)~~Loss

(Unaudited; ~~Dollars~~dollars in millions)

Three Months Ended
December 31, Six Months Ended
December 31,
2017 2016 2017 2016
Net earnings/(loss) $ (21.9 ) $ 17.4
$ (18.1 ) $ 22.0
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustments (13.4 ) (64.4 ) 24.7
(63.8 )
Pension and other post-retirement adjustments 0.5
0.7
0.9
1.5
Available for sale investments (3.0 ) 15.3
(6.4 ) 15.3
Other comprehensive income/(loss), net of tax (15.9 ) (48.4 ) 19.2
(47.0 )
Comprehensive income/(loss) $ (37.8 ) $ (31.0 ) $ 1.1
$ (25.0 )


	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
Net (loss) earnings	$	(206)	$	81	$	(965)	$	81
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments	37		118		(2)		(17)
Pension and other post-retirement adjustments	4		—		4		—
Net change in marketable securities	—		1		—		2


Derivatives and hedges	(7)		—		(2)		14
Other comprehensive income (loss), net of tax	34		119		—		(1)
Comprehensive (loss) income	$	(172)	$	200	$	(965)	$	80

Catalent, Inc. ~~and Subsidiaries~~

Consolidated Balance Sheets

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


	December 31, 2023		June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	229	$	280
Trade receivables, net of allowance for credit losses of $42 and $46, respectively	843		1,002
Inventories	775		777
Prepaid expenses and other	723		633

Total current assets	2,570		2,692
Property, plant, and equipment, net of accumulated depreciation of $1,756 and $1,596, respectively	3,777		3,682
Other assets:
Goodwill	2,351		3,039
Other intangibles, net	911		980
Deferred income taxes	55		55
Other long-term assets	324		329
Total assets	$	9,988	$	10,777

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations and other short-term borrowings	$	46	$	536
Accounts payable	407		424
Other accrued liabilities	583		570
Total current liabilities	1,036		1,530
Long-term obligations, less current portion	4,959		4,313
Pension liability	101		100
Deferred income taxes	50		76
Other liabilities	155		147
Commitment and contingencies (see Note 14)

Total liabilities	6,301		6,166

Shareholders' equity:
Common stock, $0.01 par value; 1.00 billion shares authorized at December 31, 2023 and June 30, 2023; 181 million and 180 million issued and outstanding at December 31, 2023 and June 30, 2023, respectively	2		2
Preferred stock, $0.01 par value; 100 million shares authorized at December 31, 2023 and June 30, 2023;0 shares issued and outstanding at December 31, 2023 and June 30, 2023	—		—

Additional paid in capital	4,742		4,701
(Accumulated deficit) retained earnings	(703)		262
Accumulated other comprehensive loss	(354)		(354)


Total shareholders' equity	3,687		4,611
Total liabilities and shareholders' equity	$	9,988	$	10,777

Catalent, Inc. ~~and Subsidiaries~~

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

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

Shares of Common Stock
Common
Stock
Additional
Paid in
Capital
Accumulated
Deficit

Accumulated
Other
Comprehensive
Income/(Loss)

Total
Shareholders'
Equity/ (Deficit)
Balance at June 30, 2017 125,049.9
$ 1.3
$ 1,992.0
$ (955.7 ) $ (314.1 ) $ 723.5
Equity offering, sale of common stock 7,354.2
—
277.8
277.8
Share issuances related to equity-based
     compensation
913.9

—
Equity compensation 15.5
15.5
Cash paid, in lieu of equity, for tax
     withholding
(12.4 ) (12.4 )
Net earnings/(loss) (18.1 ) (18.1 )
Other comprehensive income/(loss), net
     tax
19.2
19.2
Balance at December 31, 2017 133,318.0
$ 1.3
$ 2,272.9
$ (973.8 ) $ (294.9 ) $ 1,005.5

Three Months Ended December 31, 2023


	Shares of Common Stock	Common Stock		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance at September 30, 2023	180,521	$	2	$	4,724	$	(497)	$	(388)	$	3,841

Share issuances related to stock- based compensation	147	—		—		—		—		—

Stock-based compensation	—	—		16		—		—		16


Employee stock purchase plan	—	—		2		—		—		2


Net loss	—	—		—		(206)		—		(206)
Other comprehensive income, net of tax	—	—		—		—		34		34
Balance at December 31, 2023	180,668	$	2	$	4,742	$	(703)	$	(354)	$	3,687

Three Months Ended December 31, 2022


	Shares of Common Stock	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance at September 30, 2022	179,901	$	2	$	4,674	$	538	$	(514)	$	4,700



Share issuances related to stock- based compensation	87	—		—		—		—		—

Stock-based compensation	—	—		10		—		—		10
Cash paid, in lieu of equity, for tax withholding obligations	—	—		(2)		—		—		(2)

Employee stock purchase plan	—	—		4		—		—		4

Net earnings	—	—		—		81		—		81
Other comprehensive loss, net of tax	—	—		—		—		119		119
Balance at December 31, 2022	179,988	$	2	$	4,686	$	619	$	(395)	$	4,912

Consolidated ~~Statements~~Statement of ~~Cash Flows~~Changes in Shareholders' Equity

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

Six Months Ended
December 31,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings/(loss) $ (18.1 ) $ 22.0
Adjustments to reconcile earnings from continued operations to net cash from operations:
Depreciation and amortization 85.8
71.3
Non-cash foreign currency transaction (gain)/loss, net 7.1
(3.4 )
Amortization and write off of debt financing costs 2.5
4.3
Asset impairments and (gain)/loss on sale of assets 4.2
0.5
Reclassification of financing fees paid 11.8
—
Equity compensation 15.5
11.8
Provision/(benefit) for deferred income taxes 35.6
0.9
Provision for bad debts and inventory 3.5
3.3
Change in operating assets and liabilities:
Decrease/(increase) in trade receivables 104.6
41.4
Decrease/(increase) in inventories —
(17.9 )
Increase/(decrease) in accounts payable (0.4 ) (14.6 )
Other assets/accrued liabilities, net - current and non-current (76.1 ) (23.6 )
Net cash provided by operating activities 176.0
96.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment and other productive assets (82.9 ) (54.1 )
Proceeds from sale of property and equipment 1.8
1.3
Proceeds from sale of subsidiaries 3.4
—
Payment for acquisitions, net of cash acquired (748.0 ) (85.7 )
Net cash (used in) investing activities (825.7 ) (138.5 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in other borrowings (0.6 ) (5.6 )
Proceeds from borrowing, net 442.6
397.4
Payments related to long-term obligations (9.4 ) (209.2 )
Financing fees paid (15.6 ) (6.4 )
Proceeds from sale of common stock, net 277.8
—
Cash paid, in lieu of equity, for tax withholding obligations (12.4 ) (0.5 )
Net cash provided by financing activities 682.4
175.7
Effect of foreign currency on cash 8.5
(9.0 )
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS 41.2
124.2
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 288.3
131.6
CASH AND EQUIVALENTS AT END OF PERIOD $ 329.5
$ 255.8
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest paid $ 41.5
$ 39.4
Income taxes paid, net $ 8.0
$ 19.7

Six months ended December 31, 2023


	Shares of Common Stock	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance at June 30, 2023	180,273	$	2	$	4,701	$	262	$	(354)	$	4,611




Share issuances related to stock- based compensation	395	—		—		—		—		—

Stock-based compensation	—	—		35		—		—		35

Exercise of stock options	—	—		1		—		—		1
Employee stock purchase plan	—	—		5		—		—		5

Net loss	—	—		—		(965)		—		(965)
Other comprehensive income, net of tax	—	—		—		—		—		—
Balance at December 31, 2023	180,668	$	2	$	4,742	$	(703)	$	(354)	$	3,687

Six Months Ended December 31, 2022


	Shares of Common Stock	Common Stock		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance at June 30, 2022	179,302	$	2	$	4,649	$	518	$	(394)	$	4,775




Share issuances related to stock- based compensation	686	—		—		—		—		—

Stock-based compensation	—	—		29		—		—		29

Exercise of stock options	—	—		1		—		—		1
Employee stock purchase plan	—	—		7		—		—		7

Net earnings	—	—		—		81		—		81
Other comprehensive income, net of tax	—	—		—		—		(1)		(1)
Balance at December 31, 2022	179,988	$	2	$	4,686	$	599	$	(395)	$	4,892

Catalent, Inc. ~~and Subsidiaries~~

Consolidated Statements of Cash Flows

(Unaudited; dollars in millions)


	Six Months Ended December 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) earnings	$	(965)	$	81


Adjustments to reconcile net (loss) earnings to net cash from operations:
Depreciation and amortization	233		202
Goodwill impairment charges	687		—
Non-cash foreign currency transaction loss, net	11		1
Non-cash restructuring charges	7		7
Amortization of debt issuance costs	6		4
Impairments charges and loss/gain on sale of assets, net	14		(1)



Stock-based compensation	35		29
Provision for deferred income taxes	(27)		13
Provision for bad debts and inventory	44		67
Pension settlement charges	3		—
Change in operating assets and liabilities:
Decrease in trade receivables	165		148
Increase in inventories	(46)		(180)
Decrease in accounts payable	(40)		(68)
Other assets/accrued liabilities, net—current and non-current	(85)		(181)


Net cash provided by operating activities	42		122
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisition of property, equipment, and other productive assets	(178)		(317)
Proceeds from maturity of marketable securities	—		61
Proceeds from sale of property and equipment	1		7


Payment for acquisitions, net of cash acquired	—		(474)
Payment for investments	(2)		(1)



Net cash used in investing activities	(179)		(724)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings	815		625


Payments related to long-term obligations	(722)		(32)
Financing fees paid	(16)		(4)




Exercise of stock options	1		1
Other financing activities	6		7


Net cash provided by financing activities	84		597
Effect of foreign currency exchange on cash and cash equivalents	2		(2)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(51)		(7)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	280		449
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	229	$	442
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest paid	$	112	$	83
Income taxes paid, net	$	31	$	38
Non-cash purchase of property, equipment, and other productive assets	$	21	$	13

Notes to Unaudited Consolidated Financial Statements

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ~~(“GAAP”~~(“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended December 31, ~~2017~~2023 are not necessarily indicative of the results that may be expected for the year ending June 30, ~~2018~~.2024. The consolidated balance sheet at June 30, ~~2017~~2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information on the Company's accounting policies and footnotes, refer to the consolidated financial statements and ~~footnotes~~notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, ~~2017~~2023 filed with the Securities and Exchange Commission ~~("SEC"~~(the “SEC”). on December 8, 2023.

~~Use~~Reportable Segments

Set forth below is a summary description of ~~Estimates~~the Company's two current operating and reportable segments.

Biologics—The ~~preparation of financial statements in conformity with GAAP requires management to make estimates~~Biologics segment provides development and ~~assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, allowance~~manufacturing for ~~doubtful accounts, inventory and long-lived asset valuation, goodwill~~biologic proteins; cell, gene, and other ~~intangible asset valuation~~nucleic acid therapies; plasmid DNA ("pDNA"); induced pluripotent stem cells ("iPSCs"), and ~~impairment, equity-based compensation, income taxes,~~oncolytic viruses; and ~~pension plan asset~~vaccines. It also provides formulation, development, and ~~liability valuation. Actual amounts may differ from these estimated amounts.~~manufacturing for parenteral dose forms, including vials, prefilled syringes, and cartridges; analytical development and testing services for large molecules.

Pharma and Consumer Health—The Pharma and Consumer Health segment comprises the Company’s market-leading capabilities for complex oral solids, softgel formulations, Zydis® fast-dissolve technologies, and gummy, soft chew, and lozenge dosage forms; formulation, development, and manufacturing platforms for oral, nasal, inhaled, and topical dose forms; and clinical trial development and supply services.

Each segment reports through a separate management team and ultimately reports to the Company's President and Chief Executive Officer, who is designated as the Chief Operating Decision Maker for segment reporting purposes. The Company's operating segments are the same as its reportable segments.

Foreign Currency Translation

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

Concentrations of Credit Risk and Major Customers

Concentration of credit risk, with respect to accounts receivable, is limited due to the large number of customers and their dispersion across different geographic areas. The ~~currency fluctuations related to certain long-term inter-company loans deemed to not be repayable~~customers are primarily concentrated in the ~~foreseeable future~~pharmaceutical, biopharmaceutical and consumer products industries. The Company does not normally require collateral or any other security to support credit sales. The Company performs ongoing credit evaluations of its customers’ financial conditions and maintains reserves for credit losses. Such losses historically have been ~~recorded~~ within ~~cumulative translation adjustment, a component~~the Company’s expectations.

As of ~~other comprehensive income/(loss). In addition,~~December 31, 2023 and June 30, 2023, the ~~currency fluctuation~~Company had one customer that represented 27% and 20%, respectively, of its aggregate net trade receivables and current contract asset values, primarily associated with the ~~portion~~Company's Biologics segment. After performing a risk assessment of the Company’s euro-denominated debt designated as a net investment hedge is included as a component of other comprehensive income/(loss). Foreign currency transaction gains and losses calculated by utilizing weighted average exchange rates for the period are included in the consolidated statements of operations in the other (income)/expense, net line item. Foreign currency translation gains and losses generated from inter-company loans that are long-term in nature, but may be repayable in the foreseeable future, are also recorded within the other (income)/expense, net line item on the consolidated statements of operations.

~~Revenue Recognition~~

~~In accordance with~~ ~~Accounting Standards Codification ("ASC") 605 Revenue Recognition,~~ the Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured. In cases wherethis customer, the Company has ~~multiple contracts with the same customer,~~determined that a reserve is not warranted as of December 31, 2023. Additionally, the Company ~~evaluates those contracts to assess if~~had one customer in its Biologics segment that represented approximately 16% of consolidated net revenue during the contracts are linked or are separate arrangements. Factors the Company considers include the timing of negotiation, interdependency with other contracts or elements and payment terms. The Company and its customers generally view each contract discussion as a separate arrangement.

Manufacturing and packaging service revenue is recognized upon delivery of the product in accordance with the terms of the contract, which specify when transfer of title and risk of loss occurs. Some of the Company’s manufacturing contracts with

its customers have annual minimum purchase requirements. At the end of the contract year, revenue is recognized for the unfilled purchase obligation in accordance with the contract terms. Development service contracts generally take the form of a fee-for-service arrangement. After the Company has evidence of an arrangement, the price is determinable and there is a reasonable expectation regarding payment, the Company recognizes revenue at the point in time the service obligation is completed and accepted by the customer. Examples of output measures include a formulation report, analytical and stability testing, clinical batch production or packaging and the storage and distribution of a customer’s clinical trial material. Development service revenue is primarily driven by the Company’s Drug Delivery Solutions segment.

~~Arrangements containing multiple elements, including service arrangements, are accounted for in accordance with the provisions of~~ ~~ASC 605-25Revenue Recognition—Multiple-Element Arrangements~~. The Company determines the separate units of account in accordance with ASC 605-25. If the deliverable meets the criteria of a separate unit of accounting, the arrangement consideration is allocated to each element based upon its relative selling price. In determining the best evidence of selling price of a unit of account, the Company utilizes vendor-specific objective evidence (“VSOE”), which is the price the Company charges when the deliverable is sold separately. When VSOE is not available, management uses relevant third-party evidence (“TPE”) of selling price, if available. When neither VSOE nor TPE of selling price exists, management uses its best estimate of selling price.

~~The Company accounts for purchased goodwill and intangible assets with indefinite lives in accordance with~~ ~~ASC 350 Goodwill, Intangible and Other Assets~~. Under ASC 350, goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment at least annually. The Company's annual goodwill impairment test was conducted as of April 1, 2017. The Company assesses goodwill for possible impairment by comparing the carrying value of its reporting units to their fair values. The Company determines the fair value of its reporting units utilizing estimated future discounted cash flows and incorporates assumptions that it believes marketplace participants would utilize. In addition, the Company uses comparative market information and other factors to corroborate the discounted cash flow results.

~~Property and Equipment and Other Definite Lived Intangible Assets~~

Property and equipment are stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets, including capital lease assets that are amortized over the shorter of their useful lives or the terms of the respective leases. The Company generally uses the following ranges of useful lives for its property and equipment categories: buildings and improvements — 5 to 50 ~~years; machinery and equipment —~~ 3 to 10 ~~years; and furniture and fixtures —~~ 3 to 7 ~~years. Depreciation expense was~~ ~~$30.7 million~~ ~~and $58.3 million for the~~ three and six months ended December 31, ~~2017, respectively,~~2023. The Company had one customer that represented approximately 13% of net revenue and ~~$24.4 million~~ ~~and $49.2 million for~~another customer that represented approximately 10% of net revenue during the three ~~and~~months ended December 31, 2022. For the six months ended December 31, ~~2016~~,2022, the Company had one customer that represented 11% of net revenue and two customers that each represented 10% of net revenue.

Depreciation expense was $88 million and $69 million for the three months ended December 31, 2023 and 2022, respectively. Depreciation expense was $166 million and $135 million for the six months ended December 31, 2023 and 2022, respectively. Depreciation expense includes amortization of assets related to ~~capital~~finance leases. The Company charges repairs and maintenance costs to expense as incurred.

Amortization expense related to other intangible assets was $33 million and $34 million for the three months ended December 31, 2023 and 2022, respectively. Amortization expense related to other intangible assets was $67 million for both the six months ended December 31, 2023 and 2022.

Research and Development Costs

The Company expenses research and development costs as incurred. Research and development costs amounted to $4 million for both the three months ended December 31, 2023 and 2022. Research and development costs amounted to $8 million and $9 million for the six months ended December 31, 2023 and 2022, respectively.

2. REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The Company generally earns its revenue by supplying goods or providing services under contracts with its customers in three primary revenue streams: manufacturing and commercial product supply, development services, and clinical supply services. The Company measures the revenue from customers based on the consideration specified in its contracts, excluding any sales incentive or amount collected on behalf of a third party, that the Company expects to be entitled to receive in exchange for transferring the promised goods to and/or performing services for the customer (the “Transaction Price”). To the extent the Transaction Price includes variable consideration, the Company estimates the amount of ~~capitalized interest was immaterial~~variable consideration that should be included in the Transaction Price utilizing either the expected value method or the most likely amount method, depending on which method is expected to better predict the amount of consideration to which the Company will be entitled. The value of variable consideration is included in the Transaction Price if, and to the extent, it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. These estimates are re-assessed each reporting period, as required, and any adjustment required is recorded on a cumulative catch-up basis, which would affect revenue and net income in the period of adjustment.

The Company’s customer contracts generally include provisions entitling the Company to a termination penalty when the customer terminates prior to the contract’s nominal end date. The termination penalties in customer contracts vary but are generally considered substantive for ~~all periods presented.~~

~~Intangible assets with finite lives, primarily including customer relationships, patents~~accounting purposes and ~~trademarks are amortized over their useful lives.~~create enforceable rights and obligations throughout the stated durations of the contracts. The Company ~~evaluates~~accounts for a contract termination as a contract modification in the ~~recoverability~~period in which the customer gives notice of ~~its other long-lived assets, including amortizing intangible assets, if circumstances indicate impairment may have occurred pursuant to~~ ~~ASC 360 Property, Plant and Equipment. This analysis is performed by comparing the respective carrying values~~termination. The determination of the ~~assets~~contract termination penalty is based on the terms stated in the relevant customer agreement. As of the modification date, the Company updates its estimate of the Transaction Price using the expected value method, subject to constraints, and to the ~~current~~extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. These estimates are re-assessed each reporting period, as required, and ~~expected future cash flows,~~any adjustment required is recorded on a cumulative catch-up basis, which would affect revenue and net income in the period of adjustment.

Where multiple performance obligations exist in a single contract, the Company allocates consideration to each performance obligation using the “relative standalone selling price” as defined under ASC 606. Generally, the Company utilizes observable standalone selling prices in its allocations of consideration. If observable standalone selling prices are not available, the Company estimates the applicable standalone selling price using a cost-plus-margin approach or an ~~un-discounted basis, to be generated from such assets. If such analysis indicates~~adjusted market assessment approach, in each case, representing the amount that the carrying value of these assets is not recoverable, the carrying value of such assets is reduced to fair value through a charge to the consolidated statements of operations. Fair value is determined based on assumptions the Company believes ~~marketplace participants would utilize~~the market is willing to pay for the applicable service. Payment is typically due 30 to 45 days following the invoice date, based on the payment terms set forth in the applicable customer agreement.

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

Customer contracts that include commitments by the Company to make facility space or equipment available may be deemed to include lease components, which are evaluated under ASC 842, Leases. For arrangements that contain both lease and ~~comparable marketplace information~~non-lease components, consideration in ~~similar arm's length transactions. Impairment charges~~the contract is allocated on a relative standalone selling-price basis. Determining the lease term and contract term of non-lease components, as well as the variable and fixed consideration in these arrangements, including when variability is resolved, often requires management judgment in order to determine the allocation to the lease and non-lease components.

Manufacturing & Commercial Product Supply Revenue

Manufacturing and commercial product supply revenue consists of revenue earned by manufacturing products supplied to customers under long-term commercial supply arrangements. In these arrangements, the customer typically owns and supplies the active pharmaceutical ingredient (“API”) or other proprietary materials used in the manufacturing process. The contract generally includes the terms of the manufacturing services and related product quality assurance procedures to comply with regulatory requirements. Due to the regulated nature of the Company’s business, these contract terms are highly interdependent and, therefore, are considered to be a single combined performance obligation. The transaction price is generally stated in the agreement as a fixed price per unit, with no contractual provision for a refund or price concession. In most circumstances, control is transferred to the customer over time, creating a corresponding right to recognize the related revenue, because there is no alternative use to the Company for the asset created and the Company has an enforceable right to payment for performance completed as of that date. The selection of the method for measuring progress towards the completion of the Company’s performance obligation requires judgment and is based on the nature of the products to be manufactured. For the majority of the Company’s arrangements, progress is measured based on the units of product that have successfully completed the contractually required product quality assurance process, because the conclusion of that process defines the time when the applicable contract and the related regulatory requirements permit the customer to exercise control over the product’s disposition. The customer is typically responsible for arranging the shipping and handling of product following completion of the quality assurance process. Payment is typically due 30 to 45 days after invoice date, based on the payment terms set forth in the applicable customer agreement.

Beginning in the third quarter of fiscal 2023, the Company began recognizing commercial revenue for certain contracts in its Biologics segment that have a notably long manufacturing cycle, and for which the customer exercises control over the product throughout the manufacturing process. For these contracts, revenue is recognized over time and progress is measured using an input method based on effort expended, which provides an appropriate depiction of the Company’s progress toward fulfilling its performance obligation.

Development Services and Clinical Supply Revenue

Development services contracts generally take the form of short-term, fee-for-service arrangements. Performance obligations vary, but frequently include biologic cell-line development, performing formulation, analytical stability, or other services related to ~~definite lived intangible assets~~product development, and ~~property, plant~~providing manufacturing services for products that are under development or otherwise not intended for commercial sale. They can also include a combination of the following services: the manufacturing, packaging, storage, distribution, destruction, and ~~equipment were~~inventory management of customer clinical trial material, as well as the sourcing of comparator drug products on behalf of customers to be used in clinical trials to compare performance with the drug under clinical investigation. The transaction prices for these arrangements are fixed and include amounts stated in the contracts for each promised service, and each service is generally considered to be a separate performance obligation. In most instances, the Company recognizes revenue over time because there is no alternative use to the Company for the asset created and the Company has an enforceable right to payment for performance completed as of that date.

The Company measures progress toward the completion of its performance obligations satisfied over time based on the nature of the services to be performed. For certain types of arrangements, revenue is recognized over time and measured using

an output method based on the completion of tasks and activities that are performed to satisfy a performance obligation. For certain types of arrangements, revenue is recognized over time and measured using an input method based on effort expended. Each of these methods provides an appropriate depiction of the Company’s progress toward fulfilling its performance obligations for its respective arrangement. In certain development services arrangements that require a portion of the contract consideration to be received in advance at the commencement of the contract, such advance payment is initially recorded as a contract liability. In certain clinical supply arrangements, revenue is recognized at the point in time when control transfers, which occurs upon either the delivery of the related output of the service to the customer or the completion of quality testing with respect to the product, and the Company has an enforceable right to payment based on the terms of the arrangement.

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

The following tables reflect net revenue for the three and six months ended December 31, ~~2017~~2023 and ~~2016.~~2022, by type of activity and reportable segment (in millions):

The Company expenses research and development costs as incurred. Costs incurred in connection with the development of new offerings and manufacturing process improvements are recorded within selling, general and administrative expenses. Such research and development costs included in selling, general and administrative expenses amounted to ~~$1.5 million~~ ~~and $3.3 million for the~~ ~~three and six months ended December 31, 2017, respectively, and~~ ~~$1.5 million~~ ~~and $3.0 million for the~~ ~~three and six months ended December 31, 2016~~, respectively. Costs incurred in connection with research and development services the Company provides to customers and services performed in support of the commercial manufacturing process for customers are recorded within cost of sales. Such research and development costs included in cost of sales amounted to ~~$12.4 million~~ ~~and $22.4 million for the~~ ~~three and six months ended December 31, 2017, respectively, and~~ ~~$11.0 million~~ ~~and $21.3 million for the~~ ~~three and six months ended December 31, 2016, respectively.~~


Three Months Ended December 31, 2022	Biologics		Pharma and Consumer Health		Total
Manufacturing & commercial product supply	$	76	$	364	$	440
Development services & clinical supply	504		206		710
Total	$	580	$	570	$	1,150
Inter-segment revenue elimination					(1)
Combined net revenue					$	1,149


Six Months Ended December 31, 2023	Biologics		Pharma and Consumer Health		Total
Manufacturing & commercial product supply	$	560	$	707	$	1,267
Development services & clinical supply	326		414		740
Total	$	886	$	1,121	$	2,007
Inter-segment revenue elimination					(1)
Combined net revenue					$	2,006


Six Months Ended December 31, 2022	Biologics		Pharma and Consumer Health		Total
Manufacturing & commercial product supply	$	171	$	678	$	849
Development services & clinical supply	932		391		1,323
Total	$	1,103	$	1,069	$	2,172
Inter-segment revenue elimination					(1)
Combined net revenue					$	2,171

~~Earnings / (Loss) Per Share~~

~~Equity-Based Compensation~~

~~The Company accounts for its equity-based compensation awards pursuant to~~ ~~ASC 718 Compensation—Stock Compensation~~. ASC 718 requires companies to recognize compensation expense using a fair value based method for costs related to share-based payments including stock options and restricted stock units. The expense is measured based on the grant date fair value of the awards, and the expense is recorded over the applicable requisite service period using the accelerated attribution method. Forfeitures are recognized as and when they occur. In the absence of an observable market price for a share-based award, the fair value is based upon a valuation methodology that takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of the underlying shares, the expected volatility of the underlying share price based on peer companies, the expected dividends on the underlying shares and the risk-free interest rate.

The terms of the Company’s equity-based compensation plans permit an employee holding vested stock options to elect to have the Company withhold a portion of the shares otherwise issuable upon the employee's exercise of the option, a so-called "net settlement transaction," as a means of paying the exercise price meeting tax withholding requirements, or both.

~~Marketable Securities~~

~~Marketable securities consist of investments that have a readily determinable fair value based on quoted market price of the investment, which is considered a Level 1 fair value measurement. Under~~ ~~ASC 320, Investments—Debt and Equity Securities~~, these investments are classified as available-for-sale and are reported at fair value in other current assets on the Company's consolidated balance sheet. Unrealized holding gains and losses are reported within accumulated other comprehensive income/(loss). Under the Company's accounting policy, a decline in the fair value of marketable securities is deemed to be "other than temporary" and such marketable securities are generally considered to be impaired if their fair value is less than the Company's cost basis for a period based on the particular facts and circumstances surrounding the investment. If a decline in the fair value of a marketable security below the Company's cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in earnings as an impairment charge.


	Three Months Ended December 31,				Six Months Ended December 31,
(Dollars in millions)	2023		2022		2023		2022

United States	$	653	$	734	$	1,298	$	1,432
Europe	324		356		599		630
Other	86		88		173		169
Elimination of revenue attributable to multiple locations	(39)		(29)		(64)		(60)
Total	$	1,024	$	1,149	$	2,006	$	2,171

Contract Liabilities

~~Recent Financial Accounting Standards~~

~~Recently Adopted Accounting Standards~~

~~In July 2015,~~Contract liabilities relate to cash consideration that the ~~Financial Accounting Standards Board (the "FASB") issued~~ ~~Accounting Standards Update ("ASU") 2015-11, Simplifying~~Company receives in advance of satisfying the ~~Measurement of Inventory, which requires an entity to measure inventory at lower of cost~~related performance obligations. The contract liabilities balances (current and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The ASU is effective for public reporting entities in fiscal years beginning after December 15, 2016. The Company adopted this ASU prospectively in fiscal 2018. The adoption of this ASU did not have any material impact to the Company's consolidated financial statements.

~~In August 2016, the FASB issued~~ ~~ASU 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~, which provides clarification on the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. The guidance will be effective for publicly reporting entities in fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period. The Company early adopted this ASU retrospectively in fiscal 2018. The adoption of this ASU did not have any material impact to the Company's consolidated financial statements.

~~New Accounting Standards Not Adopted~~non-current) as of December 31, ~~2017~~2023 and June 30, 2023 are as follows:

~~In August 2017, the FASB issued~~ ~~ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which reduces the complexity of and simplifies the application of hedge accounting by preparers. The ASU~~


(Dollars in millions)

Balance at June 30, 2023	$	180




Balance at December 31, 2023	$	219
Revenue recognized in the period from amounts included in contracts liability at the beginning of the period:	$	(114)

Contract liabilities that will be ~~effective~~recognized within 12 months of December 31, 2023 are accounted for ~~fiscal years beginning~~in Other accrued liabilities and those that will be recognized longer than 12 months after December ~~15, 2018,~~31, 2023 are accounted for in Other liabilities.

Contract assets primarily relate to the Company's conditional right to receive consideration for services that have been performed for customers as of December 31, 2023 relating to the Company's development and ~~interim periods~~commercial services but had not yet been invoiced as of December 31, 2023. Contract assets are transferred to trade receivables, net when the Company’s right to receive the consideration becomes unconditional. Contract assets totaled $495 million and $417 million as of December 31, 2023 and June 30, 2023, respectively. Contract assets expected to transfer to trade receivables within ~~those years. Early adoption~~12 months are accounted for within Prepaid expenses and other. Contract assets expected to transfer to trade receivables longer than 12 months are accounted for within Other long-term assets.

As of December 31, 2023, the Company's aggregate contract asset balance increased $78 million or 19% compared to June 30, 2023. The majority of this increase is ~~permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.~~

~~In May 2017, the FASB issued~~ ~~ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when an entity will apply modification accounting for changes~~related to stock-based compensation arrangements. Modification accounting applies if the value, vesting conditions, or classification of the awards changes. The ASU will be effective for annual periods beginning after December 15, 2017,large development and ~~interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.~~

~~In March 2017, the FASB issued~~ ~~ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires entities to report the service cost component of the net periodic benefit cost~~commercial programs in the ~~same income statement line~~Biologics segment, such as ~~other compensation costs arising from~~manufacturing and development services ~~rendered~~for gene therapy offerings, where revenue is recorded over time and the ability to invoice customers is dictated by ~~employees during~~contractual terms. As of December 31, 2023, the reporting period. The other components of the net benefit costs will be presented in the income statement separately from the service cost and below the income from operations subtotal. The ASU will be effective for public reporting entities in fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted in the first interim period of a fiscal year. The Company ~~is currently evaluating the impact of adopting this guidance on~~recorded no reserve against its ~~consolidated financial statements.~~aggregate contract asset balance.

~~In January 2017, the FASB issued~~ ~~ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business~~, which provides additional guidance on the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The ASU will be effective for public reporting entities in fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.Performance Obligations

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

~~In May 2014, the FASB issued~~ ~~ASU No. 2014-09Revenue from Contracts with Customers,~~ ~~which~~will supersede nearly all existing revenue recognition guidance. The new guidance’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, the new guidance creates a five-step model that requires a

~~Transaction Overview:~~3. BUSINESS COMBINATIONS

OnMetrics Contract Services Acquisition

In October ~~23, 2017,~~2022, the Company acquired 100% of ~~the equity interest~~Metrics Contract Services (“Metrics”) from Mayne Pharma Group Limited for $474 million in ~~Cook Pharmica LLC (now doing business as Catalent Indiana, LLC, "Catalent Indiana") for~~cash. Metrics, based in Greenville, North Carolina, is an ~~aggregate nominal purchase price of $950 million, subject to adjustment, in order to enhance the Company's biologics capabilities. Catalent Indiana is a biologics-focused contract~~oral solids development and manufacturing ~~organization with capabilities across biologics development, clinical~~business specializing in the manufacture of drugs containing highly potent active pharmaceutical ingredients. The operations and ~~commercial cell culture manufacturing, formulation, finished-dose manufacturing,~~facility acquired have become part of the Company’s Pharma and ~~packaging.~~Consumer Health segment.

The Company accounted for the Metrics transaction using the acquisition method ~~of accounting for business combinations,~~ in accordance with ASC 805, Business ~~Combinations.~~ Combinations. The ~~total consideration was (in thousands):~~

Cash paid at closing $ 748,002
Fair value of deferred consideration at closing 184,838
Total consideration $ 932,840

~~In addition to the cash paid at the closing~~Company funded this acquisition with a portion of the ~~acquisition, the agreement governing the purchase includes a deferred consideration arrangement that requires the Company to pay~~proceeds of an additional $200.0 million in $50.0 million increments on each of the first four anniversaries of the closing. The fair value of the deferred consideration recognized on the acquisition date was estimated by calculating the risk-adjusted present value of four deferred cash payments and includes a component of imputed interest. This deferred consideration is included in current and long-term obligations within the consolidated balance sheet at December 31, 2017.

~~Following the acquisition, the operating results of the Catalent Indiana business have been included in the consolidated financial statements. For the period~~October 2022 drawdown from the acquisition date through December 31, 2017, Catalent Indiana's net revenue was $40.4 million and pre-tax earnings were $7.9 million. Transaction costs incurred as a result of the acquisition of $1.9 million and $10.4 million are included in selling, general and administrative expenses for the three and six months ending December 31, 2017, respectively.

~~Valuation Assumptions and Preliminary Purchase Price Allocation:~~

its senior secured revolving credit facility. The Company estimated fair values at the date of acquisition for the ~~preliminary~~ allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed. During the measurement period, the Company will continue to obtain information to assist in finalizing the fair value of net assets acquired, which may differ materially from these preliminary estimates. If any measurement period adjustment is material, the Company will record those adjustments, including any related impact on net income, in the reporting period in which the adjustments are determined.

The ~~preliminary~~ purchase price allocation to assets acquired and liabilities assumed in the transaction is ~~(in thousands):~~as follows:

Accounts Receivable $ 37,021
Inventory 25,144
Other current assets 1,344
Property, plant and equipment 221,139
Identifiable intangible assets 330,000
Trade and other payables 5,380
Deferred revenue 18,132
Total identifiable net assets 591,136
Goodwill 341,704
Total assets acquired and liabilities assumed $ 932,840


(Dollars in millions)	Final Purchase Price Allocation
Trade receivables, net	$	15
Inventories	5
Property, plant, and equipment	195
Other intangibles, net	52

Other, net	(12)
Goodwill	219
Total assets acquired and liabilities assumed	$	474

The carrying value of trade receivables, ~~raw materials~~ inventory, and trade payables, as well as certain other current and non-current assets and liabilities generally represented the fair value at the date of acquisition.

~~Property, plant and equipment was valued using a combination~~Other intangibles, net consists of ~~the sales comparison approach and cost approach,~~customer relationships of $52 million, which is based on current replacement and/or reproduction cost of the asset as new, less depreciation attributable to physical, functional, and economic factors. The Company then determined the remaining useful life based on the anticipated life of the asset and Company policy for similar assets.

~~Customer relationship intangible assets of $330 million~~ were valued using the multi-period, excess-earnings method, a method that values the intangible asset using the present value of the after-tax cash flows attributable to the intangible asset only. The significant assumptions used in developing the valuation included the estimated annual net cash flows (including application of an appropriate margin to forecasted revenue, selling and marketing costs, return on working capital, contributory asset charges, and other factors), the discount rate ~~which~~that appropriately reflects the risk inherent in each future cash flow stream, ~~the~~and an assessment of the asset’s life cycle, as well as other factors. The assumptions used in the financial forecasts were based on historical data, supplemented by current and anticipated growth rates, management plans, and ~~market comparable~~market-comparable information. ~~Fair value~~Fair-value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. ~~Preliminary assumptions may change and may result in significant changes to the final valuation.~~ The customer relationship intangible asset has a weighted average useful life of 1412 years.

Property, plant, and equipment was valued using the cost approach, which is based on current replacement and/or reproduction cost of the asset as new, less depreciation attributable to physical, functional, and economic factors. The Company then determined the remaining useful life based on the anticipated life of the asset and Company policy for similar assets.

Goodwill ~~has preliminarily been~~was allocated to ~~our Drug Delivery Solutions segment as shown in Note 3,~~ the Pharma and Consumer Health segment. Goodwill~~. Goodwill is expected to be deductible for tax purposes and~~ is mainly comprised of the ~~following:~~ growth from an expected increase in capacity utilization and potential new ~~customers and~~customers. The goodwill resulting from the ~~biologic expertise and know-how acquired with the~~Metrics acquisition ~~of Catalent Indiana's workforce.~~is not deductible for tax purposes.

~~Pro Forma Results:~~

The following table provides unaudited pro forma results for the Company, prepared in accordance with ASC 805, for the three and six months ended December 31, 2017 and December 31, 2016, as if the Company had acquired Catalent Indiana as of July 1, 2016.

For the Three Months Ended For the Six Months Ended
December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016
(in millions, except per share data)
Revenue $ 621.0
$ 531.1
$ 1,216.2
$ 1,016.6
Net income/(loss) (10.5 ) 17.6 (1.0 ) (0.6 )
Basic earnings/(loss) per share (0.08 ) 0.13 (0.01 ) 0.00
Diluted earnings/(loss) per share (0.08 ) 0.13 (0.01 ) 0.00

The unaudited pro forma financial information was prepared based on the historical information of Catalent and Catalent Indiana. In order to reflect the acquisition on July 1, 2016, the unaudited pro formal financial information includes adjustments

~~to reflect the incremental amortization expense to be incurred based on the fair value~~Results of the ~~intangible assets~~business acquired ~~the incremental depreciation expense related~~were not material to the ~~fair value adjustments associated with Catalent Indiana's property, plant and equipment, the additional interest expense associated with the issuance~~Company's consolidated statement of debt to finance the acquisition, the shares issued in connection with the first quarter equity offering to finance the acquisition, and the acquisition, integration, and financing-related costs incurred during the three and six months ended December 31, 2017 and 2016. The results do not include any anticipated cost savingsoperations, financial position, or other effects associated with integrating Catalent Indiana into the rest of the Company. Unaudited pro forma amounts are not necessarily indicative of results had the acquisition occurred on July 1, 2016 or of future results.cash flows.

The following table summarizes the changes between June 30, ~~2017~~2023 and December 31, ~~2017~~2023 in the carrying amount of goodwill in total and by ~~reporting~~ segment:


(Dollars in millions)	Biologics		Pharma and Consumer Health		Total
Balance at June 30, 2023	$	1,563	$	1,476	$	3,039





Foreign currency translation adjustments	2		(3)		(1)
Impairment (1)	(392)		(295)		(687)
Balance at December 31, 2023	$	1,173	$	1,178	$	2,351

(Dollars in millions) Softgel Technologies Drug Delivery Solutions Clinical Supply Services Total
Balance at June 30, 2017 $ 415.2
$ 477.2
$ 151.7
$ 1,044.1
Additions —
341.7
—
341.7
Divestitures (0.9 ) —
—
(0.9 )
Foreign currency translation adjustments 8.9
8.3
6.2
23.4
Balance at December 31, 2017 $ 423.2
$ 827.2
$ 157.9
$ 1,408.3

~~The reduction in goodwill~~(1) Represents gross impairment charges in the Softgel Technologies reporting segment relates to the sale of two manufacturing sites in the Asia Pacific region. The site divestitures were neither material individually or in aggregate to the segment or to the Company. The increase inperiod. Accumulated goodwill ~~in the Drug Delivery Solutions reporting segment relates to the Catalent Indiana acquisition. See note 2 Business Combinations. There were no~~ impairment charges ~~recorded in the current period.~~amount to $897 million.

The Company’s definite-lived long-lived assets include property, plant and equipment as well as other intangible assets with definite lives. Refer to Note 15 Supplemental Balance Sheet Information for details related to property, plant, and equipment.

~~The details of other intangible assets subject to amortization as of~~ ~~December 31, 2017~~ ~~and~~ ~~June 30, 2017, are as follows:~~Goodwill Impairment Charges

(Dollars in millions) Weighted Average Life
Gross
Carrying
Value

Accumulated
Amortization

Net
Carrying
Value
December 31, 2017
Amortized intangibles:
Core technology 18 years $ 172.7
$ (81.2 ) $ 91.5
Customer relationships 14 years 589.3
(121.2 ) 468.1
Product relationships 12 years 212.0
(189.6 ) 22.4
Total intangible assets $ 974.0
$ (392.0 ) $ 582.0

~~The increase in customer relationships is associated with the acquisition of Catalent Indiana in October 2017. Refer to Note 2 Business Combinations for details of the acquisition.~~

(Dollars in millions) Weighted Average Life
Gross
Carrying
Value

Accumulated
Amortization

Net
Carrying
Value
June 30, 2017
Amortized intangibles:
Core technology 18 years $ 170.3
$ (74.8 ) $ 95.5
Customer relationships 14 years 253.0
(106.1 ) 146.9
Product relationships 12 years 206.9
(176.2 ) 30.7
Total intangible assets $ 630.2
$ (357.1 ) $ 273.1

Table of Contents

~~Amortization expense~~As a result of the Consumer Health reporting unit's underperformance of recent operating results relative to expectations, the current macroeconomic conditions impacting the consumer health and biotechnology industries, and increased interest rates, the Company assessed the current and future economic outlook as of September 30, 2023 for its reporting units in its Pharma and Consumer Health and Biologics segments and identified indicators for impairment of the goodwill previously recorded for two of its reporting units. The evaluation began with a qualitative assessment of the Company's Consumer Health and Biomodalities reporting units to determine if it was ~~$16.1 million~~more likely than not that the fair value of the reporting units was less than its carrying value. The qualitative assessment did not indicate that it was more likely than not that the fair value exceeded the carrying value in its Consumer Health and ~~27.5 million~~Biomodalities reporting units, which led to a quantitative assessment for the ~~three~~corresponding reporting units.

The Company estimated the fair value of its reporting units using a combination of the income and ~~six months ended~~market approaches. In performing the goodwill impairment test, the Company used a terminal revenue growth rate of 3.5% and discount rates ranging from 9% to 10% in its estimation of fair value. The evaluation performed resulted in impairment charges of $687 million with respect to the Consumer Health and Biomodalities reporting units.

While the Company believes the assumptions it used were reasonable and commensurate with the views of a market participant, changes in key assumptions, including increasing the discount rate, lowering forecasts for revenue and operating margin or lowering the long-term growth rate could lead to the conclusion that an additional impairment was appropriate.

A qualitative assessment was performed as of December 31, 2017, respectively, and $11.1 million and $22.1 million for the three and six months ended December 31, 2016, respectively. Future amortization expense for the next five fiscal years is estimated to be:2023, which yielded no indicators of impairment.

(Dollars in millions) Remainder
Fiscal 2018 2019 2020 2021 2022 2023
Amortization expense $ 34.8
$ 63.8
$ 49.7
$ 49.7
$ 49.7
$ 49.7

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5. LONG-TERM OBLIGATIONS AND SHORT-TERM BORROWINGS


5.	~~LONG-TERM OBLIGATIONS AND OTHER SHORT-TERM BORROWINGS~~

Long-term obligations and ~~other~~ short-term borrowings ~~consist~~consisted of the following at December 31, ~~2017~~2023 and June 30, ~~2017~~:2023:


(Dollars in millions)	Maturity	December 31, 2023		June 30, 2023
Senior secured credit facilities
Term loan facility B-3 (7.471% as of December 31, 2023)	February 2028	$	1,411	$	1,418
Term loan facility B-4 (8.356% as of December 31, 2023)	February 2028	600		—
Revolving credit facility	November 2027	—		500
5.000% senior notes due 2027	July 2027	500		500
2.375% Euro senior notes due 2028(1)	March 2028	910		904
3.125% senior notes due 2029	February 2029	550		550
3.500% senior notes due 2030	April 2030	650		650
Financing lease obligations	2023 to 2038	398		341
Other obligations(2)	2023 to 2028	36		25
Unamortized discount and debt issuance costs		(50)		(39)
Total debt		$	5,005	$	4,849
Less: current portion of long-term obligations and other short-term borrowings		46		536
Long-term obligations, less current portion		$	4,959	$	4,313

(Dollars in millions) Maturity as of December 31, 2017 December 31,
2017 June 30, 2017
Senior Secured Credit Facilities
Term loan facility dollar-denominated May 2024 $ 1,234.9
$ 1,244.2
Term loan facility euro-denominated May 2024 366.5
352.0
Euro-denominated 4.75% Senior Notes due 2024 December 2024 445.4
424.3
U.S. dollar-denominated 4.875% Senior Notes due 2026 January 2026 443.7
—
Deferred purchase consideration September 2021 186.0
—
$200 million revolving credit facility May 2022 —
—
Capital lease obligations 2020 to 2032 62.8
53.3
Other obligations 2018 to 2019 3.1
5.9
Total 2,742.4
2,079.7
Less: Current portion of long-term obligations and other short-term
borrowings 69.9
24.6
Long-term obligations, less current portion $ 2,672.5
$ 2,055.1
(1) The change in the carrying value of this euro-denominated debt was due to fluctuations in foreign currency exchange rates.

~~Senior Secured Credit Facilities and Third Amendment~~(2) The increase in other obligations is primarily associated with $15 million in proceeds from a failed sale-leaseback transaction that occurred in the three months ended September 30, 2023.

On ~~October 18, 2017,~~November 22, 2023, Operating Company, ~~completed~~entered into Amendment No. 310 (the ~~"Third Amendment"~~“Tenth Amendment”) to its Amended and Restated Credit Agreement dated ~~as of~~ May 20, 2014 (as ~~subsequently~~ amended, the ~~"Credit Agreement"~~“Credit Agreement”), governing the senior secured credit facilities that provide U.S. dollar denominated term loans, euro-denominated term loans and a revolving credit facility. The Third Amendment lowered the interest rate on U.S. dollar-denominated and euro-denominated term loans and the revolving credit facility and extended the maturity dates on the senior secured credit facilities by three years. The new applicable rate for U.S. dollar-denominated term loans is LIBOR (the London Interbank Offered Rate, subject to a floor of 1.00%) plus 2.25%, which Tenth Amendment further extends the deadlines by which the Operating Company is ~~0.50% lower than~~required to deliver to the ~~previous rate,~~administrative agent (i) its audited financial statements as at the end of and ~~the new applicable rate for euro-denominated term loans is LIBOR (subject to a floor of 1.00%) plus 1.75%, which is 0.75% lower than the previous rate. The new applicable rate~~ for the ~~revolving loans is initially LIBOR plus 2.25%, which is 1.25% lower than~~fiscal year ended June 30, 2023, together with the ~~previous rate,~~auditor’s report and opinion on such ~~rate can additionally be reduced~~audited financial statements, to ~~LIBOR plus 2.00% in future periods based on a measure of Operating Company's total leverage ratio. The term loans and revolving loans will now mature in May~~January 26, 2024, and ~~May 2022, respectively. The Third Amendment also includes a prepayment~~(ii) its unaudited financial statements as at the end of ~~1.0% in~~and for the ~~event of another repricing event on or before the six-month anniversary of the Third Amendment.~~fiscal quarter ending September 30, 2023 to March 13, 2024.

~~Euro-denominated 4.75% Senior Notes due 2024~~

On December ~~9, 2016,~~19, 2023, Operating Company ~~completed a private offering of €380.0~~entered into Amendment No. 11 (the “Eleventh Amendment”) to the Credit Agreement. Pursuant to the Eleventh Amendment, the Operating Company incurred $600 million aggregate principal amount of ~~4.75% Senior Notes due 2024~~U.S. dollar-denominated term B-4 loans (the ~~"Euro Notes"~~“Term B-4 Loans”).The Term B-4 Loans are a new class of term loans under the Credit Agreement, with an interest rate, at Operating Company’s option, of either (i) the term SOFR rate plus 3.00% or (ii) the base rate plus 2.00%; provided, that the term SOFR rate shall not be less than 0.50%. The ~~Euro Notes are fully~~Term B-4 Loans have a maturity date of February 2028, quarterly amortization of principal equal to 1.00% with payments on the last business day of March, June, September, and ~~unconditionally guaranteed, jointly and severally, by all of the wholly owned U.S. subsidiaries of Operating Company that guarantee its senior secured credit facilities.~~December. The Euro Notes were offered in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States only to non-U.S. investors pursuant to Regulation S under the Securities Act. The Euro Notes will mature on December 15, 2024, bear interest at the rate of 4.75% per annum and are payable semi-annually in arrears on June 15 and December 15 of each year.

~~Table of Contents~~

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

On October 18, 2017, Operating Company completed a private offering (the "Debt Offering") of $450.0 million aggregate principal amount of 4.875% senior unsecured notes due 2026 (the "USD Notes"). The USD Notes are fully and unconditionally guaranteed, jointly and severally, by all of the wholly owned U.S. subsidiaries of Operating Company that guarantee its senior secured credit facilities. The USD Notes were offered in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States only to non-U.S. investors pursuant to Regulation S under the Securities Act. The USD Notes will mature on January 15, 2026, bear interest at the rate of 4.875% per annum, and are payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The net proceeds of the ~~Debt Offering,~~Term B-4 Loans, after payment of ~~the initial purchasers' discount and related~~ fees and expenses, were used to ~~fund a portion~~repay the existing Revolving Credit Facility under the Credit Agreement, plus accrued and unpaid interest thereon.

Table of ~~the consideration for the Catalent Indiana acquisition due at its closing.~~Contents

~~Deferred Purchase Consideration~~

In connection with the acquisition of Catalent Indiana in October 2017, $200 million of the $950 million aggregate nominal purchase price is payable in $50 million installments, on each of the first four anniversaries of the closing date. The deferred purchase consideration is recorded at fair value and includes a component of imputed interest.

~~Bridge Loan Facility~~

On September 18, 2017, contemporaneous with the Company entering into the agreement to acquire Catalent Indiana, Operating Company entered into a debt commitment letter with Morgan Stanley Senior Funding, Inc., JP Morgan Chase Bank, N.A., Royal Bank of Canada, RBC Capital Markets, Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as commitment parties. Pursuant to the debt commitment letter and subject to its terms and conditions, the commitment parties agreed to provide a senior unsecured bridge loan facility (the "Bridge Facility") of up to $700.0 million in the aggregate for the purpose of providing any back-up financing necessary to fund a portion of the consideration to be paid in the acquisition and related fees, costs and expenses (the "Bridge Loan Commitment"). In connection with entering into the Bridge Facility, Operating Company incurred $6.1 million of associated fees, which was recorded in prepaid expenses and other in the consolidated balance sheet as of September 30, 2017. Operating Company did not draw on it to fund the acquisition and the Company expensed the $6.1 million in the second quarter as part of other income and expense and the facility was closed. See Note 7 for further discussion of financing costs incurred in the second quarter.

~~Debt Covenants~~

~~Senior Secured Credit Facilities~~

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

~~The Credit Agreement also contains change of control provisions and certain customary affirmative covenants and events of default. The revolving credit facility~~Facility requires compliance with a net leverage covenant when there is a 30% or more draw outstanding at a period end. As of December 31, ~~2017, Operating Company was~~2023, we were in compliance with all ~~material~~ covenants ~~related to its long-term obligations.~~

~~Subject to certain exceptions,~~under the Credit ~~Agreement permits Operating Company and its restricted subsidiaries~~Agreement.

In addition to ~~incur certain additional indebtedness, including secured indebtedness. None~~outstanding borrowings under the Revolving Credit facility, the available capacity under the Revolving Credit Facility is further reduced by the aggregate value of ~~Operating Company’s non-U.S. subsidiaries or Puerto Rico subsidiaries is a guarantor~~all outstanding letters of ~~the loans.~~

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

~~The Euro Notes and the USD Notes~~

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

~~Table of Contents~~

restricted payments, make certain investments, sell certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of their assets, enter into certain transactions with their affiliates, and designate their subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of exceptions, limitations and qualifications as set forth in the Indentures. The Indentures also contain customary events of default including, but not limited to, nonpayment, breach of covenants, and payment or acceleration defaults in certain other indebtedness of Operating Company or certain of its subsidiaries. Upon an event of default, either the holders of at least 30% in principal amount of each of the then-outstanding Euro Notes or the then-outstanding USD Notes, or either of the Trustees under the Indentures, may declare the applicable notes immediately due and payable, or in certain circumstances, the applicable notes will become automatically immediately due and payable.Agreement. As of December 31, ~~2017,~~2023, Operating Company ~~was in compliance with all material covenants~~had $1.09 billion of available capacity under the ~~Indentures.~~Revolving Credit Facility, due to $6 million of outstanding letters of credit.

Measurement of the Estimated Fair Value of Debt ~~Instruments~~

The estimated fair value of the Company’s senior secured credit ~~facility,~~facilities and other senior indebtedness is classified as a Level 2 determination (see Note 10, Fair Value Measurements to our consolidated financial statements, for a description of the method by which fair value ~~estimate,~~classifications are determined) in the fair-value hierarchy and is ~~based on the quoted~~calculated by using a discounted cash flow model with a market ~~prices for the same or similar issues or on the current rates offered for debt of the same remaining maturities and considers collateral, if any. The estimated fair value of the Euro and USD Notes,~~interest rate as a ~~Level 1 fair value estimate, is based on the quoted market prices of the instruments.~~significant input. The carrying amounts and the estimated fair values of ~~financial instruments~~the Company’s principal categories of debt as of December 31, ~~2017~~2023 and June 30, ~~2017~~2023 are as follows:


		December 31, 2023				June 30, 2023
(Dollars in millions)	Fair Value Measurement	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value


5.000% senior notes due 2027	Level 2	$	500	$	499	$	500	$	482
2.375% Euro senior notes due 2028	Level 2	910		836		904		784
3.125% senior notes due 2029	Level 2	550		508		550		481
3.500% senior notes due 2030	Level 2	650		598		650		566
Senior secured credit facilities & other	Level 2	2,445		2,225		2,284		2,141
Subtotal		$	5,055	$	4,666	$	4,888	$	4,454
Unamortized discount and debt issuance costs		(50)		—		(39)		—
Total debt		$	5,005	$	4,666	$	4,849	$	4,454

6. (LOSS) EARNINGS PER SHARE

December 31, 2017 June 30, 2017
(Dollars in millions) Fair Value Measurement
Carrying
Value

Estimated Fair
Value

Carrying
Value

Estimated Fair
Value
Euro-denominated 4.75% Senior Notes Level 1 $ 445.4
$ 474.4
$ 424.3
$ 454.0
U.S. Dollar-denominated 4.875% Senior Notes Level 1 443.7
449.8
—
—
Senior Secured Credit Facilities & Other Level 2 1,853.3
1,825.1
1,655.4
1,653.1
Total $ 2,742.4
$ 2,749.3
$ 2,079.7
$ 2,107.1


6.	~~EARNINGS PER SHARE~~

The Company computes (loss) earnings per share of the Company’s common stock, par value $0.01 (the “Common Stock”) using the treasury stock method. Diluted net (loss) earnings per share is computed using the weighted average number of shares of Common Stock outstanding plus the weighted average number of shares of Common Stock that would be issued assuming exercise or conversion of all potentially dilutive instruments. Dilutive securities having an anti-dilutive effect on diluted net earnings per share are excluded from the calculation. The dilutive effect of the securities that are issuable under the Company’s equity incentive plans are reflected in diluted earnings per share by application of the treasury stock method. The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three and six months ended December 31, ~~2017~~2023 and ~~2016,~~2022, respectively, are as ~~follows (in millions, except share and per share data):~~follows:


	Three Months Ended December 31,				Six Months Ended December 31,
(In millions except per share data)	2023		2022		2023		2022


Net (loss) earnings	$	(206)	$	81	$	(965)	$	81



Weighted average shares outstanding - basic	182		181		181		180
Weighted average dilutive securities issuable - stock plans	—		—		—		1
Weighted average shares outstanding - diluted	182		181		181		181

(Loss) earnings per share:


Basic	$	(1.13)	$	0.45	$	(5.31)	$	0.45




Diluted	$	(1.13)	$	0.44	$	(5.31)	$	0.45

Table of Contents

Three Months Ended
December 31, Six Months Ended
December 31,
2017 2016 2017 2016
Net earnings/(loss) $ (21.9 ) $ 17.4
$ (18.1 ) $ 22.0

Weighted average shares outstanding 132,983,262
124,889,681
129,327,188
124,870,327
Dilutive securities issuable-stock plans —
1,524,963
—
1,470,476
Total weighted average diluted shares outstanding 132,983,262
126,414,644
129,327,188
126,340,803

Basic earnings per share of common stock:

Net earnings/(loss) $ (0.16 ) $ 0.14
$ (0.14 ) $ 0.18

Diluted earnings per share of common stock:
Net earnings/(loss) $ (0.16 ) $ 0.14
$ (0.14 ) $ 0.17

~~The computation of diluted earnings per share~~Shares with an antidilutive effect on the weighted average shares outstanding for the three and six months ended December 31, ~~2017 excludes the maximum effect of the potential common shares issuable under the employee stock option plan of approximately 2.6 million shares,~~2023 and excludes restricted share awards of 2.1 million shares, because the Company had a net loss for the period and the effect would therefore be anti-dilutive. The computation of diluted earnings per share for the three and six months ended December 31, 2016 excludes the effect of 0.5 million shares potentially issuable pursuant to awards granted under the 2007 Stock Incentive Plan, because the vesting provisions of those awards specify performance- or market-based conditions that had2022 were not been met as of the period end. The computation of diluted earnings per share for the three and six months ended December 31, 2016 excludes the effect of potential common shares issuable under employee-held stock options and restricted stock units of approximately 0.9 million and 1.1 million shares, respectively, because they are anti-dilutive.material.

7. OTHER EXPENSE (INCOME), NET

~~Table of Contents~~


7.	~~OTHER (INCOME)/EXPENSE, NET~~

The components of other expense (income)~~/expense,~~, net for the three and six months ended December 31, ~~2017~~2023 and ~~2016~~2022 are as follows:


	Three Months Ended December 31,				Six Months Ended December 31,
(Dollars in millions)	2023		2022		2023		2022





Foreign currency losses (gains) (1)	$	4	$	(25)	15		(1)
Other	—		2		2		3
Total other expense (income), net	$	4	$	(23)	$	17	$	2

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

8. RESTRUCTURING COSTS

Three Months Ended
December 31, Six Months Ended
December 31,
(Dollars in millions) 2017 2016 2017 2016
Other (income)/expense, net
Debt refinancing costs ⁽¹⁾
$ 11.8
$ 4.3
$ 11.8
$ 4.3
Foreign currency (gains) and losses 1.3
(5.3 ) 6.9
(7.5 )
Other 0.5
(0.8 ) 0.6
(0.7 )
Total other (income)/expense, net $ 13.6
$ (1.8 ) $ 19.3
$ (3.9 )

~~(1) The 2017 debt refinancing costs include financing charges related~~From time to time, the offering of the USD Notes and the Third Amendment and also include a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018 on the Bridge Facility. The 2016 debt refinancing costs include financing charges of $4.3 million related to the December 2016 offering of the Euro Notes and repricing and partial paydown of the Company's term loans.


8.	~~RESTRUCTURING AND OTHER COSTS~~

~~Restructuring Costs~~

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

~~Other Costs / (Income)~~During the fiscal year ended June 30, 2023, the Company adopted plans to reduce costs, consolidate facilities, and optimize its infrastructure across the organization. During the three months ended December 31, 2023, the Company extended its restructuring efforts to reduce costs and headcount in both its Biologics and Pharma and Consumer Health segments.

~~Other income includes settlement~~In October 2023, and in connection with the Company's restructuring plans, the Company committed to a plan to close operations at its San Francisco facility and to transfer those operations to other sites within its network. The Company expects to incur cash and non-cash charges ~~net~~ of ~~any insurance recoveries related to~~at least $25 million in connection with the ~~probable resolution of certain customer claims~~site closure, primarily related to a ~~previous temporary suspension~~pension liability from a multi-employer pension plan and accelerated depreciation of ~~operations at a softgel manufacturing facility. Refer to Note 13 Commitments~~property, plant and ~~Contingencies~~equipment in the second half of fiscal 2024. Results for ~~further discussions~~the three months ended December 31, 2023 are reflected in the tables below under the Pharma and Consumer Health segment.

In connection with these restructuring plans, the Company reduced its headcount by approximately 300 employees and incurred cumulative employee-related charges of ~~such claims.~~approximately $12 million, primarily associated with cash severance programs through December 31, 2023.

Restructuring costs for the three and six months ended December 31, 2023 and 2022 were recorded in Other Operating Expense in the Consolidated Statement of Operations.

The following table summarizes the ~~significant costs~~charges recorded within restructuring costs:


	Three Months Ended December 31,				Six Months Ended December 31,
(Dollars in millions)	2023		2022		2023		2022
Restructuring costs:
Employee-related reorganization	$	10	$	12	$	12	$	14
Facility exit and other costs	7		11		7		13
Total restructuring costs	$	17	$	23	$	19	$	27

The following table summarizes the charges recorded within restructuring costs by segment. These amounts are excluded from Segment EBITDA as described in Note 15, Segment Information.

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Three Months Ended
December 31, Six Months Ended
December 31,
(Dollars in millions)
2017 2016 2017 2016
Restructuring costs:
Employee-related reorganization $ 1.6
$ (0.1 ) $ 3.3
$ 0.7
Facility exit and other costs (0.7 ) 0.2
(0.2 ) 0.5
Total restructuring costs $ 0.9
$ 0.1
$ 3.1
$ 1.2
Other - customer claims net of insurance recoveries (0.8 ) 3.2
(1.8 ) 3.2
Total restructuring and other costs $ 0.1
$ 3.3
$ 1.3
$ 4.4


	Three Months Ended December 31,				Six Months Ended December 31,
(Dollars in millions)	2023		2022		2023		2022
Restructuring costs:
Biologics	$	6	$	18	$	7	$	18
Pharma and Consumer Health	10		1		11		4
Non-segment (Corporate)	1		4		1		5
Total restructuring costs	$	17	$	23	$	19	$	27

The following tables summarizes the change in the employee separation-related liability associated with the restructuring plans.


	Employee-related restructuring
9. (Dollars in millions)	~~DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES~~
Balance, June 30, 2023	$	19
Charges	12
Payments	(15)
Balance, December 31, 2023	$	16

9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

The Company is exposed to fluctuations in the currency exchange rates applicable ~~exchange rate on~~to its investments in ~~foreign operations.~~operations outside the U.S. While the Company does not actively hedge against changes in foreign currency, the Company has mitigated ~~its~~ exposure from its investments in its European operations by denominating a portion of its debt in euros. At December 31, ~~2017~~,2023, the Company had euro-denominated debt outstanding of ~~$811.9~~$910 million ~~that~~ (U.S. dollar equivalent), which is designated and qualifies as a hedge ~~of a~~against its net investment in ~~foreign~~its European operations. For non-derivatives designated and qualifying as net investment hedges, the effective ~~portions~~portion of ~~the~~ translation gains or losses are reported in accumulated other comprehensive ~~income/(loss)~~loss as part of the cumulative translation adjustment. The ~~ineffective portions of the translation gains or losses are reported in the statement of operations. The~~ following table ~~includes~~summarizes net investment hedge activity during the three and six months ended December 31, ~~2017~~2023 and ~~December 31, 2016~~.2022.


	Three Months Ended December 31,				Six Months Ended December 31,
(Dollars in millions)	2023		2022		2023		2022
Unrealized foreign exchange loss within other comprehensive income	$	(38)	$	(85)	$	(6)	$	(4)

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Three Months Ended
December 31, Six Months Ended
December 31,
(Dollars in millions) 2017 2016 2017 2016
Unrealized foreign exchange gain/(loss) within other
comprehensive income
$ (3.9 ) $ 13.6
$ (21.5 ) $ 10.0
Unrealized foreign exchange gain/(loss) within statement
of operations
$ (2.8 ) $ 10.2
$ (16.2 ) $ 7.6

The net accumulated gain ofon the instrument designated as ~~the~~a hedge as of December 31, ~~2017~~2023 within other comprehensive ~~income/(loss)~~loss was approximately ~~$38.5~~$91 million. Amounts are reclassified out of accumulated other comprehensive ~~income/(loss)~~loss into earnings when the entity to which the gains and losses relate is either sold or substantially liquidated.


~~10.~~	~~INCOME TAXES~~

Interest-Rate Swap

~~U.S. Tax Reform~~

~~On December 22, 2017,~~In February 2021, the ~~U.S. government enacted wide-ranging tax legislation,~~Company entered into an interest-rate swap agreement with Bank of America N.A. (the “2021 Rate Swap”) as a hedge against the Tax Cuts and Jobs Act (the "2017 Tax Act"). The 2017 Tax Act significantly revises U.S. tax law by, among other provisions, (a) lowering the applicable U.S. federal statutory income tax rate from 35% to 21%, (b) creatingeconomic effect of a partial territorial tax system that includes imposing a mandatory one-time transition tax on previously deferred foreign earnings, (c) creating provisions regarding the (1) Global Intangible Low Tax Income ("GILTI"), (2) the Foreign Derived Intangible Income ("FDII") deduction, and (3) the Base Erosion Anti-Abuse Tax ("BEAT"), and (d) eliminating or reducing certain income tax deductions, such as interest expense, executive compensation expenses and certain employee expenses.

~~ASC~~ ~~740~~ ~~Income Taxes~~ ~~requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance~~portion of the ~~2017 Tax Act’s provisions,~~variable interest obligation associated with its Term B-3 Loans. The 2021 Rate Swap effectively fixed the ~~SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which allows companies to record the tax effects~~rate of interest payable on that portion of the ~~2017 Tax Act~~Term B-3 Loans, thereby reducing the impact of future interest rate changes on a provisional basis based on a reasonable estimate and then, if necessary, subsequently adjust such amounts during a limited measurement period as more information becomes available. The measurement period ends when a company has obtained, prepared, and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year from enactment.future interest expense. As a result of the ~~2017 Tax Act,~~ 2021 Rate Swap, the variable portion of the applicable interest rate on $500 million of the Term B-3 Loans is now effectively fixed at 0.9985%.

To conform with the adoption of Topic 848, Reference Rate Reform and the Eighth Amendment, the Company ~~revised its estimated annual effective~~amended the 2021 Rate Swap in June 2023 (the “2023 Rate Swap”). The 2023 Rate Swap continues to effectively fix the rate of interest payable on the same portion of our U.S. dollar-denominated term loans under our senior secured credit facilities. As a result of

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the 2023 Rate Swap, the variable portion of the applicable interest rate on $500 million of the U.S. dollar-denominated term loans is now effectively fixed at 0.9431%.

The 2023 Rate Swap continues to ~~reflect~~qualify for a cash-flow hedge. The Company evaluates hedge effectiveness at the inception of the hedge and on an ongoing basis. The cash flows associated with the 2023 Rate Swap amendment is reported in cash provided by operating activities in the consolidated statements of cash flows. The unrealized loss recorded in stockholder's equity related to the mark-to-market change in the ~~U.S. federal statutory rate. The revised blended U.S. federal statutory tax rate for~~2021 Rate Swap during the ~~fiscal year is 28%.~~

~~Measurement of certain income tax effects that can be reasonably estimated (provisional amounts)~~

~~During the second quarter~~three and six months ended December 31, ~~2017, the Company recorded a one-time net charge of $46.0 million within its income tax provision as a provisional estimate~~2023 was $2 million.

A summary of the ~~net accounting impact~~estimated fair value of the ~~2017 Tax Act~~2021 Rate Swap reported in ~~accordance with SAB 118. The net charge~~the consolidated balance sheets is ~~comprised of~~stated in the ~~following: (i) expense of $48.7 million related~~table below:

December 31, 2023

June 30, 2023

(Dollars in millions)

Balance Sheet Classification

Estimated Fair Value

Balance Sheet Classification

Estimated Fair Value

Interest-rate swap

Other long-term assets

10. FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement, defines fair value as the exit price that would be received to ~~the mandatory transition tax for deemed repatriation of deferred foreign income, $8.7 million of which the Company expects~~sell an asset or paid to ~~pay over~~transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an ~~8-year period after considering~~asset or liability. Valuation techniques used to measure fair value should maximize the use of ~~certain net operating losses~~observable inputs and ~~foreign tax credits,~~minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which Level 1 and ~~certain limitations on executive compensation; (ii) an additional $9.5 million charge relating~~Level 2 are considered observable and Level 3 is considered unobservable:

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

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

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

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification as of the end of each reporting period. The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis and the fair value measurement for such assets and liabilities at December 31, 2023 and June 30, 2023:

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(Dollars in millions)	Basis of Fair Value Measurement
December 31, 2023	Total		Level 1		Level 2		Level 3
Assets:



Interest-rate swap	$	59	$	—	$	59	$	—
Trading securities	5		5		—		—





June 30, 2023
Assets:


Interest-rate swap	$	62	$	—	$	62	$	—
Trading securities	1		1		—		—

The fair value of the 2021 Rate Swap was determined, and the fair value of the 2023 Rate Swap will be determined, at the end of each reporting period based on valuation models that use interest rate yield curves and discount rates as inputs. The discount rates are based on U.S. deposit or U.S. Treasury rates. The significant inputs used in the ~~Company's intentions with respect to future repatriation of undistributed earnings~~valuation models are readily available in public markets or can be derived from ~~non-U.S. subsidiaries~~observable market transactions, and ~~(iii) a benefit of $12.2 million related to a revaluation of~~ the ~~Company’s deferred tax assets~~valuation is therefore classified as Level 2 in the fair-value hierarchy.

Assets and ~~liabilities. The one-time net charge, which was recorded~~Liabilities Measured at Fair Value on a ~~provisional basis, increased~~Non-Recurring Basis

Long-lived assets, goodwill, and other intangible assets are subject to non-recurring fair value measurement for the ~~Company’s effective tax rate by 164% and 154%~~evaluation of potential impairment. There was no non-recurring fair value measurement during the ~~three-month and six-month periods~~six months ended December 31, ~~2017, respectively.~~2023.

Given the significant complexity of the 2017 Tax Act, anticipated guidance from the U.S. Treasury concerning implementation of the 2017 Tax Act, and the potential for additional guidance from the SEC or the FASB related to the 2017 Tax Act, the provisional estimates that the Company recorded may require adjustment during the measurement period. The provisional estimates were based on the Company’s present understanding of the 2017 Tax Act and other information available as of the time of the estimates, including assumptions and expectations about future events, such as its projected financial performance, and are subject to further refinement as additional information becomes available (including the Company’s actual full fiscal 2018 results of operations, as well as potential new or interpretative guidance issued by the SEC, the FASB, or the Internal Revenue Service) and the Company continues its analysis. The Company continues to analyze the changes to certain income tax deductions, assess calculations of earnings and profits in certain foreign subsidiaries, including whether those earnings are held in cash or other assets, and gather additional data to compute the full impact of the 2017 Tax Act on the Company’s deferred and current tax assets and liabilities.

11. INCOME TAXES

~~Table of Contents~~

~~Measurement of certain income tax effects that cannot be reasonably estimated~~

Because of the complexity of the new GILTI tax rules, the Company continues to evaluate this provision of the 2017 Tax Act and the application of ASC 740. In accordance with ASC 740, the Company will make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company's measurement of its deferred taxes (the “deferred method”). The Company's selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing its global income to determine whether it expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends on not only the Company's current structure and estimated future results of global operations, but also its intent and ability to modify its structure. Therefore, the Company has not made any adjustment related to potential GILTI tax in its financial statements and has not made a policy decision regarding whether to record deferred tax on GILTI.

Additionally, the Company continues to evaluate the potential impact of all other provisions, including but not limited to provisions regarding the FDII, BEAT, interest expense and certain employee expense deductions, as well as the state tax impact of the 2017 Tax Act. The Company is currently in the process of analyzing its structure and estimated future results and, as a result, is not yet able to reasonably estimate the effect of these provisions of the 2017 Tax Act.

~~Other Tax Matters~~

The Company accounts for income taxes in accordance with ASC ~~740.~~740, Income Taxes. Generally, fluctuations in the effective tax rate are ~~primarily~~ due to changes in relative amounts of U.S. and non-U.S. pretax income, ~~resulting from the Company’s business mix and changes in~~ the tax impact of special items, and other discrete tax ~~items, which may have unique tax implications depending on the nature of the item. Such discrete~~items. Discrete items include, but are not limited to, changes in ~~foreign~~non-U.S. statutory tax rates, ~~the~~ amortization of certain assets, changes in the Company’s reserve for uncertain tax positions, and ~~the~~ tax impact of ~~changes in its ASC 740 unrecognized tax benefit reserves.~~ certain equity compensation.

In the normal course of business, the Company is subject to examination by taxing authorities around the ~~world, including such major~~world. The Company is presently under audit in select jurisdictions asin the United States ~~Germany, France,~~ and in Europe, but no material impact is expected to the ~~United Kingdom. The Company is no longer subject to new non-U.S.~~financial results once these audits are completed.

ASC 740 provides guidance for the accounting of uncertain income tax examinations for years prior to fiscal year 2008. Under the terms of the 2007 purchase agreement by which the selling stockholders acquired their interest in the Company, the Company is indemnified by its former owner for tax liabilities that may arise after the 2007 purchase that relate to tax periods prior to April 10, 2007. The indemnification agreement applies to, among other taxes, any and all federal, state and international income-based taxes as well as related interest and penalties. As of December 31, 2017 and June 30, 2017, approximately $0.7 million and $0.8 million, respectively, of unrecognized tax benefit are subject to indemnification by the Company's former owner.

~~ASC 740 includes guidance on the accounting for uncertainty in income taxes~~positions recognized in the ~~financial statements.~~Company's tax filings. This ~~standard~~guidance provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that, based on technical merits, the position will be sustained upon examination, including resolution of any related appeal or litigation ~~process, based on the technical merits.~~process. As of December 31, 2017, the Company had a total of $52.5 million of unrecognized tax benefits. A reconciliation of its reserves for uncertain tax positions, excluding accrued interest and penalties, for December 31, 2017 is as follows:

(Dollars in millions)
Balance at June 30, 2017 $ 52.5
Additions for tax positions of current year —
Balance at December 31, 2017 $ 52.5

~~As of~~ ~~December 31, 2017~~2023 and June 30, ~~2017,~~2023, the ~~Company had a total of $57.5 million and~~ ~~$57.5 million, respectively, of~~Company’s reserve against uncertain income tax positions ~~(including accrued interest and penalties). As of these dates, $41.4 million and~~ ~~$41.4 million, respectively, represent the amount of unrecognized tax benefits, which, if recognized, would favorably affect the effective income tax rate. The Company recognizes interest~~remained substantially unchanged at $4 million. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. ~~As of~~

The Company recorded a provision for income taxes for the three months ended December 31, ~~2017~~2023 of $24 million relative to loss before income taxes of $182 million. The Company recorded a provision for income taxes for the three months ended December 31, 2022 of $33 million relative to earnings before income taxes of $114 million. The income tax expense for the quarter is primarily the result of income tax expense in select international jurisdictions and ~~June 30, 2017,~~ the inability to recognize income tax benefit on incremental domestic losses. The quarterly provision was also impacted by the geographic distribution of the Company's pretax loss resulting from our business mix, changes in the tax impact of permanent differences, restructuring, special items, certain equity related compensation, and other discrete tax items that may have unique tax implications depending on the nature of the item.

The Company ~~has approximately $5.0~~recorded a benefit for income taxes for the six months ended December 31, 2023 of $14 million relative to loss before income taxes of $979 million. The Company recorded a provision for income taxes for the six months ended December 31, 2022 of $36 million relative to earnings before income taxes of $117 million. The income tax benefit for the period is primarily the result of income tax expense in select international jurisdictions and ~~$5.0 million, respectively, of accrued interest and penalties related~~the inability to ~~uncertain~~recognize income tax ~~positions. As of these dates, the portion of such interest and penalties subject to indemnification by its former owner is $1.5 million and~~ ~~$1.7 million, respectively.~~benefit on incremental domestic losses.

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The year to date benefit was also impacted by the geographic distribution of the Company's pretax loss resulting from our business mix, changes in the tax impact of permanent differences, restructuring, special items, certain equity related compensation, and other discrete tax items that may have unique tax implications depending on the nature of the item.


~~11.~~	~~EMPLOYEE RETIREMENT BENEFIT PLANS~~

12. EMPLOYEE RETIREMENT BENEFIT PLANS

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


	Three Months Ended December 31,						Six Months Ended December 31,
	Three Months Ended December 31,															Three Months Ended December 31,		Six Months Ended December 31,
(Dollars in millions)	2017			2016			2017			2016			(Dollars in millions)	2023	2022		2023		2022
Components of net periodic benefit cost:
Selling, general, and administrative expenses:
Selling, general, and administrative expenses:
Selling, general, and administrative expenses:
Service cost	$	0.9		$	0.8		$	1.8		$	1.6
Service cost
Service cost
Other operating expense:
Settlement charges
Settlement charges
Settlement charges
Other expense, net:
Interest cost
Interest cost
Interest cost	1.8			1.6			3.6			3.3
Expected return on plan assets	(2.9		)	(2.6		)	(5.8		)	(5.4		)
Amortization ⁽¹⁾	0.6			1.0			1.2			2.1
Net amount recognized	$	0.4		$	0.8		$	0.8		$	1.6


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

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

As previously disclosed, the Company notified the trustees of a multi-employer pension plan of its withdrawal from participation in such plan in fiscal 2012. The actuarial review process administered by the plan trustees ended in fiscal 2015. For the three months ended December 31, 2023, the Company decided to withdraw its participation from a multi-employer pension plan as a result of recent restructuring activities in its Pharma and Consumer Health segment. The ~~liability~~liabilities reported ~~reflects~~reflect the present value of the ~~Company's~~Company’s expected future long-term obligations. The estimated discounted value of the projected contributions related to such plans was ~~$39.1~~$44 million as of December 31, ~~2017~~2023 and $38 million as of June 30, ~~2017~~2023, and is included within pension liability on the consolidated balance sheets. The annual cash impact associated with the ~~Company's obligation~~Company’s obligations in such plan ~~approximates $1.7~~is approximately $2 million.

The Company is in the process of terminating the U.S. pension plan and will settle with its participants either in a lump sum payout or through the purchase of an annuity contract, dependent upon the participant’s selection of payment. The Company will seek to purchase nonparticipating annuities for participants who do not elect lump sum payouts. Participants who elected a lump sum payout were settled in the three months ended December 31, 2023. The $7 million ~~per year.~~of lump sum payments were made with cash from the assets of the qualified pension plan.

The Company performed an actuarial valuation analysis as of December 31, 2023 assuming the pension plan would be terminated through the purchase of non-participating group annuity contracts by March 31, 2024. The Company estimates a total settlement loss of $12 million, in which $3 million was recorded during the three months ended December 31, 2023. The estimated loss to settle the U.S. pension plan as of December 31, 2023 was based upon a 4.5% discount rate.


~~12.~~	~~EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)~~

13. EQUITY AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Description of Capital Stock

The Company is authorized to issue ~~1,000,000,000~~1.00 billion shares of ~~common stock, par value $0.01 per share,~~its Common Stock and ~~100,000,000~~100 million shares of preferred stock, par value $0.01 per share. In accordance with the ~~Company's~~Company’s amended and restated certificate of incorporation, each share of ~~common stock~~Common Stock has one vote, and the ~~common stock~~Common Stock votes together as a single class.

~~Public Stock Offering~~

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

~~Outstanding Stock~~

Shares outstanding include shares of unvested restricted stock. Unvested restricted stock included in reportable shares outstanding was 0.3 million shares as of December 31, 2017. Shares of unvested restricted stock are excluded from our calculation of basic weighted average shares outstanding, but their dilutive impact is added back in the calculation of diluted weighted average shares outstanding.

~~Stock Repurchase Program~~

On October 29, 2015, the Company’s Board of Directors authorized a share repurchase program to use up to $100.0 million to repurchase shares of its outstanding common stock. Under the program, the Company is authorized to repurchase shares through open market purchases, privately negotiated transactions, or otherwise as permitted by applicable federal securities laws. There has been no purchase pursuant to this program as of December 31, 2017.

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Accumulated Other Comprehensive ~~Income/(Loss)~~Loss

The components of the changes in the cumulative translation adjustment, derivatives and hedges, minimum pension liability, and ~~available for sale investment~~marketable securities for the three and six months ended December 31, ~~2017~~2023 and ~~December 31, 2016~~2022 are presented below.

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Three Months Ended
December 31, Six Months Ended
December 31,
(Dollars in millions) 2017 2016 2017 2016
Foreign currency translation adjustments:
Net investment hedge $ (3.9 ) $ 13.6
$ (21.5 ) $ 10.0
Long-term intercompany loans (2.3 ) (13.3 ) 11.2
(20.9 )
Translation adjustments (5.2 ) (59.8 ) 30.9
(49.2 )
Total foreign currency translation adjustment, pretax (11.4 ) (59.5 ) 20.6
(60.1 )
Tax expense/(benefit) 2.0
4.9
(4.1 ) 3.7
Total foreign currency translation adjustment, net of tax $ (13.4 ) $ (64.4 ) $ 24.7
$ (63.8 )

Net change in minimum pension liability
Net gain/(loss) recognized during the period 0.6
1.0
1.2
2.1
Total pension, pretax 0.6
1.0
1.2
2.1
Tax expense/(benefit) 0.1
0.3
0.3
0.6
Net change in minimum pension liability, net of tax $ 0.5
$ 0.7
$ 0.9
$ 1.5

Net change in available for sale investment:
Net gain/(loss) recognized during the period (3.6 ) 24.5
(8.8 ) 24.5
Total available for sale investment, pretax (3.6 ) 24.5
(8.8 ) 24.5
Tax expense/(benefit) (0.6 ) 9.2
(2.4 ) 9.2
Net change in available for sale investment, net of tax $ (3.0 ) $ 15.3
$ (6.4 ) $ 15.3


	Three Months Ended December 31,				Six Months Ended December 31,
(Dollars in millions)	2023		2022		2023		2022
Foreign currency translation adjustments:
Net investment hedge	$	(38)	$	(85)	$	(6)	$	(4)
Long-term intercompany loans	14		31		(2)		(10)
Translation adjustments	73		155		8		(5)
Total foreign currency translation adjustment, pretax	49		101		—		(19)
Tax (benefit) expense	12		(17)		2		(2)
Total foreign currency translation adjustment, net of tax	$	37	$	118	$	(2)	$	(17)

Net change in derivatives and hedges:
Net gain recognized during the period	$	(8)	$	—	$	(2)	$	18
Total derivatives and hedges, pretax	(8)		—		(2)		18
Tax (benefit) expense	(1)		—		—		4
Net change in derivatives and hedges, net of tax	$	(7)	$	—	$	(2)	$	14

Net change in minimum pension liability:

Net gain recognized during the period	$	3	$	—	$	3	$	—

Total pension liability, pretax	3		—		3		—
Tax benefit	(1)		—		(1)		—
Net change in minimum pension liability, net of tax	$	4	$	—	$	4	$	—

Net change in marketable securities:
Net gain recognized during the period	$	—	$	1	$	—	$	1
Amounts reclassified from accumulated other comprehensive loss	—		1		—		2
Net change in marketable securities, pretax	—		2		—		3
Tax expense	—		1		—		1
Net change in marketable securities, net of tax	$	—	$	1	$	—	$	2

For the three months ended December 31, ~~2017,~~2023 and 2022, the changes in accumulated other comprehensive ~~income,~~loss, net of tax by component are as follows:


(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Derivatives and Hedges		Other		Total
Balance at September 30, 2023	$	(385)	$	(52)	$	50	$	(1)	$	(388)
Other comprehensive income (loss) before reclassifications	37		—		(7)		—		30
Amounts reclassified from accumulated other comprehensive loss	—		4		—		—		4
Net current period other comprehensive income (loss)	37		4		(7)		—		34
Balance at December 31, 2023	$	(348)	$	(48)	$	43	$	(1)	$	(354)

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(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Derivatives and Hedges		Marketable Securities		Other		Total
Balance at September 30, 2022	$	(513)	$	(38)	$	41	$	(3)	$	(1)	$	(514)
Other comprehensive income before reclassifications	118		—		—		—		—		118
Amounts reclassified from accumulated other comprehensive loss	—		—		—		1		—		1
Net current period other comprehensive income	118		—		—		1		—		119
Balance at December 31, 2022	$	(395)	$	(38)	$	41	$	(2)	$	(1)	$	(395)

For the six months ended December 31, 2023 and 2022, the changes in accumulated other comprehensive loss, net of tax by component are as follows:


(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Derivatives and Hedges		Other		Total
Balance at June 30, 2023	$	(346)	$	(52)	$	45	$	(1)	$	(354)
Other comprehensive income (loss) before reclassifications	(2)		—		(2)		—		(4)
Amounts reclassified from accumulated other comprehensive loss	—		4		—		—		4
Net current period other comprehensive income (loss)	(2)		4		(2)		—		—
Balance at December 31, 2023	$	(348)	$	(48)	$	43	$	(1)	$	(354)


(Dollars in millions)	Foreign Exchange Translation Adjustments		Pension and Liability Adjustments		Derivatives and Hedges		Marketable Securities		Other		Total
Balance at June 30, 2022	$	(378)	$	(38)	$	27	$	(4)	$	(1)	$	(394)
Other comprehensive (loss) income before reclassifications	(17)		—		14		—		—		(3)
Amounts reclassified from accumulated other comprehensive loss	—		—		—		2		—		2
Net current period other comprehensive (loss) income	(17)		—		14		2		—		(1)
Balance at December 31, 2022	$	(395)	$	(38)	$	41	$	(2)	$	(1)	$	(395)

14. COMMITMENTS AND CONTINGENCIES

(Dollars in millions) Foreign Exchange Translation Adjustments Pension and Liability Adjustments Available for Sale Investment Adjustments Total
Balance at September 30, 2017 $ (242.6 ) $ (43.5 ) $ 7.1
$ (279.0 )
Other comprehensive income/(loss) before reclassifications (13.4 ) —
(3.0 ) (16.4 )
Amounts reclassified from accumulated other comprehensive income —
0.5
—
0.5
Net current period other comprehensive income (loss) (13.4 ) 0.5
(3.0 ) (15.9 )
Balance at December 31, 2017 $ (256.0 ) $ (43.0 ) $ 4.1
$ (294.9 )

~~Table of Contents~~

~~For the six months ended December 31, 2017, the changes in accumulated other comprehensive income, net of tax by component are as follows:~~

(Dollars in millions) Foreign Exchange Translation Adjustments Pension and Liability Adjustments Available for Sale investment Adjustments Total
Balance at June 30, 2017 $ (280.7 ) $ (43.9 ) $ 10.5
$ (314.1 )
Other comprehensive income/(loss) before reclassifications 24.7
—
(6.4 ) 18.3
Amounts reclassified from accumulated other comprehensive income —
0.9
—
0.9
Net current period other comprehensive income (loss) 24.7
0.9
(6.4 ) 19.2
Balance at December 31, 2017 $ (256.0 ) $ (43.0 ) $ 4.1
$ (294.9 )


~~13.~~	~~COMMITMENTS AND CONTINGENCIES~~

The Company continues to receive and resolve claims stemming from a prior, temporary, regulatory suspension of one of our manufacturing facilities. To date, more than 30 customers of the facility have presented claims against the Company for alleged losses, including lost profits and other types of indirect or consequential damages that they have allegedly suffered due to the temporary suspension, or have reserved their right to do so subsequently. The Company is unable to estimate at this time either the total value of claims that are reasonably possible to be asserted with respect to this matter or the likely cost to resolve them, although (a) as of the end of December 31, 2017, the Company has settled 18 customer claims and (b) certain remaining customers have presented the Company with support for other claims having an aggregate claim value of approximately $4.0 million. To date, none of the asserted claims takes into account limitations of liability in the contracts governing these claims or any other defense that the Company may assert. In addition, the Company may have insurance for additional costs it may incur as a result of such claims, subject to various deductibles and other limitations, but there can be no assurance as to the aggregate amount or timing of insurance recoveries against any such costs.Litigation

From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business, including, without limitation, inquiries and claims concerning environmental contamination as well as litigation and allegations in connection with acquisitions, product liability, manufacturing or packaging defects, and claims for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of any of which could be significant. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effect upon the Company’s consolidated financial statements. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in a liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the

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possible loss or range of loss to the extent necessary for its consolidated financial statements not to be misleading. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the Company's consolidated financial statements. Any legal or other expenses associated with the litigation are accrued for as the expenses are incurred. The Company intends to vigorously defend itself against any such litigation and does not currently believe that the outcome of any such litigation will have a material adverse effect on the Company’s consolidated financial statements. In addition, the healthcare industry is highly regulated and government agencies continue to scrutinize certain practices affecting government programs and otherwise.

City of Warwick Retirement System Class Action

In February 2023, an alleged shareholder filed a complaint styled City of Warwick Retirement System v. Catalent, Inc., et al., No. 23-cv-01108, in New Jersey federal court against the Company and three of its then-officers (collectively, “the Warwick Defendants”) purportedly on behalf of a putative “class” consisting of persons who purchased or otherwise acquired Company securities between August 30, 2021 and October 31, 2022, inclusive. On September 15, 2023, the Warwick complaint was amended (together with the original complaint, the "Warwick Complaint"), which amended complaint expanded the class period to between August 30, 2021 and May 7, 2023, inclusive (the “Class Period”). The Warwick Complaint purports to assert claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended and the related regulations, alleging that, unbeknownst to investors, the Warwick Defendants purportedly engaged in accounting and channel stuffing schemes to pad the Company’s revenues and failed to disclose adverse facts that purportedly were known to or recklessly disregarded by the Warwick Defendants. Specifically, the Warwick Complaint alleges that the Warwick Defendants (i) overstated revenue and earnings by prematurely recognizing revenue in violation of U.S. GAAP; (ii) suffered material weaknesses in its internal controls over financial reporting related to revenue recognition; (iii) falsely represented demand for its products while knowingly selling more product to its direct customers than could be sold to healthcare providers and end consumers; (iv) cut corners on safety and control procedures at key production facilities; (v) disregarded regulatory rules at key production facilities in order to rapidly produce excess inventory that was used to pad the Company’s financial results through premature revenue recognition in violation of U.S. GAAP or stuffing its direct customers with this excess inventory; and (vi) lacked a reasonable basis for their positive statements about the Company’s financial performance, outlook, and regulatory compliance during the Class Period. The Company believes that the Warwick Defendants have defenses to the allegations and claims set forth in the complaint and filed a motion to dismiss the Warwick Complaint on November 15, 2023. The plaintiffs filed their opposition to the Company's motion to dismiss on January 12, 2024, and the Company's reply to the plaintiffs' opposition is due February 15, 2024.

Husty Derivative Claim

In August 2023, an alleged shareholder filed a derivative complaint styled Husty et al. v. Carroll, et al., No. 23-cv-00891, in Delaware federal court against certain current and former members of the Company's board of directors, (the “Husty Defendants”), and nominally against Catalent, Inc. The complaint mimics the allegations set out in the original complaint filed in the City of Warwick Retirement System action described aboveand claims that the alleged activities described there led to, and will continue to expose the Company to, costs and damages. The Company believes that the Husty Defendants have defenses to the allegations and claims set forth in the complaint and, once all Husty Defendants are properly served with the complaint, intends to vigorously defend the Husty Defendants against such allegations.

Brown Derivative Claim

In September 2023, an alleged shareholder filed a derivative complaint styled Brown, et al. v. Chiminski, et al., Case 3:23-cv-15722, in New Jersey federal court against certain current and former officers and members of the Company's board of directors (the “Brown Defendants”) and nominally against Catalent, Inc. The complaint mimics the allegations set out in the original complaint filed in the City of Warwick Retirement System action described above and claims that the alleged activities described there led to, and will continue to expose the Company to, costs and damages. On November 8, 2023, the court entered a stipulation between the parties extending the Brown Defendants’ time to respond to the complaint until January 19, 2024. The Company believes that the Brown Defendants have defenses to the allegations and claims set forth in the complaint and intends to vigorously defend the Brown Defendants against such allegations.

Subpoenas and Requests for Information

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

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In June 2023, the Company received a demand from a company stockholder pursuant to 8 Del. C. § 220 to inspect books and records of the Company relating to, among other things, the allegations raised in the Warwick Complaint. The Company ~~expects~~has responded to ~~incur costs~~the demand and cannot determine at this time if the books and records demand will lead to litigation.

Fire at Biologics Facility

During the three months ended December 31, 2023, the Company had a small fire at a facility in ~~future periods~~its Biologics segment. The fire activated the sprinkler systems, which then caused minor flooding in ~~connection with future requests.~~


~~14.~~	~~SEGMENT INFORMATION~~

certain parts of the facility. The Company ~~conducts its business within~~accrued $9 million for estimated damages, repairs, and lost inventory. The Company is insured for such incidents and has submitted claims for reimbursement. Proceeds from potential reimbursement are not included in the ~~following operating segments: Softgel Technologies, Drug Delivery Solutions,~~financial statements for the three and ~~Clinical Supply Services.~~ six months ended December 31, 2023.

15. SEGMENT INFORMATION

The Company evaluates the performance of its segments based on segment earnings before ~~noncontrolling interest,~~ other ~~(income) expense,~~(expense) income, impairments, restructuring costs, interest expense, income tax ~~(benefit)/~~expense, and depreciation and amortization (“Segment EBITDA”).

Segment EBITDA ~~from continuing operations~~ is subject to important limitations. These consolidated ~~earnings from continuing operations before interest expense, income tax (benefit)/expense, depreciation~~financial statements include information concerning Segment EBITDA (a) because Segment EBITDA is an operational measure used by management in the assessment of the operating segments, the allocation of resources to the segments, and ~~amortization~~the setting of strategic goals and ~~is adjusted~~annual goals for the ~~income or loss attributable~~segments, and (b) in order to ~~noncontrolling interest.~~provide supplemental information that the Company considers relevant for the readers of the consolidated financial statements. The Company’s presentation of Segment EBITDA ~~and EBITDA from continuing operations are not defined in GAAP and~~ may not be comparable to similarly titled measures used by other companies.

~~Table of Contents~~

The following tables include ~~net revenue and~~ Segment EBITDA for each of the Company's current reportable segments during the three and six months ended December 31, ~~2017~~2023 and ~~December 31, 2016:~~

2022:

Three Months Ended
December 31, Six Months Ended
December 31,
(Dollars in millions) 2017 2016 2017 2016
Softgel Technologies
Net revenue $ 228.1
$ 201.9
$ 447.8
$ 388.3
Segment EBITDA 50.1
43.4
85.2
73.9
Drug Delivery Solutions
Net revenue 285.4
214.0
511.2
405.3
Segment EBITDA 81.1
50.0
128.5
92.0
Clinical Supply Services
Net revenue 108.7
77.0
218.4
152.0
Segment EBITDA 19.0
11.6
35.7
22.1
Inter-segment revenue elimination (15.9 ) (9.2 ) (27.2 ) (19.7 )
Unallocated Costs ⁽¹⁾
(48.2 ) (19.8 ) (82.2 ) (40.1 )
Combined Totals:
Net revenue $ 606.3
$ 483.7
$ 1,150.2
$ 925.9

EBITDA from continuing operations $ 102.0
$ 85.2
$ 167.2
$ 147.9


(Dollars in millions)	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
Segment EBITDA reconciled to net (loss) earnings:
Biologics	$	38	$	181	$	87	$	294
Pharma and Consumer Health	126		135		227		243


Sub-Total	$	164	$	316	$	314	$	537
Reconciling items to net earnings
Unallocated costs (1)	(159)		(52)		(936)		(139)
Depreciation and amortization	(121)		(103)		(233)		(202)
Interest expense, net	(66)		(47)		(124)		(79)
Income tax (expense) benefit	(24)		(33)		14		(36)

Net (loss) earnings	$	(206)	$	81	$	(965)	$	81


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

Three Months Ended
December 31, Six Months Ended
December 31,
(Dollars in millions) 2017 2016 2017 2016
Impairment charges and gain/(loss) on sale of assets $ (4.2 ) $ (0.5 ) $ (4.2 ) $ (0.5 )
Equity compensation (8.5 ) (4.9 ) (15.5 ) (11.8 )
Restructuring and other special items ⁽²⁾
(11.9 ) (7.2 ) (24.2 ) (13.1 )
Other income/(expense), net ⁽³⁾
(13.6 ) 1.8
(19.3 ) 3.9
Non-allocated corporate costs, net (10.0 ) (9.0 ) (19.0 ) (18.6 )
Total unallocated costs $ (48.2 ) $ (19.8 ) $ (82.2 ) $ (40.1 )


~~(2)~~	~~Segment results do not include restructuring and certain acquisition-related costs.~~


~~(3)~~	~~Refer to Note 7 for details of financing charges and foreign currency translation adjustments recorded within other income/(expense), net.~~

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

Three Months Ended
December 31, Six Months Ended
December 31,
(Dollars in millions) 2017 2016 2017 2016
Earnings/(loss) from continuing operations $ (21.9 ) $ 17.4
$ (18.1 ) $ 22.0
Depreciation and amortization 46.8
35.5
85.8
71.3
Interest expense, net 27.2
22.8
51.5
44.9
Income tax expense/(benefit) 49.9
9.5
48.0
9.7
EBITDA from continuing operations $ 102.0
$ 85.2
$ 167.2
$ 147.9

the segments as follows:

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(Dollars in millions)	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
Impairment charges and gain/loss on sale of assets(a)	$	(15)	$	(1)	$	(14)	$	1
Stock-based compensation	(16)		(10)		(35)		(29)
Restructuring and other special items(b)	(83)		(33)		(106)		(42)
Goodwill impairment adjustments (charges)(c)	2		—		(687)		—

Pension settlement charges	(3)		—		(3)		—


Other (expense) income, net(d)	(4)		23		(17)		(2)
Unallocated corporate costs, net	(40)		(31)		(74)		(67)
Total unallocated costs	$	(159)	$	(52)	$	(936)	$	(139)

(a) Impairment charges and gain/loss on sale of assets for the three and six months ended December 31, 2023 includes fixed asset impairment charges associated with equipment for a product with significant decline demand in the Company's Biologics segment.

(b) Restructuring and other special items during the three months ended December 31, 2023 include (i) restructuring charges associated with plans to reduce costs, consolidate facilities, and optimize our infrastructure across the organization and (ii) transaction and integration costs associated with the Metrics acquisition. For further details on restructuring charges, see Note 8, Restructuring Costs to the Consolidated Financial Statements.

Restructuring and other special items during the three months ended December 31, 2022 include (i) restructuring charges associated with our plans to reduce costs, consolidate facilities, and optimize our infrastructure across the organization and (ii) transaction and integration costs associated with our Metrics acquisition. Restructuring and other special items for the six months ended December 31, 2022 also includes warehouse exit costs for a product the Company no longer manufactures in its Pharma and Consumer Health segment. For further details on restructuring charges, see Note 8, Restructuring Costs to the Consolidated Financial Statements.

(c) Goodwill impairment charges during the six months ended December 31, 2023 were associated with the Company's Consumer Health and Biomodalities reporting units, which are part of the Company's Pharma and Consumer Health and Biologics segments, respectively. For further details, see Note 4, Goodwill to the Consolidated Financial Statements.

(d) Other expense, net during the three months ended December 31, 2023 and 2022 primarily includes foreign currency remeasurement losses/gains.

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


(Dollars in millions)	December 31, 2023		June 30, 2023
Assets:
Biologics	$	5,363	$	5,746
Pharma and Consumer Health	4,517		4,867


Corporate and eliminations	108		164
Total assets	$	9,988	$	10,777

(Dollars in millions) December 31,
2017 June 30,
2017
Assets
Softgel Technologies $ 1,538.4
$ 1,631.8
Drug Delivery Solutions 2,650.5
1,639.0
Clinical Supply Services 620.3
596.2
Corporate and eliminations (422.1 ) (412.7 )
Total assets $ 4,387.1
$ 3,454.3

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16. SUPPLEMENTAL BALANCE SHEET INFORMATION


~~15.~~	~~SUPPLEMENTAL BALANCE SHEET INFORMATION~~

~~Supplementary~~Supplemental balance sheet information at December 31, ~~2017~~2023 and June 30, ~~2017~~2023 is detailed in the following tables.

Inventories

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


(Dollars in millions)	December 31, 2017			June 30, 2017			(Dollars in millions)	December 31, 2023	June 30, 2023
Raw materials and supplies	$	134.3		$	107.5
Work-in-process	29.3			42.8
Finished goods	69.9			56.7

Total inventories, gross
Total inventories, gross
Total inventories, gross	233.5			207.0
Inventory cost adjustment	(20.8		)	(22.1		)
Inventories	$	212.7		$	184.9
Total inventories

Prepaid expenses and other

(Dollars in millions) December 31,
2017 June 30,
2017
Prepaid expenses $ 19.0
$ 12.3
Spare parts supplies 11.4
11.8
Prepaid income tax 10.5
11.5
Non-US value added tax 19.9
16.0
Available for sale investment 9.8
18.6
Other current assets 34.8
27.6
Prepaid expenses and other $ 105.4
$ 97.8

~~Property, plant, and equipment, net~~

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

(Dollars in millions) December 31,
2017 June 30,
2017
Land, buildings, and improvements $ 894.2
$ 735.2
Machinery, equipment, and capitalized software 944.1
825.0
Furniture and fixtures 13.5
10.1
Construction in progress 179.9
137.4
Property, plant, and equipment, at cost 2,031.7
1,707.7
Accumulated depreciation (775.5 ) (711.8 )
Property, plant, and equipment, net $ 1,256.2
$ 995.9


(Dollars in millions)	December 31, 2023		June 30, 2023
Prepaid expenses	$	58	$	53

Short-term contract assets	478		399

Spare parts supplies	27		24
Prepaid income tax	75		77

Non-U.S. value-added tax	45		38



Other current assets	40		42
Total prepaid expenses and other	$	723	$	633

Other accrued liabilities

Allowance for credit losses


	Allowance for credit losses
(Dollars in millions)
Balance, June 30, 2023	$	46
Charges (Credits)	(4)

Balance, December 31, 2023	$	42

(Dollars in millions) December 31,
2017 June 30,
2017
Accrued employee-related expenses $ 72.6
$ 96.4
Restructuring accrual 3.0
5.9
Accrued interest 5.6
0.9
Deferred revenue and fees 88.1
84.9
Accrued income tax 22.2
24.7
Other accrued liabilities and expenses 58.3
68.4
Other accrued liabilities $ 249.8
$ 281.2

17. SUBSEQUENT EVENTS

On February 5, 2024, the Company entered into the Agreement and Plan of Merger (the “Merger Agreement”), with Creek Parent, Inc. (“Parent”), a Delaware corporation and a wholly owned subsidiary of Novo Holdings A/S (“Novo Holdings”), and Creek Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein and in accordance with the General Corporation Law of the State of Delaware (the “DGCL”), Merger Sub will be merged with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Parent will acquire all the issued and outstanding shares of common stock of the Company.

At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.01 per share, of the Company (such shares, collectively, the “Company Common Stock,” and each, a “Share”) that is issued and outstanding immediately prior to the Effective Time (other than any Shares held by (i) the Company, Parent or Merger Sub or any other direct or indirect wholly owned subsidiary of the Company or Parent immediately prior to the Effective Time, or (ii) a holder who has not voted in favor of the adoption of the Merger Agreement and is entitled to demand and properly demands appraisal of such Shares under the DGCL), will be converted automatically into the right to receive an amount in cash equal to $63.50 per Share, without interest (the “Merger Consideration”). The transaction values the Company at $16.5 billion on an enterprise value basis.

Consummation of the Merger is subject to customary closing conditions, including approval of the Merger by the Company’s stockholders (which has not been obtained at this stage). Further conditions include (i) receipt of certain governmental waivers, consents, clearances, decisions, declarations, approvals, and expirations of applicable waiting periods, including the expiration or early termination of the waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, with respect to (A) the Merger and (B) the sale of three of the Company’s fill-finish sites (which are located in Anagni, Italy, Bloomington, Indiana USA, and Brussels, Belgium) and related assets from Novo Holdings to Novo Nordisk A/S (“Novo Nordisk”), of which Novo Holdings is the controlling shareholder (the “Carve-Out”), and (ii) the absence of any order, injunction or law prohibiting the Merger or the Carve-Out, in each case, without a Burdensome Condition (as defined in the Merger Agreement). Parent’s and Merger Sub’s obligations to close the Merger are also conditioned upon the absence of a Material Adverse Effect (as defined in the Merger Agreement) on the Company.

Upon termination of the Merger Agreement with Parent, the Company, under specified circumstances and conditions set forth in the Merger Agreement, could be required to pay Parent a termination fee of approximately $345 million.


Item				Page

~~Item~~			~~Page~~

Part I.	Financial Information

Item 1.		Financial Statements (unaudited)		67

		Consolidated Statements of Operations for the Three and Six Months Ended December 31 , 2023 and December ~~31, 2017 and December 31, 2016~~3 1 , 2022		67

		Consolidated Statements of Comprehensive ~~Income/(Loss)~~Loss for the Three and ~~Six~~ Si x Months Ended D ecember 31 , 2023 and December 31 ~~2017 and December 31, 2016~~, 2022		78

		Consolidated Balance Sheets as of December 31 ~~2017~~, 2023 and June 30, ~~2017~~2023		89

		Consolidated Statement of Changes in Shareholders' ~~Equity/(Deficit) as of~~ Equity for the Three and Six Months Ended December 31 ~~2017~~, 2023 and December 3 1 , 2022		910

		Consolidated Statements of Cash Flows for the ~~Six~~Si x Months Ended December 31 ~~2017~~, 2023 and December 31 ~~2016~~, 2022		1012

		Notes to Unaudited Consolidated Financial Statements		1113

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		2934

Item 3.		Quantitative and Qualitative Disclosures About Market Risk		4649

Item 4.		Controls and Procedures		4750

Part II.		Other Information		4853

Item 1.		Legal Proceedings		4853

Item 1A.		Risk Factors		4853

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		4955

Item 3.		Defaults Upon Senior Securities		4956

Item 4.		Mine Safety Disclosures		4956

Item 5.		Other Information		4956

Item 6.		Exhibits		4957

Signatures				5058



	Shares of Common Stock	Common Stock		Additional Paid in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income/(Loss)			Total Shareholders' Equity/ (Deficit)
Balance at June 30, 2017	125,049.9	$	1.3	$	1,992.0		$	(955.7	)	$	(314.1	)	$	723.5
Equity offering, sale of common stock	7,354.2	—		277.8									277.8
Share issuances related to equity-based compensation	913.9												—
Equity compensation				15.5									15.5
Cash paid, in lieu of equity, for tax withholding				(12.4		)							(12.4		)
Net earnings/(loss)							(18.1		)				(18.1		)
Other comprehensive income/(loss), net tax										19.2			19.2
Balance at December 31, 2017	133,318.0	$	1.3	$	2,272.9		$	(973.8	)	$	(294.9	)	$	1,005.5


1.	~~BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~



Cash paid at closing	$	748,002
Fair value of deferred consideration at closing		184,838
Total consideration	$	932,840



Accounts Receivable	$	37,021
Inventory		25,144
Other current assets		1,344
Property, plant and equipment		221,139
Identifiable intangible assets		330,000
Trade and other payables		5,380
Deferred revenue		18,132
Total identifiable net assets		591,136
Goodwill		341,704
Total assets acquired and liabilities assumed	$	932,840



	For the Three Months Ended					For the Six Months Ended
	December 31, 2017			December 31, 2016		December 31, 2017			December 31, 2016
	(in millions, except per share data)
Revenue	$	621.0		$	531.1	$	1,216.2		$	1,016.6
Net income/(loss)	(10.5		)	17.6		(1.0		)	(0.6		)
Basic earnings/(loss) per share	(0.08		)	0.13		(0.01		)	0.00
Diluted earnings/(loss) per share	(0.08		)	0.13		(0.01		)	0.00



(Dollars in millions)	Softgel Technologies			Drug Delivery Solutions		Clinical Supply Services		Total
Balance at June 30, 2017	$	415.2		$	477.2	$	151.7	$	1,044.1
Additions	—			341.7		—		341.7
Divestitures	(0.9		)	—		—		(0.9		)
Foreign currency translation adjustments	8.9			8.3		6.2		23.4
Balance at December 31, 2017	$	423.2		$	827.2	$	157.9	$	1,408.3



(Dollars in millions)	Weighted Average Life	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
December 31, 2017
Amortized intangibles:
Core technology	18 years	$	172.7	$	(81.2	)	$	91.5
Customer relationships	14 years	589.3		(121.2		)	468.1
Product relationships	12 years	212.0		(189.6		)	22.4
Total intangible assets		$	974.0	$	(392.0	)	$	582.0



(Dollars in millions)	Remainder Fiscal 2018		2019		2020		2021		2022		2023
Amortization expense	$	34.8	$	63.8	$	49.7	$	49.7	$	49.7	$	49.7



(Dollars in millions)	Maturity as of December 31, 2017	December 31, 2017		June 30, 2017
Senior Secured Credit Facilities
Term loan facility dollar-denominated	May 2024	$	1,234.9	$	1,244.2
Term loan facility euro-denominated	May 2024	366.5		352.0
Euro-denominated 4.75% Senior Notes due 2024	December 2024	445.4		424.3
U.S. dollar-denominated 4.875% Senior Notes due 2026	January 2026	443.7		—
Deferred purchase consideration	September 2021	186.0		—
$200 million revolving credit facility	May 2022	—		—
Capital lease obligations	2020 to 2032	62.8		53.3
Other obligations	2018 to 2019	3.1		5.9
Total		2,742.4		2,079.7
Less: Current portion of long-term obligations and other short-term borrowings		69.9		24.6
Long-term obligations, less current portion		$	2,672.5	$	2,055.1



(Dollars in millions)
Balance at June 30, 2017	$	52.5
Additions for tax positions of current year	—
Balance at December 31, 2017	$	52.5


2.	~~BUSINESS COMBINATIONS~~


3.	~~GOODWILL~~


4.	~~DEFINITE LIVED LONG-LIVED ASSETS~~


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



	Three Months Ended December 31,						FX impact		Constant Currency Increase/(Decrease)
(Dollars in millions)	2017			2016					Change $			Change %
Net revenue	$	606.3		$	483.7		$	17.0	$	105.6		22	%
Cost of sales	418.9			335.8			12.7		70.4			21	%
Gross margin	187.4			147.9			4.3		35.2			24	%
Selling, general and administrative expenses	114.3			96.2			1.1		17.0			18	%
Impairment charges and (gain)/loss on sale of assets	4.2			0.5			0.1		3.6			*
Restructuring and other	0.1			3.3			—		(3.2		)	(97	)%
Operating earnings	68.8			47.9			3.1		17.8			37	%
Interest expense, net	27.2			22.8			0.3		4.1			18	%
Other (income)/expense, net	13.6			(1.8		)	1.4		14.0			*
Earnings from continuing operations, before income taxes	28.0			26.9			1.4		(0.3		)	(1	)%
Income tax expense/(benefit)	49.9			9.5			—		40.4			*
Net earnings/(loss)	$	(21.9	)	$	17.4		$	1.4	$	(40.7	)	*


	Three Months Ended December 31,				FX Impact		Constant Currency Increase (Decrease)
(Dollars in millions)	2023		2022				Change $		Change %
Net revenue	$	1,024	$	1,149	$	15	$	(140)	(12)	%
Cost of sales	853		762		12		79		10	%
Gross margin	171		387		3		(219)		(56)	%
Selling, general, and administrative expenses	250		226		2		22		10	%


Goodwill impairment adjustments	(2)		—		—		(2)		*
Other operating expense, net	35		23		1		11		39	%

Operating (loss) earnings	(112)		138		—		(250)		*
Interest expense, net	66		47		1		18		39	%
Other expense (income), net	4		(23)		(1)		28		*
(Loss) earnings before income taxes	(182)		114		—		(296)		*
Income tax expense	24		33		—		(9)		(28)	%




Net (loss) earnings	$	(206)	$	81	$	—	$	(287)	*


	2023 vs. 2022
Year-Over-Year Change	Three Months Ended December 31,
	Net Revenue
Organic	(12)	%


Constant-currency change	(12)	%
Foreign currency translation impact on reporting	1	%
Total % change	(11)	%



	2017 vs. 2016
Factors Contributing to Year-Over-Year Change	Three Months Ended December 31,
	Net Revenue		Segment EBITDA
Revenue/Segment EBITDA without acquisitions / divestitures	(3	)%	4	%
Impact of acquisitions	12	%	9	%
Constant currency change	9	%	13	%
Foreign currency translation impact on reporting	4	%	2	%
Total % change	13	%	15	%


~~(1)~~	~~Unallocated costs includes equity-based compensation, certain acquisition-related costs, impairment charges, and certain other costs that are not allocated to the segments as follows:~~


~~(2)~~	~~Restructuring and other special items include transaction and integration costs associated with the acquisition of Catalent Indiana.~~


~~(3)~~	Amounts for the six months ended December 31, 2017 include $11.8 million of financing expenses related to the offering of the USD Notes and the Third Amendment and include a $6.1 million charge for commitment fees paid during the first quarter of fiscal 2018 the Bridge Facility.


~~Item 3.~~	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~


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




















































2.1						Agreement and Plan of Merger, dated as of February 5, 2024, by and among the Company, Creek Parent, Inc., and Creek Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on February 5, 2024).
10.1						~~Offer letter,~~Amendment No. 10 to Amended and Restated Credit Agreement, dated ~~January 31, 2018, between Wetteny Joseph~~as of November 22, 2023, by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, JPMorgan Chase Bank, N.A., as the administrative agent, collateral agent, swing line lender, and letter of credit issuer, and the lenders and other parties thereto, which amends that certain Amended and Restated Credit Agreement, dated as of May 20, 2014 (as amended), by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, JPMorgan Chase Bank, N.A., as the successor administrative agent, collateral agent, swing line lender, and letter of credit issuer, and the lenders and other parties thereto (incorporated by reference to Exhibit 10.1 to the ~~Company's current report~~Current Report on Form 8-K filed on ~~February 5, 2018, File No. 001-36587) †~~November 27, 2023).

10.2						Amendment No. 11 to Amended and Restated Credit Agreement, dated as of December 19, 2023, by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, JPMorgan Chase Bank, N.A., as the administrative agent, collateral agent, swing line lender, and letter of credit issuer, and the lenders and other parties thereto, which amends that certain Amended and Restated Credit Agreement, dated as of May 20, 2014 (as amended), by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, JPMorgan Chase Bank, N.A., as the successor administrative agent, collateral agent, swing line lender, and letter of credit issuer, and the lenders and other parties thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed December 19, 2023).

10.3						Termination Agreement, dated as of December 28, 2023, by and between Catalent Pharma Solutions GmbH and Manja Boerman. †*

10.4						Amendment No.1 to Catalent, Inc. 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on January 26, 2024). †

31.1						Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amendedamended.

31.2						Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amendedamended.

32.1						Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002.

32.2						Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002.

~~101.1~~101						The following financial information from Catalent, Inc.’s Quarterly Report on Form 10-Q for the quarter ended December 31, ~~2017~~2023 formatted in inline XBRL: (i) Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended December 31, ~~2017~~2023 and ~~2016;~~2022; (ii) Consolidated Statements of Comprehensive ~~Income/(Loss)~~Loss for the Three and ~~Nine~~Six Months Ended December 31, ~~2017~~2023 and ~~2016~~2022 (iii) Consolidated Balance Sheets as of December 31, ~~2017~~2023 and June 30, ~~2017;~~2023; (iv) Consolidated Statement of Changes in Shareholders’ ~~Equity/(Deficit) as of~~Equity for the Three and Six Months Ended December 31, ~~2017;~~2023 and 2022; (v) Consolidated Statements of Cash Flows for the Six Months Ended December 31, ~~2017~~2023 and ~~2016;~~2022; and (vi) Notes to Unaudited Consolidated Financial Statements.

104						The cover page of this Quarterly Report on Form 10-Q, formatted as Inline XBRL and contained in Exhibit 101.


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