WEST PHARMACEUTICAL SERVICES INC
For the period ended Dec 31, 2025. Filed Feb 17, 2026.
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FY2025 · Filed Feb 17, 2026
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Fair Value Measurements
Note 12: Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The following fair value hierarchy classifies the inputs to valuation techniques used to measure fair value into one of three levels:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
The following tables present the assets and liabilities recorded at fair value on a recurring basis:
| Balance at · Basis of Fair Value Measurements | ||||
|---|---|---|---|---|
| ($ in millions) | December 31,2025 | Level 1 | Level 2 | Level 3 |
| Assets: | ||||
| Deferred compensation assets | $10.0 | $10.0 | $— | $— |
| Money market funds | 443.9 | 443.9 | — | — |
| Time deposits | 41.6 | — | 41.6 | — |
| Foreign currency contracts | 0.2 | — | 0.2 | — |
| Cross-currency swap | 24.7 | — | 24.7 | — |
| Commodity call options | 0.3 | — | 0.3 | — |
| $520.7 | $453.9 | $66.8 | $— | |
| Liabilities: | ||||
| Contingent consideration | $2.2 | $— | $— | $2.2 |
| Deferred compensation liabilities | 10.1 | 10.1 | — | — |
| Foreign currency contracts | 7.6 | — | 7.6 | — |
| $19.9 | $10.1 | $7.6 | $2.2 | |
| Balance at · Basis of Fair Value Measurements | ||||
|---|---|---|---|---|
| ($ in millions) | December 31,2024 | Level 1 | Level 2 | Level 3 |
| Assets: | ||||
| Deferred compensation assets | $11.1 | $11.1 | $— | $— |
| Money market funds | 117.6 | 117.6 | — | — |
| Time deposits | 71.3 | — | 71.3 | — |
| Foreign currency contracts | 17.3 | — | 17.3 | — |
| Cross-currency swap | 23.6 | — | 23.6 | — |
| Commodity call options | 0.3 | — | 0.3 | — |
| $241.2 | $128.7 | $112.5 | $— | |
| Liabilities: | ||||
| Contingent consideration | $3.0 | $— | $— | $3.0 |
| Deferred compensation liabilities | 11.2 | 11.2 | — | — |
| Foreign currency contracts | 18.3 | — | 18.3 | — |
| $32.5 | $11.2 | $18.3 | $3.0 | |
Deferred compensation assets are included within other noncurrent assets and are valued using a market approach based on quoted market prices in an active market. Money market funds are included within cash and cash equivalents and are valued based on quoted market prices in active markets, with no valuation adjustment. Time deposits are included within cash and cash equivalents and are valued using relevant observable market inputs including quoted prices for similar assets and interest rate curves. The fair value of our foreign currency contracts, included within other current and other noncurrent assets, as well as other current and other long-term liabilities, is valued using an income approach based on quoted forward foreign exchange rates and spot rates at the reporting date. The fair value of our commodity call options, included within other current and other noncurrent assets, is valued using a market approach. The fair value of the contingent consideration liability, within current and long-term liabilities, related to the SmartDose® technology platform (the “SmartDose® contingent consideration”) was initially determined using a probability-weighted income approach, and is revalued at each reporting date or more frequently if circumstances dictate. The fair value of deferred compensation liabilities is based on quoted prices of the underlying employees’ investment selections and is included within other long-term liabilities. The fair value of the cross-currency swap, included within other non-current assets as of December 31, 2025 and December 31, 2024, is valued using a market approach. Please refer to Note 11, Derivative Financial Instruments, for further discussion of our derivatives.
Other Financial Instruments
We believe that the carrying amounts of our cash and accounts receivable approximate their fair values due to their near-term maturities.
The estimated fair value of long-term debt is based on quoted market prices for debt issuances with similar terms and maturities and is classified as Level 2 within the fair value hierarchy. At December 31, 2025, the estimated fair value of long-term debt was $202.4 million compared to a carrying amount of $202.8 million. At December 31, 2024, the estimated fair value of long-term debt was $200.5 million and the carrying amount was $202.6 million. As of December 31, 2025 and December 31, 2024, all debt is long-term.
Note 13: Accumulated Other Comprehensive Loss
The following table presents the changes in the components of accumulated other comprehensive loss, net of tax:
| ($ in millions) | Derivatives | Equity affiliate investment AOCI | Defined benefit pension and other postretirement plans | Foreign currency translation | Total |
|---|---|---|---|---|---|
| Balance, December 31, 2022 | $0.2 | $1.6 | $(9.4) | $(175.4) | $(183.0) |
| Other comprehensive income (loss) before reclassifications | (6.8) | 0.7 | 0.8 | 39.4 | 34.1 |
| Amounts reclassified out | 6.6 | — | (1.5) | — | 5.1 |
| Other comprehensive (loss) income, net of tax | (0.2) | 0.7 | (0.7) | 39.4 | 39.2 |
| Balance, December 31, 2023 | — | 2.3 | (10.1) | (136.0) | (143.8) |
| Other comprehensive (loss) income before reclassifications | (5.6) | 0.2 | 1.1 | (112.3) | (116.6) |
| Amounts reclassified out | 3.1 | — | (0.8) | — | 2.3 |
| Other comprehensive (loss) income, net of tax | (2.5) | 0.2 | 0.3 | (112.3) | (114.3) |
| Balance, December 31, 2024 | (2.5) | 2.5 | (9.8) | (248.3) | (258.1) |
| Other comprehensive income (loss) before reclassifications | 0.4 | 0.7 | 2.1 | 149.2 | 152.4 |
| Amounts reclassified out | 0.6 | — | (0.4) | — | 0.2 |
| Other comprehensive income (loss), net of tax | 1.0 | 0.7 | 1.7 | 149.2 | 152.6 |
| Balance, December 31, 2025 | $(1.5) | $3.2 | $(8.1) | $(99.1) | $(105.5) |
A summary of the reclassifications out of accumulated other comprehensive loss is presented in the following table ($ in millions):
| Detail of components | 2025 | 2024 | 2023 | Location on Statement of Income |
|---|---|---|---|---|
| Gains (losses) on derivatives: | ||||
| Foreign currency contracts | $(0.7) | $0.5 | $(1.5) | Net sales |
| Foreign currency contracts | (0.1) | (5.5) | (3.1) | Cost of goods and services sold |
| Foreign currency contracts | — | 1.0 | (4.2) | Other expense (income) |
| Forward treasury locks | (0.1) | (0.1) | (0.3) | Interest expense |
| Total before tax | (0.9) | (4.1) | (9.1) | |
| Tax benefit | 0.3 | 1.0 | 2.5 | |
| Net of tax | $(0.6) | $(3.1) | $(6.6) | |
| Amortization of defined benefit pension and other postretirement plans: | ||||
| Actuarial gains | $0.4 | $1.0 | $1.7 | (a) |
| Settlements | — | — | (0.1) | (a) |
| Other | — | — | 0.4 | (a) |
| Total before tax | 0.4 | 1.0 | 2.0 | |
| Tax expense | — | (0.2) | (0.5) | |
| Net of tax | $0.4 | $0.8 | $1.5 | |
| Total reclassifications for the period, net of tax | $(0.2) | $(2.3) | $(5.1) | |
(a) These components are included in the computation of net periodic benefit cost. Please refer to Note 15, Benefit Plans, for additional details.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.