[X]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Ireland
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Not Applicable
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Treasury Building, Lower Grand Canal Street, Dublin 2, Ireland
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-
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(Address of principal executive offices)
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(Zip Code)
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PAGE
NUMBER
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PART I. FINANCIAL INFORMATION
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1
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2
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3
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4
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5
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6
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7
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8
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9
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10
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11
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12
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13
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14
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15
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PART II. OTHER INFORMATION
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Three Months Ended
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Nine Months Ended
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September 29,
2018 |
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September 30,
2017 |
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September 29,
2018 |
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September 30,
2017 |
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Net sales
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$
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1,133.1
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$
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1,231.3
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$
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3,536.5
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$
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3,663.1
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Cost of sales
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708.3
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733.5
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2,148.0
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2,196.4
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Gross profit
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424.8
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497.8
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1,388.5
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1,466.7
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Operating expenses
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Distribution
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22.5
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21.5
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71.0
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64.2
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Research and development
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43.7
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38.4
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174.0
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120.8
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Selling
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134.7
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143.5
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451.2
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454.1
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Administration
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105.6
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123.3
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310.0
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326.9
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Impairment charges
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221.8
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7.8
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223.5
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47.4
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Restructuring
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18.0
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3.8
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23.2
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54.7
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Other operating expense (income)
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0.5
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(2.9
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)
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6.6
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(41.0
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)
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Total operating expenses
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546.8
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335.4
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1,259.5
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1,027.1
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Operating income (loss)
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(122.0
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)
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162.4
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129.0
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439.6
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Change in financial assets
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(74.9
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)
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2.6
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(65.9
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)
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24.2
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Interest expense, net
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31.7
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34.7
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95.2
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133.1
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Other (income) expense, net
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0.2
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(3.6
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)
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12.3
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(1.1
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)
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Loss on extinguishment of debt
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—
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—
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0.5
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135.2
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Income (loss) before income taxes
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(79.0
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)
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128.7
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86.9
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148.2
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Income tax expense (benefit)
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(11.5
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)
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84.2
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37.3
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101.8
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Net income (loss)
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$
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(67.5
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)
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$
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44.5
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$
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49.6
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$
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46.4
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Earnings (loss) per share
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Basic
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$
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(0.49
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)
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$
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0.31
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$
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0.36
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$
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0.33
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Diluted
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$
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(0.49
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)
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$
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0.31
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$
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0.36
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$
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0.32
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Weighted-average shares outstanding
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Basic
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137.4
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141.3
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138.5
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142.5
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Diluted
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137.4
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141.7
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139.0
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142.8
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Dividends declared per share
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$
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0.19
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$
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0.16
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$
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0.57
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$
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0.48
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Three Months Ended
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Nine Months Ended
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September 29,
2018 |
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September 30,
2017 |
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September 29,
2018 |
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September 30,
2017 |
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Net income (loss)
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$
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(67.5
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)
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$
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44.5
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$
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49.6
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$
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46.4
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Other comprehensive income (loss):
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Foreign currency translation adjustments
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(9.9
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)
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69.9
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(102.5
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)
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289.9
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Change in fair value of derivative financial instruments, net of tax
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(0.9
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)
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0.1
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(5.0
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8.7
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Change in fair value of investment securities, net of tax
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—
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(8.1
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—
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(24.4
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)
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Change in post-retirement and pension liability, net of tax
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(1.0
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(1.2
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(1.4
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)
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(1.2
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)
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Other comprehensive income (loss), net of tax
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(11.8
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)
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60.7
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(108.9
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)
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273.0
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Comprehensive income (loss)
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$
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(79.3
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)
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$
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105.2
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$
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(59.3
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)
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$
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319.4
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Nine Months Ended
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September 29,
2018 |
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September 30,
2017 |
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Cash Flows From (For) Operating Activities
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Net income
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$
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49.6
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$
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46.4
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Adjustments to derive cash flows:
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Depreciation and amortization
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324.0
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333.1
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Share-based compensation
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26.6
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28.1
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Impairment charges
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223.5
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47.4
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Change in financial assets
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(65.9
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)
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24.2
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Loss on extinguishment of debt
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0.5
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135.2
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Restructuring charges
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23.2
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54.7
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Deferred income taxes
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(8.4
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)
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(16.3
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)
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Amortization of debt premium
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(6.2
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)
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(18.4
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)
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Other non-cash adjustments, net
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5.9
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(27.2
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)
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Subtotal
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572.8
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607.2
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Increase (decrease) in cash due to:
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Accounts receivable
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20.2
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38.4
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Inventories
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(101.3
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)
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(28.3
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)
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Accounts payable
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44.5
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(6.0
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)
|
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Payroll and related taxes
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(40.8
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)
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(36.7
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)
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Accrued customer programs
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(1.2
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)
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(15.8
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)
|
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Accrued liabilities
|
(31.1
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)
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(18.8
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)
|
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Accrued income taxes
|
(60.0
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)
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(61.5
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)
|
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Other, net
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(4.4
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)
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3.5
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Subtotal
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(174.1
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)
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(125.2
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)
|
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Net cash from operating activities
|
398.7
|
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|
482.0
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Cash Flows From (For) Investing Activities
|
|
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|
||||
Proceeds from royalty rights
|
11.4
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|
86.4
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Purchase of investment securities
|
(7.5
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)
|
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—
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Asset acquisitions
|
(32.8
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)
|
|
—
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|
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Additions to property, plant and equipment
|
(56.8
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)
|
|
(55.2
|
)
|
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Net proceeds from sale of business and other assets
|
5.0
|
|
|
46.7
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|
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Proceeds from sale of the Tysabri
®
financial asset
|
—
|
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|
2,200.0
|
|
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Other investing, net
|
—
|
|
|
(5.8
|
)
|
||
Net cash from (for) investing activities
|
(80.7
|
)
|
|
2,272.1
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|
||
Cash Flows From (For) Financing Activities
|
|
|
|
||||
Issuances of long-term debt
|
431.0
|
|
|
—
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|
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Payments on long-term debt
|
(470.0
|
)
|
|
(2,243.7
|
)
|
||
Borrowings (repayments) of revolving credit agreements and other financing, net
|
(8.7
|
)
|
|
—
|
|
||
Deferred financing fees
|
(2.4
|
)
|
|
(4.2
|
)
|
||
Premium on early debt retirement
|
—
|
|
|
(116.1
|
)
|
||
Issuance of ordinary shares
|
1.0
|
|
|
0.5
|
|
||
Repurchase of ordinary shares
|
(400.0
|
)
|
|
(191.5
|
)
|
||
Cash dividends
|
(78.7
|
)
|
|
(68.7
|
)
|
||
Other financing, net
|
(9.8
|
)
|
|
2.7
|
|
||
Net cash (for) financing activities
|
(537.6
|
)
|
|
(2,621.0
|
)
|
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Effect of exchange rate changes on cash and cash equivalents
|
(14.9
|
)
|
|
20.5
|
|
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Net increase (decrease) in cash and cash equivalents
|
(234.5
|
)
|
|
153.6
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|
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Cash and cash equivalents, beginning of period
|
678.7
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|
622.3
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|
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Cash and cash equivalents, end of period
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$
|
444.2
|
|
|
$
|
775.9
|
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Recently Issued Accounting Standards Not Yet Adopted
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Standard
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Description
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Effective Date
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Effect on the Financial Statements or Other Significant Matters
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ASU 2016-02 Leases (Topic 842)
ASU 2018-01 Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842
ASU 2018-10 Leases Improvements to (Topic 842)
ASU 2018-11 Leases (Topic 842): Targeted Improvements
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This guidance was issued to increase transparency and comparability among organizations by requiring recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. For leases with a term of 12 months or less, lessees are permitted to make an election to not recognize right-of-use assets and lease liabilities. The guidance is required to be adopted using the modified retrospective approach. Early adoption is permitted.
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January 1, 2019
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We have substantially completed: (1) our identification of the global lease population, and (2) the data migration to a lease integration tool that will support the accounting and disclosure requirements under the standard. We are currently in the testing and review phase of the tool and designing processes and internal controls over the post-implementation leasing activities. We intend to apply the transition package of practical expedients allowed by the standard and to transition to the standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019. We expect our financial statement disclosures in the period of adoption to be expanded to present additional qualitative and quantitative details of our leasing arrangements. At this time, we are unable to reasonably estimate the expected increase in assets and liabilities on our Consolidated Balance Sheets; however, we do expect the right of use asset and corresponding liability to be material.
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ASU 2018-02 Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
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This guidance permits tax effects stranded in accumulated other comprehensive income as a result of tax reform to be reclassified to retained earnings. This reclassification is optional and will require additional disclosure regarding whether or not reclassification is elected.
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January 1, 2019
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We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
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ASU 2017-12 Derivatives and Hedging (Topic 815)
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This update was issued to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. In addition, the amendments simplify the application of hedge accounting in certain situations. Under the new rule, the entity’s ability to hedge non-financial and financial risk components is expanded. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and also eases certain documentation and assessment requirements. Early adoption is permitted.
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January 1, 2019
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We plan to adopt the standard on the effective date and upon adoption, we expect to elect the policy to amortize excluded components. We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
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ASU 2018-15: Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
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This guidance requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred.
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January 1, 2020
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We expect to adopt the standard prospectively on the effective date. As a result, no impact is currently expected on transition, however, future hosting arrangements treated as a service contract will need to be evaluated for capitalizable costs during implementation. The Consolidated Financial Statement impact will align with the presentation of the underlying hosting contracts, which is expected to be included within Operating expenses.
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ASU 2018-13: Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement
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This guidance amends ASC 820 to add, remove, and modify certain disclosure requirements for fair value measurements.
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January 1, 2020
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We plan to adopt the standard on the effective date and, upon adoption, we will be required to provide additional disclosures on Level 3 fair value measurements.
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ASU) 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
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This guidance changes the impairment model for most financial assets and certain other instruments, replacing the current "incurred loss" approach with an "expected loss" credit impairment model, which will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities and off-balance sheet credit exposures such as letters of credit. Early adoption is permitted.
|
|
January 1, 2020
|
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We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
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|
Recently Issued Accounting Standards Not Yet Adopted (Continued)
|
||||||
Standard
|
|
Description
|
|
Effective Date
|
|
Effects on the Financial Statements or Other Significant Matters
|
ASU 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill
|
|
The objective of this update is to reduce the cost and complexity of subsequent goodwill accounting and simplify the impairment test by removing the Step 2 requirement to perform a hypothetical purchase price allocation when the carrying value of a reporting unit exceeds its fair value. If a reporting unit’s carrying value exceeds its fair value, an entity would record an impairment charge based on that difference, limited to the amount of goodwill attributed to that reporting unit. The proposal would not change the guidance on completing Step 1 of the goodwill impairment test. The proposed guidance would be applied prospectively. Early adoption is permitted.
|
|
January 1, 2020
|
|
Upon adoption, this guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment. After adoption, a Step 1 failure will result in an immediate impairment charge based on the carrying value of the reporting unit. We plan to adopt the standard prospectively on the effective date.
|
Accounting Standards Update (ASU) No. 2018-14: Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans
|
|
This guidance amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans.
|
|
December 31, 2020
|
|
We plan to adopt the standard on the effective date. We are currently evaluating the implications of adoption on our Condensed Consolidated Financial Statements.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 29,
2018 |
|
September 29,
2018 |
||||
U.S.
|
$
|
739.0
|
|
|
$
|
2,297.7
|
|
Europe
(2)
|
317.2
|
|
|
1,023.4
|
|
||
All other countries
(3)
|
76.9
|
|
|
215.4
|
|
||
|
$
|
1,133.1
|
|
|
$
|
3,536.5
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 29,
2018 |
|
September 29,
2018 |
||||
CHCA
(1)
|
|
|
|
||||
Cough/Cold/Allergy/Sinus
|
$
|
113.8
|
|
|
$
|
364.6
|
|
Infant Nutritionals
|
112.4
|
|
|
325.0
|
|
||
Analgesics
|
96.8
|
|
|
282.7
|
|
||
Gastrointestinal
|
95.4
|
|
|
290.6
|
|
||
Smoking Cessation
|
72.8
|
|
|
209.9
|
|
||
Animal Health
|
20.4
|
|
|
78.6
|
|
||
Vitamins, Minerals and Dietary Supplements
|
5.0
|
|
|
12.3
|
|
||
Other CHCA
(2)
|
79.6
|
|
|
230.9
|
|
||
Total CHCA
|
596.2
|
|
|
1,794.6
|
|
||
CHCI
|
|
|
|
||||
Cough/Cold/Allergy/Sinus
|
94.8
|
|
|
278.2
|
|
||
Lifestyle
|
70.5
|
|
|
246.3
|
|
||
Personal Care and Derma-Therapeutics
|
60.0
|
|
|
215.3
|
|
||
Natural Health and Vitamins, Minerals and Dietary Supplements
|
32.2
|
|
|
93.3
|
|
||
Anti-Parasite
|
30.2
|
|
|
88.7
|
|
||
Other CHCI
(3)
|
69.9
|
|
|
218.2
|
|
||
Total CHCI
|
357.6
|
|
|
1,140.0
|
|
||
Total RX
|
179.3
|
|
|
601.9
|
|
||
Total net sales
|
$
|
1,133.1
|
|
|
$
|
3,536.5
|
|
(2)
|
Consists primarily of branded OTC, diabetic care, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales.
|
(3)
|
Consists primarily of liquid licensed products, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales.
|
|
Balance Sheet Location
|
|
January 1,
2018 |
|
September 29,
2018 |
||||
Short-term contract assets
|
Prepaid expenses and other current assets
|
|
$
|
20.5
|
|
|
$
|
28.8
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
September 29, 2018
|
|
September 29, 2018
|
||||||||||||||||||||
(in millions, except per share amounts)
|
As
reported |
|
Adjustments
|
|
Before adoption of ASC 606
|
|
As
reported |
|
Adjustments
|
|
Before adoption of ASC 606
|
||||||||||||
Net sales
|
$
|
1,133.1
|
|
|
$
|
(9.7
|
)
|
|
$
|
1,123.4
|
|
|
$
|
3,536.5
|
|
|
$
|
(8.4
|
)
|
|
$
|
3,528.1
|
|
Cost of sales
|
708.3
|
|
|
(5.4
|
)
|
|
702.9
|
|
|
2,148.0
|
|
|
(4.3
|
)
|
|
2,143.7
|
|
||||||
Gross profit
|
424.8
|
|
|
(4.3
|
)
|
|
420.5
|
|
|
1,388.5
|
|
|
(4.1
|
)
|
|
1,384.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income (loss)
|
(122.0
|
)
|
|
(4.3
|
)
|
|
(126.3
|
)
|
|
129.0
|
|
|
(4.1
|
)
|
|
124.9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax expense (benefit)
|
(11.5
|
)
|
|
0.1
|
|
|
(11.4
|
)
|
|
37.3
|
|
|
—
|
|
|
37.3
|
|
||||||
Net income (loss)
|
$
|
(67.5
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(71.9
|
)
|
|
$
|
49.6
|
|
|
$
|
(4.1
|
)
|
|
$
|
45.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
(0.49
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
0.36
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.33
|
|
Diluted
|
$
|
(0.49
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
0.36
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.33
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
September 29, 2018
|
|
September 29, 2018
|
||||||||||||||||||||
(in millions)
|
As
reported |
|
Adjustments
|
|
Before adoption of ASC 606
|
|
As
reported |
|
Adjustments
|
|
Before adoption of ASC 606
|
||||||||||||
Net income (loss)
|
$
|
(67.5
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(71.9
|
)
|
|
$
|
49.6
|
|
|
$
|
(4.1
|
)
|
|
$
|
45.5
|
|
Comprehensive income (loss)
|
$
|
(79.3
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(83.7
|
)
|
|
$
|
(59.3
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
(63.4
|
)
|
|
September 29, 2018
|
||||||||||
(in millions)
|
As
reported |
|
Adjustments
|
|
Before adoption of ASC 606
|
||||||
Assets
|
|
|
|
|
|
||||||
Inventories
|
$
|
885.3
|
|
|
$
|
19.1
|
|
|
$
|
904.4
|
|
Prepaid expenses and other current assets
|
359.5
|
|
|
(28.8
|
)
|
|
330.7
|
|
|||
Total current assets
|
2,768.8
|
|
|
(9.7
|
)
|
|
2,759.1
|
|
|||
Total assets
|
$
|
10,942.9
|
|
|
$
|
(9.7
|
)
|
|
$
|
10,933.2
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Other non-current liabilities
|
$
|
423.7
|
|
|
$
|
(0.2
|
)
|
|
$
|
423.5
|
|
Total non-current liabilities
|
3,789.4
|
|
|
(0.2
|
)
|
|
3,789.2
|
|
|||
Total liabilities
|
5,282.9
|
|
|
(0.2
|
)
|
|
5,282.7
|
|
|||
Shareholders’ equity
|
|
|
|
|
|
||||||
Controlling interests:
|
|
|
|
|
|
||||||
Accumulated deficit
|
(1,919.7
|
)
|
|
(9.5
|
)
|
|
(1,929.2
|
)
|
|||
Total controlling interests
|
5,659.8
|
|
|
(9.5
|
)
|
|
5,650.3
|
|
|||
Total shareholders’ equity
|
5,660.0
|
|
|
(9.5
|
)
|
|
5,650.5
|
|
|||
Total liabilities and shareholders' equity
|
$
|
10,942.9
|
|
|
$
|
(9.7
|
)
|
|
$
|
10,933.2
|
|
|
Nine Months Ended
|
||||||||||
|
September 29, 2018
|
||||||||||
(in millions)
|
As
reported |
|
Adjustments
|
|
Before adoption of ASC 606
|
||||||
Cash Flows From (For) Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
49.6
|
|
|
$
|
(4.1
|
)
|
|
$
|
45.5
|
|
(Decreases) in cash due to:
|
|
|
|
|
|
||||||
Inventories
|
(101.3
|
)
|
|
(4.3
|
)
|
|
(105.6
|
)
|
|||
Accrued income taxes
|
(60.0
|
)
|
|
—
|
|
|
(60.0
|
)
|
|||
Other, net
|
(4.4
|
)
|
|
8.4
|
|
|
4.0
|
|
|||
Subtotal
|
(174.1
|
)
|
|
4.1
|
|
|
(170.0
|
)
|
|||
Net cash from operating activities
|
$
|
398.7
|
|
|
$
|
—
|
|
|
$
|
398.7
|
|
|
|
December 31,
2017 |
|
Impairments
|
|
Currency translation adjustments
|
|
September 29,
2018 |
||||||||
CHCA
|
|
$
|
1,847.4
|
|
|
$
|
(136.7
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
1,710.2
|
|
CHCI
|
|
1,205.7
|
|
|
—
|
|
|
(39.3
|
)
|
|
1,166.4
|
|
||||
RX
|
|
1,122.3
|
|
|
—
|
|
|
(4.7
|
)
|
|
1,117.6
|
|
||||
Total goodwill
|
|
$
|
4,175.4
|
|
|
$
|
(136.7
|
)
|
|
$
|
(44.5
|
)
|
|
$
|
3,994.2
|
|
|
September 29, 2018
|
|
December 31, 2017
|
||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Gross
|
|
Accumulated Amortization
|
||||||||
Definite-lived intangibles
:
|
|
|
|
|
|
|
|
||||||||
Distribution and license agreements and supply agreements
|
$
|
180.9
|
|
|
$
|
95.9
|
|
|
$
|
311.2
|
|
|
$
|
169.8
|
|
Developed product technology, formulations, and product rights
|
1,324.2
|
|
|
634.0
|
|
|
1,358.4
|
|
|
598.7
|
|
||||
Customer relationships and distribution networks
|
1,601.7
|
|
|
541.3
|
|
|
1,642.0
|
|
|
460.6
|
|
||||
Trademarks, trade names, and brands
|
1,296.3
|
|
|
173.9
|
|
|
1,335.4
|
|
|
129.5
|
|
||||
Non-compete agreements
|
14.5
|
|
|
13.2
|
|
|
14.7
|
|
|
12.6
|
|
||||
Total definite-lived intangibles
|
$
|
4,417.6
|
|
|
$
|
1,458.3
|
|
|
$
|
4,661.7
|
|
|
$
|
1,371.2
|
|
Indefinite-lived intangibles
:
|
|
|
|
|
|
|
|
||||||||
Trademarks, trade names, and brands
|
$
|
18.5
|
|
|
$
|
—
|
|
|
$
|
52.1
|
|
|
$
|
—
|
|
In-process research and development
|
29.3
|
|
|
—
|
|
|
38.2
|
|
|
—
|
|
||||
Total indefinite-lived intangibles
|
47.8
|
|
|
—
|
|
|
90.3
|
|
|
—
|
|
||||
Total other intangible assets
|
$
|
4,465.4
|
|
|
$
|
1,458.3
|
|
|
$
|
4,752.0
|
|
|
$
|
1,371.2
|
|
|
September 29,
2018 |
|
December 31,
2017 |
||||
Finished goods
|
$
|
473.7
|
|
|
$
|
454.3
|
|
Work in process
|
180.3
|
|
|
152.8
|
|
||
Raw materials
|
231.3
|
|
|
199.8
|
|
||
Total inventories
|
$
|
885.3
|
|
|
$
|
806.9
|
|
|
|
September 29, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment securities
|
|
$
|
7.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|
—
|
|
||||||
Funds associated with Israeli severance liability
|
|
—
|
|
|
14.2
|
|
|
—
|
|
|
—
|
|
|
16.3
|
|
|
—
|
|
||||||
Royalty Pharma contingent milestone payments
|
|
—
|
|
|
—
|
|
|
200.4
|
|
|
—
|
|
|
—
|
|
|
134.5
|
|
||||||
Total assets
|
|
$
|
7.0
|
|
|
$
|
17.5
|
|
|
$
|
200.4
|
|
|
$
|
17.0
|
|
|
$
|
22.6
|
|
|
$
|
134.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
6.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
Contingent consideration
|
|
—
|
|
|
—
|
|
|
16.4
|
|
|
—
|
|
|
—
|
|
|
22.0
|
|
||||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
6.6
|
|
|
$
|
16.4
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
22.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Measured at fair value on a non-recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Indefinite-lived intangible assets
(2)
|
|
—
|
|
|
—
|
|
|
10.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Definite-lived intangible assets
(3)
|
|
—
|
|
|
—
|
|
|
22.4
|
|
|
—
|
|
|
—
|
|
|
11.5
|
|
||||||
Total assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.5
|
|
(1)
|
As of September 29, 2018, goodwill with a carrying amount of
$178.9 million
was written down to a fair value of
$42.2 million
.
|
(2)
|
As of September 29, 2018, indefinite-lived intangible assets with a carrying amount of
$46.7 million
were written down to a fair value of
$10.5 million
.
|
(3)
|
As of September 29, 2018, definite-lived intangible assets with a carrying amount of
$71.3 million
were written down to a fair value of
$22.4 million
. As of December 31, 2017, definite-lived intangible assets with a carrying amount of
$31.2 million
were written down to a fair value of
$11.5 million
.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
Royalty Pharma Contingent Milestone Payments
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
125.5
|
|
|
$
|
145.8
|
|
|
$
|
134.5
|
|
|
$
|
—
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
184.5
|
|
||||
Foreign currency effect
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.8
|
|
||||
Change in fair value
|
74.9
|
|
|
(2.9
|
)
|
|
65.9
|
|
|
(42.1
|
)
|
||||
Ending balance
|
$
|
200.4
|
|
|
$
|
143.2
|
|
|
$
|
200.4
|
|
|
$
|
143.2
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
Contingent Consideration
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
16.2
|
|
|
$
|
49.7
|
|
|
$
|
22.0
|
|
|
$
|
69.9
|
|
Net realized (gains) losses
|
1.1
|
|
|
(2.9
|
)
|
|
(0.3
|
)
|
|
(18.5
|
)
|
||||
Currency translation adjustments
|
(0.3
|
)
|
|
0.2
|
|
|
(0.3
|
)
|
|
1.5
|
|
||||
Settlements
|
(0.6
|
)
|
|
(2.1
|
)
|
|
(5.0
|
)
|
|
(8.0
|
)
|
||||
Ending balance
|
$
|
16.4
|
|
|
$
|
44.9
|
|
|
$
|
16.4
|
|
|
$
|
44.9
|
|
|
September 29, 2018
|
|
December 31, 2017
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 1
|
|
Level 2
|
||||||||
Public Bonds
|
|
|
|
|
|
|
|
||||||||
Carrying Value (excluding discount)
|
$
|
2,600.0
|
|
|
|
|
$
|
2,600.0
|
|
|
|
||||
Fair value
|
$
|
2,513.9
|
|
|
|
|
$
|
2,650.8
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Retail bond and private placement note
|
|
|
|
|
|
|
|
||||||||
Carrying value (excluding premium)
|
|
|
$
|
296.1
|
|
|
|
|
$
|
306.0
|
|
||||
Fair value
|
|
|
$
|
321.1
|
|
|
|
|
$
|
342.1
|
|
Measurement Category
|
|
Balance Sheet Location
|
|
September 29,
2018 |
|
December 31,
2017
(2)
|
||||
Fair value method
|
|
Prepaid expenses and other current assets
|
|
$
|
7.0
|
|
|
$
|
17.0
|
|
Fair value method
(1)
|
|
Other non-current assets
|
|
$
|
4.8
|
|
|
$
|
6.3
|
|
Equity method
|
|
Other non-current assets
|
|
$
|
14.1
|
|
|
$
|
4.9
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Measurement Category
|
|
Income Statement Location
|
|
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
Fair value method
|
|
Other (income) expense, net
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
11.6
|
|
|
$
|
—
|
|
Equity method
|
|
Other (income) expense, net
|
|
$
|
(1.0
|
)
|
|
$
|
0.1
|
|
|
$
|
(1.6
|
)
|
|
$
|
(0.2
|
)
|
|
Asset Derivatives
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
|
||||||
|
|
|
September 29,
2018 |
|
December 31,
2017 |
||||
Designated derivatives:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Prepaid expenses and other current assets
|
|
$
|
1.0
|
|
|
$
|
4.1
|
|
Non-designated derivatives:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Prepaid expenses and other current assets
|
|
$
|
2.3
|
|
|
$
|
2.2
|
|
|
Liability Derivatives
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
|
||||||
|
|
|
September 29,
2018 |
|
December 31,
2017 |
||||
Designated derivatives:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Accrued liabilities
|
|
$
|
5.2
|
|
|
$
|
1.4
|
|
Non-designated derivatives:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Accrued liabilities
|
|
$
|
1.4
|
|
|
$
|
2.4
|
|
|
|
Amount of Gain/(Loss) Recorded in OCI
(Effective Portion) |
||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Designated Cash Flow Hedges
|
|
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
(4.2
|
)
|
|
$
|
6.3
|
|
|
|
|
|
Amount of Gain/(Loss) Reclassified from AOCI into Earnings (Effective Portion)
|
||||||||||||||
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Designated Cash Flow Hedges
|
|
Income Statement Location
|
|
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
Interest rate swap agreements
|
|
Interest expense, net
|
|
$
|
(0.4
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(1.7
|
)
|
|
|
Other (income) expense, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.9
|
)
|
||||
Foreign currency forward contracts
|
|
Net sales
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
0.9
|
|
||||
|
|
Cost of sales
|
|
(0.3
|
)
|
|
1.8
|
|
|
3.5
|
|
|
3.5
|
|
||||
|
|
Interest expense, net
|
|
(1.1
|
)
|
|
(0.7
|
)
|
|
(3.1
|
)
|
|
(1.8
|
)
|
||||
|
|
Other (income) expense, net
|
|
2.5
|
|
|
(1.2
|
)
|
|
2.0
|
|
|
(1.7
|
)
|
||||
Total
|
|
|
|
$
|
1.1
|
|
|
$
|
(0.5
|
)
|
|
$
|
1.5
|
|
|
$
|
(6.7
|
)
|
|
|
|
Amount of Gain/(Loss) Recognized in Earnings
(Ineffective Portion) |
|||||||
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||
Designated Cash Flow Hedges
|
|
Income Statement
Location
|
|
September 30,
2017 |
|
September 30,
2017 |
||||
Foreign currency forward contracts
|
|
Net sales
|
|
0.2
|
|
|
0.1
|
|
||
|
|
Cost of sales
|
|
0.1
|
|
|
0.1
|
|
||
Foreign currency forward contracts
|
|
Other (income) expense, net
|
|
—
|
|
|
1.0
|
|
||
Total
|
|
|
|
$
|
0.3
|
|
|
$
|
1.2
|
|
|
|
|
|
Amount of Gain/(Loss) Recognized against Earnings
|
||||||||||||||
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Non-Designated Derivatives
|
|
Income Statement Location
|
|
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
Foreign currency forward contracts
|
|
Other (income) expense, net
|
|
$
|
(2.0
|
)
|
|
$
|
10.1
|
|
|
$
|
6.6
|
|
|
$
|
(3.8
|
)
|
|
|
Interest expense, net
|
|
(0.2
|
)
|
|
(1.8
|
)
|
|
(0.9
|
)
|
|
(2.9
|
)
|
||||
Total
|
|
|
|
$
|
(2.2
|
)
|
|
$
|
8.3
|
|
|
$
|
5.7
|
|
|
$
|
(6.7
|
)
|
|
|
|
|
|
September 29,
2018 |
|
December 31,
2017 |
||||
Term loans
|
|
|
|
|
|
||||||
|
2018 Term loan due March 8, 2020
(1)
|
|
|
$
|
368.3
|
|
|
$
|
—
|
|
|
|
2014 Term loan due December 5, 2019
(1)
|
|
|
—
|
|
|
420.0
|
|
|||
|
Total term loans
|
|
|
368.3
|
|
|
420.0
|
|
|||
Notes and Bonds
|
|
|
|
|
|
||||||
|
Coupon
|
Due
|
|
|
|
|
|
||||
|
5.000%
|
May 23, 2019
(1)
|
|
|
139.4
|
|
|
144.0
|
|
||
|
3.500%
|
March 15, 2021
|
|
|
280.4
|
|
|
280.4
|
|
||
|
3.500%
|
December 15, 2021
|
|
|
309.6
|
|
|
309.6
|
|
||
|
5.105%
|
July 19, 2023
(1)
|
|
|
156.7
|
|
|
162.0
|
|
||
|
4.000%
|
November 15, 2023
|
|
|
215.6
|
|
|
215.6
|
|
||
|
3.900%
|
December 15, 2024
|
|
|
700.0
|
|
|
700.0
|
|
||
|
4.375%
|
March 15, 2026
|
|
|
700.0
|
|
|
700.0
|
|
||
|
5.300%
|
November 15, 2043
|
|
|
90.5
|
|
|
90.5
|
|
||
|
4.900%
|
December 15, 2044
|
|
|
303.9
|
|
|
303.9
|
|
||
|
Total notes and bonds
|
|
|
2,896.1
|
|
|
2,906.0
|
|
|||
Other financing
|
3.7
|
|
|
11.7
|
|
||||||
Unamortized premium (discount), net
|
14.4
|
|
|
21.4
|
|
||||||
Deferred financing fees
|
(17.3
|
)
|
|
(17.9
|
)
|
||||||
Total borrowings outstanding
|
3,265.2
|
|
|
3,341.2
|
|
||||||
|
Current indebtedness
|
(194.2
|
)
|
|
(70.4
|
)
|
|||||
Total long-term debt less current portion
|
$
|
3,071.0
|
|
|
$
|
3,270.8
|
|
Premium on debt repayment
|
|
$
|
116.1
|
|
Transaction costs
|
|
3.8
|
|
|
Write-off of deferred financing fees
|
|
10.6
|
|
|
Write-off of remaining discount on bond
|
|
4.7
|
|
|
Total loss on extinguishment of debt
|
|
$
|
135.2
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(67.5
|
)
|
|
$
|
44.5
|
|
|
$
|
49.6
|
|
|
$
|
46.4
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding for basic EPS
|
137.4
|
|
|
141.3
|
|
|
138.5
|
|
|
142.5
|
|
||||
Dilutive effect of share-based awards*
|
—
|
|
|
0.4
|
|
|
0.5
|
|
|
0.3
|
|
||||
Weighted average shares outstanding for diluted EPS
|
137.4
|
|
|
141.7
|
|
|
139.0
|
|
|
142.8
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive share-based awards excluded from computation of diluted EPS
|
—
|
|
|
1.0
|
|
|
1.2
|
|
|
0.8
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||
90,000
|
|
|
99,800
|
|
|
217,000
|
|
|
146,100
|
|
|
Fair value of derivative financial instruments, net of tax
|
|
Foreign currency translation adjustments
|
|
Fair value of investment securities, net of tax
|
|
Post-retirement and pension liability adjustments, net of tax
|
|
Total AOCI
|
||||||||||
Balance at December 31, 2017
|
$
|
(9.8
|
)
|
|
$
|
260.6
|
|
|
$
|
1.0
|
|
|
$
|
1.3
|
|
|
$
|
253.1
|
|
ASU 2016-01 adoption impact
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|||||
Balance at December 31, 2017 after adoption impact
|
$
|
(9.8
|
)
|
|
$
|
260.6
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
|
$
|
252.1
|
|
OCI before reclassifications
|
(3.6
|
)
|
|
(102.5
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
(107.5
|
)
|
|||||
Amounts reclassified from AOCI
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|||||
Other comprehensive loss
|
$
|
(5.0
|
)
|
|
$
|
(102.5
|
)
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
$
|
(108.9
|
)
|
Balance at September 29, 2018
|
$
|
(14.8
|
)
|
|
$
|
158.1
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
143.2
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||
14.5
|
%
|
|
65.5
|
%
|
|
42.9
|
%
|
|
68.7
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
Beginning balance
|
$
|
12.7
|
|
|
$
|
39.7
|
|
|
$
|
21.4
|
|
|
$
|
19.7
|
|
Additional charges
|
18.0
|
|
|
3.8
|
|
|
23.2
|
|
|
54.7
|
|
||||
Payments
|
(1.7
|
)
|
|
(17.8
|
)
|
|
(15.4
|
)
|
|
(47.6
|
)
|
||||
Non-cash adjustments
|
—
|
|
|
0.4
|
|
|
(0.2
|
)
|
|
(0.7
|
)
|
||||
Ending balance
|
$
|
29.0
|
|
|
$
|
26.1
|
|
|
$
|
29.0
|
|
|
$
|
26.1
|
|
•
|
CHCA
, comprises our U.S., Mexico and Canada consumer healthcare business (OTC, contract manufacturing, infant formula and animal health categories).
|
•
|
CHCI
,
comprises our branded consumer healthcare business primarily in Europe and our consumer focused businesses in the United Kingdom, Australia, and Israel. This segment also includes our U.K. liquid licensed products business.
|
•
|
RX
,
comprises our U.S. Prescription Pharmaceuticals business.
|
|
Three Months Ended
|
||||||||||||||||||||||
|
September 29, 2018
|
|
September 30, 2017
|
||||||||||||||||||||
|
Net
Sales
|
|
Operating Income (Loss)
|
|
Intangible Asset Amortization
|
|
Net
Sales
|
|
Operating Income (Loss)
|
|
Intangible Asset Amortization
|
||||||||||||
CHCA
|
$
|
596.2
|
|
|
$
|
(123.9
|
)
|
|
$
|
15.3
|
|
|
$
|
598.8
|
|
|
$
|
124.3
|
|
|
$
|
16.9
|
|
CHCI
|
357.6
|
|
|
(2.0
|
)
|
|
48.5
|
|
|
365.4
|
|
|
4.6
|
|
|
50.2
|
|
||||||
RX
|
179.3
|
|
|
36.0
|
|
|
20.5
|
|
|
250.6
|
|
|
82.1
|
|
|
21.0
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
16.5
|
|
|
(0.4
|
)
|
|
0.4
|
|
||||||
Unallocated
|
—
|
|
|
(32.1
|
)
|
|
—
|
|
|
—
|
|
|
(48.2
|
)
|
|
—
|
|
||||||
Total
|
$
|
1,133.1
|
|
|
$
|
(122.0
|
)
|
|
$
|
84.3
|
|
|
$
|
1,231.3
|
|
|
$
|
162.4
|
|
|
$
|
88.5
|
|
|
Nine Months Ended
|
||||||||||||||||||||||
|
September 29, 2018
|
|
September 30, 2017
|
||||||||||||||||||||
|
Net
Sales
|
|
Operating Income (Loss)
|
|
Intangible Asset Amortization
|
|
Net
Sales
|
|
Operating Income (Loss)
|
|
Intangible Asset Amortization
|
||||||||||||
CHCA
|
$
|
1,794.6
|
|
|
$
|
46.6
|
|
|
$
|
45.8
|
|
|
$
|
1,786.4
|
|
|
$
|
303.6
|
|
|
$
|
51.1
|
|
CHCI
|
1,140.0
|
|
|
18.4
|
|
|
149.4
|
|
|
1,116.8
|
|
|
8.7
|
|
|
143.4
|
|
||||||
RX
|
601.9
|
|
|
154.8
|
|
|
61.6
|
|
|
708.4
|
|
|
239.6
|
|
|
65.6
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
51.5
|
|
|
9.4
|
|
|
1.2
|
|
||||||
Unallocated
|
—
|
|
|
(90.8
|
)
|
|
—
|
|
|
—
|
|
|
(121.7
|
)
|
|
—
|
|
||||||
Total
|
$
|
3,536.5
|
|
|
$
|
129.0
|
|
|
$
|
256.8
|
|
|
$
|
3,663.1
|
|
|
$
|
439.6
|
|
|
$
|
261.3
|
|
•
|
Consumer Healthcare Americas
(
"CHCA"
), comprises our U.S., Mexico and Canada consumer healthcare business (OTC, contract manufacturing, infant formula and animal health categories).
|
•
|
Consumer Healthcare International
(
"
CHCI
"
),
comprises our branded consumer healthcare business primarily in Europe and our consumer focused businesses in the United Kingdom, Australia, and Israel. This segment also includes our U.K. liquid licensed products business.
|
•
|
Prescription Pharmaceuticals
(
"
RX
"
),
comprises our U.S. Prescription Pharmaceuticals business.
|
•
|
On January 1, 2018, we adopted Accounting Standard Updates ("ASU") 2014-09 Revenue from Contracts with Customers and its related amendments (collectively, "ASC 606") using the modified retrospective method. The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the transfer of control of products to our customers and will provide financial statement readers with enhanced disclosures (refer to
Item 1. Note 2
).
|
•
|
On January 1, 2018, we adopted ASU 2016-01 Financial Instruments - Recognition and Measurement of Financial Assets and Liabilities (refer to
Item 1. Note 7
and
Note 11
).
|
•
|
During the
nine months ended
September 29, 2018
, we repurchased
$400.0 million
worth of shares as part of our authorized share repurchase plan (refer to
Item 1. Note 10
).
|
•
|
On August 9, 2018, we announced a plan to separate our RX business. We have begun the preparations for the separation of our RX business, which may include a possible sale, spin-off, merger or other form of
|
•
|
We are performing a growth-driven exercise focused around our core competencies. We are measuring potential business opportunities, including organic and inorganic growth prospects, against our strengths and capabilities, as well as identifying gaps and areas for improvement. Following our assessment, we will prioritize potential investment opportunities across the organization and solidify our strategic road-map. Through this exercise, we may further refine our portfolio and the necessary capital resources deployed to deliver consistent shareholder returns.
|
|
Three Months Ended
|
||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
||||
Net sales
|
$
|
1,133.1
|
|
|
$
|
1,231.3
|
|
Gross profit
|
$
|
424.8
|
|
|
$
|
497.8
|
|
Gross profit %
|
37.5
|
%
|
|
40.4
|
%
|
||
Operating expenses
|
$
|
546.8
|
|
|
$
|
335.4
|
|
Operating expenses %
|
48.3
|
%
|
|
27.2
|
%
|
||
Operating income (loss)
|
$
|
(122.0
|
)
|
|
$
|
162.4
|
|
Operating income (loss) %
|
(10.8
|
)%
|
|
13.2
|
%
|
•
|
Net sales
decreased
$98.2 million
, or
8%
, over the prior year period due primarily to competition driven pricing pressure and decreased sales volume of certain products in the CHCA and RX segments.
|
•
|
Gross profit as a percentage of net sales was
290 basis points
lower
due primarily to product mix in the RX segment.
|
•
|
Operating income
decreased
$284.4 million
, or
175%
, over the prior year period due primarily to impairment charges related to our animal health goodwill and intangible assets in the CHCA segment.
|
|
Nine Months Ended
|
||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
||||
Net sales
|
$
|
3,536.5
|
|
|
$
|
3,663.1
|
|
Gross profit
|
$
|
1,388.5
|
|
|
$
|
1,466.7
|
|
Gross profit %
|
39.3
|
%
|
|
40.0
|
%
|
||
Operating expenses
|
$
|
1,259.5
|
|
|
$
|
1,027.1
|
|
Operating expenses %
|
35.6
|
%
|
|
28.0
|
%
|
||
Operating income
|
$
|
129.0
|
|
|
$
|
439.6
|
|
Operating income %
|
3.6
|
%
|
|
12.0
|
%
|
•
|
Net sales
decreased
$126.6 million
, or
4%
, over the prior year period due primarily to competition driven pricing pressure and decreased sales volume of certain products in the CHCA and RX segments.
|
•
|
Operating income
decreased
$310.6 million
, or
71%
, over the prior year period due primarily to impairment charges related to our animal health goodwill and intangible assets in the CHCA segment.
|
•
|
On
May 29, 2018
, we entered into a license agreement with Merck Sharp & Dohme Corp. ("Merck") that will allow us to develop and commercialize an OTC version of Nasonex-branded products, as well as other products containing the same active ingredient. In connection with this license agreement, we paid an upfront license fee of
$50.0 million
. In addition, if we achieve certain development milestones, we will make future milestone and royalty payments (refer to
Item 1. Note 3
).
|
•
|
During the three months ended September 29, 2018, we identified indications of impairment in the animal health reporting unit. The impairment indicators related to continued decline in the reporting unit’s operating results in the period and the impact this has on future periods, compared to performance expectations in the prior period. We recorded impairment charges of $213.3 million of goodwill and intangible assets in
Impairment charges
on the Condensed Consolidated Statements of Operations (refer to
Item 1. Note 4
and
Note 6
).
|
|
Three Months Ended
|
||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
||||
Net sales
|
$
|
596.2
|
|
|
$
|
598.8
|
|
Gross profit
|
$
|
184.7
|
|
|
$
|
206.1
|
|
Gross profit %
|
31.0
|
%
|
|
34.4
|
%
|
||
Operating income (loss)
|
$
|
(123.9
|
)
|
|
$
|
124.3
|
|
Operating income (loss) %
|
(20.8
|
)%
|
|
20.8
|
%
|
•
|
A net decrease in sales of existing products of
$12.2 million
due primarily to:
|
•
|
Lower sales in our animal health category due primarily to lost distribution and channel dynamics;
|
•
|
Ongoing pricing pressure, which we expect to continue for the foreseeable future, and lower sales volumes in our gastrointestinal category; partially offset by
|
•
|
Higher sales volumes in our smoking cessation category and our infant formula and dermatological businesses; and
|
•
|
The absence of sales of discontinued products of
$1.0 million
; partially offset by
|
•
|
New product sales of
$12.5 million
due primarily to the launches of esomeprazole magnesium (store brand equivalent to Nexium
®
24HR capsules), omeprazole delayed release orally disintegrating tablets and infant formula products.
|
•
|
A decrease
of
$21.4 million
in gross profit and a decrease in gross profit as a percentage of net sales of
340 basis points
due primarily to lower sales in the higher margin animal health category, pricing pressures and increased commodity cost for certain products and operating inefficiencies.
|
•
|
An increase
of
$226.8 million
in operating expenses due primarily to impairment charges related to animal health goodwill and intangible assets and certain In-process Research and Development ("IPR&D") of $221.8 million.
|
|
|||||||
|
Nine Months Ended
|
||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
||||
Net sales
|
$
|
1,794.6
|
|
|
$
|
1,786.4
|
|
Gross profit
|
$
|
580.3
|
|
|
$
|
598.3
|
|
Gross profit %
|
32.3
|
%
|
|
33.5
|
%
|
||
Operating income
|
$
|
46.6
|
|
|
$
|
303.6
|
|
Operating income %
|
2.6
|
%
|
|
17.0
|
%
|
•
|
New product sales of
$39.0 million
due primarily to the launches of esomeprazole magnesium (store brand equivalent to Nexium
®
24HR capsules), omeprazole delayed release orally disintegrating tablets, and infant formula products; partially offset by
|
•
|
A net decrease in sales of existing products of
$22.2 million
due to:
|
•
|
Lower sales in our animal health category due to lost distribution and channel dynamics;
|
•
|
Ongoing pricing pressure, which we expect to continue for the foreseeable future, and lower sales volumes in our gastrointestinal category; partially offset by
|
•
|
Higher sale volumes in our cough/cold/allergy/sinus and analgesics categories and our infant formula business; and
|
•
|
The absence of sales of discontinued products of
$6.8 million
.
|
•
|
A decrease
of
$18.0 million
in gross profit and a decrease in gross profit as a percentage of net sales of
120 basis points
due primarily to increased commodity costs for certain products, operating inefficiencies related to our infant formula business, unfavorable product mix and pricing pressure.
|
•
|
An increase
of
$239.0 million
in operating expenses due primarily to:
|
•
|
Impairment charges related to animal health goodwill and intangible assets and certain IPR&D of $221.8 million; and
|
•
|
Increased Research and Development ("R&D") expense of $47.1 million due primarily to a
$50.0 million
payment to enter into a license agreement with Merck; partially offset by
|
•
|
Decreased
Restructuring
expense of $26.8 million related to the cost reduction initiatives taken in the prior year period.
|
•
|
Management continues to implement its previously disclosed strategy for brand prioritization, sales force restructuring, and manufacturing insourcing, which is expected to reduce selling costs, improve operating margins and focus on higher value OTC products. As part of this strategy we implemented a new restructuring plan in our CHCI segment that is expected to improve our cost structure.
|
|
Three Months Ended
|
||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
||||
Net sales
|
$
|
357.6
|
|
|
$
|
365.4
|
|
Gross profit
|
$
|
166.7
|
|
|
$
|
165.9
|
|
Gross profit %
|
46.6
|
%
|
|
45.4
|
%
|
||
Operating income (loss)
|
$
|
(2.0
|
)
|
|
$
|
4.6
|
|
Operating income (loss) %
|
(0.6
|
)%
|
|
1.2
|
%
|
•
|
A decrease in sales of existing products of
$10.6 million
due primarily to lower sales in the lifestyle category and non-branded U.K. business; partially offset by higher sales volumes in the analgesics business and anti-parasite and personal care categories;
|
•
|
Unfavorable foreign currency translation of
$9.9 million
; and
|
•
|
The absence of sales of discontinued products of
$4.7 million
; partially offset by
|
•
|
New product sales of
$19.2 million
.
|
•
|
An increase
of
$7.4 million
in operating expenses due primarily to:
|
•
|
Increased
Restructuring
expense of $14.4 million related to the cost reduction initiatives taken in the current period; partially offset by
|
•
|
Decreased
Selling
and
Administration
expense of $7.6 million due primarily to cost improvement actions and lower promotional spend in current period and the effect of favorable foreign currency translation.
|
|
Nine Months Ended
|
||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
||||
Net sales
|
$
|
1,140.0
|
|
|
$
|
1,116.8
|
|
Gross profit
|
$
|
542.4
|
|
|
$
|
509.4
|
|
Gross profit %
|
47.6
|
%
|
|
45.6
|
%
|
||
Operating income
|
$
|
18.4
|
|
|
$
|
8.7
|
|
Operating income %
|
1.6
|
%
|
|
0.8
|
%
|
•
|
New product sales of
$58.7 million
; and
|
•
|
Favorable foreign currency translation of
$53.4 million
; partially offset by
|
•
|
A decrease in sales of existing products of
$40.1 million
due primarily to lower sales in the cough/cold/allergy/sinus, lifestyle, and personal care categories; partially offset by higher sales volume in the natural health and vitamins, minerals and dietary supplements category;
|
•
|
The absence of
$30.8 million
in sales attributable to the exited Russian business and prior year distribution phase out initiatives; and
|
•
|
The absence of sales of discontinued products of
$18.0 million
.
|
•
|
An increase
of
$33.0 million
in gross profit and an increase in gross profit as a percentage of net sales of
200 basis points
due primarily to improved product mix driven by new products and benefits from continued insourcing initiatives; partially offset by
|
•
|
An increase
of
$23.3 million
in operating expenses due primarily to:
|
•
|
Increased
Selling
and
Administration
expense of $15.6 million due primarily to the effect of unfavorable foreign currency translation; and
|
•
|
Increased
Restructuring
expense of $5.9 million related to the cost reduction initiatives taken in the current period.
|
•
|
We continue to experience a significant year-over-year reduction in pricing in our
RX
segment due to competitive pressures. This softness in pricing is attributable to various factors, including increased focus from customers to capture supply chain productivity savings, competition in specific products, and consolidation of certain customers. We expect this softness to continue to impact the segment for the foreseeable future and we are forecasting a 11%-14% pricing decline in this segment for the year ending December 31, 2018.
|
•
|
On August 9, 2018, we announced a plan to separate our RX business. We have begun the preparations for the separation of our RX business, which may include a possible sale, spin-off, merger or other form of separation. We believe the separation, which we currently are targeting to be completed during the second half of 2019, will enable us to focus on expanding our leading consumer businesses. In connection with the proposed separation, we anticipate incurring significant preparation costs, excluding restructuring expenses and transaction costs, in the range of $45.0 million to $80.0 million depending on the final structure of a transaction, with a spin-off resulting in costs at the higher end of this range.
|
•
|
On August 24, 2018, we purchased the Abbreviated New Drug Application ("ANDA") for Diclofenac Sodium Gel, 3% ("Diclo 3%") for
$30.4 million
in cash, which we capitalized as a developed product technology intangible asset. We expect to launch Diclo 3% within the next twelve months (refer to
Item 1. Note 3
).
|
|
Three Months Ended
|
||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
||||
Net sales
|
$
|
179.3
|
|
|
$
|
250.6
|
|
Gross profit
|
$
|
73.4
|
|
|
$
|
116.7
|
|
Gross profit %
|
41.0
|
%
|
|
46.6
|
%
|
||
Operating income
|
$
|
36.0
|
|
|
$
|
82.1
|
|
Operating income %
|
20.1
|
%
|
|
32.8
|
%
|
•
|
A decrease of
$70.8 million
in sales of existing products due primarily to increased competition driven pricing pressure, and customer service challenges resulting in decreased sales volume of certain products; and
|
•
|
The absence of sales of discontinued products of
$3.8 million
; partially offset by
|
•
|
New product sales of
$3.3 million
.
|
•
|
A decrease
in gross profit of
$43.3 million
and a decrease of gross profit as a percentage of net sales of
560 basis points
due primarily to pricing pressure and product mix.
|
•
|
An increase
of
$2.8 million
in operating expenses due primarily to an increase in R&D of $7.0 million, which represented 580 basis points increase in R&D as a percentage of net sales.
|
|
|||||||
|
Nine Months Ended
|
||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
||||
Net sales
|
$
|
601.9
|
|
|
$
|
708.4
|
|
Gross profit
|
$
|
265.7
|
|
|
$
|
332.1
|
|
Gross profit %
|
44.2
|
%
|
|
46.9
|
%
|
||
Operating income
|
$
|
154.8
|
|
|
$
|
239.6
|
|
Operating income %
|
25.7
|
%
|
|
33.8
|
%
|
•
|
A decrease in sales of existing products of
$117.8 million
due primarily to increased competition driven pricing pressure and decreased sales volume of certain products; and
|
•
|
The absence of sales of discontinued products of
$9.5 million
; partially offset by
|
•
|
New product sales of
$20.8 million
due primarily to sales of testosterone 2% topical (generic equivalent to Axiron
®
).
|
•
|
A decrease
of
$66.4 million
in gross profit and a decrease in gross profit as a percentage of net sales of
270 basis points
due primarily to pricing pressure and product mix.
|
•
|
An increase
of
$18.4 million
in operating expenses due primarily to the absence of a gain of $23.0 million for the sale of certain ANDAs recognized in the prior year period.
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
$
|
32.1
|
|
|
$
|
48.2
|
|
|
$
|
90.9
|
|
|
$
|
120.8
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||||||
Change in financial assets
|
$
|
(74.9
|
)
|
|
$
|
2.6
|
|
|
$
|
(65.9
|
)
|
|
$
|
24.2
|
|
Interest expense, net
|
$
|
31.7
|
|
|
$
|
34.7
|
|
|
$
|
95.2
|
|
|
$
|
133.1
|
|
Other (income) expense, net
|
$
|
0.2
|
|
|
$
|
(3.6
|
)
|
|
$
|
12.3
|
|
|
$
|
(1.1
|
)
|
Loss on extinguishment of debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
135.2
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
September 29,
2018 |
|
September 30,
2017 |
|
September 29,
2018 |
|
September 30,
2017 |
||||
14.5
|
%
|
|
65.5
|
%
|
|
42.9
|
%
|
|
68.7
|
%
|
|
Nine Months Ended
|
||||||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
|
Increase/(Decrease)
|
||||||
Cash Flows From (For) Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
49.6
|
|
|
$
|
46.4
|
|
|
$
|
3.2
|
|
Non-cash adjustments
|
523.2
|
|
|
560.8
|
|
|
(37.6
|
)
|
|||
Subtotal
|
572.8
|
|
|
607.2
|
|
|
(34.4
|
)
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash due to:
|
|
|
|
|
|
||||||
Accounts receivable
|
20.2
|
|
|
38.4
|
|
|
(18.2
|
)
|
|||
Inventories
|
(101.3
|
)
|
|
(28.3
|
)
|
|
(73.0
|
)
|
|||
Accounts payable
|
44.5
|
|
|
(6.0
|
)
|
|
50.5
|
|
|||
Payroll and related taxes
|
(40.8
|
)
|
|
(36.7
|
)
|
|
(4.1
|
)
|
|||
Accrued customer programs
|
(1.2
|
)
|
|
(15.8
|
)
|
|
14.6
|
|
|||
Accrued liabilities
|
(31.1
|
)
|
|
(18.8
|
)
|
|
(12.3
|
)
|
|||
Accrued income taxes
|
(60.0
|
)
|
|
(61.5
|
)
|
|
1.5
|
|
|||
Other, net
|
(4.4
|
)
|
|
3.5
|
|
|
(7.9
|
)
|
|||
Subtotal
|
$
|
(174.1
|
)
|
|
$
|
(125.2
|
)
|
|
$
|
(48.9
|
)
|
|
|
|
|
|
|
||||||
Net cash from operating activities
|
$
|
398.7
|
|
|
$
|
482.0
|
|
|
$
|
(83.3
|
)
|
•
|
Changes in inventory due primarily to increased volumes related to operating inefficiencies and actions to improve customer service in our CHCA segment, insourcing initiatives in our CHCI segment and changing market dynamics in our RX segment;
|
•
|
Decreased net income after non-cash adjustments;
|
•
|
Changes in accounts receivable due primarily to the discontinuation of our Belgium accounts receivable factoring program, more than offset by timing of sales and receipt of payments in our CHCA and CHCI segments;
|
•
|
Changes in accrued liabilities due primarily to the change in legal and professional expense accruals, royalty and profit sharing accruals, accrued interest payable and deferred revenue associated with BCH-Belgium distribution contracts; partially offset by
|
•
|
Changes in accounts payable due primarily to timing of payments, mix of payment terms, and an increase in inventory; and
|
•
|
Changes in accrued customer-related programs due primarily to higher customer related-accruals and the timing of rebate payments.
|
|
Nine Months Ended
|
||||||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
|
Increase/(Decrease)
|
||||||
Cash Flows From (For) Investing Activities
|
|
|
|
|
|
||||||
Proceeds from royalty rights
|
$
|
11.4
|
|
|
$
|
86.4
|
|
|
$
|
(75.0
|
)
|
Purchase of investment securities
|
(7.5
|
)
|
|
—
|
|
|
(7.5
|
)
|
|||
Asset acquisitions
|
(32.8
|
)
|
|
—
|
|
|
(32.8
|
)
|
|||
Additions to property, plant and equipment
|
(56.8
|
)
|
|
(55.2
|
)
|
|
(1.6
|
)
|
|||
Net proceeds from sale of business and other assets
|
5.0
|
|
|
46.7
|
|
|
(41.7
|
)
|
|||
Proceeds from sale of the Tysabri
®
financial asset
|
—
|
|
|
2,200.0
|
|
|
(2,200.0
|
)
|
|||
Other investing, net
|
—
|
|
|
(5.8
|
)
|
|
5.8
|
|
|||
Net cash from (for) investing activities
|
$
|
(80.7
|
)
|
|
$
|
2,272.1
|
|
|
$
|
(2,352.8
|
)
|
|
Nine Months Ended
|
||||||||||
(in millions)
|
September 29,
2018 |
|
September 30,
2017 |
|
Increase/(Decrease)
|
||||||
Cash Flows From (For) Financing Activities
|
|
|
|
|
|
||||||
Issuances of long-term debt
|
$
|
431.0
|
|
|
$
|
—
|
|
|
$
|
431.0
|
|
Payments on long-term debt
|
(470.0
|
)
|
|
(2,243.7
|
)
|
|
1,773.7
|
|
|||
Borrowings (repayments) of revolving credit agreements and other financing, net
|
(8.7
|
)
|
|
—
|
|
|
(8.7
|
)
|
|||
Deferred financing fees
|
(2.4
|
)
|
|
(4.2
|
)
|
|
1.8
|
|
|||
Premium on early debt retirement
|
—
|
|
|
(116.1
|
)
|
|
116.1
|
|
|||
Issuance of ordinary shares
|
1.0
|
|
|
0.5
|
|
|
0.5
|
|
|||
Repurchase of ordinary shares
|
(400.0
|
)
|
|
(191.5
|
)
|
|
(208.5
|
)
|
|||
Cash dividends
|
(78.7
|
)
|
|
(68.7
|
)
|
|
(10.0
|
)
|
|||
Other financing, net
|
(9.8
|
)
|
|
2.7
|
|
|
(12.5
|
)
|
|||
Net cash (for) financing activities
|
$
|
(537.6
|
)
|
|
$
|
(2,621.0
|
)
|
|
$
|
2,083.4
|
|
•
|
Reviewing our income tax processes and controls and enhancing the overall design and procedures performed in calculating our income tax provision on an interim and annual basis
|
•
|
Significantly strengthening our tax capabilities through a combination of key new hires and providing additional resources
|
•
|
Re-designing our management review controls and enhancing the precision of review around the key income tax areas
|
•
|
Evaluate the sufficiency of our income tax resources and personnel to determine whether additional enhancements are needed
|
•
|
Evaluate whether further enhancements are needed to the design of our income tax procedures and controls
|
•
|
Demonstrate consistent operating effectiveness of our management review controls over income taxes over a number of quarterly periods
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
|
|
Value of Shares Available for Purchase
(1)
|
||||||
July 1 - July 31, 2018
|
852,400
|
|
|
$
|
76.25
|
|
|
852,400
|
|
|
|
||
August 1 - August 31, 2018
|
985,700
|
|
|
$
|
71.04
|
|
|
985,700
|
|
|
|
||
September 1 - September 30, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
908.46
|
million
|
Total
|
1,838,100
|
|
|
|
|
|
|
$
|
908.46
|
million
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
PERRIGO COMPANY PLC
|
|
|
|
(Registrant)
|
|
|
|
|
Date:
|
November 8, 2018
|
|
/s/ Murray S. Kessler
|
|
|
|
Murray S. Kessler
|
|
|
|
Chief Executive Officer and President
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
November 8, 2018
|
|
/s/ Ronald L. Winowiecki
|
|
|
|
Ronald L. Winowiecki
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Accounting and Financial Officer)
|
EMPLOYEE
|
|
PERRIGO MANAGEMENT COMPANY
|
||
|
|
|
|
|
|
|
|
|
|
/s/ Uwe Roehrhoff
|
|
|
/s/ Todd Kingma
|
|
Employee Signature
|
|
By:
|
Todd Kingma
|
|
|
|
|
|
|
UWE ROEHRHOFF
|
|
Title:
|
EVP, General Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
10/9/2018
|
|
Date:
|
10/10/2018
|
/s/ Uwe Roehrhoff
|
|
Uwe Roehrhoff
|
|
|
|
|
|
Dated as of:
|
10/9/2018
|
|
1.
|
I have reviewed this report on Form 10-Q of Perrigo Company plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Murray S. Kessler
|
Murray S. Kessler
|
Chief Executive Officer
|
|
1.
|
I have reviewed this report on Form 10-Q of Perrigo Company plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Ronald L. Winowiecki
|
Ronald L. Winowiecki
|
Chief Financial Officer
|
|
|
Re:
|
Perrigo Company plc
|
(i)
|
this Quarterly Report on Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(ii)
|
the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of Perrigo Company plc.
|
|
|
|
|
Date:
|
November 8, 2018
|
|
/s/ Murray S. Kessler
|
|
|
|
Murray S. Kessler
|
|
|
|
Chief Executive Officer and President
|
|
|
|
|
|
|
|
|
Date:
|
November 8, 2018
|
|
/s/ Ronald L. Winowiecki
|
|
|
|
Ronald L. Winowiecki
|
|
|
|
Chief Financial Officer
|
|
|
|
|