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美国
证券交易委员会
华盛顿特区20549
_______________________________________________
 表格 10-Q
_______________________________________________
☒
根据1934年证券交易法第13或15(d)条款的季度报告。
截至本季度结束 2024年9月28日

或
☐根据1934年证券交易法第13或15(d)条款的过渡报告
到              至             
委员会文件编号 001-36353
_______________________________________________
perrigo company plc
（依凭章程所载的完整登记名称）
_______________________________________________
爱尔兰 不适用
(依据所在地或其他管辖区)
的注册地或组织地点)		 (国税局雇主识别号码)
识别号码)

The Sharp Building, Hogan Place, 都柏林2号, 爱尔兰 D02 TY74
+353 1 7094000
(地址，包括邮递区号和电话号码，包括
注册人主要执行办公室的区号

不适用
(如与上次报告不同，列明前名称、前地址及前财政年度)
根据法案第12(b)条规定注册的证券：
每种类别的名称交易标的（s）每个注册交易所的名称
普通股，每股面值€0.001PRGO纽约证券交易所
2024年到期的3.900%票据PRGO24纽约证券交易所
2030年到期的4.900％票据
PRGO30纽约证券交易所
2032年到期的6.125%票据
PRGO32A
纽约证券交易所
2032年到期的5.375%票据
PRGO32B
纽约交易所
2043年到期的5.300％票据perrigo company plc43纽约交易所
2044年到期的4.900%票据perrigo company plc44纽约交易所
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截至2024年11月4日， 136,427,804 优先股股份。


百利高公司
表格10-Q
指数
页码
编号
第一部分. 财务资讯
1
2
3
4
5
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8
9
10
11
12
13
14
15
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17
18
第二部分。其他资讯
第 2 项。未注册的股票发行和款项使用


关于前瞻性陈述的警示性声明

本报告中的某些陈述属于“前瞻性陈述”，根据1934年修订的《证券交易法》第21E条的规定，并受其建立的安全港影响。这些陈述涉及未来事件或我们未来的财务表现，涉及已知和未知的风险、不确定性和其他因素，可能导致我们或我们所在行业的实际结果、活动水平、表现或成就与任何前瞻性陈述所表达或暗示的结果显著不同。特别是，本报告中包含的有关我们期望、信念、计划、目标、假设、未来事件或未来表现的陈述，包括“管理层对财务状况和营业成果的讨论与分析”中的某些陈述，均属前瞻性陈述。在某些情况下，前瞻性陈述可通过“可能”、“将”、“可能”、“将”、“应”、“预期”、“计划”、“预测”、“意图”、“相信”、“估计”、"预测"、"预测"、"预测"、"潜在"或该些术语的否定形式或其他可比术语来识别。

本公司根据其目前的预期、假设、估计和预测来建立这些前瞻性声明。尽管本公司认为这些预期、假设、估计和预测是合理的，但这些前瞻性声明只是预测，并涉及已知和未知的风险和不确定性，其中许多都超出公司控制，包括：供应链对公司业务的影响，包括武装冲突、贸易和其他经济制裁和/或疾病引起或加剧；一般经济、信贷和市场条件；乌克兰战争的影响及其任何升级经济的影响以及美国、英国、欧盟及其他与其他相关国家施行的政治制裁；在我们经营业务的其他地区（包括中东）爆发或升级冲突；当前和未来的减值费用，包括与 Héra SAS（「HRA Pharma」）罕见疾病业务有关的销售相关费用，如果我们确定特定资产的帐面价值可能无法从该客户的预期未来资产中收回；接受新产品；与其他行业的竞争参与者，其中有些人在某些产品类别中拥有比本公司更大的市场份额或市场份额；客户和消费者的定价压力；解决不确定税务状况和任何相关诉讼、正在进行或未来的政府调查和监管措施；公司有关获得和维持监管批准的不确定性；产品召回或销售停止的潜在成本和声誉影响；美国和外国税务、医疗保健和保健和潜在的负面变化其他政府政策；疫情或大流行病的影响；任何股份回购（或缺乏）及/或到期前未偿还债务的时间、金额和成本；货币汇率和利率波动；公司从出售 HRA 罕见疾病业务中获得预期收益的能力，包括潜在的逾期付款和出售医院和专科业务以及潜在成本或负债的风险保留与这些有关交易可能超过本公司的预估或对本公司的业务或营运造负面影响；与出售 Rx 业务有关的潜在成本或负担的风险可能会超过公司的预估或对公司的业务或营运造不利影响；公司能够从收购 HRA Pharma 和雀巢 Gateway 婴儿配方奶粉厂而获得预期的利益，以及美国和加拿大对该公司的权利。 好开始® 婴儿奶粉品牌及其他相关配方奶粉品牌（「Gateway」）及/或公司协同预估估计不准确或公司因收购有关的整合或其他成本高于预期的风险；与 HRA Pharma 和 Gateway 相关的风险，包括销售和分销网络的任何延迟增长率受到不利影响的风险；其他公布和未预告收购或销售的完成和成功，以及公司的能力实现其所期望的好处；以及本公司能够执行并实现公布的降低成本工作及其他策略性措施和投资所需的效益，包括本公司在本文所述的持续重组计划中获得预期的利益的能力。对待处理诉讼的不利结果可能会对公司的经营业绩、现金流量和流动性产生重大不利影响，最终可能需要使用公司资产支付损害赔偿，从而减少其他公司用途可用的资产。这些及其他重要因素，包括截至 2023 年 12 月 31 日止年度的 10-k 表格、本报告「风险因素」以及任何随后向美国证券交易委员会提交的申报中所讨论的因素，可能会导致实际业绩、表现或成就与这些前瞻性声明表达或暗示的重要因素有所讨论的因素。本报告中的前瞻性声明仅于本文日期起作出，除非适用证券法规另有规定，否则我们不会因新资讯、未来事件或其他原因而更新或修改任何前瞻性声明的意图或义务。

商标、贸易名称和服务标记

本报告包含Perrigo Company plc拥有的商标、商号和服务标志，以及其他组织拥有的商标、商号和服务标志，仅供信息目的。仅为方便起见，本报告中提到的某些商标、商号和服务标志未附上™和符号，但该等参考并不意味著我们或适用的所有人（视情况而定）不会根据适用法律的最大范围主张我们或他们对这些商标、商号和服务标志的权利。 ®, ™ 和 有本息攸关的风险性产品 符号，但这些参考并不意味著我们或适用的所有人（依情况而定）不会主张根据适用法律的最大范围保有对这些商标、商号和服务标志的权利。
3
perrigo company plc - 项目 1
第一部分。 　　财务资讯

项目1。 基本报表（未经审核）

perrigo company plc
综合综合综合损益表
（金额以百万为单位，每股金额的单位是美元）
(未经审核)
 
 截至三个月结束截至九月三十日的九个月
 2024年9月28日2023年9月30日2024年9月28日2023年9月30日
营业净收入$1,087.5 $1,123.8 $3,235.1 $3,498.7 
销售成本683.1 712.6 2,078.3 2,245.6 
毛利润404.4 411.2 1,156.8 1,253.1 
营运费用
分配25.2 27.8 74.7 85.0 
研究与开发26.0 29.6 84.4 92.9 
销售129.4 150.2 429.8 489.2 
管理116.9 126.0 373.3 393.6 
资产减损损失16.2 — 50.3 — 
重组16.8 15.5 98.1 25.7 
其他营业(收入)费用，净额(6.5)— 47.5 (0.8)
营业费用总额324.0 349.1 1,158.1 1,085.6 
营业利益（损失）80.4 62.1 (1.3)167.5 
利息费用，净额57.6 43.5 144.7 131.1 
其他（收入）费用，净额(4.1)(0.6)(0.5)(9.6)
债务消灭亏损5.1 — 5.2 — 
持续营运业务税前收支(损失)21.8 19.2 (150.7)46.0 
所得税（收益）费用39.4 3.8 (31.5)22.7 
继续营运所得(损失)(17.6)15.4 (119.2)23.3 
停业损失（税后）(3.4)(1.2)(8.1)(3.7)
净利（损失）$(21.0)$14.2 $(127.3)$19.6 
每股盈（亏）利
基本
持续营运$(0.13)$0.11 $(0.87)$0.17 
中止业务(0.02)(0.01)(0.06)(0.03)
基本每股盈利（亏损）$(0.15)$0.10 $(0.93)$0.14 
掺薄
持续营运$(0.13)$0.11 $(0.87)$0.17 
已停业营运(0.02)(0.01)(0.06)(0.03)
稀释每股盈利（亏损）$(0.15)$0.10 $(0.93)$0.14 
加权平均发行股数
基本137.5 135.5 137.3 135.2 
稀释137.5 136.9 137.3 136.6 

请参阅简明合并基本报表的附注。
4
perrigo company plc - 项目 1
perrigo company plc
综合损益简明合并财务报表
(以百万为单位)
(未经审核)
截至三个月结束截至九月三十日的九个月
2024年9月28日2023年9月30日2024年9月28日2023年9月30日
净利（损失）$(21.0)$14.2 $(127.3)$19.6 
其他综合损益：
外币翻译调整73.7 (101.3)1.2 (65.0)
公允价值变动损益，税后净额(9.5)3.9 (0.3)15.6 
养老后及退休金负债变动，扣除税项后的净额(0.2)(0.6)(1.8)(1.7)
其他综合收益（损失），税后净额64.0 (98.0)(0.9)(51.1)
综合收益（损失）$43.0 $(83.8)$(128.2)$(31.5)

请参阅简明合并基本报表的附注。
5
perrigo company plc - 项目 1
perrigo company plc
简明综合资产负债表
（金额以百万为单位，每股金额的单位是美元）
(未经审核)
2024年9月28日2023年12月31日
资产
现金、现金等价物和受限制的现金$1,463.5 $751.3 
应收帐款，扣除信用损失准备金 $7.5 在截至2024年9月30日及2023年9月30日的三个月内，本公司对其运营租赁使用权资产产生的摊销费用为$7.8，分别为
785.9 739.6 
库存1,133.8 1,140.9 
预付费用及其他流动资产311.6 201.1 
持有待售的流动资产 13.0 — 
全部流动资产3,707.8 2,832.9 
不动产、厂房及设备净值909.1 916.4 
经营租赁资产182.2 183.6 
商誉和无限期无形资产3,426.8 3,534.4 
明确期限的无形资产，净值2,655.4 2,980.8 
递延所得税22.4 25.8 
其他非流动资产299.5 335.2 
非流动资产总额7,495.4 7,976.2 
总资产$11,203.2 $10,809.1 
负债及股东权益
负债
应付帐款$458.5 $477.7 
工资和相关税款137.8 127.0 
已计提客户计划168.3 163.5 
其他应计负债227.0 335.4 
应计所得税10.0 42.1 
目前的负债440.7 440.6 
待售的流动负债8.2 — 
流动负债合计1,450.5 1,586.3 
非流动负债
长期负债，不含流动部分4,312.6 3,632.8 
递延所得税213.8 262.3 
其他非流动负债660.3 559.8 
非流动负债总额5,186.7 4,454.9 
总负债6,637.2 6,041.2 
风险及不确定性 - 请参阅附注17
股东权益
控制权益:
优先股，$0.0001 每股面额， 10 已授权股份数量
— — 
普通股，€0.001 每股面值， 10,000 授权的股票数量
6,763.9 6,837.5 
其他综合收益累积额9.8 10.7 
保留收益（累积亏损）(2,207.7)(2,080.3)
股东权益总额4,566.0 4,767.9 
总负债及股东权益$11,203.2 $10,809.1 
资产负债表资讯的补充披露
优先股已发行且仍存在
— — 
普通股份，已发行并流通
136.5 135.5 

See accompanying Notes to the Condensed Consolidated Financial Statements.
6
Perrigo Company plc - Item 1
PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in millions, except per share amounts)
(unaudited)
 Ordinary Shares
Issued		Accumulated
Other
Comprehensive
Income (Loss)		Retained
Earnings
(Accumulated Deficit)		Total
 SharesAmount
Balance at December 31, 2022134.7 $6,936.7 $(27.0)$(2,067.6)$4,842.1 
Net (loss)— — — (3.0)(3.0)
Other comprehensive income— — 20.7 — 20.7 
Restricted stock plan1.0 — — — — 
Compensation for restricted stock— 24.9 — — 24.9 
Cash dividends, $0.26 per share
— (36.2)— — (36.2)
Shares withheld for payment of employees' withholding tax liability(0.4)(14.6)— — (14.6)
Balance at April 1, 2023135.3 $6,910.8 $(6.3)$(2,070.6)$4,833.9 
Net income— — — 8.4 8.4 
Other comprehensive income— — 26.2 — 26.2 
Restricted stock plan
0.1 — — — — 
Compensation for restricted stock— 18.6 — — 18.6 
Cash dividends, $0.26 per share
— (37.0)— — (37.0)
Shares withheld for payment of employees' withholding tax liability— (1.5)— — (1.5)
Balance at July 1, 2023135.4 $6,890.9 $19.9 $(2,062.2)$4,848.6 
Net income— — — 14.2 14.2 
Other comprehensive (loss)— — (98.0)— (98.0)
Restricted stock plan
0.2 — — — — 
Compensation for restricted stock— 14.7 — — 14.7 
Cash dividends, $0.26 per share
— (38.9)— — (38.9)
Shares withheld for payment of employees' withholding tax liability(0.1)(2.5)— — (2.5)
Balance at September 30, 2023135.5 $6,864.2 $(78.1)$(2,048.0)$4,738.1 
























7
Perrigo Company plc - Item 1
PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Continued)
(in millions, except per share amounts)
(unaudited)

 Ordinary Shares
Issued		Accumulated
Other
Comprehensive
Income (Loss)		Retained
Earnings
(Accumulated Deficit)		Total
 SharesAmount
Balance at December 31, 2023135.5 $6,837.5 $10.7 $(2,080.3)$4,767.9 
Net income— — — 2.0 2.0 
Other comprehensive (loss)— — (48.4)— (48.4)
Restricted stock plan1.2 — — — — 
Compensation for restricted stock— 15.6 — — 15.6 
Cash dividends, $0.27 per share
— (37.6)— — (37.6)
Shares withheld for payment of employees' withholding tax liability(0.4)(12.5)— — (12.5)
Balance at March 30, 2024136.3 $6,803.0 $(37.7)$(2,078.3)$4,687.0 
Net (loss)— — — (108.4)(108.4)
Other comprehensive (loss)— — (16.5)— (16.5)
Restricted stock plan
0.1 — — — — 
Compensation for restricted stock— 23.4 — — 23.4 
Cash dividends, $0.27 per share
— (38.3)— — (38.3)
Shares withheld for payment of employees' withholding tax liability— (1.9)— — (1.9)
Balance at June 29, 2024136.4 $6,786.2 $(54.2)$(2,186.7)$4,545.3 
Net (loss)— — — (21.0)(21.0)
Other comprehensive income— — 64.0 — 64.0 
Restricted stock plan
0.1 — — — — 
Compensation for restricted stock— 16.6 — — 16.6 
Cash dividends, $0.27 per share
— (38.3)— — (38.3)
Shares withheld for payment of employees' withholding tax liability— (0.6)— — (0.6)
Balance at September 28, 2024136.5 $6,763.9 $9.8 $(2,207.7)$4,566.0 

See accompanying Notes to the Condensed Consolidated Financial Statements.
8
Perrigo Company plc - Item 1
PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Nine Months Ended
 September 28, 2024September 30, 2023
Cash Flows From Operating Activities
Net income (loss)$(127.3)$19.6 
Adjustments to derive cash flows:
Depreciation and amortization245.6 273.6 
Impairment charges50.3 — 
Share-based compensation44.5 58.2 
Restructuring charges43.1 25.7 
Settlement of interest rate derivatives 41.2 — 
Dedesignation of interest rate swap agreements14.4 — 
Amortization of debt discount 1.1 1.8 
Deferred income taxes(13.5)12.3 
Gain on sale of assets(26.0)(4.0)
Gain on sale of business(5.8)— 
Other non-cash adjustments, net19.2 (2.7)
Subtotal286.8 384.5 
(Decrease) increase in cash due to:
Accrued income taxes(134.6)(54.4)
Payroll and related taxes(73.9)(52.7)
Accounts receivable(69.3)(70.6)
Inventories(14.7)(5.5)
Accounts payable(4.9)(92.9)
Prepaid expenses and other current assets0.5 35.9 
Accrued customer programs2.0 20.5 
Other accrued liabilities 22.4 13.2 
Other operating, net 36.0 18.8 
Subtotal(236.5)(187.7)
Net cash from operating activities50.3 196.8 
Cash Flows From (For) Investing Activities
Net proceeds from sale of businesses205.5 — 
Proceeds from sale of assets33.3 2.0 
Proceeds from royalty rights3.5 18.3 
Additions to property, plant and equipment(80.6)(75.0)
Settlement of foreign currency derivatives(45.8)— 
Net cash from (for) investing activities115.9 (54.7)
Cash Flows From (For) Financing Activities
Issuances of long-term debt1,092.7 — 
Payments on long-term debt(420.4)(24.0)
Cash dividends(112.9)(112.1)
Other financing, net(16.3)(6.5)
Net cash from (for) financing activities543.1 (142.6)
Effect of exchange rate changes on cash and cash equivalents2.9 (1.9)
Net increase (decrease) in cash and cash equivalents712.2 (2.4)
Cash, cash equivalents and restricted cash of continuing operations, beginning of period751.3 600.7 
Cash, cash equivalents and restricted cash of continuing operations, end of period$1,463.5 $598.3 

See accompanying Notes to the Condensed Consolidated Financial Statements.
9
Perrigo Company plc - Item 1
Note 1


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Information

Perrigo Company plc was incorporated under the laws of Ireland on June 28, 2013 and became the successor registrant of Perrigo Company, a Michigan corporation, on December 18, 2013 in connection with the acquisition of Elan Corporation, plc ("Elan"). Unless the context requires otherwise, the terms "Perrigo," the "Company," "we," "our," "us," and similar pronouns used herein refer to Perrigo Company plc, its subsidiaries, and all predecessors of Perrigo Company plc and its subsidiaries.

We are a leading provider of over-the-counter ("OTC") health and wellness solutions that are designed to enhance individual well-being and empower consumers to proactively prevent or treat conditions that can be self-managed. Our vision is to provide the best self-care for everyone. We are headquartered in Ireland and sell our products primarily in North America and Europe as well as in other markets around the world.

Basis of Presentation

Our unaudited Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, all adjustments considered necessary for a fair presentation of the unaudited Condensed Consolidated Financial Statements have been included and include our accounts and accounts of all majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation. Some amounts in this report may not add due to rounding.

Segment Reporting

Our reporting and operating segments are as follows:

•Consumer Self-Care Americas ("CSCA") comprises our consumer self-care business in the U.S. and Canada.

•Consumer Self-Care International ("CSCI") comprises our consumer self-care business outside of the U.S. and Canada, primarily in Europe and Australia.

We previously had an Rx segment which was comprised of our generic prescription pharmaceuticals business in the U.S., and other pharmaceuticals and diagnostic business in Israel, which have been divested. Following the divestiture, there were no substantial assets or operations left in this segment. The Rx segment was reported as Discontinued Operations in 2021, and is presented as such for all periods in this report (refer to Note 5).

Our segments reflect the way in which our chief operating decision maker, who is our CEO, makes operating decisions, allocates resources and manages the growth and profitability of the Company. Financial information related to our business segments and geographic locations can be found in Note 2 and Note 18.

Foreign Currency Translation and Transactions

We translate our non-U.S. dollar-denominated operations’ assets and liabilities into U.S. dollars at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of Accumulated other comprehensive income (loss) ("AOCI"). Gains or losses from foreign currency transactions are included in Other (income) expense, net.

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Note 1

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist primarily of demand deposits and other short-term investments with maturities of three months or less at the date of purchase.

We had $1.1 million and $7.0 million of restricted cash as of September 28, 2024 and December 31, 2023 in the Condensed Consolidated Balance Sheets, respectively. We entered into an agreement to extend a credit line to an existing customer in exchange for a cash security deposit. The agreement requires the cash to be held in a separate account and to be returned to the customer at the expiration of the agreement provided all credits have been paid as agreed.

Allowance for Credit Losses
Expected credit losses on trade receivables and contract assets are measured collectively by geographic location. Historical credit loss experience provides the primary basis for estimation of expected credit losses and is adjusted for current conditions and for reasonable and supportable forecasts. Receivables that do not share risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. The following table presents the allowance for credit losses activity (in millions):
Three Months EndedNine Months Ended
September 28, 2024September 30, 2023September 28, 2024September 30, 2023
Balance at beginning of period$7.6 $8.1 $7.8 $6.8 
Provision for credit losses, net(0.3)0.6 (1.5)1.9 
Receivables written-off(0.1)(0.2)(0.1)(0.7)
Recoveries collected— — 1.1 0.4 
Currency translation adjustment0.3 (0.3)0.2 (0.2)
Balance at end of period$7.5 $8.2 $7.5 $8.2 

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Note 2
NOTE 2 - REVENUE RECOGNITION

The following is a summary of our net sales by category (in millions):
Three Months EndedNine Months Ended
September 28, 2024September 30, 2023September 28, 2024September 30, 2023
CSCA(1)
Nutrition$127.1 $129.7 $303.8 $436.3 
Upper Respiratory120.9 131.2 370.0 422.2 
Digestive Health113.5 118.1 361.7 368.2 
Pain and Sleep-Aids87.7 94.5 251.9 294.6 
Healthy Lifestyle80.9 79.4 221.3 219.3 
Oral Care66.9 76.7 204.8 235.5 
Skin Care51.9 58.2 158.6 189.8 
Women's Health18.0 10.5 62.0 35.6 
Vitamins, Minerals, and Supplements ("VMS")3.5 4.4 13.0 13.9 
Other CSCA0.9 0.8 2.4 2.5 
Total CSCA$671.3 $703.5 $1,949.5 $2,217.9 
CSCI
Skin Care$91.0 $86.7 $333.5 $293.1 
Upper Respiratory86.1 78.2 206.0 227.9 
Pain and Sleep-Aids56.9 61.1 158.6 163.8 
Healthy Lifestyle53.2 52.4 175.2 179.4 
VMS43.0 46.1 127.4 135.4 
Women's Health32.2 28.5 101.2 89.5 
Oral Care23.3 24.8 75.0 75.5 
Digestive Health9.0 10.8 27.0 30.0 
Other CSCI(2)
21.6 31.7 81.5 86.1 
Total CSCI416.3 420.3 1,285.5 1,280.7 
Total net sales$1,087.5 $1,123.8 $3,235.1 $3,498.7 

(1) We updated our global reporting product categories as a result of legacy sales being moved out of Other CSCA and into respective categories. These product categories have been adjusted retroactively to reflect the changes and have no impact on historical financial position, results of operations, or cash flows.
(2) Consists primarily of the Rare Diseases Business and other miscellaneous or otherwise uncategorized product lines and other adjustments, none of which is greater than 10% of the segment net sales.

The following table provides information about contract assets from contracts with customers (in millions):
Balance Sheet LocationSeptember 28, 2024December 31, 2023
Short-term contract assetsPrepaid expenses and other current assets$27.4 $28.5 

We generated net sales in the following geographic locations(1) (in millions):
Three Months EndedNine Months Ended
September 28, 2024September 30, 2023September 28, 2024September 30, 2023
U.S.$656.9 $690.3 $1,917.1 $2,176.3 
Europe(2)
397.3 399.8 1,225.5 1,232.6 
All other countries(3)
33.3 33.7 92.5 89.8 
Total net sales$1,087.5 $1,123.8 $3,235.1 $3,498.7 
(1) The net sales by geography are derived from the location of the entity that sells to a third party.
(2) Includes Ireland net sales of $11.1 million and $26.8 million for the three and nine months ended September 28, 2024, and $11.9 million and $31.0 million for the three and nine months ended September 30, 2023.
(3) Includes net sales generated primarily in Australia and Canada.
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Note 3
NOTE 3 - DIVESTITURES

Divestitures During the Three Months Ended September 28, 2024

Rare Diseases Business

On July 10, 2024, we completed the sale of our HRA Pharma Rare Diseases Business (the "Rare Diseases Business") to Esteve Healthcare S.L. ("ESTEVE") for total consideration of $244.5 million, inclusive of net cash received, an estimated working capital adjustment, and contingent consideration with a fair value of $34.5 million as of September 28, 2024. The sale resulted in a pre-tax gain of $5.8 million, net of professional fees, recorded in Other (income) expense, net on the Condensed Consolidated Statement of Operations within our CSCI segment.

The assets associated with this business were reported within our CSCI segment. During previous quarters in 2024, we determined the carrying value of the net assets held for sale of this business exceeded their fair value less costs to sell, resulting in a total impairment charge of $34.1 million during the nine months ended September 28, 2024, inclusive of a goodwill impairment charge of $22.1 million. During the year ended December 31, 2023, we recorded an impairment charge of $90.0 million on the Rare Diseases Business.

Branded Products

During the three months ended September 28, 2024, we sold six branded products in three separate transactions for total cash consideration of $33.3 million, which resulted in a pre-tax gain of $26.0 million recorded in Other operating (income) expense, net on the Consolidated Statements of Operations within our CSCI segment.

NOTE 4 - ASSETS HELD FOR SALE

We classify assets as "held for sale" when, among other factors, management approves and commits to a formal plan of sale with the expectation the sale will be completed within one year. The net assets of the business held for sale are then recorded at the lower of their current carrying value and the fair market value, less costs to sell.

On September 14, 2024, the Company signed a definitive agreement to sell Orion Laboratories Hospital & Specialty Business (the "Hospital & Specialty Business") to General Pharma BidCo Pty Ltd, being an Australian incorporated entity which is ultimately owned by funds managed by Genesis Capital ("Genesis Capital"); as a result, such assets were classified as held for sale. The assets associated with this business were reported within our CSCI segment. At September 28, 2024, we determined the carrying value of the net assets held for sale of this business exceeded their fair value less costs to sell, resulting in a total impairment charge of $16.2 million, inclusive of a goodwill impairment charge of $5.4 million within our CSCI segment.

The assets and liabilities held for sale related to the Hospital & Specialty Business were reported within Current assets held for sale and Current liabilities held for sale on the Condensed Consolidated Balance Sheets. Net of impairment charges, the assets and liabilities of the Hospital & Specialty Business reported as held for sale as of September 28, 2024 totaled $13.0 million and $8.2 million, respectively.

The sale of the Hospital & Specialty Business was completed on November 1, 2024. Gain (loss) on de-recognition will be recognized in the fourth quarter within Other (income) expense, net on the Condensed Consolidated Statement of Operations.

NOTE 5 - DISCONTINUED OPERATIONS

Our discontinued operations primarily consist of our former Rx segment, which held our prescription pharmaceuticals business in the U.S. and our pharmaceuticals and diagnostic businesses in Israel (collectively, the “Rx business”).

On July 6, 2021, we completed the sale of the Rx business to Altaris Capital Partners, LLC ("Altaris") for aggregate consideration of $1.55 billion. The consideration included a $53.3 million reimbursement related to Abbreviated New Drug Application (“ANDA") for a generic topical lotion which Altaris delivered in cash to Perrigo pursuant to the terms of the definitive agreement during the first quarter of 2022.

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Note 5
Under the terms of a transition services agreement ("TSA"), we provided transition services which were substantially completed as of the end of the third quarter of 2022. We also entered into reciprocal supply agreements pursuant to which Perrigo will supply certain products to the Rx business and the Rx business will supply certain products to Perrigo. The supply agreements have a term of four years, extendable up to seven years by the party who is the purchaser of the products under such agreement. We also extended distribution rights to the Rx business for certain OTC products owned and manufactured by Perrigo that may be fulfilled through pharmacy channels, in return for a share of the net profits.

In connection with the sale, Perrigo retained certain pre-closing liabilities arising out of antitrust (refer to Note 17- Contingencies under the header "Price-Fixing Lawsuits") and opioid matters and the Company’s Albuterol recall, subject to, in each case, Altaris' obligation to indemnify the Company for fifty percent of these liabilities up to an aggregate cap on Altaris' obligation of $50.0 million. We have not requested payments from Altaris related to the indemnity of these liabilities during the three and nine months ended September 28, 2024.

Current and prior period reported net loss from discontinued operations primarily relates to legal fees, partially offset by an income tax benefit.

NOTE 6 - INVENTORIES

Major components of inventory were as follows (in millions):
 
September 28, 2024December 31, 2023
Finished goods$669.7 $646.8 
Work in process240.7 241.9 
Raw materials223.4 252.2 
Total inventories$1,133.8 $1,140.9 

NOTE 7 - INVESTMENTS

The following table summarizes the measurement category, balance sheet location, and balances of our equity securities (in millions):
Measurement CategoryBalance Sheet LocationSeptember 28, 2024December 31, 2023
Fair value methodPrepaid expenses and other current assets$— $0.1 
Fair value method(1)
Other non-current assets$0.9 $1.3 
Equity methodOther non-current assets$57.5 $60.1 
(1) Measured at fair value using the Net Asset Value practical expedient.

The following table summarizes the expense recognized in earnings of our equity securities (in millions):
Three Months EndedNine Months Ended
Measurement CategoryIncome Statement LocationSeptember 28, 2024September 30, 2023September 28, 2024September 30, 2023
Fair value methodOther operating (income) expense, net$— $— $0.1 $0.1 
Equity methodOther operating (income) expense, net$0.1 $0.3 $1.3 $1.5 
    
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Note 8


NOTE 8 - LEASES

The balance sheet locations of our lease assets and liabilities were as follows (in millions):
AssetsBalance Sheet LocationSeptember 28, 2024December 31, 2023
OperatingOperating lease assets$182.2 $183.6 
FinanceOther non-current assets12.2 13.7 
Total$194.4 $197.3 
LiabilitiesBalance Sheet LocationSeptember 28, 2024December 31, 2023
Current
OperatingOther accrued liabilities$30.0 $27.5 
FinanceCurrent indebtedness1.7 1.9 
Non-Current
OperatingOther non-current liabilities159.7 159.6 
FinanceLong-term debt, less current portion12.3 13.2 
Total$203.7 $202.2 
    
The below tables show our lease assets and liabilities by reporting segment (in millions):
Assets
OperatingFinancing
September 28, 2024December 31, 2023September 28, 2024December 31, 2023
CSCA$91.9 $79.3 $11.9 $12.8 
CSCI34.7 44.7 — 0.3 
Unallocated55.6 59.6 0.3 0.6 
Total$182.2 $183.6 $12.2 $13.7 
Liabilities
OperatingFinancing
September 28, 2024December 31, 2023September 28, 2024December 31, 2023
CSCA$95.2 $81.6 $13.5 $14.2 
CSCI40.5 47.8 0.1 0.3 
Unallocated54.0 57.7 0.4 0.6 
Total$189.7 $187.1 $14.0 $15.1 

Lease expense was as follows (in millions):
Three Months EndedNine Months Ended
September 28, 2024September 30, 2023September 28, 2024September 30, 2023
Operating leases(1)
$12.5 $11.8 $36.7 $34.4 
Finance leases
Amortization$0.6 $0.9 $1.7 $3.1 
Interest0.1 0.1 0.3 0.4 
Total finance leases$0.7 $1.0 $2.0 $3.5 
(1) Includes short-term leases and variable lease costs, which are immaterial.
    
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Note 8


The annual future maturities of our leases as of September 28, 2024 are as follows (in millions):
Operating LeasesFinance LeasesTotal
2024$9.2 $0.6 $9.8 
202535.3 2.0 37.3 
202627.9 1.6 29.5 
202725.7 1.6 27.3 
202818.6 1.6 20.2 
After 2028106.5 9.0 115.5 
Total lease payments$223.2 $16.4 $239.6 
Less: Interest33.5 2.4 35.9 
Present value of lease liabilities$189.7 $14.0 $203.7 

Our weighted average lease terms and discount rates are as follows:
September 28, 2024September 30, 2023
Weighted-average remaining lease term (in years)
Operating leases9.5910.65
Finance leases9.129.41
Weighted-average discount rate
Operating leases3.8 %2.7 %
Finance leases3.5 %3.1 %

Our lease cash flow classifications are as follows (in millions):
Nine Months Ended
September 28, 2024September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases$26.7 $27.0 
Operating cash flows for finance leases$0.4 $0.4 
Financing cash flows for finance leases$1.5 $2.8 
Leased assets obtained in exchange for new finance lease liabilities$0.4 $0.5 
Leased assets obtained in exchange for new operating lease liabilities$26.5 $5.9 

NOTE 9 - GOODWILL AND INTANGIBLE ASSETS

Goodwill

Changes in the carrying amount of goodwill, by reportable segment, were as follows (in millions):
December 31, 2023Business divestituresImpairmentsCurrency translation adjustmentsSeptember 28, 2024
CSCA(1)
$2,080.9 $— $— $1.0 $2,081.9 
CSCI(2)
1,448.2 (93.1)(27.5)11.9 1,339.5 
Total goodwill$3,529.1 $(93.1)$(27.5)$12.9 $3,421.4 
(1) We had accumulated goodwill impairments of $6.1 million as of September 28, 2024 and December 31, 2023.
(2) We had accumulated goodwill impairments of $995.9 million and $968.4 million as of September 28, 2024 and December 31, 2023, respectively.

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Note 9


Orion Laboratories Hospital & Specialty Business Goodwill

On September 14, 2024, we signed a definitive agreement to sell the Hospital & Specialty Business within our CSCI segment to Genesis Capital. As a result, we determined an impairment indicator existed and prepared a quantitative goodwill impairment test. We determined the carrying value of this business exceeded the fair value and recorded an impairment of $5.4 million within our CSCI segment during the three months ended September 28, 2024 (refer to Note 4 and Note 10).

Rare Diseases Business Goodwill

On April 25, 2024, we announced the receipt of a binding offer from ESTEVE to acquire the Rare Diseases Business within our CSCI segment. As a result, we determined an impairment indicator existed and prepared a quantitative goodwill impairment test. We determined the carrying value of this business exceeded the fair value and recorded an impairment of $22.1 million within our CSCI segment during the nine months ended September 28, 2024. On July 10, 2024, we completed the sale of the Rare Diseases Business to ESTEVE (refer to Note 3 and Note 10).

Intangible Assets

Intangible assets and related accumulated amortization consisted of the following (in millions):
 September 28, 2024December 31, 2023
 GrossAccumulated
Amortization		GrossAccumulated
Amortization
Indefinite-lived intangibles:(1)
Trademarks, trade names, and brands$3.5 $— $3.4 $— 
In-process research and development1.9 — 1.9 — 
Total indefinite-lived intangibles$5.4 $— $5.3 $— 
Definite-lived intangibles:
Distribution and license agreements and supply agreements$90.9 $60.5 $90.8 $57.5 
Developed product technology, formulations, and product rights347.6 224.5 534.0 238.4 
Customer relationships and distribution networks1,850.8 1,161.2 1,868.1 1,108.9 
Trademarks, trade names, and brands2,516.5 704.2 2,502.0 609.3 
Non-compete agreements2.1 2.1 2.1 2.1 
Total definite-lived intangibles$4,807.9 $2,152.5 $4,997.0 $2,016.2 
Total intangible assets$4,813.3 $2,152.5 $5,002.3 $2,016.2 
(1) Certain intangible assets are denominated in currencies other than U.S. dollar; therefore, their gross and net carrying values are subject to foreign currency movements.

As a result of the Company signing a definitive agreement to sell the Hospital & Specialty Business, during the three months ended September 28, 2024, we reclassified $0.2 million net book value of associated intangible assets to Current assets held for sale (refer to Note 4).

As a result of the Company completing the sale of the Rare Diseases Business during the nine months ended September 28, 2024, $162.0 million net book value of associated intangible assets were divested (refer to Note 3).

We recorded amortization expense of $57.5 million and $173.4 million for the three and nine months ended September 28, 2024, respectively, and $68.0 million and $202.7 million for the three and nine months ended September 30, 2023, respectively.

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Note 10

NOTE 10 - FAIR VALUE MEASUREMENTS

The table below summarizes the valuation of our financial instruments carried at fair value by the applicable pricing categories (in millions):
September 28, 2024December 31, 2023
Measured at fair value on a recurring basis:Level 1Level 2Level 3Level 1Level 2Level 3
Assets:
Investment securities$— $— $— $0.1 $— $— 
Foreign currency forward contracts— 2.6 — — 0.6 — 
Interest rate swap agreements— 1.8 — — 30.5 — 
Total assets$— $4.4 $— $0.1 $31.1 $— 
Liabilities:
Cross-currency swap$— $152.6 $— $— $172.0 $— 
Foreign currency forward contracts— 3.9 — — 2.7 — 
Interest rate swap agreements— 45.6 — — 11.7 — 
Total liabilities$— $202.1 $— $— $186.4 $— 
Measured at fair value on a non-recurring basis:
Assets:
Goodwill(1)
$— $— $— $— $— $118.9 
Assets held for sale, net(2)
$— $— $4.8 $— $— $— 
Total assets held for sale, net$— $— $4.8 $— $— $118.9 
(1) During the year ended December 31, 2023, goodwill within the Rare Diseases Business with a carrying value of $208.9 million was written down to a fair value of $118.9 million.
(2) We measured the net assets held for sale for impairment purposes and recorded a total impairment of $10.8 million, resulting in a net asset held for sale balance of $4.8 million (refer to Note 4).

There were no transfers within Level 3 fair value measurements during the three and nine months ended September 28, 2024 or the year ended December 31, 2023.

Non-recurring Fair Value Measurements

Non-recurring fair values represent only those assets whose carrying values were adjusted to fair value during the reporting period.

Goodwill and Intangible Assets

Hospital & Specialty Business

During the three months ended September 28, 2024, we prepared a goodwill impairment test utilizing the estimated closing consideration resulting from the definitive agreement to sell the Hospital & Specialty Business to Genesis Capital. The estimated consideration included an upfront cash payment. We determined the carrying value of this business exceeded the fair value and recorded an impairment in the CSCI segment (refer to Note 9).

Rare Diseases Business

On July 10, 2024, we completed the sale of our Rare Diseases Business to ESTEVE and valued the contingent earn-out milestone payments at $34.5 million utilizing a Monte Carlo simulation. The approach determined the expected value of achieving the milestone payments based on adjusted revenue projections for the Rare Diseases Business and the cash flows were discounted.
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Note 10


Assets (liabilities) held for sale, net

During the three months ended September 28, 2024, we classified the Hospital & Specialty Business disposal group as held for sale, we prepared a fair value analysis and estimated remaining costs to sell. We determined the carrying value of the net assets held for sale exceeded the fair value less cost to sell and recorded an impairment in the CSCI segment (refer to Note 4).

Fixed Rate Long-term Debt    

Our fixed rate long-term debt consisted of the following (in millions):
September 28, 2024December 31, 2023
Public BondsLevel 1Level 1
Carrying value (excluding discount)$3,350.0 $2,244.4 
Fair value$3,272.2 $2,062.2 

The fair values of our public bonds for all periods were based on quoted market prices. The fair values of our private placement notes for all periods were based on interest rates offered for borrowings of a similar nature and remaining maturities.

The carrying amounts of our other financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable, short-term debt, revolving credit agreements, and variable rate long-term debt, approximate their fair value.

NOTE 11 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES     

Interest Rate Swaps

In April 2022, to economically hedge the interest rate risk of the Senior Secured Credit Facilities (as defined in Note 12), we entered into five variable-to-fixed interest rate swap agreements. Three of the interest rate swaps were designated as cash flow hedges to fix the interest rate on a substantial portion of the Term Loan B Facility (as defined in Note 12). The interest rate swaps cover an interest period ranging from June 1, 2022, through April 1, 2029, on notional balances that decline from $1.0 billion to $812.5 million over the term. The other two interest rate swaps were designated as cash flow hedges to fix the interest rate on a substantial portion of the Term Loan A Facility (as defined in Note 12). The interest rate swaps covered an interest period ranging from June 1, 2022, through April 1, 2027, on notional balances that decline from $487.5 million to $387.5 million over the term.

In November 2023, to economically hedge the interest rate risk of the $300.0 million Term B Loan add-on (as defined in Note 12), we entered into four variable-to-fixed interest rate swap agreements. The interest rate swaps were designated as cash flow hedges to fix the interest rate on a substantial portion of the Term B Loans. In September 2024, we elected to fully de-designate these four interest rate swap agreements and discontinued hedge accounting as a result of the reduction in our variable rate debt (refer to Note 12), and entered into one additional undesignated fixed-to-variable interest rate swap agreement to offset the de-designated interest rate swap agreements. As a result, the $14.4 million loss reported in AOCI related to the de-designated interest rate swap agreements was reclassified into earnings immediately as the forecasted transaction (i.e. interest payments) will no longer occur. These five interest rate swap agreements are carried at fair value and are not designated as hedging instruments. Changes in fair value of the derivative instruments are recognized in other income (expense), net in the Condensed Consolidated Statement of Operations, in the current period, along with offsetting foreign currency gain or loss on the underlying assets or liabilities.

In May 2024, we cash settled the remaining notional of $712.5 million variable-to-fixed interest rate swap agreements at market rates. The termination resulted in cash proceeds of $41.2 million, for which the gain remains deferred in Other Comprehensive Income ("OCI") and will be recognized within Interest expense, net as interest is paid on the Senior Secured Credit Facilities. The proceeds are recognized as cash flows from operating activities within the Statement of Cash Flows for the nine months ended September 28, 2024.

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Note 11

Additionally, to economically hedge the interest rate risk of the Term Loan B Facility, we entered into new variable-to-fixed interest rate swap agreements to replace the terminated interest rate swaps during the second quarter of 2024. The interest rate swaps were designated as cash flow hedges to fix the interest rate on a substantial portion of the Term Loan B Facility. The interest rate swaps cover an interest period ranging from May 9, 2024, through April 1, 2029, on notional balances of $712.5 million over the term.

As a designated cash flow hedge, gains and losses will be deferred in AOCI and recognized within Interest expense, net when interest is paid on the Senior Secured Credit Facilities.

Cross-currency Swaps

In October 2022, we entered into three fixed-for-fixed cross currency interest rate swaps at market rates and designated the instruments as net investment hedges on our investment in European operations. As a designated net investment hedge, the loss related to the EUR spot exchange rate on the settled swaps was deferred within the Cumulative Translation Adjustment, a component of AOCI, and will not be recognized in the Statement of Operations until the hedged EUR net investment is substantially liquidated. The following are the terms and notional amounts outstanding:

•$700.0 million notional amount outstanding from October 25, 2022 through March 15, 2026;
•$100.0 million notional amount outstanding from October 25, 2022 through June 15, 2030; and
•$152.5 million notional amount outstanding from August 2, 2024 through April 20, 2027.

On November 21, 2023, we entered into fixed-for-fixed cross currency interest rate swaps designated as net investment hedges to hedge the EUR currency exposure of our investment in European operations. The following are the terms and notional amount outstanding:

•$300.0 million notional amount outstanding from November 21, 2023 through April 20, 2027.

In May 2024, we cash settled $547.5 million notional amount outstanding of the original $700.0 million cross currency interest rate swap outstanding from October 25, 2022 through December 15, 2024. The settlement resulted in cash outflows of $41.4 million recognized as part of cash flows for investing activities within the Statement of Cash Flows for the nine months ended September 28, 2024. On August 2, 2024 we restructured the $152.5 million remaining notional amount outstanding of the original $700.0 million cross-currency interest rate swap to extend the maturity to April 2027. There was no cash outflow as a result of the restructuring.

On May 7, 2024, we entered into new fixed-for-fixed cross currency interest rate swaps designated as net investment hedges to hedge the EUR currency exposure of our investment in European operations. The following are the terms and notional amount outstanding:

•$547.5 million notional amount outstanding from May 7, 2024 through April 20, 2027.

On September 17, 2024, we entered into new fixed-for-fixed cross currency interest rate swaps designated as net investments hedges to hedge the EUR currency exposure of our investment in European operations. The following are the terms and notional amounts outstanding:

•$300.0 million notional amount outstanding from September 17, 2024 through September 30, 2028;
•$215.0 million notional amount outstanding from September 17, 2024 through June 15, 2030; and
•$200.0 million notional amount outstanding from September 17, 2024 through September 30, 2032.

As a designated net investment hedge, gains and losses related to the EUR spot exchange rate will be deferred within the Cumulative Translation Adjustment, a component of AOCI, and recognized in the Statement of Operations when the hedged EUR net investment is substantially liquidated. Gains and losses on excluded components (e.g., interest differentials) will be recorded in Interest expense, net on a systematic and rational basis.

Other Hedging Instruments

On September 17, 2024, we designated €350.0 million of the 2032 Notes (as defined in Note 12) as a net investment hedge on our investment in European operations.

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Perrigo Company plc - Item 1
Note 11

As a designated net investment hedge, gains and losses related to the EUR spot exchange rate will be deferred within the Cumulative Translation Adjustment, a component of AOCI, and recognized in the Statement of Operations when the hedged EUR net investment is substantially liquidated.

Foreign Currency Forwards

Notional amounts of foreign currency forward contracts were as follows (in millions):
September 28, 2024December 31, 2023
British Pound (GBP)$144.6 $72.4 
Swedish Krona (SEK)90.5 36.5 
European Euro (EUR)59.7 79.9 
Danish Krone (DKK)64.3 5.9 
United States Dollar (USD)83.8 22.1 
Canadian Dollar (CAD)37.7 7.1 
Chinese Yuan (CNH)34.2 14.1 
Polish Zloty (PLZ)30.2 3.8 
Norwegian Krone (NOK)5.3 4.4 
Hungarian Forint (HUF)5.6 3.9 
Other8.7 3.5 
Total$564.6 $253.6 

The maximum term of our forward currency exchange contracts is 60 months.

Effects of Derivatives on the Financial Statements

The below tables indicate the effects of all derivative instruments on the Condensed Consolidated Financial Statements. All amounts exclude income tax effects. The balance sheet location and gross fair value of our derivative instruments were as follows (in millions):
Balance Sheet LocationSeptember 28, 2024December 31, 2023
Designated derivative assets:
Foreign currency forward contractsPrepaid expenses and other current assets$1.3 $— 
Foreign currency forward contractsOther non-current assets0.7 0.4 
Interest rate swap agreementsOther non-current assets1.8 30.5 
Total designated derivative assets$3.8 $30.9 
Non-designated derivative assets:
Foreign currency forward contractsPrepaid expenses and other current assets$0.6 $0.2 
Total non-designated derivative assets$0.6 $0.2 
Designated derivative liabilities:
Foreign currency forward contractsOther accrued liabilities$2.1 $— 
Foreign currency forward contractsOther non-current liabilities0.2 — 
Cross-currency swapOther accrued liabilities— 75.1 
Cross-currency swapOther non-current liabilities152.6 96.9 
Interest rate swap agreements
Other non-current liabilities31.3 11.7 
Total designated derivative liabilities$186.2 $183.7 
Non-designated derivative liabilities:
Foreign currency forward contractsOther accrued liabilities$1.6 $2.7 
Interest rate swap agreements
Other non-current liabilities14.3 — 
Total non-designated derivative liabilities
$15.9 $2.7 
21
Perrigo Company plc - Item 1
Note 11


The amounts of (income)/expense recognized in earnings related to our non-designated derivatives on the Consolidated Statements of Operations were as follows (in millions):
Three Months EndedNine Months Ended
Non-Designated DerivativesIncome Statement LocationSeptember 28, 2024September 30, 2023September 28, 2024September 30, 2023
Foreign currency forward contractsOther (income) expense, net$(0.9)$(0.3)$(4.2)$(4.7)
Interest expense, net— (1.6)— (2.2)
$(0.9)$(1.9)$(4.2)$(6.9)

22
Perrigo Company plc - Item 1
Note 11

The following tables summarize the effect of derivative instruments designated as hedging instruments in AOCI (in millions):
Gain or (Loss) Reclassified from AOCI into Earnings
Related to Amounts Included in Effectiveness TestingRelated to Amounts Excluded from Effectiveness Testing
Amount of Gain or (Loss) Recognized in OCI(1)
Location of Gain or (Loss)
Amount Reclassified(2)
Location of Gain or (Loss)
Amount Reclassified(2)
Three Months Ended September 28, 2024
Cash flow hedges
Interest rate swap agreements$(28.4)Interest expense, net$8.9 Interest expense, net$— 
Foreign currency forward contracts(0.1)Net sales(0.3)Net sales(0.3)
Cost of sales0.2 Cost of sales(0.2)
Other (income) expense, net(0.3)
Total Cash flow hedges$(28.5)$8.8 $(0.8)
Net investment hedges
Cross-currency swap$(72.9)Interest expense, net$6.9 
Euro Notes Due 2032$(1.8)
Nine Months Ended September 28, 2024
Cash flow hedges
Interest rate swap agreements$11.7 Interest expense, net$25.3 Interest expense, net$— 
Foreign currency forward contracts(0.6)Net sales(0.4)Net sales(0.8)
Cost of sales0.3 Cost of sales(0.7)
Other (income) expense, net0.3 
Total Cash flow hedges$11.1 $25.2 $(1.2)
Net investment hedges
Cross-currency swap$(6.6)Interest expense, net$21.1 
Euro Notes Due 2032$(1.8)
Three Months Ended September 30, 2023
Cash flow hedges
Interest rate swap agreements$17.7 Interest expense, net$6.4 Interest expense, net$— 
Foreign currency forward contracts(6.8)Net sales(0.2)Net sales0.2 
Cost of sales0.2 Cost of sales0.1 
Other (income) expense, net— 
Total Cash flow hedges$10.9 $6.4 $0.3 
Net investment hedges
Cross-currency swap$40.1 Interest expense, net$6.4 
Nine Months Ended September 30, 2023
Cash flow hedges
Interest rate swap agreements$20.9 Interest expense, net$16.2 Interest expense, net$— 
Foreign currency forward contracts(17.0)Net sales— Net sales0.4 
Cost of sales0.4 Cost of sales0.1 
Other (income) expense, net(0.5)
Total Cash flow hedges$3.9 $16.6 $— 
Net investment hedges
Cross-currency swap$(0.1)Interest expense, net$19.2 
(1) Net income of $17.7 million is expected to be reclassified out of AOCI into earnings during the next 12 months.
(2) For additional details about the effect of the amounts reclassified from AOCI refer to Note 14.

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Perrigo Company plc - Item 1
Note 11

The classification and amount of gain/(loss) recognized in earnings on fair value and hedging relationships were as follows (in millions):
Net SalesCost of SalesInterest Expense, netOther (Income) Expense, net
Three Months Ended September 28, 2024
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
$1,087.5 $683.1 $57.6 $(4.1)
Gain (loss) on cash flow hedging relationships
Foreign currency forward contracts
Amount of gain or (loss) reclassified from AOCI into earnings$(0.3)$0.2 $— $— 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$(0.3)$(0.2)$— $(0.3)
Interest rate swap agreements
Amount of gain or (loss) reclassified from AOCI into earnings$— $— $8.9 $— 
Nine Months Ended September 28, 2024
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$3,235.1 $2,078.3 $144.7 $(0.5)
Gain (loss) on cash flow hedging relationships
Foreign currency forward contracts
Amount of gain or (loss) reclassified from AOCI into earnings$(0.4)$0.3 $— $— 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$(0.8)$(0.7)$— $0.3 
Interest rate swap agreements
Amount of gain or (loss) reclassified from AOCI into earnings$— $— $25.3 $— 
Three Months Ended September 30, 2023
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
$1,123.8 $712.6 $43.5 $(0.6)
Gain (loss) on cash flow hedging relationships
Foreign currency forward contracts
Amount of gain or (loss) reclassified from AOCI into earnings$(0.2)$0.2 $— $— 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$0.2 $0.1 $— $— 
Interest rate swap agreements
Amount of gain or (loss) reclassified from AOCI into earnings$— $— $6.4 $— 
Nine Months Ended September 30, 2023
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$3,498.7 $2,245.6 $131.1 $(9.6)
Gain (loss) on cash flow hedging relationships
Foreign currency forward contracts
Amount of gain or (loss) reclassified from AOCI into earnings$— $0.4 $— $— 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$0.4 $0.1 $— $(0.5)
Interest rate swap agreements
Amount of gain or (loss) reclassified from AOCI into earnings$— $— $16.2 $— 
24
Perrigo Company plc - Item 1
Note 12

NOTE 12 - INDEBTEDNESS

Total borrowings are summarized as follows (in millions):
September 28, 2024December 31, 2023
Term loans
Term A Loans due April 20, 2027(1)
$453.1 $471.9 
Term B Loans due April 20, 2029(1)
984.7 1,386.2 
Total term loans$1,437.8 $1,858.1 
Notes and Bonds
CouponDue
3.900%December 15, 2024$400.0 $400.0 
4.375%
March 15, 2026(2)
700.0 700.0 
4.900%
June 15, 2030(3)
750.0 750.0 
*
5.375%
September 30, 2032(4)
390.6 — 
6.125%
September 30, 2032(4)
715.0 — 
5.300%November 15, 204390.5 90.5 
4.900%December 15, 2044303.9 303.9 
Total notes and bonds3,350.0 2,244.4 
Other financing13.7 14.8 
Unamortized premium (discount), net(23.7)(17.8)
Deferred financing fees(24.5)(26.1)
Total borrowings outstanding4,753.3 4,073.4 
Current indebtedness(440.7)(440.6)
Total long-term debt less current portion$4,312.6 $3,632.8 
(1)    Discussed below collectively as the "Senior Secured Credit Facilities".
(2)     The 4.375% Notes due 2026 were redeemed in full on October 2, 2024.
(3)     The coupon rate noted above is as of September 28, 2024. This increased from 4.650% to 4.900% on payments starting after June 15, 2024, following a credit rating downgrade by S&P Global in the first quarter of 2024. Future interest rate adjustments are subject to a 2.0% total cap above the original 3.150% interest rate which would result in an interest rate not to exceed 5.150% based on certain rating events as specified in the Note’s Supplemental Indenture No. 3, dated as of June 19, 2020, among Perrigo Finance Unlimited Company, Perrigo Company plc, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee.
(4)    Discussed below collectively as the "2032 Notes".
* Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate.


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Perrigo Company plc - Item 1
Note 12

Note Issuances

On September 17, 2024, Perrigo Finance Unlimited Company ("Perrigo Finance"), a public unlimited company incorporated under the laws of Ireland and an indirect wholly-owned finance subsidiary of Perrigo whose primary purpose is to finance the business and operations of Perrigo and its affiliates, issued $715.0 million in aggregate principal amount of 6.125% Senior Notes due 2032 (the "USD Notes due 2032") and €350.0 million in aggregate principal amount of 5.375% Senior Notes due 2032 (the "Euro Notes due 2032" and together with the USD Notes due 2032, the "2032 Notes"). The 2032 Notes are fully and unconditionally guaranteed on a senior unsecured basis by Perrigo and its subsidiaries that provide guarantees under Perrigo's Senior Secured Credit Facilities (as defined below). Net proceeds from the 2032 Notes were used to prepay a portion of the Term Loan B Facility (as defined below) on September 19, 2024 and the remaining proceeds were used to fund the redemption of $700.0 million of the 4.375% Notes due 2026 on October 2, 2024. As a result of the redemption, we recognized an extinguishment loss of $5.1 million during the third quarter of 2024 and we anticipate an additional loss of $1.6 million in the fourth quarter of 2024.

Credit Agreements

On April 20, 2022, we and our indirect wholly owned subsidiary, Perrigo Investments, LLC, (the "Borrower") entered into the senior secured credit facilities, which consisted of (i) a $1.0 billion five-year revolving credit facility (the “Revolver”), (ii) a $500.0 million five-year Term Loan A facility (the “Term Loan A Facility” and the Term A Loans thereunder, the "Term A Loans"), and (iii) a $1.1 billion seven-year Term Loan B facility (the “Term Loan B Facility” and the Term B Loans thereunder borrowed on April 20, 2022, the "2022 Term B Loans” and, together with the Revolver and Term Loan A Facility, the "Senior Secured Credit Facilities"), pursuant to a Term Loan and Revolving Credit Agreement (the "Credit Agreement").

On December 15, 2023, we and the Borrower, entered into Amendment No. 1, an Incremental Assumption Agreement (the "Amendment") to the Credit Agreement. The Amendment provides for a fungible add on to the 2022 Term B Loans in an aggregate principal amount of $300.0 million (the "Incremental Term B Loans" and together with the 2022 Term B Loans, the “Term B Loans”). The terms of the Incremental Term B Loans, including pricing and maturity, are identical to the 2022 Term B Loans. The Term B Loans will mature on April 20, 2029. The net proceeds from the Incremental Term B Loans were used to settle the cash tender offer by Perrigo Finance for $300.0 million in aggregate principal amount of 3.900% Senior Notes due 2024 ("2024 Notes"). The tender offer was settled on December 15, 2023, and Perrigo Finance accepted for purchase $300.0 million of the 2024 Notes and paid approximately $295.1 million in aggregate cash consideration (excluding accrued interest).

The Senior Secured Credit Facilities are guaranteed, along with any hedging or cash management obligations entered into with a lender, by us, and certain of our direct and indirect wholly-owned subsidiaries organized in the United States, Ireland, Belgium and England and Wales (subject to certain exceptions) (the “Guarantor Subsidiaries”). Additionally, the Borrower and the Guarantor Subsidiaries provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 5.300% Notes due 2043 issued by the Company, and the Guarantor Subsidiaries, the Company and the Borrower provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 3.900% Notes due 2024, the 4.375% Notes due 2026, the 4.900% Notes due 2030 and the 4.900% Notes due 2044 issued by Perrigo Finance Unlimited Company, a wholly-owned subsidiary.

We are subject to financial covenants in the Senior Secured Credit Facilities. The agreements contain financial covenants that require the Borrower and its restricted subsidiaries to (a) not exceed a maximum first lien secured net leverage ratio of 3.00 to 1.00 at the end of each fiscal quarter and (b) not fall below a minimum interest coverage ratio of 3.00 to 1.00 at the end of each fiscal quarter, provided that such covenants apply only to the Revolver and the Term Loan A Facility. If we consummate certain qualifying acquisitions during the term of the loan, the maximum first lien secured net leverage ratio covenant would increase to 3.25 to 1.00 for such quarter and the three following fiscal quarters thereafter.

During the three and nine months ended September 28, 2024, principal repayments of $400.8 million and $420.4 million, respectively, were made on the Term Loan A Facility and Term Loan B Facility.

26
Perrigo Company plc - Item 1
Note 12

There were no borrowings outstanding under the Revolver as of September 28, 2024 or December 31, 2023.

We are in compliance with all the covenants under our debt agreements as of September 28, 2024.

Other Financing

We have overdraft facilities available that we use to support our cash management operations. We report any balances outstanding in the above table under "Other financing". There were no material borrowings outstanding under the overdraft facilities as of September 28, 2024 or December 31, 2023.

We have financing leases that are reported in the above table under "Other financing" (refer to Note 8).

NOTE 13 - EARNINGS PER SHARE AND SHAREHOLDERS' EQUITY

Earnings per Share

A reconciliation of the numerators and denominators used in our basic and diluted earnings per share ("EPS") calculation is as follows (in millions):
 Three Months EndedNine Months Ended
 September 28, 2024September 30, 2023September 28, 2024September 30, 2023
Numerator:
Income (loss) from continuing operations$(17.6)$15.4 $(119.2)$23.3 
Loss from discontinued operations, net of tax(3.4)(1.2)(8.1)(3.7)
Net income (loss)$(21.0)$14.2 $(127.3)$19.6 
Denominator:
Weighted average shares outstanding for basic EPS137.5 135.5 137.3 135.2 
Dilutive effect of share-based awards— 1.4 — 1.4 
Weighted average shares outstanding for diluted EPS (1)
137.5 136.9 137.3 136.6 
(1) In the period of a net loss from continuing operations, diluted shares equal basic shares.


Shareholders' Equity

In October 2018, our Board of Directors authorized up to $1.0 billion of share repurchases with no expiration date, subject to the Board of Directors’ approval of the pricing parameters and amount that may be repurchased under each specific share repurchase program (the "2018 Authorization"). We did not repurchase any shares during the three and nine months ended September 28, 2024 or September 30, 2023.

NOTE 14 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in our AOCI balances, net of tax were as follows (in millions):
Fair Value of Derivative Financial Instruments, net of taxForeign Currency Translation AdjustmentsPost-Employment Plan Adjustments, net of taxTotal AOCI
Balance at December 31, 2023$17.1 $(4.0)$(2.4)$10.7 
OCI before reclassifications24.9 1.2 (1.8)24.3 
Amounts reclassified from AOCI(25.2)— — (25.2)
Other comprehensive income (loss)$(0.3)$1.2 $(1.8)$(0.9)
Balance at September 28, 2024$16.8 $(2.8)$(4.2)$9.8 
For additional details about the effect of the amounts reclassified from AOCI refer to Note 11.

27
Perrigo Company plc - Item 1
Note 15

NOTE 15 - RESTRUCTURING CHARGES

We periodically take action to reduce redundant expenses and improve operating efficiencies. Restructuring activity includes severance, lease exit costs, asset impairments, and related consulting fees. The following reflects our restructuring activity (in millions):
Three Months Ended
September 28, 2024
Supply Chain
Reinvention		HRA Pharma
Integration 		Project EnergizeOther InitiativesTotal
Beginning balance$0.3 $4.9 $37.8 $0.8 $43.8 
Additional charges2.3 — 14.5 — 16.8 
Payments(1.9)(0.5)(13.5)(0.4)(16.3)
Non-cash adjustments— — — — — 
Ending balance$0.7 $4.4 $38.8 $0.4 $44.3 

Nine Months Ended
September 28, 2024
Supply Chain
Reinvention		HRA Pharma
Integration 		Project EnergizeOther InitiativesTotal
Beginning balance$0.7 $6.8 $2.9 $1.8 $12.2 
Additional charges7.3 — 90.6 0.2 98.1 
Payments(7.0)(2.4)(43.5)(1.7)(54.6)
Non-cash adjustments(0.3)— (11.2)0.1 (11.4)
Ending balance$0.7 $4.4 $38.8 $0.4 $44.3 

Three Months Ended
September 30, 2023
Supply Chain ReinventionHRA Pharma Integration
Other
 Initiatives
Total
Beginning balance$— $9.6 $3.8 $13.4 
Additional charges13.5 0.5 1.5 15.5 
Payments(2.3)(4.0)(2.8)(9.0)
Non-cash adjustments(11.2)(0.1)(0.4)(11.7)
Ending balance$— $6.0 $2.2 $8.2 

Nine Months Ended
September 30, 2023
Supply Chain
Reinvention		HRA Pharma
Integration		Other
Initiatives		Total
Beginning balance$2.2 $13.3 $4.3 $19.8 
Additional charges17.4 2.7 5.6 25.7 
Payments(8.4)(10.1)(7.8)(26.3)
Non-cash adjustments(11.2)0.1 0.1 (11.0)
Ending balance$— $6.0 $2.2 $8.2 

The charges incurred during the three and nine months ended September 28, 2024 were primarily associated with actions taken on Project Energize activities associated with employee separation, consulting fees and lease exit costs. The charges incurred during the three and nine months ended September 30, 2023 were primarily associated with actions taken on our multi-year supply chain restructuring program initiative started in 2022, and HRA Pharma integration activities associated with employee separation, continuity and other benefit-related costs.

28
Perrigo Company plc - Item 1
Note 15

Of the amount recorded during the three and nine months ended September 28, 2024, $9.1 million and $48.8 million was related to our CSCI segment and $5.4 million and $23.8 million related to our CSCA segment, and $2.3 million and $25.5 million was related to our Unallocated segment. For all segments, amounts were due primarily to Project Energize. Of the amount recorded during the three and nine months ended September 30, 2023, $12.5 million and $19.2 million was related to our CSCI segment, due primarily to supply chain restructuring (including the $11.2 million asset impairment) and HRA Pharma integration initiatives, and $2.3 million and $4.6 million was related to our CSCA segment, also due primarily to supply chain restructuring initiatives.

There were no other material restructuring programs for the periods presented. All charges are recorded in Restructuring expense on the Condensed Consolidated Statements of Operations. The remaining $44.3 million liability for employee severance benefits and consulting fees is expected to be mostly paid within the next year.

NOTE 16 - INCOME TAXES

The effective tax rates were as follows:
Three Months EndedNine Months Ended
September 28, 2024September 30, 2023September 28, 2024September 30, 2023
180.9 %19.7 %20.9 %49.5 %

The effective tax rate on the pre-tax income for the three months ended September 28, 2024 and on the pre-tax loss for the nine months ended September 28, 2024 was largely impacted by losses recognized in various tax jurisdictions, in both periods, as well as the impacts of accounting for income taxes in interim reporting periods. As a result, a significant variation in the customary relationship between income tax expense and pre-tax book income may occur. Due to the net impact of an inter-company intellectual property sale, estimated worldwide non-deductible expenses, as well as establishing a partial valuation allowance in the United States, we are projecting an income tax expense for the full year ended December 31, 2024, which results in an unusually high annual effective tax rate when applied to the forecasted pre-tax income for the year.

The Organization for Economic Co-operation and Development (“OECD”), which represents a coalition of member countries, has recommended changes to numerous long-standing tax principles. In particular, the OECD’s Pillar Two initiative introduces a global per-country minimum tax of 15%. Pillar Two legislation has been enacted or substantively enacted in many of the jurisdictions in which we operate. The legislation is effective for our financial year beginning January 1, 2024. We are in scope of the enacted or substantively enacted legislation and have performed an assessment of our potential exposure to Pillar Two income taxes.

The assessment of the potential exposure to Pillar Two income taxes is based on the most recent tax filings, country-by-country reporting and financial statements for our constituent entities. Based on the assessment, the Pillar Two effective tax rates in most of the jurisdictions in which we operate are above 15%. However, there are a limited number of jurisdictions where the transitional safe harbor reliefs do not apply, and the Pillar Two effective tax rate is below 15%. We do not expect a material exposure to Pillar Two income taxes in those jurisdictions.

Internal Revenue Service Audits of Perrigo Company, a U.S. Subsidiary

Perrigo Company, our U.S. subsidiary ("Perrigo U.S."), is engaged in a series of tax disputes in the U.S. relating primarily to transfer pricing adjustments including income in connection with the purchase, distribution, and sale of store-brand OTC pharmaceutical products in the United States, including the heartburn medication omeprazole. On August 27, 2014, we received a statutory notice of deficiency from the Internal Revenue Service ("IRS") relating to our fiscal tax years ended June 27, 2009, and June 26, 2010 (the “2009 tax year” and “2010 tax year”, respectively). On April 20, 2017, we received a statutory notice of deficiency from the IRS for the years ended June 25, 2011 and June 30, 2012 (the “2011 tax year” and “2012 tax year”, respectively). Specifically, both statutory notices proposed adjustments related to the offshore reporting of profits on sales of omeprazole in the United States resulting from the assignment of an omeprazole distribution contract to an Israeli affiliate. In addition to the transfer pricing adjustments, which applied to all four tax years, the statutory notice of deficiency for the 2011 and 2012 tax years included adjustments requiring the capitalization and amortization of certain legal expenses that were deducted when paid or incurred in defending against certain patent infringement lawsuits related to Abbreviated New Drug Applications ("ANDAs") filed with a Paragraph IV Certification.
29
Perrigo Company plc - Item 1
Note 16


We do not agree with the audit adjustments proposed by the IRS in either of the notices of deficiency. We paid the assessed amounts of tax, interest, and penalties set forth in the statutory notices and timely filed claims for refund on June 11, 2015 for the 2009 and 2010 tax years, and on June 7, 2017, for the 2011 and 2012 tax years. On August 15, 2017, following disallowance of such refund claims, we timely filed a complaint in the United States District Court for the Western District of Michigan seeking refunds of tax, interest, and penalties of $27.5 million for the 2009 tax year, $41.8 million for the 2010 tax year, $40.1 million for the 2011 tax year, and $24.7 million for the 2012 tax year, for a total of $134.1 million, plus statutory overpayment interest thereon from the dates of payment. The amounts sought in the complaint for the 2009 and 2010 tax years were recorded as deferred charges in Other non-current assets on our balance sheet during the three months ended March 28, 2015, and the amounts sought in the complaint for the 2011 and 2012 tax years were recorded as deferred charges in Other non-current assets on our balance sheet during the three months ended July 1, 2017.

A bench trial was held during the period May 25, 2021 to June 7, 2021 for the refund case in the United States District Court for the Western District of Michigan. The total amount of cumulative deferred charge that we are seeking to receive in this litigation is approximately $113.3 million, which reflects the impact of conceding that Perrigo U.S. should have received a 5.24% royalty on all omeprazole sales. That concession was previously paid and is the subject of the above refund claims. The issues outlined in the statutory notices of deficiency described above are continuing in nature, and the IRS will likely carry forward the adjustments set forth therein as long as the OTC medication is sold, in the case of the omeprazole issue, and for all post-2012 Paragraph IV filings that trigger patent infringement suits, in the case of the ANDA issue. Post-trial briefings were completed on September 24, 2021 and the case is now fully submitted for the court’s decision. On April 30, 2021, we filed a Notice of New Authority in our refund case in the Western District of Michigan alerting the court to a United States Tax Court decision in Mylan v. Comm'r that ruled in favor of the taxpayer on nearly identical ANDA issues as we have before the court. On August 1, 2023, we filed a Notice of New Authority in our refund case in the Western District of Michigan alerting the court to the Third Circuit Court decision in Mylan v. Comm’r that ruled in favor of the taxpayer on nearly identical ANDA issues that we have before the court. On August 22, 2022, the parties filed a Notice of New Authority in the refund case alerting the court to a United States Court of Federal Claims decision in Actavis Laboratories v. United States that also ruled in favor of the taxpayer on the ANDA issues. The government appealed the Actavis Laboratories decision to the United States Court of Appeals for the Federal Circuit in December of 2022; oral argument was held on June 7, 2024, and the case is now awaiting decision.

On January 13, 2021, the IRS issued a 30-day letter and Revenue Agent's Report ("RAR") with respect to its audit of our fiscal tax years ended June 29, 2013, June 28, 2014, and June 27, 2015. The 30-day letter proposed, among other modifications, transfer pricing adjustments in connection with the distribution of omeprazole consistent with the IRS position in the prior years in the aggregate amount of $141.6 million and ANDA-related adjustments in the aggregate amount of $21.9 million. We timely filed a protest to the 30-day letter for those additional adjustments but noted that, due to the pending refund litigation described above, IRS Appeals would not consider the merits of the omeprazole or ANDA matters. We believe that we should prevail on the merits on both carryforward issues and have reserved for taxes and interest payable on the 5.24% deemed royalty on omeprazole through the tax year ended December 31, 2018. Beginning with the tax year ended December 31, 2019, we began reporting income commensurate with the 5.24% deemed royalty. We have not reserved for the ANDA-related issue described above. While we believe we should prevail on the merits of this case, the outcome remains uncertain. If our litigation position on the omeprazole issue is not sustained, the outcome for the 2009–2012 tax years could range from a reduction in the refund amount to denial of any refund. In addition, we expect that the outcome of the refund litigation could effectively bind future tax years. In that event, an adverse ruling on the omeprazole issue could have a material impact on subsequent periods, with additional tax liability in the range of $25.0 million to $124.0 million, not including interest and any applicable penalties.

The 30-day letter for the 2013-2015 tax years also proposed to reduce Perrigo U.S.'s deductible interest expense for the 2014 tax year and the 2015 tax year on $7.5 billion in certain intercompany debts owed by it to Perrigo Company plc. The debts were incurred in connection with the Elan merger transaction in 2013. On May 7, 2020, the IRS issued a Notice of Proposed Adjustment ("NOPA") capping the interest rate on the debts for U.S. federal tax purposes. On May 5, 2023, we finalized an agreement resulting in settlement of the May 7, 2020 NOPA. In fiscal year 2023 we adjusted our previously established reserves related to this matter. On March 28, 2024, we received a Notice of Assessment and on April 10, 2024 we made the settlement payment.

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On December 2, 2021, the IRS commenced an audit of our federal income tax returns for the tax years ended December 31, 2015, through December 31, 2019.

Internal Revenue Service Audit of Athena Neurosciences, Inc., a U.S. Subsidiary    

On December 22, 2016, we received a NOPA for the year ended December 31, 2011, denying the deductibility of settlement costs incurred in 2011 by Athena's parent company Elan Pharmaceuticals, Inc. ("EPI") related to illegal marketing of Zonegran by EPI's employees in the United States raised in a Qui Tam action under the U.S. False Claims Act. We strongly disagreed with the IRS' position on this issue. Because we believed that any concession on this issue in Appeals would be contrary to our evaluation of the issue and to avoid double taxation of the same income in the United States and Ireland, we pursued our remedies under the Mutual Agreement Procedure ("MAP") of the U.S.-Ireland Income Tax Treaty to alleviate double taxation. On October 20, 2020, we requested Competent Authority assistance and the request was accepted. This issue remains pending in the MAP and is being considered by the U.S. and Irish Competent Authorities.

Summary

Although we believe that our tax estimates are reasonable and that we prepare our tax filings in accordance with all applicable tax laws, the final determination with respect to any tax audit and any related litigation could be materially different from our estimates or from our historical income tax provisions and accruals. The results of an audit or litigation could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest assessments.
    
Based on the final resolution of tax examinations, judicial or administrative proceedings, changes in facts or law, expirations of statute of limitations in specific jurisdictions or other resolutions of, or changes in, tax positions - one or more of which may occur within the next twelve months - it is reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may change materially from those recorded as of September 28, 2024. However, we are not able to estimate a reasonably possible range of how these events may impact our unrecognized tax benefits in the next twelve months.
    
NOTE 17 - CONTINGENCIES

In view of the inherent difficulties of predicting the outcome of various types of legal proceedings, we cannot determine the ultimate resolution of the matters described below. We establish reserves for litigation and regulatory matters when losses associated with the claims become probable and the amounts can be reasonably estimated. The actual costs of resolving legal matters may be substantially higher or lower than the amounts reserved for those matters. For matters where the likelihood or extent of a loss is not probable or cannot be reasonably estimated as of September 28, 2024, we have not recorded a loss reserve. If certain of these matters are determined against us, there could be a material adverse effect on our financial condition, results of operations, or cash flows. We currently believe we have valid defenses to the claims in these lawsuits and intend to defend these lawsuits vigorously regardless of whether or not we have a loss reserve. Other than what is disclosed below, we do not expect the outcome of the litigation matters to which we are currently subject to, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations, or cash flows.

Price-Fixing Lawsuits Related to the Company's Former Rx Business

Beginning in 2016, the Company, along with other manufacturers, was named as a defendant in lawsuits in the United States and Canada generally alleging anticompetitive conduct with respect to the sale of generic drugs by the Company’s former Rx business. The complaints – which have been filed by putative classes of direct purchasers, end payors, and indirect resellers, as well as individual direct and indirect purchasers and certain cities and counties – allege a conspiracy to fix, maintain, stabilize, and/or raise prices, rig bids, and allocate markets or customers for various generic drugs in violation of federal and state antitrust and consumer protection laws. While most of the class complaints involve alleged single-drug conspiracies, the three putative classes and many of the opt out plaintiffs have each filed an over-arching conspiracy complaint alleging that Perrigo and other manufacturers (and some individuals) entered into an “overarching conspiracy” that involved allocating customers, rigging bids, and raising, maintaining, and fixing prices for various products. The vast majority of the lawsuits described in this
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paragraph have been consolidated in the In re Generic Pharmaceuticals Pricing Antitrust Litigation multidistrict litigation ("MDL") MDL No. 2724 (United States District Court for Eastern District of Pennsylvania).

The Court has designated three sets of cases to proceed as "bellwethers," meaning that they will proceed on a more expedited basis than the other cases in the MDL. Those cases are (a) class actions alleging "single drug" conspiracies involving Clobetasol and Clomipramine; and (b) the third Complaint filed by the State Attorneys General alleging an overarching conspiracy concerning various topical products (described below). Perrigo was initially named as a defendant in the Clobetasol class bellwether cases, but the classes voluntarily dismissed their claims against Perrigo relating to “single drug” conspiracies involving Clobetasol in May 2023. Discovery closed in the bellwether cases on October 2, 2023. Summary judgment motions in the State bellwether case were filed in September 2024, and additional briefing and summary judgment motions are scheduled to be filed through November 2025. No trial dates have been set for any of the bellwether cases, or any of the other cases in the MDL.

State Attorney General Complaint

On June 10, 2020, the Connecticut Attorney General’s office filed a lawsuit on behalf of Connecticut and 50 other states and territories against Perrigo, 35 generic pharmaceutical manufacturers, and certain individuals (including two former Perrigo employees), alleging an overarching conspiracy to allocate customers and/or fix, raise, or stabilize prices of eighty products. This case is included among the “bellwether cases” designated to follow the expedited schedule described above. On April 19, 2024, this case was remanded from the MDL and transferred to the District of Connecticut. No trial date has been set for this case.

Canadian Class Action Complaint

In June 2020, an end payor filed a class action in Federal Court in Canada against Perrigo and 29 manufacturers alleging an overarching conspiracy to allocate customers and/or fix, raise or stabilize prices of dozens of products, most of which were neither made nor sold by Perrigo's former Rx business. The product conspiracies allegedly involving Perrigo focus on the same products as those involved in other MDL complaints naming Perrigo. The Statement of Claim has been amended three times since it was issued. The next step in the action is currently expected to be the motion to certify the action as a class proceeding, which is scheduled to be heard in June 2025.

Hospitals Complaint

On June 30, 2023, a group of 150 hospitals filed a complaint against Perrigo and 35 other generic drug manufacturers alleging a conspiracy to fix, raise, or stabilize prices of 228 products. Perrigo's former Rx business made and sold 33 of these products. Most of the product conspiracies allegedly involving Perrigo focus on products that are the same as the products involved in other MDL complaints naming Perrigo. This case was transferred to the MDL on September 15, 2023 for all pre-trial proceedings.

Self-Insured Employer Complaint

On April 4, 2024, nine corporate employers with self-insured health and benefit plans filed a complaint against Perrigo and 35 other generic drug manufacturers alleging a conspiracy to fix, raise, or stabilize prices of scores of generic drug products, most of which were neither made nor sold by Perrigo. The allegations in this complaint, and the products at issue, parallel the allegations in other complaints in the MDL. This case has been transferred into the MDL for pretrial proceedings.

At this stage, we cannot reasonably estimate the outcome of the liability if any, associated with the claims listed in the "Price-Fixing Lawsuits Related to the Company's Former Rx Business", section above. We intend to defend each of these lawsuits vigorously.
    
Securities Litigation
 
In the United States (cases related to events in 2015-2017)

Beginning in May 2016, purported class action complaints were filed against the Company and our former CEO, Joseph Papa, in the U.S. District Court for the District of New Jersey (Roofers’ Pension Fund v. Papa, et al.) purporting to represent a class of shareholders for the period from April 21, 2015 through May 11, 2016,
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inclusive. The original complaint alleged violations of federal securities laws in connection with the actions taken by us and the former executive to defend against the unsolicited takeover bid by Mylan in the period from April 21, 2015 through November 13, 2015. The plaintiff also alleged that the defendants provided inadequate disclosure concerning alleged business developments during the alleged class period including integration problems related to the Omega acquisition.

The operative complaint is the first amended complaint filed on June 21, 2017, and named as defendants us and 11 current or former directors and officers of Perrigo (Mses. Judy Brown, Laurie Brlas, Jacqualyn Fouse, Ellen Hoffing, and Messrs. Joe Papa, Marc Coucke, Gary Cohen, Michael Jandernoa, Gerald Kunkle, Herman Morris, and Donal O’Connor). The amended complaint alleges violations of federal securities laws arising out of the actions taken by us and the former directors and executives to defend against the unsolicited takeover bid by Mylan in the period from April 21, 2015 through November 13, 2015 and the allegedly inadequate disclosure throughout the entire class period related to the business developments during that longer period (April 2015 to May 2017) including purported integration problems related to the Omega acquisition, alleges incorrect reporting of organic growth at the Company and at Omega, alleges price fixing activities with respect to six generic prescription pharmaceuticals, and alleges improper accounting for the Tysabri® royalty stream. During 2017, the defendants filed motions to dismiss, which the plaintiffs opposed. On July 27, 2018, the court issued an opinion and order granting the defendants’ motions to dismiss in part and denying the motions to dismiss in part. The court dismissed without prejudice defendants Laurie Brlas, Jacqualyn Fouse, Ellen Hoffing, Gary Cohen, Michael Jandernoa, Gerald Kunkle, Herman Morris, Donal O’Connor, and Marc Coucke. The court also dismissed without prejudice claims arising from the Tysabri® accounting issue described above and claims alleging incorrect disclosure of organic growth described above. The defendants who were not dismissed are the Company, Joe Papa, and Judy Brown. The claims (described above) that were not dismissed relate to the integration issue regarding the Omega acquisition, the defense against the Mylan tender offer, and the alleged price fixing activities with respect to six generic prescription pharmaceuticals. The defendants who remain in the case (us, Mr. Papa, and Ms. Brown) have filed answers denying liability.

On November 14, 2019, the court granted the lead plaintiffs’ motion and certified three classes for the case: (i) all those who purchased shares between April 21, 2015 through May 2, 2017 inclusive on a U.S. exchange and were damaged thereby; (ii) all those who purchased shares between April 21, 2015 through May 2, 2017 inclusive on the Tel Aviv exchange and were damaged thereby; and (iii) all those who owned shares as of November 12, 2015 and held such stock through at least 8:00 a.m. on November 13, 2015 (whether or not a person tendered shares in response to the Mylan tender offer) (the "tender offer class"). Plaintiffs' counsels sent notices during 2020 to the alleged classes.

The parties took discovery from 2018 through 2020. After discovery ended, defendants filed motions for summary judgement and to exclude plaintiffs' experts, which were fully briefed. On August 17, 2023, the court granted summary judgment to Ms. Brown on all claims and dismissed her from the case; the court granted summary judgment in part to Mr. Papa terminating the claim against him that he made false statements with respect to alleged collusive pricing at the Generic Rx business. The court did not grant summary judgment on statements made about the integration of Omega during 2015. Thereafter, parties engaged in court-ordered settlement conferences.

On April 5, 2024, the class plaintiffs filed papers seeking Court approval of a settlement between the alleged classes and the defendants for $97.0 million. Perrigo and the remaining individual defendant agreed to the proposed settlement without any concession of liability or wrongdoing. We recorded an additional loss provision of $34.0 million during the first quarter as a result of the pending settlement. The Company funded the $97.0 million to an escrow account controlled by class counsel under the Court supervision until final approval and relieved the corresponding liability from Other accrued liabilities on the Condensed Consolidated Balance Sheets as of June 29, 2024. On September 5, 2024, the Court granted final approval of the class action settlement and terminated the case with respect to Perrigo, its co-defendant, and other individuals who previously had been named as defendants. The expense is presented within Other operating (income) expense, net on the Condensed Consolidated Statements of Operations for the nine months ended September 28, 2024.

In addition to the class action, the following opt-out cases have been filed against us, and in some cases, Mr. Papa and Ms. Brown. Mediation efforts and settlement discussions occur from time to time; to the extent settlements cannot be achieved, we intend to defend these lawsuits vigorously. These cases in the New Jersey federal court currently are stayed pending further developments following the settlement of the Roofers' case (discussed above).
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We anticipate that one or more of the opt-out plaintiffs will take a position that the settlement of the Roofer’s case does not have any direct effect on the opt out cases discussed below. The following lawsuits contain factual allegations and claims that are similar to some or all of the factual allegations and claims in the class actions, but involve different evidence, expert witnesses, and theories of liability:
CaseDate Filed
Carmignac Gestion, S.A. v. Perrigo Company plc, et al.11/1/2017
First Manhattan Co. v. Perrigo Company plc, et al.2/16/2018; amended 4/20/2018
Nationwide Mutual Funds, et al. v. Perrigo Company plc, et al.10/29/2018
Schwab Capital Trust, et al. v. Perrigo Company plc, et al.1/31/2019
Aberdeen Canada Funds -- Global Equity Fund, et al. v. Perrigo Company plc, et al.2/22/2019
Principal Funds, Inc., et al. v. Perrigo Company plc, et al.3/5/2020
Kuwait Investment Authority, et al. v. Perrigo Company plc, et al.3/31/2020
Mason Capital L.P., et al. v. Perrigo Company plc, et al.1/26/2018
Pentwater Equity Opportunities Master Fund Ltd., et al. v. Perrigo Company plc, et al.
1/26/2018
WCM Alternatives: Event-Drive Fund, et al. v. Perrigo Co., plc, et al.11/15/2018
Hudson Bay Master Fund Ltd., et al. v. Perrigo Co., plc, et al.11/15/2018
Discovery Global Citizens Master Fund, Ltd., et al. v. Perrigo Co. plc, et al.12/18/2019
York Capital Management, L.P., et al. v. Perrigo Co. plc, et al.12/20/2019
Burlington Loan Management DAC v. Perrigo Co. plc, et al.2/12/2020
Universities Superannuation Scheme Limited v. Perrigo Co. plc, et al.3/2/2020
Harel Insurance Company, Ltd., et al. v. Perrigo Company plc, et al.2/13/2018
TIAA-CREF Investment Management, LLC., et al. v. Perrigo Company plc, et al.4/20/2018
BlackRock Global Allocation Fund, Inc., et al. v. Perrigo Co. plc, et al.4/21/2020
Starboard Value and Opportunity C LP, et al. v. Perrigo Company plc, et al.2/25/2021

During the three months ended September 28, 2024, eight of the cases listed above were dismissed following settlements reached in the prior quarter (cases brought by the following plaintiffs in the order listed above): Mason Capital; Pentwater; WCM Alternatives; Hudson Bay; Discovery Global; York Capital; Burlington; and Universities Superannuation. Also, during the three months ended September 28, 2024, the New Jersey federal court held that the plaintiffs in an additional purported opt out case (Sculptor Master Fund et al. v. Perrigo Company plc, et at. filed 2/16/2019) failed to opt out and therefore can only recover through the class action. In October 2024, the Sculptor Fund plaintiffs filed an appeal of that ruling. During the quarter, the Company engaged in mediation and settlement discussions in certain of the other opt-out cases described above, and we recorded a total loss provision of approximately $20 million and $40 million during the three and nine months ended September 28, 2024, respectively, as a result of reasonable estimates of probable loss regarding the remaining opt-out cases listed above, which is included in the Other (income) expense, net on the Condensed Consolidated Statement of Operations. The remaining aggregate loss accrual for litigation contingencies is described below under "Contingencies Accruals."

In June 2020, three Highfields Capital Fund entities filed a lawsuit in Massachusetts State Court with factual allegations that generally were similar to the factual allegations in the Amended Complaint in the Roofers' Pension Fund case described above, except that the Highfields plaintiffs did not include allegations about alleged collusive pricing of generic prescription drugs, and added alleged Massachusetts state law claims under the Massachusetts Unfair Business Methods Law (chapter 93A) and Massachusetts common law claims of tortious interference with prospective economic advantage, common law fraud, negligent misrepresentation, and unjust enrichment. In December 2021, the Massachusetts State Court granted Defendants’ motion to dismiss in part and denied it in part. Defendants filed their answers in January 2022 denying liability. This was the only opt out case that has not been stayed during the summary judgment proceedings in the New Jersey federal court. The fact discovery phase in this case ended in March 2024 and expert discovery largely concluded in August 2024. Summary judgment briefing occurred during September and October 2024, and oral argument on the summary judgment motions is anticipated
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in November 2024. If summary judgment is not granted in defendants' favor, a trial is currently scheduled in February 2025. We intend to continue defending the lawsuit vigorously.

In Israel (cases related to events in 2015-2017)

On June 28, 2017, a plaintiff filed a complaint in Tel Aviv District Court styled Israel Elec. Corp. Employees’ Educ. Fund v. Perrigo Company plc, et al. The lead plaintiff seeks to represent a class of shareholders who purchased Perrigo stock on the Tel Aviv exchange during the period from April 24, 2015 through May 3, 2017 and also a claim for those that owned shares on the final day of the Mylan tender offer (November 13, 2015). The complaint names as defendants the Company, Ernst & Young LLP (the Company’s auditor), and 11 current or former directors and officers of Perrigo (Judy Brown, Laurie Brlas, Jacqualyn Fouse, Ellen Hoffing, Joe Papa, Marc Coucke, Gary Cohen, Michael Jandernoa, Gerald Kunkle, Herman Morris, and Donal O’Connor). The complaint alleges violations under Israeli securities laws that are similar to U.S. Securities Exchange Act sections 10(b) (and Rule 10b‑5) and 14(e) against all defendants and 20(a) control person liability against the 11 individuals or, in the alternative, under other Israeli securities laws. In general, the allegations in Israel are similar to the factual allegations in the Roofers' Pension Fund case in the U.S. as described above. The plaintiff indicates an initial, preliminary class damages estimate of 2.7 billion NIS (approximately $760.0 million at 1 NIS = 0.28 cents). After the other two cases filed in Israel were voluntarily dismissed, the plaintiff in this case agreed to stay this case pending the outcome of the Roofers’ Pension Fund case in the U.S. (described above). The Israeli court approved the stay, and this case is now stayed. We intend to defend the lawsuit vigorously.

In Israel (case related to Irish Tax events)

On December 31, 2018, a shareholder filed an action against the Company, our former CEO Murray Kessler, and our former CFO Ronald Winowiecki in Tel Aviv District Court (Baton v. Perrigo Company plc, et. al.). The case is a securities class action brought in Israel making similar factual allegations for the same period as those asserted in a securities class action case (for those who purchased on a U.S. exchange) in New York federal court in which the settlement received final approval in February 2022. The Baton case alleges that persons who purchased securities through the Tel Aviv stock exchange and suffered damages can assert claims under Israeli securities law that will follow the liability principles of Sections 10(b) and 20(a) of the U.S. Securities Exchange Act. The plaintiff does not provide an estimate of class damages. Since 2019, the court granted several requests by Perrigo to stay the proceedings pending the resolution of proceedings in the New York federal court. During 2022, the case was reassigned to a newly-appointed judge. After the settlement of the U.S. case in New York federal court, Perrigo's counsel informed the Israeli Court of the final approval of the settlement of the U.S. case. The parties then sought further stays of the case while they attempted mediation, which the Court granted. In April 2023, the parties reported to the Court that the mediation had led to a preliminary agreement on settlement. The parties submitted settlement papers to the Court on November 17, 2023. On June 5, 2024, the Court approved the settlement, which was funded by insurance during the quarter ended September 28, 2024.

Other Matters

Talcum Powder

The Company has been named, together with other manufacturers, in product liability lawsuits in a variety of state courts alleging that the use of body powder products containing talcum powder causes mesothelioma and lung cancer due to the presence of asbestos. All but one of these cases involve legacy talcum powder products that have not been manufactured by the Company since 1999. One of the pending actions involves a current prescription product that contains talc as an excipient. As of September 28, 2024, the Company has been named in approximately 130 individual lawsuits seeking compensatory and punitive damages. The Company has several defenses and continues to vigorously defend these lawsuits as well as explore various means of expeditiously resolving these claims. Trials for these lawsuits are currently scheduled throughout 2024 and 2025.

Ranitidine

After regulatory bodies announced worldwide that ranitidine may potentially contain N-nitrosodimethylamine ("NDMA"), the Company promptly began testing its externally-sourced ranitidine API and ranitidine-based products. On October 8, 2019, the Company halted shipments of the product based upon preliminary results and on October 23, 2019, the Company made the decision to conduct a voluntary retail market withdrawal.
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In February 2020, the resulting actions involving Zantac® and other ranitidine products were transferred for coordinated pretrial proceedings to a Multi-District Litigation ("MDL") (In re Zantac®/Ranitidine Products Liability Litigation, MDL No. 2924) in the U.S. District Court for the Southern District of Florida. The Company successfully moved to dismiss the first set of Master Complaints in the MDL based on federal preemption, which the Court granted without prejudice.

After the filing of Amended Complaints, on June 30, 2021, the Court again dismissed all claims against the retail and distributor defendants with prejudice and on July 8, 2021, the Court again dismissed all claims against the Company, this time with prejudice. Appeals of these dismissal orders to the U.S. Court of Appeals for the 11th Circuit have been filed. In December 2022, the Court granted in full the brand defendants' Daubert motions, finding that Plaintiffs' causation experts' opinions were unreliable and thus inadmissible. The Court later ruled that it was appropriate to apply the same expert causation standards to the retail and distributor defendants as well as the generic defendants, and the Court thereby ruled that its Daubert decision barring Plaintiffs' expert opinions applied equally to these defendants as well. Thus, the Court's rulings on both federal preemption and scientific causation grounds dismissed all claims against the Company on two independent grounds, and is also binding on all claims in the Census Registry. Appeals of these orders have been filed to the 11th Circuit. The Company continues to vigorously defend itself against such claims at the appellate level.

As noted above, the Company has won multiple motions to dismiss in the MDL, most recently in Illinois where the Circuit Court granted in full the Company's motions to dismiss based on federal preemption. The Company has also been dismissed from additional state court actions in California, Pennsylvania, Ohio, New York, New Jersey, and Maryland. Other than the MDL and state court matters that have been dismissed at the trial court level, as of September 28, 2024, the Company has been named in approximately 190 personal injury lawsuits in the state of California. The Company is named in these lawsuits alongside manufacturers of the national brand Zantac® and other manufacturers of ranitidine products, as well as distributors, repackagers, and/or retailers. Following the end of the third quarter of 2024, the Company reached a settlement in principle in each of remaining Ranitidine California state court lawsuits. The pending settlement is for an immaterial amount and is expected to be fully funded by insurance.

Once the pending California settlement is finalized and those cases are dismissed, the only remaining active ranitidine lawsuit against the Company that is not currently on appeal is in a matter brought by the New Mexico Attorney General based on nuisance and negligence theories. The Company's motions to dismiss the action were denied. The Company will continue to vigorously defend this lawsuit.

Some of the Company’s retailer customers are seeking indemnity from the Company for a portion of their defense costs and liability relating to these cases.

Acetaminophen

In October 2022, the Judicial Panel on Multidistrict Litigation consolidated a number of pending actions filed in various federal courts alleging that prenatal exposure to acetaminophen is purportedly associated with the development of autism spectrum disorder (“ASD”) and attention-deficit/hyperactivity disorder (“ADHD”). The acetaminophen MDL is styled In re: Acetaminophen – ASD/ADHD Products Liability Litigation (MDL No. 3043) and is pending before the U.S. District Court for the Southern District of New York. Plaintiffs in the MDL have asserted claims against Johnson & Johnson Consumer, Inc. (“JJCI”) and various retailer chains alleging that plaintiff-mothers took acetaminophen products while pregnant and that plaintiff-children developed ASD and/or ADHD as a result of prenatal exposure to these acetaminophen products. As of September 28, 2024, the Company has not been named as a defendant in any Complaints filed in the MDL. Certain of the Company’s customers have made requests regarding indemnity from the Company for a portion of their defense costs and potential liability. On December 18, 2023, the Court granted in full defendants' motions to exclude testimony of Plaintiffs' general causation expert witnesses, finding Plaintiffs presented no credible evidence of scientific causation between prenatal ingestion of acetaminophen and ASD or ADHD in children. Final judgment has been entered as to the majority of pending cases with an appeal to proceed in the Second Circuit. A small minority of cases were exempted from the Court’s dismissal to enable Plaintiffs to present an additional expert to be evaluated through a similar process as the larger majority to determine if they can withstand scientific causation through this new expert. However, on July 10, 2024, the Court granted in full defendants' motion to exclude testimony of Plaintiffs' new general causation expert witness in this subset of carve out cases for similar reasons as the Court's December 2023 Order. Final judgment was entered against the plaintiffs in those carve out cases, which have now been appealed to the Second Circuit. Currently, it is not possible to assess reliably the outcome of these cases or reasonably estimate any potential future financial impact on the Company.

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Phenylephrine

In September 2023, the FDA’s Advisory Committee on Nonprescription Drugs issued an advisory opinion calling into question the efficacy of orally administered phenylephrine (PE) containing products as a nasal decongestant. While the FDA itself has thus far taken no action in response to the Advisory Committee opinion, several putative class action lawsuits have been filed asserting various economic injury claims to consumers. On December 6, 2023, a number of the pending PE actions filed in various federal courts were consolidated into a multi-district litigation ("MDL") (In re: Oral Phenylephrine Marketing and Sales Practices Litigation, MDL No. 3089), pending before the U.S. District Court for the Eastern District of New York. A smaller group of putative class-action lawsuits alleging various PE products also were mislabeled as "Maximum Strength" were initially excluded from the consolidation, but have recently been joined to the MDL. Several individual arbitrations have also been threatened or filed with the American Arbitration Association with similar efficacy allegations. The Court has permitted Plaintiffs’ to file a streamlined and consolidated bellwether Complaint for purposes of testing the Plaintiffs’ case and enabling briefing on threshold issues. Defendants filed a consolidated Motion to Dismiss and the Court heard oral argument on that motion in September 2024. On October 29, 2024, the Court dismissed in its entirety Plaintiffs’ Streamlined and Consolidated Bellwether Complaint, finding that all of Plaintiffs’claims regarding PE were preempted by federal law, and further dismissing Plaintiffs’ RICO claims for lack of standing.

Contingencies Accruals

As a result of the matters discussed in this Note, the Company has established a loss accrual for litigation contingencies where we believe a loss to be probable and for which an amount of loss can be reasonably estimated. Except as otherwise discussed for specific matters above, we cannot determine a reasonable estimate of the maximum possible loss or range of loss for these matters given that they are at various stages of the litigation process and each case is subject to inherent uncertainties of litigation. At September 28, 2024, the loss accrual for litigation contingencies reflected on the balance sheet in Other accrued liabilities was $41.9 million, inclusive of the remaining accrual for the securities litigation opt-out cases. The Company’s management believes these accruals for contingencies are reasonable and sufficient based upon information currently available to management; however, there can be no assurance that final costs related to these contingencies will not exceed current estimates, nor any assurance as to the amount of such final costs that will be covered by insurance as described below. In addition, we have other litigation matters pending for which we have not recorded any accruals because our potential liability for those matters is not probable or cannot be reasonably estimated based on currently available information. For those matters where we have not recorded an accrual but a loss is reasonably possible, we cannot determine a reasonable estimate of the maximum possible loss or range of loss for these matters given that they are at various stages of the litigation process and each case is subject to the inherent uncertainties of litigation.

Insurance Coverage Litigation

In May 2021, insurers on multiple policies of D&O insurance filed an action in the High Court in Dublin against the Company and multiple current and former directors and officers of the Company seeking declaratory judgments on certain coverage issues. Those coverage issues include claims that policies for periods beginning in December 2015 (the "2015 Policy") and December 2016 (the "2016 Policy"), respectively, do not have to provide coverage for the securities actions described above pending in the District of New Jersey or in Massachusetts state court concerning the events of 2015-2017. The insurers on the policy period beginning December 2014 (the "2014 Policy") then provided coverage for those matters. However, if the insurers were successful, the total amount of insurance coverage available to defend such lawsuits and to satisfy any judgment or settlement costs thereunder would be limited to one policy period. The insurers’ lawsuit also challenged aspects of coverage for Krueger derivatively on behalf of nominal defendant Perrigo Company plc v. Alford et al., a prior derivative action filed in the District of New Jersey that was dismissed in August 2020. Perrigo responded in the High Court proceedings on November 1, 2021; Perrigo’s defense and counterclaim included its position that the 2015 Policy and 2016 Policy also provide coverage for the underlying securities litigation matters and sought a ruling to that effect. The discovery stage of the case occurred in 2022, and a bench trial was held in mid-November 2023. In January 2024, the High Court delivered its judgment rejecting the insurers' position that Perrigo's insurance coverage is limited to the 2014 Policy. The High Court held additional hearings in April and July 2024 to hear the parties' submissions concerning under which of the 2014, 2015, and 2016 Policies Perrigo is entitled to coverage. The High Court delivered written judgments in January, May and July 2024, finding that coverage is available to Perrigo under each of the 2014 Policy, 2015 Policy and 2016 Policy. On October 18, 2024 the Court issued its final order on its three judgments, and the insurers have 28 days thereafter to seek an appeal of those three judgments. In September 2024, the one tower providing coverage paid out the remaining policy limits to Perrigo.
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Perrigo Company plc - Item 1
Note 17


NOTE 18 - SEGMENT INFORMATION
    
The tables below show select financial measures by reporting segment (in millions):
Total Assets

September 28, 2024December 31, 2023
CSCA$5,665.9 $4,952.9 
CSCI5,537.3 5,856.2 
Total $11,203.2 $10,809.1 

Three Months Ended
September 28, 2024September 30, 2023
Net
Sales		Operating Income (Loss)Intangible Asset AmortizationNet
Sales		Operating Income (Loss)Intangible Asset Amortization
CSCA$671.3 $103.6 $15.2 $703.5 $91.1 $14.5 
CSCI416.3 48.9 42.3 420.3 13.6 53.5 
Unallocated— (72.1)— — (42.6)— 
Continuing Operations Total $1,087.5 $80.4 $57.5 $1,123.8 $62.1 $68.0 
Nine Months Ended
September 28, 2024September 30, 2023
Net
Sales
Operating income (loss)
Intangible Asset Amortization
Net
Sales
Operating income (loss)
Intangible Asset Amortization
CSCA$1,949.5 $188.6 $44.9 $2,217.9 $272.0 $43.1 
CSCI1,285.5 65.1 128.5 1,280.7 43.6 159.6 
Unallocated— (255.0)— — (148.1)— 
Continuing Operations Total $3,235.1 $(1.3)$173.4 $3,498.7 $167.5 $202.7 

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Perrigo Company plc - Item 2
Executive Overview


ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis ("MD&A") is intended to provide readers with an understanding of our financial condition, results of operations, and cash flows by focusing on changes in certain key measures from year to year. This MD&A is provided as a supplement to, and should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes found in Item 1 included in this Form 10-Q, and our Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). These historical financial statements may not be indicative of our future performance. This discussion contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks referred to under “Risk Factors” in Item 1A of our 2023 Form 10-K and Part II. Item 1A of this Form 10-Q.

Perrigo Company plc was incorporated under the laws of Ireland on June 28, 2013 and became the successor registrant of Perrigo Company, a Michigan corporation, on December 18, 2013 in connection with the acquisition of Elan Corporation, plc ("Elan"). Unless the context requires otherwise, the terms "Perrigo," the "Company," "we," "our," "us," and similar pronouns used herein refer to Perrigo Company plc, its subsidiaries, and all predecessors of Perrigo Company plc and its subsidiaries.

EXECUTIVE OVERVIEW

Perrigo is a leading pure-play self-care company with more than a century of innovation and experience serving the health and wellness needs of consumers. As one of the originators of the over-the-counter ("OTC") self-care market, Perrigo has a powerful legacy and vast scale in producing high-quality self-care products through a proven ability to proactively shape its portfolio to meet the evolving needs of consumers and customers.

Perrigo provides access to trusted self-care products that can be procured without the need to visit a doctor for a prescription. Guided by our vision and purpose, our strategic goal is to create sustainable and value accretive growth by 1) delivering consumer preferred brands and innovation, 2) driving category growth with our customers, 3) powering our business with our world-class quality and supply chain, including a focus on sustainability with meaningful goals to reduce greenhouse gas emissions, water, and waste, in addition to improving the recyclability of our packaging, and 4) evolving our global organization to a single operating model. Our unique competency is to deliver a blended-branded business model of branded, value and store brand product offerings that provide consumers access to self-care products across the value spectrum.

Perrigo's broad offerings are well diversified across several major product categories as well as across geographies, primarily in North America and Europe with no one product representing more than 3% of total revenue. In North America, Perrigo is the leading store brand private label provider of self-care products in many categories, including upper respiratory, nutrition and women's health, along with brands including Opill® and Mederma®. In Europe, our portfolio consists primarily of brands, including Compeed®, EllaOne®, Solpadeine®, and ACO®.

Two key initiatives are fundamental to advancing our self-care strategy — the implementation of our Supply Chain Reinvention Program and Project Energize, a global investment and efficiency program. In addition, we continue to invest in other initiatives, including innovation, information systems and tools, and our people to drive consistent and sustainable results.

Our fiscal year begins on January 1 and ends on December 31. We end our quarterly accounting periods on the Saturday closest to the end of the calendar quarter, with the fourth quarter ending on December 31 of each year.

Our Segments

Our reporting and operating segments reflect the way our chief operating decision maker, who is our CEO, makes operating decisions, allocates resources and manages the growth and profitability of the Company. Our reporting and operating segments are:

•Consumer Self-Care Americas ("CSCA") comprises our consumer self-care business in the U.S. and Canada.
•Consumer Self-Care International ("CSCI") comprises our consumer self-care business outside of the U.S. and Canada, primarily in Europe and Australia.
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Executive Overview



We previously had an Rx segment comprised of our generic prescription pharmaceuticals business in the U.S. and other pharmaceuticals and diagnostic businesses in Israel, which have been divested. The Rx segment was reported as Discontinued Operations in 2021, and is presented as such for all periods in this report. See Item 1. Note 5 for more information.

Recent Developments

•The sale of the HRA Pharma Rare Diseases Business (the "Rare Diseases Business") to Esteve Healthcare, S.L. ("ESTEVE") was completed on July 10, 2024. See Item 1. Note 3 for more information.
•Several leadership changes were announced during the three months ended September 28, 2024:
•On August 19, 2024, Dr. David Ball was appointed as Executive Vice President and Chief Brand and Digital officer.
•On September 4, 2024, Charles Atkinson was appointed as Executive Vice President, General Counsel and Secretary.
•A definitive agreement to sell Orion Laboratories Hospital & Specialty Business (the "Hospital & Specialty Business") to General Pharma BidCo Pty Ltd, being an Australian incorporated entity which is ultimately owned by funds managed by Genesis Capital ("Genesis Capital") was signed on September 14, 2024. The sale of the Hospital & Specialty Business was completed on November 1, 2024. See Item 1. Note 4 for more information.
•On September 17, 2024, Perrigo Finance Unlimited Company ("Perrigo Finance"), a public unlimited company incorporated under the laws of Ireland and an indirect wholly-owned finance subsidiary of Perrigo whose primary purpose is to finance the business and operations of Perrigo and its affiliates, issued $715 million in aggregate principal amount of 6.125% Senior Notes due 2032 (the "USD Notes due 2032") and €350 million in aggregate principal amount of 5.375% Senior Notes due 2032 (the "Euro Notes due 2032" and together with the USD Notes due 2032, the "2032 Notes"). Net proceeds from the 2032 Notes were used to prepay a portion of the Term Loan B Facility (as defined below) on September 19, 2024 and the remaining proceeds were used to fund the redemption of $700.0 million of the 4.375% Notes due 2026 on October 2, 2024.
•A brand partnership between Good Start® and Dr. Browns® infant formula solutions was announced September 26, 2024. The new Good Start® and Dr. Brown's™ portfolio will offer the same trusted infant formula products as the existing Soothe Pro™ and Gentle Pro™, now with refreshed packaging to celebrate the launch of the new partnership. Good Start® and Dr. Brown's™ infant formulas offer complete nutrition specially formulated for tolerance concerns.

Supply Chain Reinvention Program

In 2022, we initiated our Supply Chain Reinvention Program to reduce structural costs, improve profitability and our service levels to our retail partners, and strengthen our resiliency by streamlining and simplifying our global supply chain. Through this initiative, we are reducing portfolio complexity, investing in advanced planning capabilities, diversifying sourcing, and optimizing our manufacturing assets and distribution models. From 2022 through 2025, we expect to achieve $100 million to $120 million in gross pre-tax annualized savings, not including any benefits or impacts from the acquired Perrigo Wisconsin (Gateway) facility. To achieve these run rate savings per year by 2025 (not taking into account depreciation expense on capital investments related to the program), we previously anticipated incurring an estimated $160 million in costs by the end of 2025, which included investments to adjust our global manufacturing footprint. As we continue to assess the best alignment of operations to our new ways of working, we have decided to not proceed with manufacturing footprint actions related to this Program at this time. Therefore, we expect to incur costs of $100 million, or $60 million lower than originally projected by the end of 2025, to achieve the same savings opportunity of $100 million to $120 million in gross pre-tax annualized savings by the end of 2025, not including any benefits or impacts from the acquired Perrigo Wisconsin (Gateway) facility. Refer to Item 1. Note 15 for further details on restructuring charges.

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Executive Overview


Project Energize

Perrigo has successfully transformed into a pure-play consumer self-care company and is now embarking on the next stage of its self-care journey - evolving to One Perrigo. This evolution will create sustainable, value accretive growth through a blended-branded business model that better positions the Company to win in self-care.

As part of the Company's sustainable, value accretive growth strategy, the Company launched Project Energize - a global investment and efficiency program to drive the next evolution of capabilities and organizational agility. This three-year program is expected to produce significant benefits in the Company’s long-term business performance by enabling our One Perrigo growth strategy, increasing organizational agility and mitigating impacts from stabilizing and strengthening the infant formula business.

Project Energize was initiated in the first quarter of 2024, subject to local law and consultation requirements, and is expected to deliver an annualized pre-tax savings in the range of $140 million to $170 million by 2026. The Company expects to reinvest approximately $40 million to $60 million of these savings to drive its blended-branded business model. Restructuring and related charges associated with these actions are estimated to be in the range of $140 million to $160 million, including $20 million to $40 million in investments to enhance capabilities, and are expected to be substantially incurred by the end of 2026. Restructuring activities as part of Project Energize are expected to result in the net reduction of approximately 6% of total Perrigo roles. Refer to Item 1. Note 15 for further details on restructuring charges.

U.S. Department of Justice Antitrust Division Investigation

On July 29, 2024, the Antitrust Division of the U.S. Department of Justice advised us that it no longer considers Perrigo a subject or target of the division’s grand jury investigation of antitrust violations in the generic drug industry. That investigation had stemmed from the Company’s Rx Pharmaceuticals business, which was divested in 2021.

Market Factors and Trends

Economic Uncertainty

Current macroeconomic conditions remain very dynamic, including impacts from inflation and interest rates, volatile changes in foreign currency exchange rates, political unrest and uncertainty magnified by the 2024 U.S. presidential election and legislative and regulatory changes. Any causes of market size contraction could reduce our sales or erode our operating margin and consequently reduce our net earnings and cash flows.

Our interest expense is impacted by the overall global economic and interest rate environment. We manage interest rate risk through our capital structure and the use of interest rate swaps to fix the interest rate on greater than 90% of our outstanding debt.

Inflationary Costs and Supply Chain

As the war in Ukraine continues, supply chain disruptions in specific categories such as oil, agricultural and paper based commodities continue to lead to inflationary pressures in those areas. Additionally, we experienced employment vacancies and attrition as the labor market negatively impacted productivity and drove the need for wage rate increases and other retention benefits. We implemented a series of actions to substantially mitigate these and other inflationary cost pressures such as strategic pricing and our Supply Chain Reinvention Program. Benefits from our actions have begun to substantially offset the impacts of inflation, and the global freight constraints in availability of freight containers and truck drivers has normalized. However, future supply chain disruptions and inflationary pressures from the continuation of the conflicts between Russia and Ukraine, and escalating conflicts in the Middle East and neighboring regions are uncertain.

Infant Formula

As part of its efforts to prevent supply interruptions and risk of Cronobacter spp. illnesses associated with powdered infant formula, in March 2023, the FDA released an “Immediate National Strategy to Increase the Resiliency of the U.S. Infant Formula Market” and issued a letter to the powdered infant formula industry to share information to assist the industry in improving the microbiologic safety of powdered infant formula. In response to those changes,
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Perrigo Company plc - Item 2
Executive Overview


we made considerable investments in all our infant formula manufacturing sites, including enhanced cleaning and sanitation protocols, enhancements to our environmental monitoring programs, enhanced quality oversight and increasing the number of quality and operations personnel. These changes resulted in higher costs and lower manufacturing output and production yields across our infant formula network.

As previously disclosed, the Company received a warning letter from the FDA on August 30, 2023 relating to the Perrigo Wisconsin infant formula facility, which was acquired from a third party in November 2022. While the Company worked to resolve the issues raised in the August 30 letter, on November 29, 2023, the Company received notice from the FDA of additional inspection observations relating to Perrigo Wisconsin. Consistent with the Company’s commitment to quality, the Company temporarily paused all production at that facility and conducted an extended site-wide assessment and cleaning.

The Company also bolstered its internal resources and brought in additional outside expertise to help revise, enhance and strengthen comprehensive standards and processes across our infant formula network, including in some instances, pausing production for comprehensive cleaning and infrastructure improvements. All planned large-scale manufacturing plant resets have now been completed, and the Company is implementing the next phase of our quality enhancements, including further protocol, process and procedural improvements at the site level, and additional investments to upgrade infrastructure. We do not expect these continuing improvements to result in extended shutdowns beyond typical planned maintenance activities.

Currently, all sites are up and running and have returned to reliable, quality-assured production with recent output across the network near 2023 levels. Our focus now lies in rebuilding customer service levels and getting these critical products back on the shelves for consumers who need high-quality, affordable infant formula.

We have incurred and expect to incur certain extraordinary non-recurring costs associated with the remediation and enhancement actions described above and the evolving U.S. infant formula regulatory landscape, including consulting and legal fees relating to the Company’s responses to the FDA and the development and institution of new protocols across our infant formula manufacturing sites, as well as other costs relating to the extended cleaning and sanitization and the pausing and restarting of production. Cash costs in 2024 to achieve this remediation plan are estimated at $15 to $20 million, of which approximately $17.9 million were incurred during the first three quarters. We also expect higher ongoing operating costs at our infant formula manufacturing sites moving forward as we continue to implement our enhanced program with additional internal capabilities. Due to these costs and the unabsorbed overhead and depressed sales volumes resulting from these actions, infant formula results in 2024 are expected to be below 2023 levels.

War in Ukraine

The invasion of Ukraine by Russia and resulting economic and political sanctions imposed by the United States, United Kingdom, European Union, and other countries on Russia, Belarus, and occupied regions in Ukraine have negatively impacted our results from operations in the region. We currently have 64 employees working in our Ukraine subsidiary. We do not have a subsidiary or employees in Russia. We have no manufacturing facilities in either Russia or Ukraine and we previously sold products into Russia entirely through distributors. In March 2022, we halted all sales to distributors in Russia and sales in Ukraine were severely depressed. Future impacts are difficult to predict due to the high level of uncertainty related to the war's duration, evolution and resolution. If the conflict spreads or materially escalates, or economic conditions deteriorate, the impact on our business and results of operations could be material.

Middle East Conflicts

We continue to closely monitor the ongoing Israel/Hamas conflict and the social, political and economic environment in Israel and in the surrounding region to evaluate the impacts on our operations and supply chain. Israel is a global technology research and development center that plays a critical role to the global API market, as a number of key suppliers are located within Israel. The Company sources some raw materials and finished goods from suppliers in Israel for certain self-care products, including Omeprazole. To date, Perrigo has confirmed that our suppliers in the region have active operations and continue to manufacture materials for us, and we have not received any reports of restrictions on imports or exports in Israel. However, there is potential for some disruption as it relates to in-country logistics, including freight. As a precaution, Perrigo has engaged alternate suppliers to help minimize a
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Perrigo Company plc - Item 2
Executive Overview


potential supply disruption. If the conflict spreads or materially escalates, or if the conflict leads to further volatility and uncertainty in financial markets or economic conditions, the impact on our business and results of operations could be material. This includes the related events developing in the Red Sea and their potential to disrupt supply chains and lead to further inflationary pressures which we are also continuing to monitor closely.

Foreign Exchange

We have both translation and transaction exposure to the fluctuation of exchange rates. Translation exposures relate to exchange rate impacts of measuring income statements of foreign subsidiaries that do not use the U.S. dollar as their functional currency. Transaction exposures relate to 1) the impact from input costs that are denominated in a currency other than the local reporting currency and 2) the revaluation of transaction-related working capital balances denominated in currencies other than the functional currency. Significant exchange rate fluctuations, especially in the Euro or the British Pound Sterling, have had, and could continue to have, a significant impact on our net sales, net earnings and cash flows.

RESULTS OF OPERATIONS

Currency Translation

Any currency translation effects described below represent estimates of the net differences between translation of foreign currency transactions into U.S. dollars for the three and nine months ended September 28, 2024 at the average exchange rates for the reporting period and average exchange rates for the three and nine months ended September 30, 2023.

CONSOLIDATED FINANCIAL RESULTS

Three Month Comparison

 Three Months Ended
(in millions, except percentages)September 28, 2024September 30, 2023
Net sales$1,087.5 $1,123.8 
Gross profit$404.4 $411.2 
Gross profit %37.2 %36.6 %
Operating income
$80.4 $62.1 
Operating income %
7.4 %5.5 %

Net sales decreased $36.3 million, or 3.2%, due primarily to:
•$26.8 million decrease, or 2.4%, due primarily to lost distribution of lower margin products in U.S. Store Brands and lower net sales in Oral Care and Pain & Sleep Aids categories. These factors were partially offset by strategic pricing actions, new products and growth in branded OTC product offerings;
•$14.9 million decrease from the divestiture of the Rare Diseases Business and the sale of branded products; and
•$1.4 million decrease from exited product lines; partially offset by
•$5.1 million increase from favorable foreign currency translation.

Operating income increased $18.3 million, or 29.5%, due primarily to:

•$6.8 million decrease in gross profit driven by the impact from lower global OTC net sales volumes of $61.5 million, including lost distribution in U.S. Store Brands, and the exited Rare Diseases Business. These factors were partially offset by savings achieved through Supply Chain Reinvention and Project Energize activities, higher gross profit flow-through of $20.6 million from strategic pricing actions, and net favorable productivity stemming from infant formula efficiencies. Gross profit as a percentage of net sales increased 60 basis points compared to the prior year due to favorable mix within global store brand and across the portfolio in addition to the same factors that drove gross profit.

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Perrigo Company plc - Item 2
Consolidated

•$25.1 million decrease in operating expenses due primarily to decreased selling and administration expenses of $29.9 million. Additionally, savings from Project Energize and the sale of branded products further reduced operating expenses. These were partially offset by impairment charges of $16.2 million recognized as part of the assets held for sale of the Hospital & Specialty Business, and an additional provision for litigation contingencies.

Nine Month Comparison
Nine Months Ended
(in millions, except percentages)September 28, 2024September 30, 2023
Net sales$3,235.1 $3,498.7 
Gross profit$1,156.8 $1,253.1 
Gross profit %35.8 %35.8 %
Operating income (loss)
$(1.3)$167.5 
Operating income (loss) %
— %4.8 %

Net sales decreased $263.6 million, or 7.5%, due primarily to:
•$216.7 million decrease, or 6.3%, due primarily to lower net sales in U.S. Nutrition driven by actions to augment and strengthen the infant formula network, lower net sales in Upper Respiratory and Pain & Sleep Aids categories and purposeful SKU prioritization actions to enhance margins as part of the Company's Supply Chain Reinvention Program across most product categories. These factors were partially offset by strategic pricing actions and new products;
•$36.5 million decrease from the divestiture of the Rare Diseases Business and the sale of branded products;
•$14.4 million decrease from exited product lines; and
•$8.9 million decrease from unfavorable foreign currency translation.
Operating income decreased $168.8 million, or 100.8%, due primarily to:

•$96.3 million decrease in gross profit driven by the impact of lower global OTC net sales volumes of $150.9 million, including lost distribution in U.S. Store Brands, lower manufacturing productivity within U.S. Nutrition driven by actions to augment and strengthen the infant formula network, exited products and the exited Rare Diseases Business, partially offset by higher gross profit flow-through of $84.6 million from strategic pricing actions, savings achieved through Supply Chain Reinvention and Project Energize, and new products. Gross profit as a percentage of net sales remained flat compared to the prior year due to the same factors that impacted gross profit; and
•$72.5 million increase in operating expense due primarily to an additional provision for litigation contingencies, increased restructuring expenses associated with Supply Chain Reinvention and Project Energize of $72.4 million, and impairment charges recognized as part of the assets held for sale of the Hospital & Specialty Business and the Rare Diseases Business. These increases were partially offset by gains recognized on the sale of branded products, decreased selling expenses of $59.4 million, and savings from Project Energize.
CONSUMER SELF-CARE AMERICAS FINANCIAL RESULTS

Three Month Comparison

 Three Months Ended
(in millions, except percentages)September 28, 2024September 30, 2023
Net sales$671.3 $703.5 
Gross profit$220.8 $224.0 
Gross profit %32.9 %31.8 %
Operating income$103.6 $91.1 
Operating income %15.4 %12.9 %

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Perrigo Company plc - Item 2
CSCA

Net sales decreased $32.2 million, or 4.6%, due primarily to:

•$30.7 million decrease, or 4.4%, due primarily to lost distribution of lower margin products in U.S. Store Brands and lower net sales in the Oral Care and Upper Respiratory categories due to lower seasonal demand. These factors were partially offset by growth in the rest of the segment; and
•$1.4 million decrease from exited product lines.

CSCA net sales by product category were as follows:

SalesThree Months Ended
(in millions, except percentages)(1)
September 28, 2024September 30, 2023$ Change% Change
Nutrition$127.1 $129.7 $(2.6)(2.0)%
Upper Respiratory120.9 131.2 (10.3)(7.9)%
Digestive Health113.5 118.1 (4.6)(3.9)%
Pain and Sleep-Aids87.7 94.5 (6.8)(7.2)%
Healthy Lifestyle80.9 79.4 1.5 1.9 %
Oral Care66.9 76.7 (9.8)(12.8)%
Skin Care51.9 58.2 (6.3)(10.8)%
Women's Health18.0 10.5 7.5 71.4 %
Vitamins, Minerals, and Supplements ("VMS")3.5 4.4 (0.9)(20.5)%
Other CSCA0.9 0.8 0.1 12.5 %
Total CSCA$671.3 $703.5 $(32.2)(4.6)%

(1) We updated our global reporting product categories as a result of legacy sales being moved out of Other CSCA and into respective categories. These product categories have been adjusted retroactively to reflect the changes and have no impact on historical financial position, results of operations, or cash flows.

Sales in each category were driven primarily by:

•Nutrition: Net sales of $127.1 million decreased 2.0% due primarily to lower net sales of oral electrolyte solutions (OES), which were partially offset by a 3% increase in net sales of infant formula products as the Company continues to refill store brand and contract customer inventories and regain market share.
•Upper Respiratory: Net sales of $120.9 million decreased 7.9% due primarily to previously disclosed lost distribution of lower margin products in U.S. Store Brand and lower volume consumption in the cough cold category versus the prior year period. These impacts more than offset strong growth of Nasonex® and Triamcinolone Acetonide in the allergy category.
•Digestive Health: Net sales of $113.5 million decreased 3.9% due primarily to previously disclosed lost distribution of lower margin products in U.S. Store Brand and lower net sales of products in the Omeprazole family. These impacts more than offset higher net sales of Polyethylene Glycol, products within the Esomeprazole family, and Prevacid®, in addition to new business awards.
•Pain and Sleep-aids: Net sales of $87.7 million decreased 7.2% due primarily to previously disclosed lost distribution of lower margin products in U.S. Store Brand, partially offset by new business awards.
•Healthy Lifestyle: Net sales of $80.9 million increased 1.9% due primarily to higher net sales of nicotine gums which benefited from new distribution at specific retail customers and market share gains.
•Oral Care: Net sales of $66.9 million decreased 12.8% due to lower total category consumption versus the prior year period, lower distribution at specific retail customers, and lower net sales of Plackers® dental flossers.
•Skin Care: Net sales of $51.9 million decreased 10.8% due primarily to lower contract manufacturing sales from one customer that is insourcing production, as expected. This dynamic more than offset growth within the Minoxidil franchise.
•Women's Health: Net sales of $18.0 million increased 71.4% due primarily to Opill® and higher net sales of feminine hygiene products; and,
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Perrigo Company plc - Item 2
CSCA

•VMS and Other: Net sales of $4.4 million decreased 15.4% due primarily to volume decline in the VMS category.
Operating income increased $12.5 million, or 13.7%, due primarily to:

•$3.2 million decrease in gross profit driven by the impact from lower OTC net sales volumes of $36.0 million, partially due to lost distribution of lower margin products in U.S. Store Brands; partially offset by greater manufacturing efficiencies in infant formula of $17.0 million, benefits from the Company's Supply Chain Reinvention program, and higher profit new products. Gross profit as a percentage of net sales increased 110 basis points compared to the prior year due to favorable mix within store brand and across the segment, in addition to the same factors that impacted gross profit.

•$15.7 million decrease in operating expenses due primarily to benefits from Project Energize, partially offset by higher brand advertising and promotional investments.

Nine Month Comparison
 Nine Months Ended
(in millions, except percentages)September 28, 2024September 30, 2023
Net sales$1,949.5 $2,217.9 
Gross profit$564.1 $659.3 
Gross profit %28.9 %29.7 %
Operating income
$188.6 $272.0 
Operating income %9.7 %12.3 %
Net sales decreased $268.4 million, or 12.1%, due primarily to:
•$253.6 million decrease, or 11.5%, due primarily to lower net sales in U.S. Nutrition driven by actions to augment and strengthen the infant formula network, SKU prioritization actions to enhance margins and lower net sales in the Upper Respiratory and Pain & Sleep Aids categories due to lower seasonal demand. These factors were partially offset by growth in the Women's Health and Healthy Lifestyle categories; and
•$14.4 million decrease from exited product lines.

CSCA net sales by product category were as follows:
SalesNine Months Ended
(in millions, except percentages)(1)
September 28, 2024September 30, 2023$ Change% Change
Upper Respiratory$370.0 $422.2 $(52.2)(12.4)%
Digestive Health361.7 368.2 (6.5)(1.7)%
Nutrition303.8 436.3 (132.5)(30.4)%
Pain and Sleep-Aids251.9 294.6 (42.7)(14.5)%
Healthy Lifestyle221.3 219.3 2.0 0.9 %
Oral Care204.8 235.5 (30.7)(13.0)%
Skin Care158.6 189.8 (31.2)(16.4)%
Women's Health62.0 35.6 26.4 74.2 %
VMS13.0 13.9 (0.9)(6.3)%
Other CSCA2.4 2.5 (0.1)(2.3)%
Total CSCA$1,949.5 $2,217.9 $(268.4)(12.1)%
(1) We updated our global reporting product categories as a result of legacy sales being moved out of Other CSCA and into respective categories. These product categories have been adjusted retroactively to reflect the changes and have no impact on historical financial position, results of operations, or cash flows.
Sales drivers in each category are provided below:
•Upper Respiratory: Net sales of $370.0 million decreased 12.4% due primarily to lower consumer demand for cough cold and allergy products, in addition to net lost distribution of lower margin products. The
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category was also impacted by a 3.9 percentage points reduction from exited product lines and portfolio optimization actions. These impacts more than offset strong growth of Nasonex® and Triamcinolone Acetonide in the allergy category;
•Digestive Health: Net sales of $361.7 million decreased 1.7% as higher volumes of antacid and laxative products, including Polyethylene Glycol, and products within the Esomeprazole family were more than offset by a 2.1 percentage points reduction from exited product lines and portfolio optimization actions, lost distribution of lower margin products in U.S. Store Brand and lower volume of Omeprazole;
•Nutrition: Net sales of $303.8 million decreased 30.4% as increases in net sales of infant formula products as the Company continues to refill store brand and contract customer inventories, and regain market share was more than offset by lower shipments to customers in the first half of the year as the company worked through its infant formula plant remediation plans in addition to a 0.8 percentage points decline from exited product lines in the category;
•Pain and Sleep-aids: Net sales of $251.9 million decreased 14.5% due primarily to net lost distribution of lower margin products, purposeful SKU prioritization actions and exited product lines, which had an aggregate negative impact of 5.0 percentage points. In addition, inventory reductions by U.S. retail customers resulted in lower net sales of pain and sleep-aid products;
•Healthy Lifestyle: Net sales of $221.3 million increased 0.9% due primarily to higher net sales of nicotine lozenges, including the new product launch of the Nicotine Ice Mint Lozenge, higher net sales of nicotine gums and market share gains partially offset by inventory de-stocking at U.S. retail customers and lower category consumption compared to the prior year period;
•Oral Care: Net sales of $204.8 million decreased 13.0% due primarily to lower distribution at specific retail customers and the comparison to strong sales in the prior year as customers normalized inventories, partially offset by higher net sales of Reach® toothbrushes;
•Skin Care: Net sales of $158.6 million decreased 16.4% due primarily to portfolio optimization actions and exited product lines, which had an aggregate negative impact of 12.1 percentage points, and lower contract manufacturing sales from one customer that is insourcing production, as previously disclosed. These impacts more than offset strong, double digit, growth of Mederma® and growth within the Minoxidil franchise;
•Women's Health: Net sales of $62.0 million increased 74.2% due primarily to the new product launch of Opill® and higher net sales of feminine hygiene products, partially offset by a 5.6 percentage point reduction from exited product lines; and
•VMS and Other: Net sales of $15.4 million decreased 6.1% due primarily to volume decline in the VMS category.
Operating income decreased $83.4 million, or 30.7%, due primarily to:

•$95.2 million decrease in gross profit driven by the impact from lower net sales volumes throughout the segment of $64.7 million and cost of actions to augment and strengthen the infant formula network; partially offset by savings achieved through Supply Chain Reinvention and Project Energize activities, strategic pricing actions and new products. Gross profit as a percentage of net sales decreased 80 basis points compared to the prior year due to the same factors that impacted gross profit, partially offset by favorable product mix, including higher margin new products, lost distribution of lower margin products, and SKU prioritization activities.

•$11.8 million decrease in operating expenses due primarily to savings from Project Energize, partially offset by higher restructuring costs, and brand advertising and promotional investments.

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CONSUMER SELF-CARE INTERNATIONAL FINANCIAL RESULTS

Three Month Comparison

 Three Months Ended
(in millions, except percentages)September 28, 2024September 30, 2023
Net sales$416.3 $420.3 
Gross profit$185.0 $187.2 
Gross profit %44.4 %44.5 %
Operating (loss) income
$48.9 $13.6 
Operating (loss) income %
11.7 %3.2 %

Net sales decreased $4.0 million, or 1.0%, due primarily to:
•$14.9 million decrease from the divestiture of the Rare Diseases Business and the sale of branded products; partially offset by
•$5.3 million increase from favorable foreign currency translation; and
•$3.9 million increase, or 1.0%, due primarily to growth in the Upper Respiratory, Skin Care and Women's Health categories stemming from market share gains in key brands, strategic pricing actions and new products, partially offset by lower net sales in the Pain & Sleep Aids and VMS categories.

CSCI net sales by product category were as follows:
SalesThree Months Ended
(in millions, except percentages)
September 28, 2024September 30, 2023$ Change% Change
Skin Care$91.0 $86.7 $4.3 5.0 %
Upper Respiratory86.1 78.2 7.9 10.1 %
Pain and Sleep-Aids56.9 61.1 (4.2)(6.9)%
Healthy Lifestyle53.2 52.4 0.8 1.5 %
VMS43.0 46.1 (3.1)(6.7)%
Women's Health32.2 28.5 3.7 13.0 %
Oral Care23.3 24.8 (1.5)(6.0)%
Digestive Health9.0 10.8 (1.8)(16.7)%
Other CSCI21.6 31.7 (10.1)(31.9)%
Total CSCI$416.3 $420.3 $(4.0)(1.0)%
Sales in each category were driven primarily by:

•Skin Care: Net sales of $91.0 million increased 5.0%, inclusive of a 0.4% favorable effect of currency translation, due to strong growth in Compeed®, driven by market share gains, in addition to higher net sales within the ACO® and Sebamed® brand portfolios. The category also benefited from the absence of prior year distribution transitions.
•Upper Respiratory: Net sales of $86.1 million increased 10.1%, inclusive of a 2.2% favorable effect of currency translation, due primarily higher net sales of Bronchenolo®, Bronchostop® and Coldrex®, which benefited from category growth and market share gains.
•Pain & Sleep-Aids: Net sales of $56.9 million decreased 6.9%, inclusive of a 2.6% favorable effect of currency translation, due primarily to lower net sales of Solpadeine®, due primarily to supply constraints, and lower net sales of store brand products.
•Healthy Lifestyle: Net sales of $53.2 million increased 1.5%, inclusive of a 1.5% favorable effect of currency translation, as higher consumption for anti-parasite products including Paranix®, were more than offset by lower category consumption in weight loss, impacting XLS Medical®.
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•VMS: Net sales of $43.0 million decreased 6.7%, inclusive of a 1.1% favorable effect of currency translation, due primarily to promotional phasing of Davitamon® and Abtei® and overall lower category consumption..
•Women's Health: Net sales of $32.2 million increased 13.0%, inclusive of a 1.3% favorable effect of currency translation, due primarily to higher net sales of contraceptive products including EllaOne®, driven by market share gains and the absence of prior year distribution transitions.
•Oral Care: Net sales of $23.3 million decreased 6.0%, inclusive of a 1.8% favorable effect of currency translation, due primarily to lower net sales of store brand products and Plackers®; and,
•Digestive Health and Other: Net sales of $30.6 million decreased 28.0%, inclusive of a 1.1% unfavorable effect of currency translation, primarily due to the divestiture of the HRA Pharma Rare Diseases Business, which was partially offset by higher net sales of store brand products.
Operating income increased $35.3 million, or 259.6%, due primarily to:
•$2.2 million decrease in gross profit due primarily to the impact of lower net sales volumes of $25.5 million and the exited Rare Diseases Business, partially offset by higher gross profit flow-through from strategic pricing actions of $24.0 million and new products. Gross profit as a percentage of net sales decreased 10 basis points compared to the prior year due to the same factors impacting gross profit; more than offset by

•$37.6 million decrease in operating expenses due primarily to the sale of branded products of $26.0 million and savings from Project Energize; which were partially offset by impairment charges of $16.2 million recognized as part of the assets held for sale of the Hospital & Specialty Business.

Nine Month Comparison

 Nine Months Ended
(in millions, except percentages)September 28, 2024September 30, 2023
Net sales$1,285.5 $1,280.7 
Gross profit$594.2 $593.8 
Gross profit %46.2 %46.4 %
Operating income$65.1 $43.6 
Operating income %5.1 %3.4 %

Net sales increased $4.8 million, or 0.4%, due primarily to:
•$37.2 million increase, or 3.0%, due primarily to growth in the Skin Care and Women's Health categories stemming from strategic pricing actions and new products, partially offset by lower net sales in the Upper Respiratory category due to lower seasonal demand and supply constraints; partially offset by
•$36.5 million decrease from the divestiture of the Rare Diseases Business and the sale of branded products; and
•$8.5 million decrease from unfavorable foreign currency translation.

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CSCI net sales by product category were as follows:
SalesNine Months Ended
(in millions, except percentages)
September 28, 2024September 30, 2023$ Change% Change
Skin Care$333.5 $293.1 $40.4 13.8 %
Upper Respiratory206.0 227.9 (21.9)(9.6)%
Healthy Lifestyle175.2 179.4 (4.2)(2.3)%
Pain and Sleep-Aids158.6 163.8 (5.2)(3.2)%
VMS127.4 135.4 (8.0)(5.9)%
Women's Health101.2 89.5 11.7 13.1 %
Oral Care75.0 75.5 (0.5)(0.7)%
Digestive Health27.0 30.0 (3.0)(10.0)%
Other CSCI81.5 86.1 (4.6)(5.3)%
Total CSCI$1,285.5 $1,280.7 $4.7 0.4 %
Sales in each category were driven primarily by:

•Skin Care: Net sales of $333.5 million increased 13.8%, inclusive of a 2.9% unfavorable effect of currency translation, due to strong growth in Compeed® driven by the new product launch of Compeed Spots, and the absence of prior year distribution transitions. Category growth was also driven by improved performance within the ACO® and Sebamed® brand portfolios;
•Upper Respiratory: Net sales of $206.0 million decreased 9.6%, inclusive of a 1.3% favorable effect of currency translation, due primarily to lower net sales of cough cold products stemming from lower incidence of cough cold throughout the E.U. compared to the prior year and supply constraints on several products in the category, partially offset by higher net sales of Bronchenolo®, Bronchostop® and Coldrex® which benefited from category growth and market share gains;
•Healthy Lifestyle: Net sales of $175.2 million decreased 2.3%, inclusive of a 4.0% unfavorable effect of currency translation, as higher consumption of anti-parasite products including, Jungle Formula, Paranix and Lyclear®, were more than offset by lower category consumption in weight loss, impacting XLS Medical and timing of sales for smoking cessation brand NiQuitin®;
•Pain & Sleep-Aids: Net sales of $158.6 million decreased 3.2%, inclusive of a 2.1% favorable effect of currency translation, due primarily to lower net sales of Solpadeine, related to supply constraints, and lower net sales of store brand products, partially offset by higher net sales of Tiger Balm for muscle relief;
•VMS: Net sales of $127.4 million decreased 5.9%, inclusive of a 0.4% favorable effect of currency translation, due primarily to lower net sales of Granufink and Arterin, stemming from lower consumption. These dynamics were partially offset by higher net sales of Abtei and promotional phasing of Davitamon;
•Women's Health: Net sales of $101.2 million increased 13.1%, inclusive of a 0.0% effect of currency translation, due primarily to higher net sales of contraceptive products including EllaOne®, driven by market share gains and the absence of prior year distribution transitions;
•Oral Care: Net sales of $75.0 million decreased 0.7%, inclusive of a 1.3% favorable effect of currency translation, due primarily to lower net sales of store brand products and Plackers®;
•Digestive Health and Other: Net sales of $108.5 million decreased 6.5%, inclusive of a 0.7% unfavorable effect of currency translation, due primarily to the divestiture of the Rare Diseases Business, partially offset by higher net sales of store brand digestive health products.
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Operating income increased $21.5 million, or 49.3%, due primarily to:
•$0.4 million increase in gross profit due primarily to higher gross profit flow-through from strategic pricing actions, new products, and Supply Chain Reinvention savings, almost entirely offset by the impact of lower sales volumes, cost of goods sold inflation and the exited Rare Diseases Business. Gross profit as a percentage of net sales decreased 20 basis points compared to the prior year due to the same factors impacting gross profit being more than offset by unfavorable product mix driven in part by supply constraints; and
•$21.1 million decrease in operating expenses due primarily to decreased selling expenses of $52.7 million, savings from Project Energize and the sale of branded products; which were partially offset by impairment charges of $50.3 million recognized as part of the assets held for sale of the Hospital & Specialty Business and the Rare Diseases Business, and increased restructuring expenses associated with Project Energize and Supply Chain Reinvention activities.

Unallocated Expenses

Unallocated expenses are comprised of certain corporate services not allocated to our reporting segments and are recorded in Operating income on the Consolidated Statements of Operations. Unallocated expenses were as follows (in millions):
Three Months EndedNine Months Ended
September 28, 2024September 30, 2023September 28, 2024September 30, 2023
$70.7 $42.5 $253.6 $148.1 

The increase of $28.2 million in unallocated expenses during the three months ended September 28, 2024, and the increase of $105.5 million in unallocated expenses during the nine months ended September 28, 2024, compared to the prior year periods was due primarily to an increase in expenses for litigation as well as restructuring associated primarily with Project Energize.

Interest expense, net, Other (income) expense, net and Loss (gain) on extinguishment of debt
Three Months EndedNine Months Ended
(in millions)September 28, 2024September 30, 2023September 28, 2024September 30, 2023
Interest expense, net$57.6 $43.5 $144.7 $131.1 
Other (income) expense, net$(4.1)$(0.6)$(0.5)$(9.6)
Loss on extinguishment of debt$5.1 $— $5.2 $— 

The $14.1 million increase in Interest Expense, net during the three months ended September 28, 2024 compared to the prior year period was due primarily to the de-designation of interest rate swap agreements (refer to Item 1. Note 12).

The $13.6 million increase during the nine months ended September 28, 2024 compared to the prior year period was due primarily to the same factors as noted above.

The $3.5 million increase in Other (income) expense, net for the three months ended September 28, 2024 compared to the prior year period was due primarily to the gain recognized on the sale of the Rare Diseases Business.

The $9.1 million decrease in Other (income) expense, net for the nine months ended September 28, 2024 compared to the prior year period was due primarily to the absence of higher prior year milestone income related to legacy royalty rights, partially offset by the gain recognized on the sale of the Rare Diseases Business.

The loss on extinguishment of debt during the three and nine months ended September 28, 2024 is related to the unamortized fees associated with the partial payment on the Term Loan B Facility (refer to Item 1. Note 12).

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Unallocated, Interest, Other, and Taxes

Income Taxes (Consolidated)

The effective tax rates were as follows:
Three Months EndedNine Months Ended
September 28, 2024September 30, 2023September 28, 2024September 30, 2023
180.9 %19.7 %20.9 %49.5 %

The effective tax rate on the pre-tax income for the for the three months ended September 28, 2024 and on the pre-tax loss for the nine months ended September 28, 2024 was largely impacted by losses recognized in various tax jurisdictions, in both periods, as well as the impacts of accounting for income taxes in interim reporting periods. As a result, a significant variation in the customary relationship between income tax expense and pre-tax book income may occur. Due to the net impact of an inter-company intellectual property sale, estimated worldwide non-deductible expenses, as well as establishing a partial valuation allowance in the United States, we are projecting an income tax expense for the full year ended December 31, 2024, which results in an unusually high annual effective tax rate when applied to the forecasted pre-tax income for the year. Although a significant tax benefit has been recorded on the losses for the nine months ended September 28, 2024, a tax expense has been recorded for the three months ended September 28, 2024, and as noted above, we are projecting an income tax expense for the full year ended December 31, 2024.

FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES

Overview

We finance our operations with internally generated funds, supplemented by credit arrangements with third parties and capital market financing. We routinely monitor current and expected operational requirements and financial market conditions to evaluate other available financing sources including term and revolving bank credit and securities offerings. In determining our future capital requirements, we regularly consider, among other factors, known trends and uncertainties, such as the war in Ukraine and conflict between Israel and Hamas and related developments in the Red Sea, inflation and interest rates, the status of material contingent liabilities, recent financial market volatility and other uncertainties. Subject to relevant restrictions under our debt agreements, our cash requirements for other purposes and other factors management deems relevant, we may from time to time use available funds to redeem, repurchase or refinance our debt in privately negotiated or open market transactions, by tender offer or otherwise, in compliance with applicable laws, rules and regulations, at prices and on terms we deem appropriate (which may be below par).

Based on the foregoing, management believes that our operations and borrowing resources are sufficient to provide for our short-term and long-term capital requirements, as described below. However, an adverse result with respect to our appeal of any material outstanding tax assessments or litigation, including securities or drug pricing matters and product liability cases, damages resulting from third-party claims, and related interest and/or penalties, could ultimately require the use of corporate assets to pay such assessments and any such use of corporate assets would limit the assets available for other corporate purposes. As such, we continue to evaluate the impact of the above factors on liquidity and may determine that modifications to our capital structure are appropriate if market conditions deteriorate, favorable capital market opportunities become available, or any change in conditions relating to the war in Ukraine and Israel, inflation and interest rates, the status of material contingent liabilities, financial market volatility or other uncertainties have a material impact on our capital requirements.

Cash, Cash Equivalents and Restricted Cash

(in millions)September 28, 2024December 31, 2023
Cash, cash equivalents and restricted cash(1)
$1,463.5 $751.3 
Working capital(2)
$1,229.7 $935.9 
(1) We had $1.1 million and $7.0 million of restricted cash as of September 28, 2024 and December 31, 2023 in the Condensed Consolidated Balance Sheets, respectively.
(2) Working capital represents current assets less current liabilities, excluding cash, cash equivalents and restricted cash and excluding current indebtedness.

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Financial Condition, Liquidity and Capital Resources

Cash, cash equivalents, restricted cash, cash flows from operations, and borrowings available under our credit facilities are expected to be sufficient to finance our liquidity and capital expenditures in both the short and long term. Although our lenders have made commitments to make funds available to us in a timely fashion under our revolving credit agreements and overdraft facilities, if economic conditions worsen or new information becomes publicly available impacting the institutions’ credit rating or capital ratios, these lenders may be unable or unwilling to lend money pursuant to our existing credit facilities. Should our outlook on liquidity requirements change substantially from current projections, we may seek additional sources of liquidity in the future.

Cash Flows

The following table includes summarized cash flow activities:
Nine Months Ended
(in millions)September 28, 2024September 30, 2023$ Change
Net cash from operating activities$50.3 $196.8 $(146.5)
Net cash from (for) investing activities115.9 (54.7)170.6 
Net cash from (for) financing activities543.1 (142.6)685.7 
Effect of exchange rate changes on cash and cash equivalents2.9 (1.9)4.8 
Net increase (decrease) in cash and cash equivalents$712.2 $(2.4)$714.6 

Net cash from Operating Activities

The $146.5 million decrease in operating cash flow was primarily driven by a decrease in cash flow from the change in net earnings after adjustments for items including deferred income taxes, gain on sale of branded products, impairment charges, settlement of interest rate derivatives, and restructuring, partially offset by significantly higher working capital during the period, primarily related to timing of sales and payments received and made.

Net cash from (for) Investing Activities

The $170.6 million increase in investing cash flow was due primarily to the proceeds from the sale of the Rare Diseases Business and the sale of six branded products in the current year.

Net cash from (for) Financing Activities

The $685.7 million increase in financing cash flow was due primarily to the issuance of the 2032 Notes during the period, partially offset by increased payments on our Senior Secured Credit Facilities compared to the prior year.

Borrowings and Capital Resources

Note Issuances

On September 17, 2024, Perrigo Finance issued the 2032 Notes.The 2032 Notes are fully and unconditionally guaranteed on a senior unsecured basis by Perrigo and its subsidiaries that provide guarantees under Perrigo's Senior Secured Credit Facilities (as defined below). Net proceeds from the 2032 Notes were used to prepay a portion of the Term Loan B Facility (as defined below) on September 19, 2024 and the remaining proceeds were used to fund the redemption of $700.0 million of the 4.375% Notes due 2026 on October 2, 2024. As a result of the redemption, we recognized an extinguishment loss of $5.1 million during the third quarter of 2024 and we anticipate an additional loss of $1.6 million in the fourth quarter of 2024.

Credit Agreements

On April 20, 2022, we and our indirect wholly owned subsidiary, Perrigo Investments, LLC, (the "Borrower") entered into the senior secured credit facilities, which consisted of (i) a $1.0 billion five-year revolving credit facility (the “Revolver”), (ii) a $500.0 million five-year Term Loan A facility (the “Term Loan A Facility” and the Term A Loans thereunder, the "Term A Loans"), and (iii) a $1.1 billion seven-year Term Loan B facility (the “Term Loan B Facility” and the Term B Loans thereunder borrowed on April 20, 2022, the "2022 Term B Loans” and, together with the
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Financial Condition, Liquidity and Capital Resources

Revolver and Term Loan A Facility, the "Senior Secured Credit Facilities"), pursuant to a Term Loan and Revolving Credit Agreement (the "Credit Agreement").

On December 15, 2023, we and the Borrower, entered into Amendment No. 1, an Incremental Assumption Agreement (the "Amendment") to the Credit Agreement. The Amendment provides for a fungible add on to the 2022 Term B Loans in an aggregate principal amount of $300.0 million (the "Incremental Term B Loans" and together with the 2022 Term B Loans, the “Term B Loans”). The terms of the Incremental Term B Loans, including pricing and maturity, are identical to the 2022 Term B Loans. The Term B Loans will mature on April 20, 2029. The net proceeds from the Incremental Term B Loans were used to settle the cash tender offer by Perrigo Finance for $300.0 million in aggregate principal amount of 3.900% Senior Notes due 2024 ("2024 Notes"). The tender offer was settled on December 15, 2023, and Perrigo Finance accepted for purchase $300.0 million of the 2024 Notes and paid approximately $295.1 million in aggregate cash consideration (excluding accrued interest).

As of September 28, 2024 and December 31, 2023, we had $1,437.8 million and $1,858.1 million, respectively, outstanding under our Term Loan A Facility and Term Loan B Facility. Our short-term debt as of September 28, 2024 of $440.7 million is comprised of (i) the remaining portion of the 3.900% Senior Notes due 2024, (ii) amortization payments for the Term A Loans and the Term B Loans and (iii) lease payments.

The interest rate net of derivatives results in a fixed rate on a substantial portion of our long-term debt, the earliest of which matures in December 2024.

We are in compliance with all the covenants under our debt agreements as of September 28, 2024.

Other Financing

We have overdraft facilities available that we may use to support our cash management operations. There were no material borrowings outstanding under the overdraft facilities as of September 28, 2024 or December 31, 2023.

Leases

We had $203.7 million and $202.2 million of lease liabilities and $194.4 million and $197.3 million of lease assets as of September 28, 2024 and December 31, 2023, respectively. For information on our operating and finance lease obligations and the amount and timing of future payments refer to Item 1. Note 8.

Credit Ratings

Our credit ratings on September 28, 2024 were Ba2 (negative), BB- (stable), and BB (negative), by Moody's Investor Services, S&P Global Ratings, and Fitch Ratings Inc., respectively. On March 25, 2024, S&P downgraded our issuer credit rating to BB- from BB, senior secured notes ratings to BB from BB+ and senior unsecured notes ratings to B+ from BB- and the rating outlooks remained stable. On April 16, 2024, Fitch downgraded our issuer credit rating to BB from BB+ and the rating outlooks remained negative.

Due to the downgrade by S&P Global Ratings, the interest of the 3.150% Senior Notes due 2030 stepped up from 4.650% to 4.900% on payments made after June 15, 2024. There was no impact to our interest rates as a result of the Fitch downgrade. Future interest rate adjustments of the 3.150% Senior Notes due 2030 are subject to a 2.0% total cap above the original 3.150% interest rate which would result in an interest rate not to exceed 5.150% based on certain rating events as specified in the Note’s Supplemental Indenture No. 3, dated as of June 19, 2020, among Perrigo Finance Unlimited Company, Perrigo Company plc and Wells Fargo Bank, National Association, as trustee.

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Financial Condition, Liquidity and Capital Resources

Guarantor Financial Information

As detailed in Item 1. Note 12, the Guarantor Subsidiaries and the Borrower provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 5.300% Notes due 2043 issued by the Company, and the Loan Parties provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 3.900% Notes due 2024, the 4.375% Notes due 2026 (subsequent to September 28, 2024, these Notes were redeemed in full), the 4.900% Notes due 2030, the 5.375% Euro Notes due 2032, the 6.125% USD Notes due 2032, and the 4.900% Notes due 2044 issued by Perrigo Finance.

The guarantees of the Guarantor Subsidiaries, the Company and the Borrower are subject to release in limited circumstances only upon the occurrence of certain customary conditions. The guarantees of the Guarantor Subsidiaries, the Company and the Borrower rank senior in right of payment to any future subordinated indebtedness of the Company, equal in right of payment with all of the Company’s existing and future senior indebtedness and effectively subordinated to any of the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing such indebtedness.

Basis of Presentation

The following tables include summarized financial information of the obligor groups of debt issued by Perrigo Finance and the Company. The summarized financial information of each obligor group is presented on a combined basis with balances and transactions within the obligor group eliminated. Investments in and the equity in earnings of non-guarantor subsidiaries, which would otherwise be consolidated in accordance with U.S. GAAP, are excluded from the below summarized financial information pursuant to SEC Regulation S-X Rule 13-01.

The summarized balance sheet information for the consolidated obligor group of debt issued by Perrigo Finance and the Company is presented in the table below:
September 28, 2024December 31, 2023
Current Assets$2,896.4 $1,999.9 
Non-current Assets$4,428.4 $4,596.2 
Current liabilities$1,079.7 $1,888.8 
Non-current liabilities$13,114.9 $11,498.4 
Due to non-guarantors$8,215.2 $7,355.3 

The summarized results of operations information for the consolidated obligor group of debt issued by Perrigo Finance and the Company is presented in the table below:
Nine Months Ended
September 28, 2024
Total Revenues$2,256.9 
Gross Profit$691.6 
Operating (Loss) Income$(95.3)
Net (Loss) Income$(208.7)
Revenue from non-guarantors$233.8 
Operating Expenses to non-guarantors$(1.3)
Other (income) expense to non-guarantors$(25.2)

Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have a material current effect or that are reasonably likely to have a material future effect on our financial condition, changes in financial condition, net sales or expenses, results of operations, liquidity, capital expenditures, or capital resources.

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Financial Condition, Liquidity and Capital Resources

Contractual Obligations

There were no material changes in contractual obligations as of September 28, 2024 from those provided in our 2023 Form 10-K.

Significant Accounting Policies

There have been no material changes to the significant accounting policies as disclosed in our 2023 Form 10-K.

Critical Accounting Estimates

The determination of certain amounts in our financial statements requires the use of estimates. These estimates are based upon our historical experiences combined with management’s understanding of current facts and circumstances. Although the estimates are considered reasonable based on the currently available information, actual results could differ from the estimates we have used. There have been no material changes to the critical accounting estimates as disclosed in our 2023 Form 10-K.

ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our quantitative or qualitative disclosures found in Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," of our 2023 Form 10-K.

ITEM 4.        CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act) as of September 28, 2024. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective in ensuring that all material information relating to us and our consolidated subsidiaries required to be included in our periodic SEC filings would be made known to them by others within those entities in a timely manner and that no changes are required at this time.

Evaluation of the Effectiveness of Internal Control over Financial Reporting

Our management assessed the effectiveness of our internal control over financial reporting as of September 28, 2024. The framework used in carrying out our evaluation was the 2013 Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission. In evaluating our information technology controls, we also used components of the framework contained in the Control Objectives for Information and related Technology, which was developed by the Information Systems Audit and Control Association’s IT Governance Institute, as a complement to the COSO internal control framework. Management has concluded that our internal control over financial reporting was effective as of September 28, 2024. The results of management’s assessment have been reviewed with our Audit Committee.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended September 28, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.     OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

Refer to Item 1. Note 16 and Item 1. Note 17 of the Notes to the Condensed Consolidated Financial Statements.

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Perrigo Company plc - Item 1A
Risk Factors



ITEM 1A.    RISK FACTORS

Our Annual Report on Form 10-K for the year ended December 31, 2023 includes a detailed discussion of our risk factors. At the time of this filing, there have been no material changes to the risk factors that were included in the Form 10-K.

ITEM 5.         OTHER INFORMATION

Rule 10b5-1 Trading Plans

On September 9, 2024, Jeffrey B. Kindler, a Director, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. Mr. Kindler's plan provides for the potential sale of up to 17,598 shares of the Company's common stock and will expire on December 31, 2024 or on any earlier date on which all of the shares have been sold.

Except as disclosed above, during the three and nine months ended September 28, 2024, no other director or executive officer adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement", as each term is defined in Item 408(a) of Regulation S-K.

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Perrigo Company plc - Item 6
Exhibits

ITEM 6.    EXHIBITS
Exhibit
Number
Description
2.1
Purchase and Sale Agreement, dated as of July 3, 2024, by and among Perrigo Company plc and Esteve Healthcare S.L. (Incorporated by reference from Exhibit 2.1 to the Company Current Report on Form 8-K filed on July 10, 2024).
3.1
3.2
4.1
Sixth Supplemental Indenture dated as of September 17, 2024, among the Issuer, the Company, the Subsidiary Guarantors and Computershare Trust Company, N.A., as trustee. (Incorporated by reference from Exhibit 4.1 to the Company's Current Report on Form 8-K filed on September 17, 2024).
4.2
Form of 6.125% Note due 2032 (included in the Sixth Supplemental Indenture filed as Exhibit 4.1). (Incorporated by reference from Exhibit 4.2 to the Company's Current Report on Form 8-K filed on September 17, 2024).
4.3
Seventh Supplemental Indenture dated as of September 17, 2024, among the Issuer, the Company, the Subsidiary Guarantors and Computershare Trust Company, N.A., as trustee. (Incorporated by reference from Exhibit 4.3 to the Company's Current Report on Form 8-K filed on September 17, 2024).
4.4
Form of 5.375% Note due 2032 (included in the Seventh Supplemental Indenture filed as Exhibit 4.3). (Incorporated by reference from Exhibit 4.4 to the Company's Current Report on Form 8-K filed on September 17, 2024).
10.1*
Letter Agreement dated June 11, 2024, by and between the Company and Kyle L. Hanson (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on August 2, 2024).
10.2*
10.3*
Compromise Waiver Agreement dated April 5, 2024, by and between Perrigo Corporation DAC and Grainne Quinn (incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on August 2, 2024).
10.4*
22
31.1
31.2
32
101. INSXBRL 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.SCHXBRL Taxonomy Extension Schema Document.
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFXBRL Taxonomy Extension Definition Linkbase Document.
101.LABXBRL Taxonomy Extension Label Linkbase Document.
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Date File, formatted in Inline XBRL (contained in Exhibit 101).
*Denotes management contract or compensatory plan or arrangement.
58

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
PERRIGO COMPANY PLC
(Registrant)
Date:November 6, 2024/s/ Patrick Lockwood-Taylor
Patrick Lockwood-Taylor
Chief Executive Officer and President
(Principal Executive Officer)
Date:November 6, 2024/s/ Eduardo Bezerra
Eduardo Bezerra
Chief Financial Officer
(Principal Accounting and Financial Officer)

59