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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________________
 FORM 10-Q
_______________________________________________
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2023

OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number 001-36353
_______________________________________________
Perrigo Company plc
(Exact name of registrant as specified in its charter)
_______________________________________________
Ireland Not Applicable
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)

The Sharp Building, Hogan Place, Dublin 2, Ireland D02 TY74
+353 1 7094000
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary shares, €0.001 par valuePRGONew York Stock Exchange
3.900% Notes due 2024PRGO24New York Stock Exchange
4.375% Notes due 2026PRGO26New York Stock Exchange
4.650% Notes due 2030
PRGO30New York Stock Exchange
5.300% Notes due 2043PRGO43New York Stock Exchange
4.900% Notes due 2044PRGO44New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒   No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer ☐Non-accelerated filer ☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ☐  Yes  ☒ No

As of November 3, 2023, there were 135,506,489 ordinary shares outstanding.


PERRIGO COMPANY PLC
FORM 10-Q
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
PART II. OTHER INFORMATION


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this report are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our, or our industry’s actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this report, including certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” "forecast," “predict,” “potential” or the negative of those terms or other comparable terminology.

The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company’s control, including: supply chain impacts on the Company’s business, including those caused or exacerbated by armed conflict, trade and other economic sanctions and/or disease; general economic, credit, and market conditions; the impact of the war in Ukraine and any escalation thereof, including the effects of economic and political sanctions imposed by the United States, United Kingdom, European Union, and other countries related thereto; the outbreak or escalation of conflict in other regions where we do business; future impairment charges, if we determine that the carrying amount of specific assets may not be recoverable from the expected future cash flows of such assets; customer acceptance of new products; competition from other industry participants, some of whom have greater marketing resources or larger market shares in certain product categories than the Company does; pricing pressures from customers and consumers; resolution of uncertain tax positions and any litigation relating thereto, ongoing or future government investigations and regulatory initiatives; uncertainty regarding the Company’s ability to obtain and maintain its regulatory approvals; potential costs and reputational impact of product recalls or sales halts; potential adverse changes to U.S. and foreign tax, healthcare and other government policy; the effect of the coronavirus (COVID-19) pandemic and its variants, or other epidemic or pandemic disease; the timing, amount and cost of any share repurchases (or the absence thereof) and/or any refinancing of outstanding debt at or prior to maturity; fluctuations in currency exchange rates and interest rates; the Company’s ability to achieve the benefits expected from the sale of its Rx business and the risk that potential costs or liabilities incurred or retained in connection with that transaction may exceed the Company’s estimates or adversely affect the Company’s business or operations; the Company’s ability to achieve the benefits expected from the acquisitions of Héra SAS ("HRA Pharma") and Nestlé’s Gateway infant formula plant along with the U.S. and Canadian rights to the GoodStart® infant formula brand and other related formula brands ("Gateway") and/or the risks that the Company’s synergy estimates are inaccurate or that the Company faces higher than anticipated integration or other costs in connection with the acquisitions; risks associated with the integration of HRA Pharma and Gateway, including the risk that growth rates are adversely affected by any delay in the integration of sales and distribution networks; the consummation and success of other announced and unannounced acquisitions or dispositions, and the Company’s ability to realize the desired benefits thereof; and the Company’s ability to execute and achieve the desired benefits of announced cost-reduction efforts and other strategic initiatives and investments, including the Company’s ability to achieve the expected benefits from its Supply Chain Reinvention Program. Adverse results with respect to pending litigation could have a material adverse impact on the Company's operating results, cash flows and liquidity, and could ultimately require the use of corporate assets to pay damages, reducing assets that would otherwise be available for other corporate purposes. These and other important factors, including those discussed in our Form 10-K for the year ended December 31, 2022, this report under “Risk Factors” and in any subsequent filings with the United States Securities and Exchange Commission, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this report are made only as of the date hereof, and unless otherwise required by applicable securities laws, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

This report contains trademarks, trade names and service marks that are the property of Perrigo Company plc, as well as, for informational purposes, trademarks, trade names, and service marks that are the property of other organizations. Solely for convenience, certain trademarks, trade names, and service marks referred to in this report appear without the ®, ™ and SM symbols, but those references are not intended to indicate that we or the applicable owner, as the case may be, will not assert, to the fullest extent under applicable law, our or their rights to such trademarks, trade names, and service marks.
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Perrigo Company plc - Item 1
PART I.     FINANCIAL INFORMATION

ITEM 1.        FINANCIAL STATEMENTS (UNAUDITED)

PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(unaudited)
 
 Three Months EndedNine Months Ended
 September 30, 2023October 1, 2022September 30, 2023October 1, 2022
Net sales$1,123.8 $1,100.2 $3,498.7 $3,296.3 
Cost of sales712.6 737.3 2,245.6 2,223.5 
Gross profit411.2 362.9 1,253.1 1,072.8 
Operating expenses
Distribution27.8 30.6 85.0 84.5 
Research and development29.6 29.8 92.9 90.5 
Selling150.2 144.5 489.2 431.0 
Administration126.0 105.9 393.6 386.0 
Restructuring15.5 19.1 25.7 32.2 
Other operating (income) expense, net— (0.1)(0.8)0.7 
Total operating expenses349.1 329.8 1,085.6 1,024.9 
Operating income62.1 33.1 167.5 47.9 
Interest expense, net43.5 41.0 131.1 115.1 
Other (income) expense, net(0.6)(4.0)(9.6)48.7 
(Gain) loss on extinguishment of debt— (0.4)— 8.9 
Income (loss) from continuing operations before income taxes19.2 (3.5)46.0 (124.8)
Income tax expense (benefit)3.8 48.6 22.7 (6.6)
Income (loss) from continuing operations15.4 (52.1)23.3 (118.2)
Income (loss) from discontinued operations, net of tax(1.2)2.7 (3.7)1.3 
Net income (loss)$14.2 $(49.4)$19.6 $(116.9)
Earnings (loss) per share
Basic
Continuing operations$0.11 $(0.39)$0.17 $(0.88)
Discontinued operations(0.01)0.02 (0.03)0.01 
Basic earnings (loss) per share$0.10 $(0.37)$0.14 $(0.87)
Diluted
Continuing operations$0.11 $(0.39)$0.17 $(0.88)
Discontinued operations(0.01)0.02 (0.03)0.01 
Diluted earnings (loss) per share$0.10 $(0.37)$0.14 $(0.87)
Weighted-average shares outstanding
Basic135.5 134.6 135.2 134.4 
Diluted136.9 134.6 136.6 134.4 

See accompanying Notes to the Condensed Consolidated Financial Statements.
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Perrigo Company plc - Item 1
PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
Three Months EndedNine Months Ended
September 30, 2023October 1, 2022September 30, 2023October 1, 2022
Net income (loss)$14.2 $(49.4)$19.6 $(116.9)
Other comprehensive income (loss):
Foreign currency translation adjustments(101.3)(270.5)(65.0)(477.9)
Change in fair value of derivative financial instruments, net of tax3.9 101.0 15.6 132.5 
Change in post-retirement and pension liability, net of tax(0.6)(0.8)(1.7)(7.5)
Other comprehensive income (loss), net of tax(98.0)(170.3)(51.1)(352.9)
Comprehensive income (loss)$(83.8)$(219.7)$(31.5)$(469.8)

See accompanying Notes to the Condensed Consolidated Financial Statements.

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Perrigo Company plc - Item 1
PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
(unaudited)

September 30, 2023December 31, 2022
Assets
Cash and cash equivalents$598.3 $600.7 
Accounts receivable, net of allowance for credit losses of $8.2 and $6.8, respectively
737.8 697.1 
Inventories1,149.5 1,150.3 
Prepaid expenses and other current assets279.7 271.8 
Total current assets2,765.3 2,719.9 
Property, plant and equipment, net902.9 926.3 
Operating lease assets199.9 217.1 
Goodwill and indefinite-lived intangible assets3,554.7 3,549.0 
Definite-lived intangible assets, net2,941.4 3,230.2 
Deferred income taxes6.8 7.1 
Other non-current assets387.3 367.7 
Total non-current assets7,993.0 8,297.4 
Total assets$10,758.3 $11,017.3 
Liabilities and Shareholders’ Equity
Accounts payable$433.1 $537.3 
Payroll and related taxes108.8 136.4 
Accrued customer programs156.3 139.1 
Other accrued liabilities262.3 250.2 
Accrued income taxes9.8 14.4 
Current indebtedness38.1 36.2 
Total current liabilities1,008.4 1,113.6 
Long-term debt, less current portion4,048.5 4,070.4 
Deferred income taxes349.4 368.2 
Other non-current liabilities613.9 623.0 
Total non-current liabilities5,011.8 5,061.6 
Total liabilities6,020.2 6,175.2 
Contingencies - Refer to Note 16
Shareholders’ equity
Controlling interests:
Preferred shares, $0.0001 par value per share, 10 shares authorized
— — 
Ordinary shares, €0.001 par value per share, 10,000 shares authorized
6,864.2 6,936.7 
Accumulated other comprehensive income(78.1)(27.0)
Retained earnings (accumulated deficit)(2,048.0)(2,067.6)
Total shareholders’ equity4,738.1 4,842.1 
Total liabilities and shareholders' equity$10,758.3 $11,017.3 
Supplemental Disclosures of Balance Sheet Information
Preferred shares, issued and outstanding
— — 
Ordinary shares, issued and outstanding
135.5 134.7 

See accompanying Notes to the Condensed Consolidated Financial Statements.
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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		Retained
Earnings
(Accumulated Deficit)		Total
 SharesAmount
Balance at December 31, 2021133.8 $7,043.2 $35.5 $(1,927.0)$5,151.7 
Net loss— — — (2.4)(2.4)
Other comprehensive loss— — (20.5)— (20.5)
Restricted stock plan1.2 — — — — 
Compensation for restricted stock— 26.3 — — 26.3 
Cash dividends, $0.26 per share
— (34.2)— — (34.2)
Shares withheld for payment of employees' withholding tax liability(0.4)(16.4)— — (16.4)
Balance at April 2, 2022134.6 $7,018.9 $15.0 $(1,929.4)$5,104.5 
Net loss— — — (65.1)(65.1)
Other comprehensive loss— — (161.8)— (161.8)
Compensation for restricted stock— 9.0 — — 9.0 
Cash dividends, $0.26 per share
— (35.4)— — (35.4)
Shares withheld for payment of employees' withholding tax liability— (1.4)— — (1.4)
Balance at July 2, 2022134.6 $6,991.1 $(146.8)$(1,994.5)$4,849.8 
Net loss— — — (49.4)(49.4)
Other comprehensive income— — (170.3)— (170.3)
Compensation for restricted stock— 9.3 — — 9.3 
Cash dividends, $0.26 per share
— (35.5)— — (35.5)
Shares withheld for payment of employees' withholding tax liability— (1.2)— — (1.2)
Balance at October 1, 2022134.6 $6,963.7 $(317.1)$(2,043.9)$4,602.7 


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Perrigo Company plc - Item 1
 Ordinary Shares
Issued		Accumulated
Other
Comprehensive
Income		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, $0.27 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, $0.27 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, $0.27 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 

See accompanying Notes to the Condensed Consolidated Financial Statements.
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Perrigo Company plc - Item 1
PERRIGO COMPANY PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Nine Months Ended
 September 30, 2023October 1, 2022
Cash Flows From (For) Operating Activities
Net income (loss)$19.6 $(116.9)
Adjustments to derive cash flows:
Depreciation and amortization273.6 241.5 
Share-based compensation58.2 46.7 
Restructuring charges25.7 32.2 
Amortization of debt discount (premium)1.8 (2.8)
Foreign currency remeasurement loss— 39.4 
Loss on sale of business— 1.4 
Deferred income taxes12.3 (19.6)
Gain on sale of assets(4.0)(5.8)
Other non-cash adjustments, net(2.7)3.4 
Subtotal384.5 219.5 
Increase (decrease) in cash due to:
Accounts receivable(70.6)(38.6)
Accounts payable(92.9)46.1 
Payroll and related taxes(52.7)(40.5)
Accrued income taxes(54.4)(50.1)
Inventories(5.5)(78.8)
Accrued liabilities13.2 19.0 
Prepaid expenses and other current assets35.9 6.7 
Accrued customer programs20.5 15.7 
Other operating, net 18.8 22.4 
Subtotal(187.7)(98.1)
Net cash from operating activities196.8 121.4 
Cash Flows From (For) Investing Activities
Additions to property, plant and equipment(75.0)(70.0)
Acquisitions of businesses, net of cash acquired— (1,901.4)
Settlement of acquisition-related foreign currency derivatives— (37.1)
Asset acquisitions— (10.3)
Net proceeds from sale of businesses— 58.7 
Proceeds from sale of assets2.0 24.8 
Proceeds from royalty rights18.3 2.7 
Net cash for investing activities(54.7)(1,932.6)
Cash Flows From (For) Financing Activities
Cash dividends(112.1)(107.0)
Payments on long-term debt(24.0)(964.8)
Issuances of long-term debt— 1,587.3 
Payments for debt issuance costs
— (20.9)
Premiums on early debt retirement— (12.2)
Proceeds on seller-financed divestiture4.3 
Other financing, net(6.5)(22.6)
Net cash (for) from financing activities(142.6)464.1 
Effect of exchange rate changes on cash and cash equivalents(1.9)(63.5)
Net decrease in cash and cash equivalents(2.4)(1,410.6)
Cash and cash equivalents of continuing operations, beginning of period600.7 1,864.9 
Cash and cash equivalents held for sale, beginning of period— 14.4 
Cash and cash equivalents of continuing operations, end of period$598.3 $468.7 

See accompanying Notes to the Condensed Consolidated Financial Statements.
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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 make lives better by bringing Quality, Affordable Self-Care Products that consumers trust everywhere they are sold. 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, 2022. 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. CSCA previously included our Latin American businesses until they were disposed on March 9, 2022.

•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 4).

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 17.

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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Perrigo Company plc - Item 1
Note 1

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 30, 2023October 1, 2022September 30, 2023October 1, 2022
Balance at beginning of period$8.1 $7.3 $6.8 $7.2 
Provision for credit losses, net0.6 0.7 1.9 2.9 
Receivables written-off(0.2)(0.9)(0.7)(3.1)
Recoveries collected— — 0.4 — 
Currency translation adjustment(0.3)(0.2)(0.2)(0.1)
Balance at end of period$8.2 $6.9 $8.2 $6.9 

NOTE 2 - REVENUE RECOGNITION

The following is a summary of our net sales by category(1) (in millions):
Three Months EndedNine Months Ended
September 30, 2023October 1, 2022September 30, 2023October 1, 2022
CSCA
Nutrition$130.7 $124.4 $435.4 $376.7 
Upper Respiratory130.2 132.2 422.2 430.9 
Digestive Health117.1 119.6 368.0 363.3 
Pain and Sleep-Aids94.1 104.0 295.0 309.5 
Healthy Lifestyle79.4 73.8 220.1 208.7 
Oral Care76.5 83.6 237.8 230.6 
Skin Care47.6 48.9 150.7 138.4 
Women's Health10.2 12.4 34.6 32.6 
Vitamins, Minerals, and Supplements ("VMS")4.3 7.1 12.7 23.0 
Other CSCA(2)
13.4 16.3 41.4 46.5 
Total CSCA$703.5 $722.3 $2,217.9 $2,160.2 
CSCI
Skin Care$86.7 $81.1 $293.1 $257.5 
Upper Respiratory78.2 69.2 227.9 194.5 
Pain and Sleep-Aids61.1 46.1 163.8 149.2 
Healthy Lifestyle52.4 47.6 179.4 165.6 
VMS46.1 46.4 135.4 138.2 
Women's Health28.5 28.7 89.5 65.7 
Oral Care24.8 21.7 75.5 71.2 
Digestive Health10.8 8.2 30.0 27.4 
Other CSCI(3)
31.7 28.9 86.1 66.8 
Total CSCI420.3 377.9 1,280.7 1,136.1 
Total net sales$1,123.8 $1,100.2 $3,498.7 $3,296.3 
(1) We updated our global reporting product categories as a result of our product portfolio reconfiguration. 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 product sales and royalty income related to supply and distribution agreements and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales.
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Perrigo Company plc - Item 1
Note 2

(3) Consists primarily of our rare diseases business and other miscellaneous or otherwise uncategorized product lines, none of which is greater
than 10% of the segment net sales.

While the majority of revenue is recognized at a point in time, certain of our product revenue is recognized over time. Customer contracts recognized over time exist predominately in contract manufacturing arrangements, which occur in both the CSCA and CSCI segments. Contract manufacturing revenue was $77.0 million and $267.3 million for the three and nine months ended September 30, 2023, respectively, and $102.2 million and $270.6 million for the three and nine months ended October 1, 2022, respectively.

We also recognize a portion of the store brand OTC product revenues in the CSCA segment on an over time basis; however, the timing difference between over time and point in time revenue recognition for store brand contracts is not significant due to the short time period between the customization of the product and shipment or delivery.

The following table provides information about contract assets from contracts with customers (in millions):
Balance Sheet LocationSeptember 30, 2023December 31, 2022
Short-term contract assetsPrepaid expenses and other current assets$23.6 $41.5 

We generated net sales in the following geographic locations(1) (in millions):
Three Months EndedNine Months Ended
September 30, 2023October 1, 2022September 30, 2023October 1, 2022
U.S.$690.3 $716.1 $2,176.3 $2,116.7 
Europe(2)
399.8 365.1 1,232.6 1,098.8 
All other countries(3)
33.7 19.0 89.8 80.8 
Total net sales$1,123.8 $1,100.2 $3,498.7 $3,296.3 
(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 $11.9 million and $31.0 million for the three and nine months ended September 30, 2023, respectively, and $6.2 million and $20.1 million for the three and nine months ended October 1, 2022, respectively.
(3) Includes net sales generated primarily in Australia and Canada.

NOTE 3 - ACQUISITIONS AND DIVESTITURES
Acquisitions During the Year Ended December 31, 2022

Héra SAS ("HRA Pharma")

On April 29, 2022, we completed the previously announced acquisition of 100% of the outstanding equity interest in HRA Pharma for total consideration of €1.8 billion, or approximately $1.9 billion based on exchange rates at the time of closing. We funded the transaction with cash on hand and borrowings under our New Senior Secured Credit Facilities (as defined in Note 11). The acquisition of HRA Pharma was accounted for as a business combination and has been reported in our Condensed Consolidated Statements of Operations as of the acquisition date.

HRA Pharma is a self-care based company with consumer brands such as Compeed®, ellaOne® and Mederma®, as well as a trusted rare disease portfolio. The acquisition completed our transformation to a consumer self-care company. HRA Pharma’s operations are reported in both our CSCA and CSCI segments.

We recorded the preliminary purchase price allocation in the second quarter of 2022. During the first quarter of 2023, we recorded measurement period adjustments resulting in an increase to goodwill of $80.6 million, which consisted of a $104.3 million decrease in definite-lived intangibles, $27.2 million decrease in net Deferred income tax liabilities, a net increase of $2.0 million to other non-current liabilities, and a $1.5 million decrease in Prepaid expenses and other current assets. Current year earnings adjustments of $3.5 million to Cost of sales were recorded that would have been recognized during the year-ended December 31, 2022, if the measurement period adjustments to the provisional opening balance sheet were reflected as of the acquisition date. As of the first quarter of 2023 the opening balance sheet is final.

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Perrigo Company plc - Item 1
Note 3

Nestlé’s Gateway Infant Formula Plant and GoodStart® infant formula brand Acquisition

On November 1, 2022, we purchased Nestlé’s Gateway infant formula plant in Eau Claire, Wisconsin, along with the U.S. and Canadian rights to the GoodStart® infant formula brand ("Gateway"), for $110.0 million in cash, subject to customary post-closing adjustments. The acquisition was accounted for as a business combination and operating results attributable to the products are included in our CSCA segment in the Nutrition product category. There were no measurement period adjustments to the provisional opening balance sheet as of the acquisition date. As of the third quarter of 2023 the opening balance sheet is final.

Pro Forma Impact of Business Combinations

The following table presents unaudited pro forma information as if the HRA Pharma and Gateway acquisitions had occurred on January 1, 2021 and had been combined with the results reported in our Condensed Consolidated Statements of Operations for all periods presented (in millions):
Three Months EndedNine Months Ended
(Unaudited)October 1, 2022October 1, 2022
Net sales$1,156.1 $3,572.0 
Income (loss) from continuing operations$(28.0)$(33.9)

The unaudited pro forma information is presented for information purposes only and is not indicative of the results that would have been achieved if the acquisition had taken place at such time. The unaudited pro forma information presented above includes adjustments primarily for amortization charges for acquired intangible assets, depreciation of property, plant and equipment that have been revalued, certain acquisition-related charges, and related tax effects.

Divestitures During the Year Ended December 31, 2022

Latin American businesses

On March 9, 2022, we completed the sale of our Mexico and Brazil-based OTC businesses ("Latin American businesses"), both within our CSCA segment, to Advent International for total consideration of $23.9 million, consisting of $5.4 million in cash, installment receivables due 12 and 18 months from completion totaling $11.3 million based on the Mexican peso exchange rate at the time of sale, and contingent consideration of $7.2 million based on the Brazilian real exchange rate at the time of sale. The sale resulted in a pre-tax loss of $1.4 million, net of professional fees, recorded in Other operating expense, net on the Condensed Consolidated Statements of Operations.

ScarAway®

On March 24, 2022, we completed the sale of the ScarAway® brand asset, a U.S. OTC scar management brand, to Alliance Pharmaceuticals Ltd. for cash consideration of $20.7 million. The sale resulted in a pre-tax gain of $3.6 million recorded in our CSCA segment in Other operating expense, net on the Condensed Consolidated Statements of Operations.

NOTE 4 - DISCONTINUED OPERATIONS

Our discontinued operations consist of our generic 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 an 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.

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
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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 16 - 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 30, 2023.

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

NOTE 5 - INVENTORIES

Major components of inventory were as follows (in millions):
 
September 30, 2023December 31, 2022
Finished goods$671.6 $620.3 
Work in process241.1 262.2 
Raw materials236.8 267.8 
Total inventories$1,149.5 $1,150.3 

NOTE 6 - INVESTMENTS

The following table summarizes the measurement category, balance sheet location, and balances of our equity securities (in millions):
Measurement CategoryBalance Sheet LocationSeptember 30, 2023December 31, 2022
Fair value methodPrepaid expenses and other current assets$0.1 $0.1 
Fair value method(1)
Other non-current assets$1.6 $1.7 
Equity methodOther non-current assets$60.5 $63.4 
(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 30,
2023		October 1, 2022September 30,
2023		October 1, 2022
Fair value methodOther operating (income) expense, net$— $0.1 $0.1 $0.4 
Equity methodOther operating (income) expense, net$0.3 $0.3 $1.5 $1.6 
    
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Note 7


NOTE 7 - LEASES

The balance sheet locations of our lease assets and liabilities were as follows (in millions):
AssetsBalance Sheet LocationSeptember 30, 2023December 31,
2022
OperatingOperating lease assets$199.9 $217.1 
FinanceOther non-current assets19.4 22.0 
Total$219.3 $239.1 
LiabilitiesBalance Sheet LocationSeptember 30, 2023December 31,
2022
Current
OperatingOther accrued liabilities$27.9 $28.4 
FinanceCurrent indebtedness2.1 3.3 
Non-Current
OperatingOther non-current liabilities173.0 189.5 
FinanceLong-term debt, less current portion16.3 17.4 
Total$219.3 $238.6 
    
The below tables show our lease assets and liabilities by reporting segment (in millions):
Assets
OperatingFinancing
September 30, 2023December 31,
2022		September 30, 2023December 31,
2022
CSCA$93.9 $100.5 $13.2 $13.8 
CSCI44.2 49.5 6.0 6.6 
Unallocated61.8 67.1 0.2 1.6 
Total$199.9 $217.1 $19.4 $22.0 
Liabilities
OperatingFinancing
September 30, 2023December 31,
2022		September 30, 2023December 31,
2022
CSCA$95.9 $102.2 $14.5 $14.9 
CSCI46.9 51.7 3.7 4.1 
Unallocated58.1 64.0 0.2 1.7 
Total$200.9 $217.9 $18.4 $20.7 

Lease expense was as follows (in millions):
Three Months EndedNine Months Ended
September 30, 2023October 1,
2022		September 30, 2023October 1,
2022
Operating leases(1)
$11.8 $11.1 $34.4 $31.7 
Finance leases
Amortization$0.9 $1.3 $3.1 $4.2 
Interest0.1 0.2 0.4 0.5 
Total finance leases$1.0 $1.5 $3.5 $4.7 
(1) Includes short-term leases and variable lease costs, which are immaterial.
    
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Note 7


The annual future maturities of our leases as of September 30, 2023 are as follows (in millions):
Operating LeasesFinance LeasesTotal
2023$8.4 $0.7 $9.1 
202431.2 2.5 33.7 
202528.4 2.3 30.7 
202622.6 2.2 24.8 
202721.6 2.1 23.7 
After 2027117.3 11.6 128.9 
Total lease payments229.5 21.4 250.9 
Less: Interest28.6 3.0 31.6 
Present value of lease liabilities$200.9 $18.4 $219.3 

Our weighted average lease terms and discount rates are as follows:
September 30, 2023October 1,
2022
Weighted-average remaining lease term (in years)
Operating leases10.6511.35
Finance leases9.419.45
Weighted-average discount rate
Operating leases2.7 %2.5 %
Finance leases3.1 %2.9 %

Our lease cash flow classifications are as follows (in millions):
Nine Months Ended
September 30, 2023October 1,
2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases$27.0 $30.6 
Operating cash flows for finance leases$0.4 $0.5 
Financing cash flows for finance leases$2.8 $3.8 
Leased assets obtained in exchange for new finance lease liabilities$0.5 $— 
Leased assets obtained in exchange for new operating lease liabilities$5.9 $62.3 

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

Goodwill

Changes in the carrying amount of goodwill, by reportable segment, were as follows (in millions):
December 31, 2022Purchase accounting adjustments Currency translation
adjustments		September 30, 2023
CSCA(1)
$2,044.4 $35.2 $(2.0)$2,077.6 
CSCI(2)
1,446.0 45.4 (19.3)1,472.1 
Total goodwill$3,490.4 $80.6 $(21.3)$3,549.7 
(1) We had accumulated goodwill impairments of $6.1 million as of September 30, 2023 and December 31, 2022.
(2) We had accumulated goodwill impairments of $878.4 million as of September 30, 2023 and December 31, 2022.

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Note 8

Intangible Assets

Intangible assets and related accumulated amortization consisted of the following (in millions):
 September 30, 2023December 31, 2022
 GrossAccumulated
Amortization		GrossAccumulated
Amortization
Indefinite-lived intangibles:(1)
Trademarks, trade names, and brands$3.2 $— $3.2 $— 
In-process research and development1.8 — 55.4 —