WEST PHARMACEUTICAL SERVICES INC

Note 6: Leases

As of December 31, 2025, we had leases primarily related to land, buildings, and machinery and equipment, with lease terms through 2269. Certain of our leases provide us with an option, exercisable at our sole discretion, to terminate the lease or extend the lease term forone year or more. At this time, the Company is not able to assert whether any of these options will be exercised.

Judgments used in applying ASC 842 include determining: i) whether a contract is, or contains, a lease; ii) the discount rate to be used to discount the unpaid lease payments to present value; iii) the lease term; and iv) the lease payments. We determine if a contract is, or contains, a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: 1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment); and 2) the customer has the right to control the use of the identified asset.

ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As all of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease term for all of our leases includes the noncancellable period of the lease plus any additional periods covered by either a lessee option to extend (or not to terminate) the lease that the lessee is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Lease payments included in the measurement of the lease right-of-use assets and lease liabilities are comprised of fixed payments (including in-substance fixed payments), variable payments that depend on an index or rate, and the exercise price of a lessee option to purchase the underlying asset if the lessee is reasonably certain to exercise.

The components of lease expense were as follows:

The following table summarizes the finance lease amounts in the consolidated balance sheets as of December 31:

Supplemental information related to leases was as follows:

The following table shows the weighted average remaining lease terms and discount rates for our operating and finance leases as of December 31:

Maturities of lease liabilities as of December 31, 2025 were as follows:

Practical Expedients and Exemptions

We have elected to adopt practical expedients around the combination of lease and non-lease components and the portfolio approach relating to discount rates. These practical expedients were applied consistently to all leases.

We have elected not to recognize lease right-of-use assets and lease liabilities for all short-term leases (leases with an initial lease term of 12 months or less). We recognize the lease payments associated with our short-term leases as an expense over the lease term.

Note 7: Affiliated Companies

At December 31, 2025, the following affiliated companies were accounted for under the equity method:

The following table summarizes the aggregate carrying amounts of our investments in affiliated companies that are accounted for under the equity method and our investments in affiliated companies that are not accounted for under the equity method as of December 31:

We have elected to record non-equity method investments, for which fair value was not readily determinable, at cost, less impairment, adjusted for subsequent observable price changes. We test these investments for impairment whenever circumstances indicate that the carrying value of the investments may not be recoverable.

The following table summarizes the amounts due to and from affiliates in the consolidated balance sheets as of December 31:

The following table summarizes the Company's affiliate transactions:

The majority of the purchase transactions listed above relate to a distributorship agreement with Daikyo that allows us to purchase and re-sell Daikyo products.

Note 8: Goodwill and Intangible Assets

The changes in the carrying amount of goodwill by reportable segment were as follows:

As of December 31, 2025, we had $0.1 million of accumulated goodwill impairment losses.

Intangible assets and accumulated amortization as of December 31 were as follows:

The cost basis of intangible assets includes a foreign currency translation gain of $0.2 million and a loss of $0.7 million for the years ended December 31, 2025 and 2024, respectively.

Amortization expense for the years ended December 31, 2025, 2024 and 2023 was $2.8 million, $3.6 million and $3.6 million, respectively. Additionally, intangible asset impairment expense for the years ended December 31, 2025, 2024 and 2023 was $0.5 million, $0.0 million and $0.0 million, respectively. Estimated annual amortization expense for the next five years is as follows: 2026 - $2.2 million, 2027 - $2.0 million, 2028 - $1.8 million, 2029 - $1.0 million and 2030 - $0.4 million.

Note 9: Other Current Liabilities

Other current liabilities as of December 31 included the following: