☒
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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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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Ordinary shares
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PRGO
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New York Stock Exchange
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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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16
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17
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PART II. OTHER INFORMATION
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Three Months Ended
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||||||
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March 28,
2020 |
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March 30,
2019 |
||||
Net sales
|
$
|
1,341.0
|
|
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$
|
1,174.5
|
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Cost of sales
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857.8
|
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725.7
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Gross profit
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483.2
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448.8
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||||
Operating expenses
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|
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Distribution
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24.2
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23.3
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Research and development
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41.9
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40.2
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Selling
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147.7
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|
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148.6
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Administration
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122.6
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125.1
|
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Impairment charges
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—
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4.1
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|
||
Restructuring
|
—
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|
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9.3
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|
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Other operating expense (income)
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1.1
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(4.1
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)
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Total operating expenses
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337.5
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346.5
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Operating income
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145.7
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102.3
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||||
Change in financial assets
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(1.6
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)
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(10.4
|
)
|
||
Interest expense, net
|
30.2
|
|
|
28.6
|
|
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Other (income) expense, net
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2.4
|
|
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3.2
|
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Income before income taxes
|
114.7
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80.9
|
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Income tax expense
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8.3
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17.0
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Net income
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$
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106.4
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$
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63.9
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Earnings per share
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Basic
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$
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0.78
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$
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0.47
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Diluted
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$
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0.77
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$
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0.47
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Weighted-average shares outstanding
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Basic
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136.2
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135.9
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Diluted
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137.3
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136.2
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Three Months Ended
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||||||
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March 28,
2020 |
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March 30,
2019 |
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Net income
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$
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106.4
|
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$
|
63.9
|
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Other comprehensive income (loss):
|
|
|
|
||||
Foreign currency translation adjustments
|
(92.2
|
)
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(16.8
|
)
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Change in fair value of derivative financial instruments, net of tax
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(9.4
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)
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1.7
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|
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Change in post-retirement and pension liability, net of tax
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(1.9
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)
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(0.5
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)
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Other comprehensive income (loss), net of tax
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(103.5
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)
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(15.6
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)
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Comprehensive income
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$
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2.9
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$
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48.3
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Ordinary Shares
Issued |
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Accumulated
Other Comprehensive Income |
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Retained
Earnings (Accumulated Deficit) |
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Total
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|||||||||||
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Shares
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Amount
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|||||||||||||||
Balance at December 31, 2018
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135.9
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$
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7,421.7
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$
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84.6
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$
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(1,838.3
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)
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$
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5,668.0
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Adoption of new accounting standards
|
—
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—
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—
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(3.4
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)
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(3.4
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)
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Net income
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—
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—
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—
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63.9
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63.9
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Other comprehensive loss
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—
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—
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(15.6
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)
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—
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(15.6
|
)
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Restricted stock plan
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0.2
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—
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—
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—
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|
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—
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Compensation for stock options
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—
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1.8
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|
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—
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—
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1.8
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|
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Compensation for restricted stock
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—
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14.2
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—
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—
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14.2
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Cash dividends, $0.19 per share
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—
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(25.9
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)
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—
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—
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(25.9
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)
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Shares withheld for payment of employees' withholding tax liability
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(0.1
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)
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(2.4
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)
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—
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—
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(2.4
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)
|
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Balance at March 30, 2019
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136.0
|
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$
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7,409.4
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$
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69.0
|
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$
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(1,777.8
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)
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$
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5,700.6
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|
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Ordinary Shares
Issued |
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Accumulated
Other Comprehensive Income |
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Retained
Earnings (Accumulated Deficit) |
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Total
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|||||||||||
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Shares
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Amount
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|||||||||||||||
Balance at December 31, 2019
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136.1
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$
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7,359.9
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$
|
139.4
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|
|
$
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(1,695.5
|
)
|
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$
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5,803.8
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Net income
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—
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|
|
—
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|
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—
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|
|
106.4
|
|
|
106.4
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|
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Other comprehensive loss
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—
|
|
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—
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|
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(103.5
|
)
|
|
—
|
|
|
(103.5
|
)
|
||||
Restricted stock plan
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Compensation for stock options
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
Compensation for restricted stock
|
—
|
|
|
15.4
|
|
|
—
|
|
|
—
|
|
|
15.4
|
|
||||
Cash dividends, $0.23 per share
|
—
|
|
|
(30.9
|
)
|
|
—
|
|
|
—
|
|
|
(30.9
|
)
|
||||
Shares withheld for payment of employees' withholding tax liability
|
(0.1
|
)
|
|
(5.6
|
)
|
|
—
|
|
|
—
|
|
|
(5.6
|
)
|
||||
Balance at March 28, 2020
|
136.3
|
|
|
$
|
7,339.6
|
|
|
$
|
35.9
|
|
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$
|
(1,589.1
|
)
|
|
$
|
5,786.4
|
|
|
Three Months Ended
|
||||||
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March 28,
2020 |
|
March 30,
2019 |
||||
Cash Flows From (For) Operating Activities
|
|
|
|
||||
Net income
|
$
|
106.4
|
|
|
$
|
63.9
|
|
Adjustments to derive cash flows:
|
|
|
|
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Depreciation and amortization
|
93.1
|
|
|
96.6
|
|
||
Share-based compensation
|
16.2
|
|
|
12.4
|
|
||
Impairment charges
|
—
|
|
|
4.1
|
|
||
Change in financial assets
|
(1.6
|
)
|
|
(10.4
|
)
|
||
Restructuring charges
|
—
|
|
|
9.3
|
|
||
Deferred income taxes
|
6.7
|
|
|
3.9
|
|
||
Amortization of debt premium
|
(0.7
|
)
|
|
(1.9
|
)
|
||
Other non-cash adjustments, net
|
(14.0
|
)
|
|
13.4
|
|
||
Subtotal
|
206.1
|
|
|
191.3
|
|
||
Increase (decrease) in cash due to:
|
|
|
|
||||
Accounts receivable
|
(67.6
|
)
|
|
(48.5
|
)
|
||
Inventories
|
36.5
|
|
|
(37.5
|
)
|
||
Prepaid expenses
|
(33.4
|
)
|
|
(3.7
|
)
|
||
Accounts payable
|
53.8
|
|
|
75.4
|
|
||
Payroll and related taxes
|
(18.4
|
)
|
|
(19.9
|
)
|
||
Accrued customer programs
|
(13.6
|
)
|
|
(61.7
|
)
|
||
Accrued liabilities
|
11.1
|
|
|
(3.8
|
)
|
||
Accrued income taxes
|
3.8
|
|
|
(10.0
|
)
|
||
Other, net
|
(6.5
|
)
|
|
12.9
|
|
||
Subtotal
|
(34.3
|
)
|
|
(96.8
|
)
|
||
Net cash from operating activities
|
171.8
|
|
|
94.5
|
|
||
Cash Flows From (For) Investing Activities
|
|
|
|
||||
Proceeds from royalty rights
|
1.8
|
|
|
1.2
|
|
||
Acquisitions of businesses, net of cash acquired
|
(11.3
|
)
|
|
—
|
|
||
Proceeds from the Royalty Pharma contingent milestone
|
—
|
|
|
250.0
|
|
||
Asset acquisitions
|
(32.7
|
)
|
|
—
|
|
||
Additions to property, plant and equipment
|
(33.8
|
)
|
|
(21.1
|
)
|
||
Other investing, net
|
1.2
|
|
|
—
|
|
||
Net cash from (for) investing activities
|
(74.8
|
)
|
|
230.1
|
|
||
Cash Flows From (For) Financing Activities
|
|
|
|
||||
Payments on long-term debt
|
—
|
|
|
(12.3
|
)
|
||
Borrowings (repayments) of revolving credit agreements and other financing, net
|
102.0
|
|
|
(0.3
|
)
|
||
Cash dividends
|
(30.9
|
)
|
|
(25.9
|
)
|
||
Other financing, net
|
(6.4
|
)
|
|
(3.1
|
)
|
||
Net cash from (for) financing activities
|
64.7
|
|
|
(41.6
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(5.6
|
)
|
|
3.8
|
|
||
Net increase (decrease) in cash and cash equivalents
|
156.1
|
|
|
286.8
|
|
||
Cash and cash equivalents, beginning of period
|
354.3
|
|
|
551.1
|
|
||
Cash and cash equivalents, end of period
|
$
|
510.4
|
|
|
$
|
837.9
|
|
•
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Consumer Self-Care Americas ("CSCA") comprises our consumer self-care business (OTC, contract manufacturing, infant formula, and oral self-care categories and our divested animal health category) in the U.S., Mexico and Canada.
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•
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Consumer Self-Care International ("CSCI") comprises our branded consumer self-care business primarily in Europe, our consumer self-care businesses in the United Kingdom and Australia, and our liquid licensed products business in the United Kingdom.
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•
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Prescription Pharmaceuticals ("RX") comprises our prescription pharmaceuticals business in the U.S., predominantly generics, and our pharmaceuticals and diagnostic businesses in Israel.
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Recently Issued Accounting Standards Not Yet Adopted
|
||||||
Standard
|
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Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
ASU 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 post-retirement plans.
|
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December 31, 2020
|
|
We are currently evaluating the implications of adoption to related disclosures in our Consolidated Financial Statements.
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ASU 2019-12: Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
|
|
This guidance enhances and simplifies various aspects of the income tax accounting guidance in ASC 740.
|
|
January 1, 2021
|
|
We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
|
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Three Months Ended
|
||
|
March 28,
2020 |
||
Beginning balance
|
$
|
6.7
|
|
Provision for credit losses
|
0.8
|
|
|
Receivables written-off
|
(0.1
|
)
|
|
Recoveries collected
|
—
|
|
|
Currency translation adjustment
|
(0.3
|
)
|
|
Ending balance
|
$
|
7.1
|
|
|
Three Months Ended
|
||||||
|
March 28,
2020 |
|
March 30,
2019 |
||||
U.S.
|
$
|
901.6
|
|
|
$
|
768.8
|
|
Europe(2)
|
372.6
|
|
|
340.9
|
|
||
All other countries(3)
|
66.8
|
|
|
64.8
|
|
||
Total net sales
|
$
|
1,341.0
|
|
|
$
|
1,174.5
|
|
|
Three Months Ended
|
||||||
|
March 28,
2020 |
|
March 30,
2019 |
||||
CSCA(1)
|
|
|
|
||||
Upper respiratory
|
$
|
154.6
|
|
|
$
|
132.8
|
|
Pain and sleep-aids
|
120.4
|
|
|
91.3
|
|
||
Digestive health
|
106.9
|
|
|
102.3
|
|
||
Nutrition
|
102.2
|
|
|
99.6
|
|
||
Healthy lifestyle
|
85.8
|
|
|
76.0
|
|
||
Oral self-care
|
55.3
|
|
|
—
|
|
||
Skincare and personal hygiene
|
46.7
|
|
|
45.5
|
|
||
Vitamins, minerals, and supplements
|
6.4
|
|
|
6.3
|
|
||
Animal health
|
—
|
|
|
19.6
|
|
||
Other CSCA(2)
|
22.3
|
|
|
8.4
|
|
||
Total CSCA
|
700.6
|
|
|
581.8
|
|
||
CSCI
|
|
|
|
||||
Skincare and personal hygiene
|
94.7
|
|
|
101.9
|
|
||
Upper respiratory
|
84.1
|
|
|
71.9
|
|
||
Vitamins, minerals, and supplements
|
48.5
|
|
|
45.8
|
|
||
Pain and sleep-aids
|
46.8
|
|
|
40.4
|
|
||
Healthy lifestyle
|
43.6
|
|
|
47.3
|
|
||
Oral self-care
|
23.2
|
|
|
1.6
|
|
||
Digestive health
|
6.0
|
|
|
7.2
|
|
||
Other CSCI(3)
|
35.8
|
|
|
34.7
|
|
||
Total CSCI
|
382.7
|
|
|
350.8
|
|
||
RX
|
257.7
|
|
|
241.9
|
|
||
Total net sales
|
$
|
1,341.0
|
|
|
$
|
1,174.5
|
|
(2)
|
Consists primarily of 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, our distribution business 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
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
Short-term contract assets
|
Prepaid expenses and other current assets
|
|
$
|
28.1
|
|
|
$
|
26.3
|
|
|
Ranir
|
||
Purchase price paid
|
$
|
759.2
|
|
|
|
||
Assets acquired:
|
|
||
Cash and cash equivalents
|
$
|
11.5
|
|
Accounts receivable
|
40.6
|
|
|
Inventories
|
59.0
|
|
|
Prepaid expenses and other current assets
|
4.0
|
|
|
Property, plant and equipment, net
|
40.8
|
|
|
Operating lease assets
|
3.7
|
|
|
Goodwill
|
291.1
|
|
|
Definite-lived intangibles:
|
|
||
Developed product technology, formulations, and product rights
|
$
|
48.6
|
|
Customer relationships and distribution networks
|
260.0
|
|
|
Trademarks, trade names, and brands
|
41.0
|
|
|
Indefinite-lived intangibles:
|
|
||
In-process research and development
|
39.7
|
|
|
Total intangible assets
|
$
|
389.3
|
|
Other non-current assets
|
2.7
|
|
|
Total assets
|
$
|
842.7
|
|
Liabilities assumed:
|
|
||
Accounts payable
|
$
|
17.6
|
|
Other accrued liabilities
|
7.7
|
|
|
Payroll and related taxes
|
5.5
|
|
|
Accrued customer programs
|
5.7
|
|
|
Deferred income taxes
|
44.2
|
|
|
Other non-current liabilities
|
2.8
|
|
|
Total liabilities
|
$
|
83.5
|
|
Net assets acquired
|
$
|
759.2
|
|
|
Three Months Ended
|
||
(Unaudited)
|
March 30,
2019 |
||
Net sales
|
$
|
1,248.4
|
|
Net income
|
$
|
70.7
|
|
|
|
December 31,
2019 |
|
Purchase accounting adjustments
|
|
Currency translation adjustments
|
|
March 28,
2020 |
||||||||
CSCA
|
|
$
|
1,899.1
|
|
|
$
|
(10.8
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
1,882.6
|
|
CSCI(1)
|
|
1,203.7
|
|
|
10.8
|
|
|
(17.8
|
)
|
|
1,196.7
|
|
||||
RX(2)
|
|
1,013.9
|
|
|
—
|
|
|
(3.2
|
)
|
|
1,010.7
|
|
||||
Total goodwill
|
|
$
|
4,116.7
|
|
|
$
|
—
|
|
|
$
|
(26.7
|
)
|
|
$
|
4,090.0
|
|
|
March 28, 2020
|
|
December 31, 2019
|
||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Gross
|
|
Accumulated
Amortization
|
||||||||
Indefinite-lived intangibles:
|
|
|
|
|
|
|
|
||||||||
Trademarks, trade names, and brands
|
$
|
17.6
|
|
|
$
|
—
|
|
|
$
|
18.8
|
|
|
$
|
—
|
|
In-process research and development
|
38.6
|
|
|
—
|
|
|
50.0
|
|
|
—
|
|
||||
Total indefinite-lived intangibles
|
$
|
56.2
|
|
|
$
|
—
|
|
|
$
|
68.8
|
|
|
$
|
—
|
|
Definite-lived intangibles:
|
|
|
|
|
|
|
|
||||||||
Distribution and license agreements and supply agreements
|
$
|
133.5
|
|
|
$
|
82.6
|
|
|
$
|
126.7
|
|
|
$
|
81.1
|
|
Developed product technology, formulations, and product rights
|
1,393.5
|
|
|
770.2
|
|
|
1,392.8
|
|
|
755.3
|
|
||||
Customer relationships and distribution networks
|
1,792.6
|
|
|
694.5
|
|
|
1,805.6
|
|
|
671.4
|
|
||||
Trademarks, trade names, and brands
|
1,370.7
|
|
|
265.7
|
|
|
1,353.5
|
|
|
250.1
|
|
||||
Non-compete agreements
|
6.4
|
|
|
6.0
|
|
|
6.5
|
|
|
6.0
|
|
||||
Total definite-lived intangibles
|
$
|
4,696.7
|
|
|
$
|
1,819.0
|
|
|
$
|
4,685.1
|
|
|
$
|
1,763.9
|
|
Total intangible assets
|
$
|
4,752.9
|
|
|
$
|
1,819.0
|
|
|
$
|
4,753.9
|
|
|
$
|
1,763.9
|
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
Finished goods
|
$
|
485.8
|
|
|
$
|
530.3
|
|
Work in process
|
188.8
|
|
|
186.9
|
|
||
Raw materials
|
256.2
|
|
|
250.1
|
|
||
Total inventories
|
$
|
930.8
|
|
|
$
|
967.3
|
|
|
|
March 28, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment securities
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
—
|
|
|
11.1
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
||||||
Cross-currency swap
|
|
—
|
|
|
11.4
|
|
|
—
|
|
|
—
|
|
|
26.3
|
|
|
—
|
|
||||||
Funds associated with Israeli severance liability
|
|
—
|
|
|
13.6
|
|
|
—
|
|
|
—
|
|
|
14.6
|
|
|
—
|
|
||||||
Royalty Pharma contingent milestone
|
|
—
|
|
|
—
|
|
|
96.9
|
|
|
—
|
|
|
—
|
|
|
95.3
|
|
||||||
Total assets
|
|
$
|
3.7
|
|
|
$
|
36.1
|
|
|
$
|
96.9
|
|
|
$
|
6.6
|
|
|
$
|
45.2
|
|
|
$
|
95.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
13.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.4
|
|
|
$
|
—
|
|
Contingent consideration payments
|
|
—
|
|
|
—
|
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
11.9
|
|
||||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
13.7
|
|
|
$
|
13.0
|
|
|
$
|
—
|
|
|
$
|
8.4
|
|
|
$
|
11.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Measured at fair value on a non-recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,013.1
|
|
Definite-lived intangible assets(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.3
|
|
||||||
Total assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,036.4
|
|
(1)
|
During the year ended December 31, 2019, goodwill with a carrying amount of $1,122.3 million was written down to a fair value of $1,013.1 million.
|
(2)
|
During the year ended December 31, 2019, definite-lived intangible assets with a carrying amount of $55.3 million were written down to a fair value of $23.3 million.
|
|
Three Months Ended
|
||||||
|
March 28,
2020 |
|
March 30,
2019 |
||||
Beginning balance
|
$
|
95.3
|
|
|
$
|
323.2
|
|
Payments received
|
—
|
|
|
(250.0
|
)
|
||
Change in fair value
|
1.6
|
|
|
10.4
|
|
||
Ending balance
|
$
|
96.9
|
|
|
$
|
83.6
|
|
|
Three Months Ended
|
||||
|
March 28,
2020 |
|
March 30,
2019 |
||
Volatility
|
35.0
|
%
|
|
30.0
|
%
|
Rate of return
|
7.29
|
%
|
|
8.02
|
%
|
|
Three Months Ended
|
||||||
|
March 28,
2020 |
|
March 30,
2019 |
||||
Beginning balance
|
$
|
11.9
|
|
|
$
|
15.3
|
|
Changes in value
|
1.1
|
|
|
1.2
|
|
||
Settlements and other adjustments
|
—
|
|
|
(4.1
|
)
|
||
Ending balance
|
$
|
13.0
|
|
|
$
|
12.4
|
|
|
|
|
|
|
Three Months Ended
|
||
|
|
|
|
|
March 28, 2020
|
||
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Weighted Average)(1)
|
||
Contingent consideration payments: sales-based milestones
|
Discounted cash flow
|
|
Projected royalties
|
|
$
|
105.0
|
|
|
|
|
Projected year of payment of sales-based milestones
|
|
2020 - 2035 (2028)
|
|
|
|
|
|
Discount rate
|
|
52.5
|
%
|
(1)
|
Unobservable inputs were weighted based on the relative estimated milestone payments.
|
|
March 28,
2020 |
|
December 31,
2019 |
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 1
|
|
Level 2
|
||||||||
Public Bonds
|
|
|
|
|
|
|
|
||||||||
Carrying Value (excluding discount)
|
$
|
2,600.0
|
|
|
—
|
|
$
|
2,600.0
|
|
|
—
|
|
|||
Fair value
|
$
|
2,482.5
|
|
|
—
|
|
$
|
2,618.4
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
||||||||
Private placement note
|
|
|
|
|
|
|
|
||||||||
Carrying value (excluding premium)
|
—
|
|
|
$
|
150.5
|
|
|
—
|
|
|
$
|
151.4
|
|
||
Fair value
|
—
|
|
|
$
|
153.6
|
|
|
—
|
|
|
$
|
168.4
|
|
Measurement Category
|
|
Balance Sheet Location
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
Fair value method
|
|
Prepaid expenses and other current assets
|
|
$
|
3.7
|
|
|
$
|
6.6
|
|
Fair value method(1)
|
|
Other non-current assets
|
|
$
|
2.3
|
|
|
$
|
2.3
|
|
Equity method
|
|
Other non-current assets
|
|
$
|
18.5
|
|
|
$
|
17.8
|
|
(1)
|
Measured at fair value using the Net Asset Value practical expedient.
|
|
|
|
|
Three Months Ended
|
||||||
Measurement Category
|
|
Income Statement Location
|
|
March 28,
2020 |
|
March 30,
2019 |
||||
Fair value method
|
|
Other (income) expense, net
|
|
$
|
2.9
|
|
|
$
|
6.1
|
|
Equity method
|
|
Other (income) expense, net
|
|
$
|
(0.7
|
)
|
|
$
|
(0.7
|
)
|
|
|
Notional Amount
|
||||||
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
Israeli Shekel (ILS)
|
|
$
|
288.3
|
|
|
$
|
712.7
|
|
European Euro (EUR)
|
|
150.5
|
|
|
157.6
|
|
||
British Pound (GBP)
|
|
79.7
|
|
|
86.9
|
|
||
United States Dollar (USD)
|
|
55.9
|
|
|
92.4
|
|
||
Danish Krone (DKK)
|
|
52.4
|
|
|
51.7
|
|
||
Canadian Dollar (CAD)
|
|
27.4
|
|
|
41.3
|
|
||
Chinese Yuan (CNY)
|
|
14.6
|
|
|
20.9
|
|
||
Swedish Krona (SEK)
|
|
14.0
|
|
|
42.0
|
|
||
Mexican Peso (MPX)
|
|
12.5
|
|
|
9.7
|
|
||
Polish Zloty (PLZ)
|
|
7.8
|
|
|
21.5
|
|
||
Switzerland Franc (CHF)
|
|
4.4
|
|
|
4.1
|
|
||
Romanian New Leu (RON)
|
|
0.4
|
|
|
2.3
|
|
||
Norwegian Krone (NOK)
|
|
0.3
|
|
|
6.6
|
|
||
Other
|
|
4.7
|
|
|
7.5
|
|
||
Total
|
|
$
|
712.9
|
|
|
$
|
1,257.2
|
|
|
|
|
Asset Derivatives
|
||||||
|
|
|
Fair Value
|
||||||
|
Balance Sheet Location
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
Designated derivatives:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Prepaid expenses and other current assets
|
|
$
|
5.3
|
|
|
$
|
1.0
|
|
Cross-currency swap
|
Prepaid expenses and other current assets
|
|
11.4
|
|
|
26.3
|
|
||
Total designated derivatives
|
|
|
$
|
16.7
|
|
|
$
|
27.3
|
|
Non-designated derivatives:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Prepaid expenses and other current assets
|
|
$
|
5.8
|
|
|
$
|
3.3
|
|
|
|
|
Liability Derivatives
|
||||||
|
|
|
Fair Value
|
||||||
|
Balance Sheet Location
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
Designated derivatives:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Other accrued liabilities
|
|
$
|
10.9
|
|
|
$
|
4.7
|
|
Non-designated derivatives:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Other accrued liabilities
|
|
$
|
2.8
|
|
|
$
|
3.7
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 28, 2020
|
||||||||||||||
Instrument
|
|
Amount of Gain/(Loss) Recorded in OCI(1)
|
|
Classification of Gain/(Loss) Reclassified from AOCI into Earnings
|
|
Amount of Gain/(Loss) Reclassified from AOCI into Earnings
|
|
Classification of Gain/(Loss) Recognized into Earnings Related to Amounts Excluded from Effectiveness Testing
|
|
Amount of Gain/(Loss) Recognized in Earnings on Derivatives Related to Amounts Excluded from Effectiveness Testing
|
||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap agreements
|
|
$
|
—
|
|
|
Interest expense, net
|
|
$
|
(0.4
|
)
|
|
Interest expense, net
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
7.0
|
|
|
Net sales
|
|
(0.4
|
)
|
|
Net sales
|
|
—
|
|
|||
|
|
|
|
Cost of sales
|
|
(0.6
|
)
|
|
Cost of sales
|
|
0.4
|
|
||||
|
|
$
|
7.0
|
|
|
|
|
$
|
(1.4
|
)
|
|
|
|
$
|
0.4
|
|
Net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||
Cross-currency swap
|
|
$
|
(15.0
|
)
|
|
|
|
|
|
Interest expense, net
|
|
$
|
2.8
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 30, 2019
|
||||||||||||||
Instrument
|
|
Amount of Gain/(Loss) Recorded in OCI
|
|
Classification of Gain/(Loss) Reclassified from AOCI into Earnings
|
|
Amount of Gain/(Loss) Reclassified from AOCI into Earnings
|
|
Classification of Gain/(Loss) Recognized into Earnings Related to Amounts Excluded from Effectiveness Testing
|
|
Amount of Gain/(Loss) Recognized in Earnings on Derivatives Related to Amounts Excluded from Effectiveness Testing
|
||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap agreements
|
|
$
|
—
|
|
|
Interest expense, net
|
|
$
|
(0.4
|
)
|
|
Interest expense, net
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
(1.0
|
)
|
|
Net sales
|
|
0.2
|
|
|
Net sales
|
|
(0.1
|
)
|
|||
|
|
|
|
Cost of sales
|
|
(1.3
|
)
|
|
Cost of sales
|
|
(1.1
|
)
|
||||
|
|
$
|
(1.0
|
)
|
|
|
|
$
|
(1.5
|
)
|
|
|
|
$
|
(1.2
|
)
|
|
|
|
|
Three Months Ended
|
||||||
Non-Designated Derivatives
|
|
Income Statement
Location
|
|
March 28,
2020 |
|
March 30,
2019 |
||||
Foreign currency forward contracts
|
|
Other (income) expense, net
|
|
$
|
10.4
|
|
|
$
|
(8.8
|
)
|
|
|
Interest expense, net
|
|
1.7
|
|
|
0.4
|
|
||
|
|
|
|
$
|
12.1
|
|
|
$
|
(8.4
|
)
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 28, 2020
|
||||||||||||||
|
|
Net Sales
|
|
Cost of Sales
|
|
Interest Expense, net
|
|
Other (Income) Expense, net
|
||||||||
Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded
|
|
$
|
1,341.0
|
|
|
$
|
857.8
|
|
|
$
|
30.2
|
|
|
$
|
2.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
The effects of cash flow hedging:
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on cash flow hedging relationships
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
|
|
|
|
|
|
|
||||||||
Amount of gain or (loss) reclassified from AOCI into earnings
|
|
$
|
(0.4
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap agreements
|
|
|
|
|
|
|
|
|
||||||||
Amount of gain or (loss) reclassified from AOCI into earnings
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 30, 2019
|
||||||||||||||
|
|
Net Sales
|
|
Cost of Sales
|
|
Interest Expense, net
|
|
Other (Income) Expense, net
|
||||||||
Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded
|
|
$
|
1,174.5
|
|
|
$
|
725.7
|
|
|
$
|
28.6
|
|
|
$
|
3.2
|
|
|
|
|
|
|
|
|
|
|
||||||||
The effects of cash flow hedging:
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on cash flow hedging relationships
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
|
|
|
|
|
|
|
||||||||
Amount of gain or (loss) reclassified from AOCI into earnings
|
|
$
|
0.2
|
|
|
$
|
(1.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach
|
|
$
|
(0.1
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap agreements
|
|
|
|
|
|
|
|
|
||||||||
Amount of gain or (loss) reclassified from AOCI into earnings
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
Assets
|
|
Balance Sheet Location
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
Operating
|
|
Operating lease assets
|
|
$
|
124.0
|
|
|
$
|
129.9
|
|
Finance
|
|
Other non-current assets
|
|
27.9
|
|
|
27.6
|
|
||
Total
|
|
|
|
$
|
151.9
|
|
|
$
|
157.5
|
|
Liabilities
|
|
Balance Sheet Location
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
Current
|
|
|
|
|
|
|
||||
Operating
|
|
Other accrued liabilities
|
|
$
|
30.9
|
|
|
$
|
32.0
|
|
Finance
|
|
Current indebtedness
|
|
5.7
|
|
|
3.4
|
|
||
Non-Current
|
|
|
|
|
|
|
||||
Operating
|
|
Other non-current liabilities
|
|
96.8
|
|
|
101.7
|
|
||
Finance
|
|
Long-term debt, less current portion
|
|
19.3
|
|
|
21.1
|
|
||
Total
|
|
|
|
$
|
152.7
|
|
|
$
|
158.2
|
|
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||||||||||||
|
|
Operating
|
|
Financing
|
|
Operating
|
|
Financing
|
||||||||||||||||||||||||
|
|
March 28,
2020 |
|
December 31,
2019 |
|
March 28,
2020 |
|
December 31,
2019 |
|
March 28,
2020 |
|
December 31,
2019 |
|
March 28,
2020 |
|
December 31,
2019 |
||||||||||||||||
CSCA
|
|
$
|
21.4
|
|
|
$
|
22.4
|
|
|
$
|
16.4
|
|
|
$
|
16.8
|
|
|
$
|
21.5
|
|
|
$
|
22.8
|
|
|
$
|
16.4
|
|
|
$
|
16.6
|
|
CSCI
|
|
39.3
|
|
|
41.6
|
|
|
5.7
|
|
|
5.8
|
|
|
40.3
|
|
|
42.4
|
|
|
2.7
|
|
|
2.9
|
|
||||||||
RX
|
|
33.5
|
|
|
35.1
|
|
|
0.7
|
|
|
0.8
|
|
|
34.7
|
|
|
36.3
|
|
|
0.7
|
|
|
0.8
|
|
||||||||
Unallocated
|
|
29.8
|
|
|
30.8
|
|
|
5.1
|
|
|
4.2
|
|
|
31.2
|
|
|
32.2
|
|
|
5.2
|
|
|
4.2
|
|
||||||||
Total
|
|
$
|
124.0
|
|
|
$
|
129.9
|
|
|
$
|
27.9
|
|
|
$
|
27.6
|
|
|
$
|
127.7
|
|
|
$
|
133.7
|
|
|
$
|
25.0
|
|
|
$
|
24.5
|
|
|
|
Three Months Ended
|
||||||
|
|
March 28,
2020 |
|
March 30,
2019 |
||||
Operating leases(1)
|
|
$
|
11.4
|
|
|
$
|
12.0
|
|
|
|
|
|
|
||||
Finance leases
|
|
|
|
|
||||
Amortization
|
|
$
|
1.1
|
|
|
$
|
0.7
|
|
Interest
|
|
0.2
|
|
|
0.1
|
|
||
Total finance leases
|
|
$
|
1.3
|
|
|
$
|
0.8
|
|
|
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
2020
|
|
$
|
27.4
|
|
|
$
|
3.4
|
|
|
$
|
30.8
|
|
2021
|
|
28.2
|
|
|
5.8
|
|
|
34.0
|
|
|||
2022
|
|
21.0
|
|
|
3.2
|
|
|
24.2
|
|
|||
2023
|
|
15.6
|
|
|
1.8
|
|
|
17.4
|
|
|||
2024
|
|
12.3
|
|
|
1.4
|
|
|
13.7
|
|
|||
After 2024
|
|
41.5
|
|
|
14.2
|
|
|
55.7
|
|
|||
Total lease payments
|
|
146.0
|
|
|
29.8
|
|
|
175.8
|
|
|||
Less: Interest
|
|
18.3
|
|
|
4.8
|
|
|
23.1
|
|
|||
Present value of lease liabilities
|
|
$
|
127.7
|
|
|
$
|
25.0
|
|
|
$
|
152.7
|
|
|
|
March 28,
2020 |
|
Weighted-average remaining lease term (in years)
|
|
|
|
Operating leases
|
|
6.50
|
|
Finance leases
|
|
9.90
|
|
Weighted-average discount rate
|
|
|
|
Operating leases
|
|
4.06
|
%
|
Finance leases
|
|
3.41
|
%
|
|
|
Three Months Ended
|
||||||
|
|
March 28,
2020 |
|
March 30,
2019 |
||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
|
||||
Operating cash flows for operating leases
|
|
$
|
10.7
|
|
|
$
|
11.7
|
|
Operating cash flows for finance leases
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
Financing cash flows for finance leases
|
|
$
|
1.0
|
|
|
$
|
0.7
|
|
|
|
|
|
|
||||
Leased assets obtained in exchange for new finance lease liabilities
|
|
$
|
1.5
|
|
|
$
|
—
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
$
|
5.5
|
|
|
$
|
4.7
|
|
|
|
|
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
Revolving Credit Agreement
|
|
|
|
||||||||
|
2018 Revolver due March 8, 2023
|
|
|
$
|
100.0
|
|
|
$
|
—
|
|
|
Term loan
|
|
|
|
|
|
||||||
|
2019 Term loan due August 15, 2022
|
|
|
600.0
|
|
|
600.0
|
|
|||
|
|
|
|
|
|
|
|
||||
Notes and Bonds
|
|
|
|
|
|
||||||
|
Coupon
|
Due
|
|
|
|
|
|
||||
|
3.500%
|
March 15, 2021
|
|
|
280.4
|
|
|
280.4
|
|
||
|
3.500%
|
December 15, 2021
|
|
|
309.6
|
|
|
309.6
|
|
||
|
5.105%
|
July 28, 2023(1)
|
|
|
150.5
|
|
|
151.4
|
|
||
|
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
|
|
|
2,750.5
|
|
|
2,751.4
|
|
|||
Other financing
|
27.1
|
|
|
24.6
|
|
||||||
Unamortized premium (discount), net
|
6.5
|
|
|
7.3
|
|
||||||
Deferred financing fees
|
(13.4
|
)
|
|
(14.1
|
)
|
||||||
Total borrowings outstanding
|
3,470.7
|
|
|
3,369.2
|
|
||||||
|
Current indebtedness
|
(287.8
|
)
|
|
(3.4
|
)
|
|||||
Total long-term debt less current portion
|
$
|
3,182.9
|
|
|
$
|
3,365.8
|
|
|
Three Months Ended
|
||||||
|
March 28,
2020 |
|
March 30,
2019 |
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
106.4
|
|
|
$
|
63.9
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Weighted average shares outstanding for basic EPS
|
136.2
|
|
|
135.9
|
|
||
Dilutive effect of share-based awards
|
1.1
|
|
|
0.3
|
|
||
Weighted average shares outstanding for diluted EPS
|
137.3
|
|
|
136.2
|
|
||
|
|
|
|
||||
Anti-dilutive share-based awards excluded from computation of diluted EPS
|
1.7
|
|
|
2.1
|
|
|
Fair Value of Derivative Financial Instruments, net of tax
|
|
Foreign Currency Translation Adjustments
|
|
Post-Retirement and Pension Liability Adjustments, net of tax
|
|
Total AOCI
|
||||||||
Balance at December 31, 2019
|
$
|
12.7
|
|
|
$
|
132.9
|
|
|
$
|
(6.2
|
)
|
|
$
|
139.4
|
|
OCI before reclassifications
|
(8.0
|
)
|
|
(92.2
|
)
|
|
(1.9
|
)
|
|
(102.1
|
)
|
||||
Amounts reclassified from AOCI
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
||||
Other comprehensive income (loss)
|
$
|
(9.4
|
)
|
|
$
|
(92.2
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(103.5
|
)
|
Balance at March 28, 2020
|
$
|
3.3
|
|
|
$
|
40.7
|
|
|
$
|
(8.1
|
)
|
|
$
|
35.9
|
|
Three Months Ended
|
||||
March 28,
2020 |
|
March 30,
2019 |
||
7.2
|
%
|
|
21.1
|
%
|
|
Three Months Ended
|
||||||
|
March 28,
2020 |
|
March 30,
2019 |
||||
Beginning balance
|
$
|
19.6
|
|
|
$
|
24.0
|
|
Additional charges
|
—
|
|
|
5.9
|
|
||
Payments
|
(3.5
|
)
|
|
(9.0
|
)
|
||
Non-cash adjustments
|
(0.1
|
)
|
|
(0.4
|
)
|
||
Ending balance
|
$
|
16.0
|
|
|
$
|
20.5
|
|
|
|
Total Assets
|
||||||
|
|
March 28,
2020 |
|
December 31,
2019 |
||||
CSCA
|
|
$
|
4,179.2
|
|
|
$
|
3,990.2
|
|
CSCI
|
|
4,653.1
|
|
|
4,682.7
|
|
||
RX
|
|
2,568.4
|
|
|
2,628.5
|
|
||
Total
|
|
$
|
11,400.7
|
|
|
$
|
11,301.4
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
March 28, 2020
|
|
March 30, 2019
|
||||||||||||||||||||
|
Net
Sales
|
|
Operating Income (Loss)
|
|
Intangible Asset Amortization
|
|
Net
Sales
|
|
Operating Income (Loss)
|
|
Intangible Asset Amortization
|
||||||||||||
CSCA
|
$
|
700.6
|
|
|
$
|
124.6
|
|
|
$
|
13.6
|
|
|
$
|
581.8
|
|
|
$
|
94.2
|
|
|
$
|
10.1
|
|
CSCI
|
382.7
|
|
|
25.0
|
|
|
38.3
|
|
|
350.8
|
|
|
8.1
|
|
|
44.1
|
|
||||||
RX
|
257.7
|
|
|
51.7
|
|
|
21.2
|
|
|
241.9
|
|
|
60.6
|
|
|
21.2
|
|
||||||
Unallocated
|
—
|
|
|
(55.6
|
)
|
|
—
|
|
|
—
|
|
|
(60.6
|
)
|
|
—
|
|
||||||
Total
|
$
|
1,341.0
|
|
|
$
|
145.7
|
|
|
$
|
73.1
|
|
|
$
|
1,174.5
|
|
|
$
|
102.3
|
|
|
$
|
75.4
|
|
•
|
Consumer Self-Care Americas ("CSCA") comprises our consumer self-care business (OTC, contract manufacturing, infant formula, and oral self-care categories and our divested animal health category) in the U.S., Mexico and Canada.
|
•
|
Consumer Self-Care International ("CSCI") comprises our branded consumer self-care business primarily in Europe, our consumer self-care businesses in the United Kingdom and Australia, and our liquid licensed products business in the United Kingdom.
|
•
|
Prescription Pharmaceuticals ("RX") comprises our prescription pharmaceuticals business in the U.S., predominantly generics, and our pharmaceuticals and diagnostic businesses in Israel.
|
•
|
We previously announced a plan to separate our RX business, which, if completed, would enable us to focus solely on our consumer-focused businesses. A separation of the RX business could include a possible sale, spin-off, merger or other form, and we have not committed to a time frame for a separation. We have incurred significant preparation costs due to the announced plan to separate, and if completed we could incur total costs in the range of $45.0 million to $80.0 million, excluding restructuring expenses and transaction costs, depending on timing and structure of a transaction.
|
|
Three Months Ended
|
||||||
(in millions)
|
March 28,
2020 |
|
March 30,
2019 |
||||
Net sales
|
$
|
1,341.0
|
|
|
$
|
1,174.5
|
|
Gross profit
|
$
|
483.2
|
|
|
$
|
448.8
|
|
Gross profit %
|
36.0
|
%
|
|
38.2
|
%
|
||
Operating income (loss)
|
$
|
145.7
|
|
|
$
|
102.3
|
|
Operating income (loss) %
|
10.9
|
%
|
|
8.7
|
%
|
•
|
$203.0 million, or a 17%, net increase due primarily to an increase in demand for our consumer products due to increased cough and cold illnesses and allergens, and new product sales including the launch of albuterol sulfate inhalation aerosol, both of which include the positive impact from a surge in demand for certain products due to consumer and customer behavior surrounding the COVID-19 pandemic, as well as an increase of $76.3 million due to our acquisition of Ranir. These increases were partially offset by pricing pressure, primarily in our RX segment, and an $11.2 million decrease due to discontinued products; partially offset by
|
•
|
$36.5 million decrease due primarily to:
|
◦
|
$13.2 million primarily from unfavorable Euro foreign currency translation; and
|
◦
|
$23.3 million due to our divested animal health business previously included in our CSCA segment and Canoderm prescription product previously included in the Nordic region of our CSCI segment.
|
•
|
$34.4 million increase in gross profit due primarily to increased net sales as described above, partially offset by operational inefficiencies primarily in our CSCA and RX segments. Gross profit as a percentage of net sales decreased 220 basis points due primarily to pricing pressure in our RX segment, operational inefficiencies, and unfavorable product mix; and
|
•
|
$9.0 million decrease in operating expenses due primarily to the absence of restructuring expenses taken in the prior year period, the absence of expenses for the divested animal health business, and a decrease in expenses related to our current cost savings initiative, partially offset by the inclusion of Ranir.
|
•
|
Towards the end of the quarter, we experienced an increase in demand for many of our OTC and infant nutrition products attributed to consumer reaction to the outbreak of COVID-19. We are uncertain as to what extent, or if, the demand will continue in the future and what the impact may be on our future results of operations. It is possible that consumer demand for such products in future periods may be reduced and could depend on the duration and severity of the COVID-19 related illnesses.
|
•
|
On April 6, 2020, we received approval from the U.S. Food and Drug Administration on our abbreviated new drug application for OTC diclofenac sodium topical gel 1%, the store brand equivalent to Voltaren® gel. When launched, this product will be marketed under store brand labels and will provide consumers with a high-quality, value alternative for the temporary relief of arthritis pain. We expect to launch the new OTC product later this year.
|
•
|
On April 1, 2020, we completed the acquisition of the oral care assets of High Ridge Brands for total agreed purchase consideration of $113.0 million, subject to customary post-closing adjustments, including a working capital settlement which may raise or lower the purchase price. The consideration includes an $11.3 million deposit we paid during the three months ended March 28, 2020, which is recorded on the Condensed Consolidated Balance Sheets within Other non-current assets. This acquisition includes the leading children’s oral care value brand, Firefly®, in addition to the REACH® and Dr. Fresh® brands. The addition of these brands positions us as the number one fastest-growing value brand player in the children’s oral care category and the strong licensing portfolio will enable creative solutions for our customers (refer to Item 1. Note 17).
|
•
|
On January 3, 2020, we acquired Steripod®, a leading toothbrush accessory brand and innovator in the toothbrush protector market, from Bonfit America Inc. Total consideration paid was $26.0 million, subject to customary post-closing adjustments. The transaction was accounted for as an asset acquisition, in which we capitalized $24.9 million as a brand-named intangible asset. The remainder of the purchase price was allocated to working capital. The acquisition, which includes a portfolio of antibacterial toothbrush protectors, kids’ toothbrush protectors and tongue cleaners, complements our current portfolio of oral self-care products, and leverages our manufacturing and marketing platform (refer to Item 1. Note 3).
|
|
Three Months Ended
|
||||||
(in millions)
|
March 28,
2020 |
|
March 30,
2019 |
||||
Net sales
|
$
|
700.6
|
|
|
$
|
581.8
|
|
Gross profit
|
$
|
215.5
|
|
|
$
|
184.0
|
|
Gross profit %
|
30.8
|
%
|
|
31.6
|
%
|
||
Operating income (loss)
|
$
|
124.6
|
|
|
$
|
94.2
|
|
Operating income (loss)%
|
17.8
|
%
|
|
16.2
|
%
|
•
|
$139.4 million, or a 24%, net increase due primarily to an increase of $18.3 million due to new product sales driven by an infant formula launch at a major retailer and Prevacid®, and e-commerce growth in the OTC and nutrition categories. Additional OTC category increases relate to market share gains from store brand competitors due to greater consumer purchases of existing and new products, and increased store brand penetration market-wide versus national brand. All of these drivers include the positive impact from a surge in demand for certain products due to consumer behavior surrounding the COVID-19 pandemic.
|
•
|
$20.6 million decrease due primarily to:
|
◦
|
$19.6 million due to our divested animal health business; and
|
◦
|
$1.0 million of unfavorable Mexican peso foreign currency translation.
|
•
|
$31.5 million increase in gross profit due primarily to increased net sales as described above, partially offset by carryover impact from the prior year operating inefficiencies at one of our infant nutrition facilities. Gross profit as a percentage of net sales decreased 80 basis points due primarily to operating inefficiencies at one of our infant nutrition facilities, and the exited animal health business, which had relatively higher gross margins than the overall portfolio, partially offset by favorable product mix; partially offset by
|
•
|
$1.1 million increase in operating expenses due primarily to the inclusion of Ranir, partially offset by the absence of expenses from the divested animal health business, and a decrease in expenses related to our current cost savings initiative.
|
•
|
Towards the end of the quarter, we experienced an increase in demand for products included in our upper respiratory and vitamins, minerals and supplements categories and certain of our store brand products, as well as a decrease in demand for certain products in our skincare and personal hygiene category, attributed primarily to consumer reaction to COVID-19. We are uncertain as to what extent, or if, the demand shift will continue in the future and what the impact may be on our future results of operations.
|
•
|
On February 13, 2020, we acquired Dexsil®, a silicon supplement brand, from RXW Group Nv, for total cash consideration paid of approximately $8.0 million. The transaction was accounted for as an asset acquisition, in which we capitalized the consideration paid as a brand-named intangible asset. The acquisition provides additional opportunities for growth through new product launches and geographic expansion (refer to Item 1. Note 3).
|
|
Three Months Ended
|
||||||
(in millions)
|
March 28,
2020 |
|
March 30,
2019 |
||||
Net sales
|
$
|
382.7
|
|
|
$
|
350.8
|
|
Gross profit
|
$
|
179.9
|
|
|
$
|
168.4
|
|
Gross profit %
|
47.0
|
%
|
|
48.0
|
%
|
||
Operating income
|
$
|
25.0
|
|
|
$
|
8.1
|
|
Operating income %
|
6.5
|
%
|
|
2.3
|
%
|
•
|
$48.9 million, or a 14%, net increase due primarily to new product sales of $30.1 million driven partially by XLS-Medical Forte 5 and the ACO skincare line and a $21.0 million increase from our acquisition of Ranir. In addition volume increased in our upper respiratory and vitamins, minerals and supplements categories and UK store brand business, which included the positive impact from a surge in demand for certain products due to consumer behavior surrounding the COVID-19 pandemic. These increases were partially
|
•
|
$17.0 million decrease due primarily to:
|
◦
|
$13.3 million from unfavorable foreign currency translation primarily related to the Euro; and
|
◦
|
$3.7 million due to our divested Canoderm prescription product previously included in the Nordic region.
|
•
|
$11.5 million increase in gross profit due primarily to increased net sales as described above, partially offset by operational inefficiencies. Gross profit as a percentage of net sales decreased 100 basis points due primarily to the acquisition of Ranir, which has a relatively lower gross margin than the overall portfolio, and operational inefficiencies, partially offset by favorable product mix; and
|
•
|
$5.4 million decrease in operating expenses due primarily to favorable Euro foreign currency translation, a decrease in expenses related to our current cost savings initiative, and a decrease in advertising and promotion expense, partially offset by the inclusion of Ranir.
|
•
|
Although pricing pressure is beginning to moderate, we continue to experience a year-over-year reduction in pricing in our RX segment due to competitive approvals against products in our portfolio and overall competitive pressures. We expect softness in pricing to continue to impact the segment for the foreseeable future.
|
•
|
Towards the end of the quarter, as the COVID-19 pandemic gained momentum, we experienced increased customer interest in and demand for certain products that other competitors are struggling to consistently supply. It is too early to assess the scope and scale of this trend, which would depend on the duration and severity of supply disruptions that our competitors or we may experience, but we believe that our competitive advantage in supply chain strength and organizational efficiencies may allow us to, in the near term, benefit from the trend if competitors are unable to meet supply demands.
|
•
|
On February 24, 2020, along with our partner Catalent Pharma Solutions, we received approval from the U.S. Food and Drug Administration on our abbreviated new drug application for generic albuterol sulfate inhalation aerosol, the first AB-rated generic version of ProAir® HFA. We launched commercially shortly after the approval.
|
|
Three Months Ended
|
||||||
(in millions)
|
March 28,
2020 |
|
March 30,
2019 |
||||
Net sales
|
$
|
257.7
|
|
|
$
|
241.9
|
|
Gross profit
|
$
|
87.9
|
|
|
$
|
96.4
|
|
Gross profit %
|
34.1
|
%
|
|
39.9
|
%
|
||
Operating income
|
$
|
51.7
|
|
|
$
|
60.6
|
|
Operating margin
|
20.0
|
%
|
|
25.1
|
%
|
•
|
$14.7 million, or a 6%, net increase due to new product sales of $58.2 million driven mainly by the launch of generic albuterol sulfate inhalation aerosol, the scopolamine relaunch, and diclofenac sodium topical gel 1%. This includes the positive impact from a surge in demand for certain products due to customer behavior surrounding the COVID-19 pandemic. This increase was partially offset by pricing pressure due partially to testosterone gel 1.62%, which still had 180-day market exclusivity in the prior year period, and $4.8 million of discontinued low margin distribution products; and
|
•
|
$1.1 million increase due to favorable foreign currency translation.
|
•
|
$8.5 million decrease in gross profit, or a 580 basis point decrease in gross profit as a percentage of net sales, due primarily to pricing pressure, third party operational inefficiencies on partnered products and higher inventory costs on a key product, partially offset by the gross profit from the incremental sales driven by generic albuterol sulfate inhalation aerosol pre-launch inventory that was expensed as pre-commercialization product in the prior year.
|
Three Months Ended
|
||||||
March 28,
2020 |
|
March 30,
2019 |
||||
$
|
55.5
|
|
|
$
|
60.6
|
|
|
Three Months Ended
|
||||||
(in millions)
|
March 28,
2020 |
|
March 30,
2019 |
||||
Change in financial assets
|
$
|
(1.6
|
)
|
|
$
|
(10.4
|
)
|
Interest expense, net
|
$
|
30.2
|
|
|
$
|
28.6
|
|
Other (income) expense, net
|
$
|
2.4
|
|
|
$
|
3.2
|
|
Three Months Ended
|
||||
March 28,
2020 |
|
March 30,
2019 |
||
7.2
|
%
|
|
21.1
|
%
|
•
|
$74.0 million increase in cash due to the change in inventory, primarily related to increased sales;
|
•
|
$48.1 million decrease in the use of cash due to the change in accrued customer programs, due primarily to pricing dynamics in our RX segment as well as timing of rebate and chargeback payments;
|
•
|
$14.8 million increase in cash due to the change in net earnings after adjustments for items such as deferred income taxes, impairment charges, restructuring charges, changes in our financial assets, share-based compensation, amortization of debt premium, and depreciation and amortization; and
|
•
|
$14.9 million increase in cash due to the change in accrued liabilities, due primarily to changes in legal and litigation accruals and changes in our underlying hedge exposure, partially offset by value-added and property tax liability accruals; partially offset by
|
•
|
$29.7 million decrease in cash due to the change in prepaid expenses due primarily to an increase in our directors and officers prepaid insurance and payments made for annual prepaid expenses, partially offset by payments received related to our cross currency swap;
|
•
|
$21.6 million decrease in cash due to the change in accounts payable due primarily to the timing of payments and mix of payments terms; and
|
•
|
$19.1 million decrease in cash due to the change in accounts receivable due primarily to timing of sales and receipt of payments.
|
•
|
$250.0 million decrease in cash due to the absence of the Royalty Pharma contingent milestone proceeds received in the prior year period (refer to Item 1. Note 6);
|
•
|
$11.3 million decrease in cash for a deposit paid for the High Ridge Brands acquisition (refer to Item 1. Note 17);
|
•
|
$32.7 million decrease in cash due to acquisitions, primarily for the purchase of the Steripod® brand for $24.9 million and the Dexsil® brand for approximately $8.0 million (refer to Item 1. Note 3); and
|
•
|
$12.7 million decrease in cash due to capital spending, primarily to increase tablet and infant formula capacity and for quality/regulation projects.
|
•
|
$102.3 million increase in net borrowings of revolving credit agreements and other financing; and
|
•
|
$12.3 million decrease in payments on long-term debt; partially offset by
|
•
|
$5.0 million increase in dividend payments.
|
|
Three Months Ended
|
||||
|
March 28,
2020 |
|
March 30,
2019 |
||
Volatility
|
35.0
|
%
|
|
30.0
|
%
|
Rate of return
|
7.29
|
%
|
|
8.02
|
%
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101. INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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.
|
|
|
|
104
|
|
Cover Page Interactive Date File, formatted in Inline XBRL (contained in Exhibit 101).
|
|
|
|
PERRIGO COMPANY PLC
|
|
|
|
(Registrant)
|
|
|
|
|
Date:
|
May 5, 2020
|
|
/s/ Murray S. Kessler
|
|
|
|
Murray S. Kessler
|
|
|
|
Chief Executive Officer and President
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
May 5, 2020
|
|
/s/ Raymond P. Silcock
|
|
|
|
Raymond P. Silcock
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Accounting and Financial Officer)
|
SECTION 1
|
INTRODUCTION
|
SECTION 2
|
TERMS OF SEVERANCE PROGRAMME
|
SECTION 3
|
WHAT HAPPENS TO ALL BENEFITS
|
SECTION 4
|
REDUNDANCY TAXATION
|
SECTION 5
|
SOCIAL WELFARE ENTITLEMENTS
|
SECTION 6
|
OTHER INFORMATION/ADVICE
|
SECTION 7
|
PRACTICAL “TO DO” LIST UPON LEAVING PERRIGO
|
SECTION 8
|
USEFUL FUTURE CONTACT DETAILS
|
IMPORTANT NOTICES
1. The information in this Booklet, and indeed any individual advice that you may receive from the Company (or the advisors it retained at a later stage), is based on the Company’s understanding of current legislation, particularly in the tax, pension and social welfare areas. It will, of course, be up to the relevant authorities to determine your exact tax position and your Social Welfare entitlements. Pension benefits will be determined in accordance with and subject to the relevant pension deeds and rules as well as Revenue limits. You should take appropriate advice on the information contained in the Booklet.
2. This Severance Programme contains the entire terms of severance for employees of Perrigo and all previous programmes, plans, agreements, understandings, assurances, statements, promises, warranties, representations (whether written or oral) provided by Elan or Perrigo are
superseded by this Severance Programme.
|
1.
|
INTRODUCTION
|
1.
|
made redundant; or
|
2.
|
terminated without cause; or
|
3.
|
relocated from your existing place of work; or
|
4.
|
subject to a material diminution of your authority, duties or responsibilities; or
|
5.
|
subject to a material diminution in your salary,
|
•
|
the financial terms and conditions of the Programme;
|
•
|
details of how it will operate in practice, and
|
•
|
the support services made available to you.
|
•
|
Your estimated tax position;
|
•
|
Your pension entitlements; and
|
•
|
Outplacement service for career planning and guidance.
|
2.
|
TERMS OF SEVERANCE PROGRAMME
|
2.1
|
Statutory Redundancy
|
Terms
|
Employees with 104 weeks or more weeks’ continuous service with the Company are eligible for a statutory redundancy payment.
Statutory Redundancy is calculated on the basis of: -
a. Two weeks pay for each year of service
plus
b. One week’s additional pay.
|
Eligible Pay
|
Statutory Redundancy is calculated by reference to your continuous years of service and is based on your actual gross weekly wage at the date of your notification of redundancy.
There is a statutory ceiling of €600 per week; any excess of this limit is not included in the calculation of your statutory redundancy payment – e.g. if an employee’s basic pay is €650 per week the €600 amount is used.
|
Service
|
Statutory Payment is based on years of reckonable service. If the total amount of reckonable service is not an exact number of years, the “excess” days are credited as a proportion of a year. Reckonable service includes the following:
v All or part of a week an employee is at work
v Period of up to 52 consecutive weeks absence due to occupational injury
v Period of up to 26 weeks due to illness or non occupational injury
v Any authorised absences by the employer which includes holidays, compassionate leave, career break or short-time
v Any periods whilst an employee is on protected leave – including maternity, additional maternity leave, parental leave, carer’s leave and adoptive leave.
|
2.2
|
Discretionary Ex-Gratia Payment
|
Terms
|
Each affected employee with 2 or more year’s continuous reckonable service will receive 6 WEEKS PAY PER EACH YEAR OF SERVICE (exclusive of Statutory) plus 1 additional week.
Employees with 1.5 years of continuous reckonable service but less than 2 years of continuous reckonable service the ex-gratia payment will receive 12 weeks pay plus 1 additional week.
Employees with less than 1.5 years of continuous reckonable service will receive 8 weeks pay plus 1 additional week.
The maximum ex-gratia payment will be 79 weeks of pay i.e. 78 weeks plus 1 additional week.
|
Eligible Pay
|
The Discretionary Ex-Gratia lump sum will be based on your actual gross weekly wage at the date of your notification of redundancy.
Calculation of ex-gratia payments does not include potential amounts available under any discretionary Company bonus programme (‘bonuses’), fixed allowances or amounts ‘in lieu of benefits’ such as Company cars.
The cap of €600 per week does not apply in respect of the Company’s additional Ex-Gratia payment.
|
Service
|
The Discretionary Ex-Gratia Payment is based on years of reckonable service. If the total amount of reckonable service is not an exact number of years, part-years of 6 months or more will count as an additional year (e.g. 5 years & 7 months service will be rounded to 6 years) “
|
Employment
Classification
|
Discretionary Ex-Gratia Terms for
Bands A or higher
|
Band A (VP)
|
Seventy-eight (78) Weeks of Pay plus an amount equal to the Eligible Employee’s target annual bonus for the year in which the Severance date occurs.
|
Band A (SVP)
|
Two times (2x) the sum of (a) fifty-two weeks (52) Weeks of Pay (prior to any reduction due to a Significant reduction in Scope or Base Compensation, is applicable) and (b) the Eligible Employee’s target annual bonus for the year in which the Severance Date occurs. Furthermore, the Eligible Employee will be entitled to the benefits of the Excise Tax Gross-Up Payment, if applicable.
|
EVP
|
Two and one half times (2.5x) the sum of (a) fifty-two weeks (52) Weeks of Pay (prior to any reduction due to a Significant reduction in Scope or Base Compensation, if applicable) and (b) the Eligible Employee’s target annual bonus for the year in which the Severance Date occurs.
|
2.3
|
Notice Periods
|
3.
|
WHAT HAPPENS TO ALL BENEFITS
|
•
|
VHI Healthcare – Krystle Fitzpatrick 01 887 1749
|
•
|
Laptop Computers
|
•
|
Blackberry/IPhone/other cell phone
|
•
|
Computer & printer hardware
|
•
|
ID Badges
|
•
|
Company Credit Cards
|
•
|
Phone Cards
|
4.
|
REDUNDANCY TAXATION
|
a)
|
Basic Exemption, or
|
b)
|
Increased Exemption, or
|
c)
|
Standard Capital Superannuation Benefit
|
a)
|
Basic Exemption:
|
b)
|
Increased Exemption:
|
•
|
Any tax-free lump sum from the pension scheme to which you may be immediately entitled or
|
•
|
The present day value at the date of leaving employment of any tax-free lump sum which may be receivable from the pension scheme in the future.
|
c)
|
SCSB (Standard Capital Superannuation Benefit):
|
5.
|
SOCIAL WELFARE ENTITLEMENTS
|
Postal Districts
|
Office
|
Phone Number
|
Opening Hours
|
Athlone
|
Barrack Street
|
090 649 2066
|
Mon – Fri
|
|
|
|
9.30 – 12.00
|
|
|
|
2.00 – 4.00
|
Dublin 1
|
North Cumberland Street
|
01 889 9500
|
Mon – Fri
|
|
|
|
9.15 – 12.00
|
|
|
|
2.00 – 4.00
|
Dublin 2
|
Pearse Street
|
01 636 9300
|
Mon – Fri
|
|
|
|
9.15 – 12.00
|
|
|
|
2.00 – 4.00
|
Other Regional Offices
|
|||
Dublin 1
|
Amiens Street
|
01 704 3000
|
|
Dublin 5
|
Greendale Road
|
01 806 3800
|
|
Dublin 7
|
Navan Road
|
01 882 3100
|
|
Dublin 8
|
Ballyfermott
|
01 616 0300
|
|
Dublin 11
|
Ballymun
|
01 816 5100
|
|
Dublin 11
|
Finglas
|
01 864 0480
|
|
Dublin 14
|
Nutgrove
|
01 493 5266
|
|
Dublin 15
|
Blanchardstown
|
01 824 6300
|
|
Dublin 22
|
Clondalkin
|
01 403 0000
|
|
Dublin 24
|
Tallaght
|
01 452 7019
|
|
Co. Dublin
|
Balbriggan
|
01 802 0050
|
|
Co. Dublin
|
Dun Laoghaire
|
01 280 0288
|
|
Co. Dublin
|
Malahide
|
01 806 1040
|
|
6.
|
OTHER INFORMATION/ADVICE
|
6.1
|
Individual Value of Severance Terms
|
•
|
The terms of the agreement as they relate to you (i.e. your Eligible Pay for the purpose of the lump sum calculation)
|
6.2
|
Individual Advice Sessions
|
6.3
|
Outplacement Advice
|
6.4
|
References
|
7.
|
PRACTICAL “TO DO LIST” UPON LEAVING PERRIGO
|
Ö
|
Consider your pension options (they do not need to be entered immediately). You may wish to delay this decision until you find alternate employment.
|
Ö
|
Review your need to replace Risk Benefits (e.g. life assurance, etc.) which will cease when you leave Perrigo.
|
8.
|
USEFUL FUTURE CONTACT DETAILS
|
PERRIGO CONTACT LIST
|
||
Payroll
|
|
|
Valerie Healy
|
01 709 4623
|
valerie.healy@perrigo.com
|
Compensation & Benefits
|
||
John Castanos
|
01 709 4028
|
john.castanos@perrigo.com
|
HR
|
|
|
Louise Milner
|
01 709 4427
|
Louise.milner@perrigo.com
|
BENEFIT CONTACTS
|
||
Pension & Risk Benefits
|
||
Mercer - 1 6039877
|
|
john.redmond@mercer.com
|
Health Insurance
|
|
|
Krystle Fitzpatrick
|
01 887 1749
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krystle.fitzpatrick@vhi.ie
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Employee Assistance Program
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Optum
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1800 409 476
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Perrigo Pharma International D.A.C.
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The Sharp Building, Hogan Place,
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Dublin 2, Ireland D02 TY74
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T (+353 1) 709 4000
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F (+353 1) 709 4082
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▪
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Contract of Employment*
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Employee Proprietary Information and Invention Assignment Agreement*
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New Employee Details Form
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Bank Details Form
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▪
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Irish Employee Benefits Guide
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Perrigo Pharma International D.A.C.
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The Sharp Building, Hogan Place,
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Dublin 2, Ireland D02 TY74
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T (+353 1) 709 4000
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F (+353 1) 709 4082
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1.
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You are employed primarily as Executive Vice President and Chief Scientific Officer reporting to Murray Kessler, CEO. You will perform the duties appropriate to this position as instructed by Perrigo including any such additional or alternative duties as Perrigo shall reasonably assign to you from time to time. Your Ireland employment will commence once you receive work authorization in Ireland. Perrigo will continue to recognize your original date of hire of January 14, 2019 for all other benefits.
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2.
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Your normal hours of work will be from 9.00am to 5.30pm. Perrigo reserves the right to alter your normal working hours. You may be required to work such additional time as may be required to complete your responsibilities. Such additional time will be unpaid.
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3.
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If your continued employment is subject to Perrigo holding a valid work permit/work visa for you, in the event that the work permit/work visa is withdrawn, your employment will terminate immediately and without notice. It is your responsibility to inform Perrigo if you require a work permit/work visa or any other permission to work in Ireland and if and when such permission has been withdrawn.
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4.
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Your salary is € 500,625 gross per annum, subject to deductions of tax, PRSI and any other deductions required by law or provided for under this agreement. Your salary is payable monthly in arrears by way of bank transfer into your nominated bank account. This method of payment may be changed at Perrigo's discretion. A list of additional compensation and benefits are provided at Schedule 1, which can be found at the end of this document.
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5.
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Perrigo reserves the right to require you to repay either by deduction from salary or any other method acceptable to Perrigo, any losses sustained through fraud or dishonesty on your part or any remuneration, expenses or any other payments which are overpaid to you whether made by mistake or otherwise. By signing this agreement, you hereby consent to any such deductions from sums due by Perrigo.
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6.
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Subject to the production of satisfactory receipts and compliance with the Perrigo’s Expenses Policy, you will be reimbursed for all reasonable and genuine out of pocket expenses incurred by you in the carrying out of your duties.
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7.
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Your normal place of work is at The Sharp Building, Hogan Place, Dublin 2, D02 TY74 but your duties may require travel to and work at other locations outside of Dublin and for other subsidiaries or associated companies of Perrigo, including overseas. Perrigo reserves the right to change the place of your
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8.
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Either you or Perrigo may terminate this contract by giving three [3] month's notice in writing. Perrigo reserves the right to make a payment to you in lieu of any notice. In cases of misconduct, your employment may be terminated without notice. In the event of notice of termination being given by either party, Perrigo may request you not to attend for work or perform duties during the notice period. Nothing in this agreement shall prevent the giving of a lesser period of notice where both parties are in mutual agreement.
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9.
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Perrigo's leave year runs from 01 January to 31 December and annual leave must be taken within the year. You are entitled to twenty-two (22) days annual leave per annum calculated by reference to time worked on a pro rata basis, in addition to public holidays in accordance with the Organisation of Working Time Act 1997. Annual leave must be agreed in advance with Perrigo and must be taken at times convenient to it. Accrued but unused annual leave, up to a maximum of five (5) days, may be carried over to the following holiday year in exceptional circumstances and at the discretion of Perrigo and in any event, must be taken within six (6) months of the end of the year during which the leave was accrued.
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10.
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You must notify your manager/supervisor of any unplanned absence no later than one (1) hour after scheduled start time on the first and any subsequent day of absence (whether through illness or otherwise). In the event that you are unable to contact your manager/supervisor you must notify your Department Administrator. A voicemail may not be acceptable. Where there is continuing absence, you must keep Perrigo fully informed of your expected return to work. A medical certificate must be produced in respect of any illness-related absence from the third day of illness, and at such additional intervals as may be required by Perrigo and at least on a weekly basis. Perrigo reserves the right to have you medically examined by the Company Doctor, or a Company-nominated Specialist, at any time during your employment and you agree to the release of a medical report following any such examination directly to Perrigo.
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11.
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Perrigo reserves the right to lay you off from work or to reduce your working hours. You will receive as much notice as is reasonably possible prior to such lay-off or short-time. You will not be paid during a period of lay-off. You will be paid only in respect of hours actually worked during a period of short-time.
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12.
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Perrigo has Grievance and Disciplinary Procedures which are applicable to all employees. For further information on Perrigo’s grievance and disciplinary policies please refer to the Employee Handbook. The Employee Handbook will be provided to you on your first day. Perrigo reserves the right to change, replace or withdraw its Grievance and Disciplinary Procedures at any time and you are required to comply with the policies and procedures in force from time to time.
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13.
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Your attention is drawn to Perrigo's Safety Statement which is available for inspection and is located on the company premises. Please contact the Safety Department if a copy is required. You are required to comply with Perrigo’s health and safety practices and procedures and to use protective equipment and clothing where necessary.
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14.
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It is a condition of your employment that you sign an Employee Proprietary Information and Invention Assignment Agreement when you commence employment and the provisions of the Employee Proprietary Information and Invention Assignment Agreement form part of your contract of employment.
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15.
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You agree that Perrigo is permitted to hold personal information about you as part of its personnel and other business records and may use such information in the course of Perrigo’s business or that of any associated company. You agree that Perrigo may disclose such information to third parties in the event that such disclosure is, in Perrigo’s view, required for the proper conduct of Perrigo’s business or that of any associated company. It may also be necessary to share this information with potential or future employers, potential bidders and purchasers or in order to comply with any legal or regulatory obligations.
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16.
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During your employment you shall not at any time without the prior written consent of Perrigo either alone or jointly with any other person carry on or be either directly or indirectly employed, concerned or interested in any business, prospective business or undertaking other than that of Perrigo. If, with the consent of Perrigo, you accept any other appointment or employment you must keep Perrigo accurately informed of the amount of time you spend working under that appointment.
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17.
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You shall not be entitled to receive or obtain directly or indirectly any discount, rebate or commission as a result of any sale or purchase of goods or services affected or other business transacted (whether or not by you) by or on behalf of Perrigo or any associated company and if you (or any person in which you are interested) obtain any discount, rebate or commission you shall account to Perrigo for the amount received by you (or due proportion of the amount received by the person having regard to the extent of its interest therein).
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18.
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Perrigo reserves the right to search your property, person or vehicle while on or departing from Perrigo's premises.
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19.
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All notes, records, lists of customers, supplier and employees, correspondence, computer and other disks or tapes, data listings, codes, keys and passwords, designs, drawings and other documents or material whatsoever (whether made or created by you or otherwise and in whatever medium or format) relating to the business of Perrigo or any associated company or any of its or their clients and any copies of same remain the property of Perrigo or any associated company or client, and should be handed over by you to Perrigo or any associated company or client on demand by Perrigo and in any event on termination of your employment.
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20.
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Perrigo reserves the right to make changes of a minor, administrative, or non-fundamental nature to the terms and conditions of your employment from time to time. Wherever practicable, you will be given advance notice of any such change.
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21.
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You hereby warrant that by virtue of entering into this agreement you will not be in breach of any express or implied terms of any Court order, contract or any other obligation legally binding upon you.
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22.
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No failure or delay by Perrigo in exercising any remedy, right, power or privilege under or in relation to this agreement or at law shall operate as a waiver of the same nor shall any single or partial exercise of any remedy, right, power or privilege preclude any further exercise of the same or the exercise of any other remedy, right, power or privilege.
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23.
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This agreement is governed by and shall be construed in accordance with Irish law and the parties to this agreement hereby submit to the exclusive jurisdiction of the Irish Courts.
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1.
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I have reviewed this report on Form 10-Q of Perrigo Company plc;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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:
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a.
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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
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b.
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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.
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/s/ Murray S. Kessler
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Murray S. Kessler
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Chief Executive Officer
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1.
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I have reviewed this report on Form 10-Q of Perrigo Company plc;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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:
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a.
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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
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b.
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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.
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/s/ Raymond P. Silcock
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Raymond P. Silcock
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Chief Financial Officer
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Re:
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Perrigo Company plc
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(i)
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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
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(ii)
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the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of Perrigo Company plc.
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Date:
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May 5, 2020
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/s/ Murray S. Kessler
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Murray S. Kessler
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Chief Executive Officer and President
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Date:
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May 5, 2020
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/s/ Raymond P. Silcock
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Raymond P. Silcock
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Chief Financial Officer
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