Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2022 | Oct. 27, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36587 | |
Entity Registrant Name | Catalent, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, State or Province | NJ | |
Entity Tax Identification Number | 20-8737688 | |
Entity Address, Address Line One | 14 Schoolhouse Road | |
Entity Address, City or Town | Somerset, | |
Entity Address, Postal Zip Code | 08873 | |
City Area Code | (732) | |
Local Phone Number | 537-6200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | CTLT | |
Security Exchange Name | NYSE | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001596783 | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding (shares) | 179,963,589 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Income Statement [Abstract] | |||
Net revenue | $ 1,022 | $ 1,025 | |
Cost of sales | 764 | 701 | |
Gross margin | 258 | 324 | |
Selling, general, and administrative expenses | 196 | 183 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | [1] | 0 | (1) |
Other Cost and Expense, Operating | 2 | 4 | |
Operating earnings | 60 | 138 | |
Interest expense, net | 32 | 26 | |
Other (income)/expense, net | [2] | 25 | 9 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total | 3 | 103 | |
Income tax expense | 3 | 10 | |
Net earnings/(loss) | 0 | 93 | |
Participating Securities, Distributed and Undistributed Earnings (Loss), Basic | 0 | 9 | |
Net Income (Loss) Available to Common Stockholders, Basic | $ 0 | $ 84 | |
Earnings Per Share, Basic | $ 0 | $ 0.49 | |
Earnings Per Share, Diluted | $ 0 | $ 0.49 | |
[1]Gain on sale of subsidiary for the three months ended September 30, 2021 was due to the sale of the facility in Woodstock, Illinois and the associated business[2]Other expense, net during the three months ended September 30, 2022 includes foreign currency remeasurement losses/gains.Other expense, net during the three months ended September 30, 2021 includes financing charges related to the Company’s Incremental Term B-3 Loans and foreign currency remeasurement losses/gains. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income / (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Other comprehensive income/(loss), net of tax | ||
Net earnings/(loss) | $ 0 | $ 93 |
Foreign currency translation adjustments | (135) | (14) |
Pension and other post-retirement adjustments | 0 | 1 |
Available for sale investments | 1 | |
Net change in derivatives and hedges, net of tax | 14 | 1 |
Other comprehensive income/(loss), net of tax | (120) | (12) |
Comprehensive income/(loss) | $ (120) | $ 81 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 281 | $ 449 |
Trade receivables, net | 989 | 1,051 |
Inventories | 732 | 702 |
Prepaid expenses and other | 632 | 625 |
Marketable Securities | 64 | 89 |
Total current assets | 2,698 | 2,916 |
Property, plant, and equipment, net | 3,167 | 3,127 |
Other assets: | ||
Goodwill | 2,929 | 3,006 |
Other intangibles, net | 1,017 | 1,060 |
Deferred Income Tax Assets, Net | 45 | 49 |
Other Assets, Noncurrent | 349 | 349 |
Total assets | 10,205 | 10,507 |
Current Liabilities: | ||
Debt, Current | 106 | 31 |
Accounts payable | 379 | 421 |
Other accrued liabilities | 458 | 620 |
Total current liabilities | 943 | 1,072 |
Long-term obligations, less current portion | 4,098 | 4,171 |
Pension liability | 98 | 103 |
Deferred Income Taxes | 214 | 202 |
Other liabilities | 152 | 164 |
Total liabilities | 5,505 | 5,712 |
Temporary Equity, Carrying Amount, Attributable to Parent | $ 0 | $ 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 |
Common Stock, Value, Outstanding | $ 2 | $ 2 |
Preferred Stock, Value, Outstanding | 0 | 0 |
Additional paid in capital | 4,674 | 4,649 |
Accumulated deficit | 538 | 538 |
Accumulated other comprehensive income/(loss) | (514) | (394) |
Total shareholders' equity | 4,700 | 4,795 |
Total liabilities, redeemable preferred stock, and shareholders’ equity | $ 10,205 | $ 10,507 |
Common stock, shares issued (shares) | 180,000,000 | 179,000,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (shares) | 180,000,000 | 179,000,000 |
Common Stock, Shares, Outstanding | 180,000,000 | 179,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Accounts Receivable, Allowance for Credit Loss, Current | $ 24 | $ 29 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 1,358 | $ 1,347 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Shareholder's Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income/(Loss) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Temporary Equity, Carrying Amount, Attributable to Parent | $ 359,000,000 | ||||
Common Stock, Shares, Outstanding | 170,549,000,000 | ||||
Temporary Equity, Carrying Amount, Attributable to Parent | 359,000,000 | ||||
Beginning Balance at Jun. 30, 2021 | 3,915,000,000 | $ 2,000,000 | $ 4,205,000,000 | $ 25,000,000 | $ (317,000,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Issued During Period, Value, Stock Options Exercised | 0 | 0 | 0 | ||
Stock-based compensation | 21,000,000 | 21,000,000 | |||
Cash paid, in lieu of equity, for tax withholding | (4,000,000) | (4,000,000) | |||
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition | 4,000,000 | 4,000,000 | |||
Non-qualified stock | (8,000,000) | ||||
Dividends, Preferred Stock | 4,000,000 | 4,000,000 | |||
Net earnings/(loss) | 93,000,000 | 93,000,000 | |||
Other comprehensive income/(loss), net of tax | (12,000,000) | (12,000,000) | |||
Ending Balance at Sep. 30, 2021 | 4,021,000,000 | $ 2,000,000 | 4,234,000,000 | 114,000,000 | (329,000,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share issuances related to stock-based compensation | 484,000,000 | ||||
Temporary Equity, Carrying Amount, Attributable to Parent | 359,000,000 | ||||
Common Stock, Shares, Outstanding | 171,033,000,000 | ||||
Temporary Equity, Carrying Amount, Attributable to Parent | 359,000,000 | ||||
Temporary Equity, Carrying Amount, Attributable to Parent | $ 0 | ||||
Common Stock, Shares, Outstanding | 179,000,000 | 179,302,000,000 | |||
Temporary Equity, Carrying Amount, Attributable to Parent | $ 0 | ||||
Beginning Balance at Jun. 30, 2022 | 4,795,000,000 | $ 2,000,000 | 4,649,000,000 | 538,000,000 | (394,000,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity offering, sale of common stock, | 0 | ||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | 0 | ||||
Stock-based compensation | 19,000,000 | 19,000,000 | |||
Proceeds from Tax Withholding Obligations | 2,000,000 | (2,000,000) | |||
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition | 3,000,000 | 3,000,000 | |||
APIC, Share-based Payment Arrangement, Option, Increase for Cost Recognition | 1,000,000 | 1,000,000 | |||
Non-qualified stock | 8,000,000 | ||||
Net earnings/(loss) | 0 | 0 | |||
Other comprehensive income/(loss), net of tax | (120,000,000) | (120,000,000) | |||
Ending Balance at Sep. 30, 2022 | 4,700,000,000 | $ 2,000,000 | $ 4,674,000,000 | $ 538,000,000 | $ (514,000,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 599,000,000 | ||||
Temporary Equity, Carrying Amount, Attributable to Parent | $ 0 | ||||
Common Stock, Shares, Outstanding | 180,000,000 | 179,901,000,000 | |||
Temporary Equity, Carrying Amount, Attributable to Parent | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net earnings/(loss) | $ 0 | $ 93,000,000 | |
Adjustments to reconcile earnings/(loss) from operations to net cash from operations: | |||
Depreciation and amortization | 99,000,000 | 81,000,000 | |
Non-cash foreign currency transaction (gain)/loss, net | 27,000,000 | 9,000,000 | |
Amortization and write-off of debt financing costs | 2,000,000 | 2,000,000 | |
Asset impairments charges and (gain)/loss on sale of assets | (2,000,000) | 3,000,000 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | [1] | 0 | (1,000,000) |
Debt Call Premium Fees | 0 | 4,000,000 | |
Derivative, Gain (Loss) on Derivative, Net | 0 | (2,000,000) | |
Share issuances related to stock-based compensation | 19,000,000 | 21,000,000 | |
Provision/(benefit) for deferred income taxes | (4,000,000) | (8,000,000) | |
Provision for bad debts and inventory | 28,000,000 | 10,000,000 | |
Change in operating assets and liabilities: | |||
Decrease/(increase) in trade receivables | 31,000,000 | 185,000,000 | |
Decrease/(increase) in inventories | (85,000,000) | (63,000,000) | |
Increase/(decrease) in accounts payable | (52,000,000) | (6,000,000) | |
Other assets/accrued liabilities, net — current and non-current | (155,000,000) | (165,000,000) | |
Net Cash Provided by (Used in) Operating Activities, Total | (92,000,000) | 163,000,000 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of property and equipment and other productive assets | (149,000,000) | (154,000,000) | |
Proceeds from Sale and Maturity of Marketable Securities | 24,000,000 | 20,000,000 | |
Proceeds from Sale of Property, Plant, and Equipment | 6,000,000 | 0 | |
Settlement on sale of subsidiaries, net | 0 | 3,000,000 | |
Payment for acquisitions, net of cash acquired | 0 | (26,000,000) | |
Payments to Acquire Investments | 4,000,000 | ||
Proceeds from Sale and Maturity of Other Investments | 3,000,000 | ||
Net cash (used in) investing activities | (116,000,000) | (167,000,000) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from Issuance of Debt | 75,000,000 | 1,096,000,000 | |
Payments related to long-term obligations | (7,000,000) | (3,000,000) | |
Payments of Debt Issuance Costs | 0 | (15,000,000) | |
Dividends and Interest Paid | 0 | (4,000,000) | |
Proceeds from Tax Withholding Obligations | 2,000,000 | ||
Cash paid, in lieu of equity, for tax withholding | (4,000,000) | ||
Proceeds from (Repurchase of) Equity [Abstract] | |||
Proceeds from Stock Options Exercised | 1,000,000 | 8,000,000 | |
Proceeds from (Payments for) Other Financing Activities | 3,000,000 | 4,000,000 | |
Net cash (used in)/provided by financing activities | 74,000,000 | 1,082,000,000 | |
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (34,000,000) | (5,000,000) | |
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS | (168,000,000) | 1,073,000,000 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 281,000,000 | 1,969,000,000 | |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 449,000,000 | ||
CASH AND EQUIVALENTS AT END OF PERIOD | 281,000,000 | ||
SUPPLEMENTARY CASH FLOW INFORMATION: | |||
Interest paid | 46,000,000 | 40,000,000 | |
Income taxes paid, net | $ 11,000,000 | $ 15,000,000 | |
[1]Gain on sale of subsidiary for the three months ended September 30, 2021 was due to the sale of the facility in Woodstock, Illinois and the associated business |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Catalent, Inc. ( “ Catalent ” or the “ Company ” ) directly and wholly owns PTS Intermediate Holdings LLC ( “ Intermediate Holdings ” ). Intermediate Holdings directly and wholly owns Catalent Pharma Solutions, Inc. ( “ Operating Company ” ). The financial results of Catalent are comprised of the financial results of Operating Company and its subsidiaries on a consolidated basis. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ( “U.S. GAAP ” ) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending June 30, 2023. The consolidated balance sheet at June 30, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information on the Company's accounting policies and footnotes, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022 filed with the Securities and Exchange Commission (the “SEC”). Reportable Segments Effective July 1, 2022, in connection with the appointment of a new President and Chief Executive Officer, the Company changed its operating structure and reorganized its executive leadership team accordingly. This new organizational structure includes a shift from the four operating and reportable segments the Company disclosed during fiscal 2022 to two segments: (i) Biologics and (ii) Pharma and Consumer Health. Set forth below is a summary description of the Company's two current operating and reportable segments. Biologics—The Biologics segment provides the same services as the Biologics segment the Company reported in fiscal 2022, with some organizational adjustments and the addition of analytical development and testing services for large molecules that were previously disclosed as part of the Company's prior Oral and Specialty Delivery segment. The Biologics segment as reorganized provides development and manufacturing for biologic proteins; cell, gene, and other nucleic acid therapies; plasmid DNA; induced pluripotent stem cells ( Pharma and Consumer Health—The Pharma and Consumer Health segment encompasses, except as noted above, the offerings of three of the Company's prior reportable segments—Softgel and Oral Technologies, Oral and Specialty Delivery, and Clinical Supply Services—and 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 reportable purposes. The Company's operating segments are the same as its reportable segments. All prior-period comparative segment information has been restated to reflect the current reportable segments in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting , promulgated by the Financial Accounting Standards Board (the “FASB”). Reclassifications Certain prior-period amounts were reclassified to conform to the current period presentation. Foreign Currency Translation The financial statements of the Company’s operations are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of operations outside the United States (“U.S.”) into U.S. dollars are accumulated as a component of other comprehensive income utilizing period-end exchange rates. Since July 1, 2018, the Company has accounted for its Argentine operations as highly inflationary. Depreciation Depreciation expense was $66 million and $58 million for the three months ended September 30, 2022 and 2021, respectively. Depreciation expense includes amortization of assets related to finance leases. The Company charges repairs and maintenance costs to expense as incurred. Amortization Amortization expense related to other intangible assets was $33 million and $23 million for the three months ended September 30, 2022 and 2021, respectively. Research and Development Costs The Company expenses research and development costs as incurred. Research and development costs amounted to $5 million and $6 million for the three months ended September 30, 2022 and 2021, respectively. Marketable Securities The Company classifies its marketable securities as available-for-sale, because it may sell certain of its marketable securities prior to the stated maturity for various reasons, including management of liquidity, credit risk, duration, relative return, and asset allocation. The Company determines the fair value of each marketable security in its portfolio at each period end and recognizes gains and losses in the portfolio in other comprehensive income. As of September 30, 2022, the amortized cost basis of marketable securities approximates fair value and all outstanding marketable securities mature within one year. Recent Financial Accounting Standards New Accounting Standards Not Adopted as of September 30, 2022 In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04 , Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional guidance to ease the potential burden in accounting for the discontinuation of a reference rate such as LIBOR, formerly known as the London Interbank Offered Rate, because of reference rate reform. The expedients and exceptions provided by the guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition [Abstract] | |
Revenue from Contract with Customer [Policy Text Block] | REVENUE RECOGNITION The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers . The Company generally earns its revenue by supplying goods or providing services under contracts with its customers in two primary revenue streams: (i) manufacturing and commercial product supply, and (ii) development 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 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 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 adjustments required are recorded on a cumulative catch-up basis, which affects 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 invokes its contractual right to terminate prior to the contract’s nominal end date. The termination penalties in the customer contracts vary but are generally considered substantive for accounting purposes and create enforceable rights and obligations throughout the stated duration of the contract. The Company accounts for a contract cancellation as a contract modification in the period in which the customer invokes the termination provision. The determination of the 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 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 any adjustments required are recorded on a cumulative catch-up basis, which would affect revenue and net income in the period of adjustment. 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, or API, that is 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. 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. Progress is measured based on the units of product that have successfully completed the contractually required product quality assurance process, as the conclusion of that process generally 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 the goods are delivered as requested by the customer, based on the payment terms set forth in the applicable customer agreement. Development Services and Clinical Supply Revenue Development services and clinical supply 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 product development, and 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, inventory management of customer clinical trial material and 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 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 adjusted market assessment approach, in each case, representing the amount that the Company believes the market is willing to pay for the applicable service. Payment is typically due 30 to 45 days following the completion of services provided to the customer, based on the payment terms set forth in the applicable customer agreement. The Company records revenue for comparator sourcing arrangements on a net basis because it is acting as an agent that does not control the product or service before it is transferred to the customer. Payment for comparator sourcing activity is typically received in advance at the commencement of the contract and is initially recorded as a contract liability. The Company generally expenses sales commissions as incurred because either the amortization period is one year or less, or the balance with an amortization period greater than one year is not material. The following tables reflect net revenue for the three months ended September 30, 2022 and 2021, by type of activity and reportable segment (in millions): Three Months Ended September 30, 2022 Biologics Pharma and Consumer Health Total Manufacturing & commercial product supply $ 94 $ 292 $ 386 Development services & clinical supply 429 207 636 Total $ 523 $ 499 $ 1,022 Three Months Ended September 30, 2021 Biologics Pharma and Consumer Health Total Manufacturing & commercial product supply $ 134 $ 276 $ 410 Development services & clinical supply 414 201 615 Total $ 548 $ 477 $ 1,025 The following table allocates revenue by the location where the goods were made or the service performed: Three Months Ended (Dollars in millions) 2022 2021 United States $ 697 $ 630 Europe 274 351 Other 82 72 Elimination of revenue attributable to multiple locations (31) (28) Total $ 1,022 $ 1,025 Contract Liabilities Contract liabilities relate to cash consideration that the Company receives in advance of satisfying the related performance obligations. The contract liabilities balances (current and non-current) as of September 30, 2022 and June 30, 2022 are as follows: (Dollars in millions) Balance at June 30, 2022 $ 194 Balance at September 30, 2022 $ 145 Revenue recognized in the period from amounts included in contracts liability at the beginning of the period: $ (91) Contract liabilities that will be recognized within 12 months of September 30, 2022 are accounted for in Other accrued liabilities and those that will be recognized longer than 12 months after September 30, 2022 are accounted for within Other liabilities. Contract Assets Contract assets primarily relate to the Company's conditional right to receive consideration for services that have been performed for customers as of September 30, 2022 relating to the Company's development services but had not yet been invoiced as of September 30, 2022. Contract assets are transferred to trade receivables, net when the Company’s right to receive the consideration becomes unconditional. Contract assets totaled $461 million and $441 million as of September 30, 2022 and June 30, 2022 , respectively. Contract assets expected to transfer to trade receivables within 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. |
Goodwill
Goodwill | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill Disclosure [Abstract] | |
Goodwill | GOODWILL The following table summarizes the changes between June 30, 2022 and September 30, 2022 in the carrying amount of goodwill in total and by segment: (Dollars in millions) Biologics Pharma and Consumer Health Total Balance at June 30, 2022 (1) $ 1,535 $ 1,471 $ 3,006 Reallocation 16 (16) — Foreign currency translation adjustments (33) (44) (77) Balance at September 30, 2022 $ 1,518 $ 1,411 $ 2,929 (1) As of result of the organizational realignments which were effective July 1, 2022, (described in Note 1, Basis of Presentation and Summary of Significant Accounting Policies ), beginning balances have been reclassified to conform with the current period presentation. As part of the business reorganization discussed in Note 1, Basis of Presentation , the goodwill from the previous Biologics, Softgel and Oral Technologies, Oral and Specialty Delivery, and Clinical Supply Services segments was reallocated between the current Biologics and Pharma and Consumer Health segments. |
Long-Term Obligations and Other
Long-Term Obligations and Other Short-Term Borrowings | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations and Other Short-Term Borrowings | LONG-TERM OBLIGATIONS AND SHORT-TERM BORROWINGS Long-term obligations and short-term borrowings consisted of the following at September 30, 2022 and June 30, 2022: (Dollars in millions) Maturity September 30, 2022 June 30, 2022 Senior secured credit facilities Term loan facility B-3 (5.063% as of September 30) February 2028 $ 1,429 $ 1,433 Revolving credit facility (1) (7.250% as of September 30) May 2024 75 — 5.000% senior notes due 2027 July 2027 500 500 2.375% euro senior notes due 2028 (2) March 2028 794 874 3.125% senior notes due 2029 February 2029 550 550 3.500% senior notes due 2030 April 2030 650 650 Financing lease obligations 2022 to 2038 243 234 Other obligations 2022 to 2028 2 2 Unamortized discount and debt issuance costs (39) (41) Total debt $ 4,204 $ 4,202 Less: current portion of long-term obligations and other short-term 106 31 Long-term obligations, less current portion $ 4,098 $ 4,171 (1) During the three months ended September 30, 2022, the Company drew down $75 million on its revolving credit facility to supplement operating cash flows. (2) The decrease in euro-denominated debt was primarily due to large fluctuations in foreign currency exchange rates. Measurement of the Estimated Fair Value of Debt The estimated fair value of the Company’s senior secured credit facilities and other senior indebtedness is classified as a Level 2 determination (see Note 8, Fair Value Measurements , for a description of the method by which fair value classifications are determined) in the fair-value hierarchy and is calculated by using a discounted cash flow model with a market interest rate as a significant input. The carrying amounts and the estimated fair values of the Company’s principal categories of debt as of September 30 and June 30, 2022 are as follows: September 30, 2022 June 30, 2022 (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 $ 461 $ 500 $ 483 2.375% Euro senior notes due 2028 Level 2 794 649 874 744 3.125% senior notes due 2029 Level 2 550 457 550 476 3.500% senior notes due 2030 Level 2 650 552 650 561 Senior secured credit facilities & other Level 2 1,749 1,609 1,669 1,575 Subtotal $ 4,243 $ 3,728 $ 4,243 $ 3,839 Unamortized discount and debt issuance costs (39) — (41) — Total debt $ 4,204 $ 3,728 $ 4,202 $ 3,839 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Effective July 1, 2022, the Company computes earnings per share of the Company’s common stock, par value $0.01 (the “Common Stock”) using the treasury stock method. Prior to fiscal 2023, the Company computed earnings per share of the Common Stock using the two-class method required due to the participating nature of the previously outstanding Series A Preferred Stock (as defined and discussed in Note 11, ( Equity and Accumulated Other Comprehensive Loss ). Diluted net earnings per share is computed using the weighted average number of shares of Common Stock outstanding plus the weighted average number of shares of Common Stock that would be issued assuming exercise or conversion of all potentially dilutive instruments. Dilutive securities having an anti-dilutive effect on diluted net earnings per share are excluded from the calculation. The dilutive effect of the securities that are issuable under the Company’s equity incentive plans are reflected in diluted earnings per share by application of the treasury stock method. Prior to fiscal 2023, the Company applied the if-converted method to compute the potentially dilutive effect of the previously outstanding Series A Preferred Stock. The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three months ended September 30, 2022 and 2021, respectively, are as follows: Three Months Ended (In millions except per share data) 2022 2021 Net earnings $ — $ 93 Less: Net earnings attributable to preferred shareholders — (9) Net earnings attributable to common shareholders $ — $ 84 Weighted average shares outstanding - basic 180 171 Weighted average dilutive securities issuable - stock plans 1 1 Weighted average shares outstanding - diluted 181 172 Earnings per share: Basic $ — $ 0.49 Diluted $ — $ 0.49 The Company's Series A Preferred Stock was deemed a participating security, meaning that it had the right to participate in undistributed earnings with the Company's Common Stock. On November 23, 2020, the holders of Series A Preferred Stock converted 265,223 shares of Series A Preferred Stock and $2 million of unpaid accrued dividends into shares of Common Stock. On November 18, 2021, the holders of Series A Preferred Stock converted the remaining 384,777 shares of Series A Preferred Stock and $2 million of unpaid accrued dividends into shares of Common Stock. The diluted weighted average number of shares outstanding as of September 30, 2022 and 2021 did not include the following shares of Common Stock associated with the formerly outstanding Series A Preferred Stock due to their antidilutive effect: Three Months Ended (share counts in millions) 2022 2021 Series A Preferred Stock — 8 |
Other (Income)_ Expense, Net
Other (Income)/ Expense, Net | 3 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense Disclosure [Text Block] | OTHER EXPENSE, NET The components of other expense, net for the three months ended September 30, 2022 and 2021 are as follows: Three Months Ended (Dollars in millions) 2022 2021 Debt financing costs (1) $ — $ 4 Foreign currency losses (2) 24 9 Other (3) 1 (4) Total other expense, net $ 25 $ 9 (1) Debt financing costs for the three months ended September 30, 2021 includes $4 million of financing charges related to $450 million of U.S. dollar-denominated term loans borrowed under the Company’s senior secured credit facilities (the “Incremental Term B-3 Loans”). (2) Foreign currency remeasurement losses include both cash and non-cash transactions. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives The Company is exposed to fluctuations in the currency exchange rates applicable to its investments in operations outside the U.S. While the Company does not actively hedge against changes in foreign currency, the Company has mitigated exposure from its investments in its European operations by denominating a portion of its debt in euros. At September 30, 2022, the Company had euro-denominated debt outstanding of $794 million (U.S. dollar equivalent), which is designated and qualifies as a hedge against its net investment in its European operations. For non-derivatives designated and qualifying as net investment hedges, the effective portion of translation gains or losses are reported in accumulated other comprehensive loss as part of the cumulative translation adjustment. The unhedged portions of the euro-denominated debt translation gains or losses are reported in the consolidated statements of operations. The following table summarizes net investment hedge activity during the three months ended September 30, 2022 and 2021. Three Months Ended (Dollars in millions) 2022 2021 Unrealized foreign exchange gain (loss) within other comprehensive income $ 81 $ 22 Unrealized foreign exchange gain (loss) within statement of operations $ — $ (3) The net accumulated gain on the instrument designated as a hedge as of September 30, 2022 within other comprehensive loss was approximately $208 million. Amounts are reclassified out of accumulated other comprehensive loss into earnings when the entity to which the gains and losses relate is either sold or substantially liquidated. Interest-Rate Swap In April 2020, pursuant to its interest rate and risk management strategy, the Company entered into an interest-rate swap agreement with Bank of America N.A. (the “2020 Rate Swap”) as a hedge against the economic effect of a portion of the variable interest obligation associated with its U.S. dollar-denominated term loans under its senior secured credit facilities. In February 2021, in connection with an amendment to the Credit Agreement, the Company paid $2 million in cash to Bank of America N.A to settle the 2020 Rate Swap. This loss is deferred in stockholders’ equity, net of income taxes, as a component of accumulated other comprehensive loss, and amortized as an adjustment to interest expense, net over the original term of the formerly outstanding term loans. The net amount of deferred losses on cash flow hedges that is expected to be reclassified from accumulated other comprehensive loss into interest expense, net within the next twelve months is not material. In February 2021, the Company entered into a new interest-rate swap agreement with Bank of America N.A. (the “2021 Rate Swap”) as a hedge against the economic effect of a portion of the variable interest obligation associated with its Term B-3 Loans. The 2021 Rate Swap effectively fixed the rate of interest payable on that portion of the Term B-3 Loans, thereby reducing the impact of future interest rate changes on future interest expense. As a result of the 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%. The 2021 Rate Swap qualifies for and is designated as a cash-flow hedge. The Company evaluates hedge effectiveness at the inception of the hedge and on an ongoing basis. The cash flows associated with the 2021 Rate Swap is reported in cash provided by operating activities in the consolidated statements of cash flows. The unrealized gain recorded in stockholder's equity from marking the 2021 Rate Swap to market during the three months ended September 30, 2022 was $18 million. A summary of the estimated fair value of the 2021 Rate Swap reported in the consolidated balance sheets is stated in the table below: September 30, 2022 June 30, 2022 (Dollars in millions) Balance Sheet Classification Estimated Fair Value Balance Sheet Classification Estimated Fair Value Interest-rate swap Other long-term assets $ 54 Other long-term assets $ 36 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | FAIR VALUE MEASUREMENTS ASC 820, Fair Value Measurement, defines fair value as the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which Level 1 and Level 2 are considered observable and Level 3 is considered unobservable: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Value is determined using pricing models, discounted cash flow methodologies, or similar techniques and also includes instruments for which the determination of fair value requires significant judgment or estimation. Assets and Liabilities Measured at Fair Value on a Recurring Basis The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses of the Company approximate fair value based on the short maturities of these instruments. The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification as of the end of each reporting period. The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis and the fair value measurement for such assets and liabilities at September 30 and June 30, 2022: (Dollars in millions) Basis of Fair Value Measurement September 30, 2022 Total Level 1 Level 2 Level 3 Assets: Marketable securities $ 64 $ 64 $ — $ — Interest-rate swap 54 — 54 — Trading securities 4 4 — — June 30, 2022 Assets: Marketable securities $ 89 $ 89 $ — $ — Interest-rate swap 36 — 36 — Trading securities 2 2 — — The fair value of the 2021 Rate Swap is determined at the end of each reporting period based on valuation models that use interest rate yield curves and discount rates as inputs. The discount rates are based on U.S. deposit or U.S. Treasury rates. The significant inputs used in the valuation models are readily available in public markets or can be derived from observable market transactions, and the valuation is therefore classified as Level 2 in the fair-value hierarchy. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis Long-lived assets, goodwill, and other intangible assets are subject to non-recurring fair value measurement for the evaluation of potential impairment. T here was no non-recurring fair value measurement during the three months ended September 30, 2022. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company accounts for income taxes in accordance with ASC 740, Income Taxes . Generally, fluctuations in the effective tax rate are due to changes in relative amounts of U.S. and non-U.S. pretax income, the tax impact of special items, and other discrete tax items. Discrete items include, but are not limited to, changes in non-U.S. statutory tax rates, amortization of certain assets, changes in the Company’s reserve for uncertain tax positions, and tax impact of certain equity compensation. In the normal course of business, the Company is subject to examination by taxing authorities around the world. The Company is presently under audit in select jurisdictions in the United States and in Europe, but no material impact is expected to the financial results once these audits are completed. ASC 740 provides guidance for the accounting of uncertain income tax positions recognized in the Company's tax filings. This 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. As of September 30 and June 30, 2022, the Company's reserve against uncertain income tax positions was $4 million and $5 million, respectively. The majority of the reduction during the quarter is attributable to the expiration of the statute of limitations on certain of the reserves. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. The Company recorded a provision for income taxes for the three months ended September 30, 2022 of $3 million relative to earnings before income taxes of $3 million. The Company recorded a provision for income taxes for the three months ended September 30, 2021 of $10 million relative to earnings before income taxes of $103 million. The relatively higher income tax provision on lower earnings before income taxes reflects a reduction of pretax income in tax jurisdictions with favorable tax rates and foreign tax credits claimed in the prior-year quarter resulting from amended returns. Generally, fluctuations in the effective tax rate are due to changes in the geographic distribution of the Company's pretax income 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. |
Employee Retirement Benefit Pla
Employee Retirement Benefit Plans | 3 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Employee Retirement Benefit Plans | EMPLOYEE RETIREMENT BENEFIT PLANS Components of the Company’s net periodic benefit costs are as follows: Three Months Ended (Dollars in millions) 2022 2021 Components of net periodic benefit cost: Selling, general, and administrative expenses: Service cost $ 1 $ 1 Other expense, net: Interest cost 2 1 Expected return on plan assets (2) (2) Amortization (1) — 1 Net amount recognized $ 1 $ 1 (1) Amount represents the amortization of unrecognized actuarial losses. |
Equity and Accumulated Other Co
Equity and Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Equity, Redeemable Preferred Stock and Accumulated Other Comprehensive Loss | EQUITY AND ACCUMULATED OTHER COMPREHENSIVE LOSS Description of Capital Stock The Company is authorized to issue 1.00 billion shares of its Common Stock and 100 million shares of preferred stock, par value $0.01 per share. In accordance with the Company’s amended and restated certificate of incorporation, each share of Common Stock has one vote, and the Common Stock votes together as a single class. In 2019, the Company designated 1,000,000 shares of its preferred stock, par value $0.01, as its Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and issued and sold 650,000 shares of the Series A Preferred Stock to affiliates of Leonard Green & Partners, L.P. In November 2021, the holders of the Series A Preferred Stock converted all then-outstanding shares of Series A Preferred Stock and $2 million of related unpaid accrued dividends into shares of Common Stock. Accumulated Other Comprehensive Loss The components of the changes in the cumulative translation adjustment, derivatives and hedges, minimum pension liability, and marketable securities for the three months ended September 30, 2022 and 2021 are presented below. Three Months Ended (Dollars in millions) 2022 2021 Foreign currency translation adjustments: Net investment hedge $ 81 $ 22 Long-term intercompany loans (41) (3) Translation adjustments (160) (28) Total foreign currency translation adjustment, pretax (120) (9) Tax expense 15 5 Total foreign currency translation adjustment, net of tax $ (135) $ (14) Net change in derivatives and hedges: Net gain recognized during the period $ 18 $ 1 Total derivatives and hedges, pretax 18 1 Tax expense 4 — Net change in derivatives and hedges, net of tax $ 14 $ 1 Net change in minimum pension liability: Net gain recognized during the period $ — $ 1 Total pension liability, pretax — 1 Tax benefit — — Net change in minimum pension liability, net of tax $ — $ 1 For the three months ended September 30, 2022 and 2021, the changes in accumulated other comprehensive loss, net of tax by component are as follows: (Dollars in millions) Foreign Exchange Translation Adjustments Pension and Liability Adjustments Derivatives and Hedges Marketable Securities Other Total Balance at June 30, 2022 $ (378) $ (38) $ 27 $ (4) $ (1) $ (394) Other comprehensive (loss) income before (135) — 14 — — (121) Amounts reclassified from accumulated other — — — 1 — 1 Net current period other comprehensive (loss) income (135) — 14 1 — (120) Balance at September 30, 2022 $ (513) $ (38) $ 41 $ (3) $ (1) $ (514) (Dollars in millions) Foreign Exchange Translation Adjustments Pension and Liability Adjustments Derivatives and Hedges Marketable Securities Other Total Balance at June 30, 2021 $ (268) $ (47) $ — $ (1) $ (1) $ (317) Other comprehensive (loss) income before (14) — 1 — — (13) Amounts reclassified from accumulated other — 1 — — — 1 Net current period other comprehensive (loss) income (14) 1 1 — — (12) Balance at September 30, 2021 $ (282) $ (46) $ 1 $ (1) $ (1) $ (329) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business, including, without limitation, inquiries and claims concerning environmental contamination as well as litigation and allegations in connection with acquisitions, product liability, manufacturing or packaging defects, and claims for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of any of which could be significant. The Company intends to vigorously defend itself against any such litigation and does not currently believe that the outcome of any such litigation will have a material adverse effect on the Company’s consolidated financial statements. In addition, the healthcare industry is highly regulated and government agencies continue to scrutinize certain practices affecting government programs and otherwise. From time to time, the Company receives subpoenas or requests for information relating to the business practices and activities of customers or suppliers from various governmental agencies or private parties, including from state attorneys general, the U.S. Department of Justice, and private parties engaged in patent infringement, antitrust, tort, and other litigation. The Company generally responds to such subpoenas and requests in a timely and thorough manner, which responses sometimes require considerable time and effort and can result in considerable costs being incurred. The Company expects to incur costs in future periods in connection with future requests. |
Segment Information
Segment Information | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The Company evaluates the performance of its segments based on segment earnings before other (expense) income, impairments, restructuring costs, interest expense, income tax expense, and depreciation and amortization (“Segment EBITDA”). Segment EBITDA is subject to important limitations. These consolidated financial statements include information concerning Segment EBITDA (a) because Segment EBITDA is an operational measure used by management in the assessment of the operating segments, the allocation of resources to the segments, and the setting of strategic goals and annual goals for the segments, and (b) in order to provide supplemental information that the Company considers relevant for the readers of the consolidated financial statements. The Company’s presentation of Segment EBITDA may not be comparable to similarly titled measures used by other companies. The following tables include Segment EBITDA for each of the Company's current reportable segments during the three months ended September 30, 2022 and 2021: (Dollars in millions) Three Months Ended 2022 2021 Segment EBITDA reconciled to net earnings: Biologics $ 113 $ 167 Pharma and Consumer Health 108 99 Sub-Total $ 221 $ 266 Reconciling items to net earnings Unallocated costs (1) (87) (56) Depreciation and amortization (99) (81) Interest expense, net (32) (26) Income tax expense (3) (10) Net earnings $ — $ 93 (1) Unallocated costs include restructuring and special items, stock-based compensation, gain on sale of subsidiary, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows: (Dollars in millions) Three Months Ended September 30, 2022 2021 Impairment charges and gain/loss on sale of assets $ 2 $ (3) Stock-based compensation (19) (21) Restructuring and other special items (a) (9) (8) Gain on sale of subsidiary (b) — 1 Other expense, net (c) (25) (9) Unallocated corporate costs, net (36) (16) Total unallocated costs $ (87) $ (56) (a) Restructuring and other special items during the three months ended September 30, 2022 include (i) transaction costs associated with the Metrics Contracts Services (“Metrics”) acquisition and (ii) warehouse exit costs for a product the Company no longer manufactures in its respiratory and specialty platform. Restructuring and other special items during the three months ended September 30, 2021 include (i) transaction and integration costs associated with the Delphi Genetics SA, Hepatic Cell Therapy Support SA, and RheinCell Therapeutics GmbH acquisitions (ii) transaction costs associated with the Bettera Holdings, LLC acquisition, and (iii) restructuring costs associated with the closure of the Company's facility in Bolton, U.K. (b) Gain on sale of subsidiary for the three months ended September 30, 2021 was due to the sale of the facility in Woodstock, Illinois and the associated business. (c) Other expense, net during the three months ended September 30, 2022 includes foreign currency remeasurement losses/gains. Other expense, net during the three months ended September 30, 2021 includes financing charges related to the Company’s Incremental Term B-3 Loans and 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. (Dollars in millions) September 30, June 30, Assets: Biologics $ 5,651 $ 5,770 Pharma and Consumer Health 4,262 4,355 Corporate and eliminations 292 382 Total assets $ 10,205 $ 10,507 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 3 Months Ended |
Sep. 30, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Information | SUPPLEMENTAL BALANCE SHEET INFORMATION Supplemental balance sheet information at September 30 and June 30, 2022 is detailed in the following tables. Inventories Work-in-process and inventories include raw materials, labor, and overhead. Total inventories consist of the following: (Dollars in millions) September 30, June 30, Raw materials and supplies $ 705 $ 651 Work-in-process 119 109 Total inventories, gross 824 760 Inventory cost adjustment (92) (58) Total inventories $ 732 $ 702 Prepaid expenses and other Prepaid expenses and other consist of the following: (Dollars in millions) September 30, June 30, Prepaid expenses $ 72 $ 61 Short-term contract assets 418 398 Spare parts supplies 21 22 Prepaid income tax 28 26 Non-U.S. value-added tax 34 48 Other current assets 59 70 Total prepaid expenses and other $ 632 $ 625 Other accrued liabilities Other accrued liabilities consist of the following: (Dollars in millions) September 30, June 30, Contract liabilities $ 135 $ 185 Accrued employee-related expenses 137 198 Accrued expenses 109 140 Operating lease liabilities 13 14 Restructuring accrual 1 1 Accrued interest 21 32 Accrued income tax 42 50 Total other accrued liabilities $ 458 $ 620 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 3 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS Drawdown on Revolving Credit Facility and Metrics Contract Services Acquisition In October 2022, the Company acquired Metrics from Mayne Pharma Group Limited for $475 million in cash, subject to customary adjustments. Metrics, based in Greenville, North Carolina, is an oral solids development and manufacturing business specializing in the manufacture of drugs containing highly potent active pharmaceutical ingredients. The Company funded this acquisition with a portion of the proceeds of an October 2022 drawdown of $500 million from its senior secured revolving credit facility. The Company is using the remainder of the drawdown for general corporate purposes. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ( “U.S. GAAP ” ) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending June 30, 2023. The consolidated balance sheet at June 30, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information on the Company's accounting policies and footnotes, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022 filed with the Securities and Exchange Commission (the “SEC”). Reportable Segments Effective July 1, 2022, in connection with the appointment of a new President and Chief Executive Officer, the Company changed its operating structure and reorganized its executive leadership team accordingly. This new organizational structure includes a shift from the four operating and reportable segments the Company disclosed during fiscal 2022 to two segments: (i) Biologics and (ii) Pharma and Consumer Health. Set forth below is a summary description of the Company's two current operating and reportable segments. Biologics—The Biologics segment provides the same services as the Biologics segment the Company reported in fiscal 2022, with some organizational adjustments and the addition of analytical development and testing services for large molecules that were previously disclosed as part of the Company's prior Oral and Specialty Delivery segment. The Biologics segment as reorganized provides development and manufacturing for biologic proteins; cell, gene, and other nucleic acid therapies; plasmid DNA; induced pluripotent stem cells ( Pharma and Consumer Health—The Pharma and Consumer Health segment encompasses, except as noted above, the offerings of three of the Company's prior reportable segments—Softgel and Oral Technologies, Oral and Specialty Delivery, and Clinical Supply Services—and 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 reportable purposes. The Company's operating segments are the same as its reportable segments. All prior-period comparative segment information has been restated to reflect the current reportable segments in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting , promulgated by the Financial Accounting Standards Board (the “FASB”). |
Reclassification, Policy | Reclassifications Certain prior-period amounts were reclassified to conform to the current period presentation. |
Foreign Currency Translation | Foreign Currency Translation The financial statements of the Company’s operations are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of operations outside the United States (“U.S.”) into U.S. dollars are accumulated as a component of other comprehensive income utilizing period-end exchange rates. Since July 1, 2018, the Company has accounted for its Argentine operations as highly inflationary. |
Depreciation, Depletion, and Amortization | Depreciation Depreciation expense was $66 million and $58 million for the three months ended September 30, 2022 and 2021, respectively. Depreciation expense includes amortization of assets related to finance leases. The Company charges repairs and maintenance costs to expense as incurred. Amortization Amortization expense related to other intangible assets was $33 million and $23 million for the three months ended September 30, 2022 and 2021, respectively. |
Research and Development Costs | Research and Development CostsThe Company expenses research and development costs as incurred. Research and development costs amounted to $5 million and $6 million for the three months ended September 30, 2022 and 2021, respectively. |
Marketable Securities | Marketable SecuritiesThe Company classifies its marketable securities as available-for-sale, because it may sell certain of its marketable securities prior to the stated maturity for various reasons, including management of liquidity, credit risk, duration, relative return, and asset allocation. The Company determines the fair value of each marketable security in its portfolio at each period end and recognizes gains and losses in the portfolio in other comprehensive income. As of September 30, 2022, the amortized cost basis of marketable securities approximates fair value and all outstanding marketable securities mature within one year. |
Recent Financial Accounting Standards | Recent Financial Accounting Standards New Accounting Standards Not Adopted as of September 30, 2022 In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04 , Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional guidance to ease the potential burden in accounting for the discontinuation of a reference rate such as LIBOR, formerly known as the London Interbank Offered Rate, because of reference rate reform. The expedients and exceptions provided by the guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. |
Revenue from Contract with Cust
Revenue from Contract with Customer (Policies) | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Policy Text Block] | REVENUE RECOGNITION The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers . The Company generally earns its revenue by supplying goods or providing services under contracts with its customers in two primary revenue streams: (i) manufacturing and commercial product supply, and (ii) development 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 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 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 adjustments required are recorded on a cumulative catch-up basis, which affects 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 invokes its contractual right to terminate prior to the contract’s nominal end date. The termination penalties in the customer contracts vary but are generally considered substantive for accounting purposes and create enforceable rights and obligations throughout the stated duration of the contract. The Company accounts for a contract cancellation as a contract modification in the period in which the customer invokes the termination provision. The determination of the 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 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 any adjustments required are recorded on a cumulative catch-up basis, which would affect revenue and net income in the period of adjustment. 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, or API, that is 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. 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. Progress is measured based on the units of product that have successfully completed the contractually required product quality assurance process, as the conclusion of that process generally 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 the goods are delivered as requested by the customer, based on the payment terms set forth in the applicable customer agreement. Development Services and Clinical Supply Revenue Development services and clinical supply 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 product development, and 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, inventory management of customer clinical trial material and 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 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 adjusted market assessment approach, in each case, representing the amount that the Company believes the market is willing to pay for the applicable service. Payment is typically due 30 to 45 days following the completion of services provided to the customer, based on the payment terms set forth in the applicable customer agreement. The Company records revenue for comparator sourcing arrangements on a net basis because it is acting as an agent that does not control the product or service before it is transferred to the customer. Payment for comparator sourcing activity is typically received in advance at the commencement of the contract and is initially recorded as a contract liability. The Company generally expenses sales commissions as incurred because either the amortization period is one year or less, or the balance with an amortization period greater than one year is not material. The following tables reflect net revenue for the three months ended September 30, 2022 and 2021, by type of activity and reportable segment (in millions): Three Months Ended September 30, 2022 Biologics Pharma and Consumer Health Total Manufacturing & commercial product supply $ 94 $ 292 $ 386 Development services & clinical supply 429 207 636 Total $ 523 $ 499 $ 1,022 Three Months Ended September 30, 2021 Biologics Pharma and Consumer Health Total Manufacturing & commercial product supply $ 134 $ 276 $ 410 Development services & clinical supply 414 201 615 Total $ 548 $ 477 $ 1,025 The following table allocates revenue by the location where the goods were made or the service performed: Three Months Ended (Dollars in millions) 2022 2021 United States $ 697 $ 630 Europe 274 351 Other 82 72 Elimination of revenue attributable to multiple locations (31) (28) Total $ 1,022 $ 1,025 Contract Liabilities Contract liabilities relate to cash consideration that the Company receives in advance of satisfying the related performance obligations. The contract liabilities balances (current and non-current) as of September 30, 2022 and June 30, 2022 are as follows: (Dollars in millions) Balance at June 30, 2022 $ 194 Balance at September 30, 2022 $ 145 Revenue recognized in the period from amounts included in contracts liability at the beginning of the period: $ (91) Contract liabilities that will be recognized within 12 months of September 30, 2022 are accounted for in Other accrued liabilities and those that will be recognized longer than 12 months after September 30, 2022 are accounted for within Other liabilities. Contract Assets Contract assets primarily relate to the Company's conditional right to receive consideration for services that have been performed for customers as of September 30, 2022 relating to the Company's development services but had not yet been invoiced as of September 30, 2022. Contract assets are transferred to trade receivables, net when the Company’s right to receive the consideration becomes unconditional. Contract assets totaled $461 million and $441 million as of September 30, 2022 and June 30, 2022 , respectively. Contract assets expected to transfer to trade receivables within 12 months are accounted for within Prepaid expenses and other. Contract assets expected to transfer to trade receivables longer than 12 months are accounted for within Other long-term assets. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 1,022 | $ 1,025 |
Elimination of revenue attributable to multiple locations | $ (31) | (28) |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Contractual Liabilities | The contract liabilities balances (current and non-current) as of September 30, 2022 and June 30, 2022 are as follows: (Dollars in millions) Balance at June 30, 2022 $ 194 Balance at September 30, 2022 $ 145 Revenue recognized in the period from amounts included in contracts liability at the beginning of the period: $ (91) | |
Geographical [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregation of Revenue | The following table allocates revenue by the location where the goods were made or the service performed: Three Months Ended (Dollars in millions) 2022 2021 United States $ 697 $ 630 Europe 274 351 Other 82 72 Elimination of revenue attributable to multiple locations (31) (28) Total $ 1,022 $ 1,025 | |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 697 | 630 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 274 | 351 |
International Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 82 | $ 72 |
Product and Service[Member] | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregation of Revenue | The following tables reflect net revenue for the three months ended September 30, 2022 and 2021, by type of activity and reportable segment (in millions): Three Months Ended September 30, 2022 Biologics Pharma and Consumer Health Total Manufacturing & commercial product supply $ 94 $ 292 $ 386 Development services & clinical supply 429 207 636 Total $ 523 $ 499 $ 1,022 Three Months Ended September 30, 2021 Biologics Pharma and Consumer Health Total Manufacturing & commercial product supply $ 134 $ 276 $ 410 Development services & clinical supply 414 201 615 Total $ 548 $ 477 $ 1,025 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill Disclosure [Abstract] | |
Goodwill - Rollforward | The following table summarizes the changes between June 30, 2022 and September 30, 2022 in the carrying amount of goodwill in total and by segment: (Dollars in millions) Biologics Pharma and Consumer Health Total Balance at June 30, 2022 (1) $ 1,535 $ 1,471 $ 3,006 Reallocation 16 (16) — Foreign currency translation adjustments (33) (44) (77) Balance at September 30, 2022 $ 1,518 $ 1,411 $ 2,929 (1) As of result of the organizational realignments which were effective July 1, 2022, (described in Note 1, Basis of Presentation and Summary of Significant Accounting Policies ), beginning balances have been reclassified to conform with the current period presentation. As part of the business reorganization discussed in Note 1, Basis of Presentation , the goodwill from the previous Biologics, Softgel and Oral Technologies, Oral and Specialty Delivery, and Clinical Supply Services segments was reallocated between the current Biologics and Pharma and Consumer Health segments. |
Long-Term Obligations and Oth_2
Long-Term Obligations and Other Short-Term Borrowings (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations, Presented Net of Issue Discounts and Fees Paid to Lenders, and Other Short-Term Borrowings | Long-term obligations and short-term borrowings consisted of the following at September 30, 2022 and June 30, 2022: (Dollars in millions) Maturity September 30, 2022 June 30, 2022 Senior secured credit facilities Term loan facility B-3 (5.063% as of September 30) February 2028 $ 1,429 $ 1,433 Revolving credit facility (1) (7.250% as of September 30) May 2024 75 — 5.000% senior notes due 2027 July 2027 500 500 2.375% euro senior notes due 2028 (2) March 2028 794 874 3.125% senior notes due 2029 February 2029 550 550 3.500% senior notes due 2030 April 2030 650 650 Financing lease obligations 2022 to 2038 243 234 Other obligations 2022 to 2028 2 2 Unamortized discount and debt issuance costs (39) (41) Total debt $ 4,204 $ 4,202 Less: current portion of long-term obligations and other short-term 106 31 Long-term obligations, less current portion $ 4,098 $ 4,171 (1) During the three months ended September 30, 2022, the Company drew down $75 million on its revolving credit facility to supplement operating cash flows. (2) The decrease in euro-denominated debt was primarily due to large fluctuations in foreign currency exchange rates. |
Fair Value Disclosures [Abstract] | |
Schedule Of Carrying And Fair Value Of Financial Instruments Table | The carrying amounts and the estimated fair values of the Company’s principal categories of debt as of September 30 and June 30, 2022 are as follows: September 30, 2022 June 30, 2022 (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 $ 461 $ 500 $ 483 2.375% Euro senior notes due 2028 Level 2 794 649 874 744 3.125% senior notes due 2029 Level 2 550 457 550 476 3.500% senior notes due 2030 Level 2 650 552 650 561 Senior secured credit facilities & other Level 2 1,749 1,609 1,669 1,575 Subtotal $ 4,243 $ 3,728 $ 4,243 $ 3,839 Unamortized discount and debt issuance costs (39) — (41) — Total debt $ 4,204 $ 3,728 $ 4,202 $ 3,839 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three months ended September 30, 2022 and 2021, respectively, are as follows: Three Months Ended (In millions except per share data) 2022 2021 Net earnings $ — $ 93 Less: Net earnings attributable to preferred shareholders — (9) Net earnings attributable to common shareholders $ — $ 84 Weighted average shares outstanding - basic 180 171 Weighted average dilutive securities issuable - stock plans 1 1 Weighted average shares outstanding - diluted 181 172 Earnings per share: Basic $ — $ 0.49 Diluted $ — $ 0.49 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The diluted weighted average number of shares outstanding as of September 30, 2022 and 2021 did not include the following shares of Common Stock associated with the formerly outstanding Series A Preferred Stock due to their antidilutive effect: Three Months Ended (share counts in millions) 2022 2021 Series A Preferred Stock — 8 |
Other Income and Expense (Table
Other Income and Expense (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | The components of other expense, net for the three months ended September 30, 2022 and 2021 are as follows: Three Months Ended (Dollars in millions) 2022 2021 Debt financing costs (1) $ — $ 4 Foreign currency losses (2) 24 9 Other (3) 1 (4) Total other expense, net $ 25 $ 9 (1) Debt financing costs for the three months ended September 30, 2021 includes $4 million of financing charges related to $450 million of U.S. dollar-denominated term loans borrowed under the Company’s senior secured credit facilities (the “Incremental Term B-3 Loans”). (2) Foreign currency remeasurement losses include both cash and non-cash transactions. |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities Net Investment Hedge Activity (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Schedule of Net Investment Hedge in Accumulated Other Comprehensive Income (Loss) and Statement of Financial Performance | The following table summarizes net investment hedge activity during the three months ended September 30, 2022 and 2021. Three Months Ended (Dollars in millions) 2022 2021 Unrealized foreign exchange gain (loss) within other comprehensive income $ 81 $ 22 Unrealized foreign exchange gain (loss) within statement of operations $ — $ (3) |
Schedule of Interest Rate Derivatives | A summary of the estimated fair value of the 2021 Rate Swap reported in the consolidated balance sheets is stated in the table below: September 30, 2022 June 30, 2022 (Dollars in millions) Balance Sheet Classification Estimated Fair Value Balance Sheet Classification Estimated Fair Value Interest-rate swap Other long-term assets $ 54 Other long-term assets $ 36 |
Fair Value Measures and Discl_2
Fair Value Measures and Disclosures (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis and the fair value measurement for such assets and liabilities at September 30 and June 30, 2022: (Dollars in millions) Basis of Fair Value Measurement September 30, 2022 Total Level 1 Level 2 Level 3 Assets: Marketable securities $ 64 $ 64 $ — $ — Interest-rate swap 54 — 54 — Trading securities 4 4 — — June 30, 2022 Assets: Marketable securities $ 89 $ 89 $ — $ — Interest-rate swap 36 — 36 — Trading securities 2 2 — — |
Employee Retirement Benefit P_2
Employee Retirement Benefit Plans (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Components of Company's Net Periodic Benefit Costs | Components of the Company’s net periodic benefit costs are as follows: Three Months Ended (Dollars in millions) 2022 2021 Components of net periodic benefit cost: Selling, general, and administrative expenses: Service cost $ 1 $ 1 Other expense, net: Interest cost 2 1 Expected return on plan assets (2) (2) Amortization (1) — 1 Net amount recognized $ 1 $ 1 (1) Amount represents the amortization of unrecognized actuarial losses. |
Equity and Accumulated Other _2
Equity and Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Comprehensive Income (Loss) | Accumulated Other Comprehensive Loss The components of the changes in the cumulative translation adjustment, derivatives and hedges, minimum pension liability, and marketable securities for the three months ended September 30, 2022 and 2021 are presented below. Three Months Ended (Dollars in millions) 2022 2021 Foreign currency translation adjustments: Net investment hedge $ 81 $ 22 Long-term intercompany loans (41) (3) Translation adjustments (160) (28) Total foreign currency translation adjustment, pretax (120) (9) Tax expense 15 5 Total foreign currency translation adjustment, net of tax $ (135) $ (14) Net change in derivatives and hedges: Net gain recognized during the period $ 18 $ 1 Total derivatives and hedges, pretax 18 1 Tax expense 4 — Net change in derivatives and hedges, net of tax $ 14 $ 1 Net change in minimum pension liability: Net gain recognized during the period $ — $ 1 Total pension liability, pretax — 1 Tax benefit — — Net change in minimum pension liability, net of tax $ — $ 1 |
Schedule of Accumulated Other Comprehensive Income (Loss) | For the three months ended September 30, 2022 and 2021, the changes in accumulated other comprehensive loss, net of tax by component are as follows: (Dollars in millions) Foreign Exchange Translation Adjustments Pension and Liability Adjustments Derivatives and Hedges Marketable Securities Other Total Balance at June 30, 2022 $ (378) $ (38) $ 27 $ (4) $ (1) $ (394) Other comprehensive (loss) income before (135) — 14 — — (121) Amounts reclassified from accumulated other — — — 1 — 1 Net current period other comprehensive (loss) income (135) — 14 1 — (120) Balance at September 30, 2022 $ (513) $ (38) $ 41 $ (3) $ (1) $ (514) (Dollars in millions) Foreign Exchange Translation Adjustments Pension and Liability Adjustments Derivatives and Hedges Marketable Securities Other Total Balance at June 30, 2021 $ (268) $ (47) $ — $ (1) $ (1) $ (317) Other comprehensive (loss) income before (14) — 1 — — (13) Amounts reclassified from accumulated other — 1 — — — 1 Net current period other comprehensive (loss) income (14) 1 1 — — (12) Balance at September 30, 2021 $ (282) $ (46) $ 1 $ (1) $ (1) $ (329) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Reconciliation of Earnings/(Loss) from Continuing Operations to EBITDA | (Dollars in millions) Three Months Ended 2022 2021 Segment EBITDA reconciled to net earnings: Biologics $ 113 $ 167 Pharma and Consumer Health 108 99 Sub-Total $ 221 $ 266 Reconciling items to net earnings Unallocated costs (1) (87) (56) Depreciation and amortization (99) (81) Interest expense, net (32) (26) Income tax expense (3) (10) Net earnings $ — $ 93 (1) Unallocated costs include restructuring and special items, stock-based compensation, gain on sale of subsidiary, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows: (Dollars in millions) Three Months Ended September 30, 2022 2021 Impairment charges and gain/loss on sale of assets $ 2 $ (3) Stock-based compensation (19) (21) Restructuring and other special items (a) (9) (8) Gain on sale of subsidiary (b) — 1 Other expense, net (c) (25) (9) Unallocated corporate costs, net (36) (16) Total unallocated costs $ (87) $ (56) (a) Restructuring and other special items during the three months ended September 30, 2022 include (i) transaction costs associated with the Metrics Contracts Services (“Metrics”) acquisition and (ii) warehouse exit costs for a product the Company no longer manufactures in its respiratory and specialty platform. Restructuring and other special items during the three months ended September 30, 2021 include (i) transaction and integration costs associated with the Delphi Genetics SA, Hepatic Cell Therapy Support SA, and RheinCell Therapeutics GmbH acquisitions (ii) transaction costs associated with the Bettera Holdings, LLC acquisition, and (iii) restructuring costs associated with the closure of the Company's facility in Bolton, U.K. (b) Gain on sale of subsidiary for the three months ended September 30, 2021 was due to the sale of the facility in Woodstock, Illinois and the associated business. (c) Other expense, net during the three months ended September 30, 2022 includes foreign currency remeasurement losses/gains. Other expense, net during the three months ended September 30, 2021 includes financing charges related to the Company’s Incremental Term B-3 Loans and foreign currency remeasurement losses/gains. |
Total Assets for Each Segment and Reconciling in Consolidated Financial Statements | The following table includes total assets for each segment, as well as reconciling items necessary to total the amounts reported in the consolidated financial statements. (Dollars in millions) September 30, June 30, Assets: Biologics $ 5,651 $ 5,770 Pharma and Consumer Health 4,262 4,355 Corporate and eliminations 292 382 Total assets $ 10,205 $ 10,507 |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Inventory | Inventories Work-in-process and inventories include raw materials, labor, and overhead. Total inventories consist of the following: (Dollars in millions) September 30, June 30, Raw materials and supplies $ 705 $ 651 Work-in-process 119 109 Total inventories, gross 824 760 Inventory cost adjustment (92) (58) Total inventories $ 732 $ 702 |
Prepaid and Other Assets | Prepaid expenses and other Prepaid expenses and other consist of the following: (Dollars in millions) September 30, June 30, Prepaid expenses $ 72 $ 61 Short-term contract assets 418 398 Spare parts supplies 21 22 Prepaid income tax 28 26 Non-U.S. value-added tax 34 48 Other current assets 59 70 Total prepaid expenses and other $ 632 $ 625 |
Other Accrued Liabilities | Other accrued liabilities Other accrued liabilities consist of the following: (Dollars in millions) September 30, June 30, Contract liabilities $ 135 $ 185 Accrued employee-related expenses 137 198 Accrued expenses 109 140 Operating lease liabilities 13 14 Restructuring accrual 1 1 Accrued interest 21 32 Accrued income tax 42 50 Total other accrued liabilities $ 458 $ 620 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies Research and Development Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Research and Development Expense [Abstract] | ||
Research and Development Costs | Research and Development CostsThe Company expenses research and development costs as incurred. Research and development costs amounted to $5 million and $6 million for the three months ended September 30, 2022 and 2021, respectively. | |
Research and Development Expense | $ 5 | $ 6 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Polices Depreciation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Depreciation, Depletion and Amortization [Abstract] | ||
Depreciation, Depletion, and Amortization | Depreciation Depreciation expense was $66 million and $58 million for the three months ended September 30, 2022 and 2021, respectively. Depreciation expense includes amortization of assets related to finance leases. The Company charges repairs and maintenance costs to expense as incurred. Amortization Amortization expense related to other intangible assets was $33 million and $23 million for the three months ended September 30, 2022 and 2021, respectively. | |
Depreciation Cost | $ 66 | $ 58 |
Revenue Recognition Disaggregat
Revenue Recognition Disaggregation of Revenue by type of activity and reporting segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 1,022 | $ 1,025 |
Biologics | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 523 | 548 |
Biologics | Manufacturing & Commercial Product Supply | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 94 | 134 |
Biologics | Development Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 429 | 414 |
PharmaConsumerHealth | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 499 | 477 |
PharmaConsumerHealth | Manufacturing & Commercial Product Supply | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 292 | 276 |
PharmaConsumerHealth | Development Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 207 | 201 |
Total Catalent before inter-segment revenue elimination | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,022 | 1,025 |
Total Catalent before inter-segment revenue elimination | Manufacturing & Commercial Product Supply | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 386 | 410 |
Total Catalent before inter-segment revenue elimination | Development Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 636 | $ 615 |
Revenue Recognition Disaggreg_2
Revenue Recognition Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Elimination of revenue attributable to multiple locations | $ (31) | $ (28) |
Net revenue | 1,022 | 1,025 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 697 | 630 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 274 | 351 |
International Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 82 | $ 72 |
Revenue Recognition Contractual
Revenue Recognition Contractual Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Jun. 30, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Contract with Customer, Liability | $ 145 | $ 194 |
Contract with Customer, Liability, Revenue Recognized | $ (91) |
Revenue Recognition Contractu_2
Revenue Recognition Contractual Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Text Block [Abstract] | ||
Contract with Customer, Asset, Purchase | $ 461 | $ 441 |
Business Combinations Acquisiti
Business Combinations Acquisition Purchase Agreement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||
Payments to Acquire Businesses, Net of Cash Acquired | $ 0 | $ 26 |
Business Combinations Net Asset
Business Combinations Net Assets Acquired (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Net Assets Acquired from Business Combinations | ||
Payments to Acquire Businesses, Net of Cash Acquired | $ 0 | $ 26 |
Payments to Acquire Businesses, Net of Cash Acquired | $ 0 | $ 26 |
Business Combinations, Divestit
Business Combinations, Divestitures (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Business Acquisition, Contingent Consideration [Line Items] | |||
Payments for (Proceeds from) Businesses and Interest in Affiliates | [1] | $ 0 | $ 1 |
[1]Gain on sale of subsidiary for the three months ended September 30, 2021 was due to the sale of the facility in Woodstock, Illinois and the associated business |
Goodwill - Rollforward (Detail)
Goodwill - Rollforward (Detail) $ in Millions | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 3,006 |
Goodwill, Transfers | 0 |
Foreign currency translation adjustments | (77) |
Ending balance | 2,929 |
Biologics | |
Goodwill [Roll Forward] | |
Beginning balance | 1,535 |
Goodwill, Transfers | 16 |
Foreign currency translation adjustments | (33) |
Ending balance | 1,518 |
PharmaConsumerHealth | |
Goodwill [Roll Forward] | |
Beginning balance | 1,471 |
Goodwill, Transfers | (16) |
Foreign currency translation adjustments | (44) |
Ending balance | $ 1,411 |
Other Intangibles, Net (Detail)
Other Intangibles, Net (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 33 | $ 23 |
Long-Term Obligations and Oth_3
Long-Term Obligations and Other Short-Term Borrowings - Long-Term Obligations, Presented Net of Issue Discounts and Fees Paid to Lenders, and Other Short-Term Borrowings (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 | |
Schedule Of Debt [Line Items] | |||
Total long-term debt | $ 4,204 | $ 4,202 | |
Debt, Current | 106 | 31 | |
Long-term obligations, less current portion | 4,098 | 4,171 | |
Line of Credit, Current | 75 | ||
Term loan facility B-3 U.S. dollar-denominated | |||
Schedule Of Debt [Line Items] | |||
Total long-term debt | 1,429 | 1,433 | |
Revolving Credit Facility - Two | |||
Schedule Of Debt [Line Items] | |||
Total long-term debt | 75 | 0 | |
Capital lease obligations | |||
Schedule Of Debt [Line Items] | |||
Total long-term debt | 243 | 234 | |
Other obligations | |||
Schedule Of Debt [Line Items] | |||
Total long-term debt | 2 | 2 | |
Estimate of Fair Value Measurement [Member] | |||
Schedule Of Debt [Line Items] | |||
Total long-term debt | 3,728 | 3,839 | |
Debt Instrument, Fair Value Disclosure | 3,728 | 3,839 | |
Estimate of Fair Value Measurement [Member] | Debt Issuance Costs | |||
Schedule Of Debt [Line Items] | |||
Total long-term debt | 0 | 0 | |
Carrying Value [Member] | |||
Schedule Of Debt [Line Items] | |||
Total long-term debt | 4,204 | 4,202 | |
Debt Instrument, Fair Value Disclosure | 4,243 | 4,243 | |
Carrying Value [Member] | Debt Issuance Costs | |||
Schedule Of Debt [Line Items] | |||
Total long-term debt | 39 | 41 | |
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | U.S Dollar-denominated 5.00% Senior Notes [Member] | |||
Schedule Of Debt [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 461 | 483 | |
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | 2.375% Senior Euro Denominated Notes [Member] | |||
Schedule Of Debt [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 649 | 744 | |
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | 3.125% Senior US Denominated Notes | |||
Schedule Of Debt [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 457 | 476 | |
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | 3.500% Senior US Denominated Notes | |||
Schedule Of Debt [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 552 | 561 | |
Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | U.S Dollar-denominated 5.00% Senior Notes [Member] | |||
Schedule Of Debt [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 500 | 500 | |
Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | 2.375% Senior Euro Denominated Notes [Member] | |||
Schedule Of Debt [Line Items] | |||
Debt Instrument, Fair Value Disclosure | [1] | 794 | 874 |
Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | 3.125% Senior US Denominated Notes | |||
Schedule Of Debt [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 550 | 550 | |
Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | 3.500% Senior US Denominated Notes | |||
Schedule Of Debt [Line Items] | |||
Debt Instrument, Fair Value Disclosure | $ 650 | $ 650 | |
[1]The decrease in euro-denominated debt was primarily due to large fluctuations in foreign currency exchange rates. |
Long-Term Obligations and Oth_4
Long-Term Obligations and Other Short-Term Borrowings Long-Term Obligations and Other Short-Term Borrowings (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 4,204 | $ 4,202 |
Term loan facility B-3 U.S. dollar-denominated | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 1,429 | $ 1,433 |
Long-Term Obligations and Oth_5
Long-Term Obligations and Other Short-Term Borrowings Fair Value Measurements of Financial Instruments - Carrying Amounts and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 | |
Estimate of Fair Value Measurement [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | $ 3,728 | $ 3,839 | |
Carrying Value [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 4,243 | 4,243 | |
U.S Dollar-denominated 5.00% Senior Notes [Member] | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 461 | 483 | |
U.S Dollar-denominated 5.00% Senior Notes [Member] | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 500 | 500 | |
2.375% Senior Euro Denominated Notes [Member] | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 649 | 744 | |
2.375% Senior Euro Denominated Notes [Member] | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | [1] | 794 | 874 |
3.125% Senior US Denominated Notes | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 457 | 476 | |
3.125% Senior US Denominated Notes | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 550 | 550 | |
Senior Secured Credit Facilities & Other [Member] | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 1,609 | 1,575 | |
Senior Secured Credit Facilities & Other [Member] | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | |||
Fair Value Measurements Of Financial Instruments [Line Items] | |||
Debt Instrument, Fair Value Disclosure | $ 1,749 | $ 1,669 | |
[1]The decrease in euro-denominated debt was primarily due to large fluctuations in foreign currency exchange rates. |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share - Additional Details (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 18, 2021 | Nov. 23, 2020 | Sep. 30, 2022 | Jun. 30, 2022 |
Earnings Per Share [Abstract] | ||||
Conversion of Stock, Shares Converted | 384,777 | 265,223 | ||
Dividends, Preferred Stock, Stock | $ 2 | $ 2 | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||
Net earnings/(loss) | $ 0 | $ 93 |
Participating Securities, Distributed and Undistributed Earnings (Loss), Basic | 0 | 9 |
Net Income (Loss) Available to Common Stockholders, Basic | $ 0 | $ 84 |
Weighted Average Number of Shares Outstanding, Basic | 180 | 171 |
Dilutive securities issuable-stock plans | 1 | 1 |
Total weighted average diluted shares outstanding | 181 | 172 |
Earnings Per Share, Basic | $ 0 | $ 0.49 |
Earnings Per Share, Diluted | $ 0 | $ 0.49 |
Diluted earnings per share due
Diluted earnings per share due to their antidilutive effect (Detail) - shares shares in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Series A Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 8 |
Other Income and Expense (Detai
Other Income and Expense (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Other Income and Expenses [Abstract] | |||
Debt refinancing costs | [1] | — | |
Foreign Currency (gains) and losses | [2] | $ 24 | $ 9 |
Other | [3] | 1 | (4) |
Other (income)/expense, net | [4] | 25 | 9 |
Gain (Loss) on Extinguishment of Debt | 4 | ||
Term Loan Facility Incremental Dollar Term B-3 | 450 | ||
Derivative, Gain (Loss) on Derivative, Net | $ 0 | 2 | |
Other Nonoperating Expense | [1] | $ 4 | |
[1]Debt financing costs for the three months ended September 30, 2021 includes $4 million of financing charges related to $450 million of U.S. dollar-denominated term loans borrowed under the Company’s senior secured credit facilities (the “Incremental Term B-3 Loans”).[2]Foreign currency remeasurement losses include both cash and non-cash transactions.[3]Other, for the three months ended September 30, 2021, includes a gain of $2 million related to the fair value of the derivative liability associated with the formerly outstanding Series A Preferred Stock.[4]Other expense, net during the three months ended September 30, 2022 includes foreign currency remeasurement losses/gains.Other expense, net during the three months ended September 30, 2021 includes financing charges related to the Company’s Incremental Term B-3 Loans and foreign currency remeasurement losses/gains. |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Derivative [Line Items] | |||
Total long-term debt | $ 4,204 | $ 4,202 | |
Unrealized foreign exchange gain/(loss) within other comprehensive income | 81 | $ 22 | |
Unrealized foreign exchange gain/(loss) within statement of operations | 0 | (3) | |
Net accumulated gain related to investment hedges | 208 | ||
Derivative, Gain (Loss) on Derivative, Net | 0 | $ 2 | |
Cash Paid to Settle, Interest Rate Swap Agreement | 2 | ||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, before Tax | 18 | ||
Interest Rate Cash Flow Hedge Liability at Fair Value | 36 | ||
Carrying Value [Member] | |||
Derivative [Line Items] | |||
Total long-term debt | 4,204 | 4,202 | |
Debt Instrument, Fair Value Disclosure | 4,243 | 4,243 | |
Euro Denominated Debt Outstanding [Member] | |||
Derivative [Line Items] | |||
Total long-term debt | 794 | ||
U.S. Denominated Term Loan [Member] | |||
Derivative [Line Items] | |||
Total Debt, U.S Denominated Term Loan | $ 500 | ||
Debt Instrument, Interest Rate, Effective Percentage | 0.9985% | ||
3.500% Senior US Denominated Notes | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | |||
Derivative [Line Items] | |||
Debt Instrument, Fair Value Disclosure | $ 650 | $ 650 |
Fair value measurement recurrin
Fair value measurement recurring basis (Detail) - USD ($) $ in Millions | 3 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | ||
Fair Value Disclosures [Abstract] | ||||
Marketable Securities | $ 64 | $ 89 | ||
Trading Securities at Fair Value | 4 | 2 | ||
Interest Rate Cash Flow Hedge Asset at Fair Value | 54 | 36 | ||
Interest Rate Cash Flow Hedge Liability at Fair Value | 36 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Marketable Securities | 64 | 89 | ||
Trading Securities at Fair Value | 4 | 2 | ||
Interest Rate Cash Flow Hedge Asset at Fair Value | 54 | 36 | ||
Interest Rate Cash Flow Hedge Liability at Fair Value | 36 | |||
Payments for (Proceeds from) Businesses and Interest in Affiliates | [1] | 0 | $ 1 | |
Derivative, Gain (Loss) on Derivative, Net | 0 | $ 2 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value Disclosures [Abstract] | ||||
Marketable Securities | 64 | 89 | ||
Trading Securities at Fair Value | 4 | 2 | ||
Interest Rate Cash Flow Hedge Asset at Fair Value | 0 | 0 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Marketable Securities | 64 | 89 | ||
Trading Securities at Fair Value | 4 | 2 | ||
Interest Rate Cash Flow Hedge Asset at Fair Value | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value Disclosures [Abstract] | ||||
Marketable Securities | 0 | 0 | ||
Trading Securities at Fair Value | 0 | 0 | ||
Interest Rate Cash Flow Hedge Asset at Fair Value | 54 | 36 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Marketable Securities | 0 | 0 | ||
Trading Securities at Fair Value | 0 | 0 | ||
Interest Rate Cash Flow Hedge Asset at Fair Value | 54 | 36 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value Disclosures [Abstract] | ||||
Marketable Securities | 0 | 0 | ||
Trading Securities at Fair Value | 0 | 0 | ||
Interest Rate Cash Flow Hedge Asset at Fair Value | 0 | 0 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Marketable Securities | 0 | 0 | ||
Trading Securities at Fair Value | 0 | 0 | ||
Interest Rate Cash Flow Hedge Asset at Fair Value | $ 0 | $ 0 | ||
[1]Gain on sale of subsidiary for the three months ended September 30, 2021 was due to the sale of the facility in Woodstock, Illinois and the associated business |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized Tax Benefits, Including Income Tax Penalties and Interest Accrued | $ 4 | $ 5 | |
Income tax expense(benefit) | 3 | $ 10 | |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | $ 3 | $ 103 |
Employee Retirement Benefit P_3
Employee Retirement Benefit Plans - Components of Company's Net Periodic Benefit Costs (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Components of net periodic benefit cost: | |||
Service cost | $ 1 | $ 1 | |
Interest cost | 2 | 1 | |
Expected return on plan assets | (2) | (2) | |
Amortization | [1] | 0 | 1 |
Net amount recognized | 1 | 1 | |
Estimated discounted value of future employer contributions | 38 | ||
Estimated annual cash contribution | $ 2 | $ 2 | |
[1]Amount represents the amortization of unrecognized actuarial losses. |
Equity and Accumulated Other _3
Equity and Accumulated Other Comprehensive Income (Loss) - Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 18, 2021 | Nov. 23, 2020 | Sep. 30, 2022 | Jun. 30, 2022 |
Equity [Abstract] | ||||
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 | ||
Preferred Stock, Shares Authorized | 100,000,000 | 100,000,000 | ||
Conversion of Stock, Shares Converted | 384,777 | 265,223 | ||
Dividends, Preferred Stock, Stock | $ 2 | $ 2 | ||
Preferred Stock, Shares Outstanding | 0 | 0 | ||
Auction Market Preferred Securities, Stock Series [Line Items] | ||||
Preferred Stock, Shares Authorized | 100,000,000 | 100,000,000 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | ||
Preferred Stock, Shares Issued | 0 | 0 |
Equity and Accumulated Other _4
Equity and Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Foreign currency translation adjustments: | ||
Net investment hedge | $ 81 | $ 22 |
Long-term intercompany loans | (41) | (3) |
Translation adjustments | (160) | (28) |
Total foreign currency translation adjustment, pretax | (120) | (9) |
Tax expense/(benefit) | 15 | 5 |
Total foreign currency translation adjustment, net of tax | (135) | (14) |
Net change in derivatives and hedges | ||
Net loss recognized during the period | 18 | 1 |
Total derivatives and hedges, pretax | 18 | 1 |
Tax expense/(benefit) | 4 | 0 |
Net change in derivatives and hedges, net of tax | 14 | 1 |
Net change in minimum pension liability | ||
Net gain/(loss) recognized during the period | 0 | 1 |
Total pension liability, pretax | 0 | 1 |
Tax expense/(benefit) | 0 | 0 |
Pension and other post-retirement adjustments | 0 | $ 1 |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent [Abstract] | ||
Available for sale investments | $ 1 |
Equity and Accumulated Other _5
Equity and Accumulated Other Comprehensive Income (Loss) - Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | $ (394) | $ (317) |
Other comprehensive income/(loss) before reclassifications | (121) | (13) |
Amounts reclassified from accumulated other comprehensive income/(loss) | 1 | 1 |
Total foreign currency translation adjustment, net of tax | (135) | (14) |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | 1 |
Net change in derivatives and hedges, net of tax | 14 | 1 |
Other Comprehensive Income, Other, Net of Tax | (120) | (12) |
Available for sale investments | 1 | |
Other comprehensive income/(loss), net of tax | (120) | (12) |
Ending Balance | (514) | (329) |
Accumulated Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (378) | (268) |
Other comprehensive income/(loss) before reclassifications | (135) | (14) |
Amounts reclassified from accumulated other comprehensive income/(loss) | 0 | |
Total foreign currency translation adjustment, net of tax | (135) | (14) |
Ending Balance | (513) | (282) |
Accumulated Defined Benefit Plans Adjustment [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (38) | (47) |
Other comprehensive income/(loss) before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive income/(loss) | 0 | 1 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | 1 |
Ending Balance | (38) | (46) |
AOCI, Derivative Qualifying as Hedge, Parent [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | 27 | |
Other comprehensive income/(loss) before reclassifications | 14 | 1 |
Amounts reclassified from accumulated other comprehensive income/(loss) | 0 | |
Ending Balance | 41 | 1 |
ACOI, Accumulated Gain (Loss), Marketable Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (4) | (1) |
Other comprehensive income/(loss) before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive income/(loss) | 1 | |
Net change in derivatives and hedges, net of tax | 14 | 1 |
Available for sale investments | 0 | |
Ending Balance | (3) | (1) |
Available-for-sale Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (1) | (1) |
Other comprehensive income/(loss) before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive income/(loss) | 0 | |
Other Comprehensive Income, Other, Net of Tax | 0 | |
Ending Balance | $ (1) | $ (1) |
Segment Information - Net Reven
Segment Information - Net Revenue and Segment Ebitda (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items] | |||
Net revenue | $ 1,022 | $ 1,025 | |
Segment Reporting Information Unallocated Expense | [1] | (87) | (56) |
Biologics | |||
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items] | |||
Net revenue | 523 | 548 | |
Segment EBITDA | 113 | 167 | |
PharmaConsumerHealth | |||
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items] | |||
Net revenue | 499 | 477 | |
Segment EBITDA | 108 | 99 | |
Total Catalent sub-total of Segment Reporting [Member] | |||
Segment Reporting, Revenue & EBITDA Reconciling Item [Line Items] | |||
Segment EBITDA | $ 221 | $ 266 | |
[1]Unallocated costs include restructuring and special items, stock-based compensation, gain on sale of subsidiary, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows: |
Segment Information, EBITDA, Re
Segment Information, EBITDA, Reconciling Items (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Unallocated costs [Abstract] | |||
Impairment Charges And Gain Loss On Sale Of Assets | $ (2) | $ 3 | |
Stock-based compensation | 19 | 21 | |
Restructuring And Other Special Items | [1] | 9 | 8 |
Payments for (Proceeds from) Businesses and Interest in Affiliates | [2] | 0 | 1 |
Other (income)/expense, net | [3] | (25) | (9) |
Non Allocated Corporate Costs Net | 36 | 16 | |
Segment Reporting Information Unallocated Expense | [4] | $ 87 | $ 56 |
[1]Restructuring and other special items during the three months ended September 30, 2022 include (i) transaction costs associated with the Metrics Contracts Services (“Metrics”) acquisition and (ii) warehouse exit costs for a product the Company no longer manufactures in its respiratory and specialty platform. Restructuring and other special items during the three months ended September 30, 2021 include (i) transaction and integration costs associated with the Delphi Genetics SA, Hepatic Cell Therapy Support SA, and RheinCell Therapeutics GmbH acquisitions (ii) transaction costs associated with the Bettera Holdings, LLC acquisition, and (iii) restructuring costs associated with the closure of the Company's facility in Bolton, U.K.[2]Gain on sale of subsidiary for the three months ended September 30, 2021 was due to the sale of the facility in Woodstock, Illinois and the associated business[3]Other expense, net during the three months ended September 30, 2022 includes foreign currency remeasurement losses/gains.Other expense, net during the three months ended September 30, 2021 includes financing charges related to the Company’s Incremental Term B-3 Loans and foreign currency remeasurement losses/gains.[4]Unallocated costs include restructuring and special items, stock-based compensation, gain on sale of subsidiary, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows: |
Segment Information - Reconcili
Segment Information - Reconciliation of Earnings / (Loss) from Continuing Operations to Ebitda (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Segment Reporting [Abstract] | |||
Segment Reporting Information Unallocated Expense | [1] | $ 87 | $ 56 |
Depreciation and amortization | 99 | 81 | |
Interest expense, net | 32 | 26 | |
Income tax expense(benefit) | 3 | 10 | |
Earnings/(loss) from continuing operations | $ 0 | $ 93 | |
[1]Unallocated costs include restructuring and special items, stock-based compensation, gain on sale of subsidiary, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows: |
Segment Information - Total Ass
Segment Information - Total Assets for Each Segment and Reconciling in Consolidated Financial Statements (Detail) - USD ($) $ in Millions | 3 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | $ 10,205 | $ 10,507 | ||
Payments for (Proceeds from) Businesses and Interest in Affiliates | [1] | 0 | $ 1 | |
Biologics | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 5,651 | 5,770 | ||
PharmaConsumerHealth | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 4,262 | 4,355 | ||
Corporate and Eliminations [Member] | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | $ 292 | $ 382 | ||
[1]Gain on sale of subsidiary for the three months ended September 30, 2021 was due to the sale of the facility in Woodstock, Illinois and the associated business |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information - Inventory (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Inventory, Net [Abstract] | ||
Raw materials and supplies | $ 705 | $ 651 |
Work-in-process | 119 | 109 |
Total inventories, gross | 824 | 760 |
Inventory cost adjustment | (92) | (58) |
Inventories | $ 732 | $ 702 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information - Prepaid and Other Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid expenses | $ 72 | $ 61 |
Contract with Customer, Asset, Net, Current | 418 | 398 |
Spare parts supplies | 21 | 22 |
Prepaid income tax | 28 | 26 |
Non-U.S. value added tax | 34 | 48 |
Other current assets | 59 | 70 |
Prepaid expenses and other | $ 632 | $ 625 |
Supplemental Balance Sheet In_5
Supplemental Balance Sheet Information - Other Accrued Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued employee-related expenses | $ 137 | $ 198 |
Accrued Operating Lease, Liabilities | 13 | 14 |
Restructuring accrual | 1 | 1 |
Accrued interest | 21 | 32 |
Contract liability | 135 | 185 |
Accrued income tax | 42 | 50 |
Other accrued liabilities and expenses | 109 | 140 |
Other accrued liabilities | $ 458 | $ 620 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Oct. 01, 2022 | Sep. 30, 2022 | Jun. 30, 2022 |
Subsequent Event | |||
Unrecognized Tax Benefits, Including Income Tax Penalties and Interest Accrued | $ 4 | $ 5 | |
Assets | 10,205 | $ 10,507 | |
Line of Credit, Current | $ 75 | ||
Metrics | |||
Subsequent Event | |||
Business Combination, Consideration Transferred | $ 475 | ||
Line of Credit, Current | $ 500 |
Uncategorized Items - ctlt-2022
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 896,000,000 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 449,000,000 |